New South Wales Court of Appeal Killen v Rennie & 1 Ors [2005] NSWCA 392 CITATION: This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 5 August 2005 JUDGMENT DATE: 15 November 2005 JUDGMENT OF: Mason P at 1; Santow JA at 2; Brownie AJA at 131 DECISION: Appeal allowed with costs (see Orders at [130]). Please Note: Orders made pursuant to this judgment have been varied by judgment [2006] NSWCA 189 dated 14 July 2006. CATCHWORDS: TRUSTS – Contest over the ownership of the proceeds of mortgaging a former family home – whether at acquisition date the second respondent, Aroona (a family company) held the former family home on resulting trust for the appellant, Mrs Killen – whether the equitable interest in former family home passed to Mrs Killen pursuant to resolution recorded in minute of 8 July 1974 Aroona directors' meeting. LEGISLATION CITED: Conveyancing Act s23C(1)(a); s54A Calverley v Green (1984) 155 CLR 242 CASES CITED: Shephard v Cartwright [1954] 3 All ER 649 Rosanne Lyle Fulton KILLEN (Appellant) PARTIES: Kenneth John RENNIE (First Respondent) AROONA DEVELOPMENTS PTY LIMITED (in liquidation) ACN 008 441 129 (Second Respondent) FILE NUMBER(S): CA 40054/04; 40044/04 M D YOUNG (Appellant) COUNSEL: R HUGH (Solicitor) - submitting appearance (First Respondent) J T JOHNSON (Second Respondent) McKells (Appellant) SOLICITORS: Hugh & Associates (First Respondent) Watson Mangioni (Second Respondent) LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): SC 1810/02; SC 4112/02 LOWER COURT JUDICIAL OFFICER: Austin J IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40054/04 CA 40044/04 SC 1810/02 SC 4112/02 MASON P SANTOW JA BROWNIE AJA 15 NOVEMBER 2005 Rosanne Lyle Fulton KILLEN v Kenneth John RENNIE & 1 Ors Judgment 1 MASON P: I agree with Santow JA. 2 SANTOW JA: INTRODUCTION AND OVERVIEW This appeal is essentially the continuation of a contest between the appellant, Mrs Killen, and the respondent liquidator of two Killen family companies, Aroona Developments Pty Limited ("Aroona") (the second respondent) and Rotor-Work Pty Ltd ("Rotor-Work"). The contest is directly over the ownership of the proceeds of mortgaging a former family home, Piccadilly Gardens. Mrs Killen occupied it with her then husband Mr Bryce Killen and their children. Those proceeds from the mortgage were on-lent by Aroona to Rotor-Work. Mrs Killen failed at first instance before Austin J in establishing that she had a beneficial interest in Piccadilly Gardens and consequently in those proceeds. This appeal challenges that result. 3 To elaborate, the trial judge concluded, contrary to the contentions of Mrs Killen, that (a) Aroona never held Piccadilly Gardens on resulting trust for Mrs Killen, though she provided the consideration for its purchase and serviced many of the mortgage payments, on the basis that the presumption of a resulting trust was rebutted by evidence manifesting a contrary intention, and (b) Aroona did not later dispose of the equitable interest in Piccadilly Gardens to Mrs Killen pursuant to a resolution of a directors' meeting of Aroona on 8 July 1974. 4 The trial judge's reason for concluding against such a disposal in (b) above was that he concluded Mrs Killen gave no consideration to Aroona for the beneficial interest in Piccadilly Gardens. The expressed consideration was partial forgiveness of a debt said to be owed by Aroona to Mrs Killen. But draft accounts at the time (30 June 1974) were, according to the trial judge, sufficient evidence that there was no such debt, but rather a debt owed by Mrs Killen to Aroona. This issue turns in part upon the status of the draft accounts of 30 June 1974 and their reconciliation with subsequent accounts in the events that happened. 5 The end result was that the trial judge found that Aroona was entitled to prove in the liquidation of Rotor-Work (proceeding No. 1810/02) but that Mrs Killen was not. Further, he concluded in parallel proceedings that Aroona did not hold the loan monies on trust for Mrs Killen (proceeding No. 4112/02). This appeal resolves itself into a contest between Mrs Killen and Aroona, both of whom are seeking to prove in the liquidation of Rotor-Work for the same debt. The liquidator Mr Rennie submits to any order of the Court, except as to costs, and has played no role in the appeal. 6 There are therefore two principal issues on the appeal: (a) whether at the date of acquisition, Aroona held Piccadilly Gardens on resulting trust for Mrs Killen or, if not, (b) whether the equitable interest in Piccadilly Gardens passed to Mrs Killen pursuant to the resolution of the Aroona directors' meeting recorded in the minute of 8 July 1974. SALIENT FACTS 7 I set out below the salient facts which are essentially undisputed; where these are disputed I will indicate how. 8 Rotor-Work was incorporated in 1963 and Aroona was incorporated in 1964. They were part of a group of companies referred to in evidence as "the Killen Group". 9 Mrs Killen's husband, Mr Killen, was a director and shareholder of Rotor-Work (and became a director of Aroona in 1979) and Mrs Killen was a director and shareholder of Aroona. 10 On 27 August 1964, Aroona became the registered proprietor of three strata lots comprising Unit 82 and two car spaces, Piccadilly Gardens, in Woollahra. 11 Mr and Mrs Killen lived in Piccadilly Gardens from that time until 1969 and from 1977 until the property was sold in 1995. 12 The trial judge's findings of fact as to how Piccadilly was acquired and subsequently dealt with by Aroona can be found below in my summary of the trial judge's findings. 13 Rotor-Work was wound up in a creditors' voluntary winding up pursuant to a resolution passed on 20 January 1993 and Mr Rennie was appointed liquidator. Aroona was wound up by order of the Federal Court on 9 March 1995. Mr Vouris was appointed liquidator on 1 May 2000. 14 Aroona lodged a proof of debt with Mr Rennie on 31 March 2000 and Mrs Killen lodged a proof of debt on 30 May 2000. The latter was later withdrawn or rejected and a second proof of debt lodged on 30 April 2002, this being the subject of this appeal. 15 Mr Rennie issued a Notice of Rejection of Formal Proof of Debt in relation to Aroona's proof on 21 February 2002 and issued a similar Notice of rejection in relation to Mrs Killen's second proof on 10 July 2002. He regarded the claims as insufficiently supported by particulars and evidence. The Notice of Rejection of Mrs Killen's proof referred to the fact that Aroona's proof was subject to an appeal. 16 Findings as to the mortgage over Piccadilly Gardens appear below. THE JUDGMENT AT FIRST INSTANCE 17 It is convenient to group the relevant findings of fact or mixed fact and law under the two principal issues the subject of this appeal. The first issue is whether at the date of acquisition, 27 August 1964, Aroona held Piccadilly Gardens on resulting trust for Mrs Killen, or whether the presumption in that behalf, as the trial judge held, had been successfully displaced by the manifestation of a contrary intention. 18 The second issue is whether, assuming there were no resulting trust, the equitable interest in Piccadilly Gardens passed to Mrs Killen pursuant to the resolution of the Aroona directors' meeting, recorded in the minute of 8 July 1974 (and subsequently noted in later documents). I shall refer to these as the first issue and second issue respectively. First issue: Whether a resulting trust arose at acquisition . 19 In relation to the acquisition and mortgaging of Piccadilly Gardens between 1964-5, the following findings were made. 20 The purchase of Piccadilly Gardens was settled in September 1964. The settlement letter from the solicitors for Aroona to Mrs Killen referred to payment of purchase money of £24,500, but it did not refer to the source of this money nor did it suggest that Mrs Killen would be required to make any payments. The letter was addressed to Mrs Killen but the trial judge inferred that it was in her capacity as director of Aroona (Red, 40E). 21 Eight months later, on 14 April 1965, Piccadilly Gardens was mortgaged to the MLC for an advance of £25,000. The loan was credited to the company's account. The trial judge found that there was nothing in the document to suggest that Mrs Killen had any role in the transaction (Red, 40M). 