New South Wales Supreme Court CITATION : Lowe v Pascoe [2010] NSWSC 388 30 October 2008, 6 November 2008 4 & 6 February 2009 3 April 2009 15 – 19 June 2009 HEARING DATE(S) : 22 – 26 June 2009 29 – 30 June 2009 2 - 3, 8 - 9, 15, 29 July 2009 24 August 2009 7 – 9 October 2009 Written submissions closed 23 December 2009 JUDGMENT DATE : 7 May 2010 JUDGMENT OF : Smart AJ Declarations as to the existence of partnership between plaintiffs, the late KST, his deceased second wife, Margaret, Helen and Janet and that the five-sixths share of KST in the Maroubra Road property and the whole of the Queen Street property, held on trust for partnership. DECISION : Position as to individual portion of Haig Street property reserved for further argument. Matter referred to ATO for resolution of payment of taxation issues. Consequential relief to be determined. CATCHWORDS : Existence of partnership - Unusual signed partnership agreement - Family patriarch conducting partnership business (or businesses) as if it (they) was (were) his own and controlling all aspects - Numerous disputed questions of fact and law and subsidiary issues - Substantial cash businesses (grocery and butchery) - Non-disclosure of full partnership income to ATO - Evasion of tax - Patriarch determining what should be disclosed to tax agents and ATO and paying tax of all parties except first plaintiff - Non-distribution of partnership profits to partners although distributions shown in tax returns of partnership businesses and returns of partners - Splitting of income amongst partners - Partnership funds used to acquire properties in patriarch's name - Patriarch putting Queen Street property purchased in 1988 in his name and names of his children - Children not contributing to cost - Children (all adults) holding property as to their shares upon a bare trust - Not established that Haig Street property purchased wholly out of partnership funds but use of income from rental properties at Wiley Park and Fairfield and possible use of patriarch's cash resources - Whether bare trust created as to one-third shares of Sunly and Gordon in Haig Street property - Both sons being minors when trust created, not contributing any funds to purchase and would transfer their interests in that property to their father upon his request - Whether partnership agreement created an express trust - Whether personal equities created in favour of plaintiffs - Whether Margaret (daughter) had a one-fifth (or a one-sixth) share in Maroubra Road property - Ownership of property (cash) in commercial bill - Whether it belonged to KST or Margaret - Sale by KST of YS butchery prior to 30 June 1986 and no adequate accounting for proceeds of sale - Defences of Indefeasibility of Title under the Real Property Act 1900 (NSW) fail - Defences under Limitation Act 1969, defences of laches, gross laches, acquiescence and estoppel fail - Plaintiffs not aware of full facts until size of KST's estate and the property assets standing in his name revealed in about November 2001 - Proceedings instituted in November 2005 Land Act 1962 (Q) Limitation Act 1969 (NSW) LEGISLATION CITED : Partnership Act 1982 (NSW) Real Property Act 1900 Transfer of Land Act 1892 (WA) CATEGORY : Principal judgment Bahr v Nicolay (No 2) (1988) 164 CLR 604 Bogdanovic v Koteff (1988) 12 NSWLR 472 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Breskvar v Wall (1971) 126 CLR 376 Dolman v Palmer [2005] NSWCA 361 The Duke Group Ltd (in liq) v Alamain Investments Pty Ltd [2003] SASC 415 Edmonds & Ors v Donovan & Ors (2005) 12 VR 513 CASES CITED : Frazer v Walker [1967] 1 AC 569 Government of India v Taylor [1955] AC 491 Loke Yew v Port Swettenham Rubber Co Ltd [1913] AC 491 Neat Holdings Pty Ltd v Karaja Holdings Pty Ltd (1992) 67 ALJR 170 Orr v Ford (1989) [1989] HCA 4; 167 CLR 316 Urquhart v M'Pherson (1880) 6 VLR (E) 17 Warman International Ltd v Dwyer (1994) 182 CLR 554 Williams v Minister, Aboriginal Land Rights Act 1983 (1994) 35 NSWLR 497 TEXTS CITED : Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 4th Ed Jacob's Law of Trusts, 7th Ed Geoffrey Alan Lowe (First Plaintiff) Mary Lowe (Second Plaintiff) Scott Pascoe (as trustee of the Estate of the late Kut Sze Tu) (First Defendant) Margaret Sze Tu (Second Defendant) PARTIES : Helen Sze Tu (Third Defendant) Janet McNamara (Fourth Defendant) Shiu Shing (Sunly) Sze Tu (Fifth Defendant) Shiu How (Gordon) Sze Tu (Sixth Defendant) Stella Sze Tu (as representative of the Estate of the late Chow Fung Chun) (Seventh Defendant) FILE NUMBER(S) : SC 2005/262284 AA Henskens/ AR Zahra and RC Gration (7 – 9 October 2009 only) (First & Second Plaintiffs) J Stoljar SC (excused for much of hearing) (First Defendant) MB Lee to 6 February 2009 (Second and Third Defendants) HJ Marshal SC 3 April 2009 (Second and Third Defendants) COUNSEL : (Second and Thirds Defendants self-represented from 15 June 2009) MB Lee to 6 November 2008 (Fourth Defendant) (Fourth Defendant filed submitting appearance on 28 November 2008) VRW Gray (Fifth & Sixth Defendants) (Seventh Defendant filed submitting appearance on 17 April 2008) Colin Biggers & Paisley (Plaintiffs) Bartier Perry (First Defendant) SOLICITORS : Levitt Robinson (Second and Third Defendants to 3 April 2009 and Fourth Defendant to 16 December 2008) Birbas Attorneys (Fifth & Sixth Defendants) (Seventh Defendant filed submitting appearance) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Smart AJ Friday 7 May 2010 2005/00262284 7736/2005 Geoffrey Alan Lowe & Mary Lowe v Scott Pascoe as Trustee of the Estate of the late Kut Sze Tu, Margaret Sze Tu, Helen Sze Tu, Janet McNamara, Shiu Shing (Sunly) Sze Tu (known as Sunly), Shiu How (Gordon) Sze Tu (known as Gordon) & Stella Sze Tu (Representantive for the purpose of these proceedings of the Estate of the late Fung Chun Chow). JUDGMENT Para no 1 Introduction 10 Plaintiffs' claims 12 Appointment of Mr Pascoe (First Defendant – Administrator) 15 Administrator's Defences and approach to proceedings 17 Submitting appearances 18 Defences of Margaret and Helen 25 Defences of Sunly and Gordon 37 Assets of estate of KST 38 Administrator's actions as to properties 41 Taxation returns and undisclosed income 44 Representation 48 History of Proceedings 51 Background 57 Purchase of WYT and YS 81 August – September 1975 conversations 87 Negotiations as to partnership agreement 91 Agreement dated 1 October 1975 117 Some subsidiary issues 122 Visit by Margaret to Solomon Islands 124 KST's ability to speak and understand English 130 Meeting at Clayton Utz and their advice 143 KST's ability to speak and understand English (continued) 165 Evidence of Geoffrey, Mary and evidential challenges 168 Family of KST in business 175 Preparation of tax returns 177 1975 – 1976 and Geoffrey's alleged actions 189 Revenue sources 193 1977 request for distribution of profits 196 December 1978 – legal advice sought as to accounts 200 1981 profit distribution 214 Financial contributions 247 The cash component 308 The partnership issue 329 Properties allegedly held on trust 332 Evidence of investigating accountant (M Hill) 373 Non-production of documents 396 Purchase of other properties by FC Chow and her children 400 Claim of Margaret to one-fifth share in Maroubra Road 425 Funds for purchase of Maroubra Road and Queen Street properties 443 Financial contentions and conclusions 446 Factors influencing the plaintiffs not to take action and related matters 461 Sale of YS and closure of WYT 464 Credibility of Margaret, Helen and Sunly 478 Credibility of Gordon 479 Miscellaneous 486 The indefeasibility defences 492 Limitation Act defences 510 Defences of laches, gross laches and acquiescence 555 Estoppel defences 563 Further findings 572 Relief Introduction 1 This case involves events going back to 1975 and extending from that year. Questions of a partnership and its continuance, its subject matter, alleged defalcations and alleged trusts arise. The lapse of time has made it difficult to determine the truth and what happened. Recollections and the reliability of evidence have been seriously affected. Many documents are no longer available. There must also be injected bitter family relations, including the desire of each family member (including the first plaintiff) to establish that what each said on the various issues was correct, the devotion of the plaintiffs, the second, third, fifth and sixths defendants to money and the way that has coloured the evidence given. The proceedings concern, inter alia, the activities and conduct of the late Kut Sze Tu, an astute and successful businessman and a patriarchal autocrat who died in 1997 and left an estate estimated at, on one view, about $6.8 million. Steps were taken over the years to evade the tax payable and the need for a thorough taxation review emerges. The plaintiffs contend that the two related businesses of Wing Yuen Tai ("WYT") and Yee Sing Butchery ("YS"), conducted by the late Kut Sze Tu in the Haymarket area of Sydney, received large amounts of cash some of which were never disclosed in their taxation returns. 2 Without any disrespect, I take the liberty of referring to each of the parties by their first names. The plaintiffs, Geoffrey and Mary, are husband and wife. Mary and all of the second to seventh defendants are children of the late Kut Sze Tu ("KST"), albeit that Stella, the seventh defendant, appears in a representative capacity and not in a personal capacity. KST was twice married. Mary (b 1949), Janet (b 1951), Margaret (b 1952) and Helen (b 1954) are children of the first marriage. There was an adopted son, John (b 1951). He is neither a party nor a participant in these proceedings. Fung Chun Chow ("FC Chow") was the second wife of the late KST. Sunly (b 1966), Gordon (b 1965) and Stella (b 1962) are the children of the second marriage. Stella is the representative, for the purpose of these proceedings, of the estate of her late mother, FC Chow, who died on 11 January 1994, intestate. Relations between Margaret, Helen, Janet, Sunly and Gordon are cordial, but relations between Mary, on the one hand and Margaret, Helen, Janet, Sunly, Gordon and Stella on the other could not be so described. Relations between Geoffrey and Mary on the one hand and Margaret, Helen and Sunly on the other could be described as bitter. 3 The evidence satisfies me that KST ran the businesses of WYT and YS as if they were his businesses, received large amounts of cash from such businesses and never disclosed, in any income tax returns or in the accounts of either business, the full amounts of cash received. KST was the only person who knew what moneys in total were received by the businesses. The evidence includes: a) that of Geoffrey of amounts of cash received. He gave some examples; b) that of Mary of the number of customers of WYT during the period August 1975 –1981. See paragraph 16 of her affidavit of 21 August 2007 and her affidavit of 6 August 2009 in reply. Later, I have endeavoured to resolve the conflict between the evidence of Mary as to the number of retail customers and the amounts spent with the evidence of Margaret; c) that of Jeffrey Williden as to the large numbers of retail customers who attended the YS butchery. They paid cash for their purchases. Margaret and Helen substantially understated the number of retail customers who patronised the YS butchery. Mr Williden described the YS butchery as a busy one and said it continued to be a good and busy business after its sale in 1986. Three butchers were employed at various periods. This would not have happened unless necessary; d) the cash takings of YS were delivered to KST at the end of each working day; this was not disputed; e) that of the investigating accountant which established that: (i) the purchase of a property in Maroubra Road in 1983 necessitating the expenditure of about $600,000.00 and the purchase of a property in Queen Street in 1988 necessitating expenditure of about $1.655 million could not have been paid for from the known rental income of KST; and (ii) the Queen Street property could not have been paid for from the known rental income of KST and the disclosed profits of WYT and YS. The size of the amounts paid was telling; f) the Maroubra Road and Queen Street properties were paid for in cash and no mortgage was obtained. The investigating accountant also took the view that KST could not have purchased in late 1978 a property in Haig Street for $129,000.00 without using "partnership" moneys. If that is so, the question arises whether the "partnership" moneys used consisted of disclosed income (in tax returns) or cash received by KST from the businesses or a mixture. This may be insoluble. There is the further question of whether KST had or used other resources. Again, no mortgage was obtained; g) there were additional factors. No partnership distributions were made as suggested in the tax returns of WYT and YS and the various "partners". The incomes of these businesses were split for tax purposes, KST paying the tax of each "partner" except Geoffrey; h) the evidence of Helen that the business of YS improved over the years from 1980 onwards to its sale in about 1986; i) the amounts of cash received from the retail customers of YS were substantial. 4 The plaintiffs also contended that the shortfall of about $1.3 million found by Mr Hill (i.e., the surplus KST needed or achieved) may have been the result of a manipulation by KST of the stock figures, particularly those relating to the cost of goods sold. The plaintiffs contended, in substance, that it was the shortfall and its size that mattered and that how it occurred was secondary. The latter was not necessarily within the plaintiffs' knowledge or their ability to prove. 5 The Revenue Authorities of the Commonwealth were not told of the true income of WYT and YS and tax appears to have been evaded. These non-disclosures continued over the period August 1975 to June 1989. In addition to the tax evaded, there may to be a case for penalties of some magnitude. Interest at commercial rates may be payable. 6 As a result of the evidence adduced in these proceedings and the Court's findings, the Administrator of the estate of the late KST is now on notice of the liability of the deceased's estate for outstanding tax. It would be difficult for any distribution to take place or the partnership assets to be determined prior to the resolution of the tax issues. The evasion of tax is to be attributed to KST. I am satisfied that Margaret, Helen, Janet, Sunly and Gordon were not aware that he was evading tax during the years August 1975 – 30 June 1989. In late 1978 the plaintiffs had their suspicions, but lacked sufficient proof. The Court has been asked to order an account or the payment of equitable compensation. The plaintiffs have yet to indicate which they prefer. Although the estate is a large one, the tax liability of the estate should be settled prior to any consequential relief being granted by the Court. There are the further difficulties of the events taking place so long ago and KST being no longer available. 7 (a) The true income of the partnership has to be resolved and tax paid on any omitted income. Questions of penalties and interest may also arise and there could be some argument as to where the burden of the penalties and interest should lie. (b) The Administrator could not be expected to lodge amended tax returns, especially in view of the instructions of the beneficiaries other than Mary. Those beneficiaries contend that KST did not fail to disclose the whole of the cash income received from WYT and YS businesses. The Administrator is bound to protect the interests of the estate of KST which he represents. KST's estate has a 20 per cent interest in the partnership by virtue of KST's interest in the partnership. KST was the managing partner and controlled the operations and finances of WYT and YS, the partnership businesses. (c) This is a case where the ATO, having received returns and issued assessments which were subsequently paid, must make its own appraisal of the income received and not disclosed in the tax returns of WYT and YS. The ATO should be given the opportunity to review the position and decide whether to take action in view of what the ATO was not told. (d) Much will depend on the stance and approach of the ATO, but the matter cannot be allowed to drift indefinitely. (e) Depending on the resolution of the first set of issues, there will probably be questions of the extent of their effect on the value of the estate and its distribution. (f) There could probably be no distribution of the partnership assets and final winding up of the partnership until the taxation position is resolved. Alternatively, perhaps a suitable amount could be set aside to cover potential tax liabilities. (g) Nor could there probably be any distribution in the estate of KST until the position in relation to the estate's liabilities is resolved. That includes it taxation liabilities. Alternatively, perhaps a suitable amount could be set aside to cover potential liabilities. (h) The hearing was conducted in public and included those parts of the affidavits which were admitted, the exhibits, the written submissions of the parties, the oral evidence (of which there is a transcript) and this Judgment. A copy of this judgment will be forwarded to the ATO and I so order. It will be a matter for the ATO to make arrangements to obtain such other documents as it needs. 8 These proceedings arise out of allegations that KST and Geoffrey entered into an agreement to purchase two businesses conducted by the late KST, namely WYT, a general store and mixed business, often referred to as a grocery business, in "Chinatown", Sydney and YS Butchery located around the corner from WYT; the conduct of those businesses and allegations that there was a partnership involving the plaintiffs, KST, his second wife and Margaret, Helen and Janet; allegations that KST used partnership funds to purchase a property in Haig Street in December 1978 for $129,000 in his name, Sunly's name and Gordon's name each as tenants in common as to a one third share (both Sunly and Gordon still being infants aged respectively about 12 and 13), a property in Maroubra Road in February 1983 for $585,000 in the name of KST as to four one-fifth shares and Margaret as to one one-fifth share as tenants in common, and a property in Queen Street in July 1988 for $1.58 million in KST's name as to six one-tenth parts with Margaret, Gordon, Helen and Sunly as to the remaining one-tenth parts each and as tenants in common. 9 It is alleged that these three last-mentioned properties were impressed with trusts and held on behalf of the alleged partnership. Plaintiffs' claims 10 Wide-ranging relief was sought in the Further Amended Statement of Claim filed 15 November 2008 (FASOC). In summary (excluding consequential relief), the plaintiffs in their final submissions sought: a) a declaration that the plaintiffs, the late KST, the late FC Chow, Margaret, Helen and Janet operated the WYT and YS business pursuant to a partnership in shares as found by the Court; b) an order winding up the partnership under the directions of the Court; c) a declaration that the interests of each of the first to sixth defendants (or the estates they represent) in the properties in Haig Street, Maroubra Road and Queen Street were held on trust for the partnership, such properties being acquired by the late KST using the moneys of the partnership; d) an order that an inquiry be held to ascertain the assets of the partnership and in particular the application of partnership money towards the purchase of the three properties and the profits derived from the use of those properties, and to determine the financial payments to be made to the plaintiffs by each of the defendants in order to distribute to the plaintiffs their share of the partnership entitlements by the taking of an account or, alternatively, by way of equitable compensation. 11 In their FASOC filed 15 November 2008 a declaration was sought that the plaintiffs, the late KST, the late FC Chow, Margaret, Helen and Janet were partners during the period 1 October 1975 to 20 October 1997 in the following shares: a) KST – a 20 per cent share b) Geoffrey and Mary – each a 10 per cent share c) Margaret, Helen and Janet – each a 10 per cent share d) FC Chow – a 30 per cent share. In their FASOC the plaintiffs sought a declaration that the partnership was dissolved on 4 November 2005 (the day after the affidavits verifying the Statement of Claim which was filed 7 November 2005). 20 October 1997 was the date of death of the late KST. Appointment of Mr Pascoe (First Defendant – Administrator) 12 The first defendant, Mr Scott Pascoe, a chartered accountant, was on 26 March 2001 appointed interim receiver of KST's estate by order of this Court. On 22 November 2002 he was appointed by this Court as the Administrator of KST's estate with the agreement of the second plaintiff and the second to sixth defendants. Initially a grant of Probate had been made by this Court on 2 October 1998 to Mary, Helen and Sunly on their application based on the wrongly alleged will of KST. Subsequently, on Mary's application, that grant of Probate was revoked on the basis that the alleged will was not the will of KST. Prior to revocation the "executors" had made some distributions. 13 Order 3(d) of the Orders made on 26 March 2001 required Mr Pascoe to obtain an account and verify the distributions made from KST's estate. In late November 2001 he submitted a draft interim detailed report of his investigations into KST's estate and on 13 May 2002 he submitted his report which was little changed. It covered what had occurred with a number of investment and residential properties, bank accounts, other assets (mining shares), estate tax returns and distributions from the estate totalling $952,590.00. Gordon received $171,174.00, Helen $104,258.00, Margaret $217,932.00, Janet $63,000.00, John $80,000.00, Tang Fung (KST's first wife) $100.00, Sunly $173,818.00, Mary $94,996.00 and Stella $47,310.00. These figures did not include any distribution from the Citibank Accounts. Section 7 of Mr Pascoe's report summarises the sources from which the moneys distributed came. The period covered appears to be the 1997/1998, 1998/1999, 1999/2000 and 2000/2001 years. Some of the moneys came from the rental income of the Wiley Park, Fairfield, Maroubra Road and Queen Street properties – see Tables 5, 6 and 7 of the report. Some of the moneys came from an Interest Bearing Term Deposit with St George Bank, which matured on 24 November 1997. Table 8 shows that an amount of $287,138.34 was distributed in full. Mr Pascoe also included in his report post appointment income received as at 31 October 2001; cash at bank totalled $261,381.0. He also included the estimated position of the estate to 30 October 2001. 14 On 22 November 2002 Sunly, Helen, Gordon and Stella and Mary, John, Janet and Margaret were, by Court order, to specifically perform a Deed. Inter alia, it regulated the distribution of the estate of KST. It seems that the parties to the Deed probably executed it. Administrator's Defences and approach to proceedings 15 By the Administrator's Defence to the Further Amended Statement of Claim, filed 17 December 2008, the Administrator, inter alia, admitted paragraphs 1 to 8, 8A.3 (relating to formal family details) and 50 – 51B (relating to the uncontested details of KST and his estate and sales of the Maroubra Road property and Queen Street property by the Administrator) of the FASOC, did not admit paragraphs 8A.1, 8A.2, 11 – 34, 35 – 49 (containing the allegations on which the plaintiffs' claim was based) of the FASOC, and denied paragraph 52 (asserting the entitlement of the plaintiffs to the relief claimed) of the FASOC. In paragraph 13 of the Defence, the Administrator pleaded a Settlement Deed dated 22 November 2002. The first defendant pleaded that, in reliance upon the Settlement Deed, he had acted in accordance with that Deed with the plaintiffs' knowledge and had commenced administering the estate. He pleaded that the plaintiffs were estopped from making the allegations of a partnership and were precluded from maintaining paragraphs 9 to 52 of the FASOC. He pleaded delay and laches by the plaintiffs and the provisions of the Limitation Act 1969 (NSW), referring to ss 15 and 48. 16 Senior counsel for the first defendant explained that, at the time his client's various defences were filed, the Administrator took the view that he was bound to raise the available defences which would protect the interests of the estate. However, it now appeared that the principal protagonists were the plaintiffs and the second, third, fifth and sixth defendants (and, until 28 November 2008, the fourth defendant). Senior counsel was satisfied that all relevant points (from his client's point of view) had been raised by the second, third, fifth and sixth defendants and advised that, in those circumstances, the Administrator preferred to adopt a neutral position and leave the contest to the plaintiffs and the second, third, fifth and sixth defendants. The plaintiffs stated that they were not seeking to impose any personal liability upon the first defendant. Submitting appearances 17 On 28 November 2008 the fourth defendant, Janet, filed a submitting appearance in which she withdrew her defence and submitted to the making of all orders sought and the giving or entry of judgment in respect of all claims made, save as to costs. On 16 December 2008 I granted leave to the fourth defendant nunc pro tunc to file a submitting appearance with all questions of costs reserved. The seventh defendant, Stella as the representative of the estate of her mother, FC Chow, filed a submitting appearance dated 17 April 2008. An Amended Statement of Claim had been filed against her about 11 March 2008. She had been appointed on 7 March 2008 to represent the estate of FC Chow because of a possible conflict of interest between Sunly in his personal capacity and as Administrator of the estate of the late FC Chow. It was ordered that Stella be joined as the seventh defendant. Defences of Margaret and Helen 18 Margaret and Helen admitted that their father was a party to the Purchase Agreement but denied, as alleged in paragraph 9 of the FASOC, that about 30 July 1975 their late father and Geoffrey entered into an agreement with the vendors of the WYT and YS to purchase those two businesses. They denied that Geoffrey was a party to such agreement. They contended that all of the funding for the purchase of these two businesses was provided by their father. 19 Margaret and Helen, while admitting that they signed a document purporting to be a partnership agreement, denied that they entered into a partnership agreement with Geoffrey, Mary, KST, Janet and FC Chow and became partners in a partnership. Margaret and Helen alleged that the "agreement" was a "sham", or a device to protect KST's assets from the British Solomon Islands Inland Revenue, and that they only signed that document because KST had signed it and they were accustomed to acting in accordance with his wishes. It may be, as the evidence emerged, that they were raising a defence of "non est factum", but no amendment was sought. 20 There was no dispute as to the terms of the "agreement" bearing date 1 October 1975. Margaret and Helen denied the allegation that, in about August or September 1975, KST represented to Geoffrey that he would invest the profits of the partnership for all members of the partnership and all property purchased by KST using the proceeds of the partnership would be held by KST on trust for the partners of the partnership. 21 Margaret and Helen contended that, as there was no partnership, the issues of making distributions and use of the funds of WYT and YS did not arise. In the event of a partnership being found, Margaret and Helen denied that the three properties (Haig Street, Maroubra Road and Queen Street) were acquired by KST using profits of such a partnership. 22 Other issues arise out of the FASOC and the Amended Defence of Margaret and Helen. 23 Margaret and Helen relied on the losses allegedly made by YS, the sale of YS to Mr Tony Lam and WYT making alleged losses in 1986, 1988 and being closed by the deceased about 30 June 1989. In the event of a partnership being found, Margaret and Helen contended that such partnership was dissolved, at the latest, on 1 July 1989 and that any legal or equitable rights arising on dissolution arose no later than 1 July 1989. The plaintiffs submitted, correctly, that this had not been pleaded. It need not be further considered. Reliance was placed on s 32(b) of the Partnership Act 1982 (NSW) by Margaret and Helen. 24 Margaret and Helen relied upon defences under the Limitation Act 1969 (NSW) and upon delay, gross laches (or laches) and acquiescence. They also relied upon estoppel based primarily upon the Settlement Deed of 22 November 2002. They relied upon their title being indefeasible under s 42 of the Real Property Act 1900 once they became registered as the proprietors of a share in the Queen Street property. Margaret contended that, as to the Maroubra Road property, she had contributed about $100,000 or approximately one-fifth of the purchase price. Her actual contribution is closer to one-sixth of the cost of purchasing that property and associated expenses. Defences of Sunly and Gordon 25 Sunly and Gordon, while admitting that on or about 30 July 1975 KST entered into an agreement with the vendors, Shiu Tong Leung, Cheun (or Chen) Cheung and Lin Sun Chun about the purchase from those persons of WYT and YS businesses, denied that Geoffrey was a party to the agreement. Sunly and Gordon did not admit that the agreement was partly oral. Sunly and Gordon admitted that the vendors sold the WYT business for $57,500.00 and the YS business for $30,000.00. Sunly and Gordon did not know and could not admit that the purchase agreement contained a term that the purchase price of the businesses would be paid to the vendors over time while KST operated the businesses, nor a term that the vendors would be paid for the stock associated with the businesses as that stock was sold over time while KST operated the businesses. Sunly and Gordon did not know and could not admit if the trading of the businesses proved satisfactory prior to completion. Sunly and Gordon admitted that the purchase of the businesses was completed and that these payments were made: $2,400.00 for stock in respect of the YS business – paid 22 June 1975 $18,975.00 for goodwill of the YS business – paid on 5 September 1975 $11,025.00 for the plant and equipment of the YS business – paid 5 September 1975 $51,125.00 for the goodwill of the WYT business – paid 3 October 1975 $57,180.91 for stock in respect of the WYT business – paid 11 December 1975 26 Sunly and Gordon, who were aged nine and ten as at August 1975, did not know and could not admit that funds for the purchase and for working capital of the businesses were sourced from: a) personal and/or borrowed funds of Geoffrey in excess of $46,000.00 b) personal and/or borrowed funds of Mary in excess of $2,500.00 c) personal funds of KST of about $32,400.00 d) finance of $70,000.00 from the Commonwealth Bank (CBA). 27 Sunly and Gordon did not know and could not admit that the finance provided by the CBA was supported by the guarantee and securities alleged by Geoffrey. 28 Sunly and Gordon admitted that a document titled "Agreement" and purporting to be a partnership agreement was signed by Geoffrey, Mary, KST, Margaret, Helen, Janet and FC Chow, but contended that, to the extent that the agreement binds any of its signatories, it refers only to the business of WYT and does not refer to YS. Sunly and Gordon did not admit that the signatories entered into a partnership agreement and became partners in a partnership. Sunly and Gordon did not admit that the document bearing date 1 October 1975 was intended by the parties thereto to operate, or did in fact operate, as an effective partnership. (There was debate in the final submissions of the parties whether this encompassed an allegation that the partnership was abandoned, but I do not think that it does.) 29 There was no issue as to the terms that the document bearing date 1 October 1975 titled Agreement contained. 30 Sunly and Gordon did not know and could not admit paragraphs 19, 20, 21, 22, 23, 24, 25, and 26 of the FASOC, including, by way of summary, that: a) in about August – September 1975 KST represented to Geoffrey that he would invest the profits of the partnership for all members of the partnership and all property purchased by KST using proceeds of the partnership would be held by KST pursuant to an express trust for the partners of the partnership; b) at all material times the businesses were the property of the partnership and that the partners were entitled to share the profits of the businesses in accordance with the shares specified in the agreement; c) the amounts owing to the vendors in respect of the purchase of the businesses were paid using moneys generated from the conduct of the businesses and funds advanced by KST and Geoffrey; d) a significant proportion of the day-to-day operations of the businesses were conducted in cash; and e) the financial statements and books and records of the businesses, and of the partnership, understated the turnover and profitability of the businesses. 31 Issue was joined as at 1 August 1975 of the extent of the beneficial interest of KST in real property in Australia. The Amended Defence of Sunly and Gordon does not put in issue that KST purchased and paid for properties in Haig Street, Maroubra Road and Queen Street, nor the purchase prices. I will not summarise all the further issues and admissions emerging from the pleadings. 32 In further answer to the whole FASOC, Sunly and Gordon say that the estates and interests each had at the start of the proceedings in the Haig Street property and the Queen street property were given to them by KST and that, upon them becoming registered as proprietors of such, each became indefeasibly entitled to a one-third share in the Haig Street property and a one-tenth share in the Queen Street property. 33 Sunly and Gordon contended as to Haig Street, that, upon registration of the transfer of the additional 16.67% interest to each, each became indefeasibly entitled to the additional interest free of any unregistered estate or interest claimed by the plaintiff. Sunly and Gordon denied that either was bound by any personal equity, allegedly enforceable against either by either plaintiff. 34 Sunly and Gordon pleaded that the plaintiffs' causes of action fell within various sections of the Limitation Act 1969 and were barred. Sunly and Gordon pleaded that the plaintiffs were guilty of laches and, in the alternative, gross laches and/or acquiescence and were not entitled to relief. 35 Sunly and Gordon further relied on a settlement deed attached to consent orders filed and made by this Court in proceedings number 118302 of 2000, and raised a defence of conventional estoppel, the conventional basis being that the assets standing in the name of KST at his death would constitute the assets of his estate for the purposes of the deed and that the parties would respectively carry out their obligations in accordance with the deed and accept their entitlements under the deed in satisfaction of all their respective claims against the estate and against each other connected with property derived from KST or his estate, and that Mr Scott Pascoe was entitled to transfer to them severally such estates and interests as the deed provided, free from any claims by the plaintiffs of the nature advanced in these proceedings. One difficulty was that Geoffrey was not a party to the deed, but Sunly and Gordon sought to overcome this. While not abandoned, the defence of conventional estoppel was not a major consideration. 36 There was also a defence that the plaintiffs did not come to equity with clean hands. Assets of estate of KST 37 KST's estate's assets as at 20 October 1997 (his date of death) included: a) $31,514.80 held in CB Account b) $120,236.19 held in St George Bank Account c) $117,519.19 held in St George Bank Account d) $287,138.34 held in St George IBD e) $346,721.67 held in Citibank Term Deposit f) $430,111.50 held in Citibank Term Deposit g) 40,000 shares in Normandy Mining Ltd h) ¾ share in Wiley Park property i) 92,048/168,000 share in Fairfield property j) 4/5 share in Maroubra Road property as tenant in common with Margaret k) 6/10 share in Queen Street property l) 2/3 share in unit in Coogee Bay Road m) 1/3 share in Haig Street property This list is taken from paragraph 9 of the affidavit of the Administrator, Scott Pascoe, of 28 March 2007, to which I have added the Citibank Term Deposit of $430,111.50. Administrator's actions as to properties 38 Upon the grant of administration to him, Scott Pascoe began making arrangements to sell the estate's properties. 39 The Administrator caused to be sold the Maroubra Road property and the Queen Street property and the proceeds of sale have been preserved pending the determination of these proceedings. The Maroubra Road property was transferred to a third party probably about September/ October 2005 for a large sum (see paragraphs 6 and 7 of Mr Pascoe's affidavit of 4 November 2008). KST's legal interest in Queen Street was transferred to Margaret and Helen on 15 November 2005 for $1 million. The certificate of title of the Queen Street property following the transfer records Margaret as having a 5/10 (or ½) share, Helen as having a 3/10 share and Sunly and Gordon each having a 1/10 share. 40 The Administrator caused to be transferred KST's one-third interest in the Haig Street property to Sunly and Gordon in about June 2004. The plaintiffs alleged that the transfer was for a notional consideration of only $367,000.00. Sunly and Gordon contended that the transfer was made in part for valuable consideration paid to Scott Pascoe, and as to the balance, as a partial distribution of KST's estate. Mr Pascoe said that this transfer was made prior to him having notice of the partnership claim. Taxation returns and undisclosed income 41 At the directions hearings on 30 October and 6 November 2008 I raised questions that on the pleadings there appeared to be allegations the effect of which was that tax had not been paid and that there may be evidence of a conspiracy to defraud the Commonwealth of taxation revenue. Geoffrey contended that there was a partnership and that, in substance, for many years he was a "sleeping" partner. 42 There was a further problem with the taxation returns. Distributions of partnership income were not made as stated. KST caused the taxation returns of the second wife, Mary, Helen, Margaret and Janet to be prepared, as well as those of the partnership. Margaret, Helen and Janet acknowledged that they were not really partners and that the two businesses and the money were those of KST. KST paid the tax of his four daughters. Effectively, what KST did was to split the income received from the two businesses. That would have affected the taxation rate. Janet's affidavit put the matter succinctly – "apart from the documents I appear to have signed, I am not aware that there ever was a partnership". 43 The plaintiffs contended that KST used undisclosed profits from the two businesses alleged to be partnership businesses to purchase the three properties. The second, third, fifth and sixth defendants denied that there were any undisclosed profits and contended that the purchase moneys for the three properties must have come from resources of KST of which no one was aware. KST was secretive and controlling about his financial affairs and those of the family. Representation 44 Throughout the whole of the proceedings the plaintiffs were represented by an experienced counsel, mostly assisted by a second junior counsel. Margaret and Helen were represented by counsel up to and including 3 April 2009. The matter was before the Court on 30 October, 6 November and 16 December 2008. On 4 February 2009 there was an application to amend the defence of Sunly and Gordon. I delivered judgment as to that on 13 February 2009. The hearing proper commenced late on the afternoon of 4 February 2009, when the Court commenced to read the many lengthy affidavits and rule on the objections. This continued on 6 February and 3 April 2009. On 15 June 2009 when the hearing resumed and for the remainder of the hearing Margaret and Helen represented themselves, although they did obtain assistance from their solicitor in respect of their closing submissions. They may have consulted him for advice at other times. The hearing continued for 10 days between 15 to 26 and on 29 – 30 June 2009 and on 2, 3, 8, 9, 15 and 29 July 2009. On 24 August 2009 the plaintiffs' case in reply was heard. The parties made extensive written submissions and spoke to their submissions during 7, 8 and 9 October 2009. 45 Margaret and Helen were at a disadvantage in not being represented. This was particularly evident when it came to the cross-examination of witnesses. I did not think that they were engaging in tactical manoeuvres. I had regard to the heavy costs burden to which an extended court hearing gives rise. Being able to pay for 22 days in Court imposes a heavy burden and one that few individuals can shoulder, especially after the earlier costs. 46 Experienced counsel appeared for the fifth and sixth defendants during the whole of the proceedings. That counsel cross-examined the plaintiffs and their witnesses first and spoke with Margaret and Helen and obtained material from them for use in cross-examination and in the proceedings. Margaret and Helen heard each other's evidence whereas Geoffrey remained outside the Court while Mary was cross-examined and she was not present in the Court when Geoffrey was cross-examined. Counsel for the fifth and sixth defendants technically cross-examined the second and third defendants. It was a restrained cross-examination and in total was generally more akin to an examination in chief than cross-examination. Counsel for the fifth and sixth defendants was careful not to take objectionable advantage of the situation. 47 The relationship between the second and third defendants and the fifth and sixths defendants and counsel for the latter was no substitute for the second and third defendants being represented by their own counsel and such counsel leading evidence and cross-examining on their behalf. This was a complex piece of litigation in which many difficult issues were raised which went back over many years. History of Proceedings 48 The Statement of Claim was filed on 7 November 2005. There were numerous interlocutory applications. An Amended Statement of Claim was filed on 11 March 2008. On 6 November 2008, there was a contested directions hearing in which the future conduct of this matter was discussed. On that day, I ordered that there be a separate hearing in this matter pursuant to UCPR 28.2 on all issues in the proceedings except for the hearing of evidence on the taking of an account or with regard to equitable compensation. 49 In my Judgment of that date I stated: "It emerged during the debate before me, of which a record has been kept, that there should be a separate trial of all issues of liability, including: a) the existence of a partnership between the plaintiffs and the defendants or any predecessors; b) the dissolution of the partnership; c) the fiduciary duties, if any, owed by the late Kut Sze Tu to the plaintiffs and the breaches of any of those duties; d) whether the three properties, Haig Street, Maroubra Road and Queen Street, were held on the trusts alleged in the Statement of Claim; e) the defences of laches, including gross laches and acquiescence; f) the defences based on the Limitation Act 1969, sections 15, 47, 48 and 68A; g) the defences based on estoppel, that is, that the plaintiffs were estopped from maintaining this action; h) the defences based on indefeasibility of title." 