Supreme Court New South Wales Medium Neutral Citation: King v Benecke [2013] NSWSC 568 Hearing dates: 6-10, 29 and 31 August, 13 December 2012 Decision date: 23 August 2013 Before: Harrison J Decision: 1. Verdict for the defendants. 2. Unless within 14 days I receive notice given to my Associate that either party wishes to contend for a different order, I will order that the plaintiff pay the defendants' costs. Catchwords: PROFESSIONAL NEGLIGENCE - plaintiff sues former solicitor - where plaintiff sought effective ownership and control of family farming and grazing business - where business shares were to be acquired by plaintiff from family members - whether solicitor was retained by plaintiff - where solicitor denied existence of retainer - no formal retainer - whether retainer implied by conduct of parties - where professional relationship between solicitor and plaintiff's family spanned generations - retainer existed - whether breach of retainer or duty of care - where solicitor advised parties on both sides of transaction - conflict of interest - where misuse of confidential information - where failure to advise client properly - breach of duty and retainer - causation - whether breaches disadvantaged plaintiff's negotiating position at mediation - whether breaches influenced final settlement sum offered - where plaintiff influenced by own conduct independent of defendant Legislation Cited: Civil Liability Act 2002 Corporations Act 2000 Cases Cited: ACN 070 037 579 Pty Ltd v Larvik Pty Ltd [2008] QCA 416 Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420 Astley v Austrust Limited [1999] HCA 6; (1999) 197 CLR 1 Colyer Fehr Tallow Pty Ltd v KNZ Australia Pty Ltd [2011] NSWSC 457 County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 Dominic v Riz [2009] NSWCA 216 Ermogeneous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; (1986) 160 CLR 1 Hendricks v McGeoch [2008] NSWCA 53 Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351 Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 McCrohon v Harith [2010] NSWCA 67 Monaghan Surveyors Pty Ltd v Stratford Glen-Avon Pty Ltd [2012] NSWCA 94 Pegrum v Fatharly (1996) 14 WAR 92 Poseidon Ltd & Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 Simmons v Story [2001] VSCA 187 State of New South Wales v Mikhael [2012] NSWCA 338 Steele v Marshan [2012] NSWCA 141 Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182 Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 Watson v Foxman (1995) 49 NSWLR 315 Category: Principal judgment Parties: George Berkeley Ewart King (Plaintiff) Ian John Benecke (Defendant) Representation: Counsel: D L Williams SC with T J Breakspear and M F Newton (Plaintiff) I Pike SC with J J Hutton (Defendant) Solicitors: Thompson Eslick Solicitors (Plaintiff) Yeldham Price O'Brien Lusk (Defendant) File Number(s): 2009/297857 Judgment 1HIS HONOUR: George King sues Ian Benecke and others for professional negligence in his capacity as his former solicitor. George King alleges that he retained Mr Benecke to act for him in the performance of legal work related to a series of transactions intended to give him effective ownership and control of the family farming and grazing business conducted on and from a property known as "Coombing Park" near Carcoar in the central west region of New South Wales. George King alleges that he was in effect lured to return to run the property by promises made to him by his father Berkeley King. His case is that he agreed with his father that he would return and conduct the family business, provided that he was able to acquire from his father and his uncle Peter King a large parcel of shares in a series of inter-related companies that owned or controlled the property. Mr Benecke was retained to give effect to that acquisition. 2George King alleges that Mr Benecke was negligent, and in breach of the terms of his retainer, in that he failed properly to give effect to the transactions leaving his father free to resile from the agreement and leaving George King without the benefit of the agreement. He further alleges that he was required in the circumstances to purchase the controlling interest that he expected to receive in accordance with the agreement with his father at a premium following a family mediation and settlement, instead of what would otherwise have been an acquisition on the previously negotiated and more beneficial terms. He contends that he was placed in a position of considerable disadvantage, and was thereby vulnerable, in the course of the negotiations that resulted in the settlement. George King alleges that those with whom he was required to deal exploited that vulnerability to his considerable financial disadvantage. George King looks to Mr Benecke for damages calculated as the difference between what he expected to pay and what he was forced to pay. 3The circumstances and events that give rise to that claim cover many years and are detailed and complex. Even though not all of the many complicated combinations of facts are equally relevant for present purposes, a proper understanding of at least the following matters is necessary. Introduction 4Coombing Park comprises approximately 3000 hectares and is currently run as an Angus cattle breeding operation. The King family, to the members of which I refer in more detail below, has held an interest in the property for six generations, dating back to George King's great great-grandfather in 1881. Since 1902 those interests have been held primarily by the Whitney Pastoral Company Pty Ltd, which was incorporated pursuant to the Whitney Estates Act 1902. The passing of interests in the property over successive generations has produced a relatively complex shareholding structure. Interests were held both personally and directly or indirectly by a number of different corporate entities and trusts. For ease of reference they will be referred to as follows: (a) "Whitney" referring to The Whitney Pastoral Co Pty Ltd. (b) "Esk" referring to Esk Pty Ltd. (c) "Somers" referring to Somers Investments Pty Ltd. (d) "Coombing Pastoral Co" referring to Coombing Pastoral Co Pty Ltd, a wholly owned subsidiary of Whitney. (e) "Weander" referring to the company known as Weander Pty Ltd, and after 18 June 2002 known as Deerslayer Pty Ltd. (f) "BKST" referring to the Berkeley King Share Trust, of which Weander was trustee until 8 January 2008. (g) "Charmdew" referring to Charmdew Pty Ltd, which was the trustee of a trust known as the Peter King Share Trust. (h) "Brumby Run" referring to Brumby Run Pty Ltd, which was the trustee of a trust known as the Brumby Trust. 5The shareholding structure as it existed in 1999 or thereabouts lies at the heart of issues that arise in this case. 6A majority of 65.71 percent of shares in Whitney was held by Somers. In 1996 Berkeley King, George King's father, Peter King, George King's uncle and Patricia Bellamy, George King's aunt, held the equity in Somers in one-third shares. Each of these three had inherited those shares from their mother Audrey Emmiline King following the death of her husband E S King in 1994. Audrey King and E S King were George King's grandparents. 7There were three classes of shares in Somers held as follows. First, 67,250 non-voting preference shares. Berkeley King/Weander owned 23,416 shares and Patricia Bellamy and Peter King/Charmdew respectively owned 21,917 each. Secondly, 45 ordinary equity shares of which Berkeley King and his brother and sister held 15 shares each. Thirdly, 300 preferred ordinary voting shares. Berkeley King owned one share and Weander owned 99. Patricia Bellamy owned 100 shares. Peter King owned one share and Charmdew owned 99. As at 1999, these interests in Somers amounted to approximately 22 percent of Whitney. Berkeley King held 135 shares in Esk, Peter King held 70 in his name and 23 were held by Charmdew and Patricia Bellamy held 147 shares. 8George King was born in 1973. After leaving school he worked in rural operations in the Kimberley and the Riverina. Central to his case in these proceedings are the agreements that George King says he reached with his father and uncle Peter to cease working off farm and to return to manage Coombing Park. He asserts that such agreements were made in two stages in 1996 and 1999. 9George King says that in 1996 he agreed to return to manage Coombing Park on the conditions that the property would be kept intact and not sold down and that he would be given ownership and control so that his future was certain. His father agreed that George King would inherit all of his shares in Somers and his uncle agreed that George King would inherit all of his shares in Somers, Whitney and Esk Pty Ltd. Thereafter George King returned to Coombing Park and assumed the day-to-day management of the property. In March 1997 he was appointed as a director of Whitney. 10In 1997 Patricia Bellamy began negotiations to sell her interests in Somers, Whitney and Esk. Berkeley King wanted at that time to dispose of some of Coombing Park's land and to use the proceeds to purchase her interest. George King held the view that reducing the size of the property would adversely affect its viability. He felt that his father was resiling from the agreement that they had earlier made to keep the property intact. George King told his father that if Coombing Park was to be sold down, he would leave and pursue farming interests elsewhere. 11Peter King advised George King that if he left Coombing Park then he would leave his shares to George King's cousin David Bellamy, the son of Patricia Bellamy. If that were to occur, David Bellamy and his mother would together have a controlling majority interest. The King side of the family would be left with Berkeley King's minority interest in Coombing Park. 12George King therefore set about negotiating an arrangement whereby he could secure long term control in order to prevent the piecemeal sale of Coombing Park and to prevent the Bellamy side of the family gaining control. His wish was that he should secure his own future and retain Coombing Park with the Kings for generations to follow. 13Over a number of months in 1999 George King negotiated with his parents on the terms upon which this could be achieved. It is George King's case that for him then to agree to stay at Coombing Park, his future had to be secure. That translated in his terms to the need for an enforceable agreement that would prevent his father later changing his mind and selling off the land. George King alleges that the negotiations culminated in an agreement for the transfer of shares from his father to him, which is described in the amended statement of claim as the Berkeley Transaction. Berkeley King allegedly agreed to transfer all of the shares held or controlled by him in Somers to George King, to resign as the chief executive officer of Whitney and to have George King appointed as managing director. 14At the time of the negotiation of the Berkeley Transaction, Berkeley King also held or controlled 135 shares in Esk, representing 36 percent of its issued capital, as well as a number of shares directly in Whitney amounting to approximately four percent of its issued capital. These are referred to as the Berkeley Minority Interests. 15As part of the Berkeley Transaction, George King agreed that at an appropriate time he would negotiate to purchase the Berkeley Minority Interests for "a fair value". The proceeds of that transaction could then be utilised by Berkeley King to provide for George King's two sisters Kristen King and Katie King as part of their inheritance following Berkeley King's death. George King also understood that his sisters would inherit their father's non-Coombing Park assets, including a substantial share portfolio. 16Because Berkeley King held only a one-third interest in Somers, the Berkeley Transaction was not alone sufficient to provide George King with the security or certainty that he required. Each of his uncle Peter King and his aunt Patricia Bellamy held identical interests. Accordingly, in the same period during which the Berkeley Transaction was negotiated, George King also negotiated terms with Peter King. This is referred to in the amended statement of claim as the Peter Transaction. 17George King alleges that pursuant to the Peter Transaction his uncle agreed to sell him all of the shares that Peter King held or controlled in Somers, Whitney and Esk for a consideration of $500,000, funded by a loan from Peter King. George King was required to repay the loan in amounts sufficient to support his uncle's living costs. The balance of the debt outstanding at Peter King's death was to be forgiven. 18These transactions were both negotiated and documented with the professional assistance of Mr Benecke during 2000 and 2001. George King alleges that Mr Benecke was negligent in respect of both transactions in ways that are referred to in detail below. 19Garland Hawthorn Brahe or its predecessors have acted for both sides of George King's family for three generations. George King first met Mr Benecke in the early 1980s when he was still in primary school. The professional relationship with George King commenced when he was 24 in about 1997, shortly after he returned to manage Coombing Park. During that period, Mr Benecke gave legal advice to George King on various issues concerning the property. 20From about September 1999, Mr Benecke was retained to act for George King with respect to the negotiations for the acquisition of Patricia Bellamy's minority holding. That negotiation ultimately developed into a protracted dispute that was litigated in this Court between 2003 and 2006 when it was settled. Mr Benecke acted for George King throughout that period. 21Mr Benecke prepared the share transfers for the Berkeley Transaction and the loan agreement, deed of release and forgiveness of debt and share transfers for the Peter Transaction. George King contends that he had a retainer with Mr Benecke in respect of both transactions and that he was given advice concerning each of them. Mr Benecke has admitted that there was a retainer with George King in respect of the Peter Transaction and initially, although no longer, contended that the retainer was limited to the preparation of the documentation. Part of that transaction involved the transfer of Peter King's interests in Somers, Whitney and Esk to George King. Mr Benecke does not admit that he gave any advice to George King about the implementation of that transaction. 22Mr Benecke denies the existence of any retainer with George King with respect to the Berkeley Transaction or that he gave any advice concerning it. He contends on the contrary that his retainer was from Berkeley King in respect of the Berkley Transaction and that George King was apparently unrepresented. Background 23The parties do not entirely agree about the events that give rise to these proceedings or by inference to the preceding summary of George King's case. However, George King maintains that the evidence establishes the following chronology. Events occurring before 1999 24Berkeley King's Somers shares were issued to him on 15 July 1960, well before the introduction of capital gains tax. On 7 December 1995, the BKST was settled by deed of trust and Weander was appointed as its trustee. The BKST was established to receive shares previously owned by George King's grandmother that were being given to Berkeley King. The BKST was made a discretionary trust, of which Berkeley King and Penny King ("first corpus beneficiaries") and their children/spouses and grandchildren/spouses ("second corpus beneficiaries"/"alternate corpus beneficiaries") were made the objects. Berkeley King was given power under the deed to appoint or to remove the trustee. 25In 1996, George King was living and working at a merino stud in the Riverina. He returned to live at Coombing Park in about December 1996 and took over management of the property following discussions with his father and Peter King. As a result of these discussions, an oral agreement was reached with them that if George King returned to Coombing Park to take up the position of manager, Berkeley King would leave his Somers shares to George King under his will, and Peter King promised that he would leave his Somers shares to George King under his will 26On 5 March 1997, it was resolved at an extraordinary general meeting of the members of Whitney to appoint George King a director. The minutes noted that George King was then the manager of Coombing Park, the principal asset of Whitney. Events in 1999 27By 1999, George King's aunt Patricia Bellamy had been negotiating for some time to sell her interests in the family companies. During that year, Berkeley King informed George King that he wanted to sell a parcel of land held by Whitney known as Gobabla and use the proceeds to purchase shares from his sister and cause Esk to sell Coombing West. George King was concerned that a sale of Coombing West would affect the viability of the business of Coombing Park and he expressed that concern to his father, indicating that he would leave if a sale were to take place. 28George King also had discussions with Peter King at this time. He indicated that if George King did not continue managing Coombing Park, he would leave his shares to David Bellamy. A consequence of this would be that control of Somers, and thus Whitney, would thereafter rest with the Bellamy side of the family. 29In the first half of 1999, George King had a number of conversations with his parents about this. On 15 July 1999, he wrote a letter to them expressing concern that he did not have control over decisions that were being made in relation to Coombing Park. The letter states, among other things: "What I am asking is for you both to decide what you want to do here. Accumulate wealth or distribute wealth. Dad, you have always said I should only come here on my conditions. It's a bit late now I'm already here. I hope I wouldn't be the last person to jump off a burning ship but I don't think it would be sensible for me to try and save the ship while fires are being lit quicker than they can be put out and I am told I am not allowed to put them out..." 30Negotiations followed thereafter about whether George King would remain at Coombing Park. In early August 1999, an oral agreement was reached between George King and his father which included promises that his father would transfer his Somers shares to George King, thereby giving him an effective 22 percent interest in Whitney and that he would resign as managing director of Whitney to make way for his son. That conversation was in the following terms: Berkeley: "I will transfer my Somers shares to you and will resign as CEO to make way for you to be Managing Director. You will be the majority shareholder. I would prefer you to shake a warm hand instead of a cold one. But I expect you to pay fair value for my remaining shares in WPC and Esk." George: "I agree to this as long as I am not asked to buy out the shares at a time or for an amount that will compromise the business." 31Pursuant to the oral agreement between George King and his father, Berkeley King wrote a letter on 6 August 1999 to the secretary of Whitney tendering his immediate resignation as its "CEO". That was subsequently confirmed at a meeting of directors of Whitney on 11 December 1999, at which it was resolved to accept the resignation of Berkeley King as managing director and to appoint George King to that office, with no change to his then current terms and conditions of employment. 32Around the middle of 1999, George King and Peter King also discussed George's future at Coombing Park. His uncle Peter indicated that he would sell his shares to George King if Berkeley King's Somers shares were also transferred to George, but on condition that George King kept Coombing Park and its history intact. Then from early September 1999, George King also began negotiating to purchase Patricia Bellamy's shares after her solicitors sounded out Mr Benecke about whether any family members were interested in buying her holdings. Mr Benecke was involved in the negotiation, and on 6 October 1999 he opened a file in the matter with George King as the client. 33Mr Benecke had obviously been acting for George King even before then. The relevant events included the following. On about 2 September 1999, Mr Benecke received a letter of that date from Colin Skelton of Hardings Lawyers stating that they acted on behalf of Patricia Bellamy. The letter said that Hardings had written to Berkeley King on 8 January 1999, requesting that he consider the possibility of purchasing some, if not all, of his sister's shares in Whitney, Somers, Esk and Coombing Pastoral Co, and that Berkeley King had responded by saying that he was not in a position to make an offer. Hardings said they were instructed to advise of Patricia Bellamy's intention to sell her shares and that she would prefer them to be sold to family members. They stated they were instructed to advise of the intended sale so that Berkeley King and other family members could consider the matter. 34On 3 September 1999, Mr Benecke forwarded a copy of the Hardings letter to George King and referred to a telephone discussion with him. The letter stated, "No doubt you will give the matter some consideration". On 10 September 1999 Mr Benecke and George King discussed a proposed purchase of Patricia Bellamy's shares, including possible terms, purchase price and valuation. On about 30 September 1999, Mr Benecke received a letter from George King setting out the terms and conditions on which he would purchase Patricia Bellamy's shares in Somers, Whitney and Esk. It proposed that the purchase price would be payable over ten years, with the writer "to have effective ownership of shares from beginning of contract". The letter further stated, "There would be very little interest in Patricia's minority shareholding in a private company outside the existing majority shareholders" and that "[Berkeley King] and [Peter King] are not interested in increasing their shareholding". 35On 5 October 1999, Mr Benecke prepared a draft letter of offer to Patricia Bellamy's solicitors and faxed it to George King for instructions. The draft stated that neither Berkeley King nor Peter King was interested in increasing his shareholdings, but that Mr Benecke was instructed by George King to put an offer to Patricia Bellamy. The following day Mr Benecke opened a file for George King as his client in relation to his proposed purchase of Patricia Bellamy's shares in Whitney. On 7 October 1999, Mr Benecke sent a letter to Hardings containing an offer by George King to purchase his aunt's shares. The letter was in the form of the draft previously sent to George King for instructions two days earlier. Events in 2000 36In 2000, George King continued to negotiate to acquire Patricia Bellamy's shares, including her one-third interest in Somers. This is evidenced by a Garland Hawthorn Brahe tax invoice addressed to George King dated 28 June 2000, for work done in the period September 1999 to June 2000 in relation to "Proposed Acquisition of Equity/Shareholding in [Whitney] from Mrs P Bellamy". In about mid-2000, further steps were taken in the unfolding of the Berkeley Transaction and the Peter Transaction, the essential features of which, intended to give George King a two-thirds ownership of Somers, having been orally agreed in about mid-1999. 37In mid-2000 George King was informed by his father that some of the shares George King understood to be held by his father were in fact held in a trust of which Weander was the trustee. Berkeley King informed George King that he would transfer three of the four shares in Weander to him, thereby giving George King control of the trust (being the BKST). George King says he asked Mr Benecke to prepare documents for the transfer of Peter King's shares to him. No mention of the power to remove or to appoint a new trustee would appear to have been considered or discussed at this time. 38These events were confirmed by a letter dated 17 July 2000 from George King to Mr Benecke that included the following: "Could you please contact my uncle Fr. Peter King on 02 6892 1074 to obtain instructions for the conditions he desires in order to hand over control of Charmdew Pty Ltd to the writer. My father has indicated that he will follow the same steps to hand over his control of Weander Pty Ltd." The letter also stated that it enclosed a trust document for Charmdew, which was said to be "verbatim of the Weander Pty Ltd trust document". 39On 25 July 2000, Mr Benecke phoned George King and made a file note stating "re: Peter K: Tfr of shares to George". The same day, Mr Benecke also spoke by phone to Peter King. Mr Benecke's file note of that call appears to contain details of Charmdew's shareholdings in Esk, Whitney and Somers as well as instructions to Mr Benecke to prepare an authority and direction. 40On 25 July 2000, Peter King also wrote to Mr Benecke asking him to investigate the implications of transferring Charmdew's interest in Whitney to his nephew, on condition of receiving some "honour or obligation document" from George King to "ensure my long term financial security". That letter indicated that Mr Benecke held the trust deed for the trust of which Charmdew was trustee. Peter King also added a note that he thought what he was asking for only applied to "his" voting shares in Somers. 41On 28 July 2000, Berkeley King left a telephone message with Mr Benecke regarding a meeting between them scheduled for that morning. Berkeley King said that he had asked his son to ask Mr Benecke some questions regarding Berkeley King's affairs and that it was okay for Mr Benecke to talk to George King about them. George King met Mr Benecke at his office that day. Peter King says that he had conversations with both Mr Benecke and George King the same day and was informed that he understood they were calling from Mr Benecke's office. Peter King discussed the Charmdew trust arrangements and a transfer of shares to George King with Mr Benecke. Both Peter King and George King gave evidence that Mr Benecke advised that George was not a beneficiary of the Peter King Share Trust, because he held an office in relation to the Trust. This was intended by neither of them but instead frustrated their longstanding intention that George King would succeed to his uncle's shares. 42George King and Mr Benecke both agree that in the course of the meeting, Mr Benecke prepared the following documents pertaining to these matters. First, transfers to George King of shares that Charmdew held in Somers, Whitney and Esk. Mr Benecke's evidence was that he prepared these share transfers at the meeting on 28 July 2000. Secondly, a form of "Irrevocable Request and Direction to Trustee" from Peter King to the directors of Charmdew as trustee for the Peter King Share Trust with reference to an in specie distribution of the trust's shares in Esk and Whitney and preferred ordinary and preference shares in Somers. The document indicated that Peter King's stated wish, for an irrevocable instruction and direction, was for those shares to be distributed in favour of his nephew notwithstanding that George King was then a director of Charmdew. George King drove straight from the meeting to Lake Cargelligo, a drive of eight or nine hours from Sydney, to have his uncle sign the documents prepared by Mr Benecke. 43Around this time, Mr Benecke evidently spoke with GFB Peacocke & Co, accountants, because by letter dated 28 July 2000 they wrote to Mr Benecke "as instructed" and enclosed copies of the Charmdew Annual Return and the Weander Trust Deed. Mr Benecke agrees that at this time his firm accepted a retainer to act for George King on the Peter Transaction. Mr Benecke's 25 November 2011 affidavit includes the following: "In about July 2000 I was retained by the plaintiff (George) in respect of the sale and transfer to him of shares held by Peter King (Peter) in Whitney Pastoral Company Pty Limited (WPC), Esk Pty Limited (Esk) and Somers Investments Pty Limited (Somers Investments). My work in respect of this retainer was carried out also under GHB file number 210123". 44Meanwhile, Mr Benecke continued to act for George King in relation to his negotiations with Patricia Bellamy. George King and Mr Benecke communicated in July and August 2000 following approaches made by Patricia Bellamy's accountant and intermediary, John Knox. On 21 August 2000 Mr Benecke forwarded a letter to George King received from Mr Knox setting out a proposal for George King's acquisition of Patricia Bellamy's shareholding. A meeting was arranged between Mr Benecke and George King for 30 August 2000. Mr Benecke made a file note stating "Geo King avail Wednesday 30 August only". 45On 29 August 2000, Mr Benecke wrote a letter to George King that, among other things, reported on a discussion with Mr Knox. Mr Benecke wrote that Mr Knox had said that Patricia Bellamy was seeking at least some cash for the sale of her shares, suggested that George King could enlist the help of his father and uncle, and that Gobabla may not be vital to the business and could generate capital if sold. Mr Benecke said that with George King's permission, he would provide a copy of his letter to Berkeley King. 46On the same day George King sent a fax of a draft letter to Mr Knox to Mr Benecke stating that the terms and conditions proposed by Patricia Bellamy were not achievable or realistic, and rejecting a sale of Gobabla in order to obtain capital. That draft letter concluded by saying: "It would be inappropriate for Berkeley and Peter King to provide guarantees. The writer now controls both their shareholdings." 47On 29 August 2000, Mr Benecke had a meeting with Berkeley King at which there was discussion about the shares to be transferred to George King. Mr Benecke's file note of an attendance dated 29 August 2000, states, among other things, "Weander P/L → control to go to George". Berkeley King is said to "confirm happy to do this". On 30 August 2000 at 7:52 am, George King sent a fax to Mr Benecke of a further copy of his draft letter to Mr Knox dated 29 August 2000. 48George King's evidence is that he had a meeting this day with Mr Benecke and asked him to explain the share structure relevant to Berkeley King's Somers shares. Mr Benecke denies that this meeting took place. George King's evidence was originally that this meeting occurred in late 2000. However, in his 15 February 2012 affidavit at [14], George King says by reference to his diary that he believes the meeting was 30 August 2000. His diary entry refers to a meeting with Mr Benecke on 30 August 2000 in Sydney. 49At [72] of his 31 August 2010 affidavit, George King says that at the 30 August 2000 meeting, Mr Benecke said to him: "...You will have full and total control of all the shares in the Berkeley King Share Trust as long as you own the majority of the shares in Weander. Also due to the stamp duty costs it would be better for Berkeley to hold the 15 Somers equity shares in trust for you and leave them in his will as stamp duty could be as much as $90,000". 50On 6 September 2000, Mr Benecke phoned George King and advised him that it was okay to send the 29 August 2000 draft letter to Mr Knox but suggested that he leave off the last paragraph, cited at [46] above. 51On 22 November 2000, Mr Benecke sent a letter to Berkeley King referring to a "meeting during late August" and a "telephone discussion of yesterday" which enclosed unsigned transfers of two shares in Weander to George King from his father and one from his mother. The letter also enclosed for signing forms of resignation by Penny King as a Weander director and secretary and consent by George King to appointment as a Weander director and secretary. Lastly, the letter enclosed for signing a statutory declaration in relation to the shares structure and asset value of Weander. Mr Benecke stated in the letter: "Following the stamping and registration of these Share Transfers, George will become the holder of seventy five per cent (75%) (three of a total of four shares) in the Company and will thus be in effective control of Weander, the appointed trustee and controller of the Berkeley King Share Trust. I note this is in line with your wishes and instructions to me." 52On 4 December 2000, George King again wrote to Mr Benecke referring to a telephone conversation of that day about the valuation of Patricia Bellamy's shareholding in Whitney and some concerns he had about the negotiations. He stated that he had very little experience in the area and was relying heavily on Mr Benecke's advice. 53The following day George King and Peter King orally agreed that shares owned or controlled by Peter King would be sold to George King for $500,000, with vendor finance for that sum repayable at $10,000 per annum subject to increases in the Consumer Price Index and with the loan to be forgiven upon Peter King's death. Peter King recalled an agreement to this effect, although he thought that it was reached in about April 2001. He also understood at about December 2000 that Berkeley King was transferring shares to George King. 54A letter dated 6 December 2000 from George King to Mr Benecke confirms the timing of the agreement between George King and his uncle. That letter stated that Peter King had agreed to transfer Charmdew's shares to his nephew on conditions consistent with those recalled by both George King and Peter King, and requesting advice as to whether it would be appropriate to transfer part of the shares held in Peter King's name at the same time. 55On 7 December 2000, Berkeley and Penny King signed forms for the transfer of three of their four shares in Weander to their son. The transfers were stamped on 11 December 2000. Early in the New Year, Mr Benecke also prepared papers for the appointment of George King, and resignation of Penny King, as directors of Weander. Events in 2001 56By the beginning of 2001, George King had secured control of Weander and of the shares held in the BKST. George King's ultimate objective of acquiring control of Somers, and thus of Whitney, still required him to secure control of Peter King's shares. This process continued in the early part of 2001. 57On 23 January 2001, George King and Mr Benecke had a telephone conversation. Mr Benecke made a file note about it. Although the file note is dated 23 February 2001, Mr Benecke agreed that it was recording a conversation on 23 January 2001. It records instructions from George King that "his uncle Peter wishes to transfer/sell his shares in Coombing group/WPC to him". 58On 29 January 2001, George King and Mr Benecke spoke by telephone. Mr Benecke's file note of the call records discussions with George King to the effect that Peter King's shares were to be sold to Weander in lieu of George King, with $10,000 payable per annum as a capital sum. The file note states: "Peter agrees (doesn't want anymore!) even tho worth much more". The notion of transferring Peter King's shares into Weander therefore arose very shortly after George King obtained control of that company, which in turn had occurred after George King received advice from Mr Benecke about the advantages of holding assets in the BKST. 59George King and Mr Benecke also met on 29 January 2001. Mr Benecke made a further file note on that day in which the following matters are recorded. First, all of Peter King's and Charmdew's shares in Esk, Somers and Whitney were to be sold or transferred to Weander as trustee for the BKST. Secondly, therefore, the signed transfers to George King personally were not to be executed. Thirdly, George King was to become a director and secretary of Weander as trustee for the BKST. Fourthly, the BKST was to remain the same, with no change in beneficiaries, who were noted as being Berkeley and Penny King and their children. Fifthly, Berkeley King was to remain as the principal/first beneficiary. Finally, George King was to hold the majority of shares in Weander and "control trustee action/distribution". 60On or about 29 January 2001, Mr Benecke also put a line through the share transfers of Peter King's shares prepared in July 2000 and noted on the forms that transfers to George King were not being proceeded with. Mr Benecke thereafter attended to putting the Peter Transaction into effect over the course of several months. The following events are material. 61On 29 February 2001, Peter King wrote to Mr Benecke explaining what he had agreed with George King and asking for Mr Benecke's advice and/or suggestion about some matters. On 1 March 2001, Peter King asked George King to have Mr Benecke provide a "plain English" explanation about the arrangements for the transfer of his shares. The same day, George King sent a facsimile letter to Mr Benecke in relation to the proposed sale of Peter King's shares, stating that his uncle wished to receive a letter from Mr Benecke "in very plain English to explain that his intentions are being suitabl[y] attended to". 62On 1 March 2001 Mr Benecke asked Peter King to send him a copy of his will. 63On 5 March 2001 George King sent Mr Benecke a further facsimile letter in similar terms to the one dated 1 March 2001, but with the addition of some further statements about Peter King's intentions, which were said to involve the following things: (i) transferring shares from Charmdew to Weander as the Charmdew trust document could not favour George King; (ii) a change of name for Weander in the near future; (iii) George King having control of Weander; (iv) the setting up of a loan account between George King and Peter King (or Peter's chosen representative) with capital only payments of $10,000 per annum until the loan amount was retired or Peter's death; (v) the loan agreement giving Peter King security over the sale of his shares; (vi) the trust continuing to deal with Peter King if something unforeseen happened to George King; (vii) the transfer of all of Peter King's shares such that there would be no need to make provision for them in his will; and (viii) George King undertaking to ensure that Peter King would be suitably housed in his retirement. 64On 8 March 2001, Mr Benecke advised George King by telephone that Peter King should obtain independent legal advice. The following day Mr Benecke sent a letter to George King attaching draft share transfers for the transfer of his uncle's shares to Weander. The letter also referred to the desirability of Peter King taking separate financial and/or legal advice. 65On 12 March 2001 George King received correspondence from Mr Benecke, including a letter for Peter King to sign. George King and Mr Benecke had two telephone conversations in the course of that morning. Later that day, George King asked his uncle to write out the letter in his own handwriting. Peter King's letter noted Mr Benecke's concern that he take independent financial or legal advice and stated that he was not concerned to do so as he was giving George King the shares in his will in any event. Peter King asked Mr Benecke to send a document stating that George King will pay him $10,000 per annum. Peter King also signed forms that day for the transfer of his shares to Weander. 66The next day Mr Benecke wrote to George King requesting financial statements of Whitney, Somers and Esk for the year ended 30 June 2000 for the purposes of stamp duty assessment on the transfers of Peter King's shares. On 15 March 2001 Mr Benecke wrote to George King enclosing a revised Loan Agreement and Deed of Forgiveness of Debt. Mr Benecke repeated his recommendation that Peter King take independent legal advice. 67On 16 March 2001 Mr Benecke wrote to George King seeking financial statements for the year ending 30 June 2000 and an original valuation of Boyce Chartered Accountants. Mr Benecke said the Office of State Revenue would require the material, whether for share transfers from Peter King or Patricia Bellamy. On 26 March 2001 Mr Benecke sent George King final versions of the Loan Agreement and Deed of Forgiveness of Debt for signing. On 6 April 2001 Mr Benecke advised George King that he was preparing the necessary statements for submission to the Office of State Revenue for assessment of stamp duty. 68On 9 April 2001 George King and his uncle entered into a Loan Agreement and Deed of Forgiveness of Debt. In May 2001, Peter King told George King that he wished to change the name of Weander to prove that George King controlled the company and that his father did not. In the event, the forms for the transfer of Peter King's shares to Weander were signed and given three different dates. Each of them was also lodged with the Office of State Revenue for assessment of stamp duty and assessed with nominal duty. 69The form for the transfer of shares in Esk and Whitney was dated 12 May 2001. In May 2001, those share transfers were assessed for duty: $63 for the shares in Esk and $187.80 for the shares in Whitney. The form for the transfer of Somers preference and ordinary shares was dated 22 August 2001. On 11 September 2001, those share transfers were assessed for stamp duty at $262. 70The form for the transfer of Peter King's 15 equity shares in Somers was dated 1 October 2001. It was lodged for stamp duty on 27 November 2001 and was assessed for stamp duty at $3,123.45. The lodgement of the form followed the compilation of supporting material by Mr Benecke, including a statutory declaration dated 20 October 2001 prepared by him and signed by Berkeley King. Mr Benecke accepted in the course of his cross-examination that at that time he considered the terms of that statutory declaration to be wholly correct: "Q. You say in the second last paragraph, 'I consider the terms of the enclosed statutory declaration by your father to be wholly correct'? A. I do. Q. May we take it that you believed that statement to be true and correct at the time you made it? A. Yes, yes." Events from 2002 to the end of 2005 71By the beginning of 2002, Peter King's shares had been transferred to Weander, providing George King with majority control. George King believed that Mr Benecke's apparent implementation of the Berkeley Transaction and the Peter Transaction had given him ownership and control of Whitney. As a layperson, George King understandably believed that his control of the trustee put him in a secure position with respect to the trust assets. George King said the following in the course of his cross-examination: "Q. You understood that Weander was the trustee, correct? A. Yes. Q. And that it was a trust, as you understood it like all other trusts whereby there was a trustee, that was Weander, and beneficiaries? A. Yes. I had no idea the two could be separated. Q. What do you mean by that, Mr King? A. I understood at that stage that, right up until 2007, that a trust and the trustee were married together, they couldn't be separated." 72Significantly, Mr Benecke also understood that George King believed at this time that he controlled Whitney. He gave the following evidence: "Q. It was clear to you, I suggest, that George King understood from at least 2000 that his rights in relation to Weander meant that he had effective majority ownership and control of Whitney Pastoral Company? A. Well, I can't speak for George's state of mind but I believe George would have been of the opinion that if he, as the majority shareholder of the trustee company, vested that trust or determined that trust he could vest it wholly in favour of himself. Q. It was your observation as a result of your dealings with him over those years that he believed that he controlled Whitney Pastoral Company. That's right, isn't it? A. I would agree with that. Had he acquired his uncle's shares by then? I just can't recall. Assuming he had acquired his uncle's shares, yes." 73On 18 June 2002, Weander's name was changed from Weander Pty Ltd to Deerslayer Pty Ltd. This was an agreed step in the Peter Transaction. It occurred on George King's instructions and was not done earlier (as contemplated in the Peter Transaction) on Mr Benecke's advice. 74Patricia Bellamy's shares remained an issue in this period. In about 2003, she commenced proceedings in this Court alleging oppression of the minority shareholders in Whitney, Somers and Esk and seeking orders that the companies be wound up. Garland Hawthorn Brahe acted in those proceedings. On 7 August 2003, George King wrote to Mr Benecke's partner, Brenden Miller, in relation to the litigation with his aunt. He commenced the letter by asking whether it was possible to have the action directed at him on the basis that: "... the First Defendant [my father] is not the majority shareholder of the group. I own and control Deerslayer Pty Limited, the parent company". 75It is evident that Mr Benecke also erroneously believed that George King had control of Whitney. This would appear to follow from the fact that on 5 December 2003 he wrote a letter to Champions, chartered accountants, stating that George King was seeking accounting, financial and tax management advice in relation to the Whitney Pastoral Co Group's business and affairs. The letter stated that George King was the Group Managing Director and the "controller of the common shareholder, Weander". Moreover, on 2 June 2004, Mr Benecke wrote a letter to similar effect to Allworths, chartered accountants, repeating that George King was the Group Managing Director and the "controller of the common shareholder, Weander". Settlement with Patricia Bellamy in 2006 76In 2006, the long-running dispute with Patricia Bellamy was concluded. On 16 March 2006, a Deed of Release was finalised in settlement of the Patricia Bellamy's Supreme Court proceedings. The deed provided for the transfer of shares by Patricia Bellamy: her shares in Somers were extinguished and Whitney purchased her shares in Esk. This was a decision taken on 23 June 2006. She received a water licence and a payment of $125,000 for her shares. 77The effect of these dealings with Patricia Bellamy's shares was that as at 23 June 2006, the group ownership structure changed. As a consequence of these changes, the Minority Shares that George King was obliged to purchase pursuant to the Berkeley Transaction represented different percentages of the issued capital in the relevant companies. These percentages became as follows: (a) 135 shares in Esk, representing 36 percent of the shares in that company; and (b) 44,713 shares representing approximately 6.14 percent of the shares in Whitney. (After the extinguishment of Patricia Bellamy's 19,724 shares in Whitney, there were 728,481 shares on issue in it). 78George King was still labouring under the misapprehension at the time of the settlement with Patricia Bellamy, and indeed after its completion, that he owned and controlled Weander and, by that means, Somers and Whitney. That is supported by his anticipation that Patricia Bellamy's shares would be transferred to Weander and his expressed concern that the structuring of the settlement would not affect his position of control. 79On 20 March 2006 George King sent an email to Mr Benecke requesting that they discuss the transfer of Patricia Bellamy's shareholding in Whitney, Somers and Esk to Weander, and issues concerning other shareholders. The email attached a schedule of various shareholdings and made reference to a payout of minority shareholders. 80On 24 March 2006, George King emailed Mr Benecke again and attached a schedule of shareholder movements from 1998 to 2006. This email stated: "Will need the [Patricia] shares into [Weander] to keep everything together - before the next generation split happens". 81On 20 July 2006 George King wrote to Mr Benecke referring to his effectively having "control of the Group". He asked Mr Benecke about the stamp duty implications of transferring Patricia Bellamy's shares to Weander and also whether her shares in Somers could be extinguished without affecting his "ownership or control position". Negotiations with Berkeley King in 2006 82The issue of George King's purchase of the Minority Shares arose at the time of the settlement of the dispute with his aunt. Around March 2006 when the settlement with her was concluded, Berkeley King said to George King words the effect of, "we need to get some money out for the girls so we can give them a start". George King understood that to mean that his father wanted him to purchase his remaining shares in Whitney and Esk. This request came earlier than George King had expected and during a difficult time due to drought conditions at Coombing Park. 83Between March and July 2006 there were a series of discussions amongst the family members. George King made a number of offers, none of which was accepted. For example, in March he made an oral offer to purchase the Minority Shares. He offered $572,720 based on what had been paid to Patricia Bellamy and what he thought was affordable given the drought. He based the offer on calculations that are in evidence. Then in about May, George King made a second offer of $643,604 to the family. That figure was based on calculations that are also in evidence. The offer was rejected. Berkeley King made a counter offer that his son should sell Gobabla and apply the net proceeds (after a fair distribution of debt) to the purchase of the Minority Shares. 84On 22 June 2006, there was a family meeting attended by a facilitator named Michael Adamedes at which George King made a third offer to his family to pay them $1,294,702 on terms involving the sale of a parcel of land known as the Coombing South scrub blocks. As far as George King was concerned, that offer was accepted at that meeting. This appears from letters George King wrote to Mr Benecke on 20 July 2006 and to Mr Adamedes on the following day. He said to Mr Benecke that the family resiled from what he understood to be an agreement while he was on holiday for two weeks in early July 2006. 85A further family meeting with Mr Adamedes was arranged for 31 July 2006. In advance of that meeting, members of the family sent each other letters and position statements. At the meeting, Berkeley King told George King that he wanted $2M for his shares and that the funds could be obtained by selling Coombing South. 86Following that meeting George King made a further offer to pay his family $1,761,412. He regarded the offer as involving a 50 percent premium above the price paid for Patricia Bellamy's shares. This offer was only made after George King began to become concerned about his father's intentions regarding his father's Somers shares. 87Agreement was not reached. It is evident from the correspondence that passed between George King and his parents and Mr Adamedes that George King considered the amounts that his father wanted for the Minority Shares to be above their "fair value". It is also clear from documents prepared by George King at this time that he proceeded in this series of negotiations upon the footing that he was negotiating to acquire minority interests, with him holding or controlling approximately 87.4 percent of the Whitney Group. 88This inability to reach agreement as to the price to be paid for the Minority Shares caused Berkeley King to apply pressure to his son to increase his offers. That pressure consisted of statements as to the future course with respect to Berkeley King's Somers shares. George King therefore realised or suspected that his father's promise in relation to them may not be as secure as he had been led to understand. That situation would not have arisen but for the fact that his father's Somers shares had not been transferred to George King but had only been dealt with as part of his father's will. 89The 22 June 2006 letter George King wrote to his parents explained how he saw the then current position. The terms of that letter are instructive, and are as follows: "Dear Dad, Mum, Katie and Shish, It seems that I am in a position that I can only lose. If I destroy the economy of scale of the company and spend the rest of my life working in a failing business I will be resentful, if I don't pay the girls their perceived value they will be resentful, if I pay the girls their actual share value they will feel hard done by, if I do nothing I will be also resented. I wrote a letter to Mum & Dad in early 1999 outlining in detail my concerns for the direction we were heading and my perceived consequences of that direction. I said if that was the direction that the company was heading I would walk away and pursue a career on my own. The result of that was that if I was to put my career into WPC I would have to have control of my own destiny. Peter agreed to sell his shares to me on the condition BK transferred his shares to me so I effectively had control of the Group. BK transferred 24.5% of the group to me via 12,725 shares in WPC and 170,936 Somers shares. The Somers portion included voting shares. I amalgamated this shareholding with the shares I purchased from Peter equating to his 24% or 179,219 shares plus any rights from Brumby Run. This gave me control of the company. I have set out in my business career intentionally and deliberately to be successful. Peter would not have sold his shares to anyone else because he could see that I was going to make Coombing work. It was through the amalgamation of Peters and Berkeley's shares that I became majority shareholder. BK never had control of WPC without Peter's favour. As majority shareholder I began negotiations with Tricia to purchase her 33% shareholding. This was within my legal, moral and logical right to do so. This purchase does not affect Katie's and Shish's inheritance as they have no right to inheritance from Tricia. What is being asked is that I distribute my wealth to my siblings instead of my children before I have died. WPC has always been a family Company, from Gran Whitney to her five daughters, to Ewart (75%) and Whitney (25%), to Tricia (33%), Berkeley (33%) & Peter (33%). I have received by way of inheritance 24.5% and have purchased both Tricia's and Peter's shareholding to bring my ownership in the WPC Group to just over 90%. I can't control anyone else's feelings or emotions, I think it is unfair to hold me to ransom to pay out some magical figure of an amount that is not earned and is not able to be paid out. I also do not think it is appropriate for anyone to be jealous of my perceived financial position. The shares in WPC are worth about $5.00 at best. No minority shareholder will ever have control of the asset, and by rights no majority shareholder should think they have the right to disperse a family asset that we have held for the past 126 years and has survived this exact same problem through the past five generations. I don't think it is my right to make that call; it wasn't the right of the Melbourne mob or Tricia to make that call either. I hope Coombing will always be a family base for all of us. Ewart was in control of the Group for fifty years, in that time he bought out most of the other shareholders except for his brother and built the asset up (only to let it deteriorate again) to distribute to his three children. Fifty years to build asset. Berkeley held his one third shareholding for less than three years and it is expected to achieve more than what Ewart took a lifetime to do. I feel as if the impossible is expected of me also. If this is seen as a battle it will be un-winnable by all. I would like to see Coombing as our family home and continue to enjoy it as much. Most importantly I would hope that we don't let bad emotions to take over and tarnish the love and friendships we have all held so tightly for so many years." 