Re Day

[2016] HCATrans 6

[2016] HCATrans 006

IN THE HIGH COURT OF AUSTRALIA

SITTING AS THE COURT OF
DISPUTED RETURNS

Office of the Registry
  Canberra  No C14 of 2016

B e t w e e n -

IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING MR ROBERT JOHN DAY AO

GORDON J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON TUESDAY, 24 JANUARY 2016, AT 9.31 AM

(Continued from 23/1/17)

Copyright in the High Court of Australia

HER HONOUR:   Mr Kirk.

MR KIRK:   Two minutes of homework, if I may, your Honour.

HER HONOUR:   Have you got a new document for me?

MR KIRK:   Yes.  Can I hand up ‑ ‑ ‑

HER HONOUR:   Have you given it to the other parties?

MR KIRK:   Yes, your Honour.

HER HONOUR:   Thanks.

MR KIRK:   And also, we are seeking to hand up a note with a series of dot points relating to the trust accounts ‑ ‑ ‑

HER HONOUR:   Right.

MR KIRK:   ‑ ‑ ‑ just to put down a bit of detail, but in the end, I do not think that will trouble your Honour too much.

HER HONOUR:   Why is that?

MR KIRK:   Because when your Honour gets that amended ‑ ‑ ‑

HER HONOUR:   Can I have some spare ones of these so I can write on it?  Have you got any spares of these, sorry?

MR KIRK:   If I can take your Honour to ‑ ‑ ‑

HER HONOUR:   Just to make sure ‑ does anyone object to this amended findings document being filed?

MR BELL:   No, your Honour.

MR WILLIAMS:   No, your Honour.

HER HONOUR:   Right, that can be filed.

MR KIRK:   If it please the Court.  If I could take your Honour to page 3 ‑ ‑ ‑

HER HONOUR:   Of what?

MR KIRK:   Of this amended facts document, and proposed fact 4 and, then over the page, 5 – sorry, proposed fact 3, I apologise.

HER HONOUR:   You mean 3; you have rewritten it.

MR KIRK:   We have taken out the word “profit”, so it is, we “made distributions . . . from time to time” and fiddled a little bit with the dot points.  And then 4 has been put in slightly different terms of “reasonable expectation”, which picks up language from one of the cases referred to in what your Honour might call “the big submissions” to the Full Court.  By taking out references to “profit”, we seek to avoid the issue of whether or not the distributions were being made from profit or not, because ‑ ‑ ‑

HER HONOUR:   Just so I am clear, do you accept the way I put it to you yesterday; there was accumulated income at the end of each year which included the profit, as I read the accounts?

MR KIRK:   Well, they seem to, but as we spelled out in the other two‑page note, the accounts are not actually completely consistent with each other.

HER HONOUR:   That is what I said to you yesterday.

MR KIRK:   Indeed.

HER HONOUR:   I have got this handed up.  What is the finding you now make – made distributions from time to time?

MR KIRK:   Yes, that is right.

HER HONOUR:   Inconsistently and from year to year?

MR KIRK:   But particularly from 2012 and 2013.  They were the two years in which distributions appear to have been made.

HER HONOUR:   All right.  I will hear what Dr Bell has got to say about it, and then you can do anything in reply in relation to it, because I have not got time to analyse it now.

MR KIRK:   Thank you, your Honour.  There was one other piece of homework.  It is now agreed fact between the parties, as I understand it, that David Fredericks ‑ ‑ ‑

HER HONOUR:   This is AM154 at transcript 88; he is Department of Finance.

MR KIRK:   He is a senior official within the Department of Finance.

HER HONOUR:   Is that agreed?

MR KIRK:   Yes.

MR BELL:   Yes, your Honour.

HER HONOUR:   Senior official.

MR KIRK:   Within the Department of Finance.

HER HONOUR:   Okay; done.  Your homework list is complete.

MR KIRK:   Thank you, your Honour.

HER HONOUR:   Mr Williams, why are you addressing me on 81 and 82 when it has gone to the Full Court?

MR WILLIAMS:   Those are facts that are agreed between Mr Day and the Attorney, but not between the Attorney and Ms McEwen.

HER HONOUR:   I know that, but am I to deal with those?  The ones in the next section were the subject of agreement by you – that is 83 to 92.

MR WILLIAMS:   Yes.

HER HONOUR:   So I will deal with those as part of the judgment by way of admission.  What am I to do with 81 and 82?

MR WILLIAMS:   We would invite your Honour to find them.

HER HONOUR:   All right, two seconds.  Mr Kirk, do you object to 81 and 82?

MR KIRK:   Yes, your Honour, insofar as they are inconsistent with the case as we put it.  As an alternate fall‑back, if we lose on everything else, if I can put it ‑ ‑ ‑

HER HONOUR:   I think you should identify upfront why you say 81 and 82 are not made out, or why they are inconsistent.

MR KIRK:   Yes, your Honour.  So 81 is ‑ ‑ ‑

HER HONOUR:   Deal with 82 first, because that is simple and straightforward.  I mean, this is why I am asking.

MR KIRK:  We do not dispute that.

HER HONOUR:   Thank you.  So 82 is no longer in dispute.

MR KIRK:   Yes.  As for 81, it is inconsistent with our case to say there was any such agreement or understanding unless ‑ and this is why it is partially inconsistent, depending on what your Honour may find.

HER HONOUR:   I want to know what you say is wrong about 81.

MR KIRK:   Two things:  first, that there is no evidence establishing an agreement between Fullarton Investments and Day Family Trust – B&B Day, that is – at least insofar as Fullarton Investments was said to be in the control of Mrs Smith.  If, however, it was in the control, as we do put, of Mr Day, then it is possible that he reached an agreement with himself, but that leads to the second point.

The way we have put the case, and indeed in our asserted findings of fact, is that the repayments – even the word “repayments” presupposes some obligation to repay and we do not concede there was such an obligation to repay but, rather, the way we put it is that the arrangement was rent would go ‑ ‑ ‑

HER HONOUR:   I understand what your argument is.  I just want to know what the two points are.  So the first point is the control question and the second is repayments.

MR KIRK:   That is right.

HER HONOUR:   Is that it?

MR KIRK:   Yes.

HER HONOUR:   Okay.  I will hear from Mr Williams.  Sorry, I just wanted to make sure I was not having address on items which were not in dispute and I at least narrowed some of them.  Mr Williams.

MR WILLIAMS:   Your Honour, the evidence that makes out paragraph 81 can be briefly summarised.  It is partly documentary, but I will seek briefly to relate it to the oral evidence that was given yesterday.  At page 503 of the book in volume 2 ‑ ‑ ‑ 

HER HONOUR:   This is the 12 December email?

MR WILLIAMS:   Yes, your Honour.

HER HONOUR:   Yes, the famous email.

MR WILLIAMS:   The 2 December email.

HER HONOUR:   Yes.  Sorry, I meant to say 2 December.

MR WILLIAMS:   It is certainly famous.  The penultimate paragraph, about line 45:

The trust will simply hold the property and collect rent on a regular basis.  The rent will then pass back to the Day Family Trust so there will be no profit nor loss in the new trust.

That of course was agreed to by Ms Smith.  “No profit nor loss” reflects, we submit, Mr Smith’s agreement with B&B Day through Mr Day, that is reflected in the transcript – I will just give line references, 1615 and 1735.  Your Honour will recall the evidence.

