Wilden Pty Ltd v Green [No 6]

[2018] WASCA 198

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION:   WILDEN PTY LTD -v- GREEN [No 6] [2018] WASCA 198

CORAM:   MURPHY JA

MITCHELL JA

BEECH JA

HEARD:   8 AUGUST 2018 & ON THE PAPERS

DELIVERED          :   9 NOVEMBER 2018

FILE NO/S:   CACV 101 of 2005

BETWEEN:   WILDEN PTY LTD

First Appellant

MAGENTA NOMINEES PTY LTD

Second Appellant

TACE PTY LTD

Third Appellant

SYDNEY JAMES CHESSON

Fourth Appellant

BERT LEONARD DENBOER

Fifth Appellant

CALLAO PTY LTD

Sixth Appellant

BENRONE PTY LTD

Seventh Appellant

AND

GRAEME WILLIAM GREEN

First Respondent

W J GREEN & CO (1984) PTY LTD

Second Respondent

SHARYN LEE GREEN

GRAEME WILLIAM GREEN

JULIE ANNE GREEN

WILLIAM JOSEPH GREEN

NORMA GLENYCE GREEN

Third Respondents

Catchwords:

Account - Registrar's report - Taking of account in accordance with Court of Appeal's orders - Proper construction and application of orders - Adoption of Registrar's report - Principles to be applied

Legislation:

Rules of the Supreme Court 1971 (WA), O 35 r 9, O 35 r 11, O 36 r 9, O 45 r 8, O 67 r 17

Result:

Respondents' application to adopt Registrar's report is granted
Appellants' applications to adduce additional evidence dismissed

Category:    B

Representation:

Counsel:

First Appellant	:	Mr N D C Dillon
Second Appellant	:	Mr N D C Dillon
Third Appellant	:	Mr N D C Dillon
Fourth Appellant	:	In Person
Fifth Appellant	:	Mr N D C Dillon
Sixth Appellant	:	Mr N D C Dillon
Seventh Appellant	:	Mr N D C Dillon
First Respondent	:	Mr M L Bennett
Second Respondent	:	Mr M L Bennett
Third Respondents	:	Mr M L Bennett

Solicitors:

First Appellant	:	AustAsia Legal Pty Ltd
Second Appellant	:	AustAsia Legal Pty Ltd
Third Appellant	:	AustAsia Legal Pty Ltd
Fourth Appellant	:	In Person
Fifth Appellant	:	AustAsia Legal Pty Ltd
Sixth Appellant	:	AustAsia Legal Pty Ltd
Seventh Appellant	:	AustAsia Legal Pty Ltd
First Respondent	:	Bennett + Co
Second Respondent	:	Bennett + Co
Third Respondents	:	Bennett + Co

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

Armour v Mason [2002] NSWSC 464

Australian Securities and Investment Commission v GDK Financial Services Pty Ltd [2006] FCA 1415; (2006) 236 ALR 699

Beneficial Insurance Co Ltd v Hamilton (1985) 73 FLR 347

Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5

Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784

Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124

Green v Wilden Pty Ltd [2005] WASC 83

Green v Wilden Pty Ltd [2005] WASC 83 (S)

Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41

Juul v Northey [2010] NSWCA 211

Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146

Mid‑City Skin Cancer Laser Centre v Zahedi‑Anarak [2006] NSWSC 844; (2006) 67 NSWLR 569

Netglory Pty Ltd v Caratti [2013] WASC 364

Owen v ComLaw (No 62) Pty Ltd [2006] VSCA 151; (2006) 201 FLR 275

Super Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549

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

Wenco Industrial Pty Ltd v WW Industries Pty Ltd [2009] VSCA 191; (2009) 25 VR 119

Wilden Pty Ltd v Green [2009] WASCA 38

Wilden Pty Ltd v Green [2009] WASCA 38 (S)

Wilden Pty Ltd v Green [No 4] [2016] WASCA 195

Wilden Pty Ltd v Green [No 5] [2017] WASCA 105

Young v National Australia Bank Ltd [2004] WASCA 298; (2004) 29 WAR 505

JUDGMENT OF THE COURT:

1. This matter concerns an application by the respondents, filed 22 June 2017, for, in general terms (1) the adoption of the report of Registrar Davies delivered 7 June 2017 in Wilden Pty Ltd v Green [No 5][1] (Registrar's report), and for consequential orders in accordance with the Registrar's report, and (2) costs orders.  The matter came before the court on 8 August 2018, and the hearing on that date proceeded on the basis that the court would determine pars 1 and 2 of the respondents' application (dealing with the adoption of the Registrar's report and consequential orders) and leave for further determination pars 3 ‑ 6 of the application (dealing with costs orders).[2]  These reasons deal with pars 1 and 2 of the respondents' application.

   [1] Wilden Pty Ltd v Green [No 5] [2017] WASCA 105.

   [2] Appeal ts 947 - 948.

2. The appellants challenge the adoption of the Registrar's report and, in that regard, filed and served grounds of challenge and submissions in support in the form of an 'appellants' case'.  The first - third and fifth - seventh appellants filed an amended appellants' case on 20 November 2017.  They are legally represented.  The fourth appellant, Mr Chesson, filed an amended appellant's case on 27 November 2017.  The respondents filed an amended respondents' answer on 13 December 2017.

3. Before referring to the appellants' challenges to the Registrar's report, it is convenient to outline, in summary, the relevant background to the current iteration of the dispute between these parties.  The dispute goes back to events which occurred over 25 years ago, and has produced a significant amount of litigation which has resulted in a number of judgments over the years.

Background

1. The first appellant (Wilden) is the trustee of a trust sufficiently described for present purposes as the Balga Trust.  The second appellant (Magenta) is the trustee of what may be referred to as the Kelmscott Trust.  The third appellant (Tace) is the trustee of what may be referred to as the Summerfield Trust.  The respondents may collectively be described as the 'Green Parties'.  The first respondent is Graeme Green (Mr Green).  The second respondent (W J Green & Co) is a trustee company for a family trust for the Green family.[3]  The third respondents are members of Mr Green's extended family (the Greens).  At all material times, Mr Green was a registered holder of units in the Balga Trust and the Summerfield Trust, W J Green & Co was a holder of units in the Balga Trust and the Summerfield Trust, and the Greens were holders of units in the Kelmscott Trust.[4]

   [3] Green v Wilden Pty Ltd [2005] WASC 83 [3], [73].

   [4] Wilden Pty Ltd v Green [2009] WASCA 38 [5] ‑ [6].

2. There were disputes about the operation of the trusts, including, relevantly for present purposes, in relation to:

   (a)claims by the Green Parties requiring the trustees to repurchase their units in the trusts; and

   (b)the issue of additional units in the Balga Trust for an allegedly fraudulent purpose.[5] 

   [5] Wilden Pty Ltd v Green [2009] WASCA 38 [1], [7] - [27].

3. The dispute between the parties was originally determined by Hasluck J in Green v Wilden Pty Ltd[6] (the primary decision).  By that stage, the litigation had been on foot for 14 years.  Orders were made by Hasluck J on 9 August 2005, following the delivery of supplementary reasons in Green v Wilden Pty Ltd.[7]  There was an appeal to this court:  Wilden Pty Ltd v Green[8] (the 2009 appeal).  This court also delivered supplementary reasons in relation to the making of orders by this court on 6 July 2009:  Wilden Pty Ltd v Green.[9]  The orders of the Court of Appeal of 6 July 2009 are referred to as the '2009 Court of Appeal orders'.

   [6] Green v Wilden Pty Ltd [2005] WASC 83.

   [7] Green v Wilden Pty Ltd [2005] WASC 83 (S).

   [8] Wilden Pty Ltd v Green [2009] WASCA 38.

   [9] Wilden Pty Ltd v Green [2009] WASCA 38 (S).

4. The 2009 Court of Appeal orders involved the setting aside of a number of the orders made by Hasluck J on 9 August 2005, but preserved the operation of a number of other orders made by Hasluck J.  The 2009 Court of Appeal orders are set out in sch 1 to these reasons.  The orders of Hasluck J which were preserved by the 2009 Court of Appeal orders will be referred to as 'Hasluck J's preserved orders'.  These orders are set out in sch 2 of these reasons.

The effect of the 2009 Court of Appeal orders

1. The effect of the 2009 Court of Appeal orders, in conjunction with the continued operation of Hasluck J's preserved orders, is set out below.

A      Units issued in the Balga Trust declared to be void (par 2(a) of 2009 Court of Appeal orders)[10]

[10] Paragraph 2(a) of the 2009 Court of Appeal orders; pars 4.3 and 4.4 of Hasluck J's preserved orders.

1. Under pars 4.3 and 4.4 of Hasluck J's preserved orders:

   4.3200 units issued to the sixth appellant (Callao Pty Ltd) in the Balga Trust in or about 1992 is void and of no effect.

   4.4200 units issued to the seventh appellant (Benrone Pty Ltd) in the Balga Trust in or about 1992 is void and of no effect.

B      Moneys received and paid pursuant to the void issue of units in the Balga Trust (par 8 of 2009 Court of Appeal orders)

1. By par 8 of the 2009 Court of Appeal orders:

   8.The trustee of the Balga Trust (Wilden) shall:

   (a)ascertain the funds received by Wilden for the purported issue of units referred to in orders 4.3 and 4.4 of Hasluck J's judgment on 9 August 2005;

   (b)ascertain the moneys paid or credited as having been paid by way of capital distribution or income distribution to the purported unit holders from the date of the purported issue of the units until the date of these orders; and

   (c)thereafter set off against the sum found to have been received by Wilden under 8(a), the funds found to have been credited or paid by capital or income distribution to the purported unit holders under 8(b).

C      Amounts payable by Mr Green and W J Green & Co to the Balga Trust (par 2(b) of the 2009 Court of Appeal orders)[11]

[11] Paragraph 2(b) of the 2009 Court of Appeal orders; pars 13.1, 13.2, 14 (as amended in the 2009 Court of Appeal orders, par 3), 15 of Hasluck J's preserved orders.

1. By pars 13.1, 13.2, 14 and 15 of Hasluck J's preserved orders, in effect:

   13.1Mr Green is indebted to the Balga Trust as and from 25 October 1990 in the sum of $85,365.86.

   13.2W J Green & Co is indebted to the Balga Trust as and from 25 October 1990 in the sum of $234,097.56.

   …

   14.An account be taken between Mr Green, W J Green & Co, and Wilden, before a registrar, as to the cost to the Balga Trust from time to time as from 1 December 1990 of its borrowing of a bill line facility with the ANZ Bank Ltd, together with recurring charges.

   15.The sums owing by Mr Green and W J Green & Co to the Balga Trust referred to in par 14 [sic - presumably par 13]:

   15.1bear interest at the rate and for the periods found on the account referred to in par 14 [sic - presumably par 13] to be the cost to the Balga Trust; and

   15.2for the period during which the Balga Trust did not incur costs on a bill line facility with ANZ, at the (interest) rate prescribed from time to time pursuant to s 32 of the Supreme Court Act 1935 (WA).

