Soulos v Pagones

[2023] NSWCA 243

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Soulos v Pagones; Soulos v Soulos; Soulos v Soulos; Soulos v Pagones; Kristallis v Soulos; Kristallis v Soulos; Kristallis v Pagones [2023] NSWCA 243

Hearing dates:

4 – 6 April 2023

Date of orders:

13 October 2023

Decision date:

13 October 2023

Before:

Ward P at [1]; Meagher JA and Mitchelmore JA at [688]

Decision:

(1) Grant leave for the filing of the Executors’ amended notice of appeal in the Executors’ Dennis Appeal.

(2) Dismiss with costs the Executors’ appeals in proceedings 2022/369112 (the Executors’ James Appeal); 2022/369130 (the Executors’ Maria Appeal); and 2022/369139 (the Executors’ Dennis Appeal).

(3) Refuse leave for the proposed amendment of Nick’s notice of appeal in the Succession Act appeals.

(4) Dismiss with costs the appeals by Nick in proceedings 2022/370862 (Nick’s James Appeal); 2022/370852 (Nick’s Maria Appeal); and 2022/370837 (Nick’s Dennis Appeal).

(5) Set aside Orders 1 to 8 made by Lindsay J on 24 November 2022 in proceedings 2021/00108316 (the Oppression Proceeding).

(6) Otherwise dismiss the appeal by Nick and John in proceedings 2022/370857 (the Oppression Appeal).

(7) Direct that any brief submissions as to costs of the proceedings at first instance be filed within 14 days, to be dealt with on the papers.

(8) Direct that any brief submissions as to the costs of the Oppression Appeal be filed within 14 days, to be dealt with on the papers.

Catchwords:

CORPORATIONS – Members’ rights and remedies – Oppression – Where one shareholder has control over family company through management shares and position as Governing Director – Whether no oppression if self-dealing transaction was necessary to bring about acquisition of property accepted to be in the best interests of the company – Whether primary judge erred in finding oppressive conduct in relation to omission of demolition clause in lease by company to entity associated with director – Whether relief granted went beyond that necessary to bring end to continuing effect of oppressive conduct.

EQUITY – Proprietary estoppel – Encouragement – Detrimental reliance – Where a property had been purchased by parents for the benefit of their son – Where the son had been promised ownership of the property and had expended time and money renovating the property – Whether sufficient detriment had been suffered to establish an estoppel – Whether the relief granted by the primary judge was proportionate to the detriment suffered.

SUCCESSION – Family provision – claims made for provision under the Succession Act 2006 (NSW) by three of the deceased’s four adult children – Where the deceased had engendered an expectation in her children that they would share equally in the assets of the family company – Whether provision made for the respective children was proper and appropriate for their advancement or maintenance in life – Where large portion of estate assets held through shares in family company and deceased’s last will left all management (voting) shares to one child – Whether primary judge erred in failing properly to take into account financial needs of children or in making good expectations engendered in the deceased’s children as to future material wealth.

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 173

Corporations Act 2001 (Cth), ss 180-182, 232, 233, Ch 2F

Probate and Administration Act 1898 (NSW), Pt II, Third Schedule

Succession Act 2006 (NSW), ss 59, 60, 66, Ch 3

Uniform Civil Procedure Rules 2005 (NSW), rr 14.26 51.18

Cases Cited:

Ambridge Investments Pty Ltd (in liq) (rec apptd) v Baker [2010] VSC 59

Ananda Marga Pracaraka Samgha Ltd v Tomar (No 6) [2013] FCA 284; (2013) 94 ACSR 199

Angas Law Services Pty Ltd v Carabelas (2005) 226 CLR 507; [2005] HCA 23

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27

Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12

Australian Securities & Investments Commission v Maxwell [2006] NSWSC 1052; (2006) 59 ACSR 373

Augusta Pool 1 UK Ltd v Williamson [2023] NSWCA 93

Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51; [2003] HCA 18

Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; [2014] HCA 14

Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61

Australian Karting Association Ltd v Karting (New South Wales) Incorporated [2022] NSWCA 188

Baba v Sheehan [2021] NSWCA 58

Backoffice Investments v Campbell [2007] NSWSC 161; (2007) 25 ACLC 302

Bisley Investment Corporation v Australian Broadcasting Tribunal [1982] FCA 58; (1982) 40 ALR 233

Botsman v Bolitho (No 1) (2018) 57 VR 68; [2018] VSCA 278

Brown v Brown [2022] NSWSC 1393

Browne v Browne [2019] WASCA 1

Byrne v A J Byrne Pty Ltd [2012] NSWSC 667

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25

Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359

Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62

Chew v The Queen (1992) 173 CLR 626; [1992] HCA 19

Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust v Michel, in the matter of Laava ID Pty Ltd (No 4) [2023] FCA 25

Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; [2000] HCA 47

Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39

Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33

Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84

Donis v Donis (2007) 19 VR 577; [2007] VSCA 89

Doyle v Australian Securities and Investments Commission (ASIC) (2005) 227 CLR 18; [2005] HCA 78

DSHE Holdings Ltd (Receivers and Managers) (in liq) v Potts; HSBC Bank Ltd v Abboud; Potts v National Australia Bank Ltd [2022] NSWCA 165; (2022) 405 ALR 70

Durham v Durham (2011) 80 NSWLR 335; [2011] NSWCA 62

Estate Lioutas; Lioutas v Papasoulis [2018] NSWSC 352

Evans v Braddock [2015] NSWSC 249

Ex parte Powter; Re Powter (1945) 46 SR (NSW) 1; 63 WN 34

Exton v Extons Pty Ltd (2017) 53 VR 520; [2017] VSC 14

Falkingham v Peninsula Kingswood Country Golf Club Ltd [2015] VSCA 16; (2015) 104 ACSR 481

Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413; (1998) 28 ACSR 688

Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672

Fifteenth Eestin Nominees Pty Ltd v Rosenberg (2009) 24 VR 115; [2009] VSCA 112

Gee v Gee [2018] EWHC 1393 (Ch)

Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10

Gooze v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534

Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63

Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641; [1937] HCA 58

Hall v Hall (2016) 257 CLR 490; [2016] HCA 23

Hart Security Australia Pty Ltd v Boucousis [2016] NSWCA 307; (2016) 339 ALR 659

Hay v Renwick [2016] NSWSC 1048

House v The King (1936) 55 CLR 499; [1936] HCA 40

Hunter v Hunter (1987) 8 NSWLR 573

In re Sharpe (a Bankrupt); Ex parte Trustee of the Bankrupt’s Property v The Bankrupt [1980] 1 WLR 219; [1980] 1 All ER 198, Ch D

Joint v Stephens [2008] VSCA 210; (2008) 26 ACLC 1467

Kennon v Spry; Spry v Kennon (2008) 238 CLR 366; [2008] HCA 56

Leary v NSW Trustee and Guardian [2017] NSWSC 1113

Levin v Clark [1962] NSWR 686

Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; [2005] NSWCA 189

Mackay Sugar Ltd v Wilmar Sugar Australia Ltd [2016] FCAFC 133; (2016) 338 ALR 374

Martin v Australian Squash Club Pty Ltd (1996) 14 ACLC 452

Mayfield v Lloyd-Williams [2004] NSWSC 419

Maynard v Maynard [2018] NSWSC 1961

McNab v Graham (2017) 53 VR 311; [2017] VSCA 352

Meres v Meres [2017] NSWSC 285

Mifsud v Campbell (1991) 21 NSWLR 725

Minister for Immigration & Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30

Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133

Murdoch v Mudgee Dolomite & Lime Pty Ltd (in liq) [2022] NSWCA 12; (2022) 398 ALR 658

Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78

New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231

Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17

Olsen v Olsen (2019) 101 NSWLR 225; [2019] NSWCA 278

Owies v JJE Nominees Pty Ltd (ACN 004 856 366) (in its capacity ATF the Owies Family Trust) [2022] VSCA 142

Parker v Auswild; Bergmuller v Auswild [2022] VSCA 8

Parsons v McBain (2001) 109 FCR 120; [2001] FCA 376

Perpetual Ltd v Barghachoun [2010] NSWSC 108

Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41; (2006) 14 BPR 26,369

Phillips v James (2014) 85 NSWLR 619; [2014] NSWCA 4

Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19

Priestley v Priestley [2017] NSWCA 155

Public Service Board of New South Wales v Osmond (1986) 159 CLR 656; [1986] HCA 7

Public Trustee v Smith [2008] NSWSC 397; (2008) 1 ASTLR 488

Q (A Pseudonym) v E Co (A Pseudonym) [2020] NSWCA 220; (2020) 383 ALR 469

Re a Company (No 002612 of 1984) (1986) 2 BCC 99,453

Re Bright Pine Mills Pty Limited [1969] VR 1002

In the matter of Candy-Vend Pty Ltd [2020] NSWSC 1735

Re Estate Soulos [2022] NSWSC 1507

Re Fulop Deceased (1987) 8 NSWLR 679

Re George Raymond Pty Ltd; Slater v Gilbertson [1999] VSC 460; (2000) 18 ACLC 85

Re Hollen Australia Pty Ltd [2009] VSC 95

Re Lowes Park Pty Ltd; Headlam v Lowes Park Pty Ltd (1994) 62 FCR 535; [1994] FCA 579

Re Manormay Investments Pty Ltd [2013] VSC 260

Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134

Reid v Bagot Well Pastoral Co Pty Ltd (1993) 61 SASR 165; (1993) 12 ACSR 197

Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33

Robinson v Tame [1994] NSWCA 266

Samaan bht Samaan v Kentucky Fried Chicken Pty Ltd [2009] NSWSC 1265

Sanford v Sanford Courier Service Pty Ltd (1986) 10 ACLR 549

Scott v Scott [2022] NSWCA 182

Scottish Co-Operative Wholesale Society Ltd v Meyer [1959] AC 324; [1958] 3 All ER 66

Secretary, Department of Social Security v Agnew (2000) 96 FCR 357; [2000] FCA 59

Sgro v Thompson [2017] NSWCA 326

Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393; (2004) 51 ACSR 278

Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19

Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40

Snell v Glatis (No 2) [2020] NSWCA 166

Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114

Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35

Thomas v HW Thomas Ltd [1984] 1 NZLR 686; (1984) 2 ACLC 610

Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152

Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104

Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11

Vukic v Grbin [2006] NSWSC 41

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7

Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18

Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9

Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12

Wayde v NSW Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68

Webb v Stanfield [1991] 1 Qd R 593

Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669

Wheatley v Wheatley [2006] NSWCA 262

Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285; [1987] HCA 11

Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127; [2004] NSWCA 174

Wright v Australian Broadcasting Commission [1977] 1 NSWLR 697

Yates v Halliday [2006] NSWSC 1346

Zong v Lin [2022] NSWCA 136

Texts Cited:

H A J Ford, W A Lee, Law of Trusts (4th ed, 2010, Thomson Reuters)

J Hudson, “One Thicket in Fraud on a Power” (2019) 39 Oxford Journal of Legal Studies 577

Professor Ben McFarlane, The Law of Proprietary Estoppel (1st ed, 2014, Oxford University Press)

Young, Croft and Smith, On Equity (2009, Thomson Reuters)

A J Oakley, Constructive Trusts (3rd ed, 1997, Sweet & Maxwell)

Category:

Principal judgment

Parties:

2022/00370857 (Oppression Appeal)

First Appellant: Nicholas Andrew Soulos
Second Appellant: John Nicholas Soulos
First Respondent: Maria Pagones
Second Respondent: Esperia Court Pty Ltd
Third Respondents: Con Kristallis & Trevor Ian Cork as executors of the Estate of the late Rene Soulos

2022/00370862 (Nick’s James Appeal)

Appellant: Nicholas Andrew Soulos
First Respondent: James Soulos
Second Respondent: Con Kristallis
Third Respondent: Ian Trevor Cork

2022/00370837 (Nick’s Dennis Appeal)

Appellant: Nicholas Andrew Soulos
First Respondent: Dimosthenis (Dennis) Soulos
Second Respondent: Con Kristallis
Third Respondent: Trevor Ian Cork

2022/00370852 (Nick’s Maria Appeal)

Appellant: Nicholas Andrew Soulos
First Respondent: Maria Pagones
Second Respondent: Con Kristallis
Third Respondent: Ian Trevor Cork

2022/00369112 (Executors’ James Appeal)

First Appellant: Con Kristallis
Second Appellant: Trevor Ian Cork
First Respondent: James Soulos
Second Respondent: Nicholas Andrew Soulos

2022/00369139 (Executors’ Dennis Appeal)

