McRobert Superannuation Pty Ltd v Cranston - [2019] WASC 376

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   MCROBERT SUPERANNUATION PTY LTD -v- CRANSTON [2019] WASC 376
CORAM:   SMITH J
HEARD:   13-15, 18-21 FEBRUARY 2019
DELIVERED          :   22 OCTOBER 2019
FILE NO/S:   CIV 2682 of 2016
BETWEEN:   McROBERT SUPERANNUATION PTY LTD
First Plaintiff
ANDREW JOHN MCROBERT
CARON MAREE MCROBERT
Second Plaintiffs
MORARA PTY LTD
Third Plaintiff
AND
JOHN WINDSOR CRANSTON
First Defendant
KINGSLANE PTY LTD
Second Defendant
GIORGI 2009 PTY LTD
Third Defendant
MPD PTY LTD
First-named Fourth Defendant
REDMONT RESOURCES PTY LTD
Second-named Fourth Defendant
GILLIAN ANN MORRIS As Executor of the Estate of GRAEME WILLIAM MORRIS
Third-named Fourth Defendant
KINGSLANE PTY LTD
Fourth-named Fourth Defendant

Catchwords:

Trusts - Action for breach of trust against trustee and third party - Alleged breach of trust by trustee entering into lease for peppercorn rent - Whether consent or acquiescence of beneficiary - Whether beneficiary can bring action against third party on behalf of the trust and for the benefit of the beneficiaries - Whether all beneficiaries must consent or acquiesce to the breach of trust for a valid defence - Whether terms of trust deed prohibit variation of terms of lease entered into by trustee on behalf of trust - Dispute as to when the trust deed was executed and who populated the list of beneficiaries at the time the trust deed was executed

Termination of trust - Application for trust to be wound up in equity - Whether trust deed should be wound up in accordance with the terms of the trust deed - Trust deed provides for two different dates upon which the trust was to terminate in certain circumstances - Distribution

Evidence ‑ Credibility of witnesses ‑ Events that took place in excess of eight years prior ‑ Corroboration with documentary evidence ‑ Whether witnesses reliable in light of demeanour and documentary evidence ‑ Whether evidence of witnesses is corroborated by documentary evidence

Corporations law - Where trust a managed investment scheme - Application for winding up of trust pursuant to s 601EE of Corporations Act - Whether the trust was required to be registered as a managed investment scheme under the Corporations Act - Whether person promoting the scheme was a 'promoter' as that term is defined in the Corporations Act - Whether the trust is subject to exemption from requirement of registration due to offers being 'personal offers' to retail investors - Who bears the onus of proving that the offers were 'personal offers' on the balance of probabilities

Planning and development - Whether trust breaches requirement under s 136 of the Planning and Development Act 2005 (WA) requiring the consent of the Commissioner for land to be sold other than as a lot or lots - Whether contract for an option to purchase land on subdivision breaches provisions of the Planning and Development Act

Acceptance by court of assumptions or admissions made by party - Whether the court should accept admission of party, general observations - Whether admission of party is correct - Interpretation of trust deed

Claims based on allegations of unconscionable conduct, misleading and deceptive conduct - Claims fall away based on other findings

Legislation:

Australian Consumer Law, s 18, s 20
Australian Securities and Investments Act 2001 (Cth), s 12BD, s 12CC
Contaminated Sites Act 2003 (WA)
Corporations Act 2001 (Cth), s 9, s 601ED, s 601EE, s 601MB, s 601ND, s 708, s 727, s 1012E, s 1311, s 1317H
Corporations Regulations (Cth), reg 7.9.16A
Environmental Protection Act 1986 (WA), s 48C(1)
Fair Trading Act 1987 (WA), s 10, s 11A
Motor Car Act 1971 (Vic)
Planning and Development Act 2005 (WA), s 35, s 81, s 82(1), s 84, s 86, s 87, s 135, s 136
Planning and Development Local Planning Scheme Regulations 2015 (WA)
Trade Practices Act 1974 (Cth), s 51AB , s 51AC, s 52
Transfer of Land Act (Survey Regulations) 2015 (WA)
Transfer of Land Act 1893 (WA), s 166(1)

Result:

Plaintiffs' claim dismissed

Category: B

Representation:

Counsel:

First Plaintiff	:	Mr D H Solomon
Second Plaintiffs	:	Mr D H Solomon
Third Plaintiff	:	Mr D H Solomon
First Defendant	:	Mr G D Cobby SC
Second Defendant	:	Mr G D Cobby SC
Third Defendant	:	Mr G D Cobby SC
First-named Fourth Defendant	:	No appearance
Second-named Fourth Defendant	:	No appearance
Third-named Fourth Defendant	:	No appearance
Fourth-named Fourth Defendant	:	Mr G D Cobby SC

Solicitors:

First Plaintiff	:	Solomon Brothers
Second Plaintiffs	:	Solomon Brothers
Third Plaintiff	:	Solomon Brothers
First Defendant	:	Douglas Cheveralls Lawyers
Second Defendant	:	Douglas Cheveralls Lawyers
Third Defendant	:	Douglas Cheveralls Lawyers
First-named Fourth Defendant	:	No appearance
Second-named Fourth Defendant	:	No appearance
Third-named Fourth Defendant	:	No appearance
Fourth-named Fourth Defendant	:	Douglas Cheveralls Lawyers

Case(s) referred to in decision(s):

Alexander v Perpetual Trustees WA Ltd [2004] HCA 7; (2004) 216 CLR 109
Australian Securities and Investments Commission v Cycclone Magnetic Engines Inc [2009] QSC 058; (2009) 224 FLR 50
Australian Securities and Investments Commission v Great Northern Developments Pty Ltd [2010] NSWSC 1087; (2010) 242 FLR 444
Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345
Australian Securities and Investments Commission v Whitebox Trading Pty Ltd [2017] FCAFC 100; (2017) 251 FCR 448
Australian Securities and Investments Commission v Young [2003] QSC 29; (2003) 173 FLR 441
Australian Securities Commission v Woods & Johnson Developments Pty Ltd (1991) 6 ACSR 191
Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200
Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253
Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226
Chugg v Pacific Dunlop Ltd [1990] HCA 41; (1990) 170 CLR 249
Cotton v Dempster (1918) 20 WALR 14
Currie v Dempsey (1967) 69 SR (NSW) 116
Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492
Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen [1945] HCA 22; (1945) 70 CLR 635
De Bussche v Alt (1878) 8 Ch D 2
Dickinson v Minister for Pensions [1953] 1 QB 228
DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1980] 1 NSWLR 510
Dowling v Bowie [1952] HCA 63; (1952) 86 CLR 136
Embleton Motor Co Pty Ltd v St Kilda Beach Taxi School and Staffing Pty Ltd [2014] WASCA 183
Emma Silver Mining Co Ltd v Lewis & Son (1879) 4 CPD 396
Evans v Braddock [2015] NSWSC 249
Fazio v Fazio [2010] WASC 263
Fremantle Lawyers Pty Ltd v Sarich [2019] WASCA 48; (2019) 54 WAR 113
Gore v Australian Securities and Investments Commission [2017] FCAFC 13; (2017) 249 FCR 167
Hayim v Citibank NA [1987] AC 730
Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Kauter v Hilton [1953] HCA 95; (1953) 90 CLR 86
Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361
Lidden v Composite Buyers Ltd (1996) 139 ALR 549
Love v Brien [2012] WASC 457
Love v Brien [2013] WASCA 280
Morara Pty Ltd v Kingslane Property Investments Pty Ltd [2019] WASC 136
Morgan v Babcock & Wilcox Ltd [1929] HCA 25; (1929) 43 CLR 163
National Trustees Executors & Agency Co of Australasia Ltd v Barnes [1941] HCA 3; (1941) 64 CLR 268
Orr v Ford [1989] HCA 4; (1989) 167 CLR 316
Pye v Metropolitan Coal Co Ltd [1934] HCA 9; (1934) 50 CLR 614
Re Pauling's Settlement Trusts; Younghusband v Coutts & Co [1961] 3 All ER 713
Spellson v George [1992] NSWCA 254; (1992) 26 NSWLR 666
Swan v Perpetual Executors and Trustees Association of Australia Ltd (1897) 23 VLR 293
TAL Life Ltd v Shuetrim [2016] NSWCA 68; (2016) 91 NSWLR 439
Tracy v Mandalay Pty Ltd [1953] HCA 9; (1953) 88 CLR 215
Vacuum Oil Co Pty Ltd v Wiltshire [1945] HCA 37; (1945) 72 CLR 319
Vines v Djordjevitch [1955] HCA 19; (1955) 91 CLR 512
Walker v Clough Property Claremont Pty Ltd [2010] WASCA 232
Warrington Management Pty Ltd v Kingslane Property Investments Pty Ltd [2019] WASC 2
Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 5] [2019] WASC 310
Whaley Bridge Calico Printing Co v Green (1879) 5 QBD 109
Willmott Forests Ltd (in liq) and Willmott Finance Pty Ltd (in liq) (2011) 85 ACSR 71

Table of Contents

1.0 The action and the result

2.0 The parties: the trustee and beneficiaries

3.0 Factual background of material events that occurred in 2008 and 2009

4.0 The material terms of the Giorgi Trust Deed

5.0 Do the terms of the Giorgi Trust Deed prohibit variation of the terms of the contract agreed to by Giorgi and ARF on 30 January 2009?

6.0 Reliability and assessment of evidence ‑ legal principles

7.0 Credibility of the witnesses

8.0 When was the Giorgi Trust Deed executed and who were the beneficiaries of the Giorgi Trust immediately prior to the variations of the ARF contract in June 2009?

9.0 Terms of the ARF contract and whether the variations were agreed to by Mr McRobert in June 2009

9.1 The material terms of the contract for the purchase of lot 2009

9.2 Mr McRobert's evidence about the variation of the terms of contract of the purchase of lot 2009

9.3 The evidence of Mr John Cranston and Mr Arias about discussions with Mr McRobert in mid‑2009 about the final agreement reached to vary the terms of the contract to purchase lot 2009

9.4 The objective facts established by the contemporaneous documents that show the knowledge of Mr McRobert about the terms of the variation of the ARF contract

9.5 The effect of Mr McRobert's consent or acquiescence to the breach of trust

10.0 ARF's acquisition of Kingslane's beneficial interest in lot 26 ‑ was there an interest capable of being transferred under the transfer deed and did ARF acquire that interest?

11.0 Does the transfer deed and the lease entered into on 26 June 2009 contravene s 136(1) of the Planning and Development Act 2005 (WA)?

12.0 Can the action be brought on behalf of the Giorgi Trust and for the benefit of all the beneficiaries?

13.0 Giorgi Trust ‑ a Managed Investment Scheme

13.1 Was the Giorgi Trust required to be registered by s 601ED of the Corporations Act?

13.2 The Giorgi Trust is a Managed Investment Scheme but is exempt from registration

13.3 Who bears the onus of proving that the offers made by Mr Cranston were 'personal offers' as defined in the Corporations Act?

13.4 Were the offers made to Mr Morris, Mr Weaver, Mr Cuthbert, Ms Jackson, Mr Bandy and Mr Norton 'personal offers' as that term is defined in s 1012E(5) of the Corporations Act?

