New South Wales Supreme Court CITATION : BRGM Nominees Pty Ltd v Garling [2010] NSWSC 273 HEARING DATE(S) : 29-31 March, 1,6 April 2010 JUDGMENT DATE : 14 April 2010 JURISDICTION : Equity JUDGMENT OF : Biscoe AJ DECISION : 1. First cross claim dismissed 2. Declarations and orders as sought in second cross claim 3. Order Max Michael Garling to pay the other parties' costs 4. Exhibits and Court Book may be returned CATCHWORDS : CONTRACT - whether oral contract that A would pay B amount equal to 30 per cent of net sale proceeds of a gold mine if B put a structure in place whereby it could be sold and found a buyer - if so, whether agreement activated by B's performance of terms - TRUSTS - whether B's share in C held as nominee for or on trust for A - whether C's shares in a gold mine held as trustee for A's family trust LEGISLATION CITED : Corporations Act 2001 (Cth) BRGM Nominees Pty Ltd (plaintiff, second cross defendant to first cross claim) Max Michael Garling (defendant, first cross claimant, first cross defendant to second cross claim) Raymond Francis Wright (first cross defendant to first cross claim, second cross claimant) Nickel Seekers Mining Services Pty Ltd (third cross defendant to first cross claim) PARTIES : Nickelseekers Pty Ltd (fourth cross defendant to first cross claim) Ridgeview Nominees Pty Ltd (second cross defendant to second cross claim) Write Family Investments Pty Ltd (third cross defendant to second cross claim) FILE NUMBER(S) : SC 2008/00280210 COUNSEL : Mr D L Cook (plaintiff, cross defendants to first cross claim, second cross claimant) Mr J Stevenson SC and Ms C Spruce (defendant, first cross claimant, first cross defendant to second cross claim) SOLICITORS : Slater & Gordon (plaintiff, cross defendants to first cross claim, second cross claimant) K A Garling (defendant, first cross claimant, first cross defendant to second cross claim) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BISCOE AJ 14 April 2010 2008/00280210 BRGM NOMINEES PTY LTD v MAX MICHAEL GARLING JUDGMENT CONTENTS Paragraphs Introduction [1]-[5] History of Proceedings [6]-[7] Mr Garling's 30 per cent Agreement Cross Claim [8]-[88] Mr Wright's Ridgeview Cross Claim [89]-[121] Orders [122] INTRODUCTION 1 HIS HONOUR: These proceedings raise three claims. 2 First, there is a claim by the plaintiff, BRGM Nominees Pty Ltd (BRGM), against the defendant, Max Michael Garling, for making numerous payments totalling $458,022 from BRGM's bank accounts to himself or his benefit between July 2005 and May 2007, in breach of ss 181 and 182 of the Corporations Act 2001 (Cth) and in breach of his fiduciary duty as a director of BRGM. It is common ground that Mr Garling made those payments. On 16 November 2009, by consent and without admissions, there was judgment in that amount for BRGM against Mr Garling and an order that judgment be stayed pending determination of Mr Garling's cross claim or until further order of the Court. 3 Secondly, there is a contested cross claim by Mr Garling against Raymond Francis Wright and three Wright family companies, BRGM, Nickel Seekers Mining Services Pty Ltd and Nickelseekers Pty Ltd, for breach of an oral contract which he alleges he entered into on 27 May 1994 with Mr Wright, that if Mr Garling did certain work in relation to the sale of the Daisy Milano gold mine owned by BRGM, he would be paid an amount equal to 30 per cent of the net sale proceeds received (the 30 per cent agreement). Mr Garling says he did that work. In 2007 those three companies sold the Daisy Milano mine (including adjacent tenements) to Perilya Ltd and received $8 million partly in cash and partly in shares. After deducting costs of $3.5 million, the net proceeds were $4.5 million of which Mr Garling says he is entitled to 30 per cent ie $1.35 million. 4 Thirdly, there is a second contested cross claim (entitled "Interlocutory Process") by Mr Wright against Mr Garling, Ridgeview Nominees Pty Ltd (Ridgeview) and Write Family Investments Pty Ltd (as trustee for the Wright Family Investment Trust) for: (i) a declaration that Ridgeview holds its shares in Morning Star Gold NL on trust for the Wright Family Investment Trust and an order that the shares be transferred to the new trustee, Write Family Investments Pty Ltd, which has replaced Ridgeview as trustee for that Trust; (ii) a declaration that the one share held by Mr Garling in Ridgeview is held by him on trust for or as nominee of Mr Wright and an order that it be transferred to Mr Wright. 5 I propose to dismiss Mr Garling's cross claim and to uphold Mr Wright's cross claim. HISTORY OF PROCEEDINGS 6 There were earlier proceedings in 2008 by Mr Garling against Mr Wright, Ridgeview and BRGM in which, by consent, he succeeded in establishing that he was still a director of Ridgeview notwithstanding Mr Wright's purported removal of him as a director in 2005 (the old proceedings). 7 These proceedings were commenced in 2008 and were originally listed for hearing in November 2009. In the preceding week, Mr Garling applied successfully to vacate the hearing date. One of the grounds was that he proposed to obtain corroborative evidence of his 30 per cent agreement with Mr Wright from Mrs Garling. Another ground was that he proposed to amend his cross claim to seek relief concerning the nature of his interest in Ridgeview and the nature and extent of Ridgeview's interest in Morning Star Gold NL. Corroborative affidavit evidence from Mrs Garling was not served until the end of the week before the hearing commenced before me in March 2010. An amended cross claim by Mr Garling concerning the Ridgeview issue not only was not filed but all reference to that aspect was removed from his case by filing a new affidavit sworn by him in 2010 which was identical to an affidavit he swore in 2009 but without the paragraphs relating to the Ridgeview issue, and by filing an amended cross claim which deleted Ridgeview as a cross defendant. Mr Wright's response was to file his cross claim in 2010 which ventilates the Ridgeview issue. MR GARLING'S 30 PER CENT AGREEMENT CROSS CLAIM 8 Mr Garling's 30 per cent agreement cross claim illustrates the difficulties of proof that can arise when an alleged agreement is not documented and is disputed. It hangs by the slender thread of three sentences allegedly uttered by Mr Wright on the evening of 27 May 1994: see [24] below. Background 9 In 1979 Mr Garling gave up practice as a solicitor in a substantial Sydney firm to become involved in the management, structuring and funding of mining companies. 10 In the course of his legal practice, Mr Garling had met Mr Wright's father and Mr Wright. The Wright family have been involved in the mining industry for many years, principally through owning and operating mines. The corporate parties to this proceeding are all Wright family companies. 11 One of Mr Garling's mining ventures was as a business associate of Mr Wright's father (who died in about 1994). 12 In about 1985 there was a falling out between Mr Wright's father and Mr Garling. Mr Wright deposed to a belief that his father and Mr Garling never spoke again. However, on the basis of Mr Garling's evidence and Mr Wright's evidence in cross-examination, I accept that by around 1992 they had substantially re-established their relationship, as Mr Wright knew. Indeed, Mr Wright asked Mr Garling to give the eulogy at his father's funeral. 