Mathas v Slater; Donnybrook Properties Pty Ltd v Simpson - [2009] NSWSC 1397

No judgment structure available for this case.

CITATION: Mathas v Slater; Donnybrook Properties Pty Ltd v Simpson [2009] NSWSC 1397

HEARING DATE(S): 19 - 23 October 2009

JUDGMENT DATE :
11 December 2009

JURISDICTION: Equity Division

JUDGMENT OF: Rein J

DECISION: (1) Mr Simpson is liable to Donnybrook to pay $350,000 plus interest, subject to the offset of the amount referred to in (3) below;
(2) Mr Slater is liable to pay to Mr Simpson a commission of $268,833 plus interest from a reasonable period after the date of sale of the property, which I would treat as four weeks from the date of sale of Lots 15 and 16;
(3) Donnybrook is liable to pay Mr Simpson $60,000 from the proceeds of sale of Hendrix, plus interest from four weeks after the sale of the horse;
(4) GLSP is liable to Donnybrook for the balance of the loan account, i.e. $127,252. If that does not include interest, that will need to be calculated;
(5) Mr Simpson is not personally liable for the loan balance referred to in (4) above;
(6) Mr Simpson is not liable for $40,000 of Deacons’ fees or the costs of defending the Deacons claim.

CATCHWORDS: EQUITY – general principles – fiduciary obligations – fiduciary relationship arising between investment adviser and advisee – whether investment adviser has breached his fiduciary obligation when failing to properly advise about an investment in which he had a conflict of interest - CONTRACTS – loan agreement, dispute as to parties to and terms of agreement – agreement to invest funds in return for a ‘profit share’, dispute as to parties to and terms of agreement – agreement for payment of commission for assistance in sale of property, dispute as to terms of agreement, whether s 60 of Real Estate and Business Agents Act 1978 (WA) applicable – agreement by third party to pay or guarantee legal fees, dispute as to terms of agreement – agreement to purchase horse and share profit upon sale, dispute as to the purchase price and the sharing of costs - LIMITATION OF ACTIONS – claim for equitable damages for breach of fiduciary obligations – whether limitation period applies by analogy pursuant to s 23 of the Limitation Act 1969

LEGISLATION CITED: Limitation Act 1969
Real Estate and Business Agents Act 1978 (WA)
Uniform Civil Procedure Rules 2005

CATEGORY: Principal judgment

CASES CITED: Allison v Clayhills [1908] LT 709
Ausintel Investments Australia Pty Ltd v Lam (1990) 19 NSWLR 637
Breen v Williams (1996) 186 CLR 71
Catt v Marac Australia Ltd (1980) 9 NSWLR 639
Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2008] NSWSC 801
Coleman v Meyers [1977] 2 NZLR 225
Commonwealth Bank of Australia v Smith (1991) 42 FCR 390
Daly v Sydney Stock Exchange (1986) 160 CLR 371
Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 4
Farrell v Bannister (1952) 52 SR (NSW) 73
Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418
Grant v Commissioner for Fair Trading; John B Grant Real Estate Pty Ltd v Commissioner for Fair Trading [2005] NSWADT 268
Hanson v Lorenz and Jones (1986) 136 NLJ 1088
Hill v Rose [1990] VR 129
Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41
Huat v Rintag Pty Ltd [2000] ANZ ConvRep 2
Hyde v Sullivan [1956] SR (NSW) 117
J B Witts Pty Ltd v Wholesalers (Aust) Pty Ltd (1963) 109 CLR 322
LAC Minerals v International Corona Resources (1989) 61 DLR (4th) 14
McKenzie v McDonald [1927] VLR 134
McKenzie v McDonald [1927] VLR 134
Mercer v Dally (1943) VLR 14
Nocton v Lord Ashburton [1914] AC 932; [1914-1915] All ER Rep 45
Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165
Rawley Pty Ltd v Bell (No 2) (2007) 61 ACSR 648
Slater v Strawberry John Pty Ltd [2002] WASC 204
Tate v Williamson (1866) LR 2 Ch App 55
Trevorrow v State of South Australia (No 5) (2007) 98 SASR 136
United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1

TEXTS CITED: Meagher Gummow & Lehane’s Equity Doctrine & Remedies 4th edition (2002) Butterworths LexisNexis
P D Finn, “The Fiduciary Principle” in T G Youdan (ed), Equity, Fiduciaries and Trusts (1989) Carswell
Young, Croft and Smith, On Equity, (2009) Thomsons/Lawbook Co

PARTIES:
In proceedings 2906/06:
Angelos Mitchell Mathas and 151 others (Plaintiffs and cross-defendants)
William Diarmid Slater (Defendant and cross-claimant)
Gregory Lane Simpson (Cross-defendant)
In proceedings 3014/06:
Donnybrook Properties Pty Ltd (Plaintiff and first cross-defendant)
William Diarmid Slater (Second cross-defendant)
Kingswood Nominees Pty Ltd (Third cross-defendant)
Gregory Lane Simpson (First defendant and cross-claimant)
GLS Properties Pty Ltd (Second defendant)

FILE NUMBER(S): SC 2906/06; 3014/06

COUNSEL: G Lindsay SC, A Paterson (Mr Slater, Donnybrook Properties Pty Ltd, Kingswood Nominees Pty Ltd)
J Stoljar SC, J Potts (Mr Simpson, GLS Properties Pty Ltd)

SOLICITORS: Bellantonio & Rees (Mr Slater, Donnybrook Properties Pty Ltd, Kingswood Nominees Pty Ltd)
Eakin McCaffery Cox (Mr Simpson, GLS Properties Pty Ltd)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Rein J

Date of Hearing: 19 – 23 October 2009
Date of Judgment: 11 December 2009

2906/06 Angelos Mitchel Mathas and ors v William Diarmid Slater

3014/06 Donnybrook Properties Pty Ltd v Gregory Lane Simpson and anor

JUDGMENT

1 REIN J: Mr William Diarmid Slater (“Mr Slater”) and companies which he alone, or together with his wife Mrs Denise Sharon Slater (“Mrs Slater”) controls, Donnybrook Properties Pty Ltd (“Donnybrook”) and Kingswood Nominees Pty Ltd (“Kingswood”), have a number of disputes with Mr Gregory Lane Simpson (“Mr Simpson”) and a company of which Mr Simpson is the sole director and shareholder, GLS Properties Pty Ltd (“GLSP”) in connection with development of a Western Australia property known as ‘Sweetwater’ which comprised Lots 15 and 16, a loan of $400,000 made by Donnybrook (“the loan”) and the payment of $350,000 also made by Donnybrook (“the investment”). Mr Lindsay SC appears with Mr Paterson for the Mr Slater and his companies and Mr Stoljar SC appears with Mr Potts for Mr Simpson and his company. I received detailed oral and written submissions including written submissions in reply delivered (in accordance with the timetable set) on 30 October 2009.

2 These proceedings commenced as a claim against Mr Slater by partners of Deacons the law firm in relation to unpaid fees and that firm’s claim to be entitled to reimbursement out of funds held following the sale of Lots 15 and 16 pursuant to a direction to pay given by Mr Slater. The proceedings as between Deacons and Mr Slater were resolved on the basis that of the $100,000 fund, $60,000 was to be paid to Deacons and the balance to be paid to Mr Slater. Mr Slater claims the $60,000 and the costs of defending the claim by Deacons against him from Mr Simpson. Although not strictly accurate it was agreed that – as the proceedings are now constituted – the Slater interests could be referred to compendiously as the plaintiffs and Mr Simpson and GLSP as the defendants.

3 The plaintiffs’ claims against Mr Simpson are:

(1) for the balance of the $400,000 loan said to have been advanced by Donnybrook to Mr Simpson or Mr Simpson and GLSP of which approximately $127,000 is now owing or alternatively said to have been advanced to GLSP and guaranteed by Mr Simpson under a collateral agreement. This claim was amended during the hearing to also be a claim made against GLSP in the alternative;

(2) for the repayment of the investment of $350,000 by Donnybrook and paid to Mr Simpson or Mr Simpson and GLSP. Again it is said that if the advance was made to GLSP, the investment was guaranteed by Mr Simpson. This claim was also amended during the hearing to be a claim made in the alternative against GLSP; and

Investa

4 Mr Simpson’s claims against the plaintiffs are:

(1) that he is entitled to a commission of 3% of the sale price on Lots 15 and 16. The plaintiffs claim he was entitled to only 2% and that there was an agreement that he accept half of the commission payable by Investa to Mr Manners, the agent appointed by it (anticipated to be around $98,000 and when paid was $99,983.96) and which has in fact been paid to Mr Simpson; and

(2) that he is entitled to the proceeds of sale of the horse Hendrix sold for $120,000 (at market value, it was agreed) less a small amount for veterinary expenses. He claims that since he paid $12,500 towards the purchase price and since $12,500 (and not $25,000, as he was informed) was the actual price, he had a 100% interest in the horse. Mr Slater contends that he paid $25,000 for Hendrix. Mr Slater claims that when the costs of maintaining Hendrix are taken into account there is no net profit to be shared.

Background material relating to Deacons’ fees

5 A trust called the Summerfield Trust had been established by Mr Slater, the trustee of which was Casula Nominees Pty Ltd (“Casula”). Casula was controlled by Mr Slater and his first wife Christina. The trust owned Lots 15 and 16. A riding school and residence were established on Lot 16. Casula borrowed money from a bank in connection with the development and in due course the bank placed Casula in liquidation following its failure to repay the loan. The mortgage taken by the bank related only to Lot 16. Mr Slater also made a claim against Casula asserting that he had expended $436,800 on the improvements to Lot 16. He obtained default judgment in that amount against Casula. No attention was given in the proceedings as to how Mr Slater, a director of Casula, could have commenced proceedings against Casula and obtained default judgment against it.

6 Mr Slater arranged for Kingswood to take over from Casula as trustee of the Summerfield Trust. How this was organised is not clear, but it appears to have been achieved with the consent of Christina.

7 The bank, whose debt had not been repaid, put Lot 16 up for auction. At the auction Lot 16 was purchased by a Mr McColl. Subsequently the contract for sale was amended to record Strawberry John Pty Ltd (“Strawberry John”) as the purchaser – Mr McColl being a director of Strawberry John.

8 Mr Slater lodged a caveat claiming an interest in Lot 16 and he subsequently commenced proceedings against Strawberry John claiming that he and Mr McColl had reached an agreement that Mr McColl would bid for lot 16 as his agent and transfer the property to him if he was successful.

9 In the Supreme Court of Western Australia, Hasluck J held that Strawberry John was a trustee for Mr Slater under a constructive trust: see Slater v Strawberry John Pty Ltd [2002] WASC 204. In support of his claim for relief, Mr Slater provided evidence from Mr Simpson that should the Court declare a constructive trust of Lot 16 in favour of Mr Slater funds of $840,000 could be made available to Mr Slater by Mr Simpson and his wife, Jenelle, that would permit Strawberry John to be repaid the purchase price and any adjusted figure. Following the publication of the Court’s reasons, there were apparently negotiations between Mr Simpson, on behalf of Mr Slater, and Mr McColl, on behalf of Strawberry John, as to how the property was to be conveyed and how much was to be paid. The property was later transferred into the name of Mr Slater. The willingness of Mr Simpson (and his wife) to make funds available to Mr Slater may have had some connection with the loan and the investment which together totalled $750,000 and which I describe in more detail below.

10 As at 2002, relations between the Slaters and Mr Simpson were good and they remained so until 2004.

11 Mr Slater was given assistance by Mr Simpson in connection with Lots 15 and 16 not only by virtue of the promise of financial support to which I have referred but also in other respects particularly after Mr Slater had obtained a declaration of constructive trust because it was necessary for Mr Slater to negotiate a final outcome with Strawberry John and then obtain and negotiate a sale of the properties. Initially Mr Simpson tried to arrange a sale to Australand but this was unsuccessful. Later Lots 15 and 16 were both sold to Investa for a total of approximately $12 million.

12 Mr Simpson, in late December 2001 or early 2002, suggested that Mr Slater and Donnybrook’s interests would best be served if they retained Mr Forsyth of Deacons. Mr Simpson had used Mr Forsyth’s services in other matters and was confident, he said, that Mr Forsyth would be able to draft the appropriate clauses to deal with some difficult aspects of the transaction.

13 There is no dispute that Deacons did act on the sale of Lots 15 and 16 and in due course, when the settlement was imminent, Deacons obtained a direction from Mr Slater authorising $100,000 from the settlement to be paid to Deacons.