13.5 The Giorgi Trust not required to be registered as a managed investment scheme

14.0 Termination of the trust - distribution

15.0 The effect of failing to terminate the lease when ARF Picton went into administration in January 2016

16.0 Claims based on allegations of unconscionable, misleading and deceptive conduct

17.0 Conclusion

SMITH J:

1.0 The action and the result

The plaintiffs seek to bring the proceedings (insofar as the proceedings seek relief for the benefit of Giorgi Pty Ltd (Giorgi) in its capacity as trustee of the Giorgi 2009 Trust (Giorgi Trust)) on behalf of and for the benefit of the beneficiaries of the Giorgi Trust, to recover trust property,[1] by the following relief:[2]
[1] Plaintiffs' further re‑amended statement of claim, filed 22 June 2018 [7] ‑ [8]; not admitted by [7] and [8] of the defendants' second further re‑amended defence and counterclaim, filed 8 January 2019.
[2] Plaintiffs' further re-amended statement of claim, filed 22 June 2018, 27 ‑ 29.
(a)an order that the Giorgi Trust be wound up under s 601EE of the Corporations Act 2001 (Cth), because it is a managed investment scheme which has operated in breach of s 601ED(5) of the Corporations Act, and all appropriate directions and consequential orders under s 601EE(2) of the Corporations Act; and for compensation payable to all plaintiffs under s 1325(2) of the Corporations Act;
(b)restitution by Giorgi of all money invested by the plaintiffs in the Giorgi Trust as money had and received, in consequence of avoidance by each of the plaintiffs of their contracts to acquire interests in the Giorgi Trust;
(c)an order that Giorgi account to Giorgi as trustee of the Giorgi Trust for the benefit of all beneficiaries on the footing of wilful default for Giorgi's breaches of trust and breaches of fiduciary duty pleaded in the further re‑amended statement of claim (statement of claim) and orders for all necessary and consequential accounts, inquiries and directions;
(d)a declaration that Kingslane Pty Ltd (Kingslane) holds the benefit of the option deed on constructive trust for Giorgi in its capacity as trustee of the Giorgi Trust;
(e)further or alternatively to [1(d)], an account of profits in favour of Giorgi as trustee of the Giorgi Trust for all benefits received by it under or by virtue of the transfer deed and/or the option deed and/or the breaches referred to in [1(c)];
(f)equitable compensation in favour of Giorgi as trustee of the Giorgi Trust against Mr John Cranston and Kingslane for their procuring and knowingly assisting in a dishonest and fraudulent design carried out by Giorgi in breach of the fiduciary duties of Giorgi and orders for all necessary accounts, inquiries and direction;
(g)a compensation order against Mr John Cranston and Kingslane pursuant to s 1317H of the Corporations Act in favour of Giorgi to compensate Giorgi for its liability under [1(c)] with respect to:
(i)as against Mr John Cranston for the contraventions, alternatively each contravention, pleaded in the statement of claim [75.4]; and
(ii)as against Kingslane for the contraventions, alternatively the contravention, pleaded in the statement of claim [77].
(h)alternatively to [1(a)], an order that the Giorgi Trust be wound up under and in accordance with the Trust Deed, and orders for all necessary and consequential accounts, inquiries and directions.
The plaintiffs also plead that transactions entered into by Giorgi, Mr John Cranston and Kingslane by a lease, transfer deed, and side letter were in contravention of s 136 of the Planning and Development Act 2005 (WA) with the result that the lease was void.[3]
[3] Plaintiffs' further re-amended statement of claim, filed 22 June 2018 [76].
The plaintiffs claim Giorgi engaged in, and Mr John Cranston was a party to, misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) or, alternatively, s 18 of the Australian Consumer Law, or s 12DB of the Australian Securities and Investments Act 2001 (Cth) (ASIC Act) or s 12CC of the ASIC Act, or s 10 of the Fair Trading Act 1987 (WA); and claim loss and damage in the sum of $500,000.[4]
[4] Plaintiffs' further re-amended statement of claim, filed 22 June 2018 [80] ‑ [82].
The plaintiffs also claim Giorgi engaged in, and Mr John Cranston was knowingly concerned in or a party to, unconscionable conduct in contravention of s 51AB of the Trade Practices Act or, alternatively, s 51AC of the Trade Practices Act, or s 20 of the Australian Consumer Law, or s 11A of the Fair Trading Act; and claim loss and damages in the sum of $500,000.[5]
[5] Plaintiffs' further re-amended statement of claim, filed 22 June 2018 [80] ‑ [82].
For the reasons that follow, I am not satisfied that the plaintiffs:
(a)have made out any of their claims;
(b)are able to bring these proceedings to recover trust property on behalf of all beneficiaries of the Giorgi Trust; and
(c)are entitled to any relief as pleaded in the further re‑amended statement of claim, filed on 22 June 2018.
It is admitted by Mr John Cranston, Kingslane, and Giorgi (the defendants)[6] that by cl 6.13.2 and cl 24.1.1(d) of the Giorgi Trust Deed the Giorgi Trust was to terminate, and the trust fund distributed to the beneficiaries in accordance with their entitlements on or before 29 January 2014, being a date not more than five years from the date of the Giorgi Trust Deed, but that:
(a)due to the slow progress of the subdivision, necessary to prepare and register a deposited plan, Giorgi was entitled, by cl 6.27 of the Giorgi Trust Deed, to extend the period of the trust; and
(b)Giorgi exercised the option to do so.
[6] In these reasons, including in the footnotes, where the term defendants is used, it is intended to refer only to Mr John Cranston, Kingslane and Giorgi.
In the alternative, the defendants contend that the Giorgi Trust terminated on 29 July 2013 (pursuant to cl 6.25 and cl 6.26 of the Giorgi Trust Deed) and say that the Giorgi Trust should be wound up, under and in accordance with the Giorgi Trust Deed, by applying the order of priority in cl 24.3.
For the reasons that follow I am:
(a)not satisfied that the notice was given to extend the Giorgi Trust;
(b)satisfied that the trust terminated on 29 July 2013; and
(c)satisfied that the preconditions for winding up the Giorgi Trust by applying the order of priority in cl 24.3 have been met, and that orders should be made to that effect.

2.0 The parties: the trustee and beneficiaries

Each of the parties are capital beneficiaries of the Giorgi Trust (as that term is defined in the Giorgi Trust Deed dated 29 January 2009).
The third defendant, Giorgi, is the trustee of the Giorgi Trust.
In late 2008, the second plaintiffs, Mr Andrew John McRobert and Ms Caron Maree McRobert (by her husband Mr Andrew McRobert) together with the second defendant, Kingslane Pty Ltd,[7] through Kingslane's owner, Mr John Cranston, and the first named fourth defendant, MPD Pty Ltd, through its owner Mr Tony Arias, reached agreement to purchase and undertake the development by subdivision of lot 2009 Giorgi Road, Picton, being lot 2009 on deposited plan 43721 and the whole of the land comprised in certificate of title vol 2593, folio 990 (lot 2009).
[7] Kingslane is sued as second defendant in its capacity as trustee of the JW Cranston Family Trust and as the fourth defendant in its capacity as trustee of the Cranston Superannuation Fund.
Giorgi was incorporated on 10 December 2008 to carry out the development.
In 2008, lot 2009 was owned by Australian Renewable Fuels Ltd (ARF).
The third plaintiff, Morara Pty Ltd, is owned and controlled by Mr Christopher Weaver. In late 2009, Morara took an assignment of part of the interest of Mr and Mrs McRobert in the Giorgi Trust, and thereby became a capital beneficiary of the Giorgi Trust.
In September 2009, the remaining fourth defendants, Redmont Resources Pty Ltd and Civmec Superannuation Fund Pty Ltd, through their owners Mr Stuart Cuthbert and Mr Graham William Morris (a former business partner of Mr McRobert), became capital beneficiaries of the Giorgi Trust.[8]
[8] MPD, Redmont Resources and Mr Morris entered an appearance in the action. By order of Principal Registrar Strk on 24 October 2016 and 8 November 2016, MPD, Redmont Resources and Mr Morris were granted leave not to participate in the proceedings, attend any further hearings or file any further documents in the action. On 4 May 2018, Principal Registrar Strk made an order that Gillian Ann Morris in her capacity as executor of the estate of Mr Morris be made a party to the proceedings.
There is one beneficiary of the Giorgi Trust who is not a party to the proceedings. On settlement of the sale of lot 2009, on or about 15 September 2009, ARF ceased to be the owner of the land and became a lot beneficiary of the Giorgi Trust. ARF has not, however, been joined as a party to the proceedings.

3.0 Factual background of material events that occurred in 2008 and 2009

Mr John Cranston has considerable experience in property development and in utilising corporate structures to develop land by subdivision.

Mr McRobert is a town planning consultant who at material times has been located in, and worked from, Bunbury. He has known Mr Arias since the 1980s. Mr Arias has considerable experience in planning and development, and he is also a property developer and a property consultant.
In the 1980s, Mr Arias and Mr McRobert worked for the Department of Planning as town planners.
Mr Arias is a close business associate of Mr John Cranston and during late 2008 to late 2009 worked out of Mr John Cranston's offices in Subiaco, Perth.
Mr Weaver is the holder of a real estate licence and is an experienced property investor and property syndicate manager. In or about August 2008, Mr Weaver established his own property investment and syndication management business through a company he controlled and owned at that time, Warrington Management Pty Ltd. In about June 2009, Mr Weaver also began to work out of Mr John Cranston's office in Subiaco.
In mid‑2007, Mr McRobert was engaged by the Southwest Development Corporation (LandCorp) with the consent of the owners of lot 2009, ARF, through a company he was a director of, Thompson McRobert Edgeloe Pty Ltd (TME), to apply to the Shire of Dardenup to initiate an amendment to the Shire's planning scheme to rezone lot 2009, and the adjoining lot 2010, from 'general farming' to 'development zone'.[9]
[9] Exhibit A, tab 709, 3992 ‑ 4042.
Lot 2010 was used for dairy farming and lot 2009 was used by ARF to operate a biodiesel plant. Both lots were surrounded by land uses that included retail and distribution services.[10] In the rezoning documents, Mr McRobert described the location, area and ownership and objective of the amendment as follows:
[10] Exhibit A, tab 709, 3999.
1.1Location, Area and Ownership
The combined subject land is made up of lots 2009 and 2010 Giorgi Road, Picton, situated within the Shire of Dardanup (Figure 1 ‑ Location Plan). The subject land has a combined area of 54.63 hectares and is bound by Temple Road to the North and East, Giorgi Road to the West and the South Western Highway to the South. Lot 2009 is currently owned by Australian Renewable Fuels Ltd (ARF) and Lot 2010 is currently owned by the South West Development Commission (SWDC). The relevant Certificate of Title details are as follows; and are attached as Appendix 1

Lot number

CT number

Landowner

Area (hectares)

Lot 2009

Lot 2010

2593/990

2593/991

ARF

SWDC

10.013

44.617

Total:

54.63

1.2Objective of the Amendment

The objective of this amendment is to secure approval for the rezoning of Lots 2009 and 2010 Giorgi Road, Picton from the 'General Farming' zone to the 'Development' zone. This will facilitate further development within the Picton Industrial/Enterprise Park in accordance with structure planning to be undertaken for the locality.