13 The relationship between Mr Garling and Mr Wright broke down in 2007 after Mr Wright discovered that a large amount of money was missing from BRGM's bank accounts on which Mr Garling was an authorised signatory. The missing funds gave rise to the claim in this proceeding by BRGM against Mr Garling in which judgment has been entered by consent: see [2] above. 14 In May 1993 Mr Garling was appointed as a director of Ridgeview and made a shareholder. In August 1993 he was appointed as a director of BRGM. The Daisy Milano Gold Mine 15 In 1989 the Wright family acquired BRGM, which at all material times has acted as trustee for the Daisy Milano Goldfield Units Trust. BRGM owned the Daisy Milano gold mine. 16 In 1993 Mr Garling and Mr Wright discussed the Wright family's interest in the Daisy Milano mine. At that time the Wright family owned 60 per cent of the units in the Daisy Milano Goldfields Unit Trust. Around 300 external unit holders owned the other 40 per cent. Mr Garling: (a) offered to examine the books and records of BRGM, which were located in Melbourne; (b) having examined the books and records, suggested to Mr Wright that BRGM should buy out the external unit holders to ensure that the Wright family would obtain the full benefit of any investment in the mine in the event of its sale; and (c) offered to put in place the necessary arrangements for that to occur. 17 Mr Garling deposed that in the course of that 1993 discussion, words to the following effect were said: Mr Garling: "If we get the mine running [by which Mr Garling says he meant running profitably] then I will negotiate an ongoing deal with you" Mr Wright: "Sure Max. We will cut you in. Let's get it going". 18 In evidence, Mr Wright denied that Mr Garling suggested an "ongoing deal" and said that they never discussed remuneration or "cutting him in". Although he was not so forthcoming in his affidavit evidence, Mr Wright's evidence in cross-examination was that he probably said he "would look after" Mr Garling, and that it was his practice to give such an assurance to people who assisted him because they engaged in transactions on the basis of mutual trust. His version of the assurance he gave Mr Garling is not much different from Mr Garling's version, which I am prepared to accept. 19 On 1 August 1993 Mr Garling was appointed a director and executive chairman of BRGM. 20 Mr Garling performed a substantial amount of work examining the books and records of BRGM, contacting the external unit holders, organising a unit holders' meeting and obtaining sufficient proxies to pass a resolution to sell the external unit holders' 40 per cent. Mr Garling issued a letter to unit holders which explained that upon completion of the sale the unit trust would be wound up. 21 On 27 May 1994 a meeting of unit holders was held. Those present included Mr Garling, who chaired the meeting, his wife, Mr Wright and the Wright family accountant, Mr Ashok Parekh. No external unit holders were present. Mr Wright deposed that he did not recall attending the meeting, but I am satisfied he was present. A resolution was passed that the directors of the trustee be authorised to sell the external unit holders' 40 per cent interest in the trust. The object was to sell their interest to Wright family interests which thereby would obtain 100 per cent beneficial ownership of the Daisy Milano mine. 22 In my view, 100 per cent control of the Daisy Milano mine was important to the Wright family interests and, although Mr Wright seemed reluctant to accept it in evidence, I think that he so regarded it at the time of this meeting. 23 It is against that background that Mr Garling alleges that the 30 per cent agreement was entered into in a discussion between Mr Wright and him immediately following the unit holders' meeting of 27 May 1994. 24 Mr Garling's critical evidence as to the 30 per cent agreement was expressed as follows in an affidavit that he swore in 2010 (and identically in an affidavit he swore in 2009): "48. Following the meeting everyone except Raymond and I had left the room. We were discussing the next steps to be taken to get the mine to the operational stage and had a conversation containing words to the following effect: Me: `Now we have control of the mine we can get on with rehabilitating it and preparing it for sale. Raymond: What we really have to get on with is building a decline shaft to increase gold output. Me: Where do we go from here as far as my interest in the venture is concerned?' Raymond: ' Well, we will put you on the same sort of deal as I did with Bob Orchard. You do the work getting a structure in place whereby this mine can be sold and find us a buyer or a merger prospect. You pay your own costs, and when we can sell it, you get 30% of what we get when it's all completed .' Me: 'Sounds fine to me.' Raymond: 'Let's have some dinner late to celebrate.' 49. I knew that in the months leading up to these negotiations, Raymond had discussed with me on several occasions a land subdivision his family was pursuing in Sawtell, NSW. He explained to me how Bob Orchard, a person experienced in subdivisions in that area was managing the subdivision process under an arrangement whereby he was to be remunerated with a fixed 30% proportion of the proceeds of sales, which would take place over several years going forward." (emphasis added) 25 In evidence, Mr Wright denied that he ever had a conversation involving Mr Garling receiving 30 per cent of the eventual sale price of Daisy Milano and denied that that discussion occurred. He denied that there was any percentage arrangement with Mr Orchard and said Mr Orchard was a civil contractor who was paid for his services against invoices. This was corroborated by the unchallenged evidence of Mr Orchard, which I accept. Mr Wright had no specific recollection of any discussion with Mr Garling after the May 1994 meeting. He accepted he may have said something about his future plans for the mine. He was certain he did not offer 30 per cent of the proceeds of any sale from a buyer found by Mr Garling or a merger put by him. He said there was no mention of remuneration for Mr Garling for work done in getting the resolution passed or of any entitlement to remuneration. He had no recollection of any celebratory dinner being arranged. 26 In cross-examination, Mr Garling's evidence as to the question he asked Mr Wright in this discussion was read to him and he was asked to say what Mr Wright's response was. He could not remember. 27 In re-examination, the whole of the preceding part of that paragraph of his affidavit was read and he was then asked what was the substance of what Mr Wright said. Mr Garling's answer was "It was, 'we will do the deal' like the Bob Orchard, was the substance, and 'you will get 30 percent of what I am getting". He could not recall anything further. This answer omitted any reference to "You do the work getting a structure in place whereby this mine can be sold and find us a buyer or merger prospect. You pay your own costs". 28 In an affidavit sworn in 2008 in the old proceedings, Mr Garling did not mention that part of the conversation he recounted in his 2009 and 2010 affidavits preceding the question he asked Mr Wright. His explanation in cross-examination was to the effect that he recalled more over time. 29 The evidence establishes that in 1993/1994 Mr Wright and Mr Garling trusted each other and their business relationship was informal. 