50 In paragraph 33 of my Judgment of 13 February 2009 I added some additional sections of the Limitation Act 1969 (NSW) on which the fifth and sixth defendants placed reliance. The issue of a lack of clean hands was also raised in that Judgment. There were further pleadings after 6 November 2008, namely a FASOC was filed on 15 November 2008, the first defendant, Scott Pascoe, filed an Amended Defence to the FASOC on 17 December 2008, the second and third defendants filed a Defence to the FASOC on 3 April 2009 and the fifth and sixth defendants filed a Defence to the FASOC on 22 May 2009. I have earlier referred to the course of the hearing. The fifth and sixth defendants provided further written submissions after 9 October 2009, to which the plaintiffs replied in writing about 23 December 2009. In this difficult matter, both as to the facts and the law, I would grant leave to the fifth and sixth defendants and the plaintiffs to rely on their further submissions. I have taken them into account. This case still has a considerable distance to run. Background 51 For many years, probably starting in the early 1950s, KST had owned and conducted general stores in the British Solomon Islands and had other assets there. In about 1964 and 1965 Mary and Janet respectively were sent as boarders to St Gabriel's School, Waverley for their education. When it closed down in 1966 they transferred to another private girls' school. Margaret came to Australia with John in 1966 and Helen followed in 1968. All four daughters attended the second-mentioned private girls' school. John attended a private boys' school. For the Christmas holidays all five children returned to Honiara. In about 1969 KST purchased a 3-bedroom unit in Coogee Bay Road. The four daughters and John moved into the unit after it was purchased and ceased being boarders at the private schools. 52 Again in about 1969 KST purchased a property at Wiley Park with eight residential units. In about 1972 he purchased a property at Fairfield with 12 residential units. Mary said that from about the late 1960s or early 1970s KST started spending more time in Australia. In about mid 1974 KST and his first wife came to live in Australia. For a short period KST, his first wife and the four daughters lived at the Coogee Bay Road unit. 53 Margaret explained that it was an old Chinese custom that a man can have more than one wife, that her father followed that custom and went through a traditional Chinese marriage ceremony with FC Chow in Hong Kong. This was in 1956. Helen explained that there was nothing untoward in KST's relationship with FC Chow. Helen said her mother agreed and approved KST's second marriage. Helen added that KST and her mother were traditional Chinese, and KST wanted a son to carry on the family name. KST continued to financially support and care for his first wife. 54 Because KST wanted to bring FC Chow and his three children by her to Australia from Hong Kong and because of immigration requirements KST divorced his first wife and married FC Chow in 1976. On the arrival in Australia of FC Chow, Stella, Gordon and Sunly in about mid 1976, they all lived with KST's first wife, Margaret and Helen in the Coogee Bay Road unit. Subsequently KST, FC Chow and their three children lived at Janet's home at Bondi. On purchasing the Haig Street property in late 1978, KST moved there to live with FC Chow, Stella, Gordon and Sunly. 55 From at least February 1975 KST was aware that the Inland Revenue Branch of the Solomon Islands was investigating his financial affairs. About 12 August 1975 a tax assessment going back to 1950 for about $160,000.00 was issued. 56 Geoffrey and Mary met in 1972 and married in December 1974. Geoffrey said that he first met Mary's parents in about 1974. He said that in about May 1975 he and KST held a discussion about going into business together, that their initial field of interest was hotels but they decided not to venture into that field. Geoffrey said that they then started inspecting a number of liquor stores which were for sale. In early June 1975 Geoffrey's accountant, Mr H Rosser, prepared reports on two liquor stores. By letter of 3 July 1975 addressed to KST and the plaintiffs at the Randwick address of Geoffrey, the Commonwealth Trading Bank confirmed that it had approved accommodation of $145,000.00 to assist them to purchase and operate a liquor store at Glebe. The Bank required a satisfactory valuation of KST's flat properties at Wiley Park and Fairfield and registered mortgages over both. It also required the transfer of all credit accounts from building societies and the ANZ Bank, both in Honiara and Sydney, to the Commonwealth Bank. Purchase of WYT and YS 57 KST decided not to proceed with the purchase of the liquor store. According to Margaret and Helen, a friend of KST, who spoke the same dialect, Szeyap, introduced KST to the purchase of WYT and YS businesses. Margaret said that KST told her that he could easily accomplish the purchase of the two businesses and stock with his money in the various bank accounts. She said that KST began negotiations with the vendors, Messrs Leung and Cheung. She attended on one occasion in early July 1975 at WYT when Mr Leung showed KST and Margaret the ledger books. Margaret said that during weeks in June and July 1975 KST left home early to observe the businesses in operation. KST told her that the businesses were good investments and something that he was familiar with. 58 There is a version of subsequent events in Geoffrey's affidavit of 8 December 2006. However, there is a later version given in Geoffrey's affidavit of 21 August 2007 after he had been able to consider documents produced by Margaret as to the purchases of WYT and YS. There is a difference in the details of the two versions. In his affidavit of 21 August 2007, Geoffrey states: a) Mary and he attended a meeting at KST's request on the ground floor of the WYT retail shop about 30 July 1975 with KST, Shiu Tong Leung and Chen Cheung. (Shiu Tong Leung died in 2000.) b) The meeting was conducted partly in English and partly in Cantonese. c) KST told Geoffrey that he had signed an agreement to purchase WYT and YS. It was very profitable. KST asked Geoffrey to look at the documents and he did so. 59 By letter of 30 July 1975 addressed to KST, Mr ST Leung on behalf of WYT offered to sell KST the business of WYT for $57,500.00; "plant and equipment to be at depreciated value as shown in our account books." There is a handwritten notation of plant and equipment of $6,375.00 and goodwill of $51,125.00. 60 By letter of 30 July 1975 addressed to KST, Mr ST Leung on behalf of YS offered to sell KST the business of YS for $30,000.00: "plant and equipment to be at depreciated value as shown in our account books". There is a handwritten notation of goodwill of $18,975.00 and plant and equipment of $11,025.00. 61 There are two further documents of 30 July 1975. That as to WYT was signed by Shiu Tong Leung, Cheun Cheung and Susan Quan. That as to YS was signed by ST Leung, Chen Cheung and Lin Sun Chan. One offered to KST the business and goodwill, plant and equipment of WYT for $57,500.00 and the other offered those of YS to KST for $30,000.00. 62 Both contained special terms: 1. Purchaser to take possession on 1 August 1975. 2. Purchaser to pay vendors on taking possession $10,000.00 in the case of WYT and $5,000.00 in the case of YS. 3. Balance of purchase moneys payable on completion of sale. 4. Subject to lessor's approval to transfer or assignment of lease or tenancy of premises. 5. Subject to all permits and licences relating to business being transferred to purchaser without conditions. In the case of YS these words were added "including permit issued by Abattoirs of New South Wales". 6. Purchaser to take over all stock at cost and pay for same in cash. 7. Vendors will enter covenant not to compete in similar business for three years within one mile radius. 8. Purchaser to keep accounts of trading and allow vendors to inspect same pending completion of purchase. 9. Plant and equipment shall be taken over at vendor's book value. 63 Both offers were accepted and signed by KST. Underneath the signatures of the three vendors of each business and that of KST this appears: "Witness to all signatures WJ Lee" Mr WJ Lee was a well-known barrister at the Sydney Bar and a member of Chinese community in Sydney. The accounts mentioned in special term 8 have not been produced. It is improbable that after this lapse of time that they would still exist, assuming that they were created. 64 Geoffrey said that, during his conversations with KST about 30 July 1975, KST expressed the view that the businesses he had found were more profitable than a liquor store and that they should use the money from the bank to buy them. 65 By letter dated 5 September 1975, Mr ST Leung confirmed that $18,975.00 for the goodwill of the YS business had been received. By receipt dated 5 September 1975, Mr ST Leung acknowledged receiving $11,025.00 "being purchase price in full of plant and equipment of Yee Sing Butchery". By letter dated 3 October 1975, Mr ST Leung confirmed that $51,125.00 for the goodwill of the WYT business had been received. 66 In his affidavit of 21 August 2007 Geoffrey stated that on 30 July 1975 KST stated that he did not want to look at any liquor stores and he had already paid a deposit on YS. Geoffrey stated that he refused to sign the purchase agreements. He was unhappy that the documents did not separately specify the amounts to be paid for goodwill and plant and equipment. He said he was also concerned that a deposit had been paid before "a full due diligence had been carried out". 67 Geoffrey said that he told Mr Leung that he would like to look at the accounts for the businesses and that Mr Leung told him not to worry about the accounts, that there was a lot of cash and a lot of profit and that there was around $100,000.00 in stock. Geoffrey said that he told Mr Leung that they (the purchaser) could not pay for the stock immediately, that the funds were in term deposit accounts and that they could pay as they cashed in the term deposits. Geoffrey said that Mr Leung stated that would be acceptable. 68 Geoffrey said that, after a lengthy discussion, agreement was reached to pay the vendors for stock as it was sold for WYT and to collect, for the benefit of the vendors, amounts owing from restaurants which had not settled their accounts at the time of the sale. Geoffrey was not acting as a co-purchaser but negotiated the agreement in the presence of, with and on behalf of KST with the vendors. The agreement was between KST and the vendors. 69 The vendors to KST were looking for a purchaser who relied on his observations over a number of weeks, his instincts and the cash receipts and dealings of the businesses to assess them rather than one who based his approach on the formal accounts. KST had, for the better part of two months, visited the businesses daily for lengthy periods and observed what took place. With his experience he was in a position to assess their worth, how he would run them and whether they were the sorts of businesses with which he was familiar and wanted to run. The extended arrangement for the purchase of the stock, deposed to by Geoffrey, and evidence of the payment for stock in December 1975 were a little unusual, but understandable if there were cash transactions of consequence. Broadly, Geoffrey took a more conventional approach. He preferred acceptable accounts that could be submitted to a lending authority to support the granting of a loan and to carry out a full "due diligence" exercise. 70 It seems that Mr Leung provided a copy of the accounts of WYT and YS for the year ending 30 June 1974. WYT's accounts revealed stock on hand at 30 June 1974 of $43,107.00. YS's accounts revealed stock on hand at 30 June 1974 of $676.00. 71 Geoffrey appeared to be concerned about the stock position and payment for the stock. Geoffrey said that he told KST in about early August 1975 that they would need money to replace stock when goods were sold and to cover wages. Part of KST's skill and experience was to organise stock purchases so that that the businesses had sufficient stock to meet orders but relatively little by way of surplus or slow-moving stock. Some reserves of stock would be needed, as would amounts to cover operating expenses. As to wages, the family seemed to render valuable help. This probably enabled the businesses to function effectively at low cost, especially in the early days. Further, the skill and hard work of KST should not be under assessed. 72 Geoffrey said that Mr Leung showed Mary and Geoffrey around the WYT premises and spent some time explaining how the businesses operated. 73 Geoffrey stated that, after the meeting with Messrs Leung and Cheung, he (Geoffrey) told KST that he would not invest until it was resolved whether the Solomon Islands could enforce the tax liability it had claimed against him. Geoffrey said he would arrange for Clayton Utz (his solicitors) to look into whether KST's assets in Australia could be used to satisfy the Solomon Island's taxation assessment. He disagreed with the suggestion that KST's assets should be transferred to a trust. The transfers would be costly and they could subsequently be set aside. Geoffrey said that KST agreed to the retention of Clayton Utz on the taxation issue mentioned. It seems that Clayton Utz was also consulted about the future management and holding of KST's assets so as to minimise the duties payable on his death. Written advice was given on these matters subsequently by Senior Counsel and Clayton Utz, but advice was given in conference in late September 1975 on the claims of British Solomon Islands Inland Revenue against KST. 74 In his affidavit of 8 December 2006 Geoffrey said that, before completing the purchase of the WYT and YS businesses for the price of $150,000.00, KST and he operated the businesses for a trial period of about three months from about 1 August 1975 and that this was extended to nearly 12 months. Whether there was a trial period was in issue. 75 In her affidavit of 3 May 2007 Margaret denied that there was a trial period. She said that the takeovers of both businesses took place on 1 August 2005. Margaret said there was a period during which the previous owners stayed on to show KST and the family how the business worked. There is evidence to the effect that Mr and Mrs Leung stayed on for about three weeks. Mr Cheung, one of the previous owners, stayed on for longer. He remained until a suitable replacement was found, that is, until John was employed. I do not think that there was a trial period of consequence and that Geoffrey has confused Mr Cheung staying on for as long as he did with a trial period. However, while KST took possession of the businesses on 1 August 1975, completion took place subsequently and the period between 1 August 1975 and the date of completion could be regarded as a trial period. 76 Geoffrey refers to a payment of $2,400.00 on 22 June 1975 for stock for the YS business and one of $57,180.96 for stock for the WYT business on 11 December 1975. Geoffrey described this as the last payment for the businesses (of WYT and YS). 77 Geoffrey said that, in early August 1975, KST asked him to contribute money to the purchase of WYT and YS, that he (Geoffrey) expressed the view that they would probably need the whole $145,000.00 they had already arranged to borrow from the Bank, that KST said he did not have $145,000.00 and that they would need to borrow money from the bank. Geoffrey said that KST asked him to join with KST in the businesses and to attend a meeting with KST and the ANZ Bank to secure a loan. Geoffrey said that he insisted on a formal agreement being drawn up showing everything they agreed. There was a high degree of risk and he wanted a part-ownership of the businesses. Geoffrey said that KST agreed to him (Geoffrey) being his partner and setting up a partnership to deal with both the WYT and YS businesses and any other businesses and to try to purchase properties in the partnership. I do not accept that at that early stage Geoffrey and KST discussed the matter in terms of a partnership, nor the acquisition of properties. A term along the lines of clause 20 of the agreement of 1 October 1975 is reasonably standard and not uncommon. 78 A meeting, attended by KST, Geoffrey and a banking officer, was held at the ANZ Business Banking Centre at Zetland probably about August 1975, but no loan funds resulted. The Bank was concerned about the actions being taken by the Inland Revenue Branch of the Solomon Islands. 79 Geoffrey said that, in early August 1975, he and KST met with Mr Byrne of the Commonwealth Bank, Stock Exchange Branch and that he (Geoffrey) explained that KST had asked him to join as KST's partner to purchase some businesses in Chinatown instead of a liquor store and asked if they could borrow a similar amount to the previous approval. Mr Byrne requested the accounts for the businesses. Geoffrey said that, after he provided the accounts of WYT and YS for the year ended 30 June 1974, Mr Byrne remarked that there were no assets for the Bank to lend against and that the Bank would want a higher level of security to allow the loan to proceed and that the joint and several liability of a partnership (KST and both plaintiffs) would be attractive to the Bank. Subsequently, Geoffrey said that Mr Byrne said that it would be essential that partners other than KST have joint and several liability for the loan. I am reluctant to place any reliance upon conversations alleged to have occurred in 1975 which depend upon Geoffrey's recollection as to what was said. Geoffrey was much influenced also by self-interest. 80 On 12 August 1975, by accepted letter addressed to KST and both plaintiffs at Geoffrey's address, the Commonwealth Bank (via a Relieving Manager) approved accommodation totalling $145,000.00 to assist them to purchase the two businesses (WYT and YS). The letter referred to the loan being funded by 2 October 1975 and requested the title deeds to the flat properties (of KST) at Wiley Park and Fairfield by way of security (registered mortgages). It incorporated the terms and conditions of the Bank's earlier letter of 3 July 1975. If the advance was not drawn by 2 October 1975 a commitment fee of 0.1% per month applied. The letter did not refer to the plaintiffs providing security or other support. The letter referred to a fully drawn loan of $100,00.00 repayable at $25,000.00 per annum over four years with interest to be met from the overdraft account and an overdraft account of $45,000.00 to be reviewed annually. August – September 1975 conversations 81 Geoffrey said in his affidavit of 8 December 2006 that in about August or September 1975 KST said to him that: a) he would own 80% of the partnership and divide that amongst his children, that Geoffrey would get 20%, b) KST would be the main partner and could invest in his own name, c) none of his children would receive any distributions, d) they would all contribute to the family business, e) that, aside from Geoffrey's money, it was all his and he would invest for all, f) the partnership would continue indefinitely and as it became richer so would he as part-owner, and g) "we" will continue to re-invest the profits in property. 82 I have earlier referred to Geoffrey's reply of wanting a formal agreement. 83 Geoffrey said that in about August – September 1975 KST further said: a) he insisted on being the managing partner, b) he wanted to retain the money in the business to repay the loan earlier, c) he would invest for everyone and hold the money for all of them and buy property in his name for all of the family (including Geoffrey), d) his sons were still children and cannot own part of WYT and YS, e) his second wife will hold shares for her children so she will have additional shares, f) Geoffrey could have 20% with Mary. 84 Geoffrey said that KST agreed that on anyone's death the partnership should continue. 85 Mary Lowe, in her affidavit of 7 December 2006, said that in about mid to late 1975 she was present during discussions between Geoffrey and KST about setting up a partnership to own the WYT and YS businesses. She said she recollected one discussion in a car when KST said he would give her 10% and Geoffrey would get 10% of the businesses. 86 I do not accept that KST had the English language comprehension and expression skills alleged by and on behalf of the plaintiffs. I think that KST communicated to Geoffrey in simple terms that he (KST) intended to run and control the WYT and YS businesses, that, despite KST's dislike of borrowing, funds would have to borrowed from the bank, that KST wanted to repay any loan quickly, that KST would own 80% of the businesses and divide that amongst his children and FC Chow, who would hold shares on behalf of her children and that Geoffrey and Mary could have 20% of the businesses. KST probably did not speak of distributions, nor do I think that he spoke of purchases of property. The first and major task was to ensure that WYT and YS operated profitably. KST, who believed in making all the decisions without impediment in businesses he ran, probably did not think in terms of a partnership, but Geoffrey did. Geoffrey did not share KST's dislike of borrowing funds. What, in substance, Geoffrey has done is to convert into his own language and forms of thought what he assessed was the desired result of the conversations he held with KST. Negotiations as to partnership agreement 87 Geoffrey caused his solicitors, Slattery Thompson, to prepare a draft partnership agreement. Initially it recited "And whereas the said SZETU KUT has provided the substantial portion of the purchase price for the said business". That was changed on the draft to read "has for and on behalf of the partnership purchased said business" (see Exhibit W). The date of commencement of the partnership was altered from 1 October 1975 to 1 August 1975. The said business is specified as that of WYT. 88 Geoffrey said that he and KST held a meeting over this document and that they went through it line by line. Geoffrey said that KST particularly wanted to change "provided the substantial portion of the purchase price" to "for and on behalf of the partnership". I do not believe that statement of Geoffrey. KST did not have English language skills of this order. I have not overlooked the probable presence of Mr WJ Lee. Further, that statement runs counter to the other statements of KST, his character and KST's general desire to assert control over the businesses and do as he determined. Geoffrey said that he wanted to start later, not in August 1975, because he did not have enough funds to pay for his share of the business. Geoffrey said KST replied, "Well, I will supply all of it". Geoffrey said: "We originally agreed to move to August '75 which was the start date of the business. The proportions were that I was going to get a larger amount but then basically he said that his step family had to have some and there was some mistakes in the figures, 5750, for instance".(T 381) 89 On Geoffrey's evidence it would seem that Mr WJ Lee was probably present at the meeting at the request of KST. 90 There may have been some other drafts. Agreement dated 1 October 1975 91 A partnership agreement bearing date 1 October 1975 and purporting to be signed by all parties was adduced in evidence. 92 It recited that KST had purchased the business of WYT for $57,500.00 for and on behalf of the partnership. 93 The agreement provided (clause 1) that KST, Geoffrey, Mary, Margaret, Janet and FC Chow will become and remain partners as and from 1 August 1975 and shall continue as partners until the partnership shall be determined. 94 Curiously, Helen is not mentioned in this clause. She is shown as one of the partners in clause 3 and as one of the parties at the end of the agreement. In the draft in clause 1 she is shown as one of the parties. No point was taken that she was not one of the partners if a partnership was held to have existed having regard in terms of the Agreement of 1 October 1975. 95 In clause 2 the name of the partnership is stated to be WYT but, for the purposes of these proceedings, YS was included when WYT was referred to. Separate accounts were kept for the two businesses which were controlled by KST and acted in conjunction with each other. Partnership tax returns were lodged in respect of each business. 96 Under clause 3, which specified the shares held by each person in the alleged partnership, it is stated "and the capital of such shares shall be contributed by the partners in accordance with the share or shares taken up by them". That did not occur. 97 Clause 7 provides: "The profits of the partnership shall be divided between the partners in accordance with the share or shares of the capital taken up by the partners respectively and the losses of the partnership shall be borne by them in the same shares and proportions." While, according to the tax returns, there were distributions of profits, these did not occur in fact. 98 Clause 13 requires the preparation of annual accounts of the partnership. It provided: "Immediately after the preparation of the said balance sheet and profit and loss account the net profits (if any) shown by such amount shall be divided." 99 Clause 16 provides: "The death of a partner shall not dissolve the partnership." 100 Clauses 16 – 18 provide that the surviving partners may purchase the share of the deceased partners and a mechanism by which this may occur. It is not stated what is to happen if no surviving partner wishes to purchase the share of the deceased partner. 101 Clause 19 provides that KST shall be the managing partner of the partnership. 102 Clause 20 provides: "All property and assets purchased and acquired or contracts or leases entered into by a partner in his own name as agent for the partnership shall become partnership property and all such property and assets so purchased and acquired shall be held in trust by such partner or partners in trust for the partnership." The plaintiffs contended that KST did acquire property out of the partnership assets and was acting as agent for the partnership. This clause reflects the general law. It also creates an express trust of the property and assets purchased and acquired. 103 Geoffrey was not a party to the original purchase agreements of WYT and YS. He acted as an adviser in considering the agreements, the accounts and questions of stock. Geoffrey regarded the purchase of the stock as an outstanding and important issue. He probably negotiated the arrangements for the purchase of stock on behalf of KST. 104 Mr WJ Lee probably assisted KST with a draft of the agreement dated 1 October 1975. KST probably had explained to him by Mr WJ Lee what that agreement provided in substance. Whether KST appreciated during that explanation the concept of a partnership, in a family context where his wishes prevailed, is open to doubt. He had not been used to a partnership and the obligations it imposes. Geoffrey deposed to Mr Lee's presence at a meeting where a draft was considered. KST and WJ Lee were friends. KST was inclined to seek specialist assistance when he felt he needed it and he preferred that assistance to come from people who spoke his own dialect or Cantonese. 105 In view of the terms of the agreement of 1 October 1975 it may not matter whether Geoffrey was a party to the original purchase agreements or negotiating on behalf of KST as at 30 July 1975 as to the stock and payment for it. 106 KST probably realised that he needed Geoffrey's skills and support in his purchases, particularly Geoffrey's assistance in obtaining finance from the Commonwealth Bank to finance the purchase of WYT and YS. 107 As KST was secretive about his financial affairs and business interests, he did not tell anyone of all the assets he had. He disclosed his flats at Wiley Park and Fairfield but he did not tell anyone of the amount of cash he had. I would not have expected him to do so. KST was unlikely not to have considerable resources. He had been in business for a long time and he anticipated what was likely to happen as to the taxation issues in the British Solomon Islands. In at least one of his statements KST referred to having considerable cash. Where he kept it is unknown, but there are many possibilities. I do not regard KST as regular or open in his financial dealings or operations as his use of cash from the two businesses and non-disclosure of its receipt and use tend to demonstrate. 108 Geoffrey said, in his first affidavit, that he arranged for KST, Mary, Margaret, Helen and Janet to sign the agreement. Geoffrey believed that KST arranged for FC Chow, who was living in Hong Kong, to sign it. 109 In her affidavit of 3 May 2007, Margaret deposes to Geoffrey advocating in some detail that KST should re-arrange his financial affairs. She said that he said he would arrange for a partnership agreement, that she and the others would sign it and that a little later he took her to the Commonwealth Bank and told her, "This is the space you have to sign". She said that she signed the document and the Bank officer witnessed her signature, that she was told nothing about the document and had not previously had a copy. Janet did not remember the circumstances in which she signed the partnership agreement, nor who asked her to sign it (paragraph 5(k)). She did not recall the partnership document. She had never received a copy of it. She did not recall reading it or having it explained to her at the time (paragraph 6(k) of her affidavit). 110 Helen said that Geoffrey approached her at WYT and enquired whether she had signed the partnership agreement. She replied in the negative. She said that Geoffrey took her to the Commonwealth Bank near the Stock Exchange. A bank officer produced a document for her to sign. She did so. She said that Geoffrey never explained the contents to her. No one talked about it. She never read the document and she had no idea what the document meant at the time. She signed it because she saw that her father had signed it. 111 In reply to Margaret's affidavit Geoffrey denied the conversation to which she deposed in paragraph 60 of her affidavit. Geoffrey denied that he took Margaret to any bank to enable her to sign the partnership agreement. Geoffrey contended that he asked KST to arrange for his wife and children to sign the partnership agreement and he thought that that was what occurred. He said that this is what he intended to convey in paragraph 44 of his first affidavit. That paragraph conveyed a different message. 112 Geoffrey said that just before Margaret signed the partnership agreement she had a copy of it. He said that he told her that her father needed a loan from the bank, that he (Geoffrey) would not advance any money nor guarantee the bank loans until the agreement was signed. Geoffrey said that he told her that there was some risk so he was entitled to partnership profit. I am unable to determine which of the versions of events and conversations, given by Geoffrey or Margaret respectively, is correct. 113 Geoffrey stated that the interest that John Sze Tu (the adopted son of KST) held in the Wiley Park property had to be transferred back to KST to satisfy the security requirements of the Bank. John signed the requisite document on 16 September 1975. Gordon and Margaret gave a different explanation for this transfer. There was a transfer of John's interest in the Wiley Park property to KST and John ceased to be treated as a member of the family by KST. 114 Geoffrey stated that, in addition to the services he provided to the WYT and YS businesses, he made, or caused to be made, contributions totalling about $46,000.00 to the businesses. I have not accepted this figure – see later. 115 Geoffrey said that he provided personal guarantees to the CBA. There is no acceptable documentary or other evidence which supports his assertions. 116 In his affidavits of 8 December 2006, 1 August 2007 and 18 March 2009 Geoffrey has detailed many services which he states that he provided to the WYT and YS businesses. He stated that he was never involved in the day-to-day trading operations of either business. Mary supports this assertion. Some subsidiary issues 117 Evidence was led of investments of substantial sums of cash with Building Societies in the names of KST and his children during 1975. These could be transfers of moneys received from his rental properties. The most controversial and significant records produced were photocopies of Commonwealth Bank Passbook pages 1 to 3 for Account 12625 covering the period 22 July 1975 – 16 December 1975 and in the names of KST and FC Chow. At that time she lived in Hong Kong. These pages show withdrawals of $50,000.0 and $10,000.00 on 1 August 1975 and a balance of $31,683.09. There are some further deposits and a further withdrawal of $25,000.00 in September 1975. After some more deposits there is a further withdrawal of $36,000.00 on 16 December 1975 leaving a balance of $804.00. These withdrawals in 1975 might be thought to probably relate to payments by KST for WYT and YS and stock or the provision of working capital. This could not be affirmatively established. 118 The plaintiffs relied on the marked inadequacy of the discharge of Sunly's discovery obligations. The plaintiffs suggested that Sunly held the original bank passbook and did not produce it as it did not assist the defendants' case and only produced material helpful to the defendants' case. The plaintiffs placed reliance upon this description in the Supplementary List of documents of 3 July 2008 prepared by the solicitors for Sunly: "1. Commonwealth Bank bankbook in respect of an account held in the names of KST Chow Fung Chen (sic) 1975." It was pointed out that in that list the author had used the word "copy" before other entries. In three other entries the name of "Chow Fung Chun" was spelt incorrectly in that "Chun" was spelt "Chen". However, in that list in other places "Chun" was spelt correctly. I thought that Sunly's explanation that he did not read the list sufficiently closely was probably correct. 119 There is no reference to the Commonwealth Bank passbook or any copy pages thereof in the Second Supplementary List of Documents of 16 December 2008. In view of the Supplementary List of 3 July 2008 this tends to indicate a lack of attention to detail, of Sunly at least, and a lack of crosschecking. 120 By letter of 11 June 2009 to the plaintiffs' solicitors, Sunly's solicitors forwarded by way of discovery copies of various documents "which have recently come into our possession". Amongst those forwarded was: "(n) Page from Commonwealth Savings Bank of Australia bank for account in the name of KST and Chow Fung Chun." The substantive hearing was due to resume on 15 June 2009. Over the intervening weekend two further copy pages of the Bank passbook were stated to have been found by Sunly and were produced about 15 June 2009. According to Sunly this resulted in all three copy pages of the bank passbook that he had sighted some years ago becoming available again. I was asked to disbelieve Sunly's evidence on this point but do not do so. The original Statement of Claim emphasised the alleged partnership but it did seek a declaration that each of the Haig Street, Maroubra Road and Queen Street properties be included. I can understand a layman thinking that the case was primarily about the partnership. However, the letter of 2 May 2006 from the plaintiffs' solicitors made it clear that there should be discovered all documents recording or relating to moneys spent by KST as to each of the three properties – see paragraph 4(c). See also paragraph 2(c). One difficulty was that for a period Sunly acted for himself. The task of discharging his discovery obligations without professional legal assistance was beyond him. 121 I am persuaded that probably Sunly does not have the Commonwealth Saving Bank passbook (or bank book) in respect of account 12625. Nor am I persuaded that the evidence of Sunly as to the three copy pages of the bank passbook becoming separated and missing is untrue. A sufficiently diligent search was not made for the missing copy pages nor was any explanation provided. It was required. Notwithstanding these deficiencies, the Court should act on the three copy pages of the bank passbook and what they reveal by way of withdrawals in August, September and December 1975. These copy pages tend to indicate that funds of some size were available to KST and FC Chow, and importantly, the former. Visit by Margaret to Solomon Islands 122 At KST's request, Margaret visited the Solomon Islands in May 1975. She completed the sale of KST's island trader boat "Halamon" for $12,000.00 and returned to Sydney on 21 May 1975 with a cheque for that sum "and other assets as my father had instructed me … ." The other assets were not specified nor any sum said to be received for any of them. I find that, probably, Margaret effected the sale of the boat and returned to Sydney with a cheque for $12,000.00. 123 About 18 August 1975 she travelled to Honiara. She believed that she completed the sale of one of the branch stores. She does not say whether she had a cheque or received the payment of any proceeds of sale or money. She returned to Sydney about 14 September 1975. Perhaps such a branch store was amongst the assets seized by the Solomon Islands Revenue Authorities. KST's ability to speak and understand English 124 There was a sharp division of evidence on these topics. 125 Geoffrey said that KST, his wives and children all spoke a particular dialect of Chinese known as Szeyap, but that KST also spoke English quite well. Geoffrey said he has never spoken any Chinese language, so he and KST always spoke in English. Geoffrey said KST was able to speak in English quite well and that he and KST rarely had difficulty communicating in English together. 126 Geoffrey disagreed with Sunly's statement that KST had a very limited knowledge of English and could not have a conversation in English. Geoffrey stated that KST had a good grasp of the English language and was able to communicate in English. He instanced: a) KST and he were able to communicate between about 1975 and his death. He had a number of discussions in English with KST when no one else was present. b) KST dealt with many documents written in English, for example, tax returns, accounts, the partnership agreement and property transfers. Geoffrey regarded KST as a clever businessman with a good understanding of commercial matters and sound ability to conduct business in English. c) The agreements relating to the purchase of WYT and YS businesses were written in English and understood by KST. d) Between 1975 and 1981 the only members of KST's family regularly working at the WYT or YS businesses were KST, Mary and, from 1976, FC Chow. e) The oral instructions in English provided by KST to John, the driver, as to his duties generally and as to what fish he should buy at the fish markets and at what prices. KST was able to communicate with John easily. f) From about August 1975 to about 1979 KST managed the YS business. KST regularly spoke to the butcher in charge in English. Such butcher visited WYT at the end of each day with the daily takings of YS. g) On occasions when matters arose which had to be dealt with in English, for example, applying for a new licence for the manufacture of sausages or to deal with Government Health Inspectors, KST called on Geoffrey to assist him and Geoffrey said he conducted those dealings. Geoffrey said KST had discussions about those matters with him in English at the time. 127 In his affidavit of 21 August 2007 Geoffrey said that the meeting of 30 July 1975 was conducted partly in English and partly in Cantonese. This related to the sale and purchase of WYT and YS. Geoffrey said he had some understanding of Cantonese although he did not speak Cantonese (paragraph 8 of his affidavit of 18 March 2009). 128 Mr WJ Lee witnessed the signatures of all parties to agreements for the sale and purchase of WYT and YS. These agreements were simple and Mr Lee could have explained anything which was not fully understood to all parties. Mr WJ Lee was probably present with KST when he and Geoffrey went through the draft of the agreement dated 1 October 1975. 129 Geoffrey appears to have conducted the negotiations with the CBA but KST was present at one of the interviews. Meeting at Clayton Utz and their advice 130 This bears upon KST's ability to understand English. It also has a wider significance. Different accounts are given of the meeting held on 24 September 1975 at the offices of Clayton Utz at 136 Liverpool Street Sydney. Those attending included Geoffrey, KST, Margaret, Mr KV Bennett of Clayton Utz (and possibly Mr Lawler of that firm), and a representative of GT Hartigan & Co. This meeting covered a number of areas but Geoffrey relied on it in support of his assertion that KST had a good understanding of the English language. 131 It appears that these issues were raised: a) the availability of KST's Australian assets to the British Solomon Islands Inland Revenue, including whether KST could be sued in Australia by that State or a judgment of the High Court of the Solomon Islands enforced in Australia; b) whether KST was liable to be extradited to the British Solomon Islands if he divested himself of his Australian assets; c) should he proceed with a reorganisation of his Australian affairs with a view to either pegging or reducing his estate for death duty purposes. 132 Clayton Utz sought the opinion on issues (a) and (b) of Senior Counsel with expertise in taxation related matters. On 22 October 1975 Senior Counsel answered in writing some 12 questions posed by Clayton Utz. He advised that no judgment of a superior court of the Solomon Islands based on the tax liability of a person in the British Solomon Islands Protectorate can be registered and enforced in New South Wales. Senior Counsel advised that, subject to checking the legislation, there was no applicable legislation anywhere else in Australia and that the British Solomon Islands Protectorate could not sue KST in Australia. The common law rule is that the courts of one country will not collect the taxes of other countries for the benefit of those other countries and that such actions will not be entertained. The NSW legislation did not alter this rule. 133 Senior Counsel also advised that if KST resolved to divest himself of his Australian assets he would not be defrauding or conspiring to defraud the British Solomon Islands Inland Revenue, providing none of the actions take place in the British Solomon Islands or involve the doing of any acts in the British Solomon Islands. The assumptions on which Senior Counsel proceeded appeared to be correct. 134 The letter of 22 October 1975 of Clayton Utz to KST enclosed a copy of the advice of Senior Counsel. It also dealt over 12 ½ closely typed pages with possible ways in which KST might re-organise his Australian affairs. It included references to possible changes in Commonwealth and State legislation and various possibilities. While the letter would be followed by a solicitor, an accountant or a financial planner, I doubt if a layman would follow it unless he were exceptional. I would accept that the author of the letter gave considerable thought to the re-organisation he was discussing but KST would not have understood what was written. He probably did not understand the discussion which took place in the offices of Clayton Utz. 135 Geoffrey said that KST appeared to understand most of the conversation at the meeting and only asked Margaret to translate a word or two on a couple of occasions during the meeting. Margaret was present at the meeting and these were the only occasions Margaret spoke. 136 Margaret said that the solicitor asked her father some brief questions which she interpreted. She said that Geoffrey asked a lot of questions to which the solicitor replied. She said that at one stage her father asked her in Szeyap what the solicitor was saying. Margaret said she told him she was not sure and could not follow all that was being said. Margaret said that during the discussion between Geoffrey and his solicitor they used words such as "extradite, criminal offence, civil case, imprisonment, tax commissioner, tax agent, arrested, gaol, gaol term, penalty, extradition, jurisdiction, legal representation". 137 Margaret said that about half an hour into the meeting KST became uneasy and stood up to leave and that she followed him. Margaret said that KST later said that he did not understand what they were saying – he understood the word "gaol". Margaret said, probably correctly, that she did not understand what was being said at the meeting and could not explain it to KST. Her estimate of "about half an hour" is probably an underestimate. Such a meeting probably lasted considerably longer. 138 Geoffrey had arranged for Clayton Utz to be retained. They had expertise in the areas in question. That was prudent. I accept the evidence of Margaret that Geoffrey asked a lot of questions at this meeting. 