Sampey v Doherty - [2024] WASCA 105

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   SAMPEY -v- DOHERTY [2024] WASCA 105
CORAM:   BUSS P
HALL JA
LUNDBERG J

HEARD:   19 DECEMBER 2023
DELIVERED          :   4 SEPTEMBER 2024
FILE NO/S:   CACV 13 of 2023
BETWEEN:   BRUCE RONALD SAMPEY
First Appellant
BRUCE RONALD SAMPEY as trustee for THE MUSTANG UNIT TRUST
Second Appellant
STEPHEN JOHN WAKE as trustee for THE MUSTANG UNIT TRUST
Third Appellant
BRUCE RONALD SAMPEY as trustee for THE SAMPEY SUPERANNUATION FUND
Fourth Appellant
LINDA JUNE SAMPEY as trustee for THE SAMPEY SUPERANNUATION FUND
Fifth Appellant
STEPHEN JOHN WAKE as trustee for THE WAKE SUPERANNUATION FUND
Sixth Appellant
TONYA ALLISON WAKE as trustee for THE WAKE SUPERANNUATION FUND
Seventh Appellant
AND
PHILLIP CARL DOHERTY
First Respondent
PHILIP CARL DOHERTY as trustee for THE PD TRUST
Second Respondent
GREGORY JOHN NORRIS
Third Respondent
ANGOURIE INVESTMENTS PTY LTD (ACN 064 357 651) as trustee for THE ANGOURIE UNIT TRUST
Fourth Respondent
FANFARE PTY LTD (ACN 051 059 342)
Fifth Respondent
HEATHER JOANNA DOHERTY
Sixth Respondent
BRUCE RONALD SAMPEY as administrator of the estate of PATRICIA ADELE ADDISON (AKA SAMPEY)
Seventh Respondent
JENNIFER ANNE SAMPEY as administrator of the estate of PATRICIA ADELE ADDISON (AKA SAMPEY)
Eighth Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   ALLANSON J
Citation: DOHERTY -v- BRUCE RONALD SAMPEY as administrator of the estate of PATRICIA ADELE ADDISON (AKA SAMPEY) [2023] WASC 10
File Number            :   CIV 1337 of 2014

Catchwords:

Partnership - Whether a partnership formed in the absence of a written partnership agreement - Examination of the course of conduct of the parties

Partnership - Nature and extent of the business of the partnership and the fiduciary duties owed by the partners - Examination of the course of dealings between the parties over time - Appropriate analysis to be undertaken when partnership evolves or develops over time

Practice and procedure - Failure by appellants to address Primary Judge as to equitable defence in opening or closing submissions at trial - Whether Primary Judge ignored the defence - Obligations of a trial judge in those circumstances - Primary Judge found to have addressed the defence

Equitable defences - Plea of laches - Nature of the defence - Whether prejudice required - Whether Primary Judge misapprehended the requirements of the species of laches pleaded - Whether appellate court in a position to make appropriate findings of fact in the circumstances or whether matter should be remitted

Unconscionable conduct - Relief granted by the Primary Judge under the Australian Consumer Law in respect of the Deeds of Loan - Whether necessary finding made by the Primary Judge to support the grant of relief - Whether Primary Judge erred in law in concluding that conduct of the relevant appellants was unconscionable in all the circumstances

Legislation:

Competition and Consumer Act 2001 (Cth), Schedule 2, s 21, s 22 and s 243
Partnership Act 1895 (WA), s 7 and s 8

Result:

Ground as to the laches made out (ground 3)
Laches defence considered afresh and found not to have been established
Appeal dismissed

Category: B

Representation:

Counsel:

First Appellant	:	M D Cuerden SC & T J Langdon
Second Appellant	:	M D Cuerden SC & T J Langdon
Third Appellant	:	M D Cuerden SC & T J Langdon
Fourth Appellant	:	M D Cuerden SC & T J Langdon
Fifth Appellant	:	M D Cuerden SC & T J Langdon
Sixth Appellant	:	M D Cuerden SC & T J Langdon
Seventh Appellant	:	M D Cuerden SC & T J Langdon
First Respondent	:	G D Cobby SC & G B A Visscher
Second Respondent	:	G D Cobby SC & G B A Visscher
Third Respondent	:	G D Cobby SC & G B A Visscher
Fourth Respondent	:	G D Cobby SC & G B A Visscher
Fifth Respondent	:	G D Cobby SC & G B A Visscher
Sixth Respondent	:	G D Cobby SC & G B A Visscher
Seventh Respondent	:	G D Cobby SC & G B A Visscher
Eighth Respondent	:	G D Cobby SC & G B A Visscher

Solicitors:

First Appellant	:	Spyker Legal
Second Appellant	:	Spyker Legal
Third Appellant	:	Spyker Legal
Fourth Appellant	:	Spyker Legal
Fifth Appellant	:	Spyker Legal
Sixth Appellant	:	Spyker Legal
Seventh Appellant	:	Spyker Legal
First Respondent	:	Fourlion Legal
Second Respondent	:	Fourlion Legal
Third Respondent	:	Fourlion Legal
Fourth Respondent	:	Fourlion Legal
Fifth Respondent	:	Fourlion Legal
Sixth Respondent	:	Fourlion Legal
Seventh Respondent	:	Fourlion Legal
Eighth Respondent	:	Fourlion Legal

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

Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd [2003] HCA 15; (2003) 214 CLR 51
Australian Securities and Investments Commission v Kobelt [2019] HCA 18; (2019) 267 CLR 1
Birtchnell v Equity Trustees, Executors and Agency Co Ltd [1929] HCA 24; (1929) 42 CLR 384
Briggs v Lunt [No 3] [2011] WASCA 44
Bryant Bros v Thiele [1923] SASR 393
Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178
Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654
Doherty v Bruce Ronald Sampey as administrator of the estate of Patricia Adele Addison (aka Sampey) [2023] WASC 10
Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218; [1874-80] All ER Rep 271
Fisher v Brooker [2009] 4 All ER 789; [2009] 1 WLR 1764
Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Fysh v Page [1956] HCA 13; (1956) 96 CLR 233
Gunn v Meiners [2022] WASCA 95
Halford v Halford [2022] WASCA 1; (2022) 58 WAR 254
Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41
Hourigan v Trustees Executors & Agency Co Ltd [1934] HCA 25; (1934) 51 CLR 619
House v The King [1936] HCA 40; (1936) 55 CLR 499
Howard v Federal Commissioner of Taxation [2014] HCA 21; (2014) 253 CLR 83
Joyce v Anderson [2020] WASCA 48; (2020) 91 MVR 334
Lee v Lee [2019] HCA 28; (2019) 266 CLR 129
Leeder v The State of Western Australia [2008] WASCA 192
Lindsay Petroleum Co v Hurd (1874) LR 5 CP 221
Lowe Pty Ltd v Belgravia [2020] WASCA 180
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2022] WASCA 26
Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 264 CLR 541
Murdoch v Mudgee Dolomite and Lime Pty Ltd (in liq) [2022] NSWCA 12; (2022) 398 ALR 658
Nankivell v Insurance Commission of Western Australia [2017] WASCA 143; (2017) 81 MVR 24
Nowell v Palmer (1993) 32 NSWLR 574
Orr v Ford [1989] HCA 4; (1989) 167 CLR 316
Paciocco v Australian and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199
Phelan v. Middle States Oil Corporation [1955] USCA2 324; (1955) 220 F 2d 593
Pilmer v Duke Group Ltd [2001] HCA 31; (2001) 207 CLR 165
Productivity Partners Pty Ltd (trading as Captain Cook College) v Australian Competition and Consumer Commission [2023] FCAFC 54; (2023) 27 FCR 180
Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679
Rosselli v Rosselli [2007] VSC 414
Savage v Lunn [1998] NSWCA 203
Shannon v Permanent Custodians Limited [2020] WASCA 198
Siegwerk Australia Pty Ltd (In Liquidation) v Nuplex Industries (Aust) Pty Ltd [2013] FCAFC 130; (2013) 305 ALR 412
Southern Properties (WA) Pty Ltd v Executive Director of the Department of Conservation and Land Management [2012] WASCA 79; (2012) 42 WAR 287
Streeter v Western Areas [No. 2] [2011] WASCA 17; (2011) 278 ALR 291
Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 276 CLR 1
Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85
Unique International College Pty Ltd v Australian Competition and Consumer Commission [2018] FCAFC 155; (2018) 266 FCR 631
Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531
Wright v Lemon [2024] WASCA 19

Table of Contents

Summary

Factual background

Establishment of the partnership in 2003

707‑709 Albany Highway

716 Albany Highway

Brookdale Property

720 Albany Highway

The breakdown of the relationship

The Primary Reasons

Credibility and reliability findings

The partnership claims ‑ the cases presented at trial

The partnership claims ‑ the findings

The existence of a partnership

The scope of the partnership

The laches defence

The partnership claims ‑ the relief granted

The unconscionable conduct claims ‑ the cases presented at trial

The unconscionable conduct claims ‑ the findings

The unconscionable conduct claims ‑ the relief granted

Grounds of appeal

Ground 1: 716 Albany Highway

Appellants' submissions

Respondents' submissions

Disposition

The evidence of Mr Norris as to the scope of the partnership

The reasoning process of the Primary Judge

Further issues raised by the appellants

Ground 2: The Brookdale Property

Appellants' submissions

Respondents' submissions

Disposition

A factual error must be demonstrated

The parties to the contract of purchase and sale agreement

Financial statements of the MDN Partnership

Payment to Angourie Investments

Conclusion

Ground 3: The laches defence relating to 716 Albany Highway

Overview

The submissions on appeal

The obligation of the trial judge

Relevant principles

Disposition

The laches defence

Relevant principles

Disposition

Whether to remit the issue for further consideration

Reconsideration of the laches defence

Ground 4: Whether a finding of unconscionable conduct was made in relation to the Deeds of Loan

Overview

Primary Reasons

Disposition

Ground 5: Whether the conduct concerning the Deeds of Loan was unconscionable

Overview

Appellants' submissions

Respondents' submissions

Legislative framework and relevant principles

Disposition

Conclusion and orders

JUDGMENT OF THE COURT:

Summary

The proceedings at first instance arose from commercial and property dealings between the parties which unfolded over almost a decade, from 2003 through to 2012. Ultimately, in 2012, the relationship between the parties broke down and a high degree of hostility and animosity developed between them. These proceedings were then commenced in 2014, and a trial was heard in the first half of 2021 before the Primary Judge. The hostility and animosity between the parties had not dissipated by the time of the trial, according to the Primary Judge.
It should be recognised at the outset there was a considerable volume of evidence led at the trial before the Primary Judge, including lengthy oral testimony. The evidence in chief of the witnesses of fact was given orally at trial, not through witness statements.[1] The trial occupied some 13 hearing days.[2]
[1] Primary Reasons [131].
[2] The trial itself was interrupted by the public health measures introduced as a result of the COVID‑19 pandemic, and so it was necessary to fragment the hearing days over the period from mid-January 2021 through to early April 2021.
The principal individual participants in the litigation all gave evidence at trial. The Primary Judge made a number of observations in relation to the evidence of those witnesses which provide important context when coming to assess the course of events in this matter, and the findings which were made by the Primary Judge. This Court must therefore pay appropriate regard to the principles which apply to an appellate court's role in conducting an appeal by way of rehearing, as expressed in authorities such as Robinson Helicopter Co Inc v McDermott[3] and Lee v Lee.[4]
[3] Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679.
[4] Lee v Lee [2019] HCA 28; (2019) 266 CLR 129.
By the proceedings, the plaintiffs at first instance advanced equitable, tortious, contractual and statutory claims connected with the asserted establishment of a partnership, the acquisition of four commercial properties in the Perth metropolitan area, the operation of a second hand car dealership, and certain other related transactions. The transactions to acquire the commercial properties were all undertaken between late 2003 and around July 2006.
The partnership, the property acquisitions, the dealership, and the various transactions involved a number of persons, entities and trusts. The primary participants are identified below:
(a)Mr Phillip Doherty (who acted as the trustee for the PD Trust);
(b)Mr Gregory Norris, who typically entered into the transactions through his corporate vehicle, Angourie Investments Pty Ltd (Angourie Investments);
(c)Mr Bruce Sampey (who separately owned and operated the accounting firm known as Sampey & Co, and was also trustee for The Mustang Unit Trust and the Sampey Superannuation Fund);
(d)Mr Stephen Wake (who acted as trustee for The Mustang Unit Trust with Mr Sampey, and acted as trustee for the Wake Superannuation Fund);
(e)Fanfare Pty Ltd (Fanfare), the corporate vehicle which operated the second hand car dealership and leased the premises from which the business was operated; and
(f)the respective wives of Mr Doherty, Mr Sampey and Mr Wake, and their related trusts.[5]
[5] In a factual sense, Mrs Doherty, Mrs Sampey and Mrs Wake played very minor roles in the events that ensued between 2003 and 2012. It will only be necessary to mention them in these reasons in brief terms.
Three of the commercial properties were located in close proximity to each other, on Albany Highway in East Victoria Park, being 707‑709 Albany Highway, 716 Albany Highway and 720 Albany Highway. The fourth property, in which the partnership was found to have acquired a 50% interest, was located further away, at 67 Willows Road in Brookdale. We will refer to this as the Brookdale Property.
The car dealership in question was known as the 'Park Auto Centre'. It was operated from the property at 707‑709 Albany Highway, through Fanfare, which leased those premises from the partnership.[6]
[6] The property at 707‑709 Albany Highway was often referred to by the parties as the Fanfare Premises.
In broad terms, Mr Doherty, Mr Norris and Mrs Doherty (together with Angourie Investments and Fanfare), were the plaintiffs at first instance, and are the respondents to this appeal. Mr Sampey and Mr Wake (together with Mrs Sampey and Mrs Wake) were the defendants at first instance, and are the appellants to the present appeal.
In essence, the Primary Judge found in favour of the respondents at first instance in relation to the claims advanced by them concerning the partnership matters. The Primary Judge concluded that a partnership had been established by Mr Doherty, Angourie Investments, Mr Sampey and Mr Wake, each in various capacities. The partnership was styled as MDN Partners, which the Primary Judge referred to as the MDN Partnership.[7]
[7] The initials of the partnership name, MDN, appear to reflect the roles played by The Mustang Unit Trust (in respect of which Mr Sampey and Mr Wake were trustees), Mr Doherty and Mr Norris.
There was no dispute at trial, to the extent the MDN Partnership was found to have been established, that the properties at 707‑709 Albany Highway and at 720 Albany Highway were acquired by the partnership.[8]
[8] Primary Reasons [142] and [143] (which commence at BAB 4).
Whether the property at 716 Albany Highway and a 50% interest in the Brookdale Property were assets of the partnership was, however, disputed. The Primary Judge accepted the contention of Mr Doherty and Mr Norris that the interest in the Brookdale Property had been acquired by the partnership, and that the property at 716 Albany Highway had been an opportunity for the partnership, but had been acquired by Mr Sampey and Mr Wake in breach of their fiduciary duties. Further, the Primary Judge rejected the laches defence raised by Mr Sampey and Mr Wake in relation to the claim concerning the property at 716 Albany Highway. These matters are the subject of grounds of appeal 1, 2 and 3.
The Primary Judge also found in favour of Mr Doherty and Mr Norris in relation to claims of unconscionable conduct under the Australian Consumer Law,[9] which were brought against Mr Sampey and Mr Wake (and their respective wives). These claims were connected with loan instruments entered into by these parties in December 2011, contracts for sale, the registration of certain land transfers, and the execution of a further lease in January 2012. These matters, so far as the loan instruments are concerned, are the subject of grounds of appeal 4 and 5.
[9] Competition and Consumer Law Act 2010 (Cth) sch 2 (ACL).
The Primary Judge rejected additional claims brought at trial against Mr Sampey, which alleged breaches of duty on his part including in his capacity as the proprietor of Sampey & Co. That firm was said to have acted as an adviser to the respondents. These claims are not the subject of any appeal or cross-appeal and so need not be dealt with in these reasons in any substantive fashion.
The appellants appeal against the decision of the Primary Judge in Doherty v Bruce Ronald Sampey as administrator of the estate of Patricia Adele Addison (aka Sampey)[10] (Primary Reasons). For the reasons that follow, we would dismiss grounds of appeal 1, 2, 4 and 5 and allow ground of appeal 3. However, in respect of the third ground, which concerns the laches defence, we would ultimately reach the same conclusion as the Primary Judge, namely that the defence should be rejected.
[10] Doherty v Bruce Ronald Sampey as administrator of the estate of Patricia Adele Addison (aka Sampey) [2023] WASC 10 (Allanson J).

Factual background

We will commence these reasons with an overview of the non‑contentious factual matters by way of background. These factual matters are drawn from the Primary Reasons. To the extent to which there are contentious factual matters raised by the grounds of appeal, we will address those in the course of dealing with the individual grounds.

Establishment of the partnership in 2003

The factual chronology which underlies the dispute between the parties commenced in 2003. By that time, Mr Doherty and Mr Norris had considerable experience in the business of selling motor vehicles. Mr Doherty had been a dealer principal at City Toyota and Mr Norris had worked for him. Mr Wake had also worked in the industry as a car wholesaler.[11]
[11] Primary Reasons [157] ‑ [158].
Mr Doherty, Mr Norris and Mr Wake had all met by or during 2003.[12]
[12] Primary Reasons [158] ‑ [159].
Mr Doherty and Mr Norris met Mr Sampey for the first time in around March or April 2003.[13] At the time, and thereafter, Mr Sampey operated an accounting business known as Sampey & Co.[14]
[13] Primary Reasons [160].
[14] Primary Reasons [41].
Sampey & Co acted as the accountants for Fanfare from the outset, without a written retainer. Sampey & Co prepared the company tax returns and business activity statements for the company, and prepared partnership tax returns and financial statements for MDN Partners. A range of other services were provided to Fanfare by Sampey & Co, including rent collection.[15]
[15] Primary Reasons [186] ‑ [187].
Sampey & Co also acted as the tax accountants for Mr Doherty, Mr Norris and for Angourie Investments.[16]
[16] Primary Reasons [2].
Not long after meeting Mr Doherty, Mr Sampey indicated he would like to go into business with him.[17] The recollections at trial of Mr Doherty and Mr Norris on the one hand, and Mr Sampey and Mr Wake on the other, as to how the group would go into business and on what terms, differed somewhat. The Primary Judge made findings of fact in this regard at [168] ‑ [187] of the Primary Reasons.
[17] Primary Reasons [160] ‑ [161].
The Primary Judge accepted that a partnership had been established by the parties by about December 2003,[18] although no written partnership agreement was ever prepared by the parties.[19] The business of the partnership was found to be, in essence, property investment, although the Primary Judge found it may have commenced as a single venture business, confined to the purchase of the property at 707‑709 Albany Highway and the operation of the second hand car dealership from that location.[20]
[18] See paras [27], [28] and [31] below regarding timing.
[19] Primary Reasons [142] ‑ [144].
[20] Primary Reasons [142].

We will briefly summarise the background to the acquisition of the four commercial properties in the order in which they were acquired. The acquisition dates were as follows:
(a)707‑709 Albany Highway was acquired in November 2003;
(b)716 Albany Highway was acquired in March 2004;
(c)the Brookdale Property was acquired in June 2004; and
(d)720 Albany Highway was the last of the properties acquired, in July 2006.

707‑709 Albany Highway

In late May 2003, Mr Doherty, Mr Sampey and Mr Wake agreed to purchase the property at 707‑709 Albany Highway. The first offer they made did not include Mr Norris.
The Primary Judge found that Mr Doherty and Mr Norris did not enter the business on Mr Sampey's recommendation. Rather, Mr Doherty was invited to join in the purchase of the property, and Mr Norris entered the arrangement after being approached by Mr Doherty. Mr Sampey played no part in Mr Doherty recruiting Mr Norris.[21]
[21] Primary Reasons [175].
Soon after the initial agreement, within a month, the agreement broadened to include the owners running a car yard on the premises, and Mr Norris was included as one of the prospective acquirers. Mr Doherty wanted Mr Norris to be the manager of the putative business.
A second offer to purchase was thus made in June 2003, with Mr Wake or his nominee as purchaser. The offer was accepted on 23 June 2003. By this time, Mr Sampey had not had any direct dealings with Mr Norris.
The ultimate purchasers of the property were Mr Sampey and Mr Wake as trustees for The Mustang Unit Trust, Mr Doherty as trustee for the PD Trust, and Angourie Investments as trustee for the Angourie Unit Trust. The property was held by the purchasers as tenants in common, with Mr Sampey and Mr Wake holding 50% and Mr Doherty and Angourie Investments each holding 25%.[22] The property was held by them as part of the property of the MDN Partnership, which was registered as a partnership in September 2003.
[22] Primary Reasons [169] ‑ [172].
The purchase price for the property was $1.01m. It was financed by contributions from each of Mr Doherty, Mr Norris, Mr Sampey and Mr Wake, together with finance from St George Bank.[23] Several instruments were entered into with St George Bank in the last few months of 2003, for the purposes of establishing and financing the business. These were a facility agreement with a 10 year period and a facility limit of $700,000, a motor vehicle finance facilities agreement, a dealer agreement, a bailment agreement, together with guarantee and indemnity agreements.
[23] Primary Reasons [173] and [176] ‑ [177].
Fanfare was Mr Sampey's corporate vehicle. Mr Sampey suggested using Fanfare to operate the car dealership business from the premises at 707‑709 Albany Highway.[24] The other parties agreed to this approach. Initially, the four men held positions as directors of Fanfare and all held shares in Fanfare. The primary role played by Fanfare in these proceedings was thus as the lessee of this property.
[24] Primary Reasons [174].
The initial lease was executed on behalf of MDN Partners (as lessor) and Fanfare (as lessee). The lease commenced on 1 December 2003, with Fanfare trading as the Park Auto Centre. The lease was for 3 years with a monthly rental of $10,000.[25]
[25] Primary Reasons [185].
A further lease for 3 years was entered into on 1 December 2006, with a monthly rental of $13,000. The further lease was collectively signed by Mr Doherty, Mr Norris and Mr Sampey as the lessor.[26] Further leases were entered after the expiration of this lease, through until mid‑2012 when Fanfare ceased to trade.
[26] Primary Reasons [209].
We pause here to note that, on 30 June 2004, and so relatively early in the business relationship of these persons, Mr Sampey and Mr Wake disposed of 3,000 of their shares in Fanfare to both Angourie Investments and to Mr Doherty. Then, in September 2004, Mr Sampey and Mr Wake ceased to be directors of Fanfare.[27] So, from June 2004 onwards, Fanfare was owned by both Mr Doherty and Angourie Investments, with Mr Doherty and Mr Norris being the only directors of the entity.[28]

716 Albany Highway

[27] Primary Reasons [192].

[28] Primary Reasons [2].

In March 2004, Mr Sampey and Mr Wake contracted to purchase the property at 716 Albany Highway as an investment, for the sum of $650,000.[29]
[29] Primary Reasons [188].
The Primary Judge found that Mr Norris had informed Mr Sampey that both 716 and 720 Albany Highway had been advertised for sale. Mr Norris had seen the properties advertised in the daily newspaper. Neither Mr Sampey nor Mr Wake informed Mr Doherty or Mr Norris of their intention to purchase the property at 716 Albany Highway, and neither of them sought consent to do so.[30]
[30] Primary Reasons [189].
The Primary Judge found this acquisition represented an opportunity for the MDN Partnership,[31] and was acquired in breach of the fiduciary duties owed by Mr Sampey and Mr Wake to the partners of the MDN Partnership. The Primary Judge also rejected the defence of laches which had been raised by the appellants.[32]

Brookdale Property

[31] Primary Reasons [524].

[32] Primary Reasons [558] ‑ [560].

In June 2004, Mr Sampey, Mr Wake, Mr Doherty and Mr Norris signed an agreement to purchase a 50% share of a property at 67 Willows Road, Brookdale. That agreement identified Mr Norris (not Angourie Investments), Mr Doherty and The Mustang Unit Trust as the purchaser. The purchase price was $800,000.[33]
[33] Primary Reasons [190].
In February 2007, both Mr Doherty and Mr Norris sold their 25% interests in the property to Mr Sampey and Mr Wake as trustees for The Mustang Unit Trust.
The description of the parties to the original agreement and the sale agreement, as well as the treatment of the interest in the Brookdale Property in the financial statements and accounts of the MDN Partnership, were all the subject of evidence at trial.
His Honour ultimately found that the MDN Partnership acquired an interest in that property.[34] The Primary Judge found that the partnership held a 50% interest in the property.
[34] Primary Reasons [143] ‑ [144].
Whether the interest in the Brookdale Property was held by the MDN Partnership, or by some other partnership, is the subject of ground of appeal 2.