30 Shortly before the trial commenced in March 2010, Mr Garling's wife swore an affidavit in which she said that after the unit holders' meeting, whilst walking back to their hotel, she asked Mr Garling whether he discussed with Mr Wright what he was going to get from the project and he said "Ray agreed that I would get 30 per cent of the profit as my share". Such evidence from Mrs Garling had been foreshadowed in November 2009 in an affidavit by Mr Garling's solicitor which was read in support of his successful application to adjourn the trial which had been listed for the following week: see [7] above. Mrs Garling adhered to her evidence in cross-examination when she indicated that, although it was a long time ago, she remembered it because she regarded the deal as crucial from her family point of view. 31 In Mr Garling's cross-examination, he corroborated his wife's evidence and said that he had told one other person about the 30 per cent agreement: Mr Wright's brother who died five or six years ago. Mr Garling said nothing about this in any of the three affidavits that he had earlier sworn. 32 In cross-examination, Mr Garling said he had discussed the case with his wife extensively since 2008 and she had read his affidavits, but it was only 10 days or a few weeks before the trial that she indicated to him that she had evidence concerning the meeting. This was inconsistent with Mrs Garling's evidence in cross-examination that she told her husband she recalled what had happened some months before the trial and possibly a year ago, when she read Mr Wright's affidavit (sworn in May 2009). It is apparent from the adjournment application made in November 2009 that she had communicated this to his solicitor by that time: see [7] above. 33 Following the resolution at the May 1994 meeting, there was a structural change to the arrangement to buy out the other unit holders. It reflected Mr Garling's suggestion that it may be beneficial to the Wright interests to acquire the other unit holders' units rather than acquire a 40 per cent interest in the assets and then wind up the trust as originally envisaged. This involved Mr Garling obtaining transfers from those unit holders over several months from November 1994. Some $45,000 was paid for their units. 34 Between 1994 and 2003, the Daisy Milano mine was operated and developed by Wright family companies including BRGM. 35 During that period, Mr Garling continued to be a director and executive chairman of BRGM. 36 Mr Garling's evidence was that he did not record the 30 per cent deal in writing because he trusted Mr Wright, he did not consider it necessary, and he had no concern about it. He said he did not regard that as somewhat unusual behaviour for someone with his background and experience. He did not mention the 30 per cent agreement to Mr Wright again after 27 May 1994 even when it appeared in 2003 that a sale of the mine to Perilya Ltd appeared imminent. 37 In cross-examination Mr Garling indicated that he paid $458,000 to himself or associated entities in 2005 to 2007 from BRGM's bank accounts because of the 30 per cent deal he had done with Mr Wright in 1994. 38 Mr Garling agreed in cross-examination that prior to February 2008 when Mr Parekh confronted him about the missing money, he never asked Mr Wright to pay him the 30 per cent. He agreed that he did not mention it to Mr Finney, Wright's solicitor, when Mr Finney confronted him about missing money in late 2007. The Morning Star Gold Mine 39 In about 1992 Mr Wright's family interests purchased Aloren NL which held rights to the Morning Star gold mine. In 1993 Mr Wright discussed with Mr Garling the prospect of raising public funds to enable development of the mine. Mr Garling suggested they get an already listed public company to acquire it by way of a back door listing. This took place in late 1993 when Aloren NL sold the Morning Star mine to Mt Conqueror Minerals NL, now named Morning Star Gold NL (MCO). 40 Mr Wright's family companies, particularly Ridgeview, bought a substantial number of shares in MCO, as did Mr Garling and his family. 41 Mr Garling and Mr Wright met frequently about the Morning Star mine. A Wright family company, Nickel Seekers Mining Services Pty Ltd, was responsible for mine management at the Morning Star mine. Work and Remuneration 42 There is a lot of detailed evidence as to the amount of work Mr Garling did for Mr Wright in relation to the Daisy Milano mine in the 14 years of his involvement from 1993 to 2007, including in relation to its sale. 43 On Mr Garling's evidence, he did a considerable amount of work. Mr Wright's evidence tended to minimise his work. There was more of such evidence from other witnesses. 44 This evidence is of limited relevance to the 30 per cent agreement claim, which is the only claim that Mr Garling presses. The explanation for so much detailed evidence seems to be that it was introduced at a time when Mr Wright had a live alternative claim for reasonable remuneration. However, at the commencement of the trial he made it clear that he did not press that claim. In the context of the 30 per cent agreement claim, it is unnecessary to make detailed findings as to precisely how much work he did over a 14 year period. I accept that he did substantial work leading up to 27 May 1994 for which Mr Wright would probably have been minded to reward him. I accept also that he did a substantial amount of work for 14 years thereafter for which he received relatively little remuneration and that that is consistent with an expectation that he would be rewarded when the mine was sold. It is not necessarily explicable only by the alleged 30 per cent agreement. Mr Wright's credit was damaged a little by understating the amount of work Mr Garling did. Two examples will suffice. First, I do not accept Mr Wright's denial that Mr Garling was not involved in the purchase of the Burbanks Treatment Plant which treated ore from the Daisy Milano mine. The documentary evidence substantiates Mr Garling's evidence that he was fairly heavily involved in negotiations for that purchase. Secondly, Mr Wright tended to minimise Mr Garling's role in the sale of the Daisy Milano mine even when confronted in cross-examination with documents evidencing his significant involvement. 45 For the work that he did over some 14 years in relation to the Daisy Milano mine, Mr Garling has received relatively little remuneration. According to Mr Garling's evidence, he received $40,000 comprising two payments of $20,000 each by Mr Wright: one in about mid 2000, the other in about 2004/2005 during dealings for the sale of the Daisy Milano mine. Mr Wright says that, in addition, he paid Mr Garling a further $15,000 to $20,000. There is no documentary evidence of any of these payments. It is unnecessary for present purposes to resolve this limited quantum dispute. Sale of Daisy Milano Gold Mine to Perilya Ltd 46 In 2003 Perilya Ltd, a large listed zinc mining company, expressed interest in the Daisy Milano mine. Mr Garling and Mr Wright gave different accounts of what happened then. 47 According to Mr Garling, Mr Morrie Goodz, a geologist and manager of the Daisy Milano mine, suggested to him that he give Perilya's managing director a call. Mr Goodz in evidence denied this conversation and said that the initial meetings were organised by Mr Parekh. Mr Parekh did not give evidence on this point. Mr Goodz has no apparent interest in this dispute, he was cross-examined although I do not think there was any testing of this aspect of his evidence, and he seemed to me to be a careful and reliable witness. I prefer his evidence on this point to that of Mr Garling. 