139 Geoffrey said that KST stayed for the whole meeting and that at the end of the meeting KST appeared to be very happy and shook the hand of the Clayton Utz partner. 140 The threshold issues had to be resolved before any re-organisation of assets could be considered. In their letter of 22 October 1975 Clayton Utz stated, "… it is now upon us to set out in a letter to you the various alternatives most of which were discussed when you conferred with GT Hartigan & Co and ourselves". 141 I would infer that at the meeting on 24 September 1975 Clayton Utz probably expressed a preliminary view whether the British Solomon Islands Inland Revenue could have recourse to KST's Australian assets to satisfy any tax debt owed to it by KST and whether he could be extradited for a criminal offence if he re-organised his Australian assets. This is borne out by the letter of 26 September 1975 from Clayton Utz to KST. In view of the importance of these threshold questions it was prudent that the advice of a leading cautious Senior Counsel was sought. The decision in Government of India v Taylor 1955 AC 491 was well known, but much was at stake and this area of the law requires much care. The various re-organisations of his assets canvassed were not simple to a layman. No action appears to have been taken to implement any of the proposals as to re-organisation of assets in the letter of Clayton Utz. 142 Margaret said that some months after October 1975 KST and she, without Geoffrey, spoke with Mr WJ Lee, a Chinese barrister who was also a close friend of KST. They spoke in Cantonese. Mr WJ Lee stated that it was unlikely that the British Solomon Islands Inland Revenue could confiscate KST's assets in Australia and that KST should put his time into the two businesses in Chinatown. KST's ability to speak and understand English (continued) 143 I did not find some of the examples on which Geoffrey relied as to KST speaking English compelling. I did not think it required any real command or understanding of the English language for KST to tell John what fish to buy and the prices he should pay. As to YS and the butchery, it would not have required a good command and understanding of English for KST to give instructions as to the stock to be ordered, prices to be paid, prices to be charged to the customers and the conduct of the butchery or for the managers to make recommendations and to seek instructions. Nor would the collecting and counting of the daily takings. Mary gave evidence of a manager of YS Butchery in 1975 communicating with KST in simple English. 144 Mary said that KST spoke reasonably good English and that she observed many conversations in English between KST and Geoffrey. She said that from time to time one of them would ask her to translate a word but overall they were able to communicate with one another very well (paragraph 23 of the affidavit of 7 December 2006). In paragraph 8 of her affidavit of 21 August 2007 she said that her father spoke Pidgin English very well while he was in the Solomon Islands. She said that her father was able to have conversations in English (mostly Pidgin English) and he often did so. She said that, when KST conversed in English, he generally used simple English words but was able to communicate quite well that way. She said that it was only if a discussion involved very complicated or technical words that KST would need some words translated, that if there was ever an occasion when her father did not understand what Geoffrey was saying, Geoffrey repeated what he was saying using simpler words. She recalled an instance of Geoffrey trying to explain some legal documents from Heidtman & Company. 145 Jason Richard Lowe was 16 when KST, his grandfather, died. Jason estimated that during his lifetime he met with KST about once every two months. They spoke in English about his schooling, his learning Chinese, his progress at school and general topics such as the food being served. When Jason visited his grandfather in hospital in 1997 Jason noticed that KST complied with the nurse's instructions and told the nurse how he was feeling. From time to time he observed KST speaking with his other grandchildren in English. Jason did not have much to do with KST outside family gatherings. 146 On the other hand, Margaret, Helen, Janet, Gordon and Sunly gave evidence of KST having a lesser command and understanding of English. Within the family the Szeyap dialect was always spoken. Margaret said that KST could not have a conversation in English. She said he could manage simple things like the food shopping. He could not read a newspaper written in English. He always read newspapers written in a Chinese language to keep himself informed about happenings in Sydney, Australia and the world. She said that on occasions when they were watching television together she usually interpreted items of interest to KST. 147 Margaret gave evidence of regularly accompanying KST, at his request, to doctors and of accompanying him to the Bank. Margaret denied that Geoffrey was communicating well with KST. Margaret pointed out that from 1975 –1989 KST engaged a Chinese-speaking accountant. 148 Helen said that her father could not have a conversation in English and that his English was limited to short greetings and to asking simple questions. Helen said that KST asked Margaret, and after the latter's marriage in 1989 KST asked her (Helen), to accompany him to see the dentist, optometrist and doctors and to do all necessary translations. Helen said she did so. Helen said she also renewed several Bank term deposits when they matured and passed on KST's instructions to the Bank. 149 Helen said that KST's ability to speak and understand English was very limited. He spoke and understood very little English. Helen asserted that all alleged conversations in English between KST and Geoffrey referred to in the affidavits of Mary and Geoffrey could not have taken place without a full translation (on both sides). 150 Janet stated that KST could not have a conversation in English, that he understood some English and could engage in brief simple conversations in English and that his English sentences consisted of a handful of words. Janet said that KST was always accompanied by one of his children to translate when he went to the doctor, real estate agent, bankers or lawyers. Janet instanced occasions when she accompanied him. Janet said she never heard a discussion or conversation between Geoffrey and KST in English. She said she heard a few simple words in English exchanged between them from time to time, general greetings, short questions and answers, but not detailed discussions. Janet denied that KST spoke English "quite well". 151 Janet said that KST required translation generally when conversation extended beyond a handful of words and that KST used and understood simple English words. He understood the names of all the products that he carried in the shop and words relevant to the sale of the products. KST could not read a newspaper in English and had great difficulties in understanding news on television. 152 Gordon said that KST's English skills were extremely limited and that he relied upon Mary, Margaret and Helen to translate for him anything which was in or required to be in English in respect of the businesses. Gordon said that KST was not fluent in English and experienced difficulty understanding any English other than very basic English words or phrases. He was not able to have an adequate conversation in English without somebody else present to translate and was unable to read English very well. Gordon said that at home KST would often ask Stella, Sunly or him to translate the television news for him. 153 Sunly denied that KST spoke reasonably good English. Sunly said that on many occasions he was required to act as a translator when KST and Geoffrey wished to converse. 154 Mr Alan McMurran, a solicitor and partner in the firm of Heidtman & Co, recalled a conference in his office on 18 January 1995 attended by himself, Margaret, Sunly, KST and Maria Lin, a solicitor employed by his firm who spoke the Cantonese language, concerning the estate of the late Fung Chun Sze Tu (also known as FC Chow). Mr McMurran was assisted by a detailed diary note. Ms Maria Lin also made a detailed diary note. The meeting lasted approximately 1 ½ hours. In that meeting KST did not speak to Mr McMurran in the English language. 155 Mr McMurran said that he communicated with KST through the translator, Maria Lin, and vice versa, that KST did not speak in English during the conference, and that KST did not show any other indication of understanding anything that he (Mr McMurran) said in English with non verbal gestures. 156 Mr McMurran recalled that KST, via the translator, did not wish to make a will as it was a bad omen and that the meeting concluded on the basis that he did not have any instructions either to provide further advice to KST concerning setting up a trust for him during his lifetime or to prepare a will for him. 157 Mr McMurran made a note of the instructions he received in relation to the estate of the late Fung Chun Sze Tu (FC Chow). 158 In her file note, Maria Lin has recorded that the majority of matters were discussed in Cantonese in order that KST might understand the general nature of the discussions. 159 In cross-examination Mr McMurran said that for most of the meeting people spoke in Cantonese, but for a smaller part of the conference there was discussion in the English language. Mr McMurran said that during the conference there may have been the odd English word exchanged between Margaret and KST, but not with him (Mr McMurran). Neither his independent recollection nor the notes of Maria Lin helped him to recall whether Margaret and KST used English words in their exchanges. 160 Mr McMurran said that KST might as well not have been at the meeting. There was no communication between him and KST. Mr McMurran did not have at this time an independent recollection that there were no non-verbal gestures consistent with him understanding English. Mr McMurran agreed that KST was elderly and frail. 161 Mr Johnson K Wong practised as an accountant in the Haymarket area from 1971 onwards. He had a substantial number of Chinese clients. He did not know KST before he came to him to do the accounts for the two businesses. He did not have many dealings with KST personally while KST was a client. He said that in the first couple of years he always dealt with KST and Mary himself. In 1981 he underwent "a big operation". He did not come to the office a lot, "so my partners, I think Mr Kwok, would look after KST". Mr Wong said that he always spoke to KST in Cantonese. He did not recall if he ever had occasion to explain to KST any documents that were written in English. 162 Mr Wong could not recall whether the information needed to prepare the tax returns of the businesses and those described as partners was supplied personally by KST or by others on his behalf. It appears that Mr Wong was supplied with details of the bank accounts of the businesses, cheque butts, bank statements and other information such as the cash takings and any cash purchases. Mr Wong did not require anything to do with customers' and suppliers' accounts. The same procedure was adopted as to WYT and YS. While Mr Wong and his partners appear to have prepared the annual accounts and tax returns, he was not intimately involved throughout the years with the financial records and accounts of the businesses. No audit was conducted. 163 The plaintiffs emphasised the many years in which KST had been in business and that he had spoken "pidgin English" for many years. KST preferred to remain in businesses which involved the Chinese community and with which he was familiar. To run the WYT and YS businesses he did not need to be fluent in English. He knew enough simple English words to be able to give instructions to his staff and his business associates. When KST spoke to his grandchildren in English he made standard enquiries and comments. This did not require him to be fluent in English or to have other than a superficial appreciation of what was being said. KST was assisted by Mr WJ Lee when buying WYT and YS and signing the agreements to purchase and probably in relation to the partnership agreement. Mary, Janet, Margaret and Helen had attended school in Australia and were able to assist KST in understanding requirements expressed in the English language. 164 In my opinion the plaintiffs, especially Geoffrey, have markedly overstated the capacity of KST to speak and understand the English language. Geoffrey recognised that KST was a capable businessman. With his dominating manner and personality, Geoffrey did not realise that KST was letting him speak but not understanding or agreeing with much of what he (Geoffrey) was saying. KST probably preferred to avoid any direct argument or confrontation. I agreed with the description of counsel for the plaintiffs that Geoffrey was loquacious when he gave his evidence. That was a gentle description. Geoffrey speaks forcefully and endeavours to control. He likes his words and opinions to prevail. Mary follows him. On the other hand, Margaret, Helen, Sunly and Gordon understated KST's ability to use simple English words to convey what he meant. How much KST understood when spoken to in English depended upon the simplicity of the words used by the speaker and probably the simplicity of the speech within which the words were spoken. KST ultimately bought businesses with which he was familiar. The decision to buy the Chinese style WYT and YS businesses was that of KST alone. KST was comfortable dealing with those of Chinese origin and negotiating in Cantonese. KST felt able to assess, control and manage Chinese style businesses in which there were appreciable cash transactions. Geoffrey realised the potential and dangers of such businesses. Evidence of Geoffrey, Mary and evidential challenges 165 From the manner in which he gave his evidence, Geoffrey was loquacious, dominating and self-aggrandising. He was not sensitive to the indications, expressions and opinions of others. He liked to hold forth and forcefully so. He held a high view of his own importance and his skills and he evinced a strong desire to succeed and establish that his views were correct. His personal qualities led him to overstate his contributions to the businesses. It would not have been useful or efficient, in view of Geoffrey's loquaciousness, his preference not to focus on the question but to give the evidence he regarded as important and his other qualities, for further matters to have been put to Geoffrey which were adverse or tended to limit or qualify what he had said. 166 When Mary was being cross-examined there were long delays in her answering some of the questions. She left me with the impression that her answers were very calculated in that she was searching for the answer most favourable to her case. In making this observation, I have not overlooked that some of the questions she was asked were lengthy and some were convoluted. I was left in doubt as to how much of her evidence should be accepted. I did not accept that she did not notice entries in her tax returns, nor notice that they did not include any income (profit distribution) from YS after 1986. It would not have been useful or efficient, in view of Mary's long delays in answering questions and calculated answers to questions, for matters to have been put to Mary formally when the correctness of her evidence was so obviously being challenged. At the point of cross-examination Margaret and Helen were unrepresented. They were not skilled in the art of cross-examination. 167 At T 1270 I remarked during the cross-examination of Sunly that every witness had been substantially challenged and that it had been contended by the various parties that none of them should be believed. The reasons differed. Counsel did not dissent from my observation. I was speaking of each of the plaintiffs and each of Margaret, Helen, Sunly and Gordon. Each was cross-examined at length. Family of KST in business 168 Mary worked at WYT from August 1975 to mid-January 1981. After Mary left she continued to do some work at home for a period by preparing and typing the monthly statements. FC Chow worked in the businesses from shortly after her arrival in Australia in mid 1976 until YS was sold and until WYT was closed down as from about 30 June 1989. 169 Margaret worked 2 ½ days per week in the businesses from August 1975 to about May 1980 and full time from late May 1980. In January 1981 Margaret took over from Mary and did what Mary had previously done. Margaret worked in both WYT and YS businesses. Margaret helped out at YS early in the morning and when YS became busy, often between noon and 2.00 pm. She continued working for WYT full-time until it closed about 30 June 1989. 170 Helen said that from about mid 1976 she helped occasionally in both WYT and YS. Helen worked full-time in the YS butchery from early 1980 to 1986. She seems to have been at WYT when it closed down about June 1989. 171 Janet helped out at WYT on a few occasions. In 1975 – 1980 she was preoccupied with her university studies. 172 Gordon said that during most of the period from 1976 to 1980 he was attending school. He worked at the WYT shop on Saturdays and during school holidays. In 1976 he was aged eleven. As he completed his studies and began his full-time career the amount of time he worked at the WYT shop gradually declined. Gordon stated that in 1987 and 1988 he was both working full-time and studying. He did not attend WYT so frequently. Gordon agreed that he did not describe in his affidavit working with Margaret after 1981; he was infrequently working in the grocery business from 1983 to 1987. 173 Neither Gordon nor Sunly was interested in running the businesses of WYT and YS. This would have been apparent by 1986, if not earlier. Both were studying for other careers. 174 Mary, Margaret and Helen were each paid wages in cash. So was FC Chow. Gordon was not paid any wages in his early years, but as he grew older KST made small cash payments to him for the work he had done. Preparation of tax returns 175 Mr Johnson Wong said that, at some stage after the WYT and YS businesses were acquired by KST, the latter told him (Mr Wong) that a partnership had been established for the ownership of the businesses and that KST gave him a copy of the partnership agreement. Mr Wong, or his firm or company, prepared tax returns for the WYT and YS businesses for 1976, 1977, 1978, 1979, 1980, 1981, 1982, 1983, 1984, 1985 and possibly 1986. He, or his firm or company, also prepared the personal tax returns of KST, FC Chow, Margaret and Mary up to the year ended 30 June 1989 and possibly in some instances up to the year ended 30 June 1990. Mr Wong, or his firm or company, prepared the annual accounts and tax returns of WYT up to the year ended 30 June 1989. It seems that Mr Wong may also have prepared the personal tax returns of Janet and Helen, but no copies of these are available. Copies of all tax returns prepared by Mr Wong or his firm or company are not available. KST paid the tax assessed as payable by FC Chow and each of his four daughters. 176 Mr Wong stated that he never prepared taxation returns for Geoffrey who had another firm of accountants prepare his taxation returns. Geoffrey had a number of business interests. When asked how he worked out the profits of the partnership to include in his tax return, Geoffrey said that: "up until 1981 I was sort of involved because my wife was there". When asked whether he received copies of the partnership accounts prepared by Mr Wong, Geoffrey replied, "For the first couple of years, yes, then after that we tended not to get it". Geoffrey believed that his accountants telephoned Mr Wong and obtained the figures over the telephone. Geoffrey said he did not ask the accountant (unspecified) to do a full audit of this business as it was very small from his point of view. Geoffrey said that between 1975 and 1990 his share of income (distribution) from the partnership was included in his taxable income in his return and that he paid tax upon it. Geoffrey explained that he paid tax because he did not object to profits being reinvested, that in the early years it was in his interest to force the payment by the businesses of all the overdraft facilities provided by the bank and to release funds for his own purposes and that as the overdraft was liquidated he bought further property. 1975 – 1976 and Geoffrey's alleged actions 177 In his affidavit of 8 December 2006 Geoffrey said that, immediately after 1 August 1975, he set up accounting systems for the WYT and YS businesses to manage sales tax exemptions and a payroll system. He summarised various tasks to which he attended. He said that, other than dealing with the CBA as to obtaining finance, he had little involvement in the banking and accounting side of the business. 178 Geoffrey said that when the WYT and YS businesses were acquired he tried to ensure that they were properly managed because of any potential liability that might arise and affect him. To have a proper audit control system one person alone should not be responsible for too many activities relating to the handling of money. The money was controlled by the family. Initially, it was KST and Mary and from about mid 1976 by FC Chow too. 179 Geoffrey said that he did not maintain records in relation to the takings or revenue for the WYT and YS businesses, that KST recorded the takings and kept other books of account, that he (Geoffrey) saw some of those records from time to time. Geoffrey said that they were largely written in Chinese which he could not read. Moneys coming in to WYT were recorded in a logbook. Either a debtors' ledger or some record of outstanding debtors of WYT was kept in the front office with Mary and later with Margaret. Geoffrey looked at it or them very rarely. It was a manual system. Geoffrey remained a signatory on the cheque account probably until 1985. When he signed or countersigned a cheque he was not satisfied in each instance that the account was properly payable. Geoffrey said that he "basically checked the WYT account until Mary left". Thereafter he signed wads of blank cheques in advance. He took no steps as to YS business to make sure that the cheques he signed were as to accounts which were properly payable. Geoffrey said that he relied on KST who also signed the cheques. Geoffrey said that he was aware that some business accounts were paid in cash. He said that he saw some instances in which the statement was endorsed with the amount and "cash". Such statements were kept by that business. 180 Geoffrey said he asked Johnson Wong to try and "look at ways of controlling the payment and recording systems". Geoffrey said he was told it was impossible. Geoffrey said that he virtually played no part in the preparation of the annual accounts of the businesses. Geoffrey said that in about May 1976 the documents for a loan from the CBA to the "Partnership" were completed. 181 Geoffrey relied on a mortgage dated 1 June 1976 given and signed by KST, Mary and FC Chow ("the mortgagor") over the Wiley Park property in consideration of certain advances and accommodation granted or to be granted at the request of the mortgagor to KST, Mary, FC Chow and Margaret, Helen, Geoffrey and Janet (described as the Debtor). There were covenants by the Debtor in the mortgage and each of the Debtors signed the mortgage. Despite its letters of 3 July 1975 and 12 August 1975 the Bank did not take security over the Fairfield property. There is no satisfactory evidence of the value of the Wiley Park property about June 1976. The limited security taken tends to suggest that the amount borrowed and owed was not large. In his affidavit of 21 August 2007 Geoffrey said that by about 1 June 1976 the funds advanced by CBA had been partly repaid and that only about $70,000.00 remained owing to the Bank. 182 The Court is dependent upon the recollection of Geoffrey as to the amounts stated. That is not sufficient. The duty stamp upon the Wiley Park mortgage is not clear. The Wiley Park property was unencumbered in 1975 and probably until the CBA mortgage. Geoffrey was referred to the accounts of WYT and YS for the year ending 30 June 1976, being the first accounts. He said that he looked at them. At the time he saw these accounts he thought that, with a couple of qualifications, they appeared essentially accurate. He thought that the Bank overdraft (shown as $10,678.61) was probably accurate. He disputed the entry of a loan from KST of $83,500.00. Geoffrey asserted that KST did not have that amount of money. Secondly, there was nothing showing his (Geoffrey's) contribution or interest. Thirdly, he disputed the statements of capital advanced. They showed a capital advance of $2,000.00 by KST, $1,000.00 by each of Geoffrey, Mary, Margaret, Helen and Janet and $3,000.00 by FC Chow, a total of $10,000.00. Geoffrey thought that these figures were set up by KST and did not reflect what was actually contributed, that the accounts were incorrect in that they showed his contributions as $1,000.00 whereas it should be about $35,000.00 to $40,000.00. There were proportionate distributions of net profit. The statement of distribution of net income showed salaries paid to all the partners except FC Chow. The notes to the Operating Statement of WYT record that the partnership commenced on 1 August 1975, that the partnership bank account was opened at Commonwealth Trading Bank on 6 August 1975 in the name of WYT and that on 1 August 1975 the taxpayers purchased the above-named business from ST Leung for $57,5000 and "This fund was financed by Kut Sze Tu's private funds and his own personal loan from the bank". Geoffrey said that the Bank Branch given was his branch and the entry suggested that he could monitor the figures. He said he wanted the depreciation on the furniture included (T 392 ll 45 – 48). 183 Geoffrey said that to establish the businesses on a secure foundation (including the purchase of stock) and operating soundly at least $150,000.00 was needed. It is surprising that Geoffrey did not demand that the accounts be redone to reflect the correct position. Apparently, Geoffrey showed the income (net profit) attributed to him in the partnership tax returns and possibly the salary attributed to him as income in his personal income tax returns. 184 Geoffrey said that the actual payment of stock paid in cash to the previous owner was not recorded in the accounts. 185 Geoffrey stated: "we [Geoffrey and Mary] also backed the loan account. [KST] could not borrow money so we had to give him the bank overdraft" and that it went higher than $10,000.00 at one stage. 186 Geoffrey agreed that the inaccuracies mentioned were connected with the balance sheet. He regarded the revenue statement (at the time he was examining the accounts) as probably essentially accurate. The operating statement showed sales of $581,150.28 opening stock as having no value or as nil, purchases of $513,879.97 and closing stock as $34,169.00. That left a gross profit of $101,439.31. Expenses were shown as totalling $52,756.54. Net profit was shown as $48,682.77, less partners' salaries of $15,981.00. The net distributable income was shown as $32,700.92. Geoffrey said that he periodically received copies of the financial statements for the years after 1976 while the businesses were operating. Geoffrey said that his wife talked to him about how the business was doing. This appears to refer to the period up to January 1981. Geoffrey said he was more interested in his own business than WYT, which was more an investment. He had a full time job at TAFE, a full time job at the University at the same time, a computer business, property investments and a property development company. Geoffrey said that he was a consultant as well and that he started an accounting degree. Up to January 1981 he regarded the moneys from the business as effectively under family control and he was content to leave things as they were. 187 Geoffrey said that in the initial stages he went in to the businesses quite regularly and frequently verbally reported progress to the bank. He said that the bank wanted a partnership agreement and his guarantees. After the businesses had been operating for some months he formed a provisional view as to the likely monthly income and the likely monthly outgoings. That enabled him to see whether the business was operating at a profit. These were the figures which he reported to the bank. Geoffrey said there was a lot of cash coming through the walk-in trade. The butcher's shop sold in a retail format. WYT did not want a cash register - they did not have the room for a full cash register system. Geoffrey described the premises as extremely small. Further, those at WYT were extremely reluctant to pay the $10,000.00 to $12,000.00 necessary to buy control equipment. YS, however, had a cash register. 188 Mary said that the WYT business was not very profitable in the first couple of years (T 239). Geoffrey had to monitor the bank balance on a daily basis and check to ensure that there were sufficient funds in the account to pay the invoices of the suppliers. If there were insufficient funds in the account, she would withhold payment. Mary said that Geoffrey monitored the bank account for roughly the first 18 months to two years. In her latter three years at WYT Geoffrey did not monitor the bank account. Revenue sources 189 Geoffrey estimated that the debtors consisted of about 40% or less of the total revenue. With risky clients, especially in a butcher shop where the stock was perishable, extended credit was inadvisable. The fish and the dry goods came from WYT and the meat from YS. 190 Geoffrey estimated that about 60% of the goods were delivered to "cash customers" and about 40% to account customers. There was no combination of the account systems of the two businesses. I did not think that I could or should rely on Geoffrey's broad estimates. 191 Whenever, sporadically, he received copies of the financial statements of the partnership in succeeding years, the revenue statements seemed likely to be basically right to Geoffrey, subject to the qualification that as the years progressed the accounts were never sent to him directly but to his accountants. Geoffrey added that when Mary was working at WYT there was a certain degree of accuracy except for the balance sheet. The revenue statements did not sufficiently allow for the cash received by the businesses but not fully disclosed by KST. 192 Geoffrey contended that any profits that arose from WYT and YS needed to be retained specifically to pay off the overdraft and to release his loan guarantees. He said he kept an eye on the overdraft from year to year. 1977 request for distribution of profits 193 Geoffrey said that in 1977 he spoke to Mr Wong about receiving some share of profit from these businesses because by that time the businesses were trading quite well and no longer needed seed money (which he provided to start the businesses). By letter of 25 March 1977 on the letterhead of his company, Contract Computer Services Pty Ltd, using the address of 84 Harbour Street, being that of YS, to Mr Wong, the letter apparently typed by Mary, Geoffrey pointed out that he and she held a 20% share in the business of WYT and YS, that "the business has operated on the basis of the original partnership since October 1975 and that the bankers are the bankers to ourselves and we hold deposits against loans to these business (sic) and any other business we engage in" and that the "adjustments for the contribution towards the said purchase price was to be out of the profit of [WYT and YS]". 194 The letter also stated that the bank has committed its overdraft facility to the partnership. The letter concludes: "It would be appreciated if these facts are pointed out without reference to this letter in order to smooth the way for a successful reconciliation of the above dispute. A copy of this letter has been forwarded to our solicitors, Clayton Utz & Co." 195 A copy also appears to have been sent to Yee & Co, the solicitors for KST. I would infer from the evidence of Geoffrey and the terms of his letter of 25 March 1977 that a dispute had arisen between KST and Geoffrey and that the latter wanted a distribution of the profits of the partnership and KST rejected any distribution. Geoffrey was seeking to call in aid Mr Wong, his (Geoffrey's) solicitors and those of KST. Geoffrey accepted that KST made all the effective decisions about these businesses and said that there were only two partners to his mind, namely KST and him. He regarded the others who had signed the agreement as sleeping partners. I do not know whether at this time there was a dispute as to the existence of a partnership or as to how its affairs should be conducted. December 1978 – legal advice sought as to accounts 196 In December 1978 Geoffrey consulted Slattery Thompson, solicitors. This was about the time KST caused the Haig Street property to be purchased. Geoffrey had a suspicion that some of the cash being received by the businesses was not being accounted for but he could not prove that. He queried where the money had come from to reduce the bank overdraft and also to purchase the Haig Street property. Geoffrey said that the overdraft of the businesses was being liquidated at an extremely fast rate but when he looked at the accounts of the businesses they did not seem to explain how this could be done. The letter of Slattery Thompson of 19 December 1978, apparently written by Mr Paul D Rosser, referred to Geoffrey's belief of defalcations from the partnership funds. Mr Rosser confirmed the firm's advice that the defalcations would not give rise to any increased taxation or criminal liability on Geoffrey's part. The letter noted that Geoffrey did "not propose at the present time to deal with the company's problems otherwise than on an internal family basis and we confirm our advice that, on the scant evidence that is available to you at the present time, no other course is feasible". 197 Geoffrey said that about the time he received advice from Slattery Thompson he asked KST to show him all of the books and accounts for the WYT and YS businesses, but KST refused to show them to him. Geoffrey said he managed to get a look at some of the books and records of the business from time to time but many of the entries were written in Chinese and he could not read what was written. He was present on a few occasions while KST counted the daily takings. Margaret said that she never saw Geoffrey present when KST counted the takings. She claimed that KST counted the takings in private. Margaret said that Mary did the bookkeeping and that Mary's work included making daily entries of cash or cheque payments from WYT customers. These were written in English. Margaret stated that at the end of each day Mary handed to KST the total cash and cheques received and that KST recorded the amounts in his exercise book along with the petty cash purchases. KST wrote these notes in Chinese. 198 Geoffrey said that about late December 1978 he told KST that KST could not have purchased the Haig Street property from the rental income from the Wiley Park and Fairfield properties and accused KST of using moneys from the partnership. Geoffrey said that KST replied that the money to purchase Haig Street came out of the rentals of Wiley Park and Fairfield, that he lived frugally, that he had no car and that he lived with his daughter, Janet. Geoffrey said that KST walked off and refused to discuss the matter further. Geoffrey was dominating and desirous of intervening. That did not suit KST. Geoffrey realised that KST was an astute businessman but thought that KST should do as Geoffrey advised. Geoffrey also wanted to benefit from KST's skills. 199 Although the letter of Slattery Thomson bears date 19 December 1978 and refers to a conference on 13 December 1978 and Geoffrey refers to speaking to KST in late December 1978, it could be that Geoffrey spoke to KST prior to speaking to Slattery Thompson. After the lapse of over 30 years it is not possible to be certain about the order of events. In either case, when Geoffrey did not have the evidence to prove the defalcations. I doubt whether he would have suggested to KST that he had taken money out of the partnership funds to purchase the Haig Street property. Even allowing for Geoffrey's manner, I doubt whether Geoffrey did any more than raise with KST whether any money used to purchase Haig Street came from the partnership funds. 1981 profit distribution requests 200 Geoffrey said that, following the birth of Jason in January 1981, he remarked to KST that the business was now successful, that he needed a distribution of profit from WYT and YS to allow him (Geoffrey) to complete the purchase of new home and that KST had already used the partnership funds to purchase his home in Haig Street. Geoffrey said he asked KST whether he borrowed money to buy Haig Street, that KST replied that he paid cash, that he never borrowed money, that the money came, as he had already said, from his own funds and rent from the flats. Geoffrey said he pointed out to KST that he had no funds after the Solomon Islands, that he (Geoffrey) lent KST money when KST had a tax liability to the Solomon Islands and KST's flats were being claimed by Solomon Islands Inland Revenue. Geoffrey said that he asserted that some of the funds used to buy the Haig Street property were from WYT and YS. Geoffrey said that he told KST that it was only fair that he (Geoffrey) should get a return on his investment. 201 Geoffrey said that KST replied that Geoffrey had agreed to allow KST to invest for the partnership, that he (KST) had always invested for all his family, that he (KST) was the governing partner, that he held 80% (of the partnership), that he could invest any surplus funds for the purchase of property in any way he chose, that (KST) had little money, that he was supporting two families, that he had sacrificed for the partnership by living with Janet, that Geoffrey's business was doing well and that Geoffrey (and his family) had moved from Randwick to Bondi. Geoffrey said that he replied that this was his own money, not partnership funds. Geoffrey said KST became quite angry, turned and walked away from Geoffrey. 202 Margaret denied that KST and Geoffrey had conversations to the effect alleged by Geoffrey in late 1978 and shortly after the birth of Jason (paragraphs 65 and 74 of Geoffrey's affidavit of 8 December 2006). Margaret said that her father's limited ability to speak and comprehend the English language did not extend to holding the conversations Geoffrey alleged. In my opinion, the language employed as set out in the conversations probably would not have been used. I have given thought to what was probably conveyed, using simpler language. 203 As to the conversation Geoffrey alleges occurred shortly after the birth of Jason, it is probable, because of the strong desire of the plaintiffs to adequately accommodate their new son and the family, that a conversation took place and that Geoffrey told KST that he needed money to complete the purchase of a new home and asked for a distribution of profits from the partnership. During the conversation I do not think that Geoffrey advanced the arguments he now suggests as he would probably have realised that they would antagonise KST and not yield any money. They are a later reconstruction. I do not think Haig Street was mentioned. Geoffrey learned much later that there was no mortgage over Haig Street. 204 KST made it clear to Geoffrey that he would not provide any money to Geoffrey and Mary. This probably ended the conversation. I cannot make any finding on the balance of probabilities as to what KST said to Geoffrey. It would be unsafe to do so after this lapse of time. 205 Geoffrey said, in paragraph 75 of his affidavit of 8 December 2006, that in late February or early March 1981 he again raised the question of a distribution of the profits. He also allegedly sought the repayment of the money he claimed he had lent the business. Geoffrey said that he told KST that they (he and Mary) needed the money for KST's grandchildren and a house and said that he reminded KST that he (Geoffrey) had lent KST money when he needed it to set up the business. When KST effectively declined, Geoffrey said that he asked KST to return the money Geoffrey lent to the business and said that he would trust KST to invest for him and Mary and treat Haig Street as a distribution. Geoffrey said that KST agreed to sign a cheque for $25,500.00 and asked him to arrange for KST to have full authority to sign cheques without Geoffrey's signature. (Geoffrey explained that initially he believed he signed cheques until about 1981 but later seemed to accept that he signed cheques until about 1985.) Geoffrey's statement that KST asked him to arrange for KST to have full authority to sign cheques without Geoffrey's signature is incorrect. Geoffrey said that he replied to KST that he would only allow that to happen if KST assured him that he would count the Haig Street property as a partnership distribution and the profits were given to them (the plaintiffs) in the future. Geoffrey stated that KST responded the he was the managing partner, that he would invest the funds by buying future properties in his own name and holding them for the partnership, that since he owned 80% he would share it as he liked with his other children. I do not think that any conversation which occurred was in the terms alleged by Geoffrey. The plaintiffs needed $25,000.00 as a matter of some urgency for the deposit on a house which was a high priority for them. Geoffrey did not wish to antagonise KST and jeopardise the plaintiffs' chances of obtaining $25,000.00. 206 Geoffrey said that he recommended to KST that he invest in commercial property rather than residential property, that KST replied that Geoffrey could look at commercial properties, that investing in commercial properties would upset his other children, that KST said that he would hold any property in which he invested for the plaintiffs and that they would get 20% when it was sold, that this was according to the partnership agreement, that he would purchase all properties and hold interests in ten portions and that he would allocate 20% for the plaintiffs, and that he (KST) would receive all rent and reinvest it for the parties. 207 Although Margaret dealt with the conversation in paragraph 74 of Geoffrey's affidavit and expressed the view that the conversation alleged shortly after Jason's birth did not take place having regard to KST's lack of understanding and command of the English language, she did not deal in the same terms with paragraph 75 of Geoffrey's affidavit of December 2006. It is not suggested that Margaret was present. Again, Geoffrey has purported to recount a conversation to the effect stated. The terms recounted by Geoffrey contain four references to "partnership", a reference to "partner" and a reference to "partners". There is also the use of "partnership distribution" twice. There is the reference to KST owning 80% of the partnership and references to the plaintiffs holding a 20% interest. From its terms, much of the conversation recounted appears to be a reconstruction designed to advance the plaintiffs' case. I am not satisfied that a conversation along the lines indicated took place, save that I accept that Geoffrey sought about $25,500.00 so he could buy a house for the family. Margaret, in response to paragraph 75 of Geoffrey's affidavit, rejected what appeared to her to be the suggestion that KST invested in commercial properties because of Geoffrey's suggestion. She said she accompanied her father to inspect many commercial properties. 208 Geoffrey said that KST provided him with a cheque for $25,500.00 which he banked about 4 March 1981. Geoffrey's bank statement shows a withdrawal on 4 March 1981 of $25,500.00, against which he has written the words "Deposit Hse" and a deposit on 4 March 1981 by way of transfer of $25,000.00. The words "Brisbane C Council" have been written against this entry. I do not know what those words mean in the context. 