90The 20 July 2006 letter George King wrote to Mr Benecke referred to his father telling him he needed to sell Gobabla and give the proceeds less debt to his sisters. Part of what he wrote is as follows: "We had a facilitated family meeting on the 22nd of June at the request of my Sisters to come to an agreement as to what was due to them from the WPC Group given that I have received my inheritance from Berkeley around 1999. I put forward a pay-out plans for my sisters... which was agreed to and accepted. I have been away on annual holidays for the past two weeks and they have decided (Katie in particular) that is not what they want and have asked that 'Gobabla' be sold and the proceeds from that sale less some debt be given equally to my two sisters. I wrote to Berkeley and Penny [in] about 1999 stating my concerns with the direction of the Company and my future career in a private Company and not having control of my own destiny... Peter King agreed to the transfer of his shares to me on the condition that Berkeley transferred his shares to me: this effectively gave me control of the Group. Berkeley gave a condition on the transfer of his shares that I 'look after the girls' in with respect to purchasing the WPC and ESK shares from his and Penny's estate. It was never expected to be dollar equal." 91Berkeley King had also prepared a note dated 23 July 2006, in advance of the meeting on 31 July 2006. He recounted the discussions with his son back in 1999. He said in part: "At about [the time of the establishment of Brumby Run Pty Ltd] I at George's request made him managing director and signed over to him all my shares in Somers ... which gave him effective control of the WPC. I verbalised again at this time very clearly that while I was giving him control I was also giving him a responsibility of looking after his sisters' interests. There cannot be one iota of misunderstanding about this." 92In this note Berkeley King had earlier referred to his goal that "George should have unfragmented control of the WPC". He also wrote: "I have asked George to sign over Gobabla to the girls or to sell it and give them the net proceeds after a fair distribution of the coy debt. Gobabla equates to approximately 16.2% of the gross value of WPC. George would then have an asset of approximately $19 million less debt which would be totally his without any obligations to anyone. ... George has the legal right to not give any part of the WPC to anyone, every one else in the family is a minority shareholder in a private coy and we all know only too well what that means. I believe George also has a moral obligation which if he chooses to ignore will have disastrous consequences for our family." 93Berkeley King's note supports the proposition that in the negotiations taking place in 2006, he was accepting that his son was the major shareholder in Whitney and that the negotiations were about what was the price to be paid for the acquisition of a minority shareholding. He also accepted that the agreement made with his son back in 1999 was intended to give him control of Whitney. 94On 23 July 2006, George King responded to his father's note by email. He said, among other things: "If you remember the reason you transferred the Somers shares to me in 1999 was because I told you and Mum that I was leaving and going to pursue my own career if I didn't get some certainty into the future of the Company. I gave Peter the same reasons which is what prompted him to begin to sell his shares to me. Several things prompted me to take that stand two years after I had started the job here ... My major concern at the time was you were talking seriously about selling Gobabla to pay out [Patricia] and selling Esk to pay out the girls ... I gave you the option then of selling the assets you were talking about and Coombing South, paying everyone out and then employing a paid manager until you were finished with the rural lifestyle and then sell the remainder of Coombing. You promised that this is not what you wanted so I would stay; your guarantee to me was the transfer of the Somers shares. There cannot be one iota of misunderstanding about this promise. ... You never gave me effective control of WPC, I got that from having Peter on side. Peter's shares are not yours to give away, not legally, morally or logically. The responsibility of 'looking after my sisters' never included destroying the fabric of the business, you promised that to me in 1999 to make me agree to stay. The agreement was that to even up the dollar value of inheritance I had to pay back the shareholder loans which are at call and pay fair value for all the shares in WPC and Esk that you were leaving to the girls. Your residual estate from Weander was also going to the girls. I understood the 22% shareholding via Somers was to be my total inheritance and I could base my career decisions on that. There cannot be one iota of misunderstanding about this either." 95George King explained in evidence what was meant by the reference to the "residual estate from Weander". It referred to the other assets held by his parents following the sale of their first property, which had been known as Weander. In 2006, those assets were predominantly shares in blue chip listed companies, which George King understood to be worth between $1M and $2M. He understood the notion of "evening up the inheritance" to be paying fair value to his father for his remaining shares in the Whitney Group. 96Berkeley King replied to this email of 23 July 2006 in correspondence two days later. Amongst other things, he restated that his son effectively owned Whitney but also said that "[u]nfragmented control [for George] was a goal, I never said it was reality." 97On 28 July 2006, George King emailed Mr Benecke and stated that Somers had 15 shares (his father's Somers shares) still outstanding in his father's name and that his father was "under unbelievable pressure from the girls at the moment". He continued, saying, "Apart from these 15 shares it is my understanding that I control all of Somers". He asked Mr Benecke whether extinguishing Patricia Bellamy's shares in Somers would affect his position as the person with control of Somers save for his father's Somers shares. 98Either at or shortly after the mediation of 31 July 2006, George King alleges that his father said to his him, "You need to agree to pay us what we are asking or it will get difficult for you". That was consistent with Berkeley King's note of a few days earlier suggesting that George King's control may not necessarily be unfragmented. These comments, together with the fact that Berkeley King was asking for much more than the value of his remaining shares in Whitney and Esk, made George King concerned about his father's intentions regarding his Somers shares that had been promised to him. That concern had earlier manifested itself in his email to Mr Benecke on 28 July 2006. 99By the end of July 2006, therefore, the negotiations had reached a point where Berkeley King and George King had not been able to agree on what was "fair value" for the Minority Shares. It was accepted on both sides that this was a negotiation about fair value for minority interests. George King's last offer was $1,761,412 but his father wanted $2M, funded by the sale of Coombing South. George King contended that if the matter had stopped there, the issue could have been resolved through a valuation of the Minority Shares. The matter, however, did not stop there. 2006 to mid 2007 100George King planned to marry in late 2006. On 1 August 2006, Kirsten King sent him an email noting the upcoming wedding and saying "let's move forward I can't have this tension in our family, I can't do this anymore." They then had discussions between themselves and George King negotiated to purchase 3,000 of his sister's shares in Whitney. On 22 September 2006, George King emailed Mr Benecke retaining him to act on that proposed purchase. He asked Mr Benecke whether he needed documentation to purchase the shares. 101From about late 2006, George King and his new wife Melinda King also embarked on a project to establish a medical centre called The Wellness House. On 8 January 2007, there was a meeting of the directors of Whitney attended by George King and his parents at which a loan facility from Whitney was unanimously approved to finance The Wellness House transaction. 102On 19 January 2007, Mr Benecke emailed George King and advised him to "keep the ball rolling" on the share transfers from Patricia Bellamy and the transfer of 3,000 shares in Whitney from Kristen King to Weander. Mr Benecke thus continued to foster George King's belief that he was safely able to put assets that he intended to own and/or control into the BKST. 103In the first half of 2007, Gobabla was sold and the proceeds were used to repay debt. In May 2007 the shareholders of Whitney resolved in their annual general meeting to raise either equity or debt capital to buy back shareholders who no longer wished to be members. It was suggested that the sale of Coombing South be investigated. Resumption of discussions in mid 2007 104In about mid-2007, discussions regarding the Minority Shares resumed. The family situation had by this time become more difficult. For example, George King gave evidence that by "June 2007 relationships had deteriorated to a point where we weren't communicating". Matters did not improve. George King explained in his evidence the context to a handwritten note dated 17 June 2007, in which his father stated that he would love George "no matter what": "... the handwritten note from my father to me, this was the turning point. Right here is the turning point in the negotiations when everything got really nasty. About two days before this my father came up and the girls were away, phoned me up and said, 'Can I have a drink with you?' He came up with some Aberlour whisky I had brought back from my honeymoon. We spent the night at home, drank the rest of the bottle together. Sunday morning I got this note and that was the end of our relationship. That's when it got bad." 105George King then sent a note to his father dated 18 June 2007 saying, "I will sell Coombing South if it will make family relations right." 106 On 21 June 2007, Berkeley King wrote to his son saying, among other things, that his daughters' "inheritance is from me, not from you - this issue is in reality you giving me fair value for the shares I hold in WPC and ESK." He said he had a problem with how George King had chosen to calculate what he thought was a fair inheritance and that what George King inherited "was a controlling interest in Somers, which had WPC as a subsidiary coy". He also wrote that he had promised to give his son all his Somers shares. Berkeley King concluded the main body of his letter by saying, "If you agree to sell Coombing South and give the net proceeds to Katie and Shish then that will be their inheritance". 107Berkeley King sent his son a further note on 21 June 2007, which stated: "Katie & Shish both have an issue with what Mum & I have got out of this whole deal. I have not thought about that as my whole concentration has been on the girls, however I will flag it as something you and I should discuss." 108It has been submitted on behalf of George King that his sisters appear to have prevailed upon their father, because the mooted sale of Coombing South suddenly became inadequate to meet the family's demands. George King gave evidence that he and his father spoke after he received Berkeley King's first letter of 21 June 2007, to the following effect: Berkeley: "The girls aren't happy with just selling Coombing South. We are going to have to go to mediation again. You need to realise the value of the 15 Somers shares I'm still holding. George: I do realise the value of those shares. They are equity shares. You are holding them for me." 109George King began to strengthen in his view that his father was resiling from what he understood to be their agreement, including in relation to his Somers shares. On 27 June 2007, he wrote a letter to his father setting out his concerns and restating his understanding of the agreement reached. In that letter, George said (amongst other things): "...At the time the shares you transferred to me equated to 22% capital backing of WPC...I purchased Peter's shares on the condition that I would keep Coombing intact, I was given your shares on the understanding that would be my entire inheritance. I understand that the shares you gave me combined with Peters gave me a controlling interest, Peter shares were not yours to give away at any point. ... It was my understanding that this was to be the position I could begin my career with and that I would have to purchase Katie and Shish's shares in Esk and Whitney at fair value sometime in the future. At that point in 1999 I thought me getting the equivalent of $800,000 (as your shares were minority shares without Peters) was fair; you said that this transfer was to be the entire of my inheritance... Until there is an understanding from both sides and all facts are on the table I cannot see any reconciliation of relationships. Katie and Shish will understandably hold resentment and anger towards me as they think I am ripping the family off. I don't think we can move forward until this understanding is taken... It is now your responsibility to inform yourself and the girls [of] [t]he deal we made in 1999..." Events in the second half of 2007 110It is George King's case that from around August 2007, it ought to have become apparent to Mr Benecke that he was in a position of conflict by continuing to act for both he and his father. The dynamics of the negotiations to acquire the Minority Shares changed from this time, and in the second half of 2007, Berkeley King sought to acquire some leverage in the negotiations by exploiting his continuing ownership of his Somers shares and changing his will so far as it related to them, by exercising his power as appointor in relation to the BKST to remove Weander as trustee, and by seeking to include in the shares to be acquired by George King a notional holding of shares in Brumby Run. 111These events occurred with the knowledge and active involvement of Mr Benecke, who continued to act for both Berkeley King and George King over most of that period. The material events are these. 112On about 1 August 2007, George King instructed Mr Benecke to prepare a valuation of his father's realisable assets in Whitney and Esk. 113Shortly thereafter, George King asked his father if he was planning on doing something different with his Somers shares. His father responded that if George King did not trust him, he would sign the shares over to him. George King accordingly asked Mr Benecke to prepare transfers for those shares in favour of Weander. Mr Benecke was in these circumstances taking instructions from George King to prepare both a valuation and share transfers. 114On 13 August 2007 George King wrote to Mr Benecke asking him to run through some matters at a meeting with his parents the following day. One of the items listed by him concerned transfer papers for his father's Somers shares "in favour of the Berkeley King Share Trust". George King asked Mr Benecke, "Can you hold this on your records after Berkeley has signed". Mr Benecke sent an email to George King also noting that he was meeting with Berkeley and Penny King the next day and providing valuation documents. The workings for the valuation prepared by Mr Benecke included a value for Berkeley King's Somers shares ($3,577,500) and a notional half interest in Brumby Run shares ($1,213,700). Mr Benecke concluded that, including Kristin and Katie's shares, the total minority holding was valued at $6,391,348. 115Mr Benecke also informed George King around this time that he had advised Berkeley King not to sign transfers for his Somers shares. Mr Benecke's evidence also discloses that a transfer of those shares was being discussed at this time. The conversation deposed to by George King evidently occurred on 13 August 2007, after he had both written his first letter of that day and received Mr Benecke's email relating to valuation. This seems so because on 13 August 2007 George King wrote a further letter to Mr Benecke making reference to the valuation and asking him to make some adjustments in relation to it. He concluded by asking Mr Benecke: "Can you please explain to me why you told me that it was right and proper for Berkeley to transfer the 15 Somers shares he had promised to me, organized the transfer papers for him to sign and then advised him not to sign them?" 116On 14 August 2007, Mr Benecke emailed George King a revised statement of equity held by his father and stated: "As mentioned to you, I am legally obliged to indicate the currently recorded (with ASIC and in the books and records of the company) holding which your father has in Somers ... (15 shares out of 45 - an effective 1/3rd equity; or an effective 1/2 equity allowing for the extinguishment of the [Patricia] shares; but I will explain the promise/undertaking/gifting position in relation to those shares and the reason why these should not be taken into account in the overall scheme of things." 117On 14 August 2007, as shown by a tax invoice subsequently issued by Mr Benecke's firm, he attended on Berkeley King to take instructions and advise him in relation to his ultimate testamentary intentions and current will provisions. Two days later Mr Benecke provided a letter to George King with another revised valuation. This stated that Berkeley King's equity position was calculated "excluding any interest in Somers ... although legally present in his name" and valued it at $2,650,427. The workings of that valuation included a notional value of $879,800 for Brumby Run shares. Despite purporting to exclude Berkeley King's Somers shares, on the last page it contained a valuation that included them, producing figures of $6,276,688 (excluding Kristin's and Katie's interests) and $6,540,627 (including those interests). 118Mr Benecke also provided a copy of that valuation to Berkeley King on the same day. 119On 7 September 2007, Berkeley King prepared a position paper for a family mediation that recounted a history of events. Among other things, the paper referred to the valuation of 16 August 2007 prepared by Mr Benecke and Berkeley King's calculation as to what he said should be paid for the Minority Shares. The paper mentioned a figure of $3,004,190 and also stated, "again using the same valuations, the 15 ord shares in Somers have a value of $4,314,457". Berkeley King concluded the position paper with a statement that "as of now Berkeley owns just over 50% of the group, George owns under 50% of the group". 120These last statements were a marked departure from the position that had been common ground in 2006, when it was accepted that George King was the majority owner and/or controller of the companies in the group. Around this time, Mr Benecke provided advice to Berkeley King regarding his position, as evidenced by the following narrative entry in Garland Hawthorn Brahe's tax invoice for the period: "...telephone discussion with you on 10 [September] concerning... details of the Somers Investments Pty Limited classes of shares and values to be ascribed to voting shares, further discussion with you on 10 September with regard to proposed meeting, receiving from you summary position, statement of historical position...discussion with you in relation to same, preparing a draft Statement of Ownership of WBS King indicating nett equity in WPC, Somers, Esk Pty Ltd and reconciliation of that position with the GBK view/position." 121On 16 October 2007, there was a family mediation at Mr Benecke's offices, with Lyn Sykes of the New South Wales Farmers' Association. Mr Benecke attended the mediation and said he was very privileged to be included in the meeting, having dealt with three generations on both sides of the family. He also confirmed that George and Berkeley King had agreed in 1999 that Berkeley King's Somers shares were not transferred to his son because transfers would attract onerous stamp duty. 122A report on the mediation prepared by the New South Wales Farmers' Association records that there were discussions at the mediation as to the value of the shares to be acquired by George King. The table that was tendered lists the value of the Minority Shares "after promise" (that is, after Berkeley King's Somers shares excluded as belonging to George King) as being $2,388,225. This figure is obviously derived from Mr Benecke's valuation of 14 August 2007. Mr Benecke accepted in his evidence that the figure used in the mediation was very close to that which he had advised. Mr Benecke's valuation also included the value of $879,800 for the Brumby Run shares. The table recorded that Katie and Kristen would each be receiving $885,000 from their father's "other assets" (which was "the residual estate of Weander") and was going to them in addition to whatever George King paid for the Minority Shares. 123It can be seen from the mediation report that notwithstanding these figures, Berkeley and Penny King and their daughters were looking for George King to pay $3.5M for the Minority Shares. This was some $1.2M above Mr Benecke's valuation for those shares "with the promise" and some $2M above that valuation figure once the Brumby Run shares were excluded. 124George King made no offer at the mediation. His evidence is that his parents and sisters agreed amongst themselves that he was to go away and investigate whether Whitney could afford to pay them $3.5M. This was what the other family members collectively proposed they would accept. George King says he did not respond to that request and did not make any such investigation. 125The issue of Berkeley King's Somers shares was raised at the mediation. He negotiated on the basis that George King needed to pay $3.5M before Berkeley King would act on his promise with respect to those shares. The mediation report refers to "Suggested Action" that it indicated would form the basis for further discussion. Action item 3 referred to the demand for $3.5M and action item 6 to Berkeley King confirming the promise in relation to his Somers shares. George King was asked about this in cross-examination and his evidence was as follows: "Q. If we go across to page 701 the outcome is set out, correct? A. 'Suggested actions'? Q. Yes. 'Coombing Park South be sold' and various other matters are then set out. The figure that is being discussed is 3.5 million, correct? A. Yes. Q. And your father at paragraph 6 renews his promise in the will, correct? A. That was conditional on the first five actions being met. Q. What I want to suggest to you is he confirmed at this mediation his promise to leave you the shares in the will? A. Only if those top five things were confirmed and done, implemented. Q. What I want to suggest to you is there was no threat of the kind that you suggest at 165 to 166 of your affidavit? A. The threat was there." 126The 16 October 2007 mediation was left on the basis that there was to be another meeting/mediation scheduled for 17 December 2007, as referred to in the mediation report. Following the mediation, Berkeley King somewhat ominously told his son, "you don't realise the value of the Somers shares you could lose them". The day after the mediation, Ms Sykes contacted George King and informed him that his mother and Katie King were saying they wanted $4M. On that or the following day, Berkeley King informed George King that his mother and sister were telling Berkeley King that he should be giving his Somers shares to "the girls". 127George King's frustration at the situation he was faced with emerges from an email sent to Ms Sykes on 22 October 2007. He was in no doubt about what was agreed in 1999 and what should have been the legitimate subject of negotiation: "...If Berkeley stood by his agreement of 1999 about transferring his Somers shares to me, including the equity shares the position would now be that I had 85.5% of WPC and Berkeley would have 14.5% as the majority of shares the Aunt held were in Somers Investments. My understanding from the deal in 1999 was crystal clear that that was to be my only inheritance, the unclear part was that I had to buy Berkley's remaining shares at 'fair value'." 128The approach taken by Berkeley King at the mediation and afterwards was to bargain for more money from George King by threatening not to honour his promise in relation to his Somers shares. He was assisted in that course by the conduct of Mr Benecke, who provided valuations that included shares that were not the subject of the original agreement, namely the Brumby Run shares, as well as alternative valuations on an assumption that the promise regarding Berkeley King's Somers shares was not honoured. 129On 22 October 2007, a matter of six days after the family mediation, Mr Benecke attended on Berkeley King to take instructions from him and to advise him regarding a proposed modification or addition to the terms of Berkeley King's will, in order to provide for a specific trustee bequest in relation to his Somers shares. Two days later Mr Benecke wrote to Berkeley King and stated that following a meeting two days before, he had prepared a draft codicil to his will. Mr Benecke explained that the effect of the new bequest was that Berkeley King's Somers shares were to be held on trust for Penny King until 2027. Mr Benecke also said that he had referred in the codicil to: "...the fact that you have already given the other Somers shares to George [i.e. you have advanced or already 'actioned' the bequest in your Will documents concerning the other (non-ordinary) Somers shares]." 130On 30 October 2007, Garland Hawthorn Brahe issued a tax invoice to Berkeley King that contained a heading "Estate Planning/Alteration to Will" and referred to Mr Benecke's attendance on Berkeley King on 14 August 2007 to take instructions and advise him in relation to his ultimate testamentary intentions and current will provisions. George King saw and read that invoice in about early November 2007. 131At about this time, George King finally obtained separate legal representation with Cheney & Wilson. By letter dated 1 November 2007, George King informed Mr Benecke that he had instructed that firm and had authorised Tony Cheney to have access to any of the relevant files and correspondence held by Garland Hawthorn Brahe. 132It was also around this time that George King started to appreciate that his control of the assets in the BKST may be vulnerable. In about November 2007, George's wife asked him who was the appointor of the BKST. George King said he did not know what an appointor was. His wife then explained it. George King says that was the first time he had ever heard of an appointor under a trust and became concerned that his father remained a shareholder and director of Weander. 133In about early November 2007, George King saw and read Mr Benecke's letter to his father dated 24 October 2007, as well as the enclosed draft codicil to his will. George King went to see his father and said that he should transfer the remaining share in Weander to him, and should also resign as a director of that company. Berkeley King agreed to do so. George King's evidence was that this occurred without any discussion as he and his father were hardly talking at the time. On 6 November 2007, Berkeley King signed a transfer of his remaining share in Weander to his son and tendered his resignation as a director of Weander. 134On 6 December 2007, Peter King transferred his share in Brumby Run to George King, which meant that George held two out of the three shares in that company. 135In a letter to Cheney & Wilson dated 7 December 2007, Mr Benecke stated that he had that day received instructions from George King to provide copies of, among other things, the Deed of Trust for the BKST. Cheney & Wilson apparently received it on 10 December 2007. 136At this time, George King also became aware of the appointor power in the BKST Deed. He appreciated the risk associated with the appointor power and attempted to address it by having Weander's records changed to show that it owned Peter King's shares beneficially. George King candidly accepted in cross-examination that this made the records untrue but reasoned that this was how he considered the transaction ought to have been structured. 137It was also at this time that George King instructed Cheney & Wilson to prepare some documents to take to the mediation scheduled for later that month. One of these documents was a draft Deed of Variation substituting Melinda King as the appointor of the BKST. The draft documents were made available to Berkeley King prior to the mediation and on 12 December 2007 were emailed to Mr Benecke by George King. George King gave evidence that by the time these documents were prepared, he knew about the appointor power and was concerned that his father would exercise it. 138Accordingly, at the further mediation conducted by Ms Sykes on 17 December 2007, George King was aware that he no longer had the benefit of the promise of his father's Somers shares (because his father's will had been changed), and he was aware of and concerned about the risk that his father could exercise his power under the BKST Deed to remove Weander as the trustee and so deprive him of control of the trust assets, including those acquired from Peter King. Practically speaking George King was no longer in the position of a majority shareholder negotiating to acquire minority interests. 139The mediation was unsuccessful. The mediation report records that the family sought $5M from the outset. George King gave evidence that the mediation was heated. He offered to pay $3M. He contends in these proceedings that that offer was made from a position of weakness and represented a substantial premium over the fair value of the Minority Shares. 140The mediation report shows that George King's parents' and sisters' first option was a $4M settlement. Berkeley King's second option was that everything be sold. Penny King and her daughters' second option was that Coombing South and a further 1,000 acres be sold. It was starkly apparent to George King that if he did not have his father's Somers shares, and lost control of Whitney to his father, those options could be pursued. He said he was very concerned about his position now that he knew his father had the power to remove Weander. 141Following the mediation, Berkeley King, somewhat curiously with Mr Benecke's enthusiastic assistance, sought to gain leverage over his son. Over the week from 12 December to 19 December 2007, Mr Benecke read and considered the documents emailed by George King and in particular the proposed Deed of Variation concerning the BKST, as well as undertaking a detailed review of the terms of the Trust Deed. He also obtained copies of the share transfers of Peter King's shares to demonstrate that those shares were in the BKST, and not held by Weander beneficially. 142On 20 December 2007, Mr Benecke emailed George King stating that it was "completely misleading and false" to suggest that Weander had acquired Peter King's shares beneficially. Events in 2008 143George King contended that the strategy followed by the family in 2008, and by Mr Benecke on the family's behalf, was adopted to apply pressure to him, effectively by any means available. He submitted that their strategies were manifested in several ways. 144On 7 January 2008, according to an invoice issued by Garland Hawthorn Brahe, Mr Benecke attended upon Berkeley King "in relation to shareholdings, potential action in relation to the Appointor provisions... advice to you in relation to Appointor powers and exercise of same". By a deed dated 8 January 2008, Berkeley King exercised the power he had retained to remove Weander as trustee of the BKST. He signed ASIC forms changing the shareholding in Somers to the new trustee. Mr Benecke witnessed Berkeley King's execution of that deed bringing about the removal of Weander. Then on 14 January 2008, Mr Benecke wrote to George King telling him what his father had done. 145Mr Benecke gave evidence that in taking these steps he was acting on Berkeley King's behalf in order to take advantage of the weakness in George King's position. That evidence was as follows: "HIS HONOUR Q. Could you see any disadvantages for him in structuring the transaction in the way you say he advised you to structure it? A. No, I didn't, your Honour. WILLIAMS Q. If you had appreciated a disadvantage do you think it would have been your duty to tell him about it? A. Yes, I do. Q. And you now know that there was a disadvantage in carrying out the transaction in that way, don't you? A. I do. Q. Because you took advantage of that disadvantage later on by removing, by changing the appointor, I'm sorry, by changing the trustee of the trust, didn't you? A. Yes, I did." 146Mr Benecke also later gave evidence that the removal of Weander as trustee was to give "leverage" to Berkeley King in the continuing negotiations with his son: "Q. The whole point of the removal of the trustee was to place the power in Berkeley's hands to do what he wished with the trust assets; that's right, isn't it? A. Certainly it gave him some control and some leverage in negotiations, but Berkeley made it absolutely clear to my knowledge, to my best recollection that he intended to do nothing. Q. You used the word 'leverage' there, was the purpose of removal of the trustee to create leverage in the negotiations with George? A. Correct. HIS HONOUR Q. Meaning the threat that the trustee would be removed and the value of his shares would be worthless was to be held over him in negotiations, is that it? A. I think Berkeley's intention was to procure a situation where he could have his daughters paid some sort of equal inheritance value or equitable heritance value in line with promises which George had apparently made to Berkeley. Q. Not to put too fine a point on the matter, to be able to squeeze more out of George? A. Correct." 147In mid-January 2008, Kristen King told George King that their father had "taken control of the trust so that he can sell the company and he will give you 49.5 percent". George King asked his father to reinstate Weander as trustee of the BKST but he refused to do so. 148On 18 January 2008, George King's solicitors wrote to Mr Benecke stating, among other things, that his firm should forthwith cease acting in the matter "on the basis that the action now taken by Berkeley King is in conflict with the advice given to and action taken for George King by your firm." The letter also gave notice of a potential claim against them. It requested Berkeley King to reconsider his position and reinstate Weander as trustee. On 22 January 2008, George King emailed Berkeley King offering to pay the family $3M. 149On 25 January 2008, Garland Hawthorne Brahe sent a letter to Cheney & Wilson saying they were instructed to give an undertaking to provide seven days' notice before taking action to sell assets. On 1 February 2008, according to an invoice issued by Garland Hawthorne Brahe, Mr Benecke was involved in the preparation of a reply to the letter of 18 January 2008. It is George King's contention in these proceedings that that letter contained a number of false statements and also put George King's privileged and confidential instructions of 2001 to work against him in the interests of his father, including by attaching a letter of instruction that George King had provided at that time. Mr Benecke also attended upon Berkeley King to discuss potential action including winding up proceedings. 150On 8 February 2008, Berkeley and Penny King signed a notice of meeting of directors of Whitney to be held on 15 February 2008. The company accountants, Yates Baker McLean, informed George King that his parents wanted to discuss at the meeting matters including "sale of Coombing South plus a portion of Coombing Park (guess 2000 acres)". 151On or about 11 February 2008 Mr Benecke signed a letter which made a number of assertions about George King's conduct as Managing Director of Whitney. George King understood that the matters dealt with in this letter were to be on the agenda for the upcoming meeting of directors. Berkeley and Penny King, as the "majority directors" of Whitney had signed an instruction to Elders Rural Bank to limit the company's borrowings to $2M until further notice. George King was informed of this by his bank manager on 11 February 2008. 152On 13 February 2008, Garland Hawthorne Brahe wrote to Cheney & Wilson and said, in relation to the conflict issue raised by them: "Our client however will not be dictated to as to who he can instruct to act in the matter. Your client's consent in relation to Mr Benecke is irrelevant in circumstances where no conflict exists." 153In around February 2008, George King sought and obtained legal advice about his options. George King's evidence about this was that, based on such advice, he understood that taking legal action against his family might be complex and protracted, might take more than two years and would cost in excess of $500,000. 154On 9 March 2008, Berkeley King instructed Elders to cap Whitney's facility at $200,000 above its then current level. Three days later, George King and his father had an altercation. George King said that this occurred when his father attended the property with a noxious weed inspector and told him he was preparing a report to prove that George King was not a fit and proper manager of Whitney, to take to a board meeting for the purpose of having him removed as manager. 155On 18 March 2008, George King sent an email to Mr Cheney saying that as a matter of urgency he needed to get control of the boards of Somers and Whitney by appointing new directors. He wrote that he was "more sure about this than [he] was about transferring shares out of the Berkeley King Share Trust in December". In the event, George King was advised against appointing new directors to Somers and Whitney as it would lead to a dispute and derail any further attempt at mediation. 156On 28 March 2008, George King was arrested and served with an application for an apprehended domestic violence order and a Court Attendance Notice. 157On 8 April 2008, in anticipation of a further mediation, Mr Cheney emailed George King and asked him to prepare a summary of his views on the matters in dispute (in descending order of importance) and of his position, justification and best result in relation to each of those matters. George King did this and identified three issues. First, his parents not honouring the agreement to hold his father's Somers shares in trust for him. George King said he had more than honoured his part of the agreement but his father had breached his duty by demanding that George purchase shares that his father was holding in trust for him. Secondly, the removal of Weander as trustee. Thirdly, his parents not honouring the 1999 agreement that the pay-out should not be an amount that jeopardised his future and the future of Whitney. George King stated that the agreement was to pay fair value at an appropriate time, with Coombing Park to be kept intact. 158A mediation was in due course scheduled for 26 May 2008, with the Hon John Brownie QC as mediator. On 2 May 2008, Elders placed limits on facilities available to Whitney and required notice of any outcome from the mediation. On or about 21 May 2008, Garland Hawthorn Brahe ceased to act for the other family members. On that day, Deacons wrote to Cheney & Wilson and confirmed they had been appointed as the family's solicitors. They asked for the mediation to be postponed. 159George King's mother wrote to him on 16 June 2008 saying, "These are the figures I believe we have to work on - do you agree with these as our basis? What would do as your resolution to [divide]?" The figures referred to were $12.9M(land), $1.0M (stock), $357,000 (plant), $732,000 (Gobabla) and $207,000 (furniture). These figures totalled $15.196M. 160On 7 July 2008, Mr Cheney and George King discussed a "without prejudice" offer that George proposed to make. Among other things, Mr Cheney's file note recorded the following advice: "If the matter proceeds to court it is likely to involve not only George and his parents as parties but also [GHB] and Lawcover as another party. The legal issues are complex involving matters of company law and trusts. There will no doubt be senior counsel on all sides and it is likely that the costs could well exceed $600,000.00. There is a cost risk to all parties to the litigation. In addition there is a time factor. We would not anticipate proceedings of that complexity would be dealt with within 2 to 3 years. During that time George will continue to live with the uncertainty of not knowing the position concerning his financial future." 161George King sent a "without prejudice" letter to his mother the same day referring to her letter of 16 June 2008 and making an offer of $3.5M. He later met his mother four days later and she told him she wanted $4M. George King thereafter worked on drafting heads of agreement. 162On 14 July 2008, George King wrote to Mr Benecke indicating that the files that had been returned to him were missing the information surrounding the proposed transfer of his father's Somers shares and associated advice. On 22 July 2008, he emailed Mr Cheney and said he had heads of agreement with his parents to purchase Esk shares for $1.15M (cash settlement), Whitney shares for $1.35M (estimated net proceeds from sale of "Bald Hill" paddocks) and his father's Somers shares for $1.5M (estimated net proceeds from sale of Coombing South), being a total amount of $4M. George King said he was putting in the offer "so I don't risk losing it all if the court battle did not go my way and because of the obvious costs of Court as you and Simon [Kerr] keep telling me". 163On 4 August 2008, Penny King wrote to her son stating that heads of agreement prepared by him were not consistent with what was agreed on 20 July 2008. 164Deacons sent two letters dated 22 September 2008 to Cheney & Wilson. One was an open letter acknowledging that George King held all four shares in Weander and demanding that shares that Weander was purporting to hold beneficially (being Peter King's shares) be transferred to the new trustee of the BKST. That letter also threatened litigation. The other was a "without prejudice" letter proposing a further mediation. It contained a characterisation of an agreement between George King and his father (said to have been made in or about 1998) that did not include, among other things, Berkeley King's Somers shares. This letter also stated that it had been suggested that Berkeley King was bound by testamentary statements made in his will of 28 August 1998 and asserted that a will is a mere statement of intention and by its nature revocable (even if expressed to be irrevocable). Deacons also made assertions about George King's conduct as a director of Whitney. 165On 2 October 2008, George King received an email from his father taking issue with notices of meetings that George had purported to call and asserting that Weander had no entitlement to vote at the proposed meetings. Berkeley King also said that the new trustee of the BKST (Coombing) reserved all rights to take all steps to seek to set aside any motions passed at the proposed meetings as a result of any vote by Weander. On 3 October 2008, Berkeley King demanded that George King provide access to the company registers of Brumby Run, Esk and Somers. George King contends that the clear impression given by this correspondence is that Berkeley King, with advice from Deacons, was positioning himself for litigation against his son consistently with the threats made in the open letter sent on 22 September 2008. It is George King's case that this demonstrates further exploitation, in advance of the proposed mediation, of the weakness of his position as a consequence of the removal of Weander as trustee of the BKST. 166On 23 October 2008, a family mediation was fixed for 5 December 2008. By letter dated 28 October 2008, Cheney & Wilson invited Garland Hawthorn Brahe to participate but they declined. On 30 October 2008, George King emailed Mr Cheney and said that his complaints about Mr Benecke's firm were not only about the removal of Weander as trustee but also: "... the issue of the 15 Equity Shares in Somers Investments which GHB advised me not to transfer to my ownership because of stamp duty. Berkeley is now demanding full asset backing for these shares." 167Berkeley King said to his son at some time before the mediation that if the family did not get a satisfactory settlement they would be going to court. George King ultimately signed Heads of Agreement around 8:45 pm on 5 December 2008 following the mediation that day. They provided for a payment of $3.55M, with an amount of $2.55M payable on 30 January 2009 and $1M payable on 1 December 2010. Thereafter George King secured a refinancing facility from the National Australia Bank to fund the first settlement payment. The refinancing was only possible following resolution of the family dispute. 168On 30 January 2009, the family members and various other parties entered into a Deed of Release and Settlement more formally and further documenting the agreement of 5 December 2008. In accordance with clause 2.1(a) of that Deed, a payment of $2.55M was made prior to 1 February 2009. The second settlement payment due to be paid on 31 December 2010 was not paid and remains outstanding. George King is paying interest to his family on that amount at 8 percent per annum monthly in advance. The defendants' factual summary 169The foregoing represents a review and characterisation of the facts upon which George King seeks to establish his case. Much of the material is documentary and to a certain extent speaks in an unambiguous way. As might be expected, however, and as will by now have clearly emerged, the context in which the current dispute finds expression is of a family riven by competing influences, fears and loyalties. The defendants have in those circumstances conducted a similar review of the facts with emphasis upon the findings for which they respectively contend. It is convenient at this stage to set out a consideration of that competing approach. 170The factual findings that the defendants say should be made (in addition to, or instead of, the findings sought by George King) are grouped under sub-headings below in roughly chronological order. The defendants submit that, as a general matter, in the circumstances of this case where the events in question occurred many years ago, the objective contemporaneous documentation, supported by inherent probabilities, provides the most reliable guide as to what in fact occurred: Watson v Foxman (1995) 49 NSWLR 315 at 318-319; ACN 070 037 579 Pty Ltd v Larvik Pty Ltd [2008] QCA 416 at [6]-[7]. Acquisition of Berkeley King's Somers shares 171It appears from the hard copy minute book and register of members for Somers that Berkeley King's Somers shares were acquired by him in about July 1960. However, until the trial of this matter in August 2012, it would appear to have been understood by everyone involved in the dispute that those shares (as well as those of Peter King and Patricia Bellamy) were not acquired until sometime after 1994, when Berkeley King prevailed upon his mother to distribute the Somers shares to her children before she died. 172George King deposed to the following matters: "ES King [George King's grandfather] over a period of approximately 20 years, acquired ownership of the shares in WPC and hence [majority] ownership and control of Coombing Park... My father, Berkeley...had a falling out with his father and left the property in 1978. ES King managed the property until his death in 1994. He was survived by his wife Audrey Emmiline King who divided the shares in WPC, Esk Pty Limited and Somers Investments Pty Limited between their children, being my father Berkeley, my uncle Peter King and my aunt Patricia Bellamy." 173As appears from George King's 22 June 2006 letter set out in full earlier in these reasons, "Ewart ... bought out most of the other shareholders except for his brother...Berkeley held his one third shareholding for less than three years." Berkeley King's letter prepared for the facilitated meetings before Mr Adamedes in 2006 contained the following: "When my father died [1994]...I took my mother over to Orange to read my father's will...She quickly made a new will as she had always wanted it: equal three ways... I then approached my mother and told her that I could not continue with the WPC unless I lived there and I would not do that unless I had security in my position...I asked mother to distribute all her shares equally between her three children (as per her will) which she agreed to with the proviso that I put Patricia on the board... This I agreed to." 174In assessing how the parties would have behaved, Mr Benecke contended that it should be accepted that they understood Berkeley King's shares to have been acquired by him sometime after 1994 and to be subject to CGT. Mr Benecke submitted that I should therefore find that the probability is that the records of Somers are in error and that Berkeley King acquired his shares sometime after 1994 because the history of leaving and returning to Coombing Park would not otherwise make sense. He contended that both he and George King understood Berkeley King to have acquired his Somers shares sometime after 1994, that they were therefore subject to CGT, and that on the instructions given and in having regard to the family history, a reasonable and competent solicitor would not have formed the view that the shares were a pre-CGT asset. The relationship between George King and his family from 1996 to 2002 175George King agreed in cross-examination that his relationship with his father was a close and loving one, characterised by trust, up until about 2006 or 2007. He gave forceful evidence in re-examination that until June 2007 he and his father had "the best relationship". 176George King was prepared to come to work at Coombing Park in 1996 on the basis that his father would leave his Somers shares to him in his will, even though at the time he was aware that his father could change his mind about his will and even though he was conscious that there had been disputes between family members concerning property in the past. He said the following: "Q. He promised to leave you his Somers shares in the will, correct? A. Correct. Q. You were happy with that promise? A. Yes. Q. You knew, though, that he could change his will, didn't you? A. Yes. Q. But you trusted him at the time; correct? A. Exactly. Q. And you did not need any more from him at that time; correct? A. Correct." 177George King's evidence is that he and his father agreed that the Somers shares were to be transferred to him in "early August 1999". The agreement was not put into effect until November 2000 when George King took a transfer of the one Weander share from his mother and two from his father. He was evidently in no hurry to see his father's Somers shares transferred to him. Mr Benecke argues that George King has not given any reasonable explanation for why it took so long for the transaction to be effected and that the delay is again consistent with a close and trusting relationship between them at this time: George King was prepared to accept his father's promises without requiring any further legal assurance or security. The plaintiff's knowledge and understanding of trusts 178Mr Benecke also submitted that George King consistently and deliberately understated what he knew about trusts and their operation as at 1999-2002. At one point during his cross-examination he said this: "Q. You had previously read trust deeds, hadn't you? A. No. Q. Never previously read trust deeds? A. No. Q. Do you recall reading the trust deed in relation to the Brumby Trust? A. No, I've never read it." 179He then went on to deny that he had read the Brumby Run Trust Deed when he signed it on about 12 September 1997 and that he doubted that he read or understood the deed of variation of the Brumby Run Trust Deed when he signed it on about 1 September 1998. The deed of variation significantly removed Audrey Emeline King as appointor under the Brumby Run Trust. Mr Benecke asserted that George King's denials that he read the trust deeds when he signed them in 1997 and 1998, and that he had not read any trust deeds prior to 29 January 2001, were false. This is said to follow because a document subsequently tendered by him, being his letter to Mr Benecke on 17 July 2000 enclosing "the trust documents for Charmdew Pty Ltd", also stated "[t]his document is verbatim of the Weander Pty Ltd trust document". The instructions given to Mr Benecke in relation to Berkeley King's will in 1998 180The facts in relation to Mr Benecke's preparation of Berkeley King's will in 1998 are not in dispute. There is no allegation of breach in respect of them. Mr Benecke, however, contends that they are important. 181In or about early June 1998 Mr Benecke was contacted by Berkeley King who requested him to prepare his will. Mr Benecke prepared the will, which was duly executed. Mr Benecke gave uncontested evidence that he received all instructions from Berkeley King or his wife as applicable. He was not informed by Berkeley King or George King of any agreement they had reached in relation to George's inheritance or control of the family's assets. He was not asked by either of them to provide advice as to the options available to Berkeley King to give effect to any such agreement or to his testamentary intentions. Berkeley King was certain about his testamentary intentions and Mr Benecke's instructions were to prepare documentation rather than give advice. 182Because of privilege and confidentiality obligations, Mr Benecke was not able to give evidence of the nature of the will he prepared for Berkeley King in 1999, what instructions he received in respect of it, or what bequests (if any) were made to George King under it. However, the following may comfortably be inferred from evidence given by George King (and are not understood to be in dispute). In about late 1996, Berkeley King invited his son to return to Coombing Park and promised that if he did so "I will leave all shares in Somers owned or controlled by me to you in my will". George King subsequently saw his father's will and noted that it recorded that "all of his Somers shares" were bequeathed to him. The agreement between George King and Berkeley King in 1999 183The defendants do not dispute that Berkeley King and his son had a discussion in about August 1999 and reached an agreement that Berkeley King would transfer his Somers shares to George King and resign as CEO, and that in return he would pay "fair value" for his father's remaining shares in Whitney (including those shares attributed to him through his interest in Brumby Run) and Esk. The defendants therefore do not dispute that Berkeley King agreed to give George King ownership and/or control of Berkeley King's Somers shares. Large parts of George King's submissions are directed towards establishing that Berkeley King accepted that his son was "the major shareholder in Whitney". That is not in dispute. 184However, the defendants do dispute what was meant by "fair value" in the agreement concerned. Although the defendants complain that it is not pleaded or addressed, it is apparent that George King's case is that "fair value" meant the value of Berkeley King's Somers shares (and the sisters' shares, which together form the Minority Shares) assessed by reference to the net asset value of Whitney and Esk and subject to a 20 percent "minority discount". That is the approach taken by Mr Ivey in his report dated 19 July 2012 on which George King relies. 185George King has given no evidence of any discussions with his father in support of his case on the meaning of "fair value". Its only "justification" is by analogy with the Patricia Bellamy buy-out. According to the defendants, the suggestion that George King's family could have been bought out on the same basis as Patricia Bellamy, or that Berkeley King would have agreed to that course, is fanciful. It is obvious from the various position papers that Berkeley King prepared that he wished to provide for his daughters but had little regard for his sister, who he described in consistently unfavourable terms. George King's case assumes that his father would have wanted the same result for both. In any event, Berkeley King cannot have had the Patricia Bellamy buy-out in mind because it occurred after the 1999 agreement. 