First Appellant: Con Kristallis
Second Appellant: Trevor Ian Cork
First Respondent: Dimosthenis (Dennis) Soulos
Second Respondent: Nicholas Andrew Soulos
Third Respondent: James Soulos
Fourth Respondent: Esperia Court Pty Ltd
Fifth Respondent: A & R Management Pty Ltd
Sixth Respondent: Maria Pagones

2022/00369130 (Executors’ Maria Appeal)

First Appellant: Con Kristallis
Second Appellant: Trevor Ian Cork
First Respondent: Maria Pagones
Second Respondent: Nicholas Andrew Soulos

Representation:

Counsel:
MA Izzo SC and OR Jones (Nicholas Andrew Soulos and John Nicholas Soulos)
JC Kelly SC, PJ Muscat and B O’Connor (Maria Pagones)
A Cheshire SC and T Rollo (James Soulos)
V Bedrossian SC and N Bilinsky (Con Kristallis and Trevor Ian Cork)
MR Elliott SC (Dimosthenis (Dennis) Soulos)

Solicitors:
Wotton & Kearney (Nicholas Andrew Soulos and John Nicholas Soulos)
Uther Webster & Evans Solicitors (Maria Pagones)
Carroll & O’Dea Lawyers (James Soulos)
McPhee Kelshaw Pty Ltd (Con Kristallis and Trevor Ian Cork)
McCabes Lawyers (Dimosthenis (Dennis) Soulos)
Chalk Behrendt Lawyers (Esperia Court)

File Number(s):

2022/00370857; 2022/00370862; 2022/00370837; 2022/00370852; 2022/00369112; 2022/00369139; 2022/00369130

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity Division

Citation:

[2022] NSWSC 1507

Date of Decision:

7 November 2022

Before:

Lindsay J

File Number(s):

2018/00050908; 2019/00026988; 2019/00027080; 2021/00108316

HEADNOTE

[This headnote is not to be read as part of the judgment]

Seven sets of appeal proceedings were heard together, arising out of disputes between the four adult children of the late Irene Soulos (the deceased), those being James Soulos, Dennis Soulos, Maria Pagones, and Nick Soulos. Also parties to the proceedings were Nick’s son, John Soulos, and the executors of the deceased’s estate (the Executors) (the deceased’s accountant, solicitor and Nick). The disputes involved three family provision applications brought under s 59 of the Succession Act 2006 (NSW) (Succession Act) by James, Dennis and Maria, respectively; an oppression suit brought by Maria against Nick, John, and the Executors; and a proprietary estoppel claim brought by Dennis against the Executors.

The main corporate vehicle of the Soulos family was a family company (Esperia Court). Esperia Court’s shareholding structure included four classes of ordinary shares (initially distributed amongst the four children), which carried no voting rights and, other than a nominal right to receive dividends (which had never occurred), only had value in that they carried a right to participate in the winding up of Esperia Court; as well as 500 “management” shares, which were the only voting shares in the company. The management shares were held by the deceased, who also held the position of Governing Director. At the time of the deceased’s death, the board of directors of Esperia Court was comprised by the deceased, Nick and John.

The deceased’s estate had a value of around $36 million, of which a substantial part was attributable to the deceased’s shareholdings in Esperia Court (which, at the time of her death included the class shares formerly held in the name of James and Dennis, respectively). Under the deceased’s last Will, all 500 management shares were gifted to Nick, effectively giving him control of Esperia Court. Each of his siblings alleged that the deceased had engendered in them an expectation that the four children would share equally in the material benefits of the family assets through their shareholdings in Esperia Court.

As to the allegation of oppression, this related to events in 2017, when Esperia Court (with Nick as the driving force) acquired a property (the Symond Arcade) in the Strathfield town centre. The property was acquired as to 80% in the name of Esperia Court and as to 20% by Nick and John personally. Both Nick and John gave evidence that the deceased (the controlling mind of the company) would only acquiesce to the transaction going ahead if Nick and John took a personal interest in the property. The transaction was financed by a $29.05 million loan obtained from National Australia Bank. The business of leasing retail space in Symond Arcade has since been conducted as a partnership between Esperia Court as to 80%, on the one hand, and Nick and John as to 20%, on the other hand. The partnership has been conducted at a loss over a number of years.

Another property owned by Esperia Court is the Strathfield Private Hotel (the Hotel). In 2014 (before Nick was appointed as a director of Esperia Court in 2016), Nick’s corporate vehicle (SPH) entered into a lease with Esperia Court to manage the Hotel. The lease did not contain a “demolition clause” and was alleged by Maria to be at below market rent.

Maria alleged that the acquisition of the Symond Arcade (along with the ongoing partnership agreement) and the grant of the lease to SPH were self-dealing transactions that amounted to oppressive conduct under s 232(d) and (e) of the Corporations Act 2001 (Cth) (Corporations Act).

As to the proprietary estoppel claim by Dennis, this related to a property (the Chapman Street Property) owned by A&R Management Pty Ltd (A&R), a different company that was wholly owned and controlled by the deceased. In September 1998, following Dennis’ divorce from his then wife, the deceased and her husband purchased the Chapman Street Property on the understanding that Dennis would live in it and pay rent to provide funds for A&R to service the mortgage. Dennis’ evidence was that he was promised that he would own the Chapman Street Property. Dennis has lived at the Chapman Street Property since then and currently also uses the property as his place of business. Dennis paid rent to A&R until December 2003 and gave evidence that he expended significant time and money renovating the property. In the deceased’s last will, the shares in A&R (which carried ownership of the Chapman Street Property) were bequeathed to her grandsons in equal shares.

The primary judge concluded that the conduct involving the acquisition of the Symond Arcade, the partnership between Esperia Court, Nick and John, and the grant of a lease to SPH constituted oppressive conduct in breach of s 232(d) and (e) of the Corporations Act; and that the oppression was ongoing. The oppressive conduct in relation to the lease of the Hotel was limited to the fact that it did not include a demolition clause (which was to the advantage of Nick’s company). Although the rent was found to be below market rate this was not considered to be an instance of oppression (as the deceased wished to entice Nick to return as manager of the Hotel). The primary judge further found that the deceased, Nick and John had breached their duties as directors (contrary to ss 180-182 of the Corporations Act) in relation to the matters in respect of which oppression was found.

As to the respective family provision claims, the primary judge concluded that each of James, Maria and Dennis had been left without adequate provision for their maintenance, education or advancement in life, finding that they were encouraged by the deceased in an expectation that their shares in Esperia Court would enable them to enjoy substantial wealth.

The primary judge made orders restructuring Esperia Court, including making amendments to the company’s Constitution and granting each of the four children one-quarter (i.e., 125) of the management shares (and therefore equal voting rights in the company). Orders were also made varying the lease to SPH (to include a termination clause), unwinding Nick and John’s interest in the Symond Arcade, and declaring that the partnership between Esperia Court, Nick and John was terminable on six months’ notice. The transfer of management shares was ordered in both the Oppression Proceeding and the Succession Act Proceedings.

The primary judge also found that Dennis’ proprietary estoppel claim was made good, declaring that A&R holds the Chapman Street property on trust for Dennis.

The appeals

Appeals were lodged: by Nick and John from the orders made in the Oppression Proceeding; by Nick in his capacity as an affected beneficiary in relation to the orders made in each of the three Succession Act Proceedings; and by the Executors in relation to the orders made in each of the three Succession Act Proceedings.

Held (per Ward P, Meagher and Mitchelmore JJA agreeing) allowing the Oppression Appeal in part and otherwise dismissing the appeals:

The Oppression Appeal

The primary judge did not err in finding that there was oppressive conduct in the acquisition by Nick and John of a 20% personal interest in the Symond Arcade (and the subsequent partnership between them and Esperia Court) (Ward P at [211]); nor was there error in the finding that the oppression was continuing (Ward P at [226]). The primary judge also did not err in concluding that Nick and John had breached directors’ duties in relation to the acquisition of the Symond Arcade and the ongoing partnership (Ward P at [251]). (Meagher and Mitchelmore JJA at [690]).

The primary judge did err in finding that the grant of the lease to SPH without a demolition clause was an instance of oppressive conduct, in circumstances where the lease was an option lease which the company was bound to grant on the valid exercise of the option (Ward P at [211]). There was also error in the finding of breach of directors’ duties by Nick and John in relation to the grant of the lease to SPH (Ward P at [254]). (Meagher and Mitchelmore JJA at [691]).

In respect of the relief granted, the primary judge went beyond what was necessary to bring an end to the oppression in making the orders amending the Constitution of the company and re-structuring Esperia Court’s shareholding (orders 1 to 7), as the remaining orders (which dealt with the acquisition of the Symond Arcade and the related partnership) were sufficient to put an end to the continuing effects of the oppressive conduct. Discretion was therefore re-exercised to set aside orders 1 to 7 (Ward P at [304]). Given the Court’s conclusion as to the lease to SPH, the order varying the lease (order 8) was also set aside (Ward P at [304]). (Meagher and Mitchelmore JJA at [692]).

Wayde v NSW Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68; Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 applied.

Dennis’ Proprietary Estoppel Claim

The primary judge did not err in concluding that Dennis’ proprietary estoppel claim should succeed (Ward P at [408], [416] and [424]). The countervailing benefits that accrued to Dennis were not sufficient to displace the detriment suffered (Ward P at [392], [395]), nor was the relief granted by the primary judge out of all proportion to the equity that arose in his favour (Ward P at [407]). (Meagher and Mitchelmore JJA at [693]).

Sidhu v Van Dyke (2012) 251 CLR 505; [2014] HCA 19; Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2014] NSWCA 84; Q (A Pseudonym) v E Co (A Pseudonym) [2020] NSWCA 220; (2020) 383 ALR 469; Ashton v Pratt [2015] NSWCA 12 applied.

The Succession Act Appeals

The primary judge’s determination that further provision (in the form of a parcel of management shares such that each sibling held 125 management shares) was necessary for the proper maintenance and advancement of the siblings was not manifestly unreasonable, particularly given the expectations engendered by the deceased in her children (Ward P at [686]). There was no error in the finding that the siblings were encouraged to hold expectations of material benefit (Ward P at [686]). The complaint that the primary judge did not make specific findings as to the financial needs of each sibling was not upheld (Ward P at [680]). There was no failure by the primary judge to take into account a relevant consideration under s 60 of the Succession Act (Ward P at [681]). Nor was there error in the finding that proper provision for James included the transfer to him of an additional 1,000 “B” class shares; or in the conclusion that those additional shares be taken out of Nick’s bequest under the Will (Ward P at [686]). (Meagher and Mitchelmore JJA at [695]).

Sgro v Thompson [2017] NSWCA 326 applied.

INDEX

JUDGMENT			[1]
Background			[16]
Esperia Court		[17]
Acquisition of the Symond Arcade		[24]
Partnership		[56]
Lease to SPH		[57]
Chapman Street Property		[61]
Dennis’ work on other properties		[69]
The deceased’s Will dated 13 March 2017		[73]
Primary judgment			[86]
Oppression claim		[86]
Dennis’ proprietary estoppel claim		[92]
Succession Act claims		[97]
Oppression Appeal			[110]
Grounds of Appeal		[118]
Ground 1 – oppression		[119]
Determination as to ground 1	[170]
Ground 2 – continuing oppression		[212]
Maria’s submissions	[219]
Determination as to ground 2	[226]
Grounds 3 and 4 – breach of directors’ duties		[227]
Nick and John’s submissions	[227]
The Symond Arcade	[230]
Lease to SPH	[239]
Maria’s submissions	[244]
Determination as to grounds 3 and 4	[247]
Grounds 5 and 6 – relief		[256]
Offer to buy Maria’s shares	[264]
Delay	[268]
Maria’s submissions on relief	[272]
Submissions as to ultimate orders made	[293]
Determination as to grounds 5 and 6	[298]
Appeal from proprietary estoppel findings in Dennis Proceeding			[310]
Standard for appellate review		[320]
Grounds 3 to 5A		[327]
Executors’ submissions on grounds 3 to 5A	[328]
Dennis’ submissions as to grounds 3 to 5A	[347]
Determination	[377]
Grounds 1 and 2 (relied upon in the alternative)		[409]
Determination of grounds 1 and 2	[415]
Succession Act appeals			[425]
Standing issue		[432]
Application by Nick for leave to amend his notices of appeal		[436]
Submissions	[440]
Determination of application for leave to amend	[456]
Appeal grounds			[459]
Issue 3 – complaint that his Honour proceeded on basis of mistaken facts		[464]
Finding as to erroneous assumptions (ground 1(a) of Nick’s appeals; ground 3(a) of the Executors’ James Appeal and equivalent grounds in other appeals)	[464]
Complaint as to finding as to “expectations” of benefit	[500]
Issue 4 – Executors’ additional argument (ground 4(d))		[506]
Complaint as to finding as to no compensation to Nick	[516]
Issue 2 – complaint as to adoption of incorrect principles (ground 4(c))		[525]
Complaint as to failure to take into account a material consideration re compensation	[534]
Conclusion as to issue 2	[541]
Issue 1 – alleged unreasonableness of award for further provision (Appeal grounds 1, 2, 4(e) and 5 of the Executors’ James Appeal and equivalent grounds)		[542]
James	[564]
James’ submissions	[572]
Notice of contention – James’ contributions	[590]
Re-exercise of discretion	[596]
Executors’ submissions in reply	[599]
The notice of contention – James’ contributions	[615]
Maria	[620]
The Executor’s submissions in reply	[637]
Dennis	[655]
Determination	[675]
Conclusion as to Succession Act Appeals	[686]
Orders			[687]

JUDGMENT

1. WARD P: Before the Court for hearing in April this year was a series of appeals arising from what is essentially a dispute between members of the family of the late Irene (Rene) Soulos (the deceased), who was described by the primary judge (Lindsay J) as a “benevolent matriarch” (see Re Estate Soulos [2022] NSWSC 1507) (the primary judgment) at [174]) and who died in 2018. In these reasons the family members will be referred to, with no intended disrespect, by their first names.