209 Margaret gave a different version of events. She said that in about March or April 1981 Mary telephoned WYT and spoke with her. Mary told her that Geoffrey wanted a loan of $25,000.00 from the WYT cheque account for one month, that Geoffrey would pay it back in one month's time. Margaret said that Mary told her that she had rung the branch of the Bank and there was enough there. Margaret said she spoke to KST who approved a loan of $25,000.00 from WYT cheque account repayable in one month's time. Margaret said she wrote out the cheque and Geoffrey collected it. Margaret said that after about five weeks Geoffrey collected the monthly statements to take home for his wife to type, that she asked him if he was going to pay back the loan soon and that Geoffrey replied, "I don't know, ask Mary". Margaret said that she then telephoned Mary, reminded her of what she had said, inquired if they were going to pay the loan back, that Mary said that the loan would not be repaid right away, that Geoffrey was very busy and that WYT would get the cheque when they saw it. Margaret reported the position to KST and said that she never raised the matter again with either plaintiff. 210 In his affidavit of 21 August 2007 Geoffrey adhered to the conversations set out in paragraphs 74 and 75 of his first affidavit. Geoffrey denied that he had the conversations which Margaret alleged when he collected the cheque for $25,000.00 and about repayment of the loan. Geoffrey said he did not borrow $25,000.00 from the partnership, that he was aware that the partnership accounts for the year ended 30 June 1981 record a loan to him of $25,000.00, that that entry was incorrect, that he spoke to Johnson Wong about this. Geoffrey said that the loan entry did not appear in the 1984 accounts. Geoffrey said he did not have a copy of the 1983 accounts and was unable to say whether the entry had been removed by that time. The accounts of WYT for the year ended 30 June 1982 show an unsecured loan of $25,000.00 to Geoffrey. 211 Mary denied in her affidavit of 21 August 2007 that she ever had a conversation with Margaret to the effect of that set out in paragraph 134 of Margaret's affidavit of 3 May 2007 (that is, requesting a loan of $25,000.00 from WYT for one month). Mary also denied that she ever had a conversation with Margaret as set out in paragraph 138 of Margaret's affidavit (that is, as to the repayment of the alleged loan). 212 The two version of what happened do not sit readily together. It is possible to reconcile the two versions in that, if KST did not respond or was slow to respond to Geoffrey's further request for $25,000.00, Mary may have telephoned Margaret and requested a short-term loan of $25,000.00. Geoffrey and Mary were anxious to buy the house which they had selected. This "reconciliation" is somewhat strained as both KST and Geoffrey were inclined to be rather stubborn. I am unable to say whether the version of events given by Geoffrey, supported by the denials of Mary, or that given by Margaret is correct, but I would not accept on the balance of probabilities that the language allegedly used by Geoffrey was employed. 213 Hitherto I have dealt, broadly in chronological order, with events alleged to have taken place in the period from 1975 – 1981 and some of the competing contentions. I next turn to the financial contributions allegedly made to the businesses. Financial contributions 214 There is a copy of a letter addressed to the Manager, Commonwealth Trading Bank Australia, Stock Exchange which appears to be undated (or perhaps the date is obscured) stating: "I Geoffrey Alan Lowe hereby request and authorise the Bank to increase my overdraft facility by $13,000 from $6,000 to $20,000 on its usual terms and conditions. Overall facilities will then be: - Overdraft Facility $20,000 - Bill Discount Facility 35,000 Total Facilities $55,000" The copy letter appears to be signed by Geoffrey and underneath his signature the following appears: "In our capacity as Third-Party Mortgagors we hereby agree to the Bank increasing the above overdraft." The letter continues with the acknowledged signature of Mary (T 338) and the Common Seals of the Lowe companies, G Lowe and Sze Tu Holdings Pty Limited and Contract Computer Services Pty Ltd. (See Exhibit 2D & 3D – 7.) The letter does not assist in determining the amounts of the advances by the CBA in 1975 and 1976 to the businesses of WYT and YS. The letter points to possible cash resources which the plaintiffs had, but not the use of these resources. 215 (a) It is necessary to consider the funds provided by KST, those provided by the plaintiffs, those provided by the CBA and the tax returns. These areas overlap and also overlap with matters previously discussed. (b) The plaintiffs submitted that the various bank statements and passbooks put to Geoffrey in cross-examination (T 476 – 488) showed KST draining all of his bank accounts about the time of the acquisition of the WYT and YS businesses and that he was able to gather together about $98,011.00. See Exhibit 5D & 6D – 7. (c) There was a stock payment of $2,400.00 about 22 June 1975 as to YS and a final stock payment of $57,180.00 about 11 December 1975 as to WYT. $30,000.00 was paid on 5 September 1975 for YS and $51,125.00 on 3 October 1975 for WYT. Under the sale documents deposits of $10,000.00 and $5,000.00 were payable on 1 August 1975. It should be assumed that payments of those sums were made prior to possession being given of the businesses about 1 August 1975. The plaintiffs pointed out that the purchase prices of $57,500.00 and $30,000.00 under the sale documents and the payments for stock in June 1975 and December 1975 meant a total of $147,080.00 was payable on the purchase of the businesses. (d) Some further factors require consideration including the special arrangement for payment of stock as it was sold and the payments for the businesses made after KST took over running the two businesses as from 1 August 1975 when he apparently assumed possession of them. Apparently operating profits were to be used to make the payments for the businesses, at least in part. (e) It is not known what cash resources KST had. He did not disclose the amount of these, if any, to anyone. (f) There is the further factor of the amounts of cash received by KST but which he did not disclose in the income tax returns of WYT and YS. Mr Wong said that in preparing the tax returns he obtained information of the cash takings and any cash purchases (T 507). The accountant's work sheets and files are not available. 216 Margaret said that KST said to her that the partnership agreement was only a superficial document, that Geoffrey and Hing (Mary) knew that he (KST) bought the WYT and YS businesses with his own money and that he was the sole contributor of the finances, that he owned the businesses and that he had full control of the money. That is not evidence of the truth of the facts asserted but evidence that KST made a statement to that effect and an indication of the evidence he could have given. 217 Helen said that as far as she recalled KST purchased WYT and YS about 1 August 1975 and paid for the businesses and the stock in cash during the months following. 218 In the Statement of Claim filed 7 November 2005 and verified by Geoffrey and Mary it was stated that about $57,500.00 of the purchase price for the business was paid to the vendors between about October and December 1975 and the balance of the purchase price was paid to the vendors by way of instalment payments during the period from about August 1975 to June 1976. By the time of his affidavit of 21 August 2007 the payment details had changed – see paragraph 17 of that affidavit. They are set out in this judgment. Geoffrey appears to attribute this to the production by Margaret of a number of documents. I did not accept that explanation. Much caution has to be exercised in accepting recollections of events so long ago by an interested party. 219 (a) In paragraph 15 of the Statement of Claim it was stated that funds for the purchase of and/or working capital of the businesses were sourced from personal and/ or borrowed funds of Geoffrey in excess of $16,000.00 personal and/ or borrowed funds of Mary in excess of $2,500.00, personal funds of KST of about $39,000.00 and finance of $70,000.00 from the CBA. (b) While the amount alleged to have been provided by Mary has remained constant, the amount provided by Geoffrey had risen by his affidavit of 8 December 2006 to $46,000.00 – see paragraph 55. This increase of $30,000.00 one year later in the plaintiffs' materials as to amounts advanced to purchase WYT and YS, in part, causes me to approach the evidence of Geoffrey with caution and not to accept his recollection of the financial arrangements as accurate. (c) I have noted that there is a reduction of $6,600.00 in December 2006 in the amount allegedly advanced by KST. The figure of $70,000.00 finance provided by the Bank has remained constant in both the Statement of Claim and Geoffrey's affidavit. That figure is referred to at a later stage. 220 $25,000.00, being part of the $46,000.0 to which Geoffrey refers, was said to come from an increased loan facility over land at St Lucia and Bligh Place, Randwick. The transfer to Geoffrey of the two St Lucia lots and the bill of mortgage to CBA were registered on 21 December 1973. The mortgage appears to have been signed by Geoffrey on 27 July 1973, but mortgages to Banks often do not state the amount advanced and cover advances to be made from time to time. A second part ($11,000.00) of that $46,000.00 was said by Geoffrey to have come from the extension of existing overdraft facilities. A third part ($10,000.00) was said by Geoffrey to have come mostly from the sale of the AGC shares which he had held. 221 Geoffrey referred to a copy of the Bill of Mortgage with the CBA, being GAL 10. The front page of that mortgage reveals that it was assessed for duty (in Queensland) on 27 September 1973. Perhaps it is the front page of the copy mortgage included in GAL 9. It is expressed to be "in consideration of certain advances and accommodation granted or to be granted to Geoffrey … ." No amounts are stated and part of the stamp is illegible. Geoffrey also relied on a Bill of Mortgage to Esanda Ltd for $18,000.00 stamped about 8 August 1973. That appears to be over the same lots at St Lucia. GAL 12, being a bank statement of Geoffrey's fully drawn loan account, shows that $11,000.0 was debited to that account against the entry "MIS" in December 1975, prior to 10 December 1975. Supporting documentary evidence of further advances has not been produced. 222 While the copy mortgages and title documents produced reveal that Geoffrey owned the two lots at St Lucia and had obtained financial accommodation as to them and the Bank statement shows the debt of $11,000.00 in Geoffrey's fully drawn loan account, the available documents do not establish that the sums of at least $25,000.00 and $11,000.00 were paid by Geoffrey either for or towards the purchase of the two businesses, stock or by way of working capital. In paragraph 18 of his affidavit of 21 August 2007 Geoffrey says that to the best of his recollection he sold $9,940.40 worth of AGC shares about 3 September 1975 and used those proceeds towards the $11,025.00 payment in respect of the YS business. Geoffrey has produced his register of purchases and sales of AGC shares in support of his claim. It appears from the receipts issued by Mr ST Leung bearing date 5 September 1975 that $18,975.00 was paid for goodwill of the YS business and that $11,025.00 was paid for plant and equipment. 223 The plaintiffs relied on the actions being taken, or about to be taken, by the Solomon Islands Inland Revenue in about 1975 against KST and his assets, so that KST's assets there could not be taken into account. Additionally, they relied on KST's alleged lack of assets in July/August 1975 in Australia which could be used to support any purchase or any loan. In about July/August 1975 KST, according to Geoffrey, spoke of his assets as comprising his interests in the Coogee Bay Road unit and the Wiley Park and Fairfield blocks of units. The plaintiffs argued that if KST had any other assets (including cash) he would have produced them rather than borrow. I do not think that is probable in the present case. KST did not tell Geoffrey of the cash resources which KST had. 224 Margaret said that KST started moving his money and assets out of the Solomon Islands well before the purchase of the Fairfield property in 1972 (T 956). That is probable. 225 It appears that the security required by the Bank pursuant to its letters of 3 July and 12 August 1975 was not provided as specified. No registered mortgage was ever given over the Fairfield property and the mortgage of the Wiley Park property was not provided until 1 June 1976. It would be unusual for a Bank to advance a sum such as $145,000.00 without taking some security. It was not stated that there had been a deposit of title deeds. The evidence does not enable me to draw the inference that this occurred. 226 According to Geoffrey, around 16 September 1976 the CBA made available $60,000.00 for WYT and $10,000.00 for YS, secured by a mortgage of $40,000.00 over the Wiley Park property and a mortgage of $35,000.00 over Geoffrey's properties at Bligh Place Randwick and St Lucia. Geoffrey said that he did not now recall how much of those moneys were used to pay off the balance of the purchase price to the vendors and how much was injected into the business as working capital. Geoffrey said that by 1 June 1976 the funds advanced by CBA had been partly repaid such that only about $70,000.00 remained owing to the Bank. I have been referred to the mortgages signed in 1973 mentioned earlier and that signed about 1 June 1976. While the accepted letter of 12 August 1975 from CBA refers to a total financial accommodation of $145,000.00, it was subject to the borrowers meeting the conditions contained in that letter and the earlier letter of 3 July 1975. There is no mention in either letter of the CBA of any security being provided other than the flat properties at Wiley Park and Fairfield. I am not persuaded that the CBA advanced $145,000.00 as deposed to by Geoffrey and Mary. Finance in that amount was arranged. When finance is arranged it is usual to draw down as much as possible, especially when there is a commitment fee if the loan is not fully funded. However, in the present case, it is shown that KST disliked borrowing and was keen to pay off outstanding debt. The full $145,000.00 was probably not drawn down but a lesser figure probably was. The accounts of WYT for the year ended 30 June 1976 refer to a loan of $83,500 from KST and a Bank overdraft of $10,678.00. An expense is shown as "Interest C'wealth Bank re O/D - $187.20". The accounts of YS for the year ended 30 June 1976 refer to a loan of $22,400.00 from KST. The interest payable to "C'Wealth Bank re O/D" is shown as $1,103.60. The amount of the overdraft to CBA is shown in the accounts of WYT but the majority of what appears to be the interest payment on the overdraft is shown in YS's accounts. Mr Wong explained that any stock purchased from the vendors would be included in the purchase of the business. The tax returns do not state the stock so purchased, but after the business opens the returns include all purchases of stock in the figure of purchases. This means that the 1976 tax returns are of limited use when it comes to assessing the amount advanced by CBA and that it is probably desirable to distinguish between the amounts of $100,000.00 (the loan) and $45,000.00 (the overdraft). 227 Mr Wong stated that in the 1970s and 1980s any overdraft accommodation obtained from a Bank was secured. This is probably true. The overdraft does not appear to have been large. At T 910 – 911 Margaret speaks of obtaining the title certificate to Wiley Park and giving it to Mary. It was for the bank overdraft, the only one that Margaret was aware that KST had entered into. 228 Mr Wong did not have access to the accounts of WYT and YS for the year ended 30 June 1977. Copies of these were probably not available. 229 The return of WYT for the year ended 30 June 1978 shows a loan from KST of $83,500.00 and Creditors and Accruals of $60,845.00. Amongst the assets there was shown: "Cash at Bank – C'wealth Trading Bank $50,150.00 ANZ Bank $10,212.00 Security deposits $ 2,330.00" No bank overdraft or any interest payment is shown. This was probably a good year as the net profit after partners' salaries was shown as $88,472.00. 230 The return of YS for the year ended 30 June 1978 shows a loan from KST of $22,400.00 and in the assets "Cash at Bank $16,571.00". No bank overdraft or any interest payment is shown. 231 The evidence does not enable any satisfactory identification of the source of $83,500.00 said to be a loan from KST to WYT, nor the source of $22,400.00 said to be a loan from KST to YS. What is not clear is how much money, if any, KST was able to get out of the Solomon Islands before the Inland Revenue of those islands took action. According to Geoffrey, when KST told Mr WJ Lee about his assets he stated that the assets (including cash) he had in the Solomon Islands were worth about $150,000.00. KST also referred to having considerable cash (paragraphs 48 and 54 of Geoffrey's affidavit of 8 December 2006). In the conversation with Mr Lee deposed to by Geoffrey KST said that his two shops and stock in the Solomon Islands were worth over $150,000.00 (paragraph 48). 232 Mary, KST and FC Chow in writing requested the Commonwealth Bank to discharge its mortgage over the Wiley Park property and hand all deeds and any documents to Margaret on payment of "our total indebtedness". The undated request also stated, "Please cancel our limit of overdraft." About 10 May 1977 the Bank executed a discharge of Mortgage of 1 June 1976 over the Wiley Park property. The discharge released the land but reserved the rights, powers and remedies, if any, of the Bank against the mortgagors and all sureties. Margaret stated that an overdraft facility was established with the CBA, but she asserted that so far as she knew it was never used in WYT. It is probable that at least portion of such a facility was used, but I am not able to determine the amount. By about May 1977 the Bank had a request "to cancel our limit of overdrafts". 233 While the evidence does not cover the point satisfactorily, it is improbable, but not impossible, that the Bank would have discharged its mortgage over the Wiley Park property if any substantial sum had remained due to the Bank. The stated release of Geoffrey by CBA towards the end of 1977 from personal guarantees given suggests that no substantial sum remained due to the Bank. Geoffrey also asserts that the WYT and YS businesses had generated sufficient cash to repay all of the CBA loan facilities by about 1981. 234 There is no claim for interest paid and no statement of liability to the Bank in the 1978 and 1980 accounts of the two businesses. 235 I am not satisfied upon the balance of probabilities that Geoffrey contributed at least $25,000 to the purchase of the WYT and YS businesses. At the time Geoffrey appears to have other business interests, including the St Lucia development. 236 I do not question that Geoffrey sold his shares in AGC, but I am not satisfied that he advanced further cash in the amount of about $10,000.00 to the WYT and YS businesses. 237 I accept that the bank statements exhibited to Geoffrey's affidavit show that $11,000 was debited to his fully drawn loan account in early December 1975 increasing his total indebtedness, but it does not follow that this sum was part of the sum of $57,180.00 paid for the stock in respect of the WYT business on 11 December 1975. I am not satisfied on the balance of probabilities that this sum of $11,000.00 was applied as Geoffrey claims. The events alleged took place in 1975. I have had regard to the documents produced from earlier years, but it is unsafe to rely on recollections of what happened so long ago as to the application of sums of money. The difficulty is augmented when the deponent had other business interests and has an interest in the outcome of the proceedings. He had invested in property since 1973. 238 Geoffrey had investing and financial skills. He gave evidence of having a relationship with a CBA branch manager. He conducted negotiations for a loan and procured the letters of 3 July 1975 and 12 August 1975. There was a basic difference in business practice between KST and Geoffrey. KST did not like borrowing money and was reluctant to do so. If he did borrow money, KST liked to pay off any debt very quickly. Geoffrey borrowed money from banks to finance his business activities. Both KST and Geoffrey liked to rule the roost. They did not work together readily in business. 239 A distinction should be drawn between the position which prevailed from May 1977 and that revealed by the accounts of WYT and YS for the year ended 30 June 1978 on the one hand, and the position revealed by the accounts of WYT and YS as at 30 June 1981 on the other. These latter accounts seem to contain the changes (or at least some of them) which Geoffrey wanted and spoke to Mr Wong about. 240 The accounts of WYT as at 30 June 1981 show a change in the current assets. There is no cash at the bank but cash on hand is shown as $16,827.00 and unsecured loans as $28.400.00. Those accounts contain: i) an entry under the heading of Non Current Liabilities "Loan – Unsecured $47,740.00" This appears to be a loan from YS. In the 1980 accounts there was shown a current liability of $45,000.00 by way of a loan account. ii) an entry under the heading of Current Liabilities "Bank Overdraft (Secured) $14,737.00" Note 5 of the WYT accounts records unsecured loans of KST of $35,000.00 and of Geoffrey of $25,000.00. Note 7 refers to an investment (Interest Bearing Deposit) of $51,479.00. 241 The accounts of YS for the year ended 30 June 1981 in the list of assets show no cash at bank, cash on hand of $6,837.00 and unsecured loans of $62,840.00. Note 5 of the accounts refers to unsecured loan to WYT of $47,740.00 and one to KST of $10,000.00. Note 7 refers to an investment (interest bearing deposit) of $30,887.00. 242 The YS 1981 accounts contain this entry under the heading "Current Liabilities": "Bank Overdraft (Secured) $8,814.52" 243 I conclude that probably by about the latter part of 1977 any liability to CBA had been discharged, that further overdraft accommodation from the Bank was obtained or drawn on during the financial year ended 30 June 1981. Security was probably required by the Bank. What security was given does not clearly appear. The secured overdrafts of WYT and YS recorded in the accounts total about $23,551.00. 244 The copy balance sheet of WYT for the year ended 30 June 1982 shows a bank overdraft (secured) of $8,072.00. The copy balance sheet of YS for the year ended 30 June 1982 shows a bank overdraft (secured) of $4,174.00. The current assets included an unsecured loan to WYT of $70,723.00 and one of $10,000.00 to KST. The security given for the bank overdrafts does not appear. 245 The figures demonstrate that for many years WYT and YS were carrying on business with small overdrafts but with substantial inter-business loans. Perhaps YS was helping to support WYT in the 1982 financial year. 246 Geoffrey gave evidence that, while he was not involved in the day-to-day trading operations of either WYT or YS, he carried out numerous tasks for these businesses. His evidence was supported by that of his wife. Margaret accepted that he did perform some tasks but there was a dispute as to their extent. Some of the evidence as to this is referred to earlier. Helen and Janet, in their briefer affidavits, took a similar approach. It is unnecessary to resolve these differences. The cash component 247 In his affidavit of 15 March 2009, Mr Wong stated that about the time he started preparing the taxation returns for the WYT and YS businesses, KST told him that the customers of WYT and YS paid in cash. Payments by cheque were not generally accepted unless the customers were well known to the business or had an account. During the 1970s and early 1980s grocery businesses and restaurants did not accept credit card payments. 248 Mr Wong said that the records he required to prepare the taxation records for WYT and YS were principally the bank statements and the cheque butts. For cash businesses like WYT and YS he also required the sales register (rolls) recording sales and either expense invoices or receipts. Mr Wong said that it was usual in such businesses for the cash from sales to be used for other expenses of the business, such as paying wages or suppliers. Thus the amount of cash deposited at the bank did not necessarily reflect all of the cash sales. Mr Wong said that his recollection was that he was provided with such documents each year by KST. In view of the evidence as to the cash register at WYT, I doubt if his recollection is completely correct. Mr Wong may well have been supplied with the cash register rolls of YS recording the sales but it is unlikely that he would have been supplied with cash register rolls of WYT. While there was a functional cash register in YS, the cash register in WYT apparently did not keep a record of the sales made. Mr Wong said that in order to prepare the tax returns for the WYT business he obtained from KST details of the bank accounts, cheque butts. Bank statements "and other information, such as the cash takings and any cash purchases" (T 507). He prepared the tax returns in accordance with the records and the information supplied by KST. It is probable that, rather than relying on cash register records, Mr Wong relied on the information as to the cash sales and cash purchases and disbursements supplied by KST or on his behalf. Mr Wong stated that he relied on KST to supply information as to the wages paid to those family members who were described as partners. 249 Mr Wong's records of the information supplied by KST are no longer available. 250 I have earlier referred to Geoffrey's evidence that he was told by Mr Leung that there was a lot of cash and that he recalled from his observations that the majority of the payments made to the WYT were in cash. 251 Mary stated that the customers of the WYT business were both general members of the public who entered the shop and Chinese restaurants in Sydney and throughout NSW and interstate and that during the period she worked at WYT it was a busy and successful business. She excepted the first couple of years. 252 As to WYT, Mary stated that customer cheques received by mail, customer cheques handed in over the counter and payments by customers in cash of accounts were recorded in the notebooks kept by her. She did not record cash payments by off the street cash retail buyers. She put the moneys received from all sources in the till. At the end of the day KST tallied up all moneys received. Mary stated that she had nothing to do with the YS money. 253 Mary explained that with meat deliveries there are no monthly statements and that payment is made on delivery in cash or within seven days. If the butcher did not have enough cash on hand to pay the meat supplier, he would ask her for a cheque and she would write out a cheque on the YS account. 254 In her affidavit of 6 August 2009 in reply Mary said as to WYT that on weekdays the average number of walk-in retail customers between Mondays and Fridays outside of festival times was about 50 customers per day and that on average they spent about $15 to $20 in cash each. The number rose on Saturdays outside festival times to about 65 – 70 customers per day. Mary said that during the festive periods the number of daily customers increased to more than 110 customers per day with the amount they spent rising to about $30.00 - $35.00 each, again paying in cash. Mary also deposed to up to about 25 small business operators spending on average about $50.00 per week in cash on various products. 255 Mary also gave evidence of customers coming into WYT complaining that they had lengthy waits to be served at YS. Sometimes for regular customers she sent a staff member to place orders at YS so as to allow them to jump the queue. 256 Mary said that during the period August 1975 to January 1981 cash payments were made to a number of suppliers. Some were always paid in cash, for example, the moon cake supplier. Others were paid in cash occasionally. Mary has listed some particular suppliers and described some suppliers by reference to the goods supplied. Mary said that the maximum amount paid in cash averaged about $1,500.00. The examples given suggest that the amounts paid varied considerably. Mary said that some restaurant customers paid in cash. She gave examples. 257 Mary said that there were five people who sold to retail customers. If the driver, John, was included that made six. The numbers included KST, who exercised general supervision. When WYT was busy with retail customers the staff worked on serving them. 258 Mary realised that it would help her case if there were a large number of retail customers who paid cash. 259 Mary thought that her estimates of the customer attendance and spending, whether retail or household or small business operators, tended to be conservative. I do not agree. 260 Jeffrey Williden worked as a butcher for YS from about 1980 to about 1982 /1983 and again from 1986. He was first contacted to give evidence in this case about late July - early August 2009. Mr Williden said that when he started at YS Butchery in about 1980 there were six people working there, namely, Helen, Margaret, a man called "Con", another butcher, whose name he could not remember, a delivery man and himself. For about the first eight or nine months Con, a butcher, worked at the front of the shop and Mr Williden and the other butcher worked at the back of the shop cutting up meat. Helen and Margaret alone served customers in the shop, trimmed the pork up, took the orders for the restaurants and told the butchers what they had to do. When he returned after about eight weeks, Mr Williden said he moved to the front of the shop shortly afterwards and worked for YS for about another year. Con had left and there was a replacement butcher. Mr Williden said that on average during Monday to Friday YS served 60 – 80 customers per day, that on Saturdays, with the shop closing at 12 noon, YS served 60 customers. Mr Williden said that the shop was busy. 261 Mr Williden gave details of substantial sales by YS and recalled that the customers of YS included wholesale and restaurant customers and retail customers who walked in off the street and to whom substantial sales were made. Mr Williden said that he observed that most customer payments were made in cash and that walk-in customers always paid in cash. 262 Mr Williden said that in 1986 when he returned to YS he was told by Helen that the business had been sold and was in the process of a handover to Mr Tony Lam. Mr Williden worked for Mr Lam until he sold the business in about 1991. Between 1980 and 1991 the YS butchery continued, according to Mr Williden, to be a busy business employing about the same number of staff and with roughly the same number of customers. Mr Williden said that he did not notice any decline in the trade of YS butchery until after about 1991. 263 Most of the customers who patronised YS in the 1980 – 1982 period were Asian and any oral exchanges between the customers and Margaret or Helen were virtually always in Chinese. He saw money being put in the cash register but Mr Williden did not know what type of cash register. He never used it. The orders for the restaurants were written in Chinese. 264 Mr Williden's estimate of 60 – 80 customers per day was based on the shop being quite busy. He said that some of the time there were about 15 customers in the shop. He did not count the customers and was relying on his recollection of what happened many years ago. Mr Williden emphasised that he was not suggesting, even on Saturdays, that the YS butchery was chock-a-block all the time. There were breaks or lulls. 265 For part of the period there was another butcher shop in the Chinatown area but Mr Williden did not know for how long it operated. 266 Mr Williden was unaware of any festival periods. Nor could he remember any period of increased business. Mr Williden explained that he selected a figure of each walk-in customer spending an average of $15.00 to $20.00 based on "when Chinese go into a butcher shop they don't just buy one thing, they buy a half kilo of this and a half kilo of that, so that's what I thought the price would be." I had marked reservations as to the reliability and accuracy of Mr Williden's estimates of what took place so long ago. 267 Helen cross-examined Mr Williden in some detail as to what occurred in relation to various products and the preparation of the cuts of meat. She challenged the accuracy of Mr Williden's recollection. 268 Margaret gave evidence that, except when she received money from housewives (walk-in customers) at WYT, she recorded in the notebooks all moneys and cheques received. Margaret said that the purchases of the housewives varied from a couple of dollars to about $10.00 - $15.00. Margaret stated that from Monday to Fridays the number of housewives visiting WYT probably varied from five to ten a day. On Saturdays, at the peak of demand, probably from about 1975 – 1981, she could not be sure of the time, there would probably be about 50 or more housewife customers. She said it varied considerably from week to week. More grocery shops opened in the mid 80s. Margaret said that the retail trade dropped progressively after she took over from Mary. In the late 1980s the number of retail customers had dropped. Margaret said that WYT was more of a wholesaler than a retailer and that the retail trade had never been significant in WYT. That puts the matter too broadly. 269 Margaret said that the accumulated cash was used to pay petty cash and the wages. Some was banked. Helen was more or less in charge of the money at YS. Margaret did not notice any cheques come direct through the mail at YS. 270 Margaret said that no payments of creditors of either WYT or YS were ever made in cash. This has to be contrasted with Mary's detailed evidence as to payment of some suppliers. For the period 1 August 1975 – mid January 1981 Mary's evidence on this point is to be preferred. I doubt whether there was a significant change after mid-January 1981. 271 Margaret said that during the times she was at YS a very small amount of the meat was sold to retail customers. This is incorrect. Margaret was often at YS during its busy times when there were a substantial number of retail customers. Margaret said that she never received money from any driver on the basis that the money had been given to the driver to pay an account owed to WYT or YS. That may be correct. 272 In cross-examination by counsel for the plaintiffs Margaret said that from August 1975 to January 1981 there were more retail customers at the start of that period, namely about 30 per day at the peak with the expenditure varying from one customer to another. By 1981 the number had reduced. At a later stage she seemed to say that the retail customers of WYT started to decline "probably about '82 or '83 or something like that". Margaret said that the amounts spent by a retail customer (housewife) varied from $2.00 to $3.00 to probably a maximum of $15.00. She could not recall an average amount. I doubt if it is possible to give more than a range and to arrive at a meaningful average. 273 Margaret said that during 1975 – January 1981 the number of retail customers visiting WYT on Saturdays varied. She gave an estimate of 15 retail customers at the most on Saturdays. She could not recall what retail customers spent on Saturdays. Generally she wondered whether her statement of some customers paying up to $15.00 maximum was too high and whether in those cheaper days $10.00 was the maximum figure. 274 Margaret accepted that on occasions in the period 1975 - 1981 a new customer came into WYT and paid $60.00 for goods, either in cash or by cheque. 275 Margaret said that in the period 1975 to January 1981 there may have been retail customers who paid as much as $20.00 but that would be very rare. Allowance had to be made for those who spent only 60 cents. 276 Margaret denied emphatically that between 1975 and 1981 there were up to 100 retail customers on Saturdays. She also denied that during festivals there could be up to about 110 customers per day (T 936). 277 Margaret said that she had no recollection of what the percentage, of the banking she attended to, was in cash and what percentage was in cheques in the years ending 30 June 1976 to 1980. 278 Margaret said she had no recollection of the percentage of cash to cheques from January 1981 to 1989. She remembered that in about 1988 to 1989 there was not much cash to be deposited. 279 Helen worked at YS from 1980 until 1986. She ordered the meat, cut up the meat, served customers and took the orders from the restaurants. The suppliers were paid by cheque. She could not recollect any occasion where YS paid in cash the driver who delivered goods from suppliers. 280 Helen said that as to YS there were many sales over the counter to retail customers (housewives and others who walked in off the street). In the early part of the week (Mondays to Thursdays) there were about 15 to 20 over the counter sales or "something like that" (T 1402). On Fridays and Saturdays it tended to be a little busier, as there were probably a bit over 20, maybe close to 30, over the counter sales. Retail customers would spend from $2.00 to $10.00 - $15.00 in cash. Helen was probably speaking of the period from 1980 to 1985. 281 Mostly YS delivered to restaurant customers who paid by cheque. There was one exception who paid cash. At the end of the day Helen said she tallied up all the cash and took the cash and cheques received to KST. Sometimes she put the money in a drawer (till) in the shop at KST's direction. 282 Helen said that when she started at YS, the over the counter sales and the restaurant sales were not busy. As time progressed YS became busier and grew each year. When YS was sold in 1986 it was a much better business than in 1980. Helen said that when she started there was a total staff of four, two butchers, a driver/ deliveryman and herself. Helen added that there were times when they needed and employed an extra butcher full-time. There were thus three butchers. By 1986 YS had two butchers, a driver/ deliveryman and herself. There was also the assistance of Margaret from 1980 to 1986 when there was a build up of customers. 283 She thought that she and the staff were paid in cash. KST attended to that. The money was not taken out of the till. She never banked any YS moneys, nor did she write out any cheques to pay YS's accounts. 284 Helen thought that YS had a third butcher in 1980. After this lapse of time she was unable to specify when particular butchers were employed, although she did remember the names of some of the butchers employed at YS. 285 It seems that each Saturday she prepared a report in which she listed the six days of cash sales over the counter. Those reports are not available. 286 In cross-examination by counsel for the plaintiff Helen remembered a butcher working at YS called Williden, it seems from about 1980 – 1983. 287 There was no dispute that retail customers of WYT and YS paid in cash. The cash payments by the retail customers of WYT were not included in the WYT notebooks in which Mary and Margaret made entries. 288 There was a dispute as to the extent of the retail customers of WYT and YS. I thought that Mary's estimates of the numbers of retail customers who visited WYT on Mondays to Thursdays (midweek), Fridays and Saturdays and at festival times were probably too high and that she was overstating the numbers. In my opinion Margaret understated the numbers of retail customers of WYT. In the period from about 1 August 1975 to about June 1980, Margaret only came into the WYT shop about two and a half days per week (maximum) and after January 1981 Mary did not attend the WYT shop except irregularly. There was a big difference in their estimates of the number of retail customers on weekdays. Mary estimated 50 retail customers on weekdays during August 1975 – mid-January 1981 whereas Margaret estimated 5 to 10 customers per day. The estimates of attendances by retail customers on Saturdays did not vary so markedly. Mary's estimate was about 65 – 70, whereas Margaret's estimate was about 50 or more at peak demand, but the number varied considerably from week to week. Margaret thought that the period of peak demand probably occurred about 1975 – 1981, but she could not be sure of the time. Mary and Margaret were primarily concerned with different periods and there could be some variation. Too much should not be made of this. Mary and Margaret differed considerably in their recollections as to the amounts spent by the retail customers. After this lapse of time little or no reliance could, or should, be placed on estimates of the amount spent by retail customers on average. The amount each retail customer spent would probably vary. Some of the purchases may have been as small as Margaret suggested and others quite substantial. I was not persuaded that even broadly accurate estimates had been made of the amounts spent in the period from August 1975 to January 1981 and from January 1981 to the end of 1987. 289 Mary also relied on up to 25 small business operators spending on average about $50.00 per week in cash. I am not persuaded that either the estimates of the numbers alleged or of the amounts allegedly spent after this lapse of time are correct. Generally, Mary also relied on some of the customers paying in cash and there being sufficient moneys to pay some suppliers in cash. Mary was not short on the details. Margaret said that the accumulated cash was used to pay wages and meet petty cash outgoings. It was a theme of Margaret's evidence that the emphasis of the WYT business was on the wholesale sales and that the retail customer sales did not form a significant part of the income of WYT. The wholesale sales of WYT probably accounted for a substantial portion of its business and income, but I would not dismiss the income received in cash from the retail customer sales and other cash customers. That income was substantial over the years and probably greater over the period August 1975 – January 1981 than in later years. It is probable that KST did not disclose to Mr Wong the total amounts received in cash by WYT. 290 As to YS, Mr Williden's estimate was 60 – 80 retail customers per day who paid in cash. Helen said that from Mondays to Thursdays there were about 15 to 20 sales to retail customers. On Fridays and Saturdays there were about 20, maybe up to 30, sales to retail customers. 291 For most of the time Helen ran the YS butchery and served the customers. However, during busy periods Margaret helped to serve the customers but Margaret was not at the YS butchery other than on a part-time basis. Her major duties and the major portion of her time were spent at WYT. Helen conceded that for substantial portions of the years 1980 – 1983 there were three butchers employed by YS. I thought that Mr Williden was having difficulty in recalling exactly when he was employed at YS butchery in the early years. I was not satisfied that Helen accurately recalled the periods when Mr Williden was employed. I think that Mr Williden was probably employed full-time by YS butchery for two periods totalling about 19 – 20 months during about 1980 – 1983. It could have been a little later. I accept that Mr Williden was employed by Mr Lam when he (Lam) purchased the YS butchery business and that Mr Williden continued in Mr Lam's employ until he sold the butchery business. 292 I did not accept Mr Williden's estimate that each retail customer of YS spent on average $15.00 - $20.00 per visit. I thought that amount was excessive for the period 1980 – 1983. It was hard to recollect the spending in 1980 – 1983, that in about 1986 – 1991 and subsequently and to distinguish the amounts. 293 Helen agreed that during the limited hours the butchery was open on Saturdays it was busy. Helen accepted that the YS butchery was busy around Christmas and around festive times. Helen stated that one restaurant paid in cash. Helen suggested that the sales to restaurants (wholesale sales) formed the greater part of YS' business. She painted a picture of a business which built up over the period from 1980 to 1986. She understated how busy YS was in the 1980 – 1986 period. That included understating the number of retail customers on weekdays, Fridays and Saturdays and understating the amounts spent by customers. 