FEDERAL COURT OF AUSTRALIA Owston Nominees No 2 Pty Ltd v Branir Pty Ltd [2000] FCA 145 CONTRACT – oral agreement to grant a sub-lease or other interest over 20,000 acres of land subject to a pastoral lease for use as a wildlife sanctuary for the breeding and preservation of endangered and exotic animals – consent for change of use under a pastoral lease – lease in perpetuity under Crown Lands legislation – Statute of Frauds – requirement of evidence in writing of an agreement to transfer an interest in land – necessity to plead the doctrine of part performance – ascertainment and enforceability of terms under an oral agreement which is partly evidenced by writing – oral agreement to issue shares – admissibility of oral evidence – whether written document embodies the entirety of the agreement – establishment of precise terms of oral agreement where the written document does not adequately reflect the intentions of the parties ESTOPPEL – proprietary estoppel – whether representations as to the granting of a sub-lease or other interest in land under a pastoral lease and reliance on those representations gives rise to an estoppel against denying the interest in land MISLEADING AND DECEPTIVE CONDUCT – whether representations as to the granting of a sub-lease or other interest in land under a pastoral lease constituted misleading and deceptive conduct under the Corporations Law, the Trade Practices Act or the Fair Trading Act Corporations Law s 995 Trade Practices Act 1974 (Cth) s 52 Fair Trading Act 1987 (NSW) Crown Lands Act 1931 (NT) ss 23A, 26 Pastoral Land Act 1992 (NT) ss 3, 38, 61, 67, 68 Crown Lands Consolidation Act 1913 (NSW) Statute of Frauds Roach v Bickle [1915] 20 CLR 663 Davies v Littlejohn [1923] 34 CLR 174 Massart v Blight [1951] 82 CLR 423 Brown v Heffer [1967] 116 CLR 344 Regent v Millett [1976] 133 CLR 679 The Wik Peoples v State of Queensland [1996] 187 CLR 1 Pejovic v Malinic [1960] 60 SR (NSW) 184 Millett v Regent [1975] 1 NSWLR 62 BHP v Hapag-Lloyd [1980] 2 NSWLR 571 Sidney Cooke Ltd v Hapag-Lloyd [1980] 2 NSWLR 587 Francis v Francis [1952] VLR 328 Riley v Osborne [1986] VR 193 Caton v Caton [1866] LR 1 Ch App 137 Maddison v Alderson [1883] 8 AC 467 White v Nealyon [1886] 11 AC 171 (PC) Carr v McDonald's Australia Limited & Ors, Federal Court of Australia (Burchett J), unreported, 16 February 1994 OWSTON NOMINEES NO 2 PTY LTD & ANOR v BRANIR PTY LTD & ORS NG 3184 OF 1995 EINFELD J 25 FEBRUARY 2000 SYDNEY TABLE OF CONTENTS INTRODUCTION 1 Tipperary 1 The Sanctuary 2 THE DISPUTE 4 THE NEGOTIATIONS IN SUMMARY 4 The 1990 deal 4 After the 1990 deal 7 The Macquarie Bank deal 7 The December 1993 deal 9 After the Settlement 11 PERSONAL RELATIONSHIPS 12 THE CLAIM 20 THE CROSS CLAIM 22 THE SANCTUARY 22 Overview 22 The Facts 23 The 1989 events 23 The Joint Statement of Understanding 27 February 1990 to late 1993 27 September – mid-December 1993 27 Anderson's meetings in Jakarta 29 14 December – 23 December 1993 34 Before Settlement on 23 December 38 After the Settlement 39 THE CAUSES OF ACTION 44 Threshold Arguments 44 The Crown Lands legislation 44 Private perpetual sub-leases 51 The Statute of Frauds 52 The 1993 settlement documents preclude this action 55 Contract 58 Intention to contract 59 An enforceable agreement 60 The content of the agreement 63 The term of the agreement 65 Estoppel 67 Misleading and deceptive conduct 69 THE SHARES 70 Overview 70 The Facts 72 The Share letter 80 Intention to create a legally binding agreement 84 Was the Share letter an accurate and complete record of the agreement? 84 The Branir Shareholding Agreement 92 $A8 million payable only out of dividends 93 Branir must be debt free on the issue of shares to Owston 97 The $A8 million is payable to Bakrie not Branir 100 Security for the debt 102 In summary 103 CONCLUSIONS 103 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 3184 OF 1995 BETWEEN: Owston Nominees No 2 Pty Limited First Applicant Warren Perry Anderson Second Applicant AND: Branir Pty Limited First Respondent Tovehead Pty Limited Second Respondent Aburizal Bakrie Third Respondent JUDGE: EINFELD J DATE: 25 FEBRUARY 2000 PLACE: SYDNEY REASONS FOR JUDGMENT INTRODUCTION Tipperary 1 In 1985 and 1986 the first applicant, Owston Nominees No 2 Pty Limited (Owston), a company owned and controlled by the second applicant, Warren Perry Anderson (Anderson), a Western Australian businessman, acquired, in its capacity as corporate trustee for Anderson's family trust, several contiguous pastoral leases from the Northern Territory Government and portions of freehold land in the Territory. As a result of these acquisitions, Owston became the operator of several cattle stations which collectively became known as "the Tipperary group of properties", or simply "Tipperary". The properties which comprised Tipperary were Tipperary Station itself, Elizabeth Downs Station, Litchfield Station, Fish River Station, Douglas Station, Hillcrest Station and "1006". Their aggregate area is approximately 10,000 square kilometres. 2 Between 1985 and 1989 Owston spent in excess of $50 million developing Tipperary, which included the construction of a large homestead, machinery sheds, offices, bunkhouses, a school, a swimming pool, an indoor tennis court, an equestrian centre, stables, a polo field, and a 7,000 feet bitumen airstrip, and the introduction of a huge mango plantation. Large amounts of land were cleared and the properties stocked with cattle. The homestead is situated about 150 kilometres south of Darwin. The buildings and the whole development are of high quality. The Sanctuary 3 As an extension of Anderson's interest in the preservation of endangered species through his support for the work of the World Wildlife Fund for Nature, Owston also developed a wildlife sanctuary on Tipperary Station (the Sanctuary) on which it spent in excess of $3 million in capital developments. From its conception the Sanctuary was planned to be primarily a reserve for the breeding of rare and endangered species in order to preserve their gene pool for future generations. It was, apparently, not intended to be a zoo, as the wildlife were on the property for breeding and preservation purposes rather than display. The animals in the Sanctuary are not caged but roam freely in large enclosed areas and considerable efforts are made to minimise environmental and other stresses. Visitors to the Sanctuary are restricted. 4 The Sanctuary presently occupies an enclosed area of approximately 860 hectares (2500 acres) adjacent to and partly surrounding the homestead area on Tipperary Station. The Sanctuary was developed in stages. Stages I - III were mainly developed in the period between 1987 and the end of 1989 and Stage IV was developed in 1994. These various stages and their relation to the homestead area are shown in the map (page 5 of Exhibit A3) which is appended to this judgment (1). The stages can be briefly described: (a) Stage I comprises a hippopotamus enclosure with a man-made lake and a rhinoceros paddock, each of which was about 7 hectares in size, 6 animal breeding pens (each approximately 2.5 hectares in size), and an extensive, under cover, aviary. (b) Stage II comprises an area of approximately 250 hectares to the north of the Tipperary homestead area and borders the western side of the road which travels north from that area to the main road to Adelaide River and Darwin. It is enclosed by a brick and steel wall which is approximately 5 kilometres in length and stands more than 10 feet high. Where the wall crosses watercourses there are reinforced concrete culverts. The enclosure is designed to hold mega-vertebrates such as rhinoceros. Stage II also encloses a site for a substantial residence intended for Anderson himself. At present this site consists only of some foundations and a stockpile of building materials. (c) Stage III comprises an area of approximately 350 hectares to the north of Stage II and separated from it by a fenced "raceway" through which animals can be moved. Stage III is fenced with a cyclone wire fence some 12 feet in height and approximately 9 kilometres in length. The fence is anchored in concrete so as to prevent the entry of dingos or other predators by digging under the fence. Stage III has been further developed by the construction of a pygmy hippopotamus and tapir enclosure just to the north of the fenced area containing along the northern and western boundaries 22 fenced breeding pens, ranging from 2 to 8 hectares in size. This development took place in two stages: pens numbered 1 to 10 in 1991 and pens numbered 11 to 222 in 1992 and 1993. (d) Stage IV comprises an area of approximately 250 hectares to the west of Stages II and III and separated from them by the same raceway. Stage IV is fenced by approximately 4 kilometres of cyclone wire fencing in a similar manner to Stage III. 5 The Sanctuary is currently populated with approximately 1500 animals of about 29 species and 425 birds of about 54 species, most of which are rare whose survival as a species is endangered. All of them have been either bred in the Sanctuary or bought by Owston from sources overseas and in Australia. For example, Owston purchased the entire stock of rare and endangered species from Lord MacAlpine's private zoo near Broome between 1990 and 1992 for approximately $1.2 million. Although there have apparently been some sales of surplus non-endangered animals from time to time, it is not a profit-making or commercial enterprise. The current annual cost of running the Sanctuary is said to be approximately $250,000 to $300,000. 6 The Sanctuary is a class B quarantine facility under the regulatory supervision of the Australian Quarantine Inspection Service and the Australian Nature Conservation Agency. Most of the exotic species which the Sanctuary has imported into Australia are not able to be subjected to the normal regime of quarantine and disease testing applied to commercial animals because they are inherently very susceptible to stress and will die if they are not handled with the utmost care. They are imported into Australia under regulations which severely restrict where they can be kept and subject them to lifetime surveillance by the quarantine authorities. These species can only be moved from the Sanctuary to another quarantine facility and such movements are a difficult and costly exercise. THE DISPUTE 7 In circumstances and for reasons which will appear, Owston sold its interests in Tipperary to the respondents, half in 1989 and the other half in 1993. This case, which was originally commenced on 21 April 1995, arises from a dispute over what the 1993 sale was intended to achieve, in particular whether the Sanctuary was included in or excluded from the sale, and how and when the related corporate reorganisation was and is to be achieved. In order to explain the dispute and the chequered history of the litigation, a significant agglomeration of facts and negotiations must be examined. THE NEGOTIATIONS IN SUMMARY The 1990 deal 8 In 1989 Anderson began negotiations with Japto Soerjosoemarno (Japto), an Indonesian businessman to whom he had been introduced by an acquaintance, John Benson, about the possibility of Owston selling a 50% interest in Tipperary. Through Benson and Japto, Anderson was introduced to the third respondent, Aburizal Bakrie (Bakrie), a wealthy Indonesian businessman and entrepreneur who has been a senior adviser to Indonesian Presidents on economic matters. Bakrie visited Tipperary in mid 1989 and expressed an interest in purchasing a 50% share of the properties with Japto. These negotiations encompassed the possibility of setting up a joint venture with Anderson to develop a feedlot in Indonesia for the fattening and slaughter of Tipperary cattle for sale in the Asian and Middle Eastern markets. 9 In August 1989 Anderson, Bakrie and Japto executed a document entitled "Co-operation Agreement" (the 1990 deal). While it was only the first of many subsequent agreements, it provides a useful outline of the general nature of the transaction contemplated by the parties: · a Bakrie nominee company was to acquire a half interest in Tipperary for $US80 million · Anderson and Bakrie were to invest $US15 million for the further development of Tipperary · Bakrie's investment was to be funded by a loan from the vendor and from banks secured by 50% of Tipperary · Owston was to have a right of or obligation to "buy back" its interest · the partnership was to include the development of a feedlot in Indonesia 10 Throughout late 1989 and early 1990, negotiations continued and a large number of agreements were drafted and executed, many being superseded and supplanted by further agreements and negotiations. The transaction eventually proceeded but it is only necessary for present purposes to summarise its essential features. 11 By an Agreement for Sale and Purchase dated 15 November 1989, the second respondent, Tovehead Pty Limited (Tovehead), purchased from Owston an undivided one half share as tenant in common in the leases and freehold constituting Tipperary for $US80 million. Tovehead was a wholly owned subsidiary of Cross Hatch Company Ltd (Cross Hatch), a Hong Kong company which was 30% owned by Japto and 70% owned by Bakrie through a further holding company called Timeswitch Investments Limited. This sale to Tovehead was settled on 13 February 1990. 12 Of the purchase price of $US80 million, the sum of $US56 million was provided to Tovehead through a loan from Bank Bumi Daya (BBD), an Indonesian bank. There was no evidence as to Bakrie's relationship with this bank such as might have energised this substantial loan. The balance of the purchase price was provided by vendor finance advanced by Owston in the sum of $US24 million. This amount was lent by Owston to Cross Hatch and Cross Hatch on-lent it to Tovehead. 13 The operations of the joint venture in Indonesia were the subject of a Feedlot Joint Venture Agreement and a Feedlot Joint Venture Subsidiary Agreement both dated 15 November 1989. By the first of those agreements, the parties agreed to form a company to construct and operate a feedlot in Indonesia, to import cattle into Indonesia from the Northern Territory, to fatten the cattle for marketing in Indonesia, and also by way of export. The company formed to conduct these Indonesian operations was PT Tipperary Indonesia, known as "Tippindo". The interests of the parties in Tippindo were agreed to be divided so that a Bakrie company called PT Bakrie Nusantara Corporation (Nusantara) and Japto controlled 51% of the shares on issue and Owston controlled 49%. However, by the second joint venture agreement, it appears to have been agreed that Nusantara would hold 1% of its interest in the feedlot company Tippindo for the benefit of Owston and deal with it accordingly. The beneficial interests in the Indonesian feedlot venture were thus effectively divided equally between the Australian and Indonesian parties to the joint venture. 14 A further document entitled "Joint Statement of Understanding" (JSU), executed by Tovehead, Japto and Owston on 1 February 1990, provided for the use by each of Tovehead and Owston of a parcel of 20,000 acres for its own purposes: THIS STATEMENT OF UNDERSTANDING is made this 1st day of February 1990 WHEREAS: A. Agreement has been reached for Tovehead Pty Limited ("Tovehead") to purchase from Owston Nominees No 2 Pty Limited ("Owston"), a half interest in certain rural properties in the Northern Territory of Australia ("the land"). B. The parties intend to use certain parts of the land in accordance with this Statement of Understanding. THE PARTIES STATE AS FOLLOWS: 1. USE OF LAND 1.1 Owston shall use such parts of the land as it selects, not exceeding 20,000 acres for its own purposes, including construction of a private zoo. 1.2 Tovehead shall use such other parts of the property as it selects, not exceeding 20,000 acres for its own purposes, including construction of a private residence. 1.3 Neither Owston or Tovehead shall select, under 1.1 or 1.2, any of the currently developed land or commercial plantation. 1.4 Neither Owston nor Tovehead shall carry out upon the land any other business other than the business carried out for the joint benefit of Owston and Tovehead. 1.5 The parts of the land referred to in 1.1 and 1.2 shall not be utilised for any other commercial use other than personal residence and recreation including zoo. 15 I shall return to this document in more detail later. A schematic representation of the corporate structure as it was after the 1990 deal formed part of Exhibit A11, headed "Before Settlement", and is appended to this judgment (2). After the 1990 deal 16 After settlement, Tipperary continued to be operated by Owston for the benefit of the joint venture and the station manager, Frank Gardner, reported to Anderson. The development of the feedlot in Indonesia began in, and was completed by the end of, 1991 but for some reason it was not until the end of 1992 that Tovehead took over the running of the Tipperary properties. Owston continued to operate the Sanctuary under the day to day management of Kevin Langham who had been appointed by Anderson in late 1989. 17 During 1990 Anderson acquired the pastoral leases for a group of properties about 450 kilometres south east of Tipperary through a company called Moonhill Pty Limited (Moonhill). Although Anderson was the sole shareholder of Moonhill, the properties were acquired for the joint venture through loans of $7.5 million each by Owston and Tovehead to Moonhill of the working capital of $US15 million provided, whereby Tovehead acquired at least a beneficial interest in the properties which was, or the parties seem to have treated as, a 50% interest. 18 In 1992 Owston entered an agreement with Cross Hatch, Tovehead and Nusantara to forgive the loan of $US24 million from Owston to Cross Hatch which formed part of Tovehead's financing for the purchase of 50% of Tipperary. The consideration for this agreement was to be the payment to Owston through Tippindo of $US3 million in 12 monthly instalments of $US250,000 although it appears that the $US3 million was never fully paid. I shall return to this quite extraordinary arrangement later. The Macquarie Bank deal 19 In early 1993 Anderson became involved in a dispute with the Bank of New York (BNY) which was seeking payment of $US40 million pursuant to a guarantee given by Owston, Anderson and his wife for a loan arising out of a different commercial venture altogether. Through its Australian subsidiary Bank of New York Australia Ltd (BNYA), BNY was threatening to enforce its mortgages and charges over various assets owned by Anderson and Owston, including Owston's remaining 50% share of Tipperary and its share in Tippindo. Such a happening would have spelt financial disaster for Anderson and a potentially significant loss to Bakrie. This possibility led to Bakrie becoming involved in the discussions with BNY, in consequence of which the Anderson and Bakrie interests had discussions with a view to Owston obtaining funding from or with the help of Bakrie to resolve its dispute with BNY. 20 By around September 1993 the negotiations had culminated in a proposed transaction under which the Bakrie interests, through the intermediation of Macquarie Bank, were to acquire Owston's half interest in Tipperary and its shareholding in Tippindo for $A20 million (the Macquarie Bank deal). The mechanics of the Macquarie Bank deal involved the joint venture assets, Tipperary and the feedlot, being transferred to Tippindo in which a Bakrie nominee company would acquire a 49% interest. Owston was to retain an effective 20% interest in these assets through an issue of 40.815% of the shares in the Bakrie nominee company. The intended result of that proposal is summarised in the schematic labelled "September 1993 Deal" in Exhibit A11, appended to this judgment (3). 21 These negotiations were being conducted for the Anderson interests principally by Anderson himself and an adviser, Arthur Dew, who was a non-practising barrister. The Bakrie interests were represented by Bakrie himself, Nalin Rathod, an Indonesian national based in Jakarta who was the Chief Financial Officer for Bakrie's group of companies, and Charles Graham, an Australian company manager who had worked for Bakrie on a project in Indonesia in the late 1980s and whom Bakrie engaged to manage his Australian business dealings and operations from the time of the 1990 deal. Blake Dawson Waldron (BDW), a firm of solicitors, was also engaged by Bakrie to represent his interests and acted from approximately 14 November 1989 through to the present litigation. At the relevant time in 1993, Chris Greiner, a partner, and Justin Richmond, a junior solicitor, had carriage of the matter in BDW. The December 1993 deal 22 For reasons which are not now relevant, the Macquarie Bank deal foundered in around October 1993 but the Anderson and Bakrie interests continued discussions to give effect to the purchase by Bakrie of Owston's share in the joint venture assets without Macquarie's involvement. After tortuous negotiations via paper, telephone and fax, and not a little travel, agreement was reached on 23 December 1993 when various documents were executed by the parties to give effect to it. The primary result of the transaction was that, for $A20 million paid to BNY, Owston transferred its 50% interests in Tipperary and the Moonhill properties, and its 49% interest in Tippindo, to a Bakrie controlled company called Votraint Pty Limited (Votraint), later to be renamed Branir Pty Limited (the first respondent) (Branir). As a consequence of this and other payments, BNY was paid out and the relevant title documents released. 23 Four principal documents were executed and exchanged on 23 December 1993 to give effect to this transaction: · a Deed of Settlement between BNY, Owston, Anderson and others dealing, inter alia, with outstanding claims of BNY against various Anderson interests · a deed between Owston, Anderson, Bakrie, Votraint/Branir, Tovehead and others providing for the sale for $A20 million by Owston to Votraint/Branir of its half interest in Tipperary plus plant and stock, its shares in Tippindo and the Moonhill assets (which comprised the Moonhill land, and stock, moveable improvements, plant and equipment) · a letter dated 22 December 1993 from Votraint/Branir to Owston indemnifying Owston against any claims by BBD arising from an earlier undertaking by Owston to the bank · a share transfer agreement between Owston and Votraint providing for the transfer of Owston's shares in Tippindo 24 The corporate structure effected as a result of the transactions on 23 December 1993 is set out in the document headed "After settlement" in Exhibit A11, appended to this judgment (4). 25 Two further documents were exchanged on 23 December 1999 which stand at the centre of these proceedings: · The first was a letter of that date from Votraint/Branir to Owston signed by Graham which on its face appears to be an option in favour of Owston to be issued with 40.815% of the shares in Votraint/Branir to be exercised within 3 months (the Share letter). It was in the following terms: Issue of Shares Transfer of Interest in Assets Votraint No 788 Pty Limited ("Votraint") confirms its offer to issue to Owston Nominees No 2 Pty Limited ("Owston") such number of shares as will result in Owston becoming the holder of forty point eight one five per centum (40.815%) of its issued share capital immediately after such issue. The offer is made on the following terms: 1. Owston will pay to Votraint the sum of $AUS8,000,000 together with interest on that amount (as reduced from time to time) (such sum and interest being collectively called "Debt") in respect of the period between the date on which a legally binding agreement is entered into and the date on which the whole of the Debt is paid to Votraint such interest to be calculated on a daily basis at the current Indonesian market deposit rate from time to time. 2. Any dividend received by Owston in respect of the relevant shares before the Debt is paid to Votraint shall be paid by Owston to Votraint in reduction of the Debt. 3. Owston will irrevocably direct Votraint to apply all dividends to be paid in respect of the relevant shares in partial satisfaction of Owston's obligation to reply [sic] the Debt. 4. Owston will provide suitable security arrangements to Votraint including handing over possession of the relevant share certificate as Mr A Bakrie shall direct. 5. Owston will pay all stamp duty. 6. If Owston accepts this offer, Votraint agrees that Votraint will not incur any additional debts other in the ordinary course of the business of operating its assets. This offer remains open for acceptance for a period of 3 months from the date of this letter. If acceptance does not take place within that period this offer will automatically lapse. · The second was a letter dated 22 December 1993 from Votraint/Branir to Owston, initialled by Graham concerning the continuing operations of the Sanctuary (the Sanctuary letter): Tipperary Sanctuary We still have a little unfinished business in the matter of the future of the Sanctuary to be settled. Please be assured that we are anxious to ensure that the operation is allowed to continue in its present form. I have informed our people in Tipperary that the current arrangements must be continued. After the settlement 26 Following the execution of these documents on 23 December 1993, operations continued at Tipperary under the management of Gardner, now working for Tovehead and Branir. The Sanctuary continued to be run by Langham under the control of Owston and Anderson. 27 On 23 March 1994, the last day permitted by the Share letter, Owston purported to exercise its share option by sending the following letter: RE: ISSUE OF SHARES – TRANSFER OF INTEREST IN ASSETS The Company is pleased to accept the offer contained in your letter of 23 December 1993. As you would appreciate the Company as a shareholder would like to be kept advised of the affairs of Votraint from time to time and look [sic] forward to the issue of the appropriate share certificate. In particular we would appreciate copies of the accounts and details of any significant events. 28 Graham acknowledged receipt of this acceptance and informed Owston and Anderson that the matter was to be referred to Jakarta and Bakrie's legal advisers. The share scrip has never been issued. 29 In 1995, following a proposal by Tovehead and Branir to lease part of Tipperary to Aman Resorts for use as a holiday resort, Anderson placed caveats on Tipperary, resulting in proceedings in the Supreme Court of the Northern Territory where the caveats were removed. Soon after the applicants commenced the current proceedings in this Court, initially seeking interlocutory injunctions to restrain the respondents, Tovehead and Branir, from going ahead with a lease to Aman Resorts. His concern was the health and wellbeing of the wildlife if indiscriminately exposed to the public. An ex parte injunction was granted restraining the sale or leasing of Tipperary to Aman Resorts and the sale of certain plant and equipment, but after a contested hearing, the interlocutory injunction was discharged on 31 July 1995. For a number of reasons which need not be detailed here, but which involved a complete recasting of the case just as it was ready to be heard in August 1997, and several later amendments to the pleadings, the substantive hearing of this matter did not begin until the second half of 1998 and was not completed until the middle of 1999. Personal relationships 30 For a complete understanding of the relevant events, it is necessary to come to grips with some of the personal relationships that existed between the principal players. The relationship between Bakrie and Anderson transcended that of mere business associates to one of friendship and trust between wealthy and successful entrepreneurs. In my view these apparently mutual feelings were a central factor governing many of their decisions through the course of their various dealings. Indeed determining the Anderson/Bakrie relationship has assisted me in assessing where the truth probably lies. For their relationship also influenced the evidence in the case despite the intervening falling out. 31 From the time Anderson and Bakrie first met at Tipperary in 1989, their relationship developed both in a business and personal sense. From an early stage, Anderson referred to Bakrie as "Ichal" or "Pak Ichal", terms of intimacy or familiarity in Indonesia. Throughout the course of their dealings together, the two regularly exchanged friendly and personable correspondence, including Christmas greetings and, in Anderson's case, a letter wishing Bakrie well with an upcoming float of a company in Indonesia (with which Anderson was not involved). Other fond greetings were regularly exchanged and Bakrie periodically enquired in his correspondence after Anderson's family. 32 The respondents sought to establish that Bakrie's and Anderson's close relationship broke down in 1992 or 1993, on the basis of evidence from Bakrie that he began to become unhappy with Anderson when he realised that his investment in Tipperary and the feedlot were not producing the expected returns. However, the clear evidence was that warm and friendly relations existed between the two men until late1994 at the earliest. The following exchange of correspondence between them is instructive in that regard: Anderson to Bakrie 18 October 1994 Dear Ichal Thank you for the meeting the other day. I have forwarded to Nalin an offer on "Tipperary" that I believe I can put in place. The offer is with John Benson and John is meeting with Nalin shortly. I have also spoken to Nalin at the possibility of meeting him in Singapore next week if necessary to help put this together. I believe it is an offer that is vastly better than what is out in the market place. However, if it is not satisfactory then let us talk and see what we can do. I must say that it was good to see you the other day and have the pleasure of such a friendly meeting. I always enjoy getting together with you and this makes it hard for me to discuss callous business facts. My friendship with you is very important to me and I wish to protect it at all times. It has passed the test of time and pressure over the years and survived. A lot of people in Australia watch this friendship with interest and anticipation and there are also people who would like to see it "sink". But they have no hope of that occurring. Even Australian politicians and Indonesian ambassadors discuss the relationship and it is important for us to keep together this bond we have. Ichal, I would like to say your support has allowed me to establish my momentum in business for which I am very appreciative and I believe it will somewhere down the track benefit us both. Please keep in contact and let us try to make our business ventures a success. To do this I need your help and you need mine. Let us not allow our partnership to disintegrate and as I said before there are people both in your camp and mine that would like to see it fall. Let us work together to achieve a successful result. Best Regards Warren Bakrie to Anderson 31 October 1994 Dear Warren Thank you for your letter dated October 18, 1994. I was out of station and just came back on November 3, 1994. I have read your letter with interest and before I proceed on any business matter, I would like to reconfirm the following as far as our business and personal relationship is concerned: · Our partnership is very personal and we have helped each other in times of need. It would be very difficult for anybody to disturb our relationship. Just like you, I would also like to protect our relationship at all time. · I also know that lot of people are jealous of us because of our success and the way we survive our relationship when the times are hard and pressure is high. I will assure you that I will not allow neither external nor internal people to break our relationship. · Again, I must say that our mutual help to each other is the test of perfect understanding and good relationship. Lets protect it and progress the same. … If Nalin and Benson cannot conclude discussions, we can always slip in at the right time and conclude the transaction to our mutual satisfaction. I am glad to know that you have some major development projects on hand in Papua Neuginne and I wish you all the best in these projects. Please do convey my regards to Chyrile and best wishes to your kids. With best regards Aburizal Bakrie 33 It was also Bakrie's oral evidence that he distinguished between his business and personal relationships with Anderson, so that while he may have been unhappy with the development of his investment, it did not affect his personal feelings towards Anderson. Indeed my impression was that despite this strongly contested and sometimes acrimonious litigation, the two men still have regard for each other and are reluctant antagonists, in some respects prisoners of advisers, circumstances and these proceedings themselves. Graham in particular contributed to this unfortunate state of affairs. In fact, the first overt sign of any real collapse in Bakrie's determination to maintain the friendship came with a fax from Graham on 31 January 1995 set out in paragraph 105. The litigation followed soon after. 