D      Amounts payable by the third respondents to the Kelmscott Trust (par 2(c) of the 2009 Court of Appeal orders)[12]

[12] Paragraph 2(c) of the 2009 Court of Appeal orders; pars 31.1 - 31.3 and 32 - 33 of Hasluck J's preserved orders.

1. By pars 31.1 - 31.3, 32 and 33 of Hasluck J's preserved orders, in effect:

   31.1the first‑named third respondent (Sharyn Green) is indebted to the Kelmscott Trust in the principal sum of $30,000;

   31.2the second and third‑named third respondents (Graeme and Julie Green) are indebted to the Kelmscott Trust in the principal sum of $30,000; and

   31.3the fourth and fifth‑named third respondents (William and Norma Green) are indebted to the Kelmscott Trust in the principal sum of $500,000.

   32.An account be taken between the third respondents and Magenta, before a registrar, as to the cost to the Kelmscott Trust from time to time as from 6 December 1988 of its borrowings of a bill line facility with ANZ, together with recurring charges.

   33.The sums owing by the third respondents to the Kelmscott Trust referred to in par 30 [sic - presumably par 31]:

   33.1bear interest at the rate of the periods found on account referred to in par 32; and

   33.2for the period during which the Kelmscott Trust did not incur costs from any bill line facility with ANZ, at the (interest) rate prescribed from time to time pursuant to s 32 of the Supreme Court Act.

E      Repurchase of units value (par 4 of the 2009 Court of Appeal orders)

1. By par 4 of the 2009 Court of Appeal orders, the 'determination of current repurchase value made by each valuer is valid'. 

F      Amounts payable to respondents in respect of repurchase of units (pars 5 and 6 of the 2009 Court of Appeal orders)[13]

[13] Paragraphs 5 and 6 of the 2009 Court of Appeal orders.

1. By pars 5 and 6 of the 2009 Court of Appeal orders, relevantly in effect:

   5.The respondents are entitled to be paid for their respective units in the Balga Trust, the Kelmscott Trust and the Summerfield Trust by reference to the current repurchase value (less any deductions for stamp duty and other disbursements properly incurred by the relevant trustee in respect of the repurchase).

   6.The respondents are entitled to be paid:[14]

   (a)their proportionate share of the amount (if any) paid or credited as having been paid by way of income distribution to holders of units in the trusts in which they hold units, from the date of the repurchase request, until the cancellation or transfer of the units to or at the direction of the trustee; and

   (b)interest on the amounts referred to in (a), accruing at the rate the funds would have earned if invested in an interest‑bearing deposit with the banker to the trust.

G      Set-off (par 7 of the 2009 Court of Appeal orders)

[14] It was common ground in the appeal that par 6(a) of the 2009 Court of Appeal orders was directed to each respondent's proportionate share of such amount:  appeal ts 966, 970 ‑ 971, 1008.

1. Paragraph 7 of the 2009 Court of Appeal orders provides, relevantly in effect:

   7.Upon the determination of the amounts owing by Mr Green and W J Green & Co to the Balga Trust,[15] and by the third respondents to the Kelmscott Trust,[16] and the amounts owing to the respondents under the repurchase of units orders,[17] if:

   (a)a net amount is payable to a respondent, then on payment of the net amount the respondent shall transfer their units to or at the direction of the relevant trustee; and

   (b)a net amount is payable by a respondent, then they shall forthwith transfer their units to or at the direction of the relevant trustee.

H      The orders for an account

[15] See C above.

[16] See D above.

[17] See F above.

1. Paragraphs 14 and 32 of Hasluck J's preserved orders (see [11] and [12] above) provided for 'an account be taken', as to the cost of borrowings referred to in those orders.

2. Further, par 10(b) of the 2009 Court of Appeal orders provides, relevantly and in effect, that in the event of a dispute as to the amounts payable by the respondents to the appellants, or the appellants to the respondents (as the case may be) pursuant to pars 5, 6 and 8 of the 2009 Court of Appeal orders, then:

   An account be taken before a registrar of this court for the purpose of determining those matters.

The orders of the registrar for the taking of an account

1. On 6 May 2015, the registrar made orders by consent requiring the appellants to file and serve an account in respect of pars 5 ‑ 8 of the 2009 Court of Appeal orders, to be verified by affidavit.  The registrar also required the appellants to file any affidavits containing documents in support of the account.[18]

   [18] Registrar's report [28].

2. The registrar made the following further orders:[19]

   [19] Registrar's report [29].

   2.By 10 July 2015, the respondents file and serve:

   2.1any surcharges of any items in the Account;

   2.2any falsifications of any items in the Account; and

   2.3any affidavits in support of the surcharges and falsifications.

   3.By 31 July 2015, the appellants file and serve any affidavits in reply to the respondents' affidavits filed pursuant to order 2 herein.

   4.By 10 June 2015, the appellants file and serve affidavits containing the following documents:

   4.1ANZ Bank bill line facility documents in their possession and control in respect of Wilden Pty Ltd as trustee for the [Balga Trust];

   4.2all income (including capital gains) distribution statements in their possession and control in respect of the [Balga Trust], the [Summerfield Trust] and [Kelmscott Trust] created at the time that distributions were made or credited to unit holders of each of the trusts;

   4.3tax returns in their possession and control from the financial year ended 30 June 1992 to the financial year ended 30 June 2014 in respect of the [Balga Trust], the [Summerfield Trust] and [Kelmscott Trust]; and

   4.4documents in their possession and control recording or evidencing advice provided by each of the trustees of the [Balga Trust], the [Summerfield Trust] and [Kelmscott Trust] to unit holders in respect of their income or distributions from the trusts for each financial year commencing from 30 June 1992.

The Registrar's report

Overview of findings

1. The registrar:

   1.Found, in effect, that there was no issue as to the amounts in relation to the issue of the void units the subject of pars 2(a) and 8 of the 2009 Court of Appeal orders.[20]

   2.Found, in effect, that there was no issue as to the principal loan amounts due by Mr Green and W J Green & Co to the Balga Trust under par 2(b) of the 2009 Court of Appeal orders read with par 13.1 and 13.2 of Hasluck J's preserved orders, and by the third respondents to the Kelmscott Trust under par 2(c) of the 2009 Court of Appeal orders read with pars 31.1, 31.2 and 31.3 of Hasluck J's preserved orders.[21]

   3.Determined the amount of interest on the amounts due by Mr Green and W J Green & Co to the Balga Trust pursuant to par 2(b) of the 2009 Court of Appeal orders read with pars 14 and 15 of Hasluck J's preserved orders, and by the third respondents to the Kelmscott Trust pursuant to par 2(c) of the 2009 Court of Appeal orders read with pars 32 and 33 of Hasluck J's preserved orders.[22]

   4.Found, in effect, that there was no issue as to the principal amounts to be paid for the current repurchase value of the units.  The determination of current repurchase value made by each valuer was found valid in the 2009 Court of Appeal decision.[23]  The adjustments required by the 2009 Court of Appeal orders were largely not in contest.  Accordingly, the registrar determined the amounts required by par 5 of the 2009 Court of Appeal orders.[24]

   5.Said, in relation to par 6(a) of the 2009 Court of Appeal orders, that there were effectively two issues:  (1) were the trustees required to restate the accounts of the trusts pursuant to par 6(a); and (2) what is meant by 'income distributions' in this order?[25]

   6.The registrar found that, on a proper construction of par 6(a), there was no requirement for a restatement of the historical accounts of the trusts, and that, in any event, the restated accounts produced by the appellants were not reliable because a restatement was not required to bring to account deferred liabilities or to correct errors.  Also, the purported distribution of losses was not in accordance with proper trust accounting.  Accordingly, the determination required by par 6(a) should not be made on the basis of the restated accounts which the trustees of the trust had prepared for the purposes of the account.[26]

   [20] Registrar's report [152] - [155].

   [21] Registrar's report [137].

   [22] Registrar's report [151].

   [23] Paragraph 4 of the 2009 Court of Appeal orders.

   [24] Registrar's report [67] - [69].

   [25] Registrar's report [72].

   [26] Registrar's report [73], [79], [81], [93]. 

2. In relation to the second question (referred to in [20.5] above) as to what is meant by 'income distribution' in par 6(a), the registrar:

   1.Noted that the appellants sought to exclude, from the distribution calculation, the amounts that were paid to the other unit holders on the sale of property assets of the trusts, and contended that these amounts could not be described as 'income distributions'.  On the other hand, the respondents contended that there was no basis upon which to exclude such distributions.[27]

   2.Found that the word 'income' in par 6(a) is used to refer to distributions of any character made to the other unit holders, and is merely a synonym for 'payment'.[28]

   3.Said that if she were wrong as to the meaning of the word 'income' in this regard, then she accepted the evidence of the respondents' accounting expert, Mr Van Homrigh, and found that all the distributions to other units holders referred to in his report were properly characterised as distributions by way of income.[29]

   4.Said that on the basis of either of the two previous findings, the total amount payable to the respondents is $1,314,676, but if those findings were wrong, then the total amount payable to the respondents is $467,475.[30]

   [27] Registrar's report [101].

   [28] Registrar's report [124].

   [29] Registrar's report [125].

   [30] Registrar's report [125], [128] - [129].

1. In relation to par 6(b) of the 2009 Court of Appeal orders, the registrar determined the interest component on the amounts payable under par 6(a) by reference to the Reserve Bank of Australia cash rates, in amounts which were the subject of agreed expert evidence.[31]  The registrar said:[32]

   The respondents have relied on the Reserve Bank of Australia cash rate.  The respondents in their schedule of evidence have altered their amounts claimed in respect of this order and adopted the figures from the experts' joint memorandum at [5.1.1].  The experts agree that the retail deposit and investment amount rates published by the Reserve Bank of Australia are reasonable to use in the absence of information about the rate 'funds would have earned if invested in an interest bearing deposit with the banker to the trust'.

   I rely on the experts' opinion and determine that is the appropriate rate of interest to be applied to the amount of the distribution calculation.

Expert evidence

[31] Registrar's report [133] - [135].

[32] Registrar's report [133] - [134].

1. In relation to expert evidence:

   1.On 23 September 2015, the respondents filed an affidavit of Mr Van Homrigh sworn 18 September 2015 annexing an expert report.[33]

   2.On 22 December 2015, the appellants filed an affidavit of Mr Ashby sworn 17 December 2015 attaching his expert report by way of responsive opinion to Mr Van Homrigh.[34]

   3.Although the appellants tendered the expert opinion of Mr Ashby, it was tendered as responsive to the evidence of Mr Van Homrigh only.  The appellants did not contend that the calculations made by Mr Ashby should be accepted.  Instead, the appellants put forward their own set of calculations on the account.[35]

The hearing and related programming orders

[33] Registrar's report [31].

[34] Registrar's report [31].

[35] Registrar's report [56].

1. The account was heard over three days (24 ‑ 26 May 2016).  Orders were then made for the filing and service of a notice of concessions, schedules of evidence and submissions. 