294 I have not accepted parts of Mr Williden's evidence. He was being asked to cast his mind back many years and to recall numbers and prices. I did not think that his estimates of these were sufficiently reliable. However, the amounts of cash received by YS were substantial but it is not now possible to determine accurately how much. Nor is it possible to determine accurately the number of retail customers who attended on a weekly basis and how much each spent. 295 While Helen took all the cheques and moneys received by YS each day to KST, or put them in the specified drawer at WYT, I do not know what KST did with the cash, that is, how much of it he banked and how much of the cash he told Mr Wong he received. The accounts record substantial receipts. I am persuaded that KST did not disclose substantial amounts of the cash received by YS. 296 Mr Williden described the YS business both before and after it was sold as busy. I accept that evidence. He did not think that there had been any significant change in the business, its number of customers and the quantity of meat sold. It was a good business. 297 By contrast, the accounts of YS for the year ended 30 June 1984 reveal: Net profit for year ended 30 June 1983 $9,959.00 30 June 1984 $12,072.00 Interest paid to CBA for year ended 30 June 1983 $56.00 30 June 1984 $93.00 Bank overdraft (secured) for year ended 30 June 1983 $23,186.00 30 June 1984 $1,735.00 Excess of assets over liabilities for year ended 30 June 1983 $125,864.00 30 June 1984 $127,834.00 I doubt if the modest profit figures are correct. What is missing is some of the cash received. 298 The accounts also reveal that in each year the assets included intangibles of $19,178.00, a major component of which was goodwill of $18,975.00. 299 The accounts of YS for the year ended 30 June 1985 reveal a minimal and understated net profit of $2,796.00, interest paid of $381.00, a Bank overdraft (secured) of nil and an excess of assets over liabilities of $125,102.00. Of the current assets, $71,723.00 is shown as representing an unsecured loan to WYT and an unsecured loan to KST of $10,100.00. In Mary's income tax return for the year ended 30 June 1985 her income from YS is shown as $299.00. 300 A copy of the 1986 accounts of YS was not available. In Mary's tax return for the year ended 30 June 1986, prepared by Mr Wong's office, this entry appears under the heading of Partnerships: Full name of partnership File number Income other than primary production Kut Szetu & Partners FINAL T/as Yee Sing Butchery 50 803 (2287) LOSS 301 From the accounts it seems that the YS butchery had done well for the financial years ended 30 June 1978 – 1982 and moderately financially for the years ending 30 June 1983 and 1984. The results revealed by such accounts as are available reveal a drop in profitability in the YS butchery for the year ending 30 June 1985 and a loss for the year ended 30 June 1986. 302 Helen was strongly challenged in cross-examination that she had some of the missing documents but had not produced them. She denied that this was so. Helen insisted under vigorous cross-examination that she did not have the missing documents. Her various explanations were strongly tested and while some of her explanations raised questions in my mind, especially that of the 1997 wetting of documents in the garage and the later throwing out of some documents, statements and reports, I concluded that none of the missing documents mentioned for the period up to the end of 1986 were probably available. They had probably been thrown out. 303 It is difficult to reconcile the marked drop in the profitability of YS revealed by its accounts with the evidence of Mr Williden as to YS being a busy butchery and the profitability of the business under Mr Lam from 1986 and with the evidence of Helen that by the time she stopped working at YS it was a much better business than when she started (T 1123). This is not borne out by her alleged staffing numbers (if true) when she left of two butchers, the driver and herself. There had been a third butcher for substantial periods. Helen probably had the assistance of Margaret from time to time. 304 Mr Williden could speak of a period of about 20 months, probably in the period 1980 – 1983, and then from 1986, when he commenced working for Mr Lam. After some earlier good years, on one view, the business seems to have fallen away until Mr Lam took it over. I do not think that happened. Mr Williden was probably not there during the two years prior to the sale of the business and change of management. He regarded it as a profitable business in 1986. That business was unlikely to have revived so quickly from the state suggested by the figures from 1983 to 1986. 305 I find that the 1985 accounts of YS do not tell the full story. Nor does the loss revealed in Mary's tax return for 1986. They do not accurately set forth all the income received by YS, some of which was received in cash. The accounts cannot be reconciled with Mr Williden's evidence nor that of Helen. I find that it is probable that some of the income of YS received in cash was not disclosed in YS' income tax returns up to the year ended 30 June 1986. 306 It was suggested that competition may have led to the sale by KST. That does not explain the failure to disclose the true income received, including by way of cash. Two difficult questions remain, that is, what was the sale price of YS and what happened to the proceeds of sale? The evidence does not enable me to answer those questions. There is no evidence from any of the defendants of the amount or amounts received by KST from Mr Tony Lam on the sale of the YS business. Mr Wong was not told. Gordon was probably told, but does not remember the amount. I did not regard this as untruthful evidence. It was many years ago and Gordon has other interests. I do not know if the sale price was paid in a lump sum about the time the sale was completed or over a period of time. Nor do I know if the sale price was paid in cash in whole or in part. I did not accept the evidence of Mary and that of Geoffrey that she and he respectively were not aware of the sale of YS until some years after it occurred. Mary would not have missed the significance of the entry in her tax return for the year ended 30 June 1986 of "FINAL" in respect of income from YS, nor the word "LOSS", nor the lack of income from YS in subsequent years. It is improbable that she would not have drawn her husband Geoffrey's attention to this entry in her return for the year ended 30 June 1986. The 1986 return may not have been completed until 1987. 307 In taking the approach outlined I have attached much weight to the substantial inroads the plaintiffs made on the credit of Margaret and Helen. The evidence of Margaret and Helen has been approached with much caution. I had reservations as to the reliability of the evidence called on behalf of the plaintiffs about events so long ago, but these were of a different and lesser order to the caution with which I approached the evidence of Margaret and Helen. The partnership issue 308 The plaintiffs submitted that there was a partnership and relied heavily on the written agreement of 1 October 1975. It was pointed out that Margaret, Helen and Janet denied any partnership involving them and hence, the plaintiffs submitted, any partnership share. The plaintiffs also submitted that, if the Court acceded to their renunciation of any partnership share, it was entitled to hold that the plaintiffs each hold one partnership share, three shares were held for the estate of the late FC Chow and two shares for KST's estate. On this basis the plaintiffs submitted that the plaintiffs have a two-sevenths share of the partnership assets (about 28%) and income earned or capable of being earned by the three properties (Haig Street, Maroubra Road and Queen Street), (notional rent for the Haig Street property) from the time of their acquisition. Alternatively, it was submitted that if the partnership shares are to be determined by the agreement of 1 October 1975 the plaintiffs were together entitled to 20% of each of the properties and revenue generated from those properties since their acquisition. The plaintiffs envisaged KST, Sunly and Gordon being charged the equivalent of an occupation fee as to the Haig Street property. 309 The plaintiffs further relied, amongst other matters, on: (i) KST telling Mr Wong that a partnership had been established and giving Mr Wong a copy of the partnership agreement; (ii) Mr Wong, his firm or his company prepared taxation returns for many years on the basis that a partnership existed on the instructions and information supplied by KST or on his behalf. Mr Wong was never told by any of KST's family that the partnership did not exist; (iii) KST signing and lodging the partnership returns and the "partners" signing and lodging taxation returns over the period from 1975 to 1989 on the basis that they were partners and had earned partnership income from the operation of the WYT and YS businesses. If Mr Wong had been told that the partnership did not exist he would not have prepared and lodged the taxation returns on the basis of a partnership; (iv) the evidence of Geoffrey as to his negotiations with KST about the formation of the partnership and the oral agreements reached between them; (v) cheques had to be countersigned by Geoffrey and KST; (vi) the communications between Geoffrey and Slattery Thompson in December 1978 about the plaintiffs' beliefs that there had been defalcations from the "partnership" businesses to enable KST to provide the moneys to purchase the Haig Street property; (vii) the leases for the properties where the WYT and YS businesses were conducted were in the names of KST, Geoffrey, Mary, Margaret and FC Chow; (viii) the mortgage over the Wiley Park property was for the purposes of obtaining funds for the operation of the WYT and YS businesses. The mortgage refers to the "advances and accommodation" granted to each of the Debtors. The debtors specified are KST, Geoffrey, Mary, Margaret, Helen, Janet and FC Chow. Each signed the mortgage and was a party to the agreement of 1 October 1975; (ix) all of the "partners" signed the memorandum of association of Wing Yuen Tai Pty Ltd. (The corporate structure was never used but the signatures were said to be evidence of the "partnership"); (x) sales tax exemption forms from the Australian Government identify all of the "partners" as the proprietors of both the WYT and YS businesses; (xi) Janet's husband was not made a partner; and (xii) the financial contributions and services provided by Geoffrey (of a managerial and administrative kind) to assist in the establishment and successful functioning of the two businesses, provisions of guarantees and support to the businesses. 310 Geoffrey gave evidence that when he signed the agreement dated 1 October 1975 he did not consider the partnership was a sham or a device to protect KST's assets from the Solomon Island' Government or some device to defraud the Australian Taxation Office or Income Tax Commissioner. Geoffrey said he personally paid taxes on the profits of the WYT and YS partnerships from 1975 onwards and that he believed that there was a real binding partnership as per the agreement of 1 October 1975. 311 The plaintiffs submitted that it was not put to either Geoffrey or Mary in cross-examination that there was no partnership or that the conversations that they said they had with KST about the partnership and related matters did not occur and that the Court should accept their evidence about those matters and the early financial dealings in 1975/76. KST has long since been dead. It was not suggested that one of Margaret, Helen and Janet were present at the conversations. Issue was joined and a serious challenge was made to the credibility of both plaintiffs during their respective cross-examinations. The second, third, fourth, fifth and sixth defendants were not said to be present during any of the conversations and they could not have recourse to KST to provide instructions. Many of the conversations relied upon allegedly took place with KST. A substantial issue was whether the conversations alleged by Geoffrey could have taken place having regard to the restricted English language skills of KST. I have earlier referred to the manner in which Geoffrey and Mary gave evidence under the heading "Evidence of Geoffrey, Mary and evidential challenge". 312 KST repelled Geoffrey's attempts to obtain any distribution and determined how the profits of WYT and YS were invested. KST accepted assistance from Geoffrey. Whatever legal forms may have been created, KST regarded the two businesses as his and his complete control as a very important factor. He did not favour the interposition of companies and trusts. 313 KST was an astute businessman who knew how to make and save money. He was interested in Chinese-style businesses which, at least in part, dealt in cash. Stock processes, costs, sales and purchases may be adjusted. Splitting business incomes amongst family members is not unusual. It was not a cause of surprise that Johnson Wong, his firm or company was not told by KST or any of his four daughters that no distributions of profits ever took place. KST probably only told Mr Wong and his daughters what KST believed they needed to know. 314 As earlier mentioned, Geoffrey raised the question of a distribution of profits in about 1977 with Mr Wong and by letter of 25 March 1977. Geoffrey said he recalled parts of the letter but not the circumstances. The letter asserts the interest of Geoffrey and Mary and refers to "a signed copy of the partnership agreement". 315 Nothing of consequence appears to have happened consequent upon Geoffrey speaking to Mr Wong and writing the letter, and no action appears to have been taken by Geoffrey and Mary. Although relations between Geoffrey and Mr Wong appeared to be sound, it seems that Geoffrey did not ask Mr Wong for copies of the accounts of WYT and YS if a copy was not received. Geoffrey seemed to indicate that such copies of the accounts of WYT and YS as were for him were forwarded to his accountants. 316 Geoffrey referred to the businesses of WYT and YS being very small from his point of view (T 383). Geoffrey said that in 1975 in terms of income there was a reasonable amount but he had "much bigger deals on". He said "I had to make money fast. I faced the prospect (of) going blind so I really took significant risks and I tended to delegate a lot more. I managed by remote. I don't do the detail" (T 384). Geoffrey did not go blind but his eyesight was impaired. Geoffrey stated that he kept being part of a partnership when he paid tax on profits that he was not receiving because KST said he was reinvesting the profits for the partnership. As earlier mentioned, Geoffrey referred to not having arranged loans with the banks and it being in his interest "to force the payment of all the overdraft facilities of the bank to realise the funds for my own purposes" (T 387). 317 I did not attach weight to Mr Wong writing his references of 9 November 1977 at the request of the plaintiffs certifying that Geoffrey was a partner of WYT and YS, that he had a 10% interest in the two businesses, that his income for ten months ended 30 June 1976 was $5,090.00, that Mary was a partner of WYT and YS, that her interest in those two businesses was 20% and that her income for ten months ended 3 June 1976 was $10,062.00. 318 I have earlier expressed my doubts about Geoffrey's version of what he said to KST in about December 1978. I am not able to make a finding as to what, if anything, was said between Geoffrey and KST about December 1978 as to the source of the funds to purchase Haig Street and the request for access to the books of account and financial records of the two businesses. I bear in mind KST's limited command and understanding of English. Mary was involved in recording the cheques and moneys received and was in a position to watch the overall level of business of WYT and the moneys being received. It is now about 30 years since the events of late 1978 occurred. I was not satisfied that the oral accounts of the events of late 1978 were sufficiently reliable to be acted upon. 319 Under the heading "1981 profit distribution requests" I have referred to the requests for a profit distribution shortly after the birth of Jason and the one in late February – early March 1981. 320 The plaintiffs relied on Margaret's affidavit of 13 February 2002 sworn in the Probate proceedings, and in particular paragraph 16, in which she stated: "I refer to paragraph 2 of Geoff Lowe's affidavit. Over the years my father and Geoff Lowe had little contact. Even when they were in business many years ago my father …" Counsel for the plaintiffs intervened and said, "Just stop there" and then put to Margaret that KST and Geoffrey were in business together on the basis of her own sworn affidavit in 2002. Margaret said that when she made the statement that KST and Geoffrey were in business together she was relying on the partnership agreement. When Margaret referred to a statement in Mary's affidavit that the business was her father's business the cross-examiner reminded Margaret of the question he had asked. Counsel then suggested to Margaret that the only business she could have been referring to in her affidavit was the WYT and YS businesses. Margaret replied: "I would say yes, and I would make a mistake there …" (T 729) 321 Counsel for the plaintiffs had previously questioned Margaret about her statements in paragraph 62 of her affidavit of 3 May 2007 that KST told her in Szeyap, some time between October 1975 and December 1976 (T 724), that Geoffrey and Mary knew that he bought WYT and YS with his own money, that he was the sole contributor of the finances and that he owned the two businesses. She said that from the time of the conversation she always believed that the businesses were owned by KST and nobody else. She said that she had never believed that KST was in any business with Geoffrey and that she was absolutely clear on that. 322 The second and third defendants relied upon what Margaret said in her oral evidence and her explanation of what her affidavit of 13 February 2002 stated. The plaintiffs submitted that the Court should disbelieve what she stated in paragraph 62 of her affidavit of 3 May 2007 and her oral evidence in the light of what she stated in paragraph 16 of her affidavit of 13 February 2002. Points being made by Margaret in her 2007 affidavit include that Geoffrey and her father had little contact and that Geoffrey's assertions as to the ability of KST to speak and understand English were incorrect in that Geoffrey's dealings with KST did not enable him to make the assessment he purported to make. What Margaret has expressed in her 2002 affidavit is a conclusion. She has not set out the underlying facts that led to the conclusion. On the other hand, the conclusion expressed is a simple one, well within the range of Margaret's understanding and observation. I am inclined to regard the expression "even when they were in business together many years ago " as not determinative of the issue whether they were in partnership but that statement has to be taken in conjunction with the signed partnership agreement. There is also the mortgage of 1 June 1976 over the Wiley Park property to the CBA signed by the registered proprietors of the property and by each of the parties to the agreement of 1 October 1975. That mortgage (including its execution) is a factor of importance. I accept that the mortgage was discharged in about May 1977. This reflected KST's desire to liquidate debt promptly. Although Mr Wong was not told, the "partnership" tax returns which were lodged were probably part of KST's strategy to split the income of the businesses for taxation purposes. 323 A number of further factors should be taken into account: a) Geoffrey knew from his discussions with Mr Leung that there was a lot of cash in the two Chinese businesses so that the accounts did not accurately reflect the profit and that KST was interested in such a business. There was also a lot of stock. Geoffrey caused the "partnership" agreement to be prepared by his solicitor against this background. b) It was not suggested that the methods of doing business should change. c) Geoffrey realised that KST was going to run and control the business and do what he wished. d) KST, as mentioned, needed the assistance of Geoffrey in obtaining finance from the Commonwealth Bank. It is not clear how much was advanced by the Bank. I have not accepted the assertions of Geoffrey and Mary as to the amounts advanced by the Bank. 324 Margaret and Helen each denied having entered into a "partnership" and "partnership" agreement, but each signed it because their father had signed it. Each signed taxation returns over the period 1975 – 1989. Each was allocated and given a 10 per cent share. 325 There was probably a partnership substantially as alleged in paragraphs 17 and 18 of the FASOC. I take into account all the circumstances. I attach weight to the execution of the partnership agreement by all parties to it, the mortgage of 1 June 1976, the instructions of KST to Mr Wong, the lodgement of the partnership tax returns with the ATO of WYT and YS and the lodgement of the tax returns of each of the partners revealing partnership income. Under cl 6 of the agreement of 1 October 1975 "The partners shall not be required to engage actively in the carrying on of the said business". 326 It was submitted that that partnership was formed for the purpose of defrauding the Commonwealth, that is, evading the payment of taxation. 327 The fifth and sixth defendants supplied these particulars: "The defrauding of the Commonwealth occurred by the partners in the partnership claiming to the Commissioner of Taxation that they were each entitled to pay income tax on the basis that they received the shares of the income of the partnership disclosed in the respective income tax returns and were entitled to be assessed for income tax accordingly (including individual personal exemptions and reduced rates of income tax) when in truth all income of the "partnership" was the income of KST. The plaintiffs do not come to equity with clean hands because they must prove their case by leading evidence of their entry into the partnership by relying upon income tax returns making the claims referred to above." 328 Once it is concluded that there probably was a partnership this defence and the supporting particulars lose a lot of their force. All income of the "Partnership" was not the income of KST alone. See also clause 20 of the "Partnership" Agreement. Properties allegedly held on trust Haig Street 329 As previously mentioned, when KST brought his second wife, FC Chow, and their three children to Australia in 1976 they lived initially with KST's first wife, Margaret and Helen, and subsequently with Janet and her family. KST was captivated by the economies of these arrangements but FC Chow became fed up with them. Eventually, in about December 1978 KST purchased a house for $129,000.00, with the effective cost being $131,410 or about $133,000.00. Maroubra Road 330 This property was purchased at the instigation of KST in February 1983 for $585,000.00. With stamp duty of $13,508.00 and legal costs, the ultimate cost would be about $600,000.00, or perhaps a little more. The property was put in the name of KST as to four undivided one-fifth shares and in the name of Margaret as to the remaining one-fifth share. Queen Street 331 This property was purchased by KST about 1 July 1988 for $1,580,000.00. Stamp duty of $72,390.00 was payable. With legal fees and expenses it would not be imprudent to proceed on the basis of an effective cost of about $1,655,000.00, or perhaps a little more. Evidence of investigating accountant (M Hill) 332 The plaintiffs adduced evidence from Mr Michael Hill, a chartered accountant with considerable experience in the provision of forensic accounting advice and evidence on a wide variety of financial matters. He has also undertaken the work of an investigating accountant and prepared reports of his investigations. There was no challenge to his qualifications and experience. He prepared a detailed report in which he set out the instructions he had received, the assumptions he had made and the opinions which he held, based on those matters and his examination of available documents and materials. Mr Hill made some amendments to his report before cross-examination. His report was of some complexity. The amendments and the reasons therefor were explained. His report depended, in large measure, upon the assumption he was asked to make that KST had access to no other assets of consequence than the Wiley Park and Fairfield flat properties and the Coogee Bay Road unit. He summarised his functions as follows: "I have been instructed to consider the following matters in relation to the Wing Yuen Tai partnership (the partnership) and Mr Sze Tu for the period from 1 August 1975 to 30 June 1988 (the relevant period): a) Estimate the annual and total profit and cash flows generated by the businesses operated by the partnership, Wing Yuen Tai (WYT) and Yee Sing Butchery (Yee Sing); b) Estimate the annual and total profit and cash flows of the rental properties acquired by Mr Sze Tu; c) Estimate the annual and total profit and cash flows of the partnership; d) Estimate the total funds which were likely available to Mr Sze Tu; and e) If possible, determine the source of funds used to purchase the rental properties acquired by Mr Sze Tu during the relevant period." 333 Mr Hill, in considering (a), estimated that WYT and YS had business cash flows of $843,644.00 for the period 1 August 1975 to 30 June 1988. 334 As to (b), Mr Hill calculated that the Wiley Park and Fairfield properties produced rental cash flows of $590,262.00 (rounded to approximately $591,000.00) from 1 August 1975 to 30 June 1988 and that the Maroubra Road property produced a rental cash flow from February 1983 to 30 June 1988 of $323,722.00. Mr Hill proceeded on the basis that the Maroubra Road property was an asset of the "partnership" and did not assess Margaret's claimed share. 335 Mr Hill was of the opinion that the total cash flow available to KST on the basis of the "partnership" as well as the Wiley Park, Fairfield and Maroubra Road properties was $1,757,627.00. Mr Hill, in calculating the net cash flow available to KST, deducted income tax and Mr Hill's estimate of KST's living expenses. Because copy income tax returns were not available for the years ended 30 June 1977 and 1979, Mr Hill assumed that the cash flows are equal to the net profits of the businesses for the same year. For the year ended 30 June 1977 as to WYT the figure of $31,820.00 appears to be an extrapolation of the profit figure of $3,182.00 shown in Mary's copy tax return. Similar considerations apply to YS. A similar process has been followed in respect of the year ended 30 June 1979. 336 Mr Hill wrote that, for the purposes of his calculations, he assumed that the contributions made towards the acquisition costs and initial working capital requirements of WYT and YS businesses were repaid in full before KST purchased the Haig Street property on 10 December 1978 and, as a result, the loans were not included in his calculations of the cash flows generated by the businesses. That is a reasonable assumption bearing in mind the discharge in May 1977 of the mortgage over the Wiley Park property and KST's reluctance to borrow and dislike of debt. In calculating the total net cash flow available to KST derived by the partnership and the rental properties, Mr Hill deducted $504,493.00, being his estimates of income tax that would have been paid by KST in relation to the income calculated as per Appendix J of Mr Hill's report. Mr Hill also deducted $426,384.00 being his estimate of the living expenses of KST and his dependents. Mr Hill proceeded on the basis that in the year ended 30 June 1976 KST was responsible for his first wife, Tang Fung Sze Tu, whom he divorced in August 1975, and his adult daughters Margaret and Helen. Margaret was in the Solomon Islands in May 1975 and between 18 August and 14 September 1975. On 1 May 1976 FC Chow and her three children arrived in Australia. Mr Hill proceeded on the basis of KST supporting the two households for the remainder of the period to 30 June 1988. Mr Hill noted that Stella, Gordon and Sunly attended non-government schools from 1976 to 1979, 1982 and 1983 respectively. It should not be assumed that KST bore the full cost of supporting Margaret and Helen. 337 Mr Hill said that, as he had no detailed information of KST's living expenses, he relied on data published by the Australian Bureau of Statistics in its 1984 Household Expenditure Survey (HES) to estimate the living expenses that KST would have incurred in providing for his two households. He wrote that the 1984 HES indicates: (i) the weekly living expenses of a husband and wife with three dependent children were approximately $440.29; and (ii) the weekly living expenses of a single parent household were approximately $292.18. (This was on the basis of two children.) 338 Mr Hill noted that the estimated living expenses published in the HES include items such as food, household expenditures, property costs (including finance fees) and miscellaneous items which included education expenses. It was likely, if KST owned all the properties and paid for them in cash, his expenditure on property items would be below the average. Conversely, Mr Hill thought that, as three of the children attended non-government schools, the cost of that was likely to have exceeded the average costs set out in the HES. I am wary of this conclusion. Much may depend on the non-government schools attended, the levels of fees charged and the periods during which the non-government schools were attended. Mr Hill thought that, without comprehensive details of the living expenses incurred by KST and his family members, the HES provides the best indication of his likely expenditure during the period 1 August 1975 – 30 June 1988. It does not appear that Mr Hill was aware of and took into account the frugal habits of KST. He lived with members of his family from 1 May 1976 to December 1978, he did not have a car and lived modestly. Gordon finished year 12 in 1983 at a well-known Marist Boys' School. There is no evidence of the fees charged. Both Gordon and Sunly attended University. Gordon was working in full-time employment in 1987 and 1988 as well as studying at the University. The evidence does not establish whether Gordon held a Commonwealth Scholarship to cover the whole or part of his University fees. The evidence as to the extent and level of Sunly's dependence on KST in 1986 – 1988 is sparse. 339 Sunly said that KST gave FC Chow $50.00 per week to purchase staple items such as milk, sugar, soap powder and incidental items. Sunly agreed that the family got most of their groceries from WYT and most of their meat from the YS butchery. I accept that KST gave FC Chow $50.00 per week for household and incidental expenses. 340 While a deduction has to be made for living expenses, Mr Hill was not given the information necessary to calculate the deduction. An allowance would have to be made on a wholesale price basis for the groceries supplied by WYT and the meat supplied by YS. Margaret was 23 years of age in August 1975 and Helen was 21 years of age in August 1975. I do not think that a deduction of about $426,384.00 should be made for living expenses from the cash flow available. In the circumstances of the present case, I do not think that the HES of the Australian Bureau of Statistics provides a useful guide or basis. Having regard to the material available to the Court, including the frugality practised by KST the amount Mr Hill has deducted for living expenses during the period 1 August 1975 to 30 June 1988 is probably excessive. 341 In paragraph 6.2.3 of his report Mr Hill wrote: "Based on my instructions and my assumptions, the partnership would have had sufficient funds to purchase [the Haig Street property] for a total cost of $131,410 in December 1978 and would have had surplus funds of approximately $82,700.00 ($214,137 less $131,410 = $82,727)." Mr Hill had calculated in Table 14 that the cash flows available to the "partnership" as at 30 November 1978 were $214,137.00. This establishes that there were sufficient funds available to KST from WYT and YS to enable him to purchase the Haig Street property, not that he did so with those funds. The rental income of KST should not be ignored. 342 Reference was made to sources of funds said to be available to KST to purchase Haig Street other than his rental income and recourse to what were described as "partnership funds", including: a) the evidence of Margaret that after her trip to the Solomon Islands she returned with a cheque for $12,000.00, being the proceeds of sale of a boat; b) the proceeds of sale of a unit on the second floor of No 2H Davis Street, Hong Kong. It seems clear that KST owned this unit and it was sold when FC Chow and the three children moved to Australia; it realised about AUD$16,000.00; c) moneys accumulated by FC Chow from monthly payments remitted from KST. This depends upon Sunly's evidence of the monthly payments by KST to FC Chow. It seems likely that such payments were probably made. Whether there were any savings depends upon what FC Chow did; d) moneys accumulated by FC Chow from (i) purchasing grocery items on consignment in Hong Kong and transporting them back to her mother and sister in China for sale. FC Chow told Sunly she made a good profit from this activity; (ii) purchasing jade, having individual jewels set into rings and sending them to KST in the Solomon Islands for sale. This depends upon Sunly's evidence; (iii) profits made in trading in blue chip shares. This depends upon Sunly's evidence; (iv) profits made in trading in currency. This depends upon Sunly's evidence. 343 Sunly did not know the price his mother received for her shares. 344 This evidence tended to support the proposition that the financial resources of the family were not limited to the rental income from the Wiley park and Fairfield properties. However, there is no evidence that any of these resources was used in the purchase of the Haig Street property and I would not hold that they were. 345 There was some further financial evidence which Sunly relied upon as providing evidence that FC Chow had funds which she could utilize to purchase assets other than Haig Street. Reference was made to item number 28 in his Second Supplementary List of Documents, of December 2008: "28. United Permanent Building Society Limited advice of Interest earned on investment held by FC Chow for the year ended 31/5/1977" 346 Sunly said that he found this document at home. It was not discovered until December 2008. Sunly said that he knew about this document prior to December 2008, but it had nothing to do with WYT, the subject of the statement of claim. 347 At T 1342 Sunly appeared to be relying on this document to assist in showing his mother's financial capacity to contribute to the Haig Street acquisition. He made a passing reference to "other accounts in Mum's name". No details were given. Sunly stated that these were the funds that she had "at the time" and "she built on those funds". Transcript 1343 records this evidence of Sunly: "Q: Sir, the intent of that evidence was to show a contribution to Haig Street, wasn't it, which was … A: No, absolutely not, that was not the intent." Sunly said that it was his intention to demonstrate his mother had her own funds when it came to buying subsequent properties. That seemed to be directed to buying properties in 1988. 348 Sunly said that he could not find the original photocopy of the pages of the Commonwealth Bank pass book that his mother had. I accept that evidence of Sunly. 349 I have diverted from Mr Hill's report to consider whether his estimate of living expenses should be accepted and whether his instruction was correct that the only source of funds properly available to KST to purchase properties and acquire and build up assets were the rental incomes of the Wiley Park and Fairfield flat properties respectively, assuming that KST was entitled by arrangement to the whole of such income. 350 The basis of the alleged instruction appeared to be the evidence of Geoffrey that in about August 1975 he heard KST tell Mr WJ Lee that in Australia KST's assets comprised a block of units in Wiley Park, a block of units at Fairfield and a unit in Coogee Bay Road. These were said to be worth about $250,000.00. KST allegedly stated that his assets in the Solomon Islands comprised two shops, stock, an inter-island trading boat and considerable cash. The shops and stock were said to be worth over $150,000.00 according to KST. A representative of GT Hartigan allegedly said "a total of around $400,000.00" at the meeting with Mr WJ Lee, Geoffrey and Margaret. 351 In their letter of 22 October 1975, Clayton Utz have written "you have told us that your assets in Australia have a total value in excess of $400,000.00" and "as we understand it, by far the bigger part of your Australian assets consists of real estate". 352 KST's statement that he had "considerable cash" may be true. I am wary of putting too much reliance on general statements in a solicitor's letter written primarily for another purpose, but the location of assets was not unimportant. I would expect a person of KST's acumen, business experience, secretive habits, personal qualities and knowledge of what was happening in the Solomon Islands to have considerable cash and not to tell anyone (including his family, accountants and solicitors) of the amount of cash he had. 353 There are copies of some of the "partnership" returns of WYT and YS available and some of the returns of Mary. There are no copies available of the taxation returns of KST (except for 1980) and FC Chow. Apart from the 1980 return of KST it is not known whether they disclosed, amongst the income receipts, interest upon the investments of any money. It seems KST had an interest in cash and took charge of the tax payable. 354 In 1978 KST probably had access to moneys additional to the rental income of the Wiley Park and Fairfield flats. Exhibit Y, the substituted Appendix N to Mr Hill's report, describes the available rental cash thus: 30.6.1976 30.6.1977 30.6.1978 Wiley Park 9,882 9,666 9,624 Fairfield 15,984 18,306 19,689 These sources of available cash total $82,151. This means that, not making any allowance for living expenses, KST would have had to provide, or had access to, about an additional $50,000.00 to purchase Haig Street for $133,000.00. When allowance is made for living expenses for three years and six months the figure rises. I do not over look the cash available by way of income from the flats for 1 July - 30 November 1978, but that would not have made an appreciable difference. Allowance also has to be made for the income tax payable. Mr Hill's Appendix N reveals substantial available cash from the two businesses in 1977 and 1978. 355 From Mr Hill's report, it is possible to consider the position on the basis of whether KST, apart from the rental income, had access to funds other than the funds generated by WYT and YS to purchase the Haig Street property in late 1978, the Maroubra Road property in February 1983 and the Queen Street property in 1988. That involves considering the financial position at each of those times of KST and whether Margaret made the contribution she claims in February 1983 to about one-fifth of the purchase price of the Maroubra Road property. The financial position of WYT and YS, so far as known, also has to be considered. 356 Because of the assumptions he made and the instructions he received Mr Hill tended, at least in part, to take an overall approach. He took the purchase price and stamp duty in respect of each of the three properties (Haig Street, Maroubra Road, and Queen Street) described as the total costs. They amounted to $2,382,208.00. He took the total cash flow available to KST on the assumption that KST had access to all the cash flows of the "partnership", including the net rents from the Maroubra Road property as well as the two rental properties ($1,167,365.00 and $590,262.00). These totalled $1,757,627.00. 357 Mr Hill concluded that, after deductions were made from the total cash flow of $1,757,627.00 for income tax and living expenses and interest was added, the total net cash flow available was $1,088,162.00. Mr Hill wrote that the shortfall between the net cash flow available to KST of $1,088,162.00 and the costs of the properties acquired was $1,294,146.00 (rounded to $1.3 million). Mr Hill was not provided with any information on the affairs of KST, the partnership and family affairs, other than in relation to the "partnership" businesses. He was not provided with any information on any other activities, businesses, assets or related matters so he could not form a view on any of these matters. Mr Hill noted that it may be possible that the net income generated by the two businesses was understated in the "partnership" tax returns to minimise the tax that its "partners" would have had to pay. Mr Hill said that this was one possibility. He had no knowledge that, specifically, there was an understatement of the net income of the "partnerships". I appreciate the force of Mr Hill's overall approach. I have also considered separately the position in relation to each of the three properties. As to the Haig Street acquisition, I have earlier pointed out that that required at least the provision of a further $50,000.00 in cash over and above the rental income from the Wiley Park and Fairfield flats. To this sum of $50,000.00 there has to be added an amount for income tax payable. For the 1976, 1977 and 1978 financial years, Mr Hill has calculated the tax payable as $18,947.00, $16,134.00 and $42,556.00 respectively - a total of $77,637.00, but that includes the tax payable on the "partnership" income. See Table 21 of his report. I would not assess weekly living expenses for the three years as exceeding $28,500.00, having regard to the frugal living standards which KST adopted for himself and imposed upon his dependants. 358 From Exhibit JKW – 8, the copy tax return of Mary Lowe, it would seem that the tax returns for the year ended 30 June 1978 were not lodged until late February 1979 so that there might have been some delay in paying the tax for the year ended 30 June 1978. It is unlikely to have been paid by December 1978. In December 1978 KST would have had to have a substantial sum available to purchase Haig Street. However, KST may have had enough resources, excluding any "partnership" assets, to purchase the Haig Street property. He had earlier caused any debts or borrowings by WYT and YS to be reduced using the funds of those businesses. The Bank mortgage over the Wiley Park property had been discharged in May 1977. The Haig Street property may have been purchased by KST without recourse to using or appropriating any "partnership" assets or funds, or he may have used a mixture of partnership funds and his own resources. I include in the phrase "partnership assets or funds" cash received and not disclosed in the income tax returns. The resolution of the issues raised may never be known even on the balance of probabilities. 359 (a) Assuming that KST had available rental income of about $82,000.00 as at June 1978, in the year 1978 sums of $50,000.00 to $100,000.00 were considerable, but it is not out of the question that KST had cash assets of that magnitude available to him. As at December 1978 KST had available to him: (i) rental income of about $82,000.00 up to the year ended 30 June 1978; (ii) rental income for the period 1 July 1978 – 30 November 1978 from the Wiley Park and Fairfield flats; (iii) disclosed income from WYT and YS; (iv) cash funds received from WYT and YS but not disclosed as income or profit in the partnership returns or accounts; and (v) his own resources not disclosed to anyone. (b) There is no evidence of KST himself having resources of the required magnitude, i.e., cash resources or resources that could readily be realised. The plaintiffs had submitted that in 1975 KST had drained all his resources to purchase the businesses of WYT and YS and had to borrow money. On such an approach it was improbable that KST had sufficient resources of his own to purchase the Haig Street property even when coupled with the rental income from the Wiley Park and Fairfield properties. KST did not act in a conventional way. KST believed in cash resources. (c) KST controlled the funds received by WYT and YS. He did not disclose all the income received in cash by WYT and YS. As to potential sources (iii), (iv) and (v), it cannot be determined on the evidence how much, if any, came from each source. All were possible contributors. 