22 The trial judge was satisfied, on the balance of probabilities, that the document purporting to be a copy of the financial statements of Aroona for the year ended 30 June 1974 was indeed a copy and not a draft (Red, 41W). (That finding in particular is challenged on appeal; see below.) 23 That 1974 balance sheet was the only documentary record for Aroona found by Mr Rennie in respect of any period prior to 1975 (Red, 41O). 24 The trial judge inferred that the financial statements and reports for Aroona for subsequent years had been adopted by the directors and company in general meeting, but that the 1974 balance sheet had not (Red, 41L-O). 25 The trial judge accepted the unchallenged evidence that: (a) Mrs Killen provided the funds for the purchase of Piccadilly Gardens, although the property was transferred into Aroona's name; (b) Mrs Killen made mortgage payments to MLC and attended to other outgoings for a long time (Red, 42F). I should note that there is no record of that loan being repaid by Aroona, save insofar as the later balance sheets indicate its reduction. 26 The trial judge did not accept that this was sufficient to establish a resulting trust of Piccadilly Gardens in favour of Mrs Killen as beneficiary (Red, 42S). 27 While equity will presume that a person acquiring the legal title to property with funds provided by someone else is intended to hold the property in trust for that other person, this is in the absence of evidence of a contrary intention (Red, 42X). The trial judge found that neither Mrs Killen nor Aroona intended that Piccadilly Gardens be held upon any trust, either at the time of acquisition or while mortgage payments were being made by Mrs Killen, on four bases (Red, 43F ff): (a) The circumstances surrounding the acquisition of the property in 1964 and its mortgage in 1965 suggesting an intention that the company was to hold it beneficially, in particular, (i) the evidence indicated that the company was incorporated in 1964 to hold the property, in circumstances where it was apparently open to Mrs Killen to have acquired the property in her own name, (ii) as director of the company Mrs Killen was aware when dealing with the property of the way in which it was owned (Red, 43K-T). (b) Lack of evidence from Mr or Mrs Killen explaining the circumstances in which payments were made or any arrangements leading to the vesting of legal title to the property in the company rather than her (Red, 43U-44D). (c) Inconsistency of the minute of the directors' meeting of Aroona on 8 July 1974 with the assertion that before that time Mrs Killen was already the beneficiary of the property on resulting trust, rather than a creditor of the company in respect of payments she may have made (Red, 44E-J). (d) Inconsistency of the 1974 balance sheet with the proposition that Mrs Killen was the beneficiary of the property as from 1964 given that the balance sheet shows: (i) Piccadilly Gardens as a fixed asset of the company, with no notation of any beneficial interest on the part of Mrs Killen, and (ii) a mortgage to MLC secured over Piccadilly Gardens as a long term liability of the company, with no mention of mortgage payments being made by Mrs Killen (Red, 44K-R). 28 The trial judge found that this evidence was sufficient to rebut any presumption of a resulting trust, with the consequence that Aroona was the legal and beneficial owner of Piccadilly Gardens up to July 1974 (Red, 44S-V). Second Issue: Whether an equitable interest arose as a result of the 8 July 1974 transaction . 29 The trial judge's findings with respect to this issue focus on an inconsistency between: (a) the terms of the minute of 8 July 1974 by which Aroona purports to sell Piccadilly Gardens to Mrs Killen in return for partial satisfaction of a debt said to be owed by Aroona to Mrs Killen in the amount of $67,922.87, and (b) the 1974 (draft) balance sheet of Aroona reflecting its financial position eight days earlier (as at 30 June 1974). This has Piccadilly Gardens included as a fixed asset of Aroona at $55,704 (it was eight days later re-valued at $70,000). Also under current assets, Mrs Killen is shown as a debtor of Aroona in the amount of $47,282.96 rather than a creditor, though Mr Killen (alone) is shown as a creditor of Aroona in the amount of $149,037.43. 30 The trial judge preferred to rely on the draft 1974 balance sheet, concluding that it depicted the true position as one where Mrs Killen was at the time (8 July 1974) a debtor not creditor of Aroona. 31 Central to Mrs Killen's case was the reliance on the minute of a meeting of the directors of Aroona purportedly held on 8 July 1974. It was attended by her and Mr Leigo (accountant and director) as well as by Mr Killen and a solicitor, Mr Rofe. The minute purports to describe Aroona's indebtedness to Mrs Killen and to outline how it should be reduced. The minute is extracted at (Red, 45), (see Blue, 19). I quote it below in full noting that it was signed by Mrs Killen and Mr Leigo: "It was noted that the Company's indebtedness to Mrs R L F Killen at 30th June 1974 was $67,922.87. It was agreed that the Company should immediately repay as much of this debt as possible and that a firm arrangement covering its repayment should be entered into with Mrs Killen. It was decided that part of the debt should be satisfied by the sale to Mrs Killen of the Company's beneficial interest in Unit 82, Piccadilly Gardens and it was agreed that the current market value of Unit 82, Piccadilly Gardens was $70,000 and that since at 30 June 1974, an amount of $41,009.83 was still outstanding on Unit 82 under the mortgage to MLC the value of the Company's beneficial interest to be transferred to Mrs Killen was $28,990.17 and that, in consideration of this sale that the Company's indebtedness to Mrs Killen should be reduced as from today by the amount of $28,990.17. It was agreed that in order to further reduce the balance of its debt to Mrs Killen that the Company should continue to make all payments in respect of Unit 82 Piccadilly Gardens including payments of principal and interest to MLC, payments for maintenance, Council rates, water and electricity rates and Land Tax and that the Company's indebtedness to Mrs Killen would be thus progressively reduced by the amount of each payment and that at the termination of the mortgage with MLC the full free and unencumbered legal title would be transferred to Mrs Killen, her heirs or assignee. It was also agreed that at a more suitable time in the future the Company should endeavour to accelerate the repayment of its present debt to Mrs Killen and of any further advances from her by obtaining satisfactory finance from an alternative source." 32 Mrs Killen claimed that the minute was evidence that on that day (8 July 1974) she entered into a transaction with Aroona for the acquisition by her of the equitable ownership of Piccadilly Gardens (Red, 46C-J). 33 The trial judge first dealt with two preliminary issues. He found that the "contract" purportedly recorded in the minute was not vitiated by any conflict of interest (Red, 46U-47L). He concluded that the minute constituted a sufficient note of memorandum under s54A Conveyancing Act (Red, 47M-S). These findings are not disputed in any notice of contention. 34 However, the trial judge was satisfied, on the balance of probabilities, that eight days before the meeting of 8 July 1974, Mrs Killen was a debtor rather than a creditor of Aroona Developments (Red, 48L-O). 35 The trial judge noted that it was not suggested that the credit shown in favour of her husband, Mr Killen, of $149,037.43 in the 30 June 1974 balance sheet had any relevance to Mrs Killen's financial position vis a vis the company (Red, 48G). 36 The finding that Mrs Killen was a debtor was based on the trial judge's inference that the sum of $47,282.96 appearing next to Mrs Killen's name on the 1974 balance sheet referred to a loan by the company to Mrs Killen for that amount (Red, 48B-K). 37 He observed that there was no evidence that anything happened in those eight days to convert her position from debtor to creditor. 