Annexed to the rezoning document prepared by Mr McRobert in 2007, as appendix 3, was an engineering environmental due diligence investigation report concerning lot 2010 and other lots (but not lot 2009) prepared by an environmental consultant, Parsons Brinckerhoff.[11]
[11] Exhibit A tab 709, 4016 ‑ 4021.
In about late 2007, Mr McRobert met a real estate agent located in Bunbury, Mr Greg Mason. Mr Mason was a client of TME and was known to Mr John Cranston.
In early 2008, Mr John Cranston was looking for further investment opportunities in land in the Bunbury area.
Mr Mason introduced Mr John Cranston to Mr McRobert in early 2008 at a meeting at Mr McRobert's offices of TME in Bunbury. Mr Mason had come to know Mr John Cranston through prior investments Mr John Cranston had made in the Bunbury area.
From the time they met, Mr John Cranston and Mr McRobert became firm friends. Shortly after their first meeting, during the course of a very long lunch at a restaurant in Bunbury, they discussed land development projects Mr John Cranston was working on or was interested in.
Not long after they met, Mr John Cranston and Mr McRobert began meeting frequently, and met on average once per week. Sometimes Mr John Cranston travelled to Bunbury, and on occasions stayed at Mr McRobert's home. On other occasions, Mr McRobert travelled to Perth to meet with Mr John Cranston.
Their close friendship continued through 2009 and 2010, but soured somewhat in 2011 or 2012. They continued, however, to have business dealings until the end of 2015.
During the period they were close friends, Mr John Cranston discussed with Mr McRobert a number of opportunities to invest in publically listed companies. Mr McRobert did very well out of some of these investments. One of which was an investment in Ampella (Mining) which resulted in a profit to him of approximately $1 million.[12]
[12] ts 106, 14 February 2019.
Not long after Mr John Cranston first met Mr McRobert, in or about mid‑2008, Mr Mason (the real estate agent) told Mr John Cranston there was an opportunity to purchase lot 2009. Mr Mason informed Mr John Cranston that lot 2009 was a 10 ha lot of rural land near Bunbury that potentially could be developed into an industrial subdivision.
Mr John Cranston encouraged Mr McRobert to set up his own business with some other planners to work on projects in which he Mr John Cranston had an interest. Mr John Cranston and Mr McRobert prepared a flowchart for a relationship/business model for the business titled 'Kingslane Planning and Development company structure and profile'.[13] The business model provided for the outsourcing of work once there were enough projects and working for clients in the interim. The initial investment opportunity was stated to be Giorgi Road (lot 2009).[14]
[13] Exhibit A, tab 209, 1504 ‑ 1510.
[14] Exhibit A, tab 209, 1509.
Following these discussions, in or about February 2010 Mr McRobert established, with Mr Craig Pippin and Ms Shelley Coutts, McRobert Pippin Morris Pty Ltd trading as MPM Development Consultants (MPM). Mr McRobert, Mr Pippin, Ms Coutts and Mr John Cranston each provided seed capital for the business of $50,000. Mr John Cranston was a silent partner. Mr Graham Morris (one of the fourth defendants) joined and invested in MPM a few months later.
On or about 9 June 2012, MPM repaid Mr John Cranston his initial seed capital investment of $50,000, plus interest of $9,789.60. Mr McRobert's evidence is that since that time he has had very little to do with Mr John Cranston.
On 17 September 2008, Mr Mason sent to Mr John Cranston an offer and acceptance document (which contemplated the purchase of lot 2009) in the form of a standard REIWA form that named Kingslane as purchaser, for a purchase price of $4 million, together with a list of 16 due diligence requirements (conditions) and other proposed special conditions. These were as follows:[15]
[15] Exhibit A, tab 24, 168 ‑ 169.
A1LOT 2009 DUE DILIGENCE REQUIREMENTS
Within 21 days of acceptance
AUSTRALIAN RENEWABLE RESOURCES TO PROVIDE COPIES:
1.EPA Operating Approval
2.Shire of Dardanup Operating Approval
3.Licenses required to carry out business
4.Current EPA Works Approval
5.EPA Auditing/Compliance Reports
6.South West Development Commission Requirements to carry out business
7.Details of any Environmental Assessments, Contamination Surveys carried out on the Land
8.List of Project Consultants
9.Copy of any Consultants Reports
10.EPA, Shire of Dardanup or other regulatory authority Demand or Notices
AUSTRALIAN RENEWABLE RESOURCES TO PROVIDE AUTHORITIES TO DISCUSS LAND WITH THE FOLLOWING:
11.Shire of Dardanup
12.EPA
13.Project Consultants
14.South West Development Commission
KINGSLANE TO RESEARCH:
15.Shire of Dardanup Rezoning Proposal
16.Preston Industrial Park
17.Asic Searches ‑ Annual Reports
A2Formal Lease document to be prepared
Lease 5 years with 4x5 year options exercisable by Tenant CPI increase market rent at end of each term
Initial Rent $80,000 per annum plus GST plus rates & taxes
A3Tenant has option of an additional 10,000 square metres to exercise within twelve months under same Terms and Conditions
A4This property is sold as going concern therefore there is no GST payable
A5Payment of $2,500,000.00 on Settlement Vendor finance for $1,500,000.00 paid with twelve months
A6The Certificate of Title marked Annexure A6 part of this offer and acceptance
On the same day, Mr John Cranston sent the proposed offer to Mr Arias who was by that time working in the same office as Mr John Cranston. It is clear that this offer to purchase lot 2009 was not at any time executed by Mr John Cranston on behalf of Kingslane, or by ARF.
Shortly after receiving this offer and acceptance form from Mr Mason, Mr John Cranston contacted ARF directly to discuss the proposed purchase of lot 2009, and began to negotiate directly with the then chief executive officer of ARF, Mr Max Ger.[16]
[16] Exhibit 5, annotated substituted witness statement of John Windsor Cranston, filed 12 February 2019 [101].
Sometime in late 2008, Mr John Cranston, Mr Arias, and Mr McRobert began to discuss the purchase of lot 2009 by their respective entities.
It appears not to be in contest that during discussions between Mr John Cranston, Mr Arias and Mr McRobert it was agreed that the best vehicle to purchase lot 2009 would not only be to incorporate Giorgi as a company (as purchaser) but for the purchase to be in a trust, which would provide ownership of lots to beneficiaries.
Mr McRobert had funds available for a new investment as he had by that time 'done well' as a result of other property investments.[17]
[17] Exhibit 1, annotated witness statement Andrew John McRobert, filed 12 February 2019 [42].
Mr Arias and Mr McRobert undertook work as to whether lot 2009 was suitable for subdivision. In December 2008, Mr McRobert made inquiries with Mr Steve Gomme about the cost of industrial subdivision.[18] He also met with Mr Rod Meredith on 22 December 2009, a planner with the Department of Planning and Infrastructure, about the timing of a MRS scheme amendment and the Picton industrial area structure plan to ascertain how long the subdivision of lot 2009 might take.[19]
[18] ts 113, 14 February 2019; exhibit A, tab 34, 193.
[19] ts 114 ‑ 115, 14 February 2019; exhibit A, tab 35, 195.
On 2 December 2008, Mr McRobert sent an email to Mr John Cranston and Mr Arias in which he stated 'before we go signing any documents you may want to have a look at the attached'.[20] Attached to the email, was Environmental Protection Authority bulletin 1282 that raised issues about the significance of vegetation on lot 2009 and a requirement for an environmental corridor.
[20] Exhibit A, tab 25, 173.
Mr McRobert drew up a number of plans for proposed lot sizes for the development of lot 2009 on or about 8 December 2008.[21] The majority of the plans drawn by Mr McRobert proposed 26 lots. The largest lot on each plan covered the area upon which the bio-diesel infrastructure was located. The plans also made provision for a possible one hectare lot as an area for possible future expansion of the biodiesel infrastructure.
[21] Exhibit A, tab 27, 28.
By at least late 2008, it was proposed that Mr McRobert, Mr John Cranston and Mr Arias would each contribute one‑third to the cost of the development of lot 2009 (including the purchase of the land).[22]
[22] ts 111, 14 February 2019.
On 10 December 2008, Giorgi was registered as a company. Mr John Cranston was appointed its sole director and secretary.
Sometime in January 2009, Mr John Cranston asked Mr McRobert if he knew of other people who might be interested in investing in the development of lot 2009. Mr McRobert told Mr John Cranston that a friend of his, Mr George Chaffey might be interested. Mr McRobert subsequently spoke to Mr Chaffey and told him that there was an opportunity to invest in the development of lot 2009.[23]
[23] ts 115, 14 February 2019.
Mr John Cranston's evidence is that, on 29 January 2009, the Giorgi Trust was established in writing constituted by a document titled the Giorgi 2009 Trust Deed (Giorgi Trust Deed) that bears a typed written date of 29 January 2009.
The Giorgi Trust Deed was executed by Mr Robert Barry as settlor, and stated to be signed, sealed and delivered as a deed in the presence of Mr John Cranston. Mr Barry is Mr John Cranston's accountant. Mr John Cranston's evidence is that he also executed the Giorgi Trust Deed on the same day on behalf of Kingslane. This evidence is in dispute. The plaintiffs claim the Giorgi Trust was established on a date after Giorgi entered into the contract to purchase lot 2009 from ARF on 30 January 2009. I return to this issue below.
On 30 January 2009, the contract for Giorgi to purchase lot 2009 for the sum of $3,300,000 inclusive of GST was executed by ARF.[24] The terms of the contract describe the buyer as 'Giorgi 2009 Pty Ltd [ACN 134 571 547]'. The offer was not subject to finance. Nevertheless, it is common ground that it was anticipated by Mr John Cranston, Mr Arias and Mr McRobert that an application for finance would be made to finance at least part of the purchase price of the land and the development.
[24] Exhibit A, tab 43, 352.
The terms of the 30 January 2009 contract provided for settlement to occur 14 days from satisfaction of cl 6.1 of the special conditions of the contract. Clause 6.1 of the special conditions provided that acceptance of the offer by the vendor, ARF, was subject to ARF obtaining shareholder approval for the sale.
The following special conditions in Annexure A also formed part of the terms of the contract as executed on 30 January 2009:
(a)Clause 2 provided:[25]
[25] Exhibit A, tab 43, 354 ‑ 355.
2. LEASE
2.1 Terms
At Settlement, the Buyer grants a Lease of that portion of the Land comprising the Bio‑Diesel Plan (the Lease) to the Seller on the following terms:
(a)The initial term is five (5) years with four x five (5) year options to renew, exercisable by the Seller;
(b)The initial rent is $80,000 per annum, plus GST plus rates and taxes;
(c)Yearly rent increases are to be calculated as follows:
(i)in accordance with CPI on each anniversary of the commencement date except on the commencement of any new term; and
(ii)in accordance with a market rent review at the commencement of each new term.
(d)The Seller shall have an option, exercisable within 12 months of Settlement Date, to lease an additional 10,000 square metres of land (Additional Lease Area), which Additional Lease Area is to be a part of the Land that is immediately adjacent to the Bio‑Diesel Plant, under the same terms and conditions as contained in the Lease, with rent on such Additional Leased Area to be calculated on a pro rata basis.
2.2 Formal Lease
The Buyer is to prepare a formal lease incorporating the terms set out in clause 2.1, and otherwise being to the reasonable satisfaction of the parties, as soon as reasonably practicable following Settlement.
(b)Clause 7 provided:[26]
7.BIODIESEL PLANT
7.1Nothing in this Contract transfers any rights, title or interest in the Bio‑Diesel Plant to the Buyer (notwithstanding that the Bio‑Diesel Plant may be affixed to the Land) and all rights, title and interest in the Bio‑Diesel Plant shall remain vested in the Seller at all times.
7.2The Seller may enter onto the Land and remove the Bio‑Diesel Plant at any time but in doing so the Seller must make good any damage it may do to the Land.
7.3The full terms giving effect to clauses 7.1 and 7.2 will be included in the lease referred to in clause 2.2.
[26] Exhibit A, tab 43, 357.
On the same day the contract was executed by ARF, Mr McRobert sent to Mr John Cranston an email (with a copy to Mr Arias and Mr Chaffey) stating that he had spoken to Mr Chaffey who had suggested they meet for lunch (in Perth) on 13 February 2009.[27] In the email, Mr McRobert also stated 'we would like to get together to work through the proposed structure, capital input etc so that we're all on the same page and ready to go'.[28]
[27] Exhibit A, tab 42, 351.
[28] Exhibit A, tab 42, 351.
Sometime during February 2009, during a meeting between Mr John Cranston and Mr McRobert, Mr McRobert was shown a copy of the contract to purchase lot 2009.
Mr McRobert read the contract and noted the rent was $80,000 per annum and that the amount of rent could be indexed in accordance with CPI. Mr McRobert's evidence is that when Mr John Cranston showed him the Annexure A special conditions he told him that the development would 'wash its own face'. He recalls that expression because he had not heard it before. Mr McRobert asked Mr John Cranston what he meant by that expression, and Mr John Cranston told him that the portion of the land containing the bio diesel fuel plant which was owned by ARF (which was approximately a quarter of lot 2009) would be leased and that there would be an ongoing income with all outgoings and expenses to be covered by the rent paid by ARF with some funds leftover.
On 13 February 2009, and after Mr Chaffey had lunch with Mr McRobert, Mr Arias and Mr John Cranston, Mr Chaffey agreed to invest in the development.
On 6 February 2009, the deposit of $100,000 for the purchase of lot 2009 was paid by Kingslane.[29]
[29] Exhibit A, tab 48, tab 49, tab 50, 393 ‑ 394.
On 18 or 19 February 2009, Mr Chaffey (through a company controlled by him, Tallenford Pty Ltd) paid $25,000 to Kingslane as 25% of the deposit for the purchase of lot 2009.[30]
[30] Exhibit A, tab 50, 398.
On 20 February 2009, Mr Arias paid MPD's 25% share of the deposit.[31]
[31] Exhibit A, tab 50, 396, 401.
Mr McRobert paid his quarter share of the deposit to Kingslane on 23 February 2009.[32]
[32] Exhibit A, tab 60, 431, tab 63, 436.
Sometime in early 2009, Mr John Cranston made an application to the National Bank of Australia (NAB) for finance for the purchase of lot 2009.
Sometime in February 2009, it became known that the owner of the lot that adjoined lot 2009, LandCorp, wished to withdraw from the proposed amendment to the Shire of Dardanup planning scheme to rezone lot 2009 and lot 2010 to 'development zone'. This issue was discussed by Mr McRobert, Mr Arias, Mr John Cranston and Mr Chaffey at their meeting on 13 February 2009.
Mr McRobert sent an email on 23 February 2009 to Mr John Cranston, Mr Arias and Mr Chaffey suggesting a letter should be sent to the Shire of Dardanup to object to the withdrawal of the amendment and to advise that if LandCorp seeks to withdraw, that ARF advises it still wishes to pursue the rezoning of lot 2009 via amendment No 158 to the Shire's planning scheme and that scheme amendments were able to be modified ahead of the advertising process.[33]
[33] Exhibit A, tab 62, 434.
In March 2009, Mr McRobert contacted a valuer, Michael Copeland to value lot 2009 for the purposes of obtaining bank finance from NAB.[34]
[34] Exhibit A, tab 73, 475.
On 23 March 2009, ARF waived special condition 6.1 of Annexure A of the contract. At that point in time, the contract became unconditional and settlement was due within 14 days (which would have been 5 April 2009).
Mr McRobert was notified of the waiver of the condition on that same day by Mr Mason, and sent an email to Mr Chaffey on that day in which he set out the contributions required by each of the four investors to make up the purchase price as follows:[35]
[35] Exhibit A, tab 70, 462.
Hi Mate
I hope you and Pam are having a great trip.
I was advised by Greg Mason today that Giorgi Road had gone unconditional which means we need to get moving (28 days until settlement).
I also spoke to Cranno today and he indicated that he's disappointed that not much seems to have been done and that he is doing all of the chasing up.
From my recollection, you were going to speak with your bank contact in Bunbury. The details of the deal (as I recall them) were:
•Purchase Price: $3 million + GST ($300,000) + Stamp Duty;
•We are all throwing $300K in and borrowing the rest (approx $2.1m);
•We discussed throwing the GST return back into the bucket to take care of holdings costs and 1 lot of interest in advance.
Can you give me a call as soon as you get a chance? I'm keen to make sure everything keeps moving and am looking to do what I can to make sure everything stays on track. During one of our previous discussions you seemed a little hesitant so I guess I'm also keen to ensure that you're still happy to be in.