34 On the other hand, Anderson and Bakrie were indisputably the principal figures on the respective sides of this litigation. Anderson made all relevant decisions on behalf of his interests, whether they be for Owston or for a member of his family. Bakrie was similarly in control of his affairs. Although each delegated responsibility to advisers to deal with minutiae, it was clear that the central agreements were made between Anderson and Bakrie and that they expected and believed that the results of their negotiations would be implemented and be binding upon their interests. Judging from the evidence and the formal documents which passed between the parties, I believe that there was also an understanding between Anderson and Bakrie as to the moral obligations each owed to the other which transcended their formal business arrangements. These arrangements included the repayment of a debt to BBD where, unbeknowns to the bank, an agreement existed that part of the income stream from the joint venture (which on the face of the agreements was to be entirely directed to BBD) was to be diverted to Owston. The agreements set out in the Sanctuary and Share letters also fall into this category. 35 There were also a number of instances where decisions were taken for seemingly non-commercial reasons. The most striking example was Owston's agreement in 1992, with hardly a word of dissent from Anderson, to forgive the $US24 million debt of Cross Hatch to Owston (which had provided this sum as vendor finance for part of the purchase by Tovehead of the first half of Tipperary in 1990) for a total consideration of $US3 million to be paid over 12 months. The respondents sought to colour this action by claiming that Bakrie had been unhappy as he realised that he had paid too much for the property and that Anderson had therefore, in effect, lowered what he knew to be too high a purchase price by forgiving the loan. I am not convinced, on the evidence, that this was the case and, although a definitive finding on whether it was that reason precisely is not possible, the evidence suggested that it was more activated by a general desire to further the goodwill between the two men. Even if the respondents' contention was true, however, it would, as the evidence revealed, not diminish my point. 36 Anderson said in his affidavit of 12 September 1997: 39. In mid 1992, I had a meeting with Bakrie in Jakarta in which words to the following effect were spoken: AB: "I cannot pay you the $24 million." WA: "What do you want me to do?" AB: "I want you to forgive me the loan." WA: "Why would I do that? It's a lot of money." AB: "In the spirit of our partnership, I think you should let us off the $24 million. We are very tight financially and cannot pay. We have a long way to go with the feed lot and Tipperary and we do not want to be at odds as partners. You will pick it up eventually out of profits." WA: "Well look, I can't forgive you the whole $24 million, but part of it we could probably work something out on." A few days later we had a further meeting in which words to the following effect were spoken: AB: "What about forgiving the loan for US$3 million, payable by instalments of US$250,000 a month." WA: "Is that all you can raise?" AB: "Yes." WA: "Alright." AB: "I will always appreciate this gesture." 40. Exhibited hereto and marked "WPA 31" is a copy of an agreement entitled "Agreement to Forgive Loan" which was created to document this agreement. 41. The US$3 million which was agreed to be paid by Cross Hatch under that agreement was never paid in full. This agreement later became the subject of a dispute between Owston's bankers, Bank of New York and the Bakrie interests. Exhibit WPA 31 referred to in paragraph 40 of the affidavit is Appendix 5 to this judgment. 37 In paragraph 42 of the same affidavit Anderson went on that after he raised with Bakrie his problems with BNY, Bakrie said: AB: "How are you going with Bank of New York?" WA: "Not too well." AB: "You are my partner and we've got to stick together on this and see it through. I will give you my support and arrange for the debt to be paid out." WA: "Great. I would really appreciate that." AB: "Well, we are partners. I appreciate you releasing me from the US$24 million last year. We will work this out. Nalin is putting together a finance restructuring plan for Bank Bumi Daya which will include your loan." 38 In his oral evidence Anderson said that he agreed to forgive the loan because Bakrie was "in financial trouble" and that he, Anderson, was anxious to maintain the partnership and their close financial and personal relationship. 39 Bakrie's letter to Anderson of 31 October 1994, quoted in part at paragraph 32, alleged at another part that Anderson agreed to "write off the loan" because of Bakrie's high interest costs and lower returns than represented [sic]: Now, coming to business matters, Nalin has discussed the proposal with me and Warren, I need your full understanding of the transaction from the beginning. As you know, when I acquired the property, after your writeoff of loan, it costed me todate, US$103,277,266. This purchase was made by me when you really needed it in 1989 and we did not negotiate your original offer of US$80 mill and this valued 100% of the property at US$160 mill. When we found that interest costs are high and project is resulting returns we expected based on your plans, you agreed to writeoff the loan which I really appreciate. 40 Consistent with that viewpoint, and while denying that he could not pay the money, Bakrie said in his affidavit of 26 February 1998 that he had paid too much and wanted a reduction to which Anderson agreed: 4. At Anderson's request I did have one or two meetings with him in Jakarta in mid 1992. Words to the following effect were spoken: Anderson: "I need to raise some money. Can you arrange for some of the Crosshatch loan to be paid". Bakrie: "You made us pay far too much for our share of Tipperary. We need to do something to sort this out if I am to help you". I deny that I ever said words to the effect "I cannot pay you the $24 million". The conversation continued with words to the following effect: Anderson: "What do you want me to do?" Bakrie: "I want you to forgive me the loan." Anderson: "Why should I do that? It's a lot of money". Bakrie: "In the spirit of our partnership, I think you should let us off the $24 million. We have a long way to go with the feed lot and Tipperary and we do not want to be at odds as partners. You will pick it up eventually out of profits." Anderson: "Well look, I can't forgive you the whole $24 million, but part of it we could probably work something out on". I deny that I said words to the effect of "We are very tight financially and cannot pay". I cannot recall whether it was at this meeting or a few days later that we reached agreement but I agree with Anderson's evidence that USD 3 million was to be paid by instalments of USD 250,000 a month. However, I deny that Anderson ever asked "Is that all that you can raise?" 5. Following this I executed on behalf of Crosshatch, Tovehead and PT Bakrie Nusantara Corporation the agreement which is WPA 31. 41 Moreover, in a fax to Graham on 4 January 1994 to which I shall return in another context later, and in his evidence, Rathod spoke in rather vague terms of the forgiving of the loan as a type of reciprocal "give and take" arrangement by the two principals. 42 In substance these separate accounts are virtually identical and it is not necessary to resolve whatever dispute there might be. One thing can be said with some certainty – to forgive a debt of $US24 million (actually it was to be $US21 million after $US3 million was paid by Cross Hatch in instalments over 12 months) without any legal obligation, sanction, or apparent financial advantage is not indicative of a hard-nosed business relationship between two people in which each is striving to maximise his own financial position at the expense of the other. Whatever the reason for this dramatic occurrence, it was a stark example of the understanding between the two parties and showed the willingness of each to act in the interests of the other when necessary. 43 In the same manner, it will be seen later that, in negotiating with Anderson in 1993, Bakrie understood Anderson's perilous financial position and struck a deal which allowed his counterpart to retain some interest in the joint venture assets, in the full knowledge that if he had wanted to, he could have pushed Anderson into a position where he received nothing. It was not and could not have been an accident or oversight, for Graham made it clear, loudly and often, that that was the result he favoured. Indeed, Bakrie could, it seems, have even forced Anderson into bankruptcy or at least significant financial embarrassment and loss. That he did not do so is yet another example of the personal relationship between these two men to which their immediate business concerns were subservient. 44 On the other hand, and in stark contrast to his friendly relationship with Bakrie, Anderson's relationship with Graham, also central to this case, was poisonous. Some of Bakrie's and Anderson's correspondence referring to people on each party's side who were trying to undermine their relationship and to their desires to withstand this pressure has already been quoted. There was other evidence of this belief. Anderson felt that Graham in particular was attempting to impede his relationship with Bakrie because of a personal vendetta and he was therefore reluctant to deal with Bakrie through Graham, preferring to talk to Rathod or to Bakrie directly. Anderson's oral evidence was that Graham "hated him". Graham denied this assertion, although he did concede that he "disliked" Anderson and the way he did business. Graham stated that the antipathy first arose after the 1990 deal when, in Graham's perception, Anderson continued his apparently dictatorial role in running Tipperary, despite arrangements under the joint venture agreements for management committees and the like to meet and administer the operations in a more formal and consultative process. 45 Having seen the witnesses and heard the evidence, some of which will be specifically set out, I do not disagree with the applicants' assertion that Graham, on the basis of his personal antipathy to Anderson, actively tried to destroy his relationship with Bakrie. Although Graham was in every sense Bakrie's employee or agent, I believe that he pursued his own agenda when dealing with Anderson which did not necessarily accord with Bakrie's understanding with or attitude to Anderson, or even Bakrie's best interests. That this attitude was a major cause of the disputes which arose, and of this litigation being so exhaustively contested, cannot be doubted . I also have little doubt that the final falling out, and what led up to it, was brought about by Graham's continual feeding into Bakrie's ear, both directly and indirectly, information and attitudinal judgments which were shaped by the intensity of his disdain for Anderson and often did not accord with the facts. 46 Despite Graham's antagonism to Anderson, Dew gave evidence that in his dealings with Graham, he found him to be reasonable. There was no apparent hostility in the dealings between Dew and Graham, although it is clear that Graham often did not deal in good faith with Dew, as he continued to attempt to undermine Anderson. Thus, although Graham's antagonism appeared to be directed only at Anderson, it manifested itself in all his dealings with the Anderson interests. THE CLAIM 47 By their latest amended application filed in Court on 22 January 1999, Owston and Anderson sought the following relief: 1. A declaration inter partes that in the events which have happened Owston has the following rights: (a) the right to exclusive use and possession of such parts of Tipperary as are currently used by it for the Sanctuary; (b) the right to select further parts of Tipperary for its exclusive use and possession, provided that it may not select land which is, at the date of selection, developed land or commercial plantation or which would, taken together with the land referred to in (a) and land previously selected by it, exceed 20,000 acres in total area; (c) all such rights over the land referred to in (a) and land selected by it pursuant to (b) (the "Greater Sanctuary Area") as it would have if it were the lessee thereof in the terms of the underlying lease of the relevant part of Tipperary; (d) free and uninterrupted rights of carriageway, ingress and egress to and from the Greater Sanctuary Area in common with other users of Tipperary; (e) the right to use light, power and water from Tipperary; and (f) the right to use and occupation of two small staff houses on Tipperary. 2. An order that Tovehead and Branir take all steps necessary to grant to Owston in perpetuity and for its exclusive use and benefit absolutely a lease in registrable form at nil rental of all that piece and parcel of land on Tipperary as are currently used by Owston for the Sanctuary together with free and uninterrupted rights of carriageway including ingress to and egress from the said land in common with other users of Tipperary and together with such rights to use light, power and water from Tipperary as were enjoyed by Owston as at 23 December 1993. 3. An order that upon Owston making any selection as is referred to in paragraph 1(b) above, Tovehead and Branir take all steps necessary to extend the lease referred to in paragraph 2 above so as to include the areas so selected. 4. Alternatively, a declaration inter partes that in the events which have happened Owston has a licence from Tovehead and Branir giving to it the [same rights as set out in prayer 1]. 5. An order that Tovehead and Branir execute a Deed granting to Owston in perpetuity the rights referred to in paragraph 4 above. 6. An order that, upon Owston making a selection referred to in paragraph 4(b) above, Tovehead and Branir execute a Deed granting to Owston in respect of the land so selected a licence giving to Owston the rights with respect to that land which are referred to in paragraph 4 above. 6A. A declaration inter partes that, pursuant to the right referred to in paragraph 1(b) above or, alternatively, paragraph 4(b) above, Owston may select all or part of the land comprised in the paddocks on Tipperary Station known as Turkey Flat, Jumbo, Electric Fence, Campbell's, Boord's and Little Gardner. 6B. A declaration that there subsists an oral contract between Owston, Branir and Bakrie in the terms of the Branir Shareholding Agreement as set out in the Second Further Amended Statement of Claim. 7. In the alternative, to the declarations sought in paragraph 6B above an order that the terms of the letter from Votraint No. 788 Pty Ltd to Owston dated 23 December 1993 be rectified or altered to conform to the terms of the Branir Shareholding Agreement as set out in the Second Further Amended Statement of Claim. 8. An order that Branir issue to Owston such number of shares in Branir as will result in Owston becoming holder of 40.815% of Branir's issued share capital. 8A. (not now relevant) 9. A declaration inter partes that, on the registration of the shares as aforesaid, Owston shall owe to Bakrie the sum of $8 million (the "Loan") on terms that: (a) the Loan shall bear interest at the Indonesian market deposit rate for Australian dollars from time to time; and (b) the Loan shall be able to be required by Bakrie to be repaid (and interest on the Loan shall be required to be paid) by Owston to Bakrie from, and only from, such dividends as may be declared and paid from time to time on Owston's shares in Branir as aforesaid. 9A. (not now relevant) 10. A declaration inter partes that, on the registration of the shares as aforesaid, Owston shall owe to Bakrie the sum of $8 million (the "Loan") on terms that: (a) the Loan shall bear interest at the Indonesian market deposit rate for Australian dollars from time to time; and (b) the Loan shall be able to be required by Bakrie to be repaid (and interest on the Loan shall be required to be paid) by Owston to Bakrie from, and only from, such dividends as may be declared and paid from time to time on Owston's shares in Branir as aforesaid. 11. (Not now relevant) 12. Costs. 13. Such further or other orders as the Court thinks it. 48 This relief thus identifies two distinct subject matters for consideration: the size, operation and conduct of the Sanctuary and the issue to Owston of shares in Branir. Although the events relevant to each issue are to some extent intertwined and contemporaneous, it is necessary to deal with them separately. the cross claim 49 By their amended cross claim also filed in Court on 22 January 1999, further amended in their written submissions, Tovehead and Branir sought to completely undermine the JSU – by having it declared either to be of no force and effect, or to have been a licence which was either terminated 23 December 1993 or 14 December 1994 or is terminable on reasonable notice. The significance of 14 December 1994 was not clearly disclosed. It was apparently the date on which Branir became the registered proprietor of its half share. The argument seems to be that on that date, the JSU ceased to have effect because it did not bind Branir just as it was said that the Sanctuary letter did not bind Tovehead. It is not clear what consequences flowed in respect of the company each of those documents did bind. If on the other hand, the JSU was an agreement for a licence at will, the Sanctuary would presumably have to be declared to be in the possession of the applicants until terminated. The cross claim also sought a construction of the Share letter so as to require that Owston's shares be held by Bakrie until payment of the purchase price of $A8 million plus interest calculated at the relevant Indonesian rate. If this declaration were made, the share scrip would first have to be issued. The Sanctuary Overview 50 The applicants contended first that a binding agreement was entered into in December 1993 between Owston, Branir and Tovehead providing for: (a) Owston to be granted a lease in perpetuity over 20,000 acres of the Tipperary properties on substantially the terms of a draft deed which passed between the parties, such land to be selected by Owston in conformity with the JSU; and (c) the provisions of the JSU to continue to govern Owston's rights over the Sanctuary, pending the execution of formal lease documents to give effect to its terms. The consequence was said to be that Owston would continue to hold and conduct the Sanctuary, would be allowed to expand it by 20,000 acres, and would have the use of the necessary Tipperary facilities for its continued operation. 51 The applicants also asserted that in the negotiations leading up to the settlement on 23 December 1993, the respondents represented that the applicants would be granted a perpetual sub-lease over the relevant 20,000 acres including the Sanctuary, on which the applicants relied when they engaged in the operation and further development of the Sanctuary in 1994. This reliance was said to found a relevant estoppel. 52 Finally, they alleged that in making certain representations about the applicants' interest in the Sanctuary, the respondents engaged in misleading and deceptive conduct in contravention of the Corporations Law, the Commonwealth Trade Practices Act and the New South Wales Fair Trading Act. The Facts The 1989 events 53 It is common ground that after Anderson's discussions with Japto in early 1989, Bakrie visited Tipperary in mid-1989 and discussed with Anderson the possibility of purchasing a half interest in the properties with Japto. Anderson's evidence was that during the visit he showed Bakrie the Sanctuary and the following words were said: WA: If I do a deal with you Ichal, this is not part of it. The licences for the Sanctuary have been issued to me personally and it is my personal responsibility. AB: That's no problem Warren. We could take it off as your own. How big is the area? WA: Over time I will need at least 20,000 acres. AB: What if I want to build a house here for myself? If you've got 20,000 acres can I have 20,000 acres to build a house for myself as a personal asset? WA: Fine. 54 In cross-examination Anderson stated that he and Bakrie had had this conversation as they drove away from Tipperary, inspecting the Sanctuary, along the road which leads to the main highway. Anderson recalled that as they drove, he said words to the effect: "I will have 20,000 acres this way" pointing to the left of the road. He then pointed to the right side of the road and said "You can have 20,000 acres that way." They then came to a point in the road where there was a cattle grid and Anderson said words to the effect: "This is about as far as we will go and then we will go west as far as [necessary to] take in … 8,000 hectares or 20,000 acres". 55 The cattle grid is no longer there but when the Court visited the property, Anderson pointed out on the ground where he recalled the discussion had taken place. He identified it on the map as being at the point on the road where it meets the northern fence line of a paddock known as "Campbells". To reach this point Anderson and Bakrie would have driven well beyond the then existing area of the Sanctuary along a stretch of road which has the paddocks called "Turkey Flat", "Little Gardner" and "Campbells" to the left and "Heifer", "Station Creek" and "Gardner" to the right. Other paddocks covered by Anderson's "left wave" were those called "Jumbo", "Electric Fence", and "Boords". All these paddocks are clearly marked on Appendix 6. 56 Bakrie's evidence on this matter did not differ greatly from Anderson's. He recalled Anderson driving him up the road on his 1989 visit to the property and that they had what Bakrie termed "a casual conversation" about the parts of the land on which Anderson proposed to build a house and extend the Sanctuary. According to Bakrie, Anderson said to him: "This for you, this for me." At this point in his evidence Bakrie waved his hands to the left and to the right. Bakrie agreed that there was a conversation about 20,000 acres for each party and admitted that the discussion concerned 20,000 acres on "each side of the road". He agreed that Anderson made it clear that his 20,000 acres were on the same side as his house site which was located in Stage II of the Sanctuary. Bakrie did not, however, recall stopping at a cattle grid and maintained that there was no discussion of the boundaries of the 20,000 acres. 57 This evidence has very little material value in determining whether a binding agreement existed in respect of the Sanctuary some four and a half years later. It is significant, however, in three respects. Firstly, it reveals that from the very commencement of Bakrie's involvement in Tipperary in 1989, there was an understanding between himself and Anderson that 20,000 acres would be used by each for his own purposes and that Anderson's 20,000 acres would include and abut the Sanctuary. Secondly, it illustrates that there was, at this early stage, at least some delineation of the boundaries of the prospective 20,000 acres, to which Bakrie agreed or at least did not object. As some of this part of the evidence was disputed, I propose to return to it in greater detail later. Thirdly, the admitted part of these conversations between Bakrie and Anderson illustrated, as happened several times in this case, that the applicants' evidence, initially treated derisorily by the respondents, ultimately turned out to be to a large extent undisputed, and in my view did much to lend credibility to the applicants' claims. 58 During 1989 Owston instructed Timothy Somerville, a Sydney solicitor, to act on its behalf in drawing up the necessary documentation for the sale of a half interest in Tipperary to Bakrie. Somerville included in the "Co-ownership Agreement" (a document which superseded the Co-operation Agreement previously outlined) the following provisions: 5.1 Owston shall be entitled to use such part of the property as it selects, not exceeding 20,000 acres for its own purposes, including construction of a private residence and zoo. 5.2 Tovehead shall be entitled to use such other part of the property as it selects, not exceeding 20,000 acres for its own purposes, including construction of a private residence. 59 Rathod, who initially conducted the negotiations for Bakrie, raised his concern that, as drafted, the clause allowed Owston to select the homestead area as part of its 20,000 acres. Somerville assured him that this result was not the intention so Rathod redrafted the document in Jakarta to include the following provisions: 4.1 Owston shall be entitled to use such part of the property as it selects, not exceeding 20,000 acres for its own purposes, including construction of a private residence and zoo. 4.2 Tovehead shall be entitled to use such other part of the property as it selects, not exceeding 20,000 acres for its own purposes, including construction of a private residence. 4.3 Neither party can use any of the currently developed land or commercial plantation. 4.4. Neither party can carry out any other business other than the business carried out for the joint benefit of both the parties. 4.5 The allocated land shall not be utilised for any other commercial use other than personal residence and recreation including zoo. 60 With minor changes, this clause was incorporated into a fresh document and executed by the parties on 15 November 1989. The evidence as to these amendments was adduced as part of an argument that, in the event that Owston was held to have an entitlement to select 20,000 acres for the expansion of the Sanctuary, it could select any land apart from the homestead area and commercial mango plantations. There was a great deal of evidence as to what constituted "currently developed land" but as this evidence is closely related to the issue of the delineation of the boundaries of any entitlement of the applicants to the additional 20,000 acres for the Sanctuary, I propose to deal with it in that context. 61 On about 14 November 1989, BDW was retained to advise the Bakrie group of companies on the proposed purchase of the half interest in Tipperary. AdrianAhern, a solicitor with BDW, reviewed the proposed documentation and drafted a detailed critique. As part of that critique, he commented on clause 4 of the Co-ownership Agreement and pointed out the following possible breaches of the Crown Lands legislation: (a) that the clause relating to the zoo might constitute a sub-lease made without ministerial consent; and (b) that a change of land use from pastoral activities or grazing to that of a zoo might be a change for which there had been no ministerial consent. 62 Under Northern Territory legislation ministerial consent was then and is still needed for changes to pastoral leases. Ahern therefore suggested that the clause be removed and placed in a separate document. This and other evidence supports the conclusion that the parties' representatives agreed on the clause being removed on or about 16 January 1990 while Somerville was apparently on holidays and the matter was being dealt with by another solicitor in his office. Somerville's evidence that the clause had been removed at the suggestion of BBD or its solicitors, Baker & Mackenzie, does not appear to be correct. The Joint Statement of Understanding 63 Somerville thereafter drafted the JSU which was extracted in paragraph 14. There was copious evidence on the production of this document, adduced primarily by the respondents, who sought at length to establish that the removal of the licence clause from the Co-ownership Agreement and its embodiment in a separate document framed as set out in the JSU constituted a "demotion" in its legal stature. The respondents devoted much of their written submissions relating to the Sanctuary to establishing the precise nature of this document and the rights it conferred on Owston. They said that it was merely an exchange of negative covenants between two co-owners, which established that each party would not interfere with the other's use of certain parts of the land. It was not, on their argument, an agreement for a lease or even a licence, as a licence would have been unnecessary and a legal absurdity as between two co-owners of the land said to be subject to it. In some contradistinction with their cross claim, the respondents also contended that in any event the JSU necessarily came to an end when Tovehead and Owston ceased to be co-owners in 1993, and Owston's interest devolved to Branir which was not bound by it. Having regard to the applicants' argument that it was agreed in late 1993 that the terms of the JSU would govern the parties' relationship with respect to the Sanctuary pending a formal lease document, it will be seen that whichever of the competing arguments were accepted, the precise legal nature of the JSU at the time of its execution is not a question that needs to be determined, although it is valuable in identifying the intent of the parties. February 1990 to late 1993 64 After the conclusion of the 1990 deal, the Sanctuary was and continued to be operated by Owston, employing Langham as the manager. It was in the period leading up to the 1993 negotiations for the sale of the second half of Tipperary that Owston purchased the 120 or so animals from Lord MacAlpine's private zoo in Western Australia and relocated them to the Sanctuary. September – mid-December 1993 65 During the negotiations in late 1993 for Owston to sell its remaining half interest in Tipperary to Bakrie, the question of the Sanctuary was raised and discussed. There were significant differences in the parties' accounts of these negotiations. 