14 There is controversy as to what was agreed between Mr Simpson, Mr Slater and Deacons concerning the fees. Mr Slater claims that Mr Simpson agreed to pay Deacons’ fees. Mr Simpson says it was always the case that the fees would be paid out of the proceeds of sale of Lots 15 and 16, should it proceed, but if the sale did not progress then he would pay the fees and those fees so paid would be treated as partial repayment of the moneys owed to Donnybrook by GLSP: see paragraph 32 of Mr Simpson’s affidavit of 27 August 2008. Mr Slater accepts that if fees were paid by Mr Simpson they would be treated as a reduction of the moneys owed to Donnybrook.

15 Mr Slater claims that Mr Simpson gave instructions to Deacons that they should require Mr Slater execute a payment direction and that this was designed to help Mr Simpson (because in this way he would be able to avoid paying the Deacons fees that on Mr Slater’s case Mr Simpson had agreed to pay). Mr Slater accused Deacons of acting improperly because they were acting on Mr Simpson’s instructions. If Mr Slater’s version is correct there was a conflict of interest between Mr Simpson and Mr Slater because Mr Simpson would not have to pay fees, but Mr Slater or the trusts which he or his wife controlled, would. Mr Slater claims that he protested to Deacons about the payment authorities and signed them under duress.

Background material relating to the $400,000 loan and $350,000 investment

16 I return to deal with some further background material relevant to the $400,000 loan and $350,000 investment.

17 Mr Simpson had organised the incorporation of Donnybrook and compiled financial statements for Donnybrook for the 1998 and 1999 tax years and then sent them to Mr Woodgate of Carter Woodgate, who were Mr Slater’s main accountants. Mr Simpson also prepared the draft annual tax return for Donnybrook for the year ending 30 June 1999: see Exhibit A1 at pp 78 – 82. According to Mr Woodgate, Mr Simpson told him he would be checking the accounts prepared by Mr Woodgate and said: “I’ll be compiling all the information in regard to the New South Wales operation of Donnybrook”: see paragraph 4(c) of Mr Woodgate’s affidavit.

18 In 1999 the Slaters received $750,000 on the sale of a racehorse named Jox and were looking for an investment for those funds. Mr Simpson and the Slaters had become friends sharing a common enthusiasm for horses and equestrian events. Mr Simpson was a chartered accountant then operating under the name Davey Simpson.

19 As at June 1999 GLSP held units in a unit trust that was developing a large project in Wollongong. Another unit holder was Tilquin Pty Ltd (“Tilquin”), a company owned or controlled by Mr Rory O’Brien. Tilquin and Mr O’Brien had some business association with Mr Simpson and Mr O’Brien was a friend of Mr Simpson. GLSP was considering lending money to Tilquin to enable Tilquin to buy the units in the Wollongong development. GLSP lent $400,000 to Tilquin at a high rate of interest and GLSP (on Mr Simpson’s case) borrowed the $400,000 from Donnybrook at the same high rate of interest. Donnybrook claims that the loan was actually made to Mr Simpson although it accepts that Donnybrook’s cheque for $750,000 (which included the amount of $400,000) was made out, at Mr Simpson’s request, to GLSP and banked in GLSP’s account.

20 Approximately one year later Tilquin transferred the units in the Wollongong unit trust to GLSP and the mortgage given by Tilquin to GLSP was cancelled. GLSP continued to hold the units and when the Wollongong development was completed received the moneys due not only for the units bought by GLSP but also those transferred to GLSP by Tilquin.

21 Mr Simpson says that originally he had intended that some sort of documentation would be provided to Donnybrook to evidence its interest in the Tilquin mortgage but this did not happen. He says that the Slaters agreed to the end of any involvement of Tilquin and its replacement by GLSP, and GLSP was at all times the borrower from the plaintiffs. Mr Simpson told Mr and Mrs Slater that the high rate of interest would have to be reduced from 12.5% per annum to 10% per annum, which he said was a fair rate and which the Slaters accepted. It was later reduced to 9%. No security documentation was provided evidencing the loan by Donnybrook and indeed the only document is a letter of 15 July 1999 which is set out at [26] below and a copy of which is found at pp 102 – 104 of Exhibit A1. That letter is on letterhead of Davey Simpson, Chartered Accountants. The letter was obviously sent after the payment of moneys on 11 June 1999.

22 The second amount, of $350,000 (which was the balance of the $750,000 proceeds of the cheque paid by Donnybrook to GLSP on 11 June 1999) was paid, on the plaintiffs’ case, to Mr Simpson following a discussion with Mr Simpson. GLSP held one share in Stanley Gardens Pty Ltd (“SGPL”). SGPL was created to develop a site in Mona Vale which was to be called ‘Stanley Gardens’. The other shareholder was a company called Blue Ribbon Pty Ltd (“Blue Ribbon”) which was controlled by a Mr Barry Hammond. The building work at Stanley Gardens was to be undertaken by Mr Simpson’s brother, John Simpson (“John”). According to Mr Simpson, GLSP and Blue Ribbon had agreed to split profits on the venture 50/50 and that he and John had agreed to split the GLSP 50% share 50/50 giving John and Mr Simpson a 25% interest each: see T242 – T243, and Donnybrook a 25% interest. John had no written agreement with anyone relating to his work on the project and a company search of SGPL shows that he became a director of SGPL only in October 2002: see Exhibit A1 at p 73.

23 Mr Simpson says that when Mr and Mrs Slater expressed an interest in taking a share of Stanley Gardens (also referred to in the evidence as “the Mona Vale project”) he indicated that he would need to speak to John. He says he did so and that John agreed that the 25% share in the project they each held could be reduced to 12.5% so that the profits in the project would be shared: 12.5% Mr Greg Simpson, 12.5% Mr John Simpson, 25% Donnybrook and 50% Blue Ribbon. Mr Simpson, even on his own evidence, did not mention Blue Ribbon or Mr Hammond to the Slaters.

24 Mr Simpson claims that what he promised to Donnybrook through Mr and Mrs Slater was that Donnybrook would gain a 25% share in the net profits made by GLSP in the Mona Vale project. He says that he did not promise that there would be any profits.

25 Stanley Gardens did not make a profit according to Mr Simpson: see Exhibit A4 at pp 1315 - 1321. GLSP, according to Mr Simpson, had no obligation to repay the $350,000 to Donnybrook if the money invested by GLSP in the Mona Vale project was lost but he admits that the balance of the $400,000 loan is owing: see T270.30 - .35. The evidence is that GLSP cannot meet its liability to repay the balance of the loan (see T270.30 - .49 and T278 – T279) and it would follow, a fortiori, that GLSP cannot meet any liability to repay the $350,000, if that is owing. In 2003, money owed by GLSP to Mr Simpson was repaid to him and it has not traded since 2003: see T269.

26 The letter of 15 July 1999 was on the letterhead of Davey Simpson and in the following terms:

“Sharon & Bill

I thought it would be good to summarise the various situations that we are involved in.

Tax Returns and accounts (1991-1997)

Woodgate has promised to have these to us ready to sign by 26th July 1999. I think he should be rung by 21st July to make sure that he complies with this date.

He was already trying to stretch this date out to middle of August and saying that he did not have all the 1998 info which he needed to lodge it all together. I said strongly that all up to 1997 needs to be lodged first and that 1998 could be done later. We have not told him yet that I will do 1998 as we did not want anything else to effect him getting up to 1997 finished and lodged.

As I would like to have a look at things before they are lodged I pushed strongly for all returns and accounts to be sent to Sydney rather than have Bill sign in Perth when he is there in the next few weeks or so.

Please let me know if you want me to chase him up on 2 1st July or if one of you will do it.

Lot 15 & 16 West Swan

I believe that your interests in this land are best served by trying to negotiate out of Lot 16 for a good price and hanging on to Lot 15 to wait and see what becomes of the sub-division.

Even though Homes West are pushing forward quickly it is possible for many reasons (as discussed) that it may be some time before this land can be turned into real cash.

Also I believe that the risks of litigation on both sides dictates that this litigation should be settled if possible.

To settle we need an idea of the intrinsic value of Lot 16 bearing in mind that a portion of the land has been designated as part of the shopping centre.

Also it appears that Strawberry John P/L are very interested in the sub-division and may see the commerciality of settling for an amount which would still see them make money in the long term rather than risking losing the property all together.

If an amount could be settled it would be enough to settle Chrissy for all her interests plus money left to invest in another property or in other things.

To have a good chance of settling with Strawberry John P/L I think that we need to have a meeting with the major financier (Allen??) after we have the above mentioned information and before the mediation process begins. This will require action quickly to get the above mentioned details from Howard Mitchell.

BP Garage site on Gnangara Road

I think this could be a good site for a Wollongong type operation.

This information would give us a good starting point. This type of development needs to be actioned quickly for success. If there are problems to be overcome (as there seems to be) this may be in our favour. This type of development also can be finished and running quickly with the contacts that we now have. I would get a local Real Estate agent to gather this information for us as soon as possible.

Stanley Gardens Pty Ltd

The Mona Vale units are progressing as anticipated. We should have an architects (sic) impression of the finished product in the next two weeks. The planners engaged to help deal with Council and furnish the required reports etc are confident that we will have no difficulties getting quick approval from Council for the changes we are making. The Development Application will be lodged with Council by the end of August and all going to plan we will be looking to start building by late January next year and finished by end of May, 2000.

Once we have the Council approval we will begin selling the units off the plan (one is already sold subject to Council approval) and hopefully all will be sold by the time construction comences (sic).

Loan $400,000

Loan funds of $400,000 @ 12.5% have been made. Interest for one year – $50,000
As agreed interest will be paid monthly in advance at $5,000.00 per month for ten months as follows:

11.06.99 $5,000.00**
11.07.99 $5,000.00**
11.08.99 $5,000.00
11.09.99 $5,000.00
11.10.99 $5,000.00
11.11.99 $5,000.00
11.12.99 $5,000.00
11.01.2000 $5,000.00
11.02.2000 $5,000.00
11.03.2000 $5,000.00

Enclosed are eight (8) post-dated cheques for the remaining interest amounts due.

I have put GLS Properties P/L (my company) between the borrower (Tilquin Investments Pty Ltd) and Donnybrook Properties P/L so that in the unlikely event that there is a problem in the repayment of the money then it falls to me to repay it. I feel more comfortable with this position so that you will never have to worry that your funds are at risk. Security in the form of a mortgage has been given and also security in the form of shares in the investment of Tilquin has also been given. This security adds up to over $1.3 million so the position is secure. Documents to reflect your interest in this security and your interest (charge) over GLS Properties have to be signed by you in due course.

Give me a call if you have any queries about any of the above mentioned.

Yours faithfully,

Credibility of witnesses

27 The plaintiffs called in their case Mr Slater, Mrs Slater, Mr Bunning and Mr Woodgate. Mr Slater’s evidence related to all of the matters in dispute. Mrs Slater’s evidence related to the $400,000 loan, the $350,000 investment and the horse. Mr Bunning was the vendor (with his wife, he says) of the horse Hendrix and Mr Woodgate was Mr Slater’s principal accountant and his evidence went to a narrow point.

28 The defendants’ submissions on the credit of Mr Slater were extensive. I set them out below (as amended by the defendants’ reply submissions received on 30 October 2009):

“9. Mr Slater should not be accepted as a witness of credit.

10. His demeanour as a witness was aggressive, belligerent, evasive and non-responsive. He frequently avoided answering direct questions, and resorted to giving speeches. He made outlandish or exaggerated statements. At best he exaggerated. At worst he was deliberately untruthful.

11. Mr Slater is plainly a man who likes to be in control. He frequently attempted to take control of his cross-examination. He is no shrinking violet.

12. Mr Slater was at pains to attempt to portray himself as a simple man, unsophisticated in the ways of commerce or business. Although he denied it, that was a deliberately contrived position. He offered no direct response when confronted with the proposition that he was endeavouring to understate the experience and understanding that he had in respect of earning a return. Despite repeated statements that he is and was a mere “truck driver”, Mr Slater has in fact worn many other hats over many years. He has even sworn affidavits, in these proceedings, where he described his current occupation as a company director, although when giving oral evidence he was careful to describe himself as a “truck driver”. The evidence of any truck driving is scant. When questioned as to when he ceased to be a company director and started to be a truck driver, he said: “I have always been both”. It is submitted that Mr Slater’s attempts to portray himself as a mere “truck driver”, were part of a deliberate attempt to give the Court the false impression that Mr Slater was a man inexperienced in business and business transactions.

13. The evidence discloses that Mr Slater has:

(a) been a company director since at least 1979;

(b) been in the equestrian business for 50 years, had extensive experience in the sale of thoroughbreds and other horses, and during that time he has:

(i) owned, bred and maintained all sorts of horses, including thoroughbred horses and show jumpers;

(ii) sold horses to clients in Australia;

(iii) sold horses to clients overseas, including Indonesia, Singapore, Malaysia and Taiwan;

(iv) sold at least one horse for a very significant sum of money;

(v) had investments in various equestrian businesses;

(vi) been a licensed thoroughbred horse trainer;

(vii) been an accredited bloodstock agent;

…..

