TJ & P Pty Ltd as trustee for the Post Family Trust v Agrinova Pty Ltd (No 3)
[2025] FCA 587
•5 June 2025
FEDERAL COURT OF AUSTRALIA
TJ & P Pty Ltd as trustee for the Post Family Trust v Agrinova Pty Ltd (No 3) [2025] FCA 587
File number(s): NSD 1007 of 2020 Judgment of: GOODMAN J Date of judgment: 5 June 2025 Catchwords: ESTOPPEL – equitable estoppel alleged to have arisen from oral representations – evidence of four persons present as to their recollection – no contemporaneous documentation – the making of the contended representations not supported by the evidence – no actual persuasion that the representations were made
ESTOPPEL – equitable estoppel alleged to have arisen from written representations – some but not all of the contended written representations were made – proven written representations were relied upon and resiled from – consideration of the nature of the remedy required to address the detriment suffered – held that compensation for detriment suffered as a result of acting upon the representation be awarded in an amount commensurate with the detriment suffered and not on the basis of fulfilment of the expectation created by the representations
CONTRACT – alleged oral contract – evidence of four persons present as to their recollection – no contemporaneous documentation – the making of the alleged offer and contract not supported by the oral evidence – consideration of subsequent conduct – no actual persuasion that the alleged offer was made or accepted
Legislation: Conveyancing Act1919 (NSW), s 66G
Farm Debt Mediation Act 1994 (NSW)
Cases cited: Addenbrooke Pty Limited v Duncan (No 2) [2017] FCAFC 76; (2017) 348 ALR 1
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
CCL Secure Pty Ltd v Berry [2019] FCAFC 81
Commercial & General Corporation Pty Ltd v Manassen Holdings Pty Ltd [2021] SASCFC 40
Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1
Dig It Landscapes Pty Ltd (in liq) v Bupa Aged Care Australia Pty Ltd (No 2) [2024] FCA 31
Dominelli Ford(Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd [1992] FCA 550; (1992) 38 FCR 471
Elanor Funds Management Ltd v Alceon Group Pty Ltd [2024] FCAFC 121
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95
Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101
Gouldv Vaggelas [1984] HCA 68; (1984) 157 CLR 215
Hanave Pty Limited v LFOT Pty Ltd [1999] FCA 357; (1999) 43 IPR 545
John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
Kramer v Stone [2024] HCA 48; (2024) 99 ALJR 126
Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406
Manassen Holdings Pty Ltd v Commercial & General Corporation Pty Ltd [2019] SASC 171
Mikkelsen v Li [2023] VSCA 255; (2023) 72 VR 325
Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825; (2015) 329 ALR 1
Plankton Australia Pty Ltd v Rainstorm Dust Control Pty Ltd [2018] FCA 174
Richards v Han [2022] FCA 1539
Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd (1993) 41 FCR 229
Sampson in his capacity as trustee of the bankrupt estates of Van Vlymen v Agrinova Pty Ltd [2022] FCA 529
Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505
Watson v Foxman (1995) 49 NSWLR 315
Wilson v Arwon Finance Pty Ltd [2020] WASCA 137
Wong v Van Vlymen [2016] NSWSC 161
Wong v Van Vlymen [2020] NSWSC 841
Heydon J D, Heydon on Contract: The General Part (LawBook Co, 2019)
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 378 Date of hearing: 5 to 8, 11 to 15, 18 and 27 March 2024 Date of last submissions: 16 May 2025 Counsel for the Applicant: Mr A Leopold SC with Mr A E Maroya Solicitor for the Applicant: Keleher Lawyers Counsel for the Respondent: Mr T Rollo with Ms A Cameron Solicitor for the Respondent: Rural Law ORDERS
NSD 1007 of 2020 BETWEEN: TJ & P PTY LTD (ACN 118 000 516) AS TRUSTEE FOR THE POST FAMILY TRUST AS ASSIGNEE FROM DAVID SAMPSON IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATES OF WILLEM JOHAN VAN VLYMEN AND MARGRIET VAN VLYMEN
Applicant
AND: AGRINOVA PTY LTD ACN 629 285 589
Respondent
ORDER MADE BY:
GOODMAN J
DATE OF ORDER:
5 JUNE 2025
THE COURT ORDERS THAT:
1.By 20 June 2025, the parties are to confer as to the appropriate orders for relief to give effect to these reasons for judgment (including as to costs) and are to provide to the Court:
(a)a joint set of orders which may be made by consent;
(b)to the extent that agreement has not been reached:
(i)competing sets of proposed orders; and
(ii)an agreed proposed timetable for the filing of any further submissions concerning those competing orders.
2.The proceeding be listed for a case management hearing on a day after 20 June 2025, such date to be arranged in consultation with the Associate to Goodman J.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
A. INTRODUCTION
[1]
B. THE SALIENT FACTS
[7]
C. THE ESTOPPEL CASE
[259]
C.1 Overview
[260]
C.2 A clear and unequivocal representation as to future conduct?
[274]
C.2.1 Representations at the 30 October 2018 meeting
[278]
C.2.2 The letters
[290]
C.3 Expectation or intention that Mr Van Vlymen would rely upon the promise?
[302]
C.4 Reliance upon the promise?
[305]
C.5 Detriment as a consequence of reliance upon the promise?
[325]
C.6 Remedy
[330]
D. THE CONTRACTUAL CASE
[355]
D.1 Introduction
[356]
D.2 Relevant principles
[361]
D.3 Consideration
[363]
E. CONCLUSION
[378]
REASONS FOR JUDGMENT
GOODMAN J
A. INTRODUCTION
This proceeding arises out of dealings between Mr Matthew Hogg, a barrister and entrepreneur and three families he brought together in the latter capacity – (1) Mr Willem (also known as Wim) and Mrs Margriet Van Vlymen; (2) the Hughes family, being relevantly Bernard (also known as Barney) and Angela Hughes and their son, Brandon; and (3) the Stott family, being Richard and Cheryl Stott and their children, Mathew and Erin.
In the interests of clarity, and without intending any disrespect to the members of the Hughes and Stott families, I will refer to them by their first names.
Prior to the events germane to this proceeding:
(1)Mr Van Vlymen, through a series of companies, held interests in land in the Solomon Islands. He had also had previous business dealings in the Solomon Islands with a Mr Patrick Wong. However, as a result of a failure by Mr Van Vlymen and his related companies to pay amounts in the order of several million dollars owing to Mr Wong under several agreements, including a deed entered into in November 2016 (November 2016 Deed), Mr Wong appointed a receiver over the shares in several of Mr Van Vlymen’s related companies;
(2)the Hughes family were farmers and held various land holdings in Australia; and
(3)the Stott family were also farmers and held various land holdings in Australia.
The events germane to this proceeding traverse several years. The central issues are whether the respondent (Agrinova Pty Ltd), a company incorporated by Mr Hogg: (1) entered into an oral contract on 30 October 2018 pursuant to which, inter alia, it agreed to fund the payment by Mr and Mrs Van Vlymen to Mr Wong of the amount owed under the November 2016 Deed and other expenses (including the costs of retiring the receiver) so as to enable Mr Van Vlymen to regain control of his related companies and transfer his interests in those companies and their assets to Agrinova in return for the issue of units in a unit trust of which Agrinova would be the trustee; and (2) Agrinova made representations to the same effect on 30 October 2018 and in later correspondence and is now estopped from resiling from such representations.
Mr and Mrs Van Vlymen commenced this proceeding in September 2020. In June 2021 they became bankrupt. Mr David Sampson was appointed as the trustee of their bankrupt estates and later was substituted as the applicant in this proceeding. Subsequently, Mr Sampson assigned the chose in action comprising the interests of Mr and Mrs Van Vlymen in the subject matter of the proceeding to the present applicant; and an order was made for the present applicant to be substituted as the applicant in this proceeding in place of Mr Sampson: see Sampson in his capacity as trustee of the bankrupt estates of Van Vlymen v Agrinova Pty Ltd [2022] FCA 529 (Rares J).
For the reasons developed below, I am not persuaded that the contended oral contract was formed on 30 October 2018 or that any of the contended representations were made on that day. I am, however, persuaded that subsequently written representations were made that Agrinova would fund the payment to Mr Wong and the cost of removing the receiver, that Agrinova resiled from those representations and that equitable compensation is payable by reference to the detriment suffered by Mr and Mrs Van Vlymen in reliance upon those representations.
B. THE SALIENT FACTS
The applicant read affidavit evidence from:
(1)Mr Hogg;
(2)Mr Van Vlymen;
(3)Mrs Van Vlymen;
(4)Barney Hughes;
(5)Mr Thiru Ramakrishnan, a director of DPL Corporate Reconstructions Pty Ltd, a company in the business of providing consultancy services to natural and corporate persons seeking finance to carry out commercial projects;
(6)Mr Jared Chan, a licensed property valuer based in the Solomon Islands;
(7)Mr John Whiteside, the general manager between October 2002 and October 2017 of Russell Islands Plantation Estates Limited (RIPEL) one of the Solomon Islands companies in which Mr Van Vlymen and Mr Wong had an interest;
(8)Mr Abdul Hamid, a director of and shareholder in companies trading in Australia, the Solomon Islands, and Indonesia in various products and commodities, and an associate of Mr Van Vlymen; and
(9)Mr Andrew Firth, a forensic accountant who provided expert opinion evidence.
Each of these witnesses, with the exception of Mrs Van Vlymen, was cross-examined.
Agrinova read affidavit evidence from:
(1)Mr Bruce McInnes, who has been the accountant for Richard, Cheryl and Mathew Stott since the early 1980s and the accountant for Agrinova since about April 2020; and
(2)Mr Sydney Birchall, who was the solicitor for Mr Wong between May 2013 and December 2022.
Mr McInnes was cross-examined. Mr Birchall was not. Agrinova called no evidence from any member of the Stott family.
In addition to the affidavit and oral evidence mentioned above, there was a large documentary tender. From all of that evidence the following are the salient facts.
From around 1994 until around 2014 or 2015, Mr Van Vlymen conducted a business with Mr Wong which, in broad terms, involved the trading and transportation of goods and commodities between Pacific Island nations, and between those nations and countries in Asia. The business was focused on trading in copra until around 2002 or 2003, after which time it was broadened to include plantations and the subdivision, development and sale of land.
The companies through which Mr Van Vlymen and Mr Wong carried on their business are set out in the following diagram:
In summary:
(1)Mr Van Vlymen owned all of the shares in Orbis (a New South Wales company), which owned all of the shares in PIH (another New South Wales company), which in turn owned all of the shares in PIL (a Cook Islands company);
(2)Mr Wong owned all of the shares in OSTI (a Cook Islands company);
(3)from around 2002 or 2003, PIL and OSTI each owned 50 per cent of the shares in:
(a)Pacific Finance (a Cook Islands company);
(b)Cross Pacific Trading (a Cook Islands company);
(c)PMSL (a Solomon Islands company);
(d)ICSL (a Solomon Islands company); and
(4)from about 2015, ISCL owned 75.1 per cent of RIPEL and LSL, with the remaining 24.9 per cent of each of RIPEL and LSL held by Lavukal. Lavukal is a company representing the Lavukal people.
In about April 2010, Mr Hogg and Barney Hughes first met on a flight between Sydney and Wagga Wagga. Since then, they have worked together on a number of agricultural and related projects. Mr Hogg has known Cheryl and Brandon Hughes for a similar period.
Between 2013 and November 2014, Mr Van Vlymen and Mr Wong exchanged communications concerning the potential purchase by Mr Van Vlymen of all of Mr Wong’s shares in OSTI, which, if implemented, would have resulted in Mr Van Vlymen controlling all of the shares in OSTI, ICSL, PMSL, Cross Pacific Trading and Pacific Finance.
In about 2014, Mr Ramakrishnan met Mr Van Vlymen when Mr Ramakrishnan was asked to assist Mr Van Vlymen and companies associated with him to obtain finance.
On about 25 November 2014, Mr Van Vlymen and Mr Wong entered into a contract for the purchase by Mr Van Vlymen of Mr Wong’s shares in OSTI (Wong Contract).
At the time that Mr Van Vlymen entered into the Wong Contract he did not have unconditional approval from a financier to complete his obligations thereunder. He was unable to obtain finance to complete those obligations and fell into breach of that contract.
In about May 2015, Mr Wong commenced a proceeding in the Supreme Court of New South Wales (Supreme Court proceeding 2015/60753) against Mr Van Vlymen, Orbis, PIH and PIL seeking an order for specific performance of the Wong Contract.
In February 2016, Mr McInnes asked Mr Hogg to meet Richard and Mathew Stott in Mr Hogg’s chambers in Sydney, to discuss difficulties that Richard and Cheryl Stott were experiencing with their then bankers. In that same month, Mr Hogg received instructions from Ms Vicky Wade, of Noyce Salmon & D’Aquino, solicitors in Griffith, to act for the Stott family in that dispute.
On 1 March 2016, Justice Stevenson in the Supreme Court of New South Wales delivered reasons for judgment in Supreme Court proceeding 2015/60753: Wong v Van Vlymen [2016] NSWSC 161.
On 9 March 2016, his Honour ordered that Mr Van Vlymen, Orbis, PIH and PIL specifically perform the Wong Contract.
On 11 March 2016, a settlement agreement (March 2016 Agreement) was entered into. The parties to the March 2016 Agreement were:
(1)the Wong Entities (defined as Mr Wong and OSTI);
(2)the Van Vlymen Entities (defined as Mr Van Vlymen, PIL, PIH and Orbis); and
(3)the Joint Entities (being Cross Pacific, Pacific Finance, ICSL and PMSL).