48 Mr Garling deposed that he telephoned Perilya's managing director and suggested he have a look at the Daisy Milano mine and made arrangements for a geologist from Perilya to inspect the mine. Perilya representatives inspected the mine for a second time in about late August 2003. Thereafter there were discussions and correspondence. 49 Mr Wright's evidence, which I accept, is that in 2003 Mr Goodz told him he should expect an offer to purchase the mine from Perilya; within a matter of weeks he was approached directly by Perilya; and, with Mr Goodz and Mr Parekh, attended a meeting with the managing director and someone else from Perilya at which Perilya stated their desire to purchase the mine. 50 Mr Wright deposed that he told Mr Garling about this, explaining that it was speculative, and that Mr Garling appeared excited. Mr Wright deposed: "I held the view at that time that Garling knew that if Perilya completed the deal, and I received all moneys pursuant to the sale of Daisy Milano, I would reward him financially in some way." 51 Mr Wright also deposed: "I held the view throughout the negotiations with Perilya that Garling expected that if the deal came through and I made a lot of money in the deal, I would consider rewarding him financially for his assistance." 52 Mr Wright's view that Mr Garling "knew" that if Perilya completed the deal and he received the moneys, he would reward Mr Garling financially in some way, suggests, and I conclude, that Mr Wright had earlier said something to Mr Garling which created that mutual expectation. The expectation could have arisen from the 1993 discussion between them: see [18] above. 53 The critical question remains whether Mr Wright went the extra distance and promised Mr Garling 30 per cent, as Mr Garling says he did in May 1994. 54 In August 2003 Perilya sent Mr Goodz several offers to acquire an option to purchase the Daisy Milano mine. Mr Goodz provided copies to Mr Garling and wrote to Messrs Garling, Parekh and Wright with his comments on the offer. In September 2003 Mr Garling was involved in negotiations with Perilya and gave instructions to and liaised with the vendor's solicitors. 55 On 28 October 2003 an option deed for the purchase of the Daisy Milano Mine and surrounding tenements (owned by Ridgeview) was entered into between the "Ridgeview Group" of companies, identified as Ridgeview, BRGM and Nickel Seekers Mining Services Pty Ltd, on the one hand, and Perilya Daisy Milano Pty Ltd and Perilya Ltd, on the other. The option deed recited that the members of the Ridgeview Group are or will be at the commencement date the legal and beneficial owners of each part of the mining property (with certain exceptions). Later, deeds of variation were entered into. The option deed as varied recorded the following consideration payable by Perilya Ltd to the Ridgeview Group: (a) a cash deposit of $400,000 payable on the commencement date (clause 3.1(a) of the Option Deed); (b) repayment of a loan in the sum of $1.4 million, being an amount reduced from $1,540,000 (plus interest) pursuant to the Deed of Variation No 2 dated 31 January 2005 (clauses 8.1 and 8.2 of the Option Deed); (c) the payment of $1,600,000 comprising $800,000 in cash and $800,000 worth of shares in Perilya Limited, on or before 31 January 2005 (Clause 3 of Schedule 6 of the Deed of Variation No 2); (d) the payment of $1,600,000 comprising $800,000 in cash and $800,000 worth of cash or shares in Perilya Limited, on or before 30 June 2005 (Clause 4 of Schedule 6 of the Deed of Variation No 2); (e) net cash flow payments of $5 million, subject to the terms of clause 5.1 of the Option Deed being satisfied; and (f) net cash flow payments of $5 million, subject to the terms of clause 7.1 of the Option Deed being satisfied. 56 On 31 January 2005 Perilya exercised its option. 57 In late 2005 or early 2006 Mr Wright told Mr Parekh to make provision in the accounts for $500,000 to be shared between Mr Parekh and Mr Garling in the event that the $15 million deal with Perilya came off. He did not communicate this to Mr Garling. He indicated in evidence that he did not make this payment because the Perilya sale "fell over". 58 In early 2005, Mr Garling, with Mr Wright's agreement, opened bank accounts in the name of BRGM, apparently to receive moneys from the sale of Perilya stock forming part of the purchase consideration which Mr Garling had been given to sell. Mr Garling was an authorised signatory on the accounts. In July 2005 the sum of $800,000 was deposited into one of the accounts. 59 Between July 2005 and June 2007, Mr Garling, without Mr Wright's knowledge or consent, made payments to himself or to his benefit by writing numerous cheques or making bank transfers from the BRGM bank accounts, which he controlled, totalling over $450,000: see [2] above. 60 It appears that the production of gold at the mine never reached a level where Perilya had to pay the two $5 million payments tied to gold production. 61 In early 2007 at a meeting between Perilya officers and Messrs Garling, Wright and Parekh, Perilya said it had ceased mining, was going to sell all its gold mining assets and believed it was relieved from paying further monies under the option deed. 62 Mr Garling instructed solicitors to place a caveat on the mine and kept communications open with Perilya in the course of which a Perilya officer indicated that if a purchaser was found for the Daisy Milano mine, then Perilya would favourably compensate the Ridgeview Group. 63 Shortly thereafter, Silver Lake Resources Ltd emerged as an interested purchaser from Perilya. In July 2007 Mr Garling undertook work in discussions with Perilya and Silver Lake in an attempt to negotiate resolution of difficulties that had arisen between Perilya and Silver Lake. 64 In August 2007 a deal was negotiated whereby the Ridgeview Group agreed to the resale of the Daily Milano mine by Perilya to Silver Lake and, on completion, the Ridgeview Group would receive $1.5 million in cash and $1.5 million in shares in Silver Lake. The resale was completed and the Ridgeview Group received that cash and shares. 65 In total the Ridgeview Group received $8 million from the sale, partly in cash and partly in shares. Hostilities break out 66 Mr David Finney has been the Wright family's solicitor since before 1992. I accept his unchallenged evidence for Mr Wright. 67 In September 2007 Mr Finney told Mr Garling that Mr Wright had requested him to obtain the BRGM documents in Mr Garling's possession or control, including financial records, so they could get the accounts up to date. Over the next six to eight weeks he received papers in several lots from Mr Garling but no financial records regarding the applications of moneys from the sale of Perilya received into the BRGM bank account under Mr Garling's control. 