Irwin v Pamplin & Ors (No 4)

[2024] NSWSC 73

Supreme Court

New South Wales

Medium Neutral Citation:

Irwin v Pamplin & Ors (No 4) [2024] NSWSC 73

Hearing dates:

30, 31 January, 1, 2, 3, 6, 7, 8, 9 February, 15 March 2023

Date of orders:

9 February 2024

Decision date:

09 February 2024

Jurisdiction:

Equity

Before:

Henry J

Decision:

See [451]-[459]

Catchwords:

EQUITY – trusts and trustees – where siblings transferred assets and businesses to parent and new companies established in parent’s name – where new business structure intended for asset protection and “asset warehousing” by parent – whether agreement, assumption or common understanding that parent held legal ownership of assets and shares in name only – where siblings continue to operate businesses – whether parent holds interest on trust for siblings – express trust – common intention constructive trust – estoppel – finding of intention to create express trust – finding of common intention – whether binding contract

EQUITY – statute of frauds – Conveyancing Act 1919 (NSW), ss 23C, 54A – part performance – whether part performance applies to oral declaration of trust

EQUITY – trusts and trustees – express trust – discretionary trust – power of appointment – estoppel – whether trustees estopped from exercising power of appointment other than in accordance with representations to beneficiary – whether breach of non-fettering principle

Legislation Cited:

Conveyancing Act 1919 (NSW), ss 23C, 54A

Limitation Act 1969 (NSW), ss 26, 27, 38, 47, 65

Proceeds of Crime Act 2002 (Cth)

Cases Cited:

Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12

Bahr v Nicolay [No 2] (1988) 164 CLR 604; [1988] HCA 16

Bassett v Cameron [2021] NSWSC 207

Blatch v Archer (1774) 1 Cowp 63; 98 ER 969

Bryant v Bryant (2014) 17 BPR 33,511; [2014] NSWSC 374

Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26

Catchpole v The Trustees of the Alitalia Airlines Pension Scheme [2010] EWHC 1809 (Ch)

Chant v Curcuruto [2021] NSWSC 751

English & Ors v Keats & Ors [2018] EWHC 673 (Ch)

Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8

Estate of Pamplin; Irwin v Pamplin [2017] NSWSC 1477

Fielden v Christie-Miller & Ors [2015] EWHC 87 (Ch)

Fitzwood Pty Ltd v Unique Goal Pty Ltd (in liq) [2001] FCA 1628; 188 ALR 566

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Galati v Deans [2023] NSWCA 13

Gill v Garrett [2020] NSWSC 795

Green v Green (1989) 17 NSWLR 343

Harpur v Levy (2007) 16 VR 587; [2007] VSCA 128

In Re Vestey’s Settlement [1951] Ch 209

Irwin v Pamplin [2021] NSWSC 208

John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451

Jones v Dunkel (1959) 101 CLR 298

JW Broomhead(Vic) Pty Ltd (in liq) v JW Broomhead Pty Ltd [1985] VR 891

Kauter v Hilton (1953) 90 CLR 86; [1953] HCA 95

Khoury v Khouri (2006) 66 NSWLR 241; [2006] NSWCA 184

King v Adams [2016] NSWSC 1798

Koprivnjak v Koprivnjak [2023] NSWCA 2

Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62; [2015] HCA 6

Makaritis v Makaritis(No 2) [2022] NSWSC 1690

Meshumar v Otmy (2018) 97 NSWLR 615; [2018] NSWSC 125

Muschinski v Dodds (1985) 160 CLR 583

Owies v JJE Nominees Pty Ltd (in its capacity atfOwies Family Trust) [2022] VSCA 142

Paul v Constance [1977] 1 WLR 527

Payne v Rowe (2012) 16 BPR 30,869; [2012] NSWSC 685

Plunkett v Bull (1915) 19 CLR 544; [1915] HCA 14

Public Trustee v Smith [2008] NSWSC 397; 1 ASTLR 488

Rambaldi v Mullins (No 2) [2016] FCA 977

Re Armstrong (dec’d) [1960] VR 202

Registrar, Accident Compensation Tribunal v Commissioner of Taxation (1993) 178 CLR 145; [1993] HCA 1

Scott (Trustee), in the matter of Stolyar(Bankrupt) v Stolyar [2022] FCA 691

Thacker v Key (1869) LR 8 Eq 408

Walker v Corboy (1990) 19 NSWLR 382

Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18

Watson v Foxman (1995) 49 NSWLR 315

Texts Cited:

L Tucker, N Le Poidevin and J Brightwell, Lewin on Trusts (20th ed, 2020, Sweet & Maxwell)

JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity Doctrines & Remedies (5th ed, 2015, LexisNexis)

Category:

Principal judgment

Parties:

Ann Irwin (Plaintiff)
Marie Pamplin (First Defendant)
Lionel Pamplin (Second Defendant)
Mircon Pty Ltd (Third Defendant)
Dennis G. Pamplin Pty Ltd (Fourth Defendant)
Halcrows Investments Pty Ltd (Fifth Defendant)
N.MOS Pty Ltd (Sixth Defendant)
The Peak on Andrew Pty Ltd (Seventh Defendant)
Mircorp International Pty Ltd (Eighth Defendant)
OSCO (Australia) Pty Ltd (Ninth Defendant)

Representation:

Counsel:
M Condon SC and M Stevens (Plaintiff)
G George and J Adamopoulos (Defendants)

Solicitors:
Mersal & Associates Pty Ltd (Plaintiff)
Hitch Advisory (Defendants)

File Number(s):

2018/00179474

Publication restriction:

Nil

JUDGMENT

Introduction

1. The plaintiff, Ann Irwin, was the de facto spouse of the late Adrian Dennis Pamplin (deceased), who died in August 2013 without a will. Ann’s status as his de facto was established in this Court: Estate of Pamplin; Irwin v Pamplin [2017] NSWSC 1477 (Lindsay J judgment). Ann is sole administrator of the deceased’s estate.

2. The first defendant, Marie Dawn Pamplin, is the deceased’s mother. She is also the mother of the second defendant, Lionel Pamplin, who is the deceased’s younger brother.

3. With no disrespect intended, I refer to the parties and other members of their family by the first names.

4. From around 1989, the deceased and Lionel were involved in various business endeavours together, including property development. They owned shares in companies they had established, and real property.

5. The deceased and Lionel were also members of the Nomads Motorcycle Club. In the mid to late 1990’s, they were charged with drug related offences and involved in a NSW Crime Commission investigation.

6. From May 2002, the deceased and Lionel transferred legal ownership and control of the companies and assets they owned to Marie. New companies were set up and new assets acquired, all of which were (directly or indirectly) legally owned and controlled by Marie.

7. Ann says that the transactions from May 2002 happened pursuant to an agreement, understanding or an assumption held in common by the deceased, Lionel and Marie that Marie would hold the transferred business and property assets and any future assets generated by ongoing or new business ventures for the benefit of or on trust for the deceased and Lionel in equal shares, which Marie would hand over if asked to do so. She says that the agreement, understanding or common assumption also provided that the deceased and Lionel would act as shadow directors of the companies and keep de facto control of them and the assets, and that they did so.

8. Ann contends that the prime motivation for the arrangement was asset protection, namely, to shield them from vulnerability to confiscation under the Proceeds of Crime Act 2002 (Cth), and that the circumstances under which the assets were divested to Marie and future assets acquired either impressed them with a trust, or otherwise mean that Marie and the companies she controls are subject to an estoppel or contractual obligation which prevents them from dealing with the assets contrary to that arrangement.

9. Marie and Lionel deny the existence of the alleged agreement or common assumption.

10. While accepting there was a change in the way things were done from mid-2002, Marie and Lionel say that the new structure arose from a desire to pool resources in circumstances where the brothers’ property pipeline was empty, they had not produced significant wealth and were indebted to Marie for legal costs and business loans. They also say that the suggestion that the alleged arrangement was premised on a threat of asset confiscation under the Proceeds of Crime Act is misplaced.

These proceedings

11. Ann commenced these proceedings in June 2018 pursuant to directions given by Lindsay J after he delivered his judgment.

12. In her Second Further Amended Statement of Claim filed on 21 July 2021, (SFASC), Ann seeks a range of declarations and other orders to the effect that 50% of identified assets held by Marie and in companies Marie controls are held on trust for the benefit of the deceased’s estate. As Ann is the sole beneficiary of the deceased’s estate, in economic terms, Ann's claim is that the 50% share of the assets are held on trust for her.

13. Ann pleads an agreement or understanding and a common assumption on the same terms, which she says was acted on and gives rise to an express trust or, alternatively, constructive or resulting trusts in respect of the transferred assets and new assets that are legally owned by Marie and the corporate defendants. She claims that it is unconscionable for Marie to seek to depart from the terms of the arrangement or assumption and she is estopped in equity from doing so, and also pleads that the parties entered into a binding contract on the terms of the agreement. I refer to these as the Arrangement Claims.

14. Ann also makes a claim on her own behalf in respect of $451,000 of trust distributions that the Dennis G Pamplin Family Trust (DGP Trust) declared were payable to Ann in the financial years 30 June 2016 to 30 June 2012 which Ann says were never paid to her. I refer to this as the DGP Trust Distributions Claim.

15. The other defendants are companies that are directly or indirectly owned or controlled by Marie. Ann contends that the shares and assets of these companies are held on trust for her on the same terms, as are three properties located on Pitt Town Road, Kenthurst (Pitt Town properties), of which Marie is the registered proprietor.

16. The third defendant is Mircon Pty Ltd (Mircon), a company established by the deceased and Lionel in 1992 under the name A.L.T. Property Development Pty Ltd (ALT Property). It was renamed as Mircon in 1997. Marie has, since 2002, been Mircon’s sole director and company secretary and owned all of its shares.

17. The fourth defendant is Dennis G Pamplin Pty Ltd (DGP), a company established in 2002. Marie is the sole director and owns all the shares. DGP is the trustee of the DGP Trust which was also established in 2002.

18. The fifth defendant is Halcrows Investments Pty Ltd (Halcrows), which was established in 2013. Halcrows is the Trustee of the Halcrows Road Trust. Marie is the sole director and shareholder of Halcrows.

19. The seventh defendant, The Peak on Andrew Pty Ltd (Peak on Andrew), was established in 2008. The Peak on Andrew is the Trustee of the Peak Unit Trust. Marie is the sole director of the Peak on Andrew and DGP owns its shares.

20. The eighth defendant is Mircorp International Pty Ltd (Mircorp), a subsidiary of DGP, and was established in 2013.

21. The sixth and ninth defendants are, respectively, NMOS Pty Ltd (NMOS) and OSCO (Australia) Pty Ltd (OSCO). Marie is the sole director and company secretary of NMOS and OSCO and the sole shareholder of NMOS.

22. On 29 March 2021, Parker J made orders on Ann’s application for interlocutory relief, restraining Marie from dealing with her shares or interests in the corporate defendants and the Pitt Town properties and from exercising any power of appointment as to income or capital or otherwise dealing with the assets of the DGP Trust and Lionel from exercising any rights as appointor of that trust pending determination of Ann’s claims. Orders were also made for Ann to withdraw caveats she had lodged on the Pitt Town properties.

23. On 20 August 2021, Parker J made orders that certain issues be determined separately, being:

1. whether Ann is entitled to particular prayers for relief in the SFASC that relate to the Arrangement and Trust Distributions Claims;

2. whether Marie holds on trust for the deceased, a half-share in identified assets comprising shares owned by Marie in various companies, the Pitt Town properties and units in the Peak Unit Trust; and

3. whether Marie should give an account of her dealings with the identified assets and benefits derived therefrom and if so, on what basis and on what terms.