HER HONOUR:   I do.

MR WILLIAMS:   “I am happy to do that provided it didn’t cost me anything and I didn’t have to do anything.”

HER HONOUR:  Yes.

MR WILLIAMS:   Fullarton Investments payments to B&B Day were not to be a distribution of profit because there was to be ‑ ‑ ‑

HER HONOUR:   Sorry, what am I dealing with now?  This is partly evidence, partly documentary and oral.

MR WILLIAMS:   Yes.

HER HONOUR:   What is this proposition now going to?

MR WILLIAMS:   The payments to B&B Day were not to be a distribution of profits because, as we have said, 503, line 46, there was to be no profit in the new trust.  There is other evidence to that effect, to which I will briefly refer.  So it was simply a passing back of rent to B&B Day, consistently with our asserted and partly agreed fact 81.

The no‑profit element reflects Mr Smith’s evidence at line 1725 that Mr Day said he could still be paid rent if the property was not in his name – that is, Mr Day would be receiving the rent.  Page 503, line 41 is to the same effect.

HER HONOUR:   What reference was that?  I am sorry I missed that.

MR WILLIAMS:   It is that he ‑ so that he, that is ‑ ‑ ‑

HER HONOUR:   No, just the number.  Sorry.

MR WILLIAMS:   So, 503, line 40.

HER HONOUR:   Line 40, I see.

MR WILLIAMS:   Sorry, court book, your Honour.  I am sorry.  Court book 503, line 40:

sought advice on establishing an entity . . . so as to be able to avail himself of the rental allowance provided by the government.

The no‑loss element reflects the agreement, references to which I have just given, that Mr Day would take care of everything.  There would be no cost to the Smiths.  So, that is Mr Smith and Mr Day on behalf of B&B Day. 

Mr Smith’s signing of the documents reflects and implements the terms of the agreement or understanding reached between Mr Day on behalf of B&B Day and Mr Smith on Mrs Smith’s behalf; explicitly on Mrs Smith’s behalf.  The signing of the documents by Mrs Smith implemented that agreement by identifying Fullarton Investments Pty Ltd as the relevant entity.  So, that is the evidence in respect of the agreement when, for the ‑ ‑ ‑

HER HONOUR:   Just so that I am clear:  I want to make sure I have got your – do you have these written out somewhere or is ‑ ‑ ‑

MR WILLIAMS:   No, not in the form your Honour would be able to read, I am afraid.

HER HONOUR:   All right, okay.  I just want to make sure I am clear that what I have got are the steps in this argument giving rise to 81.

MR WILLIAMS:   Yes.

HER HONOUR:   So, I have got partly documentary and oral ‑ ‑ ‑

MR WILLIAMS:   Yes.

HER HONOUR:   ‑ ‑ ‑ in relation to the first limb, as I understand the way you put it, I go to court book 503, penultimate paragraph.

MR WILLIAMS:   Yes.

HER HONOUR:

The trust will simply hold the property and collect rent . . . rent will then pass back . . . there will be no profit nor loss –

MR WILLIAMS:   Yes.

HER HONOUR:   Agreed to by Mrs Smith, you say?

MR WILLIAMS:   Yes, agreed to by Mr Smith on behalf of Mrs Smith.

HER HONOUR:   1615, 1735.

MR WILLIAMS:   That is so.

HER HONOUR:   No distributions and no profit, simply passing back of the rent.

MR WILLIAMS:   Yes.

HER HONOUR:   Court book 503, 1725.

MR WILLIAMS:   Yes.

HER HONOUR:   Third step, no loss.  Is that the next step?

MR WILLIAMS:   Yes.

HER HONOUR:   Same references?

MR WILLIAMS:   Yes.

HER HONOUR:   Day take care of everything?

MR WILLIAMS:   Yes.

HER HONOUR:   Together with court book 503, line 40 to 42.

MR WILLIAMS:   Yes.

HER HONOUR:   Leading to implementation of agreement by reference to Mrs Smith executing the documents.

MR WILLIAMS:   That is so.

HER HONOUR:   Is that it?  Have I missed anything?

MR WILLIAMS:   No, your Honour.  That is it as regards the Smiths.

HER HONOUR:   All right.  Yes.

MR WILLIAMS:   There is then a question of subsistence, if you like, of the agreement at the later period, which ‑ ‑ ‑

HER HONOUR:   Because when I went to look at it, in terms of arrangements, in terms of the principles, just so I am clear about the way in which this is put ‑ so that is the consensual part of it and the implementation part of it?

MR WILLIAMS:   Yes.

HER HONOUR:   So, consensual and adoption is the way you put it.

MR WILLIAMS:   Yes.

HER HONOUR:   Consistent with the authorities on arrangement.

MR WILLIAMS:   That is so.

HER HONOUR:   Yes.

MR WILLIAMS:   Subsistence of an arrangement in those terms, after Mr Steinert stepped in to replace Mrs Smith.

HER HONOUR:   Yes.

MR WILLIAMS:   The references for those are in court book volume 2, citing page 903 is the first.

HER HONOUR:   Just one moment please.  Yes.

MR WILLIAMS:   Email chain at 903, starting at the foot of the page and reading up, Bob Day to Vic Rasera:

How are the Fullarton Investments accounts going?
I’d like to get that transfer to Colin underway.

Manifestly to Mr Steinert.  Line 20:

will do the transfer as of today’s date.
A question ‑

HER HONOUR:   Hang on, line 20.

MR WILLIAMS:   Yes, line 20 on page 903.

HER HONOUR:   Yes, I see.  Sorry, yes.

MR WILLIAMS:   So, the first one is line 45 ‑ ‑ ‑

HER HONOUR:   No, I have got it.

MR WILLIAMS:   ‑ ‑ ‑ and then up to line 20.

HER HONOUR:   Yes.

MR WILLIAMS:   Now, Rasera to Day:

will do the transfer as of today’s date.
A question ‑

A question.  If and when Fullarton Investments make a profit who do you envisage that profit will be distributed to and who is going to pay the tax on it?

Then the answer at the top of the page:

That will never happen.

HER HONOUR:   Yes.

MR WILLIAMS:   So your Honour will recall this is ‑ ‑ ‑

HER HONOUR:   I do, I understand.

MR WILLIAMS:   On 3 September - the lease was executed in December 2015 but backdated to the middle of the year.  The next reference is to page 914.  On page 914 of the court book, Mr Day to – I am sorry, starting further down, starting at about line 25, this is from Mr Steinert to Mr Day - about line 23 “Invoices attached for you to pay” and there are then invoices in the following pages, for example, line 15, that is 914, just staying there.  Then 915 are the invoices, “Please pay”.  So here we have, for example, the ASIC fees and the like.

HER HONOUR:   I remember, yes.

MR WILLIAMS:   So, your Honour, the way we put these things is that your Honour would infer that the arrangement was that Mr Day would pay.

HER HONOUR:   Yes, I understand.

MR WILLIAMS:   And this is evidence consistent – showing conduct consistent with the agreement for which we contend, and then finally ‑ ‑ ‑

HER HONOUR:   Well, put in legal terms, you would say evidence of adoption of the arrangement.

MR WILLIAMS:   Yes.

HER HONOUR:   That is the arrangement that you have agreed with Mr Day’s counsel.

MR WILLIAMS:   That is so.

HER HONOUR:   Yes.