68 On 20 November 2007 Mr Finney said to Mr Garling that $1.8 million was missing and demanded to know where it was. Mr Garling said he did not know what he was talking about. Mr Garling assured him that part of it had already been paid to Mr Parekh and nothing was missing. Mr Finney said they still needed a full accounting and that if nothing untoward had happened, there was no reason for Mr Garling not to hand over the financial records to him. Mr Garling indicated that he would do so on the following Friday. Mr Garling said nothing about a 30 per cent agreement. 69 A letter of 22 November 2007 from Mr Finney to Mr Garling recorded information from Mr Parekh that Mr Garling had now decided that he did not wish to meet with Mr Finney as previously arranged and, in particular, did not intend to hand over the last of the documents held by Mr Garling as promised on 20 November 2007. Mr Finney reiterated his request that Mr Garling hand over all documents. Mr Finney wrote that on 20 November 2007 Mr Garling had assured him there was nothing inappropriate with respect to the conduct of BRGM's financial affairs insofar as Mr Garling was involved; that he accepted Mr Garling's assurance; and that he had great difficulty in understanding why Mr Garling was being so slow in accounting for documents he had and, seemingly, in delaying a proper financial accounting. 70 Mr Garling never did hand over the BRGM bank statements and financial records. 71 Mr Ashok Parekh has been the Wright family's accountant for approximately 20 years. I accept his unchallenged evidence for Mr Wright. 72 On 1 October 2007 Mr Parekh transferred his one share in Ridgeview to a Wright family company, Greenbank Properties Pty Ltd, for a nominal consideration. 73 Mr Parekh obtained the BRGM bank statements and cheques not from Mr Garling but from the bank. In late 2007 Mr Parekh commenced a review of BRGM's bank statements and cheques. He concluded that Mr Garling had withdrawn monies totalling $434,500 by numerous cheques drawn on BRGM's bank account or by electronic transfer between July 2005 and May 2007. 74 On 24 January 2008 Mr Garling wrote a letter to Mr Parekh in which he identified his role in BRGM and matters he had attended to for BRGM; objected to Mr Finney's assertion that he had "stolen" from BRGM; and expressed a desire to finalise all outstanding matters with Mr Parekh or Mr Wright. Nothing was said about a 30 per cent agreement. 75 In February 2008, Mr Parekh met with Mr Garling, presented him with documents which he said indicated $434,500 was missing and told Mr Garling to make up his mind what to do. According to Mr Garling's evidence, Mr Garling said he was not going to pay any money and in fact had no money; Mr Parekh said he would speak to Mr Wright to see what he wanted to do; Mr Garling said "I'm blind Ashok. I won't be able to go through all that in a hurry, but don't forget that I have a Bob Orchard style agreement with Ray. I have put 15 years of my life into this"; and Mr Parekh replied that he was "not instructed in relation to anything like that". 76 Mr Parekh's unchallenged evidence was different and to the following effect. In February 2008 Mr Parekh met with Mr Garling and told him that he had been sent to resolve the situation concerning the $434,500 which had been taken out of the BRGM bank account operated by Mr Garling. He gave Mr Garling a bundle of financial records which he said showed the details. Mr Garling said if that was the case he was owed extra fees for his services as he did not charge out his time properly and that will need to be set off. Mr Parekh left for half an hour to give Mr Garling time to look at the documents and say whether he was prepared to pay back the funds. Upon his return after half an hour, Mr Garling asked him how much Mr Wright would accept as a settlement. Mr Parekh rang Mr Wright and received instructions to settle for $300,000 payable by 31 March 2008. Mr Parekh communicated this to Mr Garling. Ultimately, Mr Garling agreed to Mr Wright's terms. Nothing was said about a "Bob Orchard style agreement" and he had no knowledge of any such agreement. 77 In cross-examination, Mr Garling agreed with Mr Parekh's evidence but said there was more, apparently meaning that his version was also correct including reference to a "Bob Orchard style agreement". Given that Mr Parekh's evidence was unchallenged, I accept his evidence and do not accept Mr Garling's rider that there was more. Consequently, I am not satisfied that Mr Garling said anything to Mr Parekh about a Bob Orchard style agreement. 78 Mr Garling did not pay the $300,000 under the settlement agreement by 31 March 2008 or at all. In cross-examination, he said he did not have $300,000 to pay then or now. 79 On 19 May 2008 Mr Garling's solicitors, Thomson Playford, wrote to Mr Wright concerning Mr Garling's right in Ridgeview. The letter included a section on the proceeds of sale of the Daisy Milano mine. Nothing was said about an agreement that entitled Mr Garling to 30 per cent of the sale proceeds. The Issues 80 The issues are as follows: (a) was the 30 per cent agreement made? (b) if so, was it enlivened? According to its terms, it was enlivened if: (i) Mr Garling put a structure in place whereby the mine could be sold; and (ii) Mr Garling found a buyer; and (iii) the vendor received proceeds when it was all completed. Was the 30 per cent Agreement Made? 81 Mr Garling says, and Mr Wright denies, that the 30 per cent agreement was made orally between them on the evening of 27 May 2004. As reflected in the parties' submissions, there are factors pointing both ways. 82 The following factors weigh in favour of accepting Mr Garling's evidence of the 30 per cent agreement: (a) Mrs Garling gave corroborative evidence that on the walk back to their hotel after the unit holders' meeting on 22 May 1994, Mr Garling told her that Mr Wright had said he would get "30 per cent of the profit" as his share: see [30] above. Notwithstanding that it was so long ago, it may be accepted that she would be likely to remember such words if they were said because (as she indicated in evidence) they would be important to her family; (b) at the relevant time both men trusted each other and their business relationship was informal: see [29] above; (c) in 1993 Mr Wright told Mr Garling that he would cut Mr Garling in or look after him if they got the Daisy Milano mine running profitably: see [17]–[18] above. Mr Wright was not forthcoming about this in his affidavit evidence. Mr Garling submits that it makes the later 30 per cent agreement more likely; (d) Mr Wright said something to Mr Garling, either by reason of the 1993 discussion or otherwise, to create a mutual expectation that Mr Wright would reward Mr Garling in some way from the sale proceeds of the Daisy Milano mine: see [50]–[52] above. The substantial amount of work that Mr Garling did in relation to the sale is consistent with that expectation, as is Mr Wright's instruction to Mr Parekh to pay Mr Garling and Mr Parekh $250,000 each if the Perilya $15 million purchase came off: see [54] and [57] above; (e) contrary to Mr Wright's submission, it was not a terrible deal for him because he did not have to accept any prospective buyer that Mr Garling might find and only had to accept an offer from such a buyer that justified a 30 per cent payment to Mr Garling. 