24. The effect of these orders is, in broad terms, directed to first determining issues of liability in relation to the Trust and Trust Distributions Claims, before Ann’s claims for the transfer of trust properties, equitable compensation and damages for breach of contract.

25. The SFASC is lengthy (71 pages) and somewhat repetitive. The Defendants described it in final written submissions as “prolix” and “bloviated”.

26. Ultimately, and despite the various pleaded claims, the key issues to be determined are:

1. whether there was an agreement, understanding or common assumption pursuant to which the transactions in 2002 occurred and future businesses were established and operated and other assets acquired;

2. if so, whether and what assets (if any) are, as a consequence, impressed with the trusts or subject to a binding contract or the estoppel that Ann asserts;

3. whether defences under the Conveyancing Act 1919 (NSW) (Conveyancing Act) and Limitation Act 1969 (NSW) (Limitation Act) raised by the Defendants defeat Ann’s claims;

4. whether Ann has established an entitlement to be paid $451,000 of DGP’s trust distributions; and

5. what relief (if any), Ann is entitled to.

The hearing, evidence and witnesses

27. The hearing took 10 days. The Court received over 200 pages of written submissions and the Court Book runs for around 7500 pages.

28. I have had regard to all the evidence and facts contended for by the parties, as referred to in their written and oral submissions. Given the volume, it is not practicable or necessary, in my view, to refer to all the material. These reasons set out those facts and matters which I consider are salient to the issues and necessary to understand the parties’ respective positions and why I have made my factual findings and reached my conclusions on the issues for determination.

29. Ann read affidavits that she swore and from Mr Peter Loccisano.

30. The Defendants read affidavits from Marie, Lionel and Mr Peter Burrows.

31. Each of the witnesses were cross-examined and submissions were made about the reliability and credibility of the parties' evidence and that of Mr Loccisano’s evidence of the key witnesses. In assessing the evidence and making my findings, I have had regard to the following principles and those referred to at [49] and [51].

32. In view of the frailty of human memory and the parties’ apparent self-interest, more weight should be placed on the contemporaneous documents (to the extent they are available), the objective surrounding facts and the inherent probabilities and improbabilities of events: Watson v Foxman (1995) 49 NSWLR 315 at 319; Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [30]–[31].

33. Ann bears the onus of proof. The standard of proof is the balance of probabilities but involves an actual persuasion of the occurrence of conversations: John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94].

34. As to the witnesses, I generally accept the evidence Ann gave. While acknowledging her self-interest, she impressed me as an honest witness relaying her best recollection of events, including what the deceased and others said in her presence about events in question. The deceased's statements to her about laws changing and needing to put things into Marie’s name were inherently plausible and consistent with the objective evidence.

35. Ann answered questions in a direct and clear manner and made concessions when she did not recall matters. Her recollection was shown to be incorrect or limited on occasion, such as about the Commonwealth bank loan (which, to her credit, she accepted was in error) and the relief sought in the Buckingham property proceedings (see [55] below), but she otherwise displayed good recall of details, such as when asked about the deposits into her bank account. The matters raised in the Defendants’ submissions, such as the discrepancies about the value of shares and life insurance in the estate inventory affidavits and her evidence regarding the 2014 Centrelink report that recorded her as having a poor memory and concentration, are not matters that, to my mind, undermined the credibility or reliability of her evidence more generally. Nor did the fact that Ann had made no attempt to revoke or ask for a re-assessment in respect of tax returns that she disclaims any involvement in preparing.

36. Mr Loccisano is a person who had an interest in a footwear distribution business called X-Distribution Pty Ltd (X-Dist) and a company called Footwear Trading Company Pty Ltd (Footwear Trading). X-Dist went into administration in about late 2003, after which Mr Loccisano established Corell Holdings Pty Ltd (Corell). He was also involved in NMOS and OSCO. From about 2000, Mr Loccisano borrowed money from the deceased and Lionel which, after 2002, was repaid to DGP.

37. I treated Mr Loccisano’s evidence with some caution, noting that he has engaged in dishonest and fraudulent conduct in the past, for which he was convicted and signed a statutory declaration admitting to those things. That said, Mr Loccisano has no direct interest in the outcome of these proceedings and he was candid about his past. His evidence was, in large part, consistent with the documentary material and the evidence from others, such as about the cash loans made to him by the deceased and Lionel (starting at $30,000 and growing to $3 million) and what he was told by the deceased about being a target of authorities and needing to put everything in Marie’s name. I do not consider that his lack of response to the subpoena is significant to assessing the credibility or reliability of his evidence given the issues raised in the correspondence about that matter.

38. As for Marie and Lionel, I formed an unfavourable view of much of their evidence. I found each to be an unsatisfactory and unreliable witness in some key respects and found their evidence about the rationale for the new regime to be unsupported by any objective evidence and inherently unlikely. I concluded that, overall, I could not accept their evidence unless it was supported by other objective evidence or against the Defendants’ interest.

39. Marie’s credit was undermined, in my view, by her evidence that Ann and the deceased were not in a relationship after 1996, which was inconsistent with the DGP Trust Distributions she authorised to Ann (as the deceased’s spouse) after 2006 and the findings made in Lindsay J’s judgment. Her explanation in cross-examination that she became aware that the Trust Distributions to Ann were a mistake was fanciful in the context where she did raise that matter in her affidavit or, more relevantly, with Mr Aboud, her accountant at the time when she says she realised the mistake. Her explanation that she did not understand who the beneficiaries were undermined her evidence that she was in control of and managing DGP’s finances and business, as did her evidence that: she did not understand how the accountants moved money around the companies; she did not keep records of weekly cash payments on account of “wage splits”, with the result that she did not know money was paid to Ann on account of the distributions; and she left the deceased and Lionel to have discussions with creditors.

40. Marie’s affidavit evidence that, to her knowledge, the deceased was not being investigated by the NSW Crime Commission (Crime Commission) was implausible and likely false given that she accepted that the deceased (and Lionel) had told her that the deceased was being investigated, that she knew he was being examined at the instance of the Crime Commission and her evidence before Lindsay J, which referred to an investigation over a lengthy period of years. Her explanation for not accepting what the deceased told her because she had reviewed documents in these proceedings that did not refer to any investigation was dissembling.

41. Marie’s evidence that she invested in 4 to 5 property developments, was an experienced property developer, substantially funded Mircon’s development and was its largest creditor by May 2002 was unsupported by the objective evidence and also inconsistent with her evidence before Lindsay J that she was not a property developer, not involved with Mircon until 2022 and could not say what happened and had no knowledge of its developments prior to that time. There were also other aspects of her evidence in this case which were shown to be inconsistent with the evidence she had given previously, such as her denial in this case that the XX2 Pitt Town property was bought for the deceased’s occupation (which was also unsupported by the documents in evidence) and her description as the person in charge of decisions in relation to the new companies and assets given she referred to herself as “just a secretary”.

27. While accepting that memories fade, Marie’s inability to recall lending DGP $2.5 million in the 2013/2014 financial year, explain how she was in a position to do so based on her declared income and how Mircon came to be indebted to her for $600,000 as at 30 June 2012 (and how it increased by $85,000 the following year), raised doubts about the reliability of her evidence, noting that the Defendants final written submissions were critical of Ann for not recalling a loan for $150,000 in 2008, stating “A loan is a significant undertaking and about which the Court would expect a person to recall”. Marie also could not satisfactorily explain why her own lawyers’ letter sent on her instructions in 2014 to Ann’s lawyer asserted that the deceased was not an employee of any of her companies and no income was paid to him from those entities (contrary to the Defendants’ position in this case). Her disagreement with the description of Mr Lower’s 14 May letter as being about asset protection was also implausible, having regard to its title and terms (as set out at [136] below).

28. As for Lionel, he came across as evasive and argumentative at times, and trying to answer in terms that were favourable to his case, rather than as a generally frank and candid witness. His attempt to distance himself from the discussions with Mr Marianne in 2013 about life insurance and why he did not protest what he said were the deceased’s purported lies was unconvincing given he signed documents containing statements that referred to structuring his and the deceased’s affairs for ‘asset protection’, authorised Mr Marianne to implement recommendations in the 25 July 2013 letter and attempted to obtain insurance for DGP for $2.5 million. His rejection of a discussion about asset protection with Mr Lower in May 2002 and his description of Mr Lower’s 14 May letter as a standard advice containing suggestions was farfetched having regard to the letters’ terms, Mr Burrows’ evidence and Mr Burrows’ 1 July facsimile that was written on the basis of the asset protection strategy set out by Mr Lower.

29. I also found Lionel’s evidence that he did not tell his accountants about the loans from Marie for property development to be implausible in the context where they were preparing tax returns and financial statements for his and the deceased’s business (run by Mircon) and the repayment of debts to Marie was the underlying purpose (according to Lionel and Marie) of the transactions under the new regime. Likewise, Lionel’s oral evidence that Marie was going to forgive the debts allegedly owing to her sons sometime just around 14 May was new and inconsistent with his affidavit evidence, which was to the effect that the debts had to be repaid and that that was a primary reason for transferring Mircon and assets to Marie as part of the restructure, including Russell Island. His evidence that he received more in the way of remuneration than the deceased was also inconsistent with his evidence before Lindsay J that they received the same wages.

30. Mr Burrows is a chartered accountant who was at the firm Lower, Russell & Farr (LRF) in 1994–2012. He and Mr Steven Lower (a principal of LRF) were the accountants for the deceased and Lionel and their businesses from about 1994, and gave advice to them about structuring their affairs in 2002. Mr Burrows was supervised by Mr Lower until about 2006 and continued to provide tax and accounting services to the deceased, Lionel, Marie and the various Pamplin companies until 2012.

31. Mr Burrows impressed me as a witness who endeavoured to give evidence to the best of his recollection. Other than noting his lack of recall about matters, there were no issues raised about him. I generally accept his evidence unless contradicted by other objective evidence.

32. There are two other matters to note about the evidence.

33. The first is that the Defendants raise doubts about the credibility of the deceased’s statements to others, particularly to Ann, by reference to his character as reported in medical and expert reports in relation to a workplace injury claim and prosecution for drug offences, statements he made in an affidavit in other proceedings and in documents relating to the events in this case and the evidence given by Marie and Lionel.

34. There are statements made by the deceased in the documents that are either false or an exaggeration (such as asserting in 2008 that he had been involved in developing 250 homes and that his will and life insurance had been done in 2013). The picture painted by the evidence also suggests he may have been argumentative and boastful on occasion. That said, I do not accept that the court should not accept the truth of any of his statements unless corroborated and against interest based on the matters raised the Defendants. I have, however, had regard to them and closely scrutinised the evidence of what he said and where possible, looked for some corroboration, before making my findings: Plunkett v Bull (1915) 19 CLR 544; [1915] HCA 14; Chant v Curcuruto [2021] NSWSC 751 at [263]–[264].

35. The second matter relates to the documents, or lack of them.

36. Ann submits that the dispute with Marie about her de facto status has meant that she was deprived of access to material, including on the deceased’s computer, that other sources of records were not forthcoming, such as from the corporate defendants and advisors to the Pamplin family and discovery was significantly delayed and not fully complied with. The Defendants’ suggestion that Ann was not prevented from accessing material because, for example, she had access to his computer in the days after his death lacked merit in my view. This is particularly in light of the findings of Richmond J that a computer containing emails that fell within the scope of the Defendants’ discovery order had not been accessed and had subsequently been destroyed (apparently by lightning), with Ann being entitled to an explanation of the circumstances. In that context, I have had regard to the ability and inability of the parties, particularly Ann, to access documents and weighed the evidence according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted: Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969 at 970.