360 Having regard to the potential financial sources, it is improbable that KST would have exhausted all his cash resources. Some funds from WYT and YS were probably used. I cannot determine whether they came from non-disclosed cash funds received and retained by KST or whether they came from disclosed income. For present purposes this may not matter as it was not KST's money but belonged to WYT and KS. What does matter for present purposes is the proportion of the money, if any, contributed by KST out of his own funds and that contributed out of the funds of WYT and YS. Having regard to the size of the amounts required, it is probable that a substantial portion of the moneys required to complete the purchase of the Haig Street property came from WYT and YS, which were the subject of the partnership. I did not accept Geoffrey's evidence and contention that KST had no assets other than the Coogee Bay Road unit, the Wiley Park and Fairfield properties, nor that KST's income and available cash were limited to the rental income from the latter flat properties. Geoffrey's evidence was based on his recollection of what he believed he heard in about 1975 and possibly re-stated by him to KST in about 1978 and 1981. That was a long time ago. It does not provide a sufficient evidentiary base. Assuming the correctness of my view that KST may well have had considerable cash and may have used at least some of it to assist with the purchase of the Haig Street property, it would appear that there has been a mixing of the funds of KST with those of WYT and YS. Probably, after the lapse of so many years, no records being available which would allow any resolution of the issues just discussed, the best that can be done is to make an approximate assessment based on what is known. I have resisted the temptation to do so at this stage. I am not holding that KST had considerable cash resources which were unknown, but that this possibility cannot be excluded on the probabilities. 361 Geoffrey placed weight on his contention that there had been a manipulation of the costs of goods sold. He gave examples of frauds that could be practised with stock. Geoffrey agreed that normally there was very limited scope for manipulation of stock figures in a retail butchery. 362 The defendants submitted that the plaintiffs must establish, if they are to succeed, that it was within the reasonable capability of the WYT and YS businesses to generate $1.3 million in profit in addition to the profits disclosed in the financial statements and income tax returns, that they had not done so and that the defendants had demonstrated that the WYT and YS businesses could and would not have generated more in profit than was disclosed in the available accounts. In my opinion it is sufficient if the plaintiffs established a shortfall of about $1.3 million (or about $1 million) and that KST could not have purchased his share in the Maroubra Road property and the Queen Street property using the moneys legitimately available to him. 363 Mr Wong gave evidence that a Chinese grocery in the Haymarket in the 1970s and 1980s which operated as a wholesale business would be expected to have a gross profit margin of around 20 per cent and one which operated as a retail business between 20 to 30 per cent. Similarly, a wholesale butchery would be expected to have a gross profit margin of 20 to 25 per cent and a retail butchery to have a gross profit margin of about 25 per cent (T 510 and T 503). Mr Wong said that if KST managed to achieve a gross profit margin in excess of 30 per cent he would be doing better than Mr Wong expected. Mr Wong's expectations are a helpful guide, but no more. 364 For the years ended 30 June 1978, 1980 and 1981 Geoffrey believed when those accounts were prepared for WYT and YS, in terms of revenues derived and (net) profit earned, that they were likely to be substantially accurate (T 425). From August 1975 to January 1981 Mary was working in the business. Geoffrey agreed that the gross profit margins for WYT as a Chinese grocer in the Haymarket in the 1970s and 1980s would be pretty close to the gross profit margins for the competitors also trading in the same area. The fifth and sixth defendants submitted, correctly, that the financial statements prepared by Mr Wong disclosed that the trading results achieved by the WYT and YS businesses were consistently within, or better than, the trading result to be expected under Mr Wong's guidelines (except that after 1982 the YS gross profit margins declined). See also the losses incurred by WYT in 1986 and 1988. 365 The WYT business was trading in a competitive environment. KST set prices to compete with those charged by his immediate competitors. It was unlikely that any business in such a competitive environment could achieve a gross profit considerably higher than normal or average. 366 As mentioned earlier, Mary thought that the business of WYT was not very profitable for the first couple of years. Geoffrey thought that the net profit figures disclosed in the accounts up to about the year ended 30 June 1981 were substantially accurate. It was submitted that it was highly unlikely that there were any excess undisclosed profits in WYT in those two years mentioned by Mary. This must be weighed against the evidence of Geoffrey that the indebtedness to the CBA was being liquidated speedily and quicker than the accounts would indicate was feasible, coupled with the discharge in May 1977 of the Wiley Park mortgage. It was submitted that it was highly unlikely that there were any undisclosed profits in the years ending 30 June 1986, 1987, 1988 and 1989. These were the years in which there were losses or small profits. I did not regard this as a cogent argument. So much depends on what KST wanted to do or avoid. 367 The fifth and sixth defendants submitted that if transactions involving cash receipts are not disclosed and are in addition to the transactions recorded in the financial statements, then, if a gross profit margin of 25 per cent is used, the businesses must have paid $3.5 million (all in cash) to generate the 25 per cent profit of $1.3 million (all in cash). It was submitted that these figures suggest unrecorded cash sales of $520,000.00 per annum for ten years, or $10,000.00 per week in unrecorded cash sale revenues, and $390,00.00 per annum in each of those years in unrecorded cash purchases of stock. The defendants submitted that figures of this magnitude demonstrated that Mr Hill's approach should not be adopted. 368 These comments should be made: (i) The undisclosed cash sales should not be taken as limited to the amounts paid by the retail customers. The evidence establishes that some other customers paid in cash and wages and some suppliers were paid in cash. That does not strike me as unusual. (ii) The figure of 25 per cent is probably on the low side. It is necessary to evaluate what happened. (iii) The figure of $1.3 million could well be arrived at by a combination of recorded cash sales using goods purchased for the business, the cost of which was recorded in the financial statements and unrecorded cash sales of goods, the cost of which was not recorded in the financial statements. I would not rule out stock manipulation. (iv) Importantly, there was a shortfall of about $1.3 million (or about $1 million, allowing for adjustments). The size of that shortfall is significant. Exactly how KST managed to purchase the Maroubra Road and Queen Street properties without the assistance of mortgage finance remains unknown. The fact remains that he did purchase those properties in his own name. 369 It is improbable that, apart from the "partnership" businesses, KST had sufficient moneys or other assets to purchase Maroubra Road, including expenses, for about $600,000.00 in February 1983 (or for about $500,000.00 if Margaret's claimed contribution of about $100,000.00 is taken into account) and Queen Street in 1988 for about $1,655,000.00. The second, third, fifth and sixth defendants contended that KST must have had assets and money or resources of which members of his family were not aware. I am prepared to assume that this may be so, but not in the sums required to purchase the Maroubra Road and Queen Street properties. The size of the amounts involved is a telling factor, especially when no mortgages were involved. It is probable that KST used partnership funds to make these two substantial purchases. 370 KST had funds exceeding $1.3 million in bank accounts and bank deposits at the time of his death. The source of these funds is not clear. Even allowing for KST not telling the members of his family about all the assets he held, which appears to be the fact, the size of the funds he held at his death suggests that he had had access over the years to substantial sources of income or funds. How KST built up such large sums does not appear. 371 If an overall approach is taken, along the lines of that of Mr Hill but subject to the modification of the amount deducted for living expenses, there is a shortfall of about $1 million or a little less. Mr Hill allowed for the rental income from the Wiley Park and Fairfield properties. That was income of KST not the partnership. The size of the shortfall cannot be satisfactorily explained away by reference to cash or assets held by KST and not known to any of his children and those administering his estate. It has not been suggested that KST owned other real estate. There was no evidence pointing to KST in the years before his death converting assets hitherto unknown to his family into cash or calling up or utilising amounts of cash previously unknown to family members. 372 While I value the evidence of Mr Hill, I have taken a different approach. I have not accepted all the assumptions which Mr Hill was asked to make, nor his use of the ABS figures as to living expenses. Whichever approach is taken, there was a significant unexplained shortfall. I have taken the view, on the balance of probabilities, that KST made up the shortfall out of partnership funds including cash receipts received by WYT and YS which were not disclosed. Non-production of documents 373 The plaintiffs challenged the non-production of documents going back to 1975 relating to the affairs of KST, WYT and YS and sought to draw certain adverse inferences from the conduct of the second, third, fifth and sixth defendants. 374 Margaret had no recollection of KST cleaning out his office at WYT between 1975 and 1989. 375 In 1989 when WYT ceased trading there was some stock there, but it was old and nobody wanted it. Margaret said that she and Helen helped to clean up everything. She said that petty cash records and documents were thrown out but some documents that were regarded as important, including cheque butts and bank statements and possibly some other documents, were taken back to the Coogee Bay Road premises. Possibly included were copies of KST's tax returns and those for the WYT and YS businesses from 1975 – 1989. Margaret said that some of the later returns would not have been thrown out at the cleaning out. Margaret said that documents put into boxes from KST's office went to the garage at the Coogee Bay Road premises. Margaret said that in late 1997 there was a substantial water leak in those premises with consequent water damage affecting the documents and she and Helen threw out all the documents kept in the garage at the Coogee Bay Road premises. These were documents that had come from WYT. Margaret stated that there were some documents relating to WYT and YS that KST gave to her for safe keeping that were not put in the garage. Margaret said that they (she and Helen) did not tell their solicitor of the water leak in the garage in late 1997 and that many documents had been destroyed as a result. She said that she was not aware that she was required to explain in detail why they did not have particular documents. Margaret denied that her evidence as to the destruction of documents as a result of being thrown out consequent upon water damage was concocted. She also denied that her evidence that they did not know that they had to explain in detail why they did not have documents from long ago was untrue. 376 Margaret denied that when she wanted to produce documents to support her case she had been able to find them. Margaret said that as time passed she had found documents in various places, such as amongst her books and recipes, in her bedside table drawer and amongst her children's early years learning and reading books. Counsel for the plaintiffs was very critical of this evidence but I did not think it was untrue. Some women who have given evidence in Court proceedings treasure their books and recipes and their children's early learning and reading books. Male values tend to be different. 377 Probably there are no documents in existence which would throw further light on the supply of funds for the purchase of the Maroubra Road property in which Margaret claims to have a one-fifth interest and on the other matters and issues canvassed in these proceedings. 378 Helen said that, on the butcher's shop being sold in 1986, she packed up the statement folders, the invoice books and any other documents in the storage room and took them to KST's office in WYT. On WYT shutting down in 1989 it was Helen's recollection that the YS documents she had brought to WYT were thrown out. Helen said that prior to the YS butchery closing down (being sold) she was not aware where the bankbooks, bank statements and the tax returns relating to the YS butchery were kept. 379 She said that in 1989, apart from the YS documents which were thrown out, she assisted in packing the documents into boxes. She did not make a mental notation as to what was put in the boxes. Those boxes went to the garage of the Coogee Bay Road premises. She took four notebooks upstairs. She could not now remember why she did this. She said that the documents down in the garage were the subject of a flood which she thought occurred about late 1997. Helen said that all of the flooded documents were thrown away plus other stuff that was no good. She never raised the question of the destruction of the documents by flood. Helen said, "I just didn't see the relevance … It flooded, what's the point of bringing up something that can't be retrieved". (T 1204) 380 The discovery of Margaret and Helen was markedly inadequate. I have noted, but will not rehearse, the deficiencies to which counsel for the plaintiffs referred at some length. I do not believe that there are further relevant un-produced documents. 381 As mentioned earlier under the heading "Some subsidiary issues", Sunly's discovery was also inadequate, particularly in relation to the production of the photocopy pages 1, 2 and 3 of the Commonwealth Saving Bank passbook in the name of KST and FC Chow, A/c 12625. I am not persuaded that Sunly holds the original passbook. I was not prepared to reject Sunly's evidence on this point. 382 I have again taken into account the conduct of Margaret, Helen and Sunly in relation to the forged will and the inroads made into their credit in cross-examination. Nevertheless, I think that probably the documents transferred from YS butchery to WYT on the YS butchery being sold were thrown out on WYT closing down in 1989. While initially I had reservations about water damage being caused to the documents in boxes from WYT stored in the garage (including any relating to YS kept at WYT), I thought that this probably occurred and that those documents were thrown out. I think that Margaret and Helen probably retained some documents which they did not put in the garage as they regarded them as being important whether for business or family reasons. It is probable that they do not hold copies of all the tax returns prepared by Mr Wong as to either WYT, YS, the "partnerships" and the returns of KST, Mary , Margaret, Helen, Janet and FC Chow in respect of the periods from 1 August 1975 to 30 June 1989. I regard the early searches made by Margaret, Helen and Janet for discoverable documents as markedly inadequate. The plaintiffs should not have been put in the position where Margaret and Helen were producing relevant documents which they held during the hearing or shortly prior to the hearing resuming on 15 June 2009. 383 The plaintiffs contended that Gordon's discovery was inadequate. During cross-examination of Gordon by counsel for the plaintiffs it emerged that in the earlier years Gordon received cheques from his grandmother in the United States of America and banked them with United Permanent Building Society, as known in those days, or St George Building Society. He said that he would have to look to see if he had records going back as far as that. He agreed that he probably did not give his father any moneys with which to purchase the Queen Street property. 384 Gordon did not know whether KST kept all of his papers going back to the commencement of the businesses in the small office upstairs at WYT or whether he sometimes brought old records back (to Haig Street). Gordon said he did not have any knowledge where any of the records of the WYT business went after the shop was packed up. He did not know who helped his father pack up. There were three garages at the Haig Street property. He did not remember records from the businesses being put in one of the garages. He was aware of "stuff" moving in. By "stuff" he meant old pots, some kitchen utensils and other items people have in a work place. 385 Gordon said that since the commencement of these proceedings he had made no enquiries about what happened to the records of the businesses after they ceased. Gordon said he had not asked any of his brothers or sisters what happened to some of the old records of the businesses. 386 Gordon said he had assumed that the records of the WYT and YS businesses after they closed went to either Mary or Margaret. He did not think that KST would hang on to them because he kept his own records, mostly in Chinese. These are not available. Gordon said he did not know whether KST retained records relevant to tax records. Gordon said KST kept old things. Gordon could not recall him going into the garage. 387 Gordon, on being shown the folder containing building society and bank passbooks going back to 1974 and 1975 (Exhibit 5&6D-7), said he did not know who retained these books. He had not seen them before. Gordon did not know where the photocopy page 1 of bank passbook for a/c 12625 in the name of KST and FC Chow came from. Enquiry would have to be made of Sunly, as it was attached to Sunly's affidavit. Gordon thought that this page was likely to have been kept at Haig Street. 388 Gordon did not know where the original documents from David Szeto of 1, 26 and 27 April 1976 came from, or who held them prior to their discovery in these proceedings. Gordon did not assume that they were kept at Haig Street. Gordon said that KST on occasions put papers in the Coogee Bay Road flat. 389 Gordon recollected that there were some contents in the safe in the Haig Street property, but he did not recall the details of what was in the safe. He did not know if there were items in the safe now. 390 At the conclusion of Gordon's evidence on Friday 26 June 2009 it was anticipated that he would be returning to Hong Kong on 28 June 2009. I raised the question of Gordon making a further search to see if he could find any documents within the categories specified by the plaintiffs. 391 A supplementary affidavit was sworn by Gordon in July 2009 at Hong Kong. Gordon said that on 27 and 28 June 2009 he carried out a search of the documents located in the bedrooms set aside for his exclusive use in the Haig Street property and the garage. The search took him approximately 12 hours. He did not find any documents relevant to the plaintiffs' categories of documents for discovery (see letter of 15 May 2006 to Gordon from Colin Biggers and Paisley). 392 Gordon said that on 29 June 2009 he carried out a search of the boxes of documents he took with him when he relocated to Hong Kong from Australia which are now located at his home in Hong Kong. This search took him approximately five hours. He did not find any documents relevant to the plaintiffs' categories of documents for discovery amongst the boxes of documents he had in Hong Kong. 393 These searches were carried out and the affidavit sworn after Gordon had been extensively cross-examined in these proceedings, including about the searches he had made to locate documents for discovery. 394 It was accepted that the plaintiffs and Gordon were at issue upon the adequacy of the searches made by Gordon and his disclosure of relevant documents. The searches made by Gordon in late June 2009 were belated and a more timely discovery was required. Gordon had lived and worked in Hong Kong from 1996 but he neither arranged for anyone to make a search of the documents at the Haig Street property on his behalf nor returned to Australia to make the search himself. Both these alternatives would have involved heavy expense but these proceedings involve substantial sums of money. Gordon made no enquiries of any of his siblings who were defendants. They all had discovery obligations. Enquiries would probably not have resulted in further documents being produced. Gordon was not cross -examined on his affidavit of July 2009 but it was agreed that no point would be taken as to this. Cross-examination by video or audio link with Hong Kong would be expensive and not satisfactory from the plaintiffs' point of view. 395 While more timely discovery would have been better, I thought that the searches in late June 2009 by Gordon and their result should be accepted and went a long way towards meeting many of his obligations. While Gordon was in Hong Kong the potential existed for someone to interfere with his documents in the garage or elsewhere in the Haig Street property. The evidence does not suggest that this occurred. Purchase of other properties by FC Chow and her children 396 Counsel for the plaintiffs elicited that Gordon, Sunly, Stella and FC Chow purchased a semi-detached property in Maroubra Road in 1988. This was separate from the property purchased at the instigation of KST in Maroubra Road in 1983. Gordon recalled contributing to the purchase of that property, but not the amount. He did not recall the amounts each contributed. Gordon said that KST did not have a hand in the idea of purchasing the semi. 397 Counsel for the plaintiffs elicited that, around 1988, Gordon, Sunly, Stella and FC Chow also purchased a property at Jervis Bay very cheaply and two adjoining pieces of land at Port Macquarie. 398 Gordon said that KST did not contribute any money to the purchase of the semi. FC Chow did not, from Gordon's recollection, contribute much money to the purchase. She was made a joint owner as the mother. 399 Counsel for the plaintiffs put to Gordon that FC Chow contributed at least her share, if not more, of the amounts required to purchase these properties. Gordon said he did not have any records on him to demonstrate that the proposition put by counsel was incorrect. When asked where he would look for records of that kind, he replied in the Haig Street property and in boxes of documents that he sent over to Hong Kong when he packed up and left Australia for Hong Kong in 1996. Gordon stated that documents relevant to these transactions may be kept at Banks. He did not think it was possible that any other members of the family might have any documents. Gordon did not think there were any documents at Haig Street relating to his contribution(s) to the purchase of the properties. He did not know whether there might be some documents in the Haig Street property relevant to FC Chow's contribution to the acquisition of the four properties. Gordon did not know whether Sunly or Stella might have some documents relevant to who contributed amounts of money to the acquisition of these properties. Claim of Margaret to one-fifth share in Maroubra Road 400 When this property was purchased the transfer was stated to be in the names of KST as to four one-fifth shares and Margaret as to one one-fifth share. Margaret said that in early 1983 she was looking to buy an investment property, that KST stated that he knew she had saved up some money, that she should draw out what she had from her bank accounts and that would be her share of ownership of the Maroubra Road property. She said that she told KST that she could probably buy one-fifth and that he replied that if she was a little short he would top it up for her. Margaret said that she had about $100,000.00 saved up and that her father paid for the legal fees and stamp duty. He instructed her to make arrangements with Mr Marcel Doolan, solicitor, Rockdale, and she did so. Margaret insisted that she paid for her share of the Maroubra Road property with her own funds. This was disputed. 401 Margaret agreed that at all times up until KST's death, in respect of the bank accounts she held jointly with him, the moneys in such accounts belonged to him. She did not agree that KST put moneys belonging to him into an account solely in her name. 402 Margaret agreed that by 1974 the moneys she contributed to her savings comprised moneys earned at the Cadbury factory, Chinese Takeaway, KFC, Prince of Wales Hospital and part-time work at TAFE. These were modest amounts. She agreed that from 1975 to the first half of 1980 her sources of income comprised part-time work at TAFE and WYT. She agreed that after May 1980 her sole source of income was her WYT salary. She also received gifts of money from her mother from time to time. This was not mentioned in her affidavits. The amounts were not quantified in her oral evidence. 403 Margaret agreed that for the calendar years 1981, 1982, and 1983 all her income was WYT salary. I do not accept the accuracy of the salary figures shown in the tax returns. 404 Margaret agreed that in respect of the Maroubra Road property all of the rental income was under the control of KST. She said that the cheques for the Maroubra rentals were made out in the names of KST and herself. She said that these cheques were banked in an Advance Bank Account and were separate from the other rentals he received. Periodically money was removed from the Advance Bank Account and placed in a fixed term deposit. She said that the Advance Bank Account was in the name of KST and herself. She added that he knew best, that he would suggest withdrawing money from that account and investing it in a term deposit in both their names. Margaret said that by the mid 1980s she had saved most of the money she had received, but she could not remember how much she had saved. 405 Margaret said that by February 1983 she would have saved $100,000.00, or possibly a little more. She recollected this because of KST inviting her to contribute to the purchase of the Maroubra Road property. 406 She was referred to her copy taxation return, being Exhibit JKW – 28, for the year ended 30 June 1980. Under the headings of "Interest Received" there are two groups of entries. The first group refers to "Joint Account with KUT SZETU". A total of $6,030.00 is shown. That is halved and an amount of $3, 015.00 is shown. Underneath that there are three entries of interest received from different bodies totalling $1,771.00, making total interest disclosed $4,786.00. Margaret agreed that she had these three personal accounts at 30 June 1980 in her own name. When she was asked if she was honestly disclosing the interest income that she was receiving at that time, she was told by me that she did not have to answer that question if the answer may tend to incriminate her. Margaret responded, "Then I won't answer that question …." (T 967). The matter was not taken further. Margaret had earlier been advised that it was an offence not to fully disclose her income when making a taxation return. 407 Counsel for the plaintiffs, after going through the applicable interest rates with Margaret and the amounts of capital required to produce the interest claimed, put to Margaret that she did not have more than $22,000.00 saved by 30 June 1980. Margaret rejected that proposition. She stated that if you looked at her "commercial bill I put in 1982 there, as I have declared a tax for that financial year and you would note in all the bank books [MFI – 15] would have the calendar year written in as the tax has been declared, so if you say to me by 1980, June, I do not have $22,000.00 I may have $22,000.00, that would be wrong" (T 968 – 969). That answer is difficult to follow and something may have been lost in transcription. The position was clarified later. 408 Subsequently, and after the luncheon adjournment, Margaret sought to explain her position further. She had understood counsel to put to her that by June 1980 her savings would be only $22,000.00 and that, if they were greater, then portion of the interest she received would have been undeclared for tax purposes. She suggested that she may have declared the interest in the years ended 30 June 1981 and 1982. She suggested that interest on the commercial bill in her name may have been declared in the year ended 30 June 1982 because she had written 1982 in red on the letter confirming the commercial bill. She added that there was no reason for her not to declare her interest because her father would have paid her tax. (See T 973 – 974 and 978 – 979.) 409 Margaret was also referred to JKW – 13, being copy tax return of KST for 30 June 1980. It disclosed matching entries with those contained in her copy tax return for the same period. Margaret agreed that KST's return disclosed only joint accounts held with her. She said that this helped her remember that she was the only person that he held joint accounts with at the time. She thought that continued to be the case until KST died. 410 Margaret said that it accorded with her recollection that in the financial year ended 30 June 1980 she had, in joint accounts with KST, principal of between about $43,000.00 and $75,000.00. She was not sure of the numbers. 411 Margaret thought that she had savings of more than about $20,000.00 in June 1980. She said she did not know how much more. Margaret, after being warned, declined to answer the question that if there was any income earned from interest on bank bills that was a matter that had to be disclosed in her tax return. 412 Margaret was referred to a copy letter of 16 July 1981 from the Commonwealth Trading Bank of Australia, Haymarket branch to her confirming selling to her for $96,585.12 a bank bill due on 13 October 1981 for $100,000.000. The yield was stated to be 14.5% p.a. The bank undertook on the due date to credit her account with the proceeds. On the bottom of the letter the figures 1982 have been written. The income in question should have been disclosed for tax purposes in the financial year ended 30 June 1982. 413 When asked for an explanation of how her savings went from the assumed commencement of $22,000.00 on 30 June 1980 to be about $96,500.00 in July 1981 Margaret said that she could not explain how this happened because it was so long ago. Margaret disagreed with the suggestion that in June 1980 she only had $20,000.00 to $22,000.00 in savings. Margaret seemed to accept that she could not have gone from about $22,000.00 in June 1980 to about $96,500.00 (or $100,000.00) in July 1981. She added that all she knew was that the bank bill belonged to her and she had that money. Margaret denied that the bank bill was her father's money and insisted that the money was her money. 414 Margaret was referred to a letter of 22 July 1981 from the Commonwealth Bank Trading Bank of Australia, Haymarket addressed to KST and her confirming selling to them for $106,118,67 bank bills due on 19 October 1981 for a total of $110,000.00. The yield was stated to be 15% p.a. The bank undertook on the due date to credit their account with the proceeds. The account specified in both letters was the same Savings Bank Account with the Commonwealth Saving Bank, Haymarket. 415 Margaret disagreed that there was a dramatic unexplained increase in savings between 30 June 1980 and Commonwealth Bank documents of July 1981. She disagreed that KST had savings which were not being disclosed for the purposes of his tax returns. After being given a warning, Margaret declined to answer the question that the only way she could have had funds of $96,500.00 on 16 July 1981 was if she had not disclosed all of her savings in her tax return for the period ended 30 June 1980. 416 Margaret gave some unsatisfactory evidence as to the amounts she received while employed by WYT (including her work at YS). In paragraph 109 of her affidavit she stated, "I received the same wage as the second plaintiff" (Mary). The tax return of the WYT "partnership" for the year ended 30 June 1980 indicated that Mary was paid a salary of $9,765.38, that is, about $200.00 per week (or a little less). The tax return of WYT for the year ending 30 June 1981 indicated that Mary was paid a salary of $6,496.00 and Margaret a salary of $2,711.00. The tax return of YS for the year ending 30 June 1981 indicates that she was paid a salary of $9,175.00. 417 Margaret said that, while she could not remember exactly, she thought that KST possibly gave her $400.00 to $500.00 per week from possibly June 1980. Margaret said she did not remember how much she was paid per week when working for TAFE because TAFE deposited directly into her account. She had no recollection that in 1980 a TAFE teacher's income was about $4,000.00 p.a. 418 Margaret said that after Mary left in January 1981 she could not recollect whether there was any pay increase or she was still earning $400.00 to $500.00 per week. Margaret said that she had no recollection of what she was being paid by her father in 1982. In 1983 as business was reasonably good she imagined that she was getting $400.00 or $500.00 per week, "or maybe more or something like that" (T 923). She thought that she was probably being paid about the same amount in 1984, 1985 and 1986. In 1987 she probably did not receive as much because the business dropped quite a bit (T 923 – 924). She received less in 1988 and 1989. Margaret said that when KST gave her $400.00 - $500.00 it was not necessarily a wage (T 925). I doubted if the evidence given by Margaret to the effect that she was being paid $400.00 - $500.00 per week after January 1981 was correct. Margaret discharged a wider range of duties than Mary and I could have accepted that Margaret was paid more, but I do not accept a figure of $400.00 - $500.00 per week. 419 Geoffrey pointed out that in 1983 Margaret was 31 years old. Between 1975 and 1981 she had worked as a TAFE teacher (including part of that time as a trainee teacher). Geoffrey said that he was also a TAFE teacher during that period and so was aware of the salaries paid to TAFE teachers at that time. He contended that the annual salary for TAFE teachers at this time was about $8,000.00 as a teacher trainee and could increase to $12,000.00 by salary increments. Geoffrey submitted that the Court would find that between about 1981 and 1983 Margaret was working full-time at WYT. I think that Margaret was working for WYT from about late May 1980 but this included working for YS when YS was busy. Geoffrey placed reliance upon the moneys being paid to Mary and Margaret's statement that she received the same money as Mary. That statement is probably incorrect. Margaret worked at both WYT and YS and did more than Mary. KST relied on Margaret for a wider range of tasks. He probably paid Margaret larger sums for her work than Mary. Margaret accepted what KST gave her over the years. She did not query the source of what he paid or gave her. Mr Hill's figures show that the available cash in the years ended 30 June 1980, 1981 and 1982 was high. Margaret said that business was reasonably good in 1983 but the available cash, as shown by Mr Hill, was not as high. 420 The underlying contention of the plaintiffs was that Margaret's tax return for the year ended 30 June 1980 pointed to savings of about $22,000.00 and that she could not have saved $96,500.00 by July 1981. It was the further contention of the plaintiffs that the difference of about $74,500.00 probably came from money given to her by KST. There was the further contention that KST probably provided that sum from partnership funds derived from WYT and YS. These contentions have considerable force. Whether KST used disclosed income or undisclosed cash income does not matter for these purposes. 421 Margaret did not accept that in June 1980 her savings were limited to $20,000.00 to $22,000.00. I doubt if Margaret's savings were so limited and if she fully disclosed the full interest income she had received in her tax return for the year ended 30 June 1980. On the basis that Margaret's savings went from about $22,000.00 as at 30 June 1980 to $96,500.00 in July 1981, Margaret could not explain how this happened because it was so long ago. I would not expect Margaret to have been concerned with this apparent anomaly, nor to have kept track of or remembered how the sum of $96,500.00 was built up. Some of the money may have come from her father. Margaret and KST treated the bill for $100,000.00 maturing on 13 October 1981 as her money. There was another commercial bill in KST's name and her name for a total of $110,000.00 maturing on about 19 October 1981. The money the subject of that bill belonged to her father. Moneys previously standing in accounts in the joint names of KST and Margaret probably became the subject of the second bill. 422 $100,000.00 is a substantial sum but this family dealt in substantial amounts. I am persuaded that the commercial bill of $100,000.00 standing in the name of Margaret was probably her property. She is the legal owner and the evidence is not sufficient to warrant the Court holding that she holds the whole or part of that sum of $100,000.00 on trust for KST or the partnership. 423 As mentioned, Margaret claimed the privilege against self-incrimination when she was asked if she was honestly disclosing the interest income that she had received. She ultimately claimed that she may have disclosed that interest in a subsequent year. As she did not have copies of her returns for the years ended 30 June 1981 and 1982, this could not be checked. I think that Margaret accumulated her own savings over the years and that these probably included moneys she had received from KST for services rendered by her to KST or to the partnership or by way of gift from KST. I am not persuaded that any moneys given by KST to Margaret came from the partnership businesses. This is no more than a possibility. I do not regard the figures in the partnership returns as reflecting the true position, either as to the moneys received by or paid to family members. 424 It is correct to proceed on the basis that the moneys the subject of the commercial bill for $100,000.00 and standing in the name of Margaret were probably her moneys and were so treated by her and KST. It is probable that KST was prepared to treat Margaret as having a one-fifth interest in the Maroubra Road property. He bore the costs of acquisition of that property and was prepared to make up any shortfall on the part of Margaret. Margaret used the proceeds of the commercial bill in her name to purchase what became her one-fifth interest in the Maroubra Road property. The actual cost of the Maroubra Road property with stamp duty and expenses was $600,000.00, or perhaps a little more. At the most Margaret probably contributed about $100,000.00 or perhaps a little more. This suggests that she had, by contribution, about a one-sixth interest. The difference between a one-fifth share and a one-sixth share would be held on trust for the partnership. The one-sixth share attributed to Margaret in the Maroubra Road property is not the subject of any trust. Funds for purchase of Maroubra Road and Queen Street properties 425 Margaret could not offer any explanation for how her father could have acquired between 30 June 1980 and 14 February 1983 about $400,000.00 to $500,000.00 in savings. She denied being aware that KST was not disclosing all the cash receipts for the WYT "partnership" and the YS butchery. 426 Mr Hill's analysis of the available cash has satisfied me that the money provided by KST for the purchase of a four-fifths or five-sixths ($500,000.00) interest in the Maroubra Road property probably came from receipts from the businesses of WYT and YS, some of which may not have been disclosed for income tax purposes. In the substituted Appendix N (part of Exhibit Y) for the year ending 30 June 1983, the opening cash was shown as $507,621 and the additional cash for the year (or net cash) as $62,334.00. Mr Hill has entered as property purchases $598,508.00 (cost and stamp duty). This leaves a deficit of $28,554.00 in closing cash. Mr Hill allowed for interest of $35,533.00, total available cash of $97,867, deficit net cash of $500,641.00 and cumulative cash of $6,980.00. For the year ended 30 June 1984, on Mr Hill's figures there was available cash of $176,321.00, but this includes rental income for that year. 427 In paragraph 6.3.3 of his report, following Table 15, Mr Hill wrote: "Based on my instructions and my assumptions, the partnership would have had sufficient funds to purchase [the Maroubra Road property] for $598,508.00 in February 1983 and would have had surplus funds of approximately $3,400.00 ($601,926.00 less $598,508.00 = $3,418.00)." This would be a close call. Any additional cash resources such as the rental income of KST would have facilitated the purchase. While Mr Hill's figure allows for the cost of the purchase and stamp duty, it does not allow for the other costs borne by a purchaser. 428 Mr Hill seems to have proceeded on the basis of the partnership providing the whole purchase price for the Maroubra Road property. (See paragraph 6.3.5 of Mr Hill's report.) The figures would need adjustment if it is accepted that about $100,000.00 (or possibly $117,000.00) of the cost of the purchase of that property was probably provided by Margaret. Further adjustment would need to be made as to the deduction for living expenses. 429 A different situation existed in relation to the purchase of the Queen Street property. 430 In Table 16 of his report Mr Hill assessed the cash flows available to the partnership from 31 January 1983 to 30 June 1988 as totalling $437,450.00. In paragraph 6.4.3 of his report he wrote: "Based on my instructions and my assumptions, the partnership would not have had sufficient funds to purchase the [Queen Street property] for $1,652,390.00 in July 1988 and would have been short approximately $1,215,000 ($437,450 less $1,652,390 = $1,214,940). " Even allowing for adjustments to be made because of deductions for living expenses and KST's rental income from the Wiley Park and Fairfield properties the deficit is substantial. The deficit is still substantial even if the rental income of the Maroubra Road property from February 2003 (of $323,722.00) is taken into account. 431 Appendix N reveals deficits in available cash in 1985 and 1986 for YS and also deficits in 1986 and 1988 for WYT. 432 It is apparent that Queen Street could not have been purchased without some substantial cash injections from KST. The rental incomes from the Wiley Park and Fairfield properties, especially from 1983, were not such as to provide such injections. 