Shortly thereafter, Mr Chaffey decided he did not wish to invest in the development. On 1 April 2009, Mr John Cranston arranged for Kingslane to repay Tallenford $25,000 (to refund Tallenford's contribution to the deposit).[36]
[36] Exhibit A, tab 80, 512 – 513.
Subsequently, Mr Arias (on behalf of MPD) and Mr McRobert, each paid Kingslane one third of the amount Kingslane refunded to Tallenford, being an amount of $8,333.33.[37]
[37] Mr Arias paid this amount on 24 April 2009; Mr McRobert paid this amount on 14 April 2009; exhibit A, tab 87, 573, tab 92, 593, tab 204, 1489.
Shortly before this, on 25 March 2009, Mr McRobert sent to the valuer, Mr Michael Copeland, information about lot 2009:[38]
[38] Exhibit A, tab 73, 475.
Hi Michael
It was great to catch up with you. As I said, it has been a while.
The details I have relating to the above land are as follows and attached:
•Lot 2009 has an area of 10.013 hectares. The land is the subject of an offer and acceptance between Giorgi Road Pty Ltd (the purchaser) and Australian Renewable Fuels Ltd (the seller).
•I have attached a copy of the recently advertised Preston Industrial Park (North) Structure Plan as prepared by the Department for Planning and Infrastructure (Brad Meredith is the relevant contact person on 97910577). You will note on this plan that buffers are shown to impact on the land. Brod will be able to clarify the WAPC's position in respect of the buffers. Essentially, comments received from his office to date indicate that Temple Road comprises a physical boundary to the wetlands. This, together with the cleared nature of Lot 2009 (south of Temple Road), has resulted in the whole of the land being identified as 'Proposed Industry - Lots 2000m2 to 1 ha'. Brod will also be able to confirm that the north‑south ecological linkage identified for Precinct 2 on the attached plan does not impact upon Lot 2009.
•In relation to the proposed lease please contact my partner John Cranston on 0418927009 or [email protected]
•The name of our company is Giorgi Road Pty Ltd. Please forward any correspondence, invoices etc care of me to PO Box 2156 Bunbury WA 6231.
•A base plan with aerial photograph is attached.
•A current zoning map (and legend) is attached. It should be noted that the cadastral boundaries for Lot 2009 do not show up in Council's Scheme Map.
•A copy of the Certificate of Title for Lot 2009 is attached.
•The land is currently the subject of a joint Town Planning Scheme Amendment (with LandCorp) - Amendment No 158 to the Shire of Dardanup Town Planning Scheme No. 3. I only have a hard copy of this at the moment but will arrange for it to be scanned and forwarded separately. I will need to discuss the Amendment with you further ahead of finalisation of the valuation.
If you have any queries, require any further information or would like to meet on site, please do not hesitate to call me.
The valuation is required by Brad Dunne at the National Australia Bank Osborne Park. The valuation is required to assist with finance and settlement of the above property which is scheduled for approximately 21 days time.
Thanks for your assistance. I look forward to speaking with you soon.
Regards
Andrew McRobert
On the same day, Mr Copeland by return email sent to Mr McRobert an instruction authority form.[39] Mr McRobert filled in the form and signed it on the same day and returned it to Mr Copeland. The form recorded the purchase price of $3 million plus GST and an estimated market value of '$6M (plus sales suggest more)'.[40]
[39] Exhibit A, tab 75, 484, tab 76, 487 ‑ 490.
[40] Exhibit A, tab 76, 488. There is a dispute about who suggested this figure. Mr John Cranston suggests it was Mr McRobert; ts 279, 18 February 2019. Mr McRobert's evidence was vague on this point. He does not recall inserting that figure but agrees signing the form. He does, however, agree that the price paid for the land that is lot 2009 was reasonable; ts 120, 14 February 2019.
In a valuation report, issued on 2 April 2009, Mr Copeland valued the freehold value of the land in lot 2009 at between $32 to $35 per metre, (by using a direct comparison of sales of properties suitable for potential subdivision) equating to approximately $3,000,200 to $3.5 million on a total site area of 10.0129 ha with an adopted market value of $3,000,300.[41] Using a hypothetical development analysis, he valued the land at $3,500,000.[42]
[41] Exhibit A, tab 82, 523, 524, 551 ‑ 552.
[42] Exhibit A, tab 82, 552.
Mr McRobert was not happy with the valuation.[43]
[43] Exhibit A, tab 88, 579.
On 2 April 2009 (three days before settlement was due), Tom Engelsman was appointed a director of ARF.[44]
[44] Exhibit A, tab 678, 3760.
The contract for the purchase of lot 2009 did not settle in April 2009.
Mr John Cranston's evidence is that:
(a)he spoke to Mr Engelsman shortly after he had been appointed a director of ARF and Mr Engelsman told him that he was taking over the negotiations from Mr Ger;
(b)Mr Engelsman came to Perth to meet with Mr John Cranston at his office in Perth the Thursday before Easter in 2009 (9 April 2009);
(c)Mr Engelsman was not happy with the terms of the contract that were negotiated by Mr Ger and suggested that ARF would have difficulty in paying the agreed rent of $80,000 per annum; and
(d)Mr Engelsman also told Mr John Cranston that ARF needed the cash from the sale to settle a debt with HSBC.
It is also Mr John Cranston's evidence that:
(a)he informed Mr McRobert about what Mr Engelsman had said immediately after meeting with Mr Engelsman, and again after the Easter break;[45]
(b)he discussed with Mr Arias and Mr McRobert the downside of not having the $80,000 per annum rent and other issues including contamination and they each agreed to proceed with negotiations with ARF as potentially it could result in (the purchase of lot 2009 on) more favourable terms; and
(c)Mr McRobert agreed with proceeding to renegotiate the terms of contract of the purchase of lot 2009.
[45] ts 283, 18 February 2019.
I return below to the issue of whether I accept this evidence and whether Mr McRobert had knowledge of the negotiations between Mr John Cranston and Mr Engelsman prior to the end of June 2009 when the terms to vary the contract to purchase lot 2009 were agreed to by Mr John Cranston, on behalf of Giorgi, and ARF.
On 14 April 2009, Mr McRobert paid $375,000 (which was a portion of the sum he and his wife intended to invest in the purchase and development of lot 2009) to the settlement agent, Norm Hart Settlements.[46]
[46] Exhibit A, tab 87, 573.
On 16 April 2009, Mr McRobert signed the Giorgi Trust Deed at the offices of Mr John Cranston. It is clear that at this time the terms of the contract with ARF had not been varied, but that settlement on lot 2009 was overdue.
When Mr McRobert read the Giorgi Trust Deed on 16 April 2009, he noted that his name was incorrectly recorded as 'John McRobert'. Mr McRobert also noted that the Giorgi Trust Deed contained a schedule of lot beneficiaries and the schedule named (among the entities owned by Mr John Cranston and Mr Arias) the names of Mr Greg Mason and Ms Colleen Jackson.[47] Annexed to these reasons for decision is a copy of a schedule (which Mr McRobert says was attached to the deed he and his wife signed) containing items 1, 2, 3, 4, 5 and 6 in which under the heading of item 4:
(a)Mr Mason and Ms Jackson are specified as lot beneficiaries; and
(b)the only lot beneficiary stated to require an initial lot contribution (ex GST) is Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust for (proposed) lot 26 in the amount of $780,000.
[47] ts 101, 14 February 2019.
Mr McRobert's evidence is that he was at some time provided with a copy of the Giorgi Trust Deed but is unable to say when that occurred.[48]
[48] A copy of the schedule in this form, that appears to be part of a copy of the Giorgi Trust Deed that also contains the signatures of Mr John Cranston, Mr Barry, Mr Arias, and Mr and Mrs McRobert, was provided to Mr McRobert's accountant at some time prior to 12 June 2013: exhibit A, tab 519, 3244 ‑ 3292.
Ms Jackson is a business partner of Mr John Cranston in a business unrelated to this matter.[49] In early 2009, Ms Jackson expressed an interest in investing in the development of lot 2009. Some time later, and before settlement of the purchase of lot 2009, Ms Jackson informed Mr John Cranston that she did not have the funds to invest.[50]
[49] ts 381, 19 February 2019. Mr John Cranston and Ms Jackson are partners in a tax depreciation business (assessment for taxation) which is run solely by Ms Jackson.
[50] Exhibit 5, annotated substituted witness statement of John Windsor Cranston, filed 14 February 2019 [78] ‑ [80]; ts 382, 19 February 2019.
Mr Mason also withdrew his interest in investing in the development of lot 2009 at sometime prior to the settlement of the purchase of the land.
Neither Ms Jackson nor Mr Mason contributed any funds to the purchase of, or development of, lot 2009 at any point in time.
No bank account had been established for the Giorgi Trust as at 22 April 2009. Kingslane paid the valuation fee for the valuation report and Mr Arias and Mr McRobert were requested to pay Kingslane one third of the cost each.[51]
[51] Exhibit A, tab 90, 583.
For some reason (that is not made clear in the evidence) a copy of a draft trust deed was sent to NAB.[52] It is apparent, however, that the draft deed sent to NAB was not in the form executed by Mr McRobert on 16 April 2009. Nor was it in the form of the document which has been tendered as an exhibit in these proceedings as the original or a copy of the Giorgi Trust Deed.[53]
[52] Exhibit A, tab 99, 698 ‑ 701.
[53] See exhibit 8.
In an email sent to Mr John Cranston, on 14 May 2009, from Mr Brad Dunn, a senior partner of NAB Perth North Business Banking Centre, Mr Dunn suggested some amendments to the draft deed he had been sent and referred in his notes to the fact that in the draft the trustee was named as both Kingslane and Giorgi.[54] Whilst the plaintiffs seek to raise the fact of this email as evidence that the Giorgi Trust Deed had yet to be finalised, or the Giorgi Trust constituted by, May 2009, I do not accept this submission. I return to this point below.
[54] Exhibit A, tab 99, 698 ‑ 701.
By May 2009, solicitors were drafting a lease to be executed between Giorgi and ARF.
On 19 May 2009, Mr John Cranston sent to Mr McRobert by email a copy of a draft lease that reflected the terms of the contract entered into with ARF on 30 January 2009.[55] This draft lease contained additional conditions relating to remediation and potential contamination of the land in lot 2009. Attached to the email Mr John Cranston sent to Mr McRobert on 19 May 2009 was an email chain. Part of that email chain was an email sent from ARF's solicitor, May Chan from Blakiston & Crabb on 14 May 2009 to the solicitor for Giorgi, Michael Panegyres from Pullinger Readhead Lucas, and Mr Engelsman. In the email, Ms Chan stated:[56]
[55] Exhibit A, tab 98, 653 ‑ 696.
[56] Exhibit A, tab 98, 654.
Michael
We are instructed to send you the attached draft lease between Giorgi 2009 Pty Ltd, Australian Renewable Fuels Picton Pty Ltd and Australian Renewable Fuels Limited, marked up with our amendments. A clean draft is also attached.
The key amendments relate to clarification of the following
•The 'Property' being leased excludes the 'Biodiesel Facility'. This reflects clause 7 of the contract for the sale of the land.
•in relation to remediation of the Property, Australian Renewable Fuels Picton Pty Ltd will be responsible for the remediation of any contamination occurring during the term of the lease, but in relation to any contamination as set out in the Environmental Report referred to in clause 30, Australian Renewable Fuels Limited will be responsible for the remediation of such contamination.
Please contact me if you wish to discuss any of our amendments.
Thanks
May
Whilst the solicitors were drafting the terms of the lease, Mr John Cranston was negotiating with Mr Engelsman to vary the terms of the contract.
On 22 May 2009, Mr Panegyres sent to Mr John Cranston and his son Mr Evan Cranston (a former solicitor employed by Pullinger Readhead Lucas, who was by that time working for Ampella Mining out of his father's office) a further revised draft lease which proposed changes to a number of clauses of the draft lease. None of these changes are material to this matter, other than that, in this draft, changes were proposed to cl 11 ‑ 'liability and indemnity' which dealt with, among other matters, contamination and pollution of the land in lot 2009 and contamination and pollution extending beyond the land in lot 2009.[57]
[57] Exhibit A, tab 101, 747 ‑ 792.
In Mr Panegyres' email, sent on 22 May 2009, Mr Panegyres relevantly stated:[58]
Dear John and Evan,
Attached is a copy of the further revised draft lease incorporation 'agreed' accepted changes and other tracked changes in accordance with our meeting yesterday. Please let me know if you require any changes to the draft lease.
I understand that the parties may not be proceeding with the lease anymore however I have provided the attached draft lease to you for your review in the event that the parties revert to entering into the lease in respect of this matter.
[58] Exhibit A, tab 101, 747.
On the same day that Mr Panegyres had sent the revised draft, Mr Engelsman caused to be sent to Mr John Cranston an email which stated:[59]
[59] Exhibit A, tab 102, 793 ‑ 794.
John,
As per our conversation this morning, I have suggested the following alternative for the same;
1.ARF would sell your company the 7.4 hectares (approx) of un‑used land and retain for its own use the residual 2.6 ha, currently being used for the plant;
2.The payment for this 7.4 ha would be on a pro rata basis on the current agreed sale price;
3.ARF would give your company first right of refusal to purchase the residual 2.6 ha as and when ARF finally decides to vacate the land;
4.On the basis of the above there would be no required indemnification from your company and all remediation work required for the final 2.6 ha would be the responsibility of ARF.
By copy of this to May Chan (Blakiston & Crabb) I have requested that they draft up the basis for said land sale agreement so that hopefully we can then reach agreement on the contract and close next week.
If you require any further clarifications, please feel free to call me over the weekend 0408 364 411.
Regards
Tom Engelsman
Mr John Cranston forwarded this email to Mr McRobert on that day.[60]
[60] Exhibit A, tab 102, 793.
Mr John Cranston and Mr McRobert discussed the proposal put by Mr Engelsman on Monday 25 May 2009. Later that day, Mr McRobert sent Mr John Cranston an email, in which he stated:[61]
Hi Mate
Just one question that came to mind following our discussion this morning.
Will we be indemnified in relation to any contamination etc generated from the lake which would fall outside the 2.6ha they want?
Regards
Andrew McRobert
[61] Exhibit A, tab 103, 795.
Importantly, for reasons I return to, Mr McRobert made no other comment in writing about the negotiations with ARF in this email.
Mr John Cranston's oral evidence was that he discussed a number of alternatives to re‑negotiate the terms of the contract with ARF. These were:[62]
(a)varying the $80,000 lease which was not acceptable to Mr Engelsman;
(b)bank funding for the project which was not acceptable to the banks because of ARF's financial position; and
(c)funding the project by 'ourselves' and/or with other unit holders.
[62] ts 283 ‑ 294, 18 February 2019.
Mr Cranston's evidence is that:[63]
(a)he told Mr Engelsman that Giorgi would prefer not to have to finance the purchase using a bank loan so would be interested in a deal that reduced the purchase price in consideration of a reduction in the rent or some other benefit for ARF;
(b)Mr Engelsman said to him words to the effect that the board of ARF were not happy with the lease‑back idea and that they preferred to have ownership of the land on which they operated; and
(c)as an alternative, Mr Engelsman proposed a reduction in the purchase price on the basis that ARF would be nominated as a lot beneficiary of the land occupied by ARF's biodiesel plant, and lease the land back from Giorgi on a peppercorn rent until the development was completed.
[63] Exhibit 5, annotated substituted witness statement John Windsor Cranston, filed 14 February 2019 [140] ‑ [142].
By that point in time, it is not contested that it was proposed that the Giorgi Trust Deed provide for 26 lots and that the land upon which the biodiesel facility was located would be 'lot 26'; and it was proposed that lot 26 be transferred to Kingslane on subdivision for the payment of $780,000 plus GST (to be paid as an initial contribution).
Mr Engelsman's proposal in (c) was reflected in the email that Mr Engelsman caused to be sent to Mr John Cranston on 22 May 2009, and is the proposal that was subsequently forwarded by Mr John Cranston to Mr McRobert on the same day.
On 4 June 2009, Mr Engelsman sent an email to Mr Evan Cranston with a copy to Mr John Cranston and Ms Chan in which it was stated:[64]
[64] Exhibit A, tab 108, 803 ‑ 804.
Evan/John
Sorry, but I have been somewhat busy with the Rights Issue release, and hence the 'black out'.
May is currently finalising the docs on the basis of the concept
1.ARF sells the whole parcel of land to the Trust.
2.ARF is nominated as the Plot Beneficiary for the land under the plant.
3.ARF then enters into the Lease Agreement with Lakeside for the same terms etc as per the last lease agreement (see comments below).
4.At the time of sub-division, ARF would have the right to buy the land parcel under the plant.
5.At the end of the 20 year period Lakeside would have first right of refusal with regard to a land sale.
6.All remediation obligations for the land are to regulations at the time, and [sic] ARF responsibility/cost.
The Lease Agreement is the most recent version, and still contains the contested indemnifications clauses. Please note that I have asked May to simply attach the last version sent, so that at least we have a consistent set of documents, realising that these items are going to have to reflect the fact that ARF carries the remediation obligation at the time of the sale.
With the release of the Rights Issue today, and the overall timing/work on that, we will need to have closure with regard to the land sale next week, since it could be a material notice - one way or the other. I am going to be in Perth from Tuesday evening next week, and hope that we can have the contracts signed on Thursday.
I realise that there are open items with regard to the above, and therefore suggest that we get the lawyers working (on the assumption that the above format is generally acceptable).
Regards,
Tom
As part of the email chain, an earlier email was forwarded with Mr Engelsman's email of 4 June 2009. That email was an email sent from Mr Evan Cranston to Mr Engelsman on 2 June 2009. In this email, Mr Evan Cranston stated:[65]
[65] Exhibit A, tab 108, 804.
Tom,
As discussed with dad, please find attached:
1.Unexecuted copy of the trust deed as approved by the NAB; and
2.Transfer deed between Kingslane and your entity (whoever you want that to be).
I haven't sent a copy of the final trust deed but we will do so once we reach a final agreement upon which structure we will be using. Please talk to us before you send this to May (if you send it to her at all). It would be preferable that May doesn't amend the trust as that would be a complete nightmare with NAB and would potentially throw everything into disarray.
If the above docs are acceptable to you then the only remaining doc to be drafted is preemptive right for Kingslane to reacquire the land in 20 years.
Kind regards
Evan Cranston