2. Four sets of proceedings were heard together by the primary judge, with evidence in the one being evidence in each of the others (see [49] of the primary judgment). Of these, three were separate family provision applications brought under s 59 of the Succession Act 2006 (NSW) (Succession Act), one each by three of the four children of the deceased (James, Dennis and Maria) against the executors of the deceased’s estate; the fourth was an oppression suit brought by Maria against the deceased’s fourth child, Nick, and his son, John, as well as the executors of the deceased’s estate. The oppression suit related to the conduct by Nick, John and the deceased, in their capacity as directors, of the affairs of a family company, Esperia Court Pty Ltd (Esperia Court) in which, before her death, the deceased held all the (500) controlling management shares and the office of “Governing Director”. The shareholding structure of Esperia Court is explained in more detail in due course but in essence it comprised 500 management shares (the only shares with voting rights) and four parcels of 3,000 non-voting shares (the “A”, “B”, “C” and “D” class shares), whose holders simply had the right to participate in dividends and to the capital on a winding-up of Esperia Court.

3. The deceased’s shares in Esperia Court represent a large portion of the value of the estate’s assets. The gross distributable estate had a stated value at the time of probate of some $36 million, of which a substantial proportion was attributable to the estate’s shareholdings in Esperia Court (through the value of the properties held by the company).

4. Under the deceased’s last will dated 13 March 2017 (the Will), the deceased appointed three executors and trustees of her Will: her accountant, Mr Con Kristallis, her solicitor, Mr Trevor Ian Cork, and her son, Nick (see cl 2 of the Will). The hearing of the respective proceedings at first instance was conducted on the basis that Nick would not, by reason of being an affected beneficiary, participate in decisions concerning the conduct of the litigation on behalf of the estate (though Nick resisted the suggestion by Dennis that he therefore did not defend Dennis’ proceedings and now does not have standing to appeal in relation to the orders made in that proceeding). Nick did, however, take an active role in the proceedings at first instance (and the appeals) in his personal capacity. Mr Kristallis and Mr Cork, the only executors taking an active role in the proceedings on behalf of the estate, are referred to collectively in these reasons as the Executors.

5. The respective Succession Act proceedings at first instance will be referred to, consistently with the nomenclature in the Appeal Books, as the James Proceeding (2018/00050908), the Dennis Proceeding (2019/00026988), and the Maria Proceeding (2019/00027080). The oppression proceeding (2021/00108316), which was commenced by Maria some time after the respective Succession Act proceedings were commenced, will simply be referred to as the Oppression Proceeding.

6. Maria objected to the capital value of her (non-voting) “C” class shares in Esperia Court being locked up in a company controlled by Nick, her evidence being to the effect that she had been led by her parents to believe that she and her siblings would enjoy material wealth through Esperia Court (i.e., come into possession of assets of substantial value) on their parents’ death (see primary judgment at [154]; [166]; [168]; [210]). The oppressive conduct of which Maria complained was not, however, as to the fact that she was unable to realise the capital value of her shares in Esperia Court; rather, it related to the conduct of the directors of Esperia Court (the deceased, Nick and John) in the acquisition of a property in Strathfield (the Symond Arcade) and the grant of a lease over another property in Strathfield (the Strathfield Private Hotel) in favour of Nick’s company, SPH Holdings Pty Ltd (SPH). That conduct was also said to amount to breaches of directors’ duties by the directors.

7. In the James Proceeding, there was also a claim for rectification of the Will in relation to the description in the Will of the parcel of non-voting shares bequeathed to James (there being an acknowledged error in that the deceased left James 2,000 “A” class shares and Dennis 2,000 “B” class shares whereas they had formerly held “B” and “A” class shares, respectively). In the Dennis Proceeding, there was similarly an issue as to the identification of the Esperia Court class shares left to James under the Will. It was accepted that the reference to “A” and “B” class shares under the Will was incorrect. With the consent of the relevant parties, during the proceedings at first instance, an order was made for the rectification of the register of Esperia Court so as to record Dennis as the holder of the 3,000 “A” class shares. Thus, at the time of the hearing at first instance, Dennis, Nick and Maria each held 3,000 class shares in Esperia Court (being “A”, “D” and “C” class shares respectively) and of the remaining 3,000 “B” class shares, which formed part of the estate’s assets, 2,000 had been gifted to James and 1,000 had been gifted to Nick.

8. In the Dennis Proceeding, Dennis also invoked the principles of proprietary estoppel or, in the alternative, a common intention constructive trust to claim an interest in two properties (referred to in these reasons as the Parsons Avenue Property and the Chapman Street Property), though Dennis ultimately only pressed those claims in relation to the Chapman Street Property in which Dennis resides and has resided for a long time.

9. The Chapman Street Property was owned by another company controlled by the deceased (A&R Management Pty Ltd) (A&R), having been acquired in the name of that company (rather than in Dennis’ name) with Dennis’ agreement to that arrangement. Dennis claimed that the executors of the deceased’s estate held their shares in A&R (900 of the 1,000 issued shares) on trust for Dennis (at [148] of the primary judgment) (Dennis’ second further amended statement of claim: prayer 5, [51]-[70]]) or, alternatively, that A&R held the Chapman Street Property on trust for Dennis (second further amended statement of claim prayers 5B and 5C; at [51]-[65]). In essence, Dennis’ claim was that: he was induced to permit A&R to purchase the Chapman Street Property in his place (second further amended statement of claim at [54]); he acted in reliance upon the promise that he would ultimately own A&R (by way of a gift of those shares to him by his parents), by paying rent (second further amended statement of claim at [58]) and by undertaking renovations to the property (second further amended statement of claim at [60]); and it would be unconscientious for the deceased (and now her executors) to resile from the understanding that the property would be gifted to him (second further amended statement of claim at [64]-[65]).

10. In summary, the primary judge found that the complaint by Maria in the Oppression Proceeding as to oppressive conduct in breach of ss 232(d) and (e) of the Corporations Act 2001 (Cth) (Corporations Act) was made good, and also that there had been a breach of directors’ duties, in relation to the affairs of Esperia Court by reference to: first, the conduct of Nick, John and the deceased in causing the acquisition of the Symond Arcade as to 80% in the name of Esperia Court and 20% in the names of Nick and John personally and the conduct thereafter of a partnership between Esperia Court, Nick and John for the business of leasing space in the Symond Arcade for profit; and, second, the grant of a long term lease by Esperia Court over the Strathfield Private Hotel to a company controlled by Nick (SPH) on terms which did not include a demolition clause (see the primary judgment at [247]; [385]; [391]).

11. The primary judge, by way of relief for what his Honour held was continuing oppressive conduct (but also, at least insofar as the testamentary bequest of the management shares was concerned, in the exercise of the powers available under the Succession Act), made orders restructuring the shareholding of Esperia Court (so as effectively to give James, Dennis and Maria equal voting shares in the company) and orders in relation to the ownership of the Symond Arcade, declaring the partnership to be terminable on six months’ notice in writing (see Order 11 in the Oppression Proceeding) and varying the lease to SPH to include a termination clause (see Order 8 in the Oppression Proceeding). The relief that Maria had primarily sought had been the winding up of Esperia Court but no such order was made. Nick’s complaint, among others, is that the effect of these orders is to enable his siblings together to bring about the winding up of Esperia Court. Nick, John and the Executors contend that the relief so granted goes beyond the minimum necessary to remedy any oppressive conduct in relation to the affairs of Esperia Court.

12. As to Dennis’ claims (other than the Succession Act claim – see below), the Parsons Avenue Property claim was not pressed by him (see the primary judgment at [213]); his claim regarding the identification of shares in Esperia Court was resolved (see the primary judgment at [89]; [92]; [155]; [212]); and his proprietary estoppel claim was upheld, with the primary judge finding that the Chapman Street Property was held (by A&R) on trust for Dennis (see at [214]-[230]). His Honour concluded (at [228]; [230]) that only beneficial ownership of the property was sufficient to avoid unconscionability.

13. As to the Succession Act claims, the primary judge concluded that each of James, Maria and Dennis had been left without adequate provision for his or her maintenance, education or advancement in life “if and to the extent that they are unable to unlock the asset-backed value of their “A”, “B” and “C” class shares in Esperia Court and they remain without a voice in management of the Company” ([424]). His Honour explained that this was because they were “throughout the joint and several lives of their parents, encouraged in an expectation that the shares would enable them to enjoy substantial material wealth in their mature years”, adding that “the shares, in themselves, provide a measure of what the parents regarded as proper provision for their children”. His Honour indicated (at [424]) that he would make orders “supported by orders made under Chapter 3 of the Succession Act 2006 NSW, as well as orders made under section 233 of the Corporations Act 2001 Cth” to the effect that each of the claimants receive (in addition to any provision made for them in the Will) 125 of the 500 shares held by the deceased in her lifetime in the character of management shares in Esperia Court.

14. The determination of those four sets of proceedings by the primary judge has spawned no less than seven sets of appeal proceedings: an appeal by Nick and John from the orders made in the Oppression Proceeding (2022/00370857) (the Oppression Appeal); appeals by Nick in his capacity as an affected beneficiary from the orders made in the respective Succession Act proceedings (2022/00370862 in relation to the James Proceeding (Nick’s James Appeal); 2022/00370837 in relation to the Dennis Proceeding (Nick’s Dennis Appeal); and 2022/00370852 in relation to the Maria Proceeding (Nick’s Maria Appeal)); as well as separate appeals by the Executors from the orders made in the James Proceeding (2022/00369112, the Executors’ James Appeal), the Dennis Proceeding (2022/00369139, the Executors’ Dennis Appeal), and the Maria Proceeding (2022/00369130, the Executors’ Maria Appeal). There was an inevitable degree of overlap in the submissions made by the Executors and by Nick in the respective appeals (although I accept that the respective appellants sought to minimise the overlap in their written and oral submissions).

1. Notices of contention have been filed by James and Dennis, respectively, in the appeal proceedings relating to their particular Succession Act claims, to which I will turn in due course. James raises a single ground in his notice of contention: that the decision was justified by reference to his special contributions to the deceased. Dennis’ notice of contention raises two grounds, both arising only if certain of the orders made by the primary judge are set aside, to the effect that the relief granted by the primary judge in relation to the shares in A&R (being Orders 3 to 8 of the orders made on 24 November 2022) and the Chapman Street Property (being Orders 9 to 11 of the orders made on 24 November 2022) should be granted in any event, by way of an order for the provision of the shares in A&R and the Chapman Street Property under s 59 of the Succession Act.

Background

16. The background to the present dispute, as gleaned from the primary judgment and material before his Honour, is as follows. In what follows, the paragraph references are to the primary judgment unless otherwise indicated.

Esperia Court

17. Esperia Court was incorporated in 1964 by the deceased and her late husband, Andreas (Andrew) Soulos ([75]). As noted above, Esperia Court’s shareholding was divided into 500 management shares (whose holders are the only persons entitled to vote at any general meeting of the company) and 3,000 of each of the non-voting “A”, “B”, “C” and “D” class shares (whose holders are the only persons entitled to dividends or a surplus on a winding up) ([78]; [97]).