720 Albany Highway

In July 2006, Mr Sampey, Mr Wake, Mr Doherty and Angourie Investments entered into a contract to purchase 720 Albany Highway for $1,025,000. The purchase was funded entirely by an increase in the loan facility with St George Bank. At that stage, the amount owed to the bank was $1,812,000.[35]
[35] Primary Reasons [205].
The property at 720 Albany Highway was held by the MDN Partnership in the same proportions as the property at 707‑709 Albany Highway.
When the property at 720 Albany Highway was acquired, it was subject to an existing lease to a third party, which Sampey & Co would thereafter manage on behalf of the MDN Partnership. The existing lease ran until 2012.

The breakdown of the relationship

As observed by the Primary Judge, the car dealership had a few modestly successful years, but then began to lose money. Fanfare continued to trade until mid‑2012, but suffered losses over this period.[36] The Primary Judge attributed the failure of the business to a lack of business acumen and the state of the used car market at the time.[37]
[36] Primary Reasons [3].
[37] Primary Reasons [229].
The subdued market at the time for the sale and development of commercial land, coming around the time of the Global Financial Crisis, was also regarded by the Primary Judge as a factor which impacted the parties' ability to profit from the land acquisition business.[38]
[38] Primary Reasons [230].
It appears from the Primary Reasons that, in 2012, the relationship between Mr Doherty, Mr Norris and Mr Sampey broke down. It became necessary for Mr Doherty and Mr Norris to sell their homes to repay debts incurred in the business.
Mr Doherty and Mr Norris also lost their interest in two properties they had bought with Mr Sampey and Mr Wake, being the properties at 707‑709 Albany Highway and 720 Albany Highway. These properties were transferred to Mr Sampey and Mr Wake.[39] The events surrounding these matters occurred in 2011 and 2012. We will summarise the factual background later in these reasons. Presently, it is sufficient to note that these matters occurred in the context of the Deeds of Loan by which the interests of Mr Sampey and Mr Wake advanced funds to Mr Doherty and Mr Norris on certain terms.[40] In connection with those advances, Mr Doherty and Mr Norris had signed transfers and sale agreements in respect of the properties at 707‑709 Albany Highway and 720 Albany Highway.[41]
[39] Primary Reasons [4].
[40] Ex 1.650; Ex 1.651.
[41] Primary Reasons [396].

The Primary Reasons

Credibility and reliability findings

As already noted, the Primary Judge made a number of adverse credibility and reliability findings in relation to the evidence of the witnesses who testified at trial, most particularly Mr Doherty, Mr Norris, Mr Sampey and Mr Wake.
The adverse assessments of the witnesses formed by the Primary Judge were not confined to one camp of witnesses. His Honour's assessments were evenly spread.
At a general level, the Primary Judge found there was 'palpable hostility' between Mr Norris, Mr Doherty (as well as a Mr Roger Hughes) and Mr Sampey. His Honour described there being a 'continuing level of animosity between the plaintiffs and Mr Sampey' which influenced the way in which Mr Doherty in particular gave his evidence.[42]
[42] Primary Reasons [63].
Both Mr Doherty and Mr Norris attributed the failure of the business endeavour to their reliance on Mr Sampey. Indeed, his Honour noted that Mr Norris 'blamed Sampey for everything'. This uncritical attribution of responsibility affected the reliability of Mr Norris' evidence, according to the Primary Judge.[43]
[43] Primary Reasons [65] and [71].
Further, the Primary Judge did not find Mr Doherty to be a reliable witness, with his evidence veering between combative and evasive. His Honour describing him as 'not convincing'.[44]
[44] Primary Reasons [82].
Perhaps not surprisingly according to the Primary Judge, as the witnesses were testifying at trial in 2021 about matters which occurred between 2003 and 2012, he found that their recollections were limited and at times selective.[45]
[45] Primary Reasons [61].
As to the Primary Judge's overall assessment of the role played by the key witnesses, the following matters should be noted:
(a)The Primary Judge considered that Mr Norris' recollection when giving evidence was not good, despite being frequently prompted by being taken to contemporaneous documents. Even when taken to documents, he was disinclined to read them. Mr Norris also asserted that he was 'useless with paperwork'. Nonetheless, Mr Norris accepted that he knew whether the business was making a profit, that he and Mr Doherty made business decisions jointly about the stock they needed, and they both received monthly reports prepared on the operation of the business. In respect of certain important decisions, Mr Norris took his lead from Mr Doherty. Finally, the Primary Judge found that, following the failure of the Fanfare premises to sell at auction in 2011, Mr Norris was hindered by anxiety attacks and deteriorating mental health, coupled with a long term back injury.[46]
(b)The Primary Judge observed that Mr Doherty professed a surprising lack of business knowledge for someone who had, for several years, occupied a senior position with a major car franchise. The Primary Judge found that Mr Doherty attributed poor decisions to his reliance on Mr Sampey's advice, yet his Honour found that no advice or conduct on the part of Mr Sampey was identified that could cause a modestly successful business in 2007 to record substantial losses in 2008 to 2011. His Honour found that Mr Doherty played a more active role in Fanfare than he presented.[47]
(c)The Primary Judge was surprised at Mr Sampey's ability to recall certain matters which occurred so long ago,[48] and noted certain important matters going to Mr Sampey's credibility.[49] The Primary Judge disbelieved Mr Sampey's evidence in certain respects, most particularly in relation to matters concerning the Deeds of Loan entered into in December 2011 and the meetings which occurred in July 2012.[50]
(d)The Primary Judge found that Mr Wake had been an associate of Mr Sampey's for many years. Mr Wake was a party to some of the business arrangements, but the Primary Judge found that he lacked any detailed knowledge of what had happened. He relied on Mr Sampey to organise matters, even where he was committing substantial sums of money or where The Mustang Unit Trust was involved. In an overall sense, the Primary Judge concluded that Mr Wake's conduct was largely controlled by Mr Sampey and his Honour did not form the view that he actively participated with knowledge of what was going on, but rather that he did what he was told. Ultimately, according to the Primary Judge, Mr Wake's view of what had occurred appeared to reflect what Mr Sampey said, because that was what he had been told by Mr Sampey (the Primary Judge inferred).[51]

The partnership claims ‑ the cases presented at trial

[46] Primary Reasons [64] ‑ [71].

[47] Primary Reasons [72] ‑ [76].

[48] Primary Reasons [109].

[49] Primary Reasons [111].

[50] Primary Reasons [111] and [403].

[51] Primary Reasons [112] ‑ [114].

In the proceedings below, the respondents pleaded that Mr Doherty as the trustee of the PD Trust (the PD Trustee) and Mr Norris (through Angourie Investments) entered into a partnership with both Mr Sampey and Mr Wake as trustees of The Mustang Unit Trust.[52] The partnership was pleaded as being under the style 'MDN Partners'. The existence of that partnership was denied by Mr Sampey and Mr Wake.
[52] Further Re‑Amended Statement of Claim dated 20 January 2021, [15] and [16] (which commences at BAB 134) (Statement of claim).
At trial, the respondents' case was that, in the absence of any written partnership agreement, a partnership could be found on the basis of the joint intention of the parties by reference to the whole course of their dealings with each other.[53] That is an uncontroversial proposition.
[53] Plaintiffs' Amended Outline of Submissions at trial dated 14 January 2021 [6] ‑ [13] (Plaintiffs' opening trial submissions).
In their opening submissions at trial, the respondents identified the various factors which were relevant to determining the existence of a partnership and its scope, highlighting the contemporaneous documents which provided support for the conclusion there was a partnership in existence and as to the scope of the partnership.[54]
[54] Plaintiffs' opening trial submissions [14] to [15], which list 15 categories of documents relied upon by the respondents to demonstrate the existence of a partnership, and [16] and [17], which list 7 categories of documents relied upon by the respondents to demonstrate the business of the partnership was property investment and leasing.
The appellants pleaded a relatively detailed factual response to the respondents' allegation that a partnership had been established, and expressly denied the existence of any partnership arising from the business arrangement between the parties.[55]
[55] Amended Substituted Defence dated 28 January 2021 [12] (which commences at BAB 167) (Defence).
The appellants did not plead a case at trial that, if there was a partnership, it was limited to 'property investment' confined to the holding of the properties at 707‑709 Albany Highway and 720 Albany Highway, from the dates of their purchase, as is now contended.[56] The relevant pleading is as follows:
[12.8] on 4 September 2003, Sampey on behalf of the third defendants, the PD Trustee and Angourie adopted the trading name MDN Partners when obtaining registration on their behalf for an Australian Business Number, with the intention that they together account for both tax and accounting purposes in relation to their co-ownership of the Premises, but the defendants deny that the third defendants, the PD Trustee and Angourie thereby, or at any time, entered into partnership;[57]
[56] Appellants' appeal submissions [16] ‑ [18] (which commences at WAB 15), and Defence [12].
[57] Appellants' appeal submissions [16] ‑ [18], and Defence [12.8].
Counsel for the appellants at trial (not being counsel on the appeal) made brief submissions in closing before the Primary Judge to the effect that the acquisitions of the various properties were for different purposes. Counsel rejected the contention that the nature of the relationship between the parties to the alleged partnership was such that 'if ever a property of any kind was to come the way of one of the four individuals then that necessarily fell within the purview of what they agreed would be the purposes of the acquisition'.[58] Counsel did not directly address the contention as to whether the scope of the partnership included the acquisition of property or its leasing.
[58] Trial ts 1393 ‑ 1394.
The appellants denied at trial they owed any duty to seek consent from the PD Trustee or from Angourie Investments for the purchase of 716 Albany Highway, or to advise them of their intention to purchase.[59] The appellants then pleaded a general denial to the allegation of breach of duty.[60]
[59] Defence [16], and Primary Reasons [189].
[60] Defence [18].
Mr Doherty and Angourie Investments alleged at first instance that the property at 716 Albany Highway represented an opportunity for the partnership, but was instead acquired by Mr Sampey and Mr Wake in their own capacities without notice to the others.
The respondents pleaded that Mr Norris had advised Mr Sampey and Mr Wake in early 2004 that the property at 716 Albany Highway was available for purchase and 'suggested that the MDN Partnership purchase both properties'.[61] The respondents pleaded that Mr Sampey and Mr Wake as trustees for The Mustang Unit Trust breached their fiduciary duties by purchasing the property without the consent of the PD Trustee or Angourie Investments.[62] Relief was sought for an account, equitable compensation and associated remedies.
[61] Statement of claim [23].
[62] Statement of claim [24] ‑ [27].
As to the circumstances in which Mr Sampey and Mr Wake came to know of the opportunity to acquire the property at 716 Albany Highway, the appellants admitted that Mr Norris had told them that the property at 716 Albany Highway was available for purchase.[63] There was no evidence led at trial as to whether Mr Sampey or Mr Wake came to know of the opportunity through any other source.[64] Nor were Mr Doherty or Mr Norris cross‑examined on the issue. Given the admission on the pleadings, the course of the evidence in this regard is perhaps not surprising.
[63] Defence [14].
[64] Appeal ts 61 and ts 64.
Those parties further alleged that a 50% interest in the Brookdale Property was owned by the MDN Partnership, although no specific relief was sought in the proceedings in respect of the Brookdale Property. Senior counsel for the respondents observed at the hearing of the appeal that his clients had relied upon the investment in the Brookdale Property to further demonstrate that 'by early 2004 the partnership business did include consideration of other opportunities to acquire other properties'.[65]
[65] Appeal ts 62.
On the cases presented by the parties at trial, the Primary Judge was thus required to consider whether the partnership had been established, the scope of the partnership, and whether the acquisition of certain of the properties was within the scope of that partnership. We turn now to the findings made by his Honour.

The partnership claims ‑ the findings

The existence of a partnership

The Primary Judge's analysis as to whether there was a partnership and its scope is primarily found at [134] to [146] of the Primary Reasons.[66]
[66] Primary Reasons [134] ‑ [146].