The March 2016 Agreement required the Van Vlymen Entities (as defined therein) to pay to the Wong Entities (as defined therein) an initial amount of USD 250,000 and within 120 days further amounts of USD 1,750,000 and SBD 15,000,000 (SBD being Solomon Islands dollars). In exchange, the Wong Entities were to transfer to the Van Vlymen Entities all shares in OSTI and relinquish all directorships in the Wong Entities, the Joint Entities, RIPEL and LSL.
In about May 2016, Mr Van Vlymen met Mr Hogg through mutual contacts. Mr Van Vlymen was aware that Mr Hogg was a barrister, but did not receive legal services from him.
On 17 June 2016, Justice Stevenson ordered specific performance of the March 2016 Agreement.
On 26 August 2016, Mr Van Vlymen paid USD 250,000 in part payment of his obligations under the March 2016 Agreement. However, he was unable to obtain sufficient funding to pay the remainder due under that agreement.
On 13 September 2016, by order of the Supreme Court of New South Wales, Mr Christopher Darin of Worrells was appointed as receiver and manager of Mr Van Vlymen’s interests in the real property owned by Mr and Mrs Van Vlymen.
On 23 September 2016, Mr Darin commenced a proceeding in the Supreme Court of New South Wales seeking orders under s 66G of the Conveyancing Act1919 (NSW) to act as trustee for sale of certain real property owned by Mr and Mrs Van Vlymen (Supreme Court proceeding 2016/289390).
On 5 October 2016, by order of Justice Stevenson, Mr Darin and Mr Nicholas Malanos were appointed as trustees for the sale of that real property.
In about October 2016, Mr Hogg, Mathew Stott and Barney Hughes commenced discussions regarding the possibility of fusing together the farming operations of the Hughes family and of Mathew Stott.
On about 4 November 2016, Mr and Mrs Van Vlymen entered into the November 2016 Deed with Mr Wong and Mr Darin and others. The parties to the November 2016 Deed were:
(1)the Wong Entities (defined as Mr Wong and OSTI);
(2)the Van Vlymen Entities (defined as Mr Van Vlymen, PIL, PIH and Orbis);
(3)Mrs Van Vlymen;
(4)Mr Darin in his capacity as:
(a)receiver and manager of the interests of Mr Van Vlymen including in real property at Bayview and Kulnura;
(b)trustee for sale of such land (as per the orders made on 5 October 2016); and
(5)Mr Malanos in his capacity as a trustee for sale of the same land (as per the same order).
The November 2016 Deed, in summary, operated to stay Supreme Court proceeding 2015/60753 and Supreme Court proceeding 2016/289390, to halt the proposed sale of the properties at Bayview and Kulnura to allow Mr and Mrs Van Vlymen and their related entities further time to pay the amount owing to Mr Wong. Under the November 2016 Deed, Mr and Mrs Van Vlymen and their related entities were required to pay to Mr Wong:
(1)on exchange, $100,000;
(2)by 30 November 2016, $20,000;
(3)by 28 February 2017:
(a)$1,400,000 (less the amounts paid in (1) and (2));
(b)USD 1,750,000; and
(c)SBD 15,000,000, to be paid in “USD or AUD equivalent, such amount to be calculated using the average Westpac Inward TT exchange rate for the five banking days immediately preceding the date of payment”.
On 4 and 9 November 2016, Mr and Mrs Van Vlymen paid a total of $120,000 to Mr Wong pursuant to the November 2016 Deed.
However, Mr and Mrs Van Vlymen were unable to secure sufficient funding to discharge the balance of the obligations owed by them and their related companies under the November 2016 Deed by 28 February 2017, and from that date were in breach of the November 2016 Deed.
Between March and August 2017, Mr Wong exercised his rights under the November 2016 Deed by:
(1)causing Mr Darin to be appointed over the sale of all real property owned by Mr and Mrs Van Vlymen;
(2)the enforcement of orders made by the Supreme Court of New South Wales requiring Mr and Mrs Van Vlymen to deliver up vacant possession of their real property prior to the forced sale of those properties;
(3)the forced sale of the properties owned by Mr and Mrs Van Vlymen; and
(4)the appointment of Mr Darin as receiver over the shares in Orbis, PIH and PIL. Mr Van Vlymen was also removed as a director of these companies as well as ICSL, LSL and RIPEL.
In about April 2017, Mr Hogg was approached by Richard, Cheryl and Mathew Stott in relation to a Family Court proceeding between Mathew Stott and his then wife, Hannah. Richard and Cheryl Stott had been joined to that proceeding by Hannah. Mr Hogg later received instructions from Mr Dean Wright of Wright Lawyers and Associates to act for Mathew Stott in that proceeding.
During 2018, the Stott family were looking for joint venture partners. As noted earlier, there had been discussions between the Stott family and the Hughes family about a possible fusion of their farming operations.
In about early May 2018, Barney Hughes became aware that BFB Pty Limited was to be offered for sale later in that year. BFB operated a large enterprise, comprising 65 farms spread across 48,881 hectares with the capacity to produce annually more than 50,000 tonnes of wheat and over 30,000 tonnes of canola and barley. Its revenue for the 2017 financial year was in the order of $80 million.
Barney Hughes was very familiar with BFB as it had become a significant farming operation in the Temora region of New South Wales. He had known of it since its inception in the 1980s, and he had known its principal, Mr Terry Brabim, since then or earlier. Barney Hughes brought this opportunity to the attention of Mr Hogg.
In late May or early June 2018, Mr McInnes participated in a telephone discussion with Richard and Cheryl Stott and Mr Hogg in which Mr Hogg and Mr McInnes discussed the use of trust structures to hold assets in the context of Richard and Cheryl Stott being joined to the Family Court proceeding.
In about June 2018, Mr Van Vlymen had a discussion with Mr Hogg concerning Mr Van Vlymen’s obligation to pay Mr Wong. Mr Van Vlymen told Mr Hogg that he wished to discharge his obligations to Mr Wong but he needed funding to do so.
In response, Mr Hogg indicated that he knew some people with whom Mr Van Vlymen may wish to speak. He also told Mr Van Vlymen that those people were looking at expanding their business and that they may be able to put some money in to help Mr Van Vlymen, and they could build a business together. Mr Hogg then offered to make an introduction, which Mr Van Vlymen accepted.
In early June 2018, Barney Hughes, Mathew Stott and Mr Hogg had a discussion during which Mr Hogg raised the possibility of including Mr Van Vlymen in any joint venture between the Hughes and Stott families concerning BFB. Mr Hogg indicated that:
(1)Mr Van Vlymen needed about $6,500,000 to pay out Mr Wong;
(2)Mr Van Vlymen’s Solomon Islands assets (if unlocked) could provide valuable real property for inclusion in a balance sheet for presentation to an investor or lender, and had been estimated by Mr Van Vlymen to be worth in the vicinity of USD 80,000,000, based on a sample of valuations conducted in 2015 and actual sales results;
(3)Mr Van Vlymen’s assets included about 33,000 acres of land in the Solomon Islands which had potential to generate future value including from the re-establishment of coconut and cocoa production, agricultural opportunities and other longer term options such as tourism;
(4)Mr Van Vlymen was an experienced commodities trader with expertise in dealing with international markets. This would add value to the proposed joint venture enterprise; and
(5)the Solomon Islands Government owed approximately $9,000,000 to LSL.
Mathew Stott and Barney Hughes both indicated that they were interested in exploring this idea further.
On 20 June 2018 there was a telephone discussion between Mr Hogg, Mathew Stott, Barney Hughes and Mr Van Vlymen. During that discussion there was a conversation concerning BFB and a consensus was reached that they should put in a joint bid for BFB.
At about the same time, Mr Ramakrishnan became involved at Mr Hogg’s request to assist with capital raising and to provide services as a consultant on the proposed BFB bid. Mr Ramakrishnan had previously assisted Mr Hogg in raising funds for a number of projects in which Mr Hogg had been involved, both in Australia and overseas.
Between June and October 2018:
(1)with the support of Mr Hogg – the Stott family, Mr and Mrs Van Vlymen and the Hughes family exchanged emails, participated in telephone discussions and met to participate in the preparation of the bid for BFB;
(2)Mr Hogg, Mathew Stott and Mr Van Vlymen communicated regularly, and often daily, sharing information and performing tasks for capital raising. In this regard, Mr Hogg arranged joint telephone link-ups, so that they all had the same information;
(3)Mr Van Vlymen provided information to Mr Hogg in response to his requests for the purpose of providing information on the Solomon Island assets which were being included in the submissions for funding to be used to bid for BFB. At some stage during that period Mr Van Vlymen became aware that the entity that would be making the BFB bid was called “Agrinova”; and
(4)Barney Hughes was aware from Mr Hogg and Mr Ramakrishnan that a number of finance opportunities were being explored including in Australia, Asia and in Europe.
On or about 18 September 2018, as part of Mr Ramakrishnan’s enquiries to obtain funding for Agrinova, he contacted Mr Joshua Roberts of Millennial Equity Limited.
He then arranged a telephone conference with Mr Hogg, Mr Roberts, and himself on 19 September 2018 during which Mr Hogg discussed aspects of the concept of what was to become Agrinova and the pursuit for funding for the BFB venture.
In or about mid-September 2018, PricewaterhouseCoopers Securities Ltd (PwCS) formally put BFB to market in what was announced as a two phase process: an “Indicative Offer Phase”, to be followed by a “Binding Offer Phase”.
The proposed acquisition of BFB required extensive due diligence and financial modelling to be undertaken as well as sourcing funding, for all of which Mr Hogg assumed responsibility.
In September 2018, a short form “Information Memorandum” regarding a proposed investment in “Agrinova”, seeking investment from selected investors was prepared by Mr Hogg.
Richard, Mathew and Cheryl Stott and Barney and Angela Hughes all assisted Mr Hogg in obtaining relevant information for inclusion in the “Information Memorandum”. Mr Ramakrishnan and Mr Hogg worked on a capital raising memorandum.
This “Information Memorandum” was ultimately not provided to the market.
On 7 October 2018, Mr Roberts indicated to Mr Hogg and Mr Ramakrishnan that Millennial Equity would be in a position to provide funding in the sum of USD 275,000,000 with respect to a bid for BFB.
Mr Hogg passed this news onto Mathew and Richard Stott, Barney Hughes, and Mr Van Vlymen.
Mr Hogg felt that with funding at this level, funds would have been available to pay out the existing debts owed by the Stott and Hughes families, to meet the sum required to be paid to Hannah Stott with respect to the Family Court proceeding (which he estimated to be in the order of $1,600,000), to meet the estimated amount owed by Mr Van Vlymen to Mr Wong, and to allow appropriate working capital and to move forward with the BFB purchase.
Mr Hughes considered that the Millennial Equity funding package would have allowed all of the Stott and Hughes families’ debts to be repaid and to fund the BFB purchase, on the assumption that “Agrinova” was the successful bidder. He also considered that the package was intended to assist Mr Van Vlymen in making a payment to Mr Wong of approximately $6,500,000, that he was required to make to Mr Wong.
On 8 October 2018, Mr Hogg had a telephone discussion with Mathew and Richard Stott, Barney Hughes, and Mr Van Vlymen. During this discussion, which lasted for more than two hours, the BFB purchase and its implications were discussed.
On 9 October 2018, Agrinova was incorporated, with Mr Hogg as the sole member and director. He remained as its sole director until 14 March 2019.
On 10 October 2018:
(1)Mr Roberts of Millennial Equity signed a Binding Term Sheet for a facility to be provided by Millennial Equity of up to USD 275,000,000 for the acquisition of BFB; and
(2)Agrinova submitted a non-binding indicative offer dated 9 October 2018 for the acquisition of all of the shares in BFB, for $270,000,000.
The letter of offer included:
Re: Non – Binding Indicative Offer (Stage 1)
Acquisition of 100% of B.F.B Pty Limited Issued Shares...
2.By way of brief introduction, the bidding syndicate comprises four (4) groups whom have come together to Roll up a series of related, diverse and dynamic agribusinesses which when taken together provide significant scale, liquidity, stability of earnings, innovation and an integrated platform for achieving internal and external access to markets.
...
5.The acquiring entity is as follows:
Submitting Party: Agrinova Pty Ltd (ACN 629 285 589)
Acquiring Entity: The acquiring party will be the Agrinova Unit Trust managed by Agrinova Pty Ltd (ACN 629 285 589) both of which are vehicles specifically established to facilitate the Roll up.
Initial Unit Holders: The Hogg Family or their Nominee
The Van Vlymen Family or their Nominee
The Stott Family or their NomineePoint Farms Ag Co Pty Ltd
Financial Capability: The Agrinova Unit Trust will be initially established asset holdings of $164,250,200 (equity 86.75%)
...
12. The roll up when completed, will consist of:
a)69,620 hectares (ha) of arable dry land and irrigation country, including permanent viticulture, horticulture and tree crops;
b)42 properties;
c)30,887 megalitres of water;
d)117 EFT Staff and 130 Casual Employees;
e)cropping including Almonds, Barley, Canola, Cocoa Beans, Cotton, Copra, Fava Beans, Grapes, Lupins, Maize, Poppies, Popping Corn, Sorghum, Soy Beans, Sunflowers and Wheat; and
f)livestock including cattle, pigs and sheep.
...
15. Agrinova indicatively offers $270 million (AUD).
...
31.Financing has been approved by Millennial Equity Group with funds being able to be released within 28 days of Due Diligence having been satisfactorily completed and verified and a final transaction price confirmed.