38 The trial judge inferred from the absence of evidence from Mr Wood (auditor for 1975 accounts) and Mr Allen (company accountant) that no explanation to be given by them would have been favourable to Mrs Killen (Red, 48N-49C). 39 The trial judge rejected an application by counsel for Mrs Killen for leave to reopen to adduce evidence from Mr Rofe, a solicitor present at the 8 July meeting on two bases: (a) The pertinence of evidence explaining the 8 July transaction should have been apparent before the hearing, and (b) The funds available for litigation to the two companies in liquidation were limited (Red, 49D-N). 40 The trial judge held that the transaction recorded as a "sale" in the minute of the directors' meeting could not have been anything more than a voluntary transaction. He concluded that: (a) Any "contract" recorded in the minute was not a specifically enforceable transaction because it was unsupported by valuable consideration (there being according to the trial judge no balance of indebtedness owed by Aroona to Mrs Killen), and (b) On the other hand, if the minute were treated as evidence of a decision by the company purporting to vest equitable ownership in Mrs Killen, the absence of writing would mean that the decision would be ineffective having regard to s23C(1)(a) Conveyancing Act (Red, 49P-X). 41 The trial judge rejected Mrs Killen's submission that the contention that she in fact owed Aroona money on 8 July 1974, rather than the reverse, was in substance an allegation of fraud on her part (Red, 50B-T). Subsequent Events to 8 July 1974 as dealt with in the primary judgment. 42 The trial judge reviewed the subsequent financial statements in some detail and made various findings but as these findings are disputed, I will deal with these under disposition below. 43 However, I should here deal with the subsequent events concerning mortgages over Piccadilly Gardens. 44 The mortgage to the MLC was discharged in 1989. 45 Aroona mortgaged Piccadilly Gardens to ANZ Bank on 17 February 1988 in order to provide additional security in respect of the indebtedness of Rotor-Work (Red, 53Q-X). 46 The mortgage to ANZ makes no reference to Mrs Killen having a beneficial interest in the property (Red, 54C). 47 Mr Killen gave evidence that shortly after the execution of the mortgage, a document was prepared by legal officers of the Bank showing Mrs Killen as a beneficial owner of the property (Document (1)). However, no copy of the document was located (Red, 54C-G). 48 Mr Killen gave evidence that Mrs Killen signed Document (1) twice – once as director of Aroona which was providing security as titleholder, and once as owner of the unencumbered interest or equity (Red, 54H-M). 49 Piccadilly Gardens was mortgaged to FAI on 28 March 1990 to pay off Rotor-Work's debt to ANZ (Red, 54N-Q). The loan was for $630,000. The balance after deducting expenses was $616,041.50 (ie the amount of the debt that both Aroona and Mrs Killen seek to prove in the liquidation of Rotor-Work) (Red, 56D). 50 The mortgage makes no reference to the beneficial interest of Mrs Killen. However, Mr Killen again gave evidence that ANZ's legal officers prepared a similar document to Document (1) being Document (2). He gave evidence that he and Mrs Killen signed Document (2) as directors of Aroona and Mrs Killen signed in respect of the beneficial interest (Red, 54U-55C). Document (2) could not be located (Red, 55K). 51 The trial judge found that Mr Killen's evidence about the contents of Documents (1) and (2) was vague, but that it seemed that they were documents generated for the benefit of security holders rather than for any purpose of Aroona conferring a benefit on Mrs Killen (Red, 55E-G). 52 The trial judge found it unnecessary to decide whether to accept Mr Killen's evidence about Documents (1) and (2). Mr Killen did not say that, by either document, Aroona acknowledged or made any representation about the existence of Mrs Killen's beneficial interest so as to create some form of estoppel against it (Red, 55O-W). 53 A letter from solicitors for Aroona regarding the FAI mortgage makes reference to payments being made on authority from Aroona into Rotor-Work's account in exchange for the discharge of the mortgage over Piccadilly Gardens (Red, 56C-K). 54 Mr Killen gave evidence that he discussed the FAI mortgage with his wife, referring to Piccadilly Gardens as "your unit" (Red, 56M-R). 55 The trial judge concluded that at the time of the FAI advance, Piccadilly Gardens was owned by Aroona, and Mrs Killen did not have any equitable interest in it. Consequently the funds raised from FAI on the security of Piccadilly Gardens belonged to Aroona. Therefore he concluded that Aroona was entitled to prove in the liquidation of Rotor-Work for the amount on-lent: $616,041.50. 56 The trial judge found his analysis reinforced by a document signed by Mrs Killen dated 1 March 1990 directed to FAI. In it Mrs Killen stated that she occupied Piccadilly Gardens "at the will of" Aroona and that she had no agreement with Aroona relating to her occupancy and no interest by way of tenancy or licence (Red, 57D-I). 57 The trial judge found that the description of the mortgagors as "Aroona Developments Pty Ltd for its legal interest and Rosanne Lyle Fulton Killen for her equity and beneficial interest" in an unregistered mortgage granted over Piccadilly Gardens to Castanair on 3 July 1992 could not amount to any disposition of an equitable interest by Aroona to Mrs Killen. Nor could it be regarded as a representation founding an estoppel in her favour. Rather, it was a description operating to bring into the mortgage any equitable interest that Mrs Killen might have, for the protection of the mortgagee [my emphasis] (Red, 57I-P). 58 Mrs Killen gave evidence that when Piccadilly Gardens was sold on 8 March 1995, she received no money. The trial judge observed that this was consistent with her having no beneficial interest in the property and also with her having a beneficial interest that was extinguished by the claims of prior ranking security holders (Red, 57Q-V). 59 After the liquidation of Rotor-Work commenced, a Report as to Affairs was lodged with Mr Rennie. It listed Aroona as an unsecured creditor for $615,308. Mrs Killen was not listed as a creditor (Red, 57W-58C). 60 Two letters were written by Mr Killen to the receiver/manager of another company in the group which the trial judge considered reinforced the conclusion that Mrs Killen did not have any equitable interest in Piccadilly Gardens (Red, 58D-R). 61 The trial judge concluded that the Report as to Affairs for Aroona Developments had no probative value (Red, 58T-59D). 62 The trial judge found that there was no evidence of a later disposition of equitable interest to Mrs Killen by Aroona. Later documents in evidence referred to her interest in the property but there was no evidence of the disposition of such an interest. 63 The trial judge therefore concluded that the evidence did not support Mrs Killen's claim to an equitable interest in respect of Piccadilly Gardens or the loan monies advanced by Aroona to Rotor-Work, borrowed on the security of that property. 64 He concluded that Mrs Killen's appeal against Mr Rennie's decision to reject her claim in proceeding No 4112/02 must fail. Likewise, her alternative application that any monies received by Aroona if successful must also fail (Red, 59F-I, S-V). 65 The trial judge concluded that there was sufficient evidence to show, on the balance of probabilities, that Rotor-Work incurred a debt to Aroona (not Mrs Killen) in the sum of $616,041.50 when it borrowed that amount upon the settlement of Aroona's mortgage to FAI. 66 Consequently, he concluded that Aroona was entitled to succeed in proceeding No 1810/02 in its appeal against Mr Rennie's decision as liquidator of Rotor-Work to reject its claim (Red, 59J-S). 