18. After the death of her husband in 2003, the deceased held all 500 management shares ([83]) and the office of Governing Director ([103]). As Governing Director, the deceased had all the powers and duties vested in the directors and in the general meeting, and all other directors were required to conform to her directions (see Article 86 of Esperia Court’s articles of association, set out at [101]). It is worth noting that, on their own evidence, the deceased’s children and grandchildren were not aware of the existence of the office of Governing Director until after the death of the deceased; however, it was understood that, as holder of all management shares, the deceased had complete control over Esperia Court ([111]; [190]).

19. Soon after incorporation of Esperia Court, the non-voting “A”, “B”, “C” and “D” class shares were issued to the deceased and her husband’s four (then infant) children: Dennis held the 3,000 “A” class shares; James, the 3,000 “B” class shares; Maria, the 3,000 “C” class shares and Nick, the 3,000 “D” class shares ([79]). By the time of the deceased’s death, neither Dennis nor James held any shares in Esperia Court ([80]). The deceased had required them at different times to transfer their shares to her – James, as the “price” for marrying against her wishes ([84]-[85]); Dennis, at the time of his divorce from his wife, Kerrie, in the context of the arrangements made for his property settlement with her whereby Kerrie obtained the matrimonial home ([87]).

20. The directors of Esperia Court when the impugned conduct occurred were the deceased, Nick (from 2016) and Nick’s son, John (from 2003) ([93]-[94]). Maria, James and Dennis played no part in the affairs of Esperia Court at this time ([182]) although James had earlier been involved in the company’s business. Maria has lived in Greece since 1969 ([12]).

21. Esperia Court is the owner or co-owner of four adjacent parcels of land in the Strathfield Town Centre. The first three commercial properties (being 3-9 The Boulevarde, 2-10 Churchill Avenue, and 1 The Boulevarde, Strathfield) ([32]) were acquired in 1966, 1972 and 2006, respectively (see Nick’s affidavit sworn 18 August 2021 at [32] and the affidavit of Bruno Robert Pignataro affirmed 18 August 2021 at [15]) and are held as to 100% by Esperia Court. The fourth of those properties is the Symond Arcade (the acquisition of which was the subject of complaint in the Oppression Proceeding). The Symond Arcade was acquired in 2017 and is owned 80% by Esperia Court and 20% by Nick and John ([32]-[33]). Contracts for the purchase of the Symond Arcade were exchanged shortly before a public auction of the property was scheduled to take place for 28 March 2017 ([312], [338]) (see further below). It is not disputed that none of Maria, James or Dennis was consulted about the purchase of the Symond Arcade before it occurred ([300]-[301]). Nick and John, of course, would argue that there was no requirement for Nick’s siblings to be consulted.

22. A jointly appointed expert (from DB Valuers Pty Ltd trading as Kohler Bird Valuers) valued the net assets of Esperia Court at about $38 million (see report dated 1 July 2022). The company’s accounts show a profit before tax of $663,084 in FY2020 and $604,929 in FY2021. The company’s revenue is derived largely from leasing income as the landlord under several leases (see Ex M40).

23. Another jointly appointed expert (Lauren Cusack of Cusack Forensics and Business Valuation Pty Ltd) valued the share parcels held by each of James, Dennis and Maria on two scenarios: first, at market value – valuing them at nominal value on the basis that the value of each of the parcels is entirely dependent on the intentions of Nick; and, second, on a liquidation of Esperia Court – valuing each parcel of 1,000 shares at around $3,030 million (in other words, a parcel of 2,000 non-voting shares, such as each of James and Dennis was left under the Will, was valued at $6,090,877; whereas Maria’s parcel of 3,000 non-voting shares held by her independently of the Will was valued at $9,136,316).

Acquisition of the Symond Arcade

24. According to Nick’s evidence, Esperia Court had, since at least 2008, explored the possibility of development of its (then three) Strathfield properties in connection with a proposed redevelopment of the Strathfield town centre. It had obtained development consent for an 11-storey mixed-use development across the three sites ([207]). Since 2014, there had been negotiations with the owner of the Symond Arcade with a view to Esperia Court either purchasing the Symond Arcade or undertaking a joint development project Involving the Symond Arcade ([304]-[317]).

25. On 6 March 2017, Nick learnt that the Symond Arcade had been listed for auction on 28 March 2017 ([312]). Nick considered that it might be necessary to pay $30 million to acquire the Symond Arcade (there being a competing purchaser ‘in the wings’) and he was concerned about Esperia Court’s ability to borrow from its banker, National Australia Bank (NAB), that amount of money. Nick indicated his willingness to assist in funding the acquisition by providing, as security, land in Silverwater worth at least $5 million owned by Cyan Holdings Pty Ltd, the trustee of his family trust (the Cyan Family Trust) ([316]-[318]; [320]; [334]; [338]).

26. According to a file note prepared by Mr Kristallis of a meeting of the directors of Esperia Court on 15 March 2017 (at which the deceased, Nick and John were recorded as being in attendance, as well as at least one representative of NAB), it was resolved to “go ahead” with the purchase of the Symond Arcade and it was decided to apply for a loan of up to $25 million (see also Nick’s affidavit sworn 18 August 2021 at [119]). There is also reference in the documents to discussions for over six months between Esperia Court and LendLease as to a redevelopment of the Strathfield town plaza (see, for example, the email dated 21 March 2017 from Nick, in his capacity as director of Esperia Court, to an NAB bank officer).

27. Prior to the day of the auction, the directors of Esperia Court resolved to make an offer to the vendor of the Symond Arcade for up to $25 million and to offer any property of Esperia Court as security for the finance for the purchase including by way of mortgage ([329]) (see Board minutes dated 24 March 2017, which followed the text of a draft Board resolution that had been prepared by solicitors and forwarded to Nick and John by email on 21 March 2017). That offer was not accepted by the vendor ([333]).

28. On the morning of 28 March 2017 (the day of the anticipated auction), there was a meeting at the deceased’s home (77 The Boulevarde, Strathfield) between the deceased, Nick and John (at which Nick’s other son, Andrew, was also present) ([338]).

29. Nick’s evidence is that on that morning he went to the deceased’s house and he explained to the deceased what had happened in relation to the $25 million offer (see his affidavit sworn 18 August 2021 at [127]); that he told the deceased that he wanted to offer $30 million for the Symond Arcade just before the auction; and that the deceased agreed to this (see Nick’s affidavit sworn 18 August 2021 at [127], as set out at [338]). Nick deposed that, shortly after this, his sons John and Andrew arrived at the deceased’s home and that they agreed that “[Symond] Arcade was worth getting and that we should offer $30M” (see [130] of his affidavit sworn 18 August 2021). Nick deposed that at this stage he was factoring into his calculations his Silverwater properties (which he thought could be sold for $5 million to “top up” the amount required for the purchase) (see [125]; [128] of his affidavit sworn 18 August 2021).

30. Nick’s evidence is that by about 7.15am that morning they had decided to buy the Symond Arcade and the first resolution was passed ([131] of his affidavit sworn 18 August 2021). The first resolution largely followed the format of the earlier signed resolution (the 24 March 2017 resolution) but, rather than being expressed as a resolution of the directors alone, this resolution was prefaced by the words “The directors of Esperia Court (“the Company”), Nick Soulos in personal capacity and John Soulos in personal capacity resolve to …”. This resolution otherwise followed the previous resolution but for the amendment to the purchase price (this now being specified as a sum not exceeding $30,000,000).

31. However, Nick went on to depose that, after passing the first resolution, they talked about it for a while and he said that “If worst comes to worst, I’ll sell [my property in] Silverwater” in response to which the deceased said “I don’t want it. Tear it up” (Nick’s affidavit sworn 18 August 2021 at [131]), by which Nick understood the deceased to be referring to the resolution that had just been signed; and that the deceased then said “I want you to have it. Use Esperia’s property as the guarantee” (by which Nick understood the deceased to mean that she wanted him and his two sons to have the property) (Nick’s affidavit sworn 18 August 2021 at [132], set out at [338]).

32. Nick’s other son, Andrew (who did not ultimately take any ownership interest in the Symond Arcade), deposed that the deceased said “I want you [i.e., Andrew, John and Nick] to have it. It’s yours” (see Andrew’s affidavit sworn 17 August 2021 at [14]). John similarly deposed that the deceased said “I want your family to buy it. If you won’t buy it, then I don’t want it”; and that words to that effect were said about three times (John’s affidavit sworn 17 August 2021 at [87]-[88]).

33. The evidence of Nick and John was that this was the first time that they had heard of any desire of the deceased for them to buy the Symond Arcade themselves (see Nick’s affidavit sworn 18 August 2021 at [133], set out at [338]). Nick also recalled that Andrew and John said words to the effect “we shouldn’t buy it like that because it doesn’t look right” and “It isn’t fair” (Nick’s affidavit sworn 18 August 2021 at [134]).

34. The evidence of each of Nick, John and Andrew was that they rejected the idea (that they buy the Symond Arcade themselves) (see [338], and also John’s affidavit sworn 17 August 2021 at [88], [94] and Andrew’s affidavit sworn 17 August 2021 at [14]). Both Nick and John gave evidence to the effect that they sought unsuccessfully to persuade the deceased to allow Esperia Court to acquire the entirety of the Symond Arcade. John deposed (see his affidavit sworn 17 August 2021 at [95]) that:

I recall that there was some more discussion between my Dad, Andrew, Yiayia [the deceased] and I, during which we tried to convince Yiayia that Esperia should buy the property, but she continued to refuse. At this point, it became apparent to me that Yiayia was not going to agree to only Esperia [Court] buying the Symond Arcade

35. John said in cross-examination that he pleaded with the deceased to allow Esperia Court to acquire the entirety of the Symond Arcade “but she would not agree” (T 170.30-31); Nick said that they spoke for about ten minutes and “she wouldn’t budge on us buying the whole lot” (T 217.47-48).

36. Nick deposed that he suggested a “20/80 split” of the Symond Arcade (i.e., a split in which he and John would acquire a 20% interest in the ownership of the property and Esperia Court an 80% interest) but that the deceased refused (see his affidavit sworn 18 August 2021at [135], set out at [338]) (T 218.32-34). This was explained as being in the context that Nick was proposing to put up the Silverwater properties owned by his family trust (the Cyan Family Trust) as security for the loan or to sell them to contribute $5 million to the purchase price (T 178.44-47) (see John’s affidavit sworn 17 August 2021 at [96]). Pausing here, the 20/80 split is accepted by Nick and John to be a mistaken arithmetical calculation of the proportionate contribution then proposed to be made by the parties (i.e., a $5 million contribution by Nick in relation to a $30 million purchase would in fact be a 16.7% contribution by Nick, not 20%). There has, however, been no suggestion that the proportionate holdings be adjusted. In oral submissions, Senior Counsel for Nick and John said that if the worst came to the worst the percentage could be adjusted – see AT 4 April 2023 at 20, though he pointed out that stamp duty and partnership expenses have been borne in accordance with the 20/80 split and would also require adjustment – see AT 4 April 2023 at 21).

37. Nick’s evidence is that the deceased initially said no to the 20/80 split (T 218.47-49) but then, within about 15 seconds after an exchange in Greek, the deceased said “All right I’ll sign” (T 219.4-6) (see Nick’s affidavit sworn 18 August 2021 at [135]-[137] set out at [338]). The deceased’s agreement to sign followed Nick saying to her “Look, we’ve only got the loan for 1 year. When the 1 year is up, if Jim for some reason gains control of the company, me and John could owe $30M and not have anything to back it up” (see Nick’s affidavit sworn 18 August 2021 at [136]). Pausing here, at this stage it does not appear that any loan had been arranged in relation to the purchase of the Symond Arcade; indeed, Nick goes on to depose that he did not remember seeing before the auction the NAB email dated 28 March 2017 (which was received at 8.45am) attaching the NAB’s Business Lending Proposal for a loan of $25 million for a term of three years (see Nick’s affidavit sworn 18 August 2021 at [142]), so it is not clear to what Nick’s reference to a one year loan related. While there was subsequently a letter of offer from NAB on 25 October 2017 for a loan of $29,050,000 with a 12 month term (see Nick’s affidavit sworn 18 August 2021 at [175]), this surely could not have been foreseen as at 28 March 2017.

38. Nick’s evidence is that he knew that the deceased would only be persuaded (to accept the 20/80 split) if she understood that she could harm “us” (i.e., could harm Nick’s family with her wish for Nick’s family to have all of the Symond Arcade) (see his affidavit sworn 18 August 2021 at [137]).