83 The following factors tend to suggest that the 30 per cent agreement is improbable: (a) the 1993 statement by Mr Wright that he would cut Mr Garling in or look after him is insufficient of itself to establish the 30 per cent agreement; (b) the 30 per cent agreement is rather surprising because Mr Garling had come to Mr Wright with the problem that if Mr Wright invested in the mine he only stood to get 60 per cent back from its sale. With Mr Garling's assistance, he secured 100 per cent through the unit holders' resolution (subject to paying them $45,000). Yet, according to Mr Garling, he immediately agreed to give up most of what he had just gained and to end up with only 70 per cent by giving Mr Garling 30 per cent of the sale price if Mr Garling put in place a sale structure and found a buyer. The weight of this point is diminished only a little by the fact that Mr Wright did not have to accept any prospective buyer that Mr Garling might find unless the price was acceptable in light of the 30 per cent payment, and the fact that in any event he might have to pay a commission of some sort to whoever found a buyer; (c) the lack of writing. It is one thing to do things orally and on trust when they consist of broad and uncertain promises to look after someone or cut them in or when the amount contemplated is relatively small. For example, Mr Wright was prepared to informally give $250,000 to each of Mr Parekh and Mr Wright if the Perilya $15 million deal came off: see [57] above. It is a different and rather surprising thing to orally and contractually give away 30 per cent of your mine if the nominee finds a buyer and puts a sale structure in place, whilst continuing to shoulder the entire financial burden of operating the mine in the meantime. Notwithstanding the mutual trust that then existed between Mr Garling and Mr Wright, it is also a little surprising that someone with Mr Garling's background as a lawyer and businessman never recorded or mentioned the agreement in writing in any way, even in correspondence with Mr Finney and Mr Parekh in late 2007 and early 2008 when they were confronting him and he had his back to the wall, even in the letter he wrote to Mr Parekh on 24 January 2008. (d) Mr Garling did not mention the 30 per cent agreement orally at any time over the years to Mr Wright, Mr Parekh or Mr Finney, even in the confrontational communications with Mr Parekh and Mr Finney in late 2007 and early 2008. Mr Garling's credit is damaged by my rejection of his evidence that he told Mr Parekh in their early 2008 meeting that he had a Bob Orchard style agreement with Mr Wright: see [77] above. Mr Garling submits that his failure to mention the 30 per cent agreement to Mr Finney when Mr Finney confronted him in late 2007 is explicable because Mr Finney had wrongly accused him of taking $1.8 million. I have difficulty with that explanation. Mr Garling had only to say how much he had taken and that it was justified under the 30 per cent agreement. He did neither. The only other persons Mr Garling says he ever told about the 30 per cent agreement were Mr Wright's deceased brother (which he alleged in cross-examination) and, of course, Mrs Garling. When the Ridgeview Group received money and shares from the Perilya sale, one would have expected Mr Garling to raise with Mr Wright the matter of paying him 30 per cent of the net proceeds. Yet he remained mute. In his February 2008 meeting with Mr Parekh he negotiated a settlement agreement but did not insist, as he now does, that he was entitled to the money taken from the BRGM bank accounts by reason of the 30 per cent agreement; (e) in the conversation with Mr Parekh in February 2008, Mr Garling's explanation was that he was owed extra fees for his services as he had not charged out his time properly and that there would therefore need to be a set-off. That is inconsistent with the existence of the 30 per cent agreement; (f) viewed as at May 1994, a reward to Mr Garling of 30 per cent of the net proceeds of a sale of the mine seemed disproportionate to the work he had put in to that date and to the work which the alleged agreement contemplated of finding a buyer and effecting a structure to permit a sale (particularly as there already was a sale structure, in that the resolution authorised a sale); (g) on credit, Mr Garling in cross-examination could not recall the terms of the May 1994 30 per cent agreement at all: see [26] above. The three sentences comprising that agreement allegedly uttered by Mr Wright were the foundation for his entire case. While a temporary mental blank is a possible explanation, in re-examination, with further assistance, his recollection was still significantly incomplete: see [27] above. Nor did he produce the critical BRGM bank statements when he was asked to do so or at all, although he produced other documents. If he was suggesting (as he appeared to be) that his failure to produce the bank statements was caused by his seriously impaired eyesight, I do not think that is a satisfactory explanation; (h) the Bob Orchard factor is bizarre. There is no doubt that there was no 30 per cent of profits deal with Mr Orchard: see [25] above. That makes it unlikely, to say the least, that Mr Wright would have told Mr Garling that there was. I have difficulty accepting a suggested explanation that Mr Wright himself misunderstood such an important deal with Mr Orchard and therefore misdescribed it to Mr Garling. Nor was that suggested to Mr Wright in cross-examination. Yet it is clear enough that Mr Garling thought that there was a 30 per cent of profits deal with Mr Orchard and it seems likely that he got that mistaken impression from something that someone told him. Had there been a Bob Orchard 30 per cent deal, the inclusion of a reference to it in Mr Garling's evidence concerning the 30 per cent agreement would have given that evidence an element of authenticity. As there was no such deal and as I think it is unlikely that Mr Wright would have told Mr Garling that there was, the credibility of Mr Garling's evidence as to the 30 per cent agreement is undermined; (i) Mrs Garling's corroborative evidence must be weighed in the scales with all the other factors. There is a shadow of doubt over Mr Garling's corroboration in cross-examination of his wife's evidence for he did not mention it in any of his affidavits. Her evidence is explicable on more than one basis and may be viewed against the background that Mr Garling received relatively little for the work that he did in relation to the Daisy Milano mine over many years, notwithstanding Mr Wright's uncertain assurances which created an expectation that he would be rewarded in some way: see [17]–[18] and [50]–[52] above. The preferable explanation is that she probably came to believe that her husband told her about the 30 per cent agreement in May 1994 in circumstances where her evidence was vulnerable to being subconsciously tainted over time by her discussions with her husband about the evidence in the case and by her love for him (which she acknowledged). 84 I am not satisfied on the balance of probabilities that the 30 per cent agreement was made. In my opinion, the factors pointing against the conclusion that it was made outweigh the competing factors, and by a substantial degree. Was the alleged 30 per cent agreement enlivened? 85 Lest I am in error, I will assume that the 30 per cent agreement was made and turn to the next question whether it was enlivened by Mr Garling's performance of its conditions. 