(d) a detailed understanding of the horse industry;

(e) engaged in substantive construction and development of his property in Western Australia, Lots 15 and 16, over a period of 15 years including:

(i) personally carrying out building works;

(ii) engaging others to carry out works on his behalf, whilst supervising such projects;

(iii) conducting extensive earthworks;

(iv) generally supervising the development of that property;

…..

(g) described himself as a “developer” before a Standing Committee on Constitutional Affairs and Statutes Revision of the Western Australian Parliament (“the Parliamentary Standing Committee”);

…..

(j) lobbied a Parliamentary Standing Committee in relation to land development;

(k) been involved in numerous legal proceedings, other than the present ones, including:

(i) Family Court proceedings with his ex-wife;

(ii) proceedings which he brought on his own account against Casula;

(iii) the Strawberry John litigation;

(l) a detailed understanding of various dealings in real property, including:

(i) the lodging of caveats;

(ii) the creation of equitable mortgages;

(iii) the creation of unregistered mortgages;

(m) been involved in numerous trusts, including the Summerfield Trust and the Bill Slater Family Trust;

(n) had set up and maintained complex corporate and family trust structures;

(o) had a keen understanding of the distinction between an individual and a corporate entity;

(p) had a clear understanding of the difference between acting on his own account and in the capacity of a trustee;

(q) is aware of the taxation implications of various commercial dealings and decisions he has made;

(r) understood that a high rate of interest on a loan reflected a high rate of riskiness of the investment;

(s) understood the relative degree of riskiness of a third mortgage, indeed, in his words, a third mortgage was: “useless” because two other people stand in front of you;

(t) understood that not all property developments make money;

(u) is a man who makes up his own mind;

(v) was sufficiently confident to reject the recommendation that he take further advice on tax issues, when it was suggested that he do so by Mr Simpson;

(w) elected not to follow the advice of Deacons, including, their taxation expert, Mr Toole, to the effect that it would be risky to proceed on the basis that the constructive trust is held by Bill Slater as trustee for the Summerville Trust [sic], and that it would be preferable to seek a private tax ruling and appeal if the ruling were unfavourable;

(x) on his evidence, engaged in discussions with Mr Woodgate concerning the imminent sale of the horse Jox and the tax implications which would arise from such sale and the use of accumulated losses to offset the tax which would be payable in relation to such sale;

(y) on his evidence, considered and rejected a suggestions by Mr Simpson that he invest in various projects prior to the Mona Vale development, namely:

(i) an ice cream business at Coogee;

(ii) a franchise, called Shakespeare pies;

(iii) an investment in a development in Wollongong;

(iv) a development concerning vacant land at Ingleside at Mona Vale;

(z) even in the face of recommendations from Mr Simpson that he needed tax advice on capital gains tax issues, chose not to obtain any such advice.

14. In his evidence Mr Slater denied that he had carried out property development work, seeking to distinguish between “property development” and “developing a property” (which was a distinction without a difference), yet before the Parliamentary Standing Committee he had no trouble calling himself a “developer”. It is also plain from the evidence he gave to the Parliamentary Standing Committee that he had knowledge and experience of property development, and indeed, his evidence in relation to what he had done on Lots 15 and 16 revealed quite clearly he had engaged in property development activities on that land for 15 years.

15. Mr Slater is an experienced, hard-nosed businessman, with substantial experience of real property dealings, trusts and commercial transactions, including property developments. He attempted to present himself as commercially naive and unsophisticated, but nothing could be further from the truth. The objective evidence discloses that Mr Slater was at all material times a strong-willed and vigilant protector of his own commercial interests.

16. Mr Slater made important concessions that there were numerous past instances where, in circumstances where he was under a legal obligation to tell the truth, he had knowingly and deliberately failed to do so, including:

(a) making a knowingly false statutory declaration in 1994;

(b) in 1995 he told the Parliamentary Standing Committee that horse “buyers from Asia continually come down here in droves” yet in his evidence he first denied buyers had ever come to Western Australian equestrian centres in droves, and then confronted with evidence he had given to the Parliamentary Standing Committee which suggested that they had, denied that it was correct;

(c) in 1995 before the Parliamentary Standing Committee he described himself as developer twice, yet denied he had seen himself as a developer in 1995. When it was put to him that he was giving incorrect evidence to the committee he simply responded: “Yeah, yeah, look, Mr Stoljar ...” and then proceeded to give an unresponsive speech, and asserted: “You are reading into this document things that never happened, right?” Plainly, he had described himself as such before the committee;

(d) when it was suggested to him that he had exaggerated some of the evidence given to the Parliamentary Standing Committee, he did not deny that suggestion, but simply said: “I am saying that I wanted, I didn’t want any development in the area whatsoever”, which was effectively a concession that he had;

(e) just a few moments later, he was asked: “is it the case that you say that the evidence that you gave to the committee was exaggerated?”, he answered: “You can put it that way if you like” effectively conceding that he had, but then he refused to accept that; and

(f) he conceded that certain matters which he had verified as true in the statement of claim on 31 May 2006, which he claimed to have read through to ensure that it was true and correct before he swore his affidavit verifying it, included allegations which had no basis in fact.

17. There were also the following instances where Mr Simpson conceded that, during the course of his evidence in these proceedings, he had given false evidence:

(a) he conceded that the evidence he had given on 19 October 2009 that he had received a letter from Mr Simpson between the period July 1999 and January 2000 which gave him confidence that the Mona Vale investment was going to plan was simply false;

(b) at first he said that paragraph 11(vi) of the statement of claim contained words said to him by Mr Simpson; then he changed that evidence; and then when confronted with the suggestion that the original evidence was false, the best he could say was: “I need some help here”; and

(c) he conceded that the verification of the second-cross claim, and in particular, paragraph 9, was incorrect, despite having carefully read the cross-claim before he swore the affidavit, and satisfied himself that the contents of that cross-claim were true and correct.

18. There were instances where he gave evidence which was also plainly false, even though he did not concede it, such as:

(a) when first shown the judgment in Slater v Strawberry John Pty Ltd [2002] WASC 204 (“the Judgment”) he claimed that had “read it a long time ago”, yet is abundantly plain from the handwritten pencil notes on the face of Ex 4 that he had looked at it the very night before,

(b) after a brief adjournment, Mr Slater was questioned about his statement that he had not read the Judgment for some time, and could not remember what was in it, and was asked whether that evidence was true or false. Rather than answer that question directly, Mr Slater attempted to assert that he was somehow confused about whether Ex 4 was a “judgment or a finding”, but then almost straight away conceded that he knew that the document which became Ex 4 was a copy of the judgment in the Slater v Strawberry John proceedings. He then conceded that he had read the Judgment the previous night;

(c) Mr Slater then asserted that the pencil marks had been made “ages ago”. That was plainly a false statement, and must have been knowingly false at the time it was made. His subsequent explanation of this comment was entirely unsatisfactory for the following reasons, and was a transparent attempt to explain away what was plainly the untruthful evidence that Mr Slater had earlier given. First, it is clear that the pencil notation made the night before was not on any view made “ages ago”. Secondly, the balance of the pencil marks were conceded to have been made the Thursday, Friday or the weekend before the hearing (ie. on one of 15, 16, 17 or 18 October). Given that the evidence that those marks were made “ages ago” was given on Monday, 19 October 2009, the explanation that: “It wasn’t ages to me but to me it seemed ages ago because I had read so many documents” is a wholly unbelievable explanation, especially in light of the myriad of other problems with Mr Slater’s credibility generally. It is also significant that the explanation for the evidence about “ages ago” came after Mr Slater was recalled for further cross-examination, and after he had heard the argument about the notes and the admissibility of Ex 4 whilst sitting in court, immediately before being recalled for further cross-examination;

(d) Mr Slater’s conduct in giving Ex 4 to his counsel whilst he was under cross-examination: “Because [Mr Slater] felt it was relevant” was flatly contradictory to the instructions given to him by his counsel that he could not talk to anyone about the case whilst under cross-examination, and demonstrates Mr Slater’s scant regard for the proprieties of conducting litigation;

(e) Mr Slater had signed a resolution of Kingswood resolving to de-register it, and in applying for deregistration of the company, had certified to ASIC that Kingswood was not a party to any legal proceedings, when plainly, to Mr Slater’s knowledge, it was a party to these proceedings. At first Mr Slater said he had not seen Ex 2 before. When directed to his signature he agreed he had signed it on 10 September 2009. He denied that he had read through the form before he had signed it. That denial was not credible. He accepted that paragraph (f) of the declaration was false. He claimed not to have known that when he signed it, and, interjecting before a full question could be put to him, volunteered that: “I have just signed the document without reading it. That is all I have done”. That was an explanation which he gave at the end of his cross-examination, after he had repeatedly been shown to have sworn affidavits that had been incorrect. It is submitted that in the context, his explanation was scarcely credible. He claimed that his accountant Mr Woodgate gave him the document to sign. He claimed to have been in Western Australia in June when he signed the document, but according to Mr Woodgate, it was sent to him in the post. If it was indeed sent to him in the post as Mr Woodgate asserted, and was accompanied by a covering letter of the kind Mr Woodgate described, it is inconceivable that Mr Slater did not read it on receipt before he signed it; and

(f) Mr Woodgate’s evidence was that he had had a telephone conversation with Mr Slater and asked him if there was any reason why Kingswood could not be deregistered. Mr Slater made no mention of any such call.

19. There were various other unsatisfactory aspects of Mr Slater’s evidence, such as:

(a) he denied that he would describe himself as a “developer”, saying: “No way. I describe myself as a truck driver”, and denied that he had ever described himself as a developer. Despite this, before the Parliamentary Standing Committee he described himself as a developer at least twice. When asked whether he had seen himself as a developer in 1995, he said: “No way”.

(b) he said in his evidence that the description of Mr Simpson as a “business associate” was a false description, yet he was later forced to concede that for the whole of the period between May 1999 to about May 2002 he regarded the description of Mr Simpson as a “long time friend and business associate” as correct, and that it accurately and fairly described the relationship between Mr Simpson on the one hand, and Mr & Mrs Slater on the other;

(c) he claimed that when he prepared his 29 September 2008 affidavit he had set out to give a comprehensive account to the Court of what happened with the $350,000 investment, and that he had made sure it did not omit any material matters, and that he had checked it carefully before he swore it, yet then had to concede that there was no reference to sale of the home units on a progressive basis as each sale was achieved, and his explanation was that: “We didn’t think of everything in the affidavit. I didn’t put everything in it”, which was flatly contradictory of his earlier answer that he had attempted to be comprehensive;

(d) he then said that he regarded it as unimportant to include that he would be entitled to a quarter share of any net proceeds achieved from the sale of the home units on a progressive basis as each sale was achieved, but then immediately conceded it was important, but claimed it was missed or omitted;

(e) there were similar problems with the omission of any evidence that Mr Simpson said that he would take also reasonable steps to commence construction;

(f) Mr Slater then tried to blame his difficulties caused by verification of allegations in the statement of claim which had no basis in fact on the fact that his solicitor Mr Rees had drafted it;

(g) he gave first gave evidence that Mr Simpson had assured him a letter that building would start on the Mona Vale development by late January, yet he was later forced to concede that he did not receive a letter from Mr Simpson between July 1999 and January 2000 which gave him confidence that the Mona Vale project was going to plan, and admitted that the evidence he had given the day before was false;

(h) he conceded that paragraph 63 of his affidavit of 24 March 2009 was simply untrue and contained a false statement, yet denied he knew it was false when he swore the affidavit, but conceded that by that paragraph he was attempting to rebut the proposition that there was an agreement that Mr Simpson would receive commission, and that the paragraph was endeavouring to convey a false impression, although he denied that he knew this when he swore the affidavit;

20. Mr Slater was, during the course of his sworn evidence, quite content to make serious but completely unfounded allegations against Mr Simpson. It is submitted that, the plaintiffs entire case in these proceedings against Mr Simpson in fact falls into that category. In an extraordinary non-responsive answer, which prompted Mr Slater’s own counsel to object, Mr Slater alleged that Mr Simpson had gone behind his back, in some sort of underhand way, in negotiating with Australand. When confronted with the allegation, he retracted that evidence, and conceded that it was an unfounded accusation.

21. There were various other matters that also impact adversely on Mr Slater’s credit. For example, the acceptance of the evidence of the plaintiffs that the purchase price of the horse Hendrix was $25,000 plus some GST, would involve an acceptance that Mr Slater had attempted to devise a scheme with Mr Bunning to avoid paying GST on the sale of Hendrix (then known as “Monty”) which was known by all concerned to be properly payable. In other words, Mr Slater was attempting to procure the assistance of Mr Bunning to devise a scheme to avoid paying GST properly payable. On any view, if the true purchase price of Hendrix was $25,000 exclusive of GST, then that scheme was implemented to some degree, because GST was only paid on amount of $10,500, when at the very least, both Mr Slater and Mr Bunning knew that the total consideration moving to Mr Bunning (assuming he only owned a half share of the horse as he contends) was $12,500, and GST would properly be payable on that amount, but in reality, there was GST payable on the whole $25,000 consideration if indeed that is what was paid.