39. John deposed that he had several conversations in which the deceased expressed concern that James could take control of Esperia Court and the Symond Arcade (see his affidavit sworn 17 August 2021 at [35], [89], [126]-[127]). As I understand John’s account, there had been aggravation on the part of the deceased due to her perception that James was hiding his business dealings from her, was “hassling” her about the acquisition of the Symond Arcade, and may have asked for his shares back before she died (see John’s affidavit sworn 17 August 2021 at [42], [129] and AT 4 April 2023 at 17).

40. Andrew records the deceased saying “I didn’t want it that way, but that’s acceptable” (see his affidavit sworn 17 August 2021at [18]). Andrew described this as “the compromise that my late grandmother made, the compromise position she took” (T 251.8-9), saying that “that was essentially as far as we could get, with [the deceased’s] concordance” (T 250.21-22).

41. I interpose here to note that Maria places significance on the evidence (referred to at [33] above) that Andrew told Nick that it would be “unfair” to exclude Maria, James and Dennis from involvement in the purchase (see [349](a)). Nick and John say that Maria has mischaracterised this evidence and that what Andrew (and John) thought would be unfair was that their family should acquire the whole of the Symond Arcade in their own names (see [132]-[134] of Nick’s affidavit sworn 18 August 2021, set out at [338]).

42. Both Nick and John gave evidence that they agreed to take an interest in the Symond Arcade because it was the only way in which they could convince the deceased to permit Esperia Court to acquire the property at all. John deposed in his affidavit sworn 17 August 2021 (at [102]) that:

I did have some concerns about me becoming an owner of the Symond Arcade, due to its impact on my personal capacity to get credit and the potential for the bank to recover the debt from my Dad or me personally. I personally felt purchasing the Arcade in my own name was a bit of a noose. I agreed with the other directors to purchase Symond Arcade in this way in order to enable Esperia [Court] to make the purchase, as I understood how important Symond Arcade was to Esperia [Court]’s longer term goals. Beyond enabling the deal to be done for Esperia [Court]’s benefit, I had no desire to own part of the Symond Arcade personally.

43. In cross-examination, John said that “My grandma was not going to agree for Esperia Court to buy the arcade” (T 169.5); that “I ended up putting my name on the title just to secure it for the company” (T 168.48-49); and that “I went into the transaction to secure the arcade when my grandma refused for Esperia Court to buy it” (T 181.13-14).

44. Nick deposed that “if I had not proposed the 20/80 compromise, and convinced by [sic] mother to accept it, then I do not think she would have let Esperia buy the Arcade at all” (see Nick’s affidavit sworn 18 August 2021 at [138], set out at [338]). In cross-examination, Nick said that “I didn’t want it either” and “I did it [i.e., took an interest in the Symond Arcade] to help” (T 215.20-28); that “I wanted my mother to buy the arcade. I didn’t want her to say ‘I’m not going ahead’. I was worried she was going to take the whole arcade and say ‘We’re not buying it’” (T 215.31-33).

45. However, as the primary judge noted, despite their professed unwillingness to take a personal interest in the property, Nick and John have staunchly resisted any suggestion that it be held on trust for Esperia Court ([65]). That, of course, does not mean that they were not unwilling to do so at the time; and for present purposes nothing turns on their subsequent seeming change of heart in this regard. Further, any adjustment in the beneficial holding to that effect would require account to be taken of their contribution to the purchase of the property and contributions to the property made by them since then (and there was apparently a dispute by Maria as to whether or how such account should be taken, which may provide part of the explanation for their present stance, as well as perhaps a concern as to the feasibility of that accounting process). Indeed, there was some concern expressed by Nick and John in the course of submissions as to the import of Order 9(c) in the Oppression Proceeding, which reserved liberty to any party to apply to have the Court determine the sum to which Nick and John are entitled to receive from any sale proceeds of the Symond Arcade in respect of any capital expenditure paid by each of them in respect of the acquisition of the Symond Arcade (see AT 4 April 2023 at 24-25). (As I read Order 9, what was intended by (a) to (c) was to note that Nick and John reserve their rights to claim an entitlement to be indemnified for any liability they may have to NAB arising from the NAB loan made jointly to Esperia Court, Nick and John; and liberty was granted for any party to apply – if there was a sale of the Symond Arcade and the parties could not agree the amount Nick and John were entitled to receive from the sale proceeds for their capital expenditure on the acquisition of the property – for the determination of that sum; not that the primary judge was reserving that issue for further consideration on his part.) Nevertheless, there is no little irony in the emphasis now (and at first instance) placed by Nick and John on their unwillingness at the time to take a personal interest in the property given their appeal from the orders seeking to unwind that acquisition.

43. Nick and John say that the fact that they did not know at the time that the deceased occupied the role of Governing Director (to which Maria has referred in her submissions) goes nowhere given that the primary judge accepts they knew the deceased held the office of “Managing Director” and the management shares in Esperia Court ([352]). Further, they note that there was uncontested evidence that Nick and John appreciated that the deceased was in charge of the company and they were required to comply with her wishes in the conduct of its affairs (T 170.9; John’s affidavit sworn 17 August 2021 at [6]-[7]; Nick’s affidavit sworn 18 August 2021 at [49]).

44. The second resolution signed on 28 March 2017 (after the conversations referred to above) was found by the primary judge to have superseded the first ([341]). The second resolution again contained a resolution by the directors and by Nick and John in their personal capacities for the purchase of the Symond Arcade for a sum not exceeding $30 million but this resolution provided for it to be purchased in the name of Esperia Court, Nick and John. John agreed in cross-examination that he inserted that language (T 162.11-43). The resolution noted that “Esperia Court will provide $25,000,000 and Nick Soulos will provide $5,000,000” (see [340]).

45. Maria complains that at no stage has Nick “provided” $5 million to the purchase of the Symond Arcade. Nick and John, however, argue that their contribution was by way of the provision of security for the loan obtained from NAB and they point out that they were joint borrowers in respect of the whole of the funds obtained from NAB from the purchase of the property. They further argue that neither did Esperia Court “provide” its $25 million – at most the whole of the funds being advanced by way of loan (but this suffers from the same problem as Maria’s complaint in relation to Nick himself – since the company was a joint borrower for the whole of the funds required for the purchase).

46. John deposed that in a conversation he had with the deceased between exchange and settlement the deceased said “Why did you take 20%, I wanted you to take 100%...I wanted you and Nick to buy all of it…Can you change it?” but that the deceased ultimately agreed to leave the matter be (see John’s affidavit sworn 17 August 2021 at [126]-[127]).

47. Pausing here, Nick and John argue that, to the extent that his Honour’s findings at [353], [354] and [357] entail rejection of the proposition that the deceased refused to permit Esperia Court to purchase the Symond Arcade in its own name, and that Nick and John acquired a 20% interest only to overcome that refusal, they are contrary to the unchallenged evidence of Nick, John and Andrew referred to above.

48. Contracts were exchanged on 28 March 2017 for the purchase of the Symond Arcade for the sum of $30 million; with the purchasers being Esperia Court, on the one hand, and Nick and John, on the other, in the 80/20 proportions proposed by Nick ([342]). Completion occurred on 14 November 2017 ([34]).

49. The $30 million purchase price was funded by a 10% deposit ($3 million) and the balance by an NAB loan ($29,050,000) ([343]). Of the $3 million deposit, Esperia Court paid $2 million, the deceased paid $150,000, John paid $140,000 and the trustee of Nick’s family trust (Cyan Holdings) paid $710,000. John and Nick (the latter through his family trust) thus together contributed in excess of 20% (namely 28.33%) of the deposit for the Symond Arcade ([343]), although that amount was later adjusted in Esperia Court’s books in their favour ([363]).

50. The balance of the purchase price was paid with funds borrowed from NAB. Nick, John and Esperia Court jointly assumed liability to NAB for a $29.05 million loan to finance the purchase ([345]-[346]). The NAB loan was secured by mortgages over all of Esperia Court’s properties as well as security given by Nick’s family trust (though the security provided by Nick’s family trust was not long after released in 2019) ([291]; [293]).

51. Pausing here, Maria argues that the first registered mortgages given by Esperia Court over its commercial properties represented the security which caused NAB to advance the loan. Nick and John cavil with this proposition and say that there is no evidence to support this. They point out that the primary judge did not make any such finding and that when Esperia Court was proposing to use its own properties alone as security, in March 2017, it had been able to obtain only a loan offer of $25 million (see [316], [338]). Nick and John say that this suggests that the additional securities provided by Nick’s family trust were essential to obtaining the $29.05 million offer which Esperia Court, Nick and John received in October 2017 ([345]). Further, Nick and John emphasise that (whether or not the securities put up by Nick’s family trust were essential) as Nick perceived the matter in March 2017 those additional securities might be necessary to enable Esperia Court to borrow $30 million. Nick, John and the company remain liable to NAB for the entire $29.05 million advanced ([343]; [345]).

52. On or about 5 February 2018, NAB extended the term of its loan from one year to two years, expiring on 31 October 2019 ([292]). The loan was extended again in October 2019 (until 31 October 2022) but the security given by Nick’s family trust and related entity SPH was released at that time, as adverted to above ([293]).

Partnership

56. Following the acquisition of the Symond Arcade, the business of leasing retail space in the arcade was conducted as a partnership between Esperia Court as to 80% and Nick and John as to 20% ([361]-[362]). There was no written partnership agreement. The partnership has at all times been loss-making, because rental income is not sufficient to cover the partnership’s operating expenses, which primarily include interest on the NAB loan ([363]).

Lease to SPH

57. As to the lease of the Strathfield Private Hotel ([366]-[376]), from 2000 to 2013 the hotel had been managed by Nick and his wife in partnership (again undocumented) with Esperia Court ([372]). Nick deposed that in 2013 that partnership was terminated as he and his wife were unwilling to undertake the work required to manage the hotel (see Nick’s affidavit sworn 18 August 2021 at [74]-[75]).

58. In 2014, Nick agreed to return to manage the hotel at the deceased’s request ([373]) and a lease was entered into between Esperia Court, as lessor, and Nick’s corporate vehicle, SPH, as lessee, for a five-year term from 1 January 2015, with two further five-year terms available at SPH’s option ([367]). The first term of the lease expired on 31 December 2019. The first option for renewal was exercised on 27 September 2019 and a new lease was executed on 18 March 2020, terminating on 31 December 2024 ([286]; [368]). That current lease was executed by Nick twice (in his capacities both as a director of Esperia Court and as a director of SPH) and by John (as a director of Esperia Court).

59. The SPH lease does not contain a demolition clause, namely a clause which would enable the lessor to terminate the lease in aid of a decision by it to demolish the structures on the land ([286]), this being one of the complaints that Maria raised in the Oppression Proceeding. Maria also complained that the rent for the lease was below market ([375]) and relied on this as another instance of oppressive conduct. (The primary judge was not prepared to find that there was oppression in relation to the grant of the lease to SPH at below market rate, because the deceased wished to entice Nick back as the manager – see [376]-[377].)

60. Nick’s evidence was that he did not recall discussing a demolition clause with the deceased when, on 11 July 2014, a handwritten agreement was signed setting out the terms on which Esperia Court would lease the hotel to Nick’s company ([288]). Maria has referred (see below) to evidence as to the instructions given in relation to the new (option) lease executed in 2020, arguing that it can be inferred that instructions were given at that time not to include a demolition clause in that lease. Nick and John, however, point out that, on the valid exercise of an option for lease, there comes into existence an agreement for lease on the terms provided by the agreement under which the option is granted; and they say that in the present case the option lease was, relevantly, to be on the same terms as the lease being renewed, which did not include a demolition clause.

Chapman Street Property

61. It is relevant, in the context of Dennis’ proprietary estoppel claim, to note the circumstances in which A&R became the registered proprietor of the Chapman Street Property.

62. The deceased and her late husband were directors of A&R from the time of its incorporation up to her husband’s death in December 2003, after which the deceased was the sole director ([139]).

63. Dennis’ evidence is that, when he and his then wife, Kerrie, were in the process of dividing their assets as part of their divorce proceedings (in about 1997 or 1998), the deceased and her husband were anxious to avoid Dennis’ wife taking the 3,000 “A” class shares that Dennis held in Esperia Court and they encouraged him to agree to a settlement where Kerrie kept the matrimonial home so that his shares in Esperia Court would not be at risk (of passing to an “outsider”). Dennis says that, as part of those discussions and in a context in which Dennis was being effectively asked to give up the prospect of an overall cash settlement with his wife that would enable him to buy his own property after their separation, his parents told him that they would help him get back into the property market.