(as written; emphasis in original)
The failure to refer to the Hughes family in this bid does not appear to have been explained. Point Farms Ag Co Pty Ltd belonged to the Stott Family.
On 20 October 2018, Mr Hogg, on behalf of Agrinova, signed the Binding Term Sheet which had been signed on 10 October by Mr Roberts on behalf of Millennial Equity.
On 22 October 2018, Mr Hogg provided the Binding Term Sheet by email to PwCS and forwarded a copy of that email to Barney Hughes; Richard, Cheryl and Mathew Stott; and Mr Van Vlymen.
On 26 October 2018, Mr Greg Quinn of PwCS wrote to Mr Hogg indicating that the shareholders of BFB had decided to not proceed with a formal stage two process. The Canadian Public Sector Pension Investment Board (PSP) was subsequently announced as the successful purchaser of the shares in BFB at $208,000,000 (i.e. less than the $270,000,000 bid from Agrinova).
On 29 October 2018, and following notification that Agrinova’s bid for BFB had been unsuccessful, there was a meeting at Mr Hogg’s chambers in Sydney between Mr Hogg, Richard and Mathew Stott, Barney Hughes and Mr Van Vlymen. Mr Richard Stott attended part of the meeting by telephone.
The purpose of the meeting was to discuss what steps could be taken in view of the unsuccessful bid for BFB and the extant Millennial Equity funding.
It was agreed at that meeting that complaints would be raised with the Foreign Investment Review Board (FIRB) and State and Federal governments about the outcome of the BFB tender in circumstances where the winning bid was substantially below Agrinova’s bid.
Following that meeting, Richard Stott and Mr Hogg on behalf of the wider group, lobbied State and Federal members of parliament including the Premier of New South Wales, the Prime Minister, the Deputy Prime Minister and the Federal Treasurer. They also liaised with stakeholders in the National Farmers Federation and the NSW Farmers Association; and co‑ordinated a television, radio and newspaper campaign. Mr Hogg also travelled to Canada to meet with representatives of PSP.
On 30 October 2018, a meeting took place between Mr Hogg, Mr Van Vlymen, Mathew Stott, Barney Hughes and Mr Ramakrishnan. This meeting is central to the applicant’s case in contract as well as the applicant’s case in estoppel, and it is appropriate to set out in some detail the various recollections of the events of that meeting. The question of which, if any, recollections are to be accepted as accurate is addressed at [278] to [289] below.
Mr Van Vlymen’s account of the meeting is that:
(1)he understood the purpose of the meeting to be an opportunity for those present to discuss what to do if the FIRB would not change the decision about BFB with the result that Agrinova did not acquire it;
(2)during that meeting, Mr Hogg made comments to the following effect (as recorded in Mr Van Vlymen’s affidavit):
(a)
I propose that [Matt Stott]’s family, Barney’s family and Wim continue to work together and do so in a joint venture.
The assets belonging to [Matt Stott]’s family, the assets belonging to Barney’s family and Wim’s assets in the Solomon Islands and certain other assets acquired in the future be rolled into the joint venture to build an agricultural enterprise operating under Agrinova as a conglomerate.
I propose that the joint venture be carried on for the financial benefit of Matt Stott’s family, Barney’s family and Wim and Margriet Van Vlymen, with the value of the assets being contributed by each party to the joint venture to determine the number of units that the respective families would be allocated in an overarching trust structure.
We need to ensure that Agrinova operates in a manner that meets all corporate requirements of transparency and corporate governance to attract substantial investment from large investors such as the likes of PSP (the Canadian Superannuation Fund that acquired BFB) with the ultimate aim of floating Agrinova. ;
(b)
We all are aware that Wim needs to pay the money he owes to Patrick Wong to gain control of the Solomon Island assets. So Agrinova’s proposal to Wim is that Agrinova will pay the balance outstanding that Wim and Margriet owe Patrick Wong.
Agrinova will pay the receiver’s fees required to retire the receiver appointed over the shares in Wim’s companies.
Agrinova will pay Wim’s legal fees that he needs to incur to finalise all matters with Patrick Wong under that November Deed.
Agrinova will allocate units in the Agrinova Unit Trust to Wim and Margriet or which ever company they want to use to hold the units. Agrinova will allocate the units on a pro-rata basis based on the net value of Wim and Margriet’s assets transferred to Agrinova as a proportion of Agrinova’s total assets, the valuation of the Solomons assets will depend on the identification of final amounts paid by Agrinova to pay out Patrick Wong and on a formal valuation of all Agrinova’s assets.
Wim, you will need to take whatever action you need to take to confirm the amount payable to Patrick Wong so Agrinova can make that payment. Also, you’ll need to transfer to Agrinova Orbis’ shareholding in PIHL which will have the result of Agrinova being the sole shareholder of PIL and OSTI and thereby result in Agrinova having 100% ownership of ICSL, PMSL, Cross Pacific and Pacific Finance.
Wim, do you agree with this deal?
(3)Mr Van Vlymen responded:
Yes Matthew. I agree to this deal
(4)at that time, the other persons present were Mr Hogg, Mathew Stott, Barney Hughes and Mr Ramakrishnan;
(5)Mathew Stott said:
I agree we should acquire the Solomons assets. Lets do it ; and
(6)Barney Hughes said:
I agree lets bring the Solomon assets into Agrinova
Mr Van Vlymen took no notes of the meeting.
Mr Hogg’s account of the meeting is as follows:
(1)during the meeting, a range of future options was discussed and recorded onto pieces of butcher’s paper. Those present discussed what they would do if they could not reverse the decision of PwCS to sell BFB to PSP;
(2)after extensive discussions and planning during the day, the following course was determined:
(a)the Stotts, Hugheses and Van Vlymens would continue in moving towards a joint venture, and in relation to the Stotts and Hugheses, this would either be on 1 July 2019, to be able to start on a new financial year, or when the “roll up” was funded;
(b)further work needed to be completed to re-work the joint venture project without BFB;
(c)the assets identified included “Point Farms”, “Wetareal”, “Hasting”, “Avondale”, “Sunshower”, “Wondaree”, “Koonwarra”, “Solferino”, “Summer Hill”, “Preston Grain”, “Solomon Islands”, “Solar + Sync Diesel Renewables projects”, “Eurabonny” and “Marinna”;
(d)Mathew Stott and Barney Hughes were to work together to seek to identify further farming opportunities;
(e)AgriNational (a Hughes family company) would not renew its “Milby Downs” lease at the end of 2018, given it was located in Condobolin and lacked synergy with the remainder of the project;
(f)units would be allocated in a unit trust to the Stotts and to the Hugheses based on units of value for the land and water assets, which they brought to the joint venture at an agreed value, minus any associated debt;
(g)Mr and Mrs Van Vlymen would receive an allocation of units in the unit trust based on the final value of their Solomon Islands assets once acquired from Mr Wong; minus the value of funds paid to Mr Wong, together with a further discount rate of somewhere between 20 and 30 cents in the dollar. The discount rate was based on the perceived time and energy required to realise the Solomon Islands assets and their location when compared to the remainder of assets which were being contributed by the Stott and the Hughes families;
(h)during that discussion, Mr Hogg summarised the position to Mathew Stott and Barney Hughes with words to the effect:
You will all receive an allocation of units in a unit trust based on the land and water assets which you bring with you, minus any associated debt. [Mr Van Vlymen] will receive an allocation of Units based on the final value of the Solomon Islands assets, minus funds paid to Patrick Wong, together with a discount of 20 or 30 cents in the dollar. The discount rate can be based on the effort required to realise the Solomon Assets and their location. ;
(i)plant and equipment, crop, livestock, and existing debt would not form part of Agrinova but would be dealt with separately. Mr Hogg’s recollection is that at the time it was roughly the case that current level of trading debt would have cancelled out crop in the ground and livestock;
(3)Mr Hogg agreed to take on a larger, if not primary, role in the co-ordination of Agrinova moving forward and would receive approximately five per cent interest in the enterprise with the precise figure to be determined, with Mr Hogg saying “we will fix it up when we do the final allocation”; and
(4)Barney Hughes, Mr Hogg and Mathew Stott said words to the effect:
Barney Hughes: I agree, we need to look forward.
Mr Hogg:I agree and this is what we need to look at. BFB is not the end of everything.
Mathew Stott: I agree, let’s go ahead.
Mr Hogg did not recall there having been any discussion of legal costs on 30 October 2018.
Barney Hughes’s account of the 30 October 2018 meeting is as follows:
(1)the meeting was convened to strategise about the future in light of the BFB outcome, and on the assumption that the decision to sell BFB to overseas interests could not be reversed;
(2)Mr Hogg said:
The families [Stotts, Hugheses and Van Vlymens] can continue to move towards a joint venture…I am not particularly confident that Millennial Equity will continue to be willing to enter into a funding arrangement without BFB, so further work will need to be completed to rework the project without BFB. The assets will include “Point Farms”, “Wetareal”, “Hasting”, “Avondale”, “Sunshower”, “Wondaree”, “Koonwarra”, “Solferino”, “Summer Hill”, “Preston Grain”, “Solomon Islands”, “Solar + Sync Diesel Renewables projects”, “Eurabonny” & “Marinna”. ;
(3)Barney Hughes said:
(a)
AgriNational will not renew their “Milby Downs” lease at the end of 2018, in Condobolin as it is not a fit with the new strategy for Agrinova. ;
(b)
We will start to work together to achieve synergies during sowing and harvest periods and through the better utilisation of staff. This will assist in defraying any loss of income as a result of the cancellation of the Milby Downs’ lease from 1 January 2019. ;
(4)Mr Hogg said:
Stotts and Hughes can receive an allocation of units based on the land and water assets which they brought to the joint venture at agreed value, minus any associated debt. Van Vlymen will receive an allocation of Units based on the final value of the Solomon Islands assets, minus funds paid to Patrick Wong, together with a discount. The discount rate will be based on the time and energy required to realise the Solomon Assets and their location when compared to the remainder of assets which are being contributed by the Stotts and Hughes families. ;
(5)Barney Hughes said:
I agree and this is what we need to look at. BFB is not the end of everything.
(6)Mathew Stott said:
I agree, let’s go ahead with this. ; and
(7)sometime later during the discussion, Barney Hughes raised the matter of remuneration for Mr Hogg for putting this proposal together and for his involvement. In this regard agreement was reached that Mr Hogg would receive five per cent of the value of the trust.
Mr Ramakrishnan’s account of the 30 October 2018 meeting is that the effect of what was “agreed”, is as follows:
(1)Agrinova would set up a unit trust into which the Stott, Van Vlymen and Hughes families would roll their respective farming and Solomon Islands assets, with each family receiving units based on the value of the net equity that they were contributing, except for the Van Vlymens for whom the value of the units would be discounted by 20 to 30 per cent;
(2)Agrinova would continue to pursue funding opportunities with Millennial Equity and also explore other funding options;
(3)Mathew and Richard Stott, and Barney Hughes, would continue to operate farming operations in Australia, which would be achieved via an associated company or companies;
(4)Agrinova would look to seek to acquire other properties and businesses and other farming properties and/or associated farming businesses; and
(5)Mr Hogg would receive five per cent of the units.
As noted earlier, Mathew Stott did not give evidence. There is no evidence that any of the attendees took notes of the meeting. No such notes were adduced.
Following the meeting, Mr Van Vlymen did not send a communication recording what had been agreed at the meeting. There is no evidence that any other attendee did so.
On 29 November 2018 Mr Birchall, for Mr Wong, wrote to Mr Mark Doble, the solicitor for the receiver, providing a further update of the amount owed to Mr Wong, which was expressed to be in the order of $6,916,000. This letter was copied to Mr Sean Keleher (the solicitor for Mr and Mrs Van Vlymen). This occurred after Mr Keleher requested an updated calculation.
On 19 December 2018 Agrinova, by email by Mathew Stott from his parents’ email address, sent a written “Best and Final Offer Form” (signed by Richard Stott) to CBRE, for the purchase of land and water rights associated with “Cobran” for approximately $80,000,000.
On 20 December 2018, judgment was delivered in the Family Court proceeding.
On 21 December 2018, the FIRB confirmed the sale of BFB to PSP. Mr Hogg’s evidence was that at this time Agrinova had the Millennial Equity facility, but no business to acquire with those funds. However, without the specific cash flow characteristics which were unique to BFB and the ability to service a full debt facility, the Millennial Equity offer fell away in late February 2019.
During 2019, a practice developed whereby Mr Hogg, Mathew and Richard Stott, Barney Hughes and to a lesser extent Mr Van Vlymen, would each communicate regularly as a group. They would also speak by telephone to share information, update each other and allocate tasks to be achieved every few days. These conversations and discussion lasted between 10 minutes and two hours. They often occurred at night while Mr Hogg was driving hours between Sydney and Wagga Wagga, which at that time he did weekly.