MR WILLIAMS:   Yes.  Page 919, at the foot of 919 at about line 45:

I would like to request that ‑ ‑ ‑

HER HONOUR:   One moment please, I am being slow.  Yes.

MR WILLIAMS:   About line 45”

I would like to request the Department pay rent -

So Mr Day pressing for rent to be paid reflecting the arrangements, we say, that the rent would be passed through showing in effect Mr Day’s interest in the rent being paid.

HER HONOUR:   Yes.

MR WILLIAMS:   Now, your Honour, we submit that your Honour would find fact 81 unless some fact were found that was directly inconsistent with it ‑ ‑ ‑

HER HONOUR:   Just one moment while I double‑check my notes on this - sorry, pieces of paper everywhere.  So in 81 if I was to shell it out in further detail – sorry to be so difficult, I just want to make sure I am abundantly clear what the agreement is between you and Mr Bell.  It is Bob Day on behalf of B&B Day, so the participants ‑ ‑ ‑

MR WILLIAMS:   Yes.

HER HONOUR:   ‑ ‑ ‑ entered into the arrangement or agreement.  Is that the way it is put?

MR WILLIAMS:   Yes.

HER HONOUR:   Who is the party that – the parties that put this arrangement in play are Bob Day for and on behalf of B&B Day, Mr and Mrs Smith - is that it?

MR WILLIAMS:   Fullarton Investments.

HER HONOUR:   But who is the participant on that behalf?  The arrangement was that there would be – and the way that is executed, as I understand the way you have just put it to me by reference to CB503 and working through, is it has to include that Mr and Mrs Smith are in effect the ones who agree to the arrangement.

MR WILLIAMS:   Yes, and implement it, yes.

HER HONOUR:   All right.  Then the two points put against you by Mr Kirk, as I understand it, are the control question which you say the way you understand it does not arise as a fact relevant to the way in which it is put.

MR WILLIAMS:   That is so.

HER HONOUR:   Is that right?

MR WILLIAMS:   That is so.

HER HONOUR:   Then the second is his obligation to make repayments and you say that is borne out, as I understand it, regardless of the vendor finance agreement by the court book 503 document and those arrangements.

MR WILLIAMS:   And those two transcript references.

HER HONOUR:   That is what I meant, yes.  Is that how you put it?

MR WILLIAMS:   Yes, your Honour.

HER HONOUR:   Is that the subject of agreement between you and Dr Bell?

MR WILLIAMS:   I will leave him to answer that.

HER HONOUR:   Dr Bell, do I have it right or wrong?

MR BELL:   The only qualification I would seek ‑ ‑ ‑

HER HONOUR:   I am just trying to make sure I understand what the ground is.

MR BELL:   I understand, your Honour.  We have agreed the fact as set out in 81.  As to the last part, the adoption of elements of the conversation between Mr Smith and Mr Day, we do not see that as necessary and we do not make any concession that that supports fact 81.  We say fact 81 is supported by the reference in that second‑last paragraph on 503, and that is sufficient.

HER HONOUR:   All right.  Is that the only qualification?

MR BELL:   Yes, your Honour, but ‑ ‑ ‑

HER HONOUR:   The reason being, I say, is this:  this has to go somewhere else ‑ ‑ ‑

MR BELL:   I know that, your Honour.

HER HONOUR:   ‑ ‑ ‑ and it is important that I understand with absolute clarity what it is is the arrangement.

MR BELL:   Yes, and to be abundantly clear, the reference to “repayments” in the fourth line is a repayment of the purchase price for the property.  That is what that means.  That is the only thing it can mean.

HER HONOUR:   Yes, it says “from rent received from the Commonwealth”.

MR BELL:   Yes.

HER HONOUR:   No, I accept that.

MR BELL:   So it is not – one other slight point where I would take issue, Mr Williams used the phrase “passed through” - we do not submit that that is correct.  There is rent collected by Fullarton Investments and Fullarton Investments then can ‑ ‑ ‑

HER HONOUR:   “Deposited into account in the name of Fullarton Nominees”.

MR BELL:   Well, if Fullarton Investments – the liability to pay the rent under the lease is a liability owed by the Commonwealth to – or any lessee to Fullarton Investments ‑ ‑ ‑

HER HONOUR:   I accept all of that.

MR BELL:   ‑ ‑ ‑ and Fullarton Investments can direct that that then be paid, and the character of that payment, that payment to – payment is by way of repayment of the purchase price.  It is not a direct payment under the lease to B&B Day or Mr Day at all. It is a legal obligation owed to the lessor and the lessor, as any creditor to a contract can do, can direct that moneys owing to it which would discharge a liability to it can be paid to some nominated third party - that was what the arrangement was - and the character of repayments ‑ ‑ ‑

HER HONOUR:   The problem I have with it is really 81 is just too compressed.  I mean, it has conclusions in there which do not identify what the facts are.  I accept that you might say as an ultimate conclusion, if I accepted your view, it would make repayments from rent received from the Commonwealth, what it does not explain is in a sense how it would implement it.  Anyway, all I am trying to ‑ ‑ ‑

MR BELL:   Well, if you go to the email at 503, it uses the language “Fullarton Investment will collect the rent”, so it is the Fullarton Investments, or the entity collecting the rent, step one – and then step two, will transmit it to B&B Day.  So they are the two steps.  There is the collection and then the repayment.  That is why we have used the word “repayment”.  So, the only point which I would really depart from Mr Williams is we say it is sufficient you can get that out of the email at 503.  One does not need ‑ ‑ ‑

HER HONOUR:   You just do not like the – you do not like the words “pass through”.

MR BELL:   Well, that is not part of what is agreed and it just ‑ ‑ ‑

HER HONOUR:   No, I know, but you just do not like the language, otherwise you ‑ ‑ ‑

MR BELL:   Well, we say it is incorrect.

HER HONOUR:   Well.

MR BELL:   Yes.

HER HONOUR:   One could form the view it was a pass through, just a pass through through two steps.  We are not going to sit here and quibble about it but ‑ ‑ ‑

MR BELL:   No, no.

HER HONOUR:   I accept – I understand what the position is.

MR BELL:   But I do not understand Mr Williams is – the Commonwealth is ever contending for that characterisation “pass through”.  It is the agreed fact ‑ ‑ ‑

HER HONOUR:   Well, Mr Williams just made that submission.

MR BELL:   Well, the agreed fact between myself and – my client and the Commonwealth ‑ ‑ ‑

HER HONOUR:   I know, but the question is ‑ ‑ ‑

MR BELL:   ‑ ‑ ‑ is repayment.

HER HONOUR:   Well, it might be.  The question is whether I find it, whether I am going to in effect go further.

MR BELL:   Well, with respect, your Honour, we are not on notice from the Commonwealth of any additional or different facts to which they have agreed with us, and we have the Commonwealth’s agreement to these words.

HER HONOUR:   Yes, but the question is whether it is any use.  That is the point.

MR BELL:   The whole purpose of the direction to reach agreement, et cetera, is to – there are lots of matters of agreement which are, in a sense, compressed in a way where the underlying factual documents are not there, but we say, your Honour, it is supported by the email at 503.

HER HONOUR:   All right.  Anything else on 81, Mr Williams?