67 On costs, the trial judge ordered that: (a) Mrs Killen pay the costs of Aroona in respect of both proceedings (Red, 60F). (b) Mr Rennie pay, out of the assets of the company in liquidation, Aroona's costs up until 2 October 2002 and that he be entitled to recoup his own costs of both proceedings from those assets (Red, 60H-M). (c) The trial judge rejected Aroona's submission that it should have its costs with respect to the claim against Mr Rennie personally, without limitation to the available assets of Rotor-Work (Red, 60R-61L). (d) The trial judge ordered that Aroona pay Mr Rennie's costs in respect of Aroona's claim against him personally (Red, 61L-P) and that Mrs Killen pay his costs in proceeding No 4112/02 (Red, 61Q). GROUNDS OF APPEAL 68 The grounds of appeal are numerous but essentially are grouped around the first and second issues as articulated in the Introduction above. I shall deal with these various grounds in the context of the disposition of this appeal below. One of the issues to which I will return was the status of additional evidence sought to be brought through a Mr Robert Wood, who prepared Aroona's accounts for the years 1975 and following. In support of an application for this additional evidence to be received was an affidavit filed in accordance with Supreme Court Rules Pt 51 r19(4). DISPOSITION Issue 1: Whether at the date of acquisition Aroona held Piccadilly Gardens on resulting trust for Mrs Killen (Grounds 1-4) . 69 A resulting trust is a species of implied trust, that is to say a trust which arises by presumption of law in favour of the settlor or his or her representatives. As is explained in Jacobs' Law of Trusts in Australia, R P Meagher and W M C Gummow (Butterworths, 1997): "The circumstances in which such trusts may arise can be grouped under two main headings: first, where the settlor has transferred property to trustees but has not disposed of, or not wholly disposed of, the beneficial interests and secondly, where a purchaser of property directs that it be transferred into the name of a third person and there is nothing to indicate that he intended that person to take the property beneficially. In these circumstances the law presumes that the settlor or purchaser, as the case may be, intended to retain the beneficial interest which he has not disposed of. The term 'resulting' applied to these trusts expresses the view that the property comes back to him after it has been given away, although in truth the beneficial interest may never have left him. Implied trusts do not need to be evidenced by writing." 70 Here the legal title to Piccadilly Gardens is vested in Aroona, being an entity other than the person Mrs Killen who provided the purchase money. There is no challenge to the trial judge's conclusion that the purchase money here was wholly provided by Mrs Killen though the legal title remained in Aroona's name until Piccadilly Gardens was sold. The question is whether the trial judge was in error in concluding that the presumption of a resulting trust in favour of Mrs Killen was rebutted in the circumstances elaborated below. 71 Aroona, according to a search made on 8 June 1964 some two months before Aroona became the registered proprietor of Piccadilly Gardens, showed that, as was common ground, its four shareholders were Mrs Killen for 201 shares, and her three children for 200 shares each. The company was a typical family company set up for asset protection purposes in the Australian Capital Territory of which Mrs Killen was a 25% shareholder (actually fractionally over 25%). That she was a 25% shareholder is not of itself conclusive as to whether the presumption of a resulting trust was rebutted. Her 25% share ownership in Aroona may suggest that she did not believe she could rely on a resulting trust and therefore chose instead to have a 25% shareholding to protect her interest in Piccadilly Gardens. That said, it is equally consistent with her having chosen to reinforce her interest under a resulting trust with a voting interest in the trustee as it held the legal title. 72 To that circumstance should be added the following explanation for the circumstances in which Aroona acquired Piccadilly Gardens. This emerges from questions put to Mrs Killen in cross-examination (Black, T17M-V): "Johnson: Q. Would it be correct to say that in relation to the Killen family your primary role was that of primary care-giver and being a mother? A. Yes. Q. And you did not put your mind to much of what I might call the commercial activities of your husband? A. No, not to a great extent." She was then asked. "Q. And Aroona Developments was primarily a company that owned real estate, occupied by your husband, yourself and your family at various times? A. Yes. Q. That was the intention of why it was set up? A. Well, he wasn't a shareholder, Bryce wasn't a shareholder. Q. He was a director at some time? A. Yes, but he wasn't a shareholder. Q. Why was that? A. I think he was making provision for us." 73 Aroona was thus described as a company through which Mr Killen "was making provision for us" meaning Mrs Killen and her children, while holding no shares himself. That is consistent with Aroona owning the property beneficially as well as legally. 74 One of the reasons given by the trial judge for concluding that the presumption of resulting trust was rebutted was that "no evidence was given by Mr or Mrs Killen explaining the circumstances in which the payments were made and as to any arrangements that may have been made between Mrs Killen and the company leading to the vesting of legal title to the property in the company rather than her. The contemporary evidence tendered by Mrs Killen (the solicitors' letters of 18 September 1964 and 14 April 1965) gives no hint that she may have made any payments or that there was any arrangement for her to make payments in respect of the property". (Red, 43-4 [19]) 75 That lack of evidence however does not refute the conclusion reached by the trial judge that in fact Mrs Killen did provide the funds for the purchase of Piccadilly Gardens and made mortgage payments to the MLC and attended to other outgoings for a long time (Red, 42 at [14]). 76 However, the trial judge relied upon two further matters for rebutting the presumption of a resulting trust. While the second of these is still reconcilable with a resulting trust, the first is to my mind decisive in its rebuttal of that presumption. I set out here paragraphs of the judgment relevant to the first matter: "20 Thirdly, the proposition that, as from 1964, Mrs Killen was the beneficiary of the property, is at odds with her own claim in reliance on the minute of a meeting of directors of Aroona Developments on 8 July 1974. The minute of their meeting of 8 July 1974 is inconsistent with the assertion that before that time Mrs Killen was already the beneficiary of the property on a resulting trust, rather than a creditor of the company in respect of payments she may have made. 21 Fourthly, the proposition that Mrs Killen was the beneficiary of the property as from 1964 is not supported by the financial statements of Aroona Developments for the year ended 30 June 1974 (a document which is inconsistent with the minute of 8 July 1974 in another respect, as I shall point out). The balance sheet to 30 June 1974 shows Piccadilly Gardens as a fixed asset of the company, with no notation of any beneficial interest on the part of Mrs Killen, and it records a mortgage to Mutual Life & Citizens Assurance Co Ltd secured over Piccadilly Gardens as a long-term liability of the company, without any suggestion that mortgage payments were being made by Mrs Killen." 77 Thus the minute of 8 July 1974 provides evidence of Mrs Killen's actual intention in rebuttal of any resulting trust. It shows she signed as a director of Aroona, along with her co-director, Mr Leigo. She is also shown as agreeing and accepting the arrangement on her own behalf. 78 Moreover, the arrangement in unequivocal terms refers to Mrs Killen as creditor to the company (in the amount of $67,922.87). It then refers to the sale to Mrs Killen of the company's "beneficial interest" in Piccadilly Gardens. This is for a consideration corresponding to the value of Aroona's beneficial interest and is in return for a pro tanto reduction of the indebtedness. The value of Aroona's interest is calculated at $70,000 less an amount of $41,009.83 still outstanding on the mortgage to the MLC leaving a net balance of $28,990.17. 