186The defendants' case is that "fair value" meant whatever value was needed to achieve a rough equality in the division of Berkeley and Penny King's assets among their children. That position is said to be supported by the following matters. Consideration of surrounding circumstances and post contractual conduct is permissible when what is in issue is the existence or terms of a wholly oral contract: Colyer Fehr Tallow Pty Ltd v KNZ Australia Pty Ltd [2011] NSWSC 457 at [47] ff, referring primarily to County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [20]. 187As to the surrounding circumstances at the time of formation, George King accepted that his parents loved him and his sisters equally and wanted to treat all three of them equally "as far as possible" and that he knew this at the relevant time. He gave the following evidence about his understanding when he returned to Coombing Park in 1996: "Q. I think you agreed with me yesterday the discussions that you had with your father and your uncle in 1996 were had in the context of you coming back and working the farm with a view to ultimately getting it to carry on the generation of Kings running it; correct? A. Correct. Q. You would get the land as a result of that; correct? A. No, the shareholding. Q. But the effect of it would be that you would get control of the land and the pastoral operation? A. Yes. Q. And that would be, as you understood it, your inheritance; correct? A. Yes. Q. And you understood at the time in 1996 that your sisters would therefore have to get their inheritance in some other way? A. Yes. Q. As far as possible to achieve equality between the three of you; correct? A. If possible, yes. Q. As far as possible? A. As far as possible." 188In terms of post-contractual conduct, there are numerous statements by George King and Berkeley King to the effect that the agreement was to make George King responsible for evening up the inheritance of his sisters. For example, in the course of the initial mediations in April and June 2006, George King wrote a letter to Mr Adamedes in which he stated, under the heading "Agreement of Somers", that "[t]he agreement that was in place was that it was my responsibility to even up the dollar value of inheritance." At those mediations he made an offer based on calculations designed to achieve equality among himself and his sisters. 189In Berkeley King's 23 July 2006 document, he referred to his goal that George King should have unfragmented control of Whitney and that his daughters should be made "as close as possible to $ equal". He went on to say in that document that: "I verbalised again [when I signed over the Somers shares] at this time very clearly that while I was giving him control I was also giving him the responsibility of looking after his sisters' interests. There cannot be one iota of misunderstanding about this." 190Later in Berkeley King's statement in September 2007, for the purposes of the Sykes mediations, he said: "At this time [1996] I made my goals known re children inheritance to all my family. I wanted George to have unfragmented control [o]f WPC and I wanted my two daughters to have as close as possible to $ equal without putting Coombing at Risk, knowing and saying that $ equal was no possible unless all was sold up the $ divided equally." 191Shortly thereafter, in a letter from Deacons dated 22 September 2008 it is noted that: "It is our client, Berkeley's view that the terms of the agreement reached were as follows ... the above two items were to be conditional upon George providing for his two sisters' inheritance being as dollar value equal as possible." 192Lastly in this respect, Mr Benecke's unchallenged evidence was that in the dispute between George King and his family in 2007-2008, Berkeley King's intention was: "to procure a situation where he could have his daughters paid some sort of equal inheritance value ... in line with promises which the plaintiff had apparently made to Berkeley." 193As is particularly apparent from Berkeley King's statement dated 23 July 2006, the negotiations occurred against an historical background, known to both George King and his father, that George King's grandfather had not treated his children equally in terms of inheritance but, following the grandfather's death, Berkeley King had prevailed upon George King's grandmother to divide the estate equally among her children. The defendants contended that this historical context makes it very unlikely that Berkeley King would have said anything that departed from a principle of equal distribution. 194George King also admitted at various points that his understanding of "fair value" (being the position now asserted in these proceedings) was not clear. For example, in his email to Ms Sykes dated 22 October 2007 he stated: "the unclear part [of the deal in 1999] was that I had to buy Berkeley's remaining shares at 'fair value'." George King's letter to his father on 22 January 2008 stated "I have never asked to be released from my obligation to pay 'fair value' for your shares in the WPC group. What is 'fair value' has not been clear". 195Notwithstanding this background, and George King's admissions that the meaning of "fair value" was not clear to him, he refused to accept in cross-examination that he and his father had agreed that in return for transfer of Berkeley King's Somers shares, he was to make a payment that would achieve, as near as possible, money equality among him and his sisters. However, he accepted that this was the intent behind what was agreed: "Q. And at this time as you understood it your parents' intention was still, as far as possible, to ensure that the three of you got an equal inheritance, correct? A. As far as possible, correct. ... Q. And the intent of that as you understood it was that each of you and your two sisters would, as close as possible, receive an equal dollar share of your parents' wealth, correct? A. Yes. ... Q. You would agree with me that you undertook a responsibility to buy your father's WPC and Esk shares at fair value, correct? A. Yes. Q. And the intent behind that was that each of you and your two sisters would, as close as possible, receive an equal dollar share of your parents' wealth? A. Yes." 196Mr Benecke submitted that this evidence was telling. George King accepts that the intent of what was agreed between him and his father is consistent with the defendants' case. He has not given any evidence that his father did or said anything that would have the effect of departing from that intent or that he and his father understood "fair value" to mean something different. When negotiations with his family commenced in 2006, George King was initially prepared to calculate what he had to pay in accordance with that intent. 197The defendants accept that George King appears to have formed a different view of what was meant by "fair value" after 2006, in the course of the dispute with his family in 2007-2008 and that he maintains that position in these proceedings. However, the defendants assert that that position is improbable in light of the circumstances and commonly known expectations of the parties at the time the agreement was made, contrary to numerous and consistent statements by Berkeley King about his intentions and contrary to George King's subsequent admissions about the meaning of "fair value" not being clear to him. The instructions given to Benecke in relation to the transfer of Berkeley King's shares in 2000 198There is a factual contest about whether George King asked Mr Benecke to give him advice in respect of the transfer of Berkeley King's Somers shares and whether any such advice was given. The only advice the he claims to have been given was oral advice on 30 August 2000, as deposed in his first affidavit at [72], as follows: George King: "Are there any issues with the transfer of dad's shares to me via Weander?" Ian Benecke: "No. You will have full and total control of all the shares in the Berkeley King Share Trust so long as you own the majority of the shares in Weander. Also, due to the stamp duty costs it would be better for Berkeley to hold the 15 Somers equity shares in trust for you and leave them in his will as stamp duty could be as much as $90,000." George King: "Are the 15 Somers equity shares that Dad is holding in trust for me safe so that my control is secure?" Ian Benecke: "There is more than enough evidence to prove that your father is holding these for you if he ever goes back on his word." 199Mr Benecke has denied that a discussion in these terms took place. The starting point for that denial is that George King did not expressly retain Mr Benecke in relation to the transfer of his father's shares. Instead, the true position is said to be that the steps taken in relation to the transfer of the shares occurred pursuant to the retainer with or instructions provided by Berkeley King himself. The evidence is as follows. 200In 1998 Mr Benecke was retained by Berkeley King to prepare his will. George King does not suggest that, in relation to preparation of that will, Mr Benecke was retained or instructed by anyone else. 201In mid-2000 George King had a conversation with his parents about how the Somers shareholding would be transferred to him. In his first affidavit at [68] he deposed to a conversation that occurred in "mid to late" 2000 but he said in cross-examination that he had revised the date to "mid 2000" after reviewing documents with his wife who had "helped him". In cross-examination he also accepted that the discussion with his father was more extensive than the one he had deposed to: "Q. I want to suggest to you that your father said to you, consistent with the deal in 1996 and 1999, that he would transfer three of the four shares in Weander to you; correct? A. Yes. Q. He would leave the other shares in Somers to you in his will; correct? A. Yes. Q. And the reason that he gave to you for doing it that way was because of stamp duty consequences in relation to the remaining shares; correct? A. Mr Benecke told me about the stamp duty consequences. Q. I want to suggest to you that your father also told you about the stamp duty consequences; correct? A. Correct. Q. So as you understood it, you were getting three of the four shares in Weander because that could be done without stamp duty consequences? A. Yes." 202George King later accepted that the reason he was happy with that arrangement was because he trusted his father, although he later sought to qualify his acceptance by reference to the advice he claims he received from Mr Benecke. 203On 28 July 2000 Berkeley King phoned the offices of Garland Hawthorn Brahe and left a message for Mr Benecke. The file note of the message records: "Berkeley King phoned. He knows that his son, George, is seeing you this morning and wanted you to know that he has asked George to ask you some questions regarding Berkeley's affairs. Berkeley King wanted you to know that it is okay to talk to George about Berkeley's affairs." 204That file note treats Berkeley King as the sole client and is consistent with there being no retainer with George King in relation to the Somers shares. As George King points out, Mr Benecke had other dealings with him at this time, in relation to Peter King's shares and the dispute with Patricia Bellamy. The file note arguably makes it quite clear that "Berkeley's affairs", including the transfer of his Somers shares, were treated as a distinct matter on which Mr Benecke acted for Berkeley King. 205George King met with Mr Benecke on 28 July 2000. Significantly according to Mr Benecke, George King does not give any evidence that there was any discussion with him about Berkeley King's affairs or about any agreement or dealings with him. 206On 22 November 2000 Mr Benecke sent a letter to Berkeley King referring to a meeting with him in late August 2000, and a telephone discussion on 21 November 2000. Mr Benecke enclosed various documents including share transfers in Weander from Berkeley and Penny King to their son. Mr Benecke's evidence is that he was not asked by Berkeley King "to provide advice as to the options available... to give effect to his intentions at that time." 207Mr Benecke's maintains that there is no evidence that George King (or anybody else) ever informed him in about 2000 or 2001 that an agreement (referred to as the Berkeley Transaction) existed between George King and his father. Mr Benecke's answers in cross-examination, upon which George King relies, establish only that as at 2001-2002 Mr Benecke understood that Peter King intended his nephew to have his Somers' shares and Berkeley King intended him to have his Somers' shares (by transfer in the case of the shares held by Weander/Deerslayer and by bequest in the case of the shares he held personally). Further, by reason of the transfers from Peter King and Berkeley King, George King would obtain control of Somers and consequently Whitney, and that this was his objective. 208What evidence there is on the matter indicates that Mr Benecke was not aware of the terms of the agreement between Berkeley King and his son. George King only informed Mr Benecke of the terms of the agreement he had reached with his father by letter dated 20 July 2006, stating "Berkeley gave a condition on the transfer of his shares that I 'look after' the girls..." Mr Benecke emphasises that George King would have had no reason to do this if he had informed him on an earlier occasion. There is no evidence or any suggestion that George King (or anybody else) ever requested Mr Benecke to act for him in relation to the so-called Berkeley Transaction or in estate planning matters generally. 209George King's claim that he sought and received advice on his options for transferring his father's Somers shares to him rests wholly on the alleged discussion on 30 August 2000 referred to earlier. Even if there had been a meeting between George King and Mr Benecke at that time (and there is some documentary material supporting that conclusion), Mr Benecke contended that I should find that no such discussion occurred. That submission is based upon the following circumstances. 210First, having regard to the previous dealings between George King and Mr Benecke, it is objectively unlikely that the advice of the nature described was sought or given. Berkeley King had told his son what his clear views were as to how his Somers shares were to be transferred. Although there had been previous (and ongoing) dealings between Mr Benecke and George King in relation to other matters, no advice had been sought on the transfer of Berkeley King's Somers shares (even though the agreement had been reached over a year before). The transfer of those shares was a matter upon which Mr Benecke acted for Berkeley King and occurred in the context of an earlier, express retainer under which Mr Benecke prepared a will that bequeathed the very same shares to his son. 211Secondly, George King plainly had no genuine recollection of any meeting. He accepted that he had given three different versions as to the time at which the advice was allegedly given. 212Thirdly, in the context of the close and trusting relationship between George King and his father, and in circumstances where he had been prepared to proceed without legal assurance or security, it is highly unlikely that he would have asked the questions he claims to have asked. 213Importantly according to Mr Benecke, George King's evidence is also inconsistent with a later written statement made by him. On 20 July 2006 he wrote to Mr Benecke concerning the dispute with his family, saying: "My thoughts are that if this is to continue it will destroy family relationships. I also see it as unwinnable by me on the emotional grounds it appears to be played on at the moment. If I were to do nothing my legal position with all this is extremely clear and I do not think I require advice on that front. My position is I would like to return to Berkeley the equivalent amount of shares he transferred to me in 1999." [Emphasis added] 214George King would not have written the emphasised words above if he had already received advice on the security of the transfers from Mr Benecke or, if he really could recall such advice being given, he would have referred to it. The so-called "lost invoice" for work done in 2000 215There is a dispute in these proceedings about whether Mr Benecke issued an invoice to George King for work performed relating to the transfer of Berkeley King's shares in 2000. Mr Benecke's position is that no such invoice exists because no such invoice was issued. George King has pursued this issue extensively in correspondence and by notices to produce. No invoice has been produced. There is no suggestion that Mr Benecke's firm has not taken all required steps to comply with the notices to produce and related correspondence. Mr Benecke has sworn that after receiving the notices to produce, his accounts department conducted searches of the electronic and physical records kept by the firm in order to locate documents covered by the notices to produce. Electronic copies of invoices dating from the period of the alleged "lost invoice" were located. 216Mr Benecke was cross-examined extensively about his billing practices. It was not put to him that he or someone else at his firm had destroyed or falsified records in relation to the invoice so that the searches in response to the notices to produce would not have found it if it existed. 217Mr Benecke submitted that George King's evidence on this issue, on which he was also cross-examined, was inherently implausible. He said that he looked at the invoice several times, understood it to be important and yet provided his only copy of it to his accountants in 2007 (when it related to the 2000-2001 financial year). He has given no evidence through his accountants as to what happened to it or how they kept their files. He accepted that he was uncertain whether it was addressed to him personally or not, even though his affidavit states: "the lost invoice was issued by [the firm] and addressed to me personally". 218What emerges is that the accounts department of a law firm has conducted a thorough search for the invoice. Its record-keeping systems appear to be such that if the invoice existed it would have been located. It has not been located and there is no suggestion that the law firm's records were manipulated to conceal its existence. Mr Benecke submits that I should find that the so-called "lost invoice" was not issued and does not exist. The settlement with Patricia Bellamy in 2006 219Patricia Bellamy appears at all relevant times to have resided in Melbourne. There does not seem to have been much, if any, friendly interaction between her and George King's family. She does not appear to have been involved at all in the Whitney farming operations. 220Patricia Bellamy started negotiations to sell her one-third interest in Somers and her interest in Esk in about 1997. Proceedings were commenced in this Court and ultimately settled. This has already been referred to above in some detail. Those facts are not contentious. However, the nature of the settlement is in issue because George King seeks to establish causation on the basis that, had there not been any issue in relation to his ownership of Berkeley King's Somers shares and Peter King's shares, he would have obtained a settlement or resolution with his family on the same terms as the Bellamy settlement. His evidence is that Patricia Bellamy settled for total consideration of $975,000 (the water licence being valued at $850,000). 221The defendants' position is that each of the settlements turned on their particular circumstances and that George King's attempt to establish causation and quantum of loss by a comparison with the Bellamy settlement should be rejected. This is referred to later. However, the relevant evidence in relation to it is as follows. 222The amount for which Patricia Bellamy was ultimately bought out was significantly less than the amounts that had previously been offered to her and which George King and other family members were prepared to pay her. For example, in December 2000 George King proposed purchasing her interests for $1,164,000. In March 2002 he had telephone discussions in which it was proposed that Whitney would offer her $1.6M to buy out her interest. 223There is also evidence that George King regarded the Bellamy settlement as extraordinarily favourable to Whitney. On 24 March 2006, very shortly after the Bellamy settlement, George King recorded in a note he sent to Mr Benecke that Patricia Bellamy's Whitney shares had been purchased at a cost of $5 per share in circumstances where Whitney's notional value on a winding up was $21.38 per share. George King's evidence in this case is that, as at January 2009, it is properly valued at about $18 per share or $14 per share with a minority discount. 224George King stated in his 2005/2006 Managing Directors' Report for Whitney that "Mrs Bellamy sought mediation to close what was described by [Whitney's] QC as a 'hopeless' case". 225Other family members also regarded the Bellamy settlement as extraordinarily favourable to Whitney. Katie King wrote to her brother on 31 July 2006 saying, "Just another notch on your belt so you could say: 'I can't believe that Katie and Shish were stupid enough to sell out for $300k each' just like you did for Tricia". 226Berkeley King set out his thoughts on the topic in the paper he prepared and provided to his son for the mediation in October 2007: "Because George was the controlling shareholder he elected to run the case, which went through all the usual stages of discovery etc. As the case came closer to the courtroom Bellamy sued us for mediation. (Our legal team said that there is no such thing as an unlosable case but if there was one, this would be it.) During the mediation Bellamy accepted the water licence from Gobabla and $150,000 as payment for all her shares and entitlements. George deserves credit for how he ran the case and the outcome was excellent." 227George King also seeks to rely on the Bellamy settlement to establish that there was a practice within Whitney of applying a 20 percent minority discount where minority interests were bought out as a matter of course. He calculates his damages on that basis. He relies on two transactions to establish the "practice", being the payment to Whitney King in 1998 and the Bellamy settlement. Mr Benecke argues that these two instances are insufficient to establish a practice that provides any reliable guidance on what the family would have been prepared to accept. George King did not apply any such discount when he negotiated with his family in 2006 (when, on his own admission, he was not under any pressure). In any event, there is no evidence that Patricia Bellamy agreed to any such discount. There is, on the contrary, evidence that she was unwilling to do so when on 7 August 2003 George King wrote to Brenden Miller saying, "Mrs Bellamy has had no intention whatsoever of selling her shares for anything under their full asset backing price, she will not even discuss minority discounts". 228As to the position of Whitney King, there is no probative evidence that he agreed to a 20 percent discount. The document George King points to does not refer to any such discount and there is otherwise no evidence about the wider circumstances in which Whitney King agreed to sell his shares. 229The Bellamy settlement was extraordinarily favourable to Whitney. The terms of the settlement must have turned on the particular circumstances, including the parties' respective legal costs (proceedings had been on foot for over three years) and the prospects of the oppression suit succeeding (which, of course, turns on the particular quality of the alleged oppressive conduct). Patricia Bellamy was also far more removed from Coombing Park and its operations and less close to George King personally than his immediate family. George King's attempt to have Patricia Bellamy's shares transferred to himself personally in March-April 2006 230Mr Benecke contends that the timing of the Bellamy settlement is significant. The settlement deed was executed on about 16 March 2006. George King deposed that negotiations with his family commenced "[a] week or so after the Bellamy dispute was resolved in March 2006" when he had a discussion with his parents in which they said words to the effect "we need to get some money out for the girls so that we can give them a start". 231That affidavit evidence has to be compared with what George King said in cross-examination when he accepted that the topic of his sisters' inheritance had been discussed prior to March 2006. Indeed, he and his sisters had met in January 2006 and the issue was on the agenda for the meeting. The agenda sets out a number of sub-issues under the heading "Inheritance" including "Timing", "Money value" and "Esk". George King later asserted that he had "started the talk about getting assets out to Katie and Shish early in their lives so they [could] be responsible for their own circumstance[s] and to begin their own capital growth as [he had] done". 232On 24 March 2006 (that is, about a week after the Bellamy settlement deed was executed) George King sent an email to Mr Benecke as follows: "Dear Ian, Attached is the shareholder movements from 1998-2006. Will need the PEB shares into Deerslayer to keep everything together - before the next generation split happens. Look forward to seeing you 3.00pm Tuesday. Regards, George" 233The documents attached to the email are also significant. They treat Patricia's Bellamy's shares as being already transferred to George King. They state that he had "purchased" Patricia Bellamy's shares notwithstanding that the consideration was paid by Whitney. They also attribute 111,234 shares in Whitney to George King via Brumby Run (that is, two-thirds of the 166,867 Whitney shares held by Brumby Run) and state "purchased rights from PESK and PEB". This confirms George King's view that the Whitney shares held by Brumby Run were to be attributed to the shareholders of Brumby Run in accordance with their holdings. It is also curious that George King gave himself the benefit of those shares when he did not purchase Peter King's Brumby Run share until 2007 and Patricia Bellamy never held a Brumby Run share. 234George King was cross-examined on these matters as follows: "Q. So as far as you were aware all of the settlement monies or value in relation to the Bellamy settlement was coming from WPC, correct? A. Yes. Q. Notwithstanding that you wanted to get the shares that Mrs Bellamy was transferring as part of the settlement, I want to suggest to you, into your name or into companies that you control. That is correct, isn't it? A. Correct. It was my understanding that I was the majority shareholder. Q. But you wanted to get those shares into your name or into the companies that you controlled, correct? A. Correct. Q. Notwithstanding that WPC was providing the consideration for the settlement? A. Yes. Q. You wanted to do that, in other words get the transfer of shares into your name, before there was any discussion about the paying out of money to your sister. That is correct, isn't it? A. To finish the transaction first, yes." 235By an email dated 27 March 2006 Mr Benecke confirmed that as Whitney had funded the proceedings against Patricia Bellamy and paid the consideration for her shares, George King could not take a transfer of her shares without giving some consideration to Whitney's other shareholders. He also said that there would be complications in Whitney funding him to purchase its own shares. George King then appears to have accepted that the Bellamy shares should be extinguished. At the Whitney Annual General Meeting on 23 June 2006 it was resolved that Patricia Bellamy's shares in Whitney and Somers should be extinguished, and that Whitney purchase her shares in Esk. George King attended the meeting and he is recorded as voting in favour of the resolutions. There may have been some doubt about the efficacy of the resolution (of Whitney) to extinguish Patricia Bellamy's Somers shares. In any event, on 28 July 2006, George King asked Mr Benecke whether Patricia Bellamy's Somers shares could be extinguished "without affecting my position". 236Notwithstanding these events, George King represented to his family in negotiations with them that he had acquired Patricia Bellamy's interests in Whitney and Esk. In a letter to them dated 22 June 2006 he said: "As majority shareholder I began negotiations with Tricia to purchase her 33% shareholding. This was within my legal, moral and logical right to do so. This purchase does not affect Katie's and Shish's inheritance as they have no right to inheritance from Tricia. ... WPC has always been a family Company, from Gran Whitney to her five daughters, to Ewart (75%) and Whitney (25%), to Tricia (33%), Berkeley (33%) & Peter (33%). I have received by way of inheritance 24.5% and have purchased both Tricia's and Peter's shareholding to bring my ownership in the WPC Group to just over 90%." 237George King was cross-examined on this material as follows: "Q. I suggest to you that you were attempting to create in those two paragraphs a false position, weren't you? A. No. When her shares were extinguished in Somers I went from owning 66 per cent of that to a hundred per cent. Q. The situation was, was it not, there had been proceedings commenced by Ms Bellamy against WPC and others, correct? A. Yes. Q. The defence of those proceedings had been paid for by WPC? A. Yes. Q. The outcome of which was to be paid for by WPC? A. Yes. Q. And what I suggest to you is in those circumstances you personally had no entitlement to those shares at all, did you? A. That is why I got advice from Mr Benecke to see if I could take them in my name, how it could be done and we realised there was no difference at all time to my position if I had them either transferred to me or extinguished. Q. The advice that Mr Benecke gave is that you could not put them simply into your name without giving value? A. Yes. Q. To the other shareholder. That is correct, isn't it? A. Yes. Q. What I want to suggest to you is that in the letter of 22 June 2006 you were putting a contrary position to that to your father and sisters, weren't you? A. It is not contrary because the shares were extinguished. Q. The shares not been extinguished by 22 June 2006 had they? A. No." 238Mr Benecke contends that George King's claim that the treatment of Patricia Bellamy's shares affected all shareholders "proportionately" is false. The fact is that Whitney had funded a buy-out that had the effect of disproportionately increasing the shareholdings of those persons who held Whitney shares through Somers. That is because Patricia Bellamy held almost all of her shares in Whitney through Somers. It is common ground that George King owned, or was entitled to (pursuant to the promises made to him by his father) the whole of Somers at the time. He benefited significantly from Whitney's buy-out of Patricia Bellamy. By reason of the extinguishment of her Somers shares, his holding in Whitney through Somers increased from 43.8 percent, or 327,783 shares (two-thirds of Somers' holdings), to 65.7 percent, or 491,676 shares (100 percent of Somers' holdings). The shareholdings of George King and his family were not correspondingly increased. They increased only marginally by reason of the extinguishment of Patricia Bellamy's 2.64 percent interest in Whitney that was directly held. 239Further, if George King had acquired Patricia Bellamy's shares, he would have been even better off, because he would have acquired her 2.46 percent direct interest in Whitney and her 33 percent interest in Esk. His claim that it made no difference whether Patricia Bellamy's shares were extinguished or acquired by him is also false. 240The purchase of Patricia Bellamy's shares in Esk by Whitney also gave George King (for the first time) an interest in that company through Whitney. Once again, he paid no consideration for that interest. 241George King's family expressed concerns about his attempted treatment of the Bellamy shares and what it suggested about the management of Whitney. On 25 July 2006 Berkeley King wrote to his son as follows: "Re your purchase of Bellamy shares. This is not clear and there are some unanswered questions. You did not pay the costs of running the case, WPC did. You did not provide the capital or the cash to pay for her shares. WPC did. What deal you did with the coy to justify putting those shares in your name I have zero information. As far as I know it has not been approved at a board level." 242Although he used the word "purchased", Berkeley King's concerns seem to relate not only to George King's unsuccessful attempt to have Patricia Bellamy's shares transferred into his name, but also to the general issue about the disproportionate benefit that in fact accrued to him as a result of the Bellamy settlement. That is, the increase in his interest in Whitney through Somers from 43.8 percent to 65.7 percent, in circumstances where the other Whitney shareholders did not get a corresponding increase. 243That is confirmed by later documents, such as the email exchanges between George King and the mediator, Ms Sykes, where George King states that the question of "who paid the aunt" is "the main point of contention" between him and his family. Ms Sykes replied, accurately: "I think you are correct this is probably the contentious bit I would suspect and that is all it is that maybe they would think aunts shares would not be yours alone as WPC paid the price!" 244Unsurprisingly, George King's family had difficulty accepting that, without paying any consideration of his own, his share in Whitney had increased so dramatically as a result of the treatment of Patricia Bellamy's shares. That treatment significantly influenced later negotiations. Negotiations between George King and his family in January-July 2006 245Negotiations appear initially to have been conducted with the assistance of Mr Adamedes. Facilitated meetings were held on 22 June 2006 and 31 July 2006. George King's offer on 22 June 2006 246At the facilitated meeting on 22 June 2006 George King made an offer of $1.294M. The offer was calculated on the basis that each share in Whitney was worth $5, being the amount George King considered Patricia Bellamy had received. He later accepted far higher per share values for Whitney and he accepts for the purposes of these proceedings, in accordance with the Ivey report dated 19 July 2012, that as at January 2009 Whitney was valued at about $17.67 per share or $14.14 per share with the 20 percent minority discount. 247Importantly, the offer made was not for all of the Minority Shares or the other benefits ultimately obtained by George King under the settlement. It was to purchase only the family's remaining shares in Whitney (not Berkeley King's shares in Esk, which were to remain with the family). This is apparent from the terms of the offer as described by George King in his 20 July 2006 letter to Mr Benecke referred to earlier. There is also no suggestion that he would have become entitled to occupy the homestead, a right he later valued at $500,000. 248In his opening, George King's counsel conceded that the offer of $1.294M made on 22 June 2006 was put "before Mr George King started to have doubts about the legal position that he was in as a result of what we say is the negligence of Mr Benecke". In light of that concession, Mr Benecke submitted that it becomes important to consider the offer in some detail. A number of aspects of it are significant. 249First, George King set out his calculations of what he was prepared to offer in a document that became annexure "A" to a letter he sent to Mr Benecke on 20 July 2006. The annexure stated: "Assumptions: GK returns all inherited shares to BK and Bellamy's shares are extinguished by the Company. BK's shares are divided equally three ways." 250This suggests that George King was negotiating with his family, and was prepared to resolve the dispute, on the basis that there would be, as far as possible, an equal division of his parent's wealth, among his sisters and him. He was cross-examined on this material as follows: "Q. Anyway, the essence of the payout plan that is set out in annexure A was this. Tell me if you agree. You treat Berkeley's shares as going back to him; correct? A. Correct. Q. You treat the Bellamy shares as cancelled? A. Yes. Q. In effect it gives Berkeley holding 52 percent of WPC, which we then split three ways? A. Yes. Q. Seventeen or so to you, 17 to each of your two sisters? A. Yep. Q. And that was the basis upon which you were prepared to resolve the matter then; correct? A. That was what they were wanting. If you go to the handwritten notes of the March meeting of my sister's, that's what she was trying to undo. Q. That's what you put forward at the meeting of 22 June, wasn't it? A. Yes. Q. It's what you were prepared to offer; correct? A. 1.2, yes. Q. An offer on the basis of treating Berkeley's shares as going back to him? A. Yes. Q. And Bellamy's shares being cancelled and then a three way split? A. This is what I put in the meeting, yes." 251George King recorded elsewhere that this approach was taken "[i]n the interests of fairness to both the existing shareholder[s] and future beneficiaries of Penny & Berkeley's estate." On the same page, in a set of documents prepared by George King for provision to the family in mid-2006, he set out the effect that the cancellation of Patricia Bellamy's Somers shares had on his and his father's shareholdings in both Somers and Whitney on the assumption set out above: "The end result is that neither George [nor] Berkeley [has] purchased any more shares, the number of shares they hold remains the same, but the fact that there are only 2 major shareholders instead of 3 now means [their] percentage shareholding has changed from approx 33% each to approx 50% each. So both have benefited equally as a result of their existing 1/3 shareholding [in Somers] and neither [has] used [his] position to the detriment of the other." 252Unless it is assumed that Berkeley King's shares "go back to him" and there is then a division of his 52 percent interest in Whitney among his children (17 percent each) then the above comment does not apply. Far from "benefiting equally" from the extinguishment of Patricia Bellamy's shares, George King's shareholding in Whitney would increase from 43.8 percent to 65.7 percent whereas the other Whitney shareholders (including Berkeley King) would obtain only a marginal increase (less than one percent), as explained above. Mr Benecke contends that is another reason for inferring that equal division with his sisters was acceptable to George King at this time. Otherwise, by reference to his own explanation to his family, the extinguishment of Patricia Bellamy's shares would be grossly unfair to them and favourable to him. 253George King's preparedness to resolve the dispute with his family on the basis of an equitable division between him and his sisters is readily explicable. Apart from obvious notions of fairness, it is also consistent with the evidence he gave on the intent of the agreement between him and his father and would otherwise see him take a disproportionate benefit from the cancellation of Patricia Bellamy's Somers and Whitney shares. 254Moreover, the offer is revealing about George King's attitude towards the 166,867 Whitney shares held by Brumby Run. George King said in his 20 July 2006 letter to Mr Benecke that: "Berkeley gave a condition on the transfer of his shares that I 'look after' the girls ... with respect to purchasing the WPC & Esk shares from his and Penny's estate. It was never expected to be dollar equal (Please refer to annexure marked C.) This is Katie and Kristen's actual legal position." 255Annexure "C" records under the heading "Current Actual Situation" that 87,610 shares in Whitney were held by "Penny & Berkeley King & Assoc Companies". These are the shares George King told Mr Benecke he was required to purchase from his parents' estate. The 87,610 must include an amount attributable to Berkeley King's share in Brumby Run. As a matter of arithmetic, the 87,610 appears to comprise: (a) the sisters' direct holdings of 12,505 Whitney shares; (b) Berkeley King's direct holding of 1,983 Whitney shares; (c) the Grand Children Trust shareholding of 17,500 Whitney shares; and (d) Berkeley King's holding through Brumby Run of 55,622 Whitney shares (being 1/3 of the total number of such shares held by Brumby Run). 256These amounts add up to exactly 87,610. Mr Benecke contended that it was somewhat surprising that George King did not include the 17,500 Whitney shares held by Weander/Deerslayer, which he accepted in later negotiations he was required to purchase (i.e., they were not given to him with Berkeley King's Somers shares and are treated as part of the Minority Shares). But even if these are included, the number of Whitney shares that he considered himself bound to purchase could not be anything like 87,610 unless it included a quantity of Whitney shares held by Brumby Run. In any event, George King clearly included a one-third interest in Brumby Run (equated to 55,622 Whitney shares) in his calculations when determining what he should offer his family. He also acknowledged in a handwritten letter to them at about this time that he was required to purchase "Brumby and Esk" (although he did not think it was achievable at that time). It is clear that in making the 22 June 2006 offer, George King attributed one-third of the Whitney shares held by Brumby Run to his father (being 55,622 shares), and considered himself obliged to purchase them. 257The offer made on 22 June 2006 is also important for what it reveals about George King's understanding of "pressure". As noted above, his counsel conceded in opening that the offer was made without any pressure attributable to the alleged negligent structuring of the share transfers. That concession was obviously correct: he could have had no inkling at this time of any legal issues about the security of his control over Berkeley King's Somers shares. However, he repeatedly asserted in cross-examination that he was under pressure at this time: "Q...You accept, don't you, that this offer was made by you at a time when, if your evidence be accepted, you were not concerned about your father going back on his promise to transfer the 15 Somers shares to you? A. The concern was straight away because my sister wanted to undo the deal and she exerts a lot of pressure over him and influence. There are handwritten notes from the March deal. Q. As at 22 June, I want to suggest to you, you had no concern that your father was contemplating changing his mind in relation to the 15 Somers shares being left to you. That's correct, isn't it? A. That he had no contemplation? I'm not sure. I don't know what he was thinking at the time. I know my sister was contemplating. ... Q. I just want to put to you there was no pressure at all on you on 22 June to reach a resolution A. Not at all. Q. ...of the kind that you say arose later. That's correct, isn't it? A. The pressure was beginning. It was already there." 258That evidence was contrary to the concession made by George King's counsel in opening and to his affidavit evidence that it was only in July 2006 or later, after the 22 June 2006 mediation, that he began to form the impression that his father might change his mind about the 15 Somers shares left to him in his father's will. Mr Benecke submitted that this evidence was "plainly false". The very next month, on 20 July 2006, George King wrote to Mr Benecke saying that he regarded his "legal position" to be "extremely clear". 259Mr Benecke emphasised that George King's evidence in cross-examination, that he was under pressure in June 2006, was demonstrative of the way that his case has shifted so as progressively to bring forward his discovery or suspicion of the weakness said to have been caused by the negligent structuring of the share transfers. That suspicion or discovery is then used to explain high offers made by him well before October 2007 (when the will was changed) or February 2008 (when the power of appointment was exercised). Facilitated meeting on 31 July 2006 and George King's subsequent offer of $1.761M 260After the further facilitated meeting on 31 July 2006 George King made an offer to purchase the Minority Shares for $1.761M. He prepared a "calculation" of the terms of the offer for submission to his family. That calculation indicated that he arrived at that figure by increasing the value of each Whitney share from $5 to $7.50, still well below the $14.14 per share he now accepts, even with a minority discount. 261Even though it is based on an unrealistically low per share value, the offer of $1.761M is still higher than the amount for which George King now says he would have purchased the Minority Shares but for the alleged negligence of Mr Benecke, which is $1.429M. Mr Benecke has submitted that it presents even more of a difficulty for him when the other benefits he received under the settlement, such as his father's Esk shares and a right to live at Coombing Park, which were not part of the offer made after 31 July 2006, are taken into account. 262According to Mr Benecke, George King attempts to get around this difficulty by maintaining that he was under pressure by reason of Mr Benecke's negligent structuring of the share transfers before he made the offer. The only basis for that contention, according to Mr Benecke, is to be found at [139] in George King's first affidavit as follows: "Either at the mediation or shortly afterwards Berkeley said words to me to the effect of: 'You need to agree to pay us what we are asking or it will get difficult for you.' These comments together with the fact that Berkeley was wanting much more than the value of the remaining WPC and Esk shares made me concerned about Berkeley's intentions regarding the 15 Somers shares he was to leave me in his will. I formed the impression he was suggesting that he would change his mind about those shares if I did not agree to the payments being requested." 263George King was cross-examined about this evidence in these terms: "Q. I just want to put to you there was no pressure at all on you on 22 June to reach a resolution A. Not at all. Q. of the kind that you say arose later. That's correct, isn't it? A. The pressure was beginning. It was already there. Q. What I want to suggest to you is that the words that you say your father said to you at paragraph 139 of your affidavit were not said? A. I believe they were said. Q. And you did not have the concern or the impression that you set out in paragraph 139? A. I had that concern. Q. Do you accept that at no stage shortly after it being said did you express that concern to anyone? A. This letter to Mr Benecke is before that date. I don't recall expressing it." 264Mr Benecke also submitted that it was highly improbable that Berkeley King made the threat attributed to him for several reasons. First, at the time the words were allegedly said, Berkeley King had affirmed in writing, on several occasions, that it had been agreed that his Somers shares would be transferred to his son. These have been referred to earlier: "I signed over to him all my shares in Somers"; "George would then have an asset of approximately $19M less debt which would be his totally without any obligations to anyone" and "George has the legal right to not give any part of the WPC to anyone...". Nowhere does Berkeley King suggest that there is any uncertainty about his son's rights in that respect. Berkeley King also wrote to his son on 25 July 2006 saying: "All I have ever done for you has been done with love and with absolute faith in you. I do not understand when you say that I have misled you and used you (to suit my own end) when you now own in effect the WPC. Where you are now is where I have always wanted you to be." 265Mr Benecke emphasised that it is highly unlikely that Berkeley King would have made an oral threat that contradicted his numerous contemporaneous written statements. 266Additionally, George King did not report the supposed threat to anyone or write it down. There is no documentary evidence supporting the making of the threat and much documentary evidence inconsistent with it. 267George King's evidence is that when he did raise the security of the 15 Somers shares with his father over a year later in August 2007, he was told, "If you don't trust me I will sign them across to you now". On 21 June 2007 Berkeley King had said to his son, "I have promised to give you all of my Somers shares". Berkeley King had no intention not to honour his promise to transfer the 15 Somers shares to his son as at June and August 2007. It is highly improbable that he had a different attitude in July 2006, when his relationship with his son was still relatively good. 268Mr Benecke submitted in any event that even if I were to find that the words were said, George King did not form the "impression" that he claims he formed. That is for the following reasons. 269First, Berkeley King only said "it will get difficult for you". There was no reference to the 15 Somers shares left by him in his will. There was no reference to any shares at all. Berkeley King could have meant any number of things. George King had no reason to think his father was implying that he would change his will. Whether the recollection is honest or not, it is arguably influenced by hindsight. 270Secondly, when Berkeley King is alleged to have said "it will get difficult for you", George King had just read a number of written statements from his father affirming that his son had been given his Somers shares. George King's evidence is that Mr Benecke told him that there was sufficient written evidence to enforce his father's promise to leave him the 15 Somers shares and that he was content to proceed on that basis. Nothing in what his father said could reasonably have upset his confidence on that issue. George King considered written evidence of the promise to be sufficient assurance before July 2006 and it remained in place. 271Thirdly, on 20 July 2006, only a couple of weeks before the threat is said to have been made, George King told Mr Benecke that "my legal position with all this is extremely clear" and said that he did not "require advice on that front". Hearing his father say "it will get difficult for you" could not reasonably have shaken his conviction that his legal position was "extremely clear". It would not have shaken it sufficiently to prompt him, without seeking any legal advice, to increase his offer from $1.21M to $1.76M. 272Finally, even if George King did increase his offer from $1.21M to $1.76M because he formed the impression that his father "might change his mind" about the 15 Somers shares, that impression could not logically have been caused by any negligence on the part of Mr Benecke. There was always a possibility that his father would come to regret, and attempt to resile from, his promise. Mr Benecke could have done nothing about that. On his own evidence, George King had an assurance that there was enough documentary evidence to enforce the promise if his father resiled from it. He regarded his legal position as "extremely clear". On his own case, he thought he was in as good a position as if he had taken an outright transfer of the 15 Somers shares. He gives no evidence that he was concerned that his father might change his mind or that he began to doubt the advice he says he received from Mr Benecke about enforcement. 273Mr Benecke drew attention to a number of other matters of note concerning the July 2006 facilitated meeting and offer. First, it is naïve to suggest, as George King does, that the dispute could have been resolved in July 2006 by valuation of the Minority Shares. If that was the way it could have been resolved, it was curiously never raised at the time. It was never a simple matter of getting a valuation done with which everyone would agree: this was a family inheritance dispute with all of the complications and conflicts that involves. Given the lack of detail in the agreement between George King and his father, and the different views expressed from 2006 onwards on the meaning of "fair value", it was always going to involve significant controversy and dispute. In any event, if a valuation had been carried out as at July 2006 and George King had bought out his family on the basis he was then prepared to accept, he would have had to pay more than he ultimately settled for in December 2008. 274Secondly, the calculation he prepared when he made the offer after the 31 July 2006 mediation also stated: "I have offered 111,245 BR shares I have purchased from Peter and Tricia to be given to Katie and Shish. 14.8% of WPC". This seems to have been an alternative offer. It is noteworthy for two reasons. George King was still misrepresenting to his family on or after 31 July 2006 that he had "purchased" his aunt's shares. In fact, he had not paid anything to her and her shares had not been transferred to him. He had, however, benefited substantially, and disproportionately, from the extinction of her shares. Furthermore, George King plainly treated the Whitney shares Brumby Run held as being held proportionately to the Brumby Run shareholding (i.e., he claims to have "purchased" two of three Brumby Run shares, thus giving him an entitlement to 111,245 of the 166,867 Whitney shares held by Brumby Run). 275Thirdly, George King's submission that his father was prepared to accept $2M in the 2006 negotiations, as if to set a ceiling on what the family was seeking at this time, is contrary to the evidence. The amounts that Berkeley King and the other family members sought in 2006 varied significantly. George King recorded in a letter to Mr Adamedes on 4 September 2007 that his father "started last year at a payout of $4.5M for the girls without reference to his total shares having an asset backing of $2.6 million". Resumption of negotiations from June 2007 276Mr Benecke perceives George King's submissions to give the impression that when negotiations resumed in June 2007 he was already in a position of weakness and the "dynamics of the negotiations" had changed. That submission telescopes events from June 2007, confuses the chronology, and thus incorrectly gives the impression that he had reasons to be concerned about the security of his position from that date. The sequence of events from June 2007 was as follows. 277In late June 2007 there was correspondence between George King and his father regarding division of inheritance, apparently sparked by them sharing a bottle of whiskey together on about 16 or 17 June. Berkeley King confirmed in his 21 June 2007 letter that he had given his son all of his Somers shares in these terms: "I have promised to give you all of my Somers shares which would include those I receive from the distribution of the Bellamy shares. Unless of course the board decides to extinguish all of her shares." 278There also appears to be a falling out between father and son, primarily in relation to George King's attitude towards his sisters. Nonetheless, George gave unhesitating evidence that he believed his father when he read on or about 21 June 2007 that he would give him all of his Somers shares: "Q. Can I direct your attention to the paragraph numbered 5, 'I promise to give you all of my Somers shares.' Do you see that? A. Yes. Q. You received this letter of 21 June 2007, correct? A. Yes. Q. You read it? A. Yes. Q. You understood that what your father was saying to you in paragraph 5 was that he reiterates his promise to give you all of his Somers shares. That's correct, isn't it? A. Yep. Q. You believed him when he wrote that, didn't you? A. Yep. Q. And you were in no doubt at this time that he would honour that promise? A. This is the whole area there's a bit missed out on in my affidavit. Q. There's a bit missed out A. Just the whole history and the order of these things, it needs explanation." 