Facts

52. The following facts are based on the affidavit, oral and documentary evidence. Unless otherwise indicated, I am satisfied of the following matters.

Ann

53. Ann (born in 1969) and the deceased commenced their relationship in 1987 and started living together, in around 1999, in a property located at Buckingham Street, Pitt Town (Buckingham St property). They continued in their de facto relationship until the deceased’s death in August 2013, at the age of 47.

54. From 1999, Ann was not in paid employment. She was financially dependent on the deceased until his death.

55. The Buckingham St property was owned by Ann, her father and her brother, Andrew. In 1996, the deceased bought Andrew's share of the property, but did not have that interest put into his name, telling Ann, at the time, “the mortgage will affect my borrowing power with the businesses”. In 2008, the deceased brought proceedings against Ann and her father seeking orders appointing a trustee for sale of the Buckingham property. The proceedings were settled on terms which acknowledged that Ann and her father held the property upon trust for themselves and the deceased as tenants in common. Ann later became the sole registered proprietor.

The deceased

56. The deceased was in born in 1966. He left school in 1980 and did a fitting and machining apprenticeship.

57. The deceased was, from about 1989 and until his death, a member of the Nomads Motorcycle Club.

58. The deceased had a history of medical and mental health issues stemming from a motorcycle accident in 1987 on his way to work and trichlorethylene poisoning in 1991, which he sustained while he was working as a water proofer. The deceased ceased working as a water proofer following the poisoning. He received payouts in relation to the accidents and treatment for physical and psychological complaints from the accidents, which included severe headaches and migraines, back pain and tiredness.

59. Prior to 2002, the deceased and Lionel were involved in various business ventures together and with third parties (which are outlined below). The deceased also undertook some property developments on his own account, which are also described below.

Marie

60. Marie was born in 1946. She was married to Dennis Pamplin, the father of the deceased and Lionel, who died in 1996.

61. Marie, Dennis and their sons lived in the family home at Pellitt Lane, Dural (Pellitt Lane property), where Marie continues to live. Marie became the sole registered proprietor of the Pellitt Lane property following Dennis’ death.

62. Marie entered the work force in the 1980’s after Dennis suffered a work injury and started experiencing severe mental health issues. She worked at Fasco Electric Motors Australia from 1981 until April 2000, when she was made redundant and accepted a payout of around $50,000.

63. According to Lionel, in 1997, the deceased and Lionel gave Marie their share of Dennis’ estate, which comprised approximately $150,000 from the sale proceeds of a unit in Woy Woy that Dennis had owned. Ann says that the deceased told her that he and Lionel were going to put the money from Dennis’ estate “in the company” and did not mention giving the money to Marie.

Lionel

64. Lionel was born in 1966. After school, he worked as a machine operator.

65. Lionel was, from the 1980’s, a member of the Nomads Motorcycle Club and continues to be a life member.

Other relevant players and their relationships

66. As already noted, Mr Burrows and Mr Lower commenced as accountants for the deceased and Lionel in about 1994.

67. Prior to 2002, Mr Burrows prepared financial statements and tax returns for the companies established by the deceased and Lionel, met with them to do their tax returns and was aware of the property developments they carried out. Mr Burrows was involved in the development and implementation of the 2002 strategy and his involvement with the Pamplin’s various businesses increased after 2002.

68. Mr Ron Winter (now deceased) was a partner of Reimer Winter & Williamson, a firm of solicitors. He acted as the solicitor for the deceased and Lionel from at least 1996 to at least 2013 and also for Marie after the deceased’s death.

69. Mr Vincent Aboud is a chartered accountant and principal of Vincent Aboud & Associates. He provided accounting and tax services to the Pamplins and the various companies from 2012. Mr Aboud prepared and lodged tax returns for the deceased and Ann. Ann gives evidence, which I accept, that she never gave Mr Aboud instructions to prepare her tax return, never signed any documents in his presence and never met him.

70. Mr Stephen Marianne is a financial planner at DIB Financial who dealt with the deceased and Lionel in 2013 to broker life insurance for them. He is the author of various business records that refer to an asset protection strategy employed by the deceased and Lionel.

Pre May 2002: the deceased and Lionel's business ventures

71. It is common ground that prior to May 2002, the deceased and Lionel were involved in business ventures together, including property development and money lending. They established companies through which those activities were carried out and also undertook some of them with third parties and some on their own account. The following sets a summary of the ventures and describes the role played by Marie, as claimed by the Defendants.

A and L Pamplin Earthmoving and Contracting Pty Ltd

72. On about 13 November 1989, A and L Pamplin Earthmoving and Contracting Pty Ltd (ALPEC) was incorporated (with the “A” and “L” standing for Adrian and Lionel), with the deceased and Lionel as the only directors and equal shareholders.

73. ALPEC was established to carry out earthmoving and excavation activities.

74. According to Lionel, the deceased agreed to establish the business on terms that provided for Lionel to purchase an earthmoving machine called a “Drott” for $110,000, the deceased providing his Hebersham property as security for a loan to buy the Drott from the Commonwealth Bank (CBA), Lionel hiring and operating the machine and the deceased and Lionel sharing the venture's net income equally.

75. Lionel says that in late January or early February 1990, their agreement to share ALPEC’s running costs, expenses and earnings terminated and between 1990 and 1996, he alone operated ALPEC’s earthmoving business and the deceased was not involved. Lionel also says that his solo operation of ALPEC generated sufficient funds to repay the CBA loan so that the deceased’s Hebersham property was no longer encumbered.

76. Lionel's evidence that he operated ALPEC alone for a period in the early 1990s has some support from statements made by the deceased to medical practitioners in 1994: see the report prepared by a Clinical Psychologist, Sam Borenstein, that records the deceased was a partner in an earthmoving business with his brother but gained no financial benefit and did not work within the company and a report prepared by Dr Florida that records that the deceased said he lost his ability to carry out the fledgling bulldozer business after developing an illness following exposure to toxic chemicals. However, according to an affidavit sworn by the deceased on 19 June 2008 in relation to the Buckingham property proceedings (2008 Affidavit) (Exhibit A), the deceased had established the earthmoving business with Lionel and had worked in it ever since. According to Lionel, it was also the deceased who signed the tax returns for ALPEC as a director between 1994 to 2000.

77. It is unclear on the evidence what work was carried out through ALPEC after late 1996 or 1997 (when Lionel says he sold the Drott) or what assets it owned as at 27 May 2002, when Marie was appointed sole director and company secretary of ALPEC.

Russell Island property

78. In about 1989, the deceased and Lionel purchased land on Russell Island, Queensland (Russell Island Property) from Tony Taylor, the deceased’s employer at the time. According to Lionel, he and the deceased each paid $3,000 to Mr Taylor for the property. The deceased and Lionel remained the owners of the Russell Island Property until it was transferred to DGP on about 19 November 2007.

ALT Property Developments Pty Ltd / Mircon

79. On 4 November 1992, ALT Property was established as a property development vehicle by the deceased, Lionel and John Browne, the founder of the Nomads Sydney Chapter (referred to by the Defendants as “Metho Tom”), each of whom was a director and shareholder. On 1 February 1994, Mr Browne resigned as director and gave up his shareholding. Thereafter, until May 2002, the deceased and Lionel were the only directors and each held 50% of the issued shares.

80. On 8 November 1996, ALT Property was appointed trustee of the Pamplin Discretionary Trust which was established by deed made that day. Mr Winter was the settlor and the deceased and Lionel were the specified beneficiaries.

81. ALT Property changed its name to Mircon on about 11 August 1997. The deceased told Ann that the derivation of Mircon’s name was “Nocrim”.

82. Between 1996 and 2002, the deceased and Lionel carried out the following property developments.

Linde Road, Glendenning

83. In July 1997, ALT Property purchased land at Linde Road, Glendenning for $205,000 (Glendenning property) for a subdivision development. The purchase price was funded by a loan of $200,000 from Lanreilly Pty Ltd, secured by mortgage over the Glendenning property. A further loan of $105,000 from Lanreilly for capital works was secured against Marie’s Pellitt Lane property. The deceased and Lionel, as directors of Mircon, gave personal guarantees to Lanreilly.

84. On 15 December 1997, the subdivision of the Glendenning property into four lots was registered (SP873219). The lots were sold by Mircon in 1998 and 1999 for a total of $346,000.

Paton Street, Woy Woy

85. On 23 December 1997, Mircon acquired land at Paton Street, Woy Woy for a subdivision and development into three villas for $172,000 (Woy Woy property).

86. The purchase price was funded by a loan from St George Bank of $137,500 secured by a mortgage on the Woy Woy property. Lionel says that Marie paid the balance of the purchase price.

87. On 1 March 2000, the subdivision of the Woy Woy property that created three lots was registered (SP62103). Mircon sold the three lots between 20 April and 28 November 2000 for a total sale price of $710,950.

South Street, Umina Beach

88. On 31 October 1997, Mircon acquired two properties on South Street, Umina Beach (South St properties) for a subdivision and development into six villas. The purchase price of $400,000 was funded by a loan from St George Bank of $159,900.

89. The South St properties were used as security for a construction facility that Mircon obtained on 21 April 1999 for $1,390,000 from St George Bank (St George loan), that was guaranteed by the deceased and Lionel as Mircon’s directors. Mircon’s St George loan was refinanced on 29 January 2001 by a loan from NAB in the amount of $1 million (NAB loan) that was secured by a mortgage over the South St properties, as well as a mortgage over the Woy Woy property.

90. On 19 October 2001, the subdivision of the South St properties that created six lots was registered (SP66658). The six lots were sold by Mircon between 24 December 2001 and 24 June 2002 for a total sale price of $1,722,500.

91. According to Marie, she provided the balance of the purchase price for the South St properties. Lionel says that the funds from the sale of South St properties project were insufficient to repay Marie the monies that she had advanced to him and the deceased.

First St, Kingsgrove development

92. On 6 June 1994, the deceased, Lionel and Mr Geoffrey Krahe purchased land at First Street, Kingsford (First St property) to subdivide and to build three town houses.

93. Development of the First St property stalled in 1995 due to the Crime Commission lodging a caveat against Lionel's interest in the property. According to Lionel, the freezing orders made also meant he could not access funds to contribute his share of the capital for First Street’s development. He says that this annoyed the deceased who refused to contribute his share, with the impasse only broken when Marie provided $70,000 to enable work to continue.

94. On 29 March 1996, the subdivision of the First St property that created two lots was registered (SP858160). One lot was sold in May 1996 for $101,500.

95. The other lot was developed for townhouses with a loan for $153,000 from St George Bank that was secured by a mortgage over the property and in respect of which the deceased and Lionel gave personal guarantees. The subdivision of that land (creating three lots) was registered on 18 December 1997 (SP56138). These three lots were sold between April and July 1998 for a total of $456,500.

Superior Property Developments Pty Ltd / Broken Bay development

96. On about 21 May 1997, Superior Property Developments Pty Ltd (SPD) was established by the deceased and Lionel as a vehicle to carry out property developments with Frank Marino and his wife, Maria Marino.