64. As part of the couple’s property settlement, Kerrie received the majority of the proceeds of sale of the former matrimonial home. Dennis then found the Chapman Street Property for sale for $370,000 and his parents gave him $37,000 for the deposit.

65. Dennis’ evidence is that, before contracts were exchanged for the purchase of the Chapman Street Property, the deceased and Mr Kristallis proposed to him that the property be purchased by A&R; that it be rented to him so as to provide a source of funds for A&R’s mortgage repayments on the property; and that A&R be given to him on the deaths of his parents so that Dennis would (in effect) own the Chapman Street Property. Dennis agreed to this and A&R then purchased the property in September 1998 at a price of approximately $360,000. Dennis has lived at the Chapman Street Property since then. Dennis paid rent up until December 2003, when he was told that he no longer needed to do so. Dennis has used the property both as his residence and as his workplace (conducting a signage business within a commercial space on the ground floor).

66. Dennis’ evidence is that in late 1998, not long after the Chapman Street Property had been purchased, Dennis discussed with the deceased proposed substantial renovations to the property (including the addition of a second storey to the building on the property so as to double the floor area). Dennis says that the deceased agreed but said words to the effect “[b]ut I am not going to pay you for your work because the property will be yours one day anyway”. Dennis’ evidence is that this statement was repeated many times by the deceased.

67. Dennis relies on the renovation work carried out to the Chapman Street Property, which he gave evidence he would not have undertaken at his own expense had he not been told that he would receive the property. That work involved the contribution of Dennis’ own labour, for approximately 52 weeks, completing most of the work for the renovation (including all of the construction management, together with labouring, masonry works, render works, floor laying and internal fit out). Dennis says that his work had a value of $2,000 per week (and thus amounted to $104,000 for the whole renovation) and that, while the deceased reimbursed part of Dennis’ out-of-pocket costs in paying third party sub-contractors, Dennis paid a sum of $98,758 to a carpenter (Jack Pullar) for which he was not reimbursed by the deceased. In all, Dennis says that he contributed over $202,000 towards the improvement of the property (being $104,000 worth of his own labour plus $98,758 paid to the carpenter), noting that this was more than half of the cost of purchasing the property shortly before the renovations were undertaken.

68. Dennis’ evidence is that the first time he realised that the Chapman Street Property was not going to be left to him was when he read the Will after her death.

Dennis’ work on other properties

69. Relevant at the very least to Dennis’ family provision claim (but also relied upon in the context of the proprietary estoppel claim) was evidence he gave that he made substantial contributions to other properties (on the basis, he says, of promises by the deceased that they too would one day be his), namely, the Parsons Avenue Property (which was bequeathed to Maria and in respect of which Dennis ultimately abandoned his claim for the “betterment” of Maria) and the Smith Street Property in Summer Hill (an old art-deco mixed-use premises with five downstairs shops and three upstairs units), which the deceased bequeathed to Dennis.

70. Dennis’ evidence is that he had located the Smith Street Property as a potential investment property, and discussed the purchase of it with the deceased in 2003; that the deceased originally said she would buy it as an investment property for Dennis and Nick and suggested that Dennis and Nick pay the deposit; that Nick was not interested and said he thought it was a bad investment; and that he, Dennis, wanted the purchase to proceed but could not then afford to pay the deposit on his own. Dennis says that he and the deceased agreed to proceed on the basis that the deceased would fund the deposit in the first instance, with Dennis to make repayments to her for half of the deposit when he was able to do so.

71. Dennis gave evidence that, shortly after the purchase of the Smith Street Property, he undertook significant renovation and restoration works to the property, including reinstating the entire building to its original art deco condition (which he says required a large amount of time and effort, particularly in the sourcing of authentic features such as brass shopfronts, leadlights and other items), renovating the residential units, converting one of the shops to a café, and renovating the rear downstairs courtyard, toilets and storage garage. Dennis’ evidence is that he did all of this work in a context in which the deceased had told him that she was buying it for him, that the property would be left to Dennis in her will, and that in those circumstances it was up to him to look after it and maintain it. Dennis argues that this work resulted in him being able to negotiate an increase in rent for the café space from $180 a week to $1,000 a week, and an increase in rent for an upstairs unit from $80 a week to $180 a week, reflecting a weekly increase in the income stream for the property of the order of $920 a week as from about 2005 (that is, $47,840 a year). In this way, Dennis has calculated that this translates to about half a million dollars over a decade, and he says that it amounts to about $815,000 over the time since the renovations were done. Dennis says that this rental stream serviced the mortgage over the property.

72. In addition, Dennis says that he undertook a series of renovations to the deceased’s property (at 77 The Boulevarde) converting the house so that it would continue to be fit for his parents as they grew older. Dennis says that he was not paid for his work on that project, which took 13 weeks. Dennis’ evidence is that he also built a conservatory on the verandah, providing four weeks of his own labour without payment. Dennis also says that he made considerable improvements to the Parsons Avenue Property, including building a new kitchen and new laundry facilities, repainting the house, and renovating the bathroom; he estimates that the total costs of the renovations (including both his labour and material costs) were around $50,000. Finally, Dennis says that he carried out a range of valuable renovations, repairs and maintenance to the property at Churchill Avenue, Strathfield, which is owned by Esperia Court, over the course of about a decade, spending at least one to two days per month doing this work, at a value of about $30,000.

The deceased’s Will dated 13 March 2017

73. The deceased died in 2018. As the primary judge noted (at [2]), the deceased was a prolific will maker.

74. As to the historical sequence of the deceased’s wills (see the Exhibit to Mr Cork’s affidavit sworn 6 December 2018), the Executors emphasise that, over the period from 1995, the deceased changed her testamentary provisions in various ways.

75. Relevantly, it may be noted that in each of the deceased’s 22 January 2003 and 3 February 2003 wills the deceased recorded a gift to Dennis of a life interest in the shares in the company that was later renamed A&R (which would have given Dennis control, during his lifetime, over the Chapman Street Property). By the deceased’s 4 June 2008 will, the deceased left the entirety of her shares in A&R to Dennis (this was not combined with any gift of a freehold interest in any other real estate), which again would have given Dennis the ability to control A&R and to continue to reside in the Chapman Street Property. In her 11 June 2010 will, the deceased gave a life estate in the Chapman Street Property to Dennis, as well as a 50% interest in the Smith Street Property.

76. The Executors note that in each of her 11 June 2010, 12 May 2011, 18 May 2011, 13 December 2012, 22 March 2013, and 26 March 2013 wills, the deceased proposed to leave 50% of the Smith Street Property to Dennis, and that, under the 26 March 2013 will, Dennis was to receive a life estate in both the Chapman Street Property and the Parsons Avenue Property, and 50% of the Smith Street Property.

77. Ultimately, in both an informally executed 8 February 2017 testamentary document and in her last will (13 March 2017), the deceased varied the position again so as to leave 100% of the Smith Street Property to Dennis.

78. Pausing here, Dennis notes that the effect of the change from the 2013-2015 wills is that, in the informally executed 8 February 2017 document and the (final) Will (where Dennis is to receive 100% of the Smith Street Property), what “disappears” is the gift in respect of the Parsons Avenue Property. Thus, Dennis argues that if any inference is to be drawn from the change in the wills in relation to the gift of the Smith Street Property it is that this was to be in substitution for the Parsons Avenue Property (and not a substitute gift for the Chapman Street Property).

79. As already noted, under the deceased’s final will executed on 13 March 2017 (the Will), the deceased appointed Mr Kristallis, Mr Cork and Nick as her executors and trustees (cl 2). The deceased gave to Nick the 500 management shares in Esperia Court (cl 4) and also 1,000 of each of the “A” class and “B” class non-voting shares (cll 7 and 9). As to the balance of the non-voting class shares held by the deceased, under the Will 2,000 “A” class shares were left to James and 2,000 “B” class shares were left to Dennis (cll 6 and 8). As noted earlier, it was accepted that the Will should be rectified so as to identify the 2,000 class shares left to Dennis as “A” (not “B”) class shares and vice versa in relation to James. (The remaining non-voting shares were not held by the deceased and so were not subject of gift under the Will, those being the “C” class shares held by Maria and the “D” class shares held by Nick.)

80. It would seem that the position of Governing Director of Esperia Court simply ceased on the deceased’s death, there being no provision for the appointment of a Governing Director to succeed the deceased on her death. The deceased expressed the wish (see cl 10) that none of the class shares be sold or transferred to any person, including other shareholders at the date of her death, and that the shares in the issued capital of Esperia Court only be sold or transferred to the company itself as part of a share buy-back. The deceased also expressed the wish that the class shares bequeathed to James and Dennis be left by those sons to their son or sons, respectively (see cll 6 and 8).

641. The Executors maintain that the enumerated sub-paragraphs in appeal ground 1 (and appeal grounds 1 and 2 when read together) identify facts and circumstances that meant that there was no reasonable basis for any further provision being made in her favour, even taking into account matters pertaining to moral obligation and duty (cf Maria’s submissions at [13]).

642. The Executors say that Maria’s disparagement of their reference to financial factors impacting upon the merits of her claim for further provision out of the estate is misdirected, because her own application for relief (and the learned primary judge’s intention to facilitate her “unlocking” the value of her shareholding in Esperia Court) was expressly directed to financial concerns. The Executors say that there is no suggestion by Maria that the desire to “unlock” the value of her shareholding is anything other than a financial issue (referring in this regard to Maria’s submissions at [14]). The Executors argue that Maria’s submissions bypass at least two core questions: first, what is the purpose or objective (beyond a simple desire to be richer) behind her wish to “unlock” the value of the shareholding and what is it that makes it a priority for her to access the value of that asset now; and second, how it is that the conferral by the primary judge of 125 management shares upon her was better directed to that undefined purpose or objective than would have been an order for further provision in a fixed dollar amount (noting that his Honour rejected the proposition that any legacy would be justified at [437]).

643. The Executors maintain that the primary judge erred in applying the Succession Act to permit Maria and her siblings to control the affairs of Esperia Court when the deceased did not (during her lifetime) cede her management shares or her control of the company to anyone else. It is noted that the Will clearly passed the management control vested in those management shares to Nick. The Executors say that the deceased was free to determine which beneficiaries received which assets, provided that, taken as a whole, the moral obligation she owed to each of her children was fulfilled.

644. As to ground 3 of the Maria Appeal (which raises the contentions that his Honour erred at [417] by stating that the scheme of the Will had been undermined by erroneous assumptions)), the Executors point out that the 3,000 “C” class shares in Esperia Court which are the subject of these submissions were not a gift to Maria under the Will (cf [161]); rather, they were shares gifted to Maria many years previously, in about 1964 ([79]; [172]. The Executors say that the analysis in the context of “illusory” gifts is misplaced; that the rights and entitlements attaching to Maria’s shareholding were essentially the same in 2022 as they were in 1964.

645. As to Maria’s argument (at [21] of her submissions) that the primary judge’s findings are not inconsistent, the Executors say that this is misdirected inter alia because it assumes that placing control of Esperia Court in the hands of Nick was a material (and adverse) change in the manner of management of Esperia Court. They say that the evidence established that no dividends had been declared and paid out of Esperia Court for at least 45 years (see [105]-[106]) and therefore this is not a case where the deceased had a pattern of causing Esperia Court to declare and pay dividends to its shareholders, such that Maria had become accustomed to receiving such income (but with that expectation now imperilled by Nick receiving all of the management shares).

646. In reply to Maria’s submissions (at [22]) (as to the legislative interference with freedom of testation), the Executors say that, even allowing for the scope of the legislation, at all times the Court must return to the central principle, as stated by McLelland J (as his Honour then was) in Re Fulop Deceased (1987) 8 NSWLR 679 at 679, namely:

The Court should not interfere with the dispositions in the will…except to the extent necessary to make adequate provision for the plaintiff’s proper maintenance, education and advancement in life.

649. As to ground 4(a) of the Executors’ Maria Appeal (which alleges an error of legal principle in taking into account an irrelevant factor, namely the expectations of Maria and/or her siblings) the Executors refer to their submissions on the Executors’ James Appeal on this issue. They say that the primary judge used expectations for the purpose of framing the relief to be granted, rather than by reference to overcoming any inadequacy of proper provision for “maintenance, education or advancement in life”; and that this was an error of principle and a use of “expectations” that was irrelevant.