Also during 2019, Mathew and Richard Stott and Barney Hughes worked to investigate a number of potential acquisitions in New South Wales, Queensland and Western Australia, while they continued to operate their normal farming operations independently of Agrinova. Mr Hogg, who was kept informed of these discussions, described those potential acquisitions as follows:
(1)Adveq Almond Trust 2 Aggregation (AAT2), which at the time was Australia’s largest almond orchard. AAT2 comprised 20,000 hectares of land of which 12,000 hectares contained almond permanent plantings and water entitlements of 161,076 megalitres. Located near Robinvale in Victoria, all AAT2 properties were all subject to a lease to Olam Orchards Australia Pty Ltd. AAT2’s existing use was almond production, integrated livestock, and cropping operations;
(2)Ballandry Station Aggregation, comprising 27,735 hectares of land near Griffith in New South Wales. Ballandry’s existing use was as an integrated mixed livestock and cropping operation;
(3)40 per cent of Green Swamp Agriculture Pty Ltd. Green Swamp was a landholding company operating out of Kununurra, Western Australia which compromised of 1,385 hectares of broad acre irrigated horticultural land and 19,601 megalitres of water entitlements. Green Swamp’s existing use was as an integrated livestock and cropping operation;
(4)Milton Downs & Boolcarrol Aggregation, which comprised 49,968 hectares of land between Moree and Coonamble in New South Wales. Milton Downs’s existing use was as an integrated livestock and cropping operation;
(5)Ceres Gunyerwarildi Aggregation, comprising 16,742 hectares of farming land near Moree in New South Wales. Ceres’s existing use was as an integrated livestock and cropping operation;
(6)Ostwald Aggregation, comprising 22,500 hectares of farming land including 24,000 megalitres of water storage infrastructure located in two clusters. The first cluster was between Goondiwindi in New South Wales and Texas in Queensland and the second between Nyngan and Bourke in New South Wales. Ostwald’s existing use was an integrated livestock and cropping operation;
(7)600 Riverfarm Road, Kununurra (the Workshop) comprising 3,556 hectares of riverfront property together with a five bedroom dwelling and other infrastructure in Kununurra, Western Australia. The Workshop’s existing use was accommodation and other infrastructure; and
(8)Cattanach’s, comprising 7,200 hectares of irrigation property and 1,805 megalitres of Lower Murrumbidgee groundwater near Darlington Point, NSW. Cattanach’s existing use was cropping operations.
During 2019, Mr Hogg worked with potential funders and equity partners in Australia and overseas to source finance and equity investment options. During this period, and at Mr Hogg’s own expense, he travelled to China, Kuala Lumpur, Singapore (multiple times), Malta, London and New York, to work through funding opportunities through various banks, private equity lenders and various family offices.
To assist in obtaining funding, Mr Hogg was provided with access to the historic and current financial data for the operations of the Stott and Hughes families. Mr Hogg had access to their financial data through their respective accountants. To a lesser degree, Mr Hogg had limited financial information in relation to Mr and Mrs Van Vlymen’s Solomon Islands operations through their accountants, Grant Thornton (in Sydney).
On 15 January 2019, Mr Wright wrote to the ANZ Bank to advise of the 20 December 2018 judgment in the Family Court proceeding. In that letter, Mr Wright explained a proposed arrangement for a Stott family discretionary trust to hold their assets.
On 31 January 2019, Justice Benjamin of the (then) Family Court of Australia made orders disposing of the Family Court proceeding including an order, inter alia, for Mathew Stott to pay approximately $1,900,000 to Hannah Stott by 22 February 2019.
On 1 February 2019, there was a meeting by telephone during which Richard, Cheryl and Mathew Stott discussed with Mr Hogg and Mr McInnes a discretionary trust structure for their assets.
On 4 February 2019 Mathew Stott sent an email to Mr Hogg and Mr Hughes attaching a list of the Stott family’s assets and a list of assets titled “Potential Asset Purchases”. Mr Hogg forwarded this email to Mr Van Vlymen.
On or about 4 February 2019, Mr Keleher requested Mr Doble provide an up-to-date copy of “the Receiver’s Trial Balance and the Receiver’s current fees and disbursements” to assist with calculating the amount owing to Mr Wong.
On 5 February 2019, Cheryl Stott sent an email to Mr Hogg and Mathew and Erin Stott with the subject line “Avondale Family Trust Minutes 1st Feb 2019” and attaching minutes of the 1 February 2019 meeting.
On 11 February 2019:
(1)Mr Birchall wrote to Mr Doble:
I refer to your call just now and late last week. Patrick and I have reviewed the figures over the weekend. By our calculations, taking into account the payment made in December last year and using exchange rates published yesterday, as at today the amount that the Van Vlymens and the Van Vlymen entities owe my clients (Wong and OSTI) is around $7.05 to 7.06 million. Determining an exact figure would involve, among other things, finalising entirely up-to-date fees, costs and disbursements of Birchall Legal and Worrells, as well as my client’s choice to take the SBD15m principal sum in USD or AUD as provided for under the November Deed (2016). Nevertheless, the range we have arrived at is narrow enough for Mr Van Vlymen and any financier to work with. ;
(2)Mr Birchall forwarded that email to Mr Keleher; and
(3)Mr Keleher responded:
Thank you for forwarding Mr Birchall’s email. Clearly, there will be an argument to resolve the final payout figure.
We concede that we do not have information in relation to the Receiver’s outstanding fees and disbursements or Mr Wong’s outstanding legal fees. However, our best estimate on the payout figure (making generous allowances for fees and disbursements) does not exceed $AUD5.4M.
As discussed, we would be grateful for an up to date copy of the Receiver’s trial balance and details of the land transfers by or on behalf of any of the joint venture entities between 10 July 2017 to date.
Thank you in anticipation of your assistance and we look forward to receiving your response.
Notwithstanding Mr Keleher’s requests, the receiver did not provide the requested information at that time.
On 8 March 2019, Mr Hogg sent an email to Mr Greg Durham of Catalyst Accountants concerning the creation of the Agrinova Unit Trust and the Avondale Agricultural Trust and making the following request (as written):
Can you please;
1) Take Agrinova Pty Ltd (ACN 629 285 589) and restyle it as the Trustee Company for a new Agrinova Unit Trust;
Agrinova Pty Ltd
Shares: 100 Ordinary – Keep held in Matthew Hogg name in the first instance Keep: Matthew Hogg as Director Shareholder
Add: Bruce McInness as Director
Address: Level 64, MLC Centre – 19 Martin Place, Sydney NSW 2000Agrinova Unit Trust
Type of Trust: Unit Trust
Number of Units: 200,000
Distribution of Units: Avondale Agricultural Trust (100%)
Appointer: Matthew Hogg
Settlor: Bruce McInness
Address: Level 64, MLC Centre – 19 Martin Place, Sydney NSW 2000Can you please;
2)set up the Avondale Agricultural Group Pty Ltd as a Trustee Company for the Avondale Agricultural Discretionary Trust
Avondale Agricultural Group Pty Ltd
Shares: 100 Ordinary – Matthew Hogg in the first instance
Directors: Matthew Hogg (Director/Secretary) / Bruce McInnes (Director) Address: Level 64, MLC Centre – 19 Martin Place, Sydney NSW 2000Avondale Agricultural Trust
Type of Trust: Discretionary Trust – Standard Family
Beneficiaries: Richard Stott, Cheryl Stott, Mathew Stott & Erin Stott Appointer: Matthew Hogg
Settlor: Bruce McInnesAddress: Level 64, MLC Centre – 19 Martin Place, Sydney NSW 2000
…
(emphasis in original)
On 14 March 2019, Mr Hogg sent an email to ANZ informing ANZ of the instructions he had given to Catalyst Accountants.
Also on 14 March 2019, Mr McInnes was appointed as a director of Agrinova. It will be recalled that Mr McInnes was the long-standing accountant for Richard, Cheryl and Mathew Stott. From 14 March 2019 until 1 August 2019, the directors of Agrinova were Mr Hogg and Mr McInnes.
Mr McInnes gave evidence, which was the subject of intense cross-examination and which I accept, that:
(1)he was not advised by Mr Hogg at any time that Agrinova had agreed to:
(a)pay an undetermined sum of money to Mr and Mrs Van Vlymen to pay:
(i)the balance of monies owed by Mr Van Vlymen to Mr Wong;
(ii)the fees and expenses required to retire the receiver appointed over the shareholdings of Mr and Mrs Van Vlymen; and
(iii)the legal fees and expenses of Mr Van Vlymen incurred in finalising matters with Mr Wong;
(b)allocate Mr Van Vlymen units in the Agrinova Unit Trust, to be valued and allocated on a pro‑rata basis based on the net value of the Van Vlymen’s assets transferred to Agrinova compared with Agrinova’s other assets, which was dependent on the identification of final amounts payable by Agrinova in sub‑paragraphs (a)(i) to (iii) above and a formal valuation of all Agrinova’s assets; and
(2)he was also not advised by Mr Hogg at any time that Agrinova had agreed to allocate units in the Agrinova Unit Trust to the Hughes family (to be valued and allocated on a similar pro‑rata basis).
However, in about February 2020, Richard Stott told Mr McInnes that there was some form of joint venture involving the Stott family assets, the assets of the Hughes family and when available, the assets of Mr and Mrs Van Vlymen (see [182] below).
On 25 March 2019, Avondale Agricultural Group Pty Ltd was incorporated.
On 26 March 2019, the Agrinova Unit Trust was established with Agrinova as the trustee.
Mr Hogg caused all 200,000 units in the Agrinova Unit Trust to be allocated to Avondale Agricultural qua trustee of the Avondale Agricultural Trust.
Clause 2.3 of the trust deed for the Agrinova Unit Trust provided that the issuance of additional units could only occur with the written consent of existing unitholders. Thus, Avondale Agricultural had a veto over the issue of further units in the Agrinova Unit Trust.
On 28 March 2019, Mr Hogg sent an email to the Stott family, Mr McInnes and ANZ (not copied to Mr Hughes or Mr or Mrs Van Vlymen) confirming the “Trust and Associated material now received in Stott roll up…”.
On 1 April 2019, Mr Hogg had a telephone call with Mathew Stott and Bernard Hughes and perhaps Richard Stott. Mr Hogg was in a lounge at Kuala Lumpur airport waiting for a flight to Sydney. During that call, Barney Hughes asked “What about the Solomons, is that still part of our plan?” and Mr Hogg replied:
It’s up to the group. On one view it’s a small price for a lot of assets, on another view it’s the Solomon Islands and it has its own baggage. I think [Mr Van Vlymen] will understand if we don’t go that way, we just need to keep [him] informed so he can work out all of his options.
On 16 May 2019, Mathew Stott and Barney Hughes received an email from Mr Brad Bland of Mainland Finance enclosing a term sheet for a loan facility of $4,438,000. The term sheet was signed by Richard Stott, Mathew Stott, Angela Hughes, Barney Hughes and returned to Mr Bland on 17 May 2019. The term sheet outlined the purpose of the funds, being the provision of working capital, refinancing and funding the payment Mathew Stott was required to make to Hannah Stott pursuant to the orders made on 31 January 2019.
In May 2019, Mathew and Richard Stott and Barney Hughes inspected properties in Kununurra, Western Australia.
During a call in very late May/early June 2019 between Mr Hogg, Richard and Mathew Stott and Barney Hughes, Mr Hogg asked: “How are we with Fusion” (meaning the planning of the new single farming operation)?” Mathew Stott responded: “Not much done on it to be honest, Barney and I need to get onto it.”
Richard Stott then said: “Matt, I think that with all our debt and all the issues with the plant, should we wait until at least the assets have rolled into Agrinova so we can tell our creditors what is happening?” and Mr Hogg replied: “You are probably right Rich(ard), the issue was previously showing a clean set of books which looks and is professional. I can’t really see any issue if the farming operation entity commenced contemporaneously with the holding of assets.” Richard Stott responded: “It would make it easy for Cheryl (Stott), that’s really my concern.”
Mr Hogg continued to work closely with, and took responsibility on behalf of Agrinova for dealing with, a number of brokers, funders and lenders, including Mr Ramakrishnan, Mr Matthew Hower of KWS Capital No 3 Pty Ltd, Mr Bland, Mr Stephen Petite and Mr Andrew Smith (Brisbane), Mr Murray Priestly (Singapore), Merrick Capital (Melbourne), Capital Securities Australia (CSA) (Adelaide) and the ANZ.
By 30 June 2019, it appeared to Mr Hogg that the following would be likely funding options and outcomes:
(a)ANZ would advance approximately $22,500,000 by way of a 12 month facility which would allow the Stott assets to be rolled into Agrinova and pay Hannah Stott approximately $1,600,000 (ANZ Option);
(b)CSA would advance approximately $15,000,000 by way of a six month facility with the option to roll over this facility for a further six months, which would allow:
(i)the Hughes family to roll their assets into Agrinova;
(ii)approximately $6,500,000 to be paid to Mr Wong to allow the Van Vlymen assets to be rolled into Agrinova;
(iii)the acquisition of a 40 per cent interest in Green Swamp at approximately $4,500,000; and
(iv)the acquisition of the Workshop for approximately $1,600,000 together with any associated commissions and costs (CSA Option);
(c)Merricks would provide a single longer term facility of anywhere between two and five years which would achieve the same net outcome;
(d)each option or combination of options would trigger the establishment of a subsidiary company to run the fused farming operations; and
(e)each option was unique in its own right and brought with it varying terms and conditions such as interest rates and the term of the loan.
On 1 July 2019, Richard, Cheryl and Mathew Stott filed an application in the Family Court proceeding for orders, inter alia, joining Agrinova to that proceeding and for the transfer of particular assets to Agrinova qua trustee of the Agrinova Unit Trust.
On 10 July 2019, Mr Hower wrote to Mr Hogg providing indicative terms for a facility in the order of $42,000,000, with the borrower to be Agrinova Pty Ltd qua trustee of The Agrinova Unit Trust; with Mr Hogg, Mr McInnes, Richard, Cheryl and Mathew Stott and Barney and Angela Hughes as guarantors.
On the same day, Mr Hogg forwarded that email to Mr Van Vlymen under cover of an email:
Hi Wim,
See attached.
I understand that this won’t be enough for your purposes.