86 The first condition was that Mr Garling "do the work getting a structure in place whereby this mine can be sold". It is a curious condition because there already was a structure in place, or virtually in place, whereby it could be sold as a result of the unit holders' meeting. It may be that all Mr Garling had to do to satisfy the structure condition was to put in place an arrangement to sell the assets of the trust, the unit holders' resolution having authorised that course. Be that as it may, in my view Mr Garling did later put in place a different structure, and one that was better for the Wright family whereby the mine could be sold; namely, buying the external unit holders' units: see [33] above. 87 The second condition was that Mr Garling find a buyer. I am not satisfied that he did: see [46]- [54] above. Perilya bought the mine. Perilya appears to have found the vendors rather than the other way around. Even if that is incorrect, I have accepted Mr Goodz' evidence that he did not have the initial conversation with Mr Garling on which Mr Garling seems to rely as the springboard for his introduction to Perilya and to his subsequent dealings with Perilya on which he relies as constituting finding Perilya as a buyer: see [47] above. I accept Mr Wright's evidence as to the negotiations that he, Mr Parekh and Mr Goodz had with Perilya. That evidence tends to suggest that if anyone "found" Perilya as a buyer, it was them. I accept that Mr Garling was also involved in the negotiations with Perilya along the lines indicated in his evidence. But I consider that is insufficient to establish that he found Perilya as a buyer when the whole of the evidence is taken into consideration. 88 For these reasons, Mr Garling's cross claim should be dismissed. MR WRIGHT'S RIDGEVIEW CROSS CLAIM 89 I turn to Mr Wright's cross claim against Mr Garling, Ridgeview and Write Family Investments Pty Ltd (as trustee for the Wright Family Investment Trust) seeking: (a) a declaration that Ridgeview holds its shares in Morning Star Gold NL ( MCO ) on trust for the Wright Family Investment Trust and an order that they be transferred to the new trustee, Write Family Investments Pty Ltd, which has replaced Ridgeview as trustee of that Trust; (b) a declaration that the one share held by Mr Garling in Ridgeview is held by him on trust for or as nominee of Mr Wright and an order that it be transferred to Mr Wright. 90 Thus, Mr Wright says that Mr Garling is twice removed from any beneficial interest in MCO because (a) Ridgeview is the trustee for the Wright Family Investment Trust and (b) in any event, Mr Garling holds his share in Ridgeview on trust for or as nominee of Mr Wright. 91 Mr Garling says that he owns his share in Ridgeview beneficially and that Ridgeview holds its shares in MCO in its own right and not as trustee for the Wright Family Investment Trust. 92 The circumstances of the 2003 sale of the Morning Star mine by a Wright family company, Aloren NL, to Mt Conqueror Minerals NL, now named Morning Star Gold NL (MCO), have been recounted at [39]–[41] above. 93 In 1993 Mr Finney met and advised Mr Wright and Mr Parekh that, for commercial reasons, a trustee company should be set up to act as a trustee for the Wright family interests to hold shares that were anticipated to be issued in MCO and that Mr Wright should make Mr Parekh and Mr Garling the directors and shareholders of the trustee company as nominees of the Wright family interests. Mr Finney agreed to set up the trust side and Mr Parekh agreed to set up the company side, which they subsequently did. 94 Ridgeview was incorporated on 22 March 1993. 95 By a deed executed on 15 April 1993, the Shelf Trust No 3024 trust was established. There was a holding trustee company. 96 On 11 May 1993, the trustee of the trust was changed by deed by the Appointor to Ridgeview. 97 In cross-examination, Mr Garling said he could not recall executing this deed on behalf of Ridgeview. In fact he did execute it on behalf of Ridgeview, as he accepted when the deed was shown to him. He then conceded that he was fully aware that Ridgeview's purpose was to act as trustee for the Wright family interests. Nevertheless, he claimed Ridgeview had multiple jobs, the other one being to hold options in MCO for Mr Wright and himself. 98 Also on 11 May 1993, the original Appointor under the trust resigned and appointed Mr Wright in her stead. 99 On 2 June 1993, the name of the trust was changed to the Write Family Investment Trust. 100 On 10 May 1993 Mr Parekh and Mr Garling were appointed as the directors of Ridgeview and each became the holder of one of the two issued ordinary shares in Ridgeview. 101 In oral evidence Mr Garling said that the annual returns of Ridgeview recorded him as the beneficial owner of his Ridgeview share but did not record Mr Parekh as the beneficial owner of his share. This was incorrect. The annual returns of Ridgeview stated that both Mr Parekh and Mr Garling were the beneficial owners of their shares in Ridgeview. However, Mr Garling conceded that Mr Parekh held his share in Ridgeview as a nominee for the Wright family. Therefore, the annual returns are incorrect at least so far as Mr Parekh is concerned. I consider that the annual returns are a neutral factor on the issue whether Mr Garling held his share in Ridgeview beneficially. 102 It is common ground that: (a) on or about 8 June 1993, MCO resolved to issue to Aloren NL 2,900,000 options to purchase shares ( MCO shares ) which expired on 30 June 1996; (b) in December 1995, Aloren NL exercised 2,000,000 of those options and the shares issued pursuant to the options were registered in the name of Ridgeview; (d) in mid 1996, there was a two for three bonus issue in respect of the MCO shares; (e) Ridgeview currently holds 51,666,666 fully paid MCO shares, having acquired some further shares since the initial allotment. 103 The bulk of the MCO shares acquired by Ridgeview in December 1995 arose from the sale of the Morning Star mine owned by Aloren NL. Mr Garling had no interest in Aloren NL. 104 Apart from the MCO shares, Ridgeview's only assets were mining tenements, acquired some years later, appurtenant to the Daisy Milano mine, which were included in the sale of that mine to Perilya. Mr Garling conceded that Ridgeview acquired those tenements as trustee for the Wright Family Investment Trust and, therefore, that the trust was activated in respect of at least those assets. This concession was an about face from the position adopted in a letter written by his former solicitors on 19 May 2008 to Mr Wright. 105 Mr Garling paid no money for his share in Ridgeview, provided no funds for Ridgeview to acquire the MCO shares and invested no funds in Ridgeview. 106 On 8 December 2005, before hostilities between the parties broke out, Mr Wright caused to be lodged with the Australian Securities and Investments Commission a form which recorded that Mr Garling and Mr Parekh ceased to be directors of Ridgeview on that date and that Mr Wright was appointed sole director. This was consistent with Mr Wright thinking he was master of the Ridgeview domain. However, there had been no process for removal of Mr Garling as a director. In 2008, after the parties fell out, Mr Garling brought proceedings to establish he was still a director, which Mr Wright conceded. 107 On 10 October 2007, after hostilities between the parties had broken out, Mr Parekh transferred his share in Ridgeview to another Wright family company. 