650. The Executors say that (contrary to Maria’s submissions at [27]-[30]), it is not apparent that his Honour paid any regard to the expenditure of over $1 million in legal fees (which otherwise would have augmented Maria’s savings to meet her future contingencies in life) which the Executors maintain was, on any view, a significant financial issue. The Executors say that, to the extent that a likely large portion of those funds were expended upon her pursuit of the Oppression Proceeding at first instance, it would be expected that, having succeeded in that claim, Maria would obtain reimbursement of at least 50% of those costs. It is said that this would represent a significant additional cash sum and thus, if not considered by his Honour, would be a material error.

651. As to Maria’s submissions (at [31]-[34]) in relation to appeal ground 4(c) (the failure to take into account the offer to buy her shares), the Executors say that these submissions do not accurately state the position, nor do they accurately identify the contents of the primary judgment). The Executors say that, contrary to Maria’s submissions at [32](a), the finding at [396] was not that Nick and John had no capacity to make good on the offer of $7 million; rather, it was a finding that, by reason of having “only” offered $7 million, they had demonstrated an inability “to pay to Maria the full amount of the value of her shares predicated upon a winding up of Esperia Court” (that is, $9 million). Second, it is said that, contrary to Maria’s submissions at [32](b), it is not apparent how the terms or conditions attaching to the offer of $7 million rendered it a meaningless offer. It is noted that Maria does not identify which terms were so qualified as to be illusory, nor is there any identification of the “cross-examination and evidence that traversed same”. The Executors point to the cross-examination of Nick on that topic at T 227.13-229.30 and the cross-examination John at T 191.47-197.10.

652. The Executors say that Maria’s submissions also ignore that Nick and John are the recipients of valuable gifts under the Will, being 77 The Boulevarde ([21]), which was sold by the Executors for about $4.2 million ([434]), and the Balmoral Beach property ([163]), which is worth about $2.1 million ([434]). The Executors say that there is no suggestion in the primary judgment that his Honour paid any regard to Maria’s ability to access $7 million in return for her shareholding ([73]).

653. In relation to their appeal ground 4(d) (which goes to the contended manifest unreasonableness and unjust nature of the relief by way of conferral of the management shares), the Executors say that (contrary to Maria’s submissions at [35]-[37]) it is precisely the dichotomy between, on the one hand, the management shares being of no financial value (in and of themselves) and, on the other hand, those shares being a mechanism for realising about $9 million in value that is illustrative of the unreasonable and unjust nature of the relief granted by his Honour (and, they maintain, illustrative of the error in principle in the approach adopted by his Honour).

654. The Executors say that it is seemingly a corollary of what is said at Maria’s submissions at [36]-[37] that, if the primary judge had conferred upon her further provision of $9 million (rather than conferring upon her and each of the other two applicants 125 management shares), then she would still be contending that this fell within “the range of evaluative outcomes open to the primary judge” and that it “aligns with an evaluative assessment of what was ‘proper’ provision in all the circumstances”. The Executors say that if that hypothetical proposition is obviously wrong (i.e., that further provision of $9 million would be obviously unreasonable), then it is difficult to identify how a conferral of management shares upon Maria was not also unreasonable (either because the shares had no value or they had $9 million of value).

Dennis

655. As to Dennis’ family provision claim, the Executors make similar submissions to those made in support of the Executors’ James Appeal and the Executors’ Maria Appeal (see at [57]) in relation to grounds 6 to 10 of the Executors’ Dennis Appeal.

656. As noted above, appeal grounds 6 to 11 in the Executors’ Dennis Appeal are premised on the appeal being upheld in relation to the orders made on his proprietary estoppel claims; whereas ground 12 is premised on the orders made on the proprietary estoppel claim not being disturbed (in which case the Executors point out that Dennis will have received assets (namely, the Chapman Street Property and the Smith Street Property) worth around $6.2 million to $8.6 million, not including the 3,000 “A” class shares in Esperia Court that are already owned by him). The Executors contend that the latter scenario underscores the artificiality of the further provision to Dennis of 125 management shares. It is submitted that this provision was not necessary to remediate any inadequacy of provision but, rather, was directed to permitting Dennis, Maria and James jointly to control Esperia Court.

657. Insofar as ground 11 is concerned, the Executors note that Dennis himself sought relief to that effect (being a life estate in the Chapman Street Property) (referring to the second further amended statement of claim prayer 11(b).

658. As to costs, while the Executors contend that both Dennis’ proprietary estoppel claim and his Succession Act claim ought to have been dismissed with costs, they acknowledge that there are some “potential complications” with respect to costs at first instance (noting that Dennis did obtain some other relief in his favour that is not the subject of this appeal). Thus the Executors say that if the appeal is upheld, there may need to be a hearing on the question of costs. (As the Succession Act appeal is not being upheld, this question should not arise.)

659. Dennis argues that, if the Executors’ appeal against the order in relation to his proprietary interest in the Chapman Street Property were to be upheld, then there would be all the more reason to uphold the primary judge’s family provision order. Dennis further argues that, if Nick fails in his appeal against the orders in the Oppression Proceeding for the 500 management shares to be distributed equally between the deceased’s children (such that Dennis receives 125 management shares as a result of the outcome of that case), then Dennis will be entitled to receive 125 management shares in any event and he says that the appeals from the family provision orders in his case will then become otiose. (This to some extent highlights the difficulty that the relief was put on both an exercise of discretion under the Succession Act and exercise of the power under the Corporations Act.)

660. Dennis argues that it is of relevance (as recognised by the primary judge at [421]), that a gift which is subject to the exercise of a discretion by a third party may not be a proper provision in favour of a donee (in that the gift is illusory because the discretion in question may never be exercised in the donee’s favour).

661. Dennis emphasises that the deceased’s estate is extremely large but that most of the deceased’s wealth is tied up in Esperia Court. Indeed, Dennis argues that, adding the assets controlled but not owned by the deceased (namely, the class shares held by Dennis, Maria and Nick) to the net value of the estate, the assets controlled by the deceased had a net value of some $54 million; though he accepts that the gross distributable estate at the time of probate was of some $36 million, of which a large portion was attributable to the estate’s shareholdings in Esperia Court.

662. Dennis argues that although the deceased made the Will on the understanding that the four parcels of 3,000 class shares were very valuable and that each parcel represented a quarter of the value of the property of Esperia Court, the practical effect of the Will was that the gifts of class shares to her children (including the gifts inter vivos to Dennis, Maria and Nick) are gifts of no value because the sale of any property in Esperia Court is a matter entirely for the holder of the management shares, and, under the Will, they were all left to Nick. Hence it is said (as Nick himself appears to recognise) that the class shareholders are dependent on Nick for the enjoyment of any benefit out of Esperia Court.

663. Dennis points to the evidence that the deceased had told her children that, while not all children would receive the same number of properties held in her own name, Esperia Court existed for the four of them equally, and she wanted her children to share equally in the wealth held by the company, with the assets of Esperia Court to be used to generate funds for each of them so that they would have a comfortable life (as referred to by the primary judge at [186]-[196]); and notes that the primary judge found that the children of the deceased had a legitimate expectation that they would be well provided for through the shares they held in Esperia Court, and they were encouraged to work in the family business without remuneration ([420], [424] of the primary judgment).

664. Dennis thus identifies the inadequacy of the provision made for him as being in the fact that he is unable to access that which was, as a matter of substance, a major intended part of his inheritance (the value in his 3,000 “A” class shares); pointing in that regard to the evidence of Nick’s control over Esperia Court since the deceased’s death and the lack of any indication that the siblings will receive anything as a result of the class shares gifted to them (referring to [61]; [67]; and [74]).

665. Dennis describes his financial circumstances at the time of the deceased’s death as threadbare, noting that he did not own his own home, had few assets and had an income that did not even cover his immediate medical needs. Dennis says that, rather than being gifted any real estate inter vivos as his siblings had been, the deceased had promised that she would leave three properties to him in the Will (the Chapman Street, Smith Street and Parsons Avenue Properties); and that, on the faith of the deceased’s promises, he had contributed time and expense to the renovation and expansion of the buildings on those properties. Dennis also points to other contributions to the deceased’s estate through improvements made to other properties of the deceased and those within Esperia Court.

666. Dennis maintains that, although he was left the Smith Street Property under the Will, it remains unknown what he will enjoy in respect of this gift because it appears likely that the property will be sold along with other real estate to cover the costs of this administration of the estate. Dennis accepts that if he retains his success on his proprietary estoppel claim then he now has his own residence secured (the Chapman Street Property) but argues that the order for further provision is appropriate because he is unable to unlock the value of his class shares in Esperia Court (emphasising that he and his siblings were encouraged by the deceased in an expectation that the shares would enable them to enjoy substantial material wealth in their mature years and the shares, in themselves, provide for a measure of what their parents regarded as proper provision for their children.

667. In reply to Dennis’ submissions, the Executors say that the principle to the effect that a gift which is subject to the exercise of a discretion by a third party may not be a proper provision in favour of a donee in that the gift is illusory because the discretion may never be exercised is inapplicable (there being no operative gift of any “A” class shares; rather, as recorded at [158]-[159], Dennis had a pre-existing entitlement to those shares). Thus, the Executors say that there is no question of any gift by the deceased being of illusory value. It is noted that Dennis’ 3,000 “A” class shares in his possession had a liquidation value of about $9 million.

668. The Executors cavil with the proposition (see Dennis’ submission at [13](d)) that the pool of assets controlled by the deceased had a net value of some $54 million. It is noted that the total value of Esperia Court was about $36 million but that Nick had agreed to amendments to the articles of association so as to ensure equal distribution of dividends ([48]). The Executors say that it does not follow that the full amount of $36 million is attributable to the 500 management shares. Nevertheless, the Executors accept that the estate was large (exceeding $35 million).

669. The Executors say that, of the three family provision applicants, Dennis received the most generous of the real property gifts under the Will. As to Dennis’ reliance in his submissions upon the proposition that there was a legitimate expectation of material wealth, the Executors note that at [195] the primary judge recorded that the deceased and her husband appear never to have told their children explicitly that Esperia Court would or must be wound up on their deaths (which the Executors say aligns with his Honour’s observations as to the deceased’s “dynastic tendency of mind” ([151]). The Executors say that any expectation that the passing of the deceased would lead inexorably to the liquidation of Esperia Court (or its assets) was not reasonably held. I interpose to note that what his Honour then went on to say at [195] was that:

… However, the children were told that they would inherit wealth; they were never paid dividends from the company; and any inherited wealth that could come their way, as they themselves aged, could come only from access to capital of the company.

670. His Honour then went on to note that the children had been left with shares which, in the absence of a winding up, have no commercial value and, under the management of the holder of Esperia Court’s management shares, no certain right to dividends.

671. As to Dennis’ submission that the inadequacy of the provision for him lies in the fact that he is unable to access the value in his 3,000 “A” class shares, the Executors say that this ignores both the first sentence of [195] of the primary judgment (where his Honour recorded that the deceased and her husband appeared not to have told their children explicitly that Esperia Court must be wound up on their deaths) and the fact that, on his own evidence, Dennis and his siblings were told that there would need to be ongoing management of the company after her death so as to develop the Strathfield property ([191] of the primary judgment)

672. Insofar as Dennis’ accommodation is concerned, the Executors point out that his own claim for relief expressly included an alternative claim for a life estate “or such other order as is appropriate to permit the plaintiff to continue to reside in the Chapman Street Property for so long as he can do so”. The Executors note that early iterations of the deceased’s will had conferred upon Dennis a life estate in the shares in A&R (being the owner of the Chapman Street Property), which would have had the same effect (see cl 11 of the 22 January 2003 will and 3 February 2003 will). It is said that this would have been the maximum required by way of further provision for Dennis (amended notice of appeal, ground 11).

670. The Executors maintain that the award of provision was unreasonable and unjust in circumstances where Dennis already received a valuable gift under the Will (appeal ground 6(c)) and where the 125 management shares were either of no value or immense value (appeal ground 9(b)). The Executors maintain that there was an error of principle in the approach adopted by his Honour in making the order because the siblings were unable to unlock the value of their class shares in Esperia Court and because they were encouraged in an expectation that the shares would enable them to enjoy substantial material wealth in their mature years. They complain that the manner in which expectations were taken into account (as a measure of the relief to be granted) involved an error of principle. The Executors say that his Honour looked to what Dennis did not have, and to what Dennis thought he should have, instead of examining the adequacy of what Dennis did have and whether it was adequate for his proper provision.