97. The deceased, Lionel and Mr and Mrs Marino were appointed directors and shareholders, with the brothers’ interests being equal. On or around 31 July 2001, the brothers’ shares in SPD were transferred to Mircon. The deceased, Lionel and Mr Marino remained the directors of SPD until it was deregistered on 15 December 2002.

98. On 24 November 1999, the deceased, Lionel and Mrs Marino acquired land for development at Ettalong Beach, Broken Bay for $315,000 (Broken Bay property). The Broken Bay property was used as security for a loan of $752,000 from Cardinal Financial Securities Ltd that was later assigned to LKM Capital Limited.

96. On 27 August 2001, the Broken Bay property was subdivided into three lots, (SP66273). In October and December 2001, one lot was transferred to each of the deceased, Lionel and Mrs Marino for $1.00 as the stated consideration. The transferred lots were subject to mortgages from NAB (LKM Capital's mortgage having been discharged) that secured loans of $265,000 in respect of each of the deceased and Lionel's lots and a loan of $500,000 in respect of Mrs Marino’s lot.

97. The deceased’s lot was sold for $420,000 on 6 August 2002, Lionel's lot was sold for $400,000 on 2 December 2002 and Mrs Marino's lot was sold for $590,000 on 22 August 2002.

Other property transactions

101. Prior to 2002, the deceased undertook the following property developments on his own account:

1. land at Hebersham (Hebersham property) was acquired in November 1988 for $93,000 and sold in January 1995 for $104,000;

2. land at Kutmut St, Glenmore Park was acquired in January 1995 for $75,000, subdivided into two lots (using the proceeds of a $184,900 loan secured by a mortgage from St George Bank) and sold in 1995 for $329,500; and

3. land on the Great Western Highway in Kingswood was acquired in November 1997 for $108,000, subdivided into three lots (using the proceeds of a $280,000 loan secured by a mortgage from St George Bank) and sold in 1999 for $495,000.

102. On 18 July 1996, the deceased, Lionel and Marie purchased land in North Turramurra for $195,000 with a loan of $155,000 secured by a mortgage over the property and guarantees given by the deceased, Lionel and Mircon. It appears that this development did not progress and the property was sold on 28 September 1997 for $280,000.

103. On 10 April 1997, the deceased and Lionel each bought a block of land to develop in Glenmore Park. The land was bought in their own names.

104. The deceased’s land (at Magpie Close) was acquired for $77,000, subdivided into two lots (using a $150,000 loan from St George Bank secured by a mortgage) that were later sold in February 2000 and in May 2001 for $415,000.

105. Lionel's land (at Woodlands Drive) was acquired for $80,000 using (Lionel says) the Drott's proceeds of sale. The Crime Commission lodged a caveat on that property on 28 April 1997, which was withdrawn in March 1998. The land was subdivided into two lots (using a $152,600 loan from St George Bank secured by a mortgage), which were later sold in August and October 1999 for $370,000.

Loans to Mr Loccisano and X-Dist

106. In the late 1990’s or 2000, the deceased and Lionel loaned money to Mr Loccisano to assist him with his clothing and footwear businesses, including X-Dist. The money was lent on the basis that each of the deceased and Lionel would put in half of the amount loaned and split the monies repaid and interest 50/50. The monies loaned to Mr Loccisano were paid in cash by Lionel and, prior to 2002, repaid in cash by Mr Loccisano.

107. There is a dispute as to how much was borrowed by Mr Loccisano and when. Lionel says the loans before the early 2000’s were never more than $40,000 and funds of $120,000 were sought later. Mr Loccisano says it was closer to $150,000 in 2000.

108. I am unable to say how much money the deceased and Lionel lent to Mr Loccisano before 2002. There were further dealings between the deceased, Lionel and Mr Loccisano and his companies, post 2002, which I describe below.

Factual findings about Marie pre-2002

109. Lionel deposes that, as best as he can recall, Marie contributed $70,000 to the First St property, $90,000 to his legal fees in relation to the Crime Commission proceedings and $45,000 towards the deceased’s legal expenses. He gave evidence that Marie funded other developments but could not recall how much Marie advanced in relation to the First St property and also said that the Woodlands Road, Glenmore Park development was the only development in respect of which Marie advanced money (T576, T552).

110. Marie also gave evidence that following 1995 she contributed significant funds to Mircon for the First St property and Glendenning property and to the brothers for their legal expenses. Marie said that, to her knowledge, in the years prior to 2002, she was the biggest funder of Mircon’s developments and the deceased and Lionel did not make any contributions after 1995. Marie could not say how much money she gave the brothers for legal fees or the property developments, other than the amount of $50,000 (her retrenchment payment), which she says she paid to Mircon on 2 August 2000.

111. Ann deposes that the deceased never told her that Marie had contributed to his (or Lionel’s) legal fees or funded the property developments.

112. I cannot exclude the possibility that Marie assisted the brothers with their legal expenses. However, in the absence of any document or other objective evidence referring to that occurring, I am not satisfied that Marie lent Lionel $90,000 and the deceased $45,000 to pay for their legal fees between 1995 and 1997 or that they owed her money in relation to legal fees as at early 2002.

113. I also do not accept Marie's and Lionel's evidence that Marie was substantially funding Mircon’s property developments up to 2002, that she provided $70,000 for the First St property development and paid the balance of the purchase price for the Woy Woy property or that she was owed significant sums of money by the deceased and/or Lionel at the beginning of 2002.

114. Marie did put her Pellitt Lane property up as security for the $105,000 loan in respect of the Glendenning property development but there is no evidence to suggest that Marie discharged the mortgage from her own funds, rather than being paid from the sale proceeds of the property itself. As to Marie’s evidence that she paid her $50,000 retrenchment payout to Mircon, the bank statements in evidence indicate that $50,000 was paid out of her account the day after $50,000 had been paid into Mircon, making it difficult to conclude that the $50,000 payment into Mircon's account was from Marie.

115. In cross-examination, Marie was unable to identify the source of the funds which she allegedly made available for the property developments, the amount of her savings at the time or recall the amounts allegedly advanced by her (other than the $50,000). More significantly, there are no documents or other objective evidence referring to the payments by Marie or loans occurring to the brothers for property development (or legal fees). Nor is there any ongoing accounting for loans from her. The contemporaneous records indicate that the deceased and Lionel and their companies were able to obtain large loans to fund their activities, such as in relation to the Woy Woy and Broken Bay developments and none of them refer to Marie as a creditor of Mircon as at 2002 or that monies had been lent by her to the brothers for the property development purposes.

116. I am satisfied and find that from at least 2000, Marie assisted with bookkeeping for the deceased and Lionel and their companies. This finding is supported by Mr Burrows’ evidence, who says that he dealt with Marie from that time in connection with those matters. However, I find that prior to 2022, Marie did not have relevant experience or knowledge in relation to property development, other than as co-purchaser of the Turramurra property in 1996 which development did not proceed. I reject her evidence that she had been involved in 4 to 5 property developments by May 2002. It is not supported by the objective evidence and was inconsistent with the evidence she gave in the estate proceedings before Lindsay J.

117. I also find that other than doing some bookkeeping, Marie did not have any involvement or experience in any of the other businesses conducted by the deceased and Lionel, such as ALPEC's earthmoving business or lending money.

Criminal charges and NSW Crime Commission investigation

118. The deceased and Lionel were not unacquainted with the law enforcement authorities.

119. In the 1990s, the deceased was charged with and convicted of drug offences and spent some time in prison.

120. In August 1993, the deceased was arrested in connection with supplying a commercial quantity of a prohibited substance. In about 1994, he submitted to the “Seizure Department” of the police. In 1996, he was convicted of conspiracy to supply prohibited substances and sentenced to 12 months periodic detention, which he served.

121. In 1995, Lionel was investigated by the police and the NSW Crime Commission (Crime Commission) in connection with alleged drug trafficking and was arrested and charged in connection with supplying prohibited drugs. Those charges were subsequently withdrawn or dismissed.

122. In 1995, the Crime Commission commenced proceeds of crime proceedings against Lionel in the Supreme Court of NSW pursuant to the Drug Trafficking (Civil Proceedings) Act 1900 (now known as the Criminal Assets Recovery Act 1990 (NSW)). The Crime Commission obtained freezing orders against Lionel’s assets and lodged caveats on property that he owned, which included property that was jointly owned with the deceased in First Street, Kingswood.

123. On 22 March 1995, the deceased was ordered to attend the Supreme Court for an examination in relation to the joint affairs of him and Lionel and any joint property they held as part of the Crime Commission’s proceedings against Lionel.

124. On 5 March 1998, the Crime Commission discontinued the Supreme Court proceedings against Lionel.

125. In October 2002, the Proceeds of Crime Act 2002 (Cth) was enacted. The Bill to the Act was propounded in 2001.

126. At the hearing, the Defendants took issue with the proposition that the deceased was, in fact, investigated by the Crime Commission and submitted that it was implausible that the introduction of the Proceeds of Crime Act 2002 (Cth) was the motivating factor that led to concern about an investigation and confiscation of assets and the new way of doing things from May 2002. The Defendants’ final written submissions devoted 13 pages to these matters, including a “primer” on the proceeds of crime legislation. I do not accept the Defendants' submissions on this issue.

127. Irrespective of whether the deceased was, or was not, the target of the 1995 Crime Commission investigation and notwithstanding that legislation existed prior to the Proceeds of Crime Act 2002 (Cth) that enabled authorities to take action in respect of property held beneficially, I am satisfied that in the period before and up to 2002, the deceased considered he was a potential target for investigation by the Crime Commission, his assets were at risk as a result and he told other people of his concerns. I also consider it likely and find that Lionel thought and said the same, despite his evidence that in 2002 he had no reason to be concerned of any future action by the Crime Commission.

128. Ann gave evidence, which I accept, that the deceased told her he had been the subject of inquiries from the Crime Commission and she overheard him say to Lionel, on a number of occasions in the 1990’s, that “Once this is over we should look at putting everything in mum’s name so if we get arrested again they will have nothing to take from us.” Although Ann's recollection of when she was told this may have been inaccurate (she said in the late 1990’s), her evidence that the deceased told her after he was arrested that, “I’ve transferred everything of mine to mum. Fuck the Crime Commission they’re not getting this shit”, was entirely plausible given the facts set above and later in these reasons, together with evidence from the other witnesses.

129. Mr Burrows gave evidence that in the 1990s and throughout the two to three year period to the end of 2001, the deceased and/or Lionel told him that they had been investigated by the Commission, their assets had been frozen and they were very concerned about the resurgence of investigation by the Crime Commission, which concerns were ongoing at the time of the 13 May 2022 meeting described below.

130. As for Mr Loccisano, he may have been off with timing when he deposed that the deceased said to him in 2004 that new laws were being introduced to disrupt and dismantle motorcycle clubs and about a meeting at Belmonte’s when he first met Mr Burrows (Mr Loccisano and Lionel said it occurred in the early 2000’s; Mr Burrows said in 2006 or 2007), but his evidence that the deceased was scared that his and Lionel’s involvement with the Nomads made them subjects of investigation by the police, the Commission and other law enforcement authorities, they feared that their assets would be seized and they had instructed Mr Winter and Mr Burrows to put everything into Marie’s name was not, in my view, both “implausible and contradicted” (as the Defendants submit), having regard to the totality of the evidence.

131. Marie also accepted that the deceased told her that he had been the subject of inquiries by the Commission, had concerns about members of motorcycle clubs being targeted for investigation, including by the police, and he expressed those concerns for a number of years, both before and after 2002 (T388).