Notice of Concessions and Schedules of Evidence

1. On 10 June 2016, Mr Chesson filed a notice of matters conceded or not pursued (Notice of Concessions).  On 1 July 2016, the respondents filed a schedule of evidence.  The appellants filed an outline of submissions on 4 August 2016.  They purported to comply with the orders for the filing of the schedule of evidence, however, the document filed by the appellants was not accepted for filing.  Mr Chesson also sought to file submissions, which document was also not accepted for filing.  The appellants applied for a review of the registrar's decision in respect of those two documents, and the applications for review were dismissed by this court.[36]

   [36] Wilden Pty Ltd v Green [No 4] [2016] WASCA 195; Registrar's report [37] - [38].

2. Following the unsuccessful applications for review, on 29 November 2016 further programming orders were made by the registrar, following which the following further documents were filed:[37]

   (a)the appellants' schedule of evidence was filed on 16 December 2016;

   (b)the respondents' response to the appellants' schedule of evidence dated 16 December 2016 was filed on 16 January 2017;

   (c)Mr Chesson's submissions in closing with respect to the account was filed on 17 February 2017; and

   (d)the appellants' amended outline of submissions on account was filed on 20 February 2017 (pursuant to order 5 of the orders dated 29 November 2016).

   [37] Registrar's report [38].

3. The appellants included in their schedule of evidence amendments to the amounts claimed in respect of some of the items in the schedule of account, by reference to the Notice of Concessions.  The registrar ruled that the Notice of Concessions was not evidence.  Nor were the schedules.  The registrar said that this was conceded by the appellants in their submissions.  The registrar said that to the extent the schedule of evidence referred to the Notice of Concessions, she considered that material as submissions made by the appellants in respect of the relevant item.[38]

   [38] Registrar's report [39].

4. The schedule of evidence filed by the appellants also included references to transcripts from other hearings in the proceedings.  Objections were made by the respondents to the reception of those transcripts, and the objection was upheld.  Reference was made by the registrar to Wilden Pty Ltd v Green [No 4][39] in upholding the objections.  Accordingly, the registrar concluded that she would not take into consideration material referred to in the appellants' schedule, which included transcript not tendered in the account.[40]

Mr Ashby's evidence and the Kelmscott Central Development Trust

[39] Wilden Pty Ltd v Green [No 4] [2016] WASCA 195 [26] - [32].

[40] Registrar's report [40] - [42].

1. Mr Ashby in his affidavit set out sources of information that he had considered in preparing his report, including annual reports for the Kelmscott Central Development Trust (KCD Trust) for 2005 - 2007, which he stated had been provided to him on 10 December 2015.  No evidence was led by the appellants about that trust.  An objection was made by the respondents on the basis that the underlying KCD Trust materials had not been tendered in the account.[41]

   [41] Registrar's report [55].

2. The registrar upheld that objection to Mr Ashby's evidence:[42]

   Against that background, I observe that I upheld the objection taken to this material on the grounds of basic fairness.  The records of the [KCD Trust] did not form part of the materials annexed to the 31 July 2015 Chesson affidavit and were never served on the respondents.  I was told that Mr Van Homrigh saw the documents in conferral with Mr Ashby, but he was not asked about then [sic - them] in his evidence.  By the time this issue arose, Mr Van Homrigh was on a plane to Brisbane.

   This was not a situation in which the appellants could be given leave to reopen and provide the evidentiary basis for the conclusions expressed by Mr Ashby on the basis of this material.  The evidence for both parties had by then closed.  At the hearing, I resolved this difficult forensic position by marking for identification the [KCD Trust] statements of financial position for the years 2005, 2006 and 2007.  I also marked for identification the parts of Mr Ashby's affidavit that are based on those documents and I indicated that I would deal with those matters after submissions were filed.

   In the submissions filed by the parties after the hearing this issue was not addressed in any detail.  The respondents simply noted that there is an evidentiary issue with Mr Ashby's report in that a portion of it has not been admitted into evidence (at [39] respondents' closing submissions).  The appellants noted (at [61.2]) that the issue with the [KCD Trust] accounts has been 'saved up for appeal' and that 'in any event, the relevant entries in the Trusts' accounts relevant to or flowing from the [KCD Trust] accounts have been admitted into evidence as part of Mr Chesson's July 2015 affidavit in that they are recorded in the historical accounts'.

   To the extent that Mr Ashby expresses an opinion on matters relating to the [KCD Trust] I cannot receive that evidence because the evidentiary basis for that opinion is not before the court.  The statements of financial position for the [KCD Trust] for the years 2005, 2006 and 2007 that were marked for identification at the hearing have not been made exhibits and I remain of the view that it would be unfair to rely on them.  This ruling affects the following parts of the Ashby report:  [6.4.1], [6.4.11], Figure 10, [6.4.15], Figure 11, footnotes 25, 29, 31 and 32.  Accordingly, I have not relied on those portions of the Ashby report in making the determinations set out in this report.  (emphasis added)

   [42] Registrar's report [58] - [61].

Grounds of challenge

1. The appellants advance a number of grounds in support of their contention that the court should not adopt the Registrar's report.  The grounds are prolix and are summarised in sch 3 to these reasons.  The general effect of the grounds is to challenge the Registrar's report in determining amounts payable under:

   1.paragraphs 2(b) and 2(c) of the 2009 Court of Appeal orders, in relation to the registrar's failure to account for loans made to Mr Green and W J Green & Co to assist in the purchase of units in the Summerfield Trust, and interest on those loans;

   2.paragraph 6(a) of the 2009 Court of Appeal orders, concerning the respondents' entitlement to payments of 'income distribution' to holders of the unit trusts; and

   3.paragraph 6(b) of the 2009 Court of Appeal orders, concerning the respondents' entitlement to interest on income distribution payments.

The fundamental issues for determination in the respondents' application

1. At the hearing of the application, it was evident that there were effectively four issues raised by the first ‑ third and fifth ‑ seventh appellants' grounds:[43]

   1.Whether any loans (principal and interest) made by Tace as trustee of the Summerfield Trust to Mr Green and W J Green & Co for the purpose of acquiring their units in the Summerfield Trust are to be credited to the appellants in the taking of the accounts referred to in pars 2(b) and 2(c) of the 2009 Court of Appeal orders.[44]

   2.The proper construction and application of par 6(a) of the 2009 Court of Appeal orders.  This was identified by the appellants as the 'principal' ground.[45]

   3.The proper construction and application of par 6(b) of the 2009 Court of Appeal orders.[46]

   4.The allegation that the whole of the Registrar's report is infected by errors of law or principle and, or alternatively, is manifestly unreasonable.[47]

   [43] Appeal ts 949 - 950.

   [44] Certain loans are referred to by Hasluck J in Green v Wilden Pty Ltd [2005] WASC 83 [232] ‑ [233].

   [45] Appeal ts 965.

   [46] Appeal ts 949.

   [47] Appeal ts 949.

2. As to the last matter, counsel for the first - third and fifth - seventh appellants said that the success of this would depend upon, in effect, the success of the complaint regarding the proper construction and application of par 6(a).[48]

   [48] Appeal ts 989 - 990.

3. Counsel for the first - third and fifth - seventh appellants also accepted that the error alleged in ground 11 in relation to the Notice of Concessions and the use of correct or restated accounts was immaterial if the appellants did not succeed in relation to the proper construction of par 6(a).[49]

   [49] Appeal ts 986.

4. In relation to par 6(a), the second and 'principal' ground, counsel for the first ‑ third and fifth ‑ seventh appellants also accepted that the issues were:[50]

   1.Is the reference in par 6(a) - the amount (if any) paid or credited as having been paid - a reference to anything other than amounts which have, in fact, been paid or credited to unit holders in the relevant period?

   2.Does the reference to 'income distribution' in par 6(a) comprehend distributions made out of the capital of the relevant trust fund?

   3.Are the capital gains, which have been distributed to unit holders, to be characterised as income distributions or capital distributions?

   [50] Appeal ts 967 - 968.

5. The fourth appellant did not demur from the above characterisation of the issues for determination, and an examination of his grounds and submissions indicates that the points that he seeks to make are effectively the same as those raised by the first - third and fifth - seventh appellants.

The appellants' applications to adduce additional evidence

1. The appellants filed an application on 7 February 2018, supported by an affidavit of Mr Chesson of 2 February 2018, seeking to adduce additional evidence on the application.  The evidence was said to be certain pages of the transcript of the original hearing before Hasluck J, and of the appeal hearing on 20 May 2008.

2. Well after the oral hearing in this matter, the first - third and fifth ‑ seventh appellants filed a further application, on 16 October 2018, to adduce further additional evidence.[51]

   [51] The fourth appellant, however, signed the application filed by the first - third and fifth - seventh appellants on 16 October 2018.

Orders for schedules of evidence after the conclusion of the oral hearing

1. A key argument raised by the appellants at the hearing of the application was that certain distributions made by the trustees were distributions by way of capital rather than distributions by way of income.  The appellants, in oral argument, did not point to any evidence to support their contention that the evidence before the registrar showed that the distributions in question were treated as distributions of capital rather than income. 

2. Counsel for the first - third and fifth - seventh appellants ultimately conceded that he was merely 'speculating' that there existed such evidence.[52]  Nor was the fourth appellant able, in oral submissions, to refer to the evidence which he contended would best support his argument.[53] 

   [52] Appeal ts 1024 - 1029.

   [53] Appeal ts 994 - 997.

3. This resulted in the appellants applying for leave at the conclusion of the hearing to file and serve a schedule identifying:

   (a)what the appellants contend to be references in the evidence to the trustees having historically treated distributions to unit holders as capital distributions; and

   (b)transcript references which they contend show that historically the trustees treated the distributions as capital distributions.

4. Although it was wholly inappropriate for the appellants to conduct their arguments on the basis that they were not in a position to tell the court at the hearing of any evidence which supported their assertions, leave was given to the appellants to file a schedule of evidence in that regard.  An order was made that the appellants file and serve such a schedule by 4.00 pm on 9 August 2018, and the respondents file a schedule in response by 4.00 pm on 10 August 2018.

5. The first - third and fifth - seventh appellants filed a schedule of evidence on 10 August 2018, and the respondents filed a responsive schedule on 10 August 2018.

6. The fourth appellant did not file and serve a schedule of evidence in accordance with the court's orders.[54]

   [54] The fourth appellant, however, signed the schedule filed by the first - third and fifth - seventh appellants on 10 August 2018.

Provisions of the trust deeds

1. The parties referred to cl 11 and cl 12.1(15) of the trust deeds in the course of argument.  Clause 11 and cl 12.1(15) of the Balga Trust deed  are, relevantly, set out below.[55]  The other trust deeds have identical provisions.

   [55] GB 3711 - 3712.

2. Clause 11 relevantly provides:

   11.1The Trustee shall collect all dividends interest rents and other income from the Investments of the Trust Fund.

   11.2The Trustee shall pay out of the gross income of the Trust Fund all costs and disbursements commissions fees taxes (including land tax and income tax) management charges and other proper outgoings in respect of the Investments and administration of the Trust Fund.

   11.3Subject to any special rights or restrictions provided in the Second Schedule in relation to Units of any class the Trustee in each Accounting Period … shall pay or apply the net income of the Trust Fund of that Accounting Period to or for the benefit of the Unit Holders in proportion to the number of Units of which they are respectively registered as Holders at the end of each Accounting Period.