Mat Hower’s details are ... Can you have Sean contact Mat directly (Mat is expecting the call)
Mat understands the issues and will be able to accommodate - but let’s let him and Sean take care of those issues instead of adding to many layers.
I infer that the reference to “Sean” is to Mr Van Vlymen’s solicitor, Mr Keleher.
On 12 July 2019:
(1)at 12:12pm, Mr Hogg sent an email to Richard, Cheryl and Mathew Stott, and Barney Hughes – “Please see attached. Speak soon” – attaching a draft letter on Agrinova letterhead addressed to Mr Keleher and incorrectly dated 12 July 2018, to be signed by Richard Stott;
(2)at 4:32pm, Richard Stott sent an email to Mr Keleher attaching a signed version of the draft letter sent by Mr Hogg earlier that day. I infer, as Agrinova invited me to, that Richard Stott did so following a conversation between himself and Mr Hogg. The signed letter (12 July 2019 letter) was in the following form:
RE: RESOLUTION OF ONGOING DISPUTE BETWEEN PATRICK WONG AND WILLEM VAN VLYMEN
I understand that you act for Mr Willem Van Vlymen in relation to an ongoing dispute between Mr Van Vlymen and Mr Patrick Wong arising from an agreement between Mr Van Vlymen and Mr Wong whereby Mr Van Vlymen (through his corporate entities) agreed to purchase the shares in Overseas Shipping Trade & Investment Pty Ltd, a Cook Islands corporation, owned solely by Mr Wong.
I understand that a Receiver has been appointed over Mr Van Vlymen’s shares in his corporate entities due to Mr Van Vlymen’s inability to complete his obligations under the abovementioned agreement with Mr Wong.
Please note that Stott and Hughes Family through Agrinova Pty Ltd ATF the Agrinova Unit Trust is in a position to satisfy the outstanding amount owed by Mr Van Vlymen to Mr Wong pursuant to the abovementioned agreement including the costs to retire the Receiver. Agrinova is in a position to satisfy the outstanding amount irrespective of whether the amount is agreed between the parties or determined by a Court.
Please provide a cheque direction and breakdown of the final settlement figure owing to Mr Wong (or his corporate entity), legal fees and Receiver’s fees.
We would be grateful if you could liaise with Mathew Stott ... or Bernard Hughes ... arrange a suitable date and time for settlement.
Richard Stott
ChairmanAgrinova Pty Ltd ATF Agrinova Unit Trust
(emphasis added) ; and
(3)Mr Keleher sent a letter addressed to Mr Birchall and to Mr Doble:
RE: WONG & ANOR v VAN VLYMEN & ORS
We refer to the above matter and attach a letter from the Chairman of Agrinova Pty Ltd confirming that it is in a position to satisfy the outstanding amount owed by Mr Van Vlymen to Mr Wong pursuant to the November Deed including the costs to retire the Receiver.
We refer to the following correspondence and documents (copies attached):
•November Deed;
…
We are instructed to request the following information (including supporting documentation):
•Receiver’s Trial Balance as at today’s date;
•Total Receiver’s fees and disbursements incurred to date and payable pursuant to the November Deed
•Total Receiver’s fees and disbursements incurred but not yet invoiced as at today’s date and payable pursuant to the November Deed
•Total Plaintiffs’ legal fees and disbursements incurred to date and payable pursuant to the November Deed
•Total Plaintiffs’ legal fees and disbursements incurred but not yet invoiced as at today’s date and payable pursuant to the November Deed.
Please provide the above information by 5pm 15 July 2019.
Following the provision of this information we propose to circulate our client’s calculation on the balance owing to the Plaintiffs pursuant to the November Deed to resolve the matter and retire the Receiver.
We are instructed to demand that the Plaintiffs and the Receiver instruct the directors appointed to the boards of the Joint Venture entities who represent the interests of the Plaintiffs and the Receiver to take no further action on behalf of those entities pending the completion of the agreement between the parties and the retirement of the Receiver.
We note that his Honour Justice Sackar gave leave to the parties to re-list the matter on 24 hours notice when the matter was last before his Honour on 14 March 2018 and we are instructed to seek an urgent listing before his Honour in the event that there is a delay in the provision of the information requested above and/or disagreement between the parties on the balance outstanding to finalise our client’s obligations under the November Deed and retire the Receiver.
(emphasis added)
Mr Hogg did not recall drafting what became the 12 July 2019 letter and suggested that it contained language that he would not have used. However, little turns on this when – as Mr Hogg accepted – he provided a draft of it to Richard Stott for signature on behalf of Agrinova. Mr Hogg also accepted that the 12 July 2019 letter was the result of a request by Mr Van Vlymen for such a letter.
On 15 July 2019, Mr Doble replied to Mr Keleher’s 12 July 2019 email, indicating that the receiver would be unlikely to provide the information requested within the deadline specified.
On 17 and 22 July 2019, Mr Birchall sent letters to Mr Keleher in response to Mr Keleher’s 12 July 2019 email and providing updated figures concerning legal fees and disbursements.
On 22 July 2019, Mr Keleher sent an email to Mr Hogg and Mr Van Vlymen forwarding Mr Birchall’s letters dated 17 and 22 July 2019.
The receiver did not respond to the request for information in Mr Keleher’s letter dated 12 July 2019. The difficulty in obtaining information from the receiver had been an ongoing issue for Mr Van Vlymen since the receiver was appointed.
Mr Van Vlymen was unable to form an opinion on the figures put forward by Mr Wong via Mr Birchall’s letters of 17 and 22 July 2019, without the information requested from the receiver.
On 1 August 2019, Mathew Stott was appointed as, and Mr McInnes ceased to be, a director of Agrinova. From that date until 27 January 2020, the directors of Agrinova were Mr Hogg and Mathew Stott.
The timing of Mathew Stott’s appointment as a director was linked to an interim refinance which at the time was being sought from ANZ to allow funds to be drawn to meet the payment required to be made to Hannah Stott.
In the last quarter of 2019, Agrinova’s financing options crystallised and Mr Hogg was of the view that both the ANZ Option and CSA Option would be able to be implemented.
On 23 October 2019, Mr Hogg appeared before Justice Benjamin in the Family Court of Australia in the Family Court Proceeding. The transcript of that hearing includes:
HIS HONOUR: I’ve read the minutes of order. Everyone is satisfied, are they, that there’s sufficient authority from Agrinova Proprietary Limited to join - - -
MR HOGG: Yes.
HIS HONOUR: - - - and that I have the jurisdiction, and that the company is clearly represented by company officers here to do that.
MR HOGG: That’s correct.
HIS HONOUR: Thank you. And other - this just does a restructure which enables payment to the wife; is that essentially the case?
MR HOGG: That’s correct, it is. Your Honour - - -
MR FITZGERALD: And, your Honour, I rely on the assurances of Mr Hogg as not only counsel, but as an office holder in that particular entity.
HIS HONOUR: Yes.
MR HOGG: Yes. I can indicate, your Honour, it has to do with the way that ..... mediation works - that the only way, in effect, the bank would advance the funds is to merge them together and to put them into a corporate structure.
HIS HONOUR: Right.
MR HOGG: So on that basis, that’s how it comes to pass. So it’s specifically related to the ability to put the funds together to pay the wife in accordance with your Honour’s judgment.
HIS HONOUR: Thank you. All right. Do you have a signed copy of those orders there?
…
(emphasis added)
There was no mention to Justice Benjamin of any broader “roll up” involving Mr and Mrs Van Vlymen or the Hughes family.
On 20 November 2019, CSA made an indicative offer, by letter addressed to:
(1)Agrinova and Orbis as borrowers;
(2)the following natural persons and companies as guarantors:
(a)Mr Hogg;
(b)Mathew Stott;
(c)Richard Stott;
(d)Cheryl Stott;
(e)Barney Hughes;
(f)Angela Hughes;
(g)Point Farms Ag Co;
(h)Avondale Agricultural Group; and
(i)PIH.
The letter included:
Dear Borrowers and Guarantors,
Capital Securities Australia Pty Ltd and / or its nominated lender (“CSA”) is pleased to provide you with indicative terms and conditions of a loan facility set out in this letter. This indicative letter of offer does not represent a formal offer of a loan facility. Until formal credit approval is obtained and a facility agreement is issued, we do not offer to provide you with a loan facility. The terms and conditions detailed in this indicative letter of offer are not exhaustive and are necessarily general in nature. Any subsequent facility agreement would comprehensively detail the terms and conditions on which a loan facility is offered.
SUMMARY OF TERMS
1. Line of Credit Facility Limit
- this is the loan amount
$15,000,000.00 (Fifteen Million Dollars) made up as follows:
· Stage 1: $9,285,000 (Nine Million Two Hundred and Eighty-Five Thousand Dollars)
· Stage 2: Approx. $5,715,000 (Five Million Seven Hundred and Fifteen Thousand Dollars)
2. Term – length of your loan Six (6) calendar months (option to renew at CSA’s discretion depending on due diligence and conduct) ...
6. Security – what security you are giving CSA for the loan Stage 1
(a) First registered mortgage overi. Junee Reefs NSW – ‘Summer Hill’
ii. Marinna NSW – Marinna Rail Siding
(b) Second registered mortgage over
i. Darlington Point NSW – ‘Wetareel’
ii. Darlington Point NSW – ‘Hastings’
iii. Whitton NSW – ‘Point Farms’
iv. Whitton NSW – ‘Avondale’
(c) General security agreements and registration of charges over the Borrowers and Guarantors listed in this offer, along with any others if required. Charges over water licenses and plant and equipment owned by Borrowers and Guarantors or associated with the Security
Directors of the Borrowers are to provide personal and unlimited guarantees
Stage 2
As per above Stage 1 (a) to (c) and also further Real Property security to the satisfaction of CSA in its sole discretion
(emphasis in original)
In November and December 2019, members of the Stott family transferred various assets to Agrinova. This occurred pursuant to finance provided by ANZ. Mr Hogg understood that ANZ would not renew the facilities and Agrinova had until 30 September 2020 to “finance away” from ANZ.
On 6 December 2019, Mr Steven Giustozzi of CSA sent an email to Mr Hogg requesting further information including information concerning Orbis, PIH and assets in the Solomon Islands.
On the same day, Mr Hogg forwarded that email to Richard, Cheryl and Mathew Stott, Barney Hughes and Mr Van Vlymen.
On 12 December 2019 Mr Hogg, on behalf of Agrinova, responded to Mr Giustozzi of CSA providing further information including:
…
5)Companies in Administration (Orbis Commodities, Pacific Investment Holdings etc) - Updates
The status of all entities associated with the Solomon Islands transaction remain unchanged. Each entity continues to be subject to the receivership of Christopher Darin and Nicholas Malanos of Worrells ( confirm that simultaneously with the settlement of Patrick Wong from the funds associated with this transaction, all entities (see flowchart in Dropbox - Solomon Islands Folder) will return to the sole control of Agrinova Pty Ltd.
Once approval (sic) final approval is granted by CSA all documents to give effect to the retirement of Christopher Darin and Nicholas Malanos will be drawn and circulated.
6) Updates on the settlement of the Solomon Islands lands
We confirm that Agrinova will be acquiring a 100 interest in either Orbis Commodities Pty Ltd and or Pacific Investment Holdings Pty Ltd. No issues arise regarding the conveyance or transfer of Solomon Islands properties. In effect the acquisition of the head or primary share interest has a cascading effect through each corresponding corporation, ensuring total ownership and control. See flowchart in Dropbox - Solomon Islands Folder).
…
9)How the funds at settlement will be disbursed and relevant purchase costs (Lawyers trust in Australia or other. Please specify where and with whom)
…
Orbis Commodities (Solomon Assets)
•The totality of the Orbis Commodities Pty Ltd (ACN 003 546 898) shares and / or the totality of the Pacific Investment Holdings Pty Ltd (ACN 001 614 964) shares will transfer by way of a Sale of Share Agreement and Share Transfer in the amount to be determined to Agrinova NOTING THAT no Stamp Duty will be payable.
•On Settlement, funds will be payable into the Trust Account Sean Keleher Solicitor as follows:
Amount: Up to $7,000,000 (AUD)
Duty Payable: $0
Trust Account: Sean Patrick Keleher Trust Account
...(as written; emphasis in original save for double underline which has been added)
On 12 December 2019, Mr Van Vlymen received a copy of that letter.
On 19 December 2019, Mr Keleher sent a letter to Mr Birchall and Mr Doble (and forwarded that letter by email to Mr Hogg and Mr Van Vlymen). Mr Keleher’s letter was in the following form:
RE: WONG & ANOR v VAN VLYMEN & ORS
We refer to the above matter and to our previous letters dated 12 and 15 July 2019.
We note that a partial response was provided to the abovementioned letter by Birchall Legal on behalf of Mr Wong, but no substantive response was received from the Receiver.
We confirm that our client is in a position to complete payment of the balance owing to the Plaintiffs pursuant to the Settlement Deed exchanged 4 November 2016 (November Deed) and retire the Receiver.
We are instructed to request the following information:
•Receiver’s Trial Balance as at today’s date;
•Total Receiver’s fees and disbursements incurred to date;
•Total Receiver’s fees and disbursements incurred but not yet invoiced as at today’s date;
•Total Plaintiffs’ fees and disbursements incurred to date;
•Total Plaintiffs’ fees and disbursements incurred but not yet invoiced as at today’s date
Please provide the above information by 5pm 23 December 2019.
Following the provision of this information we propose to circulate our client’s calculation on the balance owing to the Plaintiffs pursuant to the November Deed to resolve the matter and retire the Receiver.
