Lambert v Twigg; Twigg v Twigg (No 3)

[2019] NSWSC 1363

Supreme Court

New South Wales

Medium Neutral Citation:

Lambert v Twigg; Twigg v Twigg (No 3) [2019] NSWSC 1363

Hearing dates:

8 October 2019

Date of orders:

09 October 2019

Decision date:

08 October 2019

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

The proceedings to be tried at the same time or one immediately after the other

Catchwords:

CIVIL PROCEDURE – hearings – order that proceedings be heard together – two proceedings involving some common parties – where issues of credit of common witnesses likely to arise – where result in one case may be determinative of the result in the other

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Twigg v Twigg [2019] NSWSC 373

Category:

Procedural and other rulings

Parties:

In 2018/212326:
Frances Lambert (First Plaintiff/Respondent)
Elizabeth Flintoft (Second Plaintiff/Respondent)
Diane Twigg (Third Plaintiff/Respondent)
Twigg Investments Pty Ltd as trustee for Twigg Investments Trust (Defendant/Applicant)

  In 2019/71329:
Diane Twigg (First Plaintiff/Respondent)
Ipswich Landfill Pty Ltd as trustee for the Ipswich Landfill Trust (Second Plaintiff/Respondent)
Brooklyn Landfill & Waste Recycling Pty Ltd as trustee for the Brooklyn Landfill Trust (Third Plaintiff/Respondent)
Twigg Plant Hire Pty Ltd as trustee for the Twigg Family Trust (Fourth Plaintiff/Respondent)
Maxwell James Twigg (First Defendant/Applicant)
Twigg Landfill Pty Ltd (Second Defendant/Applicant)
Byron Bay Beach Hotel Properties Pty Ltd (Third Defendant/Applicant)
Twigg Consulting Pty Ltd (Fourth Defendant/Applicant)
B Bay H Pty Ltd (Fifth Defendant/Respondent)
Twigg Investments Pty Ltd (Sixth Defendant/Applicant)
Maly Holdings Pty Ltd (Seventh Defendant/Applicant)
Twigg Property Development Pty Ltd (Eighth Defendant/Applicant)
Twigg Motor Sport Pty Ltd (Ninth Defendant/Applicant)
Vision Motor Sport Pty Ltd (Tenth Defendant/Applicant)
Twigg Motor Racing Pty Ltd (Eleventh Defendant/Applicant)
Surf Street Holdings Pty Ltd (Twelfth Defendant/Applicant)
W&E Twigg Pty Ltd (Thirteenth Defendant/Applicant)

Representation:

Counsel:
In 2018/212326:
M R Elliott SC with DK Smith (Plaintiffs/Respondents)
J C Giles SC with M Bersten (Defendant/Applicant)

 

In 2019/71329:
M R Elliott SC with DK Smith (Plaintiffs/Respondents)
J C Giles SC with M Bersten (Defendants/Applicants)

 

Solicitors:
In 2018/212326:
Roberts and Partners Lawyers (Plaintiffs/Respondents)
O’Loughlin Westhoff (Defendant/Applicant)

  In 2019/71329:
Roberts and Partners Lawyers (Plaintiffs/Respondents)
O’Loughlin Westhoff (Defendants/Applicants)

File Number(s):

SC 2018/212326; SC 2019/71329

Judgment

1. There are two proceedings involving the Twigg family pending in this List.

2. The first proceedings, which the parties call the “UBE Proceedings”, were commenced on 10 July 2018 (proceedings numbered 2018/212326).

3. The second proceedings, which the parties call the “Sale Proceeds Proceedings” were commenced on 5 March 2019 (proceedings numbered 2019/71329).

4. By notices of motion filed on 1 and 3 July 2019, the defendants in each proceedings sought an order that the Sales Proceeds Proceedings be heard prior to the UBE Proceedings or, alternatively, that each proceeding be heard together with evidence in one evidence in the other.

5. During argument on 8 October 2019, I expressed the opinion that the proceedings should be heard together.

6. These are my reasons for reaching that conclusion.

7. The family members involved in the proceedings are Mrs Diane Twigg, and her three children, Mr Max Twigg, Ms Francis Lambert and Ms Elizabeth Flintoft.

8. During submissions counsel referred to these parties by their given names. I will do the same. I intend no disrespect.

9. The plaintiffs in the UBE Proceedings are Diane, Francis and Elizabeth. The only defendant is Twigg Investments Pty Ltd as trustee of the Twigg Investment Trust. Twigg Investments is controlled by Max.

10. Diane, Francis and Elizabeth claim that, in 2009, Twigg Investments as trustee of the Trust made distributions of around $2.1 million to Diane and $2.5 million to each of Francis and Elizabeth, but that Twigg Investments has not paid those distributions.

11. In response, Twigg Investments asserts a pre-existing arrangement whereby Diane, Francis and Elizabeth agreed to gift their unpaid entitlements paid to the Trust as part of a tax minimisation scheme. The alleged agreement is said to be oral. Twigg Investments claims that this agreement was performed by the subsequent payment of tax liabilities of Diane, Elizabeth and Francis.

12. Twigg Investments also asserts that the claims in these proceedings are time barred, and defended by laches, acquiescence and estoppels.

13. Witnesses relevant to each of those defences are Diane, Francis, Elizabeth and Max, as well as Mr Adrian Fitzpatrick, the former family accountant. The credit of each of those witnesses is likely to be in issue.