The necessary analysis to be undertaken, and which the Primary Judge did in fact undertake, was to first examine the objective intention of the parties to assess whether a partnership existed. That analysis begins with ss 7 and 8 of the Partnership Act 1895 (WA) (Partnership Act) which define the concept of 'partnership' and the rules to apply to determine whether a partnership exists. His Honour expressly identified these provisions in his reasons.[67]
[67] Primary Reasons [134] and [136].
The Primary Judge found that Mr Doherty, Mr Norris (through Angourie Investments), Mr Sampey and Mr Wake carried on business as the MDN Partnership.[68] That conclusion is not challenged on appeal (although, as noted, the appellants had denied the existence of any partnership at first instance). In essence, the Primary Judge found that the partnership operated from 2003 until its dissolution on 7 August 2015.[69]
[68] Primary Reasons [137].
[69] The primary judge declared that the partnership be dissolved as from 7 August 2015, to be wound up under the direction of the court.
As his Honour correctly observed, whether a partnership exists is a question of fact which is dependent upon the joint intention of the parties.[70] That intention is not to be determined by an examination of the private intention of the parties, but by inference from their conduct and actions throughout the whole course of their dealings with one another.[71]
[70] Primary Reasons [135].
[71] Primary Reasons [135], citing Bryant Bros v Thiele [1923] SASR 393, 401 and Rosselli v Rosselli [2007] VSC 414 [39].
The mere fact of joint ownership of property by the parties did not establish the existence of a partnership in the present circumstances, given the terms of s 8(1) of the Partnership Act, as his Honour noted.[72] There were numerous other factors in existence which supported his Honour's conclusion that Mr Sampey, Mr Wake, Mr Doherty and Mr Norris (through Angourie Investments) were carrying on a business through a partnership, which are detailed at [137] ‑ [140] of the Primary Reasons.
[72] Primary Reasons [136].
In summary, his Honour relied upon the following matters:
(a)the agreement reached by Mr Sampey, Mr Wake, Mr Doherty and Mr Norris to jointly acquire the Fanfare premises and conduct the business of Park Auto Centre from those premises;[73]
(b)the agreement by those parties to use Fanfare, which was a jointly owned company, as the corporate vehicle for this business;[74]
(c)the decision by those parties to borrow money jointly from St George Bank;[75]
(d)the representation made by those parties to St George Bank that the business structure included the 'MDN Partners' partnership;[76]
(e)the decision by those parties to adopt the name MDN Partners, which they registered as a trading name and in respect of which they filed partnership tax returns (through the firm Sampey & Co);[77]
(f)the fact the partners disclosed income from MDN Partners in their individual returns as well;[78] and
(g)the fact Sampey & Co maintained a trust account in the name MDN Partners[79] and produced partnership financial statements for MDN Partners.[80]
The scope of the partnership
[73] Primary Reasons [138].
[74] Primary Reasons [138].
[75] Primary Reasons [138].
[76] Primary Reasons [138] and Exhibit 1.31.
[77] Primary Reasons [139] and Exhibits 1.95 (Partnership tax return ‑ GAB 46), 384 and 488.
[78] Primary Reasons [139] and Exhibit 1.271.
[79] Primary Reasons [140] and Exhibit 1.1009.
[80] Primary Reasons [140] and Exhibits 1.41, 1.64, 1.94, and 1.383.
Having found that a partnership had been established, his Honour proceeded to consider the scope of that partnership. His Honour's reasoning in this regard is the subject of criticism on appeal.
The Primary Judge recognised that a partnership could be confined to one joint activity or be a continuing relationship between its members.[81] In this regard, his Honour cited the decision of Leeming JA in the New South Wales Court of Appeal in Murdoch v Mudgee Dolomite and Lime Pty Ltd (in liq).[82] Within the passage cited by the Primary Judge, Leeming JA referred with approval to the well‑known passage of Dixon J in Birtchnell v Equity Trustees, Executors and Agency Co Ltd,[83] as well as the reasons of French CJ and Keane J in Howard v Federal Commissioner of Taxation.[84] We will return to these authorities below.
[81] Primary Reasons [141], citing Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178, 196.
[82] Murdoch v Mudgee Dolomite and Lime Pty Ltd (in liq) [2022] NSWCA 12; (2022) 398 ALR 658 [81] (Leeming JA, with whom Mcfarlan and Gleeson JJA agreed).
[83] Birtchnell v Equity Trustees, Executors and Agency Co Ltd [1929] HCA 24; (1929) 42 CLR 384, 408 (Dixon J).
[84] Howard v Federal Commissioner of Taxation [2014] HCA 21; (2014) 253 CLR 83 [34] (French CJ and Keane J).
His Honour's reasons continue as follows:[85]
[142]MDN Partners may, initially, have been conceived as a single venture, relating solely to the purchase of the Fanfare premises and the operation of Park Auto Centre from there. MDN Partners, as lessors, leased the Fanfare premises to Fanfare to conduct business on the land, while intending to either sell or develop the land at some time in the future and to share the profits of that venture. That purpose survived Sampey and Wake separating themselves from the Fanfare business and company.
[143]But the course of dealings went beyond a single venture. MDN Partners continued to invest, first in Brookdale, and later in 720 Albany Highway. It was not a single venture partnership, but an ongoing business of purchasing and owning land with a view to profit. Mr Sampey's evidence was that he was always looking for opportunities 'for us to develop ‑ to buy', and he would take anything to the other partners and ask what they thought.
[144]I am satisfied that the Brookdale investment was part of the business of MDN Partners. Although Norris, and not Angourie, was named as a party to the contract, the payments under the agreement with the vendors (Russell and Lisa Atthowe) were recorded in the financial statements of MDN Partners. Sampey's evidence about the payment of management fees from the partnership showed that he treated the commitment to the Atthowes as part of the partnership cashflow, so that when that deal was completed there was surplus income. When Norris sold his interest in Brookdale, the payment was made to Angourie.
[85] Primary Reasons [142] ‑ [144].
So, following on from the references to the authorities just identified at [141] of the Primary Reasons, his Honour thus observed that MDN Partners may initially have been conceived as a single venture, confined solely to the purchase of the Fanfare premises and the operation of the Park Auto Centre from those premises.[86] However, his Honour found that MDN Partners had intended to either sell or develop this land at some time in the future and share the profits from that venture.[87] His Honour concluded that this broader purpose survived Mr Sampey and Mr Wake separating themselves on 30 June 2004 from the Fanfare business and company.[88]
[86] Primary Reasons [142].
[87] Primary Reasons [142].
[88] Primary Reasons [142].
More importantly, his Honour found the course of dealings between the parties 'went beyond a single venture'.[89] It was an ongoing business of purchasing and owning land with a view to profit, which continued to invest, first in the Brookdale Property and subsequently in the property at 720 Albany Highway.[90]
[89] Primary Reasons [143].
[90] Primary Reasons [143].
The primary evidence to which his Honour had regard in reaching his conclusions as to the scope of the partnership included Mr Sampey's evidence that he was always looking for opportunities, and the contemporaneous documentary material created by the parties for the purposes of the partnership. We will address these two aspects of the evidence in turn.
In the Primary Reasons at [143], his Honour expressly relied upon the evidence of Mr Sampey to the effect that he was always looking for opportunities 'for us to develop ‑ to buy' and he would take anything to the other partners and ask what they thought.[91] The evidence of Mr Sampey to which the Primary Judge referred in this regard emerges from the cross‑examination in the following passage:[92]
[91] Primary Reasons [143].
[92] Trial ts 923.
VISSCHER, MS: There's another entry on the same page, on 15 February 2007, and it says:
Meeting with Tony Hatt regarding town planning concept plan for Victoria Park.
SAMPEY, MR: Yes.
VISSCHER, MS: So you've had discussion with Tony Hatt for several months; correct? –
SAMPEY, MR: On and off, it seems, yes.
VISSCHER, MS: And you didn't tell Mr Doherty and Mr Norris about everything you were doing, did you?
SAMPEY, MR: They knew it was ongoing. I was always looking for opportunities for us to develop ‑ to buy. That's what I do, you know, and they knew ‑ they knew that was going on, and anything that I would come up with I would take it to them ‑ say, 'What do you think of this, guys?' If they didn't like it, it didn't happen. It's what I did and it's what I enjoyed doing. (emphasis added)
As is evident from the above passage, the cross‑examination of Mr Sampey at this point concerned an event in his diary which took place in February 2007, which is well after the acquisition of the property at 716 Albany Highway and the Brookdale Property. We will return to that aspect of the evidence in due course.
In the Primary Reasons at [139] and [140], his Honour had regard to the terms of the partnership tax returns and partnership financial statements. His Honour also made express reference to the partnership financial statements when considering whether the interest in the Brookdale Property formed part of partnership (at [144] of the Primary Reasons). The documentary evidence adduced by the respondents at trial, which was relied upon by them to sustain the submission that the partnership carried on the business of property investment and leasing,[93] includes:
[93] That evidence is detailed in the Plaintiffs' opening trial submissions [17].
(a)the application for finance submitted to St George Bank by MDN Partners in December 2003 which listed the industry of the business as 'Property Investment';[94]
[94] Exhibit 1.31, 460 ‑ 467; and Plaintiffs' opening trial submissions [17.1].
(b)the letter from Mr Sampey to St George Bank dated 27 September 2004 stating that the partners of MDN Partnership were The Mustang Unit Trust, the PD Trust and the Angourie Unit Trust, that the partnership owned 707‑709 Albany Highway, and that Fanfare paid rent to the MDN Partnership;[95]
[95] Exhibit 1.31, 424 and Plaintiffs' opening trial submissions [17.2].
(c)various financial statements for MDN Partners which listed:
(i)the properties at 707‑709 Albany Highway and 720 Albany Highway as assets (from 2004 to 2012 and 2007 to 2012 respectively);
(ii)the loan in relation to the Brookdale Property;
(iii)the bank loan from St George Bank which financed the purchase of 707‑709 Albany Highway and 720 Albany Highway;
(iv)the rent received from Fanfare between 2004 and 2012;
(v)the rent received from the tenant of 720 Albany Highway for the period 2007 to 2011; and
(vi)the expenses which were consistent with a property investment and leasing business;[96]
(d)the partnership tax returns for MDN Partners prepared by Sampey & Co, which included amounts for total business income, total expenses, net income and net loss which were consistent with the amounts in the financial statements for MDN Partners for the years 2004 and 2007 to 2011, with a modest variance in the 2006 tax year;[97] and
(e)the partnership tax returns for MDN Partners prepared by Sampey & Co, which included amounts for assets, liabilities and proprietors' funds which were consistent with the amounts in the financial statements for MDN Partners for the years 2006 to 2008, 2010 and 2011, with a modest variance in the 2009 tax year.[98]
[96] Exhibit 1.41, 522 and Exhibit 1.64, 633, for example, and Plaintiffs' opening trial submissions [17.3].
[97] Exhibit 1.42, 527 and Exhibit 1.65, 639, for example, and Plaintiffs' opening trial submissions [17.7].
[98] Exhibit 1.95, 865 and Exhibit 1.165, 1331, for example, and Plaintiffs' opening trial submissions [17.7].
Much later in his Honour's reasons, he addressed the claim in relation to the property at 716 Albany Highway, and whether that was a partnership opportunity. At [523] to [525] of the Primary Reasons, his Honour held as follows:
[523]When Sampey and Wake purchased this property, they were in partnership with Doherty and Norris. The partnership had purchased the Fanfare premises, which it leased to Fanfare, and later acquired interests in the Brookdale property and acquired 720 Albany Highway. The partnership business is properly described as property investment.
[524]It is not in dispute that Norris informed Sampey and Wake of the availability of 716 Albany Highway as a partnership opportunity. The purchase of that land was an opportunity for MDN Partners which, in breach of their fiduciary duty as partners, Sampey and Wake appropriated for their own benefit. There was neither any plea nor evidence that Doherty or Norris (on behalf of Angourie) consented to Sampey and Wake taking the opportunity for themselves.
[525]Doherty and Angourie plead, in the alternative, that Sampey and Wake account to MDN Partners, alternatively to them, in respect of the profits obtained from the sale of 716 Albany Highway, alternatively that there be an order for equitable compensation. (emphasis added)
Much of the focus of the appellants' contentions on this appeal, in respect of ground 1, rests upon the emphasised finding of the Primary Judge at [524] of the Primary Reasons, which is said to be erroneous.
The scope of the partnership was also the subject of oral testimony from Mr Norris. Mr Norris volunteered evidence in relation to the scope of the partnership, which prompted a request for clarification from the Primary Judge. We refer to the following passage from the evidence at trial, and the emphasised portions in particular:[99]
[99] Trial ts 240.
VISSCHER, MS: Now, I'm going to change topics. If - - -
NORRIS, MR: But if I can just say ‑ if I could say something. With that ‑ with the ‑ the purchasing 716 Albany Highway, it was always said that we would get into other land investments in the future, and that was the reason why - -
ALLANSON J: I'm sorry, when you said 'it was always said' - - ---
NORRIS, MR: Sorry.
ALLANSON J: - - - you cannot do that. You - - -
NORRIS, MR: ---I'm sorry.
ALLANSON J: - - - have to say who said what - - -
VISSCHER, MS:---I think Mr - - -
ALLANSON J: - - - and when?
NORRIS, MR: --- Yes. Mr Sampey and Mr Wake and Phil Doherty and myself, it was said we would always get into other land investments in the future, and that is why I rang Steve Wake to tell him about those properties. Because that was ‑ that was said.
VISSCHER, MS: So when was this?
NORRIS, MR: When was this said? This was - - -
VISSCHER, MS: When was?
NORRIS, MR: ---Well, it was actually said, firstly, when we bought ‑ when we purchased 709 Albany Highway, and - - -
VISSCHER, MS: You mean at the time?
NORRIS, MR: ---At the time. Yes.
VISSCHER, MS: So - - -?
NORRIS, MR: --- After we had purchased 709 ‑ 707‑709 Albany Highway, Bruce Sampey had said after that that we would get into other land investments in the future, and that was the reason why I called Mr Wake, to let him know that these two properties were available. (emphasis added)
This evidence was not expressly referred to by his Honour, although it is supportive of the finding made as to the broader scope of the partnership as 'property investment'. On its face, this evidence, if accepted, would point to the potential existence of a prior conversation between the parties as to the scope of the partnership business. The proposition that there was such a prior conversation was not put to either Mr Sampey or to Mr Wake during their evidence.[100] Senior counsel for the appellants on appeal described this unsolicited evidence as having a 'ring of convenience about it'.[101]
[100] Appeal ts 33.
[101] Appeal ts 32.
The Primary Judge ultimately concluded that the opportunity to acquire 716 Albany Highway was a partnership asset. His Honour similarly found that the Brookdale Property was an asset of the MDN Partnership.
While the existence of the partnership is not challenged on appeal, the appellants squarely contest the Primary Judge's conclusions as to the scope of the partnership, as will be evident from the first two grounds of appeal.
The appellants challenge on this appeal the finding that the purchase of 716 Albany Highway was an opportunity for the MDN Partnership (ground of appeal 1), and the finding that the Brookdale Property was an asset of the MDN Partnership (ground 2).
The laches defence
The foregoing conclusions left his Honour to address the laches defence pleaded by the appellants. The appellants pleaded that any equitable claim by Mr Doherty or Angourie Investments with respect to the property at 716 Albany Highway had become unmaintainable by early 2010 by virtue of delay and acquiescence on their part.[102]
[102] Defence [97.5].
The defence was largely ignored by the appellants at trial, and no submissions were made by them in opening or closing in support thereof.
The Primary Judge addressed the defence in brief terms, identifying the relevant pleading at [558] of the Primary Reasons and the absence of any evidence of prejudice at [559]. The appellants appeal against the rejection of the defence (see ground of appeal 3, which is expressed to be an alternative to ground 1).