66 The applicants' evidence was that they raised the issue in the course of the negotiations from September onwards. Dew gave evidence that he had a discussion with Anderson in which Anderson stated that he had confirmed with Bakrie and Rathod that Owston would have 20,000 acres after settlement in which to expand the Sanctuary and that Anderson asked Dew to procure an agreement with Graham to this effect. According to Dew, he then had a conversation with Graham in which Dew presented his understanding of the agreement between Anderson and Bakrie as that: …the current arrangements are to stay in place and he [Anderson] will have a continuing licence to operate the sanctuary…he is to have exclusive use of the sanctuary…the period will be the same as the perpetual leases and there will need to be provision for continuing rights of access…Can you speak to Bakrie because we need to get an agreement documented? 67 Dew stated that Graham then came back to him and said that Bakrie had agreed that Anderson could "continue to operate the Sanctuary" and that Graham would speak to Greiner about getting a draft agreement. Graham denied that this conversation occurred. Dew also said that he had many conversations with Graham and Greiner during this period in an attempt to have an agreement drawn up regarding the Sanctuary. Graham did not give any specific evidence about these alleged requests except to state that his only instructions on the issue of the Sanctuary were that it could continue to operate in its then present form. 68 There was some corroboration for Dew's evidence from Langham who stated in his evidence that Graham said to him in late 1993 that: There is an agreement between Anderson and Bakrie that Anderson can build on one side of the road on 20,000 acres and that Bakrie has the same amount of land on the other side of the road. That arrangement is to continue. Graham denied making this statement to Langham. Langham struck me as a manifestly truthful witness. I accept his evidence on the matter. 69 On 30 November 1993 there was a meeting between Graham and Anderson at the Regent Hotel in Sydney. Anderson's evidence was that he stated: "The Sanctuary must continue as it is and have security of tenure in accordance with the original agreement." He said that Graham replied: "That is right, I will also confirm this with Nalin [Rathod]." Graham admitted that he did meet with Anderson at the Regent Hotel and that the Sanctuary was discussed but denied the substance of the conversation. Anderson's meetings in Jakarta 70 By mid-December 1993, despite Dew's evidence as to his persistent efforts to obtain a draft agreement from Graham and Greiner, nothing had been received. On 12 December 1993 Anderson flew to Jakarta and met with Bakrie and Rathod. Dew sent Anderson a fax to his hotel in Jakarta: I have not been able to get a letter from Charlie re the Sanctuary – do you think you could get one from Nalin – if not I will continue to press Charlie. 71 Anderson seems then to have armed himself for a discussion with Bakrie and Rathod regarding the Sanctuary. On 13 December 1993 he was sent a fax from Umberto Gianotti, a lawyer in Perth retained by Anderson to advise him personally, the cover page of which indicated that attached were, inter alia, two documents referred to as a copy of the "Statement of Understanding re 20,000" and as a "Deed for 20,000 acres". The draft deed was in the following terms: THIS DEED made the day of 1993 BETWEEN: Aburizal Bakrie of Wisma Bakrie ("ARB"), 7th Floor, Jalan H.R. Rasuna Said Kev B-1 Jakarta 12920: Tovehead Pty Ltd (CAN 003 745 140) (herein called "Tovehead" which term includes successors, transferees and assigns) and Votraint No. 788 Pty Ltd (CAN 061 718 876) ("Votraint" which term includes successors, transferees and assigns) both c/– Edney, Lawrence & Co., 706 Military Road, Mosman NSW 2088; Owston Nominees No. 2 Pty Ltd (CAN 001 769 099) c/– Stubbs & Co., Level 2, 44 Hunter Street, Sydney NSW 2000 (herein called "Owston" which term shall include all servants, agents, employees, contractors, invitees and licensees approved of by Owston); and Warren Perry Anderson of 52 Johnston Street, Peppermint Grove, Western Australia (herein called "Anderson"). WHEREAS: By Statement of Understanding dated 31 January 1990 Tovehead and Owston covenanted that each of Tovehead and Owston shall select any parts of "Tipperary Station" situate in the Northern Territory and described as all that land comprised in Volumes 201 Folios 43, 44, 45, 47 and Volume 198 Folio 32 ("Tipperary") for its own exclusive use as a private zoo including a private residence and recreation but excluding any other commercial use. NOW THIS DEED WITNESSES THAT: 1. Each of ARB, Tovehead and Votraint jointly and severally covenant and agree that Owston shall use, for a term of years, for its own exclusive use and benefit absolutely those parts of Tipperary presently used by Owston as a private zoo, residence and recreation purposes which rights will include free and uninterrupted rights of carriageway, ingress and egress to and from Tipperary in common with other users of Tipperary and the rights to use, light, power and water presently enjoyed by Owston as at the date of this Deed. Each of ARB, Tovehead and Votraint jointly and severally covenant and agree that in the event that Tovehead or Votraint or both shall sell its or their interests in or to Tipperary, they will obtain from any purchaser of Tipperary a deed of covenant from the purchaser acknowledging and accepting the terms of this Deed. IN WITNESS thereof the parties have executed this Deed on the date herein appearing. 72 The draft deed left blank the term of the agreement. Anderson apparently wrote in by hand that it was to be "for the term of the lease" and faxed it back to Gianotti on the evening of 13 December 1993. The following morning Gianotti faxed back to Anderson a revised version of the deed which provided that the grant of the 20,000 acres was for "the term of the perpetual leases". 73 Anderson stated that on 14 December 1993 he met first with Rathod and showed him the draft deed and told him that he wanted a lease in perpetuity. Anderson claimed Rathod agreed and said that he would send it down to Graham to check the legalities and finalise it. 74 Anderson's evidence was that he then met with Bakrie on 14 December 1993 during which words to the following effect were said: Anderson: Now, in regards to the Sanctuary, we have an agreement from our original deal that each of us have 20,000 acres. My 20,000 acres was for the Sanctuary and yours was to build a house on and have as a personal asset. To follow up on that agreement I have discussed a lease with Nalin. As part of that lease I will have right of access and a right to two small houses in the staff area with power and water for my staff. Is that okay by you? Bakrie: Yes that is alright. I will instruct Nalin to follow up with your lawyers and finalise the lease. What term do you want? Anderson: The same as the perpetual lease on the land. Bakrie: Okay. Will the government agree to the lease? Anderson: Yes, they will. Bakrie: Okay, then let us proceed. Anderson then told Dew that he had the agreement of Bakrie to the terms of the draft deed and asked him to proceed to get those terms executed by Graham. 75 In his evidence in chief, Bakrie stated that he did not recall a meeting with Anderson in December 1993 in Jakarta and denied that a conversation in the terms alleged ever took place. In cross-examination, however, his memory improved markedly. He stated that he and Anderson might have had a meeting in December 1993 and conceded that he may have been told by Rathod that Anderson had brought with him some documents concerning a proposed lease over the Sanctuary land. He did recall a conversation with Anderson about getting a lease over the Sanctuary sorted out and said that he told Anderson that he had no objection to Anderson having a lease for 20,000 acres of the property for his Sanctuary. He also admitted that he told Rathod that he had no objection to a lease and that he was happy for it to be 20,000 acres. He left the details, including the term of the lease, to Rathod's discretion. 76 In his evidence in chief Rathod swore that he did not recall any meeting with Anderson in Jakarta in December 1993 and that he did not recall being shown the draft deed for the Sanctuary. He also denied that Anderson had ever spoken to him of a "lease in perpetuity" and said that he would have "remembered this phrase and would not have agreed to it". 77 Rathod's evidence also changed considerably in cross-examination. He conceded that he did have a conversation with Anderson in December 1993 about the Sanctuary in which Anderson said that he wanted a lease over up to 20,000 acres. Rathod also admitted that he had understood that Anderson and Bakrie had come to an agreement about giving Anderson a lease over the 20,000 acres and that, although he did not specifically recall it, it was "possible" that Bakrie had told him to get documentation for that matter "fixed up". He also conceded that he had in fact faxed a copy of the draft deed regarding the Sanctuary to Graham and Greiner in Sydney on 14 December 1993 with a covering note which was in evidence and stated: Please find enclosed two drafts of the agreements as per our discussion which need to be cleared by you and fax back to me the final version so that I can get them signed by ARB and fax back to you to be handed over to Mr Anderson. 78 When it was put to Rathod that the clear implication of his fax was that he had in fact agreed with Anderson that a lease in the terms of the draft deed would be acceptable to the Bakrie interests subject to the legalities being sorted out, he: (a) at first sought to say that he may not even have read the draft deed but was merely delegating the task of sorting it out to Graham and that he was simply sending Graham and Greiner the documents so that they could come back and advise him; then (b) conceded that in saying "cleared by you" he meant that he wanted Graham and Greiner to reassure him that the document was in proper legal form to achieve his and Bakrie's intent, not that it should be redrafted or for Graham and Greiner to put in their own ideas; but nevertheless (c) sought to deny that when he sent the fax, he was of the view that the document had been agreed with Bakrie and merely had to be put into final legal form. 79 Pressed in cross-examination to admit that his oral evidence and the fax which he had sent to Graham and Greiner attaching the draft deed were inconsistent with his affidavit in which he denied ever being shown an only slightly different version of the draft deed, Rathod denied that Anderson had ever spoken to him of a lease in perpetuity and said that he never received any instructions from Bakrie to follow up on the lease. He also refused to concede that he must have read the document which was attached to his fax and had a discussion with Anderson about it, asserting that he had not read it but had merely sent it on to Graham to look at. He also continued to deny that he had had a discussion with Anderson in Jakarta about the deed although he was unable to explain how else the document came to be in his possession. Rathod's evidence on this matter was evasive and prevaricating. I do not accept it as truthful. 80 Graham's evidence on this matter did not help the respondents' case. There was in evidence a copy of the draft deed bearing a note in Graham's handwriting – which Rathod eventually conceded he faxed to Graham. Unfortunately Graham's cross-examination did not reach this matter as he died shortly after Christmas in 1998, while the hearing was adjourned. Nevertheless, the draft deed, which Graham had obviously had in his possession at some point, squarely contradicted statements in his affidavit of February 1998 that: (i) he was unaware of any meeting that Rathod had with Anderson on around 13 December 1993 and denied "that Rathod ever sent me a proposal, or advised me of the existence of a proposal, as the result of a meeting Rathod may have had with Anderson in Jakarta in December 1993"; (ii) he had never seen the draft deed about the Sanctuary until after the commencement of proceedings (it was annexed to Dew's affidavit), and had never discussed it with Dew; (iii) Rathod had never contacted him to discuss the legal position or any other aspect of a draft agreement in relation to the Sanctuary; (iv) he had no recollection of a formal "Sanctuary deed" ever being prepared; and (v) he had not at any time received any instructions from Bakrie or Rathod in relation to the term of any such lease or as to any payment to be made pursuant to any such formal agreement. The only instructions he received in relation to the Sanctuary was that it could continue to operate in its then present form. This evidence also contradicted the evidence of Anderson, Dew, Rathod and Bakrie. It was untrue. Indeed the cross-examination of Rathod, Graham and Bakrie on this issue was devastating not only to the respondents' case in this respect but also to the credibility of the respondents' witnesses generally. Their "flexibility" – by which I mean evasiveness, vagueness and obfuscation – on this issue and, in Graham's case in particular, a preparedness to deliberately lie in order to bolster the respondents' case, reflected very poorly on their credibility. I reject Graham's evidence, virtually entirely, especially where it conflicts with the evidence of Dew and Anderson, and eventually Bakrie and Rathod. 81 Ultimately, there was not a great deal of dispute as to the events relating to this issue. The oral evidence of both sides, along with the contemporaneous documents, clearly supported the applicants' proposition that Anderson went to Jakarta in December 1993 to discuss the issue of the Sanctuary with Bakrie and Rathod, that he had the draft Gianotti deed with him in those discussions, that Bakrie agreed to its fundamentals, and that Bakrie delegated responsibility for the finalisation of an agreement to Rathod who in turn passed it on to Graham and Greiner, not for advice, but to have it put into proper legal form for execution. 82 Notwithstanding this collapse of a significant part of their defence in this connection, the respondents continued to vehemently deny that any binding agreement had been reached, pointing to the fact that the draft deed was never signed and that it referred to Owston obtaining a lease over the land which was "presently used" by the Sanctuary rather than to the expanded area of 20,000 acres, for which the applicants now contend. The applicants submitted that the failure to sign the agreement resulted from Graham's deliberate obfuscation in the period between receiving the draft deed from Rathod and the settlement on 23 December, rather than any lack of agreement or ongoing negotiation as to terms. They also submitted that the words "presently used" were a drafting anomaly which was to be fixed before the document was signed. Bakrie's evidence that he had had a discussion with Anderson about 20,000 acres and did not have an objection to a lease over that amount of land being granted to Anderson, and the fact that the cover page Gianotti sent to Anderson attached to the draft deed which Anderson discussed with Bakrie in Jakarta, referred to it as a deed "for 20,000", led to the clear inference that the words in the draft deed did not yet accord entirely with the parties' intentions. I will return in due course to the precise nature and status of the agreement resulting from Anderson's meetings, which is at the heart of this aspect of the case, but this finding does not preclude a conclusion that an agreement on certain terms was reached. 14 December – 23 December 1993 83 The applicants contended that following Anderson's meetings in Jakarta, Graham deliberately delayed finalising the draft deed concerning the Sanctuary. In support of his evidence that he attempted to get the deed finalised with Graham and Greiner but without success, Dew recalled that he had a conversation with Graham about it in which he was told: There are a lot of problems to get it done because I have to get Greiner to approve it, there are conveyancing matters to be dealt with, Greiner has to send it up to his agents in the Northern Territory, I have to look at it and get it into correct form and all of this we just can't get done, in the few days remaining, for settlement. Dew stated that he also pressed Greiner and Richmond to finalise the arrangements but they did not, saying that it was a Northern Territory conveyancing operation and that they would "have to send it up there". 84 Graham's oral evidence on the events relating to the Sanctuary in the lead up to settlement included that he had been chasing Rathod for a draft shareholders' agreement to be drawn up in Jakarta which would deal not only with the proposed share issue to Owston but also with the Sanctuary. There was never any agreement being drawn up in Jakarta relating to the Sanctuary, as Rathod and Bakrie stated in evidence and Graham must have known. Graham's evidence in this respect was clearly false and in my view was designed to try and cover the fact that he had been deliberately delaying the finalisation of any agreement in order to frustrate Anderson from achieving his side of the bargain. How he thought he was serving Bakrie and his companies as his employers can only be a matter for speculation. The adverse consequences for all concerned, in terms not least of this litigation, not to mention the various operations at Tipperary, have been considerable. 85 As he was making no progress on finalising the position of the Sanctuary prior to settlement on 23 December 1993, Dew stated that he spoke to Graham and suggested that there at least be a letter confirming the arrangement. Dew drafted a letter which he faxed to Graham with a covering note which said "Herewith suggested simple letter which should cover the situation. Please let me know your thoughts on this." The suggested letter was to be from Tovehead and Votraint to Owston and Anderson in the following terms: I confirm that the arrangements in place regarding the Tipperary Wildlife Sanctuary under the joint venture agreements between Tovehead and Owston will continue in place after the purchase of Owston's interests in Tipperary Station by Votraint pending any other arrangement agreed between Aburizal Bakrie and Warren Anderson. 86 Graham's evidence in chief was that he immediately discussed Dew's letter with Bakrie by telephone on the basis of which he prepared a draft letter himself which he discussed with Dew on 22 December 1993, the day before settlement was due to take place. Not only was this evidence completely inconsistent with Graham's claim to have been awaiting an agreement being prepared in Jakarta regarding the Sanctuary but, had his cross-examination not been foreshortened, Graham would have had to explain how he could have understood Dew's letter (and for that matter the reference to the JSU in the draft deed which he had undoubtedly seen) in light of his sworn evidence in his affidavit of February 1998 that he had not heard of the JSU before the start of these proceedings. 87 Nevertheless, Graham's response to Dew's draft letter concerning the Sanctuary was to be on Votraint letterhead and to read as follows: We still have a little unfinished business in the matter of the future of the Sanctuary to be settled. Please be assured that we are anxious to ensure that the operation is allowed to continue in its present form. For the time being and until you and I reach agreement on the future structure and management of the Sanctuary, I have instructed our people in Tipperary that the current arrangements must be continued. This situation can continue until agreement is reached or the 30th June 1994, whichever is the earliest. Incidentally I am advised that the station has been required to pay certain accounts on behalf of the Sanctuary amounting to $57066.38. 88 Dew's evidence was that he spoke to Graham by telephone on 22 December 1993 and that Graham read the text of the letter to him. The conversation, according to Dew, was as follows: (a) Graham read the first paragraph and Dew asked him what he meant by "a little unfinished business". Graham replied: Well this is the finalisation of the lease documents, but we can't get them finalised because of time restraints [sic]. This is referring to the fact that we have to get the lease documents done. (b) Graham then read the second paragraph and Dew asked what he meant by "allowed to continue in its present form" and the conversation continued: Graham: Well the arrangements that are included in the joint venture documents - there's a statement of understanding - that whatever is in that document can continue until we have the new lease document. Dew: Well if that's what it means I'll agree to that arrangement. So, the status quo will remain under the existing documents until the new lease is entered into? Graham: Yes, that's okay. (c) With regard to the third paragraph, Dew's evidence was that he said: Well, I think that's a bit long. You need to perhaps just say that you instruct your people that the current arrangements are to be continued. and that Graham agreed. (d) Graham then read the fourth paragraph and he and Dew had "quite a lengthy argument" about it in which Dew recalled words to the following effect being spoken: Dew: This is totally unacceptable, we can't put a time limit on this because, firstly, you don't know how long it's going to take to get the lease documents done and if there is a time limit there'll be a hiatus, so it's got to be unlimited in time and it's got to come out and there's no way we'll agree to it. Graham: Well, I'd like to put a time limit so there's some cut off point, so that the parties will work towards [getting] this done, but within a time - so we know we've got a cut off point when we're going to get the lease done. Dew: No, look, it's not acceptable. It's between Bakrie and Anderson; we cannot agree to a time limit. Graham: Okay, I'll agree to take it out. (e) It was also agreed that the last paragraph was inappropriate and should be removed. 89 I accept this evidence given by Dew in oral examination in chief. In light of all the surrounding circumstances, including the admissions of Bakrie and Rathod, the equivocation of Graham, and the evidence of Anderson and Dew, I do not doubt that a conversation to that effect did take place. Before settlement on 23 December 90 At the settlement meeting at the offices of Allen Allen & Hemsley, the amended Sanctuary letter was initialled by Graham and handed to Anderson and Dew. Dew stated that as the letter was being handed over, he had a conversation with Graham in which words to the following effect were said: Graham: I'm not signing this. I'm just initialling it. Dew: Why? Graham: I don't like what Bakrie is doing. I would like to get Anderson out of Tipperary altogether. If it were left to me I would not let him have the shares or the sanctuary. However, Bakrie has agreed to it so I will go along with it. Dew: I don't care if you initial it or sign it as long as the initials or signature are yours and you tell me you will honour it. Graham: Yes we have agreed to it and we will honour it. 91 Graham denied that these words were said. He claimed that he said: I can only initial this undertaking because I have no instructions on this issue. 92 Unfortunately Graham died before he could be asked to reconcile his evidence that he had "no instructions on this issue" with the fact that he swore in his February 1998 affidavit that he had drafted the letter on Bakrie's instructions. If Graham's oral evidence as to what was said was true, then his affidavit was disingenuous to say the least. Dew's evidence, on the other hand, provided an explanation for many of the difficulties experienced by the Anderson interests in finalising the Sanctuary agreement. 93 There was a great deal of evidence adduced regarding the machinations on settlement day, particularly in respect of the Sanctuary letter. There was argument over who was where when drafts were prepared and faxed, who received them and what was said. This evidence largely related to the respondents' assertion that the drafting of the Sanctuary letter was merely part of the further negotiations going on in respect of the Sanctuary, given that no agreement had been reached. In my view these differences were of little moment in the resolution of this issue. After the settlement 94 During the first half of 1994 the Sanctuary continued to operate in much the same manner as it had previously, although Tipperary began to charge Owston for use of plant and equipment. Langham's evidence was that relationships between the managements of Tipperary and the Sanctuary were co-operative. There were no steps taken during this period to formally document the agreement which Owston and Anderson maintained had been made. Anderson stated that "all of 1994 the time seemed to go, I was busy in other places". 95 By early 1994 the population of animals at the Sanctuary had increased to the point where more space was required and plans were made in mid-1994 to expand the Sanctuary area to allow for an increase in the population of animals and build larger breeding pens. Frank Gardner, as General Manager of all the Tipperary stations, was directly involved and he acted as a communications conduit between Anderson and Langham. 96 This proposed expansion was asserted by the applicants to have been undertaken in reliance on the representations of the respondents that they would be granted a lease over the expanded area. Apart from denying that the representations were made prior to settlement, the respondents' case was that the applicants' expenditure and improvements were not made in genuine reliance on any belief as to their interest in the land, as they were on notice that the respondents disputed their entitlements before the work was started. These claims and counter-claims were the basis for a great deal of evidence, some of which related to Frank Gardner's employment, including precisely by whom he was employed and whether knowledge by him of events at Tipperary constituted knowledge by the respondents. Other evidence concerned when the work on Stage IV actually began, and when and to what extent the applicants were aware of the respondents' disputation of their entitlement. 97 In mid-June 1994 Anderson, Langham and Gardner walked along the boundary of the proposed next stage of the Sanctuary, referred to as Stage IV, and on 20 June 1994 Langham sent Anderson a fax containing a proposal for the construction of Stage IV to relieve overcrowding, at an estimated cost of $166,000. The proposal also envisaged the future construction of internal holding yards in Stage IV and further expansions of another 390 hectares and 1036 hectares over time, being Stages V and VI respectively. 98 Work on Stage IV began in July 1994. On 15 July a payment of $70,400 was made to the fencing contractor, Haigh's Fencing, and by 28 July Langham was able to report to Gardner that the fence lines for Stage IV had been cleared with heavy equipment and that the lines had actually been put in. To assist in the clearing of the fence lines, Bruce Boord, the Station Manager at Tipperary Station, provided a grader without charge from the Station plant and equipment. During the construction of the fencing, he provided another Tipperary Station member and a cement mixer, both without charge, to assist in concreting in the fence posts and securing the drainage lines with concrete buffers. 99 In June or July 1994 Anderson visited Tipperary with a number of people, variously described as potential investors, family or friends. Anderson stated that following this visit Graham telephoned him, apparently on 27 July, and they had a conversation in the following terms: CG: You've been at Tipperary Station. You have exceeded your authority. You must obtain approval from me to go to Tipperary Station. … WA: I will go to Tipperary whenever I want to. 100 On 29 July 1994 Graham sent the following fax to Anderson: Dear Warren During our telephone conversation of 27 July it has become apparent that we have widely different views as to the role you personally will play in the operations of Tipperary Station Group of properties. Accordingly and to avoid any unpleasantness and confusion in the minds of all Tipperary staff I am setting out the position as I see it. I have very clear written and verbal instructions from the majority shareholders of Branir Pty Ltd, that Owston Nominees Pty Ltd, hold the normal position as an ordinary shareholder in Branir. As such and in accordance with the Articles of Association of Branir Pty Ltd, Owston Nominees Pty Ltd is entitled to attend and vote at the occasion of the Annual General Meeting of Branir and to approve the Annual Accounts. I have sought legal advice as to any other special provisions which may apply to an ordinary shareholder and find that there are none which are relevant. The position is that you have far exceeded your authority in recent times, as a result of which I have been forced to instruct Tipperary Station employees that any visit to any to any of Tipperary Group of Stations properties and/or use of Tipperary facilities can only be made under the written authority of a director of Branir Pty Ltd,. Further any information or enquiries you may wish to make regarding Tipperary or Branir business affairs may only be supplied by a director of Branir Pty Ltd. The purpose of this formal letter is to clarify the position and to avoid any further confusion or disagreements. 101 By 8 August, Langham reported to Gardner that the fencing in Stage IV was progressing well and on 14 August Langham sent a fax to Graham referring to the development of Stage IV. On 17 August 1994, Anderson received the following fax from Graham: Re: SANCTUARY Dear Warren, You will recall that as part of the arrangement whereby Branir purchased the half of Tipperary Station properties owned by Owston, that an informal approval was given by Votraint (Branir) that the Sanctuary located on Tipperary property could continue to operate in its then present form. It has come to my notice that the Sanctuary is/or will extend the area originally occupied further into the Tovehead/Branir land. No permission has been given for any extensions or for any fixed improvements on the land. Would you please advise as soon as possible full details of the extensions and work being carried out. On receipt of which I will bring the matter to the attention of both Tovehead and Branir. In view of these events and in our desire to maintain the Sanctuary in its very important work of caring for endangered species, we think it time to make some arrangements which are clearly documented. Your thoughts on these lines would be appreciated. 