79 It is said in the minute that the company "should continue to make all payments in respect of" Piccadilly Gardens including "payments of principal and interest to MLC" as well as other current expenses. But there does not seem to be any dispute that the words "continue to make" are to be understood as "from now on to make". The minute is not inconsistent with Mrs Killen making the mortgage payments to the MLC. 80 The final part of the minute refers to the intent that at "the termination of the mortgage with MLC the full free and unencumbered legal title would be transferred to Mrs Killen, her heirs or assignee". 81 Though that last reference by itself might suggest that the bare legal title was all that was to be transferred, the earlier quoted part of the minute is the clearest acknowledgement Aroona retained the beneficial interest in Piccadilly Gardens. Its sale to Mrs Killen is wholly inconsistent with her already owning it. 82 The appellant attempted to escape the consequences of the unequivocal language of sale to Mrs Killen used in the minute by seeking to characterise it as "steps … taken by the company to confirm that the presumed beneficiary under a resulting trust is indeed the equitable owner of the land", or as "more confirmatory of the trust in her favour as a result of having provided the acquisition funds (and indeed mortgage payments)."; Orange, 32 at para 11. The language of the minute is not however the language of confirmation but rather the language of a dispositive sale. An intention to sell to Mrs Killen is simply irreconcilable with Mrs Killen already having that beneficial interest by way of resulting trust. 83 Indeed there is a further piece of evidence in the transcript of cross-examination of Mr Bryce Killen at T, 53.17-.24: "Q. And Aroona Developments Pty Limited in its original formation was established to own the house that you lived in? A. Yes. Q. It had the Piccadilly Gardens property? A. Yes." 84 Again it is not really plausible to attempt to explain away the use of the word "own" as somehow equivocal. In the context of the question, one could only assume that Aroona was established to take the beneficial ownership of the house. That would be commonplace where a wife and children were made shareholders but not beneficial owners in the company chosen for that purpose. 85 Mason and Brennan JJ in Calverley v Green (1984) 155 CLR 242 at 262 observed that the relevant evidence of intention has to be "before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction". But that does not prevent subsequent acts being admissible against the person doing those acts; Shephard v Cartwright [1954] 3 All ER 649, reaffirmed by the High Court in Calverley v Green (supra) at 251, 262, 269 as the law in Australia. Mrs Killen clearly confirmed that she was entering into what she understood to be a transaction of sale of the beneficial interest in Piccadilly Gardens from Aroona. So her acts in entering into the minute were admissible against her. 86 It might be argued that if it were shown that Mrs Killen did not take an effective transfer of the equitable interest from Aroona on 8 July 1974 then the failure of the purported disposition denies it relevance to the rebuttal of a presumptive resulting trust. But that would be an incongruous result. The short answer to that lies in the reason given by the trial judge for concluding that the transaction failed. The reason given by the trial judge was that, on the evidence, there was no indebtedness owed by Aroona to Mrs Killen. Rather he concluded that the indebtedness was rather owed by Mrs Killen to Aroona, thus rendering any sale without consideration and hence ineffective. Without at this point doing other than assuming for present purposes the correctness of that conclusion, a matter to which I will return, there is nothing in that reasoning which would preclude the following scenario. Mrs Killen, thinking mistakenly that Aroona owed her money, set about acquiring the beneficial interest that she assumed Aroona had retained in Piccadilly Gardens. She failed on this hypothesis, not because Aroona did not have that beneficial interest, but because the express and only consideration for that disposition was a debt that did not exist. As I explain later, I respectfully disagree with the conclusion of the trial judge that no debt existed in favour of Mrs Killen, owed by Aroona. Of course her lay assumption that Aroona retained a beneficial interest in Piccadilly Gardens might conceivably simply illustrate her lack of knowledge of a technical area of property and trust law. Nonetheless I consider a purported disposition in the circumstances, effective or not, is cogent evidence that any resulting trust was rebutted. 87 It remains to consider the final basis relied upon by the trial judge for concluding that the presumption of resulting trust had been rebutted, namely that quoted from the judgment at Red, 44 at [21] quoted below. "21. Fourthly, the proposition that Mrs Killen was the beneficiary of the property as from 1964 is not supported by the financial statement of Aroona Developments for the year ended 30 June 1974 (a document which is inconsistent with the minute of 8 July 1974 in another respect, as I shall point out). The balance sheet to 30 June 1974 shows Piccadilly Gardens as a fixed asset of the company, with no notation of any beneficial interest on the part of Mrs Killen, and it records a mortgage to Mutual Life & Citizens Assurance Company Ltd secured over Piccadilly Gardens as a long-term liability of the company, without any suggestion that mortgage payments were being made by Mrs Killen." 88 In my view that basis was not necessary for the conclusion reached. Because the status of the financial statements of Aroona for the year ended 30 June 1974 are central to the second set of issues, it is preferable that I deal with the question in that context. Conclusion 89 I agree with the trial judge that the presumption of a resulting trust was rebutted. I would do so simply for the reason that a resulting trust would be entirely incompatible with Mrs Killen's adoption of the minute of 8 July 1974 and her acceptance of its terms. Issue 2: Whether the equitable interest in Piccadilly Gardens passed to Mrs Killen pursuant to the resolution of the Aroona directors' meeting recorded in the minute of 8 July 1974 (grounds 5-24). 90 I quote below the critical conclusions of the trial judge (Red, 48 at [32-33]): "32 Amongst the current assets of the company according to the balance sheet for the year ended 30 June 1974 was the sum of $47,282.96, appearing next to Mrs Killen's name. I infer that this records a loan by the company to Mrs Killen, that amount being the loan balance as at 30 June 1974. The document records the sum of $4,249 against her name in respect of 1973, suggesting that she was indebted in the smaller sum in 1973 and that her debt had increased by 30 June 1974. I note that the company's balance sheet for 30 June 1974 also records a current liability in the sum of $149,037.43 against the name "BGL Killen", suggesting that Mr Killen was a creditor of the company for that amount, but it has not been suggested that this entry has any relevance to Mrs Killen's financial position vis-a-vis Aroona Developments. 