671. The Executors say that appeal ground 12 is, like appeal ground 6(c), an identification of why the primary judge’s orders for further provision were unreasonable and unfair; and that appeal grounds 10 and 11 identify the outcome for which the Executors contend. The Executors say that the orders made by the primary judge were, at best, directed solely to the fulfilment of the “lofty and unreasonable” expectations of an adult child; at worst, they empowered the winding up of Esperia Court, being an outcome neither desired by the deceased nor available to his Honour under the Corporations Act.

Determination

675. There was no error in the primary judge concluding that the scheme of the Will had been undermined by what proved ultimately to be an erroneous assumption as to the ownership of the Chapman Street Property (even though at the time that the Will was executed the property was owned by A&R and the deceased, despite being aware of the circumstances in which the property was acquired by A&R and then renovated by Dennis, would presumably not have foreseen the ultimate litigation as to the property nor the outcome of that litigation). The relevant fact is that, as events have transpired, the Chapman Street Property was held to be beneficially owned by Dennis and this has necessarily undermined the deceased’s testamentary intentions at least in relation to the disposition of the shares in A&R to the grandchildren as this no longer carries with it the benefit of ownership of that property.

676. Nor was there error in the primary judge’s conclusion that the deceased evidently did not have regard to the possibility that, by leaving the management shares to Nick, any benefit to the siblings of the class shares could prove illusory. There can be no doubt as to the potential for the benefit of those shares to be illusory – the class shares conferred no voting rights and hence any value that might be realised from ownership of those shares would always be contingent on the exercise by Nick of his sole voting rights (whether to declare dividends or to wind up Esperia Court or in some other way to confer benefits on his siblings through the company). The expert report confirmed that the shares, prior to the restructure by the primary judge, had nominal value absent a winding up scenario. The Executors’ contention (see ground 3(b)(i) of the James Appeal and equivalent grounds in other appeals) that there was “limited” benefit to those shareholdings is an understatement.

677. Thus, ground 3 of the respective Executors’ Appeals is not made good; nor is ground 1(a) of the appeal grounds raised by Nick.

678. As to the complaint by Nick (sought to be raised by his proposed amended ground 1(d)) as to the finding that the siblings were encouraged to hold, and held, expectations of material benefit, as noted above, even were this amendment to be permitted, I would conclude that the primary judge did not err in making the finding as to the siblings’ expectations (having regard to the evidence of conversations over the years in relation to that very issue). The distinction sought to be drawn in this regard as to the precise content of the expectations encouraged in the siblings is semantic in the extreme.

679. The complaint that the primary judge erred in failing to give appropriate weight to the testamentary intentions of the deceased (ground 1(b) of Nick’s grounds of appeal) is not in its terms a ground raising a House v The King error unless it can be said that the outcome was so manifestly unreasonable as to fall within the fourth category of such error; and that is not here the case. The primary judge carefully had regard to the deceased’s testamentary intentions and made clear why it was that he considered that to give full effect to those intentions would not amount to adequate provision for the proper maintenance and advancement of the siblings. Hence ground 1(b) of Nick’s grounds of appeal is not made good.

680. The essence of the complaint as to the finding of inadequate provision (as I have earlier noted) is the complaint by both sets of appellants that the primary judge did not have regard to, or make specific findings, as to the financial needs of the respective siblings. The suggestion that the primary judge “overlooked” the question of financial need is not a fair criticism in my opinion. His Honour made clear that he had in mind the question of financial need insofar as he referred in relation to James to his impecuniosity being of his own making; and in his conclusion that Maria had been left with inadequate provision only insofar as the value of their shares was locked in. As far as Dennis is concerned, his Honour similarly stated that it was necessary that he receive management shares to enable him to realise the underlying value of his shares ([440]).

681. True it is that his Honour did not engage in what might be described as a formulaic ‘ticking of the boxes’ in respect of the factors to which s 59(1) of the Succession Act provides regard may be had. However, what his Honour clearly did was to reach a conclusion (that must have involved a weighing of the relevant factors with the benefit of the parties’ submissions in relation thereto) that the determinative factor in the present case was the fact of the expectations engendered in the siblings of material benefit through their shares in Esperia Court in their mature years. It cannot be said that this was an irrelevant factor to take into account (not least because s 60 permits account to be taken of any other relevant matter and it has been recognised in other cases that expectations encouraged by the deceased may be relevant in determining whether there has been proper provision made). As Senior Counsel for James argued, in the present case this is the factor that “carried the day” (AT 6 April 2023 at 143.38-39) but that does not reveal error of principle on the part of the primary judge. I am not persuaded that the primary judge thus failed to take into account a relevant consideration (financial need) or that he took into account an irrelevant consideration. Nor do I accept that the primary judge erred as contended for by Nick in ground 1(c) of his grounds of appeal. The manner in which a judge assesses the relevant factors in a family provision application is not prescribed; nor is it correct to suggest (as this ground appears to contend) that the exercise is limited to a comparative exercise as to the applicant’s needs and the provision in the Will.

682. It must be emphasised that the statutory provision speaks of adequacy of provision for the “proper” maintenance or advancement (education here not being relevant) in life, as was emphasised in Sgro v Thompson. The fact that this was a large estate (albeit that the bulk of the wealth was effectively tied up in the family company) does not provide a basis for some kind of blank cheque exercise but that was not what his Honour here did. Rather, his Honour quite permissibly had regard to the long held expectations of the siblings (encouraged by the deceased and her late husband) that they would have an equal share of the material wealth in Esperia Court; and concluded that in the absence of an ability for the siblings to realise the value of their class shares, adequate provision for their proper maintenance and advancement had not been made by the deceased. I see no error in that conclusion, let alone any House v The King error.

683. Thus in my opinion his Honour did not err in concluding that s 59 of the Succession Act was enlivened in respect of each of the siblings.

684. As to the complaints made in relation to the exercise of discretion by his Honour to make provision as ordered, I am also not persuaded that error has been established.

685. As to the perceived contradiction in the provision made for James (namely, that the class shares had no value unless coupled with an ability to exercise some control in Esperia Court via the management shares but that if the value in those class shares could be realised then the provision already made for James under the Will was worth some $6 million), this goes to the provision made for James of the additional 1,000 “B” class shares. Again, this focuses unduly on financial need in circumstances where the deceased had encouraged an expectation that her children would be treated equally. Nick’s complaint that, if provision were to be made of the 1,000 additional shares, the primary judge erred in concluding that it should be made out of the 1,000 “B” class shares left to him under the Will fails to take into account that the other siblings’ shares were held by them independently of the bequest under the Will and, in any event, it does not behove Nick to contend for error in this regard when there was no submission put to the primary judge to this effect.

Conclusion as to Succession Act Appeals

686. I do not accept that the primary judge’s determination that further provision for each of the siblings (by means of the provision of a parcel of the management shares and, in James’ case, additional “B” class shares) should be made for their proper maintenance and advancement in life was manifestly unreasonable, particularly having regard to the expectations that the deceased had engendered in her children over many years that they would share equally in the material benefits of the family assets through their shareholdings in Esperia Court.

Orders

687. For the above reasons, I propose the following orders:

1. Grant leave for the filing of the Executors’ amended notice of appeal in the Executors’ Dennis Appeal.

2. Dismiss with costs the Executors’ appeals in proceedings 2022/369112 (the Executors’ James Appeal); 2022/369130 (the Executors’ Maria Appeal); and 2022/369139 (the Executors’ Dennis Appeal).

3. Refuse leave for the proposed amendment of Nick’s notice of appeal in the Succession Act appeals.

4. Dismiss with costs the appeals by Nick in proceedings 2022/370862 (Nick’s James Appeal); 2022/370852 (Nick’s Maria Appeal); and 2022/370837 (Nick’s Dennis Appeal).

5. Set aside Orders 1 to 8 made by Lindsay J on 24 November 2022 in proceedings 2021/00108316 (the Oppression Proceeding).

6. Otherwise dismiss the appeal by Nick and John in proceedings 2022/370857 (the Oppression Appeal).

7. Direct that any brief submissions as to costs of the proceedings at first instance be filed within 14 days, to be dealt with on the papers.

8. Direct that any brief submissions as to the costs of the Oppression Appeal be filed within 14 days, to be dealt with on the papers.

688. MEAGHER AND MITCHELMORE JJA: We have had the advantage of reading the comprehensive reasons of Ward P. We agree with the orders her Honour proposes, and with her Honour’s reasons. The following comments aim briefly to summarise, rather than to narrow the scope of, those reasons.

689. In the Oppression Appeal, Nick and John’s central contention on the challenge to the finding of oppression regarding the purchase of the Symond Arcade was that the alleged commercial unfairness attending the purchase, as to 80% by Esperia Court and as to 20% by Nick and John, needed to be evaluated in the family and corporate context, whereby Rene was the “benevolent matriarch” (a description used by the primary judge at [174]) and was able to exercise complete control as Governing Director of Esperia Court. Senior Counsel for Nick and John submitted that Rene’s authority provided the “real world” reason for what transpired, in the sense that they had to contend with Rene’s will and overcome her refusal to have Esperia Court purchase the Symond Arcade (AT 4 April 2023 at 32-33). The structure of the purchase as it was ultimately completed, which gave Esperia Court an 80% interest in the Symond Arcade, was submitted to be justified in those circumstances, and where it was accepted that it was in the interests of the company to acquire 100% of that property.

690. We agree with Ward P (at [180]) that the fact that Esperia Court received a benefit from the acquisition of the Symond Arcade does not preclude a finding of oppressive conduct if that acquisition is determined to be objectively unfair. For the reasons her Honour has given, the conduct was objectively unfair. It involved the diversion of a corporate opportunity to two directors, in their personal capacity, at the behest of the controlling shareholder, to the substantial disadvantage of the minority shareholder. The primary judge did not err in concluding that the acquisition was oppressive, or in concluding that the oppression was continuing. Nor did his Honour err in concluding that the same conduct involved breaches on the part of Nick and John of their duties as directors of Esperia Court.

691. The primary judge did err, however, in concluding that the grant of the SPH lease without the benefit of a demolition clause constituted oppressive conduct and involved corresponding breaches of directors’ duties, for the reasons Ward P has given. The notional objective bystander would be unlikely to regard as unfair that the renewed lease had been granted without a demolition clause in circumstances where the relevant lease was executed on the exercise of an option for renewal and the original lease did not include such a term.

692. His Honour also erred, in our view, in relation to the relief granted for the oppressive conduct that his Honour found. We agree with Ward P that Orders 1 to 8 of the Orders his Honour made in the Oppression Proceedings, together with the orders his Honour made in relation to variation of the lease, should be set aside.

693. The Executors’ challenge to the primary judge’s conclusions on Dennis’ proprietary estoppel claim in relation to the Chapman Street Property should fail for the reasons expressed by Ward P. In the light of the substantial capital expended and work undertaken by Dennis in renovating, his Honour did not err in concluding that Dennis had suffered detriment sufficient to give rise to proprietary estoppel. This detriment was not displaced by the fact that Dennis had enjoyed countervailing benefits insofar as he had lived in the Property rent-free since December 2003, as well as having the deceased occasionally pay his utility bills and for renovations. Nor was it displaced, or the deceased’s conscience assuaged, by the fact that Dennis had received under the will a more valuable property at Smith Street, which the evidence did not establish was gifted in substitution for the Chapman Street Property.

694. As to the Succession Act Appeals (noting Ward P’s decision, with which we agree, to refuse the application for leave that Nick made at the hearing of the appeal to amend his notices of appeal), the appellants had to establish that the primary judge’s determinations under s 59(1)(c) of the Succession Act were affected by an error of the nature identified in House v The King (1936) 55 CLR 499 at 504-505; [1936] HCA 40: see Scott v Scott [2022] NSWCA 182 at [10] (Meagher JA, Ward P and Kirk JA agreeing) and the authorities there cited.

695. Ward P has addressed the various appeals by the issues they collectively raise. The appellants’ central contention was that the primary judge was required, and yet failed, to consider the financial needs of the respective applicants. We agree with her Honour that the primary judge did consider, at least implicitly (and, in the case of James, explicitly), the financial positions of each of the siblings, in concluding that the only finding as to inadequacy of provision was by reason of their inability to realise the value from their class shares in the face of the expectations they had been led to hold. It was open to his Honour, in the exercise of the discretion conferred by s 59 of the Succession Act, to find the parents’ engendering of those expectations to be determinative. As to the other issues that arose on the Succession Act appeals, we agree with the reasons of Ward P.

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Decision last updated: 13 October 2023