102 Anderson did not respond to this request for information believing, as he said, that he was merely acting in accordance with the previous agreements on the Sanctuary. In addition, he did not speak to Graham about it because he preferred to deal with Rathod and Bakrie, observing that "if I spoke to Charlie Graham about anything he would torpedo it". The applicants submitted that this fax from Graham was not a bona fide expression of Graham's beliefs regarding the Sanctuary but rather a calculated attempt to engage Anderson in an argument. This motive was evidenced by a fax the next day from Graham to Wally Peart, who was an associate of an investment banker called Frank Hunnewell, retained by the Bakrie Group to review the Tipperary joint venture finances. In that fax, Graham stated: I have made the point to you several times, that if we could get rid of Anderson out of our hair, life and the progress of the Stations operations would be many, many times easier. Bakrie people seem strangely reluctant to force a head on solution to the problem, but have more or less given me carte blanc [sic] to do as I think fit. I have therefore entered into a sort of sniping war on various points with Anderson. Apart from complaints from Anderson to Nalin Rathod, I do not seem to be able to draw any blood… 103 The applicants submitted that given the acrimonious reaction of Graham to Anderson's visit to Tipperary, his request merely for further information after discovering that Anderson was building on the land leads to the conclusion that Graham was not genuinely disputing Anderson's rights, but merely firing another shot in his "sniping war" in the hope of "drawing blood". 104 This conclusion was also supported by the fact that the construction of Stage IV proceeded unimpeded at Tipperary and the staff apparently remained unaware of any dispute of the kind raised in Graham's fax to Anderson. Indeed, on 18 November 1994, a final payment of $35,915 was being made to the fencing contractor and on 28 November Langham confirmed to Gardner that the construction of Stage IV had been completed. 105 By December a dispute had begun to arise over a Bakrie proposal, referred to in another part of Bakrie's letter to Anderson of 31 October 1994 partially set out at paragraph 32 to lease the homestead area of Tipperary to Aman resorts for development as a luxury holiday destination. Anderson was concerned for the safety and wellbeing of the animals. By January 1995 this dispute had led to an open rift between Anderson and Bakrie so that on 31 January 1995 Graham wrote to Hunnewell: I have instructions from Aburizal Bakrie that Anderson must be "killed" and put out of our hair fully and completely for ever and ever. 106 Gardner's employment was terminated in late November or early December 1994 and in early 1995, Ken Sawers took up the position as General Manager of the Tipperary group of properties. At about the same time, Graham's attitude began to communicate itself on the ground at Tipperary Station when, to put it colloquially, "all hell broke loose". On 13 January, finding that Owston had surveyors on the property, Sawers ordered them off and, on that day and over the next few weeks, he made various statements and gave a number of directions to Langham about the status of the Sanctuary on Tipperary Station, including: (a) You are no longer responsible for managing the Sanctuary. I'll make the day to day decisions and you'll be answerable directly to me (b) The fences are our responsibility. Anderson only owns the animals. We own the land and the improvements (c) threatening to close the Sanctuaryand to evict it from the Station (d) We will reduce the size of the Sanctuary (e) I will decide the mix of animals held in the Sanctuary and may not allow importation … Warren may have to move the animals off Tipperary altogether while we spend 12 months rebuilding the Sanctuary for a tourist venture (f) Anderson does not own the Sanctuary. I will decide the time frame and how it is to be managed (g) he has written instructions that Anderson is to be prevented from entering the Station accessing the Sanctuary (h) access to the Sanctuary by staff and government authorities requires the written approval of a director of Tovehead/Branir (i) permission for fencing contractors to visit the Sanctuary to repair fences is refused pending a detailed submission (j) permission for quarantine authorities to visit the Sanctuary is refused and visits by vets must be the subject of a specific request (k) research programs are to be minimised until legal proceedings are concluded "as they are activities which the owners may wish to vary" (l) I restate the owners' refusal to grant permission for expansion of activities by the Sanctuary … 107 If not actually taken on Graham's instructions (as I believe to be an overwhelming inference), Sawers' position was certainly backed up by Graham, with: (a) Graham sending a fax to Langham on 13 January asking him to instruct the surveyor to leave the Station land, "including Sanctuary land…with all speed"; (b) Langham recalling being told by Graham: Branir owns the station. You will be prosecuted for trespass if you leave the existing fenced sanctuary area. From now on everything between the Sanctuary and the Station will be done to the letter of the law. If I had my way, you wouldn't be using the Tipperary accommodation and you'd all be behind the wire. 108 Since January 1995, relations between the parties have been more or less frozen by legal proceedings. No further development has been undertaken, Owston has not purchased any more animals and the Sanctuary's breeding programs have had to be curtailed because further increases in the animal population are not feasible without expanding the area of the Sanctuary. the causes of action Threshold arguments 109 The respondents raised a number of threshold arguments that they submitted defeated the applicants' claim before it fell to be considered on the facts. I propose to deal with these arguments first, before addressing the question of whether there was, in fact, a binding and enforceable agreement entered into between Bakrie and Anderson, and if so, what its terms were. The Crown Lands legislation 110 The respondents submitted that the applicants' claims relating to the Sanctuary were bound to fail because of provisions in the Crown Lands legislation. Up to and including 25 June 1992, all or most of the properties which comprised Tipperary were subject to the Crown Lands Act 1931 (Northern Territory) (CLA), and since that date the Pastoral Land Act 1992 (Northern Territory) (PLA). The respondents submitted that the applicants' failure to procure ministerial consent, required by both Acts, either for the use of the land as a Sanctuary or for the devolution of an interest in the land, is in contravention of the Acts with the result that Owston has no enforceable rights in relation to the land. 111 CLA section 23A provided in part: Subject to section 23B leases under this Act (other than leases under section 6A) shall contain reservations, covenants, conditions, and provisions, as follows: ... (e) a covenant by the lessee that he will, subject to this Act, use the land only for the purposes for which it is leased; ... Tipperary, Litchfield, Elizabeth Downs and Douglas Stations are all leased for pastoral purposes and Fish River is leased for grazing and ancillary purposes. The respondents contended that a private zoo or sanctuary containing exotic and domestic species, and which is not intended to be and is not a profit-making or commercial enterprise, could not be considered to be a use for pastoral purposes as those words have been used in Australia. 112 CLA section 26 stated in part: (1) Except as provided by this Act, the lessee under a lease granted under this Act shall not, without the consent of the Minister, - ... (b) sub-let or otherwise part with the possession of the land or part of the land the subject of the lease. This Act was repealed with effect from 26 June 1992 and the respondents submitted that as no relevant application for ministerial consent had been made before that time, either in respect of the land use or of any sub-letting, the Sanctuary was not a permitted use of this land. 113 From 26 June 1992, Tipperary has been subject to the PLA. Section 38 of that Act states, relevantly: (1) Without limiting the power of the Minister to impose such other conditions as he or she thinks fit on the granting of a pastoral lease, a pastoral lease is subject to the following conditions and reservations: ... (d) that, subject to section 88, the lessee will use the land only for pastoral purposes. "Pastoral purposes" is defined in section 3 of the Act as: The pasturing of stock for sustainable commercial use of the land on which they are pastured or agricultural or other non-dominant uses essential to, carried out in conjunction with, or inseparable from, the pastoral enterprise, including the production of agricultural products for use in stock feeding and pastoral based tourist activities such as farm holidays, but does not include a use which, under section 91, is declared by the Board not to be a use for pastoral purposes. Section 61 of the Act provides, in part: (1) A pastoral lessee may apply to the Minister for approval to subdivide the land the subject of his or her pastoral lease into two or more pastoral leases. ... (6) The Minister may, after considering the recommendations of the Board – (a) approve the application as submitted by the pastoral lessee or as varied by the Minister; or (b) refuse the application. The relevant parts of section 67 of the PLA are: (1) Except as provided by this Act, a pastoral lessee shall not, without the consent of the Minister – (a) transfer his or her pastoral lease; (b) sub-let the land or part of the land the subject of the pastoral lease; or (c) otherwise part with possession of the land or part of the land, and compliance with this subsection is a condition of the lease. Section 68 provides in part: (1) An application for consent to transfer a pastoral lease or a sub-lease of land the subject of a pastoral lease, or to sub-let the land the subject of a pastoral lease, shall be made in writing by the lessee to the Minister. ... (5) The Minister shall not consent to a sub-letting of land or a part of the land the subject of a pastoral lease unless it is a condition of the agreement to sub-let that the land will be used only for pastoral purposes, for the purposes of the Territory or for a prescribed purpose. 114 The respondents said that the clear intent of the PLA was to prohibit a change in land ownership or use without the prior consent of the Minister and that section 68(5) proscribes the granting of that consent unless it is a condition of the agreement to sub-let the land that the land only be used for pastoral purposes, for the purposes of the Northern Territory or for a purpose prescribed under regulation 31 (the details of which are not here relevant). The respondents submitted that the use of part of Tipperary as a Sanctuary is outside the PLA's definition of these purposes. They therefore contended that any sub-lease of the Sanctuary would be in contravention of the section from the time it was purportedly made and that the Court lacked power to compel specific performance of an agreement containing a condition to submit the matter for ministerial consent. If this argument is correct, it would presumably no less apply to the transfer to Branir of the second half interest in Tipperary – as it did to Tovehead's purchase of the first half – than to any problem concerning the Sanctuary and I have been able to find no reference in the evidence to ministerial consent having been granted for Branir to take its half interest. However, as Branir is said to have become the registered proprietor of its half share on 14 December 1994, it seems that ministerial consent must have been granted. 115 The respondents relied on the case of Roach v Bickle [1915] 20 CLR 663 to illustrate the consequences of lack of consent. In that case, the lessee under an irrigation lease from the Crown purported to make a sub-lease to a person who wished to carry out cropping activities. Section 274 of the Crown Lands Consolidation Act 1913 (NSW) required the consent of the Minister or the Commissioner to a sub-lease or any other dealing with the land. No consent was sought or obtained. The plaintiff lessee sued the sub-lessee for trespass and conversion of goods in the form of severed crops and the defendant relied, inter alia, on the alleged sub‑lease. The question was whether the agreement was binding on the parties if made in breach of the Act. The respondents pointed to the following passage of the judgment of Isaacs and Gavan Duffy JJ who stated at 670-2: Consent, if asked for, can be given independently of the local Land Board, at the Commissioner's discretion, but he cannot refuse without first getting a recommendation, though when that is given he can do as he thinks right. But unless his consent is given the dealing is not to be effected, and if effected is not valid. A good deal of discussion took place as to the meaning of the word "void", and in what cases it is to be read as "voidable". But the word "void" does not occur. There is a distinct statutory prohibition against the dealing without the consent being "effected" at all ‑ that is, being made in fact; and then there is added the further provision, really unnecessary but emphatic, that if in spite of the express prohibition it be in fact made, it shall not be "valid". There is no analogy to the case where a party is not allowed to avoid his own bargain by his own wrong. This is a distinct statutory enactment made in the public interest, and applying directly as between the parties themselves, and while permitting a dealing between them on a certain condition being satisfied, forbids it without that condition, and stamps any attempt to avoid that condition as destitute of validity. A clearer case of legislative annulment of a transaction could hardly be imagined. Taking the first declaration by itself, that "such other dealing shall not be effected," and supposing that stood alone, what would the position be? The answer is not doubtful. Where a Statute prohibits a transaction either expressly or by implication, no such transaction can be validly created. The law which forbids its existence cannot consistently recognise it as ever having any binding force. Its existence in fact may be recognised for the purpose of punishing those who disobey the law, but the parties who are both transgressors cannot assert any right under it. It is lifeless from the beginning. Since the judgment of Parke B. in Cope v Rowlands [1836] 2 M. & W. 149, at p.151 the principle has been considered settled, and the recent citation of that judgment by Lord Dunedin in Whiteman v Sadler [1910] A.C. 514 at pp.526, 527 reaffirms it with added authority. The further provision that, if effected, no such dealing shall be valid is a statutory declaration of the rule of the common law, in presence of the prior prohibition. The concluding words of the section, whatever the extent of the application, though in our opinion they apply to the whole section, confirm the view already expressed. This being the true state of the law, and the parties presumably knowing this, the document ought to be construed as not attempting to violate the law, and therefore is not intended to effect a dealing forbidden. In other words the bargain was not absolute, but inchoate only and as the necessary consent was never obtained, the transaction never emerged from the inchoate stage, and no lease in fact ever existed. There is therefore no room for estoppel or personal conduct to alter their legal rights. In any case, where an Act of Parliament lays down a rule of public policy it is impossible for private individuals to abrogate it at will, and more particularly if the rule relates to the regulation of public property. (See Equitable Life Assurance Society of the United States v Reed [1914] A.C. 587 at 595. Where that rule of public policy takes the form of express declaration of invalidity no Court can permit personal relations to effect a virtual repeal of the enactment. 116 The respondents' submission was that, applying these principles, the purported grant of a sub-lease to Owston without ministerial consent is ineffective and invalid and the use of the Sanctuary for a non-pastoral purpose renders the obtaining of that consent impossible. 117 The applicants contended that PLA section 67 should not be interpreted in the same manner as section 274 of the Crown Lands Consolidation Act (NSW) and that any dealing made in contravention of section 67(1) fell to be determined under the provisions relating to the breach of a condition of a lease rather than rendering the entire transaction invalid. The applicants submitted that the current case was analogous to that of Massart v Blight [1951] 82 CLR 423, the headnote to which correctly summarises the principle to emerge from the case: At common law an assignment of a lease in breach of a condition against assignment, does not make the assignment nugatory, but merely exposes the lease to forfeiture. 118 In my view there is an arguable case that the PLA, properly construed, does not have the same effect as the legislation considered in Roach v Bickle. However, in the present case it is not necessary to finally determine the matter as, in my view, Roach v Bickle is distinguishable on the facts and does not apply to the current factual circumstances. The applicants' primary contention here was that the events of December 1993 did not result in the granting of a sub-lease to Owston but that an agreement was reached to grant such a sub-lease after 23 December 1993. As Windeyer J stated in Brown v Heffer [1967] 116 CLR 344: The statutes which regulate the incidents of various kinds of holdings of Crown land in Australia commonly prohibit, in one way or another, transfers or dealings with those holdings except with the consent of the Minister. These statutory prohibitions are not construed as preventing parties from entering into a transaction on the basis, express or implied, that their contract or dealing is subject to the requisite consent being obtained. 119 In Roach v Bickle on the other hand, the defendant pleaded that a valid sub-lease had been created as a defence to the case of trespass and conversion put against him. Due to the lack of consent, such a sub-lease was found never to have been created. In this case the applicants argued that the agreement to sub-let was subject to an express or implied term to obtain consent before the sub-lease would be granted. There would also presumably be an implied term that Branir, which might also need ministerial consent to its purchase of Owston's interests, consents to, and will use its best endeavours to procure, ministerial consent to the sub-lease. The PLA has nothing to say in such circumstances and there appears to be no compelling public policy reason requiring such a dealing to be rendered nugatory. 120 There is a possibility that the Minister might prefer to excise the Sanctuary from the Tipperary leases and lands altogether and grant a separate lease of the Sanctuary land, including the additional 20,000 acres if appropriate, to the applicants. This result would have the advantage to all concerned of not tying the present and future owners of Tipperary to a Sanctuary sub-lease in perpetuity. However, as this potential solution to the request for ministerial consent was neither proposed nor argued, it is preferable that I do no more than mention it, at least for the present. 121 It appears that after the conclusion of these proceedings, the Pastoral Land Regulations were amended to include as a prescribed purpose "the keeping and breeding of animals (other than stock)". The Sanctuary clearly falls into this category and therefore any consent to a sub-lease of the land on which the Sanctuary operated or of land which was intended to be used for its expansion would not contravene section 68(5). In the absence of an obvious bar to consent being obtained, there in my opinion is no reason that the Court could not order the specific performance of an agreement on condition that an application be submitted to the Minister for any and all necessary consents and subject to that consent being given. 122 The respondents further argued that any sub-lease in perpetuity to Owston would amount to an assignment of the reversion to Owston. The respondents stated that in effect this request for relief was an attempt to create a sub-division which under the PLA can only be made with ministerial consent after an inquiry by a Pastoral Land Board. If this argument is correct, it is a matter for the Minister to determine. If he does determine that a sub-division is indeed the effective result of such a dealing, then the provisions of the Act relating to sub-divisions can be put into place and the matter will run its course. In such a situation it will fall to the Minister to apply the provisions of the PLA. The Court is only concerned in these proceedings with the rights of the parties as between themselves. Private perpetual sub-leases 123 A further submission of the respondents which falls into the same category and is conveniently dealt with at this stage was that as a matter of law the parties could not grant, or agree to grant, one another a lease or leases in perpetuity. In the respondents' submission, the fact that Crown Lands legislation provides that there can be such a thing as a lease in perpetuity granted by the state under statute does not mean that individuals can create such an interest between themselves. They cited Professor Lang in Crown Land in New South Wales (1973): Perpetual lease grants are issued in respect of various tenures whose term is in perpetuity, to the "lessee his heirs and assigns forever". The concept of a "perpetual lease" is contrary to the rules of the common law, where a lease must have a definite term, including a beginning and an end and there can not be a valid lease in perpetuity at common law. However, as Farwell J. pointed out (Taff Vale Railway co v Amalgamated Society of Railway Servants [1901] AC 426 at 499), an Act of Parliament can create proprietary interests unknown at common law including a perpetual lease. 124 The applicants relied on the argument that a perpetual pastoral lease is a creature of statute and not of the common law. Speaking of interests under the Crown Lands Consolidation Act 1913 (NSW), Isaacs J said in Davies v Littlejohn [1923] 34 CLR 174 at 187: It creates them, shapes them, states their characteristics, fixes the mutual obligation of the Crown and the purchaser, and provides for the mode in which they shall cease to exist…Whatever estates, interests or other rights are created by the Crown must owe their origin and existence to the provisions of the statute. Similarly, Toohey J observed in The Wik Peoples v State of Queensland [1996] 187 CLR 1 at 112: Pastoral leases lie in the grant of the Crown. They are the creature of statute and the rights and obligations that accompany them derive from statute. In that case, the High Court made it clear that the mere fact that a statute uses expressions also found in the common law does not mean that the statutory creation embodies all of the characteristics of the analogous creation of the common law. As Kirby J stated at 245: As to the argument that the very word 'lease' and the other words familiar to leasehold interest ('demise', 'rent', 'assigns') are used in the Land Acts, I am quite unconvinced that they are sufficient to import all of the features of a common law lease. The case books are full of warnings against such a process of reasoning. 125 There are some obvious practical problems in granting a perpetual sub-lease in this case and why it might not be declared by the Court even if permitted to do so. But from the strictly legal standpoint, the PLA makes clear that there can be dealings with perpetual pastoral leases and that those dealings can include transfers, sub-letting and other parting with possession. There is no express provision detailing any restrictions on sub-letting and there does not seem to be a public policy reason which would prohibit a sub-lease for the term of the head pastoral lease, subject of course to the Minister's consent prior to its taking effect. I am of the view that this argument does not raise a bar to the success of this action because it is for the Minister, not the Court or the respondents, or for that matter the applicants themselves, to determine the nature and extent of the interest that should be granted in respect of the Sanctuary if the facts support the applicants' claim to it. For that reason, the whole matter is, at least at this stage, academic. The Statute of Frauds 126 In respect of the applicants' claim that Owston, Tovehead and Branir had a binding agreement for a lease over 20,000 acres as agreed orally and in terms of the JSU, the respondents pleaded and relied on the effect of the Statute of Frauds which is still in effect in the Northern Territory. Section I of the Statute provides, inter alia, that: … all Leases … made or created by … Parol, and not put in Writing, and signed by the Parties so making or creating the same, or their Agents thereunto lawfully authorised by writing, shall have the Force and Effect of Leases… at Will only. 127 Section II provides that only leases made for greater than three years are affected and Section III stipulates that any such lease must be granted by Deed. Section IV of the Statute is directed to contracts and provides: … no Action shall be brought whereby to ... charge any Person upon any Agreement made … upon any Contract or Sale of Lands, Tenements or Heriditaments, or any interest in or concerning them; ... unless the Agreement upon which such Action shall be brought, or some Memorandum or note thereof, shall be in Writing, and signed by the Party to be charged therewith, or some other Person thereunto by him lawfully authorised." 128 The respondents submitted that on the basis of these sections, all evidence as to the discussions between the parties relating to the grant of an interest in Tipperary for greater than three years or relating to any contract for such a grant is inadmissible to prove any aspect of the applicants' claim. They also said that the draft deed is inadmissible under either Section I or Section IV. The only writing which the respondents claimed could be considered were the JSU and the Sanctuary letter handed over at settlement by Graham to Anderson. Neither of these documents is a deed, nor does either purport to be, in its own right, an agreement for lease. Thus, in the respondents' submission, the Statute of Frauds operates to exclude the very evidence on which the applicants make their case. 129 For their parts, the applicants did not dispute either that the agreement to grant the lease for which they contend was at least partly oral or that, if the Statute of Frauds did operate, their evidence as to the agreement would be excluded. Their submission was that an oral agreement for a lease will be enforceable in equity notwithstanding the absence of a memorandum in writing sufficient for the requirements of the Statute of Frauds if the agreement has been partly performed. Otherwise the Statute would itself be used as an instrument of fraud: Maddison v Alderson [1883] 8 AC 467. In Caton v Caton [1866] LR 1 Ch App 137 at 148, Lord Cranworth LC said: The ground on which the Court holds that part performance takes contract out of the purview of the Statute of Frauds is, that when one of two contracting parties has been induced, or allowed by the other, to alter his position on the faith of the contract, as for instance by taking possession of land, and expending money in building or other like acts, there it would be a fraud in the other party to set up the legal invalidity of the contract on the faith of which he induced, or allowed, the person contracting with him to act, and expend his money. 130 The requirements for sufficient acts of part performance are that the acts relied upon must: (a) have been "permitted by" or done "pursuant to" the contract alleged: Millett v Regent [1975] 1 NSWLR 62 per Hutley JA at 65-68; Regent v Millett [1976] 133 CLR 679; White v Nealyon (1886) 11 AC 171 (PC); Riley v Osborne [1986] VR 193; Meagher Gummow & Lehane, Equity: Doctrines and Remedies, 3rd edition, paragraph2037 (b) be referable to the alleged contract, in the sense that they are "unequivocally … referable to 'some such agreement as that alleged'": McBride v Sandland [1918] 25 CLR 69 at 78, or to "some contract of the general nature alleged": Regent v Millett [1976] 133 CLR 679. The expression "unequivocally" in this context has been interpreted as follows: (i) "clear reference according to the normal probabilities", per Sholl J, Francis v Francis [1952] VLR 328 at 332; (ii) "not being reasonably explicable except upon the footing that the plaintiff had acquired an interest in the land", per Walsh J, Pejovic v Malinic [1960] 60 SR (NSW) 184 at 190; (iii) "whether the acts of part performance admit of any other reasonable explanation", per Glass JA, Millett v Regent [1975] 1 NSWLR 62 at 72A. 131 As acts of part performance since the alleged contract was entered into, the applicants pointed to the fact that Owston has continued in possession of the Sanctuary area, paid for the upkeep of the wildlife, and taken possession of the Stage IV area upon which it has constructed extensive and costly improvements. In Regent v Millett the High Court said at 682-3: The books are full of cases in which it has been held that the entry into possession alone, or the taking of possession coupled with the expenditure of money by one party on the improvement of property, with the cognizance of the other party to the contract, may amount to part performance…The change of possession of land has been described as "the act of part performance par excellence" – Williams: The Statute of Frauds, Section IV, p.256. 132 The respondents proposed that the applicants cannot rely on part performance as it was not specifically pleaded in reply to the respondents' reliance on the Statute of Frauds. The applicants submitted that it was sufficient that they had pleaded the acts of part performance relied on and that it was not necessary to refer in their pleadings to the doctrine by name: Carr v McDonald's Australia Limited & Ors, Federal Court of Australia (Burchett J), unreported, 16 February 1994. 133 The acts of part performance relied on by the applicants in this connection are precisely the acts which they say evidenced their reliance in respect of their case in estoppel. These were matters on which there was a great deal of evidence and on which the respondents cross-examined. They appear in paragraph 14 of the second further amended statement of claim which also refers to the particulars in paragraph 10. In these paragraphs the applicants pleaded that they continued to operate and develop the Sanctuary and expended money on infrastructure for and improvements of the Sanctuary, including the construction of Stage IV. In my view, this pleading sufficiently sets out the acts of part performance required in order to rely on the doctrine to avoid the effect of the Statute of Frauds. It follows that, even if the Statute of Frauds is applicable in the present case, the applicants can rely on their part performance to establish an equitable right of enforcement of their contract. 