   11.4Notwithstanding anything contained in this Part the Trustee subject to any law in force at the time in relation to this Deed so permitting may accumulate all or any part of the income of such period and such accumulation shall be dealt with as an accretion to the Trust Fund but so that the Trustee may at any time … resort to all such accumulations and pay or apply the whole or any part or parts thereof as if they were income of the Trust Fund …

   11.5The Trustee may make monthly interim distributions of income during any Accounting Period …

   11.6A determination to pay … any Unit Holder and the implementation of such determination may be made by -

   (a)placing such amount to the credit of the Unit Holder in the books of the Trust Fund; or

   …

   (c)by paying same in cash to or for the benefit of the Unit Holder …

   …

   11.7If at the end of any Accounting Period the amounts in respect of which determinations have been made pursuant to this Part exceed the net income of the Trust Fund for the Accounting Period the amount of the excess shall in the first place be deducted from the amounts which the Trustee has determined to accumulate and in the second place should any deficiency remain the Trustee shall be deemed to have applied the capital of the Trust Fund the value of which shall thereupon be adjusted accordingly.

   …

   11.9The Trustee with the sanction of a Special Resolution of the Unit Holders at any time or times and from time to time before the date of the termination of the Trust may pay out of the capital of the Trust Fund any sum or sums to Unit Holders in proportion to the Units registered … for their own use and benefit in addition to any income to which the said Unit Holders may from time to time be entitled.  (emphasis added)

3. Clause 12.1(15) relevantly provides:[56]

   12.1The Trustee in addition to the powers otherwise conferred upon the Trustee by law shall have the following powers -

   …

   (15)to determine whether any … property or any receipts or payments from for or in connection with any … property shall be treated as and credited or debited to capital or to income and generally to determine all matters as to which  any doubt difficulty or question may arise under or in relation to the execution of the trusts and powers of this Deed (and every determination of the Trustee … shall upon approval thereof by a Special Resolution of the Unit Holders bind all parties interested therein …)[.]  (emphasis added)

   [56] GB 3712, 3715.

The issues for determination - a recapitulation

1. It is convenient to recapitulate here the issues for determination (see [32] ‑ [36] above):

   1.Whether any loans (principal and interest) made by Tace as trustee of the Summerfield Trust to Mr Green and W J Green & Co for the purpose of acquiring their units in the Summerfield Trust are to be credited to the appellants in the taking of the accounts referred to in pars 2(b) and 2(c) of the 2009 Court of Appeal orders.

   2.The proper construction and application of par 6(a) of the 2009 Court of Appeal orders, and, in particular:

   (a)Is the reference in par 6(a) - the amount (if any) paid or credited as having been paid - a reference to anything other than amounts which have, in fact, been paid or credited to unit holders in the relevant period?

   (b)Does the reference to 'income distribution' in par 6(a) comprehend distributions made out of the capital of the relevant trust fund?

   (c)Are the capital gains, which have been distributed to unit holders, to be characterised as income distributions or capital distributions?

   3.The proper construction and application of par 6(b) of the 2009 Court of Appeal orders.

   4.The allegation that the whole of the Registrar's report is infected by errors of law or principle and, or alternatively, is manifestly unreasonable.

2. In the disposition part of these reasons, the issues described above are referred to as issue 1, issue 2(a), issue 2(b), issue 2(c), issue 3 and issue 4, respectively.

Principles

1. Section 50(2) of the Supreme Court Act provides relevantly, in effect, that the report of a registrar to whom the court has referred for inquiry or report any question arising in a cause or matter (other than a criminal proceeding) may be adopted wholly or partially by the court and, if so adopted, may be enforced as a judgment or order to the same effect.

1. By O 35 r 9 of the Rules of the Supreme Court 1971 (WA) (RSC) read with O 35 r 11, any party may apply to the court to adopt or carry into effect the report of (relevantly) a registrar to whom a question or issue has been referred. As the registrar in this case observed:[57]

   Order 35 provides for a report to be made at the conclusion of an account. When a report is made at the end of an account notice is to be provided to the parties and the report provided to the court that made the orders for an account. The court then has a discretion whether or not to adopt the report … The report after an account must include sufficient reasons so that

   'the parties, the court and the disinterested observer [know] that the conclusion is not arbitrary, or influenced by improper considerations; but that it is the result of a process of logic and the application of a considered mind to the factual circumstances proved.  The reasoning process must be sufficiently disclosed so that the court can be satisfied that the conclusions are based upon such an intellectual exercise:  Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784 ... [7(11)]; Wenco Industrial Pty Ltd v WW Industries Pty Ltd [[2009] VSCA 191] [47].'

   [57] Registrar's report [26].

2. The following observations may be made for present purposes, without intending to be an exhaustive statement of the relevant principles.

3. The court exercises a judicial discretion as to whether to adopt the Registrar's report.  The discretion is to be exercised in the interests of justice consistently with the object and purpose of the rules permitting the court to direct the necessary inquiries or accounts to be taken or made.  An application to adopt the report is neither an 'appeal' de novo nor an appeal by way of rehearing.  The nature of the complaints made about the report, the type of litigation involved and the length and complexity of the proceedings before the registrar may all be relevant considerations.[58] 

   [58] Super Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549, 563 ‑ 564; Wenco Industrial Pty Ltd v WW Industries Pty Ltd [2009] VSCA 191; (2009) 25 VR 119 [17].

4. If a report reveals an error of principle, an absence or excess of jurisdiction, a patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding, that would ordinarily be a reason for its rejection.[59]  In this context, patent misapprehension of the evidence refers to a lack of understanding of the evidence as distinct from according aspects of the evidence with particular weight.  Perversity or manifest unreasonableness means a conclusion that no reasonable tribunal of fact could have reached.[60]  Also, the court is entitled to consider the futility and costs of relitigating an issue determined by the registrar where the parties have had ample opportunity to place before the registrar such evidence and submissions as they desire.[61]

   [59] Super (563 ‑ 564); Wenco [17].

   [60] Wenco [17].

   [61] Wenco [17].

Disposition

Issue 1 - Summerfield Trust loans

1. Issue 1 concerns the proper construction of the 2009 Court of Appeal orders, including, in particular, the operation of pars 2(b) and 2(c), and the appellants' claims that Tace, as trustee for the Summerfield Trust, is entitled to be repaid certain vendor finance loans made by Tace for the issue of units in that trust to Mr Green and W J Green & Co (Summerfield loans).[62]

The Summerfield loans

[62] First - third and fifth - seventh appellants' amended submissions, par 2.1.

1. It is common ground in this application that the Summerfield loans were made by way of vendor finance by Tace as trustee of the Summerfield Trust.[63] 

   [63] Respondents' amended submissions, par 21.

2. As Hasluck J noted in the primary decision, the Summerfield loans were not, however (as counsel for Tace accepted[64]), the subject of any counterclaim by Tace in the primary proceedings.[65]  The absence of such a claim is notable in a context where the book of pleadings in the primary proceedings contained 338 pages, and the litigation had then been on foot for 14 years.[66] 

   [64] Appeal ts 958 - 960.

   [65] Green v Wilden Pty Ltd [2005] WASC 83 [1353] - [1354].

   [66] Green v Wilden Pty Ltd [2005] WASC 83 [2].

3. In this application, the appellants did not put a date on when they say the Summerfield loans were made. The inference is open that they were made in the late 1980s or at least by early 1990. In the primary decision, Hasluck J narrated certain evidence in relation to events in 1987 in connection with the creation of the Summerfield loans,[67] and the respondents' subsequent conduct, in 1990, to have their units in the Summerfield Trust repurchased.[68]  The requests for repurchase in November 1990 were on the basis that the Summerfield loans should be deducted from the repurchase price.[69]  His Honour also recounted evidence to the effect that in 1992 'statements of repurchase' had been prepared on the basis that the repurchase price for the units would be reduced by the amount outstanding on the Summerfield loans.  However, 'these events did not lead to a resolution of the differences between the parties'.[70]

   [67] Green v Wilden Pty Ltd [2005] WASC 83 [233] - [235].

   [68] Green v Wilden Pty Ltd [2005] WASC 83 [246] - [247].

   [69] GB 3901 - 3902.

   [70] Green v Wilden Pty Ltd [2005] WASC 83 [271] ‑ [272].

4. There has been no judicial determination that Mr Green and W J Green & Co are liable to repay the Summerfield loans, including no determination as to whether they have any limitation or other defences.  Further, the Summerfield loans were not contemplated by Hasluck J as forming part of any account or final relief.[71]  Also, there is nothing in the reasons for judgment of this court[72] to suggest that the Summerfield loans were relevant to the orders made by this court in the 2009 Court of Appeal orders.

   [71] Green v Wilden Pty Ltd [2005] WASC 83 [1353] - [1354].

   [72] Wilden Pty Ltd v Green [2009] WASCA 38; Wilden v Green [2009] WASCA 38 (S).

5. Accordingly, in the primary proceedings Tace made no claim for recovery of the Summerfield loans, Hasluck J proceeded on the basis that such claims were not being made, and there were no orders of Hasluck J, or of this court, which expressly or impliedly provided for the repayment of such loans to Tace. 

6. In this application, the first - third and fifth - seventh appellants contended that the Summerfield loans were 'repayable on demand', and that 'no demand [had] been made for repayment of the Summerfield loans'.[73]  The first ‑ third and fifth ‑ seventh appellants did not seek in their submissions to support those statements by reference to any findings of Hasluck J in the primary decision, or by this court in the appeal from the primary decision, or by any evidence.  The fourth appellant made no reference in his submissions to what he contended to be the terms upon which the Summerfield loans were repayable.  He submitted, however, that if the Registrar's report is adopted 'there would be further proceedings regarding the loans'.[74]

   [73] First - third and fifth - seventh appellants' amended grounds, par 1.6; first - third and fifth ‑ seventh appellants' amended submissions, par 2.11.

   [74] See fourth appellant's amended submissions, par 14, and, in particular, par 14.9.

7. For their part, the respondents contend that if the Summerfield loans were payable on demand, the loans created an immediate debt, not conditional upon the making of any demand, and that the Summerfield loans are accordingly statute barred.  Reference was made to Netglory Pty Ltd v Caratti.[75]  They also contend that even if the loans did not create an immediate debt, and, instead, their recoverability was conditioned upon first making demand, Tace effectively made demand in 1992 when it deducted the loan amount from the 'statement of repurchase' (see [58] above).  Either way, they contend that claims in respect of the loans are statute barred.[76] 

   [75] Netglory Pty Ltd v Caratti [2013] WASC 364 [275]. In this regard, see also Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5 [36] ‑ [38].

   [76] See respondents' amended submissions, pars 22, 23.

8. In response to the limitation point raised by the respondents, counsel for the first - third and fifth - seventh appellants referred to Young v National Australia Bank Ltd.[77]  In that case, the court said, in effect, that in an action by a plaintiff (P) against a defendant (D), a countervailing claim pleaded by D by way of equitable set‑off is, for limitation purposes, deemed to commence when the action by P commenced, and not at the time that D pleads its claim against P as a defence to P's action.[78]  Counsel for the first - third and fifth - seventh appellants did not, however, contend that Tace had pleaded as a defence in the primary proceedings a countervailing claim in respect of the Summerfield loans.[79]  Moreover, given Hasluck J's express reference to the absence of any counterclaim by Tace,[80] the absence of any reference to a set‑off is a powerful indicator that there was no plea of set‑off.