MR WILLIAMS:   Just this, your Honour.  Your Honour would find that unless it were directly inconsistent with another fact that your Honour found, even if your Honour were to find that the shares in Fullarton Investments held by Mrs Smith or by Mr Steinert were held on trust, on express trust, for B&B Day, that would not be inconsistent and it would not

be inconsistent if your Honour found consistently with Mr Kirk’s contention that the Fullarton Road property was held on trust by Mrs Smith or Fullarton Investments for B&B Day or Mr Day.  That is all on paragraph 81, your Honour.

HER HONOUR:   Yes.

MR WILLIAMS:   Finally, paragraphs 63 and 64 ‑ ‑ ‑

HER HONOUR:   Paragraph 64 is no longer pursued.

MR WILLIAMS:   I am sorry; yes.  Paragraph 63(a) is probably the centrepiece of the argument.  We say simply in respect of this that there is ‑ ‑ ‑

HER HONOUR:   I think in relation to 63(b) my notes are that Mr Kirk accepted that paragraph (b) was ambitious, so he only, in a sense, identified paragraph (a).  That is not to say I will not deal with (b), but that was his submission in relation to (b).  So what is (a)?

MR WILLIAMS:   That is the significantly lower vote.  Our submission in respect of that is that there is no possible inference to that effect available on the evidence, on the balance of probabilities, for essentially the reasons canvassed in relation to the objections to Professor Jackman and subsequently to his underlying material.  The Court could not draw any such inference in light of the extensive range of possible competing hypotheses.

In a sense, Ms McEwen seeks to have it both ways.  In paragraph 61 she relies on the fact that Mr Day featured prominently in the party’s election campaign but in paragraph 63(b) makes the assertion that Family First would have received a significantly lower number of votes had he not been on the ballot paper.  Now, if he had not been on the ballot paper one possible hypothesis is that he would not have featured prominently in the election ads.  Another one is that he might have as a supporter of the Family First ticket.  There might have been an alternative candidate.  There is simply no evidence on which your Honour could reach the inference contended for in 63(a), in our submission.  That is all I need say about it, your Honour.

HER HONOUR:   Thank you.

MR BELL:   Thank you, your Honour.  Your Honour, I propose first to make a few general propositions about the fact finding and to address Mr Smith and Mr Smith’s evidence and some of the key points to emerge or not emerge from that.  Then I will deal with some of the individual paragraphs, not all of the individual paragraphs.  One thing we would note, though, about Mr Kirk’s address on the individual paragraphs, there was much from what your Honour has called our little document, or the paragraph by paragraph document, much that was not actually engaged with or contradicted.  Your Honour has the document; we rely on it.  But there were many points we made by way of rebuttal to what was said to be the supporting evidence for various propositions, which simply was not answered or challenged by Mr Kirk.  So we do not – of course your Honour will not lose sight of that but they are there and we rely on them.

Now, generally, obviously, your Honour, Ms McEwen has chosen to seek some very detailed and specific factual allegations and a number of them involve matters of some gravity, and so those in the territory of the well‑known observation of Sir Owen Dixon in Briginshaw, which we have extracted in our factual submissions document.

There is also the basal proposition that Jones v Dunkel of course cannot be used to fill gaps where one party bears the onus particularly where, as we have experienced in this case, there have been shifting sands in terms of the factual allegations made and those sands continue to shift up until yesterday, as reflected in the document received this morning.  Now, as to Mrs ‑ ‑ ‑

HER HONOUR:   Just one moment, sorry, Mr Bell.  Sorry.

MR BELL:   That is all right, your Honour.  As to Mrs Smith ‑ ‑ ‑

HER HONOUR:   So we are now moving on to Mrs Smith’s evidence?

MR BELL:   Mrs Smith, yes.

HER HONOUR:   Yes.

MR BELL:   Now, of course, the Court has before it a host of documents which she has signed.  Can I just give your Honour and just read onto the transcript those documents and where they are.  There is the Fullarton Road trust deed, which is court book 73.  There is the agreement for sale, court book 101.  There is the minute of Fullarton Investments, court book, volume 2, page 611.  There is the guarantee on behalf of Fullarton Investments, court book, volume 2, page 683.  There is a mortgage, court book 448.  There is a memorandum of transfer, court book 103.  There is a heads of agreement, court book 113, and there is the vendor finance agreement acknowledgement executed by Mrs Smith at court book 107.

So the Court has a large number of documents.  The Court also has Mrs Smith’s evidence in the transcript.  Does your Honour want page numbers as well as line numbers or simply ‑ ‑ ‑

HER HONOUR:   Line numbers are fine.

MR BELL:   Certainly, your Honour.

HER HONOUR:   Whatever is easiest for you, Dr Bell.

MR BELL:   So it is page 30 at line 1294 and following:

Mrs Smith, you are an honest person, aren’t you?---I believe so.

Yes.  And you wouldn’t sign a document that you thought was false or wrong, would you?---No.

And if you didn’t understand something you were asked to sign or was presented to you for signature you could ask your husband or Mr Rasera, your accountant?---I could, yes.

So we have got a host of documents she has signed.  We have got her evidence that she would not sign a false or wrong document.

The next proposition is this:  those documents show Mrs Smith acting as a director, making decisions for Fullarton Investments, giving effect to those decisions by executing not only documents such as minutes but also contractual documents such as the guarantee, the mortgage, the transfer, et cetera.  Your Honour also has the evidence from Mrs Smith under cross‑examination at page 28, lines 1205 to 1215 that – and this is an important qualification to a lot of her evidence in‑chief ‑ ‑ ‑

HER HONOUR:   This is that she glanced at documents?

MR BELL:   She would not have pored over them.  First she said:

I may have glanced over them, yes.  Like I said, I wouldn’t have pored over them.

No, and by “poring over” you mean, do you, reading every line by line?‑‑‑That’s right.

Then she says:

I would have got the gist of this is what this is about.  This is where I sign ‑ ‑ ‑

Yes.  So you would look at the document to see, at least, what it was about without reading every line?‑‑‑Yes.

And then, “you were able to contact Mr Rasera”, et cetera.  So you have got documents executed which she said she at least reviewed to a particular level, not line by line, but reviewed.  It is clearly beyond argument, in my submission, that she knew and fully understood that she was a director of Fullarton Investments in this period.  Could I remind your Honour of the document at volume 2, page 601.

HER HONOUR:   What is that document?

MR BELL:   That is the document, your Honour, the heads of lease, where she has written in the word “director” in her own handwriting, in her own printing, under her signature.  Now, she gave what, with respect, was some unimpressive evidence about why she did that.  I was putting to her that she fully understood what she was doing.  She was a director, et cetera, and volunteered, there might have been something “in pencil”.

HER HONOUR:   In pencil, yes.

MR BELL:   She very quickly disavowed having any recollection of that.  That is at transcript page 25, line 1090 to 1095.  Of course, if somebody had taken the trouble to write it in there is no reason why it would have been written in in pencil.  The critical thing is ‑ ‑ ‑

HER HONOUR:   Does it matter if it was there in pencil or not?  She wrote it in.

MR BELL:   She wrote it in; quite.  It was unlikely to have been written in, but if somebody had ‑ ‑ ‑

HER HONOUR:   Do you need that?

MR BELL:   No, I do not.  Then also it is clear from the email at 503 and her response to it within the hour and her evidence – and I will come to the reference to this – that she did not discuss that with her husband at all, but she knew she was being asked to be a director.  She knew that a new entity would be founded, that she would be the director of it, that she would be the shareholder of it, that it would acquire the property and it was expected that the property would be leased.