433 With reference to the purchase of the Maroubra Road property, the plaintiffs, at T 1564, drew attention to the investments in the WYT and YS accounts disclosed in their tax returns for the year ending 30 June 1981. They totalled about $82,367.00. In July 1981 KST, it was submitted, invested in two bank bills totalling about $202,000.00. The plaintiffs asked me to conclude that the two businesses would not have generated about $120,000.00 in 22 days, that is, from 30 June 1981 to 22 July 1981. That is probably so. I was asked to draw the inference that the partnership tax returns were not properly disclosing the income received. That is an available inference and one which should be drawn. I was next taken to the returns for the year ended 30 June 1982. The WYT return (Notes to Accounts – note 7) refers to a commercial bill of $100,000.00. It was submitted that the sequence was that on 30 June 1981 there was $82,000.00 in interest bearing deposits. By 22 July 1981 there was $202,000.00 in commercial bills, but by 30 June 1982 the amount invested was stated to be $100,000.00. The accounts for the year ended 30 June 1984 included in Mary's copy tax return contain details of the previous year and those details show that by 30 June 1983 the commercial bill of $100,000.00 was no longer shown as an investment. The plaintiffs submitted that the disclosed $100,000.00 went with the undisclosed $400,000.00 to buy the Maroubra Road property in March 1983. The sum of $100,000.00 did not appear in the accounts of WYT and YS for the year ending 30 June 1984. 434 The plaintiffs contended that the commercial bill for $100,000.00 shown in the accounts of WYT stood in the name of Margaret, but that may not be correct in view of the endorsement on the back of the letter of 22 July 1981 of CBA. 435 The plaintiffs further submitted that, as there were no investments shown in the accounts for WYT and YS for the year ended 30 June 1985, KST had to raise about $1.3 million in 1988 to acquire the Queen Street property. 436 The plaintiffs submitted that the accounts (or tax returns) were consistent with under-disclosure of income. 437 The fifth and sixth defendants submitted that it should not be assumed that KST had no financial resources capable of providing $120,336.00 ($202,703.00 less $82,367.00) outside the WYT and YS businesses, nor that KST had no material financial resources not disclosed in Mr Hill's report. 438 The fifth and sixth defendants submitted that it was inconceivable that Mr Wong (his firm or company) would prepare the 1981 income tax returns disregarding $120,000.00 profit held in a bank account as at 30 June (22 July) 1981, if that sum were in truth profit derived by the WYT and YS businesses. (This contention assumes that if there were a profit of $120,000.00 it would have existed on 30 June 1981 and been disclosed to Mr Wong.) The fifth and sixth defendants submitted that another explanation was that the purchase of bank bills was made with funds held by KST in a bank account. They submitted that one of the gaps in the plaintiffs' case was the absence of any evidence as to how the $1.3 million in unaccounted for cash sales, i.e. the alleged shortfall, became deposited in a bank account at all. 439 On the back of the letter of 22 July 1981 from the Commonwealth Trading Bank to KST and Margaret as to the commercial bills for $110,000.00 there is an endorsement written in the Chinese language by KST (Exhibit 5D & 6D – 10) (T 736). A copy of this letter was not produced to the plaintiffs by the second defendant (via counsel for the fifth and sixth defendants) until 23 June 2009 (T 649). The original should have been discovered very much earlier. Gordon gave this translation: "July 22 nd – got a cheque from CSB for the amount of $6,118.67 plus amount of $100,000.00, deposit October 19 th , will get the principal plus interest, will get $110,000.00." (T 737) 440 That does not advance matters as to the commercial bill in Margaret's name. However, it may assist in explaining the entry of $100,000.00 under investments (note 7) in the accounts for the year ended 30 June 1982. The commercial bill referred to may not be the one in the name of Margaret but be the one in the name of KST and Margaret referred to in the Bank's letter of 22 July 1981 and KST's endorsement. 441 The plaintiffs were primarily interested in establishing that KST must have used partnership assets to acquire the Haig Street, Maroubra Road and Queen Street properties. They established that he could not have purchased these with the cash available from his rental income from the Wiley Park and Fairfield properties. The plaintiffs contended that WYT and YS were substantially cash businesses and that not all cash income received was disclosed for taxation purposes. The plaintiffs also directed attention to the profits and income disclosed in the partnership returns and the income from the rental properties. The plaintiffs also relied on moneys being derived by KST as a result of the manipulation of the cost of goods sold (stock). The expert accountant, engaged by the plaintiffs, devoted considerable effort to assessing the cash available by reference to the rental income figures and the net profits that could be extracted from the returns of WYT and YS and then making deductions for the income tax payable and living expenses. 442 Where did KST obtain the additional cash from to purchase Queen Street? KST had sold the YS butchery in 1986 so that it was not producing income. KST closed down WYT on the lease of the premises expiring. I doubt if the sale price of YS butchery will ever become known after such a long period. None of the defendants can recollect it and I accept their evidence on this point. Financial contentions and conclusions 443 As between the plaintiffs and the fifth and sixth defendants (and probably by adoption, the second and third defendants) there was a major difference of approach as to the moneys needed to purchase the three properties. The fifth and sixth defendants contended that, on the figures, it had been shown that it was neither feasible nor probable for WYT and YS to have accumulated an additional amount of $1.3 million. They contended that it should not be assumed that these moneys did not come from unknown resources of KST. The fifth and sixth defendants contended that the onus rested on the plaintiffs to establish the sources of those moneys and that they had not discharged that onus. I have earlier dealt with the position as to the Haig Street property. 444 A starting point is the substantial purchase price of each of the Maroubra Road and Queen Street properties. Their acquisition required a lot of money. The plaintiffs also added in the Haig Street property. The plaintiffs pointed out that to make the purchases KST needed, and paid, an extra $1.3 million and that that sum could not have come from the disclosed profits of WYT and YS. The plaintiffs contended that it had been established that: (i) WYT and YS received substantial sums of cash which were controlled by KST; (ii) KST also controlled the stock purchases, the valuation of the stock, and the figures given to Mr Wong; and (iii) KST had no other assets of consequence under his control with which to pay the extra $1.3 million save that he probably used the whole or part of the moneys received from the YS sale in purchasing the Queen Street property. 445 I have concluded: a) Even excluding the Haig Street property and reducing the figure of $1.3 million to about $1 million or a little less, a large amount remains. b) It is improbable that KST had an amount of that approximate size or a little less in undisclosed resources. It is over 20 years since the Queen Street property was purchased and over 10 years since KST's death, yet undisclosed assets of the requisite magnitude have not emerged. c) KST had access to and controlled substantial sums of cash received by WYT and YS. KST controlled all aspects of these businesses including the moneys banked, the purchases of stock, the valuation of the stock and the figures given to Mr Wong, his firm or company. d) KST did not disclose all the cash income received by WYT and YS in the figures supplied to Mr Wong and used for the partnership tax returns. The stock figures may also have been adjusted but a finding cannot be made as to this. e) The plaintiffs have established that KST, in order to purchase his shares in the Maroubra Road property and the Queen street property, utilized a sum of about $1 million or a little less which did not come from the disclosed income of WYT and YS. The rental incomes from the Wiley Park and Fairfield properties were not sufficient to make up the balance. Some of the moneys used to purchase "his" share in the Maroubra Road property and the Queen Street property probably came from the cash received by WYT and YS and controlled by KST but not disclosed. Some of such moneys may have come from stock manipulation but I am unable to make a finding on this point. KST was not entitled to appropriate the proceeds of sale of YS to his own use. Factors influencing the plaintiffs not to take action and related matters 446 Geoffrey said that, at a family gathering for KST's 80th birthday held on 16 July 1994, he asked KST what happened to WYT and YS and KST stated that in the last few years they made substantial losses so they closed them down. KST allegedly attributed this to butcher shops started by the Vietnamese and movement away from Chinatown to the suburbs. Geoffrey stated that KST said that the losses offset the profits made earlier, that there was no profit to distribute and that was why they did not give partnership returns to them. Geoffrey said that Helen also told him that the businesses had lost money and been closed down. (See paragraphs 92 and 93 of Geoffrey's affidavit of 8 December 2006.) 447 Geoffrey said that it was some time after about 1994, in the course of his firm preparing KST's tax returns, that he became aware that KST had acquired the Maroubra Road and Queen Street properties. Geoffrey added, "Prior to that time I had always found [KST] to be secretive about his dealings and I had no involvement with any of [KST's] investment properties". (See paragraph 89 of Geoffrey's affidavit of 8 December 2006.) 448 Geoffrey said that he first knew that KST and members of his family had interests in these properties "about 1995/7" and said, "Basically, I think I noticed it about 1997" (T 417). Geoffrey said he thought in about 1978 that KST's explanation that there was enough money coming out of the rental units to purchase Haig Street might have been true. Geoffrey probably thought that substantiating a case against KST was risky. Geoffrey agreed that by December 1978 he had suspicions that moneys received from these businesses were not being recorded. 449 In cross-examination Geoffrey agreed that, in his eyes, the person best placed to state exactly what money came into these businesses was KST. Geoffrey said that he was not able to resolve the matter during KST's lifetime. However, the business was reporting losses. Geoffrey claimed that he was called upon several times in about 1985 because the business (or businesses) did not have enough money (T 410). Geoffrey said the business was losing money and he (presumably KST or Geoffrey) was called in by Perpetual Trustee to account for a shortfall in rent as to 25 Little Hay Street just before the lease ran out. Geoffrey said that after Mary had left the business, the business went into a very large decline in revenue and losses were being recorded. In these circumstances, the issues he raised with Slattery Thompson did not arise. Geoffrey said he was called in several times with a request to supply money. (T 411) 450 I was referred to some cheques drawn on WYT's account and purporting to be signed by KST and Geoffrey in favour of Perpetual Trustee and the new agent during the period from January 1985 to January 1986. (See Annexure A to Margaret's affidavit of 30 May 2007.) I was also referred to a lease dated 10 May 1982 for a term of three years from Perpetual Trustee Company Limited to KST, Margaret, Geoffrey, Mary and FC Chow of 25 Little Hay Street, 3 Kimber Lane and 84 Harbour Street. Helen was not a party. The lease was for a term of three years terminating on 13 February 1985. The lease contained an option for renewal for a further three years. The use permitted was that of a grocer and storage. There was a second lease of 80 Harbour Street in substantially the same terms, except as to rent. The use permitted was that of a butcher and storage. 451 In Exhibit GAL 4 (the sales brochure of premises in Chinatown) the lessees were described as holding over from month to month in the premises. The sales details provided that tenders closed on 22 November 1985. 452 The documents suggest that 1985 may have been an unsettled year from a tenancy point of view of the grocery shop and associated storage and of the butcher's shop and associated storage. The tenancy problems as to the butchery premises were probably resolved to enable the sale of YS butchery to proceed. Geoffrey said that Perpetual Trustee telephoned him and said his guarantee would be enforced, that the rent was overdue and that the new owner rang him up as well (T 415). Geoffrey explained that, because of his various experiences and what he was told (by KST and other relatives), he believed that there was no profit to be had from the businesses. Geoffrey said that he took some steps in 1985 to look at the accounts in full and he was convinced that the businesses were losing money. Geoffrey said he changed his approach on receipt of information from the Administrator of the interests of KST's estate in the three properties (Haig Street, Maroubra Road and Queen Street). 453 I have earlier referred to Geoffrey's views about the accuracy of the accounts prepared by Mr Wong and the advantage of Mary working in the business from August 1975 to January 1981. Geoffrey said that in terms of what Mr Wong presented as an accountant the accounts would be correct, "…but the rate at which the debts were being paid was far above that and on top of that the purchase of the property. I was released from the liability of the loans rather rapidly and it led me to believe possibly there was some defalcation, one of the reasons I asked Slattery Thompson to look into that".(T 426) Their advice was that before action could be taken an audit was required. The property referred to was probably the Haig Street property. 454 Geoffrey agreed that what he had described as the unaccounted for difference between the total cost of the property purchases made by KST and the total funds available to him in the spread sheet document must have come from WYT and YS businesses as undisclosed profit. This depended upon the questionable assumption that KST during his lifetime had no resources available to him other than those taken into account in his spreadsheet. That appears to be Exhibit JRL-2, the spreadsheet being re-cast by Jason. Resources there specified include the income from the Wiley Park and Fairfield flat properties. The figures commence with the year ended 30 June 1976 and continue each year to the year ended 30 June 1997. KST was able to call upon substantial cash resources and utilise them in Australia in respect of purchases in 1969 and 1972. These were apparently made before the Solomon Islands Inland Revenue became active. As an astute and capable businessman, and knowing that independence was coming and its anticipated consequences, KST is unlikely not to have shifted a substantial portion of his cash resources out of the Solomon Islands. Margaret confirmed this (T 955 – 956). 455 Geoffrey was referred to the shortfall of about $1.3 million assessed by Mr Hill. Geoffrey was unable to say what component should be attributed to WYT and what component should be attributed to YS. He relied on the overall result when combining the two businesses. Geoffrey agreed that to achieve a shortfall of about $1.3 million the total profit would be over $2.1 million. This would require the total sales for one or both businesses to be increased by over $2.1 million (T 437). Geoffrey explained that if the $1.3 million that he believed was misappropriated were in truth recorded in the accounts, it would not necessarily have to appear as an increase in gross sales because the stock figures could be false. Geoffrey said that it is possible to manipulate two areas to achieve the suggested profit. He said that one common fraud is to have the cost of sales higher than it should be. Geoffrey contended that the gross profit margin of the butchery was far lower than it should be, that Chinese butchers cut the meat differently, that the YS butchery was an extremely profitable business at the time it was run. Geoffrey said that his concern has always been a manipulation of the costs of goods sold rather than the sales figures and possibly also the non-reporting of cash receipts. 456 Geoffrey said he never fully investigated the butcher shop. When pressed, Geoffrey agreed that he did not fully investigate anything. He added "… it is just impossible. The purchases were done by [KST] … he paid for the stock, he recorded in Chinese …" (T 439) 457 Geoffrey said that there was a physical stock take of WYT in 1975 and each year. While he participated in some of the stock take in 1975, Geoffrey did not participate in the annual stock takes. Geoffrey discounted the stock takes because after the goods were counted KST gave an assessed value of the goods. Geoffrey said that as an outsider there was no way in which he could work out the value of the stock. 458 Geoffrey agreed that normally there was very limited scope for manipulation of stock figures in a retail butchery. Geoffrey gave various examples of frauds that could be practised with stock. Geoffrey said he did not have a period, i.e. 1976 – 1986 or so, when he had direct experience of other retail butcheries. He saw the accounts of some butcheries round about 2000 and onwards. Chinese butchers differed from standard butchers. Gross profit margins for different types of butchers vary markedly. From 1976 to 1986, apart from YS, there were no real competitors, so he had no real knowledge of prevailing gross profit margins for retail butchers in the Haymarket. 459 As to Geoffrey's allied complaint that KST was keeping for himself large amounts of money, Geoffrey referred to: a) an account with the ANZ Bank into which money was paid belonging to these businesses but which was never recorded in their books. On the balance sheet of WYT as at 30 June 1978 there is shown as an asset "Cash at Bank – ANZ Bank $10,212.09". KST had at one stage had an account with ANZ Bank. There is a broadly similar entry on the balance sheet of WYT as at 30 June 1980; b) about $430,000.00 in a Citibank account in Hong Kong. Geoffrey asserted that that sum was distributed among the four defendants without disclosure to anyone. Geoffrey did not know the source of the money in Hong Kong. He said he discovered this money in 2001; c) a commercial bill for $100,000.00 with NSW Permanent Building Society – this appears on the balance sheet of WYT for the year ending 30 June 1982. Geoffrey complained that he was not consulted about (a) and (c) by KST. 460 Geoffrey said that by 1985 the concerns he had about possible defalcations in 1978 were entirely eliminated in that he was convinced that the businesses were no longer profitable and that there had never been any defalcation. Sale of YS and closure of WYT 461 (a) It was contended that if either business was producing substantial profits, albeit some of the profits were undisclosed, it would be irrational for KST to jeopardise the security of the business by not paying the rent or paying it late. (b) It was further contended that rationally it would have been in KST's interests to sell WYT rather than close it down for nothing. (c) When the sale of YS was proposed it is hard to understand how any question of non-payment or late payment of rent could arise, especially as it was probably a profitable business. A purchaser usually satisfies himself that he has some security of tenure. The evidence as to the tenancy position is far from complete and persuasive. What is known is that the YS butchery business continued to be carried on profitably until about 1991. 462 The suggestion that KST could improve the accounts of the businesses for sale purposes by banking some of the undisclosed cash profits struck me as unreal. That would increase the tax payable and possibly lead to questions from, or an investigation by, the ATO. It could lead to the ATO reviewing its taxation assessments for earlier years. If, as I hold, KST had been receiving substantial undisclosed profits or income in cash over the years, this may have made it difficult for KST to sell the WYT business. YS was sold by KST for an unknown purchase price. While the accounts prepared by Mr Wong suggest that that business was starting to encounter difficulties, the evidence of Mr Williden suggests that YS was in a healthy state and continued in a healthy state under Mr Tony Lam, the purchaser. 463 Closing down WYT probably effectively precluded an ATO investigation. With the closing down of WYT rather than its sale there was relatively little likelihood of it being discovered that that business had received undisclosed income in cash, amounting overall to substantial sums or that the stock figures had been manipulated. Credibility of Margaret, Helen and Sunly 464 The plaintiffs correctly stressed the serious misconduct of these defendants for their part in propounding, or assisting to propound, as the last will of KST a document which was not his last will and known not to be his last will. The document represented what some of KST's children alleged to be KST's wishes. It appears that shortly after KST's death his seven children met in the office of a Mr Yee, a solicitor who had acted for KST and was able to communicate with KST in a Chinese language. Mr Yee told the children that he did not hold a will of KST and that he had had a meeting with KST and held some notes. Mr Yee told them to go away and see if they could find a will (T 1056, T 1151 – 1152). 465 Mary said that in September 1998, at the request of either Helen or Sunly, she attended by herself at the office of Mr Yee. Helen and Sunly were there. The solicitor had prepared some documents in support of a Probate application of the document referred to as a purported will. Mary said that she did not read the affidavit of executors before she signed that affidavit as requested. Mary said that she was asked to sign a document which Sunly told her was the will of KST. Mary, Helen and Sunly signed the purported will. Margaret said that the will (of which Probate was sought) was in her handwriting but she did not construct it. A draft of the document was given to her to be copied. Margaret gave this evidence at T 1054 – 1055: "Q. It was actually the will which was presented and in respect of which probate was granted of his estate, wasn't it? A. Yes. Q. I suggest to you it was created for that purpose, wasn't it? A. With everybody's knowledge except John's. … Q. It was created to give a false impression to the Supreme Court that this was the genuine will of your father, wasn't it? A. Well, the seven of us knew about it except John. … Q. It was created for the purpose of giving the false impression that it was written by your father, wasn't it? A. Well, when you put it that way, yes." 466 Margaret repeated that the seven children of KST knew the position. Margaret volunteered the evidence that the seven natural-born children of KST knew the position. She was not asked and did not explain how Mary or Gordon knew. 467 The evidence of Margaret on the issue of the preparation of the document purporting to be the will of KST at T 1049 – 1057 reveals a sorry state of affairs. While I have approached Margaret's evidence with much caution, I have not rejected it in its entirety. I thought that some of her evidence was correct. 468 Helen procured the signatures of two witnesses to the document in the handwriting of Margaret. They appeared to be attesting witnesses. Helen volunteered that everyone knew about the document but she did not explain the basis of her statement, nor was she asked. 469 Helen knew that the document advanced as the will of KST in September 1998 had not been signed by KST and was not a genuine will. She agreed that, prior to going to Mr Yee's office in September 1998, the signatures of the two witnesses were already on the purported will. 470 At T 1174, line 35 Helen said that "Mr Yee explained everything to us" (Mary, Helen and Sunly). Whether that statement extends beyond what is stated in Annexure C (assets of estate) is not clear. 471 Sunly agreed that he instructed Mr Yee to obtain probate of the purported will in Margaret's handwriting. Sunly knew that the document was not signed by KST as required. He denied that about the time he signed the documents he told Mary that the document was their father's will. Sunly at T 1347 on several occasions volunteered that all seven members of the family knew that the purported will was to be used to obtain probate. Sunly further volunteered that Mary knew that the purported will represented their father's wishes. Sunly said that to his knowledge Mary had not seen a copy of the purported will before she signed it. 472 Sunly agreed that the purported will was a joint composition amongst members of the family. Sunly said he and Stella wrote a first draft of the purported will and then Margaret wrote out the document of which Probate was granted. 473 Sunly stated that he explained to Stella how to write the portions and entitlements as to the various properties in the draft (T 1349, ll 18 – 21). He added, "the rest came from the floral notebook together with Mr Yee's notes" (T 1349, l 35). Sunly agreed that the purported will had significantly more content than the floral notebook. Sunly agreed that he was part of the process of composing the additional content. 474 In re-examination Sunly said that the draft written by Stella was not an exact copy of what had been written in the floral notebook but mathematically the draft was true with the exception of the Normandy shares. 475 The purported will provided for Mary to be one of the executors but she received no benefit under it. That would have troubled her if she had appreciated that as at September 1998. It is probable that Mary never saw the terms of the purported will prior to signing it in September 1998 at Mr Yee's office. It is not an easy document to follow. Mary impressed me as cautious and deliberate. I am unable to accept that Mary did not read the affidavit of executors. She realised that a grant of probate was being sought. She probably did not have an appreciation of the terms of the purported will and their effect at that time. It is improbable that Mary would have applied for a grant of Probate if she had appreciated the terms of the purported will. Mary had worked closely with her father from August 1975 to mid January 1981 and I am surprised that she did not recognise that the purported will was not in the writing of KST when at Mr Yee's office in September 1998. I do not think that in September 1998 Sunly told her that the purported will was that of KST. Mary assumed that. 476 Irrespective of precisely what occurred at the meeting in Mr Yee's office in September 1998, there was, and can be, no justification for Margaret, Helen and Sunly knowingly participating in seeking Probate of a document known by each of them not to be the will of KST. That was shameful and seriously affects their credit. It does not assist any of them that others might have known of their misconduct. While adopting a cautious approach to relying on any of the evidence of Helen and Sunly, I thought that portions of the evidence of each of them were correct. 477 By early December 1998 Mary had raised questions as to the purported will's authenticity. Credibility of Gordon 478 (a) The plaintiffs mounted an attack on the credit of Gordon and the reliability of his evidence. Some of that attack dealt with his inability to recall what he was told as to the sale price of YS and the circumstances in which be learnt of the sale price of YS. (b) I reject the plaintiffs' challenge to Gordon's evidence. From my observations I thought that Gordon did his best to tell the truth, that insufficient allowance was made for Gordon being in Hong Kong since about 1996 and that his interests had changed. He was being cross-examined about events that took place many years ago. Gordon had a cautious and studious manner and was a little reserved. I did not regard him as evasive. Miscellaneous 479 Counsel for the plaintiffs stated that because of a technical hitch they had not been supplied with a copy of the fax sent by counsel for the fifth and sixth defendants to my Associate on 20 October 2009. It read: "During the hearing of submissions His Honour raised the question of inferring criminal conduct from circumstantial evidence in civil proceedings. There is a discussion of this point in Dolman v Palmer [2005] NSWCA 361 at [33] and following." Counsel for the plaintiffs stated that they: "… reserve their right to respond to it [ Dolman v Palmer ] if any submissions were made about the case. We accept that the case in an authority relevant to be applied by the Court." As no submissions were made by counsel for the fifth and sixth defendants, it was not necessary to refer the matter to counsel for the plaintiffs. I have read Dolman and Palmer and applied the principles in Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5. See also Dolman v Palmer at [39] - [41], [45] – [47]. The summary at [47] has been applied, namely, "taking due account of what was said in Neat Holdings Pty ltd v Karaja Holdings Pty Ltd [(1992) 67 ALJR 170 at 171] has the allegation been proved on a balance of probabilities". Amongst the many allegations made the critical allegation was that KST used partnership moneys to acquire the three properties. 480 Margaret did not suggest that KST ever saved money which he did not try to earn interest on. 481 The plaintiffs challenged Margaret's evidence that she could not remember whether KST told her of the sale price of the YS butchery. It was submitted that it was extraordinary that she could recall conversations going back to the 1970s but could not recall the sale price of the YS butchery in 1986. I did not think that Margaret's evidence on the point was incorrect. 482 KST probably did not tell Margaret that he was under-disclosing the moneys being received by WYT and YS and thereby defrauding the Commonwealth. KST's bland assertions to his family that he had paid and was paying the income tax that was due were untrue. 483 Mary gave evidence that on 13 December 1998 she had a telephone conversation with Sunly in which he supplied the profit figures for WYT and YS for 1978, 1979, 1980, 1981, 1982, 1983 and 1984. She said that as Sunly gave her the profit figures she wrote them down on a notepad. Mary produced the pages of a notebook on which she said she had written down those figures. The plaintiffs pointed out that the profit figures given to Mary corresponded with those in the available copy tax returns and that Sunly had supplied figures for which there were no available complete copy partnership tax returns (i.e., 1977, 1979, 1982, 1983 and 1984). 484 Sunly denied that he had the conversation with Mary about 13 December 1998 which she alleged (T 1318 – 1319). The plaintiffs placed reliance upon Sunly not denying the conversation when it was asserted in a letter of 18 July 2006 from the plaintiffs' solicitors that it had occurred. At that stage Sunly was acting for himself and I would not expect a litigant in person to realise that he should deny in writing all assertions made by the plaintiffs' solicitors with which he disagreed. The letter of 18 July 2006 dealt with the inadequate discovery of Sunly at some length. Sunly did not read the letter sufficiently and realise the extent and seriousness of his discovery obligations. He was not capable of acting for himself in this matter. 485 The plaintiffs placed weight on what Mary claimed was her contemporaneous note but the conversation was in issue. I am unable to resolve whether the alleged conversation occurred. I do not draw the inference that Sunly had access to copies of the tax returns of the WYT and YS partnership businesses for the years 1977, 1979, 1982, 1983 and 1984. The indefeasibility defences 486 In Bahr v Nicolay (No 2) (1988) 164 CLR 604, dealing with sections 68 and 134 of the Transfer of Land Act 1892 (WA) of which there are equivalent provisions in the Real Property Act 1900 (NSW), Mason CJ and Dawson J said at [10]: "Neither the two sections nor the principle of indefeasibility precludes a claim to an estate or interest in land against a registered proprietor arising out of the acts of the registered proprietor himself … . Thus, an equity against a registered proprietor arising out of a transaction taking place after he became registered as proprietor may be enforced against him … . So also with an equity arising from conduct of the registered proprietor before registration …, so long as the recognition and enforcement of that equity involves no conflict with ss 68 and 134." (citations omitted) 487 It was pointed out that actual fraud, personal dishonesty or moral turpitude lie at the heart of ss 68 and 134. (This also applies to the corresponding provisions in other States, including New South Wales). Treating partnership assets as one's own involves fraud, an act of dishonesty and moral turpitude. See also the observations of Wilson and Toohey JJ at [20] – [22] and [46] – [48] and Brennan J at [13]. The quotation by Brennan J of the example given by Lord Moulton in Loke Yew v Port Swettenham Rubber Co Ltd 1913 AC 491 at pp 504 – 505 is telling and applies in the present case. 488 Each of Margaret, Helen, Sunly and Gordon holds her or his interest in the Queen Street property under a bare trust. The legal title of these co-owners and KST was subject to a personal equity capable of defeating any claim by the legal owners to an indefeasible title: Frazer v Walker [1967] 1 AC 569 and Breskevar v Wall (1971) 126 CLR 376. Additionally, there was an express trust in favour of the partnership. The interest of KST vis-à-vis the co-owners is capable of being traced into the properties by the plaintiffs under a successful partnership claim in respect of the partnership assets. The personal equities against the co-owners of the properties which are beneficially held for the partnership cannot be defeated by any claims of indefeasibility of title. The plaintiffs' submissions extended to the interests of the three legal co-owners of the Haig Street property and the legal co-owners of the Maroubra Road property. 489 The second and third defendants, apart from contending that no partnership existed, relied upon paragraph 49 of their Defence, filed 3 April 2009 in answer to the FASOC, namely that the ten per cent interest which each of them had in the Queen Street property as at 7 November 2005 was given to them by KST and that, upon each of them being registered as proprietor of that ten per cent interest, each became indefeasibly entitled to that share, pursuant to s 42 of the Real Property Act 1900. I would not so construe s 42 of that Act and in my opinion it has not been so construed. 490 The fifth and sixth defendants also submitted that the plaintiffs' case was barred by s 42. They relied upon Bogdanovic v Koteff (1988) 12 NSWLR 472, but the decision did not assist them. The plaintiffs placed reliance on the express trust under clause 20 of the partnership agreement in addition to what they alleged were the bare trusts of Margaret, Helen, Sunly and Gordon. 491 I reject the indefeasibility defences raised by Margaret, Helen, Gordon and Sunly having regard to the facts of the present case. Limitation Act defences 492 Sections 15, 24, 47, 48, 63, 64, 65 and 68A of the Limitation Act 1969 (see my Judgment of 13 February 2009, paragraph 33) have been raised. 493 In Williams v Minister, Aboriginal Land Rights Act 1983 (1994) 35 NSWLR 497, Kirby P at 509 stated: "The structure of the Limitation Act 1969 makes it clear that the ancient principles of Equity have been preserved." and: "…the scheme of the Limitation Act does not apply, in its own terms, to a cause of action for equitable relief. It only applies by analogy." Kirby P added: "This does not mean that an equitable cause of action pays no regard to gross delay." He referred to the courts of equity developing their own limitation defences, most importantly, laches. Priestley JA was in broad agreement with Kirby P. Powell JA dissented as to the result and on certain matters of principle, but he does not seem to express disagreement with the general statements of Kirby P set out above. 494 Reference must be made to s 23 of the Limitation Act (application by analogy). Division 5 of Part 2 of the Act applies to Trusts. 495 The fifth and sixth defendants submitted that, in so far as the plaintiffs' claim was in respect of the disclosed profit shares recorded in the financial statements, these claims were barred by s 24 of the Limitation Act. They further submitted that, as to the plaintiffs' claim arising from the alleged undisclosed profits generated by the WYT and YS businesses, the cause of action arose when the plaintiffs either knew or had actual knowledge of facts which gave rise to the cause of action: Urquhart v McPherson (1880) 6 VLR (E) 17 at 23 per Molesworth J. It was submitted that the moneys in question would necessarily be encompassed by an account of all partnership moneys following the sale of the YS business and the closure of the WYT business. 496 The fifth and sixth defendants disputed that the plaintiffs had no knowledge of facts giving rise to a right of action against the deceased or his estate until Mr Pascoe's draft report of November 2001. See the facts narrated under Laches, infra. I regard the making available of the draft report of November 2001 as important. That sets out significant facts. 497 I do not agree that the plaintiffs had the requisite knowledge prior to November 2001 because: a) the plaintiffs could not reasonably have commenced proceedings until they knew it would be worth while to do so; b) the plaintiffs were told that the businesses had incurred losses and there were no profits. They had effectively been kept at bay; c) Geoffrey was contacted about the non-payment of rent of the business premises; d) KST did not tell the plaintiffs of the moneys received from the sale of YS; e) KST had not told the plaintiffs of his real estate investments and their purchase in cash; (f) it was the size of KST's estate and that it included his shares in the three properties mentioned, coupled with the realisation that the three properties had been acquired without the assistance of mortgage finance, that led the plaintiffs to commence legal proceedings. They realised, with the help of their legal advisors, that they had evidence to substantiate their case and that much of what they had been told as to the two businesses was untrue or did not represent the complete picture. 498 Geoffrey was concentrating on his lecturing duties and his other business interests and investments which he regarded as more profitable. He did not want to commence proceedings until the plaintiffs had sufficient evidence to establish their case. He realised that commencing and pursuing proceedings would be costly. 499 The fifth and sixth defendants submitted that either the plaintiffs' case was barred by s 47 of the Limitation Act or, in the case of an equitable claim falling outside s 47, the Court would apply s 47 by analogy. I did not think that s 47 had the effect submitted. In my opinion, bearing in mind the express trust, the propounding of the false will of KST, the conduct of KST and the statements made by him, equity would, in the exercise of the Court's discretion, not permit the limitation defences by analogy to succeed. See Williams v The Minister at 509 – 510 and The Duke Group Ltd (in liq) v Alamain Investments Pty Ltd [2003] SASC 415 at [111] – [116]. 500 The plaintiffs, in reliance upon Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 4th Ed at [34 – 160], submitted that claims for equitable compensation or an account of profits are in personam actions to which the Limitation Act does not apply. 501 Under s 47 of the Limitation Act the 12 year bar commences from the date on which the plaintiff "first discovers or may with reasonable diligence discover the facts giving rise to the cause of action and that the cause of action has accrued". 502 The plaintiffs explained that they did not contend that acquiring the properties was in breach of any trust. They contended that the creation of the bare trust and the existence of the personal equity was not the commencement of the cause of action. They sought to terminate the partnership by winding it up, a distribution of the partnership assets and an account of partnership profits or equitable compensation. They submitted that an action to recover partnership property under s 47(1)(c) does not commence until the partnership (and hence the trusts in favour of the partners) is wound up. They submitted that the cause of action does not accrue and will not commence to run until an order is made winding up the partnership. 503 It was further submitted that for the purposes of s 47(1)(e) the plaintiffs could not with reasonable diligence have discovered the existence of the three properties as partnership assets until details of KST's assets and income came to light after his death. It was submitted that Mary and Geoffrey were only put on inquiry of the facts giving rise to their cause of action after the first draft report of 29 November 2001 was given to them and that it was only then that they had credible evidence that partnership funds had been used to acquire the three properties. 504 The plaintiffs contended for a personal equity in the three properties in two ways. In respect of the interests in the properties standing in the name of KST, Helen and Margaret, the interests are impressed with an express trust. As to Gordon and Sunly, and also alternatively as to Margaret and Helen, as volunteers who were prepared to return the property to KST upon his request; their interests in the properties was subject to a bare trust or a resulting trust. The plaintiffs submitted that the presumption of advancement has been rebutted as assets were routinely held in the name of KST's children which were treated as his property and under his control. The plaintiffs submitted that the bare trust does not fall foul of s 23C(1) of the Conveyancing Act 1919. It is an implied trust under s 23C(2). Alternatively, if it is an express trust which fails, a resulting trust will arise in favour of the partners: Jacob's Law of Trusts, 7th Ed at [120]. In the further alternative the plaintiffs submitted that the use of partnership funds would be impressed with a constructive trust which the partners were entitled to trace into the hands of the registered proprietors. 505 The first question to be answered under s 47(1)(e) as to the action to recover trust property is when the plaintiffs first discovered, or may with reasonable diligence have discovered, the facts giving rise to the cause of action. 506 The plaintiffs developed suspicions about the acquisition of the Haig Street property in late 1978. Geoffrey sought advice from a solicitor and was told that the evidence he had was markedly insufficient and that a full audit would be needed. That would have been very costly, caused a family upheaval and it was not known what, of consequence, it would yield. It would not have been reasonable to pursue that line of inquiry and action. 