The vendor finance loans by Wilden and Magenta

[77] Young v National Australia Bank Ltd [2004] WASCA 298; (2004) 29 WAR 505; see appeal ts 963.

[78] Young [37] - [44].

[79] As to the difference between counterclaims and set-off, see, for example, Meagher, Gummow & Lehane's Equity:  Doctrines & Remedies (5th ed, 2015) [39‑05].

[80] Green v Wilden Pty Ltd [2005] WASC 83 [1353].

1. Unlike in relation to the Summerfield loans, Wilden as trustee of the Balga Trust and Magenta as trustee of the Kelmscott Trust counterclaimed for amounts said to be owing on vendor finance loans made to the respondents in connection with the purchase of the units in those trusts.[81]  The respondents' defence to the demands by Wilden was that the loans were made on terms that they would not be repayable unless the shopping centre (an asset of the trust) was sold and the trust wound up, or the trustee had effected a repurchase of the units.[82]  Hasluck J rejected that defence.  His Honour appears to have found, in effect, that the vendor finance loans which were the subject of counterclaims by Wilden and Magenta, were repayable on demand.[83]  Hasluck J also said that in respect of the counterclaims by Wilden and Magenta, 'there appears to be no dispute that the amounts in question [the vendor finance loans by Wilden and Magenta] are outstanding'.[84]

   [81] Green v Wilden Pty Ltd [2005] WASC 83 [433] - [434], [740] - [747], [1182], [1272], [1298], [1304], [1333], [1339], [1353] ‑ [1354]; Green v Wilden Pty Ltd [2005] WASC 83 (S) [143] ‑ [153], [161] ‑ [162].

   [82] Green v Wilden Pty Ltd [2005] WASC 83 [1181].

   [83] Green v Wilden Pty Ltd [2005] WASC 83 [1298], [1300] - [1301], [1333] - [1340], [1353] - [1354].

   [84] Green v Wilden Pty Ltd [2005] WASC 83 [1333].

2. In the final orders made by Hasluck J, his Honour included declarations in terms that the Wilden and Magenta debts were 'repayable on demand', subject to the adjustments provided for in the orders.[85]  However, the orders containing those particular declarations were part of the suite of orders set aside by the 2009 Court of Appeal orders.

Paragraphs 2(b) and 2(c) of the 2009 Court of Appeal orders

[85] Green v Wilden Pty Ltd [2005] WASC 83 (S), Appendix A, pars 13.3, 31.4.

1. Paragraphs 2(b) and 2(c) of the 2009 Court of Appeal orders have been summarised in [11] and [12] above.

2. Those orders deal only with the amounts in respect of the vendor finance loans which were the subject of counterclaims by Wilden as trustee for the Balga Trust (par 2(b)) and Magenta as trustee for the Kelmscott Trust (par 2(c)).  The principal amounts payable to the trustees of those trusts are specified by those orders.  Those orders also provide for interest to be payable on the principal amounts.  Paragraphs 2(b) and 2(c) of the 2009 Court of Appeal orders do not provide for, or require, any payment by Mr Green and W J Green & Co in relation to the Summerfield loans - loans made by a different trustee (Tace) in connection with a different trust (the Summerfield Trust).

Appellants' claims in relation to set-off, just allowances and other matters

1. The appellants nevertheless contend that they may, in effect, recover the Summerfield loans by exercising rights of set‑off, or through a claim for 'just allowances' pursuant to O 45 r 8 of the RSC. Order 45 r 8 of the RSC provides that in taking any account directed by any judgment or order, all 'just allowances shall be made without any direction for that purpose'. By virtue of O 67 r 17 of the RSC, O 45 applies 'in so far as … relevant and with the necessary modifications to, and in relation to such account'.

2. The appellants also say that it would be 'unconscionable' for a set‑off not to be effectuated.  They referred to Hasluck J's observations to the effect that 'equitable requirements' dictated that (in effect) the liability of Wilden and Magenta to repurchase the units in those trusts should be adjusted to take into account the loans the subject of the successful counterclaims by Wilden and Magenta.[86] They also contend that the respondents have, through their 'entire approach' in the proceedings, 'elected' to set‑off the Summerfield loans against the amounts recoverable by the respondents pursuant to the 2009 Court of Appeal orders. They also rely on O 36 r 9 of the RSC, which provides that 'all evidence taken at the hearing or trial of any cause or matter may be used in any subsequent proceedings in the same cause or matter'.[87]

   [86] Green v Wilden Pty Ltd [2005] WASC (S) 83 [147].

   [87] First - third and fifth - seventh appellants' amended submissions, pars 3 - 8; fourth appellant's amended submissions, pars 11.8 ‑ 11.12.

3. On the topic of whether the repayment of the Summerfield loans formed part of the 2009 Court of Appeal orders, counsel for the first - third and fifth - seventh appellants said, at various points, that (1) the Summerfield loans were not within the scope of the 2009 Court of Appeal orders;[88] (2) that the loans were within the scope of the orders;[89] (3) that the orders 'didn't clearly deal with it'[90] and (4) that the registrar was obliged, in effect, to take an account which, in any event, transcended the requirements of the 2009 Court of Appeal orders.[91]

Consideration

[88] Appeal ts 956.

[89] Appeal ts 957, 961.

[90] Appeal ts 958.

[91] Appeal ts 959.

1. It is correct to say that Hasluck J found, in effect, that equity required that the liability of Wilden and Magenta to repurchase the units in those trusts should be subject to the overall adjustment of liabilities between the parties.  His Honour was evidently satisfied that Wilden and Magenta had established the terms of the loans, their recoverability, and that it was equitable in all the particular circumstances to fashion the relief in that way.  In broad terms, that is the effect of pars 2(b), 2(c) and 7 of the 2009 Court of Appeal orders in relation to the vendor finance loans that were the subject of successful counterclaims by Wilden and Magenta. 

2. However, absent a pleaded claim in respect of the Summerfield loans,[92] there was no occasion for Hasluck J in the primary decision (or, for that matter, this court in the 2009 appeal against the primary decision) to make equivalent findings in relation to the repurchase of the units in the Summerfield Trust.

   [92] Hasluck J said, in effect, that he was determining the primary proceedings only by reference to the pleadings:  Green v Wilden Pty Ltd [2005] WASC 83 [344] ‑ [351].

3. Turning to O 45 r 8, the effect of this order is that it is unnecessary for the court expressly to provide for allowances in the taking of an account directed by a judgment or order of the court. Where, however, the court expressly provides for allowances, it is the court's orders, properly construed, which govern the question of whether, and to what extent, the accounting party is entitled to allowances. Where the court's orders do not expressly deal with allowances, the nature and scope of the 'just allowances' provided for in O 45 r 8 will, in any particular case, depend upon the nature, scope and subject matter of the account directed by the order in question. In an account of profits, just allowances commonly include allowance for the time, energy, skill and financial contribution that the errant fiduciary has expended or made.[93] 

   [93] Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 110; Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, 558 ‑ 562; Mid‑City Skin Cancer Laser Centre v Zahedi‑Anarak [2006] NSWSC 844; (2006) 67 NSWLR 569 [273]; see also generally Meagher, Gummow & Lehane's Equity:  Doctrines & Remedies (5th ed, 2015) [5‑280].

4. Tace's claim that it is entitled to 'just allowances' in respect of the Summerfield loans has no merit for the following reasons.  First, the orders requiring a repurchase of the units in the Summerfield Trust (pars 4 and 5 of the 2009 Court of Appeal orders) make express provision (par 5) for specified allowances being 'deductions for stamp duty and other disbursements properly incurred by the relevant trustee … in respect of the repurchase'.  On the proper construction of the 2009 Court of Appeal orders, it is only those allowances which are available to Tace as trustee of the Summerfield Trust.  No other allowances are permitted.[94]

   [94] It is unnecessary to consider whether the orders for repayment of the loans made by Wilden and Magenta are properly characterised as 'just allowances'.  Whatever their characterisation, the significant point is that they are express orders arising from a determination of the pleaded issues.

5. Secondly, that conclusion is confirmed by the further consideration that  it could not, objectively, have been the intention of the 2009 Court of Appeal orders, particularly given the lengthy history of the proceedings, that the registrar would effectively conduct a fresh trial of unpleaded issues in giving effect to the 2009 Court of Appeal orders.

6. Thirdly, even if Tace was entitled more broadly to 'just allowances' under the 2009 Court of Appeal orders on their proper construction, Tace has not established that the registrar's decision not to require payment or allow a set‑off in respect of the Summerfield loans was manifestly unreasonable, or that it revealed any other basis for not accepting the Registrar's report.  Tace did not refer to any binding findings or orders of Hasluck J in the primary proceedings to the effect that the loans were recoverable or that there was a liability to repay them. 

7. Also, the evidence that in seeking to repurchase the units in 1990, Mr Green and W J Green & Co accepted, in correspondence, that the loans should be off‑set against the repurchase price, does not assist the appellants. Tace evidently did not accept the respondents' proposals in 1990,[95] and there developed disputes between the parties leading to the commencement of the primary proceedings. The primary proceedings involved an assertion by Mr Green and W J Green & Co that they were entitled to have the units repurchased. Tace was unsuccessful in the defence of that claim, and Tace did not make any countervailing claim in respect of the Summerfield loans. Nor is it suggested by the appellants that Tace ever sought orders corresponding to the orders made in favour of Wilden and Magenta in pars 13 ‑ 15 and 31 of Hasluck J's preserved orders. The final orders, both by Hasluck J and in this court, reflected the way that the parties fought the litigation.

   [95] Green v Wilden Pty Ltd [2005] WASC 3 [248] - [252].

8. In this context, it was not manifestly unreasonable or otherwise inappropriate for the registrar to proceed on the basis that the respondents' correspondence in 1990 did not represent an operative admission for the purpose of the account under the 2009 Court of Appeal orders that the loans are recoverable by Tace.[96] 

   [96] Whether viewed as at the date of Hasluck J's decisions in 2005, or as at the date of this court's decisions in 2009, or as at the date of the taking of the account before the registrar.

1. For similar reasons, it cannot be said that Mr Green and W J Green & Co have 'elected' to set‑off the amounts which Tace now seeks to recover under the Summerfield loans.  Nor is there anything 'unconscientious' in giving effect to the 2009 Court of Appeal orders on their proper construction. 

2. Further, the fourth appellant effectively contended that if the Summerfield loans do not form part of the account required by the 2009 Court of Appeal orders, then they will be the subject of separate proceedings by Tace.  In that event, any rights that Tace may have in relation to the Summerfield loans, and any questions in relation to the exercise of those rights,[97] may be determined in the subsequent proceedings foreshadowed by the fourth appellant.  That result cannot be characterised as involving unconscientious conduct by the respondents.