132. For these reasons and based on other evidence (to which I will come), I am satisfied that the risks referred to above and the desire to protect their existing and future assets was the motivating factor for the deceased and Lionel changing the way they did business together and why, together with Marie, they restructured their affairs from May 2002.

13 May–30 July: the start of the new way of doing things

133. From mid-May 2002, the way in which the deceased and Lionel conducted their business affairs changed. They, together with Marie, obtained advice from Mr Lower, Mr Burrows and Mr Winter about those matters.

134. On 13 May 2002, the deceased and Lionel attended a meeting with Mr Lower and Mr Burrows at LWT’s offices.

135. Marie deposed that she was also present at the meeting. I do not accept Marie’s evidence and find she was not at the meeting. This is based on Mr Burrows’ evidence, who said that he could not recall Marie being at the meeting, but that Mr Lower was there (which was contrary to Marie’s and Lionel’s evidence that they could not recall Mr Lower being at the meeting), and the letter that Mr Lower sent the next day, which was not addressed to Marie.

136. On 14 May 2002, Mr Lower wrote a letter, addressed to the deceased and Lionel, copied to Mr Winter that said:

Dear Adrian & Lionel,

Further to our conference, 13^th May 2002, I thought it worth summarising the points raised.

Asset Protection

We discussed the following strategies.

A & L Pamplin Earthmoving & Contracting Pty Ltd

1.   A wind down of the company’s operations

2.   A transfer of the fixed assets to mum's trust. Mum’s trust would then hire this equipment to Mircon Pty Ltd.

You to discuss with Reimer Winter for a proper sale agreement from the company to mum's trust of the fixed assets. I believe stamp duty will be payable on this transfer. In addition, you should discuss with Ron, whether there is any external register that maintains a record of leased vehicles (something like REVS) etc.

Mircon Pty Ltd

1.   Mircon Pty Ltd would take over the previous function of “A & L Pamplin”, providing earthmoving and contracting services.

2.   Mircon will continue to acquire your personal vehicles. It was felt that the limited equity that was built up in these vehicles should not be of concern.

3.   Both Adrian and Lionel to remain as directors and shareholders of this company.

4.   Cash balances in Mircon's account would be maintained at a low level to avoid any creditor claims.

The Pamplin Family Trust

It was felt that we would wind down the Pamplin Family Trust.

Mum’s Affairs

1.   It was felt that mum should set up her own separate company with a name to be chosen by you.

2.   That a separate trust would be set up under the company for mum to operate through. This trust would own all projects undertaken by mum, however Mircon Pty Ltd would act as the manager of those projects and would receive a fee for the work done on those projects.

3.   Any profits made in this trust over and above mum’s $50,000 per year would be retained in the trustee company.

4.   This company to be a sole shareholder and director company, with mum taking both positions.

5.   Mum has recognised that she will have to provide personal guarantees for projects entered into by her trust.

6.   It was agreed that Adrian and Lionel would be prepared to provide personal guarantees to any lenders in addition to mum, as they would earn income by way of Mircon's management of projects.

Your Homes

•   We discussed the importance of the CGT exemption available on personal homes and the need to take advantage of this exemption. As you will both be exposed as directors in Mircon Pty Ltd, ii would be beneficial if these homes were held in your spouse's names.

•   Alternatively, you might buy properties in your own names, however have mum advance funds to you for the purchase of those properties by way of a second mortgage behind the bank. She would charge a high interest rate on these, so that no substantial equity built up in your names on these properties.

You were to discuss these points with Reimer Winter, and if Ron was happy, he was to organise for a company and trust to be set up on mum's behalf.

You should mention to Ron that it may be necessary to exclude both of you as beneficiaries of the trust to ensure that creditors have no access to the trust assets.

Current Position

1.   You currently hold Unit 1 and Unit 2 at Broken Bay Road as your personal residences and you expect these to be sold in the next three to four months.

2.   Mum has already commenced her Castle Hill project.

3.   Mum is about to acquire interest in an eight lot subdivision. You were to discuss with Ron, whether this should be undertaken under her new company.

Tax Planning

We discussed the current year tax position. You advised that Adrian has purchased shares in CCCX for approximately $180,000. That these shares have unfortunately “gone south”. I suggested that you might like to realise your loss on shares by transferring these to a third party.

It would be possible for mum to acquire these shares at the market value. If we are to crystallise your loss, you will need to do this on the public register prior to the 30th June.

Obviously we need to discuss the above matters further. Look forward to hearing from you.

Yours faithfully

LOWER RUSSELL & FARR

SH LOWER PARTNER

Our Ref: SHL/RFA:P177

c.c. Messrs Reimer Winter & Williams

137. Mr Burrows gave evidence that he could not recall what was discussed at the meeting but he had no reason to doubt that Mr Lower’s letter accurately reflected what was discussed. He described the document as “Mr Lower's letter”, said that he was not surprised by the reference to asset protection (T661ff) and that he and Mr Lower had discussed asset protection with the deceased and Lionel from the late 1990's and early 2000’s.

138. Lionel could not recall discussing the matters referred to in the 14 May letter. He described the letter as a “standard advice”, that included suggestions that were not adhered to. Lionel was asked why “Asset Protection” strategies (as identified in the letter) had been discussed, he responded “you would have to ask Mr Burrows”, and then gave a discursive answer about the letter dealing with a couple of things that should have been in separate letters. Lionel’s evidence that there was no need for asset protection, he and the deceased were not concerned about that matter and the structures suggested by Mr Lower were not designed for that purpose was implausible in the context of that letter and the matters referred to above in relation to their history with law enforcement (particularly the Crime Commission proceedings) the timing of the introduction of the Proceeds of Crime Act and concerns they expressed about the risk of future investigation and seizure of assets and I reject it.

139. Mr Lower was not called by the Defendants. I accept Ann’s submission that the Court should draw an inference pursuant to Jones v Dunkel (1959) 101 CLR 298 that his evidence would not have assisted them. He was someone who could be expected to have given evidence about the genesis of the asset protection strategy and recall what was discussed at the 13 May meeting given he was the author of the letter.

137. The matters proposed in Mr Lower’s 14 July letter were not all adopted; for example, the deceased and Lionel did not remain directors and shareholders of Mircon. However, that letter and Mr Burrows’ evidence satisfies me that the deceased and Lionel discussed and agreed to change the way they did business at or shortly after the meeting on 13 July, they also discussed the proposals for changes with Marie and they agreed on a way forward as to how they were going to conduct their business affairs in the future which was for asset protection reasons, which they started implementing within 10 days.

138. Under the hearing “Current Position”, the letter refers to Unit 1 and Unit 2 at Broken Bay Road. These are the Broken Bay property lots owned by the deceased and Lionel which, as noted above, they sold later in 2002.

139. Shortly after the 14 May letter, steps were taken by the deceased and Lionel and Marie to implement the new asset protection regime.

140. On 16 May 2002, DGP was incorporated, with Marie appointed the sole director and shareholder on 21 May 2002.

141. On 24 May 2002, the DGP Trust (a discretionary trust) was established by a deed made that day (DGP Trust Deed). DGP was the trustee and Mr Lower was the settlor and appointor. (Lionel became appointor of the DGP Trust on 10 July 2017 when Mr Lower resigned form that role.) The DGP Trust Deed relevantly provides that:

1. the deceased, Lionel and Marie are the “Specified Beneficiaries” and the “General Beneficiaries” include the Specified Beneficiaries, their spouses, children and grandchildren (among others): cl 1;

2. during the expiration of each Accounting Period, the Trustee shall determine with respect to all or part of the net income of the Trust Fund to pay or set aside the income for any one or more of the General Beneficiaries (or accumulate, pay or set it aside for charitable purposes): cl 3(a);

3. at the “Vesting Date”, the Trust property is vested in the Specified Beneficiaries as tenants in common in equal shares or, if one the Specified Beneficiaries is deceased, the deceased’s child or children take the deceased's share per stirpes: cl 4; and

4. where the Trustee is given a discretion, the discretion is absolute and uncontrolled and the Trustee has the power to decide whether to exercise any power: cl 10.

145. On 27 May 2002, the deceased and Lionel resigned as directors of Mircon and ALPEC and Marie was appointed the sole director and secretary. On 17 July 2002, the shares in those companies were transferred to Marie to become the sole shareholder.

146. On 29 May 2022, Mircon sold the remaining South St property lot for $280,000. Marie signed the transfer as sole director, with the deceased witnessing her signature as “manager”.

147. On 1 July 2002, Mr Burrows sent a fax to the deceased and Lionel headed, “who does what”, which states:

Hi Adrian,

Here's a summary of who does what in the new regime:

MIRCON

Mircon takes over “A&L Pamplin” functions of running any earthmoving/contracting work that comes in;

Mircon will continue to own and run your personal vehicles, phones etc;

Mircon will retain a minimum level of cash in its bank a/c to protect it from creditors;

Mircon will receive management fees for looking after Mums projects

PAMPLIN TRUST

This is winding down operations after the sale of its properties and will be “shelved”

DENNIS G PAMPLIN PTY LIMITED

This is Mums new trust which new projects will go through

A&L PAMPLIN EARTHMOVING & CONTRACTING PTY LIMITED

This company is now surplus to our needs and will be wound up (or struck off) in the next year or so

Hope this helps - please give me a call if you need any clarification

Regards

PETE

148. The reference in Mr Lower’s 14 May letter to the Castle Hill project “Mum has already commenced” is to a property located in Ridgecrop Drive, Castle Hill (Castle Hill property), which was acquired in Marie’s name on 5 July 2002 for $562,000 for a subdivision development. Mircon was originally to be the owner and developer of the Castle Hill property, and only after May 2002 was Marie to become its registered proprietor (T368.50–T369.41). I infer this was the result of the new asset protection regime.

149. The Castle Hill property was secured by a mortgage in favour of NAB in respect of a loan facility to Mircon for $1 million which Mircon obtained in March 2002 that was guaranteed by the deceased and Lionel up to $975,000 and by Marie up to the amount of $575,000. The Castle Hill subdivision development was completed in 2003, and the two lots created were sold by Marie on 14 July 2003 and 7 January 2004 for $468,000 and $650,000 respectively.

150. Ann deposes that the deceased said to her on different occasions:

“Me and Lionel are transferring everything into mum’s name. I have spoken to Ron [Winter]. He is and has set up a family trust making mum the trustee. He is going to do it through Burrows.”

“…we’re going to set up a trust for the assets and making mum the trustee on paper, but we'll still be running the show. It is still going to be 50/50 split between me and Lionel but mum will own it on paper for the peering eyes. We are also going to transfer Mircon into mum's name on paper. Me and Lionel was still be doing what we always did.”

“It’s all done. Everything is in mum’s name but me and Lionel still own the shit.”

151. She also says that some weeks later, Lionel asked her, “Did Adrian tell you we put all our shit in mum's name?”. Lionel denies saying this.

152. The Defendants submit that what Ann was told by the deceased (and Lionel) was wrong as the deceased and Lionel did not transfer anything into Marie’s name and the trust did not make them owners per se. In my view, that submission is not to the point. The statements, while technically incorrect, were made by laymen and can be readily understood as applying to shares and directorships of Mircon and ALPEC and relating to the creation of a new entity, DGP, which was in Marie’s name and would carry out most of the future business activities. In any event, in my view, they are indicative of the deceased and Lionel both proceeding on the basis that they remained entitled to the assets despite Marie indirectly owning or controlling them via Mircon, ALPEC and, in respect of future assets, through DGP and the DGP Trust. Ann was not cross-examined on this evidence. I find her evidence credible given the other objective evidence and accept it.