134 As to sufficiency, the respondents submitted that Owston was on notice when it built Stage IV that they disputed its right to expand, leading to the conclusion that Owston's acts were not referable to a genuine belief that a contract existed. In my view, however, the facts clearly demonstrated that Owston did undertake sufficient acts of part performance in their ongoing development and operation of the Sanctuary. Although Gardner did continue to act as a link between Langham and Anderson with regard to the operation of the Sanctuary, and Gardner had been originally employed by Anderson, there is no doubt that after the settlement in December 1993, he was an employee of the joint venture of Tovehead and Branir. He was well aware of the continued operation and expansion of the Sanctuary into Stage IV and his knowledge constitutes knowledge on behalf of the respondents as to the operations on Tipperary. Although Graham did write to Anderson on 17 August 1994 disputing his right to continue with the expansion of the Sanctuary, there was no evidence, from Bakrie or Rathod themselves, or in any written form, adopting or agreeing with this challenge. It is therefore reasonable to conclude that Graham's fax was another example of his design to cause trouble and upset relations between the Anderson and Bakrie interests. In the circumstances, as described here and earlier, it is my view that Anderson did believe that there was an agreement in place which gave him the right to undertake the expansion of the Sanctuary. Part performance has displaced the Statute of Frauds. The 1993 settlement documents preclude this action 135 The respondents submitted that various clauses in the agreements signed by Owston on 23 December 1993 at the settlement preclude it from bringing this action and that if the Court allowed the application, it would assist in a breach of the agreements. They relied on clause 12 of the settlement deed, made between Anderson, his family, Owston, the respondents and a number of others: This Deed is the entire agreement of the parties in respect of its subject matter. The only enforceable obligations and liabilities of the parties in relation to the subject matter are those that arise out of the provisions contained in this Deed. All representations, communications and prior agreements in relation to the subject matter are merged and superseded by this Deed. 136 The respondents argued that, in principle, an "entire agreement" clause of this kind renders inadmissible extrinsic evidence to prove terms other than those in the written contract, or other alleged contracts dealing with the same subject matter, since the parties have by the clause expressed their intention that the document is to contain all the terms of their agreement. Further, clause 15 provides: This deed [sic] may only be amended or supplanted by another deed executed by the parties to this Deed. 137 The subject matter of the deed was set out, inter alia, in recitals E and J and clauses 3 and 5, as principally the sale of the second half of Tipperary on the terms and conditions contained in the Deed. It follows, the respondents said, that the parties have agreed that the Deed shall contain the whole of their agreement regarding the terms and conditions on which one shall sell its remaining half share in the Tipperary leases and the other shall become registered proprietor of that share. Clause 5.2(b) of the deed provides: On Settlement: ... (b) the whole of the right, title and interest of Owston in each of Tipperary, the Plant, the Stock and the PTT shares and the whole of the right, title and interest of Moonhill in the Moonhill Assets will automatically vest in Votraint without need for any party to take any further action or whatsoever;... 138 In the respondents' submission, it follows that any right, title and interest Owston had in Tipperary, whether as co‑owner or under any agreement with any other party, must have vested in Branir by this clause. Whatever the discussions may have been between the parties prior to the execution and delivery of the deed, they must be taken to have intended that clause 5 would operate without qualification unless the deed were amended or a separate deed was made pursuant to clause 15. Owston can therefore have no right, title or interest in Tipperary remaining to it either under the JSU or the Sanctuary letter of 22 December 1993. 139 According to the respondents, the fact that Anderson said in evidence that he would not have entered into the deed if it had not been for the various things said or written to him on behalf of Tovehead or Branir does not affect this proposition. The whole point of clause 12 is that the parties have agreed that such statements, whether oral or written, shall not have effect unless contained in the deed. The respondents therefore submitted that the applicants cannot maintain any action regarding Tipperary in the face of these provisions. 140 The respondents also pointed to clauses 7.1 and 7.3 of the deed which they claimed manifest a similar intention. Clause 7.1 provided that: At Settlement Date Owston, the Directors, the Shareholders and the Beneficiaries agree that each of Owston, the Directors, the Shareholders and the Beneficiaries will discontinue any legal proceedings then current and will take no further action of any kind against any one or more of BNYA, ARB, Votraint, Cross Hatch and Tovehead in any way relating to or arising out of the BNYA Securities (including, without limitation, the creation, validity or enforcement of the BNYA Securities), this Deed or the Deed of Settlement and will indemnify and keep indemnified each of ARB, Cross Hatch, Tovehead, Votraint and Bakrie against any claim, action, loss, damage, cost or expense incurred by either Votraint or Bakrie by reason of or arising out of any such action. 141 By Clause 7.3 Owston covenanted that it would take no action, including any legal proceeding, which would adversely affect any of the assets being transferred or conferred by the deed. Tipperary was obviously among such assets. The respondents argued that the bringing of these proceedings undoubtedly adversely affects their rights in and to Tipperary by reason of the fact that if the application is successful, Tovehead and Branir will be subject to proprietary rights in favour of Owston denying them the use of up to 20,000 acres of developed land on the properties. At its highest the denial of rights over this land will be in perpetuity. The respondents submitted that Owston is therefore in breach of this clause and that the Court cannot, at the suit of Owston, grant relief which would adversely affect Tipperary as an asset transferred within the meaning of this clause. It was submitted that clause 7.1 of the deed has a similar effect. It is no bar to the enforcement of these provisions that they are wide, were entered into before any course of action was perceived, or were in advance of any facts which gave rise to such a cause of action: BHP v Hapag-Lloyd [1980] 2 NSWLR 571 and Sidney Cooke Ltd v Hapag-Lloyd [1980] 2 NSWLR 587. 142 In respect of the respondents' reliance on clause 12 of the deed, the applicants submitted that the subject matter of the deed did not include any reference to Owston's future rights to occupy the Sanctuary and therefore that clause 12 has no application, as these rights were dealt with by a separate agreement. As to the respondents' reliance on clauses 7.1 and 7.3, the applicants stated that these provisions related to releases and indemnities between the Anderson and Bakrie interests so as to protect the efficacy of the arrangements being entered into between them on 23 December 1993, and therefore that they can hardly be intended to apply so as to prohibit the enforcement of these very agreements. According to the applicants, clause 7.1 refers to actions relating to or arising out of the securities entered into by Owston, with which this action is quite unconnected. 143 It is my view that the terms of the deed do not proscribe the bringing of the present action. The fact that Owston's interest in Tipperary was transferred to Branir does not affect the efficacy of the separate agreement which grants certain rights over part of the property to Owston in the future. Clause 7 should not be allowed to operate to prevent an action designed to vindicate the applicants' rights as they were dealt with in the transaction of the which the deed in question formed a part. As I see the position, it cannot have been intended by the 23 December agreements to deny the enforcement by Owston of rights which were to be granted as an integral part of the transactions being entered into on that day. For this reason, these proceedings cannot adversely affect the respondents' rights in respect of Tipperary because Tipperary was already, as at 23 December 1993, subject to the agreement for lease which is now said to adversely affect it. In other words, the proceedings themselves have no effect at all on the assets because those assets were already subject to the agreement for a lease before the proceedings were brought. Contract 144 According to the applicants, the provisions of the December 1993 agreements which defined and preserved Owston's rights in relation to the Sanctuary were evidenced by the discussions between Bakrie and Anderson in Jakarta on about 14 December 1993, by the fax sent from Rathod to Graham on that day attaching the draft deed for clearance and finalisation, and by the Sanctuary letter handed over to Anderson by Graham on 23 December 1993, construed in light of the conversation between Graham and Dew on the previous day regarding its terms. 145 The respondents argued that no agreement was reached and that after the meeting between Bakrie and Anderson, negotiations continued up to settlement, at which point a letter was provided to the applicants which, on an interim basis, provided for the continued operation of the Sanctuary in its then present form pending further negotiations. According to the respondents, Anderson was well aware that the JSU would come to an end when Owston ceased to be a co-owner and that he therefore needed an agreement in place regarding the future of Sanctuary. They contended that this agreement was not reached by settlement and that the letter was given pending further negotiations. 146 The applicants agreed that the Sanctuary letter was an interim measure, but not to permit further negotiations. In their submission, there was an agreement and the letter provided for the maintenance of the status quo – i.e. the continuation of the JSU beyond what otherwise might have been its inevitable demise – while the final arrangements were made to effect that agreement, namely the provision of a sub-lease or other relevant interest, subject to ministerial consent. Intention to contract 147 The first question is whether there was an intention on the part of the parties to create legal relations between them about the Sanctuary. Although the conversations between Anderson and Bakrie/Rathod in Jakarta on 14 December 1993 were based on and revolved around the draft deed Anderson had with him, Bakrie did not of course sign the draft. Moreover, it was conceded by the applicants that the draft deed did not itself adequately reflect the agreement reached in that it provided for a lease over the area "presently used" by the Sanctuary. Further, as Bakrie delegated the task of finalising the agreement to Rathod, it is clear that a formal and final agreement had yet to be produced. There is nevertheless no doubt that Bakrie, as the principal on the respondents' side, intended that legal relations would come into being, based on the agreement reached verbally between himself and Anderson. Nor do I doubt that there was an intention on Rathod's part that formal legal relations would be entered into providing for, presumably, a sub-lease or some other arrangement so that 20,000 acres would be delineated for Anderson to expand the Sanctuary and build a residence. While eventually conceding that an agreement had been reached over the 20,000 acres, Rathod in turn delegated the task of finalising that agreement to Graham and Greiner and sent them a copy of the draft deed. 148 As for Graham, it is clear enough that the Sanctuary letter, construed in the light of his conversation with Dew the day before which I have accepted took place more or less as Dew related, was intended by him to create legal relations of some kind. Further evidence of Graham's belief is that the day after settlement, he sent Rathod a fax, entitled "Report on Settlement", which stated in part: We won a few but lost a few… The Sanctuary…we lost. 149 In other words, Graham was reporting that he had failed in his efforts to avoid giving any binding commitment on the Sanctuary as he had been forced to acknowledge the agreement that had been embodied in the JSU, evidenced in the draft deed, and initialled in the Sanctuary letter. Graham clearly believed that he had entered into a binding agreement that gave Anderson what he wanted in this regard. I reject Rathod's weak explanation that he understood that Graham had been forced to give a commitment to a longer lease than had been hoped for. An enforceable agreement 150 The second question, then, is whether the intention of the parties was translated into an enforceable agreement. When the understanding reached by Bakrie and Anderson fell into the hands of Graham, it ran into his deliberate efforts to prevent it from becoming legally binding on the respondents. I certainly accept that the applicants attempted to procure a final agreement which would have left no doubt about the future of the Sanctuary. They laboured, however, under a heavy commercial disadvantage. Anderson was in serious trouble with BNY and had to settle that dispute. It is not admirable that Graham used this pressure to advance his own personal agenda but Anderson was an astute and experienced businessman and cannot be treated by the Court as a person requiring special protection so as to prevent any advantage being taken on the basis of commercial naivety. 151 In my view, Graham was deliberately dilatory and evasive in the lead up to settlement with regard to finalising an agreement for the Sanctuary. The one fact that permeated any discussions about the Sanctuary from the very beginning of the events covered by these proceedings is that there was an agreement between Bakrie and Anderson that Anderson would have 20,000 acres for the Sanctuary. It was embodied in the JSU and I do not believe that Graham was unaware of this document. Indeed, in my opinion, he deliberately sought to delay finalising an agreement in the hope that he could undermine the JSU and leave Anderson with no enforceable rights in respect of the Sanctuary at all. 152 Further evidence of his approach to the finalisation of an agreement was contained in a fax he sent to Rathod at 11am on 22 December 1993, the day before settlement, in which he reported that he had spoken to Anderson and that Anderson "did not mention the 20% or the zoo". The obvious inference is that Graham was deliberately avoiding finalising an agreement in the hope that Anderson would simply not press the issue. 153 In my view Graham's behaviour before, at and after the settlement points unmistakably to the rejection of the respondents' proposition that negotiations were still on-going and that the Sanctuary letter confirmed this position. However, whether Graham's tactics were successful in their aim of denying Anderson the Sanctuary is somewhat more complex. The evidence established that Anderson believed that an agreement had been reached in Jakarta which required no further action on his part, merely the finalisation of the formalities by his adviser with Bakrie's adviser. It will also be recalled that in the final days prior to settlement Dew drafted a letter which sought to hold in place the arrangements under the JSU pending the finalisation of the lease after settlement, and that Graham responded with a significantly different draft. During the hearing I raised the question whether Dew, as an experienced adviser, ought to have been alerted to the fact that this reply by Graham indicated that he did not agree with the terms proposed by Dew, or at the very least that he was trying to be as vague as possible. Dew's response was that his conversation with Graham on 22 December 1999, in which Graham explained what he meant by the terms of his letter, convinced Dew that it would suffice to record the parties' agreement for an enforceable contract on the matter subject to finalisation after settlement. 154 One question that arises, however, is why Anderson agreed to settle when both he and Dew acknowledged that they were aware that the letter which was provided in respect of the Sanctuary did not adequately set out the terms which they claimed had been agreed. Anderson's explanation was given in cross-examination: Mr Rayment: …Mr Anderson would you please explain to his Honour how it happened that you settled the transaction on 23 December without insisting upon being provided with a signed copy of these documents? Anderson: I found with Nalin Rathod and Bakrie would agree to something and when they sent it to Charlie Graham for some reason or other - and I know Charlie Graham never liked me and he always tried to veto any agreement I had between myself, Bakrie, or Nalin Rathod. And Arthur Dew - it wasn't for the want of trying - Arthur Dew chased Charlie Graham about these agreements right up until the settlement date and you will see that in Mr Dew's correspondence to Mr Graham that he wanted these agreements signed. And Mr Graham ducked and dived everywhere, and that's the explanation. His Honour: But was not the purpose of this gigantic settlement which took all day partly to secure your position in the rearrangement? Was that not the purpose of doing it? Anderson: Yes but you must understand your Honour that Charlie Graham refused to do anything and kept on delaying it and I was under pressure from the Bank of New York to settle. I had no choice to settle. If I hadn't settled in that way they would have cleaned me out and I kept asking Arthur Dew have you got these agreements and he said I can't get Charlie to do them and I said well look if you have got anything for me. He said I can get a letter from him in the interim and that is what happened. His Honour: You felt yourself under pressure did you? Anderson: I was under pressure. The Bank of New York was bashing the doors down in my houses and taking paintings off the wall… 155 Both the facts and commonsense gainsay the respondents' assertion that the Sanctuary letter was merely an interim arrangement to allow the Sanctuary to be operated in its then present form pending further negotiations. It is not a criticism to say that the Bakrie interests knew nothing about and were not interested in protecting and breeding endangered wildlife. Their interests were solely financial and the Sanctuary was not a profit-making undertaking. Despite the potentially disastrous consequences for Anderson if he did not settle, it is simply inconceivable that he would have passed over, and that Bakrie and his team could have believed they were acquiring, the immensely valuable asset of full control of these vast holdings and assets, without securing the Sanctuary in the separate hands of its founder, protector and financier. I find that the parties agreed on 23 December 1993 that the Sanctuary was not to be included in the sale of the second half of Tipperary and that Owston was to continue to hold and operate it. All that remained was the finalisation of the terms and the gaining of any necessary consents from the Northern Territory Government. The content of the agreement 156 The third question then is what the agreement comprised. In my view, for the reasons given, there was an agreement that subject to any necessary ministerial consent being obtained, Branir and Tovehead would sub-let or otherwise procure a grant of 20,000 acres to the applicants to enable the expansion of the Sanctuary and the building of a residence. The conditions of use of this expanded area in terms of access and services were to be in accordance with the conditions of use of the Sanctuary under the JSU prior to 23 December 1993. I have already queried whether in the events that have occurred, the applicants are not still the holders of at least the Sanctuary but for the purposes of this judgment, I will assume that they are not. 157 The JSU did not comprehensively set out either a detailed definition or the conditions of use of the Sanctuary area and there were and remain a number of issues to be dealt with to complete the matter. The first issue, which was the subject of a great deal of evidence during the course of the proceedings, was the method by which the 20,000 acres were to be selected and which parts of Tipperary could be selected. The only reference in the JSU to any particular parts of Tipperary was in clause 1.3 which stated that neither party was permitted to select "any of the currently developed land or commercial plantation". The respondents submitted that the phrase "currently developed land" ought to be construed as prohibiting Owston from selecting any land which had been cleared and prepared for cattle grazing. 158 In my view, the phrase does not carry this meaning. In the circumstances, it is clear that the clause was designed to prevent either principal from attempting to select and annex any part of the homestead complex for his own use. It will be remembered that Owston had spent in excess of $50 million developing this complex, which included vast accommodation, sporting and administrative facilities. The discussions at the time the JSU was drafted pointed to the fact that the respondents insisted on the inclusion of this clause to prevent precisely and only this occurrence. It should also be noted that, as part of the development of the Tipperary homestead complex, a large commercial mango plantation was added. The proximity of the words "commercial plantation" to the phrase "currently developed land" in the JSU establishes, in my view, that what was being referred to was the entire development around the homestead area in order to ensure that the current buildings and commercial operations at Tipperary were excluded from any subsequent selection of land. Accordingly, while this land must be excluded from the 20,000 acres selected by the applicants, the land to be actually chosen was as determined by oral agreement subject to more precise delineation and calculation. 159 I have previously referred to Anderson's identification of, and Bakrie's at least general agreement to, where the expanded Sanctuary area would be when the two men first met at Tipperary in 1989 to discuss the purchase and sale of the initial 50% interest. Although the area pointed to by Anderson has not been surveyed, I was told that it is thought to comprise approximately 20,000 acres. In my view it is a reasonable consequence of the agreement made at that time and reaffirmed several times later that this area – involving the paddocks known as Campbells, Turkey Flat, Little Gardner, Jumbo, Electric Fence and Boords – constitute what was agreed to be the expanded Sanctuary area as required to make up 20,000 acres subject to the area being professionally surveyed for this purpose. In my view, the agreement between the parties requires that the area be selected in one exercise and, apart from those areas not currently contiguous, that the land selected adjoin the current Sanctuary area made up by Stages I, II, III and IV. A single application will no doubt then be made for any necessary ministerial consent to a sub-lease or other grant of the entire Sanctuary area. 160 Although it was not expressly stated, the agreement clearly contained a number of implied terms to enable Owston to gain its expanded Sanctuary area. In my view there must have been and were terms granting Owston free and uninterrupted access to and from the Sanctuary areas and access to basic services such as water and electricity. These terms are largely derived from and in accordance with the parties' practice in relation to the Sanctuary prior to this dispute arising. The fact that the Sanctuary is located in a unique environment in a remote part of the Northern Territory means that it must rely upon some of the already developed amenities of Tipperary in order to operate. The applicants sought to argue that there was express agreement that these services would be provided by the respondents. In his 1997 affidavit Anderson said that part of his conversation with Bakrie in Jakarta in mid December 1993 was: WA: Now, in regards to the Sanctuary, we have an agreement from our original deal that each of us have 20,000 acres. My 20,000 acres was for the Sanctuary and yours was to build a house on and have as a personal asset. To follow up on that agreement I have discussed a lease with Nalin. As part of that lease I will have right of access and a right to two of the small houses in the staff area with power and water for my staff. Is that okay by you? AB: Yes that is alright. I will instruct Nalin to follow up with your lawyers and finalise the lease. As far as I have been able to see, Bakrie did not challenge the substance of this assertion by Anderson. In fact he at first denied that there was any conversation at all at the time and place suggested although later he agreed that it possibly or probably occurred. Although it is implicit in the parties' agreement that they are not to be withheld, it is my belief that applicants' free use of potentially costly services was never seriously addressed or contemplated by the respondents, if it was by the applicants. It will therefore be necessary to initiate an appropriate system for charging Owston for the Sanctuary's use of these services. 161 Moreover, I do not agree with the applicants' claim that there was a term in the agreement allowing for the free use by Sanctuary staff of two houses in the Tipperary homestead complex. It is clear that as far as possible given the unusual circumstances, the Sanctuary and the operation of the cattle station were to be separate, as was emphasised when control of the entirety of the cattle operations passed out of Owston's hands to the respondents. The homestead complex is and always has been a part of the cattle stations and relief in respect of the Sanctuary should reflect the parties' implied agreement that the two be separated as far as practically possible. Anderson had always planned to build a residence on the expanded area. Unless agreement can be reached otherwise, he will need to build appropriate accommodation for his staff. The term of the agreement 162 Finally, there is the difficult question of the agreed or intended length of the applicants' interest in the Sanctuary including the 20,000 acres. The applicants argued that the sub-lease must and was agreed to be for the same perpetual term as the head lease. While the respondents argued that all the applicants had at best was a licence at will over the existing Sanctuary, they conceded that reasonable notice to vacate might mean many, even 20, years occupancy. 163 The applicants' case on the Sanctuary was based, and only based, on Anderson's personal commitment to the wildlife and made no mention of anyone else in his family or otherwise, being interested in the undertaking at all. Moreover, although the evidence on the matter was sparse, the situation as I understood it was that the Sanctuary was conducted, and only permitted, by and under various special licences issued to Anderson alone. If so, and he does not own or have adequate rights to the land on which it stands, the Sanctuary will have to close and the wildlife appropriately dispersed. The cost is likely to be considerable. 164 The deed drafted by Gianotti which Anderson had with him in Jakarta in mid December 1993 spoke eventually of the "term of the lease" or " of the perpetual leases". In his 1997 affidavit, Anderson said that at their Jakarta conversation in mid December 1993, Bakrie agreed to the same term as the head lease. Bakrie said in evidence that he left the matter to Rathod. Rathod in turn sent the Gianotti draft sub-lease to Graham and Greiner for their final drafting. It seems that thereafter the parties and their advisers simply did not apply their minds to the question in any real sense at all in their discussions either internally or with the other party. My impression was that the whole transaction was coloured by Anderson's belief or assertion that he would eventually buy back everything he had sold. This view seemed also to be held by Bakrie as expressed in his letter to Anderson of 31 October 1994 previously quoted in part at paragraph 32 for other purposes [sic]: Any proposal that we make, I would only propose to you that our original intent should be kept intact irrespective of the legal agreements we have, which are needed for corporate purposes. I still believe that one day you will own the property, which you love and adore. You know, I will not sell the property for a loss to and book the loss. This will hurt my Parent Company books. You will be my first choice buyer and I am sure you will keep our original intent intact. … I will assure you that pending the ultimate sale of the property, we will make sure the property is weltaken care and earns results. 165 I do not think that a term can reasonably be implied into the agreement that any sub-lease be in perpetuity merely because the head lease is in perpetuity. On the other hand, there was evidence that this was the term, and the only term, discussed or assumed. If a perpetual grant is to be declared for a sub-lease, further argument and perhaps evidence is necessary. In evidence Anderson expressed confidence that ministerial consent will not prove a problem but the Minister may choose a grant other than a sub-lease. For reasons to do with the conditions for conducting the Sanctuary and introducing the wildlife to it, on which there was virtually no evidence at all, it seems that the Sanctuary itself is not saleable or even transferable by gift. On the other hand, the cattle stations and other developments are able to be transferred at any time subject to ministerial consent. As there may from time to time be a clash between the conduct and disposal or dispersal of the two enterprises, and the operation of the Sanctuary cannot apparently be in the hands of anyone other than Anderson, it seems to me that tying the terms of one to the other may be harmful to either or both of proprietors. 