In cross‑examination, Mr John Cranston conceded that, as at 2 June 2009, the Giorgi Trust Deed had been executed, but a change to the Giorgi Trust Deed was being contemplated in negotiations between him and Mr Engelsman.[66] This did not, however, eventuate.
[66] ts 330, 18 February 2019.
The email chain containing both the email Mr Engelsman sent on 4 June 2009 and the email Mr Evan Cranston sent on 2 June 2009 were forwarded to Mr McRobert by Mr John Cranston on 5 June 2009. In the forwarding email, Mr John Cranston stated:[67]
Looks like we are getting closer!!!
[67] Exhibit A, tab 108, 803.
On 10 June 2009, Phillip Pullinger, principal of Pullinger Readhead Lucas, sent to Mr John Cranston and Mr Evan Cranston a letter by email setting out advice about stamp duty implications of cancelling the contract with ARF and entering into a replacement contract or varying the contract.
Two material aspects of the advice were:[68]
(a)any agreement to vary the contract which records the parties' agreement to reduce the land area and purchase price may still be subject to duty on the original purchase price; and
(b)under the new proposed contract, the seller (ARF) proposes to sell to the buyer (defined as Kingslane in the advice) that part of the property which comprises lot 26 less the leased land however with an option in favour of the buyer (Kingsland) in the future to also purchase the leased land. If this is correct, then this may be advantageous to the buyer (Kingslane) if there are any concerns that the leased land may contain any contamination.
[68] Exhibit A, tab 111, 868 ‑ 869.
Mr Pullinger's legal advice also provided detailed advice in respect of the effect of the Contaminated Sites Act 2003 (WA).[69]
[69] Exhibit A, tab 111, 866 ‑ 870.
A copy of the email attaching the letter of advice from Mr Pullinger was sent by email to Mr McRobert by Mr John Cranston on the same day that Mr John Cranston received the email from Mr Pullinger attaching the advice. In the email, Mr John Cranston sent to Mr McRobert he stated:[70]
Andrew
This is why we have not agreed with ARF yet.
Regards
John Cranston
[70] Exhibit A, tab 111, 865.
Later that evening, Mr McRobert replied by email to Mr John Cranston as follows:[71]
Mate
Very interesting reading. Contamination has always (as you know) been a major concern for me.
I don't think that we should just concern ourselves with contamination within the 'Lease Area' but also the pond that extends into the area we are seeking to purchase.
My experience with contamination sites is that it also plumes quite often impacting on adjoining land.
Regards
Andrew McRobert
[71] Exhibit A, tab 112, 871.
Mr McRobert's evidence is that after he received this email he telephoned Mr John Cranston and spoke to him about his concerns that the development was to 'wash its own face', and that he was not in a financial position to meet ongoing or other costs. Mr McRobert's evidence is also that after this conversation (after the receipt of the email) he was cut out of all further email communication by Mr John Cranston about the terms of the contract and the lease.[72]
[72] ts 141, 146 ‑ 149, 14 February 2019; exhibit 1, annotated witness statement Andrew John McRobert, filed 12 February 2019 [80].
It appears that Mr McRobert was, at that time, concerned about his financial contribution to the purchase and development of lot 2009.
On 3 June 2009, Mr McRobert sent an email to Ms Hewett and Mr Arias, with a copy to Mr John Cranston, in which he stated that he had incurred interest charges on his borrowings of $375,000 (to invest in lot 2009) in the amount of $3,197.33 (being interest on the money he paid to the settlement agents' trust account on 14 April 2009) and sought one third reimbursement from each of Mr John Cranston and Mr Arias.[73] Mr McRobert's evidence is that he made this claim for reimbursement as Mr Arias had suggested he do so.[74]
[73] Exhibit A, tab 107, 802.
[74] Exhibit 1, annotated witness statement Andrew John McRobert, filed 14 February 2019 [76].
Despite Mr McRobert's unequivocal evidence that from the time of receipt of the email on 10 June 2009 he was cut out of all communications (about agreements reached to vary the terms of the contract and the lease) by Mr John Cranston, it appears that Mr McRobert was shown a copy of a draft of a lease, dated 19 June 2009, by Mr John Cranston, at about that time that reflected the varied terms of the contract between ARF and Giorgi.[75]
[75] Exhibit A, tab 115, 876 ‑ 914; ts 202 ‑ 203, 15 February 2019; at ts 340, 15 February 2019, counsel for the plaintiff put to Mr John Cranston that a copy of the draft lease in the form of exhibit A, tab 115 was the document Mr John Cranston showed Mr McRobert on 18 or 19 June 2009. It is to be noted that the draft proposed the lessee as ARF Picton Pty Ltd (a subsidiary of ARF) and ARF as guarantor; at ts 149, 14 February 2019, when cross‑examined, Mr McRobert said he saw the draft lease before he spoke to Mr John Cranston for the last time about his concerns about the development to 'wash its own face'.
The draft of the lease dated 19 June 2009 provided that the lease was to be entered into by Giorgi (as lessor), Australian Renewable Fuels Picton Pty Ltd (ARF Picton) (as lessee) and ARF (as guarantor) and contained tracked type in some clauses. In cl 1.1 definitions, in tracked type, it defined the term 'Option' to mean:[76]
[T]he option to purchase the Land as provided in the deed to be entered into on or about the date of this Lease by the Guarantor as grantor of the option and Kingslane Pty Ltd as trustee for the Cranston Family Trust as the option holder.
[76] Exhibit A, tab 115, 881.
In cl 1.1, the term 'Transfer Deed' was also defined. It was defined to mean:[77]
[A] deed dated on or about the date of this Lease between the Guarantor, the Lessor and Kingslane Pty Ltd (ACN 009 411 410) as trustee for the Cranston Family Trust which sets out the obligations of the parties to undertake the Subdivision in order to create a separate certificate of title for the land.
[77] Exhibit A, tab 115, 882.
The draft lease also contained in the schedule as terms cl 1, cl 3 and cl 4 which were expressed in the following terms:[78]
[78] Exhibit A, tab 115, 910.
1.LAND
Part of lot 2009 on deposited plan 43721 and being the whole of the land comprised in certificate of title volume 2593 folio 990 and which is known as part of lot 2009 Giorgi Road, Picton East, Western Australia and comprising a land area of approximately 26,000 square metres (subject to any final survey) and as shown highlighted as Lot 26 on the plan annexed to this Lease.
…
3.TERM OF LEASE
A term commencing on and from the Commencement Date and expiring on the earlier of:
(a)twenty (20) years from the Commencement Date; or
(b)upon completion of the Subdivision, the date of transfer of the Land from the Lessor to the Lessee in accordance with the terms of the Transfer Deed.
4.RENT
The Rent for the Term shall be the sum of one dollar ($1.00) (including GST), receipt which the Lessor by its execution of this Lease acknowledges having received.
Clause 28 of the draft lease contained provisions deeming ARF Picton to be responsible to Giorgi, and requiring ARF Picton, to remediate any contamination on the land and to indemnify Giorgi in respect of any loss, injury or damage to any person caused by contamination on the land.
I return to the significance of these terms below.
On 25 June 2009, Mr John Cranston, on behalf of Giorgi and Kingslane, and Mr Engelsman and Robert Scott as directors of ARF, entered into an agreement to vary the contract for the purchase of lot 2009 by executing a side letter to transfer deed and land sale contract (side letter).[79]
[79] Exhibit A, tab 144, 1268.
The material terms of the side letter were:[80]
[80] Exhibit A, tab 144, 1268.
Dear Sirs
SIDE LETTER TO TRANSFER DEED AND LAND SALE CONTRACT
We refer to the Transfer Deed to be dated on or about 25 June 2009 ('Transfer Deed') between Australian Renewable Fuels Ltd, Kingslane Pty Ltd as trustee for the Cranston Family Trust and Giorgi 2009 Pty Ltd.
All capitalised terms used in this letter have the same meaning given to those terms in the Transfer Deed, unless otherwise defined in this letter.
We refer to clause 2.3 of the Transfer Deed and propose that the Trustee is to procure the written consent of its mortgagee, which is lending funds to the Trustee for the purchase of the Land, to:
(a)the transfer of the interest of the 'Beneficiary' in Lot 26 under the Trust Deed to ARF, with effect on and from the Settlement Date;
(b)the registration of the Lease with Landgate by ARF (or its nominated subsidiary) on the Settlement Date; and
(c)the discharge of any securities granted over Lot 26, at the time of the transfer of legal title to Lot 26 from the Trustee to ARF,
within 14 days from the date of the Transfer Deed, or such other date as mutually agreed between the parties to the Transfer Deed.
We refer to Special Condition 2 of the Contract relating to the lease and propose that Special Condition 2 of the Contract be deleted. The terms of the lease with respect to the Land are now set out in the Lease to be dated on or about 25 June 2009.
The deed referred to in the side letter was executed by ARF on 26 June 2009.[81]
[81] Exhibit A, tab 148, 1277 ‑ 1323; see specifically, 1278.
The lease was executed by Mr John Cranston on behalf of Giorgi, and Mr Engelsman and Mr Scott on behalf of ARF, and ARF Picton, on 26 June 2009.[82]
[82] Exhibit A, tab 149, 1366.
The option to purchase was executed by Mr John Cranston on behalf of Kingslane, and Mr Engelsman and Mr Scott on behalf of ARF, on 26 June 2009.[83]
[83] Exhibit A, tab 150, 1379.
The terms of the lease which constitute a variation of the contract entered into by ARF and Giorgi on 30 January 2019 are materially the same as the terms of the draft lease shown to Mr McRobert on or about 16 June 2009.
The material terms of the lease that are relevant to this action are:[84]
(a)the parties are Giorgi (as lessor), ARF Picton (as lessee) and ARF (as guarantor);
(b)the term 'option' is defined in cl 1.1 (in the same terms as the draft shown to Mr McRobert on or about 16 June 2009);
(c)the term 'transfer deed' is defined in cl 1.1 (in the same terms as the draft shown to Mr McRobert on or about 16 June 2009); and