Post July 2002: dealings under the new regime

153. It is common ground that post July 2002, a range of business activities, including property developments and investments, were undertaken through DGP or new companies and new trusts were also established. Marie also acquired the Pitt Town properties. The following sets a summary of those activities and describes the role of Marie.

DGP property transactions

154. DGP was involved in six property transactions between 2002 and 2011.

155. The first of these was a development in Port Stephens (Lemon Tree Passage development) that was undertaken with Coolrush Pty Ltd, a company part owned by Mr Loccisano.

156. DGP and Coolrush bought adjoining lots of land as tenants in common on 7 August 2002 for $373,000 that was funded by a loan of $299,000 from NAB secured by a mortgage over the property. The plan of subdivision was registered on 22 August 2003 creating eight lots (SP105566), which were sold in 2003 and 2004. Marie’s evidence does not disclose the sale price of the lots other than in respect of lot 8, which sold for $115,000 on 25 September 2003. The evidence does not refer to any involvement Marie had with the development and she gave evidence that she was unaware that Coolrush was part owned by Mr Loccisano, even though schedules she said she prepared (and sent to Mr Loccisano) in respect of loans made around that time referred to that company.

157. In mid-2003, DGP acquired land in Airlie Beach and built a two-unit residential apartment complex. Internal NAB documents refer to a land purchase price of $400,000, construction costs of $700,000, a loan of $690,000 granted in July 2004, construction completed in April 2005 and one unit sold (for an unspecified sum) in August 2005. Marie and Lionel gave limited evidence about this development and it is unclear what happened to the other unit. Ann’s evidence is that this development was undertaken by the deceased with a Mr Paul Rostirolla.

158. On 13 April 2006, DGP acquired two parcels of land in Windsor (Windsor property) for $595,000 with a loan of $1,054,000 secured by a mortgage over the property. Two townhouses were built at the rear of each parcel of land. The land was subdivided on 18 March 2008 into four lots (SP270579). DGP continues to own the Windsor property and the four lots are leased.

159. In October 2007, DGP acquired 6 hectares of land in Tamworth as a tenant in common with a third party company, Stiks Land Pty Ltd, for $110,000. Approval to subdivide was granted in around 2014. In 2019, Ann consented to the dedication of a road to the local council. DGP continues to own this land. Marie says that DGP does not derive income from its interest in the Tamworth land, it has funded its share of the capital works to undertake the subdivision but does not say how much funding was provided or when the subdivision is expected to be completed.

160. In February 2009, DGP acquired four vacant lots of land on Putty Road, Garland Valley for $300,000. The Garland Valley properties are subject to a mortgage to NAB as partial security for a total indebtedness of $4,190,000. DGP continues to own this land. According to Ann, the deceased told her that he had bought a couple of hundred acres along Putty Road so she could ride horses and he could ride his dirt bike. Marie describes the land as acquired for “land banking” and future development.

161. The last property acquired by DGP, which it continues to own, is land in Dural that was acquired on 5 September 2011 for $640,000 and funded by a loan of $512,000 from the Bank of Queensland. The Dural property is located next to Marie’s Pellitt Lane property. Marie says the plan is to build townhouses on the two lots. Ann describes the deceased telling her that he and Lionel had bought the property.

DGP investment in Coastal Waters Seafood

162. From about 2001, the deceased and Lionel had business dealings with Peter Hunt in relation to a seafood business in Tasmania, which was operated by Coastal Waters Seafood Pty Ltd (CWS) and CWS’s holding company, Fishinthenet Investments Pty Ltd (FITN).

163. In about 2005, DGP made a loan to CWS of $243,334 and acquired 40 shares in FITN. In November 2009, DGP acquired 50% of the shares in FITN. According to Marie’s evidence, in December 2012, FITN was sold to a third party and DGP received approximately $1,062,500 for its 50% shareholding and the loan was repaid. FITN was deregistered in 2015.

164. Ann says that the deceased told her that he and Lionel had lent money to the Hunt family. Marie gives evidence of a discussion with the deceased and Lionel about the seafood business in 2002 but she was otherwise not involved in any meetings or discussions about it.

DGP investment in landfill business in Bulla, Victoria

165. In 2007, DGP made an investment in a landfill operation in Bulla, Victoria by acquiring a majority stake in the two companies that owned and operated the site, Bulla Quarry Developments P/L (Bulla) and BTQ Group P/L Ltd (BTQ).

166. The deceased and Lionel negotiated the purchase. Ann describes the deceased telling her that he and Lionel had just bought the site at Bulla and “we are the proud owners of a landfill facility”. An internal NAB memorandum refers to the Pamplin family’s ownership stake in the business.

167. Lionel played a greater role in managing the landfill business. He travelled there regularly. Marie was a director of both companies until 2013, when Lionel took on the role.

168. The landfill business investment was lucrative and provided cash income. According to the deceased's 2008 Affidavit, the business turned over about $75,000 –$80,000 per week. Ann says that she regularly witnessed Lionel bring cash from the landfill business and divide it between himself and the deceased. According to Lionel and Marie, Lionel brought the cash to Marie who then distributed it to herself, the deceased and Lionel and there was no split just between Lionel and the deceased.

169. DGP sold its stakes in Bulla and BTQ in 2017 for undisclosed sums.

Peak on Andrew

170. Peak on Andrew was established on 14 March 2008 in relation to a potential mixed use development in Andrew Street, Adelaide (Andrew St property) by Mr Gregory Chin (an architect who had lodged a DA and was looking for a partner to invest) who was the sole director and shareholder. Peak on Andrew is the trustee of the Peak Unit Trust, which was established on 17 March 2008 by Mr Chin.

171. On 19 August 2008, Marie became the sole director and shareholder of Peak on Andrew, having been appointed a director on 1 August 2008.

172. On 4 September 2008, Peak on Andrew acquired the Andrew St property for $1,200,000, funded by a loan secured by a mortgage in favour of NAB. On 21 August 2008, the deceased, Lionel, Marie and Mircon provided personal guarantees to NAB for $840,000 for Peak on Andrew’s debts.

173. In 2008, the deceased told Ann that he had just bought a development site in Adelaide.

174. Development consent was granted on 7 August 2008 but the development did not eventuate.

175. On about 9 October 2018, Marie transferred her shares in Peak on Andrew to DGP. The units in the Peak Unit Trust were owned by Marie and now by DGP.

176. According to Marie, the Andrew Street property has been rented since 2008. .

Halcrows

177. In about 2013, the deceased identified a property to purchase in Broadwater, Glenorie. On 8 February 2013, Halcrows was incorporated as the vehicle to acquire the property, which it did on 22 April 2013 for $140,000. The settlement funds on purchase, of $130,567.11, were paid from DGP's NAB account. Halcrows continues to own the Glenorie property.

178. Marie is the sole director and shareholder of Halcrows, which is the trustee of the Halcrows Road Trust, a discretionary trust established on 1 February 213 by deed made that day. The deceased, Lionel and Marie are the specified beneficiaries of the Halcrows Road Trust. Marie says she was advised to purchase the property in a trust to minimise land tax and avoid a concentration of investments.

Mircorp

179. Mircorp was incorporated on 21 November 2013. Marie was appointed sole director and company secretary and DGP is the sole shareholder.

180. Mircorp was established to conduct overseas trade. There was no evidence of any trading activity by Mircorp at the hearing.

Further dealings with Mr Loccisano: X-Dist and Corell Holdings Pty Ltd

181. From 2002, Mr Loccisano continued to borrow money for the X-Dist business.

182. In late 2002, the deceased asked Mr Loccisano to transfer shares in X-Dist to secure payment of moneys that had been lent to him and directed that the shares be transferred to “Marie’s name”. The evidence is unclear, but it suggests that DGP may have received some shares in X-Dist around this time.

183. In late 2003, X-Dist went into administration. According to the Report as to Affairs dated 16 December 2003, X-Dist had unsecured creditors of $2,619,979, of which Marie was listed for $444,446. A Deed of Company Arrangement was later executed, which Marie signed as a creditor.

184. Mr Loccisano then established Corell Holdings Pty Ltd (Corell), which operated another footwear business.

185. Mr Loccisano continued to borrow money from the deceased and Lionel and his evidence refers to asking the deceased for a loan of $3 million, which the deceased agreed to and directed be repaid to DGP by electronic transfer. From November 2004, payments were made to DGP by Footwear Trading and Corell, with some payments made to Mircon in 2011. A schedule of electronic transfers attached to Ann's submissions (which was not disputed by the Defendants) identifies payments totalling $3,982,722.85 from Footwear Trading and Corell during the period 12 November 2004 to 6 May 2011.

186. On or around 31 January 2011, DPG became the sole shareholder of Corell. According to Mr Loccisano, the deceased asked him to transfer his shares in Corell to DGP. Ann says that at this time, the deceased said to her, “we are now the proud owners of a shoe importing business”.

187. On 13 July 2011, Corell was wound up in insolvency. The Report of Affairs of the company records that DGP had made loan advances to Corell in the amount of $5.6 million.

188. Lionel and Marie say that the money lent to Mr Loccisano’s businesses was from DGP and not from the deceased and Lionel, and Marie was involved in approving them. I consider it likely that many were cash loans lent to Mr Loccisano and his companies but not all money came from DPG and the loan were not all approved by Marie (DGP’s sole director and shareholder). This is based on a document Marie says she prepared, which refers to a loan of $90,000 in February 2002 (before DGP was established) and a loan of $125,000 on 2 July 2002 (before DGP’s bank account was established) and Marie’s evidence in cross-examination that she could not recall who made the loans (T484, T482).

OSCO and NMOS

189. On 2 March 2010, Mr Loccisano established a new company, OSCO (the ninth defendant), which also ran a shoe wear business.

190. According to Mr Loccisano, in about 2012, the deceased directed that OSCO take over the businesses of the Corell group of companies (which had by then been deregistered) and it became the lessee of factory units in Dural. Ann says that about this time, the deceased told her that “[OSCO] is a company that me and Lionel just opened”.

191. Money was lent to OSCO and it seems that funds were misappropriated by Mr Loccisano.

192. On 2 July 2013, Mr Loccisano made a statutory declaration (witnessed by Mr Winter) that he had incurred debts in OSCO’s name without authority, transferred Footwear Trading's debts to OSCO and forged documents intending that employees and creditors would believe that Footwear Trading had transferred its business to OSCO. OSCO’s 30 June 2014 financial statement records that OSCO owed the DGP Trust $3,374,373 in loans.

193. After the deceased’s death, of the 26 issued shares in OSCO, 20 were registered in DGP’s name and two each were registered in the names of the deceased, Lionel and Marie. Since 2 August 2019, Marie has been the sole director and company secretary of OSCO.

194. NMOS was acquired on 15 July 2010 to purchase a shoe manufacturing factory in China. NMOS owned 2 shares in OSCO before they were transferred to DGP. Marie is NMOS’s sole director and shareholder.

195. NMOS is the registered owner of a BMW motor car that the deceased drove before his death.

196. It is common ground that Lionel travelled to China and Vietnam in relation to the footwear business.

Pitt Town properties

197. Marie is the registered proprietor of the Pitt Town properties, which were purchased on: 14 November 2005 for $1,000,000 (funded by a loan of $650,000 from NAB) (XX5 Pitt Town); 12 February 2007 for $775,000 (funded by a loan from NAB and used as security for a multi property facility) (XX2 Pitt Town); and 12 July 2010 for $1,060,000 (funded by a loan from NAB and secured by a mortgage for a $3,200,000 facility) (XX7 Pit Town).