33 The balance sheet for 30 June 1974 satisfies me, on the balance of probabilities, that merely eight days before the meeting of directors which is the subject of the minute of 8 July 1974, Mrs Killen was a debtor rather than a creditor of Aroona Developments. It has not been alleged that anything happened in those eight days to convert her position from debtor to creditor. Mrs Killen had the opportunity to adduce evidence to explain the matter, and did not do so. No evidence was given on her behalf by Mr Wood, the auditor who signed the audit certificate for the 1975 accounts, or by Mr Allen, one of the company's accountants at the time, persons who may have been able to explain the position, and no reason was advanced for not calling them. No evidence was given on her behalf by Mr Leigo, who was present at the meeting, although there was an explanation in his case, having regard to Mr Leigo's involvement in litigation with the Killen family. I infer, from the absence of evidence by Mr Wood and Mr Allen, that there was no explanation to be given by them that would have been favourable to Mrs Killen: see Commercial Union Insurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389, 418–9 per Handley JA." 91 The trial judge records that Mrs Killen through her counsel in final submissions foreshadowed an application for leave to re-open. This was to adduce evidence from Mr Rofe, a solicitor who was also at the meeting on 8 July 1974. The trial judge concluded that "such an application for leave should not be entertained after the conclusion of the evidentiary hearing of a case such as this. It was a case where the precise nature of the transaction recorded in the minute was likely to be an issue once it became clear, as it did before the hearing, that the two appeals would be heard together and so the real protagonists would be Aroona Developments by its liquidator and Mrs Killen. Although the 1974 accounts came into evidence at a later stage, the pertinence of evidence explaining the 8 July transaction should have been apparent." He adds that he infers that the funds available to the two companies to conduct litigation are limited. 92 He finally concludes that "being unsupported by valuable consideration, it ["the transaction recorded as a sale" in the minute of the meeting of directors] was not a specifically enforceable transaction". He adds that "the minute of the directors' meeting does not purport to be itself an instrument creating or disposing of an equitable interest in favour of Mrs Killen, but rather to record a decision of the directors". Accordingly, he "treated it as evidence of a contract for the sale and purchase of the equitable ownership of property". He adds that "if one were to treat it as evidence of a decision by the company purporting for [sic] forthwith vest the equitable ownership in Mrs Killen, the absence of writing would mean that the decision would be ineffective having regard to s23C(1)(a) of the Conveyancing Act"; Red, 49 at [35]. 93 I should deal with the last matter first. At [30] the trial judge records his conclusion that, but for the lack of consideration, the contract would have been specifically enforceable although oral. This was because the minute of 8 July 1974 was a note or memorandum in writing of the contract, signed on behalf of Aroona, containing sufficient information to satisfy the requirements of s54A of the Conveyancing Act 1919 (NSW). 94 What is however here at issue is whether the trial judge was correct to infer there was no debt owing. He concluded that there was no debt owing by Aroona to Mrs Killen of $67,922.87 at 30 June 1974 but rather that she was indebted to Aroona, such that there was no consideration for the purported agreement for sale evidenced by the minute of 8 July 1974. 95 The challenge to the trial judge's reasoning starts with the provenance and status of the document described as "Draft Accounts of the Company for the year ended 30 June 1974". Essentially the appellant's argument is that all subsequent balance sheets and accounts, starting with those for 30 June 1975, showed Mrs Killen as a creditor not debtor of Aroona. Thus the accounts of 30 June 1975 in particular showed an indebtedness by Aroona to "B G L and R L F Killen", Mr and Mrs Killen, of $73,330.69 as at 30 June 1975. That figure reflected a reduction in indebtedness from the debt of $149,037.43 shown in the draft accounts of 30 June 1974 as owed to "B G L Killen". It is a greater reduction than the amount of $28,990.17 referred to in the minute of 8 July 1974, but that is not of itself significant. What is significant is that the balance sheet for 30 June 1975 has in the 1975 column against "B G L and R L F Killen" a current liability of $73,330.69 and in the 1974 column, likewise against their names $149,037. The appellant submits that this substantiates that the accounts of 30 June 1974 either had no status and should be disregarded, or should be interpreted as failing to recognise Mrs Killen's interest in the debt of $149,037. This is said, not implausibly, to reflect the mores of the time, where the assets of married couples tended to be attributed to the husband. 96 I shall start with the provenance of what the appellant refers to as the draft 30 June 1974 accounts. These came into evidence as P7. This was in circumstances more particularly set out in an affidavit of 2 August 2005 by the appellant's solicitors Mr McKell. At para 3 of the affidavit, it is stated that the unsigned draft balance sheet as at 30 June 1974 of Aroona was served on the appellant with Aroona's bundle of documents shortly prior to the original trial hearing. Mr McKell deposes that he did not on receipt observe the difference between that set of accounts and the signed Aroona accounts for the year ended 30 June 1975, the latter with its incorporated reference to the balance sheet position as at 30 June 1974 (Blue, 66-73 esp. 71). The first mentioned draft accounts, for 30 June 1974, became P7 and bear a marking of 21 May 2003 against the exhibit note. That document was not admitted into evidence until well after the close of Mrs Killen's case (Black, 69W). 97 When the document was produced, as the transcript of 21 May 2003 reveals, objection was taken to its admission; Black T, 68.40 and earlier at T, 67.16. 98 In framing his objection to that production, counsel for Mrs Killen conceded that it was relevant for the purposes of the consideration of the proof of debt lodged by Aroona and its rejection in relation to Rotor-Work Pty Limited. However, counsel urged that it should not be admitted as being evidence of "proof of or even as being draft balance sheet because of its form"; T, 68.43. 99 The trial judge had before him accounts tendered for the 1975 and 1976 years by Mr Young but not for 1974. The trial judge noted that so far as the document showed, the document noted as P7 had been in the liquidator Mr Rennie's files as liquidator of Rotor-Work. The trial judge indicated that he did not know how it came to be in those files (T, 69.17). No further light has been thrown on this in the appeal. 100 The trial judge then ruled that if it went into evidence against Mr Rennie, it went in as evidence against Mrs Killen, that is for all purposes of that proceeding; T, 69.35-.41. 101 The document noted as P7 had however come into evidence after Mrs Killen had closed her case. It is clear that Mrs Killen had no knowledge of the content of the document. When asked whether she had any recollection of having seen it in 1974, her answer was that she had no recollection whether she had or not; Black, 2026.30-.50. No question was put to her concerning the veracity of the indebtedness said to be owed by Aroona to her, as appearing in the minute of the Aroona directors' meeting of 8 July 1974. Yet the trial judge relied upon document P7 as establishing that there was no indebtedness owed by Aroona to Mrs Killen as at 8 July 1974. I consider that there is, with respect, some substance in the criticism that this was unfair, more particularly as Mrs Killen was denied the capacity to re-open her case and adduce evidence from her solicitor Mr Rofe. 102 The appellant challenges reliance being made at all upon these draft accounts of 30 June 1974. It is first emphasised that the document was unsigned and in a form different from the subsequently acknowledged signed accounts and financial statements for the ensuing financial years. Moreover, in the case of the accounts of 30 June 1975 there was a different statement of indebtedness as between Mrs Killen and Aroona in the comparative column for 1974. It showed Aroona as indebted to Mr and Mrs Killen in an aggregate amount of $149,037 in the 1974 column. The 1975 column reveals a subsequent reduction for 30 June 1975 down to $73,330.69. That is a figure compatible with a reduction in indebtedness of $28,990.17 though the reduction was larger than that as I explain below. There is no separate apportionment between Mr and Mrs Killen in the 30 June 1975 balance sheet. But there is a revealing note 6 in the following terms (Blue, 66): "6. On 8 July 1974 the directors approved the sale of the Company's unencumbered interest in Unit 82, Piccadilly Gardens to Mrs R L F Killen, a Director of the Company, as part satisfaction of the Company's indebtedness to Mrs Killen at 30 June 1974…" 103 The draft accounts for 30 June 1974 were not only unsigned but contained no directors' report or other verification. What they do show however, and which the trial judge found to be decisive, was that under "Current Assets" Mrs Killen was shown as a debtor to Aroona in the amount of $47,282.96 whereas Mr Killen was shown as a creditor in the amount of $149,037.43. 