22. Above all else, Mr Slater’s evidence on critical events was unsupported by any contemporaneous records, unconvertible facts, or the logic of events. His evidence was also inconsistent in critical respects from that of Mrs Slater, and also, to some degree, Mr Woodgate.”

29 The submissions made on behalf of the plaintiffs in relation to the credit of Mr Slater fell into two categories. The first was to the effect that there were six objective factors which support the Slaters’ version of events and these were, Mr Lindsay submitted:

(1) The absence of any documents of a type which would be expected in commercial transactions.

(2) The fact that “the transaction was arranged by Mr Simpson – as a professional man, a chartered accountant, in and from his professional offices”: see T324.27.

(3) Mr Simpson’s “failure to disclose his business relationship with Mr O’Brien and Tilquin”: see T324.28, and his failure to disclose “the true nature of the Mona Vale development, and his failure to produce fundamental records relating to the transactions”: see T324.30.

(4) The ambiguity of the profit share arrangement.

(5) The letter of 15 July 1999.

(6) The subsequent conduct of Mr Simpson “in keeping Donnybrook and the Slaters at bay”: see T325.17.

(7) That the evidence of Deacons personnel corroborated Mr Slater’s evidence and undermined Mr Simpson’s evidence.

30 The second category of submissions on credibility were to respond to the attack made against Mr Slater in the defendants’ submissions to which I have referred. These submissions are contained in the plaintiffs’ reply submissions received on 31 October 2009. They are detailed and, adopting a shorthand way of describing them, are:

(1) If Mr Slater seemed to make exaggerated statements that is merely Mr Slater’s manner of speaking.

(2) Mr Slater was not shown to be a developer other than in respect of property owned by the trusts which he controls.

Slater v Strawberry John

(4) Mr Slater was a truck driver so it was not misleading to so describe himself since he acknowledged that he was both a truck driver and a company director.

(5) The claims that Mr Slater conceded he had exaggerated some evidence (see paragraphs 16(d) and (e) of the defendants’ submissions and see T37 – T38), are not well-founded.

(6) The Court should accept that Mr Slater was unaware that the copy of the Western Australia judgment was the same as Exhibit 4.

(7) The assertion that Mr Slater must have read the document which lead to the deregistration of Kingswood was not consistent with Mr Woodgate’s evidence – whose covering letter did not say “you should read through the documents carefully”.

(8) Signing the deregistration application is “a clear indication of Mr Slater’s commercial naivety and that he completely lacks business judgement”: see paragraph 21(b) of the plaintiffs’ reply submissions.

(9) It was not put to Mr Slater what was meant by “business associates”.

(10) In answer to the defendants’ submissions that Mr Slater’s evidence “was unsupported by any contemporaneous records, uncontroversial facts or the logic or events”, the plaintiffs’ reply submissions point out that the criticism of Mr Slater for not have contemporaneous documents should be directed at Mr Simpson. The submissions also make the point that the few documents that exist do undermine Mr Simpson’s evidence.

31 In broad measure I accept the submissions of the defendants that Mr Slater was an unimpressive witness whose credibility was severely undermined in cross-examination and for the reasons articulated by them. He admitted at several points that evidence which he had earlier given was untrue or exaggerated: see T73 – T74, T97 – T98. I do not accept that these can be put down to his manner of speech. I do not accept that his description of himself as a “truck driver” was an honest one and I accept the defendants’ submission that it was deliberately designed to present himself as an unsophisticated person, which his own letters and emails scattered through Exhibit A, and his conversations and past actions demonstrate he is not. He denied that he had ever called himself a developer but that is how he described himself to the Western Australia Parliamentary Standing Committee. When asked if he had exaggerated some of the evidence he gave to the Committee he did not answer that question: see T38.70. The cross-examination at T38 – T40, albeit on a minor point, provides an example of his unreliability, as does the cross-examination at T70 – T72. The contention that the cross-examination “over-reached” itself and served to demonstrate Mr Slater’s naivety and lack of sophistication does not rebut the attack on Mr Slater’s credibility.

32 I do not accept Mr Slater’s assertion that he did not know that the copy of the Western Australia judgment that is Exhibit 4 was the same as that contained in the bundle. I do not accept the suggestion that he did not appreciate that the declaration he made in order to obtain deregistration of Kingswood (when it was and is a cross defendant in this litigation) was false. I do not think that his act of applying for deregistration demonstrates commercial naivety.

33 The plaintiffs’ reply submissions query what is meant by ‘business associates’. Mr Slater did raise the question of whether the Mona Vale project made him a business associate but he conceded that Mr Simpson was correctly described as a long-term friend and business associate of Mr and Mrs Slater: see T110 – T111. The relationship between Mr Simpson and Mr Slater was, as I shall detail below, somewhat complex and I do not regard this aspect of the attack on Mr Slater’s credibility as of any real significance.

34 On the question of contemporaneous records, the defendants’ submissions are not a criticism of Mr Slater for not having any contemporaneous notes or records. The defendant’s contention is rather, that nothing that Mr Slater can produce supports his assertions and that there is material, to which I shall return, which undermines his case.

35 I accept however, the plaintiffs’ submission that Mr Simpson’s lack of records is no less profound than Mr Slater and in some ways more significant, given his profession. The conversations which are relied upon in this case are as old as 10 years (regarding the $400,000 loan and the $350,000 investment), 8 years in relation to the commission claim and 5 years in relation to the Deacons’ fees. The reliability of recollection of all witnesses is already open to question, quite apart from other matters.

36 The defendants accepted that Mrs Slater was a more credible witness than Mr Slater. The defendants’ submission however, was that Mrs Slater’s evidence in critical respects was unsatisfactory and that she should not be accepted as a witness of credit. The following matters were adverted to:

“25. Critically, the following aspects of Mrs Slater’s evidence undermine her credibility:

(a) her explanation of why the loan account prepared by her and her husband on 16 June 2004 was later altered by her in what would appear to be a deliberately misleading way in December 2004 by altering “$350,000 invested in Mona Vale (Stanley Gardens Pty Ltd)” to “$350,000 invested with Greg” was wholly unsatisfactory;

(b) her claim that she did not understand what a profit share was, and that this was not mentioned at the January 2005 meeting with Mr Forsyth is flatly contradicted by Mr Forsyth’s evidence, and his evidence on this should be accepted. Mr Forsyth was clearly a witness of truth. If Mr Forsyth’s evidence in respect of the January 2005 meeting is accepted, Mrs Slater’s whole testimony is seriously undermined;

(c) in dealing with an email which she sent in August 2002, notwithstanding that she had said: “We need to have the tax done up-to-date again to prepare for that land to go back into the trust”, she attempted to disown that statement and eschew any knowledge of which trusts the land was held in. When it was suggested to her that this was information she was getting from her husband, she at first denied this; then she claimed she could not remember if she was getting information from her husband about such tax issues; and it was only in the face of a question from the bench that she agreed that it must have come from her husband. This sensitivity to agreeing that such information had come from her husband marries up with Mr Slater’s evident sensitivity to the question of liability for capital gains tax because of dealings with both Lots 15 and 16, and his defensiveness in his own evidence to question about such issues. Plainly Mrs Slater was alive to such sensitivities, and was also attempting to give her evidence without disclosing such matters.”

37 Mr Forsyth’s evidence of what Mrs Slater said at his meeting with her, Mr Slater and Mr Simpson undermined her evidence.

38 The matters to which attention is drawn by the defendants left me in doubt as to the reliability of her evidence, so I approach her evidence with some caution, but I did not have the same level of concern that I did with Mr Slater’s credibility.

Mr Bunning

39 Mr Bunning was somewhat vague but I did not think that he was shown to be untruthful. He admitted that he was a friend of the Slaters. There is evidence of a total payment of $21,000 into Mr Bunning’s bank account and the $4,000 deduction was explained by Mr Bunning. I accept Mr Bunning’s evidence.

Mr Woodgate

40 Mr Woodgate’s evidence related to conversations he had with Mr Simpson in respect of accounting work that Mr Simpson was engaged to carry out on behalf of the Slaters and Donnybrook. The only real challenge to Mr Woodgate’s evidence was that he asserted a recollection of conversations 10 years ago without the benefit of any diary notes or memoranda, which conversations corroborated, in very similar terms, Mr Slater’s evidence. I do not think Mr Woodgate was shown to have given false evidence and he was not shown to have said anything inconsistent with the documents: see Exhibit A1 at pp 102 – 104, 107, 138 and 139.

41 Mr Simpson was a very calm, quietly spoken and unflappable witness who answered questions asked carefully. He made a number of admissions when they were required. The contrast between the effect of cross-examination of Mr Slater and of Mr Simpson was quite stark. Having said that, there were a number of aspects of Mr Simpson’s evidence which lead me to approach his evidence with a substantial degree of caution – notwithstanding the clear contrast between his presentation and that of Mr Slater:

(1) His assertion that he had not instructed Deacons to obtain the irrevocable authorisation from Mr Slater was contradicted by Mr Forsyth.

(2) His evidence that he had suggested Mr Forsyth to be Mr Slater’s solicitor because Mr Forsyth was an expert in the field was undermined by Mr Forsyth’s evidence that he had brought in Mr Bevan because “I do not practice as a property lawyer”: see paragraph 7 of Mr Forsyth’s affidavit of 19 May 2006.

(3) His evidence that he does not have any documentation in relation to the loan or the investment or the disbursement of the $750,000: see T235 – T236, is surprising since neither matter is concluded and since from 2004, at least, it was clear that the Mona Vale project would not be profitable.

(4) His evidence was that he had intended that documentation would be provided to the Slaters in respect of the $400,000 loan, but it was never provided.

(5) His letter of 15 July (set out at [26] above) made no reference to the payment of $350,000 as an investment in the Mona Vale project, and there was no reference in the letter to GLSP in this context.

(6) His attempt to distance himself from any advice component in his dealings with the Slaters: see T242.5 - .14, notwithstanding the terms of the letter of 15 July and other evidence which pointed to him having given advice.

(7) His assertion that he wanted to repay the loan and only allowed it to continue as a ‘favour’ to Mrs Slater was difficult to accept.

(8) The draft accounts for Donnybrook showed “investment $750,000” with no break up of the $400,000 and the $350,000. Mr Simpson was cross-examined about this at T260 – T261 and his explanation was that he was leaving it to Mr Slater to tell Mr Woodgate, which is surprising since he wrote to Mr Woodgate enclosing the accounts: see Exhibit A1 at p 107.

bona fides.

(10) In relation to [29(3)], whilst Mr Simpson did not advise the Slaters that the project in which Tilquin proposed to use the $400,000 was a property in which GLSP had an investment, I do not think this has been shown to have any significance.

These doubts relating to Mr Simpson’s credit are particularly important when it comes to the $350,000 investment dealt with below.

Mr Forsyth

42 Mr Forsyth’s evidence was not challenged in cross-examination. I accept that he and Mr Simpson are friends but do not think that establishes that his evidence is unreliable, especially where there are diary notes of what was said, the contemporaneous quality of which notes has not been challenged.

Ms Evans

43 Ms Evans was cross-examined but only briefly. Ms Evans made file notes of her conversations with Mr Slater. The evidence of Ms Evans was not impugned and I regard her diary notes as the best evidence of whether Mr Slater said what he now says he said, and not his evidence.

44 Mr Bevan was not cross-examined. He denied that Mr Slater protested to him when he signed the authorities. He denied Mr Slater had said to him that he found it

45 There is no dispute that on 11 June 1999 Donnybrook handed over a cheque made out to GLSP for $750,000. There is no dispute that that amount found its way into the account of GLSP. There is no dispute that the $750,000 was made up of:

(a) an amount of $400,000 intended to be a loan in which interest at 12.5% would be paid and which funds would be made available initially to Tilquin; and

(b) an amount of $350,000 intended to represent an investment in the Mona Vale project.

46 There is no dispute that the agreement in respect of both aspects was orally made between on the one hand, Mr and Mrs Slater on behalf of Donnybrook, and on the other, Mr Simpson, either on his own behalf (the plaintiffs’ case) or on behalf of GLSP (Mr Simpson’s case).

47 The critical conversation relied on by the plaintiffs is found at paragraph 31(b) of Mr Slater’s affidavit of 29 September 2008, on 7 June 1999 in the following terms:

“At his office Simpson said to us: “What are you going to do with the rest of your money, the $400,000.00? Do you want me to roll it over at the Bank? I’ve got a client who is interested in borrowing money and I’ll charge him 12.5%.”