279On 1 August 2007 George King instructed Mr Benecke to prepare a "valuation" of his father's net equity in Whitney (which he considered he was obliged to purchase). In early August George and his father discussed the 15 "ordinary" or "equity" Somers shares that his father had left him in his will, and his father said he would sign them across immediately. 280What happened next is contested. George King's evidence is that Mr Benecke told him that he had advised Berkeley King not to transfer the shares because "[a]s his solicitor I could not advise him to sign them". Mr Benecke's evidence is that he informed George King that the transfer would have significant tax consequences. He later informed him that Berkeley King had not signed the share transfers but that: "He has promised the remaining Somers Investments shares to you under his will. There is more than enough evidence about that promise. He said that he did not want to sign the transfers given the promise." 281On 13 August 2007 Mr Benecke provided share flow-charts and calculations to George King and noted that he was meeting with his parents the next day "to discuss matters generally relating to WPC equity and entitlements, and estate division". That same day George King wrote to Mr Benecke and asked him to raise certain things at the meeting he was to have the next day with his family. He also proposed that a facilitated meeting (referred to in subsequent correspondence as a mediation) be conducted as follows: "...I will no longer stand to be the brunt of their personal insults. This is beyond just putting a line under things and continuing, the relationships will need to be rebuilt. ... It is my opinion that this will be even more damaging to everyone if it is allowed to proceed any further ... I will not discuss any of these matters with them outside of a facilitated meeting. I am proposing that we have a mediated meeting within the next month where I will bring bank cheques to pay out all of Berkeley's, Katie's and Kristen's shares and the Esk loan account. I want the meeting to be facilitated by an independent mediator, you to be there to provide facts and oversee the transfers, Michael Adamedes ... Berkeley, Penny, Katie, Kristen and myself. Could we organise this meeting to be held in your board room please..." 282The meeting occurred on 17 October 2007 almost exactly as George King proposed, save that Mr Adamedes was not present. In particular, Mr Benecke attended to "provide facts". 283In early September 2007, position papers were exchanged ahead of the mediation or family meeting. Berkeley King's position paper reaffirms in clear terms that his son had been given his Somers shares and specifically reaffirmed the promise of the 15 ordinary or equity Somers shares in his will. His references to "unfragmented control", "absolute control in his own right", and similar statements have been referred to earlier in these reasons. 284Mr Benecke's paper, entitled "Statement of Position" also affirms, consistently with his own understanding, that George King held 85.5 percent of Somers. 285The "family meeting" was held on 16 October 2007. It was agreed, as a basis for further discussion, that George King would pay $3.5M to his parents and sisters, to be funded from sales of properties, and that his parents would continue to have a right to occupy Coombing Park. 286George King's submissions give the overall impression that he was not on the front foot at this time. Mr Benecke disputes that. George King proposed the mediation and its format and on a fair reading of the documents was the driving force behind the negotiations. The treatment and valuation of the Brumby Run shares in August 2007 and afterwards 287George King's submissions include an allegation that Mr Benecke was negligent by reason of attributing value to certain Whitney shares held by Brumby Run in the "valuation" he performed in August 2007. The defendants contend that such a case is not pleaded and should not be permitted. If it is, the defendants seek the following findings in relation to the calculation exercise carried out by Mr Benecke in August 2007. 288Exhibit "O" shows that Brumby Run was established on 13 August 1997. Three shares were allotted: one to Berkeley King, one to Peter King and one to George King. His evidence is that Brumby Run was established in 1988 when Whitney King was bought out: his shares were transferred to Brumby Run as trustee for the Brumby Trust. 289Until late in these proceedings (possibly until the trial) it appears to have been assumed by all parties that Brumby Run held its Whitney shares either for the benefit of the persons who held the Brumby Run shares, in equal proportions (so that one Brumby Run share was equivalent to 55,622 Whitney shares) or held its shares on behalf of Berkeley King and his siblings in equal one-third shares. There appears to have been some dispute about which of these views is correct. However, no-one has suggested that Brumby Run could be controlled in the manner George King now suggests. It was always accepted, as Berkeley King had one Brumby Run share, that he was to be attributed one-third of Brumby Run's shares (on the first theory) or one-half of Brumby Run's shares (on the second theory), following the extinguishment of Patricia Bellamy's interests. 290The instructions given to Mr Benecke in relation to the August 2007 valuation confirm the position. On 1 August 2007 George King wrote to Mr Benecke requesting the valuation of "Berkeley's realisable assets in WPC". The letter stated: "Assuming Brumby Run was up for the benefit of AE King's three children; effectively I have purchased Peter ES King's one third share, Berkeley wishes to sell his one third share and Bellamy's one third share is extinguished. For the purposes of share valuations can you please assume the following shares are extinguished: PE Bellamy: 19,724 KP King: 3,000 Brumby Run Pty Limited (33%): 55,622" 291Thereafter followed some correspondence between Mr Benecke and George King about how Brumby Run should be treated. George King wanted to make it clear that his aunt's interest had been extinguished. The Whitney shares held by Brumby Run were therefore held in equal shares for him (by reason of his purchase of Peter King's Whitney holdings) and his father. However, the correspondence is consistent with Brumby Run holding Whitney shares on behalf of Berkeley King and his siblings. 292Although described in George King's submissions as a "valuation", the work done by Mr Benecke in August 2007 was really only preparation of a share flow-chart and a calculation. Mr Benecke described the documents he produced, accurately, as a "flow chart indicating the position in relation to WPC land ownership and shareholding" and a statement entitled "WBS King: WPC/Somers/ESK Net Equity (Consolidated)". He later described the second document as a "Statement of Equity held by your father". It is apparent from the correspondence that the purpose of that document was merely to identify the Whitney shares held by Berkeley King or his associated companies, which George King had said he was required to purchase, and to attribute value to them by reference to valuations carried out by Yates Baker McLean. The work could not fairly be described as a valuation or as Mr Benecke being retained by George King to advise him as to what shares should be included. The mediation before Ms Sykes on 16 October 2007 293The mediation occurred at Mr Benecke's offices before Ms Sykes, a mediator from Dubbo, apparently under the auspices of the NSW Farmers Association, and in accordance with George King's proposal. What was Mr Benecke's role at the mediation? 294George King had requested Mr Benecke to attend the mediation "to provide facts and oversee the transfers". George King's evidence is that in the week prior to the mediation his father told him that "Ian Benecke will be present in the meeting" and that George King then asked for Brenden Miller to be there. Nothing is made of that evidence in George King's submissions. Mr Benecke says that there is an obvious reason for that, which is that it is false. Contemporaneous documents make it clear that Mr Benecke attended the meeting at George King's request. 295Mr Benecke's evidence on this issue is confused. In cross-examination he described his role at the mediation as follows: "Q. George went off to see Cheney & Wilson after the facilitated meeting or mediation or whatever one calls it A. Correct. Q. that was held at your offices? A. Correct. Q. The one that you had prepared the valuation when acting for both of them? A. Correct. Q. The time at which you had attended at the facilitated meeting representing both of them? A. I was asked not to represent either party. I was asked to be in attendance to explain any historical information or holding structure." 296By the time of the mediation Mr Benecke had acted for both George King and members of his family on different matters. It is apparent from his role at the mediation that he did not give legal advice and was not acting for any party. Rather, he was providing historical information at what was hoped to be a relatively informal facilitated meeting to resolve a festering family dispute. The statements that Mr Benecke made at the mediation about preserving family harmony and unity were even handed (he noted that George was "an outstanding manager and operates with the full trust of his parents") and were consistent with this role. Mr Benecke contended that he could not be criticised for his participation in the meeting on 16 October 2007. 297George King was in any event well aware that Mr Benecke was not acting exclusively in his interests at this time and was nonetheless happy for him to continue in the role he had asked him to perform. That is particularly apparent from George King's cross-examination on this topic as follows: "Q. You continued from 13 August 2007 onwards instructing Mr Benecke to continue acting on your behalf in negotiating a payout figure with your parents, didn't you? A. Yes, I did. Q. And this is the same Mr Benecke that you say you formed a view on or about 13 August 2007 that he wasn't acting on your behalf? A. Yes. Q. Or acting in your interests? A. Yes. Q. If you had the view you say you had, why did you continue to instruct him to continue to acting on your behaviour? A. Because it was a black and white transaction in relation to shares." 298George King gave evidence at [163] of his first affidavit that Mr Benecke also described the content of the "agreement" at the mediation. Mr Benecke submitted that that evidence should not be accepted having regard to what emerged in his cross-examination as follows: "Q. If we then go to 163 of your affidavit. You are dealing here with, aren't you, something that you say occurred at the mediation session on 16 October 2007? A. Yes. Q. What I want to suggest to you is that the words that you have set out at 163 were not said at the mediation by Mr Benecke. What do you say to that? A. I don't believe that's correct. Q. What I want to suggest to you is at the commencement of the facilitated meeting the mediator, Ms Sykes, with the assistance of Mr Benecke plotted the WPC Group ownership structure on a whiteboard noting details of the shares held and the percentage interest of the various parties or entities. Do you recall that occurring? A. Yes. Q. And in the course of the discussion duration the facilitated meeting Mr Benecke indicated that Berkeley's historical instructions involved the transfer of some shares to George so long as adverse duty and GST consequences were not triggered. That is correct, isn't it? A. That is not correct. Q. And that Berkeley had promised to leave certain other shares being shares on which a transaction would generate tax revenue consequences to you under your will? A. That is not correct. That is not how he said it. Q. Under his will. Now, minutes were prepared of this mediation session. That is correct, isn't it? A. Yes. Q. Those minutes contain no reference, do they, to the effect of what you set out at paragraph 163? A. Can you point me to the minutes please? ... Q. The minutes don't record, do they, anything to the effect of what you said at 163? A. They do in the table on page 700. 'Result after promise showing Berkeley's net assets at $2.388 million'. Q. That is the bit you rely on, is it? A. Yes." 299Mr Benecke therefore submits that I should find that George King requested Mr Benecke to calculate the value of his father's net equity position, and to attend the mediation before Ms Sykes, knowing that Mr Benecke was not acting exclusively in his interests. He also asks that I find that the work he performed before the mediation, and his role in it, was merely to conduct calculations and provide background or historical information. It was not a controversial role or one in which he could adversely affect George King's interests. What did George King agree to at the 16 October 2007 mediation? 300Mr Benecke submitted that the best evidence of what was discussed and agreed at the 16 October 2007 mediation is what is recorded by Ms Sims, of the NSW Farmers Association, who attended and took notes as a recorder. She was wholly neutral and there is no suggestion that she had any reason to do other than accurately record what took place. Under the heading "Suggested Action" she recorded the following: "It was agreed that the following will form the basis for further discussion: 1. Coombing Park South will be sold (see above) and proceeds will go to Berkeley and Penny. 2. Berkeley's share of Esk will be sold to [Whitney] on vendor finance - loan provided by Berkeley and Penny to WPC. 3. The total amount owing to Berkeley and Penny from 1 and 2 above will be $3.5 million. 4. $2 million of the amount in 3 will be distributed equally to Katie and Shish, with Berkeley and Penny retaining $1.5 million. 5. Berkeley and Penny have the right of occupancy of the Coombing Park main homestead rent [free] for their lifetime. 6. Berkeley confirms his Will bequest of Somers Investments shares to George." 301The agreed "basis for further discussion" expressed in these paragraphs is less favourable to George King than the deal he ultimately obtained in December 2008. It involves a payment of $3.5M (rather than $3.55M) in exchange for obtaining the Minority Shares, but it reserves to his parents a right to occupy the homestead. He valued that right at $500,000. 302George King's evidence in his first affidavit was broadly consistent with what was recorded by Ms Sims. He said he "agreed to investigate whether the company could obtain finance to pay $3.5M". He sought later to "clarify" that evidence, saying that "[a]t that meeting my parents and sisters agreed that I was to go away and do that. I didn't answer them." 303According to Mr Benecke, that attempted "clarification" reflects badly on George King's credit. It is part of the shifting case he has had to develop to explain offers consistent with the December 2008 settlement made at a time when he was not under any pressure by reason of the changing of the will and removal of the trustee. Mr Benecke insists that it should be rejected for the following reasons. 304First, and critically, George King's "clarification" is falsified by the email he sent to Ms Sykes on 19 October 2007, three days after the mediation. Mr Benecke submitted that that email is of critical importance in this case. It was sent in a context where, shortly after the mediation, it was reported to George King that his mother and sister Katie then wanted $4M instead of $3.5M. The plaintiff stated: "G'day Lyn, Absolutely positively and definitely the best thing to do is to stay with our original agreement we made last Tuesday. I need the time to get everything in order, including contracts of sale and they need time to settle down. Every meeting we have had over the past two years it has been agreed what is fair, everyone leaves and then within 12-24 hours Katie has changed her mind. ... The figures you did up last Tuesday for WPC assets [were] for 100% of the assets ... Berkeley only ever owned 33%. ... I wouldn't have though Berkeley was going to go back on his word about the transfer of the asset side of our deal from 1999. If you do a deal and give shares away; logically you would not include it in your statement of assets for distribution (he had to keep them in his assets because Penny & Katie told him to - wouldn't have been worth his life!!!!). Katie kept trying to go back to Peter's shares because she wants them included in Berkeley assets. If I agree to $4M today Katie will have it at $4.5M tomorrow (bet you half a mill). And then she won't be happy at $4M or $4.5M and the family relations will still be dead in the water. Sorry for the barrage of frantic phone calls you are going to get from the big house mob. You may like to mention to them that they have pushed me over the edge." 305The email contains a number of important admissions. Importantly, George King admits that an "agreement" was reached. It is plainly, in context, the agreement to investigate payment of $3.5M. Mr Benecke contends that George King's "clarification" is false and reflects adversely on his credit. 306Secondly, the supposed "clarification" is contrary to Ms Sims' notes, which use the word "agreed". George King was sent these notes on 22 October 2007. He did not query the accuracy of the notes with anybody. 307Thirdly, it is contrary to George King's evidence in his first affidavit. He swore several further affidavits but only sought to "clarify" the evidence at trial. Mr Benecke contended that the so-called "clarification" is nothing of the kind. In his affidavit he said that he "agreed" to investigate a payment of $3.5M. He is now seeking to withdraw an admission about what he agreed. 308Fourthly, on 6 February 2008 George King wrote a managing directors' report in which he described the meeting as follows: "We got to the meeting ... and it was disclosed that Berkeley thought I should pay out $3M, Penny thought $3.5M and Katie though $4M. They argued amongst themselves and compromised on $3.5 ... I was set the task by the mediator to work out if and how we could raise this amount of money to pay them out completely, to organise contracts of sale for the transfer and I was asked to consider this amount of money and bring all the details to the next meeting. The meeting finished and we all went home. The mediator phoned me the next day to tell me that Penny & Katie now wanted $4 million." 309This report makes clear that George King was prepared to consider and investigate payment of $3.5M. Read as a whole, it is consistent with the evidence in his first affidavit and the other material. There is no reference to, or any complaint about, pressure or a threat. George King does not state to the Melbourne shareholders that $3.5M was out of the ballpark or, as he now says, over 2.5 times greater than was reasonable for him to pay, or that he did not agree to investigate it. Consistently with his email to Ms Sykes, his gripe is only that the next day his mother and sister changed their minds and sought a higher amount. 310Finally, George King said this in the position paper he prepared for the mediation: "I have subsequently sold Gobabla which equated to approximately our debt. Dad has said for the last year that he thinks the girls should get $1M each as a fair payout which I have been working towards. The asset valuation of all the remaining shares is $2.6M. Two million dollars for the remaining 14.5% is nearly six times the value we paid for Bellamy's 33%." 311Two million dollars was the same amount recorded as being agreed at the mediation as an appropriate payout to George's sisters: $2M for his sisters and $1.5M for his parents. He indicates that it is a payment he is "working towards". That supports the defendants' case that the notes of the meeting are accurate and that George King was prepared to consider or investigate a payment of $3.5M along the lines recorded. Did Berkeley King threaten George King at or after the 16 October 2007 mediation? 312George King's evidence is that "after the mediation" his father made a threat to him along the following lines: "You don't realise the value of the 15 Somers shares. You could lose them." He deposed to the fact that it was after this threat was made ("subsequently") that his family proposed, and he agreed, to investigate payment of $3.5M. George King now seems to accept (somewhat inevitably, given what is recorded by Ms Sims as "Suggested Action" referred to earlier) that the proposal to investigate the feasibility of a $3.5M deal was made at the mediation, not afterwards. It must therefore have been made before the alleged threat. Mr Benecke submits in these circumstances that the threat cannot have had a bearing on George King's state of mind at the mediation on 16 October 2007, at which he agreed to investigate and consider a $3.5M payment. Indeed, given the terms of his 19 October 2007 email to Ms Sykes set out above, it cannot have been made before that email was sent either. 313In any event, Mr Benecke submitted that George King's evidence that he was threatened by his father in this way should not be accepted. It is inconsistent with his father's numerous affirmations of his promise in respect of the 15 Somers shares. It is also inconsistent with the "confirmation" in point 6 of the Ms Sims' "Suggested Action" section of her notes and with the 6 February 2008 managing directors' report prepared by George King, where he gave a quite different account of his discussions with his father and his state of mind at this time as follows: "I said to Berkeley before the meeting that if he goes back on his word about the Somers shares he is holding in Trust for me it would be devastating to our relationship. Berkeley replied to me to have some faith." 314George King could not give any reason why he did not report the supposed threat in the letter, when he did take his time to report a different conversation about the Somers shares in the will. His cross-examination about this included the following: "Q. You make no mention in here of the threat that you refer to in your affidavit at 165, do you? A. No. Q. That's because it never occurred. That's correct, isn't it? A. That's not correct. It did occur. Q. If it occurred why didn't you put it in the report to these people? A. I don't know. I didn't think it was relevant to them. Q. It was relevant to them, was it, to tell them before the meeting that if he goes back on his word about the Somers shares it would be devastating and that he replied to have some faith. That was relevant, was it? A. Yes. Q. If that was relevant, a statement that you don't realise the value of the Somers shares, you could lose them, would also be relevant? A. That had been going on for months and months at that stage. Q. It surely would be relevant, wouldn't it? A. It might have been but I didn't put it in." Was George King under pressure at the 16 October 2007 mediation because of some perceived lack of security in his legal position? 315George King's case is that if he was prepared to contemplate a payment of $3.5M in October 2007, it was only because of the pressure he was then under by reason of concerns about the security of his legal position. Mr Benecke contended that such an analysis should not be accepted. He proffered several reasons for this. 316First, George King has given no evidence about it. The only evidence is that he was prepared to agree to investigate the $3.5M payment "to avoid the consequences of Berkeley's threat". He now apparently accepts that the threat was made after the mediation, and therefore after he agreed to investigate payment of $3.5M. 317Secondly, there is no suggestion in any of the evidence that there was, as at 16 October 2007, any uncertainty about his ownership of the shares held by Weander/Deerslayer. George King's case must be that he was prepared to contemplate a payment of $3.5M because of his worries about losing the 15 Somers shares left to him by his father in his will. That is highly doubtful. He gave evidence that he was not particularly concerned about the shares the subject of the bequest because of his control over the voting shares. He responded as follows when questioned about whether he was happy with his father leaving him the shares in his will: "Q. And you were happy with that arrangement; correct? A. Yes. Q. Again because you trusted your father at the time; correct? A. No, because I had control of Somers then and the voting shares and no one could force me to buy the other ones, the shares that were left in his will. Q. Are you saying that the promise that was made to you by your father at that time to leave shares to you in his will was of no moment to you? A. Sorry, was of- Q. No moment to you, no concern to you at the time? A. It was a concern, but because he had transferred the voting shares and he had given me them by Weander and the Berkeley King trust, combined with the Peter shares I controlled the company. By a majority shareholding, if he said at X later date I want you to give me X for these Somers shares, he couldn't have forced me because I owned the majority of the voting shares." 318This attitude makes perfect sense, according to Mr Benecke. The shares held by Deerslayer/Weander were what gave George King control. The 15 "ordinary" or "equity" Somers shares were only of significance in a winding up. 319Thirdly, from a legal point of view, George King had no more reason to be concerned about the security of the 15 "ordinary" or "equity" Somers shares in October 2007 than he did when his father first promised them to him in 1999. As already mentioned, his evidence is that Mr Benecke told him that there was sufficient written evidence to enforce his father's promise to leave him the 15 Somers shares and that he was content to proceed on that basis. Nothing that occurred before 16 October 2007 could reasonably have shaken his confidence in that issue. He always knew there was a risk of his father changing his mind. He considered written evidence of the promise to be sufficient assurance before July 2006 and he still had that assurance. 320Moreover, there was now significantly more written evidence of the promise than there had been previously. For example, there were statements made by Berkeley King in the position paper he prepared for the mediation before Ms Sykes, including the statement "These Somers shares I have promised to leave to George in my will." The revised statement Mr Benecke prepared recorded that Berkeley King held only a 13.32 percent interest in Whitney. The replacement letter and "Equity Statement/Chart" Mr Benecke forwarded on 16 August 2007 similarly recorded that the Minority Shares comprised 14.5 percent of Whitney. The Statement of Position prepared for the mediation also recorded George King owning 85.5 percent of Whitney and his father holding 14.5 percent. 321Fourthly, George King sent numerous emails and letters at the time of the mediation and there is no reference to any "pressure" arising from a fear that he would not be able to enforce the promise with respect to the 15 Somers shares. None of them suggests he was under any particular pressure. That includes in particular the "Wild Ride" sequence of emails with Ms Sykes throughout October 2007. His 19 October 2007 email says, "I wouldn't have thought Berkeley was going to go back on his word". 322What George King did not like was the way his family continued to calculate the division of assets on the basis of notionally "returning" the Berkeley King Somers shares and then dividing the parents' estate three ways. Yet this was exactly the approach he had developed and applied "in the interests of fairness" in 2006. He did not like the potential for his father to "go back on his word" but critically did not express any doubt that if he did so, there were not sufficient documents recording the promise to enforce it. His emails suggest he was very confident of his legal position and he never put anything in writing that could be taken to indicate otherwise. 323The reality is, as he recorded in his 19 October 2007 email to Ms Sykes, that George King regarded payment of $3.5M as within the range of "what is fair". He was not perfectly happy with it, but then neither was his family. That would appear to have provoked his comment that they needed to "settle down". Ultimately he was prepared to accept it, in circumstances where he did not have any doubts about the security of the shares held by Weander/Deerslayer, which were the voting shares and therefore most important to him. On his own evidence, he did not find out about the appointor issue until mid-November 2007. Furthermore, he did not have any doubt that if his father changed his mind about the 15 "ordinary" or "equity" Somers shares, there was sufficient material in evidence to enforce his promise. 324There were a number of matters that Ms Sykes raised with George King that, sensibly, should have caused him to realise that what he was proposing was not fair. For instance, she raised with him the benefit he had obtained by reason of having use of the family's wealth before his sisters and, most importantly, the very significant and unpaid-for benefit he obtained by reason of Whitney paying to extinguish his aunt's Somers shares, thus increasing his holding by about 20 percent. Mr Benecke submitted that the suggestion that "fair value", in this context, meant nothing more than net equity value less a minority discount was highly artificial and self-serving. Events of November 2007 325George King's evidence is that he learned that his father had changed his will, removing the bequest of the 15 Somers shares to him, on 6 November 2007. He had by then already retained Cheney & Wilson to act for him in the dispute with his family. 326His evidence is that in about mid-November he found out from his wife about a possible issue regarding the appointor to the BKST. It appears from Cheney & Wilson's file note to have been raised by him with them on 10 December 2007. He then had Cheney & Wilson draft a deed of variation that would have had the effect of changing the appointor for the BKST from his father to his wife. 327The deed of variation and other transaction documents prepared for George King by Cheney & Wilson were reviewed by him and went through a number of drafts. He forwarded the documents (including the draft deed of variation to change the appointor of the trust) to his father on 12 December 2007. There is no reference in any of the documents or the affidavit evidence to George King's family raising the appointor power to the BKST until the plaintiff did so in December 2007. 328George King described the suite of transaction documents he had Cheney & Wilson prepare in November-December 2007 as "Company Restructure" documents. His correspondence with his solicitors reflects that. There is no suggestion in the correspondence of any pressure. The fact that he commissioned the documents speaks to his confidence that he and his family were about to reach agreement. He was cross-examined on this topic and was in Mr Benecke's submission unable to give any reasonable explanation why he instructed Cheney & Wilson to prepare such documents if he did not think that agreement was close. His evidence included the following: "Q. You also, in the lead up to the meeting on 17 December, caused Cheney & Wilson to prepare draft settlement documents, correct? A. Yes. Q. What you had called a company restructure; correct? A. Yes. Q. You asked them to do that because you were hopeful of getting the matter settled at the next meeting on 17 December; correct? A. Hopeful, yes. Q. The preparation of those documents by Cheney & Wilson was assisted by work done by Yates Baker McLean, correct? A. Yes. Q. It was done at some significant cost, correct? A. Yes. Q. You wouldn't have done it if you thought it was not a worthwhile endeavour; correct? A. Yes. Q. That's because you knew that settlement was close. That's correct, isn't it? A. I didn't know. How was I to know that? This had been going on for two years. Q. Because you knew you weren't very far away on the figures. That's correct, isn't it? A. Who knows? The figures kept on changing. Q. And at the time you instructed Cheney & Wilson to prepare the documents, I want to suggest to you you knew your father had changed his will, correct? A. Yes. Q. And you knew about the appointor power, correct? A. Yes. Q. And you knew or you thought that he was going to exercise it, correct? A. Yes. Q. But notwithstanding all of those matters, you still instructed your solicitors to prepare the restructure documents? A. Yes. Q. And that was because you knew that agreement was not far away? A. That was part of my instructions from the 16 October meeting, was to prepare them and have them ready for the next meeting. Q. Is that reflected in the minutes? A. No, it's not." 329The treatment of Brumby Run by Cheney & Wilson is also of significance. Mr Cheney's file note records: "Brumby Run - purchase BK' (one) 1 share which is valued at 55,622 shares". That is, the Whitney shares held by Brumby Run were attributed in equal shares to the owners of the three Brumby Run shares. That was consistent with the approach taken by Mr Benecke. The only dispute was whether George King's initial share entitled him to one-third (so that, together with Peter King's share, he had two-thirds) or whether the Whitney shares held by Brumby Run were properly divided equally between George King and his father. 330It was never suggested by Cheney & Wilson that George King could control Brumby Run without purchasing his father's single share. It appears that Cheney & Wilson forgot to include provision for transfer of the Brumby Run share from Berkeley King to his son in the first draft of the contracts but did so after he reminded them. George King's attempt to falsify the Deerslayer's share register in December 2007 and its consequences 331Upon retaining Cheney & Wilson, George King sought to have them take steps to have the share register of Deerslayer fraudulently altered to record that Deerslayer held Peter King's shares beneficially rather than as trustee for the BKST. George King's evidence was as follows: "Q. You then instructed Cheney & Wilson to change the register for Deerslayer. Do you recall that? A. Vaguely. ... Q. You did ask Cheney Wilson to change the register, didn't you? A. Yes. Q. So that Peter's shares were recorded as being beneficially owned by Deerslayer? A. That's correct. Q. That was something that you knew at the time was false, didn't you? A. Yes. Q. You knew at that time that they were not beneficially owned by Deerslayer, didn't you? A. Yes. Q. And you had no right whatsoever to have caused the share register to be changed, did you? A. They were my shares. I had bought then on vendor finance organised by Mr Benecke and I could see he was about to sack me as trustee. I was doing it to protect the property from being sold. Q. You had no right to do it? A. I had full right to sell the shares. I had no right to do the ASIC modification. Q. Notwithstanding that, you were prepared to instruct your solicitors to do it; correct? A. Yes." 332This was another matter that was picked up by the family and arguably influenced later negotiations. The mediation before Ms Sykes on 17 December 2007 333A second mediation was held before Ms Sykes on 17 December 2007. On the following day George King sent an email to Mr Cheney which included the following: "My guess from the meeting yesterday is that they (Dad & Katie) are going to start legal action. I suspect they will start with dismissing Deerslayer Pty Ltd as Trustee for the Berkeley King Share Trust. Are we certain everything is closed there? I offered $3.5 million for the three respective share groups, they had previously been demanding $4.0 and in yesterday's meeting changed their demand to $5.2. The mediator has had it with them changing their minds constantly and they are not happy with her take on the matter so I think she will be out." 334Mr Cheney replied the same day recommending mediation: "Sorry to hear you didn't resolve it. Given that there are offers being tabled a good mediator should be able to settle it..." 335Ms Sims again circulated a set of notes of the mediation but they do not record any offer ($3M or $3.5M) being made by George King. What amount did George King offer at the 17 December 2007 mediation? 336George King denied in cross-examination that he had offered $3.5M, despite the terms of his email to Mr Cheney. He claimed that he had only offered $3M. He was cross-examined about it: "Q. What I want to suggest to you is you were feeling better at the end of the meeting than when you went into it. That's correct, isn't it? A. Yes. Q. That's because it was heading in the right direction, isn't it? A. No. Q. What offer did you make? A. $3 million equivalent. Q. Sure of that? A. Yes. Q. It wasn't $3.5 million? A. Absolutely, three. Q. Have you ever written down anywhere that the offer you made on this occasion was $3.5 million? A. Yes." 337Mr Benecke urged me to find that George King made an offer of $3.5M, not just $3M. It is hardly likely that it was a typographical error in his email. It appears amongst other figures that are also expressed to one decimal place. They are all accurate and $3.5M was the same as the amount George King had agreed to investigate at the mediation on 16 October 2007. He expressed annoyance to Ms Sykes that his family had apparently gone back on the agreement to investigate payment of $3.5M 338Whether it be $3M or $3.5M, it is apparent that George King and his family negotiated on the basis of the transaction documents he sent through. Those documents provided for a right to life-long accommodation in the main homestead for his parents as he had asked for. He later valued that right at $500,000. Even if the offer was only $3M, it was therefore roughly equivalent to what George King ultimately settled for in December 2008, including a right to occupy the homestead. Was George King under pressure at the 17 December 2007 mediation because of perceived lack of security in his legal position? 339Mr Benecke submitted that George King was not under pressure by reason of any perceived vulnerable legal position when he made the offer of $3.5M on 17 December 2007. He was certainly by then aware that his father had changed his will and he was also aware of a potential issue relating to the exercise of the power of appointment. However, despite the protestations in his affidavit and in the witness box, none of the contemporaneous documents gives the impression of any pressure or vulnerability. Indeed, on 19 December 2007 he wrote to his mother and offered to help her purchase a unit in Avoca. 340Mr Benecke submitted that George King in fact occupied a dominant position over his family that is discernible in the tone and content of his correspondence with Ms Sykes. In an email sequence on 19 and 20 December 2007 he referred to a "one dollar bet" between the mediator and him. That was obviously a bet on the outcome of the mediation, although George King denied during his cross-examination being able to remember what it was about. He also referred to himself as a "hard negotiator". He was cross-examined on that self-description as follows: "Q. You had negotiated very hard at the 17 December meeting, correct? A. No. I just had a top offer and I couldn't move from it. Q. Threatened to walk away and they would get nothing. That is correct, isn't it? A. I did not say that, at all. Q. You say in your email to Ms Sykes, 'I wasn't meaning to be a hard negotiator in the meeting' correct? A. I went there with the highest possible offer I could make. Q. But you accept, don't you, having written what you wrote there that you were a hard negotiator in the meeting? A. No. I just said this is the highest offer we can do. The 3 million. And they said if that's all you've got, that's all you've got. Q. This is at a time when you had a $7 million total facility with the bank? A. Yes. Q. WPC was debt free? A. Yes. Q. The only money that it owed to the bank was the money that it on lent to Wellness House? A. Yes, which the Wellness House was servicing. Q. And you had on lent to Wellness House the residue from the sale of Gobabla from earlier in the year? A. Yes. It needs clarification, though. Q. And the Wellness House property at this time was not encumbered at all, was it? A. No. Q. Owned by a company that was jointly controlled by you and your wife? A. Yes. Q. It was a property that once completed, I'm sorry, as at December 2007 it was due to be completed in a matter of months, correct? A. Yes. Q. And the centre was to be opened in about March, correct? A. Yes. Q. Once opened the property was to be worth several million dollars, correct? A. Yes. Q. All of which was unencumbered? A. Yes. Q. But you maintain, do you, that you went in there with the highest possible offer that you could make? A. Yes, that is correct. It needs explanation though." 341It was submitted by Mr Benecke that George King evidently regarded the negotiations as a game at which he considered himself to be skilled and that there is simply no suggestion of the helplessness or vulnerability that is central to his case. 342George King has given no evidence that he reported to Mr Cheney that he was under pressure or was paying considerably more than he thought he should be paying to acquire his family's shares. There are no contemporaneous documents recording that he was under pressure. Mr Benecke emphasised that this was precisely what might have been expected that he would have told his lawyer at this time. He has not called Mr Cheney and no explanation has been provided for failing to do so. Mr Benecke submitted that I should infer that Mr Cheney's evidence would not have assisted George King and that I can more confidently conclude that at this time he was not under the pressure that he now claims he was under. The mutual undertakings not to take prejudicial action 343George King argues that the dismissal of Weander/Deerslayer as trustee of the BKST on 8 January 2008 altered the very foundations of the negotiations with his family so that they were then able to extract from him an offer that was 2.5 times the amount he would otherwise have paid and that he regarded as reasonable. Mr Benecke says that one of the reasons that case should be rejected is that shortly afterwards, mutual undertakings were exchanged that had the effect of preserving the status quo and of allowing George King, in effect, to continue to act as majority shareholder and manager of Whitney. 344On 25 January 2008 Berkeley King gave an undertaking not to take any steps whatsoever to sell any shares or assets of any company of which he was a director or shareholder without seven days' written notice. On 1 February 2008, noting that both parties were amendable to mediation, Berkeley King sought an undertaking from his son in similar terms. On 6 February 2008 George King agreed to pursue mediation and advanced a further undertaking. 345These undertakings were reaffirmed from time to time. For example, Cheney & Wilson's letter dated 13 March 2008 indicated that: "...our client understood that the parties had effectively given mutual undertakings not to take any action prejudicial to the other party pending completion of the mediation process without giving seven days notice ... Our client's understanding [is] that both parties still desire mediation to proceed." The family's discovery that George King had transferred $2.5M without authority from a Whitney loan account to The Wellness House and its consequences 346The Wellness House is a company owned by George King and his wife in equal shares. On or about 22 November 2006 he instructed Mr Benecke that he wanted to put certain arrangements in place in respect of The Wellness House, including loans to it by Whitney and by Whitney to a trustee of The Wellness House as part of his "off-farm investment portfolio". He initially sought to characterise these matters as "advice" given to him by Mr Benecke, but later conceded that they reflected his instructions to Mr Benecke. 347On 8 January 2007 at a meeting attended by George and his parents, Whitney unanimously resolved in the following terms: "...to establish a loan facility of one million dollars with the The Wellness House (TWH); the transaction is to be at an arms length distance, on commercial terms, and will not [compromise] the financial interest of WPC or be at any cost to WPC. ... Any money loaned is to be secured by a Deed of Loan with supplementary first or second mortgages over the security." 348George King accepted that as at 8 January 2007 the plan was for the loan to be limited to $1M, to be on commercial terms, to be in the form of a deed, and to be secured in the form set out in the resolution above. However, George King went on knowingly to breach every one of those stipulations. 349George King never established a loan as envisaged by the resolution of 8 January 2007. No deed was drawn up and no security was ever put in place, although a property in Orange and a property in Bathurst were purchased with the funds by George King and his wife. The business at Orange and the property at Bathurst, purchased and established with Whitney's funds, were substantial: George King valued the business at Orange at $3M as at January 2009. His evidence was as follows: "Q. There was no deed of loan ever drawn up setting out a loan by WPC to the Wellness House, was there? A. That is correct. Q. You are agreeing with me? A. Yes, I am. Q. And there was no registered first mortgage taken over the Orange property, was there? A. No. Q. And a subsequent property was bought in Bathurst, correct? A. Yes. Q. That had a prior ranking mortgage to the Commonwealth Bank, correct? A. Yes. Q. But there was no second mortgage ever taken out in favour of WPC over that property? A. Correct." 350George King then proceeded completely to ignore the $1M limit that had been imposed. He admitted that he did so. By February 2008 he had caused $2.5M to be withdrawn from the Whitney loan account and paid to The Wellness House, apparently to fund development of the Orange property. He was cross-examined on these matters. He admitted that what he was doing was wrongful and in breach of his director's duties, and that he knew it to be such. The relevant passage of transcript is as follows: "Q. So as at 15 February over $2.5 million had been paid out by you to the Wellness House in respect of this $1 million loan? A. Yes. Q. Which, contrary to the minutes of 8 January 2007, was an unsecured loan as far as WPC was concerned? A. That is correct. Q. That is correct, isn't it? A. That is correct. Q. I want to suggest to you that you never told at any time after 8 January 2007 until the end of January 2007, you never told your fellow directors or shareholders of WPC that the million dollar limit had been exceeded, did you? A. No. Q. And they, they being your father and mother, did not become aware of that until the middle of February 2008. That is correct, isn't it? A. Correct. Q. You were aware once you hit the $1 million mark that in causing WPC to pay out money to the Wellness House, you were well aware that there was no authority for to you do that. That is correct, isn't it? A. Correct. Q. And you were well aware that what you were doing was in clear breach of your duties to WPC. That is correct, isn't it? A. Correct. It needs explanation though." 351George King's explanation was, in essence, that after the $1M loan was approved, he decided to "double the size of the project" and that this required more funds. He did not seek an increase in the authorised loan because he knew his parents would not approve it, given the deterioration in the relationship between them. However, Mr Benecke contended that that was no explanation at all. The explanation was also wrong in point of fact insofar as it suggested that as soon as George King settled with his parents, The Wellness House was separately refinanced. The settlement in fact enabled George King to continue to fund The Wellness House against Coombing Park assets, and it appears still to be funded on that basis. 352George King later asserted that Whitney made a profit from the unauthorised The Wellness House loan arrangement. Mr Benecke described that assertion as self-serving and unsubstantiated. It was an attempt by George King to justify his admitted wrongdoing. He did not point to any documents supporting his assertion that Whitney made a profit. Nothing to that effect is disclosed in its accounts insofar as they are in evidence. The only documentary evidence on the point is that The Wellness House loan attracted interest at the same rate as was charged to Whitney by Elders in respect of its operating overdraft. The lending costs were therefore passed through and no profit would have been made. 353George King also later sought to justify The Wellness House payments on the basis that he could have "ratified them" as majority shareholder. It is far from clear that, without breaching his duties or committing some form of oppression, he could have exercised his majority voting power to commit Whitney's funds to an untested business in which he had a personal interest: the terms of the loan (unsecured) would hardly have satisfied the arms-length transaction exception for related party transactions in Chapter 2E of the Corporations Act 2001, so it appears most likely he would not have been able even to vote. In any event, after some questioning from me, he withdrew this explanation and confirmed that he understood what he had done to be wrongful. The effect of George King's conduct on negotiations with his family 354On 1 February 2008 Garland Hawthorn Brahe sent a letter to Cheney & Wilson referring to Mr Benecke's concerns about The Wellness House loan and seeking information about it. By this stage the amount withdrawn by George King and paid over to The Wellness House had exceeded $1M. Mr Benecke submitted that this issue influenced George King's approach to the dispute with his family. On 27 January 2008 George King instructed Mr Cheney "to organise for me/us to meet with Simon Kerr this week to seek advice to organise court action to recover my shares". Mr Kerr had earlier been briefed by Mr Cheney to act for George, who met with Mr Kerr on the afternoon of 1 February 2008, after receiving Garland Hawthorn Brahe's letter raising questions about The Wellness House loan. He accepted in cross-examination that the 1 February 2008 letter put him on notice that if the matter did not resolve itself "these would be issues that could be ventilated by [his] father in any litigation". He accepted that he was "very concerned" about those issues, and about completing The Wellness House development. Mr Kerr advised him that he should go to mediation and not respond in detail to the allegations in the 1 February 2008 letter. That advice was followed. 355On 4 February 2008 George King sent a letter to Mr Cheney that disguised the extent of his wrongdoing in relation to The Wellness House by stating that the balance of the loan was $731,000 when it was well over the $1M limit. George King had no reasonable explanation for why he had misstated the position to his own lawyer: "Q. You don't in those paragraphs, would you agree, tell Mr Cheney that the current balance of the loan was well above the $1 million approved limit? A. Are you saying I didn't say that? Q. Yes. A. No, I haven't said that there yet. Q. You tell him that the balance in the 2007 financial statements was $731,000; correct? A. Yes. Q. And you didn't tell him that you had wrongly taken out money above the $1 million limit; correct? A. Correct. Q. Why is that? A. I was answering the yeah, I don't know why I didn't put it in there, but still, taking it above that limit was within my right as majority shareholder. It could have been ratified at the next shareholders' meeting and it would have been. It's about this time in January I was trying to call shareholders meetings to ratify it which kept on getting blocked. Q. Do you suggest you could have voted at that meeting, do you? A. Yes, absolutely. I should have been able to if I hadn't been removed as trustee of my shares. Q. You agreed with me yesterday that you appreciated at the time that you did it that taking out money above a million dollars was wrong? A. Yes." 356In his letter of 4 February 2008 George King included a section at the end headed "The way forward". His instructions were not to engage with the detailed allegations but instead to seek to mediate the matter. He gave this evidence: "Q. I want to direct your attention to page 1009. The matters that you there set out in subparagraphs 1 to 6 essentially confirmed or are in line with the advice that Mr Kerr had provided to you; correct? A. Yes. Q. Don't engage on the detail of the allegations but then move forward with valuations and the like, and then have a mediation to try and agree a figure; correct? A. Yes, correct. Q. And that is how you saw it heading; correct? A. Yes. Q. In line with the advice that had been provided to you by Mr Cheney back in December. That's correct, isn't it? A. The advice not to litigate, do you mean? Q. The advice that a good mediator should be able to resolve it? A. Yes. Q. Because of the offers that were on the table? A. Yes. That was Mr Cheney's and Mr Kerr's advice." 357On 8 February 2008 Berkeley King sought to convene a Whitney directors' meeting, in part to discuss "concerns about money owed by TWH, security, amounts etc". On advice from Mr Cheney, George King did not attend that meeting. He agreed that it was in part because of concerns about exposure of The Wellness House issue. 358On 11 February 2008 Garland Hawthorne Brahe sent a letter to Cheney & Wilson again requesting information about The Wellness House loan. The letter stated, "our client now holds grave concerns regarding a misappropriation of funds... on the part of George". It referred to various preliminary investigations that had been carried out which revealed that the loan had not been made in accordance with the 8 January 2007 resolution (for instance, there were no registered mortgages for The Wellness House properties). The letter sought further information about the amount of the loan and the nature of Whitney's security. 359On the same day Berkeley King also contacted Stuart Morrow, Whitney's bank manager, to find out what the balance of its account was. That was a perfectly proper enquiry for a director to make. Mr Morrow telephoned George King and reported that his father had contacted him. Berkeley King then arranged to have withdrawals from Whitney's bank accounts capped at $200,000. Before the cap took effect, George King withdrew a further $800,000 from Whitney's loan account and transferred it to The Wellness House. George King explained his actions in an email to Mr Cheney. He said: "If this transfer had not taken place Berkeley would have been able to hold me to ransom to either save Coombing Park or The Wellness House / Melinda". 360On 15 February 2008 there was a Whitney board meeting. George King did not attend. A schedule of loan drawdowns was presented showing that $2,538,832.01 had been drawn down from Whitney by The Wellness House. It appears to have been about this time that Berkeley King learned of the extent of George King's wrongdoing. George King's evidence that some pressure to settle was attributable to The Wellness House 361George King gave evidence conceding that some of the pressure he was under in 2008 was because of The Wellness House issues. He also said that Berkeley King's capping of Whitney's accounts in February 2008 (which was done in response to his concerns about The Wellness House payments) was one of the reasons he agreed to the settlement in December 2008. 