   [97] Including any limitation issues and any issues arising from the failure to make a claim in respect of the Summerfield loans in the primary proceedings.

3. In relation to Tace's reliance on O 36 r 9, the contention appears to be bound up with the complaint about the registrar's treatment of the fourth appellant's Notice of Concessions and the appellants' schedules of evidence. The procedural history of this is set out in [25] ‑ [28] above. In substance, it appears that at the conclusion of the hearing before the registrar, the fourth appellant was ordered to file and serve a notice of matters in the account that he conceded or would not be pursued. By his Notice of Concessions, he not only conceded errors in the original account as filed, but also sought to 'rework' aspects of the account.[98]  The appellants' schedule of evidence then included amendments to the amounts claimed in respect of some of the items in the schedule of account, by reference to the Notice of Concessions.  The appellants' schedule of evidence also drew upon transcripts from other earlier hearings which had not been tendered in evidence on the hearing of the account before the registrar.  This went beyond the evident purpose of the schedule, which was to refer, as an adjunct to closing submissions, to 'the evidence adduced on the taking of the account over the three hearing days'.[99]  It was not to enable parties to introduce new evidence after the hearing.

   [98] BB 170.

   [99] Wilden Pty Ltd v Green [No 4] [2016] WASCA 195 [28].

4. The registrar was correct to rule, in effect, that the reworkings of the account and related schedule of evidence were not part of the evidence in the taking of the account. The appellants were not entitled to introduce, either through the Notice of Concessions or their schedule of evidence, additional evidence which had not been tendered at the hearing of the taking of the account. Order 36 r 9 is permissive, and did not require the registrar to allow additional evidence to be adduced after the conclusion of the hearing. No error is demonstrated.

5. In relation to set‑off, the respondents had vindicated their rights to judgment, and the registrar was concerned, only, with the proper construction and application of the 2009 Court of Appeal orders.  Giving effect to the 2009 Court of Appeal orders did not permit, much less require, the registrar to entertain claims for set‑off which had not been litigated.

6. The fourth appellant (not counsel for Tace) raised an additional argument to the effect that the words 'deductions … in respect of the repurchase' in order 5 of the 2009 Court of Appeal orders allowed Tace to recover the Summerfield loans.[100]  That submission does not assist Tace.  Any deductions under par 5 of the 2009 Court of Appeal orders must be for 'stamp duty and other disbursements properly incurred' by Tace 'in respect of the repurchase'.  The Summerfield loans cannot be reasonably regarded as a 'disbursement' within the phrase 'stamp duty and other disbursements'.  Nor can they be regarded as having been 'incurred … in respect of the repurchase'.

Conclusion

[100] Appeal ts 991.

1. The 2009 Court of Appeal orders, on their proper construction, contain no provision for any allowance, deduction, payment to or set‑off by Tace in respect of the loans made by Tace to Mr Green and W J Green & Co.  Accordingly, the registrar was correct to conclude that the loans made by Tace as trustee of the Summerfield Trust to Mr Green and W J Green & Co for the purposes of acquiring their interests in the Summerfield Trust were irrelevant to the taking of the account.

Issue 2(a) - whether a 'reworking' of financial statements is required

1. The appellants contended, in effect, that, properly construed, par 6(a) of the 2009 Court of Appeal orders did not direct attention to the historical position with respect to trust distributions, but rather required a 'reworking' of the financial statements over the past 22 years in order to create a new set of financial statements.[101]  They contended that this was 'necessary to … calculate the true income position of the Trusts'.

   [101] First - third and fifth - seventh appellants' amended submissions, pars 13 - 16, 19 - 22; fourth appellant's amended submissions, par 6; appeal ts 967 - 969, 975 - 977.

2. The use of the past tense 'paid or credited as having been paid' in par 6(a) of the 2009 Court of Appeal orders directs attention to the historical position.  Paragraph 6(a), in its ordinary meaning, refers only to amounts which have in fact been paid or credited to unit holders in the relevant period.  Its evident purpose is to ensure that pending completion of the repurchase of the respondents' units, the respondents, as unit holders, are to recover from the trustees their proportionate share (in accordance with their unit entitlements) of the distributions paid by the trustees over the years to the other unit holders.  The appellants were unable to advance any plausible construction of par 6(a) of the 2009 Court of Appeal orders contrary to its ordinary meaning.

3. Moreover, that construction of par 6(a) is consistent with the operation of the trust deeds.  Clause 11.3 (see [46] above) is to the effect that the trustees, generally, are to pay or apply the net income of the trust fund in each accounting period for the benefit of the unit holders in proportion to the number of their registered units at the end of the accounting period.  That is, if income was distributed, then the respondents ought to have received their proportionate share of that distribution.  Paragraph 6(a) requires that they be paid that share and interest from the date the distribution was made.  The effect of this is to treat the respondents equally with other unit holders, by giving them the proportion of the distributed income to which they are entitled.  If the consequence is that other unit holders have received more than they should have because they received distributions which failed to reflect a proper distribution to the respondents, that may be a matter between those unit holders and the trustee, but it cannot affect the proper construction and application of the 2009 Court of Appeal orders.

4. The appellants' complaint ultimately came down to the propositions that where the trustees had effectuated distributions in any financial year, excluding the respondents, it was (1) impossible, (2) contrary to the trustees' duties, and (3) inconsistent with s 94(2) of the Trustees Act 1962 (WA), to require the trustees to make any further distribution in accordance with par 6(a) of the 2009 Court of Appeal orders. These submissions cannot be accepted. First, the court was not taken to any evidence before the registrar to establish the impossibility suggested. Secondly, there is no basis for the contention that compliance by a trustee with a court order involves a breach of trust. Thirdly, s 94 of the Trustees Act enables the review of a trustee's act by a court. It has no application to any payments made by the trustee pursuant to par 6(a) of the 2009 Court of Appeal orders. Also, even if s 94 were somehow relevant, the appellants failed, and indeed made no attempt to establish, by reference to the registrar's findings or the evidence, the existence of the criteria necessary for the operation of s 94(2)(a) and s 94(2)(b). Fourthly, and fundamentally, those matters do not bear upon the proper construction of par 6(a) of the 2009 Court of Appeal orders, and even if they did, they could not operate to give it a construction contrary to its ordinary meaning and evident purpose.

5. The registrar was correct to conclude that par 6(a) of the 2009 Court of Appeal orders referred only to distributions that in fact had been made by the trustees of the trusts. 

Issue 2(b) - meaning of 'income distribution'

1. Paragraph 6(a) in terms refers to distribution to unit holders 'by way of income'.  On its ordinary meaning, par 6(a) is referring only to distributions by way of income, and not to distributions by way of capital.  That construction is confirmed by a reading of the 2009 Court of Appeal orders as a whole, in that the word 'capital' is used expressly where the court's orders operate with respect to both capital and income distributions.[102]

   [102] See pars 8(b) and 8(c) of the 2009 Court of Appeal orders.

2. Accordingly, the registrar was, with respect, in error in construing the reference to 'distributions by way of income' in par 6(a) of the 2009 Court of Appeal orders to mean all distributions of any character.  However, the error is immaterial for present purposes because, as discussed below, there was no error by the registrar in accepting Mr Van Homrigh's evidence that the distributions referred to in his report were distributions 'by way of income' to unit holders.

Issue 2(c) - characterisation of historical distributions

1. Issue 2(c) concerns, in substance, the question of whether the registrar incorrectly characterised certain historical distributions by the trustees of the trusts as distributions 'by way of income' within par 6(a) of the 2009 Court of Appeal orders.  The appellants contend that the registrar's findings were not open on the evidence, and that the distributions in question were by way of capital distributions, rather than income distributions.  The appellants also rely on cl 11 and cl 12.1(15) of the trust deeds (see [46] ‑ [47] above).[103]

   [103] First - third and fifth - seventh appellants' amended submissions, pars 26 - 34; fourth appellant's amended submissions, pars 12.1 - 12.22.

2. The distributions in question are the following:[104]

   1.Balga Trust distribution of $1,512,024 in 1995, arising from the sale of the Balga Bazaar Shopping Centre.

   2.Balga Trust distribution of $543,874 in 2002, arising from the sale of 'Realtech units'.

   3.Kelmscott Trust distribution of $278,684 in 2006, which according to the instructions given by the appellants to Mr Ashby, resulted from the distribution of capital by the KCD Trust.

   4.Summerfield Trust distribution of $1,522,649 in 2007, arising from the sale of the Summerfield Shopping Centre.

   [104] Registrar's report [111]; report of Mr Van Homrigh dated 18 September 2015, pars 5.3.13, 5.3.18; GB 3928, 3930; report of Mr Ashby dated 17 December 2015, par 6.4.11; GB 4075 ‑ 4076.

3. There is no merit in the appellants' contentions.  First, there is no error (let alone perversity or manifest unreasonableness) in the registrar's conclusion that the distributions in question were treated by the trustees, at the time the distributions were made, as distributions of income rather than capital.  There was ample evidence to support that conclusion:

   1.The respondents' accounting expert, Mr Van Homrigh examined the contemporaneous financial statements and tax documents of the trusts, and concluded that the distributions were by way of income.  Although the documents were not always consistent, Mr Van Homrigh gave reasons for why he regarded some documents as more reliable than others.[105]  Mr Van Homrigh gave evidence and was cross‑examined.  Amongst other things he said:[106]

   [105] Report of Mr Van Homrigh dated 18 September 2015, par 5.3; GB 3925 - 3930; appendix E.1, pars 17 ‑ 24; GB 3965 ‑ 3966; appendix E.2, pars 65 - 70; GB 3976 - 3977; appendix E.3, pars 61 - 63; GB 3988 ‑ 3989.

   [106] Report of Mr Van Homrigh dated 18 September 2015, pars 5.3.10 - 5.3.12; GB 3927; see also Registrar's report [102] - [109].

   5.3.10Because the tax returns record all taxable income as distributed to unitholders, and the annual returns show that no tax was paid, the amounts recorded as distributed in tax returns should be taken as the minimum income distribution amount pursuant to Order 6a.

   5.3.11The profits (but not losses) declared in the profit and loss statements within the annual reports are the indicator of income distributions pursuant to Order 6a.

   5.3.12Therefore, based on the analysis set out in Appendix E, and summarised above:

   (a)The profits, which are also described as 'final total distribution for year', in Balga Bazaar's annual reports for those years that had profits, should be taken as the income distributions;

   (b)The profits, generally also described as 'payable to unitholders', in Summerfield's profit and loss statements should be taken as the income distributions; and

   (c)The profits, which are also recorded as a provision for distribution, in Kelmscott's profit and loss statements should be taken as the income distributions.