(d)the lessee (ARF Picton) leases the property for the term (20 years from the commencement date) subject to the payment of rent ($1.00) (in the same terms as the draft shown to Mr McRobert on or about 16 June 2009).
[84] Exhibit A, tab 149, 1329 ‑ 1390.
The material terms of the transfer deed that are relevant to this action and constitute part of the terms that varied the contract entered into by ARF and Giorgi on 30 January 2009 are:[85]
[85] Exhibit A, tab 148, 1277 ‑ 1328.
(a)the recitals provide:
A.On 30 January 2009, the Trustee entered into the Contract with ARF to buy the Land, and which includes Lot 26.
B.The Land is to be subdivided by the Trustee in accordance with the Subdivision Plan to create Lot 26.
C.Under the Trust Deed, Kingslane is a Lot Beneficiary in relation to Lot 26.
D.On the Settlement Date, the Trustee will transfer its beneficial interest under the Trust Deed to Lot 26 to ARF.
E.On the Settlement Date:
(a)the Trustee and ARF agree to enter into the Lease, and ARF agrees to procure the entry into the Lease by its nominated subsidiary; and
(b)that ARF agrees to pay to Kingslane the sum of $780,000 exclusive of GST in consideration of the transfer of the beneficial interest of Lot 26 under the Trust Deed from Kingslane to ARF.
F.Kingslane consents to the Trustee leasing Lot 26 to ARF (or its nominated subsidiary) in accordance with the terms of the Lease.
G.If Subdivision of the Land occurs and a certificate of title in respect of Lot 26 issues from Landgate, then the Trustee and ARF agree to:
(a)terminate the Lease; and
(b)transfer the certificate of title to Lot 26 from the Trustee to ARF, in accordance with the terms of this Deed.
(b)clause 2.1 and 2.2 provide:
2.1Kingslane, a Lot Beneficiary in the Giorgi 2009 Trust, established by the Trust Deed hereby agrees to transfer all of its beneficial interest as a Lot Beneficiary of Lot 26 to ARF absolutely on the Settlement Date in consideration of the payment of the sum of $780,000 exclusive of GST.
2.2The Trustee hereby consents to the transfer of the interest of the 'Beneficiary' in Lot 26 under the Trust Deed to ARF, with effect on and from the Settlement Date, and hereby consents to the registration of the Lease with Landgate by ARF (or its nominated subsidiary) on the Settlement Date.
(c)clause 3 provides:
3.1Effective from the Settlement Date, the Trustee and ARF (or ARF's nominated subsidiary) agree to enter into the Lease.
3.2Kingslane hereby consents to the Trustee leasing Lot 26 to ARF (or its nominated subsidiary) in accordance with the terms of the Lease.
3.3If Subdivision of the Land occurs:
(a)the Trustee shall transfer legal title to Lot 26 from the Trustee to ARF as soon as is reasonably practicable, and procure, at the time of the transfer, the discharge of any securities granted over Lot 26;
(b)the Lease will immediately terminate on the date of transfer of the legal interest in Lot 26 from the Trustee to ARF; and
(c)the rights and obligations of the parties to the Lease which have accrued up to the date of settlement of Lot 26 will survive the termination of the Lease.
(d)clause 4 provides:
4.If ARF subsequently holds the title to Lot 26 following the completion of the Subdivision, Kingslane is granted an option on and from settlement of Lot 26 in accordance with the terms of an option to purchase Lot 26 entered into by Kingslane and ARF dated on or about the date of this Deed.
The option deed was made between ARF (as owner) and Kingslane (as option holder).
In consideration of the payment of $20.00 inclusive of GST by Kingslane to ARF, ARF granted to Kingslane and its ensigns (the optionee) the option for the optionee or its nominee, subject to the completion of the subdivision of lot 2009, to purchase lot 26 for the sum of $780,000 (indexed to increases in the CPI) during each of the following periods:[86]
(a)six months commencing 19 years and 6 months from the date of execution of the option deed (26 June 2009);
(b)six months commencing on the date on which ARF notifies the optionee that ARF is to remove the biodiesel facility from lot 26; and
(c)six months commencing from the date:
(i)a liquidator is appointed to ARF;
(ii)an administrator is appointed to ARF; or
(iii)a controller is appointed over lot 26.
but the six month period would terminate if ARF ceased to be in administration or lot 26 ceased to be under the control of a controller respectively.
[86] Exhibit A, tab 150, 1374 ‑ 1375.
ARF, Kingslane and Giorgi agreed that the payment of $780,000 to be made by ARF to Kingslane pursuant to the transfer deed would not be paid in cash but would be satisfied by being deducted from the purchase price to be paid by Giorgi to ARF at settlement of the contract. Giorgi, by Mr John Cranston, issued a tax invoice to ARF in the sum of $858,000 for 'purchase ‑ buyback' of the portion of the land upon which the biodiesel facility was situated.[87]
[87] Exhibit A, tab 175, 1441 ‑ 1442; tab 179, 1446; tab 197, 1479 ‑ 1481.
On 20 August 2009, Giorgi renewed its 6 August 2009 application to NAB for finance.[88] In support of its application, an updated valuation report was sought from Mr Copeland. It appears that Mr Copeland did not retain a copy of the first valuation report when he was asked to prepare a second report. On 29 July 2009, Mr Copeland sent an email to Mr McRobert in which he stated:[89]
I have been requested to update the valuation for the NAB in light of the changes to the sale and lease back etc. Do you still have the 'original' document?
[88] Exhibit A, tab 157, 1403.
[89] Exhibit A, tab 160, 1418.
In response, Mr McRobert made no comment about the reference in the email to changes to the sale and lease back etc but simply said, 'I do have it. Would you like it returned?'[90]
[90] Exhibit A, tab 160, 1417.
Prior to Mr Copeland sending the email to Mr McRobert, Mr Copeland spoke to Mr Arias who subsequently drafted an email to be sent to Mr Copeland setting out the terms of the variation to the contract for the purchase of lot 2009. The draft email prepared by Mr Arias was sent to Mr John Cranston on 23 July 2009 for Mr John Cranston to check for accuracy. In the email, Mr Arias stated:[91]
[91] Exhibit A, tab 158, 1414.
Hi John
Had the discussion with Michael, seemed ok, but would not make any commitment on Value. He understood what we were doing and didn't seem to have any problems. Before I send can you have a look at the words below for accuracy and whether there is anything you want to include.
Hi Michael
As discussed today the terms of the proposed sale have changed as follows;
1.ARF are now purchasing 26,000 m2 @ $30/m2, payment at settlement of the Englobo parcel.
2.ARF will lease the 26,000m2 @ $1/yr.
3.Lease to be a maximum of 24 months in the event the subdivision is not finalised by that period then the original lease terms apply, that is lease of $80,000 per annual for 20 years.
Could you review the valuation based on these changed circumstances. Would you please advise of your requirements and timing to undertake this review. As this is now affecting settlement your urgent attention would be appreciated.
When Mr John Cranston and Mr Arias were cross‑examined they each conceded that the third point in the draft of the email to be sent to Mr Copeland was incorrect. Mr John Cranston's evidence is that he spoke to Mr Arias shortly after he received the email and told him that this was not correct.[92]
[92] ts 333, 18 February 2019.
Mr Arias' evidence was that he had not seen a copy of the lease when he drafted the email and that he had included point three following (an earlier discussion with Mr John Cranston).[93] He however could not recall whether he spoke to Mr John Cranston after he sent the draft to him or whether indeed the email was sent (to Mr Copeland).
[93] ts 447, 19 February 2019.
It appears, however, that the information stated in the draft email was provided to Mr Copeland.[94]
[94] Exhibit A, tab 739, 4362: Valuation Report lot 2009 prepared for NAB issued 31 July 2009.
This erroneous information was also repeated to NAB.[95]
[95] Exhibit A, tab 157, 1404.
This erroneous information, however, did not appear to materially affect the valuation of lot 2009. In the second valuation report, Mr Copeland again adopted a market value of the land of $3,300,000.[96]
[96] Exhibit A, tab 739, 4371.
In a valuation report issued by Mr Copeland, on 31 July 2009, he did not assess the value of the property by regard to any gross or net rent of the property (by using a capitalisation approach). Mr Copeland assessed the value of the land by a direct comparison approach (by comparison of sales of properties suitable for potential industrial development) and as a check used a hypothetical development analysis (by assessment of a potential gross realization from the hypothetical subdivision of the property).
Mr Copeland's valuation of lot 2009 by using a direct comparison approach did not change from his first report (being $32 to $35 per square metre equating to approximately $3,200,000 to $3,500,000). The direct sales evidence he had regard to was the same comparable sales evidence he considered in his first report, issued on 24 April 2009.
However, when applying a hypothetical development analysis as a check against the direct comparison approach of valuation, Mr Copeland, in his second report, came to a slightly lower land value than he assessed in his first report (being a value of $3,290,000). In doing so, he had regard to:
(a)the potential gross realization of the sale of 29 completed individual lots (as depicted on a subdivision plan prepared by Mr McRobert, dated 2 April 2009) by regard to the level of expected demand for industrial land; which Mr Copeland observed 'remains fair only, with a general decline in market values apparent';
(b)the fact that the biodiesel facility lease site to be sold back to ARF at an agreed price of $858,000 (at a rate of $33 per square metre of land area at 2.5 ha); and
(c)for the remaining lots he adopted a higher rate, being $300,000 per lot for 2000 square metre lots (being $150 per square metre) and $560,000 for the approximate 4000 square metre lots (being $140 per square metre).[97]
[97] Mr Copeland noted that the proposed sale price of the 2.6 ha site comprising the bio-diesel refinery rate of $33 per sqm of land area, which appeared low in the circumstances, was, however, reflective of the sale and lease back nature of the transaction.