The question, for example, which Mr Kirk sought to elicit, the evidence that he sought to elicit, well, did you authorise the creation of Fullarton Investments, et cetera, there is plain authorisation of the incorporation of the company with her as shareholder and director, et cetera, et cetera, through her agreement in that email.

The next proposition in relation to Mrs Smith is this:  that in respect ‑ ‑ ‑

HER HONOUR:   Just one moment, please.  Yes.

MR BELL:   In respect of those documents that she executed, there is not the slightest hint that she executed any of those documents because she was told to or directed to by Mr Day, and the evidence I would rely on for that, your Honour, is transcript page 8, lines 295 to 304.

HER HONOUR:   Sorry, can I have that reference again, please.

MR BELL:   Page 8, lines 295 to 304, evidence solicited in‑chief, having no discussions or communications with Mr Day in respect of Fullarton Investments Fullarton Road property.  So that is pretty significant evidence which my friend Mr Kirk needs to deal with in a case where he is alleging that every step Mrs Day took was at the direction – Mrs Smith took was at the direction of Mr Day, et cetera.

So just pausing there, the Court has a wealth of documentation showing Mrs Smith acting as the director of Fullarton Investments making decisions, et cetera, without any control or direction of Mr Day or indeed Mr Rasera for that matter.  As to the significance of her signature on each of those documents, could we just give your Honour a reference?

HER HONOUR:   What is this going to?

MR BELL:   The significance which the law attaches to signed documents.  Can we just give your Honour reference to Toll v Alphapharm in this Court (2004) 219 CLR 165 at paragraphs 42 to 47. So that is, on the one hand, you have the signed documents and the inferences one can draw from the signed documents about Mrs Smith. On the other hand you have to contrast that evidence with some of her oral evidence and in particular various statements she made about just signing documents, not reading them, not speaking to people, et cetera, and aspects of her testimony show that her recollection of what she in fact did – recollections given in the witness box were poor. So the clearest but not the ‑ ‑ ‑

HER HONOUR:   So I suppose you are going to give me the references about “just signing documents”.

MR BELL:   Yes, there are references to just signing documents but the first position was that she did not sign documents ‑ ‑ ‑

HER HONOUR:   No, I accept that, so that position was altered, I think, during the course of her testimony.

MR BELL:   Yes, that position was altered, but then it altered to this at transcripts page 17, lines 731 and 732 ‑ ‑ ‑

HER HONOUR:   What is that reference again, Dr Bell, you are going a bit fast?

MR BELL:   Sorry, your Honour, page 17, lines 731 to 732.

HER HONOUR:   Yes.

MR BELL:   Her evidence morphed into:

Just signed documents when I took over as owner and then when I resigned, that I recall; nothing in between.

Now, that recollection is wrong.  Many of the documents I have given your Honour in that list of documents she signed are documents that were signed by her between those two points of time, those two bookends.  Now, another example as to the poor quality of her recollection, transcript page 31, lines 1359 to 1361:

Now, the reality is that you had simply forgotten that you had executed that document when you gave your answers to Mr Kirk earlier today.  Is that right?‑‑‑Yes.

And then back on transcript page 29, lines 1276 and 1277:

obviously I’m very vague on what I’ve signed.

So, your Honour, the submission is this.  The Court should, in approaching the fact finding and the contentions made by Ms McEwen, give weight to the fact of execution of the documents and the inferences from that execution, bolstered by the fact that Ms Smith accepted that she had access to both Mr Rasera and her husband for any advice, and give far more weight to that than her oral recollections, which are demonstrated to be poor, as to what she did in her almost two years as a director of Fullarton Investments.

At the end of the day, she could not exclude, for example, the prospect that she had been sent the accounts for the 2013‑2014 year.  She said she could not recall them but could not have any confidence that she was not and, in the ordinary course, one would expect Mr Rasera, here longstanding accountant, to have sent them to her.  So they are the general submissions I make about Mrs Smith and I seek to tie the general submission into some individual facts.

As to Mr John Smith, your Honour, the principal purpose of his evidence seemed to be to establish what was said between he and Mr Day in relation to the incorporation of Fullarton Investments and the Fullarton Road property.  Now, of course, in context, that is central to Ms McEwen’s allegation in paragraph 10 of her 12 January document about the arrangement, the arrangement it sets.

HER HONOUR:   Correct.

MR BELL:   That is the context.  This aspect of Ms McEwen’s case, in our submission, is completely problematic and that can be illustrated by working through four logical steps, first looking at what the evidence is as to what was communicated between Mr Smith and Mr Day, what was in fact said and whether ‑ ‑ ‑

HER HONOUR:   You mean the conversation?

MR BELL:   The conversation, what was in fact said and whether Mr Smith’s recollection is reliable or sufficiently clear to enable the Court to reach confident conclusions about that.

HER HONOUR:   Is this the only submission?  Are you going to develop these propositions?

MR BELL:   Yes.  Sorry, your Honour.  I am just outlining.  There are four ‑ ‑ ‑

HER HONOUR:   Yes, so I have the conversation, what is said between Day and Mr Smith.

MR BELL:   There are the conversations, what was communicated, when it was communicated and then critically whether what was communicated between Mr Smith and Mr Day whether Mr Smith then relayed that to Mrs Smith to secure her acceptance of it.  There is this embedded notion, completely not made out on the evidence that Mr Smith ‑ ‑ ‑

HER HONOUR:   Is that right?  I will come to that but the way I understood the evidence fell out was that Mrs Smith identifies what she was told.

MR BELL:   I will come to that and, yes, it was not anything like – it was far shorter than the evidence between Mr Day and Mr Smith.  There is a critical ‑ ‑ ‑

HER HONOUR:   Does that matter, given court book 503?

MR BELL:   That is the fourth problem with it.  If your Honour finds that the conversation between Mr Smith and Mr Day preceded court book 503, it is totally overtaken, in our submission, by 503.  503 is a proposal by Mr Rasera.  “I propose” this agreed to by Mrs Smith, without any reference to her husband.  I will come in detail to this but I just wanted to point out there seems to be an assumption in the way Ms McEwen has put her case that what Mr Day said to Mr Smith was agreed to by Mrs Smith.  That involves the proposition that ‑ ‑ ‑

HER HONOUR:   I think it has changed, has it not?  Is it not now ‑ the way in which 10 deals with it, it is Mr Smith on behalf of Mrs Smith.

MR BELL:   Well, yes.

HER HONOUR:   That is the finding that is now sought.

MR BELL:   Yes, and where is the first step in that, that Mr Smith was authorised by Mrs Smith to reach an agreement?

HER HONOUR:   That is a different point from what you are just putting to me.  I think it is, so if you are looking at what identifies your four problematic steps, the second – I withdraw that.  The third does not arise on the way in which the finding is now put.

MR BELL:   The way I think Mr Kirk may now be putting it is that Mr Smith was authorised ‑ ‑ ‑

HER HONOUR:   I accept that.

MR BELL:   ‑ ‑ ‑ to reach an agreement on behalf of Mrs Smith.

HER HONOUR:   That is why I say 3 does not arise, does it?

MR BELL:   It would only arise ‑ ‑ ‑

HER HONOUR:   Anyway, I have raised it.

MR BELL:   It could happen two ways:  either there could be some pre‑authorisation by Mrs Smith for her husband to make an arrangement on her behalf, as to which there is no evidence whatsoever.  Indeed, it is contrary to Mr Smith’s evidence that Mr Day said, “Could you ask Deb on my behalf whether she would do this, that and the other?”  That was Mr Smith’s evidence and it is inconsistent with this notion that he was somehow already her agent or authorised.