   2.The accounting expert called by the appellants, Mr Ashby, stated that his instructions were that the amounts in question were capital distributions.  Mr Ashby did not state that he had formed his own conclusion that the amounts in question were capital distributions.[107]

   3.The contemporaneous financial records of the trusts which indicated that the distributions were income distributions included annual reports of the trusts[108] and certain tax returns.[109]

   4.There was no evidence of any special resolutions in accordance with cl 11.9 of the trust deeds, which would have been required had the trustees made the distributions in question by way of capital distributions.  Also, any determinations by the trustee under cl 12.1(15) required a special resolution to bind unit holders.  The admitted absence of any such special resolution[110] tends to indicate that there were no relevant determinations by any of the trustees under cl 12.1(15).  It does not merely suggest, as counsel for the first ‑ third and fifth ‑ seventh appellants submitted to the registrar, that 'there may be a breach of trust', or that special resolutions were merely a 'matter of form' and 'irrelevant'.[111]

   5.In relation to the Kelmscott Trust distribution of $278,684, the suggestion that this was a capital distribution was attributable to the appellants' instruction to Mr Ashby that this sum was derived from a capital distribution from the KCD Trust.  Material relating to the KCD Trust was not in evidence on the taking of the account, and the registrar was not in error, for the reasons she gave, in deciding that it was not appropriate to allow the appellants to reopen their case to tender evidence in relation to the KCD Trust.[112]

   6.The fourth appellant's submissions, insofar as they refer to tax regimes and the differences between income and capital, do not engage with the evidence, accepted by the registrar, that the distributions were historically treated as distributions of income rather than capital.[113]  Insofar as the fourth appellant's submissions refer to other documents annexed to his affidavit dated 31 July 2015,[114] the submissions do not demonstrate any error in the registrar's reliance on Mr Van Homrigh's expert evidence and the financial documents on which he relied. 

   7.Insofar as the appellants also submitted that there was oral evidence given by the fourth appellant that the trustees treated the distributions in question as distributions of capital at the relevant times, notwithstanding assertions by counsel that 'I can give you the detail' and that 'it will just take me a few minutes',[115] they were unable to give the court, at the hearing in this matter, any references to transcript or other evidence in support of that contention.[116]

   8.The documents referred to in the schedule of evidence filed by the first - third and fifth - seventh appellants after the conclusion of the hearing (see [43] above) provide no basis for this court to conclude that there was any error in the registrar's acceptance of Mr Van Homrigh's analysis of the contemporaneous documents.

   9.The contention by the first - third and fifth - seventh appellants that it was not open to the registrar to find on the evidence that the trusts were in the business of buying and selling property cannot be accepted.[117]  In any event, the criticism does not establish any error in the ultimate finding that the distributions in question were historically treated by the trustees as distributions by way of income.

   [107] Report of Mr Ashby dated 17 December 2015, pars 1.4.1, 6.4.7(a); GB 4051, 4074; appellants' letter of instructions to Mr Ashby dated 17 December 2015, par 6; GB 4107; joint memorandum of Mr Van Homrigh and Mr Ashby dated 11 February 2011, pars 2.1.2(b), 4.3.2, GB 4008, 4014; trial ts 831.

   [108] Balga Trust - GB 245, 253, 258, 383 - 384; Summerfield Trust - GB 3251 - 3256; Kelmscott Trust - GB 1923.

   [109] Balga Trust - GB 663 - 664; Summerfield Trust - GB 3469 - 3470.

   [110] Appeal ts 980 - 981, 1016.

   [111] Registrar's report [126].

   [112] See [30] above.

   [113] Fourth appellant's amended submissions, pars 12.1 - 12.11.

   [114] Fourth appellant's amended submissions, pars 12.12 - 12.22.

   [115] Appeal ts 981.

   [116] Appeal ts 994 - 995, 1025 - 1026.

   [117] See par 4.2.1(c) of the joint memorandum of Mr Van Homrigh and Mr Ashby dated 11 February 2011; GB 4013.

4. For these reasons, the appellants' submissions with respect to issue 2(c) have no merit.

Issue 3 - interest rates

1. The appellants refer to par 6(b) of the 2009 Court of Appeal orders, which provides for interest by reference to the rate the funds 'would have earned if invested in a interest‑bearing deposit with the banker to the trust'.  In substance, the appellants contend that there was no evidence either from the trustees of the rates offered by their bankers for such deposits, or directly from the trustees' bankers as to such rates.

2. The registrar's findings are set out in [22] above.  In the absence of evidence (including by the trustees as accounting parties[118]) as to the actual interest rates offered by the particular banker to the trust, it is reasonable to infer that the deposit and investment rates published by the Reserve Bank reflected the rate the funds would have earned if invested in an interest‑bearing deposit with the banker to the trust.  Counsel for the first ‑ third and fifth ‑ seventh appellants accepted as much in oral submissions.[119]

   [118] An accounting party must ordinarily make all due inquiries for the purpose of an account, including of their relevant agents, bankers or solicitors:  Re GDK Financial Solutions Pty Ltd;Australian Securities and Investment Commission v GDK Financial Services Pty Ltd [2006] FCA 1415; (2006) 236 ALR 699 [51].

   [119] Appeal ts 987.

3. There is no merit in the appellants' contentions. 

Issue 4 - other matters

1. As noted earlier, counsel for the first - third and fifth - seventh appellants accepted that success on the matters raised in issue 4 would depend upon, in effect, the success of the complaint regarding the proper construction and application of par 6(a) of the 2009 Court of Appeal orders.[120]  The challenges in that regard have no merit, for the reasons given earlier.

   [120] See [33] - [34] above.

2. For those reasons, the challenges advanced by the first ‑ third and fifth ‑ seventh appellants to the Registrar's report must be dismissed. 

The fourth appellant's contentions

1. Although it is unnecessary to address separately the grounds raised by the fourth appellant because, as noted earlier, they in substance covered the points raised by the first ‑ third and fifth - seventh appellants, the following specific observations may be made about the fourth appellant's grounds, in addition to the observations made in [55] ‑ [101] above.

31.It is declared that:

31.1. the Third Plaintiff, Sharyn Lee Green, is indebted to the Kelmscott (1988) Unit Trust in the principal sum of $30,000;

31.2 the Third Plaintiffs, Graham William Green and Julie Anne Green, are indebted to the Kelmscott (1988) Unit Trust in the principal sum of $30,000; and

31.3 the Third Plaintiffs, William Joseph Green and Norma Glenys Green, are indebted to the Kelmscott (1988) Unit Trust in the principal sum of $500,000.

32.There be an account to be taken before a Registrar of this Honourable Court between the Third Plaintiffs and Magenta Pty Ltd as to the cost to the Kelmscott (1988) Unit Trust from time to time as and from 6 December 1988 of its borrowings of a bill line facility with the ANZ Bank Limited together with recurring charges.

33.The sums referred to in paragraph 30 [sic - presumably par 31]:

33.1.bear interest at the rate and for the periods found on account referred to in paragraph 32 hereof; and

33.2.for the period during which the Kelmscott (1988) Unit Trust did not incur costs on any bill line facility with the ANZ Bank Limited at the rate prescribed from time to time pursuant to section 32 of the Supreme Court Act.

38.The Plaintiffs' claims against the Eighth and Ninth Defendants be dismissed.

39.The Plaintiffs' claims otherwise be dismissed.

40.The First and Second Defendants have judgment on their counterclaims as provided in pars 13 ‑ 15 and 31 ‑ 33 but the counterclaims otherwise be dismissed.

Schedule 3 - Grounds of challenge

First - third and fifth - seventh appellants' grounds of challenge

Grounds 1 - 3 - pars 2(b) and 2(c) of the 2009 Court of Appeal orders (principal sums on loans from Summerfield Trust)

The first - third and fifth - seventh appellants allege, in effect, that the registrar 'erred in law or in principle or such is manifestly unreasonable' for not including amounts for loans made by Tace as trustee of the Summerfield Trust to Mr Green and W J Green & Co on the bases that:

1.the Summerfield loans were not disputed and were outstanding;

2.repayment of the sums were a 'just allowance' under O 45 r 8 and, in any event, were necessary to do justice between the parties; and

3.the registrar erred in not having regard to the transcript of the primary proceedings, in not giving effect to O 36 r 9, and in concluding that this court in Wilden Pty Ltd v Green [No 4][146] had found that the transcripts could not be included in evidence.

[146] Wilden Pty Ltd v Green [No 4] [2016] WACA 195.

Ground 4 - pars 2(b) and 2(c) of the 2009 Court of Appeal orders (interest on loans from Summerfield Trust)

It is alleged that as the principal sums said to be due to the Summerfield Trust should have been allowed, so should interest have been allowed under pars 2(b) and 2(c) of the 2009 Court of Appeal orders, and pars 14, 15, 32 and 33 of Hasluck J's preserved orders.

Grounds 6 -11 - par 6(a) of the 2009 Court of Appeal orders

There is no ground 5.

By ground 6, it is alleged that the registrar erred in law or in principle, or her decision was manifestly unreasonable, in finding that the construction and/or operation of par 6(a) was to the effect that the respondents were entitled to be paid, rather than their share of the income available for distribution each year, the same amount as had been distributed to each of the other unit holders, so as to notionally increase, by force of court orders, the total amount to be distributed in the relevant years by the trusts.

By ground 7, it is alleged that the registrar erred in law or in principle, or was manifestly unreasonable: 

1.in construing the words 'income distribution' in par 6(a) as not requiring 'income' to include or be net of costs and expenses (and losses) incurred in each year the relevant income was earned arising from the operation and management of the trusts attributable to each unit;

2.in finding (at [81]) that it was unnecessary to restate the accounts of the trusts; and

3.in finding (at [124]) that the words 'income distribution' in par 6(a) included distributions of any character, capital or otherwise, when the repurchase mechanism 'revoked' [sic] by the respondents fixed the capital value of their units as at the date of the repurchase notice, being the repurchase values to be paid in accordance with par 5.

By ground 8, it is alleged that the registrar erred in law or in principle, or was manifestly unreasonable in finding, that the losses suffered by the trusts over the relevant period should not be taken into account in giving effect to par 6(a), when not to include those losses resulted in unit holders being treated unequally 'as prescribed by the Trust Deeds', and, further, when the respondents conceded that the purpose of par 6(a) was to treat all unit holders equally.

By ground 9, it is alleged that the registrar erred in law or in principle, and her decision was manifestly unreasonable, given there was no evidence relevant to the unit holders in support of the finding (at [125]) that distributions referrable to the sale of property assets constituted income on the basis that the trusts were in the business of buying and selling property.

By ground 10, it is alleged that the registrar erred in law or in principle in finding (at [126] and [127]) that: 

1.the proper construction of cl 12.1(15) of the trust deeds required the exercise of the trustees' discretion, in determining whether income was to be allocated as capital or income, to be the subject of a special resolution by the unit holders;

2.notwithstanding the uncontroverted evidence of Mr Chesson that the trustees had exercised their discretion and the relevant determination had been made, the registrar found that the exercise of the trustees' discretion to make the determination had not been exercised;

3.the absence of special resolution supported a (general) conclusion that all distributions by the trusts can be characterised as income distributions; and

4.the trusts had not classified the proceeds of the sale of the relevant trusts' capital assets as receipts, when such a finding was against the evidence.

By ground 11, it is alleged that the registrar erred in law and principle in finding (at [39] and [54]) that the Notice of Concessions and annexed schedules were merely submissions rather than the account to be passed, and that the amended financial records should not be received as the trustees' account.