166 It is preferable that this problem be resolved by negotiation. If agreement is not possible, I will hear further argument on the question. Estoppel 167 Owston's case in estoppel is that on 23 December 1993: (a) it entered into an agreement to sell its remaining half interest in the properties (b) it thereafter continued to operate and extended the Sanctuary in the expectation, encouraged or at least acquiesced in by Branir and Tovehead, that it would be granted a lease or other exclusive interest over the 20,000 acres selected by it in perpetuity or for an otherwise lengthy period, such lease or interest to be substantially in the terms of the draft deed of 14 December 1993 (c) it would continue, in the interim, to have the right to remain in possession on the terms of the JSU 168 The applicants submitted that in these circumstances there arose a proprietary estoppel, the elements of which were summarised by Meagher, Gummow and Lehane in Equity: Doctrines and Remedies, 3rd edition, paragraph 1721: (a) an expectation or belief by A as to the property of B, for example, that … B has given or will give A an interest in it whether full ownership … or licence to stay permanently or for a period of time on the land; (b) knowledge by B of this expectation or belief of A; (c) activity in reliance upon his expectation or belief whether by expenditure upon the property or giving up or not enforcing other rights he might have in relation thereto… (d) the interest or expectation of A must be one which B could lawfully satisfy; (e) encouragement by B of the activities of A under (c) or at least knowledge of those activities with failure to assert his title to his property when they are adverse to it so that he "dishonestly remained wilfully passive" and therefore it is fraudulent for him to rely on his legal rights to defeat the expectation encouraged by his conduct or lack of it; (f) knowledge by B of his property rights as under his enjoyment control and disposition… 169 The representations which are said to have given rise to the expectation of the applicants that they would be granted a lease or other exclusive right over the 20,000 acres were the consent to this effect which Bakrie and Rathod conveyed to Anderson in Jakarta on 14 December 1993, Graham's statement to Dew in late December 1993 that a formal lease could not be executed in time for settlement and his agreement that a letter to the same effect be substituted, and Graham's explanations to Dew on 22 December 1993 of the meaning of the Sanctuary letter drafted by Graham and his subsequent agreement to amend it. I have already examined these factual questions and expressed the conclusion that the conversations did take place substantially in the terms claimed by the applicants. It is my view that these representations, made in the lead up to settlement, would have induced a belief in the applicants that they were to be granted a lease or other exclusive substantial interest over the 20,000 acres. 170 The applicants submitted that the respondents were well aware of this expectation, given that they made the representations which gave rise to them. The applicants further submitted that the respondents "dishonestly remained wilfully passive" while Owston acted on its expectation firstly by selling its interest in Tipperary and thereafter by continuing to operate the Sanctuary and expending money on the Stage IV expansion. 171 As to Anderson's belief that Owston would be granted a lease over the 20,000 acres, the respondents pointed to his evidence that he only relied on the JSU, the Sanctuary letter, the deed of settlement and the draft deed, and therefore that he did not rely on any conversations. They then sought to show that none of the documents mentioned by Anderson were sufficient to found a case of estoppel. In my view this approach involved an unrealistic interpretation of Anderson's evidence, who stated that he had relied on the fact that he "had a copy of the lease in perpetuity which I had given to Mr Rathod and Bakrie at the end of November, middle of December, one of those meetings". I reject the respondents' suggestion that this evidence meant that he did not rely on the conversations which took place during those meetings. 172 Another major factor, according to the respondents, was the evidence of Dew and Anderson that the Sanctuary letter meant different things to each of them, thus exposing the fact that no representation, other than in the specific terms of the letter, could be said to have been made by handing it over. This submission was made on the assumption that the respondents had effectively excluded any evidence as to oral representations which may have been made. In my view, the conversations between Anderson and Bakrie/Rathod in Jakarta on 13–14 December 1993 and the conversation on 22 December between Dew and Graham, which I have accepted occurred, are sufficient, in conjunction with the documents, to establish the representations asserted. 173 Further, as set out earlier in my findings on part performance, there is clear evidence that the applicants did rely on the representations that had been made in continuing to expend money on the Sanctuary, particularly in the development of Stage IV, and that Graham's letter of 17 August 1994 was not sufficient in the circumstances to discharge the respondents' responsibility to alert the applicants to their stated misunderstanding of their legal rights. Graham's letter had a mischievous not a legal intent. 174 In view of my findings on the contract, it is not strictly necessary to make findings on this claim in estoppel. For completion, however, I indicate that I would find that the respondents are estopped from denying the applicants' right to be granted a sub-lease or other exclusive right over the 20,000 acres being discussed subject to any necessary ministerial approval. Misleading and deceptive conduct 175 As with their claim in estoppel, it is not necessary to determine the applicants' claim of misleading and deceptive conduct. The applicants relied primarily on section 995(2) of the Corporations Law which is substantively similar to the misleading and deceptive conduct provisions of the federal Trade Practices Act and the New South Wales Fair Trading Act. Relevantly it provides: A person shall not, in or in connection with…any dealing in securities; or…the allotment or issue of securities…[or]…the carrying on of any negotiations, the making of any arrangements or the doing of any other act preparatory to or in any other way related to [the allotment or issue of securities]…engage in conduct that is misleading and deceptive or is likely to mislead or deceive. 176 Based on my previous findings and those to come, I am satisfied that the respondents made representations that subject to ministerial consent Owston would be granted a sub-lease or other exclusive right over the 20,000 acres to expand the Sanctuary and a 40% holding in Branir at a cost of $A8 million lent by Bakrie and repayable from company dividends. Graham's evidence made clear his intention on behalf of the respondents that these commitments would not be honoured and they have not been honoured in fact. Consequently, in my view, misleading and deceptive conduct has occurred. If it were necessary to determine this issue, it would be my view that the applicants have sufficiently made out the other elements required by section 995 of the Corporations Law and would be entitled to relief under section 1325. THE SHARES Overview 177 The Share letter, set out earlier, was also part of the settlement on 23 December 1993. The essence of the applicants' case is that the Share letter and its acceptance three months later establish that an agreement between the parties exists but that they do not accurately record the true agreement between them. They sought to establish that on 23 December 1993 there was a legally binding agreement in the form of an oral contract between the parties relating to the issue of 40.815% of the shares in Branir, which they termed the "Branir Shareholding Agreement". It was pleaded that this agreement was reached between Branir, Bakrie and Owston in late 1993, prior to the settlement on 23 December, in conversations between Anderson and Bakrie, and between Dew and Graham, and by a partly executed deed. The Branir Shareholding Agreement allegedly included the following terms: · At the option of Owston, Bakrie would procure Branir to issue to Owston such number of shares as would result in Owston owning 40.815% of the issued shares · In consideration for Bakrie procuring this issue, Owston would owe $A8 million to Bakrie, which would be repayable only from dividends declared on the Branir shares from time to time · Owston would irrevocably direct Branir to apply all dividends on the shares in reduction of the amount due to Bakrie · The amount due to Bakrie would bear interest at the Indonesian market deposit rate · Bakrie would hold the share scrip as security for the amount due to him · Owston would pay all stamp duty · Branir was to be debt free on settlement and would not incur any debt other than in the ordinary course of business 178 The applicants asked the Court to find: (i) that there was a legally binding agreement made prior to and confirmed on 23 December that Owston have the right to take up the 40.815% shareholding in Branir; (ii) that the Share letter was not a complete and accurate record of that agreement; and (iii) that the terms of the agreement were those alleged in the Branir Shareholding Agreement. 179 Again the applicants rely also upon an estoppel and misleading and deceptive conduct but, as will be seen, it is not necessary to deal with those claims. In particular, so far as the latter is concerned, no damages are now sought 180 The failure of the Share letter to accurately record the terms of the agreement was allegedly the result of two factors. The first was Graham's malicious and deliberate course of not getting the agreement documented prior to settlement thus causing the letter to be drafted in haste and under pressure on the day of settlement. The second was Graham's deliberate attempt to draft the Share letter as vaguely as possible so as to make it meaningless or unenforceable. The applicants seek either a declaration that an oral contract subsists in the terms of the Branir Shareholding Agreement or rectification of the contract formed by the Share letter and acceptance to accord with the terms of that Agreement. 181 The respondents' primary defence is that there was no such Agreement and that the Share letter was arrived at through a constantly evolving process of negotiation up to and including 23 December itself. They submitted that at no point in the period prior to that day could it be said that there was a concluded agreement, either in the terms alleged by the applicants or in any other terms. As many significant facts for which the respondents argued in their submissions were not put to the applicants' witnesses, specifically Anderson and Dew, or even asserted by Graham, Bakrie and Rathod, it is difficult to come to firm conclusions about them. On the other hand, few of the elements needed for the applicants' rectification argument to succeed were present. There was even the possibly technical problem that in or around December 1993 Anderson had, on legal advice, temporarily stood aside as a director of Owston in favour of his wife and daughter and may not have been able to commit the company to anything. On the other hand, no one treated this situation as relevant. The Facts 182 A brief repetition of some of the earlier stated facts is necessary. In 1993, BNYA was seeking to enforce the securities it held over Owston's assets to pay off $US40 million owing to BNY under a guarantee given by Anderson and his wife for an earlier Owston commercial loan which is quite unrelated to the current dispute. 183 In mid-1993 when Anderson began trying to negotiate a settlement with BNY, he met with representatives of the bank and with Bakrie in New York. Bakrie became involved at Anderson's request because the Bank was threatening to sell Anderson's interest in Tipperary, over which it held security, such as may jeopardise Bakrie's interest in the joint venture. Bakrie stated that he would attempt to raise the $40 million needed to pay out Owston's indebtedness to BNY. When Anderson, under continually great pressure from BNY, later contacted Bakrie to inquire whether he had been successful in raising these funds, he was informed that Bakrie was only able to raise $20 million. Anderson then stated that he had managed to borrow or secure $12 million privately and that he would make up the shortfall of $8 million from his own resources. It may have been a coincidence that this shortfall of $8 million is identical to the same sum that Owston was requested to pay for the shares in Branir. On the other hand, coincidence seems an unlikely explanation for the fact that as the $8 million price tag is 40% of $20 million, that was how Branir came to be valued. It seems that Branir's holdings in Tipperary alone would have far exceeded that sum. At some time during this process, there was a change in the amounts being discussed from US dollars to Australian dollars. No explanation was given for this change but in the end it may have been a concession by BNY. 184 Anderson claimed that the initial form of the deal was to be a loan from Bakrie to Owston to extricate it from its difficulties with BNY. Evidently this proposition changed and there was a great deal of evidence as to when this supposed loan actually transformed into a proposal for Owston to sell its interest in Tipperary and Tippindo to Bakrie for $A20 million. The respondents pointed to a letter from Graham to BNY dated 27 July 1993, copied to Dew, which set out Bakrie's offer to purchase Owston's interest in the Tipperary properties and Tippindo for $A20 million and then its offer to purchase just the interest in Tipperary for $A20 million, an offer on which preliminary negotiations then began. 185 In fact the first evidenced documentation of this proposed transaction, a draft deed, was prepared by Dew on about 5 September 1993. It provided for the Bakrie interests to pay $A20 million to acquire the securities over the Tipperary assets from Macquarie Bank, which was to have bought BNY's Australian operations, and for Owston to transfer its half interest in Tipperary to Tippindo (the Macquarie Bank deal). Owston was to retain its half interest in Tippindo (and therefore in Tipperary, which under the arrangements then contemplated would have been wholly owned by Tippindo, as it would also have taken over the interest in Tipperary held through Cross Hatch) and the $A20 million was to be treated as a loan to Tippindo by the Bakrie interests. The applicants submitted that this arrangement was in substance a loan by Bakrie rather than a sale by Owston of its joint venture assets. The respondents submitted that the transaction was still a sale, even though it was financed by a loan from Bakrie. They said that Dew never questioned that the substance of the transaction was a sale and not a loan, that Dew was always aware that the transaction was to be a sale, and that any claim by him to the contrary was false. As the Macquarie Bank deal fell through, it is not necessary to determine this dispute now. It is also unclear as to what issue all this evidence was relevant, apart from the credibility of the various witnesses on which, as far as I can see, it had little impact. 186 Dew forwarded his draft deed to Graham who submitted it to Greiner. On 6 September 1993 Greiner sent Dew his comments on the draft deed. The crucial observation by Greiner was that the transaction would not only involve a transfer of Owston's interest in Tipperary to Tippindo but also a transfer of Owston's interest in Tippindo to a Bakrie nominee company, thus depriving Owston of any interest in the joint venture assets. In a fax to Anderson, Dew passed on Greiner's comments with the additional comment from Graham that "any deal for Warren to come back into it is a private deal between Ichal [Bakrie] and Warren". Anderson claimed that it was only at this point that he realised that what was proposed was in fact a sale rather than a loan from Bakrie. Anderson stated in his affidavit that: That's not right Arthur you know that. To which Dew replied: Well that's what the draft agreement says. I will go back to Charlie and Greiner and try and straighten it out. 187 The respondents sought to establish that this evidence could not be true as it was Dew who prepared the first draft and therefore it was he who had proposed the transaction as a sale. This argument seemed to turn on whether the document prepared by Dew is construed as a sale or as a loan, but as I see the position, that matter is entirely academic. The movement from the position in Dew's first draft whereby Owston was to retain its interest in the joint venture assets through the retention of its interest in Tippindo, to the amended proposition of Greiner that Owston retain no interest, means in substance the conversion of the agreement from an effective loan by Bakrie to a sale by Owston. 188 In his cross-examination it became clear that this was how Dew understood the transaction. In my view, it is not possible to draw any inferences adverse to the applicants' evidence on this issue because it is obvious that, at least by September 1993, all parties were in agreement that it was now to be a sale. The reference by Dew to Graham's way for "Warren to come back into it" appears to refer to the concept which arose at about this time that Anderson would retain some interest in the assets through an interest in the Bakrie nominee company which was to acquire them under Greiner's proposed amendment to Dew's draft. Dew viewed this arrangement as an appropriate compromise between his draft (wherein Owston retained the entirety of its interest in the joint venture assets) and Greiner's suggested amendment (wherein Owston retained no interest as its Tippindo holding would be transferred to a Bakrie nominee). 189 On 10 September 1993 Anderson travelled to Jakarta to visit Bakrie. He was unable to arrange a meeting but did meet with Rathod. After discussion at this meeting, Rathod gave Anderson a document in the following terms: PROPOSED STRUCTURE FOR TIPPERARY PROJECTS 1. Owston to transfer its 50% holding in Tipperary Station to PT Tipperary Indonesia [Tippindo]. 2. Tovehead to transfer its 50% holding in Tipperary Station to [Tippindo]. 3. Owston to transfer its shareholding of 49% in [Tippindo] to a nominated Bakrie company for A$20 million. 4. Bakrie will give 40.815% in the nominated Bakrie company to WPA [Anderson] which will own 49% of [Tippindo]. This will effectively give WPA 20% share holding in [Tippindo]. For this WPA will pay A$8 million to Bakrie. The A$8 million is to be paid from Dividends of [Tippindo]. Below this typed text was the following note in Rathod's handwriting: Dear Warren Above is the structure approved by Mr Aburizal Bakrie. Nalin 11/9/93 It appears that the proposal discussed by Rathod and Anderson reached Sydney almost immediately resulting in the preparation of a new draft deed. Dew claimed that the substance of what was proposed was confirmed to him by either Graham, Greiner or Richmond who stated: …we can agree to [Anderson] having 40% of the new company which will hold the 50% interest in the station…Bakrie will lend the $8 million to him for his 40% and it can be paid back out of dividends or earlier if he wishes. 190 A new version of the deed was thus drafted around 10 September by BDW which contained the following clause 4: 4. (a) Immediately upon the later of settlement of the Macquarie Bakrie Transaction [the purchase of the securities over Owston's share of Tipperary] and the withdrawal of the Receiver by BNYA from the assets of Owston each of the Directors, the Shareholders and the Beneficiaries covenant that they will cause Owston to, and Owston agrees that it will, transfer the PTT Shares [Owston's interest in Tippindo] to a company nominated by Bakrie ("the Nominee Company") and each of the Directors, Shareholders and the Beneficiaries confirms and acknowledges to Bakrie that each of them consents to such transfer and that Owston will at the time of such transfer be fully authorised and entitled to effect such transfer. (b) ARB [Bakrie] agrees with Warren Perry Anderson ("Anderson") that he will procure that the Nominee Company issues to Anderson or as Anderson may direct forty per centum(40%) of its issued share capital (the "Anderson Shares"). (c) In consideration of the agreement by ARB mentioned in paragraph (b) of this clause 4, Anderson agrees with ARB that: (i) Anderson will pay to ARB the sum of A$8M together with interest on that amount from the date of issue of the Anderson Shares until payment, calculated on a daily basis at the current Indonesian market deposit rate from time to time (together called the "Issue Price") by applying (and solely by applying) the dividends paid in respect of the Anderson Shares for that purpose; (ii) Anderson will procure that the holder of the Anderson Shares will: (aa) irrevocably direct the Nominee Company to pay all dividends to be paid in respect of the Anderson Shares directly to ARB or as eh may direct in writing in partial satisfaction of the obligation to pay the Issue Price until such time as the whole of the Issue Price has been paid; and (bb) deposit the share certificates in respect of the Anderson Shares with ARB as security for the payment of the whole of the Issue Price so that ARB shall not be obliged to release any of such share certificates until such time as the whole of the Issue Price has been paid. 191 This structure was then incorporated into the documentation for the Macquarie Bank deal drafted by BDW and versions of the deed containing clause 4 in these terms were bound by BDW and executed by the Anderson side between 13 and 20 September 1993. The deed was not executed by the respondents. The applicants sought to suggest that the circumstances surrounding their execution of this document were indicative of a firm agreement between the parties as to the terms of clause 4. 192 In late September, after the Macquarie Bank deal began to fall through for reasons which were not the subject of evidence, the parties began negotiations to accomplish effectively the same result without Macquarie's involvement. To this end the applicants were involved in discussions with BNY for most of October and there was only minimal involvement with the respondents. 193 On 22 October 1993 BDW produced a further draft of the deed, modified to reflect the fact that Macquarie Bank was no longer involved. This deed did not contain the term that had previously been clause 4, relating to the issue to Anderson of shares in the Bakrie nominee company. The applicants submitted that the reason for the removal of clause 4 related to an understanding of Graham's that Anderson would accept the Moonhill properties free of Tovehead's interest in lieu of any holding in the nominee company which was to hold the joint venture assets. This result was apparently never Anderson's intention. Nevertheless, clause 4 was removed from the draft deed and was not reinserted in any subsequent draft. 194 A further change in the structure of the deal occurred at about this time. The drafts of the deed now being prepared by BDW provided for the transfer of all Owston's interests in the joint venture assets to a nominee company which would hold the Owston interests directly, rather than the transfer of the Owston interests to Tippindo and the transfer of Owston's interest in Tippindo to a nominee company. It was also proposed that any interest that Anderson was to be granted in the nominee company should be dealt with in a separate agreement. A further draft deed was prepared by BDW on 4 November 1993. 195 On about 12 November 1993, Bakrie instructed Graham to insist on the inclusion in the agreement with Anderson that the shares in the nominee company would not be issued to Owston until the debts of Tovehead and Tippindo to BBD were repaid. These debts totalled in excess of $130 million and Graham appreciated that a deal whereby Anderson would not receive his shares until they had been repaid was not likely to be accepted; indeed Graham considered it "a pretty hopeless sort of request". 196 On the morning of 12 November, Dew and Graham had a telephone conversation in which they discussed the terms of the share issue to Owston. Graham promised to send Dew a fax to confirm their discussion which he did later that day. In part it read: Aburizal Bakrie is fully aware of his promise made to Warren that Bakrie will allocate to Warren 40% of shares in a Bakrie nominated company which in turn will own 50% of PT Tippindo Indonesia. However such shares will be held as collateral to Bank Bumi Daya until the debt is fully paid. 197 By the end of November 1993, Bakrie had asked Graham to prepare an agreement to document the arrangement for the shares and on or about 2 December 1993, Graham faxed Dew an agreement which he stated was drafted on Bakrie's instructions and which reflected his own understanding of the terms as they had been agreed between the parties. The agreement provided, inter alia, that: · Bakrie was to procure the issue to Owston of 40.815% of the shares in the nominee company on formation of that company · The nominee company was to be debt free on formation · All dividends on the shares were to be directed by Anderson to be paid to Bakrie until the two BBD debts and the $A8 million plus interest had been repaid 198 The next day, 3 December 1993, Dew asked Graham why clause 4 had been removed from the draft deed and was informed that the Bakrie interests preferred "not to include the arrangements regarding Warren's right to take up 40% in the overall deal and would like to have a separate agreement … drawn up in Jakarta". Graham then sent Dew a fax which attached Graham's letter of 12 November with the following note: Attached is a copy of my fax of 12th November. I have confirmation that the terms as set out are in accordance with Aburizal Bakrie's wishes. I further understand that those terms have been made known to whoever is drafting the agreement. This statement was at best somewhat disingenuous if not rankly misleading as it was Graham himself who was drawing up the agreement. On receiving the fax from Graham, Dew sent it on to Anderson with the following note: I need to go back to him [Graham] with a note to clarify that the [Tovehead and Tippindo] debts [to BBD] are not included and that the share allocation is to be paid for out of dividends. Dew stated that he then had a telephone conversation with Graham in which Dew stated: Can you confirm that Aburizal agrees that Warren is to repay him for the purchase of the shares out of earnings of the nominee company? Also it is essential that the nominee company will be free of debt other than its share of the debt of PT Tipperary Indonesia. According to Dew, Graham replied that he would check and send Dew a fax. 199 In his evidence, Graham denied that this conversation took place, and he referred to an earlier affidavit he had sworn in these proceedings which he stated set out his evidence. In that affidavit he acknowledged that he did have conversations with Dew in almost exactly the same terms as Dew alleged. 200 Later that day, Graham sent Dew another fax which stated in part: … the payment of shares to be allocated will be paid for out of earnings of the nominee company to be formed. It is further to my understanding the nominee company will itself be free of debt on formation but that the nominee company will share the debt of PT Tipperary Indonesia only. The applicants submitted that the reference in the final line to the nominee company sharing in the debt of PT Tipperary Indonesia "only" is an acknowledgment by Graham on behalf of the respondents that the requirement for the nominee company to share in Tovehead's debt to BBD had been dropped. As this debt was in excess of $US70 million, such a concession was hardly surprising. Graham conceded in evidence that this inference could be drawn from this document and he also conceded that the reference to sharing in Tippindo's debt was to the fact that the nominee company, as the holder of a 49% interest in Tippindo, would only "share" in its debt in an accounting or moral sense. 201 Between 3 December and 22 December Dew claimed that he had many conversations with Graham, Greiner and Richmond about getting a finalised agreement regarding the shares but that he was told by Graham that it was being drafted in Jakarta. Graham denied these conversations in his 1998 affidavit but admitted them in his 1997 affidavit. 202 According to Anderson, when he met with Bakrie in Jakarta in mid-December the share agreement was discussed (along with the draft deed on the Sanctuary referred to earlier). However, during the final days leading up to 23 December 1993, the applicants still had not received the respondents' agreement to the share arrangement. Dew insisted that the applicants at least be provided with an interim letter confirming the terms of the share agreement. Dew stated that he told Graham: The letter should set out the agreed terms as we have discussed that were previously included in the original deed. That would be sufficient for settlement… In his 1998 affidavit, Graham denied this conversation. In his 1997 affidavit he said that Dew did ask for an interim letter but not in the terms alleged. 203 The settlement of the overall transaction with BNY was postponed a number of times but, with a receiver in place and ready to move, BNY fixed 23 December as the final deadline to avert its threat to begin to realise its securities. According to Dew, the applicants were "on the 11th hour, right on the death knock". Anderson gave evidence that he was under immense pressure from the bank and that he was "in a corner". It seems that even his own family home was under threat. Apparently his wife and children were being hounded by bank representatives. 204 There was conflicting evidence given by each side as to the events of that day. Nevertheless, during the course of the day, the Share letter was drafted and amended and finally signed by Graham and a copy given to the applicants. At Dew's insistence Graham signed the copy so that the applicants were in possession of a signed original. I will return to the events of 23 December 1993 in this connection later. The Share letter 205 Dew asserted, and Graham conceded, that two or three days prior to settlement, Dew insisted that an interim letter be provided to the applicants to confirm the terms of the share agreement. Dew stated that he said to Graham: The letter should set out the agreed terms as we have discussed that were previously included in the original deed. That would be sufficient for settlement… Graham denied that this statement was made and said that the conversation was in the following terms: Dew: If we cannot get a comprehensive agreement regarding the 40% from Jakarta in time for the settlement we will have to obtain from you an interim letter setting out the terms of the agreement. Graham: A comprehensive agreement needs to be negotiated between Warren Anderson and Aburizal Bakrie. I haven't been able to get it out of Jakarta. I will speak to Chris Greiner about an interim letter. 206 The evidence establishes quite unequivocally that no letter was ever coming "out of Jakarta". However, on the morning of the settlement, a draft of the Share letter was faxed by Richmond to Graham at 8:18am (revealed by the fax header). It was very much in the form of a first draft as at least one of the clauses had not yet been drafted, and was actually in a general commentary form, indicating what the letter had to actually achieve. This first draft also contemplated a second option (apart from the issue of shares in the nominee company to Owston) which was to transfer a 20% interest in the assets themselves to Owston as tenant in common. 