The partnership claims ‑ the relief granted

The Primary Judge ordered the winding up of the MDN Partnership and the taking of accounts in relation to partnership property. The account was to include the proceeds of the sale of the property at 716 Albany Highway.[103]
[103] Primary Reasons [563] and orders 1, 2 and 6 ‑ 8 of the orders made by the Primary Judge on 25 January 2023, BAB 2 ‑ 3.
Having found that the Brookdale Property was an asset of the MDN Partnership, his Honour was not asked to grant any relief in that regard.
The substantive relief ultimately granted by the Primary Judge, flowing from his findings on the partnership claims was as follows:[104]
[104] BAB 2 ‑ 3.
1.The partnership formerly conducted by the first and fourth plaintiffs and the third defendants under the name and stye MDN Partners ('the partnership') is declared to be dissolved as from 7 August 2015 and that the partnership business be wound up under the direction of this Court.
2. It is declared that the property known as 716 Albany Highway, Victoria Park, being the whole of the land comprised in Certificate of Title Volume 1655 Folio 220, was an asset of the partnership from 15 March 2004.
…
7. An account be taken, on a wilful default basis so far as the conduct of the third defendants is concerned, of the dealings and transactions of the partnership and of the first and fourth plaintiffs and the third defendants in relation to the partnership.
8. The account be taken before a Registrar of this Honourable Court.
9. The account is to be based on:
(a) orders 2, 4, 5 and 6 above;
(b) the finding that management fees totalling $106,800 were paid to the third defendants in breach of their fiduciary duty to the partnership.

The unconscionable conduct claims ‑ the cases presented at trial

The unconscionable conduct claims pleaded by the respondents, and agitated at trial before the Primary Judge, sought relief arising from the conduct of Mr Sampey and Mr Wake in respect of the following matters:
(a)the execution of the Deeds of Loan entered into by Mr Doherty and Mr Norris in late 2011;[105]
(b)the execution of the contracts of sale and the transfers of 707‑709 Albany Highway and 720 Albany Highway (and the registration of those transfers);[106] and
(c)the execution of a new lease in respect of the Fanfare Premises at 707‑709 Albany Highway dated 1 January 2012.[107]
[105] Statement of claim [106] ‑ [111].
[106] Statement of claim [112] ‑ [117].
[107] Statement of claim [87.1], [107.1], and [111], for example.

Although the clarity of the Statement of Claim was criticised by the Primary Judge and his Honour expressed a degree of uncertainty at the precise relief being sought,[108] it is tolerably clear that the pleading sought relief concerning the matters in (a), (b) and (c) of the preceding paragraph. Further, the pleading captured a course of conduct which commenced in around mid‑2011, which stretched through late 2011, and travelled into 2012.[109]
[108] Primary Reasons [481] and [482].
[109] Statement of claim [70] ‑ [81] (as to the events commencing in mid-2011) and [82] ‑ [104] (as to the events in late 2011 and 2012). The allegations of unconscionable conduct are then pleaded at [105] ‑ [118].
The pleaded case said to support these claims was summarised by his Honour at [371] to [388] of the Primary Reasons. The salient parts are identified below.
The respondents pleaded an oral agreement, made on or about 9 December 2011, between Mr Doherty, Mr Norris, and Mr Sampey, with Mr Doherty and Mr Norris each acting in his own right and for and on behalf of Fanfare. The effect of the agreement was:
(a)     that Mr Sampey would advance $600,000 to Fanfare, then
(b)     Fanfare would have two years to repay the loan, and
(c)the Fanfare premises and the property at 720 Albany Highway would be security for the advance.   Fanfare would also enter into a new lease for a period of two years.[110]
[110] Statement of claim [83].
The respondents pleaded that, on or about 9 December 2011, Mr Sampey paid $200,000 to Fanfare[111] and then, in late December 2011, Mr Doherty and Mr Norris entered into two written agreements by which funds were to be advanced to Mr Doherty and Mr Norris. These are the Deeds of Loan. The first was with Mr Sampey and his wife, to advance $300,000. The second was with Mr Wake and his wife, also to advance $300,000. In each case, the agreements were entered into on behalf of the appellants' superannuation funds.[112]
[111] Statement of claim [83A].
[112] Statement of claim [84].
An email prepared by Mr Sampey dated 12 December 2011, which had been addressed to Mr Norris, Mr Doherty and Mr Wake, assumed some significance at the trial.[113] The full terms of this email which, although drafted by Mr Sampey, was not sent and not seen by Mr Norris and Mr Doherty, were as follows:[114]
[113] Primary Reasons [408].
[114] Ex 1.652.
I am currently on the plane en route to Cairns and thought it would be wise to document the agreement in principle as it relates to the $600,000 advanced to Fanfare Pty Ltd. I will detail the arrangement in point form as follows:
1.The effective date of the transaction will be 1/1/2012.
2.$400,000 has now been advanced by way of prior loan and cash advance paid Friday 9^th December by bank cheque.
3.The advance will consist of two $300,000 payments from The Sampey Super Fund and The Wake Super Fund. The advance must be documented as our Super Fund auditors will insist on this. I will prepare the loan documents for all to sign. The loans will be secured by way of a second mortgage to be registered against the properties situated at 720 and 707 to 709 Albany Hwy East Victoria Park.
4.The agreement is that the loan will be repaid in full in two years with accrued interest or the Doherty and Norris interest in the properties will be assigned to Wake and Sampey or the nominees in full and final settlement of the debt. Wake and Sampey will also need to be compensated for their out‑of‑pocket costs in relation to the maintenance of the property during the two years. This will essentially be the loss incurred and funded during this period by Wake and Sampey.
5.In the New Year 720 Albany Hwy will be put up for sale... as will adjoining property 716 Albany Hwy. These properties will be sold separately or as one at the discretion of Wake and Sampey but all efforts will be made to secure the best price for 720 Albany Hwy. As agreed the proceeds of the sale will be shared equally after deducting selling and holding costs. If the property does not sell within a reasonable time it will be offered for lease.
6.Fanfare agrees to lease the premises situated at 707 to 709 Albany Hwy for a monthly rent of $9000 plus GST and outgoings. This rent will be fixed for 2 years and the lease term will expire on 31/12/2013 the same day that the loan will be pre‑payable in full. The first rent payment will be 1/1/2012 and on the first of every month thereafter.
If you have any queries or I have left anything out please get back to me, otherwise please acknowledge this email and the details contained herein is a true and correct account of the dealings as you understand it.
Mr Sampey agreed at trial that this email documented his understanding of what had been orally agreed by the parties. The email recorded Mr Sampey's understanding of the agreement (at point 4) that if the loans were not repaid within 2 years, the interests of Mr Doherty and Mr Norris in the properties would be assigned to Mr Sampey and Mr Wake.
The Deeds of Loan themselves were materially different to the summary which appears in Mr Sampey's email. The Deeds of Loan do not contain references to the grant of a second mortgage over the properties, nor do they cater for the property at 720 Albany Highway to be sold in 2012 with the proceeds used to repay the advances made under the Deeds of Loan.[115]
[115] Primary Reasons [411].
Mr Sampey referred to the email of 12 December 2011 in a subsequent email dated 20 January 2012, which was in fact sent, and was in the following terms:[116]
[116] Ex 1.674.
Hi guys, you will remember some time ago I sent through an email outlining the details of the agreement between us all as it related to the property loan etc.
I recently had a hard drive failure and have lost my copy of this email. I also intended that you would each reply acknowledging the content of the email.
Before we proceed with the advance of the balance of the funds I will require the following:
1.A reply to my email acknowledging the content and agreement as to the details therein
2.Signing of contracts and land transfers as agreed. Lyn is currently preparing these documents and should have something for you next week. It is likely that we will require signatures of Julie and Lana so please be aware of this.
3.Signing of a lease agreement between Fanfare and MDN Partners for a period of 24 months from 1/1/2012 to 31/12/2013 on the terms and conditions already agreed.
The costs in relation to this exercise are estimated at around $6000 including contracts, leases, loan agreements etc. I suggest we can share this amount 50/50. Please advise if this is agreeable to you.
Hopefully you both understand that this is the proper way to deal with this matter as I have three partners who expect me to ensure that things are done as professionally as possible in order to protect everyone's interests.
Returning to the pleaded case, the respondents further pleaded that, by about January 2012, Mr Sampey advised Mr Doherty and Mr Norris that the balance of the funds under the agreements (being $200,000) would not be provided unless:
(a)Fanfare entered into a new lease of the premises at 707‑709 Albany Highway for a monthly rental of $9,900, including GST, for a period of two years; and
(b)Mr Doherty and Angourie Investments executed contracts of sale and transfers in respect of both the Fanfare premises and the property at 720 Albany Highway.[117]
[117] Statement of claim [86].
The respondents pleaded that, in or about January 2012, by an oral agreement made between Mr Doherty and Mr Norris (in various capacities), and with Mr Sampey, it was agreed that Fanfare would enter into the new lease and Mr Doherty and Angourie Investments would execute contracts of sale and the transfers in respect of both the premises at 707‑709 Albany Highway and 720 Albany Highway. The documents were then to be held in escrow for a period of two years. Further, it was pleaded that, if Mr Doherty and Mr Norris had not repaid the loans at the end of two years, the lenders would be entitled to lodge the transfers for registration.[118]
[118] Statement of claim [87].
It was pleaded that, between about December 2011 and July 2012, Mr Doherty and Mr Norris executed:
(a)the two loan agreements;
(b)the new lease for the property at 707‑709 Albany Highway; and
(c)the contracts for sale and the transfers for the properties at 707‑709 Albany Highway and 720 Albany Highway.[119]
[119] Statement of claim [92].
The respondents pleaded that each contract did not state the purchase price and was undated.[120]
[120] Statement of claim [92].
Mr Doherty and Mr Norris pleaded that they thereafter advanced to Fanfare the funds they received, and caused Fanfare to continue to trade, and to pay rent to MDN Partners which was used in turn to pay the loan payments to St George Bank.[121]
[121] Statement of claim [92.3].
In due course, Fanfare defaulted in the repayment of the funds and was unable to repay them.[122]
[122] Statement of claim [94].
The respondents' claim as to unconscionable conduct is found at [105] to [118] of their pleading.[123] Whilst the focus of the pleading is on Mr Sampey's knowledge and conduct, it was pleaded that he was acting as the agent for the other appellants at the time.[124] The respondents alleged that Mr Sampey had knowledge of the following matters, prior to entering into the loan agreement:[125]
[123] Statement of claim [105] ‑ [118].
[124] Statement of claim [108].
[125] Statement of claim [105].
[105.1] Fanfare was in financial difficulty, such that it was unlikely that it would generate sufficient profits to enable Doherty or Norris to repay the loans within 2 years;
[105.2]the likelihood that Doherty and Norris would be able to repay the loans was negligible;
[105.3] Doherty and Norris placed trust and confidence in Sampey, and were accustomed to acting in accordance with Sampey's advice;
[105.4] Doherty and Norris did not intend to seek independent legal or financial advice in relation to the transactions;
[105.5]the Third Defendants [Mr Sampey and Mr Wake] would not recommend that they seek that advice;
[105.6]the MDN Partnership had not obtained a valuation of the property;
[105.7]the MDN Partnership had not been dissolved;
[105.8] if the MDN Partnership were dissolved, the assets of that partnership would be realised and the net proceeds distributed amongst the partners, including the PD Trustee and Angourie;
[105.9]if Norris and Doherty failed to repay the loans within 2 years, the Third, Fourth and Fifth defendants would register the transfers, and thereby acquire the MDN Partnership's interest in 707‑709 Albany Highway and 720 Albany Highway at less than its market value.
The respondents pleaded that Mr Sampey and Mr Wake (and their respective wives) entered into the loan agreements with the knowledge set out in the preceding paragraph, and with knowledge that the value of Mr Doherty and Angourie Investments' combined interest in the property at 707‑709 Albany Highway and 720 Albany Highway 'was likely substantially higher than $600,000'.[126]
[126] Statement of claim [82A], [105] and [109].
The respondents then pleaded that, by reason of these matters, at the time Mr Sampey and Mr Wake (and their respective wives) sought to have Mr Doherty and Angourie Investments execute the contracts of sale and the transfers, they knew:
[109A.1]that it was probable that Doherty and Norris would be unable to repay the $600,000 advanced to them;
[109A.2] that the likely value of the PD Trust's and Angourie's interests in the Premises and 720 Albany Highway was substantially higher than $600,000; and that
[109A.3] the effect of the term pleaded at paragraph 105.9 was that, in the event that Doherty and Norris failed to repay the loans made to them, they would acquire the PD Trust's and Angourie's interests in the Premises and 720 Albany Highway at a substantial discount to their true value.
Fundamentally, the loans to Mr Doherty and Mr Norris might be described as asset-based lending.[127]
[127] Appellants' appeal submissions [88].
The claim of unconscionable conduct was denied by the appellants in the proceedings below.
In essence, the appellants pleaded the funds were advanced pursuant to an agreement made in December 2011 and January 2012, partly oral and partly in writing, by which Mr Sampey and Mr Wake, through their superannuation funds, agreed to 'buy' the interests of Mr Doherty and Angourie Investments in the premises at 707‑709 Albany Highway and 720 Albany Highway.
This agreement was alleged to have been made in discussions between Mr Sampey and Mr Norris, and by emails passing between the parties on 20 January 2012 and 25 January 2012.[128]
[128] Defence [64].
The appellants asserted that Mr Doherty and Mr Norris executed the loan agreements pursuant to the pleaded agreement[129] and, later, in January 2012, Mr Doherty and Angourie Investments executed the contracts of sale and the transfers, also pursuant to the pleaded agreement.[130]
[129] Defence [64.4].
[130] Defence [64.5].
In December and January 2011, Fanfare is said to have entered into a lease of the premises at 707‑709 Albany Highway for a further term of two years from 1 January 2012 with a monthly rental of $9,900, including GST.[131]
[131] Defence [64.7].
In December 2011 and January 2012, as pleaded by the appellants, the Sampey Super Fund and the Wake Super Fund granted an option to Mr Doherty and Angourie Investments to buy back the interests in the premises at 707‑709 Albany Highway.[132]
[132] Defence [64.8].
The appellants further pleaded that, on 20 January 2012, Mr Sampey required the signing of the contracts of sale and transfers, and the execution of the lease, before the balance of the advance was made under the agreement.[133]
[133] Defence [64.10].
Finally, the appellants admitted they had not obtained a valuation for the premises to ascertain the market rent but denied that they were obliged to. Similarly, they admitted they did not advise the plaintiffs to ascertain the market rent, to seek independent advice, or that the agreement should be drafted by a legal practitioner, but denied they were obliged to give such advice.[134] Mr Sampey further denied that he was obliged to advise Mr Doherty and Mr Norris that they should cause Fanfare to cease to trade, appoint an administrator, or consult an insolvency practitioner, or take steps to dissolve the partnership.[135]