Ground 12 - par 6(b) of the 2009 Court of Appeal orders

By ground 12, it is alleged that the registrar erred in law in failing to give effect to par 6(b), and, on the respondents' failure to comply with that order (in not establishing the interest rate the funds would have accrued in an interest bearing deposit with the banker to the trust), in not disallowing the respondents' claim for interest.

Ground 13 - general ground

By ground 13, it is alleged that the Registrar's report is infected with error or principle, or errors of law, or is manifestly unreasonable in that the registrar:

1.proceeded on the basis that she did not need to decide or determine the correct interpretation of par 6(a), but that was a matter that ultimately would be dealt with by the Court of Appeal, when she should have found that she was required to make that determination to permit her to undertake the account; and

2.misapprehended the trustees' and the registrar's roles in giving effect to par 10.

As to the second alleged error, it is said that the trustees were, on the basis of the written true financial records of the trusts, to bring before the court the trustees' account of the amounts payable or due pursuant to pars 5, 6 and 8, and the registrar was then to rule on any objections (surcharges or falsifications) and determine the amounts payable or due, with the respondents having the burden of proof on any surcharges and the trustees on any falsifications.  The registrar, nevertheless, allegedly erred in finding that the trustees had the burden of proof for all objections, and undertook a roving review of the trustees' accounts.

Each of the grounds 1 - 12 are also repeated.

Fourth appellant's grounds of challenge

Ground 1 - failure to conduct account in an appropriate and proper manner

The fourth appellant contends, in effect:

1.The registrar conducted a roving commission of the type that would be afforded by an account on the footing of default, rather than an account for the administration of the trust in circumstances where the trustees had not breached their obligations under the trust deeds.  In that regard, it is contended that the registrar misdirected herself and failed to adhere to her limited jurisdiction to determine whether any surcharges were proven by the respondents, and whether the appellants were able to prove that any falsifications raised by the respondents were, in fact, properly incurred expenses.[147]

[147] Fourth appellant's grounds of appeal, pars 1 - 3, 5.

2.The registrar failed to recognise (at [73] and [79] - [81]) that the account was not 'a historical account but was a current account to take into account the entire period between the date of the determination of the repurchase price of the units and the date of the account'.[148]

[148] Fourth appellant's grounds of appeal, par 6.

3.The registrar misunderstood (at [25] - [26]) that she was not required to determine particular items, when particular items were reserved for determination by the trustees, in the absence of breach of trust, and failed to recognise that the account was to be taken 'before a registrar', and not 'by a registrar'.  She thereby adopted an approach which rendered nugatory the whole of the preceding litigation.[149]

[149] Fourth appellant's grounds of appeal, pars 4, 7, 8.

4.The registrar failed (at [81]) to properly construe order 6(a) in relation to the word 'income'.[150]

[150] Fourth appellant's grounds of appeal, par 9.

5.The registrar erred in finding (at [88]) that she was not satisfied that the restated accounts showed a legitimate claim to the liabilities that had been calculated and included in the accounts retrospectively.  That finding was contrary to the evidence of Mr Chesson, and Mr Chesson's evidence was supported by:  (1) the trust auditor's certificates'; (2) the fact that there was no obligation under the trust deeds to pass any specific resolutions in relation to costs and expenses; and (3) the fact that the trusts were 'closely held' and managed by companies which were managed by the unit holders.[151]

[151] Fourth appellant's grounds of appeal, par 10.

6.The registrar erred in law (at [28] - [31]) and in fact in failing to recognise that the respondents 'did not provide the Appellants with notice of the matters of cross‑examination, such matters becoming the matters identified and amended in the Notice of Concessions and attached Schedule'.[152]

[152] Fourth appellant's grounds of appeal, par 11.

Ground 2 - failure to recognise that the trust deeds are paramount

The fourth appellant:

1.effectively repeats the matters in point 3 of ground 1 above;[153] and

[153] Fourth appellant's grounds of appeal, par 12.

2.contends that the registrar failed (at [66]) to recognise that the trustees were bound to apply and act in accordance with the trust deeds.[154]

[154] Fourth appellant's grounds of appeal, par 13.

Ground 3 - failure to recognise the trustees' duty to treat all beneficiaries equally

The fourth appellant:

1.effectively repeats the matters in point 1 of ground 1 above;[155]

[155] Fourth appellant's grounds of appeal, par 14.

2.contends that the registrar (at [12] and [81]) failed to recognise that the trustees were bound to consider the interests of and be fair to all unit holders;[156] and

[156] Fourth appellant's grounds of appeal, par 15.

3.contends that the registrar (at [12] and [81]) misconstrued order 6(a) by failing to recognise that her interpretation was: [157]

[157] Fourth appellant's grounds of appeal, par 15.

(a)contrary to the obligation of the trustees;

(b)impossible to achieve; and

(c)contrary to s 94(2)(a) and s 94(2)(b) of the Trustees Act 1962 (WA).

Ground 4 - failure to recognise that the accounts had to be restated to comply with the orders

The fourth appellant alleges, in effect, that the registrar erred in law and in fact:

1.in failing to recognise (at [73] - [93]) that the 2009 Court of Appeal orders required a restatement of the accounts, because until those orders, the trustees had provided for interest to be payable to the respondents, but had not provided for income distributions to be paid to the respondents;[158] and

[158] Fourth appellant's grounds of appeal, par 16.

2.on the basis of the matters set out in grounds 1 and 3 above.[159]

[159] Fourth appellant's grounds of appeal pars 16.1, 16.2, 16.3.

Ground 5 - failure to give due regard to the trustees' discretion

The fourth appellant, in effect:

1.contends that the registrar erred in failing to recognise (at [130]) that the treatment of capital gains, as separate from trust income, was at the discretion of the trustees, which discretion the trustees had exercised;[160] and

[160] Fourth appellant's grounds of appeal, par 17.

2.repeats the matters in ground 1 above.[161]

[161] Fourth appellant's grounds of appeal, par 18.

Ground 6 - failure to properly consider the principal matters in dispute

The fourth appellant alleges, in effect, that the registrar erred in law and in fact in that she failed to determine the principal matters in dispute prior to considering the account presented before her, and that this failure infected the account and the manner in which it was conducted.[162]

[162] Fourth appellant's grounds of appeal, par 19.

Ground 7 - failure to properly consider the evidence

The fourth appellant contends, in effect, that the registrar erred in law and in fact:

1.in disregarding Mr Chesson's evidence in finding (at [84]) that Mr Chesson conceded that accounting principles were not followed when no such concession had been made;[163]

[163] Fourth appellant's grounds of appeal, par 20.

2.by relying upon the expert evidence of Mr Van Homrigh over the evidence of Mr Chesson, and, in particular, erred in relying on Mr Van Homrigh's evidence in respect of capital gains when:[164]

[164] Fourth appellant's grounds of appeal, par 21.

(a)there was no evidence that Mr Van Homrigh's view as to the approach of an investor was the approach that was actually taken by the trustees (at [119]); and

(b)Mr Chesson's evidence, and the evidence of the historical accounts and tax returns, identified the difference between capital gains and income from rents or other trading activities (at [92]);

3.by wrongly relying on the absence of special resolutions regarding capital distributions (at [126] ‑ [127]) in circumstances where:[165]

[165] Fourth appellant's grounds of appeal, par 22.

(a)there was unchallenged evidence that the trusts were closely held and the management was undertaken by companies who were managed by the trusts' unit holders;

(b)the trustees could and did waive any obligation under cl 11.9 of the trust deeds; and

(c)on the proper construction of cl 12.1(15) of each of the trust deeds, the trustees had a discretion to make allocations, and a special resolution was only required where the trustees sought approval so as to bind all unit holders.

Ground 8 - failure to properly consider the difference between income and capital

The fourth appellant alleges, in effect, that the registrar erred in law and in fact (at [127]) by determining that the intention of the 2009 Court of Appeal orders was to award both income and capital growth to the respondents in circumstances where the Court of Appeal 'had restricted the payments to income only being the converse as against the decision of Hasluck J at first instance which was to award to the Respondents distributions of Income and Capital'.[166]

[166] Fourth appellant's grounds of appeal, par 23.

Ground 9 - failure to properly consider the Notice of Concessions

The fourth appellant alleges that the registrar erred in law and in fact (at [39] and [54]) in finding that the Notice of Concessions and annexed schedules were merely submissions, in that she failed to:

1.recognise that errors in the account were not identified or raised by the respondents prior to the hearing of the account; and

2.understand that in the event of an error, surcharge or falsification identified by the respondents which was accepted by the trustees, the appellants had the right to amend the account accordingly.[167]

[167] Fourth appellant's grounds of appeal, par 24.

Ground 10 - failure to make just allowances

The fourth appellant alleges that the registrar erred in law and in fact in failing to make just allowances in:

1.that she had no regard (at [40] - [42]) to the transcripts of earlier hearings in the proceedings and thereby ignored O 36 r 8 and r 9, and erroneously misunderstood that the court in Wilden [No 4][168] had held that the transcripts could not be included in submissions advanced by the trustees;[169]

[168] Wilden Pty Ltd v Green [No 4] [2016] WASCA 195.

[169] Fourth appellant's grounds of appeal, par 25.1.

2.not accepting into evidence (at [55] - [61]) the accounts of the KCD Trust when they were referred to in the historical accounts and in annexure C to Mr Ashby's report, and where the respondents were on notice because Mr Van Homrigh was shown those accounts at an expert conferral;[170]

[170] Fourth appellant's grounds of appeal, par 25.2.

3.not including (at [143]), in the making of just allowances under O 45 r 8, or otherwise to do justice between the parties, the repayment by the first and second respondents (Mr Green and W J Green & Co) to the third appellant (Tace as trustee of the Summerfield Trust); and

4.finding (at [143]) that in taking the account required by order 10 of the 2009 Court of Appeal orders, it is unnecessary to include within that process accounting for the outstanding loans owed by the first and second respondents (Mr Green and W J Green & Co) to the third appellant (Tace as trustee of the Summerfield Trust), when the first and second respondents had admitted in 1990 that the loans were repayable.[171]

[171] Fourth appellant's grounds of appeal, par 27.

Ground 11 - failure to properly consider what is an income distribution

The fourth appellant contends that the registrar erred in law and in fact, in effect:

1.In finding (at [98]) that the losses 'suffered by the Trusts from the date of repurchase to the date of the taking of the account should not be taken into account in giving effect to order 6(a)', given that the failure to do so would result in the unit holders not being treated equally.[172]

[172] Fourth appellant's grounds of appeal, par 28.

2.In failing to recognise (at [88]) that the expenses might need to be the subject of further litigation.  In that regard, the fourth appellant also relies, in effect, on ground 1 above.[173]

[173] Fourth appellant's grounds of appeal, par 29.

3.In finding (at [81]) that the words 'income distribution' in order 6(a) did not require adjustments to costs, expenses and losses attributable to each unit, including interest on borrowings, legal fees, and expenses incurred for which payment was deferred.  In that regard, the fourth appellant also repeats, in effect, ground 1 above.[174]

[174] Fourth appellant's grounds of appeal, par 30.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

CL
ASSOCIATE TO THE HONOURABLE JUSTICE MURPHY

9 NOVEMBER 2018