We are instructed to demand that the Plaintiffs and the Receiver instruct the directors appointed to the boards of the Joint Venture entities who represent the interests of the Plaintiffs and the Receiver to take no further action on behalf of those entities to sell, assign, transfer or dispose of, encumber or further encumber or otherwise deal with any asset controlled or owned by any of the Joint Venture entities pending the completion of the agreement between the parties and the retirement of the Receiver.
We note that his Honour Justice Sackar gave leave to the parties to re-list the matter on 24 hours notice when the matter was last before his Honour on 14 March 2018 and we are instructed to seek an urgent listing before his Honour or the Duty Judge in the event that there is a delay in the provision of the information requested above and/or disagreement between the parties on the balance outstanding to finalise our client’s obligations under the November Deed and retire the Receiver.
On 20 December 2019, Mr Doble responded to Mr Keleher requiring evidence that funds were available to discharge the debt the subject of the charge pursuant to which the receiver was appointed, before he would incur the costs of providing the information sought.
Mr Keleher forwarded Mr Doble’s letter to Mr Hogg and Mr Van Vlymen, under cover of an email in the following terms:
Please see attached Receiver’s response.
Is there any document that I can serve that objectively confirms ability to settle - a letter from Agrinova would suffice.
We will need to put on affidavit evidence anyway when we come to support our case on the final payout figure. Accordingly, we are not being soft targets by providing the information at this stage - rather we are potentially reducing the issues in dispute when we get before the Duty Judge.
…
On 23 December 2019 at 12:57pm, Richard Stott sent an email to Mr Hogg, attaching a letter, incorrectly bearing a date of 12 July 2018 (23 December 2019 letter), addressed to Mr Keleher and signed by Richard Stott, in the following form:
RE: REQUEST FOR SETTLEMENT FIGURES
PATRICK WONG AND WILLEM VAN VLYMEN
We refer to our previous correspondence.
Agrinova remains and is now pressing to meet the outstanding payment owed by Wim Van Vlymen to Patrick Wong pursuant to the agreement between those parties, commonly known as the November 2016 Deed.
Please advise as a matter of urgency the amount payable on settlement including the breakdown of the final settlement figure owning to Mr Wong (or his corporate entity), legal fees and Receiver’s fees.
We would be grateful if you could liaise with Mathew Stott … or Bernard Hughes … to arrange a suitable date and time for settlement.
Richard Stott
Chairman
Agrinova Pty Ltd ATF Agrinova Unit Trust
(emphasis added)
Mr Hogg was the author of the 23 December 2019 letter.
At 12:58pm that day, Mr Hogg forwarded Richard Stott’s email and the attached 23 December 2019 letter to Mr Keleher. Mr Van Vlymen agreed in cross-examination with the proposition that he understood the 23 December 2019 letter to be evidence that Agrinova had the requisite finance to allow Mr Wong to be paid out.
At 1:40pm, Mr Keleher forwarded the 23 December 2019 letter to Mr Doble and Mr Birchall under cover of the following email:
We refer to your letter dated 20 March 2019 and attach letter from Mr Richard Stott, Chairman, Agrinova Pty Ltd of today’s date.
Please provide the information requested in our letter dated 19 December 2019 by close of business today.
We look forward to receiving your reply.
On the same day, Mr Birchall responded to Mr Keleher’s 19 December 2019 letter:
I refer to your letter to me, and the solicitor for Mr Darin, of Thursday 19 December 2019.
In your letter, you refer to a previous letter of yours dated 15 July 2019. I am unable to locate a copy of that letter. If you intend to rely on that letter, please send me a copy of it by email.
In any case, we refer to our letters to you of 17 and 22 July 2019.
No evidence of capacity to settle
As you would be well aware, Mr Van Vlymen has an extensive history of asserting that he is on the verge of settling his obligations to my client, only for nothing to materialise and for my client to waste further time, effort and costs dealing with it. Please see the annexure to this letter, which makes reference to many such cases.
In particular, it was as recently as your July correspondence in which you ‘confirm[ed]’ that your client was ready to settle and retire the receiver. That confirmation was based on a letter from Agrinova Pty Ltd as trustee for the Agrinova Unit Trust, which you enclosed. The letter was entirely unconvincing and the Agrinova proposal sank without trace.
Now, 5 months later, you again ‘confirm’ that your client is ready to settle and retire the receiver. However, unlike last time, your client has not included any particulars or evidence whatsoever to demonstrate that he has any realistic prospect of settling at this time. Until those prospects are cogently demonstrated, we are entitled to regard this latest assertion as a fantasy destined to be the next entry in the catalogue of Mr Van Vlymen’s failed promises and efforts to settle. In the circumstances, therefore, it is simply not appropriate for further costs to be incurred poring through records to provide updated legal costs and disbursements incurred ‘to date’ and as WIP.
Notwithstanding that, we can conveniently say that, since our letter to you of 22 July 2019, we estimate that approximately $1,500 has been incurred in legal fees and disbursements in this matter (including WIP, but excluding the cost of preparing this letter). You will appreciate that such sums are negligible in the context of the total amount owing by Mr Van Vlymen to my client.
Total amounts owing (including legal fees and disbursements)
As it happens, we have very recently provided to Mr Darin an updated approximate Australian Dollar‐equivalent calculation of the amounts owing to my client by your client for settlement, in order for Mr Darin to comply with reporting obligations. That figure was AUD7.619 million. (You will recall that substantial amounts due to Mr Wong are due in US Dollars.)
Settlement figure
Regarding your proposal to circulate your client’s proposed settlement figure, you are of course free to do so. However, we recommend that before doing so, you have close regard to previous correspondence from this firm on the matter. In particular, I refer you to paragraph 13 of my letter of 16 March 2018, and to item 1 and supporting explanation in my letter to Eakin McCaffery Cox of 29 November 2018 (to which I have referred you in previous correspondence).
We reserve our position on any listing before Sakar J (sic) or a duty judge as you propose in your 19 December 2019 letter, including as to costs (including security for costs). Needless to say, we reserve the right to put this letter and previous correspondence before the court on any question.
…
(bold emphasis in original; underline emphasis added)
On 24 December 2019, Ms Kate Cooper of Bransgroves Lawyers wrote to Mr Hogg (copying Mr Giustozzi and others) indicating that Bransgroves had been instructed by CSA to act on the “mortgage advance to Agrinova”. Ms Cooper confirmed that “all securities have been transferred to Agrinova except those held by Hughes”. Ms Cooper then sought the answers to several questions.
From early 2020, Mr Hogg encouraged more formal and regular meetings of the Agrinova directors. Those meetings were held via Zoom and were recorded. Mr Hogg also, in light of the family nature of the assets, encouraged extended family members to be part of those discussions.
On 5 January 2020, Mr Hogg sent an email to Ms Cooper. Mr Van Vlymen, Richard, Mathew and Cheryl Stott and Barney Hughes were also included on the email. In that email, Mr Hogg provided the following answers to the questions in Ms Cooper’s 24 December 2019 email (Ms Cooper’s questions have been italicised for ease of reading; Mr Hogg’s responses and the text is as written):
Could you please advise:
1.Agrinova’s solicitor on this transaction;
For all legal issues regarding the transaction please liaise with me on ...
To Central West Legal with facilitate the settlement (see below).
Amarlie Dent Central West Legal ...
2.I understand the Hughes properties are being transferred on settlement to Agrinova. Hughes will incorporate a new company and set up a new trust which will be a shareholder of Agrinova. That company/ trust will need to guarantee the loan. Can you please provide these details?
Two new entities (Discretionary Trusts) have been established for both Hughes and Van Vlymen’s interests. These have been be set up by Catalyst Accounting in Temora. I will follow these up tomorrow NOTING the Holiday break.
Please feel free to contact Greg Durham directly. Greg Durham
Catalyst Accountants ...
3.In the letter of offer, Orbis Commodities Pty Ltd and Pacific Investment Holdings Pty Ltd are listed as guarantors. Those companies are in external administration. These entities have been listed as the entities which will hold security in the Solomon Islands. Could you please confirm the entities which will hold the Solomon Islands interests, and their shareholders. I can then include them as guarantors.
Please contact me regarding the above. Orbis Commodities Pty Ltd and Pacific Investment Holdings Pty Ltd will not be part of the loan (noting that control will not transfer until settlement). The pathway forward is for all security documents for these relevant entities and held in escrow pending settlement.
We will need to work this thought together.
I will then be able to finalise the security documents.
Also on 5 January 2020, Mr Hogg sent an email to Barney and Angela Hughes; Richard, Cheryl, Mathew and Erin Stott; and Mr Van Vlymen attaching an agenda for a board meeting the following day.
Such reliance occurred on the basis of the promise as expressed in the 12 July 2019 and 23 December 2019 letters (as the reiteration and confirmation of the promise in the 2 April 2020 letter was yet to occur).
I am also satisfied that Mr and Mrs Van Vlymen continued to rely upon the promise – by continuing to pursue the notice of motion – after the 2 April 2020 letter.
In this regard, on the day following the 2 April 2020 letter, Mr Keleher on behalf of Mr Van Vlymen continued correspondence with Mr Birchall on behalf of Mr Wong and with Mr Doble on behalf of the receiver, stating (see [211(1)] above):
...
Please find attached a letter from Agrinova Pty Ltd dated 2 April 2020 the contents of which is self-explanatory.
Please note that it is Agrinova Pty Ltd, not Capital Securities Australia, that is providing the funding to resolve the matter between our clients.
…
Agrinova made several submissions to the effect that Mr Van Vlymen placed no reliance (or no reasonable reliance) upon the representations made in the letters in circumstances where Mr Van Vlymen was aware that the true position was that Agrinova was not in a position to fund the payment to Mr Wong. This was sometimes couched in terms of a reason to deny relief to Mr Van Vlymen on the basis that a person seeking relief in equity must have “clean hands”.
One such submission was that the 23 December 2019 letter was a “sham” set up between Mr Hogg and Mr Van Vlymen or his representatives. This submission was unburdened by any reference to the evidence. In view of the gravity of the premise of this submission it should have been (but was not) put to Mr Hogg and Mr Van Vlymen in cross-examination before being made. Regrettably, it was not. I reject the submission.
Another such submission was that there was no reasonable reliance on the 2 April 2020 letter because Mr Van Vlymen was aware that CSA had withdrawn its funding from 25 March 2020 (see [203] above).
I do not accept this submission. The premises implicit within it – (1) that Agrinova’s only source of funding was CSA; (2) this was known to Mr Van Vlymen; and (3) this remained the case as at 2 April 2020 on which date the promise was reiterated in the most strident of terms – have not been established and were not put to Mr Van Vlymen in cross-examination.
Further, the 3 April 2020 letter from Mr Keleher (see [211(1)] above) included:
Please note that it is Agrinova Pty Ltd, not Capital Securities Australia that is providing the funding to resolve the matter between our clients.
Agrinova also relied upon the absence of direct evidence from Mr and Mrs Van Vlymen that they had relied upon the promise. However, the presence or absence of such evidence is a matter of little moment.
Direct evidence of reliance, including what would have occurred had the true position been known, might well be regarded as carrying little weight and self-serving: see Dominelli Ford(Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd [1992] FCA 550; (1992) 38 FCR 471 at 481 to 483 (Beaumont, Foster and Hill JJ); Wilson v Arwon Finance Pty Ltd [2020] WASCA 137 at [227] (Quinlan CJ, Pritchard and Vaughan JJA); Elanor Funds Management Ltd v Alceon Group Pty Ltd [2024] FCAFC 121 at [285] (Bromwich and Thawley JJ). In Wilson, Quinlan CJ, Pritchard and Vaughan JJA explained at [227]:
Often a reliance finding will be established by inference from the objective facts. On occasions - as occurred in the present case - a witness will give direct evidence to the effect that he or she took particular steps (or refrained from taking particular steps) on the faith of or induced by an understanding or belief brought about by a representation or other conduct on the part of another. Any such evidence is inherently self-serving. It will usually be treated with caution and scrutinised carefully by a trial judge in much the same way, and for much the same reasons, as a trial judge will carefully consider the veracity and reliability of hypothetical evidence (where such evidence may be lead). Such hypothetical evidence is normally assessed in light of the surrounding objective facts and circumstances. Unless objective evidence confirms its reliability such evidence often has little probative value. Demeanour can play little part in accepting the evidence; it may, however, be ground for rejecting the evidence. The last observation demonstrates that rejection of a party witness’ direct evidence of reliance may result in him or her failing to establish reliance.
(citations omitted)
Thus, I am satisfied that Mr and Mrs Van Vlymen continued reasonably to rely upon the promise until Mr Van Vlymen was told on 19 May 2020 that Agrinova had resiled from it (see [230] to [236] above).
From 19 May 2020, there was no reasonable basis for reliance upon the promise.
C.5 Detriment as a consequence of reliance upon the promise?
The fourth requirement is that the consequence of Mr and Mrs Van Vlymen’s reliance must be detriment if the promise is not fulfilled, in the sense that they will be left in a worse position, as a consequence of reliance upon the promise than if the promise had not been made (Kramer v Stone at 135 to 136 [40]).
As noted above, Agrinova resiled from the promise on 19 May 2020.