207 Dew amended the draft in handwriting in a number of ways, especially by: · deleting the reference to the alternative option of transferring a direct interest in the assets · providing the $A8 million plus interest to be paid not to Votraint, but to "Bakrie", adding a note in the margin which says: "Could be anor Bakrie nominee. Depends who is providing the money. Check??" · adding a provision for "Votraint to be debt free on settlement and must not incur debts other than in normal course of business afterwards" · deleting a provision which read "Votraint further agrees that it will use every reasonable endeavour to procure that Votraint and Owston enter into a legally binding agreement as quickly as practicable to into effect the matters set out in this letter" These amendments are generally consistent with the conversations Dew claimed to have had that day. An early conversation was with Richmond: Dew: I am not particularly happy with the draft letter. I would like to expand the letter and set out more detail and I would also like to make it clear that the funds are being provided by Mr Bakrie and that Warren will have the obligation to repay him not the company. The funds should be provided by Bakrie as was previously set out in clause 4 of the draft deed and the memo from Nalin Rathod of 11 September 1993. Owston is to give security by depositing the share scrip with Bakrie. Votraint must be debt free and must not incur debts other than in the ordinary course of business. We will also have to take out the part about the parties entering into a legally binding agreement later as this must be a binding agreement. Richmond: I think it is fairly clear that Bakrie is providing the money and he will hold the shares as security. However, I will talk to Chris Greiner and see whether we can make some amendments to satisfy you. However, we will not have time to go into much detail before the settlement. Dew: We would like to include all these items in the letter. I would like to see the amended letter before the settlement is completed if possible. Richmond did not appear as a witness. I accept that Dew did have a conversation in these terms with him. 208 From the fax headers that appeared on the various drafts of the letter which were in evidence, it appears that: (a) Greiner and Richmond made amendments to the letter, telephoned them back to BDW and received a new draft at 11:00am; and that (b) after some further changes were made, another draft was faxed to Greiner at Allen's offices at 11:45am. 209 Yet Dew did not see the amended draft of the letter until it was signed by Graham and handed to him at the settlement later in the day. When he did receive the letter signed by Graham, he said that he stated to Richmond that he was not happy with it, as it was still not clear that the funds are being provided by Bakrie and that Warren will have the obligation to repay him, not the company. He said that he then spoke to Graham: Dew: This letter really isn't adequate as it does not make clear that Mr Bakrie is providing the money. Graham: I think we all know that the money is coming from Mr Bakrie and that Warren will have to pay him back. We can't do anything about the letter at this stage. In any event the comprehensive agreement is being drafted in Jakarta and we can make it clear in that document. Graham denied this part of the conversation but did concede that Dew had said to him that the letter was "inadequate" and that he had replied that the comprehensive agreement was being drawn up in Jakarta. Graham well knew this statement to be false. Apart from anything else, it was hardly possible for lawyers in one place to prepare an agreement when the discussions and negotiations about what it was to contain were taking place elsewhere unless technology was being plentifully accessed at the time. Graham, like everyone else, knew that this was not the case. Moreover, neither Graham nor Greiner ever explained how even the Share letter could have been drafted without detailed consultations with the lawyers in Jakarta who were supposedly in charge of preparing the agreement proper. I accept Dew's account of his conversation with Graham on this matter. 210 Graham's account of how the Share letter came to be drafted is set out in his evidence in chief. He stated that, after lunch on 23 December 1993, Anderson came to him and said that he couldn't complete the deal because there was nothing in the Deed of Settlement about the promise to give him 40% of Votraint. In Graham's account, either Dew or Anderson said: "At least you can give us the interim letter confirming the promise of Aburizal." Graham said that he responded: "I have no authority and am in no position to supply such a letter." He said that he then left the meeting and tried to contact Bakrie or Rathod for instructions without success and then reluctantly signed the letter, saying: "I suppose I have to sign the thing". He said nothing about trying to contact the Jakarta lawyers who, if he was otherwise telling the truth, would have had detailed instructions on the matter. 211 Graham had known for days that the applicants required an agreement in relation to the shares. When the bluff of his stonewalling on the agreement was called, he knew that an interim letter embodying the agreement was needed, and he spent the morning of 23 December giving instructions as to its drafting and considering its terms, without I repeat any stated contact with the so-called Jakarta lawyers "in charge" of the matter. Graham undoubtedly had full authority to act on Bakrie's behalf in the matter. Indeed he never raised the issue of any lack of authority in the subsequent dealings with the applicants until the initiation of these proceedings. If he required instructions on this matter, he need and would not have waited until late on the settlement day to try to get them. The evidence and Graham's equivocation and unsatisfactory answers in cross-examination made clear that his account was simply false. The inescapable inference is that Graham concocted it in order to try to avoid the respondents having to meet their obligations in this regard, and to enable him to report "success" in the matter. Intention to create a legally binding agreement 212 The Share letter was an extremely important part of the settlement for the applicants, and its importance was even acknowledged by Graham in evidence. In my view, there is no doubt that the parties intended that the Share letter be a binding legal document, in the sense that it was intended, upon its acceptance, to create enforceable legal obligations. The strongest evidence of this conclusion is Dew's deletion of the term requiring the parties to proceed forthwith to enter into a legally binding agreement and his accompanying statement that the Share letter was such an agreement. Against the quite false spectre of some mysterious document being drawn up in Jakarta, there is no argument to support the respondents' proposition that the Share letter was merely a "letter of comfort", awaiting detailed clarification. The applicants required assurance that the agreement as they understood it was to be binding and the Share letter was an attempt to embody that interest. Moreover, why such a painstakingly word-conscious process would have been added to the other pressures of the day if the letter were not intended to be binding on the parties was never explained. Was the Share letter an accurate and complete record of the agreement? 213 The applicants submitted that the Share letter was an attempt to set down in writing the terms of a pre-existing agreement, rather than an instrument stating the possible elements of an agreement for the first time. The first evidence they relied on in order to support this claim was the wording in the first sentence of the letter stating that Votraint "confirms" its offer, which indicates the existence of a pre-existing offer. 214 However, the primary submission of the applicants in this regard was more contentious. They submitted that "from the standpoint of any objective observer of events, the essential terms of the agreement had been confirmed between Graham and Dew in the exchange of communications on 3 December". According to the applicants, there were no further substantive discussions between the parties as to the terms of the agreement; rather all communication was directed toward documenting the agreement which existed from that time at the latest. They pointed to various conversations and comments made in the lead up to the settlement: for example, Dew's statement to Graham two or three days prior to settlement that "the letter should set out the agreed terms as we have discussed that were previously included in the original deed"; similarly Dew's statement to Greiner that "a short letter setting out a summary of the agreed terms similar to those set out in the original clause 4 should suffice for settlement"; and also Anderson's statement to Graham at the settlement: "Would you give me a letter of confirmation?" 215 Two observations ought to be made on this submission. Firstly, it is clear that on the day of settlement when this letter came to be drafted, it was based on previous discussions between the parties. By contrast to the written submissions of the respondents, no witness suggested that the entirety of the understanding between the parties came to be negotiated on 23 December. However, this fact does not lead to the conclusion that the understanding which may have existed in only general terms as to the structure of the transaction is a legally enforceable agreement. Secondly, I am hesitant to rely on the alleged use of precise language recalled over five years later. Such long recollections are inherently unreliable and while words to the effect recalled were in all probability used, it would be dangerous to rely on them as decisively as now sought. 216 More importantly, the applicants submitted that the circumstances of the creation of the Share letter on 23 December indicated that there was no substantive negotiation occurring but rather discussions solely about inconsequential drafting matters. The respondents went to great lengths to dispute this contention. They pointed out that Dew made a number of amendments to the first draft of the Share letter, some of which were included in the final letter and some of which were not. They identified in great detail the process of the amending of the letter, going through each draft and indicating the changes that were made until the final form was arrived at. They relied on this evidence to support the proposition that the terms of the agreement were not concluded, that negotiations were ongoing on the day of settlement, and that the final form of the Share letter was a product of this process with compromise on both sides. 217 As the drafts themselves were in evidence, the amendments made to the various drafts are clear. The applicants said that Dew's evidence that after his amendments to the first draft, he did not see the Share letter again until it was presented to him later in the day signed by Graham – which so far as I have been able to discern was not in substance challenged – should be accepted. If so, the process of negotiation put by the respondents is largely a mirage, created by the amendments and comments of Greiner and Richmond, presumably with some input from Graham, as they incorporated some of Dew's amendments and some of their own. On Dew's evidence the applicants had simply no involvement in this process. 218 The applicants posed several reasons for the fact that the Share letter does not accord with what they said were the terms of the pre-existing agreement. The first was the circumstances under which the letter was drafted. Unlike the other documents executed on settlement day, the Share letter was drafted entirely during the day itself and, according to Greiner, in extreme haste and under pressure. The settlement day was the final day that this deal could be done, so everything simply had to be completed. Secondly, the matter was largely handled by Richmond, a solicitor with very limited experience. Dew's only involvement in the drafting of the letter was his annotations on the first draft which he discussed only with Richmond, who then proceeded to finalise the letter with Greiner and presumably Graham. 219 The letter itself reveals in its terms every sign of having been drafted hurriedly. Despite the deletion of the alternative proposition involving the transfer to Owston by Branir of a 20% interest in the assets which was in the first draft, the heading was not amended to delete the words "Transfer of Interest in Assets". There is a reference in the letter to "the date on which a legally binding agreement is entered into" which appears to relate to a term, appearing in the first draft but deleted at Dew's insistence, that the parties would "use every reasonable endeavour to procure that Votraint and Owston enter into a legally binding agreement as quickly as practicable". Greiner conceded in evidence that the drafting of this paragraph was something "a competent conveyancer or competent lawyer would not be happy with". 220 Nevertheless, the respondents asserted that the letter's terms were clear but that if the applicants did not think so, or if the terms did not accord with their understanding of the agreement, they had an opportunity to amend it. They said that the applicants could have raised an objection but in fact the letter was accepted by the applicants without demur. The applicants submitted that objections were raised and that it was clear that no one from either side was content with its form. When Dew saw the first draft, he wanted to expand it to "set out more detail", to "make it clear that the funds were being provided by Mr Bakrie", and to say that "Votraint must be debt free". When he saw the final version, he was "not content" with it and thought that the drafting was "poor". Graham also conceded in his evidence that "This letter isn't really adequate". In his cross-examination he admitted that Dew had said to him that the letter "wasn't sufficient or something" and that he "had to agree with him on that point". Graham also admitted that he himself regarded the letter as being "inadequate" and "insufficient" and agreed that it was "vague" and "incomplete". Greiner considered that elements of the letter were not of a high drafting standard. 221 Contrary to the respondents' submissions, there was virtually no evidence challenging Dew's account. Greiner was vague and general about the matter. Graham prevaricated and Richmond was not called. Dew was generally a reliable, truthful and straightforward witness. I believe that his account should generally be accepted. As to lack of opportunity to change the letter, I accept that there was considerable pressure at the time which would have effectively prevented any amendments. I also accept that the applicants received the letter on the understanding that its terms were informed by the discussions which had taken place. 222 The most compelling evidence in favour of the applicants' submission that the Share letter should not be held to be an accurate and complete record of the parties' agreement is the evidence of bad faith on the part of Graham in its preparation which culminated in its late production. There was clear evidence that it was deliberately drawn so as to be vague. In a fax to Rathod on 18 February 1995 after relations between the parties had deteriorated significantly, Graham wrote that the letter had been "deliberately made as vague as possible". Although he had no independent recollection of his instructions at the time the letter was drafted, Greiner stated that the proposition that it was drafted to be as vague as possible was "an obvious inference that could be drawn". On the other hand, he also stated, somewhat unconvincingly, even tendentiously, that he would have had no difficulty in accepting instructions to draft a letter in such a manner provided that no breach of the law was involved. What the instructions were in this case, and what professional and ethical obligations arise in circumstances of this kind, were not traversed in the evidence. As a consequence, although disturbing and disconcerting, I can make no finding on those matters. 223 However, how this situation came about bears some scrutiny. Everyone knew that, at least from the applicants' point of view, the Share letter was critical. It involved the transfer of assets worth millions of dollars and was integral to the settlement proceeding. All parties were advised by lawyers and all other documents emanating from the lawyers were carefully prepared in advance. By contrast the agreement for the issue to Owston of shares in the nominee company was not prepared at all and the Share letter as its temporary substitute did not come to be drafted until virtually the last minute when it was done in haste and under pressure, even then, so far as it involved a lawyer at all, largely by a young lawyer with limited experience required to do his best on quite a difficult and complex matter. 224 The applicants postulated that the delay in drafting the Share letter came about, not because of a genuine accident or oversight but, as with the Sanctuary letter, as the result of a deliberate strategy by Graham – in this case to avoid giving Anderson any interest at all in Branir. If he could prevent the terms of the agreement regarding Owston's shareholding in Branir from being set down clearly in writing, he would be given time and opportunity to persuade the Bakrie interests after the settlement to renege on this part of the deal. At the very least, if he could delay the documenting of the deal until after settlement, the applicants would be in a weak bargaining position. 225 The evidence to support this inference was compelling. Firstly, despite his attempt to shift responsibility to Rathod, it was, as Rathod himself said, Graham who had responsibility for documenting the share agreement. It was Graham who gave instructions to BDW to draft the September deeds. It was Graham to whom Bakrie gave his instructions on the deal in November 1993 and whom he asked to prepare the agreement. It was Graham who dealt with Dew in his attempts to get the agreement documented. Richmond and Greiner both referred Dew to Graham on this matter. 226 Secondly, examination of the evidence clearly reveals that Graham, as well as having at least an active dislike for Anderson personally, was strongly opposed to the share arrangement going ahead, despite Bakrie's wishes. In a fax to Rathod on 6 November 1993, Graham stated that "legally or morally Bakrie does not owe Anderson anything". In a fax to Bakrie dated 11 February 1994 after settlement, Graham stated: "I am strongly against giving Warren anything". In a fax later in 1994 he stated to Frank Hunnewell, the American investment adviser, that he had appealed "for a way to be found to avoid meeting our obligations". In 1995 Graham wrote to Rathod that in 1993 he had been "very much against such a gift of shares". 227 Thirdly, Graham gave evidence that he did not believe that Owston was to be issued the shares until the large debt of Tovehead to BBD had been paid and that he believed that this outcome was the intent of the Share letter and his discussions with Anderson. This evidence was false as was his evidence in his 1998 affidavit on the same subject to similar effect. The true position was revealed in the letter he wrote to Anderson on 29 July 1994: I have very clear written and verbal instructions from the majority shareholders of Branir Pty Ltd, that Owston Nominees Pty Ltd, hold the normal position as an ordinary shareholder in Branir. As such and in accordance with the Articles of Association of Branir Pty Lt, Owston Nominees Pty Ltd is entitled to attend and vote at the occasion of the Annual General Meeting of Branir and to approve the Annual Accounts. I have sought legal advice as to any other special provisions which may apply to an ordinary shareholder and find that there are none which are relevant. 228 Fourthly, there was also evidence that Graham was prepared to deal in bad faith with the applicants. In his fax to Bakrie of 2 December 1993, he stated: Although my letter to Dew specifically states that the new Nominee company will own 50% of PT Tipperary Indonesia [Tippindo], I suspect that Warren expects that the Nominee company will own 50% of Tippindo plus 50% of the Tipperary Group of cattleStations [sic]. Graham admitted sending Dew a fax that was misleading, viz. a copy of a fax from Bakrie dated 16 November 1993 which implied on its face that the shares in Branir would be issued before the Tovehead debt to BBD was repaid, despite Graham claiming that this was not the case. He also agreed that he told Rathod that he had made the Share letter "as vague as possible", and had no problem in exhorting Bakrie to find ways to "avoid meeting [these] obligations". 229 Fifthly, between 3 and 23 December 1993, Graham maintained to Dew that a comprehensive draft agreement on the shares was being drawn up in Jakarta. In his evidence he even claimed that he had drafted an agreement and sent it to Jakarta with his fax of 2 December but had heard nothing further from Bakrie about it and had had no discussions with Bakrie about it. He claimed to have been chasing Jakarta for an agreement throughout this period. In fact Graham's fax of 2 December 1993 indicated that the draft agreement was not attached as it used the words "Before sending you the document itself…". Despite the formidable "paper trail" in this case, the evidence was not able to divulge corroboration for even one communication by Graham with Jakarta seeking "the agreement" or information on its content or status. Rathod denied that Graham "chased" him for an agreement and stated he was under the impression that Graham was drafting it. Bakrie stated that he never received a draft from Graham and that he was not aware of any Indonesian lawyer who had been asked to draft such an agreement. The fact is that Graham had been delegated responsibility for drafting the agreement and his claim to have been attempting to procure Jakarta to produce an agreement was a fabrication. There never was an agreement being drawn up or even discussed in Jakarta, and Graham's statements and intimations to the contrary were lies, in my view quite deliberately so. His evidence on this matter, including the so-called "chase", was an illusion invented to frustrate the applicants from achieving their and Bakrie's goals and the carrying out of the agreement between Bakrie and Anderson on the matter. 230 Furthermore, the evidence suggested that during December 1993 Graham was actively attempting to deceive the applicants about the share agreement. Graham wrote to Bakrie on 2 December 1993 that "Warren is under the impression that this agreement has been drawn up by an unknown lawyer in Jakarta". This statement alone inferred that Graham knew there was no agreement being drawn up in Jakarta, that Bakrie knew it as well, that Graham himself had responsibility for drawing up the agreement, and that Graham was trying to mislead the applicants about the matter for an unworthy and nefarious, even dishonest, purpose. On 3 December 1993 Graham wrote in his fax to Dew that he understood "that those terms have been made known to whoever is drafting the agreement". This statement hardly sits easily with his note to Rathod three days earlier in which he explained that Bakrie had asked him (Graham) to prepare the agreement, or with his fax to Bakrie on 2 December 1993 in which he told Bakrie that he (Graham) had drafted the agreement. Also, his report to Rathod on the day prior to settlement that in a conversation at the time Anderson "did not mention the 20% or the zoo", leads, as it did in relation to the Sanctuary mentioned earlier, to the obvious inference that Graham's plan to deprive Anderson of any interest at all at settlement was on track and that he was pleased to be able to report to Bakrie through Rathod accordingly. 231 The most explicit proof of Graham's deliberate strategy and its failure was evidenced in his fax to Rathod of 24 December 1993 entitled "Report on Settlement", presumably quoted in part, in which he stated: The Sanctuary and BBD we lost, letters handed to Anderson and initialled by me are attached for your signature. We lost the 40% share gift… Graham's attempts in the witness box to explain this comment were contradictory and unsatisfactory and I accept the inference which the applicants asked be drawn. Moreover, the following letter from Rathod in reply to Graham's "Report" demonstrates that the view from Jakarta at the time was the same [sic]: To: Mr. Charlie Graham From: Nalin Rathod Subject: REPORT ON SETTLEMENT – YR LETTER 372/205/CTG DATED DECEMBER 24, 1993 Dear Charlie, Thanks for your above fax and I must say we have done well. Winning or losing is an integral part of business and specially in this case we have won all, sanctuary and BBD are not be taken as lost but part of a fair business deal. Also 40% of VOTRAINT (now BRANIR) is not a gift but a reciprocal appreciation by Pak Ical and it is at a price and hence no gift. I know Charlie, we will talk for days and write for ages, but you will not consider above flexibility's from Pak Ical as not fair for our selves but I must say that what Pak Ical did was absolutely business like and it his total business acumen that got us out of a debt of US$.24 mill plus interest. I think we must give points to Warren also for this, don't you think so? … Over all and on the whole, it was good team work between you, me and Chris from Blake Dawson & Waldron. I sincerely thank you for all your help and humor in dealing with this serious matter. 232 Preferring the evidence of the applicants over that of the respondents on the issue, I believe that Graham deliberately sought to delay the documentation of the share agreement, hoping that he could avoid making any commitment to the applicants. To a certain extent his strategy worked, as he managed to delay the drafting of any documentation until the day of settlement so that the Share letter was prepared hurriedly and incompletely and presented to the applicants with no opportunity to meaningfully amend it. 233 The essence of the respondents' argument was that the terms of the Share letter could not have been already agreed prior to 23 December because there were amendments to the letter throughout the day. In my view this fact does not destroy the argument that the essential terms of the agreement had been agreed and that the process that took place at settlement was merely a drafting exercise to embody them in an acceptable if vague form. The evidence as to the amendments which were made and the significance of those which were not made must be viewed in light of the conversations between the parties on the day, the circumstances in which the letter came to be drafted, including Graham's deliberate attempt to undermine any agreement, and the lack of involvement of the applicants in the drafting process. Were it relevant, the professional obligations of lawyers advising or working with a person with Graham's motives would also require careful analysis, especially having in mind that their actual clients were Bakrie and his companies whose intentions were somewhat different to Graham's, and manifestly more benign and constructive. 234 In my view, the Share letter represented an attempt by the parties to record in writing an anterior concluded agreement as to the issue to Owston of 40.815% of the shares in Branir. After consideration of all the evidence on the events leading to the production of the Share letter, it is clear to me that its creation was coloured by the actions of Graham, who not only deliberately sought to avoid documenting the agreement at all, but then, when that discreditable strategy could no longer be sustained, ensured that the document which was to embody the agreement, was as deliberately "vague as possible". In my view, the applicants have successfully demonstrated that the written document, which prima facie appears to be the written embodiment of their agreement, does not in fact truly record it. Thus, the actual terms of the contract fall to be determined in light of all the evidence. The Branir Shareholding Agreement 235 The applicants submitted that despite the inadequacy of the Share letter to evidence it in writing, there was an agreement in existence on 23 December 1993 which, on formal acceptance by Owston, was intended to give rise to legal relations. According to the applicants, the most important terms of the Branir Shareholding Agreement were that: · Owston was to be issued shares in Branir representing 40.815% of the total shares · Owston was required to pay $A8 million for these shares · Bakrie would lend Owston the $A8 million to be repaid with interest out of dividends declared on the shares from time to time · the shares were issuable immediately upon acceptance of the agreement · Branir was to be free of debt when the shares were issued to Owston A subsidiary term of the agreement was that Owston was to provide "suitable security arrangements" for the $A8 million debt, including leaving the share scrip with Bakrie. 236 The applicants submitted that by 3 December the terms of the share agreement were clear and final and that after 3 December there were no further substantive negotiations as to the terms nor any change in the agreement. According to the applicants, the discussions and negotiations after that time concerned only the documentation of what had already been agreed. Despite a significant degree of hyperbole on the matter, the substantive dispute centred on three only of these terms. I propose to examine each of these terms to evaluate the evidence on which the applicants relied to support their contention that each was agreed and is part of a binding contract between the parties. The security question played no real role in the dispute except perhaps to bolster the respondents' argument that there was in fact no concluded agreement because inter alia no "security arrangements" were ever made. I shall therefore deal with it only briefly. $A8 million payable only out of dividends 237 The first point that ought to be noted is that the Share letter does not contain any express provision which contradicts this proposition. There is no time limit imposed upon when the amount of $A8 million must be paid and the language of the letter does not reveal that immediate or a one-off lump sum payment by Owston on issue of the shares was the intention. Thus, it is stated that interest will accrue on the amount "as reduced from time to time" and that all dividends will be applied "in reduction of" the $A8 million. 238 The respondents submitted that the fact that Dew amended the first draft of the Share letter to include the words "confirms its offer" instead of "agrees" and that a term was inserted allowing Owston a three month period in which to accept the offer, indicates that the payment of $A8 million was not to be solely from dividends. On their construction, this amendment reflected the fact that Owston would require some time in order to consider whether it wished to subject itself to this liability. According to the respondents, if the amount was to be paid solely from dividends, there would be no need for Owston to consider its position as there was nothing in this part of the deal adverse to its interests. The applicants pointed out that the three months acceptance period was inserted by BDW not Dew, and also that no one from either side gave any evidence on this aspect of the letter. In my view, it is not possible to draw an adverse inference on the basis of what scant evidence there is, without having heard from the people involved in its drafting. Richmond gave no evidence at all and Greiner gave no evidence on this particular issue. The applicants put forward a more likely possibility in any event, namely that Dew was still expecting Graham to deliver on his promise of a more comprehensive agreement from Jakarta and so was merely trying to establish in writing the elements of the agreement reached. 