104 There was, however, some conformity between the 30 June 1975 accounts and P7 being the accounts purporting to be 30 June 1974. Piccadilly Gardens was shown in both cases as an asset valued at $55,704. Also the amount owing to the MLC by way of mortgage was shown, in the case of the 30 June 1975 accounts (in the 1974 column), as $36,575 whereas in the 30 June 1974 accounts in P7 the figure is $41,009.83 but with $40,435 said to be "repayable 1975". 105 If one compares the indebtedness between the Killens on the one hand and Aroona on the other, as between the accounts of 30 June 1974 (P7) and 30 June 1975, in the column for 1974, there is, as I have pointed out, a close concordance. Thus if one takes P7 first, the amount shown as owed to Mr Killen is $149,037 (ignoring cents). If one deducts the amount shown as owed by Mrs Killen of $47,282, this leaves a balance of $101,755. If one then were to deduct from $101,755 the $28,990 referred to in the minute of 8 July 1974 as having been reduced from "the Company's indebtedness to Mrs Killen", that leaves a balance of $72,765, very close to the figure of $73,330.60 shown in the 1975 accounts. 106 Given that the transaction evidenced by the minute of 8 July 1974 would therefore have fallen in the accounting year ending 30 June 1975, that reconciliation, though approximate, shows that the accounts of 30 June 1975 with their 1974 column are capable of being reconciled with the unsigned accounts of 30 June 1974. This is provided that one takes the figure of $149,037.43 shown against Mr Killen as in fact a debt owed to both Mr and Mrs Killen and wrongly attributed in the unsigned accounts solely to Mr Killen. 107 The status of the accounts of 30 June 1974 is not assisted either by the fact that no maker of the accounts was called nor does the document identify its maker. Mr Rennie, the liquidator of Aroona, was cross-examined to the effect that that document, together with all other documents in his possession, was taken into account by him in rejecting Aroona's proof of debt (Black, T, 67.11, 68.36). However, as the appellant contends, that could not make it probative of its contents, least of all against Mrs Killen. That said, I would not differ from the trial judge's conclusion that the document was properly admitted into evidence. There does not appear any basis for limiting its use under s136 of the Evidence Act, though its weight is very much subject to these matters raised by the appellant. 108 There were three persons who did not give evidence before the trial judge, leading the trial judge to draw some inferences. First, the trial judge inferred from the absence of evidence from Mr Wood, auditor for the 1975 accounts, and Mr Allen, the accountant for Aroona, that no explanation to be given by them would have been favourable to Mrs Killen (Red, 48N-49C). 109 Taking Mr Wood's evidence first, he gave an affidavit dated 13 April 2004 after judgment had been delivered. Mr McKell in his affidavit of 2 August 2005 describes why no issue had arisen in his mind that there was evidence required as to who prepared accounts for the year ended 30 June 1975 and the earlier unsigned accounts of 30 June 1974. I quote below the relevant paragraphs of his affidavit: "6. In short on receipt of the plaintiff's bundle of documents I did not pay any attention to the document that became Exhibit "P7" nor perceived the argument to be mounted upon it. 7. Accordingly, no issue arose in my mind that was required to be investigated as to who prepared accounts for those years and what was the status of the draft unsigned balance sheet when it became "Exhibit P7" and whether the entry referring to B G L Killen as creditor was correct. The first matter, that might have brought the issue of whether there was any challenge by Aroona to the indebtedness of Aroona to Mrs Killen as shown in the 8 July 1974 minute to my attention, was the receipt of "Outline submissions of liquidator Aroona Developments Pty Ltd (in liquidation)". These submissions were e-mailed to my office at 6.45pm on Friday 16 May 2003. To the best of my recollection I did not see the e-mail submissions until Monday 19 May when I subsequently forwarded a copy to Mrs Killen's Counsel (Mr M D Young). The hearing commenced the following day. I have no recollection of reading the submissions on Monday 19 May as I immediately took steps to deliver them to counsel. The relevant excerpt of paragraph 20 of the submissions says: 'There is no evidence that Aroona Developments was a debtor to Mrs Killen at 30 June 1974 or, more importantly, at 8 July 1974. The evidence is that the balance sheet of Aroona Developments for the year ended 30 June 1974 as it did on 30 June 1973 reflected Mrs Killen as being a debtor respectively to the Company in the amount of $47,282.96 and (at 1973) $40,0249 (sic).' 8. Furthermore Exhibit "P7", the document which Mr Woods says in his Affidavit of 13 April 2004 was erroneous, was not admitted into evidence until well after the close of the Plaintiff's case (see Black 69 W). 9. The Appellant when in cross examination before Austin J had only been asked about whether she had seen the document (which later became Ex "P7") before or seen in 1974 (Black 26), following which it became part of MF12. 10. She was not challenged on the veracity of the indebtedness of Aroona Developments Pty Limited to her as appearing in the Minute of the Aroona meeting of 8 July 1974. 11. It was not until after judgment had been delivered by the trial judge and orders made by him, when obtaining instructions relating to the appeal, that I first became aware from Mr B J L Killen that he could locate Mr Wood, the former accountant to Aroona in the late 1970s. Mr Wood was subsequently interviewed and the affidavit taken from him." 110 Debate occurred at the appeal on whether Mr Wood's affidavit should be read, on the basis that this would then call for not only further questions of Mr Wood but the possibility of further evidence from other sources. The affidavit was not read in this appeal. 111 However, in the circumstances described by Mr McKell, I respectfully disagree with the trial judge that it was appropriate to infer from the absence of evidence from Mr Wood or Mr Allen as company accountant that no explanation given by them would have been favourable to Mrs Killen (Red, 48N-49C). Had the matter arisen earlier, by the 30 June 1974 unsigned accounts being tendered prior to the close of Mrs Killen's case, and had she then been questioned about the indebtedness referred to in the minute of 8 July 1974 being not reconcilable with the indebtedness in the unsigned accounts of 30 June 1974, it would have been readily available for Mrs Killen to have dealt with that matter by calling evidence from Mr Wood and/or Mr Allen. But those were not the circumstances. 112 There is also Mr Leigo, but his position could hardly be described as being in the camp of Mrs Killen, given that there is ongoing litigation between Mr Leigo and Mr Killen. 