362Mr Benecke submitted that George King's evidence that he was under pressure because of Berkeley King's actions in capping Whitney's account was false. As his email to Mr Cheney made clear, because he had successfully withdrawn the last $800,000, his father could not "hold [him] to ransom". He was cross-examined about what he said to Mr Cheney on this issue as follows: "Q. I'm asking you. Do you recall having a conversation with Mr Cheney on 12 February 2008? A. I had lots of discussions with Mr Cheney. Q. You said to him that you had got out all the money you needed to finish Wellness House and you were not worried about caps to finish Elders finance. Do you recall saying that to him on or about that date? A. I can't recall." 363Mr Benecke submitted that whether or not Berkeley King's actions on 11 February 2008 in seeking to prevent further unauthorised withdrawals from Whitney's account placed George King under pressure, his evidence on this issue is extraordinary now that the extent of his misconduct in relation to The Wellness House is known. The plaintiff said this at [195] of his first affidavit: "At this time the final payment for construction of TWH was due in four weeks time. Restrictions on our cash flow could prevent us from being able to complete the project. The immediate threat was that TWH would go into receivership ... fortunately, fifteen minutes before Berkley had faxed the bank I had arranged for the transfer of the remaining money required to complete the project..." 364George King has now admitted that he withdrew the funds in breach of his director's duties and that the "cash flow" referred to in his affidavit is a reference to cash that properly belonged to others. His complaint, in effect, is that he was almost stopped from completing his breach of duty because of his father's actions. George King's instructions in relation to Court proceedings and mediation 365As noted above, in January 2008 George King had initially proposed to commence proceedings against his family. In February 2008, after The Wellness House issue was raised and the undertakings were given, he determined not to do so. He was cross-examined as follows on these matters: "Q. Can I then direct you to page 5 of the letter, 985 of the bundle, where there's a heading 'the way forward'. As you understood it at the time you read this letter, what was being sought, all the allegations having been set out, was that you respond and then we go off to a mediation; correct? A. That's what they're suggesting, yes. Q. And reciprocal undertakings were being made as set out on page 986; correct? A. Correct. Q. You went and saw Mr Kerr on the afternoon of 1 February? A. Yes. Q. The advice you received was that you should go to mediation; correct? A. Yes. Q. That you should not respond in any detail to the letter that had been sent on 1 February? A. Correct. Q. And not engage with them on the substantive issues; correct? A. Correct. ... Q. Is it your evidence that you were anxious at this time to get the matter resolved? A. Yes. Q. So you would deny the proposition, would you, that you wanted to slow things down? A. Sorry? Q. You would deny the proposition that at this stage you wanted to slow things down? A. Fairly soon after here I wanted to slow things down. Q. Will you go, please, to page 1001 at tab 361. A. Yes, that's what I recall, trying to slow it down. Q. 'It would definitely be in our favour to delay/slow this process until after that date', which was after 8 March? A. Yes. Q. You wanted to slow things down? A. Yes. Q. Until after The Wellness House had opened? A. Yes. Q. You were conscious at this time, were you not, that you wanted money from WPC to finalise The Wellness House? A. Yes." George King's assault of his father in March 2008 366It is not in dispute that George King hit his father on 12 March 2008 and that he was subsequently convicted of assault. He said that he assaulted his father because, amongst other things, he was threatened with the loss of Coombing Park and he had "no assets outside the company". Mr Benecke disputes that. Mr Benecke contends that George King had substantial assets outside the company and tailored his evidence to give the impression that he was under pressure and in a desperate situation when he was not. 367One of Mr Cheney's file notes stated that he advised George King: "Assault matters significantly complicate broader WPC matter and must be taken into account in planning". Mr Benecke submitted that I should find that the assault was not caused by any breach of duty on the part of Mr Benecke (as George King apparently submits) but was George King's voluntary and independent action that by itself prejudiced the strength of his negotiating position with his family. The offer made by George King in July 2008 368Until about June or July 2008 both parties appear to have intended to resolve the dispute through a structured mediation. Then in about June 2008 George King started negotiating directly with his mother. On 17 June 2008 he offered to purchase the Minority Shares ("all your shares in the group") for $3.25M. The breakdown of shares makes express reference to his father's single share in Brumby Run, which George King values at $1,080,822 (on the basis that it represents one-third of the value of the Whitney shares held by Brumby Run). Mr Benecke submitted that this was further confirmation that George regarded Brumby Run as amongst the Minority Shares and/or was prepared to purchase it in any event. Certainly Cheney & Wilson do not appear instead to have advised him to take the course he now says could have been taken (that is, to disregard his father's Brumby Run share and control Brumby Run with his majority interest). 369In July 2008 George King made an offer to his mother to purchase the remaining shares for $3M or $3.5M if his parents agreed to vacate the homestead. He agreed that he had made this offer. He was plainly prepared to pay $500,000 more to acquire an immediate right to occupy the Coombing Park homestead, rather than have his parents as life-tenants as had previously been contemplated. 370George King met with his mother on 20 July 2008. Following the meeting he drafted heads of agreement that provided for a total payment of $4M for him to acquire the remaining shares, including sale of certain land. The heads of agreement made specific provision for furniture at the Coombing Park homestead, which George King agreed he regarded as valuable and wanted to make sure he received under the settlement. His mother took the view that the heads of agreement were not consistent with what they had agreed upon and they did not proceed. George King stated that his mother had agreed to "$4M for settlement and did not care how it was made up". The remaining issues in dispute concerned grazing rights. By 11 August 2008 it appears that structured mediation was back on the cards. 371Mr Benecke argued that I should therefore find that George King was prepared to purchase the Minority Shares for $4M in July 2008 and to pay $500,000 for the benefit of an immediate right to occupy the Coombing Park homestead. Business opportunities pursued by George King in August and September 2008 372George King was cross-examined on documents showing that in August and September 2008, when he claims to have been under pressure and financially vulnerable due to his compromised legal position, he was in fact contemplating expanding the separate business he operated with his wife using finance that he hoped he could obtain against Whitney assets. One of the documents was a Bank Review he prepared in September 2008. The plaintiff was cross-examined on it as follows: "Q. Then if you go on to page 93 and following you provide a detailed outline in relation to the Wellness House operation, correct? A. Yep. Q. Indeed over at page 97 you talk about the Wellness House GP super clinics? A. Yep. Q. And point out you would be '...tendering on all of the clinics which had a Federal government contribution of more than $5 million per clinic with the aim of securing 10 sites'. See that? A. Yes. Q. You were then at this stage contemplating quite a significant expansion, were you not, of the operations of the Wellness House? A. Yes, subject to yes. Q. What did you wish to say? A. It was only subject to the Federal government funding which needed to be available. I had to get the $5 million per site because you had to pay tax on that so it was 3.5. So I needed that equity. Q. In any event you were contemplating at this time quite a significant expansion of the Wellness House operations, were you not? A. Yes." 373Mr Benecke submitted that this showed, and I should find, that George King was actively pursuing off-farm business opportunities in August and September 2008, which would require significant investments of capital, at a time when he claims he had no funds to spare and was extremely anxious about the dispute with his family. His objective conduct, as evidenced by the contemporaneous documentation, is said to be starkly inconsistent with that of a man under pressure as George King asserts he was. The mediation in December 2008 374John Brownie QC conducted the mediation on 5 December 2008. George King had earlier written at length on 28 September 2008 to Mr Cheney saying, "I believe Berkeley King is in a weak position to commence and succeed in any action". He accepted at one point in his cross-examination that he continued to have that view at the December 2008 mediation, although he later denied it. He also refused to accept the obvious implication that what he wrote meant that he considered he was in a relatively strong position to defend any action. In his first affidavit at [212] he said that he considered himself to be in a "weak legal position" as at December 2008, and set out extensive reasons for that view. Mr Benecke submitted that that evidence should now be rejected as it is flatly contradicted by a document under his own hand. 375Mr Cheney and Mr Kerr represented George King at the mediation. His family made six successive bids against themselves starting at $6M and concluding at $3.55M. George King was cross-examined on his approach in the December 2008 mediation. Mr Benecke submitted that George King's view on the acceptability of the settlement reached is "telling": "Q. I want to suggest to you that when you went to the mediation in December, you gave Mr Kerr instructions to take a very hard line at the mediation; that is correct is it not? A. May have done, yes. Q. And the instructions that you provided to him which he then conveyed at the mediation were that there were no offers on the table from your side, correct? A. Initially, yes. Q. And it was up to them to make an offer if they wish to settle? A. Yes. Q. What they did is make a series of offers, bidding against themselves, didn't they? A. The offers kept on reducing yes. Q. Without you making any offer at all; that is correct is it? A. I don't recall. There may be counter-offers that... Q. Have a look at your affidavit please Mr King. What I want to put to you is that, having regard to what is in your affidavit, or affidavits if you need to refer to any other ones, no offers were made by you at the mediation? A. Not that I recall. Q. They just kept bidding against themselves, didn't they? A. Yes. Q. Started above $6 million? A. Yes. Q. You continually rejected the offers that were made? A. Yes. Q. And until we got to the 3.55 offer that was accepted? A. Yes. Q. You accepted the $3.355 million offer because you were happy with that figure, weren't you? A. No. Q. It was the same offer in effect that you had made to your mother in June? A. Yes. Q. To form part of the heads of agreement; correct? A. Yes. Q. And if you take out the $500,000 sweetener for moving out of Coombing Park, which was in the June offer, it was the same offer in effect that you put to your father in early January; correct? A. The $3 million offer in early January? Q. Yes? A. Yes. Q. It was the same offer as you had in fact put in the December mediation; that is correct is it not? A. $3 million? Q. Yes? A. Yes. Q. I want to suggest to you that you were happy with the figure because looked at in terms of the quality of inheritance as between you and your two sisters, it was a good outcome for you? A. No. Q. In settling the case you also got rid of any suggestion of any litigation regarding your conduct in relation to The Wellness House line; correct? A. Yes. Q. You also got rid of any suggestion of litigation in relation to your conduct to the Deerslayer shares; correct? A. Yes. Q. You also got lid of any litigation in relation to your conduct in relation to the Bellamy shares; correct? A. Yes. Q. You did in the settlement deed that was ultimately executed, you got certainty in relation to the furniture that was in the homestead; correct? A. No. Q. They agreed that it would stay with you; correct? A. Yes, but it didn't happen. Q. In terms of the deed? A. Oh the deed, yes you're right. Q. Certainty as to the furniture? A. Yes. Q. Because as you knew it, prior to that time, that was a potential issue; correct? A. Yes. Q. It was something that you wanted clarified? A. Yes. Q. And certainty in relation to? A. Yes. Q. And at least in terms of the legal obligation, you got certainty in the deed that was entered into. That is correct is it not? A. Correct. Q. What I want to put to you again is that you were happy with the outcome that was achieved at the mediation. That is correct is it not? A. No. Q. I want to suggest to you, you told your solicitor that you were happy with the outcome, didn't you? A. I told him I was happy that it was over. The fight was over and we certainty. That's what I was happy about, that we certainty. Q. Go to tab 694 of the bundle please. Mr King, it's an email that Mr Cheney sent to you a few days after the mediation; correct? A. Yes. Q. Records that: 'I am pleased that you and Lindy are happy with the outcome of the mediation'? A. No I remember that, and that was about us not having the threat all the threats that we had hung over our head. The closure to them. That's what that is referring to. Q. You had told Mr Cheney that you were happy with the outcome; correct? A. Yes." George King could have taken formal steps to remedy any disadvantage he was under (subject to his own wrongdoing) 376The defendants have pleaded at some length the formal steps that they say George King could have taken in 2008 to remedy any disadvantage he was under. Those steps included: (a) Prior to 8 January 2008 (when Deerslayer was dismissed as trustee): (i) seeking a written undertaking from Berkeley King not to remove Deerslayer as trustee of the BKST; and (ii) in the event such an undertaking was not provided, commencing proceedings against Berkeley King and seeking interim relief to allow negotiations to proceed without the alleged bargaining imbalance or seeking final relief, including in the form of an injunction to prevent Berkeley King from acting in a manner inconsistent with the alleged terms of the Berkeley Transaction. (b) After 14 January 2008 (once George King was aware that the trustee had been dismissed): (i) seeking written undertakings from Berkeley King or the new trustee of the BKST that would preserve George King's interests while the ultimate issue was being resolved; (ii) in the event such undertaking were not obtained, commencing proceedings against Berkeley King and seeking interim relief to allow negotiations to proceed without the alleged bargaining imbalance or seeking final relief to enforce the 1999 agreement. 377As already discussed, George King did obtain an undertaking along the lines described in subparagraph (b)(i) above. 378The defendants do not submit that George King should necessarily have litigated the proceedings to their conclusion, or preferred litigation to mediation. His case is that he was sent into negotiations under a grave disadvantage and therefore had to pay well over the odds. The defendants' submission is that he could have taken legal steps to relieve or to remove that disadvantage (including, most importantly, interim legal steps) so that he did not have to pay a premium to settle. 379George King did not take any of the other steps set out above. The only explanation put forward by him as to why he did not take those steps is given at [197] of his first affidavit as follows: "During this time [February 2008] I sought legal advice about my options for recovering my shares in Coombing Park and what the time and cost implications would be. Based on the legal advice I received I understood that taking the matter to Court was likely to be complex and protracted. I understood it would take about 2 years and cost me about $500,000. I did not have the time or money to take that course because I depended on Coombing Park for my livelihood. In those circumstances I decided my best option was to pursue a mediated settlement." 380George King gives no evidence of the content of the legal advice he actually received, only his conclusions based on it. 381Mr Benecke contends that George King clearly had enough money at his disposal to pursue litigation. He decided not to do so, but instead to proceed with mediation, because he had the benefit of the reciprocal undertakings, because the parties were close to reaching a settlement and because he did not wish to expose himself, amongst other things, on the issue of The Wellness House payments. He later deliberately slowed down negotiations towards a mediation to accommodate The Wellness House. George King's financial position in 2008 and whether he had money to commence litigation 382Apart from saying that he did not have the money to commence litigation, George King also said at [199] of his first affidavit that as at March 2008 he did not have any assets outside the company. Mr Benecke contends that that evidence should be rejected. By subpoenas that George King sought to set aside, the defendants obtained, amongst other documents, statements of assets and liabilities prepared by him for an application to the National Australia Bank, including a joint statement of assets and liabilities dated January 2009. He was cross-examined about his financial position in 2008 by reference to that joint statement as follows: "Q. Now, go to paragraph 199 of your affidavit, please? A. Yes. Q. The suggestion that you had no assets outside the company was not correct, was it? A. My wife's assets weren't up for, for splitting in this. Q. You had a half interest in the Wellness House Pty Ltd, correct? A. We had no equity in that, not one dollar of equity. Q. You owned a $3 million property at Orange, which was unencumbered at this stage? A. We had debt to the Whitney Pastoral Company and Elders Bank, it was fully encumbered. Q. It was unencumbered? A. There was no security on it at all. We had an undertaking to pay that back, which we did. Q. You had a $7 million facility with the Elders Bank, correct? A. Yes. Q. You had an unencumbered property at Orange, which was worth in the order of several million dollars? A. Incorrect. Q. You had a property at Bathurst owned by the Wellness House Pty Ltd which had a mortgage on it to the Commonwealth Bank? A. Correct. Q. But it still had some equity in it? A. I'm not sure how much. Q. There were a number of investment properties in Queensland, correct? A. Belinda owned from her first husband with very little equity in it. Q. You said to the bank in January 2009, did you not, I can take you to it. If you go to the small bundle at page 142. A. 142? Q. Yes. Do you have that? A. Yes. Q. Statement of joint assets of liabilities, which you provided to the bank in about January 2009, correct? A. Correct. Q. It discloses, does it not, that there are three properties in Queensland. Do you see those? A. Yep. Q. Totalling in excess of about $2.4 million? A. Yes. Q. The value of those properties as at March 2008 was roughly the same as what it was in January 2009, correct? A. Yes. Q. The debt in respect of those two properties was in the order of $500,000, correct? A. Yes. Q. Net equity of about $1.9 million in relation to those properties? A. Inflated values for the purpose of the bank obtaining finances, not realising it. Q. Are you suggesting by that answer that the values that you gave to the bank at page 142 in relation to the Queensland properties were inflated? A. They always are when you put it to the bank. That is how they ask for them. Q. So the bank asks, is that your evidence, the bank asks for inflated values? A. Yes. They always say put it at the highest level you can get it. Q. That is simply false. What I want to suggest to you is in dealing with the bank as at January 2009 as at any other time, you were seeking to be open and honest. That's correct, isn't it? A. Yes. Q. And give to the best of your ability your best estimate of your assets and liabilities, weren't you? A. Yes. Q. That is what you did in January 2009 at page 142? A. Yes. Q. And in respect of the three Queensland properties and the amounts owing in respect of those, what I want to suggest to you is the position was not materially different in March 2008, was it? A. Probably not. Q. What I want to suggest to you is it is simply false for you to suggest, as you do at paragraph 199 of your affidavit, that you had no assets outside the company? A. I don't consider my wife's assets from her first husband and her two children from him to be part of my assets, then or now, to give to my family. Q. I want to suggest to you that as at March 2008 you could well afford to litigate if had you to? A. No." 383George King's claim that he did not consider the Queensland properties to be his assets is belied by the fact that they appear in the statement under the heading "George & Melinda King". He and his wife operated a business together (supported by his Whitney assets) and were obviously prepared to treat their assets as common property when it suited them to do so. 384Mr Benecke submitted that George King deliberately understated his financial position in his affidavit evidence in order to give the impression that he was vulnerable and under pressure. He had unencumbered properties and properties with significant equity in them outside Whitney. The real reasons he did not litigate to protect his position are because the parties were close to settlement anyway through mediation, he had the benefit of the undertaking, and there was the complicating issue of his known serious wrongdoing in relation to The Wellness House. Potential disentitling conduct 385A question was raised during the course of the hearing about whether George King's wrongful conduct in relation to The Wellness House might have amounted to conduct that would, or may, have prevented or somehow disentitled him from obtaining equitable relief. The Wellness House issue was one factor that influenced him not to take steps to remedy his position in Court. Mr Benecke argued that he should not be held responsible for the indirect consequences of George King's own wrongdoing: but for his independent wrongful conduct, George King was in a position to remedy any consequences of Mr Benecke's negligence. The benefits obtained by George King by reason of the settlement in December 2008 386In return for his agreement to pay $3.55M, George King has received more than just the Minority Shares. It is necessary to set out what benefits he obtained by reason of the settlement, as he has not brought them to account either in his valuation evidence or in his account of his reasoning for deciding to settle for that sum. Direct benefits under the settlement deed 387The settlement was embodied in Heads of Agreement dated 5 December 2008 and later in a formal deed styled "Deed of Release and Settlement" dated 30 January 2009. As is apparent from those documents, in consideration for payment of $2.55M in cash on or before 1 February 2009 and $1M in cash on or before 31 December 2010, George King received the following benefits: (a) Berkeley, Penny, Katie and Kristen King to vacate the Coombing Park homestead on or before 30 June 2009. (b) The furniture and contents in the homestead belonging to Whitney, Peter King and/or George King were to "remain in the Homestead after 30 June 2009". The value of the furniture in the homestead was not insignificant. Much of it was antique. George King agreed it was important to him and something he specifically wanted Whitney to retain under the settlement. It was obviously something potentially subject to dispute. John McPhee Pty Ltd had performed a joint valuation in May 2008 and the furniture was valued at $263,050. (c) Transfer to George King or his nominee all of the shares held by the family in any Somers, Whitney, Esk, Deerslayer, Brumby Run and Coombing Pastoral Co. This amounts to all of the Minority Shares (as George King defines them) together with his father's single Brumby Run share. (d) Comprehensive mutual releases by the parties to the deed from all claims arising out of or connected with the companies referred to above and "the issues arising out of the correspondence between any and all of the parties and/or their legal representatives". The wording of the release provision is significant. It is plainly wide enough to capture George King's wrongful conduct in relation to The Wellness House payments. This was a significant benefit for him. Benefits by reason of refinancing with NAB 388The settlement gave George King almost 100 percent ownership of the Whitney group. It enabled him to borrow against the assets of Whitney and Esk. According to the calculations performed by Mr Ivey (in his report dated 19 July 2012), their assets totalled over $18.3M. 389In January 2009 (that is, at the same time as he was settling with his parents) George King entered into new loan arrangements with NAB. The NAB made facilities totalling $5.5M available to Whitney and $2.538M available to The Wellness House, secured only by real property held by Whitney and Esk. 390George King was cross-examined on the Whitney facility as follows: "Q. Go to [Ex 1, p 143] please? A. Yep. Q. That is a facility that was offered to WPC which had three components; is that correct? A. Yes. Q. $3 million market rate facility, firstly; correct? A. Yes. Q. Farmers Choice Overdraft of 500,000? A. Yes. Q. And a market rate facility, two million? A. Yes. Q. Now in relation to the market rate facility for two million, it was your intention at the time, was it not, to use that money to invest in blue chip high yield stocks? A. Yes. Q. Which at that stage were currently yielding 10 percent? A. Yes. Q. The letter of offer that is at 143 was accepted; is that correct? A. Yes. 243. As to the TWH facility, the plaintiff said (T245.4-36): Q. Then if you go please to 149, a separate facility was offered by the bank to TWH Services Pty Limited as trustee for the Wellness House Trust; correct? A. Yes. Q. And that was for the amount of 2.538 million; correct? A. Yes. Q. Which is the quantum of the money that had been advanced by WPC to the Wellness House prior to this in connection with the construction; is that correct? A. Yes. Q. The intent being that this money would be used to pay the WPC facility? A. Yes. Q. Now can I just ask you in relation to the Wellness House offer at 149, that was accepted; correct? A. Yes. Q. And that facility was not, however, secured in any way over the Orange property from which the Wellness House was conducted; correct? A. Correct. Q. That remained owned by the Pty Limited company that was jointly owned by you and your wife, and was unencumbered; correct? A. The Orange one? Q. Yes? A. Yes. Q. And in relation to the other property, the Bathurst property, that remains subject to a mortgage to the CBA; correct? A. Correct." 391George King obtained through the December 2008 settlement a $2M facility (secured by Whitney assets) for personal share trading and a $2.538M loan (similarly secured) so that he and his wife could continue to fund The Wellness House business, which had up until then been funded by a series of wrongful and unauthorised payments from a Whitney loan account. The settlement in December 2008 was one George King could comfortably afford 392George King has insisted throughout that the December 2008 settlement was one he had difficulty affording. His account is that he did so because he felt he had "no option" but to settle at $3.55M having regard to what he considered to be his weak legal position. Mr Benecke submitted that that evidence must be rejected. George King was able to find capacity in the financial arrangements he made at the time of settlement for a $2M share trading facility and a $2.538M facility to fund unrelated business interests. Further, he was able to do so without even encumbering the Bathurst or Orange properties owned by The Wellness House. The settlement was one he could comfortably afford. Mr Benecke urged that I should so find. George King was able to pay the $1M instalment due under settlement deed on 31 December 2010 393George King also gave evidence that he had not been able to pay the $1M instalment due under the settlement deed on 31 December 2010. Mr Benecke submitted that that evidence should also be rejected. It is allegedly inconsistent with the following objective evidence: (a) A statement of assets and liabilities for George and his wife signed by him on 21 April 2011, which discloses assets of over $25M and equity of over $15M. (b) George King informed the NAB that he proposed to fund the $1M instalment by selling two "back" blocks. There is no evidence that he was not, or would not reasonably have been, able to do so. (c) George King has established an extensive share portfolio for him and his wife and has sought to purchase land adjoining the Coombing Park property. 394In this last regard Mr Benecke draws attention to the fact that George and his wife made a request to the NAB in December 2009 for an additional $1.5M credit facility for the purchase of listed shares on the ASX. They reported that they commenced placing funds of $1.5M in the stock market around mid-August 2009. In May 2011, George King applied to the NAB for a loan to purchase a property known as "Rockville" adjoining the Coombing Park property. He expected it to sell "somewhere about or above the one million dollar mark". He applied for and received a loan of $1.1M and the cancellation of an undrawn market rate facility of $500,000, giving an overall net increase of $600,000. It appears the property was withdrawn from auction, but he continued to have approval to borrow the necessary funds and was "looking for another property". 395Mr Benecke submitted that I should find that the benefits gained by George King under the 2008 settlement included the following: (a) The Minority Shares, giving him 100 percent ownership of Esk and close to 100 percent ownership of Whitney. (b) A right to occupy the homestead (rather than have his parents as life tenants) which he valued at $500,000. (c) A right to furniture in the homestead, which he was otherwise concerned might be taken by his family, valued at $263,050. (d) A comprehensive release from any liability arising from his misconduct in relation to The Wellness House. 396Mr Benecke also submitted that I should find that the 2008 settlement was one that George King could comfortably afford and suited his wider business interests, by enabling him to obtain a bank loan against Whitney and Esk assets which he has used to continue to fund The Wellness House, purchase a blue-chip share portfolio and attempt to purchase neighbouring properties. I was also asked to find that George King was able to afford to pay the $1M due on 31 December 2010 and that his reasons for not doing so remain unexplained. Influence of family context on settlement 397George King's case on causation requires that the settlement be treated, essentially, as an arms' length business transaction. Mr Benecke argued that that was wholly unrealistic. The negotiations between George King and his family occurred against a background of, and were influenced by, personal relationships and emotional considerations. There is an enormous volume of material in evidence supporting that proposition. It comes through in addressing the other factual matters to which reference has already been made. 398Treatment of the settlement as a business transaction is also inconsistent with George King's evidence at trial. He referred in re-examination to a note addressed to him by his father dated 17 June 2007 which states: "George, No matter what happens I will always have a bond and a love for you that will be in my heart till my dying breath. Dad." 399George King gave evidence that the note was written after he and his father had shared a bottle of whisky during a period when his mother and sisters were away. He was visibly emotional when giving that evidence. His response to the note also refers to a number of personal issues between family members and concludes by restating the debt he felt he owed to his father for "laying the foundations". 400Although George King said that his father's note was the "turning point" after which "in the negotiations... everything got really nasty", it appears that there were at least moments when cordial relations resumed between particular family members. For instance, there was apparently some reconciliation in the aftermath of George King's assault on his father, even if only short lived. 401There are also numerous references in the evidence to George King's "responsibilities" and to the family members' bonds and personal obligations to one another. For example, Berkeley King's statement dated 23 July 2006 contained this: "I was also giving [George] the responsibility of looking after his sisters' interests. There cannot be one iota of misunderstanding about this... This I believe an inappropriate offer and not in the spirit of the trust I have given George... I believe George also has a moral obligation which if he chooses to ignore will have disastrous consequences for our family." 402George King's own emails to Ms Sykes in October and December 2007 also contained these references: "Every time I disagreed to something they have told me ... that I am treating this as a business transaction and not as family ... What do I have to do in this process to limit the damage to relationships?" "I wasn't meaning to be a hard negotiator. ... I went there with the highest possible offer I could make that satisfied the moral obligation to BK." 403It is also apparent from some of the material in evidence that personal animosity and anger between family members intruded into the negotiations. In any event, it is plain that by reason of the negotiations occurring between members of a once close-knit family, which had been the subject of a serious falling out, there were more than financial considerations at stake. The other considerations plainly influenced the terms of the settlement. 404Mr Benecke argued for findings that the negotiations between George King and his family occurred against a background of, and were influenced by, personal relationships and emotional considerations and that he regarded himself as owing moral obligations to the other family members. The Berkeley Transaction and the Peter Transaction 405The defendants do not dispute the fact that Berkeley King made a promise to his son in the terms alleged by George King. Senior counsel for Mr Benecke conceded as much on the second day of the hearing: "It is the defendants' case the promise was made and there are a number of documents, as your Honour will see, where it is reinforced." To like effect, Mr Benecke's evidence was that "Berkeley's historical instructions involved the transfer of Somers shares to George, so long as CGT consequences were not triggered". There are several other documentary references in the evidence about this that make it clear that the intention was for George King to acquire the Somers shares. There is also no doubt that the Berkeley Transaction and the Peter Transaction were transactions being effected in conjunction with each other as part of the intention for George King to obtain majority control of Whitney as promised in return for him remaining on at Coombing Park. The evidence of George King, Peter King and Mr Benecke, together with the contemporaneous documentation, consistently establishes the existence of the two related agreements between George King and Berkeley King, and between George King and Peter King. 406I am in these circumstances prepared to find as follows. That in mid-1999 an agreement was reached between Berkeley King and George King pursuant to which George King was to receive all interests in Somers held or controlled by his father. Berkeley King was to resign as chief executive officer of Whitney and George King was to be appointed as its managing director. George King was to pay "fair value" for his father's remaining shares in Whitney and Esk, at a time and in an amount that would not compromise the business. At or about the same time, an agreement was reached between Peter King and George King pursuant to which Peter King agreed that he would sell all shares held or controlled by him in Whitney, Somers and Esk to George King. The purpose of the two agreements, as understood by Berkeley King, Peter King and George King, was to give George King majority control of Whitney, thereby securing his future and keeping Coombing Park in the King family. Mr Benecke's defences to George King's claims 407The existence of the transactions is uncontroversial. The question of whether or not Mr Benecke acted for George King with respect to either of them is not. Indeed, the determination of this question is at the heart of Mr Benecke's first line of defence to George King's claims against him: Mr Benecke denies the existence of any such retainer from George King to act for him with respect to either transaction. (There is a formal denial of any relevant breach but the defendants have not vigorously pursued this). The second line of defence is that Mr Benecke denies that there was any causal connection between any breach of duty or retainer by Mr Benecke and any loss that George King can prove. The third line of defence in the alternative consists in Mr Benecke's denial that George King suffered any loss in the events that occurred. These issues are considered in turn. Was Mr Benecke retained by George King with respect to The Berkeley Transaction or the Peter Transaction? 408Mr Benecke originally said, but no longer maintains, that the retainer in respect of the Peter Transaction was limited to documenting the agreement. Mr Benecke has now admitted that George King retained him in respect of his purchase of Peter King's shares. In the light of the evidence Mr Benecke also now accepts that his retainer in respect of George King's purchase of those shares extended to the provision of advice about the particular legal transaction through which the purchase was to be given effect and was not limited to documenting it. Mr Benecke also accepts that he owed a concurrent common law duty of care in the same terms. 409Mr Benecke, however, did not concede that he was ever retained by George King in respect of the Berkeley Transaction. His submissions about this were to the following effect. 410It is George King's case that he retained Mr Benecke in respect of the Berkeley Transaction and that the retainer included terms that he would exercise all due care, skill and diligence and would advise George King as to risks involved in giving effect to it. There is no express retainer between them in relation to the Berkeley Transaction. The issue is whether the existence of a contract of retainer should be inferred in all the circumstances. 411The Berkeley Transaction is the share transfer aspect of the agreement made between George King and his father in 1999. Mr Benecke contended that I should find that no advice was requested by or provided to George King in relation to the transfer of Berkeley King's Somers shares on 30 August 2000 or at any time. No invoice was issued with respect to any work done pursuant to the alleged implied retainer and Mr Benecke was not paid for the work he did transferring the shares in Weander/Deerslayer in August 2001 except by Berkeley King. 412Mr Benecke submitted that there was no evidence he was ever told the terms of the 1999 agreement and that as at 2000-2002 he was not aware of the terms of the agreement. This was not a case of a solicitor being asked to provide succession-planning advice or to structure a series of transactions to give effect to a succession plan. Mr Benecke became involved in the succession plans of George King's family through two discrete engagements. First, Mr Benecke was retained by Berkeley King in 1998 to prepare his will, by which he bequeathed his Somers shares to his son and secondly he was then retained by Berkeley King in about August 2000 to transfer three of four Weander shares to him as well. 413Mr Benecke's unchallenged evidence is that he was not asked by Berkeley King to advise on the options available to him to give effect to his intentions with respect to the transfer of three of the four Weander shares in August 2000. That is consistent with George King's evidence in cross-examination that his father proposed a particular means of giving effect to their agreement by transferring control of Weander. 414Mr Benecke contended that I should find that there was no retainer between the plaintiff and Mr Benecke in respect of the so-called Berkeley Transaction. There is no basis for inferring the existence of a contract of retainer in the circumstances. The true position is that Berkeley King had a series of distinct, limited engagements. Insofar as Berkeley King's Somers shares were concerned, he acted solely for Berkeley King pursuant to two separate express retainers. 415Mr Benecke also submitted that one of the problems with the expression the "Berkeley Transaction" is that it does not distinguish between the Berkeley King Somers shares held by Weander/Deerslayer, which were transferred to George King by transferring three of the four Weander/Deerslayer shares to him in about August 2000 and the 15 "ordinary" or "equity" Somers shares, 12,750 preference Somers shares and one "preferred ordinary" Somers share that were the subject of Berkeley King's bequest to George King in 1998. The evidence and George King's case focus on the 15 "ordinary" or "equity" shares and it is convenient to refer to the second set of shares by reference to them only. 416Mr Benecke also contended that an analysis of whether an implied retainer existed is different for each set of shares. There is no evidence of anyone raising the status of the 15 "ordinary" Somers shares with Mr Benecke after 1998, when he prepared a will for Berkeley King bequeathing them to his son, except for the alleged discussion on 30 August 2000 and the so-called lost invoice. So far as Mr Benecke was concerned, he had acted in preparation of the will in 1998 and that was it. It is not suggested that Mr Benecke owed any duty to George King in 1998. Accordingly, even if it were found that there was an implied retainer in respect of the Berkeley Transaction, it should be limited to the shares held by Weander. Unless there were findings that the alleged conversation on 30 August 2000 occurred or that the lost invoice existed, there was simply no occasion for Mr Benecke to consider the position of the 15 Somers shares in 2000-2002. 417George King's alternative case, in the absence of a retainer, is that Mr Benecke owed him a common law duty of care in relation to the Berkeley Transaction. Mr Benecke submitted that I should approach this issue on the basis of the finding that the conversation George King claims occurred on 30 August 2000 did not occur. Without that conversation, there was nothing to indicate to Mr Benecke that George King was looking to him to protect his interests in relation to the transfer of the three shares in Weander/Deerslayer in November 2000. There was no assumption of responsibility. 418Mr Benecke contended that there was no duty of care in the circumstances. Berkeley King had instructed Mr Benecke to implement a transfer of three of four shares in Weander to his son. He was firm in his instructions and was not looking for advice on whether or not to proceed with the transaction or whether it could be implemented in a different manner. In those circumstances, Mr Benecke suggested that it was very difficult to see how he could come to owe a duty of care to advise George King as to those matters. 419George King's case is said to require that a penumbral duty of care to advise be imposed, contrary to Dominic v Riz [2009] NSWCA 216 at [90]-[91] and that the duty be imposed for the benefit of a third party rather than the solicitor's client. 420In any case, as with the implied retainer, Mr Benecke contended that if I were to find that there is a duty of care, it should be limited to the Berkeley King Somers shares held by Weander/Deerslayer and that there is no basis for extending it to the shares the subject of the bequest in 1998. 421George King's submissions were to a different effect. 422Apart from what is to be drawn from the applicable legal principles dealing with the question of whether or not a contract was entered into between George King and Mr Benecke, which are referred to later in these reasons, it is instructive to examine the history of their relationship and its development over time. There had been a professional connection between the King family and Mr Benecke's firm since the 1930s. A professional relationship between George King and Mr Benecke commenced in about 1997 following George's return to Coombing Park. He was 24 years old at that time. From about 1997 George King received legal services from Mr Benecke in relation to a variety of matters including the refinancing of Whitney's debt, the purchase of property, the removal of company directors, and negotiations with Patricia Bellamy in relation to the purchase of her shareholding. 423George King's submissions sought to cast light upon the retainer issue by reference to steps taken on his behalf by Mr Benecke in relation to the acquisition of Patricia Bellamy's Somers shares. Mr Benecke was initially disinclined to accept that he had acted for George King in this respect. He was shown a series of documents that touched upon the issue and ultimately gave the following evidence in cross-examination: "Q. And now having been taken to the correspondence to which I have directed your attention, you would agree would you not that you were acting for George in connection with this proposed purchase? A. The documentation would reflect that. Q. And the adamant evidence you gave me to the contrary this morning was wrong was it not? A. Just remind me of the evidence I gave you this morning. Q. You said this morning that you were not acting for George in connection with the proposed purchase of shares from Miss Bellamy? A. The documentation gives the impression that George was to acquire those shares personally. My full understanding was that Berkeley and George were acting together, and that WBC the funds to purchase would in some manner come from WBC. Q. You were taking instructions from George were you not? A. I was. Q. And you were giving advice to George? A. I was. Q. He was your client was he not? A. He's the person with whom I was dealing. At that time I was taking instructions, I verily believe that Berkeley was aware of everything that was going on. HIS HONOUR Q. But if you take instructions from George, and you give advice to George, it's not a big step to conclude that he was your client, is it? A. Your Honour, that's quite correct. WILLIAMS Q. And upon reflection, when we now look at the client registration format, Tab 16, it is correct to describe George as the client is it not? A. Yes." 424Mr Benecke appeared to prevaricate about this issue in his later evidence. However, the position seems to be clear that Mr Benecke continued to act for George King in relation to the acquisition of his aunt's shares. On 10 July 2000 Mr Benecke sent him a memorandum of fees in respect of the purchase of the shares. 425George King's evidence was that in about mid-2000 he spoke to Mr Benecke and asked him to prepare documents to transfer Peter King's shares into his name. Those instructions were given in the context of the negotiations that Mr Benecke had been engaged in with respect to Patricia Bellamy's shares for much of the previous 12 months. 426On 17 July 2000 George King wrote to Mr Benecke providing instructions as follows: "Could you please contact my uncle Fr. Peter King on 6892 1074 to obtain instructions for the conditions he desires in order to hand over control of Charmdew Pty Limited to the writer. My father has indicated he will follow the same steps to hand over his control of Weander Pty Limited." 427It is clear from that letter that George King was seeking legal assistance in relation to the transfer of the parcels of shares held by his father and his uncle. It is also clear that the intention was for Peter King's shares to go to George King as well. Mr Benecke's own affidavit refers to the fact that "In or about July 2000 [he] was retained by [George] in respect of the sale and transfer to him of shares held by Peter King". Moreover, Mr Benecke's letters sent to George King on this topic referred to the "proposed sale and transfer of shares held by your uncle...to you". 428Mr Benecke's evidence was clear that he understood during 2000 that there were in fact three related share transfer negotiations taking place directed to the single aim of George King obtaining 100 percent control of Somers. He was shown the 17 July 2000 letter and gave this evidence: "Q. You understood when you received this letter, I suggest, that George believed that by reason of the two transactions he was referring to he would thereby obtain control of or majority control of the Whitney Pastoral Company? A. Through Somers. Q. Yes. A. Yes. Q. And all that would then remain is to buy out, if possible, the interests of Bellamy to have total control of Somers? A. Yes, Bellamy, and there are some other further shareholdings involved, too. Q. That's in Whitney Pastoral Company, it's not in Somers? A. Yes, correct, in Somers, you are quite right. Q. And the retainer that you had for George in relation to the Bellamy acquisition, you understood that George saw it as the means of obtaining 100 per cent control of Somers, having secured the other two thirds from his father and uncle? A. Yes, either by acquiring Mrs Bellamy's shares or squeezing her out on a share buyback. Q. You understood George to be of the view that he had his father's shares, he had his uncle's shares and all that he needed were A. I don't think he had his uncle's shares, he was working to get them. Q. You understood by at least later in 2000 that he had promises from each of his father and his uncle to transfer their interests to him? A. Yes, theirs or their associated entities' interests to him, correct. Q. And you understood that subsequently George was of the view that all he needed to do to secure total control of Somers was to purchase the Bellamy shareholding? A. I can't speak for George's state of mind, but I think that's a very reasonable expectation. Q. That's the expectation you had at the time, too? A. I believe that to be so, yeah." 429It is common ground that George King and Mr Benecke arranged a meeting for 28 July 2000 to discuss the transfer of Peter King's shares. On the day of the meeting Berkeley King telephoned Mr Benecke's office and left a message for him. The file note of the message stated: "Berkeley King phoned. He knows that his son, George, is seeing you this morning and wanted you to know that he has asked George to ask you some questions regarding Berkeley's affairs. Berkeley King wanted you to know that it is okay to talk to George about Berkeley's affairs." 430George King contended, and I accept, that this reinforced the fact that Mr Benecke understood that George was to seek his advice in respect of matters involving both his father and his uncle. 431Discussions in relation to the three parcels of shares continued in combination. After the 28 July 2000 meeting, Mr Benecke continued regularly to write to George King and telephone him in respect of Patricia Bellamy's shares. Mr Benecke's understanding of what was occurring is revealed in the following portion of his cross-examination: "Q. Then if you go to the slimmer bundle, exhibit N, tab 39A, you will see a draft letter that was provided to you, you will see the fax transmission details at the bottom on 29 August 2000; correct? A. To GHB, yes, from WPC to me no, to George King, managing director, to John Knox, yes. ... Q. Would you look at the last paragraph: 'It would be inappropriate for Berkeley and Peter King to provide supporting guarantees. The writer now controls both their shareholdings'. A. I see that. Q. You understood from discussions with George at the time that that was his appreciation? A. Correct, yep. Q. And whilst formal documents hadn't yet been put in place in connection with his father's shares, you understood them to have discussed that matter between them and that the father, Berkeley, had agreed to transfer his shareholdings to George? A. George was being a little ambitious there saying 'the writer now controls both their shareholdings', but assuming Peter King died in the streets of Lake Cargelligo then George could have asked me to implement those transfers, it would have cost him $100,000, $120,000 worth of duty. I can't quite recollect the timing, but Berkeley had around about this time instructed me, given me separate instructions in relation to the transfer of Weander shares to him. I would have to look at my file, but in essence George's statement, 'The writer now controls both their shareholdings' is perhaps a tad ambitious, but it would have been right two months later or perhaps three months later. Q. So that was your appreciation two or three months later that he controlled their shareholdings? A. Three months after the date of that letter, no doubt about that. Q. That's all the shares they held in Somers? A. Correct. He controlled the shareholdings, or at least the Somers ones, anyway. Just the Somers shares, he didn't control the others. Q. Could you turn the page to 41A. On 6 September you advised George it was okay to send the letter but he should leave off the last paragraph? A. Yeah, I did too, because, as I said, he was being a bit anticipatory there. It was probably not technically correct at that stage. Q. Although it was in accordance with the intentions as you understood it of George, Peter and Berkeley? A. Correct. Q. Intentions, but still yet to be finalised? A. Correct, and assuming that Peter King had a coronary event and passed away in the main street of Lake Cargelligo." 432It is apparent that the Peter Transaction and the Berkeley Transaction were inextricably connected. Mr Benecke's evidence was that George King retained him in July 2000 but only in relation to the Peter Transaction. Mr Benecke also maintained that on 29 August 2000 he was retained by Berkeley King in respect of the Berkeley Transaction. It was originally Mr Benecke's case that the scope of the retainer between him and George King was limited to documenting the Peter Transaction and did not include advising in relation to the Peter Transaction. That limitation has now been abandoned. He continues to maintain, however, that he was not retained in anyway whatsoever in relation to the Berkeley Transaction. 