I said: “That’s a bit steep. No-one is going to pay that.”

He said: “It’ll be a third mortgage and that’s the going rate for a third mortgage.”

I said: “I’m not going to lend money to anyone on a third mortgage that I don’t know.”

He said: “I’ll guarantee it. I suggest that I pay $5,000.00 per month and give you 10 post dated cheques and we’ll work out how much is principal and how much is interest in 12 months.”

I said: “We want all our money back in one hit, the loan and Mona Vale at the end of 12 months.”

He said: “No problem.””

48 Mrs Slater’s version of the conversation which she had on 7 June 1999 is set out at paragraphs 24 and 25 of her affidavit of 30 September 2008:

“… Simpson said to us: “I’ve got a client who is interested in taking four hundred thousand as a loan for six months. I think we can get 12.5 % to be secured by mortgage.””

49 Mr Simpson denies that he had a meeting with the Slaters on 7 June 1999. However, he says that in the course of a telephone conversation with Mrs Slater about the $350,000 investment – set out below at [64] – the following was said about the $400,000 loan:

Mrs Slater: "If we did that what do you think we could do with the rest of our money?"

I said: "There is still that friend of mine who needs to borrow $400,000. If you do not feel comfortable with that I can put my company GLS in between you and him and I would lend it on to him at the same rate. I know him well. I have spoken to him and he would pay 12.5% interest".

…..

Our conversation continued and words to the following effect were said:

Mrs Slater: “That sounds great. That would mean that we could earn good interest on our money for living and at the same time have the investment in the Mona Vale development. We might need also possibly to draw down on that loan from time to time would that be okay?

I said: "With my company in between I can try and be a bit flexible as you need. I would need a bit of notice when you need to draw down money but I should be able to help".

Mrs Slater: "I'll speak with Bill and get back to you. When would all of this happen?"

I said: "We have to wait until the Mona Vale land is settled, however, that is due to happen shortly".

Mrs Slater: "I'll get Bill to call you".

50 It is clear from the evidence of Mr Simpson and Mrs Slater that the Slaters had become aware of the involvement of GLSP before handing over the money. Mrs Slater records Mr Simpson as having said: “[i]ts my company”. Mr Slater avoids using the word ‘company’ in his recitation of the facts both in his affidavit and his evidence in Court: see paragraph 33(b) of Mr Slater’s affidavit of 29 September 2008 and see T71 – T72. The letter sent just over one month later made it clear that GLSP was Mr Simpson’s company and it elicited no response whatsoever from Mr Slater.

51 I accept the evidence of Mr Simpson and Mrs Slater that Mr Simpson described GLSP as a company. On Mrs Slater’s evidence there was no provision of a guarantee by Mr Simpson. On Mr Simpson’s evidence he did not guarantee the loan. On Mr Slater’s evidence Mr Simpson guaranteed the $400,000 loan: see paragraphs 31(b) and 32 of Mr Slater’s affidavit of 29 September 2008.

52 The plaintiffs rely on the letter of 15 July 1999, set out at [26] above, in relation to the $400,000 loan. The letter of 15 July 1999 makes it clear that GLSP is a company. The word ‘me’ is used but in a sentence which explains that GLSP will be interposed. The letter is close in its terms to the conversation to which Mr Simpson deposes and quite different to the conversation to which Mr Slater deposes.

53 On the material, and given the view I have taken of Mr Slater’s credibility, and also having regard to the absence of any support from Mrs Slater to an oral guarantee by Mr Simpson, I am unable to conclude that a guarantee or a collateral warranty was given by Mr Simpson. The only further factors are that, first, Mr Simpson offered to repay the $400,000 out of his own funds: see T282 – T283 set out at [79] below, and see Exhibit A1 at p 273, and second, that he agreed to pay the Deacons fees on behalf of Mr Slater if the sale of Lots 15 and 16 did not proceed and did in fact pay some of the Deacons fees before the sale when, on his case, he personally had no obligation to the plaintiffs. His explanation for having offered to repay the $400,000 (out of his own money) in 2000 was that Tilquin had ceased to be involved. He was not asked why he regarded it as appropriate to offer to pay money to the Slaters (or Donnybrook) that were owed by GLSP but it was not put to him that he did so out of a recognition of an obligation that it was he, personally, who owed the money to Donnybrook, and not GLSP: see T267 – T269. The fact of the offer to repay and the arrangement in respect of the Deacons fees (which I deal with below) are consistent with Mr Simpson having regarded himself as having a personal obligation but they do not establish that he did undertake a personal obligation in the conversations of June 1999. They are also consistent with GLSP being unable to repay the funds and Mr Simpson being willing to loan money to his company so that Donnybrook could be repaid.

54 The amended statement of claim in proceedings 3014 of 2006 asserts that the agreement between Donnybrook and Mr Simpson made on 9 June 1999 was that:

(1) Mr Simpson hold the $350,000 on trust for the plaintiff to be invested as part of the capital needed to acquire 4 lots in the land needed for the Mona Vale project.

(2) Mr Simpson would ensure that Donnybrook was registered as a one-quarter owner of the land as tenants in common with other registered proprietors of the land.

(3) Mr Simpson would attend to registration.

(4) Mr Simpson through GLSP and SGPL would develop the land, obtain consent etc.

(5) all reasonable steps would be taken to commence construction of the units by the end of January 2000 and complete the development by 31 May 2000.

(6) the development would be completed and sold by 31 May 2000.

(7) Mr Simpson would market the units in the development off the plan.

(8) Mr Simpson would return the $350,000 to Donnybrook “regardless of whether the development of the home units was completed”.

(9) Donnybrook would be entitled to a quarter share of any net proceeds achieved from the sale of home units on a progressive basis as each sale was achieved.

55 Donnybrook claims that Mr Simpson breached the terms of this agreement.

56 On the last day of the hearing the plaintiff amended its claim to allege that the agreement made was made also with or alternatively with GLSP.

57 All that the letter of 15 July says in connection with the Mona Vale project is under the heading “Stanley Gardens Pty Ltd”: see [26] above. There is no reference to GLSP at all, and no mention of the fact that $350,000 had been paid to it or to anyone else.

58 The letter is silent on the question of whether a share in real estate had been offered. The absence of any complaint by the plaintiffs that they had not received documentation evidencing a share in the real estate is some evidence that none was promised.

59 The plaintiffs allege that Mr Simpson acted “as professional adviser” to them and was negligent and breached his duty of care by representing to the plaintiffs that the Mona Vale land could be purchased, developed and all units sold by 31 May 2000, failing to market the units diligently and expeditiously and with the appropriate level of professional assistance, failing to properly and skilfully implement a viable budget for the project, failing to manage the costs of the project and failing to manage the construction and construction costs of the project.

60 Mr Slater’s version of the first conversation relating to the $350,000 is:

61 Mr Slater’s version of the second conversation about the $350,000 investment is:

62 Mrs Slater did not say much about the conversations but deals with them at paragraphs 20 – 24 of her affidavit of 30 September 2008. On her version, Mr Simpson said: “John and I are going to develop this one” and “we’ve got an option on the land”. In a second conversation Mr Simpson said “I own half of Stanley Gardens and I’m selling you half my share” and that he said “John is going to be the Project Manager but I’ll still be involved. John thinks you’ll double your money but I think you’ll get at least five hundred back”.

63 Mr Simpson’s version of the first conversation is:

I said: "I'm expecting this project to be completed fairly quickly".

Mrs Slater: "Is there a way to be involved in this with you?"

I said: "My company GLS owns only 50% of the company undertaking the development which is called Stanley Gardens. The contract for the sale of the land is about to settle. There has already been spent quite a lot of money getting it to this stage. After settlement there is a lot of money to be spent in design and application for approval for the changes to be made. I don't know how that would work. I would have to ask my brother John".

Mrs Slater: "Could you ask your brother?"

64 Mr Simpson’s version of the second conversation is set out at paragraph 109 of his affidavit of 19 November 2008:

I said: "If you want to be in the Mona Vale development John has agreed with me that you can purchase half of GLS's interest in the profits of the project for $350,000. This would mean that whatever profit GLS makes on the Mona Vale development, you will get half. John says that on the present figures that the projected profit is over $2.5 million, however, this depends on how the project goes. If it made $2.0 million, 25% of the profits would be around $500,000, however, there is no guarantee of any of that."

Mrs Slater: "That sounds good."

I said: "I think it will be good. You never know exactly how it will go because it depends on a lot of things, however, I have confidence in John's ability and I will be putting money into it."

65 Donnybrook claims that Mr Simpson and/or GLSP have never accounted to Donnybrook as to how they have spent the $350,000. Donnybrook claims that Mr Simpson “intentionally and fraudulently misrepresented to the plaintiff that the investment sum would be used as part of the funds needed to acquire title to the Mona Vale land”. Donnybrook claims that neither Mr Simpson nor GLSP applied the $350,000 towards the acquisition of the land “but instead applied it to purposes not disclosed to or approved by the plaintiff” and that Mr Simpson has solicited and received moneys from the plaintiff applied it to unauthorised purposes to his own benefit or the benefit of one of his companies.

66 There is a claim for breach of fiduciary obligations and a claim that Mr Simpson has been unjustly enriched to the detriment of Donnybrook. There is also a claim of fraudulent deception based on false representations: see paragraph 27 of the amended statement of claim.

67 In the plaintiffs’ written closing submissions the claims were described in four categories:

“(a) An agreement to hold money on trust and breach of that agreement.

(b) Negligence and misrepresentations about the project being invested in.

(c) Failure to account and misrepresentations as to how the monies were used.

(d) Breach of fiduciary duty.”

68 The submissions then set out the questions which need to be answered, namely:

“(a) To whom did Donnybrook Properties Pty Ltd advance the sum of $350,000.00, Mr Simpson or GLS Properties?

(b) What were the terms on which the sum of $350,000.00 was advanced by Donnybrook Properties Pty Ltd?

(c) In the event that Mr Simpson was the person to whom Donnybrook advanced the sum of $350,000, did Mr Simpson breach the said terms as alleged?

(d) If the money was advanced to GLS Properties, did Mr Simpson give an implied collateral warranty that he would guarantee to Donnybrook Properties Pty Limited the due performance by GLS Properties of its obligation under the agreement as pleaded?

(e) Did Mr Simpson owe a duty of care to Donnybrook in respect of the $350,000 advanced and, if so:

(i) What was the content of that duty of care?

(ii) Was that duty of care breached?

(iii) Has Donnybrook suffered loss and damage by reason of the said breach?

(f) Did Donnybrook act in reliance on any representations by Mr Simpson?

(g) What representations made to and relied upon by Donnybrook Properties Pty Ltd?

(h) Did Mr Simpson owe a fiduciary duty to Donnybrook and did he breach it?”

69 The representations are not set out in these submissions but I take them from the Agreed Summary of Issues:

(a) that the land could be purchased, developed and all units sold;

(b) that the plaintiff could receive a share of profits by 31 May 2000;

(c) that the investment sum would be repaid to Donnybrook by 31 May 2000 even if the development project was not complete or all units sold by that date;

(d) that the money advanced would be used to acquire title to the relevant land;

(e) that the plaintiff would be registered as one quarter owner of the land.

70 If Mr Simpson’s version of the conversations is accepted then none of these representations are made out. Given the lack of credibility of Mr Slater, the evidence of Mrs Slater, and notwithstanding my doubts concerning Mr Simpson’s evidence, I am not persuaded that any of the representations alleged, other that (a), were in fact made. The representation in (a) has not been shown to be false either as a prediction or a fact. It follows that the plaintiffs have failed to make out a case of negligent or fraudulent misrepresentations.

71 If Mr Simpson’s evidence of the conversations is accepted, then the agreement was made on behalf of GLSP, not him personally. There is some support for that from Mr Forsyth’s evidence of what Mr and Mrs Slater said at the meeting on 31 January 2005: see paragraph 10 of Mr Forsyth’s affidavit of 4 November 2008. There is some support, too, by virtue of the fact that Mr Simpson asked the Slaters to make out the Donnybrook cheque for $750,000 to GLSP, and the fact that by the letter of 15 July 1999 Mr Simpson made clear, in relation to Tilquin, at least, that GLSP was his company, and that he was interposing it between the Slaters and Tilquin (this confirmed what, on Mr Simpson’s evidence, he had already said prior to the receipt of the cheque he would do).

72 I do not accept the evidence of Mr Slater that there was any agreement that Mr Simpson, either on his own behalf or on behalf of GLSP, would arrange for Donnybrook to obtain an interest in land or that Mr Simpson, either on his own behalf or on behalf of GLSP, or that he promised to have the project completed by a particular date. Any claim that Mr Simpson was negligent in how he ran the project, either as manager or accountant, cannot be sustained given that he was neither manager or accountant.