So if that is correct, the only other way that Mrs Smith could be fixed with what may or may not have been agreed by Mr Smith to Mr Day is if Mr Smith had relayed to Mrs Smith the substance of his conversation with Mr Day and she had agreed to it.

As to that, I will take your Honour to the evidence.  Mrs Smith said that in terms of her conversation with Mr Smith, in terms of that conversation, she said, “Bob wants you to be the owner”, and she said, “That was it.”  I will give your Honour the reference.  It does not have anything like the detail which would be required to make good any of the subparagraphs (a) to (g) in our friend’s proposition 10.

Can I go back to those steps.  As to what was communicated between Mr Smith and Mr Day, your Honour could not reach a comfortable degree of satisfaction about this for the following reasons, in our submission.

HER HONOUR:   Not ready to come to a satisfaction about what?

MR BELL:   About what Mr Day said to Mr Smith in this conversation relied on by Ms McEwen.  These propositions we put in support of that submission.  First, Mr Smith could not recall the length of that conversation with Mr Day.  That is at transcript page 37, line 1614.

Next, he could not recall the location of it.  That is at transcript 45, line 1992.  Your Honour will recall at first he said that it occurred at the office at Kent Town.  Then I put to him:

You can’t recall precisely where the conversation ‑ ‑ ‑?‑‑‑No, I can’t recall precisely, no.

No.  It may not have been there at all?‑‑‑It might not have.

Then at line 2008, he said:

it could have occurred in Queensland.  He may have been up there at the time.  So, no, I don’t know exactly where.

Your Honour will have a great deal of confidence in a witness who says categorically it occurred at his office in Kent Town and within eight lines says “it could have occurred in Queensland”.  I do not know where it occurred.  That is the second ‑ ‑ ‑

HER HONOUR:   Just so I am clear, this is an attack on paragraphs (a) to (g) of proposed evidentiary fact 10?

MR BELL:   That is the context in which this submission has been ‑ ‑ ‑

HER HONOUR:   This can be the only purpose for it.

MR BELL:   Yes, yes.

HER HONOUR:   Is your proposition in relation to this first step, that there was no conversation at all or no conversation to that effect?

MR BELL:   No, no, your Honour could not be confident as to what in fact was said between Mr Day and Mr Smith.

HER HONOUR:   Right.  I have got “no recollection”, and I have got “no location”.

MR BELL:   No recollection of the location.  Then, the next proposition is that as to the timing of the conversation as to when it occurred, Mr Smith’s evidence was, with respect, all over the place.  Can I give your Honour these references:  page 42, lines 1845 to 1855.  He said:

it occurred . . . at that stage I took over the directorship of all of the companies out of the group because Bob was going into the Senate.

There is subsequent evidence, he accepted that that was 30 June 2014.  So his first stab at it was to put it in mid‑2014.  Then, page 43, 1913 to 1915, again to the same effect:

The discussion took place after he had resigned as director.

Then at 44, lines 1920 to 1927, he said:

No, but then there was – when he mentioned the Fullarton Road properties he said at that time, “I’ve resigned as director from all the groups and now I’ve only got one more thing to do”.

Thank you?‑‑‑Sort of, I’m getting a bit twisted there.

Then I said:

Mr Day didn’t resign as a director of all of the companies until June 2014, did he?‑‑‑I don’t know.  Possibly.

 . . . 

Do you not recall when you became the sole director of the Home Australia group?‑‑‑Yes, 2014, just before he went into the Senate.  That’s correct.

So, you have got Mr Smith, the person on whom ‑ ‑ ‑

HER HONOUR:   But that is not the end of it.  He then goes back to September ‑ ‑ ‑

MR BELL:   I know, I know.  That is my point.

HER HONOUR:   I know that, but that is not the end of the evidence relevant to this ‑ ‑ ‑

MR BELL:   No, I know.  I am just saying we have got, I think, three or four references so far ‑ ‑ ‑

HER HONOUR:   We have got three.

MR BELL:   Three, and then at page 44 ‑ ‑ ‑

HER HONOUR:   Well, actually, we have got two.  We have got the time he took over the directorships, 30 June 2014.  We have got the same point made three times.

MR BELL:   Yes, reinforced.  Then, you have got page 44, lines 1944 to 1947:

MR BELL:   Is your evidence – just to be clear – that you place the discussion about the Fullarton Road property after he had actually resigned as a director of the Home Australia group of companies?  Is that your evidence?‑‑‑Yes.

So I am giving him every opportunity to consider this.  Then ‑ ‑ ‑

HER HONOUR:   They are all directed at the same day?

MR BELL:   They are all directed to the same point.  Then, at page 45, 1978 to 1985 – or to about 1988 – first, he says “Around the time he resigned”, then he says:

No, around the time of a couple of months after he was elected to the Senate.

With respect, as to what one might have thought, if he had a confident recollection of the conversation, or sufficiently confident, the Court would have confidence in the terms of that recollection.  He would know when it occurred, would know where it occurred, and have some idea about the length of the conversation as to all of those matters.  Your Honour, he was all over the shop.  As to the content ‑ ‑ ‑

HER HONOUR:   Hang on.  He says it is September – I have just got to find the page reference.  I read it last night when I went back – here it is; page 42.

MR BELL:   Yes.

HER HONOUR:   Line 1872.

MR BELL:   Yes.  My point is at all those other references, where I put it very clearly to him, he put it at a different point in time.

HER HONOUR:   Just one moment please.  Is it agreed – and this is a side issue, but it is relevant to this dates question – is it agreed between the three parties that are before me about the dates when the writs were issued, the election was held, and Mr Day was duly elected in 2013?

MR BELL:   I think that is in the agreed facts.

HER HONOUR:   It is not in the agreed facts.  There are three dates.  I am going to read them to you, and you can let me know by close of today whether or not there is some dispute about it.  They are on the public record, I assume, but I just want to make sure because it is relevant to this sort of question.

MR BELL:   Yes, certainly, your Honour.

HER HONOUR:   5 August 2013 – these three events occurred in 2013, as I understand it – 5 August, the Governor of South Australia issued a writ for the election of senators for the State of South Australia; second, on 7 September, the election was held; and third, on 2 October, the Australian Electoral Officer for the State of South Australia certified that Mr Day had been duly elected to serve as a Senator for South Australia.

MR BELL:   I am sure they are correct, but we will confirm that.

HER HONOUR:   I have asked that the three parties before me determine whether or not that is accurate.

MR BELL:   Thank you, your Honour.  Moving on, then, to the content of the conversation, at page 44, 1963, I put to him:

you do not pretend to recall precisely ‑ ‑ ‑

HER HONOUR:   Sorry, could you just give me that reference again?

MR BELL:   Page 44, line 1963:

you do not pretend to recall precisely what he said to you or what you said to him in any of those conversations, correct?

Now, your Honour, the transcript does not record Mr Day’s answer, and you will see Mr Kirk objected, but then your Honour says at the top of the next page:

I think that question has been answered, Mr Kirk.

My recollection is that Mr Smith assented to what I put to him.  That is why your Honour said what your Honour said as recorded at the top of page 45.

HER HONOUR:   Yes.