433An immediate difficulty with that position is that all work in respect of the Peter Transaction and the Berkeley Transaction was conducted on a single file maintained by Mr Benecke. A perhaps greater difficulty is that Mr Benecke understood that the two transactions had a common purpose of benefiting George King by giving him control of Whitney through Somers. Moreover, for much of the previous 12 months, Mr Benecke had been acting for George King in relation to the third parcel of shares held by Patricia Bellamy. George King contended in that context that Mr Benecke's pleaded position in respect of the retainers was plainly false and ignored the detail and substance of the state of affairs between all parties and the common purpose attaching to the transfer of 100 percent of the shares to him. 434Mr Benecke gave the following evidence: "Q. You refer to two separate retainers in paragraphs 9.2 and 9.3; is that right? A. Yes, I do. Q. In the first retainer your contention is that you were retained by Berkeley King, the father? A. Yes. Q. To arrange transfer of shares and resignation of directorships held by Berkeley and Penny in Weander? A. Correct. Q. That is a transaction for the benefit of George; is that right? A. We are looking at 9.2? Q. Yes. A. Yes, I believe so, yes. Q. In other words, the two sides of that transaction were the parents on the one side, in particular Mr Berkeley King? A. Berkeley King, yes. Q. And the beneficiary of that transaction, Mr George King? A. They were the parties, yes. Q. And you claim, do you, that you were retained only by one side of that transaction? A. Correct. Q. That is, the parents? A. For this transaction I was retained well, I was retained by Berkeley on behalf of his wife Penelope and himself. Q. And in relation to the retainer at 9.3, you accept that you were retained by George in relation to that transaction, don't you? A. Correct. George King instructed me to act on his behalf in relation to that matter. Q. And George being on the opposite side of the transaction, so as to speak, in the retainer in 9.2? A. Yes. Q. And you acted for A. Sorry, opposite, he was a transferee in both instances, if that's what you mean by opposite side. Q. Yes, he was a transferee. A. Correct. HIS HONOUR Q. You maintained one file for both of those retainers, did you? A. I would have to have a look. Q. They both have the same number. A. The answer is it would appear so, yes. WILLIAMS Q. Is this the case, that you were retained by George in connection with his dealings with Peter and the file that you operated on was to 210123? A. Correct. I believe so. Q. That's what you have said in your affidavit. Do you want to change it? A. No. I would have had recourse, I believe, to account ledgers and copies of files to record this. I believe that would be the case. Q. The transaction that's in 9.2 you understood to be a transaction by which the parents were, through some transfers, seeking to benefit George? A. Correct. Q. And on the same file you were acting for George in relation to him receiving the benefit of a transaction from Peter? A. Correct. Q. And as you understood it at the time, by reason of those two transactions George was expecting to come into control of two thirds of the family business? A. Just put that to me again? Q. By reason of those two transactions, the Berkeley transaction and the Peter transaction, you understood at the time that George was expecting to obtain a two thirds interest in the companies that controlled the Whitney Pastoral Company? A. Correct. I believe that's the case." 435It also seems clear from his cross-examination that Mr Benecke understood that the scope of his retainer with George King was not limited to mere documentation but included giving advice: "Q. Were you intending to suggest by paragraph 12.3 of your defence that you were not retained to give any advice in relation to that transaction? A. No, not intending it at all. Q. You accept, don't you, that part of your retainer involved you giving advice about the way in which the agreement referred to in 12.3 would be given legal effect? A. If requested. Q. You understood that you were being requested to give advice to that effect, didn't you? A. From that at that point the only request for advice I have received was in connection with the trust known as the Charmdew Trust. Q. Just have a look at 12.3 again? A. Of the defence? Q. Of your defence. This is a defence you verified, isn't it? A. It is. Q. Presumably you thought about it very carefully before you verified it? A. I'd better say yes. Q. What is the truth, did you or didn't you? A. No, yes I did. I read this carefully, yep. Yes, I agree with that. Q. Is there any aspect of it that is incorrect in any way? A. No. Q. You expected as a competent solicitor, didn't you, that when being retained in the fashion you have suggested in 12.3 that it would be incumbent upon you to advise the client about the manner in which that agreement was to be given legal effect? A. I agree. Q. Including the wisdom or otherwise of giving it legal effect through particular types of legal transactions? A. Correct. Q. You well understood, didn't you, from at least July 2000, that it was both Peter's intention and George's intention for Peter's interest whether it be held by a trust or a company or however to be transferred to George? A. I certainly understood that from George's point of view. Q. You also understood it from Peter? A. I spoke very briefly to Peter on the telephone on 29 July, or whatever date that was. Q. You had been in communication with Peter about the Peter transaction before 28 July 2000, hadn't you? A. Not to my recollection. Q. You understood your duty at all times throughout the Peter transaction was to give George advice as to the various ways in which the intention could be achieved and the advantages and disadvantages of those methods, didn't you? A. If requested, yes. Q. You understood him to be requesting that of you, at least implicitly, didn't you? A. Yes, I did." 436Mr Benecke subsequently gave evidence that during a telephone conversation on 28 July 2000, Peter King said that he wanted his shares to go to George King. 437It is clear and uncontroversial in these circumstances that George King retained Mr Benecke in respect of the share transfers from each of Peter King, Berkeley King and Patricia Bellamy. In addition, George King has given evidence that he requested and obtained advice from Mr Benecke in relation to the Berkeley Transaction at a meeting on about 30 August 2000 and that he was invoiced by Mr Benecke for work carried out and advice given in the second half of 2000 in relation to the Berkeley Transaction. That invoice was subsequently lost. 438George King also gave evidence that on 30 August 2000 he met with Mr Benecke at his office and obtained advice from him in relation to the Berkeley Transaction. It is in that meeting that George King says that Mr Benecke told him he would have full and total control of the shares in the BKST as long as he owned the majority of shares in Weander. He was also told that due to stamp duty considerations, it would be better for Berkeley King to hold the 15 Somers equity shares in trust for him. 439Mr Benecke does not dispute that he gave the substance of this advice to Berkeley King in or around August 2000, and also to George King. There is, however, a dispute about whether that advice was requested and given in 2000 or some two or three years later and about whether a meeting between Mr Benecke and George King took place on 30 August 2000. 440The contemporaneous documentation indicates that a meeting between George King and Mr Benecke was scheduled for 30 August 2000. Mr Benecke's file note dated 21 August 2000 and George King's diary strongly suggest it. During cross-examination Mr Benecke conceded that he could not deny that a meeting with George King occurred on that day. In the absence of any reliable contradictory evidence and in light of the contemporaneous documentation, I accept that a meeting between Mr Benecke and George King occurred on 30 August 2000. I also accept that the Berkeley Transaction was discussed at that time. 441The Berkeley Transaction had clearly been the subject of prior communications between George King and Mr Benecke. George King's letter dated 17 July 2000 supports this. Mr Benecke understood that the Peter Transaction and Berkeley Transaction were directed to the common purpose of giving George King control. The Peter Transaction could not achieve that objective without the Berkeley Transaction also being successfully implemented. 442George King also submitted that the question of whether there was a contract entered into between Mr Benecke and him could be decided by reference to the conduct of the parties and in what they said and did towards each other, without any need to identify a formal offer and acceptance: Hendricks v McGeoch [2008] NSWCA 53 at [10]. Whether a contract has been entered into is to be judged by "an objective assessment of the state of affairs between the parties": Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 at [25]. The status of the parties, the relationship between them and the nature of the putative contract will bear upon whether a contract should be inferred to have been made: Hendricks v McGeoch at [11]. 443Moreover, in Pegrum v Fatharly (1996) 14 WAR 92 at 95, Ipp J said: "A contractual relationship of solicitor and client will therefore be presumed if it is proved that the relationship of solicitor and client existed de facto between a solicitor and another person. Upon proof of that kind it would not be necessary to prove when, where, by whom or in what particular words the agreement of retainer was made ... the de facto relationship of solicitor and client has to be a necessary and clear inference from the proved facts before a retainer will be presumed." 444His Honour's statement of principle was cited with apparent approval by Winneke P in Simmons v Story [2001] VSCA 187 at [23]. 445Ipp J had regard to the following matters in Pegrum in concluding that there was a presumed or implied solicitor-client retainer: (a) The circumstances were such that it was obvious to all that the plaintiffs, for their own protection, required the services of a legal practitioner. (b) There was no other solicitor involved. (c) Security documents had to be prepared and they were of a kind that could not have been prepared by anyone other than a legal practitioner. The parties were not able to draft them. (d) The security documents were in fact prepared by the defendant solicitor. (e) The solicitor received information necessary to complete the security documents from one of the plaintiffs, Mr Pegrum. (f) The security documents were drawn by the solicitor supposedly for the plaintiffs' protection and it was obvious that the plaintiffs relied on the solicitor in this respect. (g) The plaintiffs relied on the solicitor, in the belief that he was their solicitor, to act for their benefit and in their interests and the inference that the solicitor appreciated this was compelling. (h) Mr Pegrum obviously did not have the skill or knowledge to understand the transaction fully, let alone to prepare the security documents. (i) It was obvious to the counter-party borrower that Mr Pegrum needed a solicitor (he said this to Mr Pegrum, and the latter agreed), and there is nothing to suggest that this need would not have been equally obvious to the defendant solicitor. (j) Mr Pegrum in fact regarded the defendant as his solicitor and he did in fact place reliance on the defendant solicitor to provide him with professional advice and assistance. (k) The solicitor did nothing to disabuse Mr Pegrum of his belief that he was being, in effect, looked after by the solicitor. (l) The parties accepted that, were it not for the inclusion of a clause in the loan deed making the borrower liable for legal costs, Mr Pegrum would have been liable for the solicitor's fees. 446In the same case, Anderson J made reference to the following facts and circumstances to conclude that there was a tacit retainer in Pegrum: (a) The agreement under which it was proposed Mr Pegrum would extend fully secured financial accommodation to the borrower was to be a substantial transaction, from the perspective of these parties. (b) The main object of preparing the loan deed and other securities was to protect Mr Pegrum's interests. (c) It was vital to Mr Pegrum as lender that the documents, especially the securities, be in proper form and legally effective. (d) The professional skill and judgment needed to ensure this result was therefore to be applied for the most part for the benefit and protection of Mr Pegrum. (e) The transaction was not uncomplicated and the documents would be of some complexity and specialised. It was not to be expected that Mr Pegrum would fully understand their technical aspects or fully grasp the jurisprudential basis for all that was written in them even if he could comprehend the literal text. (f) Reliance would have to be placed on the solicitor drawing up the documents. For obvious and very good reason, that would usually be a solicitor engaged by the lender. (g) Both the borrower and the solicitor asked Mr Pegrum to agree that the solicitor do this work. (h) In giving his assent to the solicitor performing the function normally performed by the lender's solicitor, it should not be inferred Mr Pegrum was dispensing with reliance on professional assistance and advice. The proper inference is that he was doing no more than accepting the solicitor as the person on whom he should rely to provide him with professional services. (i) Mr Pegrum in fact regarded the defendant as his solicitor and in fact placed reliance on the defendant solicitor to provide him with professional advice and assistance. (j) When final instructions were given regarding the loan agreement and the securities, both parties were present. Whether or not Mr Pegrum gave "instructions" as such, it was clear that both parties were present with the solicitor at a meeting specially arranged to instruct the solicitor to prepare the documents. (k) At the meeting, the parties together gave information to the solicitor to be put into the documents. (l) The documents that were then prepared included those that on any practical view of the transaction were solely for the lender's benefit and protection. (m) The solicitor, knowing that he was by agreement of the parties to be the only solicitor involved, must have known that Mr Pegrum was relying on him to provide the professional services that a solicitor is responsible to provide to a lender client. (n) At no time did the solicitor tell Mr Pegrum that he could not discharge that responsibility. (o) The clause in the loan deed dealing with legal fees was consistent with an acceptance by the solicitor, who inserted the provision into the deed, that he was acting for Mr Pegrum, in taking the instructions at the meeting and in preparing the loan deed and securities. 447George King submitted that, with appropriate modification, these factors are almost entirely applicable to the present case. 448Mr Benecke contended that the extract from Pegrum should be applied with care. In the passage extracted, Ipp J stated that a contractual relationship of solicitor and client "will be presumed if it is proved that the relationship of solicitor and client existed de facto between a solicitor and another person." As the Court of Appeal recently confirmed, although the word "presumed" is used in that passage, there is no true presumption. It is a case of a set of circumstances giving rise to an inference that a retainer exists: see Steele v Marshan [2012] NSWCA 141 at [14] and [16]. Properly understood, the decision in Pegrum does not provide a separate means of establishing that a retainer exists by application of some presumption. It is merely an application of the principle that a retainer may be implied or inferred from conduct and other circumstances: Steele v Marshan at [16]. Conclusions on the duty issue 449I accept the contention that George King's is a classic example of a Pegrum type duty. Garland Hawthorn Brahe had been the family solicitor for generations. George King had known Mr Benecke since he was a primary school aged child. Mr Benecke had provided legal services to him on a variety of matters since 1997. Most fundamentally, for the prior year since mid-1999, Mr Benecke had been acting for George King in relation to the purchase of the Bellamy shares and since July 2000 had been acting for him in relation to Peter King's shares. The Berkeley Transaction was inextricably linked to those two other matters, involving shares in the same company and directed towards the same common purpose of giving George King control of Whitney. George King was obviously looking to Mr Benecke for assistance and advice with respect to the Berkeley Transaction. Mr Benecke prepared the documentation to give effect to it and had discussions with George about it. In such circumstances it was incumbent on Mr Benecke (if he considered that he was not acting for George King) clearly and unequivocally to inform him of that fact and that he must obtain independent legal advice. 450Mr Boyce gave evidence to precisely that effect in his 21 February 2012 report. 451It is common ground that Mr Benecke did not advise George King that he was not acting for him or that he needed to obtain independent legal advice at any time. 452The same factual background gives rise to the implied representation pleaded at paragraph 14B of the Amended Statement of Claim that Mr Benecke was acting on George King's behalf and in his interests in relation to each of the Berkeley Transaction and the Peter Transaction. 453It is wholly unrealistic in my opinion to conclude that Mr Benecke was not at all times relevantly acting for George King on all critical aspects of the transactions and agreements at the heart of his case. There are potentially several additional reasons for this, but it suffices to mention at least the following. 454George King was not a solicitor and had no legal training. The agreements with his father and his uncle were reasonably straightforward in theory but extremely complex in fact. That was the result as much as anything of the tortuous series of interrelated companies and shareholdings and the legal and beneficial interests they held or controlled relating to the practical business of running Coombing Park. Mr Benecke could have been in no doubt from the very start that George King consulted him for legal advice in relation to the transactions and expected to receive advice that gave effect to them. 455Moreover, the dealings between them were not fleeting or limited in scope or content. They traversed several years and were recorded in correspondence and file notes, as well as documents of a legal nature, that Mr Benecke prepared for George King. Mr Benecke rendered fees to George King from time to time for work done for him or for the companies in the Coombing Park structure. That work was performed in the shadow of the agreements made between George King and his father that were then yet to be completed. No other solicitor was involved or engaged by George King who clearly relied entirely upon Mr Benecke to act in his best interests. 456Mr Benecke's own evidence supports these conclusions. His tacit (if to some extent begrudging) acceptance that he was in a position of intolerable conflict and that he should not ultimately have acted for either George King or Berkeley King supports the proposition that he was retained by the former in respect of the transactions about which he also advised the latter. Mr Benecke unarguably possessed confidential information from George King that was relevant to the negotiations with other family members in the lead up to the ultimate settlement in December 2008. His possession of that information was the direct result of his retainer by George King for the interrelated purposes of both the Berkeley Transaction and the Peter Transaction. 457Both parties made submissions concerning a lost invoice for work done by Mr Benecke for George King in 2000. Having regard to the conclusions I have reached, and the concessions to which I have referred, it is on one view unnecessary to consider whether or not the competing inferences arising from the existence of such a document support or detract from the existence of the duty or the retainer that I have found. For example, I find it difficult to reject a conclusion that a search for the document would not have found it if it existed. On the other hand, Mr Benecke maintained that he often did work from time to time for which he did not charge. I am not prepared to conclude that the issue of the existence or non-existence of the so-called lost invoice is determinative of or conclusive on the question of the existence of Mr Benecke's alleged duty of care or of his retainer. 458I consider that the following findings can and should be made. 459Mr Benecke was under a duty of care clearly to advise George King that Mr Benecke could not act, and was not acting, in his interests and that he should obtain independent legal advice. Mr Benecke breached that duty by failing to advise George King that he could not act, and was not acting, in his interests and that he should obtain independent legal advice. Mr Benecke represented to George King by his conduct that he was acting on George's behalf and in his interests in relation to each of the Berkeley Transaction and the Peter Transaction. That representation was false in relation to the Berkeley Transaction because Mr Benecke was acting in the interests of Berkeley King and not acting on George King's behalf or in his interests. That representation was false in relation to the Peter Transaction because Mr Benecke was merely documenting an agreement and not acting on George King's behalf or in his interests. 460I also find that if George King had been advised to obtain independent legal advice, he would have done so. Breach of duty and breach of retainer 461In the way of things in this case, breach of duty has emerged as one of the three more controversial issues calling for determination, the others being the issues of causation and to a lesser extent proof of loss. George King's primary case is that Mr Benecke breached the retainer or retainers identified above as well as a concurrent duty of care in tort. 462George King relies on breaches by Mr Benecke of an obligation to exercise reasonable care and skill arising in both contract and tort: Astley v Austrust Limited [1999] HCA 6; (1999) 197 CLR 1. Part 1A of the Civil Liability Act 2002 therefore applies: s 5A. 463Section 5B of the Act provides: "(1) A person is not negligent in failing to take precautions against a risk of harm unless: (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and (b) the risk was not insignificant, and (c) in the circumstances, a reasonable person in the person's position would have taken those precautions. (2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things): (a) the probability that the harm would occur if care were not taken, (b) the likely seriousness of the harm, (c) the burden of taking precautions to avoid the risk of harm, (d) the social utility of the activity that creates the risk of harm." 464In State of New South Wales v Mikhael [2012] NSWCA 338, Beazley JA said at [75] - [76]: "[75] The Civil Liability Act, s 5B essentially enacts in statutory form the common law test of breach of duty: see Stephens v Giovenco; Dick v Giovenco [2011] NSWCA 53 at [28] per Allsop P. However, as Allsop P noted, despite the closeness of the statutory regime to the common law test, it is the statute to which regard must be had. See also Adeels Palace Pty Ltd v Moubarak at [27]. The High Court in Adeels Palace also confirmed that the question whether there had been a breach of duty under the statutory test was to be assessed prospectively: see Vairy v Wyong Shire Council [2005] HCA 62; 223 CLR 422. [76] Section 5B(1)(a) requires a determination as to whether the risk is foreseeable. As the authorities stand at present, the common law test as stated in Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40 remains the touchstone for the determination of foreseeability. In regard to foreseeability, Mason J said, at 47: 'A risk of injury which is quite unlikely to occur ... may nevertheless be plainly foreseeable. Consequently, when we speak of a risk of injury as being 'foreseeable' we are not making any statement as to the probability or improbability of its occurrence, save that we are implicitly asserting that the risk is not one that is far-fetched or fanciful. Although it is true to say that in many cases the greater the degree of probability of the occurrence of the risk the more readily it will be perceived to be a risk, it certainly does not follow that a risk which is unlikely to occur is not foreseeable'." 465In the present case, George King complains that Mr Benecke structured the transfer of shares from both his father and his uncle so that the shares were held by Weander as trustee for the BKST rather than going straight to him. Therefore George King's shareholding in Whitney was only through shares in Weander and no other entity, and Weander was a bare trustee. Mr Benecke, Berkeley King, Peter King, and George King all intended that by controlling Weander, George King would control the Somers shares in the trust and thereby control Whitney. The flaw in that structure was that Berkeley King retained power under the trust deed to dismiss Weander as trustee. It is common ground that George King was not advised by Mr Benecke of the existence of that power of dismissal. 466Further, notwithstanding the intention to transfer Berkeley King's Somers shares to George King, that did not happen and the agreement to do so or even to hold them in trust was not documented in any way to provide George King with enforceable rights. The mere promise to leave them to George King in his will was, as the events turned out, entirely problematic. 467Mr Benecke's evidence demonstrated that he was ignorant of the fundamental flaw in the structure that provided for the shares going to Weander: "Q. Your perception at the time was that transferring the shares to Weander was either equally beneficial or more beneficial to George than transferring them to him personally? A. Correct. Q. You would have communicated those views to him, wouldn't you? A. No, I don't believe so. Not that I can recollect. ... HIS HONOUR Q. Can we take it in those circumstances that you would not have suggested to him that there was any disadvantage in proceeding in that way? A. No, I didn't perceive any disadvantage. George indicated he wanted the shares to go there for himself and for future for consolidation and future generations, or something to that effect. WILLIAMS Q. May we take it from that state of mind you've told us about that you didn't give George any advice to the effect that the transaction being implemented in that way may be less disadvantageous? A. Correct, I agree with that. Q. May we take it you didn't suggest to him that there was any means by which the intention of that transaction could be undermined? A. Correct, I would agree with that." 468There is no dispute on the evidence that a discussion occurred between Mr Benecke and George King during which Mr Benecke advised him that putting Peter King's shares into the trust would assist with asset protection. The dispute rather concerns the time at which that discussion occurred and whether it was Mr Benecke or George King who thought of it 469George King said that the discussion occurred on 29 January 2001 and that it was Mr Benecke who advised that Peter King's shares should be transferred to the trust rather than to George personally. Mr Benecke's said that on 29 January 2001 it was George King who first instructed him that the shares were to go to the trust. In paragraph [77] of his affidavit, Mr Benecke said that he made the comments about the asset protection benefits "at a time after being instructed that George wanted all of Peter's shares to be sold or transferred to Weander as trustee". During cross-examination, Mr Benecke said those comments were made in "about 2002, 2003" or "two to three years later". 470According to George King, it is perfectly clear that the intention behind the instructions given to Mr Benecke concerning Peter King's shares was that they were to be transferred to George King. Mr Benecke's file note of 23 January 2001 (incorrectly dated 23 February 2001) records the telephone conversation that day with George: "His uncle Peter wishes to transfer/sell his shares in Coombing group/WPC to him. Is going to leave [the shares] under [his] will in any event." 471By 29 January 2001 the instructions change (with Weander apparently being substituted for George King), but the intention behind the transaction does not. It was still intended that the shares go to George King. What is clear is that as at 29 January 2001, Mr Benecke held the view that transferring Peter King's shares to the trust would assist with asset protection: "Q. May we take it that that view that you express about asset protection was a view that you took at the time when the transaction was actually implemented? A. That would have been my view, yes. I, I guess that, I would have been thinking it's probably not a bad idea there, rather than somewhere else." 472Mr Benecke subsequently gave further evidence to the same effect: "Q. Your initial retainer was in about June/July of 2000? A. Correct. Q. And you have told us that it took place in two stages and I'm asking you about January 2001 which as I understand your evidence is about the commencement of the second stage? A. Yes, thank you, good. I know where I am. Q. What I want to suggest to you is that around about that time you had a discussion with George about how it would be, in your view, safer to put the shares into Weander. That is fair, isn't it? A. I disagree with that. Q. It was your state of mind at the time? A. Yes, it was my state of mind. Q. Just wait for me to finish if you would? A. Sorry. Q. That is in late January 2001 it was your state of mind that it would have been safer to put Peter's shares into Weander? A. Rather than into George's name personally? Q. Yes? A. Yes, that is correct. Q. And if that topic had arisen at around that time would you have expressed those views to George? A. I would have. Q. And at that time you were of the view, that is late January 2001? A. Yes. Q. That as long as George owned the majority of the shares in Weander he would control all of the shares in the trust? A. I was of that view. Q. And if that topic had arisen you would have given that advice to him? A. Yes, correct. Q. What I want to suggest to you is that you did actually give advice of that nature at that time? A. I disagree with that. ... Q. You don't discount the possibility that you may have given that advice in accordance with your understanding at the time but since forgotten about it? A. I don't, I agree." 473Therefore as at January 2001 Mr Benecke's own state of mind was such that he held the opinions that George King says were communicated to him at the 29 January 2001 meeting. Whilst Mr Benecke's recollection was that he did not express those opinions until some years later, he accepted that it was possible that he had given that advice at the time. George King submitted that it is logical that he would have done so. 474George King had a history of relying heavily on his solicitors for advice. As recently as 4 December 2000 he had written to Mr Benecke in relation to the negotiations to purchase Patricia Bellamy's shares stating, "I have very little experience in this area and am relying heavily on your advice". The successful transfer of Peter King's shares was a critical step to George King obtaining the desired control of Whitney. He contended that it is highly improbable that on "the most important transaction of his life" he would decide to change the shareholding structure without seeking the views of his solicitor. 475On 28 July 2000 G.F.B. Peacocke & Co sent a letter to Garland Hawthorn Brahe enclosing a copy of the "Weander Pty. Ltd. Trust Deed". Mr Benecke accepted that the probabilities are that he had access to a copy of the trust deed in 2000 and 2001. He also agreed that at no time was George King advised of the effect of Berkeley King's power of appointment under the trust deed. 476George King submitted that I should find that it was Mr Benecke who first suggested changing the structure of the transaction so that Peter King's shares were transferred to the trust rather than to George King personally. It is improbable that George King, as a young man inexperienced in the complexities of share transfers and trusts, would have independently resolved to change the existing structure of the share transfer or firmly instructed his solicitor to adopt that new course without any legal advice. I am also urged to find that on or about 29 January 2001 Mr Benecke gave George King advice to the effect set out at paragraph [83] of George King's 31 August 2010 affidavit. 477In any event, there was no dispute that the intention was that Peter King's Shares should go to George King. Even if it was George King who suggested that the shares be transferred to Weander, Mr Benecke should have advised him of the disadvantages in structuring a transaction in that way. It is clear that he provided no such advice. 478Whether it was Mr Benecke or George King who first proposed that the share transfer go to Weander as trustee rather than to George King personally is irrelevant. In either event, Mr Benecke admitted that he was under a duty to provide advice to George King with respect to the proposal and that he did not do so. That is sufficient to establish a breach of retainer and duty. 479The following passage taken from Mr Benecke's cross-examination bears relevantly upon this issue: "Q. I want to suggest to you that it was part of your duty at the time and even in the circumstances that you describe to give him advice as to whether that was a prudent or imprudent course. Would you agree? A. Correct. Q. Did you give him advice as to whether it was a prudent or imprudent course? A. No. Q. Do you accept that you breached your duty in that regard? A. When George instructed me to proceed with the transfers in favour of the company known as, previously known as Weander now known I believe as Deerslayer I had understood that George owned, beneficially owned 75 per cent of the shares of that company and I accepted that situation and didn't give him further advice on it. ... Q. * You accept, don't you, that you had a duty to advise him as to the merits and potential problems with structuring the transaction in the various ways which were contemplated. You accept that, don't you? A. If I'm acting for him as a purchaser and I perceived a difficulty I would alert him to that. Q. Would you like to answer my question, please? A. The question again? QUESTION MARKED * READ BACK A. Only one way was contemplated and I had a duty to advise him in relation to that. Q. There had been a previous way in which the transaction had been contemplated, namely by the transfer of shares directly to him. That's right, isn't it? A. Correct. Q. And what was happening is that there was a change to the way in which that transaction was going to be implemented. That's right, isn't it? A. That is correct. Q. And I want to ask you to consider this proposition? A. Sure. Q. Don't you agree that in those circumstances you had a duty to give advice as to the advantages and disadvantages of structuring that transaction in the various possible ways? A. Yes. ... HIS HONOUR Q. Could you see any disadvantages for him in structuring the transaction in the way you say he advised you to structure it? A. No, I didn't, your Honour. WILLIAMS Q. If you had appreciated a disadvantage do you think it would have been your duty to tell him about it? A. Yes, I do. Q. And you now know that there was a disadvantage in carrying out the transaction in that way, don't you? A. I do. Q. Because you took advantage of that disadvantage later on by removing, by changing the appointor, I'm sorry, by changing the trustee of the trust, didn't you? A. Yes, I did. Q. I just want to be perfectly clear? A. Sure. Q. On what you tell his Honour about your conduct in relation to this? A. Sure. Q. I want to invite your consideration to this proposition? A. Mm hm. Q. Could you tell his Honour whether you agree you breached your duty in giving the advice and not giving the advice you did, or do you say that your actions were not a breach of duty? A. With the benefit of hindsight I am, as I was acting for George King I should perhaps have asked George to acquire from his father or from the solicitors called Peacocke Dickens and Price or from the accountants called Peacocke & Co a copy of the trust deed known as the Berkeley King Share Trust, Shares Trust, of which Weander was the trustee and of which George had total control. To the extent that I did not do that on George's behalf I believe I failed in a duty to George as a purchaser. Q. Would you accept that you failed in your duty in failing to advise him as to the advantages and disadvantages of structuring the transaction in the various possible ways? A. No." 480George King submitted that in the light of that evidence there can be no doubt that Mr Benecke was under a professional duty to advise him about the advantages and disadvantages of structuring the transaction by way of transfer to Weander as trustee rather than to him personally, or some other entity controlled by him. It is also clear that Mr Benecke did not do that. It would appear that Mr Benecke did not do that because at the time he did not appreciate the existence of any disadvantage to George King in having the shares transferred to Weander. There can be no question that such a view was erroneous at the time and that Mr Benecke has now admitted that he knows he was mistaken. 481Once it is accepted, as I have, that the retainer extended to the Berkeley Transaction, the conclusions above apply with equal force to the implementation of that transfer. That is, Mr Benecke had a duty to give advice to George King as to the advantages and disadvantages of structuring the Berkeley Transaction in the various possible ways. At the time, Mr Benecke did not see any disadvantages for George King in structuring the transaction via Weander as trustee. Mr Benecke did not give George King any advice as to the potential disadvantages, particularly as to Berkeley King's power to dismiss Weander as trustee. 482George King said that he was given specific advice by Mr Benecke in relation to the structure of the Berkeley Transaction at a meeting on or about 30 August 2000 to the following effect: George: "Can you explain to me the share structure so I can understand what is happening to the Somers shares Dad has given me?" Benecke: "The shares in The Whitney Pastoral Group of companies are owned by the Berkeley King Share Trust. A corporate trustee, Weander Pty Limited, controls the trust. Whoever owns the majority of the shares in the corporate trustee has ultimate control of the assets in the trust. It is a discretionary trust and so Weander controls any distributions of money. If you control Weander then any distribution will be at your discretion." George: "Are there any issues with the transfer of dad's shares to me via Weander?" Benecke: "No. You will have full and total control of all the shares in the Berkeley King Share Trust as long as you own the majority of the shares in Weander. Also, due to the stamp duty costs it would be better for Berkeley to hold the 15 Somers equity shares in trust for you and leave them in his will as stamp duty could be as much as $90,000." George: "Are the 15 Somers equity shares that Dad is holding in trust for me safe so that my control is secure?" Benecke: "There is more than enough evidence to prove that your father is holding these for you if he ever goes back on his word." 483During cross-examination Mr Benecke also gave the following evidence in relation to the advice that George King said he had given: "Q. I suggest some time in 2000 you informed George that whoever owns the majority of the shares in the corporate trustee has ultimate control in the assets of the trust? A. I don't discount that possibility but George would have known and understood that. Q. I... A. I certainly advised his father of that. Q. And you cannot discount the possibility that you advised George of that as well? A. I couldn't discount that possibility. Q. You can't discount the possibility that you informed George that it was a discretionary trust so that Weander controls any distributions of money? A. I, I can't discount the possibility. ... Q. I will see if I can do this a little more quickly. What I want to suggest to you is that it is at least possible that you said words to this effect to George, 'Whoever owns the majority of the shares in the corporate trustee has ultimate control of the assets in the trust'? A. I agree. Q. 'It is a discretionary trust and so Weander controls any distributions of money'? A. Agree. Q. 'If you control Weander then any distribution will be at your discretion'? A. I agree. I agree that each of those is possible. Q. 'You will have full and total control of all shares in the Berkeley King Share Trust as long as you own the majority of the shares in Weander'? A. Yes. Yes. That's quite possible I said that. ... Q. It is at least possible you said words to this effect, isn't it, that 'Also, due to the stamp duty costs, it would be better for Berkeley to hold the 15 Somers equity shares in trust for you and leave them in his will as stamp duty could be as much as $90,000'? A. I believe that I reported to George that I had given advice, the advice I'd given to his father some time before that about the stamp duty that would attract, that would be applicable to shares, the Somers shares, if they were to be transferred during his lifetime rather than under the provisions of a will document. Q. And you would not discount the possibility that you mentioned a figure of $90,000 odd? A. No, not at all. To Berkeley or to George? Q. To George? A. Correct. ... Q. George asked you in 2000, I suggest, whether the 15 Somers equity shares that his father was holding in trust for him were safe so that his control was secure? A. Can I have that again? George asked me. Q. 'Are the 15 Somers equity shares that dad is holding for me safe so my control is secure'. He asked you that, didn't he? A. At what time? Q. 2000? A. I deny that. Q. You said to him, I suggest, in 2000 that 'There is more than enough evidence to prove that your father is holding these for you if he ever goes back on his word'? A. No, I did not say that in that year. Q. Did you say it subsequently, did you? A. Probably to George. 2000 and when things blew up, when things blew up I told George... No is the answer to the question. HIS HONOUR Q. What did you tell George? A. In 2000 and Q. When things blew up what did you tell George in that context? A. 'Look, George, I'm, you know your dad's told you these shares have been left to you under the provisions of a will and he's promised and there's a lot of stuff that bears out that promise'. I, I can't remember precisely but I think this may have taken place at the, at the Australia Club over lunch or something like that. No, it couldn't have. And I, even at that time or previously there had been a legal case that is referred to as Giumelli that runs around and someone else in our office, a Giumelli type transaction. So I did say to George, 'Look George, yes. I believe your father's promise is an enforceable promise and you could compel him to transfer those shares to you under the provisions of his will'. WILLIAMS Q. Would you agree with words to this effect, 'There is more than enough evidence to prove that your father is holding those for you if he ever goes back on his word'? A. At what time? Q. At any time? A. At, at, yes, I did say that. At a time, yes. Q. That was your state of mind in 2000 as well as later on when things became more contentious. That is fair, isn't it? A. 2000. I think so, yeah, yeah, yes. I believe, I believe so, yeah. Q. And if that topic had actually come up in 2000 your state of mind was that there was more than enough evidence to prove that your father is holding these for you if he ever goes back on his word? A. If the topic came up. They were kindred spirits. Q. I suggest it did come up in 2000 and you said those words? A. I disagree completely with that. Refute it wholly. Q. You would not discount that proposition, would you? A. That George asked me about the security his father Q. That you said to him in 2000? A. Yes. Q. 'There is more than enough evidence to prove that your father is holding these for you if he ever goes back on his word'. You would not discount the possibility that you would have said that, given it was your state of mind in 2000? A. I can't discount that possibility." 484Ultimately, Mr Benecke's evidence arrived at the same point as his evidence in relation to the advice that he gave on the Peter Transaction. That is, he accepted that the opinions he held in 2000 were to the same effect as the advice George King said had been given. Mr Benecke accepted he had given that advice at a later point in time. Further, Mr Benecke could not discount the possibility that he had communicated those opinions to George King. For the same reasons, therefore, George King submitted, "it is almost inevitable" that he would have sought his solicitor's advice in relation to these issues. The transfer of Berkeley King's shares was of fundamental importance to his future. 485I am prepared to find that on or about 30 August 2000 Mr Benecke gave George King advice to the effect set out at [72] in George King's affidavit dated 31 August 2010. 486The evidence given by Mr Benecke extracted above amounts to an admission of breach of his duty, although he obstinately refused to concede the ultimate issue. Mr Benecke ultimately accepted that he continued to breach his duty to George King as he continued to act for him and continued to fail to advise him of the risks in the way the share transfers had been structured. 487Mr Benecke gave the following evidence: "Q. May we take it that you didn't in the subsequent stages of the transaction give advice to George as to the merits of different forms of implementation of the transaction? A. Correct. Q. With the exemption [sic, exception] perhaps of statements you may have made about gold diggers? A. Correct, a couple of years later. That's right. I agree with that. Q. You would accept wouldn't you that in that continued period of the retainer you owed a continued duty to do so? A. I was acting under instruction from George to effect the transfer of shares from his uncle into a nominated entity. Q. But you would accept, wouldn't you, that a responsible solicitor taking on those instructions would want to ensure that the client knew the advantages and disadvantages of implementing the transaction in that way? A. I accept that, Mr Williams. Q. You accept you did not in fact give advice about the advantages and disadvantages of implementing the transactions in the way you said? A. I accept that. Q. And to that extent you breached your duty? A. To the extent a duty exists in those circumstances, yes. Q. But you accept a duty did exist on you in those circumstances, don't you? A. No, I don't. HIS HONOUR Q. Why not? A. Your Honour, I had clear, precise and I believe informed instructions as to the designated transferee for the purposes of this transaction and I acted accordingly. Q. But if it was suggested to you if, as you have, agreed you had an ongoing obligation to advise George of the competing advantages and disadvantages of entering the transaction in the structure proposed and it came to your notice that Berkeley King had a power under clause 16(a) of the Berkeley King Share Trust? A. Yes. Q. To remove and to appoint a new trustee? A. Yes. Q. Would that have fallen within one of the disadvantages, the duty to inform about which you have agreed you had? A. Yes, it would have been fallen into, if I had been aware of that I would have notified George immediately." 488The expert evidence of Mr Edward Boyce, a solicitor of almost 40 years experience, supports the conclusion that Mr Benecke breached his duty to George King. Mr Boyce provided three expert reports expressing opinions based on various assumptions drawn from the affidavits of George King and Mr Benecke. On each set of assumptions Mr Boyce expressed the opinion that Mr Benecke did not conduct himself to the standard of a competent solicitor in the circumstances. Mr Boyce was cross-examined only very briefly and none of the evidence given in his reports was challenged. 489The risk was foreseeable and significant. Mr Boyce gave unchallenged evidence that a reasonable solicitor would have taken precautions in respect of that risk. His 18 July 2012 report opines that a competent solicitor would have drawn the provisions of the Weander trust deed to George King's attention and would have considered what could be done with the trust deed to remove the risk associated with the appointor provision, before proceeding with the transaction. Mr Boyce said that if a competent solicitor had formed a view that the appointor provisions were not able to be amended, he would have: "... advised the plaintiff in relation to those assets proposed to be acquired by the trustee of the trust that he either: (a) had to accept that there was a risk that his father could remove Weander Pty Limited as trustee and therefore accept that risk...; or (b) transfer the assets to himself rather than to the trust or to an entity that he controlled and pay any stamp duty that may apply to those transfers." 490The evidence is clear that Mr Benecke provided no such advice. George King submitted in summary that Mr Benecke breached his retainer and was negligent in acting for George King in relation to both the Peter Transaction and Berkeley Transaction. 491A significant part of George King's case relates to alleged breaches by Mr Benecke of his retainer or of his duty in the period from 2006 to 2008. His contentions in relation to these alleged breaches were as follows. 492George King maintained that Mr Benecke's breaches were not limited to the period in 2000 and 2001 when the Berkeley Transaction and Peter Transaction were each documented. He continued to breach his legal obligations in the period through to 2008. This period of events is also said to be critical to the assessment of causation of the loss and damage suffered by entering into the Settlement Deed and agreeing to pay $3.55M. 493Mr Benecke continued to be retained by George King in relation to active matters through to late 2007. For example, during 2006 he sought advice from Mr Benecke in relation to the purchase from his sister Kristen of shares in Whitney. Mr Benecke continued to act for him in relation to that matter as late as September 2007. Mr Benecke also continued to act in relation to Patricia Bellamy's shares and accepted that he owed a duty to George King personally in relation to that advice. 494George King maintains that during that period of continuing retainer, Mr Benecke breached his duty in ways that included acting for both George King and his father in the negotiations, and purporting to advise both on issues of valuation. Mr Benecke was in a position of conflict. He provided advice to George King that was not in his best interests. 495A position of conflict of interest arose from about August 2007 when Mr Benecke simultaneously advised each of George King and his father in relation to the valuation of the Minority Shares that George King was to purchase from his father pursuant to the Berkeley Transaction. Mr Benecke was initially only prepared to describe this as a "potential" conflict of interest: "Q. As far as valuation issues are concerned it is in the interests of the purchaser to have a low valuation and in the interest of the vendor to have a high valuation? A. That's the way it works. ... Q. Do you think you may have had a conflict of interest in acting for both sides of the transaction in 2007? A. At that stage, when are we talking about? What stage in late 2007? Q. At the time at which you were advising them both in relation to the valuation of the minority shares in the Whitney Pastoral Company Group? A. Both had requested me to prepare I explained to both that I was not a qualified valuer, but if they wanted me to I would try and work out some rough figures for each based on the assumptions and the information they provided to me for the purposes of an intended facilitated family meeting. I did so. Q. Did it occur to you that you might have had a conflict of interest, in other words there might be a conflict of interest in acting for each of them on that transaction? A. It hadn't got to a transaction stage. It was simply negotiations. Q. In connection with giving advice to them both in relation to those matters did it occur to you that you might have had a conflict of interest? A. If we're talking about late 2007, with the benefit of hindsight perhaps I should have referred one of the parties to another firm of solicitors. Q. Do you accept with that benefit of hindsight that you acted in a situation in 2007 where you had a conflict of interest? A. Could you tell me what action you are talking about? Q. In advising both of them in relation to the value of the shares in the Whitney Pastoral Company? A. Okay. Both had instructed me. Each had instructed me. HIS HONOUR Q. I think that's the matter upon which the question is predicated. I think we know that. The question is whether in accepting instructions from both of them arguably with adverse interests one to the other you perceived yourself to have a conflict of interest? A. A potential conflict of interest, yes." 496Mr Benecke's equivocation evaporated on the following day: "Q. And you understood that their interests were conflicting, didn't you? A. I understood that, no doubt about that. Q. And notwithstanding those conflicting interests, you undertook to act for both sides of that transaction in connection with those negotiations, didn't you? A. No, I undertook at their respective requests to prepare some rough valuations based on the information that they had both jointly provided to me and agreed were to form the basis of the valuations and to make those available, I think essentially for the purposes of a family mediation with the NSW Farmers Association. I withdraw the word mediation, a facilitated meeting. HIS HONOUR Q. Does that mean you were or were not acting for both sides of that transaction? A. Your Honour, I was acting on instructions of both parties. Q. I know you have a way of answering things, but that's all Mr Williams wanted to know. A. Sorry. WILLIAMS Q. You billed each side of that transaction separately for the work that you had done, didn't you? A. I would have to look at my file records to ascertain whether that's correct, but I think that's probably right. Q. * You considered that there were two sides to the transaction, each of whom had separate and differing interests, didn't you? A. I did. Q. * And at the heart of the dispute between those two sides of the transaction was the valuation of the minority interests which George was proposing to purchase? A. Correct. Q. * And you were giving advice to A. Sorry, it was a valuation of the minority interests and I believe the quantum which George then had to pay. Q. * And what I want to suggest to you is that you were in a position of hopeless conflict in relation to the advice you were giving to both sides of that transaction? A. In relation to the preparation of the, let's use the term loosely, valuations, the information and data I had been supplied with came equally and with full knowledge of both sides. They were in agreement. Each was shown the calculations of the respective valuations and I believe I copied in each party and to that extent I wasn't I believe I wasn't conflicted because the confidential information I held from George or from Berkeley, that wasn't known to the other. However, with the benefit of hindsight now it probably would have been a better course for me at that stage to refer one or other to another lawyer, accountant or valuer. Q. * And that is because you now recognise that you were in a position of conflict. That's right, isn't it? [Objection taken - Question allowed - Questions marked * and answers read.] WITNESS: Yes." 497The consequence of Mr Benecke acting in a position of hopeless conflict in relation to the valuation of the Minority Shares was that, contrary to George King's interests and legal rights, the valuation erroneously included a value to be paid to his father for a notional interest in Brumby Run shares that ought not to have been included. Those shares did not form part of the agreement reached in 1999. They were not (and never had been) Berkeley King's shares (being shares which had been acquired from outside the immediate family). Berkeley King at no time owned or controlled, or had a right to own or control, Brumby Run. The shareholding in that company was split equally among George King, his father and his uncle and it was entirely unnecessary for George King's purposes for a purchase of a notional holding of Brumby Run shares to be included in a valuation. In fact, George King was the one who had the ability to control Brumby Run, if necessary, by acquiring Peter King's share, which is what he did in December 2007 on the advice of Mr Cheney. 