The evidence of Mr McRobert establishes that by 19 June 2014 the EPA had not assessed proposed Amendment 158 to be environmentally acceptable.[333] The steps that had been taken prior to that time to obtain the necessary approvals are as follows.
[333] Exhibit A, tab 539, 3365 ‑ 3367
In 2010, Mr McRobert (through MPM) prepared a detailed submission requesting initiation of an amendment to the Greater Bunbury Region Scheme and lodged the submission with the Commission.[334]
[334] Exhibit A, tab 267, 1688 ‑ 1699.
On 30 November 2010, the Commission notified MPM that pursuant to s 35 of the Planning and Development Act the Commission had rezoned lot 2009 (and lot 2010) from 'rural' to 'industrial' under the Greater Bunbury Region Scheme.[335]
[335] Exhibit A, tab 338, 2013.
Shortly after the Greater Bunbury Region Scheme had been amended, Mr McRobert prepared a further draft amendment to the Shire of Dardanup to amend Town Planning Scheme No 3 to rezone lots 2009 and 2010 from 'rural' to 'development zone'. It was proposed that this amendment would become Amendment 170. However, it appears that this proposed amendment did not proceed.[336]
[336] Exhibit A, tab 268, 1701; tab 505, 3181.
Mr McRobert subsequently liaised with and had many meetings with the Department of Environment and Conservation, the Department of Planning and the Shire of Dardanup about a number of planning issues. Following consultation with the Department of Planning and the Shire of Dardanup it became apparent to Mr McRobert, in 2010, that a district structure plan should be conducted prior to proceeding with Amendment 158.
On 4 September 2012, Mr McRobert wrote to the chief executive officer of the Shire of Dardanup. In that letter Mr McRobert stated:[337]
[337] Exhibit A, tab 505, 3181.
4th September, 2012
The Chief Executive Officer
Shire of Dardanup
Post Office Box 7016
EATON WA 6232
Attention: Mr Robert Quinn
Dear Robert,
Re: Proposed Town Planning Scheme Amendment No 158
We refer to correspondence received by the Shire from the Environmental Protection Authority dated 20 July 2012 (copy attached).
We have only today received instructions from our Client on this matter and apologise for the delay in providing this response.
As you are aware, the 'Preston Industrial Park (Northern Precinct) District Structure Plan' and associated 'Environmental Appraisal' are currently progressing through the relevant approvals processes. The proposed Structure Plan will establish the overall land use configuration for the total structure plan area with the environmental appraisal also establishing the parameters within which future development will be permitted to occur. Both are currently being considered by the EPA.
The land the subject of proposed Town Planning Scheme Amendment No 158 (ie Lots 2009 and 2010 Giorgi Road, Picton) lies within the above structure plan area.
Despite requesting Council support in initiating Amendment 158 following the approval of Greater Bunbury Region Scheme Amendment No 0017/57, it became apparent following further consultation with Department of Planning and Council staff, that the District Structure Plan should be finalised ahead of any local town planning scheme amendment or local structure plan being progressed for Lots 2009 and 2010 Giorgi Road, Picton.
Based upon the above discussions, it is considered important that the above structure plan and environmental appraisal be concluded ahead of Town Planning Scheme Amendment No 158 being able to proceed as they will, in effect, provide the EPA with the necessary 'District' context and relevant information in order for it to be able to properly assess proposed Amendment No 158.
In effect, we understood that the Amendment had been deferred pending the outcomes of the above studies. We would be pleased if Council would inform the EPA accordingly.
Should you have any queries in relation to this matter please do not hesitate to contact me on 97214777.
Yours faithfully
MPM Development Consultants
Andrew McRobert
Encl
The day after Mr McRobert sent the letter to the Shire of Dardanup Mr McRobert sent the following email to Mr Jarrad Cranston:[338]
Jarrod
I have just been informed by Council that Amendment No 158 is, in fact, an old amendment which was put up by TME on behalf of the South West Development Commission. Our newer amendment (No 170) is still to be initiated by Council (I didn't think it had been and was surprised by the EPA letter) given that we chose to await the outcomes of the District Structure Plan and hence, fly in under the radar.
Council have suggested that we agree to stop Amendment No 158 which is now considered irrelevant. I have advised that they should advise the EPA accordingly. This will remove the EPA's consideration/focus for the time being and enable us to progress the newer amendment when appropriate.
[338] Exhibit A, tab 507, 3188.
When giving evidence Mr McRobert explained the strategy of 'flying under the radar' (referred to in this email) as being a strategy that had been recommended by Ms Fionnuala Hannon (an environmental consultant associated with GHD) that they await the outcome of the district structure plan before progressing the amendment to the Shire of Dardanup's local planning scheme, as the environmental issues that were to be dealt with in the district structure plan related more to LandCorp's lot 2010, than to lot 2009. It is common ground that this strategy was agreed to by Mr John Cranston and Mr Arias .[339]
[339] ts 173, 14 February 2019.
Mr McRobert claims that, in or about late 2011, the planning services of MPM were terminated by Mr John Cranston and from about that time onwards Mr John Cranston stopped providing instructions to either him or anyone else at MPM, and Mr Arias (assisted by Mr Jarrad Cranston) took over the planning work that was necessary to progress the development.
Mr McRobert's evidence is that between July 2011 and late 2011, MPM's ability to progress the Giorgi development was hampered by:[340]
(a)environmental and other issues associated with advancing the district structure plan being prepared by TME for the Preston Industrial Park (Northern Precinct) which included and impacted upon the progress of the Giorgi development;
(b)requirements for groundwater monitoring to be undertaken over consecutive winters in accordance with the requirements of the Department of Water; and
(c)the preparation of a local water management strategy, which was also required to be approved by the Department of Water.
[340] ts 172 ‑ 175, 14 February 2019.
Whilst Mr McRobert claimed to cease to be involved with progressing the planning approvals necessary to rezone lot 2009 by an amendment to the Shire of Dardanup's local planning scheme in late 2011, it appears that, until (at least) late 2012, Mr McRobert was still actively attempting to progress the necessary approvals.
One of the environmental issues that affected lot 2009 and lot 2010 was the requirement of an environmental buffer which was to be implemented through a district structure plan. It was Mr McRobert's view that rezoning could not be pursued until the district structure plan had been progressed. Mr McRobert had raised this with Mr Jarrad Cranston in an email on 31 July 2012.[341]
[341] Exhibit A, tab 502, 3174.
By September 2012, it was apparent that it was unlikely that Giorgi would be able to lodge a Deposited Plan, as required by cl 2 of the Giorgi Trust Deed, for registration by 29 July 2013.
In an email to Mr McRobert, sent on 17 September 2012 from Mr Laurie Guise (from TME on behalf of LandCorp), Mr Guise informed Mr McRobert that he estimated it would be six months before they could anticipate an approved API (assessment on proponent information) from OEPA and at that time they could take the district structure plan to the Commission and to local governments to seek endorsement.[342] Time to obtain the necessary Approvals was running out and did run out. Yet planning work continued in an effort to obtain the necessary Approvals.
[342] Exhibit A, tab 509, 3193.
It is clear that, at least by December 2012, Mr Arias and Mr Jarrad Cranston had taken over the work that was necessary for Giorgi to progress the necessary Approvals. Yet, by June 2014, Mr McRobert had been re‑engaged by Giorgi to attempt to progress the necessary approvals. By that time, proposed Amendment 158 was still on foot.
In a comprehensive memorandum, Mr McRobert sent by email on 19 June 2014 to Mr John Cranston and Mr Arias, Mr McRobert stated:[343]
[343] Exhibit A, 539.
I have investigated Giorgi Road further as discussed and while things are not as straight forward as we would hope they are generally positive. There is now a clear opportunity to progress things notwithstanding LandCorp putting its dealings on hold.
Sorry for the delay however I have been waiting on clarification of a number of matters prior to forwarding. Based on my investigations, I advise as follows including the following recommended strategy:
…
Shire of Dardanup Meeting, EPA Requirements & Department of Planning Meeting
…
As advised, I met with Liz Edwards and Jake Whistler at the Shire last week. The following is a summary of the discussion:
•The land is still the subject of proposed Town Planning Scheme Amendment No 158.
•Amendment No 158 also includes Lot 2010 which is considered by Council staff to have a number of issues that do not involve Lot 2009 (eg environmental linkage requirement) and could unnecessarily complicate Lot 2009's progress.
•Council staff recommend that a new Amendment be progressed just in relation to Lot 2009 to avoid it being caught up with the issues relevant to Lot 2010. This should include a request for Amendment No 158 to be withdrawn.
•Council staff have provided copies of the EPA responses to Council's referral of Amendment No 158 as well as in relation to LandCorp's holdings within the Preston Industrial Park (refer attachments).
•The EPA's letter dated the 12^th November 2007 advises that the amendment documentation contained insufficient information for the EPA to decide whether or not to assess the Amendment. Amongst other things, the EPA's response makes reference to:
1.the environmental linkage affecting Lot 2010;
2.the necessity to provide for 'adequate buffers to Conservation Category Wetlands and address drainage management …' (also of particular relevance to Lot 2009);
3.vegetation retention and other environmental factors; and
4.the types of industries envisaged.
•The EPA's letter dated the 7th of January, 2009 also addresses the further information required by the EPA.
•The EPA's letter of the 23rd of November, 2009 advises of the additional information required in order for the EPA to make a decision as to whether or not to assess the amendment.
•The Shire has also provided a copy of correspondence from the EPA relating to LandCorp's land holdings within the Preston Industrial Park which may be of interest.
•I also met with Brad Meredith (Department of Planning) last week. Brad advised that the Department is happy for us to proceed with a Scheme Amendment and Local Structure Plan now. His only suggestions were that we simply show a proposed road linkage with Lot 2010 (to address the District Structure Plan requirement), give some thought to a possible overlay subdivision for smaller lots and address the EPA comments.
Current Town Planning Scheme Provisions, Greater Bunbury Region Scheme and Preston Industrial Park
•Lot 2009 remains within the 'General Farming' zone under the Shire of Dardanup Town Planning Scheme No 3.
•In order to facilitate subdivision of the land both Council and the WAPC require preparation of a suitable local structure plan as well as rezoning to the 'Development ' zone under the terms of the Shire's TPS 3.
•The land is now included within the 'industrial' zone of the Greater Bunbury Region Scheme.
•Discussions with Council's Director of development Services (Robert Quinn) reveal that as the land is now zoned 'Industrial' under the GBRS, Council would consider an application for development approval consistent with that zoning (eg a Transport Depot). It is however unable to support further subdivision in the absence of an approved structure plan or rezoning. I have attached a copy of my Email to Robert seeking confirmation of this as well as his response.
Recommended Strategy
…
•Having regard to the EPA's repeated concerns and requests for information, we recommend that Fionnula Hannon from GHD be requested to update and complete the various reports and information previously prepared (should be at minimal additional cost given the information produced to date) as it is relevant to Lot 2009. This should include:
1.a review of the environmental qualities of the site having regard to the impacts of the storm damage; and
2.the Conservation Category Wetland buffer including Craig's engineered response to this.
•Following and dependent upon the completion and outcomes of the above, prepare a limited Local Water Management Strategy for Lot 2009 utilising previous groundwater monitoring results.
•Request from Council a new Scheme Amendment number and prepare Town Planning Scheme Amendment and Local Structure Plan (to be discussed with you further).
Consequently, a new strategy was proposed by Mr McRobert in June 2014 that a new amendment be proposed to rezone lot 2009 (but not lot 2010) (to commercial zone) to avoid the environmental issues associated with lot 2010.
This strategy was not put in place until after June 2015.[344]
[344] Exhibit A, tab 586, 3536 ‑ 3537; tab 591, 3546.
However, the EPA still had concerns about the proposal to initiate a new amendment. By letter of 29 July 2015, Mr Darren Foster (the director of Strategic Policy and Planning of the office of the EPA) wrote to the Shire of Dardanup and advised that an amendment to rezone lot 2009 only raised a number of relevant environmental factors which related to terrestrial fauna, hydrological processes, inland waters environmental quality, amenity, and air quality and atmospheric gases.[345]
[345] Exhibit A, tab 599, 3562 ‑ 3563.
On 3 August 2015, Mr McRobert wrote to Mr Arias in an email about the EPA letter and described it as 'not great news' and asked 'how do you and John want to play it from here?'[346]
[346] Exhibit A, tab 600, 3564.
On 10 November 2015, Mr McRobert suggested to Mr John Cranston in an email that they change their strategy (again). In a lengthy email, Mr McRobert advised that, in light of the new Planning and Development Local Planning Scheme Regulations 2015 (WA) coming into effect, a development guide plan could be prepared instead of a full scale local structure plan which could be considered a form of structure plan which is necessary for approval by the council to be adopted by the Commission before an amendment to LPC3 could be applied for to rezone lot 2009.[347]
[347] Exhibit A, tab 615, 3593.
The amended LPS3 scheme amendment documentation to be put to council had still not been prepared by Mr McRobert by 14 October 2015.[348]
[348] Exhibit A, tab 611, 3584.
On 24 November 2015, Mr McRobert and Mr John Cranston fell out over the payment of Mr McRobert's invoice for fees for planning services.[349]
[349] Exhibit A, tab 622, 3622.
In early 2016, after seeking legal advice, Mr McRobert commenced legal proceedings against the defendants.
As senior counsel for the defendants points out, the evidence of Mr McRobert and the documentary contemporaneous evidence makes it plain that the Giorgi Trust failed to achieve the Approvals required to enable the lodgement of the Deposited Plan within the time prescribed by the Giorgi Trust Deed because, ultimately, the environmental issues in relation to lot 2009 and lot 2010 were significantly difficult to overcome.
It is not necessary for the court to attribute blame. Unfortunately the 'fly under the radar' strategy proved unproductive, together with the delay of about 7 1/2 months to achieve settlement on the property which restricted the ability of Mr McRobert to advance subdivision.
Notwithstanding the efforts of Mr McRobert, it is absolutely clear that the delay in the development of lot 2009 was because the Approvals were not obtained within the time required by the Giorgi Trust Deed.
For these reasons, I am of the opinion that the Giorgi Trust terminated on 29 July 2013, and that the distribution of the trust property should be effected by applying the order of priority in cl 24.3 of the Giorgi Trust Deed.