The unconscionable conduct claims ‑ the findings

[134] Defence [65] and [66].

[135] Defence [66].

The Primary Judge made an express finding that the lease of the Fanfare premises entered into in 2012 was 'obtained by the unconscionable conduct' of Mr Sampey and Mr Wake,[136] and the 'registration of the transfers of 707‑709 Albany Highway and 720 Albany Highway was unconscionable'.[137]
[136] Primary Reasons [517(1)].
[137] Primary Reasons [517(2)].
The Primary Judge's review of the evidence and his findings are set out at [389] to [480] and [498] to [515] of the Primary Reasons. In the course of his review of the evidence, the Primary Judge made important findings as to the credibility and reliability of the witnesses. In significant respects, his Honour disbelieved the evidence of Mr Sampey.[138] His Honour described the evidence of the two valuers called by the parties as not being entirely satisfactory.[139] His Honour also expressed reservations as to whether Mr Norris' recollection of important matters was genuine.[140]
[138] Primary Reasons [403] and [426].
[139] Primary Reasons [473].
[140] Primary Reasons [395].
Before evaluating the evidence, the Primary Judge identified the importance of undertaking a precise examination of the facts and every connected circumstance, and scrutinising the exact relations established between the parties.[141]
[141] Citing Mineralogy Pty Ltd v Sino Iron Pty Ltd [2022] WASCA 26 [114] and Unique International College Pty Ltd v Australian Competition and Consumer Commission [2018] FCAFC 155; (2018) 266 FCR 631 [104].
The Primary Judge concluded that Mr Doherty and Mr Norris signed the transfers and sale agreements in respect of the properties at 707‑709 Albany Highway and 720 Albany Highway by way of security for the advances under the Deeds of Loan. The Primary Judge found, however, that there was no agreement between these parties for the sale of these properties. The transactions were loans, not sales.[142] The contracts and transfers were signed for security purposes only.
[142] Primary Reasons [403], [426], [427] and [503].
His Honour found that the loan was documented in two Deeds of Loan because there were two discrete borrowers. Each was dated 9 December 2011. There was also an oral agreement that Fanfare would enter into a new lease of the Fanfare premises for two years. His Honour found there may have been an agreement to market 720 Albany Highway for sale in 2012. Mr Sampey recorded this aspect of the matter in his email of 12 December 2011, but his Honour observed that neither Mr Doherty nor Mr Norris appeared to know of the agreement.[143]
[143] Primary Reasons [504].
His Honour's further important findings may be summarised as follows:
(a)It was unlikely that Fanfare would generate sufficient profits to enable Mr Doherty or Mr Norris to repay the loans from Fanfare's earnings within two years. If, however, MDN Partners sold either of the properties the partnership owned, the loans might have been repaid following distribution of the proceeds to the partners.[144]
[144] Primary Reasons [500].
(b)His Honour was not satisfied that Mr Sampey offered any business or financial advice in relation to the loan. However, he observed that there must have been an element of trust that led to Mr Doherty and Mr Norris signing the contracts and transfers (at least that Mr Sampey would not use them other than as security).[145]
[145] Primary Reasons [501].
(c)Mr Doherty, Mr Norris and Mr Sampey all had the benefit of the valuations of the properties obtained in October 2010, but no party had the benefit of a valuation of fair market rent.[146]
(d)The written agreements were likely to have been prepared and executed on the same day, being 22 December 2011. The documents were simply presented to Mr Doherty and Mr Norris to sign. They were offered no opportunity to consider them or to take advice, nor did they ask for that opportunity.[147]
(e)There is no evidence that a demand was ever made or that a notice of default was ever given under either Deed of Loan.[148]
(f)As part of the relevant circumstances, the Primary Judge concluded that the court should have regard to the various relationships in existence between the parties. In particular, Mr Sampey and Mr Wake were in partnership with Mr Doherty and Mr Norris and had been since 2003. Although his Honour was not satisfied that Mr Doherty and Mr Norris had placed their trust and confidence in Mr Sampey to the extent alleged, they had at times acted on his advice in relation to investments. His Honour found that Mr Sampey was the accountant for Fanfare, and also in certain respects for Mr Doherty and Mr Norris and their trusts. Mr Sampey had made the financial arrangements for MDN Partners, and maintained a trust account for it in the books of Sampey & Co. While these events were occurring, he was acting on behalf of Fanfare in dealing with a government agency in relation to Fanfare's motor vehicle dealer's licence.[149]
(g)The Primary Judge found that Mr Sampey knew of Fanfare's financial position, and that it had been losing money since 2008.[150] As their accountant, Mr Sampey was aware that Fanfare was then the primary, if not the only, source of income for Mr Doherty and Mr Norris. Mr Sampey had also formed the view, as his Honour found, that unless Mr Doherty and Mr Norris made changes, Fanfare would fail.[151]
(h)Commencing in around October 2011, Mr Sampey was aware that Mr Norris had experienced anxiety attacks.[152]
(i)Mr Doherty and Mr Norris were already indebted to the trustees of the Sampey Super Fund for $200,000. Mr Sampey was concerned about repayment of that loan. Unless the assets of MDN Partners could be realised at a substantial profit, taking into account the liability to St George Bank and the personal liabilities of Mr Doherty and Mr Norris to Westpac, Mr Doherty and Mr Norris were unlikely to be able to repay the $600,000 loan, certainly not within seven days of demand, according to the Primary Judge.[153]
(j)The security under the Deeds of Loan was a caveatable interest over the borrowers' property, his Honour found. That security could only be realised by a court ordered sale or the appointment of a receiver. The security under the oral agreement, permitting the lenders to transfer the whole of the properties to themselves, was not limited to the amount outstanding.[154]
(k)Mr Sampey took no steps to obtain a valuation of the properties. To his knowledge, the values he presented were well below the valuation undertaken in 2010 for St George Bank. On 17 January 2012, before Mr Sampey sent the email requiring Mr Doherty and Mr Norris to sign contracts for sale and transfers for the premises at 707‑709 Albany Highway and 720 Albany Highway, he and Mr Wake had contracted to sell the property at 716 Albany Highway for $1.45 million. His Honour found that the property at 716 Albany Highway was sufficiently similar to 720 Albany Highway that it must have raised questions about the value he put on that property.[155]
(l)The final finding reached by his Honour, which he described as 'critical', was that Mr Sampey and Mr Wake had no entitlement under any agreement to lodge the transfers which Mr Doherty and Mr Norris had signed. To the extent any of the underlying agreements gave Mr Sampey and Mr Wake an interest in either property, it was a security interest only. Even accepting the oral agreement to be an enforceable agreement, permitting transfer after two years, the transfers were in fact registered within about seven or eight months.[156]
[146] Primary Reasons [502].
[147] Primary Reasons [505].
[148] Primary Reasons [506].
[149] Primary Reasons [507].
[150] Primary Reasons [508].
[151] Primary Reasons [508].
[152] Primary Reasons [509].
[153] Primary Reasons [510].
[154] Primary Reasons [511].
[155] Primary Reasons [512].
[156] Primary Reasons [513].