507 (a) The plaintiffs were not consulted by KST about the purchase of the Maroubra Road property in 1983, nor the Queen Street property in 1988. Business relations with KST since 1981 were almost negligible, if not a little strained. KST did not welcome enquiries as to how he was managing the finances of WYT and YS. The plaintiffs did not become aware that KST owned these until probably about 1995 during the course of preparation of KST's tax return for the year ended 30 June 1994. (b) While Geoffrey probably considered where KST obtained the money to purchase these and suspected that the money may have come from the two businesses, he had no credible evidence on which he could act. The first draft report of November 2001 of Mr SD Pascoe, coupled with searches Geoffrey obtained or had obtained, resulted in the plaintiffs first discovering credible evidence of the facts giving rise to their cause of action as distinct from suspicions. (c) Mary refers to Geoffrey and she considering Mr Pascoe's draft report of 29 November 2001 soon after receiving it (paragraph 65 of her affidavit of 7 December 2006). She also refers to considering his final report of May 2002. Mary said that she became aware after Geoffrey had done searches between 2001 and 2004 that KST had not been assisted by mortgage finance. (d) Geoffrey in his affidavits refers to receiving a copy of the Administrator's report of 13 May 2002 and not expecting KST's estate to be so substantial. The report of 13 May 2002 is in substantially the same terms as the draft. (e) On receipt of the Administrator's report Geoffrey collated the title searches and copies of the transfers including both the dates and the amounts, analysed the reported figures for the WYT and YS businesses and attempted to work out the rental returns from the properties KST had acquired. He said that he learnt for the first time the prices for which KST had acquired the three properties and that they had been purchased in cash without any borrowing. It was the size of KST's estate (and the nature of the assets and the circumstances of their acquisition) that was unexpected and led to Geoffrey's investigation. Geoffrey thought that KST must have had access to additional undisclosed income. (f) Collating and analysing all the information and evaluating it and the conclusions which should be drawn would take some time. To begin such an onerous and detailed exercise the plaintiffs needed to be alerted that it was likely to be useful. (g) Reasonable diligence would not have enabled the facts giving rise to their cause of action to be discovered earlier. In view of what the plaintiffs had been told about the losses incurred and the accounts prepared and submitted at the instigation of KST, the plaintiffs could not be expected to embark upon the heavy expense of requiring a full audit and the taking of accounts. This required more than reasonable diligence. 508 I have found it unnecessary to deal with the plaintiffs' further argument that their cause of action accrues on the winding up of the partnership. 509 In my opinion, s 47 does not operate to bar the plaintiffs' claim. Further, I do not think that any of the other provisions of the Limitation Act 1969 assist the defendants. The plaintiff's claims are not barred. Defences of laches, gross laches and acquiescence 510 This involves some repetition of matters referred to under "Limitation Act defences". 511 Whether a defence based on these matters should succeed depends largely on a detailed analysis of the facts and the application of the principles formulated in Orr v Ford [1989] HCA 4; (1989) 167 CLR 316. Wilson, Toohey and Gaudron JJ said at [20] and [21]: "Where entitlement depends on factual matters which are fairly open to dispute, prejudice occasioned by the loss of evidence as a result of delay on the part of the claimant may be raised in answer to such a claim. The question of prejudice resulting from unavailability of evidence necessarily involves some degree of speculation, but it is not a question of pure speculation. The issue is not whether evidence may have been lost, but whether evidence which may have cast a different complexion on the matter has been lost." 512 Deane J, with whom Mason CJ agreed, dealt with the position on a broader basis. Deane J stated at [12]: "The availability of a defence of laches and what will suffice to make it good depends upon the nature of the claim." and "On balance, the preferable approach is to treat the phrase "gross laches" as an intentionally imprecise one which involves not merely considerations of the period of the relevant delay but which invokes the traditional notions of equity and good conscience which are the general determinants of whether a plaintiff should be refused relief by reason of laches in the circumstances of a particular case. On that approach, the phrase refers to circumstances where inaction or standing by (with knowledge) by a plaintiff over a substantial period of time assumes an aggravated character in that it will, if the plaintiff is granted the relief which he seeks, give rise to serious and unfair prejudice to the defendant or a third party. So understood, the use of the phrase "gross laches" does little to aid in the identification of particular circumstances in which a defence of laches will preclude relief being granted to a beneficiary in an action for the enforcement of an express trust." and "The ultimate test effectively remains … whether the plaintiff has, by his inaction and standing by, placed the defendant or a third party in a situation in which it would be inequitable and unreasonable to place him if the remedy were afterwards to be asserted." citations omitted. 513 Deane J continued at [13] and [14]: (i) "Ordinarily, it is difficult to envisage circumstances, falling short of waiver, release, election or estoppel, in which the laches of a beneficiary would produce a situation in which it was inequitable and unreasonable to grant relief in proceedings for the enforcement of an express trust in relation to trust property which remained in the possession of the trustee (or his personal representative). There are, however, at least two categories of case where that is not so. The first is where there is or has been dispute or mistake about the existence of the trust or the identity or extent of the trust property. The second category is where prejudice to third parties, such as other beneficiaries, is involved. In the first category of case, unreasonable delay in instituting proceedings to enforce the claim may of itself give rise to the serious and unfair prejudice necessary to constitute 'gross laches' in that it may bring about a situation in which the means of resisting the claim, if it be unfounded, have perished." citations omitted (ii) "In determining what constitutes 'unreasonable delay' regard must be had to all the circumstances, including the nature of the claim and the conduct of the parties … . It may well be that the modern availability of proceedings for declaratory relief to negate a claim by a beneficiary makes it unlikely that such serious and unfair prejudice would be found to exist in a case where the defendant had been aware of the existence of such a claim at relevant times. It is, however, unnecessary to pursue that question for the purposes of the present case ... . citations omitted. (iii) "In the second category of case, regard is paid to the prejudice which would be caused to third parties in assessing whether the plaintiff's laches has brought about a situation in which it would be inequitable and unreasonable to grant the relief which he seeks … . The two categories of case are not mutually exclusive. Indeed, the present case falls within each of them in that it is a case involving dispute and mistake about the identity or extent of trust property and potential unfair prejudice to third parties, namely, the specific devisees of 'Cockatoo'." citation omitted. (iv) "The appropriate starting point of a consideration of the availability of a defence of laches is the precise identification of the substantive nature of the claim to which laches is said to constitute a bar." 514 When the facts are examined in the present case it can be seen that, as against the first, second and third defendants, these are claims by beneficiaries of an express trust created by a partnership agreement. 515 KST could give evidence of the financial matters surrounding the trust. I doubt if KST could successfully deny the assistance of Mr WJ Lee when he signed the purchase agreements and the partnership agreement. 516 KST's evidence could have dealt with the meeting at Clayton Utz and its outcome, the extent of his capacity to comprehend and express himself in the English language, the financial contributions of Geoffrey and Mary to the cost of the purchase of WYT and YS, stock and providing working capital, the finance provided by the Commonwealth Bank, the repayment of the moneys borrowed, the extent of his resources and where they were to be found. 517 The execution of the mortgage of 1 June 1976 could not have been denied. Nor could the various secured overdrafts referred to in the copy tax returns which are available. 518 The evidence of KST could not fairly have disputed that Geoffrey assisted WYT and YS to obtain finance to assist in the purchase of these businesses, including the payment for stock and also with operating capital. The issue that arises and is not able to be resolved is as to the extent of the Bank assistance. There is also the issue whether Geoffrey and/ or Mary made financial contributions to the acquisition of the businesses, including the payment for stock and the provision of working capital, and if so, what financial contributions. 519 It could not fairly be disputed that the rental income of the Wiley Park and Fairfield flats was insufficient to enable KST to purchase the Haig Street, Maroubra Road and Queen Street properties. As to the Haig Street property, what remained in issue was the extent of KST's resources and the contribution, if any, he made from them. 520 It could not fairly be disputed that both WYT and YS received substantial portions of their income in cash. The issue which arose was how much of the profits of the businesses was disclosed to the ATO and in the accounts, or rather, where KST obtained the shortfall of about $1.3 million or $1 million to purchase the Maroubra Road and Queen Street properties. The plaintiffs included the Haig Street property. Did the moneys come from the partnership business? 521 The size of the amounts required to purchase the Maroubra Road property (excluding Margaret's share) and the Queen Street property was telling. The size of the shortfall demonstrated in Mr Hill's analysis, allowing for adjustments, was large. It is highly improbable that it could have come from unknown assets of KST or their realisation. 522 There was a dispute as to the profitability of YS prior to its sale and reliance on the accounts of YS showing losses and modest profits. However, the evidence showing the profitability of YS was strong. KST could give evidence as to the sale price and what happened to the proceeds of sale. The plaintiffs suggested that they were probably used to purchase the Queen Street property, but this has not been established. The sale of YS could not be disputed. 523 While it is probable that the plaintiffs were not consulted prior to and about the sale of YS, I did not accept that Mary did not notice that in her copy tax return for the year ended 30 June 1986 the word "Final" was used in relation to income from YS along with the word "Loss" and a deficit figure, and that in her copy tax returns for the years ended 30 June 1987, 1988 and 1989 no income was shown as received from YS and that there was no entry as to YS. Mary was too interested in her financial affairs to miss such details. I did not accept that she first learned of the sale of YS in 1991. 524 In Geoffrey's tax return for the year ended 30 June 1987 in the section dealing with Income (Loss) from Partnership there is an entry in relation to WYT and the income received. This entry then appears: "Ye (sic) Sing Butchery SOLD 30/06/86" 525 Geoffrey's signature appears in a number of places on that return and he has signed a little below that entry on the page containing it. Geoffrey said that he did read that page but did not notice the word "sold". Nor, he claimed, did he notice that there was no income shown for that year from YS. I did not accept that evidence. Geoffrey had been concerned about WYT and YS since December 1978 and suspected that there were defalcations. He had sought distributions in 1977 and 1981. He stated that in 1985 he had been contacted about the non-payment of rent. He and Mary were interested in WYT and YS. Geoffrey denied that he knew within 1987 that YS had been sold and had produced no income whatsoever in that taxation year. Geoffrey added this explanation: "I will say clearly I don't look at all my tax returns in full. I have staff that look after my various interests. I don't look after every single little financial item of it. I have quite a few staff and quite a few interests." 526 In his tax return for the year ended 30 June 1987 Geoffrey is described as "Lecturer and Property Owner". His salary at the NSW Institute of Technology is stated, the income from WYT is stated and then he claimed a loss in respect of property held which reduced his taxable income appreciably. Geoffrey's return is a relatively simple one, even allowing for some possible negative gearing in relation to the properties held. 527 I do not believe that Geoffrey, as to his tax return for the year ended 30 June 1987, did not notice that YS had been sold and that there was no income shown for that year from YS. I was wary of Geoffrey's self-aggrandisement. 528 WYT was closed down about 30 June 1989. Mary said that she became aware during 1991 that the WYT had been "sold" (paragraph 64 of her affidavit of 7 December 2006). 529 Mary said that she did not sign a letter dated 27 June 1989 to the Commonwealth Trading Bank Stock Exchange Branch advising that WYT would cease trading on 7 July 1989. I was asked to compare the signature on that letter with signatures on other letters which Mary had admitted she signed and conclude that Mary had signed the letter to the Bank. I did not feel qualified to undertake that exercise, especially with copy documents. 530 (a) Mary denied that in 1989 Margaret telephoned her and requested her (Mary) to type a series of letters to the effect that WYT would be ceasing or had ceased to trade as from a specified date (either 30 June or 7 July 1989). (b) The letters to the estate agents who managed the Wiley Park and Fairfield properties were couched in different terms. (c) In paragraph 155 of her affidavit of 3 May 2007 Margaret, in her allegations of fact, states that the plaintiffs were fully informed and involved in the closure of WYT. (d) The second and third defendants relied on the transmission slip attached to the letter from WYT to AGL dated 6 July 1989 advising that WYT will cease trading on 7 July 1989 and requesting the disconnection of the gas supply. (e) The transmission slip indicates that a document, presumably the letter, was sent on 6 July 1989 from the facsimile business number of Geoffrey Lowe & Associates in July 1996. The second and third defendants relied on this as showing that the plaintiffs knew that WYT had closed down by at least 7 July 1989. While the transmission slip supported the evidence of Margaret, it was not conclusive. I have considered the evidence given by each of the plaintiffs and Margaret on the point that the plaintiffs were made aware of WYT closing down about 30 June – 7 July 1989 and am unable to resolve that issue. 531 As mentioned, Geoffrey said that on 16 July 1994, at a family gathering for KST's 80th birthday, KST told him that he had closed down YS and WYT, that Helen supplied similar information and that KST and Helen had each referred to substantial losses and no money being forthcoming. Helen probably held a belief to that effect. She depended upon what her father told her and the figures which he produced. I doubted Helen's capacity to form an independent judgment in the circumstances in which she found herself. 532 In considering the defences of laches, gross laches and acquiescence the delay caused by obtaining Probate of the false will cannot be overlooked. Sunly, Stella, Margaret and Helen were involved. That delay accounts for the period from shortly after the meeting in Mr Yee's office in late 1997 until 22 November 2002 when orders were made. Mary's involvement in initially seeking a grant of Probate was evidence of a marked lack of vigilance and understanding. She sought to rectify the situation by seeking to have the grant of Probate revoked. 533 Geoffrey's firm was entrusted with the preparation of KST's tax returns for the years ended 30 June 1994, 1995, 1996 and 1997 and those of Margaret, Helen and Janet. Geoffrey said that his firm used a contract accountant to prepare the taxation returns. 534 Geoffrey said that it was sometime after about 1994 that he became aware that KST had acquired the Maroubra Road and Queen Street properties. Geoffrey also said that he first knew that KST and members of his family had interests in these properties about 1995/1997. He added that basically he noticed their interests about 1997. 535 Geoffrey said that, during the time that Geoff Lowe & Associates was responsible for preparing KST's tax returns, KST did not provide his bank statements to Geoffrey or the contract accountant and that the interest figures on moneys standing to his credit were provided to him by Margaret. 536 The copy tax return of KST for the year ended 30 June 1994, probably prepared in early 1995, shows KST's current postal address as C/- Geoff Lowe & Associates and shows significant rental income from the Maroubra Road and Queen Street properties. This copy return shows the distribution of the rental income. 537 Geoffrey was interested in the financial affairs of KST and would have noticed by about March 1995 that valuable investment properties had been acquired in Maroubra Road and Queen Street. There was no statement as to where the moneys had come from to purchase these two properties. Geoffrey probably had his suspicions but no firm evidence. 538 Geoffrey contended that it was not until he received a copy of the Administrator's first draft report of November 2001 detailing the assets in KST's estate and searches revealing that KST had purchased the Haig Street, Maroubra Road and Queen Street properties without recourse to a mortgage and the purchase prices that he believed that he could establish that partnership funds must have been used to acquire the three properties. This is probably correct. I would add, if not included, the size of KST's estate. 539 The second and third defendants submitted that it was the period of delay after the sale of YS in 1986 and the closure of WYT about 30 June 1989 that constituted the laches. They also submitted that there was a dispute about the existence of the express trust and identity or extent of the trust property. Thus one of the two exceptional categories referred to by Deane J (see above) existed. 540 The terms of clause 20 of the partnership agreement are reasonably clear and I did not think that they should be read down. There was a dispute as to the extent of the trust property. This applies to the Haig Street property. The dispute as to the Maroubra Road property does not affect four undivided one-fifth shares (or perhaps five undivided one-sixth shares on the approach I have taken). Allowance would probably have to be made as to the acquisitions of the Haig Street, Maroubra Road and Queen Street properties in due course for possible contributions, if any, from the rental income from the Wiley Park and Fairfield properties. 541 The second and third defendants submitted that, assuming there was a partnership, the plaintiffs were well aware of circumstances entitling them to make a claim before KST's death in October 1997. Those defendants relied upon the absence of any distribution to any of the alleged partners as well as the sale of YS in 1986 and the closure of WYT in 1989. 542 The second and third defendants submitted that after 14 years of the operation of the alleged partnership (1975 – 1989) it came to an end without any distribution ever having been made to either plaintiff and yet they did nothing. Those defendants submitted that the further delay of 17 years to 2006 (or 16 years to November 2005) in bringing proceedings was unreasonable delay and that the plaintiffs' efforts to explain away their delay on account of having no suspicion (or evidence) that those properties had been acquired using partnership funds (which is denied) do not sit well with the interest shown by the plaintiffs in obtaining searches of the three disputed properties in 1997 and do not explain why no relief was sought upon the sale of YS and the closure of WYT. 543 Those defendants submitted that KST could have given evidence not only about the agreement of 1 October 1975, its creation and whether it was implemented, but also his finances, sources of funds (additional to the rental properties) and the conduct of WYT and YS, including the cash received. There was also the lost evidence of FC Chow who died in January 1994. She worked in the businesses from about mid 1976 to about June 1989. She may have been able to throw light on the amounts of cash received by WYT. She may have been able to deal with the diminishing business of WYT. What exactly she would say is not known. She may have been able to explain KST's response to the lack of interest of either Gordon or Sunly in taking over the business. That lack of interest may have led KST in his advancing years to close down WYT. She may have known what led KST to sell YS in 1986, the amount received and the application of the proceeds of sale. 544 Margaret and Helen submitted that KST and possibly FC Chow would have been able to give evidence as to the sources of funds used to acquire the three properties. Those defendants assert that all records concerning the actual source of funds used to purchase the three properties no longer exist. They submitted that, following the comment of Deane J at [16], it was not to the point that there might be some conjecture or speculation as to what the missing evidence would have revealed had it been available and if the plaintiffs had acted with reasonable promptness to assert their present claims. 545 This comment must be read with the further comment of Deane J in Orr v Ford at [15] that it was not suggested that Mr Orr did not at all relevant times possess "sufficient knowledge of the facts constituting the title to relief". In the present case the plaintiffs contended that it was not until about November 2001, when they received the first draft report of the Administrator as to the estate of KST and thereafter coupled the results of searches showing the purchase prices and that no mortgage finance was obtained, collated and analysed the materials that they possessed "sufficient knowledge of the facts constituting the title to relief". 546 The fifth and sixth defendants submitted that, if the plaintiffs truly considered that they were partners in the WYT and YS businesses entitled to participate in partnership decisions and to share in partnership profits, they would have taken steps to assert such an interest. That submission does not sufficiently allow for the family set-up which existed, KST utilising Geoffrey's services, Mary working in WYT, the desire of Geoffrey to take advantage of KST's skills, the position of KST as the head of the family and the desire to avoid a family upheaval. It was submitted that the plaintiffs were potentially incurring liabilities as partners with no influence on partnership decisions. Geoffrey was attending to negotiations with the Bank. He was then a relatively young man setting out to establish himself in business. He had his solicitors prepare a written partnership agreement. It was not a conventional situation. 547 Counsel for the fifth and sixth defendants referred to Meagher et al, Equity Doctrines and Remedies 36 – 010. He submitted that there was acquiescence in the sense of abstaining from interference while the violation of one's rights is in progress. See also at 36 – 090. In Orr v Ford at 10 Deane J mentioned the difficulties to which the use of the word "acquiescence" gives rise. He added: "Strictly used, acquiescence indicates the contemporaneous and informed ('knowing') acceptance or standing by which is treated by equity as 'assent' (i.e. consent) to what would otherwise be an infringement of rights." While the plaintiffs agreed to KST being the managing partner and to an agreement which contained some unusual provisions for a partnership agreement, they did not agree to KST appropriating assets acquired with the partnership funds of either WYT or YS as if the assets were his (KST's) own. 548 The fifth and sixth defendants contended that by December 1978 Geoffrey considered that there was a serious chance that KST was under-declaring assessable income and consulted Slattery Thompson. I did not accept the further submission that the plaintiffs must be seen as having wittingly turned their blind eyes to KST's conduct. As previously mentioned, there is a major difference between evidence and suspicion. It would not have been prudent to embark upon the costly exercise of taking an account when it could not be accurately assessed what it would yield. 549 As with the second and third defendants, reference was made to the income tax returns of the plaintiffs. 550 The fifth and sixth defendants submitted that the plaintiffs had eight years (1989 – 1997) in which to assert any claims but did nothing. Those defendants submitted that these claims were not asserted until 2005, a further eight years after KST's death and after the parties had settled their differences in 2002 on the basis that certain parties, including the defendants, would take certain assets. 551 The plaintiffs claim that, as a result of the rent problems in about 1985 and as a result of what they were told about the diminishing prospects of the businesses (including the losses allegedly being incurred), the suspicions entertained in late 1978 had been superseded or had fallen away and were no longer current. I do not believe that. Geoffrey said that in 1994 he inquired of KST what had happened. Geoffrey probably doubted if a business run by KST, especially a business which had major cash dealings, would fail. During the 1980s and perhaps longer Geoffrey was more interested in pursuing his other business interests and investments than in dealing with WYT, YS and KST, but that did not mean that the plaintiffs agreed with KST appropriating partnership assets. On any view it was a large estate to leave when the two businesses KST had run during his working life had incurred losses or mostly made modest profits in their later years and, in the case of WYT, when it had closed down due to alleged diminishing trade and profits. 552 There is a degree of overlap between the Limitation Act defences and the defences of laches, gross laches and acquiescence. I have not repeated many of the facts. The matters relied upon to defeat both defences arise, in part, from late disclosure of all the relevant material to the plaintiffs. 553 I reject the defences of laches, gross laches and acquiescence. Given the facts found there has not been disentitling delay, although the delay that has occurred has made it difficult to ascertain the true facts. 554 I have taken the view that the evidence of KST and FC Chow which has been lost may affect the amount payable to the plaintiffs but it does not affect their entitlement to relief. Any relief will have to be framed having regard to the unusual facts of the present case. Estoppel defences 555 I have earlier referred to the estoppel (conventional) defence raised in paragraph 31 of the Defence of Sunly and Gordon filed 22 May 2009. This is based primarily on the Deed of Settlement of about 22 November 2002. The parties were Mary, Janet, Helen, Sunly, Margaret, Gordon, John and Stella. Geoffrey was not a party. The parties acknowledged that KST died intestate. Helen and Sunly agreed to withdraw their claim for a declaration under s 18A of the Wills Act in respect of the notebook. The parties agreed that the estate was to be distributed in a particular manner and to direct the Administrator to so distribute the estate. 556 By recital G the parties acknowledged that no determination had been made as to the nature of the extent of the assets of the deceased KST's estate. No reference is made to the partnership agreement of 1 October 1975 or the distribution of the assets of the partnership. 557 The fifth and sixth defendants did not abandon their defence of conventional estoppel but they did not address it in argument. 558 In the course of the evidence it was not disputed that Geoffrey actively supported and advised Mary and that she acted on his advice. Nevertheless, he was not a party to the Deed and the estate's affairs and those of the partnership were kept separate. In my opinion the defence of conventional estoppel raised in paragraph 31 of the defence of the fifth and sixth defendants has not been established. 559 The second and third defendants, in support of their defence of estoppel, alleged: (a) the conduct of relations between the parties to the Settlement Deed dated November 2002 has been on the basis of an agreed or assumed state of facts, that is, that the estate was to be administered in accordance with the Settlement Deed and that the parties were discharged and released in accordance with clause 6 of the Settlement Deed; (b) the estate has been administered in accordance with the Settlement Deed and the defendants have acted in accordance with the Settlement Deed; (c) the conduct of the these proceedings is contrary to clause 6 of the Settlement Deed as it involves maintenance of a claim that the plaintiffs had in respect of the relief sought in paragraph 12(h) and 12(i) of the Statement of Claimed filed on 22 November 2000 in the estate proceedings (118302 of 2000); (d) these proceedings are not maintainable at law by the second plaintiff; and/ or (e) the plaintiffs are estopped from denying that the defendants were discharged and released in accordance with clause 6 of the Settlement Deed, including as to the matters pleaded in the FASOC. 560 The release in clause 6 of the Settlement Deed is in respect of the matters as expressly pleaded in the Statement of Claim and the Cross Claim in the estate proceedings (118302 of 2000). The Statement of Claim sought the revocation of the Grant of Probate and the Cross Claim sought Letters of Administration of the estate of KST and relief under section 18A of the Wills Probate and Administration Act 1898 (NSW). The Settlement Deed does not by its terms purport to treat the assets of the partnership or any of them as assets of the estate. No determination was made as to the nature and extent of the assets of the estate. 561 The Settlement Deed does not provide that assets standing in the name of KST shall be treated as assets of his estate not does it provide for any equitable interests or personal equities to be ignored. Geoffrey was not a party to the Settlement Deed, nor would that have been appropriate unless its scope was widened. 562 In my opinion the estoppel defence of the second and third defendants fails as against each plaintiff. Findings 563 I do not accept that any of the defendants has by the time of the hearing suppressed relevant documents. Nor do I accept that any defendant has only produced documents when that person believed that production would advance the case of one or more of the defendants. Nor do I believe that any defendant feigned a lack of memory. 564 I have accepted that it has no longer been possible to find and obtain many documents created between 1975 and 2000. Documents were thrown out and discarded long before these proceedings were instituted. This includes documents and financial records of WYT and YS, KST and copy tax returns. Relatively few documents and financial records remain. There are limited numbers of copy tax returns. 565 I do not find that KST had no source of income other than from the WYT and YS businesses, his rental properties and interest income from moneys held in bank accounts or term deposits as disclosed in his tax returns. I would not assume that these returns are correct, nor that he did not have any other assets. The acceptable evidence does not enable me to make a finding or to exclude the possibility that KST had income producing assets other than those mentioned. 566 I find that the memories and evidence of all parties and witnesses have been adversely affected by the lapse of time. I have approached the reliability of the oral evidence of witnesses as to events occurring prior to 2000 with caution. Much of the oral evidence of events occurring prior to 1990 is in the absence of documentary substantiation insufficiently reliable to be acted upon. There are issues which I have not been able to resolve. As mentioned, I have treated the evidence of Margaret, Helen and Sunly with further caution because of the their involvement in the false will. I thought some of the evidence of each of them was correct. This does not mean that I have automatically accepted the evidence of Geoffrey and Mary. Their evidence was also influenced by self-interest. 567 There was one person responsible for the difficulties which have arisen, namely KST. As earlier indicated, none of Margaret, Helen, Janet, Sunly, Gordon or FC Chow were responsible nor had the requisite knowledge of what KST was doing. As mentioned, KST handled the receipts, decided what cash should be banked, directed what information should be supplied to Mr Wong to prepare the tax returns, controlled the ordering of stock and ran the businesses of WYT and YS. Gordon and Sunly were minors from 1975 to, respectively, 1983 and 1984. Margaret (from late May 1980 to July 1989) and Helen (from 1980 to July 1989) did as they were directed by KST and were paid what KST determined. Mary, when working at WYT, did as KST directed but she was also attentive to Geoffrey as her husband and kept him informed of what was happening at WYT. She probably had suspicions from late 1978. The financial responsibility for what occurred with both WYT and YS rested with KST alone. None of Margaret, Helen, Janet, Sunly and Gordon was aware that he was not disclosing all his income and that of the partnership, nor, probably, was FC Chow. 568 I have earlier held that there was a partnership between the plaintiffs and the first defendant, as the Administrator of the estate of KST, and the second, third and fourth defendants. 569 I have also held that there was a breach of an express trust created under the partnership agreement of the Maroubra Road property (excluding Margaret's share) and the whole of the Campbelltown property. 570 I have also held that there was an express breach of trust as to portion of the Haig Street property. 571 Sunly and Gordon each holds his interest in portion of the Haig Street property and in the Queen Street property subject to the trust for the partnership. Relief 572 During submissions I indicated that the final form of relief, if any, to be granted would be settled after the parties have had an opportunity to consider this Judgment. There is a further caveat. I doubt if other than limited relief should be granted pending the tax review, if any, and any re-assessment or amended assessment. Further facts may emerge if any taxation review takes place. There is also the possibility that further material may come to light as a result of that review which would lead to some changes in the findings I have made. 573 I am inclined to consider at this stage: 1. A declaration that Geoffrey Lowe and Mary Lowe, the late Kut Sze Tu, the late Chow Fung Chun, Margaret Sze Tu, Helen Sze Tu and Janet McNamara were partners as from 1 August 1975 and operated the businesses of Wing Yuen Tai (WYT) and the Yee Sing Butchery (YS) pursuant to a partnership in the following shares: a. the late Kut Sze Tu as to a 20 per cent share; b. Geoffrey Lowe as to a 10 per cent share; c. Mary Lowe as to a 10 per cent share; d. Margaret Sze Tu as to a 10 per cent share; e. Helen Sze Tu as to a 10 per cent share; f. Janet McNamara as to a 10 per cent share; g. The late Chow Fung Chun as to a 30 per cent share. 2. An order winding up the partnership under the direction of the Court. (In practical terms this may necessitate the appointment of a Receiver and Manager. It should not be assumed that the Court would attend to the many matters of details that may arise. If a Receiver and Manager is not appointed this may raise questions whether such an order should be made.) 3. A declaration that five-sixths of the Maroubra Road property and the whole of the Queen Street property were acquired by the late Kut Sze Tu using moneys of the partnership. 4. A declaration that the legal interests of each of the first to seventh defendants (or the estates they represent) in five sixths of the Maroubra Road property and the whole of the Queen Street property were held on trust for the partnership. 574 I do not propose to make a declaration as to portion of the Haig Street property because that portion has not been defined. Provisionally, and subject to argument, I had in mind that on a broad assessment about $60,000.00 or about 45 per cent of the cost of purchasing the Haig Street property probably came from partnership funds. 575 Frequently in partnership proceedings an order is made for an account, but there are difficulties in following that course. Both KST and FC Chow are dead, the available accounts appear to be of limited use and the first and seventh defendants may not be in a position to account in that they may not have the requisite knowledge as to the operation of WYT and the operation of YS. The events occurred many years ago and there has been much delay. The availability and reliability of evidence, especially in the period 1975 – 1989, have been affected. 576 Margaret, Helen and Janet would have considerable difficulties in providing an account of the partnership and its dealings. They were told very little. Those who knew what was happening are dead. The available records are quite sparse. 577 As to any remedy, helpful decisions include that of the High Court in Warman International Ltd v Dwyer (1994) 182 CLR 554, especially at 559, and that of the Victorian Court of Appeal in Edmonds & Ors v Donovan & Ors (2005) 12 VR 513, especially at 543 – 545. 578 The interests of Sunly and Gordon in portion of the Haig Street property and the interests of Margaret, Helen, Sunly and Gordon in the Queen Street property are in a different category. 579 At the time the Haig Street property was placed as to their one-third shares in the names of Gordon and Sunly they were minors. This continued to be the situation until 1983 and 1984. They did not contribute to the purchase price of that property. While they agreed in evidence that they would, if they had been asked by their father to transfer their interests to him, have done so, this may not have been able to happen while they were minors. 580 The effect of their minority was not argued. It is a point that may need to be resolved. There is also the question of ratification, that is, consenting to the transfer after they turned 18 years of age. 581 It was assumed during the hearing that the whole of the rental income from the Wiley Park and Fairfield properties was available to KST. This appeared to be the fact. However, the title records show that the Wiley Park property stood in the names of KST, John, Mary and FC Chow from about June 1969 to about September 1975 when John transferred his interest to KST. As at May 2002 the title records show that KST's estate owned a three-quarters share and Mary owned a quarter share. 582 The records show that in December 1972 the Fairfield property stood in the names of KST, FC Chow, Tang Fung Sze Tu, Mary, Janet, Margaret, Helen, Gordon and Sunly. As from June 1997, the ownership interests were: % KST (and later, his estate) 92,048/168,000 54.79 Tang Fung Sze Tu 25,000/168,000 14.88 (now deceased) Mary 10,000/168,000 5.95 Margaret 10,000/168,000 5.95 Helen 10,000/168,000 5.95 Stella 6984/168,000 4.16 Gordon 6984/168,000 4.16 Sunly 6984/168,000 4.16 100.00 The questions which arises is whether the Court should proceed on the basis of the whole of the rental income being available to KST or only that portion which corresponds with his legal interest in the Wiley Park and Fairfield properties. This needs to be resolved and a direction given. Perhaps there will need to be separate proceedings, but hopefully this can be avoided. 583 I envisage, without being exhaustive, that the following may require attention once the taxation issues are resolved: (a) the net rental receipts of these properties will have to be collated:- (i) the Maroubra Road property from 14 February 1983 to the completion of its sale by the Administrator on or about 19 October 2005 (or 2 February 2006); (ii) the Queen Street property from 1 July 1988 and extending to the completion of the sale by the Administrator of KST's interest to Margaret and Helen on or about 15 November 2005; (b) estimates or assessments of the value of the occupation of the Haig Street property from 1 December 1978 to the date of the transfer of the interests therein of the estate of KST to Sunly and Gordon on or about 14 May 2004; (c) an estimate or assessment of the sale value of YS as at June 1986. This may be subject to it being established that the proceeds of sale of YS were not applied to the purchase of the Queen Street property. During the hearing it was suggested that the proceeds of sale of YS may have been so applied. If they were, such an estimate or assessment may not be necessary; (d) directions as to the disposition of the moneys held by the Administrator; (e) determination of where the burden of any additional tax, penalties and interest should lie; (f) provision being made for the costs and expenses of the Administrator and any Receiver and Manager of the partnership business. All dates are provisional. 584 I do not propose to make any consequential orders at this stage. The question of what consequential relief should be ordered remains to be decided. In view of the lack of evidentiary materials and the length of time which has elapsed it may become necessary to make a number of broad assessments. I doubt if the conventional orders would be appropriate. 585 I detected a lack of enthusiasm by all parties for a taxation review and the use of partnership assets to meet outstanding taxation liabilities, although counsel for the plaintiffs recognised that there could be taxation liabilities. I am reluctant to allow these proceedings to progress in a way that would fail to alert the taxation authorities to the incorrect material with which they were supplied and the evasion which has occurred. There are strong financial incentives for the parties to conduct proceedings as between themselves and to refrain from disclosing the details to the taxation authorities. 586 The Court will not be involved in determining any issues between the Commissioner and the partners of WYT and YS. 587 These proceedings have not sought to resolve the issue whether Mary holds a one-quarter interest in the Wiley Park property. 588 I propose to adjourn the further hearing and the issue of further relief pending the Commissioner of Taxation advising whether he is considering any taxation review of the tax payable including the issue of amended assessments in respect of the partnership businesses of WYT and YS. While the matter is attended by many complexities and voluminous documentary materials, the Court would be reluctant to hold up the winding up of the partnership beyond 31 August 2010. The Commissioner should advise the parties what he proposes to do within that period and what further period, if any, is required to complete any taxation review and issue any re-assessment or any amended assessments. There is no point in referring the matter to an Associate Justice or a referee until the taxation position is resolved. Where the liability for tax is to fall and the liability for any possible penalties or interest is to fall may affect the determination of the assets of the partnership businesses and the distribution of assets. Taxation liabilities may also affect the value of the deceased's estate. 589 I fix Tuesday 25 May 2010 or such other date as may be arranged with my Associate as the day on which I will consider the declarations and order(s) to be made at this stage. Thereafter I am considering fixing 9 September 2010 at 10 am as the next day on which the matter is to be listed to enable directions to be given as to the future course of these proceedings. It may be practicable on 25 May 2010 to appoint a Receiver and Manager of the partnership businesses, including making provision for payment of his or her fees. I am contemplating in the orders of 25 May 2010 giving all parties liberty to apply on seven days' notice because of the matter being stood over to 9 September 2010 to allow the ATO to consider the position. 590 Rather than eventually refer the matter to an Associate Justice consideration may need to be given to whether it may be preferable to refer the matter to a referee and direct the plaintiffs and the second, third, fifth and sixth defendants to share the costs and expenses of a referee in the first instance. That may require provision to be made for the referee's fees and an order to deal with the Administrator's fees. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.