73 The $350,000 was paid to GLSP and SGPL was the owner of the land, and there is evidence that it owed GLSP $1.2 million: see Exhibit A4 at pp 1315 – 1317, but there is no evidence of payment by GLSP of the $350,000 to SGPL.

74 I find that:

(1) The $350,000 was paid to GLSP at the direction of Mr Simpson.

(2) The terms of the advance were that Donnybrook would recover one half of such profits as would be made by GLSP (or SGPL) on the Mona Vale project. I express this in the alternative because I have considerable doubt that Mr Simpson made clear to the Slaters that GLSP was involved in the Mona Vale project. One matter of importance in that regard is that in his letter of 15 July Mr Simpson referred to GLSP in respect of the $400,000 loan: see [26], but not the Mona Vale project which is under the heading “Stanley Gardens Pty Ltd”.

(3) Mr Simpson gave no guarantee that GLSP (or inferentially, SGPL) would finish the project within a set time or successfully market and sell all the units within a set time.

75 Mr Simpson’s version of what he said was that the Slaters would receive a 50% profit share that GLSP would obtain from the Mona Vale project. Even on Mr Simpson’s evidence he put no legal colour to that – he did not say that it would be a share sale, a share transfer, a joint venture or a loan with profit sharing in lieu of interest. He did not explain how profits would be calculated. He did not say what would occur if the Mona Vale project not only made no profit, but made a loss. He gave no indication that documentation would be issued nor what form it would take. He made no mention of what security was envisaged for the investment or what documentation that might take. He did not say in his evidence that he had any intention of so doing (unlike his intention in respect of the loan). He did not make clear to the Slaters that the company he owned was not the company that owned the land (either solely or as co-owner) and was undertaking to project. He never mentioned that only SGPL was the owner and that another person (other than his brother John) was involved in the project. He did not reveal that his arrangements with John were wholly informal. John, it appears, was not a shareholder and had no agreement with SGPL: see Exhibit A1 at p 71 et seq. Mr Simpson said he had an arrangement between him and his brother and was not sure if that included GLSP: see T248.9 - .28.

(5) He did subsequently provide business advice in connection with the Strawberry John litigation and its aftermath.

(6) On his evidence he offered to interpose GLSP in relation to the $400,000 loan before receipt of the cheque and this and the terms of the letter of 15 July suggest that he was looking after the interests of the plaintiffs.

(7) He offered advice in respect of the Mona Vale project investment itself, when he said (on his own evidence) that he thought it would be a good investment, and that he had confidence in John’s ability: paragraph 109 of his affidavit of 19 November 2008.

(8) This apparent ‘involvement’ in the plaintiffs’ welfare is reinforced on his side by his subsequent offer to repay the $350,000 investment and to pay the Deacons fees, and reinforced on the plaintiffs’ side by reason of their willingness to hand over $750,000 without a shred of documentation and subsequently having nothing beyond the letter of 15 July in the case of the $400,000 and not even that in the case of the $350,000.

(9) He says he offered to repay the $350,000 to Donnybrook in 2003: see T282 – T283.

(10) Even as late as 6 June 2004, in an email to Mr Simpson, Mr Slater said: “we are prepared to stay in Mona Vale until you decide what the best option is, providing we can have the balance of the cash we have invested with you”: see Exhibit A2 at p 614.

(11) By his email of 5 September 2004 at Exhibit A3 at p 760, Mr Simpson offered to contribute part of his commission to help with the settlement of the Strawberry John proceedings and he stated “I have only your best interests at heart as I have always had”.

(12) In an email of 12 January 2005 he said “I believe I have always acted to try and help you”: see Exhibit A4 at p 1235.

95 Contrary to the defendants’ submissions, this is not a case in which the parties were at “arms length” or on an “equal footing”. The Slaters were not people who were shown to have had experience in any investment other than horses and Lots 15 and 16 or to have had the assistance of “fully independent professional advice” in relation to the $350,000 investment: see Commonwealth Bank of Australia v Smith at 392. I find on the totality of the evidence that Mr and Mrs Slater were seeking advice from Mr Simpson about the investment of the $750,000 and relied on him in their decision to have Donnybrook invest $350,000 in the Mona Vale project and reposed trust and confidence in him. I do not accept that Mr Simpson did not believe that the plaintiffs were relying on him or that he did not purport to give advice to the Slaters about what they should do with their money (whether or not he had the relevant expertise). Mr Simpson was, I think, “implicated” in the affairs of the Slaters and Donnybrook and they would objectively have had an expectation that their interests were being served by him.

96 There were a number of further arguments advanced on behalf of Mr Simpson as to why there was no fiduciary obligation which I have taken into account and which I do not think provide a sufficient counterweight to the matters I have identified:

(1) The defendants’ submissions refer to the admissions by Mrs Slater that she and her husband had visited Stanley Gardens in the absence of Mr Simpson and wanted to decide for themselves whether they would go ahead with the investment: see T162.17 – 162.20. The fact that they wanted to decide whether to go ahead does not demonstrate that the absence of advice that should have been given is not significant, nor that this meant that they were not relying on Mr Simpson at all.

(2) The submissions refer to admissions made by Mrs Slater in cross-examination at T163, T169 – T175 and T196 – T197. I think these admissions demonstrate that Mrs Slater was aware that there was a risk there might be no profit and that the project could take longer than 12 months. I do not accept that the answers establish that Mrs Slater was made aware that they or Donnybrook could lose the $350,000. Her answers at their highest establish that had she thought about it and known that SGPL had borrowed as much as it had then, she would have appreciated the risks. I am satisfied that neither she nor Mr Slater did appreciate at that time they handed over the money, that they were at risk of losing any or all of the $350,000. I am satisfied that they did not appreciate that risk when, on Mr Simpson’s evidence, he offered to repay the capital to them. I am doubtful as to whether Mr Simpson provided sufficient advice about the risk that the investment may not yield a profit (as opposed to might result in a loss of capital), but there are questions of what was said precisely and whether that failure had any causative effect and I do not need to determine that aspect in view of my conclusions in relation to the capital sum.

(3) Whilst there is evidence that Mr Slater rejected investment opportunities that Mr Simpson suggested to him, I do not think that this leads to the conclusion that he was not relying on Mr Simpson at all for advice. The letter of 15 July 1999 (written one month after the investment was made) reflects a role on the part of Mr Simpson that is more than simply a person in whose business endeavours the Slaters were investing. The complete lack of documentation provided to the Slaters and their acceptance of that position, reinforces my view that the Slaters placed confidence and trust in Mr Simpson. They may have been foolish to do so, but in the circumstances I do not think that the relationship was simply that of lender and borrower.

(4) The defendants’ response to the plaintiffs’ contention that there must be a duty on Mr Simpson to account was that this was confused – because there is no claim by the plaintiffs for the taking of accounts. There is no claim for the taking of accounts, and the plaintiffs’ point is expressed in terms that are much too wide but what is significant is that the plaintiffs have done everything that they can to have documents produced by Mr Simpson and GLSP and nothing establishes what GLSP did with the $350,000 and this is in a context where the arrangement between GLSP, Mr Simpson, his brother and SGPL are quite unclear. I do not accept Mr Simpson’s evidence that he did tell the plaintiffs in June that GLSP would be the investment vehicle. I think it is clear that Mrs Slater believed the investment was in SGPL: see Exhibit A2 at p 615 – Mrs Slater was cross-examined at T195 on a subsequent change to that document but not about the description of the investment as being with SGPL.

97 In all the circumstances I am persuaded that Mr Simpson was providing investment advice in connection with the $350,000 (no such case was put in respect to the $400,000) and owed the plaintiffs a fiduciary obligation not to prefer his own interests over theirs.

98 Mr Simpson did not provide any advice or warning about the $350,000 investment. He did not explain what “profit share” meant nor did he warn the Slaters that not only may they make no profit at all on the $350,000 but that they may lose all of their money. He did not explain that the entity to which they were, on his case, paying money (i.e. GLSP) had no security for any money advanced to SGPL and he did not provide full information about the nature of the project and it’s financing. He did not provide any documents relating to projected costs and unit sale prices and Mr Simpson said he did not know if any existed: see T248.30 – T249.8. He did not warn the Slaters that he was not proposing to organise any documentation in relation to the transaction with Donnybrook, nor that there was no written agreement in place between SGPL and GLSP, or between himself, his brother, GLSP and SGPL as to how the profits were to be shared. In my view he did not give “the best advice” that an advisor could give about the investment and its risks. I think that the investment was a highly imprudent one and one which, consistent with the role his 15 July letter suggested he was purporting to fulfill, he should have warned against, or, at the very least, the deficiencies of which he should have explained in clear terms.

99 I think that there is another respect in which Mr Simpson breached his fiduciary obligations to the plaintiffs. He was inviting them to take up a share in the Mona Vale project and it was left entirely to him as to how that would occur. It appears he did nothing in that regard and there is not even evidence that the funds paid into GLSP’s account for that express purpose were paid out to SGPL or used for some purpose connected with the Mona Vale project. His affidavits are silent on the topic. If the $350,000 was not paid to SGPL or used in connection with the Mona Vale project, then in my view Mr Simpson has breached a duty owed by him to the plaintiffs. He has not shown what has happened to the $350,000. I do not think that proving that SGPL was in debt to GLSP in 2005 proves that any money provided by the plaintiffs to GLSP was paid by GLSP to SGPL. I am not satisfied that GLSP had any agreement or arrangement with SGPL for the sharing of profits – no document is in evidence and Mr Simpson’s evidence about his brother was very vague. In my view, Mr Simpson had an obligation to advise Mr and Mrs Slater that GLSP had no arrangement to receive a share of profits of the Mona Vale project and that they would be wholly reliant on Mr Simpson in this regard and he has not demonstrated that he did anything to satisfy his obligations in respect of how the money would be utilised. In view of the conclusion I have reached on these matters I do not need to consider whether Mr Simpson was trustee of the $350,000.

Limitation Act 1969

100 The defendants argue that since the $350,000 was paid on 11 June 1999, it is from that date that Donnybrook first suffered damage and its is from that date that the limitation period first began to run. The proceedings were commenced on 6 May 2006, i.e. outside the six year limitation period. The defendants argue that whether the claim was one in negligence or an equitable claim, because of the Limitation Act 1969 or the statutory provisions by analogy or because of laches, the claim for damages has been brought too late.

101 Insofar as a claim is brought in negligence no argument has been advanced to the contrary. In the plaintiffs’ submissions nothing was said about the claim in negligence (“A3” in the Agreed Statement of Issues), and the limitation defence may be the reason for that.

102 In relation to the claim for equitable damages, the position is more complicated. Section 23 of the Limitation Act 1969 provides:

“Sections 14, 16, 17, 18, 20 and 21 do not apply, except so far as they may be applied by analogy, to an cause of action for specific performance of a contract, or for an injunction or for other equitable relief.”

103 On Mr Simpson’s evidence, the $350,000 was not lost to the plaintiffs as at 2003 because he offered to repay the capital at that date.

104 As at that date there is no evidence from Mr Simpson that he told the plaintiffs that Donnybrook was at risk of losing their capital, and it appears that it was only in 2004 that it became clear that the Mona Vale project would make a significant loss and that, according to Mr Simpson, Donnybrook would not recover all of its $350,000 or any of it. Mr Simpson’s offer of repayment gave the plaintiffs a false sense of security (and although I have noted he has made it clear in his evidence that the funds would have come from him personally, it is not established that he made that clear at the time of the offer to repay). Of course in all the circumstances their failure to accept that offer was most unfortunate.

105 There are authorities which make it clear that a Court of Equity will not apply the analogy if “having regard to all of the circumstances it is against conscience or unjust to do so”: see Young, Croft and Smith, On Equity (2009) Thomson Reuters/Lawbook Co. at 17.300 and see Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415 at [113], [114] and [135], Trevorrow v State of South Australia (No 5) (2007) 98 SASR 136 at 332 – 335 and see also, in respect of response to reliance on the Limitation Act, Hawkins v Clayton (1988) 164 CLR 539 at 590 – 591.

106 In circumstances where the plaintiffs did not know until 2004 that they would not recover their capital and where in 2003 Mr Simpson offered to repay that capital to them, I do not think that s 14 of the Limitation Act can, or ought be, applied by analogy. Obviously these comments would apply a fortiori to the laches defence.

107 The plaintiffs seek to recover the $350,000 as equitable damages. As Meagher, Gummow & Lehane notes at 5-260:

“Where breach of duty by a fiduciary causes loss to his principal, it is well established that compensation is available in the exclusive jurisdiction of equity to make good the loss.”