113 So far as the failure to call Mr Rofe, a solicitor, who was present at the 8 July 1974 meeting, is concerned, I would not, with respect, draw the conclusion that the trial judge drew, that the pertinence of evidence explaining the 8 July 1974 transaction should have been apparent before the hearing. This was when there had been no prior indication that the indebtedness the subject of the 8 July 1974 minute was to be challenged in the way it was by reference to the unsigned 30 June 1974 accounts, after the plaintiff's case had closed at trial. That the funds available for litigation to the Aroona and Rotor-Work companies were limited did not justify denying Mrs Killen in the circumstances the opportunity to re-open her case, surprised as she was. 114 Finally, in relation to [32] of the judgment, it is clear that it was suggested that the entry as a current liability of $149,037.43 against the name "B G L Killen" did have relevance to Mrs Killen's financial position vis-à-vis Aroona; see Red, 48I. The plaintiff's written submissions handed up at trial make it quite clear that it had been strongly suggested that Mrs Killen's financial position was misstated in the accounts referred to as Exhibit P7, as the following quotation indicates: "It is quite clear from the full report and signed accounts of 30 June 1975 (which incorporate the accounts for 30 June 1974) that Mrs Killen was a substantial creditor even if inelegantly coupled in those more sexist days with her husband." The rest of the submission merely puts these matters in issue. 115 It remains now to consider the subsequent accounts. The balance sheet of 30 June 1975 (Blue, 423), as I have explained, is wholly consistent with the minute of 8 July 1974 and with the indebtedness attributed by that minute as owed by Aroona to Mrs Killen. 116 The Company's financial statements for 1976 are similarly wholly consistent as is the equivalent note 2 to the accounts recording the effect of the minute of 8 July 1974. Those accounts show a reduction of indebtedness of $10,000 in the indebtedness shown for 1976, namely $63,266.45 owed to Mr and Mrs Killen; compare the indebtedness of $73,330 in 1975. That appears to reflect payment of outgoings. 117 The profit and loss account for the year ended 30 June 1976 refers to reimbursement of expenses by Mr and Mrs Killen. But it is not to my mind inconsistent with the efficacy of the 8 July 1974 minute. Insofar as it shows interest paid to the MLC of $4,164.66 being included in the item under income called "Reimbursement of Expenses – B G L and R L F Killen" that no doubt reflected payments by the Killens or Mrs Killen. But it does not override the effect of the 8 July 1974 transaction. It must be remembered that the accounts for 30 June 1975 and 30 June 1976 were certified and signed accounts with an audit certificate. The document P7 was neither certified nor signed and with no known provenance can fairly be described as draft accounts at best. 118 It suffices if I now summarise the remaining documentation, all of which I respectfully suggest supports an inference to the contrary of that drawn by the trial judge. 119 The later documents comprise: (a) The balance sheets for years ended 1990, 1991, 1992 and 1995 which all had similar entries under 'Fixed Assets' to that of 30 June 1975, and (b) The mortgage of 3 July 1992 to Castanair has the "mortgagors" described as Aroona Developments Pty Ltd for its legal interest and Rosanne Lyle Fulton Killen for her equity and beneficial interest (Blue, 272-274) (Orange, 41C). 120 Thus the accounts for 1990, 1991, 1992 and 1995 show in unbroken historical succession the same deduction from the value of Piccadilly as an asset by reference to "Assignment of Unencumbered Interest to R L F Killen". 121 From 1975 on up to the time of liquidation the financial statements of Aroona consistently recognised the transaction of 8 July 1974 (the transfer of the equitable interest in Piccadilly to Mrs Killen for a reduction in Aroona's indebtedness to her). These financial statements continued to acknowledge her interest in the property. 122 The changes in the value of her unencumbered interest are explained by mortgage repayments reducing the mortgage and increasing the value of Mrs Killen's interest. 123 As was said in the appellant's written submissions: "Mr Killen's affidavit of 11/6/02 described document "(1)" as showing Mrs Killen as owner of the beneficial interest with Aroona holding the legal estate on her behalf (Blue 27V-W), words the trial judge struck out on objection. In oral evidence (Black 47P-R) Mr Killen then said in describing the document (1): 'Another part of the document she signed on as the owner of the unencumbered, or words to that effect, of the equity.' Allowing for Mr Killen not being a lawyer the document (1) clearly did say something clearly about Mrs Killen's beneficial interest – contrary to the trial judge's comment. See also Mr Killen's evidence at Black 48D-H. (c) Document "(2)" [according to] Mr Killen's affidavit evidence was executed by Mrs Killen and by Aroona. He said: 'The document specifically referred to the second defendant (i.e. Mrs Killen) as owning the beneficial interest in the property and the plaintiff (Aroona) owning the legal estate on her behalf or words to that effect." (a/d 11/6/02 paragraph 17 – Black 28S-T)." 124 I do not agree that Mr Killen's evidence was so "vague" as to justify it being disregarded. It was unchallenged and there was no attack on his credit. Moreover, it is inherently likely that a mortgagee such as ANZ would in these circumstances require such documents. 125 It was not submitted that the later Castanair mortgage (Blue, 23-5, 272-4) was a "disposition of an equitable interest by Aroona Developments to Mrs Killen". Rather it was a clear admission that Mrs Killen held, and Aroona did not, the equitable and beneficial interest in Piccadilly and that Aroona's interest was restricted to the legal estate in the land. 126 I would accept that Mr Killen, in using the expression "titular interest", was referring to the situation where the title of a property is in someone's name but they are acting as trustee for a different beneficial owner (Blue, 107V-W). I likewise agree with the appellant that Mr Killen's intention in writing the letters of 24 February 1994 to a receiver/manager of another company in the group, referred to by the trial judge at [61]-[62], was irrelevant as against 20 years of financial records consistently noting her equitable interest (Orange 45X). The letters so described amount to no more than omitting express reference to Mrs Killen's beneficial interest, though they refer to Aroona's "titular interest". 127 It was not to my mind inconsistent with Mrs Killen's case that a layperson like Mr Killen should describe Aroona as a creditor of Rotor-Work of a loan of $615,308 (Orange, 45T). As is said in the appellant's written submissions: "Aroona mortgaged property beneficially owned by Mrs Killen and lent the mortgage proceeds to Rotor-Work to defray its overdraft. It was entirely unnecessary in a layman's communication with the Moonagee [sic] liquidator to raise the entire background." 128 So far as costs are concerned, the appellant has been successful on one of the two principal grounds of appeal, being the major one, in particular in terms of time spent. In those circumstances I would propose that she receive all her costs both on appeal and in the court below. OVERALL CONCLUSION AND ORDERS 129 I conclude that the minute of 8 July 1974 was effective as a note or memorandum in writing of a transaction of sale whereby Aroona disposed of its beneficial interest in Piccadilly Gardens to Mrs Killen. It follows that any monies raised from the mortgaging of Piccadilly Gardens and on-lent to Rotor-Work should be accounted for in full to Mrs Killen in the sum of $616,041.50 and Mrs Killen admitted to prove in the liquidation in that sum. 130 I would propose orders as follows: (1) Appeal allowed with costs. (2) Judgment and orders of Austin J set aside. (3) The respondents to pay the appellant's costs in this Court and in the court below but to have with respect to the former a certificate under the Suitors Fund Act 1951 if otherwise qualified (3) A declaration that the appellant, Mrs Killen, is admitted to prove in the liquidation of Rotor-Work Pty Limited (in liquidation) ACN 009 723 102 in the amount of $616,041.50. 131 BROWNIE AJA: I agree with Santow JA. Please Note: Orders made pursuant to this judgment have been varied by judgment [2006] NSWCA 189 dated 14 July 2006. ************ 14/07/2006 - - Paragraph(s) 26/07/2006 - - Paragraph(s) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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