198. Marie continues to own the Pitt Town properties.

199. Lionel and his de facto spouse, Jackie, lived in XX5 Pitt Town before Marie purchased it. Ann says that in about 2005, Lionel approached the deceased and asked if they could buy XX5 Pitt Town because it had development potential.

200. The deposit for XX5 Pitt Town of $100,000 appears to have been paid by DGP and Ann says that the deceased told her that he was responsible for obtaining the NAB loan (of $650,000). The NAB loan assessment states that: “the original plan was to purchase the property in the name of [DGP] as trust (sic: trustee) for the [DGP Trust] with Adrian and Lionel to improve the land, using their excavating expertise and to sell or develop… however, they have now decided on the advice of their accountant to purchase the property in Mrs Pamplin's own name and hold the block for up to 5 years…”.

399. I have also concluded that part performance has been established in this case. The various actions of the deceased and Lionel, in particular transferring the shares in Mircon and ALPEC and the Russell Island property to Marie for no value, together with resigning their directorships and arranging for the establishment of DGP and the DGP Trust, were acts clearly referable to the arrangement or common assumption that I have found existed. The deceased and Lionel continued to perform by working together under the new structure in the same manner they had prior to mid-2002 including by providing personal guarantees to NAB in connection with the property developments and making improvements to the Pitt Town properties.

400. It follows that I consider that the non-compliance with the statutory requirements that an express trust in relation to land be evidenced in writing has been overcome in this case as there have been sufficient acts of part performance.

401. In any event, if I am wrong about that, for the same reasons outlined earlier in respect of the constructive trust claim, I am satisfised that it would be unconscionable for the Defendants to rely upon the statute to deny or defeat the interest assets. Further, based on my conclusion that a constructive trust arises, the issue of the want of writing and effect of the statute do not arise.

402. For these reasons, the Defendants’ Conveyancing Act defence fails.

Limitation Act

405. The Defendants also plead that the Arrangement Claims are statute barred.

406. They submit that any cause of action to recover land commenced in 2002, the limitation period expired in 2014 (referring to the Limitation Act, ss 26, 27 and 65), and as the proceedings were commenced in 2018, Ann’s claims against land are statute-barred. Section 27 of the Limitation Act provides that an action on a cause of action to recover land is not maintainable if brought after the expiration of a limitation period of 12 years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.

407. Section 65 of the LimitationAct provides that rights to recover land, or to enforce an equitable estate or interest in land after the expiration of the limitation period, are extinguished.

408. Ann submits that the Limitation Act does not apply as it does not extend to any purely equitable claim not the subject of the Limitation Act and, in any event, the Defendants’ submissions do not acknowledge the operation of s 38 of the Limitation Act which operates to postpone the limitation period provided the land is not in adverse possession and there is no suggestion on the evidence that this was the case.

409. I accept Ann’s submission that the limitation defence raised by the Defendants does not apply in this case. This is for three reasons.

410. First, the limitation defence only applies to claims to recover land or an equitable interest in land and, as such, does not apply to Ann’s express trust claim in respect of, for example, the shares in DGP or Mircon.

411. Second, the limitation defence does not preclude a claim founded on an estoppel, as a purely equitable claim: Bryant v Bryant (2014) 17 BPR 33,511; [2014] NSWSC 374 at [27].

412. Third, the pleaded defences assume that time runs from the creation of the trust in 2002. As Ann submits, this is not supported by authority or s 38 of the Limitation Act.

413. The cause of action accrues once the defendant acts inconsistently with the trust, such that it would be unconscionable for one party to retain the other’s contributions: Payne v Rowe (2012) 16 BPR 30,869; [2012] NSWSC 685 at [99]. Further, and in relation to the cause of action under s 38 of the Limitation Act, this only begins from when the plaintiff seeking to recover the land first discovers or may with reasonable diligence have discovered the facts giving rise to the cause of action: Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar [2022] FCA 691 at [575].

414. In this case, the 12 year limitation period did not commence in 2002 because there is no evidence that Marie acted inconsistently with the trust until after the deceased’s death and she has never “occupied” the trust property (namely the Pitt Town properties) without the deceased or Lionel’s consent or otherwise in a manner adverse to them.

DGP Trust Distributions Claim

415. Since it was established, DGP, as trustee of the DGP Trust, made determinations that distributions of income be made to beneficiaries, which included Marie, Ann, Chantelle Pamplin (Lionel’s daughter) and Mircon. The distributions are referred to in resolutions recorded in the DGP Minutes of Meetings and in the financial statements of the DGP Trust.

416. It is common ground that between 2006 and 2012, DGP determined that distributions of income be made to Ann totalling $451,000.00 (Trust Distributions), as follows:

$20,000 in the financial year ending 30 June 2006

$60,000 declared 26 June 2007;

$65,000 declared 26 June 2008;

$66,000 in the financial year ending 30 June 2009

$80,000 declared 29 June 2010;

$80,000 declared 29 June 2011; and

$80,000 declared 29 June 2012.

417. Ann says that despite the determinations, no part of the Trust Distributions have been paid to her or applied for her maintenance, education, benefit or advancement of life.

418. In the SFASC, Ann advances a claim in her as a right (and not as administrator of the deceased’s estate) for payment of those monies from DGP. She says that upon making the determinations, each of the Trust Distribution amounts immediately and absolutely vested to her benefit and, in breach of trust, DGP failed or omitted to pay any part of them despite demand being made on 13 April 2018. She seeks an order that the amount of $451,000 plus interest to be paid to her or alternatively, relief on the basis of monies had and received.

419. Although Marie’s defence denies that Ann was ever a beneficiary within the meaning of “General Beneficiary” (as that term is defined in the DGP Trust Deed), in the Defendants’ final written submissions, they did not dispute that Ann was a “General Beneficiary” for the purposes of this proceedings and her claim.

420. However, the Defendants deny that Ann is entitled to payment of the Trust Distributions and say that the claim should be dismissed for three reasons.

421. First, the Defendants say that the Trust Distributions were in fact paid.

422. Second, they say that: the Trust Distributions were made to Ann with the knowledge of the deceased, without protest; the deceased thereby encouraged an assumption on the part of DGP that the Trust was valid and effective; DGP acted on the basis of that assumption to its detriment by continuing to make distributions to Ann and others and by conducting the business on the basis that it was entitled to do so in accordance with the terms of the DGP Trust Deed.

423. Third, they contend that Marie has applied her energies and resources and conducted the affairs of the companies (including the third to ninth defendants), on the assumption that the DGP Trust was a valid and subsisting trust and, in the circumstances, the deceased is estopped from denying it is valid and effective and from asserting the claims made (including the Arrangement Claims).

424. They contend that by pleading an entitlement to be paid Trust Distributions and suing DGP for payment, Ann has made an election to pursue rights which is inconsistent with the Arrangement Claims by which she seeks to impeach the DGP Trust Deed.

Consideration and determination

425. The factual issue raised by this claim is whether the Trust Distributions were, in fact, paid to Ann, to someone else or not at all.

426. Ann’s position on this is straightforward. She says the Court would not be satisfied that the Trust Distributions have been paid to her, noting that DGP contends they were paid in cash and the lack of records from DGP. She also says that the Court would reject Marie’s defences.

427. The Defendants ask the Court to find that the Trust Distributions were, in fact, paid to Ann based on the following matters which are, I accept, established on the evidence:

1. Ann’s tax returns for the financial years ended 30 June 2006 to 30 June 2012 record that she received income which equates with the Trust Distributions;

2. the deceased gave money to Ann for living expenses and she relied on him financially; and

3. from 2006, Ann received cash payments from the deceased from time to time that were deposited into her bank account, (noting that it was possible that not all amounts giving to Ann by the deceased were all deposited into the bank).

428. The Trust Distributions made to Ann are referred to in Ann’s tax returns for the financial years ending 30 June 2006 to 30 June 2012. It also appears that tax was paid on the Trust Distributions.

429. Ann gave evidence that it was not until the proceedings before Lindsay J that she had seen all other tax returns and became aware they contained statements about income she had received. She says that the only tax return she was aware of (but had not seen) was in relation to the 2012 financial year, when the deceased handed her a refund cheque drawn by the ATO made payable to her (which had a post-it note on it setting out the banking details of Mircon) and told her that she was drawing “wages from the company”. Ann says that until then, she was not aware that she was being paid on paper by one of the Pamplin companies and also says that did not retain the ATO funds as she banked the cheque into Mircon’s account as directed by the deceased.

430. Ann’s tax returns for the financial years 2006 to 2011 were prepared by Mr Burrows and include Marie’s address on them. The tax return for the financial year 2012 shows Ann’s address, with Mr Aboud’s address for service. None of them are signed by Ann.

431. Mr Burrows says that he prepared Ann’s tax returns following meetings with the deceased, Lionel and Marie before the end of each financial year and he met her on one or two occasions prior to 2012. Ann’s evidence, which I accept, is that she has never met Mr Aboud. I also accept her evidence that she did not provide instructions in relation to the tax returns and did not know that they recorded the amounts of Trust Distribution made to her or that she was the intended recipient of the Trust Distributions during those years.

432. The Defendants referred to Marie’s and Mr Burrows’ evidence which referred to the distributions made by the DGP Trust to the beneficiaries and an income-split (“wage-split”) arrangement.

433. Mr Burrows described discussions with the deceased and Lionel in which they would discuss what money had been taken out and spent during the course of the year and what had been distributed amongst the family, and then they would do a trust minute. He said that he would have told Marie that if there were people in the family and monies had been spent and distributions and profits have been made, they could receive a distribution for tax out of the trust. Marie gave evidence that the distributions were made as part of a wage-split arrangement as between Ann and the deceased. She said that the deceased would direct the amount to be paid to Ann so that the taxable income he received from Mircon was reduced.

434. The Defendants submit that this evidence establishes that the DGP Trust minutes record what distributions were in fact made in the relevant financial year as, according to Mr Burrows’ evidence, the resolution accorded with what money had already been distributed from the DGP Trust. It was submitted that this evidence, together with the evidence that the deceased gave Ann money shows that Ann received Trust Distributions. They submit that the Court should not accept Ann’s evidence that she was ignorant to the wage-split arrangement and receipt of the distributions, notwithstanding her evidence that she had not approved her own tax returns and did not sign it for the 2012 financial year.

435. Ann submits that the Defendants’ contentions ignore the fact that none of the tax returns that record income by way of the Trust Distributions were signed by her. It was submitted that just because Ann was aware that wages had been paid (in an unknown amount, at an unspecified time, to an unspecified account by Mircon) is not sufficient to warrant a conclusion that she was aware and was in fact paid Trust Distributions from DGP. She also takes issue with the contention that she received $451,000 from 2006 to 2012 on the basis that monies were given to her by the deceased that was paid into her bank account.

436. I do not accept the Defendants’ submission that the evidence from Marie and Mr Burrows, together with the evidence that the deceased gave Ann money (in cash), shows that Ann received the Trust Distributions or that the Court should reject her evidence that she was ignorant of the arrangement.