Nocton v Lord Ashburton

[1914] AC 932; [1914-1915] All ER Rep 45, McKenzie v McDonald [1927] VLR 134 particularly at 146 and Catt v Marac Australia Ltd (1980) 9 NSWLR 639, amongst others, are there cited. I think in this case the appropriate remedy is that Mr Simpson repay the $350,000. I have given consideration to whether or not interest should be added from June 1999 and I think it should because Donnybrook has been kept out of its money since then. The rate of interest should be in accordance with Schedule J of the Uniform Civil Procedure Rules 2005.

108 The first issue which arises on the commission claim is whether s 60 of the Real Estate and Business Agents Act 1978 (WA) (“REBA”) applies to disentitle Mr Simpson from receiving “any commission, reward or other valuable consideration in respect of his services” because he was not licensed and had no appointment in writing signed by the plaintiff: see s 60 of the REBA. There is no dispute that Mr Simpson was not licensed and held no appointment in writing. Of critical importance to this issue is s 4 of the REBA which is, relevantly, in the following terms:

real estate agent

real estate transaction

109 There are a number of cases to which my attention was drawn dealing with the REBA and similar legislation in New South Wales (the Property Stock and Business Agents Act 2002) and Queensland. There are differences between the working of various Acts – a difference which Mr Stoljar submitted is emphasised in Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418.

110 The plaintiffs’ submission emphasises the protective nature of the legislation: Grant v Commissioner for Fair Trading; John B Grant Real Estate Pty Ltd v Commissioner for Fair Trading [2005] NSWADT 268, and the defendants’ submission emphasises the penal nature of the legislation: see Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2008] NSWSC 801 at [65] per Young CJ in Eq (as his Honour then was).

111 Mr Simpson was involved in only one real estate transaction – that relating to Lots 15 and 16 in Western Australia. His involvement in Lots 15 and 16 and the offer by Mr Slater of a commission arose out of the assistance he had provided to the plaintiffs in the Western Australia proceedings. There is no evidence apart from the Lots 15 and 16 sale that he had, for the plaintiffs, or anyone else acted as or in the capacity of a real estate agent. This case is governed by Farrell v Bannister (1952) 52 SR (NSW) 73 which was applied by Miller J in Huat v Rintag Pty Ltd [2000] ANZ ConvRep 2. In Farrell v Bannister Street CJ (with whom Owen and Clancy JJ agreed) said:

“what the legislation was prohibiting was the conducting of a business, or something in the nature of a business, such as that carried on by a real estate agent, unless the person conducting the business held a licence under the Act. If he was not carrying on such a business, and if the transaction was one isolated case of acting in the matter of bringing a purchaser and vendor together for the same of a specific piece of land, then that is not prohibited by the section” at p 74.

See also Mercer v Dally (1943) VLR 14 per Lowe J, referred to in Farrell v Bannister, and see Hyde v Sullivan [1956] SR (NSW) 117 on the Moneylenders and Infants Loans Act 1941. Freehold Land Investments Ltd v Queensland Estates Pty Ltd involved the Auctioneers Real Estate Agents Debt Collectors and Motor Dealers Acts 1922 to 1961 (Qld). The definition in s 4 of that legislation defined ‘real estate agent’ as:

Freehold

112 The significance of this definition was adverted to by Walsh J (in whose judgment Barwick CJ concurred) at 435 and McTiernan J (the other member of the majority) at 421. McTiernan J made reference to J B Witts Pty Ltd v Wholesalers (Aust) Pty Ltd (1963) 109 CLR 322 dealing with the Moneylenders Acts 1916 to 1959 (Qld), in which it was held the making of one loan at an excessive rate of interest did not constitute the carrying on of business as a moneylender.

113 It follows in my view that there is no impediment to Mr Simpson recovering whatever is found to be due.

114 Mr Simpson relies on a conversation held on 6 February 2002 which he alleges was in the following terms:

Mr Slater: "I would also like your help to sell both of the Lot 15 and Lot 16 properties. I know that you have had some dealings with Australand when you sold your property. I think there are a lot of similarities between the land you sold and my land and because of your experience in negotiating with Australand you'll get a better deal from them than I could get. Do you think you could contact Australand and ask if Australand would be interested in both Lot 16 (subject of the court case) and the adjacent Lot 15. I do not want to use an agent. I would rather you had the money. If you can negotiate and sell either or both of the properties I will pay you the 3% on the total sales values which I would otherwise have to pay an agent who do nothing. That will also compensate you for all of the help you are giving me with the court case".

Mr Simpson alleges Mrs Slater was present. Mrs Slater agrees she was present in the apartment but says she was in the kitchen and did not participate in the conversation.

115 Mr Slater’s version of that conversation as set out in his affidavit of 24 March 2009 at paragraph 39 is that he says:

“The only way you’ll get paid for your work for the Strawberry John case is that I’ll guarantee that you get a commission for the sale of Lot 15. I don’t know what the current real estate commission is but I believe it’s between 1.5% and 2%. I’m happy to pay you 2%.”

116 According to Mr Slater’s account, Mr Simpson asked when the sale of Lot 15 was likely to occur but he did not say anything indicating acceptance even when Mr Slater showed him a valuation of Lot 15 indicating that it was worth approximately $2 million and would yield a commission of at least $40,000.

117 Mr Slater’s account of the commission discussion not only suffers from the absence of any agreement but he has asserted different versions of it at different times. The defendants’ submissions drew attention to these inconsistencies:

(1) In a verified second cross claim in proceedings 2906 of 2006 Mr Slater alleged that Mr Simpson “stood to earn commission of three per cent of the combined sale price of Lots 15 and 16 if both lots were sold to Australand and the same was completed.

(2) In his affidavit of 24 March 2009 at paragraph 98(b) Mr Slater claimed that in December 2003 he agreed to 3% provided both lots were sold to Australand for $300,000 per hectare and Strawberry John settled at $1.1 million.

(3) Mr Slater alleged by paragraph 72(c) of his affidavit of 24 March 2009 that it was agreed in July 2004 between himself and Mr Simpson that Mr Simpson would accept in place of the previous commission, one half of the commission payable to Mr Manners who had been appointed by Investa.

118 It is true that Lots 15 and 16 were actually sold to Investa and not Australand – they were however sold for more than $300,000 per hectare. Strawberry John settled for $1,182,000, so that condition was not strictly met. There are some indications that the assertion that it was agreed that Mr Simpson would receive half of Mr Manners’ commission (approximately $98,000) in lieu of any other commission or fees was incorrect. In an email of 11 January 2005 Mr Slater wrote:

“Also the commission I organised should be included in the calculation of your fees.” See Exhibit A4 at p 1234.

119 Both the reference to ‘included’ and ‘calculation of your fees’ point to something more than the half of Mr Manners’ commission having been intended by Mr Slater.

120 The defendants’ submissions refer to the notation of a “solution” (it is unclear what its status is) for Mr Simpson to lodge a claim for consultancy fees: see Exhibit A4 at p 1279, and submit that it is inconsistent with the treatment of Mr Manners’ fees as a final payment. If this “solution” was an agreement it is also inconsistent with Mr Simpson’s case that he was to be paid 3% of the sale price.

121 I accept Mr Simpson’s evidence that Mr Slater promised to pay him 3% of the sale price of Lots 15 and 16. I do not accept that the money paid by Mr Manners to Mr Simpson can be disregarded. I say that for the following reasons:

(1) Mr Slater organised the payment of the moneys from Mr Manners, even if the precise basis had not been determined at the time; I do not think that objectively Mr Slater can be taken to have agreed that he would compensate Mr Simpson for his work to 3% of a very substantial purchase price, and organised payment of half of Mr Manners’ commission other than as a reduction of the amount payable by Mr Slater;

(2) there was no agreement that Mr Simpson would receive more than 3%;

(3) whilst it is true that Mr Simpson offered to put the Manners commission towards the Strawberry John deal it does not follow that if he received the full 3% and did not put the Manners commission towards the Strawberry John deal that he can keep both.

122 I would add that if the payment by Mr Manners of half his commission to Mr Simpson were not treated as part of the commission earned by Mr Simpson from Mr Slater, then the question would arise as to whether a different conclusion concerning the legislative prohibition would be required since Mr Simpson would be receiving two commissions (albeit over the one transaction), but part of which would be as co-agent with someone who I infer was a real estate agent and in the business of such. This point was not the subject of argument and I would have required further argument on the point to form a firm view on this.

123 A commission of 3% on $12,293,918 (the total sale price) is $368,817.54. From that $99,983.96 should be deducted, leaving a balance of $268,833.58.

124 Mr Slater claims at paragraph 6(f) of his affidavit of 28 August 2006 that at a meeting between himself, Mr Simpson and Mr Forsyth, Mr Simpson said:

“Bill has got a substantial amount of money invested with me and I’m agreeing to pay your bill and I’ve already made out a cheque for $5000.”

and that Mr Slater said to Mr Forsyth:

“The only reason I’m here is because Greg is paying the bill.”

and that Mr Simpson said:

“I want the bills to come to me so that I can control the fees.”

125 Mr Simpson, in his affidavit of 27 August 2008, says at paragraph 32 that he had a conversation with Mr Slater by phone:

"Mr Simpson: “I've been to see Andrew Forsyth of Deacons and he is willing to act. Let me know when you want me to make an appointment with him. Deacons require me to guarantee the fees as they haven't acted for you before and you're not in a position currently to pay Deacons' fees. I've told Deacons that their fees will come from the sale proceeds of Lots 15 and 16. In the event that the sales of Lots 15 and 16 do not go ahead then Deacons fees will be paid from the loan account between GLS Properties and Donnybrook.”

Mr Slater: "That's fine. Please make an appointment with Andrew Forsyth."

126 He says at paragraph 36 of his affidavit of 27 August 2008 that a meeting was arranged for 10 February 2004 with Mr Slater and Mr Forsyth and that the following conversation occurred:

Mr Forsyth: “Greg has agreed to guarantee Deacons' fees. On that basis I suggest that he be put down as the client".

Mr Slater: "That's okay with me."

Mr Simpson: "I'd like to be able to always know where we are at with Deacons' fees so I would like the bills to come to me."

Mr Forsyth: "That's fine."

Mr Slater: "That's fine."

127 Mr Forsyth in paragraph 5 of his affidavit of 19 May 2006 says on 10 February he, Mr Simpson and Mr Slater met and had the following conversation:

Mr Forsyth: "Bill, Greg has asked us to act for you in relation to the sale of this land and has agreed to guarantee payment of our fees."

Mr Simpson: "I would like the bills to come to me so that I can control the level of fees."

Mr Forsyth: "Perhaps the best thing would be for us to open our file in Greg's name so that the bills go directly to him. Is that alright with you Bill?"

Mr Slater: "That's fine with me."

Mr Simpson: “I suggest that you direct all correspondence to me and I will liaise with Bill and his former wife when necessary.”

Mr Slater: "Yes, I’ll leave it to you and Greg."

128 There are some aspects of the arrangement that raise questions. Mr Simpson admits he agreed to pay Deacons’ fees if the sale of Lots 15 and 16 did not proceed and did pay some of the fees himself. He admits to paying $10,000 at least and says this was because these fees had to be paid to a different branch of Deacons and it was less complicated if he paid the money directly and there is evidence that he paid a total of $34,000. There is evidence that Deacons treated him as the client whose agreement was required. Also, Mr Simpson was, on his case, not a borrower from Donnybrook or Mr Slater.

129 Mr Forsyth admitted that the arrangements entered into by Deacons with Mr Simpson was unusual (see T310.19) and the history of the file which he, other Deacons personnel, Mr Simpson and Mr Slater recount is convoluted, to say the least. It appears that at some point Mr Slater insisted that Deacons open a new file with himself as the client. Given that the proceedings between Deacons and Mr Slater have been resolved with payment of $60,000 to Deacons, the Court is not concerned with whether Deacons, in insisting on the provision of the signed authorities (whether at Mr Simpson’s behest, as Mr Forsyth says, or not, as Mr Simpson contends), was entitled to do so or was acting in breach of obligations owed to Mr Slater by that firm.

130 It is clear that the work being performed by Deacons was work for Mr Slater and his interests. The only basis that Mr Simpson might be ‘responsible’ for the fees would be that GLSP (or he personally) owed money to Mr Slater. Mr Slater said that he accepted that if Mr Simpson did pay fees that that money would be treated as a withdrawal of funds by Donnybrook, which I think carries with it the notion that what was being done by Deacons was done for the benefit of Mr Slater.

131 On the evidence of Mr Forsyth, up until 14 December 2004, Deacons were treating Mr Simpson as the client who, whilst agent for Mr Slater was responsible for their fees: see paragraphs 18 and 19 of Mr Forsyth’s affidavit of 19 May 2006. It is true that Mr Forsyth said at the meeting of 10 February that Mr Simpson had agreed to guarantee payment of fees but what was suggested by Mr Forsyth went beyond a guarantee and made Mr Simpson the person primarily responsible for their fees. Mr Forsyth confirmed that on 14 December 2004 Deacons would look to Mr Simpson for payment of fees rendered and work in progress up to 14 December 2004.