MR BELL:   Next, at page 39, line 1710, he said:

the conversation was on the lines –

or it might have been “along the lines”.  At line 1727, he says:

[It was] pretty close to what we discussed.

That was his language.  The next point I make about the quality of his recall – your Honour will recall he volunteered that Mr Day said to him that the property would be held by way of shares ‑ ‑ ‑

HER HONOUR:   On trust.

MR BELL:   On trust.  But, then, your Honour, towards the end of this cross‑examination – that was in‑chief – at page 46, line 2046 ‑ ‑ ‑

HER HONOUR:   “Or something”.

MR BELL:   Yes, “or something”.

HER HONOUR:   Yes.

MR BELL:   Now, I clarified that at 2052:

So he said “by way of shares in trust or something”?‑‑‑Yes.

And didn’t elaborate on what “or something” meant?‑‑‑No.

No?  And you didn’t ask him?‑‑‑No.

Now, that is a fairly significant movement in his evidence in the context of what Ms McEwen is asking your Honour to find and the significance to be attributed to this conversation.  So, they are our submissions about whether the Court can, in an important constitutional case, reach with confidence some finding about what was said in the conversation between Mr Smith and Mr Day, and when it was said.

Now, the next proposition is this, and this is what I submit is quite significant or very significant.  Was whatever the terms of that conversation were ‑ ‑ ‑

HER HONOUR:   This is step three?

MR BELL:   Yes.  Were those terms communicated to Mrs Smith, because do not forget proposition 10 of our friends have this as an agreement between Mrs Smith and B&B Day.

HER HONOUR:   No.  As I said to you, the McEwen submission now is - is an agreement between Mr Day and Mr Smith on behalf of Mrs Smith.

MR BELL:   Well, I am not sure whether my friend has abandoned the alternate way he put it.

HER HONOUR:   I think he has.  That is why I asked for the document to be amended, so there could no doubt about it.  If I could go to 10 ‑ ‑ ‑

MR BELL:   Yes.

HER HONOUR:   ‑ ‑ ‑ it has come out, “Mr Smith on behalf of and with the agreement of Mrs Smith”.

MR BELL:   Yes. 

HER HONOUR:   It has changed again from yesterday.

MR BELL:   So this is my point.  Somehow either Mr Smith has to have been authorised upfront by Mrs Smith to reach an agreement on behalf, as to which there is no evidence whatsoever, and none was sought to be led, or the conversation has to have occurred, it has to have been relayed by Mr Smith to Mrs Smith and she has to have agreed with it.  Now, that is why this third step, in my submission, is of importance.  What we have, fatally, with respect, at transcript page 5 – you have this at page 5, line 176, Mr Kirk:

And you referred in your answer a moment ago to having a general [understanding]; where did you obtain that general ‑ ‑ ‑

HER HONOUR:   Sorry, page 5?

MR BELL:   Transcript page 5, line 176.

HER HONOUR:   Sorry, I am being slow.

MR BELL:   No, no.

HER HONOUR:   Yes.

MR BELL:   Sorry, I will slow down.  I am possibly racing.

HER HONOUR:   It is all right.  Yes, I have it now.

MR BELL:  

And you referred in your answer a moment ago to having a general [understanding]; where did you obtain that general understanding?‑‑‑From what John, my husband, said about that – that Bob wanted me to take over the property at Fullarton Road, as the owner of it.

HER HONOUR:   I think you want the next question.

MR BELL:  

You have just used the words there “take over the property, as owner of it”.  In your conversation with John, was there any more discussion as to what that involved?‑‑‑No.

Now, this is the witness called by Ms McEwen, a witness who the Court knows had spoken to Ms McEwen’s solicitors in advance of giving her evidence.  The Court had Mr Green’s affidavit previously.  What was not elicited from Mrs Smith was (a) that Mr Smith relayed the effect of what he had been told, or he understood Mr Day had told him; still less that she agreed to it.  Now, just to be fair and proper, Mr Smith’s evidence on this topic, your Honour, at page 40, transcript line 1760:

After the conversation you’d had with Bob that we’ve just been over, did you have a conversation with your wife, Deb, about these issues?‑‑‑Yes, I told Deb how I’d had the discussion with Bob and I said – and that she would do it and she said, “Okay, that’s fine”.

How long was the conversation, do you remember?‑‑‑About as long as that.

Now, that is not a sufficient basis for your Honour to – that evidence ‑ ‑ ‑

HER HONOUR:   To be fair, I think you need to go - only so that the position is complete ‑ ‑ ‑

MR BELL:   Yes:

It was not a long conversation, didn’t go into any real details.

That is the next line, down to 1769.  Now, your Honour, splicing that evidence together with Mrs Smith’s evidence – bearing in mind these are witnesses called by Ms McEwen who bears the onus, who is making the allegation of an arrangement being made on behalf of or alternatively with the agreement of Mrs Smith, your Honour simply could not reach the basal conclusion sought.  Still less – and I have not even reached the detail of subparagraphs (a) through to (g) of the terms of the arrangement and how on earth our friends seek to spell that out of the evidence they elicited - that is another problem which I will come to in due course.  But this is – so that is the third step in my attempt to defeat this submission.

The fourth step, your Honour, is that of course even if – assuming everything against me, even if there had been some arrangement reached, Mr Kirk says that the conversation occurred prior to the receipt of the Rasera email.  The Rasera email supersedes anything which occurred before.  The Rasera email is a proposal – not a proposal articulated by Mr Day, but a proposal by Mr Rasera, “I propose” – “Mr Day has sought advice about a problem; I propose this” and she accedes to that and, your Honour, significantly – and the reference is transcript page 19, lines 805 to 810:

I didn’t discuss anything with him –

Her husband –

I just replied to Vic.  I never had a conversation with my husband about it.

So, I will come to subparagraphs (a) to (g), but that is a threshold submission in respect of what is a very critical element of Ms McEwen’s contentions, and your Honour will appreciate that so many of her other contentions after paragraph 10 build on presupposed existence of the arrangement ‑ ‑ ‑

HER HONOUR:   Are dependent on – I understand the import of it, yes.

MR BELL:   ‑ ‑ ‑ implementation, et cetera.  I just want to make one separate general submission about Mr Steinert, and this is particularly so in relation to the allegation at paragraph 25 that Mr Steinert knew of the Rasera advice of 2 December, one.  Secondly, that he knew of the arrangement as alleged by Ms McEwen; and thirdly, that he adopted it.  So paragraph 25 is another very important aspect of Ms McEwen’s case.

The reason Ms McEwen rightly sees it as important is because of course this case is about the lease. The lease is the agreement in terms of section 44(v) of the Constitution that the Court is concerned about. It was Mr Steinert who was the director of Fullarton Investments at the time the lease was entered into.

Now, we make these general submissions, your Honour, in relation to Mr Steinert’s role.  The first is there is not a skerrick of evidence that Mr Steinert received the Rasera email or advice.  It was not copied to him.  Mrs Smith’s reply was not copied to him or, interestingly, to Mr Day for that matter.  It was not produced by Mr Steinert in answer to a summons or a subpoena.

HER HONOUR:   How do I know that?

MR BELL:   Well, it would have been tendered presumably in support of my friend’s case.

HER HONOUR:   Do you not have to tender the document, have to tender the request?

MR BELL:   I think that is in the bundle.  I will ask Mr Hume to - I think the subpoena is in the ‑ ‑ ‑

HER HONOUR:   You had better give me the reference.