498Mr Benecke gave the following evidence: "Q. At some point he obtained Peter's share in Brumby Run Pty Ltd, didn't he? A. Oh, without checking the file I can't say certainly but I believe that to be correct. I don't think I was involved in that transaction. Q. In any event you believed that if he wanted his uncle to provide him that share his uncle would likely do so? A. I believe so, yes. ... Q. What was in fact the case, I suggest, is that there had originally been three shareholders, George, Peter and Berkeley? A. Correct. Q. And Peter, to your understanding, was always going to give his share to George? A. That's a transaction I do not believe I was involved with. And, I can't be absolutely certain about that. Q. He did give his share to George subsequently, didn't he? A. I understand, that is from my legal team, that that occurred but that was outside of my doing and I understand that George procured that the share be transferred to him. Q. If you had been fearlessly acting in George's interests at the time you would have advised him that one of the things he should do is make sure he obtained his uncle's shares in Brumby Run, correct? A. Yes. If he wanted to control the whole of the Brumby Trust, yes. Q. And if you had given such advice and it had been followed? A. Yes. Q. George would have had total control? A. Correct. Q. Of the Brumby Run Trust? A. Correct. Q. And would not have had to pay a cent for it in any negotiation? A. It depends what he saw fit to pay to his dad for his half share. Q. But you see it was a discretionary trust, he set it up? A. If George elected to exercise the discretion wholly in favour of himself and ignore his father's notional half share, you are quite correct. ... Q. What you are saying to me I suggest is whoever controlled the corporate trustee for that trust controlled the underlying asset? A. Correct. Q. And if you had been acting fearlessly in George's interests rather than in anybody else's interests? A. Mm hm. Q. You would have recommended to him that at least from a legal point of view his position would be improved by ensuring that he had total control of that trust? A. Correct, correct. ... Q. If you had been acting only for George in relation to this matter you would not have prepared a valuation to provide to the other side of the transaction that included the Brumby Run assets, would you? A. Mr Williams, I'd have to refer to my file but I believe George instructed me to prepare the valuation on the basis that one half of Brumby Run was allowed to his father or whomever. Q. But you didn't give him advice as to whether or not that was necessary for the purposes of fulfilling any obligation he had undertaken to buy out the minority shares? A. Correct. Q. And you would have done so if you had been acting only on his behalf, wouldn't you? A. If George took the step of informing me, Ian, listen, I've now got Peter's share in Brumby Run Pty Ltd, so I've got two out of three. So let's work on the basis that I now have full control of Brumby Run and its shares. I don't believe George notified me of that. Q. But because you were in a position of conflict I suggest you did not turn your mind to whether or not he was able to obtain that benefit? A. Because I was in a position of conflict. To the extent that I didn't say to George, listen, George, if you can go back and get that voting share from your uncle then you've got two out of three, then you can forget about your dad. To the extent I didn't advise him to do that, I agree with you." 499Mr Benecke gave later evidence to the same effect "Q. And a responsible solicitor acting for George in connection with this negotiation wouldn't have presented those figures of that nature? A. George instructed me to do it. Q. But you were acting in a position of conflict. If you hadn't been conflicted you would have warned him against it, wouldn't you? A. I'm not to know what he wants to do in relation to Brumby Run. I don't believe I knew that he had acquired control from his Uncle Peter of his share in Brumby Run. Q. If you had been just acting for him you would have advised him that it was at least open to him to assert that the legal position was he didn't have to pay anything for Brumby Run? A. If I was aware that George owned the share in the two thirds shares of Brumby Run, yes, I would have. Q. If you believed that one of those shares was still held by his Uncle Peter, you would have advised him that he should try and secure that share? A. I may have done that, yes. Q. That's what a responsible solicitor acting only in his interests would have done, I suggest? A. Potentially, yes, that was a course of action. He could have asked the same thing of his father." 500George King submitted that, on the contrary, Mr Benecke was, or should have been, on notice of the share structure in Brumby Run. It was a matter of public record and in about September 2007 he did prepare a share transfer for Peter King to transfer his share in Brumby Run to George King and had sent it to him. Even so, Mr Benecke failed to advise George King in the context of the negotiations with his father that there was no legal basis for notionally including a payment to him in respect of Brumby Run. 501The inclusion of Brumby Run in the share valuation substantially increased the valuation sum for the shares George King was negotiating to purchase by something in excess of $800,000. It is apparent that the figures, including that figure, were carried forward in the figures that were discussed in the October 2007 mediation. George King was not advised at any time that those figures could be reduced by $800,000. He maintains that that amount ought not to have formed part of any assessment of the "fair value" that he was to pay for the Minority Shares in accordance with the agreement made in 1999. 502During 2007 the issue of 15 equity shares in Somers that Berkeley King had promised to leave George King in his will came to be used by Berkeley King as a negotiating ploy. George King had become concerned at the conclusion of the negotiations in July 2006 that his father was under pressure to not fulfil his promise. By July 2007, Berkeley King was actively negotiating to force his son to pay more than the agreed "fair value" for the Minority Shares. In the months or so leading up to the October 2007 mediation, George King spoke to Mr Benecke who advised him that the promise was safe. However, at the very same time, commencing from August 2007, Mr Benecke was accepting instructions from Berkeley King to vary the terms of his will. Those instructions resulted in Mr Benecke drafting a codicil to the will that had the effect of removing the bequest to George King of Berkeley King's Somers shares, which had been promised pursuant to the Berkeley Transaction. Thus, Mr Benecke was advising George King that his father's promise was safe and at the very same time he was drafting a codicil to remove the benefit of that promise. 503George King emphasised that the events at the October 2007 mediation illustrated that Berkeley King was now negotiating for figures far in excess of what could be considered "fair value" for the Minority Shares and was leveraging those negotiations by using his Somers shares as a bargaining tool. He was doing so with Mr Benecke's assistance, acting for him preparing valuations that included those shares as part of the package to be acquired and also acting on the change of the will. This denied George King the benefit of the Berkeley Transaction in the negotiations and in particular, defeated the promise for the transfer of Berkeley King's Somers shares, for which the Berkeley Transaction provided. Mr Benecke was exploiting one of the very weaknesses that he had created by his own negligence in 2000. 504None of this conduct is factually contentious. Mr Benecke gave the following evidence about it: "Q. And it is around about this time where you advised George that his father had promised the remaining Somers Investment shares to him under his will and there's more than enough evidence about that promise? A. I sure did. Q. And you knew George was worried and anxious about that matter at the time, didn't you? A. I, I, I even told him he could rush up to court and get an order to enforce the promise if his dad breached it. Q. And shortly after that you prepared a codicil to the father's will? A. I did. Q. That removed the benefit of that promise, didn't you? A. I don't have a copy of the codicil in front of me but I had a discussion with Mr Berkeley King. I think he gave the shares for a period of 15 to 20 years to his wife with gift over to his son George. That is my recollection. So George ultimately that is all I'll say. HIS HONOUR Q. But is it or is it not correct to say that you prepared a codicil at Berkeley's instructions that removed the benefit of the disposition by will of the 15 shares to George? A. Your Honour, are you talking an immediate testamentary disposition? Q. I think that is what we are talking about? A. Yes, that is correct. WILLIAMS Q. And you did that at the time when you were still purporting to act for George, didn't you? A. I did so. Q. And in doing so didn't you consider that that put you into a position of conflict? A. Are you going to give me the date of the codicil? Q. It is in or about October? A. Yes. HIS HONOUR: Of 2007. WITNESS: Seven thank you, yeah, yeah, yes. WILLIAMS Q. In fact A. I, I concede that that is correct. Q. And you were in a position of conflict when you were advising both of them in relation to that matter? A. I agree with that, Mr Williams." 505Despite conceding in that passage that he acted in a position of conflict, Mr Benecke sought in later evidence to argue that George King was no longer his client and that the conflict of interest was only "potential": "Q. Do you recognise any conflict of interest in your position when you assisted Berkeley in breaking his promise by changing his will? A. I gave Berkeley clear advice to the effect that this action, that he should be very cautious in taking this action and that I was not necessarily recommending that action and that I believed that that action could be readily undone. Q. Can you attend to my question, please? A. Sorry, the question again? HIS HONOUR Q. Did you recognise that you had a conflict of interest when you were given or acted upon the instructions by Berkeley to change his will? A. At that stage I don't believe I had any retainer from George King personally. I had done work for WPC. I did not believe I was prohibited from acting for Berkeley in implementing his instructions, wise or unwise. There were some extraordinary circumstances, which involved, I believe, the launch of a barrage of documents instigated by George from Cheney & Wilson that I think involved some misinformation. Perhaps I withdraw that. I think that didn't occur until about a month later. So your question is did I recognise a conflict of interest in relation to the preparation of the codicil in line with Berkeley's instructions in October of 2007? Yes, I did, there's potential conflict there. HIS HONOUR Q. When you say potential, I don't want to be too tough about it, I just want to understand it. How can you execute instructions to prepare a document on behalf of party A, say in the form of a codicil to a will, that is wholly inimical to your understanding of B's expectation in relation to things disposed of by the will before it was changed? A. Your Honour, with the benefit of hindsight I should have referred Berkeley King to someone else. Q. Should you not have arguably referred both of them to someone else? A. Potentially both of them, potentially both of them." 506Mr Benecke subsequently conceded that he was in fact still acting for George at the relevant time: "Q. The effect of the codicil is to remove the benefit of the promise that you had informed George there was plenty of evidence of? A. Correct. Q. But you didn't tell George that, did you? A. No. Q. That's notwithstanding the fact that you were still acting for him at least in relation to some matters at that time? A. In relation to the share transfer from Kristen, I'm not sure where that as at, it looked like it had aborted in September 2006 and George wanted to re enliven it in 2007. To that extent, yes, I was acting for George. Q. Didn't it occur to you at that time that you were in a position of conflict given the advice that you had previously given to George? A. Yes, with the benefit of hindsight there was a conflict there." 507The evidence also indicates that Mr Benecke's conduct throughout this period was heavily influenced by the strength of his personal relationships with various members of the King family. Even at the time of giving evidence, his personal interest in the lives of members of the King family appeared to blind him to his professional obligation independently to pursue the interests of his client. This was obvious from his emotional state displayed at times during cross-examination. It was also clearly demonstrated by the evidence in relation to the Farmers' Association mediation held on 16 October 2007, which Mr Benecke attended. The notes of the mediation recorded what Mr Benecke had stated as his "hopes and concerns" for the mediation. The following cross-examination occurred in relation to this issue: "Q. 'Ian's hopes and concerns for the family meeting were', and then A. Yes. Q. 'Harmony and unit in the family'? A. Yes. Q. 'Certainty and some equity for Katie and Shish'? A. Correct. Q. If you had been acting for George they wouldn't have been your hopes and aspirations for the meetings, would they? A. Certainly if I didn't know Katie and Shish, perhaps not. HIS HONOUR Q. Whether you knew them or not, if you had been acting for George alone your interests for his sisters would have been wholly irrelevant, wouldn't they? A. Your Honour, I agree with that." 508Even with the benefit of hindsight Mr Benecke failed to understand the steps he was obliged to take as a result of the conflict, instead insisting that he could have continued to act for one party: "Q. This should have occurred to you at that time, shouldn't it, that there was a conflict? A. Yes. Q. And what you should have done is, if you had received those instructions, refused to act any longer for either party? A. Well Q. That's right, isn't it? A. I'm not sure either party, certainly in relation to one party HIS HONOUR Q. Isn't that the problem with the conflict, you can't act for either? A. Your Honour, I think that would have been the preferential course, to send them both elsewhere. WILLIAMS Q. And you recognised not only was that the preferential course but that was the appropriate course at the time? A. Well, if I did, obviously I have failed to take notice of that at that time." 509In addition to the position of conflict he placed himself in, it is clear that the advice given by Mr Benecke that Berkeley King's Somers shares were safe was misconceived: "HIS HONOUR Q. If the bequest in favour of George in the will was capable of being altered by the execution of a codicil, do I take it that it was at least your understanding that the will was not in a form of an irrevocable agreement to make a will in a particular form? A. That's correct, your Honour. Q. So does that mean that at all times when you expressed the view or held the understanding that the agreement made by Berkeley to leave property in his will safely favoured George, that couldn't have been correct, could it? A. Your Honour, I was instructed by Berkeley to make a codicil but I advised Berkeley that I think I even used the expression, 'George can toddle up to Phillip Street and get that undone before Christmas', or something like that. Q. That's the part I am just trying to get at. The will was not in a form of A. Irrevocability. Q. of irrevocability by a promise to leave property by his will in an enforceable way? A. That's correct. Q. So to the extent that it was not irrevocable, any comfort that either George took or you thought he had in the enforceability of the promise was illusory, was it not? A. Well, no. I had told both Berkeley and George that I believed that those 15 shares were now on an effective constructive trust for George based on promises and consideration that had existed then over a period of six or eight years or more. Q. So you say he could have effectively obtained specific performance of a promise to either leave a will or resurrect a will in a form that left the shares to George? A. Correct. You are asking me if I advised that to Berkeley? Q. No, I just wanted to know your view of it. A. Yes, that was mine. WILLIAMS Q. Leaving shares in a will still carried with it the additional potential of a Family Provision Act claim, didn't it? A. Correct." 510Mr Benecke's own evidence was that he had been retained by George King in relation to the Peter Transaction. He understood that the common purpose sought to be achieved by the combination of the Peter Transaction and Berkeley Transaction was to give George King control of Whitney. It was that very control that George King feared losing in December 2007 as a result of his father's appointor power. That vulnerability was the direct consequence of Mr Benecke's negligence in implementing the share transfers in 2000 and 2001. 511Mr Benecke clearly understood that as at December 2007 George King feared losing control and was trying to do what he could to protect the benefit of his father's promises. The Peter Transaction and the Berkeley Transaction were now at serious risk due to Mr Benecke's negligence: "Q. And you knew, I suggest by 20 December 2007, that what George was seeking to do, whether rightly or wrongly, was to ensure that he had the benefit of the promises that had been made to him? A. No doubt about that." 512With that knowledge and understanding Mr Benecke would appear, in George King's submission "unashamedly", to have used George's confidential information to exploit the weakness in his position caused by Mr Benecke's own conduct, and to further the interests of his father: "Q. Yes. You agree, don't you, that after George went to Cheney & Wilson in or about December 2007, you acted against his interests? A. Yes, I did. Q. And in acting against his interests, you felt free to draw upon all the documents that were contained in the files held by you, irrespective of who was nominated as the client, didn't you? A. Well, to derive information? Q. Yes. A. Yes. Q. And you actually used confidential information that had been provided to you by George against him, didn't you? A. I can't recollect. Certainly we on behalf of Berkeley, we carried out some searches of ASIC, the ASIC register and I would have referred to correspondence written to George in relation to the acquisition of shares back in 2001, 2002 I believe. Q. So far as you are referring to the acquisition of shares, at least in one of those retainers, that was a retainer, which you accept that you acted for George in connection with his Uncle Peter? A. Certainly. Q. And you went back to the file in relation to that matter and used information from that file against George, didn't you? A. Yes, I believe I wrote to George to correct a barrage of misinformation, what I considered to be fraudulent documents that emanated from Cheney & Wilson on George's behalf. Q. What you did is you went back to the file in which you had acted for George and used information from him as a client, against him, didn't you? A. Correct. Q. And you used that information from George's file against him on behalf of Berkeley, didn't you? A. Correct. Q. And that was an inappropriate thing for you to do, wasn't it? A. Well, Berkeley King I can't recall the precise information that I gave or the letter that I drew on, but I believe Berkeley King was still a director of the company Weander Pty Limited with which we were dealing. In fact I think he was probably still a 25% shareholder in relation to that in relation to Weander too, so he was effectively one of the office bearers of the trustee company. Q. You used privileged information that you had obtained from your client, George King, against him at the behest of his father, didn't you? A. I'm not so sure it was privileged. I would have thought that perhaps Berkeley King was copied in on the original correspondence. HIS HONOUR Q. But the question is simple enough. If the answer is 'No', it's 'No'. If it's 'Yes', it's 'Yes'? A. Sorry, Mr Williams, the question again is? Q. You used privileged information provided to you by George as a client against him at the behest of his father, Berkeley? A. If this is if you are talking about a copy letter that I had written to George from that file and if that is regarded as privileged, yes, I did." 513Although Mr Benecke attempted to justify his conduct on the factually and legally misconceived basis that Berkeley King had an interest in Weander that entitled him to use George King's personal confidential information, it is clear that the true position is that at the time Mr Benecke did not even bother to consider whether he had a proper basis for using the information against his former client: "Q. Prior to writing this letter to George, you went back through the files in which you had acted on George's behalf, didn't you? A. Correct. Q. And you deployed information from those files against him, didn't you? A. Well, I deployed information that corrected his misunderstanding or misrepresentation of a situation. Q. Just answer my question, please. A. Mm hmm. Q. You went back to the files in respect of which you had acted for George and you deployed that information against him, didn't you? A. Yes, I did. Q. And you shared privileged information from those files with your other client, Berkeley, didn't you? A. Yes, I did. Q. And you knew that was wrong to do that, didn't you? A. Berkeley King was a director and a shareholder in a trustee company previously called Deerslayer, now called I'm sorry, previously called Weander, now called Deerslayer, and I think it was probably important for him to be aware of things that were being done to that company and it changed the complexion of ownership and it was misreporting of the ownership of shares. Q. You see by this stage, that is December 2007, Berkeley was neither a director nor a shareholder of Weander, was he? A. That I can't recall. I can't recall. Q. Really, Mr Benecke? A. I cannot recall. Q. Did you actually turn your mind to whether what you were doing was proper in December 2007, that is, using documents on George's file against him? A. Probably not. Q. You recognise now, don't you, that what you were doing was improper? A. I recognise now that it would have been better to send either party both parties away for separate legal advice. Q. What I want to suggest to you is you recognise now, don't you, that what you were doing in using George's privileged information against him, was improper? A. Yes. Q. And you if you turned your mind to it at the time, you would have known that, wouldn't you? A. Yes." 514Mr Benecke then acted to assist Berkeley King to dismiss Weander as trustee, using the very power he had failed to advise George King about in 2000. Mr Benecke fleetingly attempted to justify the dismissal on the basis that George King's position had not really been affected: "Q. If you go back to page 982, halfway down after item 6, 'We certainly do not agree that the action by Berkeley in removing the trustee of the trust is in conflict with any advice we have given to George or any action we may have taken on George's behalf'. You would regard that as a false statement, wouldn't you? A. I'm not sure that I would. HIS HONOUR Q. Why not? A. Your Honour, if the appointor exercises the power of a replacement of a trustee and the trustee does nothing to vest the trust, crystallise any entitlements, then, really, George's position has not been affected at all. Q. This is the real world, isn't it, Mr Benecke? If someone has a gun and it is loaded and it is pointed at you, it may not be worrying because you rather suspect that they won't squeeze the trigger but the potential is always there? A. Correct. Q. In a commercial setting, such as this, the fundamental and underpinning benefit of the transaction was dependent upon the issue about the appointment of the trust. We have gone over this many, many times? A. Sure. Q. I want to make it clear, whatever decision anyone comes to in this case, I think everyone would appreciate it would have to be made upon the basis of a commonsense understanding of commercial transactions, not a penny-pinching, niggardly assessment of the particular words that might have been used, on the assumption that the benefit of who could appoint or remove the trustee was insignificant? A. I understand that." 515The unequivocal evidence was that the premeditated purpose of the dismissal was to use the very weakness Mr Benecke had caused in 2000 to extract more money out of George King in the negotiations with his father: "Q. The whole point of the removal of the trustee was to place the power in Berkeley's hands to do what he wished with the trust assets; that's right, isn't it? A. Certainly it gave him some control and some leverage in negotiations, but Berkeley made it absolutely clear to my knowledge, to my best recollection that he intended to do nothing. Q. You used the word 'leverage' there, was the purpose of removal of the trustee to create leverage in the negotiations with George? A. Correct. HIS HONOUR Q. Meaning the threat that the trustee would be removed and the value of his shares would be worthless was to be held over him in negotiations, is that it? A. I think Berkeley's intention was to procure a situation where he could have his daughters paid some sort of equal inheritance value or equitable heritance value in line with promises, which George had apparently made to Berkeley. Q. Not to put too fine a point on the matter, to be able to squeeze more out of George? A. Correct." 516Mr Benecke's statement that to his knowledge Berkeley King "intended to do nothing" seems inconsistent with what was actually happening. Garland Hawthorn Brahe's invoice for work done in this period records "solicitors at GHB meeting with Berkeley on 30 January 2008 and discussing property valuations, winding up and Supreme Court proceedings". 517Mr Benecke continued actively to pursue the strategy of applying pressure to George King in January and February 2008. Following the dismissal of Weander, Cheney & Wilson wrote to Mr Benecke's firm on 18 January 2008. The letter recorded the key factual background, including the intention of Berkeley King and Peter King that George King should obtain control, and the advice given by Mr Benecke. During cross-examination, Mr Benecke accepted that these factual matters were fairly recorded in the letter. It also stated: "Your firm should forthwith cease acting for Berkeley King or any Trustee of the Berkeley King Share Trust on the basis that the action now taken by Berkeley King is in conflict with the advice give to and action taken for George King by your firm." 518Garland Hawthorn Brahe responded on 1 February 2008. Although the letter was signed by Mr Benecke's partner Mr Miller, he agreed that he had approved its contents. The letter denied the various factual matters set out by Cheney & Wilson. The letter also stated: "We certainly do not agree that the action by Berkeley in removing the trustee of the Trust is in conflict with any advice we have given to George, or any action we may have taken on George's behalf." 519Mr Benecke also accepted during cross-examination that the letter contained numerous statements he knew to be false. Further, it contained numerous pieces of information that Mr Benecke had acquired in the course of acting for George King and which he was now using improperly to increase the pressure and leverage upon him. Mr Benecke gave the following evidence as to the intended objective of the 1 February 2008 letter: "Q. Part of the matters that appear after 'Berkeley's concerns' are complaints about the conduct of George? A. Correct. Q. And various statements designed to be received as threats by him as to what actions he might be liable for in connection with those matters; correct? A. Correct, yeah. ... Q. Under the heading 'Berkeley's concerns' you set out a number of matters in which you were seeking to apply leverage or pressure to George, didn't you? A. Correct. Q. The purpose of doing so was to improve Berkeley's position in the negotiations, wasn't it? A. Correct. ... Q. What this letter was all about was promoting the idea of mediation but at the same time making threats and applying pressure so that your client, Berkeley, had the upper hand in the negotiations? A. I would agree with that." 520Mr Benecke agreed that he had given an undertaking that he would not be personally involved and that Mr Miller would continue to act. He steadfastly denied having a continued involvement after January 2008. However, it is clear that Mr Benecke continued to be directly involved. He continued to communicate with Mr Miller and there were no "Chinese walls" prohibiting such communication. Further, Mr Benecke personally drafted a letter to Cheney & Wilson dated 11 February 2008. He gave the following evidence in relation to his intended objective in writing that letter: "Q. Would you agree that in that letter you are continuing to make allegations against George? A. Yep. Q. So as to increase the pressure and leverage on him in the context of up coming negotiations? A. As at 11 February 2008 no doubt about that." 521Mr Benecke also agreed that he had discussed with Berkeley King the action that should be taken in relation to his son's assault. 522Even after having admitted a breach of his duty, Mr Benecke continued to show a somewhat remarkable misunderstanding of his professional obligations, seemingly contending that there was no prohibition against acting for Berkeley King against his son: "Q. Notwithstanding that conflict you continued to prefer the interests of Berkeley King over your former client, George King, didn't you? A. Yes, I did. Q. And that was wrong for you to do that, wasn't it? A. Well, at that stage I didn't see any prohibition why our firm could not be engaged by Berkeley King. George the retainer we had with George concluded some months beforehand and he had his own lawyer. Q. But you had confidential information from him that you had gleaned during the course of numerous retainers over the years, didn't you? A. We did. Q. And you used those confidential communications for the benefit of Berkeley against George, didn't you? A. Correct." 523To the very last question of his cross-examination, Mr Benecke proved incapable of understanding what his professional obligations required: "Q. See, Mr Benecke, you would accept, wouldn't you, that you have let George down rather badly in the transactions in which you acted for him? A. I have I believe I have let George down in not having fully examined the terms of the Berkeley King Share Trust in 2001 2002, 2001, to inform him of his father's position as the appointor. In all other respects, though, I believe the transactions were implemented in line with George's wishes and instructions. Q. What I want to suggest to you, you have let him down badly in connection with the advice you gave about stamp duty and capital gains tax in connection with the transfer of the shares in Somers? A. I disagree with that. Q. And what I want to suggest to you is you let him down badly by acting in a position of conflict from at least October of 2007? A. Until he obtained separate legal representation at the start of December. Q. You have let him down badly, even after that time, because you deployed his privileged information against him, didn't you? A. Well, I explained to Berkeley King at the time that even if Berkeley went off to see another lawyer, then he would ultimately be able to get the benefit of most all of the information that's available that I have supplied by examination of copies of records and documents that we held on our files for Berkeley and in addition by searches of ASIC records. Q. What I want to suggest to you is that you let him down badly by continuing to act against him in circumstances where he said you had a conflict of interest? A. Where George said I had a conflict of interest? I don't remember George actually saying that to me, but George apparently clearly thinks so. He clearly thinks so. Q. And you agree, don't you, that you let him down badly by continuing to act against him in circumstances where you had a conflict of interest? A. No, I disagree." 524Finally, in addition to acting for Berkeley King, Mr Benecke's firm somewhat curiously failed to hand over George King's legal files to Cheney & Wilson despite numerous requests over many months. No relevant files were received by George King until after the settlement with his family had been concluded. He contended that this further weakened his ability to defend himself against the loss of control caused by Mr Benecke's negligence and subsequent exploitation of the very weaknesses he had created. 525George King promoted the following passage from Mr Benecke's cross-examination as a pertinent summary of the manner in which Mr Benecke breached his obligations to George King during 2007 and 2008: "Q. What you did from at least October 2007 is you preferred the interests of your one client, Berkeley, over the interests of your other client, George, that's right, isn't it? A. I would agree with that. HIS HONOUR Q. What was the answer to that? A. I agree with that. WILLIAMS Q. That was a clear breach of your duty to George, wasn't it? A. Yes, it was. ... Q. You accept that from December 2007 you acted for Berkeley against George? A. Correct. Q. And you acted for Berkeley against George in relation to the very transactions upon which you had previously advised George, didn't you? A. That's correct." 526George King's case is that Mr Benecke breached the relevant retainer and duty of care by (a)transferring Peter King's shares to Weander/Deerslayer as trustee for the BKST rather than transferring them to him personally, or (b)doing so without warning of the risk of the appointor power being exercised or taking steps to prevent it from being exercised, or (c)advising George King that he had control of the shares in circumstances where his control was subject to the exercise of the appointor power. 527Contrary to the originally pleaded defence, Mr Benecke now concedes that there was a breach of retainer or duty of care in relation to Peter King's shares by reason of his failure to warn George King that there was a risk of the appointor power being exercised. (There was originally a contest about whether on 29 January 2001 George King instructed Mr Benecke to transfer Peter King's shares into the BKST or whether Mr Benecke advised him that he should do so. In the light of the concession, it is no longer necessary to decide this issue). 528With respect to the alleged breaches of retainer or duty of care in relation to the Berkeley Transaction, Mr Benecke contended as follows. 529So far as concerned the alleged breach in relation to the shares held by Weander/Deerslayer, George King says that Mr Benecke breached the retainer or duty of care owed in relation to the Berkeley Transaction by the same acts and omissions concerning the appointor power as are identified in respect of the Peter Transaction. This issue only arises for consideration if Mr Benecke had an implied retainer with George King or owed him a duty of care that required him to advise upon, and not merely implement, the instructions given to him by Berkeley King to transfer three Weander shares to him. Mr Benecke accepts that, in the event that I found such a duty to exist, it was breached by reason of him failing to warn that there was a risk of the appointor power being exercised. That breach affects only the shares that were held by Weander/Deerslayer. 530So far as concerns the alleged breach in relation to the 15 ordinary Somers shares, Mr Benecke contended that if there was an implied retainer or duty of care in relation to these shares that were the subject of the bequest in the will, he did not breach it. Once again, the only basis on which an implied retainer or duty of care could be found in respect of these shares is if it is found that the discussion on 30 August 2000 occurred. Mr Benecke denies that it did. Otherwise, the security of the 15 Somers shares simply did not arise in 2000-2001, as they were not the subject of any transaction that occurred at that time. 531It was Mr Benecke' s position that the advice George King attributes to him at [72] of his affidavit did not involve any departure from the standard of a reasonable and competent solicitor. George King understood by as early as 1996 that his father could change his mind about his will. He agreed that that was acceptable to him. The advice that he could enforce the promise, and that there was sufficient evidence to do so, has not been established to be incorrect. George King has not sought to establish that there were not sufficient documents in evidence as at 30 August 2000 to prove the promise had been made. It is clear that by the time the dispute emerged in 2007 there were sufficient documents. 532The specific breaches alleged by George King in respect of the 15 ordinary Somers shares are that Mr Benecke should have advised him to require their immediate transfer, or to obtain a binding legal agreement in respect of the promise, or to advise him of the risks of not doing so. Mr Benecke contends that these alleged specific breaches are the product of hindsight. They do not reflect what a reasonable and competent solicitor would advise in the context of a close and trusting family relationship. When Mr Benecke was cross-examined on this issue he maintained the position that George King could have enforced his father's promise. 533Mr Benecke also emphasised that there is in any event no evidence that Berkeley King would have been prepared to give an irrevocable promise. The rather delicate situation he faced in keeping Coombing Park intact while attempting to provide for his children equally, and the evident concerns his daughters had about not seeing their brother receive preferential treatment, would very likely have made it difficult for him to commit to a formal agreement. There would also have been tax implications in doing so. Mr Benecke maintained that there was accordingly no breach of duty in not advising George King to seek one. 534George King's two independent "conflict of interest" breaches that are pleaded arising out of the events of 2007-2008 allege that Mr Benecke breached his duty or retainer by acting in a position of conflict of interest in providing legal services to Berkeley King for the preparation of the second codicil to his will in October 2007 undoing the bequests of shares in Somers and Esk and providing legal services to Berkeley King for the preparation of the Deed of Removal of Weander/Deerslayer as trustee. 535Mr Benecke properly accepted that at least as a matter of good professional conduct he should not have acted in relation to the changing of the will or removal of the trustee. He was not prepared automatically to concede that the conflict of interest necessarily also amounted to a breach of retainer or duty. Notwithstanding Mr Benecke's admissions, George King was not an existing client by October 2007, when the will was altered. He was not acting for George King in relation to the Patricia Bellamy dispute in any meaningful sense. He provided historical information at the mediation in October 2007 but was not acting for either party in the inheritance dispute. He did not make use of confidential information in giving effect to Berkeley King's intentions to alter his will. 536The removal of Weander/Deerslayer as trustee in January occurred after George King had retained Cheney & Wilson. George King had specifically advised Mr Cheney that he suspected that the appointor power would be exercised on 18 December 2007, and they did not seek to have Mr Benecke cease to act. Mr Cheney in fact advised George King on 21 December 2007 that there was no need to object to Mr Benecke acting until after litigation was certain. Once again, in giving effect to Berkeley King's intention to remove Weander/Deerslayer as trustee, Mr Benecke did not make use of any of George King's confidential information. Conclusions on the breach issue 537In my opinion the following findings are available on the evidence and should be made: (a) Mr Benecke breached his duty to George King by continuing to fail to advise him of the risks in the way the share transfers had been structured. (b) Mr Benecke acted in a position of conflict in advising from about August 2007 in relation to the valuation of the minority shareholding. In particular, he erroneously included in the valuations a sum for Berkeley King's Brumby Run shares. (c) Mr Benecke exploited the weakness in George King's position caused by his own negligence by acting for Berkeley King to prepare a codicil to his will that removed the benefit of his promise to George King in respect of his Somers shares. (d) Mr Benecke used confidential information obtained in the course of his retainer by George King for the purposes of further undermining his vulnerable position and strengthening his father's position. (e) Mr Benecke exploited the weakness in George King's position caused by his own negligence by acting to remove Weander as trustee of the BKST. (f) Mr Benecke continued to act for Berkeley King against George King during 2008. (g) Garland Hawthorn Brahe failed to hand over George King's files despite repeated requests, until after the settlement was reached with his family. (h) The intended objective of Mr Benecke's conduct in acting for Berkeley King against George King was to apply pressure to George and to create leverage in order to enhance Berkeley King's negotiating strength in the event of a dispute over the terms of the transfer of practical ownership and control to George King. 538I am prepared without reservation to accept the opinions expressed about these and other matters by Mr Boyce. Nothing arising from his reports or his oral evidence leads me to doubt any of the conclusions he came to or the opinions he formed. I am also satisfied that Mr Benecke's own evidence given in cross-examination is a remarkable demonstration either of a total misunderstanding of the conflict of interest that infected his ability to act for both George King and Berkeley King in respect of the same transaction or of a chronic state of denial about it. George King's submissions upon the issue of breach of duty and breach of retainer are detailed and persuasive and I have set them out with some particularity. It is in the circumstances of an already lengthy judgment unnecessary to do more than to observe that I accept them in full. I should also note that Mr Benecke's submissions were equally detailed but did not satisfy me either in content or conviction that George King's case on breach should not be accepted in full. Causation: was any loss that George King can establish caused by a breach of duty or breach of retainer by Mr Benecke? 539George King's case on causation is conceptually clear. He maintains that he was placed under pressure to settle by Mr Benecke's defaults which eroded his negotiating position so that he paid more than if he had the benefit of proper professional advice. Put another way, he says that, but for Mr Benecke's breaches, he would have paid much less than the $3.55M for which he ultimately settled. 540Section 5D(1) of the Civil Liability Act provides that causation will not be established unless there are positive answers to two inquiries: factual causation (being a statutory statement of the "but for" test) and scope of liability. The effect of the provision and the underlying policy considerations were recently explained by the High Court in Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182 at [18]-[20]; see also Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420 at [42]-[45] and Monaghan Surveyors Pty Ltd v Stratford Glen-Avon Pty Ltd [2012] NSWCA 94 at [67] ff. 541Section 5D(1) formalises the reasoning process involved in common law causation rather than departing from it: see Monaghan Surveyors Pty Ltd v Stratford Glen-Avon Pty Ltd at [73]. If it does alter the common law test, its effect is to restrict rather than extend it. The purpose of the statute was not to make it easier for plaintiffs to establish causation. 542Section 5D(2) addresses the specific problem of causal over-determination. That was the subject of the observations in Strong v Woolworths Ltd at [26]-[28]. The High Court should not be taken to have suggested that the "but for" test no longer applies or applies less stringently, such that it is only necessary for a plaintiff to prove a "material contribution". The problem of causal over-determination does not arise in the present case. 543Mr Benecke characterised George King's case on causation as one involving "a complex counterfactual exercise". He submitted that there are many independently sufficient ways of answering it. With this in mind, Mr Benecke has formulated a series of eight propositions, each of which he contends would, if made out, prevent George King from establishing that Mr Benecke's acts or omissions caused him any loss, and each of which is supported by the findings sought by him in these proceedings. Those propositions are as follows: (a) George King has not established that Berkeley King, Peter King and he would have agreed to structure the transfers of shares as he now alleges they should have been structured. (b) George King paid no more than "fair value" as agreed with his father and is therefore in no worse position than he would have been if the share transfers had been structured as he says they should have been. (c) Even if the share transfers had been structured as George King says they should have been, there would have been a dispute about "fair value". (d) Even if the share transfers had been structured as George King said they should have been, he would not have resolved the dispute on the same terms as the dispute with Patricia Bellamy was resolved. (e) George King paid no more than the amount he was prepared to pay before any weakness in his legal position could have become apparent to him. (f) George King did not believe his legal position to be weak and was not under pressure by reason of a weak legal position, other than by reason of what resulted from his own wrongdoing. (g) But for his own wrongdoing, the alleged weakness in George King's legal position could have been remedied. (h) George King also suffered no loss, because the effect of the settlement was that he obtained a release from a potential personal liability of $2M. 544Mr Benecke made the following submissions in support of these points. 545(a) It seems clear that George King did not have any concerns about his father in 2001. He said that they enjoyed the "best relationship" and he trusted him. Mr Benecke contended that if he had been told about the possibility of the appointor power being exercised, George King would have thought nothing of it, just as he was aware that his father could have changed his will and thought nothing of it. He contended that George King's evidence that he would have insisted on "security" is the product of hindsight. 546Mr Benecke submitted that George King's submissions pay insufficient regard to the close and trusting relationship he had with his father as at 2000-2001. They also ignore the fact that his father was delicately trying to provide a measure of security for George while also not giving the impression of favouring him over his sisters. George King recognised that on a number of occasions. The agreement that was struck, with George King receiving three of the four Weander shares and his father's Somers shares passing on death, represented a balance that was acceptable to both of them in light of Berkeley King's expressed wish to deal fairly with all of his children. 547There were also the tax implications of using an alternative structure, in terms of CGT and stamp duty. George King has accepted that the parties desired to minimise tax but says that if they had been properly advised they would have realised that the tax implications of an alternative structure were insignificant. In contrast, Mr Benecke submitted that the tax implications of an alternative structure were not insignificant and that I should not find that either Berkeley King or his son would have regarded them as such. 548The main issue is said to be CGT. Mr Benecke says that it either was payable on Berkeley King's shares (because, in reality, the shares were not acquired by him until sometime after 1994) or that, in light of the instructions and family history, a reasonable and competent solicitor would not have formed the view that it was not payable because they were a pre-CGT asset. Mr Benecke was not retained to engage in a detailed and perhaps expensive exploration of the true position. 549The potential for tax problems, coupled with the loving and trusting relationship between father and son, meant the transaction was structured in the way it was. Mr Benecke characterised George King's analysis of this issue as a counsel of perfection based on hindsight. In these circumstances George King has failed to establish that he and Peter King and/or he and his father would have agreed to any different structure. 550(b) Mr Benecke submitted that "fair value" in the agreement meant an amount sufficient to put George King's sisters in a roughly money-equal position. On this interpretation, George King obtained better than "fair value" under the settlement in December 2008, and therefore suffered no loss. 551For instance, as at July 2006 George King was prepared to resolve the dispute about "fair value" on the basis that he and his sisters would receive equal shares in their parents' estate (that is, in accordance with what Mr Benecke says was actually agreed). To calculate this, George King reversed the transfer of his father's Somers shares (restoring him to a 47 percent interest in Whitney) and then divided it between him and his sisters (13 percent each). The payment he was prepared to make to his sisters was equal to 26 percent of the value of Whitney. He did not apply any "minority discount". George King accepted that approach as at July 2006 in the interests of "fairness". It is Mr Benecke's case that it reflected the actual agreement. 552Mr Ivey valued Whitney at $12,874,778 (net equity). Twenty six percent of that amount is $3.35M. Berkeley King also held 135 of 385 shares in Esk, or about 35 percent. Taking the same approach that George King was prepared to adopt for Whitney, he would have had to pay his sisters an amount equal to the value of two-thirds of his father's 35 percent interest, being about 23 percent. Mr Ivey valued Esk at $2,769,207. George King would have had to pay 23 percent of that amount, or $636,917 for the shares in Esk. 553Accordingly, if one applies the principles of equal treatment that George King was prepared to apply in June and July 2006, he would have had to pay his family about $4M to acquire the Minority Shares ($3.35M plus $636,000). He did not raise any "minority discount" in his dealings with his family in 2006. It did not enter into his calculations. Mr Benecke says that it played no part in what was meant by "fair value". However, even if a minority discount of 20 percent were applied, it would only reduce the sum payable to $3.2M. When $500,000 is added to account for the right to occupy the homestead, George King would still have been no better off than under the settlement he actually obtained in December 2008. 554The simple fact is that when a calculation is done to achieve a roughly equal division of the parents' assets among their three children, George King has come out ahead. That is all the more so because of the deal he did with his uncle. Either way he has still received better than "fair value" in terms of division of his parents' original estate among himself and his sisters. 555It follows that George King has suffered no loss by reason of the way the share transfers were structured: he has in fact done better than he would have done if the 1999 agreement had been applied according to its terms. 556(c) Part of George King's case is that if Mr Benecke had not breached his retainers and duties, the dispute with his family would have been a simple one. It would merely have been a matter of determining the net equity position of Whitney and Esk, attributing a percentage to the Minority Shares, and applying a 20 percent discount. The flaw in that argument is that it assumes that George King's version of "fair value" is the correct one. 557Even accepting the view George King now takes about what is meant by "fair value" as a term in the 1999 agreement, it is patent that his father did not accept that view. When the dispute arose in 2006, Berkeley King asserted forcefully that "fair value" meant as close as possible to money equality. Given his personal history, doing what he regarded as justice among his three children was obviously something of great importance to him. 558Irrespective of how the share transfer side of the transaction had been structured, there would always have been a dispute about "fair value". That was particularly so given the disproportionate benefit George King gained from the treatment of his aunt's shares. His family were, understandably, left wondering how his interest in Whitney had increased so markedly when he had paid no additional consideration. It was a very significant bone of contention. 559The reality is that to get a better result than he obtained under the December 2008 settlement, George King would in all likelihood have had to commence legal proceedings, prove the terms of the 1999 agreement, successfully establish that "fair value" meant what he now says it means, and explain how he had done so well out of the Patricia Bellamy buy-out. Mr Benecke contends that he would have failed to do so. However, even if that were not the case, resolution of the dispute about what was meant by "fair value" would inevitably have involved costs, delay and what George King describes as "pressure". When his misconduct (particularly in relation to The Wellness House) is factored in, George King may have emerged no better off than he did in December 2008. 560(d) George King contends that but for Mr Benecke's breaches of duty, he would have been able to buy-out his family on the same terms as Whitney bought out Patricia Bellamy. Mr Benecke submitted that this could never have happened. 561First, there was no equivalent in the dispute with Patricia Bellamy of the agreement that George King pay "fair value" to his family. There would always have been a dispute about what was meant by "fair value" as part of the dispute between George King and his family. The analogy he draws leaves that dispute entirely out of the account. 