108 According to Mr Garling's evidence in cross-examination, he has no assets of which he is the legal owner except for his one share in Ridgeview. 109 Mr Garling's written evidence as to why he held his share in Ridgeview beneficially was as follows. Following his negotiations on behalf of the Wrights in 1992 for the acquisition of the Morning Star mine, for which he was not paid, the subject of his interest in the project arose in discussions with Mr Wright and Mr Wright's father (now deceased) in which the father agreed with Mr Garling's proposition that "We can sort that out by issuing some shares in the company that ends up owning the mine". In early 1993 Mr Wright and he talked about obtaining a jointly owned corporate vehicle to reflect their shared ongoing interest in MCO after it bought the Morning Star Mine. They purchased Ridgeview as a shelf company. Equal shares were issued to Mr Parekh and him. Mr Wright said that Mr Parekh "will represent us in Ridgeview. He can hold our shares and he can act as director to protect our interest". That is a concession by Mr Garling that Mr Parekh was Mr Wright's nominee. 110 When asked in cross-examination how he came to be issued with a share in, and became a director of, Ridgeview, Mr Garling's evidence was somewhat different and rather vague. He said he believed it was in 1991 after a meeting with Mr Wright and Mr Parekh at a location which he could not recall and that the discussion concerned the need to have a joint vehicle in which Mr Wright's family had an interest and he had an interest to hold the shares resulting from the issue of options in MCO. He indicated that he was entitled to half the shares in Ridgeview because of services provided to the Wright family in setting up MCO. 111 Mr Wright's evidence was that Mr Garling's evidence is a fabrication and that he never had any such agreement with Mr Garling. 112 Mr Parekh's unchallenged evidence, which I accept, was that at the time he obtained Mr Garling's consent to act as a director of Ridgeview in 1993, he explained to Mr Garling the trust structure discussed with Mr Finney and Mr Wright. Between 1993 and the commencement of litigation with Mr Garling, he had a number of conversations with Mr Garling and in none of them did Mr Garling suggest he had a beneficial interest in Ridgeview. 113 Mr Garling does not dispute that the trust was created, that Ridgeview was appointed the trustee, and that the Wright interests provided the money for the MCO shares. 114 Both parties say that the MCO shares were acquired in December 1995 as the result of an arrangement in 1993. Mr Garling's version of the arrangement is that Ridgeview was set up to be the joint vehicle to house the joint interest of Mr Garling and Mr Wright in MCO. Mr Wright's version, which is consistent with the evidence of Messrs Finney and Parekh, is that Ridgeview was set up to act as a trustee. 115 Leaving aside the competing versions of Mr Garling and Mr Wright as to how Mr Garling got involved in Ridgeview, Mr Garling's defence is that although there was a plan in 1993 to house MCO's shares in Ridgeview as trustee, in December 1995 when Ridgeview obtained the MCO shares there was no evidence that it did so as trustee rather than for its own benefit. In other words, Mr Garling says that the trust was not activated. 116 Mr Garling's submission that the trust was not activated is mounted on the following considerations: (a) there is no evidence of beneficiaries having been nominated under the discretionary trust deed; (b) there were no tax returns or bank accounts or the like for Ridgeview between the time of establishment of the trust in 1993 and the acquisition of the MCO shares in 1995; (c) there was no written declaration by Ridgeview that it held the MCO shares in trust for the Wright family interests. This is in contrast to a written declaration by, and a letter from, Ridgeview in 2003 and 2004 that it held some of MCO shares in trust for others; (d) there is no evidence of activation of the trust of which Ridgeview was the trustee until Ridgeview acquired the mining tenements years after acquiring the MCO shares. The only evidence that those tenements were acquired on trust was Mr Garling's evidence in cross-examination. 117 I am not persuaded by the non-activation submission. The factors marshalled in aid of the submission are insufficiently weighty. The absence of a formal declaration or record that Ridgeview acquired the MCO shares in trust is also unsurprising. Ridgeview executed such documents when it held MCO shares for the benefit of third parties but it is unlikely that the Wright family itself would require such a document. It is common ground that the mining tenements were acquired in trust for the Wright interests, apparently without any such formal declaration or record. 118 For commercial reasons, a plan was proposed by Mr Finney at a meeting in 1993 with Mr Wright and Mr Parekh, and agreed at that time, for there to be a trustee company for the Wright family interests, and for Mr Garling and Mr Parekh to hold the shares in the trustee company and be its directors as nominees for Mr Wright. Formal documents to effect the plan were executed in 1993. Mr Garling was involved, as evidenced by his signature on the deed in which Ridgeview became the trustee – which he had forgotten until it was shown to him in cross-examination. Mr Parekh explained the plan to Mr Garling at the time that Mr Parekh obtained his consent to act as a director in 1993. Mr Garling contributed no funds to Ridgeview or toward the acquisition of the MCO shares. Mr Garling never told anyone that he held his share in Ridgeview beneficially until about mid 2008 after hostilities had broken out. On Mr Garling's case, Ridgeview, for its own benefit, exercised options given to it for no consideration of its own and acquired the shares for its own benefit in December 1995. It is difficult to see why it would have done that given the background trust arrangement. It is a comfortable inference that Ridgeview acquired the MCO shares as trustee for the Wright interests, as the plan contemplated. 119 Having regard to the whole of the other evidence, I prefer the evidence of Mr Wright as to the 1993 arrangement to that of Mr Garling. 120 For these reasons, I am satisfied that Ridgeview was set up to act, and did act, only as trustee for the Wright Family Investment Trust including in relation to holding MCO shares, and that Mr Garling held his share in Ridgeview on trust for Mr Wright. 121 Accordingly, I uphold Mr Wright's cross claim and propose to grant the relief that he seeks. ORDERS 122 The orders of the Court are as follows: (1) the first cross claim by Max Michael Garling is dismissed; (2) declaration that the shares held by Ridgeview Nominees Pty Ltd in Morning Star Gold NL are held on trust for the Wright Family Investment Trust; (3) order that Ridgeview Nominees Pty Ltd transfer its shares in Morning Star Gold NL to Write Family Investments Pty Ltd; (4) declaration that the share held by Max Michael Garling in Ridgeview Nominees Pty Ltd is held on trust for Raymond Francis Wright; (5) order that Max Michael Garling transfer his share in Ridgeview Nominees Pty Ltd to Raymond Francis Wright; (6) order Max Michael Garling to pay the other parties' costs of the proceedings; (7) the exhibits and the Court Book may be returned. 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.