The non-fulfilment of the promise is not relevant detriment. Rather, it is the conduct of Mr Van Vlymen in acting upon the promise that is relevant: see e.g., Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 at 121 to 122 [35] (Gleeson CJ, McHugh, Gummow and Callinan JJ); Sidhu at 522 to 523 [58]; Kramer at 135 to 136 [40]. See also the analysis of Doyle J in Manassen Holdings Pty Ltd v Commercial & General Corporation Pty Ltd [2019] SASC 171 at [244] to [254]. At [253] to [254] his Honour stated:
253Finally, the plaintiffs rely upon the non-payment of the daily fee for the period following 30 November 2016 as detriment sufficient to found its estoppel. However, the difficulty with this is that, generally at least, the mere non-receipt of the anticipated benefit of the promise is not relevant or sufficient detriment. As Brennan CJ explained in Commonwealth v Verwayen:
The relevant detriment in a case of equitable estoppel is detriment occasioned by reliance on a promise, that is, detriment occasioned by acting or abstaining from acting on the faith of a promise that is not fulfilled. The relevant detriment does not consist in a loss attributable merely to non-fulfilment of the promise.
254The rationale for this approach lies in an understanding that the object of promissory estoppel is not the protection of the expectation interest that contract law seeks to protect. Rather, its object is the prevention of the unconscionable infliction of detriment. And while, in a lay sense, it might be said to be harsh or unfair not to adhere to a promise, equity requires something more than the making and threatened non-fulfilment of a promise before it will intervene. A similar point emerges from the passages of Brennan J’s reason in Walton Stores (Interstate) Ltd v Maher, extracted earlier in these reasons.
(footnotes omitted)
The analysis of Doyle J was upheld on appeal: Commercial & General Corporation Pty Ltd v Manassen Holdings Pty Ltd [2021] SASCFC 40 by Livesey J at [142] to [160], with Stanley J agreeing at [1] and Nicholson J agreeing at [7].
Mr and Mrs Van Vlymen plainly suffered detriment in reliance upon the promise, principally a liability for legal fees incurred in connection with the re-agitation of Supreme Court proceeding 2015/60753 for the purpose of determining the amount owing to Mr Wong. They were also exposed to a potential liability (which subsequently crystallised) for legal fees incurred by Mr Wong in his response. I am comfortably satisfied that such detriment would not have occurred but for the re-agitation of Supreme Court proceeding 2015/60753, including the filing of the notice of motion, in reliance upon the promise.
C.6 Remedy
Thus, adopting the expression used by the plurality in Kramer v Stone at 136 [41], I am satisfied that conscience requires Agrinova redress the detriment suffered by Mr and Mrs Van Vlymen. I turn now to address remedy.
The applicant submitted that:
(1)there is nothing inequitable in holding Agrinova to the assumed state of affairs, namely, that Agrinova would stand behind Mr and Mrs Van Vlymen and ensure the payment of the amount owing to Mr Wong;
(2)the minimum equity is relief by way of equitable compensation, and related relief, putting Mr and Mrs Van Vlymen in the position they would have been in if Agrinova had not departed from the promise. If Agrinova had not departed from that promise, then the amount owing to Mr Wong would have been paid and Mr and Mrs Van Vlymen would have become part of the Agrinova joint venture. Accordingly, this is one of those cases in which the quantification of equitable compensation coincides with the quantification of damages for breach of contract;
(3)the Court should order Agrinova to pay, by way of equitable compensation:
(a)$1,279,135.00 as compensation for the legal costs and expenses incurred by Mr Van Vlymen in Supreme Court proceeding 2015/60753, or incurred by Mr Wong in that proceeding and payable by Mr Van Vlymen;
(b)$7,074,000 being the amount payable to Mr Wong pursuant to the 2 September 2020 orders;
(c)$5,900,000, as the loss of the value of the allocation of units in the Agrinova Unit Trust;
(d)$6,075,000 representing the diminution in value of the shares in Orbis and its wholly owned subsidiary, PIHL, as a result of the fees owing by Orbis and PIHL to Hall Chadwick arising out of the administration/liquidation of Orbis, in which Mr and Mrs Van Vlymen held an indirect 100 per cent interest; and
(e)$325,897.08, for fees payable to Mr and Mrs Van Vlymen’s trustee in bankruptcy, Mr Sampson, and the disbursements incurred by Mr Sampson,
a total in excess of $20,000,000.
For the reasons explained below, Agrinova should be required to provide compensation with respect to some legal costs and expenses, but not otherwise.
Relief in equity based upon estoppel arising out of the abandonment of a promise is directed at addressing the detriment caused to the promisee in changing their position in reliance upon the promise. Such relief is not directed at fulfilling the expectation created by the promise (albeit that in a particular case addressing the detriment may require the fulfilling of such expectation).
As Livesey J explained in Manassen Holdings at [143], [146] to [147] and [156]:
143The plaintiffs maintain that, assuming the representee proves substantial detriment, the analysis should commence with the proposition that the promise or representation is to be fulfilled. On the plaintiffs’ approach, if the relief sought is not disproportionate to the detriment suffered, then sufficient reliance will be made out. However, to reason in this way confuses the question of detriment with the appropriateness of the remedy sought. The correct approach, as applied by the trial Judge, is to first ascertain the detriment caused. To do otherwise converts the claim to a contractual claim, rather than a detrimental reliance claim. The claim in contract compensates for lost expectations, while the claim in estoppel compensates for detriment sustained in reliance. The two measures ought not be conflated.
…
146The High Court has consistently held that it is the act of detrimental reliance which forms the basis of a promissory estoppel, and not merely the departure from the representation made. After all, “[i]t is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise”.
147The point of the passage cited from Sidhu v Van Dyke is that it explains that there must be detrimental reliance: that is, some detriment must flow from the defendant’s change in position. It is not sufficient that the defendant has, on one view, breached a promise. The plaintiffs’ conduct in acting upon the promise must occasion detriment. To do otherwise coverts the claim to a contractual claim for loss of expectation. This approach was reinforced later in Sidhu v Van Dyke where the plurality quoted from Waltons Stores (Interstate) Ltd v Maher:
In Waltons Stores (Interstate) Ltd v Maher, Brennan J said:
“The protection which equity extends is analogous to the protection given by estoppel in pais to which Dixon J referred in Grundt v Great Bouler, ie, protection against the detriment which would flow from a party’s change of position if the assumption (or expectation) that led to it were deserted.”
…
156The point to be drawn from the passages from Sidhu v Van Dyke set out above is that, in some cases, the appropriate relief will be the enforcement of the assumption or the expectation, while in other cases, the appropriate relief is something less, because to hold the defendant to the promise would be wholly disproportionate to the detriment suffered by the plaintiffs. That is a point different to the contention propounded by the plaintiffs, and tends only to emphasise that the mere non-fulfillment of a promise is not sufficient to give rise to a promissory estoppel.
(footnotes omitted)
In Kramer v Stone the plurality explained at 135 to 136 [40]:
… it is the existence of detriment arising from reasonable reliance upon an unfulfilled promise that completes the recognition of the estoppel and moulds the remedial response. As this Court has repeatedly held, “[i]t is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise”. Hence, the relief is “moulded accordingly to prevent th[e] detriment”. In cases where the detriment suffered by a plaintiff is “a relatively small, readily quantifiable monetary outlay on the faith of the [defendant’s] assurances” then, apart from interest, the likely equitable relief ordered will be compensation in the amount of the monetary outlay. By contrast, where the detriment suffered “involves life-changing decisions with irreversible consequences of a profoundly personal nature”, the likely equitable relief will be to require fulfilment of the assumption upon which the plaintiff acted, such as by a conveyance of rights, or an assessment of the monetary value of the assumption.
Thus, it is necessary to identify the relevant detriment and then mould relief accordingly. As explained above, the relevant detriment is limited to the fees for which Mr Van Vlymen became liable in Supreme Court proceeding 2015/60753 between about early March 2020 and 19 May 2020.
The obviously appropriate remedy is compensation (including interest) for that expenditure.
This is not a case where performance of the promise is necessary or appropriate. The present facts are far removed from those in cases such as Giumelli, Sidhu and Kramer v Stone. In particular, the detriment suffered by Mr Van Vlymen could not on any reasonable measure be said to have involved “life-changing decisions with irreversible consequences of a profoundly personal nature” as was the case for the promisees in each of Giumelli, Sidhu and Kramer v Stone. The relevant detriment suffered by Mr Van Vlymen was purely financial, readily quantifiable, and suffered over a relatively short period (between early March 2020 and 19 May 2020).
The evidence does not allow for any precise determination of the costs incurred by Mr and Mrs Van Vlymen on the one hand, or by Mr Wong on the other, between early March 2020 and 19 May 2020.
The evidence concerning such costs is limited to the tax invoices rendered by Mr Leopold, Mr Somerville and Keleher Lawyers, which cover (but are not limited to) the period from early March 2020 to 19 May 2020; and to the 2 September 2020 orders which quantified the costs payable to Mr Wong.
Mr Leopold’s tax invoices record costs of: (1) $33,033.00 for the period from 20 April 2020 (when he was retained) to 30 April 2020; and (2) $33,891.00 for the period from 1 May 2020 to 19 May 2020, a total of $66,924.00.
Mr Somerville’s tax invoices record costs of: (1) $3,562.50 to 2 March 2020; (2) $16,775.00 for the remainder of March 2020; (3) $25,162.50 for the period from 6 to 28 April 2020; and (4) $31,212.00 for the period from 28 April 2020 to 19 May 2020, a total of $76,712.00.
Mr Keleher’s tax invoice refers to total costs of $330,000.00. It is dated 6 May 2021 (i.e. well after the relevant events and the commencement of this proceeding) and contains a general narrative of work undertaken but no means of identifying the dates on which such work was done or the amounts attributable to particular time periods. Nor is there identification of the hourly rate or the number of hours claimed. Doing the best I can with the information available and taking into account the pattern of incurrence of costs over time shown in the invoices of Mr Leopold and Mr Somerville and the likelihood that the costs rendered by Mr Keleher were not restricted solely to Supreme Court proceeding 2015/60753, I conclude that Mr Keleher’s costs for the period up to 19 May 2020 were in the order of $155,000.00.
The total of $66,924.00, $76,712.00 and $155,000.00 is $298,636.00, which I will round to $300,000.00. From this total there must be subtracted the $15,000.00 paid by Agrinova on 6 April 2020.
The applicant seeks to quantify the costs payable to Mr Wong by reference to the costs orders which formed part of the 2 September 2020 orders and which the applicant contends is an amount of $601,090.00. Agrinova contends that those costs orders amount to $517,364.00.
In my view these costs orders do not provide a reliable indication of the costs incurred by Mr Wong up to 19 May 2020 in circumstances where: (1) these costs orders (unsurprisingly) do not specifically address this time period; (2) the costs payable to Mr Wong under the 2 September 2020 orders extended beyond those associated with the determination of the amount owing to Mr Wong. I prefer to estimate the costs payable to Mr Wong arising out of the re-agitation of Supreme Court proceeding 2015/60753 and up to 19 May 2020 as an amount of the same magnitude as the costs incurred by Mr and Mrs Van Vlymen to that point, namely $300,000.00.
The other heads of compensation sought by the applicant (see [331(3)(b) to (e)] above) are not detriment arising from a change in position by Mr Van Vlymen in reliance upon the promise. Such compensation would be wholly disproportionate to the detriment occasioned.
Further, the moneys payable to Mr Wong were a debt that Mr and Mrs Van Vlymen owed Mr Wong under the November 2016 Deed and could have been the subject of action by Mr Wong at any time. It was not detriment caused by the adoption of a change of position in reliance upon the promise. Mr and Mrs Van Vlymen would have been in the same position in any event (cf. Sidhu at 531 [92] per Gageler J).
The applicant contended to the contrary, submitting that a point of no return was reached on 28 April 2020 when Mr Wong filed his amended statement of claim (see [226] above). The applicant relied, in this regard, upon the following statement of Mr Birchall in his affidavit (as written):
Had I become aware that, as appears to be case from the Bransgroves-Keleher Emails, CSA had withdrawn the CSA Funding by the end of March 2020, I would have immediately informed Mr Wong and sought instructions from him. Based on my beliefs about Mr Wong’s attitude to that issue (as deposed to above), I am highly confident that he would have instructed me to:
(a)bring that information to the attention of Sackar J immediately, with a view to aggressively pursuing an application to dismiss, or at least stay pending a revival or replacement of the CSA Funding, the Van Vlymen NoM; and
(b)if successful, refrain from pressing the amended relief sought in the 2015 Proceeding and filing of the 2020 Summons.
The reference to: (1) the “Van Vlymen NoM” is to the notice of motion; (2) the “amended relief sought in the 2015 Proceeding” is a reference to the amended statement of claim filed on 28 April 2020; and (3) the “2020 Summons” is a reference to a summons filed by Mr Wong to overcome a procedural objection taken by Mr Van Vlymen, and filed in response to the notice of motion.
The applicant relied on this paragraph in support of a submission to the effect that: (1) the promise caused Mr and Mrs Van Vlymen to file the notice of motion; (2) the notice of motion caused Mr Wong to file his summons/amended application; (3) the filing of the summons/amended application led to the making of the order on 2 September 2020 requiring payment of $7,047,000 to Mr Wong; and (4) thus reliance upon the promise caused that liability to Mr Wong.
I do not accept that submission for the following reasons.
First, it relies upon evidence from Mr Birchall which is, at its highest a statement of Mr Birchall’s belief. Secondly, it is conditioned upon: (1) the proposition that CSA had withdrawn funding by the end of March 2020; and (2) the making of a successful application to Justice Sackar for the dismissal or stay of the notice of motion. Thirdly, it is inherently unlikely that Mr Wong would have forever abandoned a debt of such magnitude.