132 On 14 October 2004 Mr Simpson instructed Mr Forsyth to obtain irrevocable directions from Kingswood and Mr Slater to deduct their fees and disbursements. Mr Forsyth told his partner, Mr Bevan, about this and “irrevocable directions” were obtained: see Exhibit A3 at pp 915 – 916. Mr Slater gives a version of his conversation with Mr Bevan (see paragraph 10(e) of his affidavit of 28 August 2006) in which he asserts that he protested that he should not have to sign it and was only doing so because Deacons were threatening him. Mr Bevan denies that Mr Slater said that to him. Mr Slater stated in his affidavit that on 28 or 29 October 2004 Mr Simpson in a telephone conversation promised that if Mr Slater signed the irrevocable authorities for the sum of $100,000 required by Deacons, Mr Simpson would repay money the $100,000 on his return from France: see paragraph 11 of Mr Slater’s affidavit of 3 October 2006.

133 Mr Simpson denies that latter conversation and there is no note or letter confirming that this was the basis on which Mr Slater executed the authorities. For present purposes the assertion by Mr Slater that he was induced to execute the authorities which he did execute because of what Mr Simpson promised or represented to him is inconsistent with allegations of coercion or duress by Deacons.

134 I do not accept Mr Slater’s evidence that he executed the authorities under duress not only because of the inconsistency to which I have referred but because:

(a) I accept the evidence of Ms Evans and Mr Bevan that Mr Slater never complained to them as he alleges he did; and

(b) I have no confidence in the evidence of Mr Slater, generally, for the reasons I have identified.

135 I am not persuaded that Mr Simpson promised to repay the $100,000 if Mr Slater executed the authorities – it is clear that Mr Simpson (rightly or wrongly) was insisting that Deacons obtain authorities from Mr Slater so that Mr Simpson did not have to pay any further amounts to Deacons.

136 It follows that Mr Slater has no claim against Mr Simpson for the $60,000 or for the costs of defending the Deacons proceedings.

Hendrix

137 I accept the evidence of Mr Bunning, which was corroborated by Mr Slater, and more importantly, by the bank statements of Mr Bunning, that $21,000 was paid in cash. I accept that $4,000 was paid by way of discharge of a debt owed by the Bunnings, and therefore that the purchase price of Hendrix was $25,000. It follows that Mr Simpson contributed 50% to the purchase. The horse was sold for $120,000.

138 Mr Simpson’s version of the agreement concerning the horse is at paragraph 138 of his affidavit of 5 December 2008:

“If we buy it we’ll put in half the money each. You take him and ride him and you can keep the prize money and pay the expenses on him. We’ll share the upfront fee 50/50 like the vet and the transport to Sydney.”

He says he also agreed to pay the first year’s insurance 50/50 to cover the fact that the horse would be taken to Sydney. He says that Mrs Slater said:

"I agree that because I will be the one riding him, as you say, I will keep all the prize money and be responsible for all the maintenance costs, including feed, farrier, vet check ups, competition entry fees and transport to competitions."

To which he replied:

"Alright, and if there are any extraordinary expenses such as major vet expenses resulting from an operation then we can pay those 50 - 50".

139 Mr Simpson did pay the $12,500 towards the cost of the horse and did pay a further $1,573.70 for 50% of the insurance and veterinary checks: see paragraph 144 of Mr Simpson’s affidavit of 5 December 2008.

140 Mrs Slater says she had the following conversation with Mr Simpson:

“I said: “Les wants $25,000 for him, it seems like quite a lot of money because the horse hasn’t done much.”

Mr Simpson said: “I can give you the money from the loan money if you want to buy it or if you like I can buy half of the horse with you. If we bought it together I’ll pay half of his costs and you ride it and maybe we can sell it overseas later on.”

I said: “We’ll sort it out and take the costs out when the horse if sold.”

141 On the evidence of Mr Simpson he is entitled to half of the net proceeds of the sale. On the version advanced by Mrs Slater there is some ambiguity about what costs are to be shared because they were not spelt out, on Mr Simpson’s evidence, there is none.

142 There are a number of matters which I take into account in concluding that Mr Simpson’s version ought be accepted on the balance of probabilities:

(1) On Mr Simpson’s version he agreed to Mrs Slater keeping the prize money. Mrs Slater’s version does not deal with prize money yet in the letter sent by the plaintiffs’ solicitors on 18 December 2007 they asserted that it was agreed that prize money would be deducted from the cost claimed as payable: see Exhibit A4 at p 1367.

(2) If Mrs Slater’s version was correct there was no need for her to contact Mr Simpson for payment of half of the transportation costs and the veterinary check-up of Hendrix at the time of purchase, but she agreed that she did do that and that Mr Simpson paid those costs.

(3) There was never any indication given to Mr Simpson, then or at any time prior to December 2007, of what are now claimed as the costs.

(4) Mrs Slater sought to minimise the benefit to her of having the horse, yet it is clear that she intended to and did ride the horse and compete in competitions. On her version, Mr Simpson agreed to pay 50% of the purchase price of the horse and 50% of the costs of upkeep for as long as she wanted to keep the horse: see paragraph 69(a) of her affidavit of 25 March 2009 where Mrs Slater asserted that Mr Simpson told her that he did not mind if she decided to keep the horse, with no explanation of the terms on which that would occur. This arrangement would give Mr Simpson a very limited prospect of profit on his investment of 50% of the purchase price and no use of the horse himself.

143 Without recourse to general credibility, I find Mr Simpson’s version more likely to reflect what occurred. Although I have expressed some doubt about Mr Simpson’s credibility I have also noted specific issues of credibility in relation to Mrs Slater and the need for caution concerning her evidence. I thought that the cross-examination of Mr and Mrs Slater on the detail of the money claimed to have been spent on Hendrix demonstrated that there was a high degree of unreliability about the figures claimed by the plaintiffs as having been spent on the horse and it had the appearance of a deliberate attempt to claim expenses that would match the $60,000 otherwise owing to Mr Simpson: see T178 – T181 and T109 – T110, further impugning the Slaters’ credibility and reinforcing my view that Mr Simpson’s version should be accepted over Mrs Slater’s on this issue.

144 It follows that Mr Simpson is entitled to $60,000 from the proceeds of sale.

145 It follows that:

(1) Mr Simpson is liable to Donnybrook to pay $350,000 plus interest, subject to the offset of the amount referred to in (3) below;

(2) Mr Slater is liable to pay to Mr Simpson a commission of $268,833 plus interest from a reasonable period after the date of sale of the property, which I would treat as four weeks from the date of sale of Lots 15 and 16;

(3) Donnybrook is liable to pay Mr Simpson $60,000 from the proceeds of sale of Hendrix, plus interest from four weeks after the sale of the horse;

(4) GLSP is liable to Donnybrook for the balance of the loan account, i.e. $127,252. If that does not include interest, that will need to be calculated;

(5) Mr Simpson is not personally liable for the loan balance referred to in (4) above;

(6) Mr Simpson is not liable for $40,000 of Deacons’ fees or the costs of defending the Deacons claim.

146 I will stand the matter over to enable the parties to prepare short minutes to reflect these orders and to make submissions on costs.

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Citations

Mathas v Slater; Donnybrook Properties Pty Ltd v Simpson [2009] NSWSC 1397

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CITATION:	Mathas v Slater; Donnybrook Properties Pty Ltd v Simpson [2009] NSWSC 1397
HEARING DATE(S):	19 - 23 October 2009
JUDGMENT DATE :	11 December 2009
JURISDICTION:	Equity Division
JUDGMENT OF:	Rein J
DECISION:	(1) Mr Simpson is liable to Donnybrook to pay $350,000 plus interest, subject to the offset of the amount referred to in (3) below; (2) Mr Slater is liable to pay to Mr Simpson a commission of $268,833 plus interest from a reasonable period after the date of sale of the property, which I would treat as four weeks from the date of sale of Lots 15 and 16; (3) Donnybrook is liable to pay Mr Simpson $60,000 from the proceeds of sale of Hendrix, plus interest from four weeks after the sale of the horse; (4) GLSP is liable to Donnybrook for the balance of the loan account, i.e. $127,252. If that does not include interest, that will need to be calculated; (5) Mr Simpson is not personally liable for the loan balance referred to in (4) above; (6) Mr Simpson is not liable for $40,000 of Deacons’ fees or the costs of defending the Deacons claim.
CATCHWORDS:	EQUITY – general principles – fiduciary obligations – fiduciary relationship arising between investment adviser and advisee – whether investment adviser has breached his fiduciary obligation when failing to properly advise about an investment in which he had a conflict of interest - CONTRACTS – loan agreement, dispute as to parties to and terms of agreement – agreement to invest funds in return for a ‘profit share’, dispute as to parties to and terms of agreement – agreement for payment of commission for assistance in sale of property, dispute as to terms of agreement, whether s 60 of Real Estate and Business Agents Act 1978 (WA) applicable – agreement by third party to pay or guarantee legal fees, dispute as to terms of agreement – agreement to purchase horse and share profit upon sale, dispute as to the purchase price and the sharing of costs - LIMITATION OF ACTIONS – claim for equitable damages for breach of fiduciary obligations – whether limitation period applies by analogy pursuant to s 23 of the Limitation Act 1969
LEGISLATION CITED:	Limitation Act 1969 Real Estate and Business Agents Act 1978 (WA) Uniform Civil Procedure Rules 2005
CATEGORY:	Principal judgment
CASES CITED:	Allison v Clayhills [1908] LT 709 Ausintel Investments Australia Pty Ltd v Lam (1990) 19 NSWLR 637 Breen v Williams (1996) 186 CLR 71 Catt v Marac Australia Ltd (1980) 9 NSWLR 639 Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2008] NSWSC 801 Coleman v Meyers [1977] 2 NZLR 225 Commonwealth Bank of Australia v Smith (1991) 42 FCR 390 Daly v Sydney Stock Exchange (1986) 160 CLR 371 Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 4 Farrell v Bannister (1952) 52 SR (NSW) 73 Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418 Grant v Commissioner for Fair Trading; John B Grant Real Estate Pty Ltd v Commissioner for Fair Trading [2005] NSWADT 268 Hanson v Lorenz and Jones (1986) 136 NLJ 1088 Hill v Rose [1990] VR 129 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 Huat v Rintag Pty Ltd [2000] ANZ ConvRep 2 Hyde v Sullivan [1956] SR (NSW) 117 J B Witts Pty Ltd v Wholesalers (Aust) Pty Ltd (1963) 109 CLR 322 LAC Minerals v International Corona Resources (1989) 61 DLR (4th) 14 McKenzie v McDonald [1927] VLR 134 McKenzie v McDonald [1927] VLR 134 Mercer v Dally (1943) VLR 14 Nocton v Lord Ashburton [1914] AC 932; [1914-1915] All ER Rep 45 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 Rawley Pty Ltd v Bell (No 2) (2007) 61 ACSR 648 Slater v Strawberry John Pty Ltd [2002] WASC 204 Tate v Williamson (1866) LR 2 Ch App 55 Trevorrow v State of South Australia (No 5) (2007) 98 SASR 136 United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1
TEXTS CITED:	Meagher Gummow & Lehane’s Equity Doctrine & Remedies 4th edition (2002) Butterworths LexisNexis P D Finn, “The Fiduciary Principle” in T G Youdan (ed), Equity, Fiduciaries and Trusts (1989) Carswell Young, Croft and Smith, On Equity, (2009) Thomsons/Lawbook Co
PARTIES:	In proceedings 2906/06: Angelos Mitchell Mathas and 151 others (Plaintiffs and cross-defendants) William Diarmid Slater (Defendant and cross-claimant) Gregory Lane Simpson (Cross-defendant) In proceedings 3014/06: Donnybrook Properties Pty Ltd (Plaintiff and first cross-defendant) William Diarmid Slater (Second cross-defendant) Kingswood Nominees Pty Ltd (Third cross-defendant) Gregory Lane Simpson (First defendant and cross-claimant) GLS Properties Pty Ltd (Second defendant)
FILE NUMBER(S):	SC 2906/06; 3014/06
COUNSEL:	G Lindsay SC, A Paterson (Mr Slater, Donnybrook Properties Pty Ltd, Kingswood Nominees Pty Ltd) J Stoljar SC, J Potts (Mr Simpson, GLS Properties Pty Ltd)
SOLICITORS:	Bellantonio & Rees (Mr Slater, Donnybrook Properties Pty Ltd, Kingswood Nominees Pty Ltd) Eakin McCaffery Cox (Mr Simpson, GLS Properties Pty Ltd)