437. I found Ann’s evidence on this issue to be persuasive. The fact that Ann did not seek to amend her tax return on the basis she did not authorise them is not a factor that I consider weighs against her credit or the reliability of her evidence on this aspect of the case. Ann’s evidence that she did not authorise her tax returns is supported by Mr Burrows’ evidence, who did not deal with her about that matter. The absence of Mr Aboud also makes it easier to draw the inference that I consider is available on the evidence that Ann did not authorise him to lodge the 2012 tax return in her name.

438. I accept that there were some inconsistencies in Ann’s evidence in relation to her tax returns, such as her evidence about the Commonwealth Bank home loan application made in December 2008. Initially Ann accepted that she provided evidence of her income to secure the loan and later said that the deceased wanted the loan, she did not handle the application and did not obtain the loan. That was shown to be incorrect as a loan of $150,000 was advanced by the CBA to Ann; to her credit, she accepted that error in cross-examination. Her evidence that she did not know anything about the tax returns over this period is also seemingly inconsistent with a statement in an affidavit she made in May 2015 that she signed her FY2008 tax return.

439. That said, overall, I found Ann’s evidence about her knowledge of (or lack thereof) of the basis which cash payments were made to her by the deceased, that, in 2012, she found out that she was being paid on “paper” by Mircon, and that she did not know about or receive payment of or know about the Trust Distributions to be convincing and I accept it. The objective evidence paints the picture of the deceased as a person in control of Ann’s finances. While Ann gave evidence in a clear and direct manner, overall, she presented as someone who was unsophisticated and unknowledgeable about business and financial matters and relied on and deferred to the deceased in respect of them.

440. I place little weight on Marie’s evidence about these matters. She contended that Ann received a wage-split from DGP despite accepting that Ann was only entitled to receive payment from the DGP Trust if she was the deceased’s spouse (which she does not accept), the entity paying the deceased’s wages was Mircon (not DGP), and the resolutions passed by DGP were unambiguous about the nature of the payments being trust distributions rather than wages. Marie also did not disclose what she described were the errors in making payments to Ann (on the basis that she did not consider her to be a spouse) to her accountant or refer to that matter in her affidavit and she could not explain why she did not do so. Nor could she readily identify the mistake, ultimately stating “well, I don’t understand what the machinations of the mistake because I believe…”. Marie accepted that she never kept a record of the payments that were allegedly made in various weekly sums on account of the wage-split, with the result that she did not know how much was paid to Ann on this account, and there seemed to be no basis for Marie to assert that she did not know why Mr Burrows recorded the payments in the way that was documented. Marie’s evidence that the Trust Distributions were paid by way of weekly cash payments was also unconvincing in circumstances where the 2011 financial year accounts disclose that there was $200,000 owing as unpaid Trust Distributions at that time. Further, other than the DGP Resolutions and Ann’s tax returns, there is no documentary evidence that Ann received or was paid the Trust Distributions in the relevant years.

441. I cannot exclude the possibility that some amounts paid to Ann by the deceased were referable to the Trust Distributions having regard to Mr Burrows’ evidence that suggests the amounts recorded in the DGP Trust minutes may have been based on payments made during the course of the year.

442. In light of Ann’s evidence and my finding that the deceased was intimately involved in DGP’s business and operated as a de facto director, I also consider it likely that the deceased was involved in and directed that payments were to be recorded as being made to Ann from DGP by way of Trust Distributions, likely for the purpose of reducing his income. However, those matters do not, in my view, establish that Ann was in fact paid those amounts by DGP or the deceased. Nor does it establish that DGP made the payments to the deceased himself.

443. In the absence of any financial records, such as bank statements or other documents, and considering the issues with Marie’s evidence compared to Ann’s, I do not accept the Defendants’ contention that I should find that the Trust Distributions were in fact paid to Ann.

444. I accept Ann’s evidence that she did not know about the Trust Distributions made in her favour and that she did not receive monies referrable to the amounts recorded and I am not satisfied that the Defendants have established that she did. Accordingly, I find that, on the balance of probabilities, Ann was not paid the amount of $415,000 by DGP for the Trust Distributions recorded in DGP’s records as having been distributed to her for the 2006 to 2012 financial years.

445. As to the defences, I do not accept the contention that Ann is estopped from bringing the claim because she is bringing inconsistent claims, on the one hand seeking to impeach the DGP Trust through her claims as administrator of the deceased’s estate, yet utilising resolutions made by DGP to claim payment for the distributions.

446. I am not persuaded that Ann is making inconsistent claims in this case. She does not seek to impeach the entirety of the DGP Trust or claim that it is invalid. Her claim, as I perceive it, asks the Court to grant relief in respect of rights arising in favour of the deceased from the understanding reached and common intention held by the deceased, Lionel and Marie that Marie would hold assets in name only on behalf of the brothers on a 50:50 basis. As Ann submits, the determination that Trust Distributions should be made to Ann is not inconsistent with such an arrangement or common assumption or the rights which she asserts flows from them because the distributions reflect a foreshadowed division of the assets of the joint endeavour, which DGP can be taken to have known about because of the deceased and Lionel’s effective control of that entity.

447. The Defendants’ estoppel defence contends that the deceased encouraged an assumption on DGP’s part that the Trust Distributions were paid with his knowledge. The issue I have is that this defence requires the Court to accept Marie’s evidence, including of detrimental reliance, which I do not. Marie’s evidence of her understanding of the relationship between the deceased and Ann lacked credibility for the reasons I have already explained, as did her evidence of the nature of her purported mistake in authorising the payments and how she allegedly became aware of that mistake (apparently because of the hearing before Lindsay J).

448. Further, the encouragement of an assumption by the deceased that the distributions were paid to Ann does not, in my view, lead to or encourage an assumption on the part of DGP that the DGP Trust was valid and effective, or establish the detrimental reliance as alleged.

428. To the extent that the Defendants also rely on a Limitation Act defence in relation to this claim, I accept Ann’s submission that the claim is not statute barred. This is because s 47(1)(c) of the Limitation Act prescribes a 12-year limitation period for a cause of action to recover trust property and the unpaid Trust Distributions are held on trust in accordance with cl 3 of the DGP Trust Deed.

429. In conclusion, I accept Ann’s submission that the appropriate factual finding is that the Trust Distributions were made at the instance of the deceased and Lionel in accordance with the joint endeavour and that Ann did not receive payment for them, and so find, and also find that the Defendants have not established their defences to this claim. Accordingly, I conclude that Ann succeeds on her claim to recover the Trust Distributions which DGP, as trustee, declared to be due and payable to her during the financial years ending 30 June 2006 to 30 June 2012 in the amount of $451,000.

Conclusion: costs and orders

451. In conclusion, I have found that Ann has established that there was an understanding or common assumption between the deceased and Lionel on the one hand and Marie on the other in the terms alleged by Ann and that from May 2002 until the deceased’s death, in furtherance of the understanding and on the faith of the common assumption, they engaged in various transactions, including but not limited to, the deceased and Lionel transferring assets to Marie for no value, establishing DGP and the DGP Trust and acquiring new assts and making investments into and with third parties. I have also found that the arrangement and common understanding was motivated by the need to create an asset protection regime which involved Marie taking ownership and control of transferred and new assets on paper only, with the shared intention that the deceased and Lionel retain a beneficial interest in the assets transferred and subsequently acquired on an equal basis.

452. I have concluded that Ann succeeds on her express trust claims in relation to the shares in Mircon and ALPEC that were transferred to Marie (and the financial benefits derived from them), the shares and units in DGP, Halcrows, NMOS, OSCO, Peak on Andrew, X-Dist, Corell and the Peak Unit Trust (together with the financial benefits Marie derived from them), as well as to the Pitt Town properties that Marie acquired in her name and, in the alternative, her constructive trust and resulting trust claims, noting that the resulting trust claims were only pressed in relation to Mircon and ALPEC.

453. I have also found that Ann succeeds on her claim in relation to DGP in its capacity as the trustee of the DGP Trust and consider it is appropriate to grant relief in this case of the nature sought by Ann, the effect of which will not be to compel DGP to exercise its power in a particular way in the future but to restrain it from doing so in respect of 50% of its assets.

454. I find that Ann fails on her contract claim and aspects of her further estoppel claim in respect of the “Further Venture Assets”.

455. I have also found that Ann succeeds on her claim to recover the Trust Distributions made to her during the financial years ending 30 June 2006 to 30 June 2012 in the amount of $451,000.

456. Based on my findings, I consider that Ann is entitled to declaratory relief in relation to the express trust that I have found exist (in the terms of Order 1 of the SFASC), an injunction restraining DGP from dealing with the income and capital of the DGP Trust other than in a manner that would cause less than 50% of the income and capital to be distributed to the estate of the deceased and an order that DGP pay to Ann $451,000 plus interest.

457. The relief sought by Ann in the SFASC and the orders made by Parker J on 20 August 2021 contemplate that Ann also seeks orders for Marie and the various entities to give a full account of their dealings with the property and profits held on trust for Ann, a receiver be appointed to Marie’s assets (except for the Pellitt Lane property) and the third to ninth defendants and Marie deliver up to Ann all personal papers in her possession belonging to the deceased. The parties’ submissions did not address those orders and so I have not considered them. I have made an order relisting the proceedings before the Equity Registrar on 29 February to enable the parties to obtain further directions in relation to those matters after consideration of the reasons.

458. As to costs, given the outcome, I see no reason why the usual order that costs follow the event should not apply and order the Defendants to pay Ann’s costs of the proceedings.

459. For these reasons, I make the following orders:

1. Declare that the first defendant holds on express trust for the late Adrian Pamplin a one-half share in the Venture Assets (as defined below).

For the purpose of these orders, Venture Assets means:

1. the shares that are or were owned by the first defendant (and the profits derived therefrom) in:

1. the third defendant, Mircon Pty Ltd (ACN 057 994 126);

2. A and L Earthmoving and Contracting Pty Ltd (ACN 003 897 783);

3. the fourth defendant, Dennis G Pamplin Pty Ltd (ACN 100 582 750);

4. the fifth defendant, Halcrows Investments Pty Ltd (ACN 162 286 697);

5. the sixth defendant, N.MOS Pty Ltd ACN (114 971 916);

6. the seventh defendant, The Peak On Andrew Pty Ltd (ACN 130 181 074);

7. the ninth defendant, OSCO Pty Ltd (ACN 142 349 853);

8. X-Distribution Pty Ltd (ACN 089 505 573);

9. Corell Holdings Pty Ltd (ACN 108 382 832);

2. the land located on Pitt Town Road, Kenthurst comprised in Folio Identifiers 1/538582, 1/653836, 3/259725 and 2/587185 (Pitt Town Properties); and

3. the units that are or were held by the first and fourth defendants (and the profits derived therefrom) in the Peak Unit Trust established 17 March 2008.

2. Order that the fourth defendant, Dennis G Pamplin Pty Ltd, as trustee for the Dennis G Pamplin Family Trust (DGP Trust), be restrained from dealing with the income and capital of the DGP Trust other than in a manner that would cause less than 50% of the income and capital of the DGP Trust to be distributed to the estate of the late Adrian Pamplin, or as the estate may direct.

3. Order the fourth defendant, Dennis G Pamplin Pty Ltd, to pay to the Plaintiff the sum of $451,000 plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) calculated in accordance with the rates set out in Practice Note SC Gen 16 from 8 June 2018 to 9 February 2024.

4. Order the Defendants to pay the Plaintiff's costs of the proceedings to date on an ordinary basis as agreed or assessed.

5. List the proceedings before the Equity Registrar at 9.30am on 29 February 2024 for further directions.

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Decision last updated: 09 February 2024