Thus, there should be an order for compensation for the legal fees for which Mr and Mrs Van Vlymen became liable and which were incurred between the beginning of March 2020 and 19 May 2020, in an amount of $585,000.00 ($300,000.00 less $15,000.00, plus $300,000.00).
D. THE CONTRACTUAL CASE
I turn now to consider the contractual case.
D.1 Introduction
The applicant’s case involves the following contentions.
First, at the 30 October 2018 meeting Agrinova – through Mr Hogg acting within the scope of his actual or apparent authority as a director of Agrinova – made an offer to Mr Van Vlymen (contended offer) to the effect that:
(1)Agrinova would pay the balance outstanding owed to Mr Wong pursuant to the November 2016 Deed;
(2)Agrinova would pay the fees and expenses required to retire the receiver;
(3)Agrinova would pay the legal fees and expenses that Mr and Mrs Van Vlymen would incur in finalising all matters with Mr Wong to complete their obligations under the November 2016 Deed;
(4)Agrinova would allocate units in the Agrinova Unit Trust (for which Agrinova was the corporate trustee) to Mr and Mrs Van Vlymen or their nominee, where the allocation of such units was to be done on a pro-rata basis based on the net value of Mr and Mrs Van Vlymen’s assets transferred to Agrinova as a proportion of Agrinova’s total assets, the valuation of Mr and Mrs Van Vlymen’s assets to be dependent on the identification of final amounts payable by Agrinova in accordance with (1) to (3) above and on a formal valuation of all of Agrinova’s assets;
(5)in consideration of Agrinova’s actions described in (1) to (4) above, Mr and Mrs Van Vlymen would – so as to crystallise the amount payable by Agrinova pursuant to (1) to (3) above – do all things necessary to formalise the amount owing to Mr Wong so as to enable Agrinova to pay that amount; and
(6)in consideration of Agrinova’s actions described in (1) to (4) above, Mr and Mrs Van Vlymen would be obliged to transfer or cause to transfer to Agrinova Orbis’s shareholding in PIHL in consideration for Agrinova carrying out the actions described in (1) to (4) above, resulting in Agrinova becoming the sole shareholder of PIL and OSTI and thereby having 100 per cent ownership of ICSL, PMSL, Cross Pacific and Pacific Finance.
Secondly, at the October 2018 Meeting, by an oral acceptance conveyed by Mr Van Vlymen to Mr Hogg, Mr and Mrs Van Vlymen accepted the contended offer.
Thirdly, Mr and Mrs Van Vlymen and Agrinova thus entered into a legally binding contract on the terms and conditions set out in the first contention above (the contended agreement).
The respondents deny each of Agrinova’s contentions.
D.2 Relevant principles
In Richards v Han [2022] FCA 1539 at [97] to [98], Halley J set out a convenient summary of relevant principles:
97The principles governing proof of the existence of a binding oral agreement are well established and can be summarised as follows:
(a)a binding agreement is made where a reasonable person would believe that, based on their words and behaviour, the parties intended that a contract be formed: John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 (Holland) at [93]-[94] (Hammerschlag J);
(b)the test is an objective one, which in most cases can be administered by determining whether there has been an offer by one party to be bound on certain terms accompanied by an unqualified acceptance of that offer communicated by the other party to the offeror: Holland at [93]-[94]; Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424; [1954] HCA 20, 457;
(c)consideration of surrounding circumstances and post contractual conduct is permissible when the existence or terms of an oral contract are in issue: Brendan Wilfred King v Robert Lawrence Adams [2016] NSWSC 1798, [63] (Sackar J);
(d)the conduct of the parties must be “capable of proving all the essential elements of an express contract”: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 (Heydon JA, as his Honour then was);
(e)where it is alleged that a binding agreement was reached during the course of a specific conversation, the Court must be persuaded that the parties intended to be bound by a contract on the terms alleged “in the course of the discussion”: Sparway Pty Ltd v Lakkis [2017] NSWSC 1465 at [55]-[67] (Darke J);
(f)in the absence of any reasonably contemporaneous memorandum or other record of the agreement, the plaintiff’s credibility in terms of both his truthfulness and reliability become a central issue in the proceedings: Arcaba v K&K Real Estate Pty Limited [2016] NSWSC 1793 (Arcaba) at [91] (Hall J);
(g)in cases where a party seeks to rely upon spoken words to show the existence of a contract, the Court must feel an “actual persuasion” of the occurrence or existence of the contract: Holland at [94] (Hammerschlag J); Diransson Pty Ltd v Hassan El Dirani [2019] NSWSC 617 (Diransson) at [465] (Sackar J);
(h)when considering conflicting accounts of events that occurred well in the past, it is pertinent to bear in mind that “with every day that passes the memory becomes fainter and the imagination becomes more active”: Lewis v Lewis [2022] QSC 208 at [176] quoting White AJA in ACN 070 037 599 Pty Ltd v Larvik Pty Ltd [2008] QCA 416 at [6]; and
(i)absent some objective and contemporaneous support, the alleged reiteration many years after the event of verbal exchanges which are said to consummate contractual relations and/or alternatively induced a particular form of conduct, are often difficult to prove: Diransson at [463] (Sackar J).
98The following additional relevant principles emerge from Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1 at [59]-[64]:
(a)an agreement that is incomplete will not give rise to an enforceable contract;
(b)an alleged contract will fail for incompleteness if, even though the parties have used clear language, a term which is regarded as essential as a matter of law has not been agreed;
(c)if the parties have not agreed on all essential terms, for example because they have left on such term to be settled by future agreement, the contract is incomplete no matter what the parties themselves may think; and
(d)if the parties have not reached consensus on the essential terms of the contract, there will be no binding contract notwithstanding that one of the parties has commenced work referable to the agreement.
(emphasis in original)
Further:
(1)in Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 at 105 [24] Gaudron, McHugh, Hayne and Callinan JJ explained:
“It is of the essence of contract, regarded as a class of obligations, that there is a voluntary assumption of a legally enforceable duty.” [Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 at 457 per Dixon CJ, Williams, Webb, Fullagar and Kitto JJ]. To be a legally enforceable duty there must, of course, be identifiable parties to the arrangement, the terms of the arrangement must be certain, and, unless recorded as a deed, there must generally be real consideration for the agreement. Yet ‘[t]he circumstances may show that [the parties] did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts’ [South Australia v The Commonwealth (1962) 108 CLR 130 at 154 per Windeyer J]. ;
(2)the magnitude and complexity of the subject matter of the alleged contract will bear upon the likelihood that the parties intended to reach legally binding terms in an informal manner: Plankton Australia Pty Ltd v Rainstorm Dust Control Pty Ltd [2018] FCA 174 at [13] (Colvin J); Dig It Landscapes Pty Ltd (in liq) v Bupa Aged Care Australia Pty Ltd (No 2) [2024] FCA 31 at [137] (Jackson J); .
(3)as to subsequent conduct:
(a)in Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825; (2015) 329 ALR 1 at 113 to 114 [722], Edelman J explained:
… in cases involving a dispute about an oral contract, evidence of subsequent acts of the parties can be used to resolve the questions of what was said at the time of the alleged contract and the context in which a reasonable person would have understood the words to have meant in the manner and circumstances in which they were spoken.
(citations omitted; emphasis in original) ; and
(b)it is fallacious to infer from subsequent conduct which is not inconsistent with an alleged contract that the conduct actually took place because of the alleged contract: Heydon J D, Heydon on Contract: The General Part (LawBook Co, 2019) at [2.110].
D.3 Consideration
I accept on 30 October 2018 that there was a lengthy discussion between those present – Mr Van Vlymen, Mr Hogg, Mathew Stott, Barney Hughes and Mr Ramakrishnan – concerning a potential joint venture between the Stott, Hughes and Van Vlymen families, which included a discussion of a broad concept involving those families transferring assets to Agrinova in return for the issue of units in a unit trust.
However, I am not satisfied that the contended agreement was made, for the following reasons.
First, for the reasons set out at [278] to [289] above, I am not satisfied that Mr Hogg made the contended offer. This is sufficient reason to find that the contended agreement was not made.
Secondly, the recollection of those persons who were present at the 30 October 2018 meeting and who gave evidence – Mr Van Vlymen, Mr Hogg, Barney Hughes and Mr Ramakrishnan – taken as a whole is not suggestive of any binding contract having been reached on that day. In this regard:
(1)Mr Hogg’s summary of the course that was determined that day was that the Stott, Hughes and Van Vlymen families “would continue in moving towards a joint venture” ([76(2)(a)] above) and “further work needed to be completed to re-work the joint venture project without BFB” ([72(2)(b)] above) and that “… this is what we need to look at” (see [76(4)] above);
(2)Barney Hughes had a similar recollection that Mr Hogg stated that “the families can continue to move towards a joint venture … I am not particularly confident that Millennial Equity will continue to be willing to enter into a funding arrangement without BFB, so further work will need to be completed to rework the project without BFB” ([78(2)] above) and that he said “I agree and this is what we need to look at” ([78](5) above); and
(3)the expressions of agreement described in the accounts given by Mr Hogg and Barney Hughes in this context are at best expressions of agreement to take further steps prior to any party being contractually bound.
Thirdly, none of this is gainsaid by the surrounding circumstances which obtained as at 30 October 2018, including the fact that the Stott family was looking for a joint venture partner, or the circumstances of the BFB bid.
Fourthly, neither Mr Van Vlymen nor Mr Hogg (on behalf of Agrinova) was naïve in matters of commerce. To the contrary, they each had considerable experience. If there was (objectively) an intention to enter into a legally binding agreement of the magnitude of the contended agreement – involving the merger of three sets of landholdings of multiple properties both in Australia and the Solomon Islands and with a combined value of many millions of dollars – then one would usually expect it to have been recorded in writing.
Fifthly, if contrary to the above, the contended offer was made and accepted, this did not create a legally binding agreement where much remained to be agreed including, critically, the price to be paid for the assets of Mr and Mrs Van Vlymen including the extent of the “discount” to be applied (see [76(2)(g) and (h)], [78(4)] and [79(1)] above).
Sixthly, subsequent events do not suggest that the contended agreement was reached on 30 October 2018.
The applicant submitted that the following steps would not have been taken unless Agrinova and Mr and Mrs Van Vlymen intended to enter into a binding agreement on 30 October 2018:
(1)the inspection by Richard and Mathew Stott and Barney Hughes of various landholdings for purchase;
(2)Mr Hogg’s dealing with various financiers and in particular with ANZ and CSA;
(3)the 12 July 2019 letter (see [119(2)] above);
(4)the 12 July 2019 letter from Mr Keleher on behalf of Mr Van Vlymen to the receiver (see [119(3)] above);
(5)the appointment on 1 August 2019 of Mathew Stott as a director of Agrinova (see [126] above);
(6)the letter from Agrinova to CSA dated 12 December 2019 (see [136] above);
(7)the 23 December 2019 letter (see [141] above);
(8)the transfer in December 2019 and February 2020 of the assets of the Stott and Hughes families respectively to Agrinova (see [133] and [177] above); and
(9)the appointment of Brandon Hughes as a director of Agrinova on 27 January 2020 (see [166] above).
I do not accept this submission. It may be accepted that the conduct described in the previous paragraph is not inconsistent with the contended agreement and that some of it is consistent with the existence of the contended agreement. However, it does not follow that the conduct took place because of the contended agreement or that the conduct is probative of the existence of the contended agreement.
The subsequent conduct described above is perfectly consistent with an evolving relationship as the Stott and Hughes families “moved toward” a joint venture which may or may not have included Mr and Mrs Van Vlymen and their assets. There is also subsequent conduct that is difficult to reconcile with the existence of the contended argument. For example, the creation of a veto vested in the Stott family company Avondale Agricultural over the issue of further units in the Agrinova Unit Trust (see [106] above), and the absence of disclosure to the Family Court of the use of the Agrinova Unit Trust as a vehicle for the merger of the assets of three families (see [129] and [130] above).
Finally, if the contended agreement had been made, one might expect there to have been some contemporaneous reference to it. There is none.
Similarly, there was no protest or assertion of the contended agreement when the promise was withdrawn on 19 May 2020.
Further, several months later: (1) on 18 August 2020, Mr Keleher wrote to Richard Stott asserting an “agreement between Agrinova and our client” ([240] above); (2) on the same day, Mr Long on behalf of Richard, Mathew and Erin Stott requested a copy of “the agreement between Mr Van Vlymen and Agrinova Pty Ltd that your refer to” (see [241] above); (3) on 26 August 2020 Mr Keleher sent a further letter to Richard Stott, which again referred to an agreement between Agrinova and Mr Keleher’s (now plural) clients. Despite providing some detail of the basis of an alleged estoppel, no reference is made to an alleged oral agreement reached on 30 October 2018 (see [242] above); and (4) on the same day, Mr Long again requested a copy of the alleged agreement (see [243] above). If there was an oral agreement reached on 30 October 2018, which Mr Van Vlymen claimed had been breached, one might have expected Mr Keleher’s letters to have made some reference to such an agreement.
For the foregoing reasons, I feel no persuasion that the contended agreement was reached on 30 October 2018. It follows that the claim based on contract fails at the outset. It is unnecessary to consider questions of breach or damages (or whether to allow the respondent’s application at the end of the hearing to amend its defence with respect to one aspect of the claimed damages).
E. CONCLUSION
The claim in estoppel succeeds in part. The claim in contract fails. As there are interest calculations to be made and there may be questions of costs to be resolved, I will make orders for conferral as to the form of orders that ought be made.
I certify that the preceding three hundred and seventy-eight (378) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman. Associate:
Dated: 5 June 2025
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