239 On the face of the Share letter, I can see no inconsistency with an intention that the $A8 million be repaid solely from dividends. If in fact there was an agreement that this would be the case, then the absence of an express provision setting it out is easily explained by Graham's desire to make the letter "as vague as possible". To ascertain whether there was an agreement in these terms, it is necessary to revisit the events leading up to settlement. 240 It was Dew's evidence that in early September 1993, in a discussion on the documentation of the Macquarie Bank deal, Graham, Greiner or Richmond confirmed to Dew that: …we can agree to [Anderson] having 40% of the new company which will hold the 50% interest in the station…Bakrie will lend the $8 million to him for his 40% and it can be paid back out of dividends or earlier if he wishes. 241 In Rathod's memorandum of 11 September 1993, which was produced after Anderson's meeting with him in Jakarta, he stated, inter alia: Bakrie will give Anderson 40.815% of the nominated company…For this WPA will pay A$8 million to Bakrie. The A$8 million is to be paid from Dividends of PT Tipperary Indonesia. 242 At this point in the deal the nominee company was to hold an interest only in Tippindo to which half of Tipperary would be transferred. No other mode of payment was mentioned. 243 The draft deed prepared in September 1993 incorporated in clause 4 the elements of the agreement as evidenced by Rathod's memorandum. In part, clause 4 stated that the price of the shares would be paid to Bakrie: … by applying the dividends paid in respect of the Anderson Shares for that purpose and Anderson shall not be obliged to pay the Issue Price other than by so applying such dividends There could be no clearer evidence that the agreement, at least at that time, was that the $A8 million was to be paid only from Tippindo dividends. 244 The applicants submitted that there was nothing in the communications between Bakrie and Graham on 12 November, purporting to set out the elements of the deal that Bakrie wanted, that referred to the shares being anything other than self-funding. The fax from Graham to Dew on that day speaks of the shares being "allocated to Warren" but does not mention any mechanism for Owston or Anderson to pay for them. 245 On 3 December 1993, after receiving a copy of Graham's fax at 9:46am, Dew sent a copy to Anderson with a note stating, inter alia: "I need to go back to him with a note to clarify that … the share allocation is to be paid out of dividends." Dew then spoke to Graham and asked for confirmation that the purchase of the shares would be repaid out of the earnings of the nominee company. Later that day, Graham sent a fax to Dew which stated that it was to confirm their discussion of that morning. It said, inter alia: It is my understanding…that the payment of shares to be allocated will be paid for out of the earnings of the Nominee company to be formed. 246 On 13 or 14 December 1993, Anderson met with Bakrie in Jakarta. As part of the discussion between them, Anderson claimed that he asked Bakrie: Just clarify this $8 million. and that Bakrie replied: Don't worry about that. I will lend you the money and you can pay me back out of dividends. Manifestly, Bakrie knew Anderson's difficult financial situation and appreciated that he did not have and was unlikely in the near future to acquire a spare $A8 million to pay for the shares. I do not believe that Bakrie had in mind that Anderson would only be given the shares in some purely nominal sense but would never in fact receive them or acquire the rights that went with them because he could not pay their issue price. 247 The applicants were also able to point to twelve occasions when, both before and after 23 December 1993, the respondents referred in documents to the share arrangement as constituting a "gift" to Anderson or which used words to that effect. The respondents sought to explain these references as either "wrong" (Bakrie), "sarcasm" (Rathod), or "hyperbole" (Graham). These answers were simply not credible. The overwhelming inference from the evidence is that the issue of 40% of the shares in Branir was to be gift in the sense that the shares were to be "self-funding". Although the respondents sought to suggest that such an arrangement constituted a change from what might have been contemplated at one stage as being a gift to a position where the shares were offered on terms, in my view the substance of the transaction was a gift from Bakrie to Anderson reflecting their cordial personal relationship and a "payback" or reward for the $US24 million debt Anderson had forgiven in 1992. The gift may be expressed also as an additional consideration for the transfer of the remaining half of Tipperary, and its terms and structure may have been chosen so as to make it compatible with both or either party's business arrangements. Nevertheless it remained a gift in the sense that Anderson was not going to have to hand over any cash for it. Bakrie's knowledge that at the time Anderson had no present or likely capacity to pay for the shares other than out of dividends is also influential in this conclusion. 248 The explanations by the respondents' witnesses of their respective understandings of this aspect of the transaction were also very difficult to reconcile. Bakrie maintained that he never intended the $A8 million to be repaid solely out of dividends but that it was to be repaid within some undefined "reasonable period". He maintained that all references to payment solely by dividends were "wrong" or "incorrect" and were contrary to "very clear" instructions he had given. Graham contradicted Bakrie by firstly stating that it was his understanding that the shares were to be self-funding; that is, they were to be paid for out of the dividends and Owston could not be required to pay for them otherwise. Graham then tried to avoid the implications of this statement by saying that he believed that the shares would not issue until the $A8 million was paid. He admitted that, as no dividends could be declared until the shares were issued, this structure would have caused a "Catch-22" situation and meant that the whole transaction was disingenuous and artificial. The statement also conflicted with Graham's letter to Anderson of 29 July 1994, previously quoted, which outlined his understanding of the limited rights of minority shareholders. As on so many other matters, Graham's evidence was patently false and I do not accept it. Rathod's evidence was also unsatisfactory, as he sought to maintain, in the face of documents created by him which stated the opposite, that he had always understood that Owston would be required to pay for the shares within some reasonable period. No one was even able to guess at what the period might have been or what would happen to the shares and the rights they bestowed in the meantime. 249 It is my view that there was an agreement between the parties that the $A8 million was to be payable only from dividends. It could, but could not be required to, be paid earlier or in any other way. Not only do the facts reveal this term as being the agreement between the parties, the Share letter itself, while not unambiguously stating it, certainly does not contradict the proposition despite its drafts and accompanying conversations showing that the applicants were asserting it. Given the circumstances surrounding its production and the factual matrix against which it falls to be construed, the Share letter should be so understood. 250 It follows that it is a necessary term of the agreement that the shares were issuable immediately. For if not, there would obviously be no dividends payable and the transaction would be aborted. While that result may have been Graham's intention, it was not the agreement between the parties. Graham said as much in his 29 July 1994 letter to Anderson earlier quoted. The true understanding between the parties was in any event made clear in Graham's draft agreement of 2 December 1993 which provided for the nominee company to issue the shares to Owston immediately upon formation. Further, the share scrip was to be lodged with Bakrie as security for the $A8 million, which certainly could not have happened had the shares not been issued. Branir must be debt free on the issue of shares to Owston 251 Again it should be noted that the terms of the Share letter do not contain any express provision to contradict this proposition of the applicants, although it is agreed that the Anderson interests had wanted its inclusion. In the first draft of the agreement, there was no reference to this issue at all. One of Dew's annotations on that first draft read: "V. [Votraint] to be debt free on settlement and must not incur debts other than in normal course of business." Dew said that he also conveyed this requirement orally to Richmond. The final draft contains the clause: If Owston accepts this offer, Votraint agrees that Votraint will not incur any additional debts other than in the ordinary course of the business of operating its assets. 252 In fact neither the evidence nor the submissions reveal the significance of the absence of any debt in Branir at or after formation. The applicants claimed that the failure to refer to this matter in the Share letter was a result of either the adverse circumstances under which the Share letter was drafted or the intent of those responsible for its creation wishing to render the proposed share issue and its consequences as avoidable as possible, or both. If the company could be formed with substantial debt, even in an inter-company sense, Anderson would never be able to pay for the shares from his share of company earnings because the earnings would be committed elsewhere for a substantial time. In this event, he might never actually receive the shares at all. 253 The applicants also pointed to the communications between the parties in the lead up to settlement. Dew claimed that on 12 November 1993 he had a conversation with Graham in which Dew said: "The nominee company will need to be clean and have no debts." Graham agreed that this conversation had taken place and that he had said: "It will have its share of Tippindo's debt." He explained that he meant "share" in an "accounting" sense. I understood this qualification to mean, as would be the logical reason for the debt free requirement in the first place, that it would be noted in the accounts as an inter-company debt but that repayment would not be required from the ordinary earnings of the company such as would reduce the amount of profits available for distribution at least to the minority shareholder. Specifically this arrangement would not impede the scheme for Anderson to repay Bakrie the $A8 million borrowed to pay for his share from those earnings. 254 The fax which Graham sent to Dew following this conversation did not accord with their conversation as it included a provision that the shares be held as collateral until the Tovehead debt to BBD was fully repaid. Dew claimed to have clarified this matter with Graham in a further conversation in which he insisted, and Graham agreed, that Votraint be debt free. 255 On 30 November Anderson met with Graham at the Regent Hotel, Sydney and asked for confirmation that the nominee company would not have any debt when Owston was issued its shares. Graham subsequently sought confirmation from Jakarta on this point and his draft agreement of 2 December, which he stated reflected his understanding of what Bakrie wanted and what had been agreed with Anderson, provided in its first clause provided that the "Nominee company on formation will be free of debt." Bakrie agreed in cross-examination that this provision accorded both with his instructions to Graham and with his understanding of how the transaction was to be constructed. 256 On 3 December, during the exchange of communications between Dew and Graham, this issue was raised. After receiving Graham's fax attaching a copy of his letter of 12 November (which referred to the debts to BBD), Dew sent it on to Anderson with a note saying: "I need to go back to him with a note to clarify that … the debts are not included". Dew and Graham then had a conversation which resulted in Graham sending a confirmatory fax to Dew later in the afternoon. In part it read: "It is my understanding … the nominee company will itself be free of debt on formation but that the nominee company will share the debt of PT Tipperary Indonesia only." Anderson also stated that during his conversation with Bakrie in mid-December in Jakarta, he confirmed that the nominee company would not share in Tovehead's debt to BBD. 257 The applicants further submitted that there was commercial logic to the calculation of the $A8 million which is consistent with Branir being debt free on formation. The respondents were purchasing Owston's joint venture assets for $A20 million. In return Owston was to receive a 40% interest in those assets through its shareholding in Branir, for which it was to be required to "pay" $A8 million, which is 40% of the notional asset value of $A20 million. The applicants submitted that this commercial rationale would be defeated if Branir shared in Tovehead's debt to BBD as Owston's 40% stake in the company would be worth not the $A8 million it was required to pay, but 40% of $A20 million less the amount of the debt which was substantially more. 258 The books of Branir in evidence show that the company does in fact owe Nusantara, another Bakrie company, $A20 million plus interest for its loan or advance to Votraint/Branir, described as a subordinated loan, to pay Owston for its half share by assisting Owston and Anderson to pay out BNY. Part of the relief sought by the applicants in these proceedings relates to the removal or satisfaction by the respondents of this debt but the parties agreed in their submissions that this matter did not need to be determined at this time and could await discussion after publication of these reasons for judgment. 259 In light of the events and communications leading up to the drafting of the Share letter, and Graham's subsequent admissions, I accept the applicants' contention that there was a clear understanding that Branir was to be in substance debt free on the issue of the shares to the applicants, presumably so as not to interfere with or impede Owston's repayment of the $A8 million. The $A8 million is payable to Bakrie not Branir 260 Although the Share letter specifically states that the $A8 million is to be repaid to Votraint, the applicants submitted that this direction did not reflect the agreement between the parties. They pointed firstly to clause 4 of the September draft deed, the final agreement between the parties before Macquarie Bank departed the scene. In that clause it was spelt out very clearly that it was "Aburizal Bakrie" who agreed to procure the issue of shares to Anderson, to whom Anderson was to pay their $A8 million price tag, to whom the dividends on the shares were to be paid until $A8 million plus interest had been earned, and with whom the share certificates were to be lodged as security for the debt. Graham agreed that this was his understanding of the agreement that had been reached. Bakrie, however, claimed that this clause was "wrong", although the provision for the dividends to be paid to him "or as he may direct" was "fine". 261 Apart from the attempt to incorporate into the deal the repayment of the BBD Tovehead debt, which they rejected, the applicants submitted that from that point there was no substantial change to the deal at all, including the term that the $A8 million was to be supplied by and repaid to Bakrie. When Graham came to draft the agreement in early December, he used clause 4 of the September deed as a basis for his draft, changing it only to incorporate the BBD debt requirement. Significantly, this agreement speaks of "ARB" (Bakrie) procuring the issue of the shares to Anderson, and Anderson directing payment of dividends to "ARB". Thus Graham clearly understood at this stage that the money was to be paid directly to Bakrie. As his evidence was that he received no further instructions on this matter, I conclude that this understanding continued up to the time he came to draft the Share letter on 23 December. 262 Dew obviously believed on 23 December 1993 that the money was to be paid to Bakrie rather than to Branir, as when he marked up the first draft of the letter he crossed out Votraint where it appeared as recipient of the $A8 million and wrote in "Bakrie". He subsequently wrote in "B" in those terms of the letter which provided for repayment through dividends to "Votraint". His marginal note, earlier quoted, "Could be anor Bakrie nominee. Depends who is providing the money. Check??", earlier quoted, also supports this view. 263 Dew also claimed, as noted earlier in another connection, that in his conversation with Richmond he stated: I am not particularly happy with the letter. I would like to … make it clear that the funds are being provided by Mr Bakrie and that Warren will have the obligation to repay him and not the company. The funds should be provided by Bakrie as was previously set out in clause 4 of the draft deed… To which Richmond is said to have replied: I think it is fairly clear that Bakrie is providing the money and he will hold the shares as security. However I will talk to Chris Greiner and see whether we can make some amendments to satisfy you. However we will not have time to go into much detail before the settlement. However, when the final draft was presented to Dew, the changes from "Votraint" to "Bakrie" had not been made. The respondents submitted that the terms were subject to negotiation and that this change had not been agreed to. However, Dew's evidence was that he said to Richmond that: …it is still not clear that the funds are being provided by Bakrie and that Warren will have the obligation to repay him, not the company. Dew also related a conversation with Graham on this matter at the time: Dew: This letter isn't really adequate as it does not make clear that Mr Bakrie is providing the money, Graham: I think we all know the money is coming from Mr Bakrie and that Warren will have to pay him back. We can't do anything about the letter at this stage. In any event the comprehensive agreement is being drafted in Jakarta and we can make it clear in that document. 264 I accept this evidence not least because of its consistency with so much else. The applicants also relied on numerous references in the communications that passed in the months leading up to and after settlement, which described the share issue agreement as being between Anderson and Bakrie. The respondents rightly retorted that "Bakrie" was often used synonymously with the Bakrie Group of companies and loosely to describe any entity controlled by Bakrie, which in this case could have included the nominee company to be formed. It is therefore difficult to place much weight on these references as indicating anything other than the general nature of the transaction. 265 More convincing, however, is the fact that if the deal were to be structured so that the nominee company was in effect to lend the $A8 million to Owston for the shares, there would almost certainly be a breach of the provisions of the Corporations Law prohibiting a company financing the acquisition of its own shares. Greiner admitted that he thought it was a "possibility" that the Share letter breached the Corporations Law in this way and Graham said in his evidence that he had received advice that the letter did breach the law. 266 The evidence supports the conclusion that there was an understanding between the parties throughout the period leading up to settlement that the money would be provided by Bakrie and that the dividends on the shares would be used to repay Bakrie. I accept, on the balance of probabilities, that there was an awareness that to provide for the repayment of money to Branir might have constituted a breach of the Corporations Law, which in my view makes it extremely unlikely to have been the intention or agreement of the parties. I am therefore constrained to find that, although the required amendment was not made to the Share letter, the true agreement between the parties in place by 23 December 1993 was that the $A8 million was to be provided by Bakrie and was to be repaid to Bakrie or his nominee. Security for the debt 267 The Share letter was prepared and submitted by the respondents and they must stand or fall by any looseness or incompleteness of its terms and the arrangements put in place for its enforcement. In their final submissions though not in or by evidence, they sought to establish some requirement that, in addition to the share scrip, the applicants supply as security for the $A8 million "such other realisable property as would give the appropriate level of comfort in Branir". No such interpretation of the Share letter was sought in the cross claim, there was no cross examination or even examination in chief on the matter, and in any event I believe that the contention is unsustainable. So was the companion argument, also raised nowhere but in the respondents' final submissions, that the deposit of the share scrip constituted some type of equitable mortgage which meant that Owston could only vote its shares as the company directed. As Bakrie well knew that following the December 1993 settlement the applicants had little to offer by way of external or additional security for the debt, and that he himself would be continually or significantly influencing the cash flow into Branir which was to fund the repayment of Owston's debt, security supplemental to the lodgment of the share scrip effectively had no meaning. It is clear enough that this term of the Share letter was simply allowed to wither. Moreover, a number of pieces of evidence, including the deed drafted by BDW (Greiner) in September 1993, the subsequent document of Rathod given to Anderson in Jakarta and approved by Bakrie, and the exchanges of paper and words between Dew and Bakrie's representatives on the day of settlement, make clear that the lodgment of the share scrip had been accepted as the only security. As is obvious, it also evidences an intention that the share scrip actually issue. In summary 268 In my view, the differences between the agreement alleged and the Share letter raised by the respondents are largely pedantic, discovered in an effort to justify their position. To a large extent, and certainly on the major issues, the respondents do not seriously take issue with the evidence, except in some minor ways. In the main, they did not advocate their witnesses' evidence, in particular Graham's and parts of Bakrie's, as more believable than the applicants, when it might have been expected that a party who was presenting the truth would argue more than simply that the other side had not sufficiently proved its case. Despite some inconsistencies and anomalies, which are hardly surprising given that these events occurred up to 10 years ago, the evidence, including many contemporaneous documents, reveals quite clearly that there was an agreement between the parties which embodied the terms set out in the Branir Shareholding Agreement. I hold that the agreement was binding and enforceable in those terms as from 23 December 1993, and that the Share letter represented a failed attempt to embody that agreement in writing. CONCLUSIONS 269 In view of the complexity of this matter, it is not appropriate for me to attempt to frame final orders without hearing submissions following the publication of these reasons for judgment. To assist this process, I propose for discussion a series of draft declarations and orders in Appendix 7. These proposals are not the Court's final views on the matters concerned. Nor are they intended to be complete. A number of issues remain including specific remedies, the subordinated loan involving Nusatara, the question of ministerial consent for the Sanctuary sub-lease or other exclusive grant, the term of the occupancy of the Sanctuary, and several other matters including costs. 270 I direct the parties to seek to achieve consent orders and declarations to achieve the results arising from these reasons for judgment. If agreement is not possible, the matter may be mediated by a Registrar or another agreed mediator or may be listed for argument before me on a date to be arranged with the Associate. Whether a mediated or court resolution is sought, the parties are to submit their separate proposed forms of relief five days prior to the resolution proceedings. 271 I express my appreciation to counsel and their instructing solicitors and clerks for their assistance in this difficult case, and to the parties and their staffs for their many courtesies especially at the hearings in Bali and at Tipperary Station, and in the Court's inspection of the Sanctuary and Tipperary itself. The applicants' submissions provided a useful description and summary of the development of the Sanctuary which, together with the evidence and my observations at the on-site inspection, I have largely used. I thank those responsible for this contribution to this judgment. Indeed, the submissions of both parties were of a particularly high quality without which, in view of the complexity and detail of the case, these reasons for judgment would not have been achievable in any reasonable time frame or with the same degree of consideration of the issues. I acknowledge the work of those responsible for their excellence. I certify that the preceding two hundred and seventy-one (271) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marcus Einfeld. Associate: Dated: 25 February 2000 Counsel for the Applicant: Mr J. N. West QC and Mr M. J. Steele Solicitor for the Applicant: Deacons Graham & James Counsel for the Respondent: Mr B. W. Rayment QC and Mr J. B. Whittle Solicitor for the Respondent: Blake Dawson Waldron Date of Hearing: 31 August 1998 1, 2, 7 and 9 September 1998 28 and 30 November, 1998 1, 3 and 4 December 1998 18, 19, 20 21 and 22 January 1999 20, 21, 22 and 23 April 1999 Written Submissions completed: 30 April 1999 Date of Judgment: 25 February 2000 OWSTON NOMINEES NO 2 PTY LIMITED & ORS v BRANIR PTY LIMITED & ORS NG 3184 of 1995 APPENDIX 1 Referred to in the Reasons for Judgment at paragraph 4 OWSTON NOMINEES NO 2 PTY LIMITED & ORS v BRANIR PTY LIMITED & ORS NG 3184 of 1995 APPENDIX 2 Referred to in the Reasons for Judgment at paragraph 15 OWSTON NOMINEES NO 2 PTY LIMITED & ORS v BRANIR PTY LIMITED & ORS NG 3184 of 1995 APPENDIX 3 Referred to in the Reasons for Judgment at paragraph 20 OWSTON NOMINEES NO 2 PTY LIMITED & ORS v BRANIR PTY LIMITED & ORS NG 3184 of 1995 APPENDIX 4 Referred to in the Reasons for Judgment at paragraph 24 OWSTON NOMINEES NO 2 PTY LIMITED & ORS v BRANIR PTY LIMITED & ORS NG 3184 of 1995 APPENDIX 5 Referred to in the Reasons for Judgment at paragraph 36 OWSTON NOMINEES NO 2 PTY LIMITED & ORS v BRANIR PTY LIMITED & ORS NG 3184 of 1995 APPENDIX 6 Referred to in the Reasons for Judgment at paragraph 55 OWSTON NOMINEES NO 2 PTY LIMITED & ORS v BRANIR PTY LIMITED & ORS NG 3184 of 1995 APPENDIX 7 Referred to in the Reasons for Judgment at paragraph 265 DRAFT ORDERS & DECLARATIONS FOR DISCUSSION The Sanctuary The Court declares that there was as at 23 December 1993, and still subsists, an agreement between the parties that subject to ministerial consent being obtained, a lease or other substantial exclusive grant be given to the first applicant over the area of Tipperary Station known as the Tipperary Wildlife Sanctuary plus an additional 20,000 acres adjacent to the Sanctuary (the Sanctuary area) for the purposes of expanding and operating the Sanctuary and building a residence and other necessary buildings, without rental being payable to the first and second respondents. The 20,000 acres are not to include any part of the existing homestead area or mango plantation but is to cover, as closely as possible given the constraints of an appropriate professional survey, the land adjacent to the present Sanctuary (generally known as Stages I, II, III and IV) up to approximately the northern boundary of the paddock known as "Campbell's" and west of the road as far as necessary to encompass 20,000 acres of the paddocks known as Turkey Flat, Little Gardner, Jumbo, Electric Fence and Boords. The Court orders that: 1. the parties select a mutually acceptable qualified chartered surveyor to undertake a survey of Tipperary Station, at the cost of the applicants, with a view to delineating an area of 20,000 acres in accordance with this declaration 2. in consultation with the applicants, the first and second respondents take all necessary steps to obtain ministerial consent for the lease or other exclusive grant to the applicants or either of them of the Sanctuary and the additional 20,000 acres delineated by the survey 3. if consent is obtained, the first and second respondents are to take all necessary steps to give effect to the consent including, but not limited to, the preparation and execution of the necessary formal documents in registrable form providing for: (i) free and uninterrupted access to the Sanctuary area for the applicants and others authorised by the applicants to enter the Sanctuary area; and (ii) access to water, electricity and other necessary services from Tipperary Station, to be paid for by the applicants at cost The Shares The Court declares that there was, as at 23 December 1993, and still subsists, a binding agreement between the applicants and the respondents embodying the following terms: · The third respondent will procure the first respondent to issue, and the first respondent will issue, to the first applicant, and register the first applicant as the holder of, such number of shares in the first respondent as will result in the first applicant becoming the holder of 40.815% of the first respondent's issued share capital (the Shares) · The first respondent is to be debt free on issue of the shares · The first respondent will not thereafter incur any debt other than in the ordinary course of business of operating its assets · In consideration for the third respondent procuring the issue of the Shares and the first respondent issuing the Shares, the first applicant will owe the third respondent the sum of $8 million · The $8 million will bear interest at the Indonesian market deposit rate for whichever is the greater of Australian dollars or the equivalent number of rupiahs from time to time averaged quarterly · The $8 million plus interest so calculated will be required by the third respondent to be repaid by the first applicant from, and only from, such dividends as may be declared and paid on the Shares from time to time · The first applicant will irrevocably direct the first respondent to pay all dividends declared and paid on the Shares from time to time to the third respondent until such time as the $8 million plus interest is repaid · Until such time as the $8 million plus interest is repaid, the third respondent is to hold the certificate evidencing the Shares as security for the repayment of the $8 million · The first applicant will pay all stamp duty resulting from the issue of the Shares