This ground particularises the error on two bases.[322]
[322] Appeal ground 5, [8]. The ground does not challenge the terms of the relief granted: Appeal ts 70.
First, it is asserted that no reasons were given for this finding. Second, it is asserted that, in all of the factual circumstances found by the Primary Judge, it was not unconscionable for the Mr Sampey and Mr Wake (and their respective wives) to enter into the Deeds of Loan with Mr Doherty and Mr Norris on the terms in question. The terms identified in the appeal ground at [8.1] and [8.2] are the charging of interest at 10% p.a. or a default rate of 14% p.a., and entering into loan agreements under which Mr Doherty and Mr Norris provided security for the loans.

Appellants' submissions

The appellants recognise that Mr Sampey may have struck a hard bargain with Mr Doherty and Mr Norris, and may even have been opportunistic.[323] Nonetheless, the appellants submit that, on the factual findings of the Primary Judge, there was nothing unconscionable about the terms of the Deeds of Loan themselves.[324]
[323] Appellants' appeal submissions [91].
[324] Appellants' appeal submissions [77].
The appellants acknowledge the findings made by the Primary Judge at [500] to [513] of the Primary Reasons, which concern the conduct of Mr Sampey and Mr Wake in relation to the loans and the other instruments, but submit that those circumstances did not make it unconscionable for Mr Sampey and Mr Wake to enter into the Deeds of Loan.
The appellants further submit that:[325]
Although the loan could accurately be described as structured to be 'asset-based lending', there is nothing inherently unconscionable about asset-based lending. There must be some other factor that makes the conduct of the lender 'morally repugnant'.
[325] Appellants' appeal submissions [88].
To support the submission, the appellants draw attention to the existence of an earlier loan from Mr Sampey to both Mr Doherty and Mr Norris, made in June 2011. The circumstances of that earlier loan were not radically different from the Deeds of Loan entered into in December 2011, yet there was 'no suggestion or finding that the June 2011 loan was unconscionable'.[326]
[326] Appellants' appeal submissions [90].
Moreover, the appellants submit that, in ordering that the Deeds of Loan should be varied to remove the interest and security provisions, the Primary Judge failed to recognise that the Deeds of Loan were 'in part a rollover of the earlier loan, and thereby deprived Mr Sampey the right to be paid interest (and have the benefit of security) for the first [loan of] $200,000'.[327] Had the original loan not been rolled over by the Deeds of Loan in December 2011, the appellants say there would be 'no question that Mr Sampey was entitled to receive interest, and have the benefit of security, for the existing loan'.[328]
[327] Appellants' appeal submissions [90].
[328] Appellants' appeal submissions [90].
The appellants observe that no finding was made that Mr Doherty and Mr Norris were pressured into accepting the loans. They were 'experienced businessmen not suffering from any unusual disadvantage'.[329] Further, the appellants say there were no findings as to the extent of Mr Norris' anxiety attacks or whether they affected his ability to make financial or business decisions as at December 2011.[330]

Respondents' submissions

[329] Appellants' appeal submissions [91].

[330] Appellants' appeal submissions [91].

Fundamentally, the respondents contend the appellants, by this ground, impermissibly seek to isolate aspects of their conduct in order to minimise it.[331]
[331] Respondents' appeal submissions [52]; and Respondents' PD 7.4 Schedule.
The respondents place a degree of emphasis on the terms of Mr Sampey's email dated 12 December 2011, being the email which was drafted but not sent. That email is said to provide support for the conclusion of unconscionability in relation to the Deeds of Loan because the email, on its terms, proposed an additional advance of $400,000 to be paid in full in two years, otherwise the whole of Mr Doherty and Mr Norris' interests in the properties at 707‑709 Albany Highway and 720 Albany Highway would be assigned to Mr Sampey and Mr Wake.[332]
[332] Appeal ts 67.
This foregoing is described by the respondents as 'asset lending in the pejorative sense because by this stage, as his Honour found, Mr Sampey was worried about [the] $200,000 loan he had made in June'.[333]
[333] Appeal ts 68.
More broadly, the respondents invite attention to the findings of fact of the Primary Judge at [406] to [426] of the Primary Reasons, and the further findings at [500] to [513] of the Primary Reasons. When those findings are considered together, the respondents submit that:[334]
The entry into the Deeds of Loan was the first step in the course Mr Sampey understood had been agreed on 12 December 2011, which included that Mr Doherty's and Angourie's interests in 707‑709 and 720 Albany Highway would be transferred to Sampey and Wake or their nominees if the $600,000 'and accrued interest thereon' was not repaid at the end of two years. Given the improbability of the loans being repaid, that would have allowed Messrs Sampey and Wake to acquire Mr Doherty and Angourie's interests in the two properties at a substantial discount to their true value, being (after discharge of the MDN Partnership's debt to St George Bank) approximately $1.319 million.
[334] Respondents' appeal submissions [55].
On the Primary Judge's findings, the respondents submit the conduct of Mr Sampey may fairly be described as predatory and coercive, and 'so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience'.[335]
[335] Respondents' appeal submissions [58], citing Australian Securities and Investments Commission v Kobelt [2019] HCA 18; (2019) 267 CLR 1 [92].
A final point is made by the respondents as to the orders sought by the appellants, on the assumption this appeal ground is upheld. The respondents assert that the orders reinstating the provision that interest be paid on the advance would result in the respondents being liable for interest on the sum of $600,000 for a period of some 11 years. On any view, that would be a significant sum for the respondents. That is an outcome which the respondents say this Court should not countenance, particularly given the only assets of any substantial value they held were acquired by the appellants in 2012.[336]

Legislative framework and relevant principles

[336] Respondents' appeal submissions [66].

Section 21 of the ACL provides that:
(1)A person must not, in trade or commerce, in connection with:
(a)the supply or possible supply of goods and services to a person; or
(b)the acquisition or possible acquisition of goods or services for a person;
engage in conduct that is, in all the circumstances, unconscionable.
Section 21 of the ACL applies where a person is 'engaging in conduct' that is unconscionable. It is not directed at engaging in conduct generally. It is directed at engaging in conduct in trade or commerce, in connection with acquisition or supply, or possible acquisition or supply, of goods or services.
Section 21(4) of the ACL permits the court to consider the terms of a contract and the manner and extent to which it is carried out, in considering whether conduct to which a contract relates is unconscionable.
Section 22(1) of the ACL describes various matters to which the court may have regard in determining whether conduct in any particular case amounts to statutory unconscionable conduct. For example, the court may consider whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the person by the supplier.[337] These matters are non‑exhaustive. While these matters inform the evaluation of the conduct, it is ultimately necessary for the court to make an assessment considering all the relevant circumstances.
[337] ACL, s 22(1)(d).
Statutory unconscionability is not a defined concept. The term 'unconscionable' in s 21 is not limited to the unwritten law relating to unconscionable conduct. It is not necessary to show that a person has a pre‑existing disability, vulnerability or disadvantage of which advantage was taken or that any particular person has been disadvantaged by the conduct.
Statutory unconscionability requires an objective evaluation of behaviour including the reasons for such behaviour and the effect or likely effect of that behaviour.
Whether or not conduct is unconscionable is a decision to be made on the facts, having regard to all relevant circumstances. That is, the court is to undertake a comprehensive analysis of all underlying factual circumstances. In MineralogyPtyLtd v SinoIronPtyLtd,[338] this Court observed that:
[114]Moreover, it is well-established that, like a court examining a claim of unconscionable conduct in equity, a court evaluating an allegation of statutory unconscionable conduct must have regard to all the circumstances of the case. Determining whether a party to a transaction has engaged in unconscionable conduct will entail 'a precise examination of the particular facts' and 'every connected circumstance' as well as 'a scrutiny of the exact relations established between the parties'.
[338] MineralogyPtyLtd v SinoIronPtyLtd[2022] WASCA 26 [114] (Buss P, Beech and Vaughan JJA).
To a similar effect, this Court in Gunn v Meiners[339] held that:
[147]Broadly speaking, the doctrine of unconscionable dealings involves: (1) a relationship that places one party at a 'special disadvantage or disability' vis‑à‑vis another party; (2) knowledge of that special disadvantage or disability by the stronger party; and (3) unconscientious exploitation by the stronger party of the weaker party's disadvantage or disability. These considerations should not be understood as if they are to be addressed separately as if they are separate elements of a cause of action in tort. The application of equitable principles relating to unconscionable conduct calls for 'a precise examination of the particular facts' and 'every connected circumstance' (including the 'mental capacities, processes and idiosyncrasies' of the vulnerable party) as well as 'a scrutiny of the exact relations established between the parties'.
[339] Gunn v Meiners [2022] WASCA 95 [147] (Mitchell, Beech and Vaughan JJA).
In providing further elucidation of the statutory concept, Gageler J in Australian Securities and Investments Commission v Kobelt held as follows:[340]
[91]In Paciocco v Australia & New Zealand Banking Group Ltd, I referred to unconscionable conduct within the meaning of s 12CB as requiring 'a "high level of moral obloquy" on the part of the person said to have acted unconscionably'. 'Moral obloquy' is arcane terminology. Without unpacking what a high level of moral obloquy means in a contemporary context, using that arcane terminology does nothing to elucidate the normative standard embedded in the section. The terminology also has the potential to be misleading to the extent that it might be taken to suggest a requirement for conscious wrongdoing. My adoption of it has been criticised judicially and academically. The criticism is justified. I regret having mentioned it.
[92]What I meant to convey by the reference was that conduct proscribed by the section as unconscionable is conduct that is so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience. To that view of the statutory standard I adhere.
[93]The judgment required of a court exercising jurisdiction in a matter arising under s 12CB is a heavy one. For a court to pronounce conduct unconscionable is for the court to denounce that conduct as offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society. Those values are not entirely confined to, or entirely removed from, the values which historically informed courts administering equity in the development of the unwritten law of unconscionable conduct. They include respect for the dignity and autonomy and equality of individuals. They include respect for the cultural diversity of communities. (footnotes omitted)
[340] Australian Securities and Investments Commission v Kobelt [91] ‑ [93] (Gageler J).
These observations point strongly against the need to demonstrate that conduct is 'morally repugnant' (to use the term identified by the appellants in their submissions on appeal), before it is capable of being characterised as unconscionable. The more appropriate, modern focus is to assess whether the conduct is offensive to conscience, being so far outside societal norms of acceptable commercial behaviour. It has been said that the values which inform the relevant standard of conscience include:[341]
… certainty in commercial transactions, honesty, the absence of trickery or sharp practice, fairness when dealing with customers, the faithful performance of bargains and promises freely made, and the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage.
[341] Productivity Partners Pty Ltd (trading as Captain Cook College) v Australian Competition and Consumer Commission [2023] FCAFC 54; (2023) 27 FCR 180 [161(d)], referring to Paciocco v Australian and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199 [262] (Allsop CJ) (affirmed in the High Court).
As to the aspect of exploitation which forms part of the statutory concept, the High Court in Thorne v Kennedy[342] explained the issue as follows:
The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring 'victimisation', 'unconscientious conduct', or 'exploitation'. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.
[342] Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85 [38].
Finally, in considering the relevant principles which inform the concept, and the proper application, of statutory unconscionability, it is appropriate to refer to the decision of the High Court in Stubbings v Jams 2 Pty Ltd.[343] The facts of that matter share a degree of broad similarity to the present circumstances, involving a type of asset-based lending.[344]
[343] Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 276 CLR 1.
[344] Stubbings v Jams 2 Pty Ltd [1] (Kiefel CJ, Keane and Gleeson JJ).
In Stubbings v Jams 2 Pty Ltd, the court was concerned with the conduct of a lender vis a vis a guarantor. The lender was in the business of asset‑based lending or pure asset lending. As described by the plurality, this type of lending has the distinguishing feature, which often makes it easier for a borrower to obtain finance, that the loans are made exclusively on the basis of the value of the assets securing the loan 'without regard to the ability of the borrower to repay by instalments under the contract, in the knowledge that adequate security is available in the event of default'.[345]
[345] Stubbings v Jams 2 Pty Ltd [1] (Kiefel CJ, Keane and Gleeson JJ).
It was apparent the guarantor in question required competent independent financial advice in respect of a loan which was said to be for business purposes, but in fact it was for a house the guarantor intended to live in, and to refinance the mortgages on two other properties until they were sold.[346]
[346] Stubbings v Jams 2 Pty Ltd [101] (Steward J).
The borrower was a company owned and controlled by the guarantor. The company had no assets and had never traded. The guarantor was unemployed and in a poor financial position (described as 'bleak' by the trial judge), with no capacity to repay the deposit on the property, and with no other assets other than two other properties.[347]
[347] Stubbings v Jams 2 Pty Ltd [97] (Steward J).
A certificate of financial advice was signed by an accountant but it was found to be a precautionary artifice, together with the solicitor's certificate, designed to prevent an inference that the lenders were wilfully blind to the obvious danger of the transaction to the appellant. The certificate of independent financial advice, signed by the accountant, stated that the advice had been given to the borrower entirely independently of the guarantor. It contained no substantive information about the borrower, the guarantor, or the transaction.[348]
[348] Stubbings v Jams 2 Pty Ltd [74] (Gordon J).
The trial judge found that the guarantor's indebtedness to the lenders had been procured by unconscionable conduct on the part of their agent, which was attributable to them.[349] This conduct was found to be contrary to equitable principle and to the provision in the Australian Securities and Investments Commission Act 2001 (Cth) which is equivalent to s 21 of the ACL. The Court of Appeal of the Supreme Court of Victoria overturned the trial judge's decision, concluding that the evidence could not support a finding of unconscionable conduct attributable to the respondents.[350]
[349] Stubbings v Jams 2 Pty Ltd [3] (Kiefel CJ, Keane and Gleeson JJ).
[350] Jams 2 Pty Ltd v Stubbings [2020] VSCA 200 [126] ‑ [135] (Beach, Kyrou and Hargrave JJA)
On appeal to the High Court, the lenders argued that there was nothing inherently unconscionable about asset‑based lending insofar as it involved lending on the value of the assets that secure the loan without any reliance upon the borrower's ability to repay the loan from his or her income or other assets.[351] The guarantor conceded that general proposition, but contended that, on the unchallenged findings of fact made by the trial judge, the loans to the company and the guarantee were effected in circumstances which made the enforcement of the respondents' rights against the appellant unconscionable.
[351] Stubbings v Jams 2 Pty Ltd [4] (Kiefel CJ, Keane and Gleeson JJ).
The High Court upheld the appeal. The appeal turned on the extent of the lender's agent's knowledge of the guarantor's circumstances and whether the agent exploited that disadvantage.[352]
[352] Stubbings v Jams 2 Pty Ltd [42] (Kiefel CJ, Keane and Gleeson JJ).
The plurality held:[353]
[5]The appellant's lack of commercial understanding coupled with his inability to repay the loans from his own income or other assets meant that default in repayment, and the consequent loss by the appellant of his equity in his properties by way of interest payments to the respondents, were inevitable as a matter of objective fact. The respondents, through their agent, sufficiently appreciated that reality that the exercise of their rights under the mortgages to turn the appellant's disadvantages to their own profit was unconscionable. Equitable intervention was justified in this case 'not merely to relieve the [appellant] from the consequences of his own foolishness ... [but] to prevent his victimisation'. (footnotes omitted)
[353] Stubbings v Jams 2 Pty Ltd [1] (Kiefel CJ, Keane and Gleeson JJ). Gordon and Steward JJ similarly allowed the appeal, for the reasons explained in their separate judgments, at [95] and [174].
In the circumstances of that case, the High Court viewed the conduct of the lenders (through their agent) as amounting to an unconscientious taking advantage of the special disadvantage of the guarantor, involving a lack of assistance or explanation where that was necessary.[354] Further, the plurality concluded that:
[43]The inevitable outcome of the transaction was, objectively speaking, that the appellant's equity in his properties would be taken by the respondents by way of interest payments, including at default interest rates. The dangerous nature of the loans, obvious to [the agent] but not to the appellant, was central to the question whether the appellant's special disadvantage had been exploited by the respondents.
[354] Stubbings v Jams 2 Pty Ltd [40] ‑ [42] (Kiefel CJ, Keane and Gleeson JJ); and [94] (Gordon J).