MR BELL:   Yes, very well, your Honour.  But it was not copied to him.  Secondly, Mr and Mrs Smith were not asked whether they sent it to him or discussed it with him.  We would rely, your Honour, on the principle articulated in a decision in the New South Wales Court of Appeal in the Ferrcom Case that it is a sort of a variation of Jones v Dunkel and then followed very often in the Federal Court and the Full Federal Court that when a party calls a witness and that witness does not address a matter one would expect them, him or her to address then one can draw an adverse inference there.  There was no attempt to elicit from Mr or Mrs Smith that they have ever communicated the advice or discussed the advice with Mr Steinert.

Next, Mr Steinert’s first involvement, on the evidence, appears to have been not until 25 March 2014 and that was purely and entirely in the context of the then proposed conveyance, remembering that the agreement for sale was entered into in April and in late March one has a communication your Honour will find at page 579 of the court book:

Colin

The Government has given approval for me to locate my Senate office at Fullarton Road – subject to me disposing of my interest in the property.

With this in mind can you please prepare a contract for sale –

et cetera - no reference to Rasera, to the Fullarton Road trust, the discretionary trust at all in that email.  There is no suggestion he had anything to do with the preparation of the Fullarton Road building. Your Honour, if I could just go back, the reference to which your Honour is seeking to the subpoena -, court book 302 is the subpoena to Fullarton Investments and court book 303, paragraph 3 of that subpoena, documents regarding mentioning agreement or arrangements with Mr Steinert.

The third general proposition we would make in respect of Mr Steinert - and it has relevance to a number of the individual submissions made by my learned friends is – can I take your Honour to Ms McEwen’s bundle to page AM143.

HER HONOUR:   What is this in relation to?

MR BELL:   This goes to (a) defeating a proposition that Mr Steinert had knowledge of either the Rasera advice or any arrangement as alleged by Ms McEwen and it also goes to Mr Steinert’s independence.  So at 143 ‑ ‑ ‑

HER HONOUR:   Is this where he says, “I’m not agreeing until it’s been cleared up by my accountant”?

MR BELL:   Yes.

Please reply with answers to the below.  I am still chasing up the Stamp Duty question.

The email below that – so prior to that – from his accountant tells him that Fullarton Investments is merely the trustee of the Fullarton Road trust.  Now, Mr Steinert is finding out about Fullarton Investments, in my submission, on the evidence, for the first time - about this relevant detail for the first time in October 2015, almost two years after the Rasera advice, a point, your Honour, made yesterday by my friend in argument.

That email also, with respect, shows Mr Steinert to be independent.  It shows him to be his own master.  This is of course fundamentally inconsistent with the contention that Mr Day, at all material times, controlled Fullarton Investment and inconsistent with the submission that Mr Steinert agreed to an arrangement whereby he would do things at the direction of Mr Day, which is what the contention in paragraph 25 amounts to, by saying Mr Steinert adopted the arrangement, as we have alleged, because subparagraphs (a), (b) (d) and (f) of that alleged arrangement are all about agreeing to do things at Mr Day’s direction.

The next point in relation to Mr Steinert – this is a document your Honour has not, I think, been taken to so far – is at court book 2, page 924.  At the start the lease has been entered into.  So a matter of months of the lease being entered into, which was December 2015, and it is Mr Steinert, as the director of Fullarton Investments giving directions to the Commonwealth.  It also is Mr Steinert nominating Joy Montgomery as the accounts contact, not Mr Day doing this; it is Mr Steinert doing this in his capacity as a director of Fullarton Investments.  The next point we would make in respect of Mr Steinert, your Honour ‑ ‑ ‑

HER HONOUR:   Just one moment, though.  I do not actually know – I have looked at these documents and these are the documents that were attached to the email from Ms Montgomery to the relevant person and so this is the electronic funds transfer form.

MR BELL:   Yes.  It was an act by Mr Steinert, not at the direction – none of this was at the direction of Mr Day.  Your Honour, it has not been…..but it is Mr Steinert giving a direction that the rental payments owed to Fullarton Investments – he, on behalf of Fullarton Investments, is directing ‑ ‑ ‑

HER HONOUR:   I understand the point.  I am just making sure I understand it.

MR BELL:   And it is nominating Ms Montgomery and that is significant because something has been sought to be made against or by Ms McEwen in relation to Ms Montgomery forwarding invoices and things.  Ms Montgomery was nominated by the director of Fullarton Investments to do so on behalf of Fullarton Investments and that is what she did.  If you look at the invoices that are sent your Honour will see page 929, for example.

She is sending them on behalf of Fullarton Investments.  That is express under the signature, John Montgomery, John Montgomery on behalf of Fullarton Investments.  Then one turns to 930, for example, the invoice is a Fullarton Investments invoice on its letterhead with its ACN number and, similarly, one will see at 932 and 933, Mr Montgomery on behalf of Fullarton sending the invoice.

A further general point about Mr Steinert, in relation to the allegation that he knew of the advice and of the arrangement and he adopted it, is Mrs Smith’s evidence at transcript page 33, line 1456, to the effect that she had no discussion:

extend time for our submissions by perhaps 48 hours.  I have not discussed this with Dr Bell.

HER HONOUR:   It just gives me the more reason to do it by Friday.

MR WILLIAMS:   I would not want to say anything about that, your Honour, but there are obviously limits ‑ ‑ ‑

HER HONOUR:   As I said, my hope and expectation is it will be Friday.  I have just got a lot to do.

MR WILLIAMS:   Yes, your Honour.

MR BELL:   We would submit, your Honour, it should not affect the reply submissions.  The submissions to date have been – what Mr Williams says fills me with alarm, that the reply submissions may be used to make new submissions in light of your Honour’s findings rather than submissions which are in reply to our submissions, which of course did not have the benefit of any additional findings by your Honour.  So that we would submit that the timetable, which gives us a fairly tight time to take on board our friends’ two replies, should be adhered to.

HER HONOUR:   All right.  I think at the moment, Mr Williams, my present view is probably that Dr Bell is right, you should limit yourself to what is currently before the Court.  Then what I will do is this:  I will give the parties liberty to apply in the sense that if it is thought as a result of the judgment other arrangements need to be made in terms of subsequent submissions and so forth, then if you cannot agree between the three of you then send up a consent order, then I will deal with it in chambers.

MR WILLIAMS:   Yes, our submissions, of course, are in reply to Ms McEwen as well, but I would not ‑ ‑ ‑

HER HONOUR:   I accept that but at the moment they are limited to the materials, notwithstanding the McEwen submissions go further.  As I have said to you, they were to be limited on the materials that were before the Court on the reference and I think that should be maintained for present purposes.  If, as a result of what happens on Friday or Monday, you cannot agree between you what is to happen then, as I have said, I will be around next week.

MR WILLIAMS:   We will take it up with our friends.

HER HONOUR:   I mean, you should be able to work it out between you, I think, and if you cannot then, as I have said, I will deal with it, urgently.  Just ring chambers and we will work it out.

MR WILLIAMS:   May it please the Court.

HER HONOUR:   Is that all right with you, Dr Bell?

MR BELL:   Of course, your Honour.

HER HONOUR:   Mr Kirk, is that all right with you?

MR KIRK:   Yes, absolutely, your Honour.

HER HONOUR:   All right.  Thank you for your assistance.  Adjourn the Court.

AT 12.59 PM THE MATTER WAS ADJOURNED