15.0 The effect of failing to terminate the lease when ARF Picton went into administration in January 2016

The plaintiffs plead and the defendants admit that:[350]
(a)on or about 21 January 2016, ARF Picton and ARF entered voluntary administration;
(b)Giorgi did not terminate the lease under cl 25(c) of the lease (as it was entitled to do) if there was a default in payment by the lessee which continued for 21 days after notice requiring fault to be remedied, upon ARF Picton entering administration; and
(c)outgoings due under the lease remain unpaid by ARF Picton.
[350] Plaintiffs' further re-amended statement of claim, filed 22 June 2018 [39] ‑ [40]; defendants' second further re-amended defence and counterclaim, filed 8 January 2019 [38] ‑ [40].
The defendants plead that pursuant to cl 23.1 of the Giorgi Trust Deed Giorgi had an unfettered discretion whether to terminate the lease and that no beneficiary including the plaintiffs were or are entitled to call for its exercise of the discretion.[351]
[351] Defendants' second further re‑amended defence and counterclaim, filed 8 January 2019 [38] ‑ [40].
The plaintiffs argue that Giorgi should have terminated the lease when ARF and ARF Picton went into administration as the lease brought no income to the trust.
This point pleaded by the plaintiffs and the arguments put in respect to this issue are, however, irrelevant as I have found that the Giorgi Trust terminated on 29 July 2013, pursuant to cl 6.25, cl 6.26 and cl 24.3 of the Giorgi Trust Deed. For this reason, this issue falls away.

16.0 Claims based on allegations of unconscionable, misleading and deceptive conduct

As I have found that Mr McRobert knew of, and acquiesced to, the variations of the terms of the contract for the purchase of lot 2009 in June 2009, not only do the plaintiffs' claims in equity for breach of trust fail, the claims based on allegations of unconscionable, misleading and deceptive conduct must also necessarily fall away.

17.0 Conclusion

For the above reasons, I would dismiss each of the plaintiff's claims.
I will hear from the parties as to the orders that should be made, including orders as to costs.

SCHEDULE
Item 1: Date of this Document
29 January 2009

Item 2:         The Trustee
Name:         Giorgi 2009 Pty Ltd
ACN:          134 571 547
Address:       PO Box 1311
Subiaco WA 6008

Item 3:         The Settlor
Name:          Robert Barry
Address:        Suite 23, 513 Hay Street Subiaco WA 6008

Item 4: Lot Interest

Lot Beneficiary

Initial Lot Contribution (ex GST)

Balance Lot Contribution (ex GST)

Lot

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$0

$190,000

1

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$0

$190,000

2

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$0

$190,000

3

John McRobert and Caron Maree McRobert atf the Cranston Family Trust

$0

$190,000

4

John McRobert and Caron Maree McRobert atf the Cranston Family Trust

$0

$190,000

5

John McRobert and Caron Maree McRobert atf the Cranston Family Trust

$0

$190,000

6

MPD Pty Ltd (ACN 075 714 135)

$0

$190,000

7

MPD Pty Ltd (ACN 075 714 135)

$0

$190,000

8

MPD Pty Ltd (ACN 075 714 135)

$0

$190,000

9

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$0

$190,000

10

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$0

$190,000

11

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$0

$190,000

12

MPD Pty Ltd (ACN 075 714 135)

$0

$190.000

13

MPD Pty Ltd (ACN 075 714 135)

$0

$190,000

14

MPD Pty Ltd (ACN 075 714 135)

$0

$190,000

15

John McRobert and Caron Maree McRobert atf the Cranston Family Trust

$0

$190,000

16

John McRobert and Caron Maree McRobert atf the Cranston Family Trust

$0

$190,000

17

John McRobert and Caron Maree McRobert atf the Cranston Family Trust

$0

$190,000

18

MPD Pty Ltd (ACN 075 714 135)

$0

$190,000

19

John McRobert and Caron Maree McRobert atf the Cranston Family Trust

$0

$190,000

20

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$0

$190,000

21

Greg Edward Mason and Cindy Sarah Mason atf the Cinger Trust

$0

$190,000

22

Colleen Anne Jackson of 5 Conn Heights Success WA

$0

$190,000

23

24

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$0

$430,000

25

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$780,000

$0

26

Item 5: Capital Interest

Lot Beneficiary

Initial Capital Contribution

Balance Capital Contribution

Share

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$250,000

TBC (if required)

1/3

MPD Pty Ltd (ACN 075 714 135)

$250,000

TBC (if required)

1/3

Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust

$250,000

TBC (if required)

1/3

Item 6:The Land
All that piece of land commonly known Lot 2009 Giorgi Road, Picton and being Lot 2009 on Deposited Plan 43721 Volume 2593 Folio 990.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
VV
Associate to the Honourable Justice Smith
22 OCTOBER 2019

Lot Beneficiary	Initial Lot Contribution (ex GST)	Balance Lot Contribution (ex GST)	Lot
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$0	$190,000	1
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$0	$190,000	2
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$0	$190,000	3
John McRobert and Caron Maree McRobert atf the Cranston Family Trust	$0	$190,000	4
John McRobert and Caron Maree McRobert atf the Cranston Family Trust	$0	$190,000	5
John McRobert and Caron Maree McRobert atf the Cranston Family Trust	$0	$190,000	6
MPD Pty Ltd (ACN 075 714 135)	$0	$190,000	7
MPD Pty Ltd (ACN 075 714 135)	$0	$190,000	8
MPD Pty Ltd (ACN 075 714 135)	$0	$190,000	9
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$0	$190,000	10
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$0	$190,000	11
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$0	$190,000	12
MPD Pty Ltd (ACN 075 714 135)	$0	$190.000	13
MPD Pty Ltd (ACN 075 714 135)	$0	$190,000	14
MPD Pty Ltd (ACN 075 714 135)	$0	$190,000	15
John McRobert and Caron Maree McRobert atf the Cranston Family Trust	$0	$190,000	16
John McRobert and Caron Maree McRobert atf the Cranston Family Trust	$0	$190,000	17
John McRobert and Caron Maree McRobert atf the Cranston Family Trust	$0	$190,000	18
MPD Pty Ltd (ACN 075 714 135)	$0	$190,000	19
John McRobert and Caron Maree McRobert atf the Cranston Family Trust	$0	$190,000	20
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$0	$190,000	21
Greg Edward Mason and Cindy Sarah Mason atf the Cinger Trust	$0	$190,000	22
Colleen Anne Jackson of 5 Conn Heights Success WA	$0	$190,000	23
24
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$0	$430,000	25
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$780,000	$0	26

Lot Beneficiary	Initial Capital Contribution	Balance Capital Contribution	Share
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$250,000	TBC (if required)	1/3
MPD Pty Ltd (ACN 075 714 135)	$250,000	TBC (if required)	1/3
Kingslane Pty Ltd (ACN 009 411 410) atf the Cranston Family Trust	$250,000	TBC (if required)	1/3