We did not understand the parties to disagree as to the principles relevant to an assessment of unconscionability. Nor is it contended that his Honour misunderstood those principles, which he summarised at [486] to [492] of the Primary Reasons. It is the application of the principles to the facts which brings disagreement in the present case.

Disposition

Insofar as this ground challenges the Primary Decision on the basis that no reasons were given for the finding of unconscionable conduct in respect of the Deeds of Loan, that has effectively been addressed above in our reasons concerning the fourth ground. The Primary Judge made a series of detailed findings of fact and gave comprehensive reasons in this respect. The appellants' criticisms in this regard cannot be accepted.
That essentially leaves the appellants' broad challenge to the ultimate finding of the Primary Judge that this particular conduct was unconscionable. This finding is said to amount to an 'error of law'.[355]
[355] Appellants' appeal submissions [77].
A conclusion as to whether certain conduct answers the statutory concept of unconscionable conduct is evaluative in character. The assessment in this regard gives rise to a unique outcome, rather than a range of outcomes. Accordingly, the Primary Judge's conclusion on this issue attracts the correctness standard of appellate review,[356] rather than the House v The King[357] standard applicable to the exercise of judicial discretions.
[356] Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531, 552; Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 214 CLR 51 [162]; Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 264 CLR 541 [46] ‑ [49] (Gageler J); Australian Securities and Investments Commission v Kobelt [47] (Kiefel CJ and Bell J); Lowe Pty Ltd v Belgravia [2020] WASCA 180 [215]; Shannon v Permanent Custodians Limited [2020] WASCA 198 [160] (Quinlan CJ and Tottle J).
[357] House v The King [1936] HCA 40; (1936) 55 CLR 499.
The correctness standard requires this Court to proceed as follows:[358]
The duty of the appellate court is to decide the case ‑ the facts as well as the law ‑ for itself. In so doing it must recognize the advantages enjoyed by the judge who conducted the trial. But if the judges of appeal consider that in the circumstances the trial judge was in no better position to decide the particular question than they are themselves, or if, after giving full weight to his decision, they consider that it was wrong, they must discharge their duty and give effect to their own judgment.
[358] Warren v Coombes (552).
We have mentioned more than once in these reasons that the Primary Judge made a number of adverse findings as to the credibility and reliability of the witnesses. Critically, for the purposes of this ground of appeal, the Primary Judge disbelieved the evidence of Mr Sampey in relation to various matters concerning the Deeds of Loan and the surrounding conduct.[359] In particular, Mr Sampey maintained in his evidence at trial that the overall transaction was a sale transaction. Objectively, the transaction was a loan arrangement, as was understood by Mr Doherty and Mr Norris. The appellants have not submitted on this appeal that the Primary Judge misused the advantage he enjoyed in seeing and hearing the witnesses (including Mr Sampey) give their evidence, and in forming conclusions in relation to their credit.
[359] Primary Reasons [111], [403] and [426].
Further, we have already extracted in these reasons the findings made by the Primary Judge that bear upon the conclusion that the conduct of Mr Sampey and Mr Wake was relevantly unconscionable contrary to s 21 of the ACL. See [126] to [129] and [331] above. It is unnecessary to repeat them in full. It is sufficient to briefly recall the key findings which, in our view, provide strong support for the Primary Judge's conclusion and which demonstrate this ground of appeal is without merit.
The key findings may be summarised in the following manner:
(a)First, Mr Doherty and Mr Norris, together with Fanfare itself, were in difficult financial circumstances at the time. It was unlikely that the Fanfare business would generate sufficient profits to enable the loans to be repaid within two years (absent a sale of the properties by the partnership).[360]
(b)Second, Mr Sampey well knew of the difficult financial position of Mr Doherty, Mr Norris and Fanfare. He knew that Fanfare had been losing money for some years. He knew that Fanfare was the primary source of income, if not the only source of income, of Mr Doherty and Mr Norris. He knew that Mr Doherty and Mr Norris were already indebted to the trustees of the Sampey Super Fund for $200,000.[361]
(c)Third, an element of trust was apparent between Mr Doherty and Mr Norris, towards Mr Sampey. Those men at times acted on Mr Sampey's advice. They had been in partnership together since December 2003. Mr Sampey was the accountant for the Fanfare business run by Mr Doherty and Mr Norris, and in certain respects was the accountant for their trusts. Mr Sampey was responsible for the financial arrangements for the partnership and maintained the trust account for the partnership.[362]
(d)Fourth, Mr Sampey did not offer any business or financial advice in relation to the loan and he took no steps to obtain a valuation of the properties, yet he must have appreciated the values he presented to Mr Doherty and Mr Norris were well below the likely valuation.[363]
(e)Fifth, the Deeds of Loan were simply presented to Mr Doherty and Mr Norris to sign, without any opportunity to consider them or take advice.[364]
(f)Sixth, the Primary Judge fundamentally rejected the evidence of Mr Sampey that the underlying agreement between the parties was for the sale of the two properties. Mr Doherty and Mr Norris signed the transfers and the sale agreements by way of security for the advances. The transactions were loans, not sales.[365]
(g)Seventh, Mr Sampey and Mr Wake lodged the transfers which had been signed by Mr Doherty and Mr Norris within about seven or eight months of them being signed. However, Mr Sampey and Mr Wake were found to have had no entitlement under any agreement to lodge the transfers. The interest acquired by Mr Sampey and Mr Wake was confined to a security interest only and to the extent to which there was any enforceable agreement to the contrary, transfer of the properties was permitted only after two years.[366]
[360] Primary Reasons [500].
[361] Primary Reasons [508] and [510].
[362] Primary Reasons [501] and [507].
[363] Primary Reasons [501] and [512].
[364] Primary Reasons [505].
[365] Primary Reasons [503].
[366] Primary Reasons [513].
With respect, the conclusion of the Primary Judge that the conduct of Mr Sampey and Mr Wake offended conscience was entirely correct. As the respondents accurately submit, the overall transaction 'was, and was intended by [Mr Sampey and Mr Wake] to be, a true sale of those assets at an undervalue, at no risk to them'.[367]
[367] Respondents' appeal submissions [62].
The thrust of the appellants' submissions, as we apprehend them, is to invite this Court to separately examine, in isolation from the entire course of conduct, the individual instruments and transactions which were considered by the Primary Judge. The appellants' suggested approach runs counter to the accepted and orthodox approach in this area, which requires a precise examination of the particular facts by reference to 'every connected circumstance', with appropriate scrutiny of the 'exact relations established between the parties'. This type of holistic analysis is essential given the nature of conduct which may answer the description of being unconscionable.
So, to examine the terms of the Deeds of Loan in isolation would be to ignore the potential interaction between those instruments and the later instruments executed by Mr Doherty and Mr Norris. It assumes, wrongly, that the analysis is confined to a search for harsh contractual terms or uncommercial clauses. The task is plainly wider, and more involved than that.
On the facts as found by the Primary Judge, the Deeds of Loan essentially initiated a process which led to the later instruments being executed, and which ultimately led to the loss of Mr Doherty and Mr Norris' interests in the two properties. The Deeds of Loan were characterised on the respondents' case as the 'drivers' for that which followed, or the 'first step'.[368] We accept that characterisation as accurate, given the findings made by the Primary Judge.
[368] Respondents' appeal submissions [55] and Appeal ts 69.
Importantly, the findings of the Primary Judge support the characterisation of this transaction as an example of 'asset‑lending'. That is not sufficient, on its own, to warrant the conclusion that the conduct in relation to the Deeds of Loan was unconscionable. More is required. The ultimate conclusion that the conduct was unconscionable is, however, justified by the additional matters which we have identified above, when taken in combination, and which were found to be established by the Primary Judge, including as to the closeness of the relationship between these parties, and the knowledge which Mr Sampey (and also Mr Wake) had acquired as to the financial position of Fanfare.
The necessary element of unconscientious exploitation or coercion is apparent on these findings, it being apparent that Mr Sampey (and with him, Mr Wake) were seeking to, and did, take advantage of the vulnerable position in which Mr Doherty and Mr Norris found themselves.
In circumstances not so dissimilar to those which transpired in Stubbings v Jams 2 Pty Ltd, Mr Sampey (and Mr Wake) took the opportunity to exploit the respondents' distressed financial circumstances to deprive them of their equity in these two valuable properties.
In our view, no material error of law has been demonstrated in respect of the unconscionable conduct finding concerning the Deeds of Loan. The appellants' challenge to the relevant conclusion and findings is, in substance, little more than an assertion that the Primary Judge should have arrived at a different conclusion. There is no basis for interfering with the assessment of the relevant facts and circumstances made by the Primary Judge below.
We would dismiss this ground of appeal.

Conclusion and orders

For the foregoing reasons, we would dismiss grounds of appeal 1, 2, 4 and 5, and we would allow ground of appeal 3.
However, in respect of the third ground, we would ultimately reach the same conclusion as the Primary Judge that the defence should be rejected.
We would hear from counsel as to the appropriate orders which should now be made in relation to the appeal including as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
LM
Associate to the Honourable Justice Lundberg
4 SEPTEMBER 2024