14. The UBE Proceedings are close to being ready for a hearing date. It appears likely that those proceedings will take two or three days.

15. The plaintiffs in the Sale Proceeds Proceedings are Diane and three companies of which she is a director and sole shareholder (the “Corporate Trustees”). The defendants in those proceedings are Max and 12 companies with which he is associated, including Twigg Investments.

16. The background to the Sale Proceeds Proceedings is set out in my judgment of 5 April 2019: Twigg v Twigg [2019] NSWSC 373.

17. The Sale Proceeds Proceedings concern the sale of the “Twigg Group” in April 2007 for approximately $155.8 million (the “Sale Proceeds”).

18. The plaintiffs’ case is that:

1. by way of single director resolutions of the Corporate Trustees, and notwithstanding that Diane was also a director, Max purported to distribute the trust income of the Corporate Trustees in breach of the terms of the relevant trust deeds;

2. Diane would have otherwise been entitled to the Sale Proceeds;

3. Max misappropriated the Sale Proceeds for the benefit of himself and the corporate defendants; and

4. the assets held by Max and the corporate defendants are held on constructive trust for the benefit of Diane and the Corporate Trustees and that a tracing exercise will be necessary.

19. The defendants’ case is that the defendants were entitled to the Sale Proceeds because:

1. in about 2001 Diane delegated the management of the “Twigg Group” and the decision making function of the Corporate Trustees to Max; and

2. there was an oral agreement made between Max and Diane in around 2001 to the effect that:

1. Max was the equitable owner of the Twigg Group;

2. Diane would, in return, leave her estate to Francis and Elizabeth.

20. Max and the corporate defendants also assert that the plaintiffs’ claims are time barred, and defeated by laches, acquiescence and estoppels.

21. The issues in the Sale Proceeds Proceedings are more complex than those in the UBE Proceedings. The hearing of the Sale Proceeds Proceedings is likely to take between two and three weeks. The proceedings are at a relatively early stage.

22. Diane, Max and Mr Fitzpatrick and, possibly, Francis and Elizabeth, will give evidence in the Sale Proceeds Proceedings. The credit of Diane and Mr Fitzpatrick will be very much in issue; as to Mr Fitzpatrick see [31] to [33] of my judgment of 5 April 2019.

23. Mr Giles SC, who appeared with Mr Bersten for Max, submitted that Diane, Francis and Elizabeth are making claims in the UBE Proceedings that are inconsistent with the claims that Diane and the Corporate Trustees are making in the Sale Proceeds Proceedings. Mr Giles also submitted that if Diane and the Corporate Trustees are successful in the Sales Proceeds Proceedings, then Diane, Francis and Elizabeth cannot succeed in the UBE Proceedings.

24. Mr Elliott SC, who appeared with Mr Smith for Diane, Francis and Elizabeth, did not deny that this is a possibility but submitted that Mr Giles’ submissions required the making of what Mr Elliott described as “unjustified assumptions about the evidence” particularly about “the traceability of the Sale Proceeds into the Twigg Investments Trust” and “Twigg Investments’ source of funds”.

25. Mr Elliott also pointed out that, as it is unlikely that the Sales Proceeds Proceedings will be ready for hearing until sometime next year, and as the UBE Proceedings are ready to take a date now, making either of the orders sought by Max would result in unjustifiable delay in the hearing of the UBE Proceedings.

26. The conclusion to which I came to was that the high likelihood of credit issues arising in relation to the evidence of, at least, Diane, Max and Mr Fitzpatrick in both proceedings, pointed to the desirability of the proceedings being heard together. Were the proceedings to be heard separately, the possibility exists that questions relevant to the credit of any of these witnesses might arise in the first proceedings heard that are relevant to their credit in the second proceedings heard or, worse, that questions relevant to their credit in the first proceedings heard might only come to light in the second proceedings heard. The problem might be exacerbated if a different judge heard the second proceedings; either because of the demands of the list, or because of views expressed by the judge hearing the first proceedings about the credit of a witness.

27. That opinion was confirmed by the possibility, and I put it no higher than that at this stage, that determination of the issues in the Sale Proceeds Proceedings will be determinative those in the UBE Proceedings.

28. I concluded that those factors outweighed any disadvantage that might accrue to Diane, Francis and Elizabeth by the delay in determination of the UBE Proceedings which appears to be the likely consequence of the two proceedings being heard together.

29. In those circumstances, I concluded that it was “for some other reason…desirable” to order that the UBE Proceedings and the Sales Proceeds Proceedings be “tried at the same time or one immediately after the other”: Uniform Civil Procedure Rules 2005 (NSW) r 28.5.

30. It will be a matter for the trial judge to determine in what order the proceedings are heard.

31. In those circumstances, I stood Max’s notice of motion over for directions in the Commercial List on 11 October 2019 with a view to the List Judge allocating a hearing date for both matters if otherwise satisfied that that is the appropriate course to follow at the moment.

32. I ordered that the costs of the argument before me on 8 October 2019 be the costs of the proceedings in each proceeding.

33. On reflection, I consider that I should also formally order that, pursuant to UCPR r 28.5, proceedings 2018/212326 (Lambert v Twigg Investments Pty Ltd) and 2019/71329 (Twigg v Twigg) be tried at the same time or one immediately after the other.

34. I grant the parties liberty to apply as to the form of this order, such liberty to be exercised by 5.00 pm on 10 October 2019.

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Decision last updated: 09 October 2019