562Secondly, Patricia Bellamy brought a minority oppression suit. The outcome of such a dispute turns largely on the behaviour of the majority shareholder or shareholders. Berkeley King certainly recognised this. He said so in various mediation position papers. For example: "As a result of knowing that a court case [with Bellamy] was inevitable I and later George took great effort to make sure everything we did was by the book and that we did nothing that could be used against us in court. Penny & I lent considerable amounts of money to the WPC interest free in an effort to show I was not defrauding the coy." 563It appears that in her suit Patricia Bellamy had difficulty identifying oppressive conduct by the majority. By way of contrast, had the family brought a minority oppression suit against George King, the evidence is that they could have included the unauthorised payments by the majority shareholder totalling $2.5M to a separate company owned by him and his wife, the wrongful attempt to have the Patricia Bellamy shares transferred into his name and the disproportionate benefit he gained from extinguishment of those shares, and the wrongful alteration of the Weander/Deerslayer shareholder register. Any hypothetical proceedings brought by George's family would not have settled on the same terms as Patricia Bellamy's proceedings. 564Thirdly, the Bellamy settlement was extremely favourable to Whitney. This was recognised by both the family and George King. In those circumstances it is unrealistic to proceed on the basis that the family would have been prepared to settle on the same terms as Patricia Bellamy. 565Finally, the Bellamy dispute involved a completely different set of circumstances. There were no close bonds of love or affection as there were, at least intermittently, between George King and his family, which influenced the negotiations in this case. 566Mr Benecke submitted that the Bellamy example exposes just how unrealistic George King's case is. The dispute with his family was very different to the dispute with Ms Bellamy, yet to succeed in his claims George King effectively requires an unlikely finding that they would have been resolved on the same terms. 567(e) According to Mr Benecke, the pattern of offers that George King made or agreed to investigate in the years leading up to the December 2008 settlement provides another basis for disproving his case on causation. That is because he paid no more under the December 2008 settlement than he was prepared to pay before any weakness in his legal position could have become apparent to him. In essence George King was not under pressure by reason of a perceived lack of security in his legal position: (i) in July 2006, when he made an offer of $1.67M for his family's Whitney shares (not his father's Esk shares, and without the right to occupy the homestead); (ii) in October 2007, when he agreed in principle to pay $3.5M for the Minority Shares (without the right to occupy the homestead) and said he would investigate finance/property sales; (iii) in December 2007, when he offered to pay $3.5M to purchase the Minority Shares (without the right to occupy the homestead). 568It should also be observed that if the offer of $1.67M for the family's Whitney shares in July 2006 had been accepted, George King would still have had to purchase his father's Esk shares sometime in the future. When the value of the right to occupy the homestead is added in, the offer is significantly higher than the amount he now says he would have paid. There can be no realistic submission that George King was under pressure in July 2006. 569Moreover, the only "pressure" George King points to affecting his decision to agree to investigate paying $3.5M in October 2007 is in relation to the 15 ordinary Somers shares. Mr Benecke submitted that his evidence that he was under pressure for that reason as at October 2007 should be rejected. In any event, if there was no duty and/or breach in relation to the 15 Somers shares, it follows that George King could not have been affected by any breach of duty by Mr Benecke as at October 2007. 570It will be recalled that one of the ways George King puts his case on causation is that, if the matter had stopped at the end of July 2006, the issue could have been resolved through the valuation of the Minority Shares, which would have been approached in the same way as Mr Ivey approached the question when he conducted a valuation of them at 31 January 2009. He argued that when negotiations resumed in 2007, the weaknesses in his legal position affected his negotiating position and changed the dynamic. 571Mr Benecke responded that such an approach, upon which George King places so much reliance, is inconsistent with his evidence that he did not have sufficient funds to settle in 2006-2007 so that, but for Mr Benecke's negligent conduct, the dispute with his family would have settled at the beginning of 2008. 572It is true that the amounts in contemplation in the 2007 negotiations were higher than the offers made by George King in 2006, but it was not because of pressure relating to his legal position. The offers the family had made during 2006 were highly variable. Further, the family gave no indication of any preparedness to accept George King's offers of $1.21M or $1.67M in 2006. They were wise not to do so. The offers were based on unrealistically low estimates of Whitney's value, at $5 per share and $7.50 per share respectively. George King now accepts that, even applying a minority discount, Whitney is worth something in the order of $14 per share. 573Mr Benecke insists that the reason why the amounts in contemplation increased in 2007 is that the family was not prepared to accept George King's unrealistically low estimates of Whitney's value. Valuations carried out in 2007 showed just how unacceptable those valuations were. The family continued to insist on what they regarded as "fair value", being as close as possible to money-equality between George and his sisters. He changed his position and began to say, somewhat inconsistently, that all he was required to pay was net equity less a 20 percent minority discount. 574(e) Mr Benecke's principal submissions on this point have been dealt with already. In summary, George King's evidence that he was under pressure because he was not negotiating from a position of security and therefore felt he had "no option" but to pay 2.5 times the amount he thought he should pay should be rejected. He agreed to the December 2008 settlement because it was within the range of "fair value", it was one he could comfortably afford to pay, and because it suited his wider business purposes. 575Alternatively, if George King did believe he had "no option" but to pay 2.5 times the amount he thought he should pay, his belief was not reasonable, is not objectively supported by the facts and cannot otherwise be justified. 576(f) There were relatively straightforward steps that George King could have taken to restore Deerslayer as trustee or preserve the status quo (to the extent it was not already preserved by the undertaking), subject to his own wrongful conduct in relation to The Wellness House. George King chose to pursue mediation instead of taking formal steps in court to protect his interests because the parties were close to settlement, he had the benefit of the reciprocal undertakings, and because he was concerned about exposing his conduct to public scrutiny. He had sufficient funds to bring proceedings to protect his position, had he wanted to do so. The only barrier to obtaining relief to remedy the consequences of any negligence by Mr Benecke was his own independent wrongdoing. 577Mr Benecke submitted that, taking a common sense approach to causation, any negligence by Mr Benecke was not a cause of George King's loss. But for George King's own wrongdoing, the consequences of Mr Benecke's negligence could have been relatively easily remedied. The fact that he took no steps to remedy those consequences supports the proposition that he was not under pressure as he claims. 578(g) George King has admitted that he wrongfully paid $2.5M out of Whitney for his own purposes, that it was a breach of his duties as a director, and that he knew it. As a defaulting fiduciary he would have been personally liable to restore the amount in Barnes v Addy terms. The effect of the very broad release that he obtained under the settlement deed was to relieve him of that liability. George King must necessarily give a credit for $2.5M in assessing his loss. When that is done, and taking into account the other benefits he received, it is clear that he did not in fact suffer in any loss. 579(h) George King's Brumby Run case is based on the premise that the controller of two of the three shares in Brumby Run could have controlled the whole of the 166,867 Whitney shares held by Brumby Run without reference to the minority shareholder, so that the minority share conferred no value. If the (unpleaded) case is allowed to go forward, and breach is established, it caused no loss. 580George King has given no evidence that if he had been advised to treat Brumby Run in the manner just described, he would have decided to do so. The objective evidence is that he would not have done so. 581First, the Whitney shares held by Brumby Run (or the portion of them attributed to Berkeley King) were among the shares George King agreed to acquire for "fair value". 582Secondly, in any event, his intention was to acquire all of his family shares, not just an effective majority. That is apparent from the fact that he was prepared to purchase and pay for his sisters' shareholdings in Whitney, the shares held by the Grandchildren Trust, and the shares held by Weander/Deerslayer. George King accepts that all of these shares are part of the Minority Shares. There is no basis for treating Brumby Run differently. 583George King has submitted that his "sisters, Katie and Kristen, also each held a small parcel of shares in [Whitney]... It was understood, perhaps implicitly, that George would also acquire these shares at some time in the future". George King purchased 3000 of Kristen's Whitney shares in about September 2006, separately from the settlement. It is clear that, whether put as an "implicit understanding" or an ambition, George King was content to attribute value to, and pay for, his father's share in Brumby Run as part of his acquisition of the whole of his family's interests in Whitney. 584Thirdly, Mr Cheney was advised by George King about the position of Brumby Run and that his father had only a single share. He specifically considered it. With the benefit of Mr Cheney's consideration of the issue, he continued to attribute value to Berkeley King's minority share. Mr Cheney also either wrongly applied a notional value to Berkeley King's Brumby Run share or George King instructed him that he wished to acquire it. 585George King's reply to these contentions was as follows. 586(a) So far as Peter King's shares are concerned, Mr Benecke has not attempted to argue that Peter King would not have been agreeable to an appropriate structure. It is plain that he would have. The submission is simply that George King trusted his father and would have thought nothing of advice from Mr Benecke that putting Peter King's shares into the BKST did not give George King secure control of them. Nothing in the evidence supports that submission and it defies common sense. George King would in those circumstances have opted to take a personal transfer of his uncle's shares. Moreover, the evidence fairly clearly establishes that if Mr Benecke had given the correct advice, Peter King would also have had a problem with transferring his shares into the BKST. George King was well aware of that fact and it is part of the reason why he would not have continued to put his uncle's shares into the BKST in spite of appropriate advice from Mr Benecke about the risks of doing so. 587With respect to Berkeley King's Somers shares, Mr Benecke's submission overlooks the fact that Berkeley King agreed to transfer the shares to his son and gave instructions to Mr Benecke to effect such a transfer provided that no adverse duty or revenue consequences arose. What prevented the immediate transfer of those shares to George King in 2000 was incorrect advice from Mr Benecke, including about CGT. Given the advice that Berkeley King had sought from Mr Benecke regarding a transfer of the shares, it is absurd to suggest that it was Berkeley King who, as a layperson, devised the structure that was actually adopted in relation to his shares. The structure was plainly one devised by Mr Benecke to give effect to his instructions from both Berkeley King and George King that it was intended for George to have the shares. 588There is no reason for thinking that, merely because he had a good relationship with his father, George King would have been content with the structure actually adopted in spite of advice from Mr Benecke that it was fraught with risk. That good relationship had not prevented George King from requiring an agreement from his father in 1999. He had already experienced the fragility of his father's oral promises in the context of family pressures upon his father following his return to the property in 1996. The letter to his father dated 15 July 1999 is demonstrative of this. From George King's perspective, the very rationale of the Berkeley Transaction, in combination with the Peter Transaction, was to secure his position and give him control over Coombing Park. There is contemporaneous documentary evidence of George King 's intentions and desires in this regard. The submission that George King would have thought nothing of it if he had been advised that the structure actually adopted did not give him that security and that control, is both unrealistic and inconsistent with the evidence. 589(b) Mr Benecke's submission in relation to this issue fails because the factual premise for it fails. The factual premise is that the terms of the 1999 agreement were something other than the express terms agreed between Berkeley King and his son in a conversation that is not in dispute. The terms did not require George King to pay an amount that would put his sisters in a roughly equal money position. They required him to pay fair value for his father's shares in Whitney and Esk. 590The significance of George King's initial offer of $1,294,702 is the amount of the offer. As discussed in his letter to Mr Benecke dated 20 July 2006, he provided the calculations in order to explain and "sell" the offer. Nothing in the document is evidence that the 1999 agreement had different terms, nor is it evidence that George King regarded himself as bound to make sure that he and his sisters obtained an equal inheritance. There is abundant evidence that he did not. His offer of $1,294,702 is evidence that he did not. 591In the circumstances George King submitted that it was unnecessary to respond to the arithmetical exercises carried out and discussed by Mr Benecke. They proceed on false premises. 592(c) Fair value is a concept with a relatively conventional meaning in relation to the acquisition of shares. As at mid-2006, George King and Berkeley King were not far apart as to what amount represented "fair value" (whatever it meant). If at the time George King had secure title to or control of his father's Somers shares, it would not have mattered very much whether (if the matter had not resolved there) his father took issue with what "fair value" meant in the context of the 1999 agreement. For the purpose of the negotiation, George King would have had the ability to treat his father as a minority shareholder, no more and no less. He would have been entitled to rely on his contractual rights and obligations under the 1999 agreement and on his position of control in relation to Whitney. Berkeley King could have argued over the meaning of or amount representing "fair value", but unless his son agreed with him, or Berkeley King took some form of action, Berkeley King's views could not have held sway. Contrary to Mr Benecke's submissions, it would have been Berkeley King, rather than his son, who would have had to confront the option of taking the dispute to court. In circumstances where little separated their respective offers in mid-2006, it is overwhelmingly likely that it would never have come to that. 593(d) Mr Benecke asserts that George King puts his causation case on a basis that the dispute among family members would have been resolved on the same terms as the dispute with his aunt. George King says this is a misconstruction of his case. The dispute with Patricia Bellamy is relied on to provide indicative evidence forming part of a relatively contemporaneous history of dealings with minority shareholders in Whitney. George King's case does not depend on any notion that the family dispute would have resolved on the same terms as the dispute with Patricia Bellamy. 594(e) This submission is unsustainable on the facts. George King started becoming concerned about undeniable weaknesses in his position before making his offer of $1,761,412 after 31 July 2006. 595(f) As the risks to George King's legal position that were caused by Mr Benecke were revealed and then came home, he was by turns put in a position where he feared he would lose everything and then did lose everything. In those circumstances, the submission that George King believed himself to have the upper hand legally or commercially is quite unreal. He clearly viewed himself as being in a desperate situation, reflected in the various desperate steps he took. There is simply no rational or credible evidentiary basis for the submission that George King viewed his position as a strong one and his family's position as a weak one. 596Mr Benecke's subsidiary submission is that if he is wrong about what George King believed, the belief was not reasonable. What actually occurred suffices to answer the argument that George King had unreasonable fears about the weakness of his position. The weaknesses were used against him when his father recanted on his promise and divested him of any control of the assets in the BKST. Mr Benecke then fall back on the argument that George King ought to have commenced litigation. He did not act unreasonably in not doing so. 597(g) The burden of this submission is that the "only barrier" to George King obtaining curial relief to remedy his position easily was his own conduct in relation to The Wellness House. That is a continuation of the evidence given by Mr Benecke that George King should have just "toddled up" to the Supreme Court to sort things out. For all the reasons already given, the submission should be rejected. George King was under no obligation to litigate, or to assume all the risks attending that step. He was under no obligation to give the undertakings as to damages that would have been required in any such proceedings. George King's conduct in relation to The Wellness House is a red herring. There is no evidence that it changed things and it does not relevantly change the assessment of the reasonableness of George King's decisions. He acted reasonably in not litigating and that conclusion would be the same if The Wellness House had never been raised as an issue. 598(h) George King obtained no release from any potential personal liability of $2.5M. Any personal liability could only have been to Whitney. The Wellness House was always liable to Whitney for the $2.5M and there is no evidence that Whitney was at risk of not recouping the loan. 599(i) Mr Benecke's inclusion of the Brumby Run shares in his valuation occurred in August 2007, not October 2007. That conduct had a causative effect because the amount that George King ultimately had to pay to his family members was influenced by the Brumby Run shares coming to be seen as a bargaining chip in the family negotiation. It was Mr Benecke's conduct that did that, creating an expectation that George King was obliged to give some value for them. He never had an obligation to buy his father's shares in Brumby Run and it was not part of the 1999 agreement. 600Mr Benecke's valuations were used in the October 2007 mediation. Once that occurred, it was inevitable that Berkeley King and others would thereafter adopt a position, sanctioned by Mr Benecke, that was contrary to George King's interests in the negotiation and his obligations under the 1999 agreement. This was a factor in the family significantly ramping up its demands from 2007. Findings and conclusions on causation 601One of the difficulties confronting me, and in that sense George King as well, is my ability to form an opinion about what factors influenced the original negotiations between him and his father. Potentially significant among the unknown matters that might have been influential is whether or not what was agreed represented the outer limits of what Berkeley King was prepared to consider in order to entice his son to stay at Coombing Park or was on the contrary well within the boundaries of what he would have been prepared to accept. In other words, the relationship between the two men at the time, or the significance to George of an informed understanding of the appointor power or his father's testamentary freedom, among other matters, do not invite a single answer that is necessarily more probable than any other. The curious fact that Berkeley King ultimately gave instructions to Mr Benecke to alter the terms of his will in a way that was inconsistent with his original promise, and that he just as curiously exercised the power of appointment of a new trustee, must cast considerable doubt upon just what Berkeley King would have been prepared irrevocably to agree to if he had been asked to do so. In so saying, I acknowledge that at the time the original agreement was struck, Berkeley King was apparently more concerned to secure his son's position at Coombing Park than he was to ensure that his daughters were treated fairly upon his death. That dynamic altered as the years went by as Berkeley King was brought face to face with the practical consequences of performing his promise to George King and the looming collision between that promise and the emotional and practical expectations of his daughters, if not the whole family. The pressures that George King alleges Mr Benecke placed him under cannot properly be assessed or understood without an appreciation of these matters. 602The burden of George King's case is that he paid more than he should have when the matter settled, and only because of Mr Benecke's breaches. As extraordinary and egregious as those breaches were, including Mr Benecke's admission that he actively assisted Berkeley King to squeeze more out of his son, they did not in my view have a relevant causal relationship to the ultimate settlement sum. In this respect I consider that George King's views on price, at times when he could not have been under any pressure caused directly or indirectly by Mr Benecke, put the lie to the proposition that his final agreement was in effect extracted under duress. 603George King's understanding of the deal in 1999 was described by him in his 22 October 2007 letter to Ms Sykes as "crystal clear". Significantly, however, his letter also noted "the unclear part was that I had to buy Berkley's remaining shares at 'fair value'." There was therefore from the very outset a concern that the price he would be required to pay was subject at least to doubt about how it was to be calculated and accordingly what it would ultimately turn out to be. He had to that extent committed to an agreement of which a most, if not the most, significant aspect was uncertain. That uncertainty had not dissipated by the time these proceedings materialised. It remains an issue. 604George King has maintained that it was around 1 November 2007 that he began to appreciate that his control of the assets in the BKST may have been vulnerable. Some time between then and mid-December 2007, George King became aware about his father's power of appointment and became concerned that his father would exercise it. At the 17 December 2007 mediation, George King and the family were $2M apart ($5M v $3M), with George King maintaining that he only offered $3M because he perceived himself to be in a position of weakness and that it represented a substantial premium over the "fair value" of the Minority Shares. He had only a short time before that altered the records of Weander without authority to show that Weander owned Peter King's shares beneficially. 605On 22 January 2008 George King wrote to his father and offered to pay the family $3M. He was aware at least by February 2008 that whatever his legal position may have been, taking legal action against the family might be complex and protracted, might take in excess of two years and would cost in excess of $500,000. By the eve of the ultimately successful mediation on 5 December 2008 it was Berkeley King who was telling George King that if the family did not get a satisfactory settlement it was they who would be going to court. 606It seems to me to be clear that from 1996 until at least 2006 or 2007, George King and his father had had a close and trusting relationship and that George King was prepared to accept his father's promises about inheritance and estate division without requiring any further legal assurance or security. He was content in that sense to remain at risk of his father changing his mind. George King's contentions about his eagerness to obtain a secure transfer of the shares in case his father went back on his word should be evaluated against that background. Part of that background included assurances from Mr Benecke that the agreement with his father was legally binding and enforceable. 607Another part of that close and trusting relationship would appear to be that George King did not expect or fear that the meaning of "fair value" was ever likely to cause problems in the future. Mr Ivey's 19 July 2012 report outlines the structure of George King's view of the concept in this case. It must be presumed that that interpretation of "fair value" inspired George King's offers to the family to buy them out from time to time over the years. That is, "fair value" meant the value of Berkeley King's Somers shares (and the sisters' shares, which together form the Minority Shares) assessed by reference to the net asset value of Whitney and Esk and subject to a 20 percent "minority discount". 608The determination of what "fair value" meant in terms of the agreement between George King and his father is therefore critical to any reasoned assessment of George King's claimed loss. In this context Mr Benecke has relied upon what is revealed by the parties' conduct after the agreement was in place. Significant among the many examples of post contractual conduct is George King's letter to Mr Adamedes in mid-2006 in which he accepted that "the agreement that was in place was that it was my responsibility to even up the dollar value of inheritance." The offers made by George King at the mediations in mid-2006 arguably reflect his acceptance of a responsibility as a result of the agreement with his father to achieve an equal outcome for his sisters. Berkeley King's 23 July 2006 document refers to George having "unfragmented control" in the same context as providing for his daughters "as close as possible to $ equal". George King does not appear contemporaneously to have contested his father's characterisation in those terms. The same can be said of Berkeley King's September 2007 statement prepared for the Sykes mediation. George King's evidence in these proceedings was also that he understood in 1996 that if he acquired control of the land and pastoral operation, his sisters would have to get their inheritance in some other way that "as far as possible" achieved equality among the three children. 609There are many examples of Berkeley King making statements about equality for all of his children. These are, of course, not statements made by George King. Their significance lies in the fact that in the course of the exchange of correspondence and documentation for the various meetings and mediations, George King had not sought to contradict or disagree with what his father was saying. The closest that George King comes to doing so is in his protestations that "what is fair value has not been clear." However, by the time of his cross-examination, George King was commendably, and in my view significantly, prepared to agree with the proposition that at the time that he undertook the responsibility to buy his father's Whitney and Esk shares at fair value, the intent behind that was that he and his sisters would, as close as possible, "receive an equal dollar share of [their] parents' wealth." 610It is significant to my mind that when negotiations with the family commenced in 2006, George King was initially prepared to calculate what he had to pay in accordance with that objective. The events of 2006 and 2007 appear to have altered that view. Before that apparent change in attitude emerged, however, it seems clear to me that these circumstances demonstrate that in the August 1999 agreement between George King and his father, "fair value" meant whatever amount was required to achieve rough equality between George King and his sisters in terms of the division of their parents' assets. It also seems to me that, irrespective of how the share transfers had been structured, and notwithstanding Berkeley King's view that "fair value" meant as close as possible to money equality, the mere possibility of an alternative interpretation of the expression meant that the current dispute about it could never confidently be excluded. 611In assessing whether or not George King was under pressure caused by Mr Benecke's breaches when he settled in December 2008, it is therefore critical to understand that his contractual obligation was to pay a price that as near as possible achieved monetary equality between himself and his sisters. I also consider that a significant contributor to the pressure under which George King then operated was his recognition and understanding of that fact. 612George King informed Mr Benecke of the terms of the agreement that he had with his father by letter dated 20 July 2006. (There is a contest about that which is not presently relevant). Part of George King's letter stated "Berkeley gave a condition on the transfer of his shares that I 'look after the girls'...". Although it is not beyond question, that is evidence from George King that is not inconsistent with an interpretation of "fair value" that conforms to the one for which Mr Benecke contends. 613It will be apparent that there is a tension between George King's insistence that a minority discount should apply and the notion of sibling equality. George King's reliance upon the discount to demonstrate that he overpaid is based upon the historical facts that it was applied in the payment to Whitney King in 1998 and in the settlement with Patricia Bellamy. George King suggests in effect that these two events establish what amounts to a family practice and that he could reasonably expect that it should have applied to his settlement, or more particularly to the anterior question of what was meant by "fair value". The evidence about this, however, is inconclusive. Ms Bellamy's position is best captured by George King's own words when he wrote to Brenden Miller on 7 August 2003 saying that his aunt "had no intention whatsoever of selling her shares for anything under their full asset backing price" and would "not even discuss minority discounts." There is little evidence, if any, that the discount applied to the Whitney King transaction in 1998. 614In these circumstances I am able to find the following facts. First, the Bellamy settlement was highly favourable to Whitney. Secondly, and in any event, the terms of the Bellamy settlement turned on the particular circumstances of the dispute between Whitney and Patricia Bellamy at the time. Thirdly, there is no satisfactory evidence to suggest that either Whitney King or Patricia Bellamy consented to a 20 percent minority discount. Fourthly, and in a related sense, there is also no evidence of a practice of a 20 percent minority discount being applied. It is not possible in these circumstances to conclude that the structure of the settlement with Patricia Bellamy or frail evidence about the application of a minority discount reliably informs the meaning of fair value in the final settlement between George King and his family. 615Mr Benecke made detailed submissions concerning the influence that the Bellamy transaction had upon the family's attitude to the December 2008 settlement. The burden of the submission was that George King illegitimately secured an advantage from the ultimate settlement of the dispute with his aunt that was disproportionately favourable to him and correspondingly disadvantageous to them. His share in Whitney increased dramatically as a result of the treatment of Patricia Bellamy's shares. 616Upon the basis of those events I consider that there was a significant influence upon later negotiations that was unfavourable to George King. That influence is in my view likely to have had a hardening effect upon the family with a corresponding upward pressure upon the price that the family would accept. That pressure was wholly different to and separate from any pressure that George King considers was caused by Mr Benecke. 617A fair summary of the position would appear to be as follows. George King attempted to have the Bellamy shares transferred to him personally even though Whitney had bought out Patricia Bellamy's interest. He negotiated with his family on the footing that the Bellamy shares had been transferred to him, even though he knew that this was not the case. He falsely maintained that it made no difference whether or not the Bellamy shares were transferred to him because he owned or controlled the remaining shares in Somers. Even though Ms Bellamy's shares in Somers and Whitney were extinguished (rather than acquired by George King), he benefited disproportionately from the Bellamy buy-out compared to other Whitney shareholders, in that it increased his holding in Whitney through Somers from 43.8 percent to 65.7 percent, in circumstances where the other shareholders of Whitney did not get a corresponding increase. George King wrongly maintained that the extinction of Ms Bellamy's shares affected all shareholders proportionately. George King's family expressed concerns about his treatment of Ms Bellamy's shares. His wrongdoing in respect of his attempt to acquire Ms Bellamy's shares, and the disproportionate benefit he actually received, influenced the subsequent negotiations with his family for the purchase of the Minority Shares in a way that was ultimately inimical to his interests. 618George King offered $1.294M at the facilitated meeting on 22 June 2006. That was based upon a Whitney share price of $5. That was the amount George King considered his aunt had received. The significance of that offer, and the light, if any, that it casts upon the alleged Benecke pressure effects after December 2007, has to be understood in context. In particular, George King accepts now, as per Mr Ivey's 19 July 2012 report, that as at January 2009 Whitney was valued at approximately $17.67 per share or $14.14 with a minority discount. The offer also did not take account of the value of his right to occupy the homestead. The offer of $1.294M was unaffected by any doubts or pressures allegedly caused by Mr Benecke. Although it cannot be described as conclusive of the issue, the circumstances surrounding the making of George King's offer at this time supports the proposition that he was prepared then to resolve the dispute with his family on the basis that he was required to make a payment that would correspond as near as possible to money equality between him and his sisters in the division of their parents' assets. 619It is interesting to note that in cross-examination, George King maintained that "the pressure was beginning" and that "it was already there" at the time he made his 22 June 2006 offer. That is, quite frankly, difficult to accept. It is contrary to his counsel's concession in opening that it was only after the 22 June 2006 mediation that George King began to doubt his father's intentions concerning the 15 Somers shares. It is also inconsistent with the thrust of his evidence concerning the effect upon him of realisations and discoveries that occurred in October 2007 or shortly thereafter. It is demonstrative of a realisation and concern about the effect upon his case of the high offers made by him before his discovery of the change to his father's will or the exercise of the Weander power of appointment. 620I reject entirely any suggestion that George King was under any relevant pressure as at 22 June 2006 that was or may have been caused by Mr Benecke's negligent structuring of the share transfers. 621George King made an offer of $1.761M at the facilitated meeting on 31 July 2006. Two things should be noted. First, that offer was based upon a share price of $7.50, which was "unrealistically low" according to Mr Benecke. Even so, it was still considerably higher than the $1.429M that George King maintains he would have paid for the Minority Shares but for Mr Benecke's negligence. Secondly, it does not take account of the other benefits he received under the settlement, such as his father's Esk shares, a right to occupy the homestead and the value of the general release. 622At the very least, George King's offer of $1.761M on 31 July 2006 is unhelpful to his case if he cannot demonstrate actionable pressure upon him at that time. In my view he cannot. 623In this same context I also reject George King's evidence that at this time, either at the mediation or shortly afterwards, his father said to him that he needed "to agree to pay...what we are asking or it will get difficult for you." The threat, if made, could only at that time have related to his father's promise concerning his Somers shares, of which there were several written confirmations of his father's obligation to transfer them to his son. The threat is patently inconsistent with Berkeley King's 25 July 2006 letter. I accept the submission that it is highly unlikely that Berkeley King would have made verbal threats in contradiction of written evidence to the contrary. George King made no mention of the threat to anyone and made no record of it. Any contemporaneous written evidence relevant to it is all to the opposite effect. 624Moreover, over one year later in August 2007, Berkeley King told his son that if he did not trust him to deliver the shares, he would "sign them across to you now". I accept the submission that it is highly improbable that Berkeley King would have had a different attitude in July 2006 when the relationship between them was still amicable. 625I am in these circumstances prepared to make the following findings. First, the words "it will get difficult for you" were never said and no similar threat was made. Secondly, George King did not in any event form the impression, based on those or similar words, that his father was going to change his mind about the 15 Somers shares. Thirdly, George King was not under any pressure by reason of the alleged negligent structuring of the share transfers when he offered to purchase the Minority Shares for $1.761M following the facilitated meeting on 31 July 2006, because he neither had nor asserted any reason to doubt that the promise with respect to the 15 Somers shares could be enforced. Lastly, if his father said those words, they had no impact on the offer he was prepared to make. That is particularly so because George King was at that time the beneficiary of legal advice, which he accepted, that his father's promise was enforceable. 626In early September 2007, when position papers were exchanged in advance of the family meeting, Berkeley King was asserting in writing that his son was to have "unfragmented control". The promise to leave his 15 Somers shares by will is unambiguously reaffirmed. The meeting took place on 16 October 2007. Ms Sims' letter to George King outlining what occurred at the meeting as "the basis for further discussion" refers to a settlement sum of $3.5M with George King's parents retaining the right to occupy the homestead. 627George King originally said that around this time he "agreed to investigate whether the company could obtain finance to pay $3.5M". In my view, that agreement was made at a time when he was not under any pressure caused by Mr Benecke's failings. The sum involved equates to $450,000 more than he ultimately agreed to pay. George King's attempts to clarify what happened at this time are critical. 628It is difficult to understand George King's words in his 19 October 2007 email to Ms Sykes as anything other than an endorsement of the proposal. The words "absolutely positively and definitely the best thing to do" are not what could be described as unclear or ambiguous. I also take the concluding words of the email ("You may like to mention to them that they have pushed me over the edge") as an example of George King striving indirectly to harness Ms Sykes as the person to communicate to George King's family that he will not be prepared to pay more and that the consequences of any attempts to force him to do so may imperil what had already been achieved. It is also important to appreciate that if George King's words were genuine, rather than merely tactical, he was unaffected by relevant pressure when he wrote them. 629I also consider that the 8 February 2008 managing directors' report suggests that George King thought that $3.5M was not unreasonable. The report makes it clear that he was prepared to consider and investigate a payment of that amount. Also of significance is the fact there is no reference to, or any complaint about, pressure or threats, which, according to his case, had by this time clearly started to operate upon him. It seems to me in all of the circumstances that at the 16 October 2007 mediation, George King agreed to investigate making a payment of $3.5M to obtain all of the Minority shares, subject to finance and/or sale of property. 630It would also seem inevitably to follow that no threat was made by Berkeley King about the 15 Somers shares before George King agreed to consider or investigate making a payment of $3.5M to obtain all of the Minority shares. George King's evidence about this at [166] of his first affidavit cannot be accepted. This is because if the proposal to investigate the feasibility of a $3.5M deal was made at the mediation, it must have occurred before the alleged threat. I reject the suggestion that George King was only prepared to investigate the $3.5M payment "to avoid the consequences of Berkeley's threat". 631I also reject the suggestion that anything that George King did or failed to do at the 16 October 2007 mediation was the result of some perceived lack of security in his legal position. None of the documentation circulating at that time gives any support to such a contention and is more consistent with the opposite position. Even if it were accepted that George King did not like the potential for his father to go back on his word, that was a limitation stemming from the nature and terms of the agreement in the first place, but which was not significant in any event given Mr Benecke's consistent assurances, which George King accepted, that there was more than enough evidence to hold Berkeley King to his promise. 632In the circumstances I find that George King was not under pressure by reason of lack of security concerning his legal position at 16 October 2007. He agreed to consider or investigate making a payment of $3.5M to obtain all of the Minority shares because he regarded it as within the range of "what is fair". There is no evidence to establish that his agreement to investigate making a payment of $3.5M was affected or influenced by any concern or issue about his legal position. His agreement without complaint or resistance to investigate making a payment of $3.5M is significant contemporaneous evidence in support of the fact that it was an amount that he considered to be fair. 633Furthermore, the draft settlement documents prepared by Cheney & Wilson on his instructions suggest that George King was confident that he was about to reach an agreement with his family. Those documents were prepared after George King had learned that his father had changed his will and after he learned that his father was at least contemplating exercising the power of appointment. 634On the day following the 17 December 2007 mediation, George King wrote to Mr Cheney saying, "I offered $3.5 million for the three respective share groups". That is the same figure as that which I have found George King agreed to investigate following the 16 October 2007 mediation. Even assuming that the figure was only $3M, the value of the later-included value of the homestead occupancy means that the sums are the same. 635Once again, there are no contemporaneous documents recording or intimating that George King was under pressure or that his perception was that he was in an imperilled legal position that forced him to negotiate from a position of weakness. He gave no evidence that he reported to Mr Cheney that he was under pressure or was paying more than he thought was fair. Mr Cheney was not called to give evidence about this. The exchange of undertakings not to take legal action without notice at this time would have served to restore confidence in George King's legal position rather than to cause him to doubt it. 636Added to this is the problem that George King's willingness to institute legal proceedings to vindicate his concerns and relieve or reduce the pressure that he alleges he was then under, has to be viewed in the context of his own conduct. By February 2008 George King had caused $2.5M to be withdrawn from the Whitney loan account and paid to The Wellness House. George King admitted in cross-examination that his conduct in that respect was wrongful and in breach of his duties as a director. His only so-called explanation for not informing his parents for exceeding the authorised loan amount was that they would not have agreed to it. He gave evidence that it was his right to exceed the limit as he was the majority shareholder and could have caused the company to ratify it. 637George King agreed that some at least of the pressure upon him to settle was created by The Wellness House issue. 638From a consideration of all of these matters, it seems apparent to me that the following matters emerge. First, George King took over $2.5M from Whitney and provided it to a separate business he conducted with his wife without any authority. Secondly, the withdrawals were without authority because they were never supported by a secured loan in the form of a deed, and because they exceeded (by $1.5M) the loan limit that had been agreed to by the other Whitney directors. Thirdly, in doing so, George King knowingly acted in breach of his director's duties to Whitney. Fourthly, George King's family did not become aware of these matters until February 2008 and then sought to investigate them. Fifthly, and in my view significantly, the family had indicated that they proposed to raise these matters in any litigation in relation to the dispute about asset division and George King was aware of that. Sixthly, George King required the unauthorised loan to continue to operate The Wellness House, which would otherwise have confronted the probability of serious liquidity problems, and he had no other convenient means of funding it. Seventhly, George King's wrongful conduct in taking over $2.5M from Whitney and using it to fund The Wellness House both discouraged him from taking steps in court in February 2008 to enforce his rights in respect of Berkeley King's Somers shares, which he otherwise thought were open to him, seriously prejudicing his negotiating position with his family, and increased his preparedness to settle and thereby avoid litigation. Finally, any pressure he regarded himself as under by reason of The Wellness House payments was independently caused by his own voluntary and knowingly wrongful acts and not by any conduct on the part of the defendants. 639The question is what, if any, practical effect or consequence did George King's conduct in this respect have upon negotiations with his family. Even though in January 2008 George King had initially proposed to commence proceedings against his family, he had decided by February 2008 not to do so. He received advice that he should go to mediation and he accepted that advice. George King gave evidence that he actually wanted to slow things down until after The Wellness House had opened. 640Having regard to this evidence, it is clear that in February 2008 George King was advised to pursue mediation and not to commence proceedings. This was primarily because he had the benefit of the undertaking, but also because he did not want to provide an opportunity for his family to ventilate the issue of his wrongdoing in relation to The Wellness House. The parties were close to settlement in any event. 641On 28 September 2008, well prior to the 5 December 2008 mediation, George King wrote to Mr Cheney saying that he believed that his father was "in a weak position to commence and succeed in any action". He subsequently attended the mediation and made no offers. The family successively made offers to George that reduced from a starting point of $6M until they reached the $3.55M offer upon which George King had stood firm throughout. Following the mediation George King wrote to Mr Cheney to say that he was happy with the outcome. When cross-examined on that letter, George King insisted that he was intending to indicate that he was happy that he was no longer under the pressure that inspired these proceedings. He said what he wrote "was about us not having the threat all the threats that we had hung over our head." 642I am completely unable to accept that at all. The sum of $3.5M had its origins in October 2007. It effectively takes centre stage at the final settlement 14 months later. I also cannot accept that when George King wrote to Mr Cheney speaking in positive terms about the outcome of the mediation he would not have made it clear, if in fact it had been the case, that he only settled because he was forced by circumstances created by Mr Benecke to do so, or some corresponding cognate statement of his position. He did not so. The deed that was entered into secured finality for a whole range of previously uncertain matters, including the possibility of litigation about the unauthorised Wellness House funds, the Weander/Deerslayer shares, the Bellamy shares, and the homestead occupation and furniture. It is not without significance that some of these issues arose both as the result of George King's own actions, not Mr Benecke's, and following the October 2007 agreement at which the $3.5M figure had originally been floated. George King did not conduct his side of the mediation from an apparent or obvious position of weakness. If he did, his bargaining skills and tactics nevertheless secured a deal at better than October 2007 rates. 643At [197] of his first affidavit, George King referred to legal advice that he received about options he had for recovering his shares in Coombing Park. He said that, "based on the legal advice [he] received" he understood that taking the matter to court would be protracted and expensive. I have not been provided with the details of this legal advice given to George King at the time. Whereas it would appear that that is because George King chose not to rely upon it as part of his case, Mr Benecke has correspondingly not forced him to do so upon the basis that his limited reference to it arguably waived a privilege otherwise attached to it. Any competing inferences about what the advice might have revealed appear to cancel each other in those circumstances. 644I was asked by Mr Benecke to find that George King could have taken formal steps (for instance, court proceedings) to remedy any disadvantage he was under, save for his wrongful conduct, by commencing proceedings in 2008. I was also asked to reject as untruthful his evidence that he could not afford to do so. It is unnecessary to do either. 645In my opinion, the fact that George King may have acted in his capacity as a director in ways that he wanted to downplay or even conceal is not important so much because it might explain why he did not take proceedings, as much as it is important to explain at least some of the matters that influenced him at the mediation. The need to regularise the irregular things that he did, and which were vulnerable to attack until the settlement deed was executed, created an uncertainty for him that required quelling. In the language of his own claims, it created pressure and insecurity about his legal position and was in my view an influence or an imperative that contributed to his decision to settle when he did and on the terms that he accepted. Once that position is reached, the question of whether or not he could afford to litigate necessarily recedes in importance. In the same way, the (somewhat inaccurate) characterisation of what George King may have done as "disentitling conduct" can be put into a more relevant context. Was George King ever under pressure that was the result of any breach of duty or retainer by Mr Benecke - conclusions 646It is common ground that George King was not under pressure by reason of perceived lack of security in his legal position in June 2006, when he offered to resolve the dispute on the basis of equal distribution of his parents' estate among him and his sisters. Mr Benecke has sought findings that he was not under pressure by reason of perceived lack of security in his legal position when he made an offer of $1.7M for the Whitney shares only in July 2006, agreed to investigate payment of $3.5M in October 2007, and offered to pay $3.5M in December 2007. 647Mr Benecke otherwise relies upon those findings in answer to George King's case on causation. He says that any one of them would be enough. However, the more fundamental point is that George King was not under pressure at any stage because of perceived lack of security in his legal position. He did not believe his legal position to be weak when he settled in December 2008. He was prepared to pay $3.55M because that was within the range of values he considered to be "fair value" (although it was obviously not as low as he would have liked) and because it was a settlement that he could comfortably afford and which suited his wider business interests. 648From December 2007 George King knew that settlement was likely to occur in a particular range (between $3.5M and $4.5M) and he sought to achieve it through mediation rather than court action, being content to slow things down for various reasons. Any pressure he was under was primarily because of his wrongdoing in relation to The Wellness House. George King's assault on his father was in my opinion a function of that pressure, not a cause of it. I do not consider that his misconduct circumscribed the legal options open to him in February 2008, when he initially instructed Mr Cheney to litigate, but did serve to create a cumulative pressure upon him in attempts to secure a final separation from the family. 649The overall shape of the offers and counter-offers suggests that George King was not under pressure. In December 2007 he had offered $3.5M (without an immediate right to occupy the homestead). In July 2008 he had sought to settle for $4M but had been rebuffed. He bided his time and ultimately settled for $3.55M. His family made six successive bids against themselves at the mediation in December 2008. The sum of $3.5M was also what he agreed to investigate in October 2007 before his family, on his own account, went back on the agreement. 650From January 2008 George King had the benefit of the mutual undertakings. Those undertakings were reaffirmed from time to time. There was in place, in effect, an injunction preserving the status quo. Subject to the capping of the account, which was a consequence of his own wrongdoing, George King was still able to manage Whitney. Even though he said to Mr Cheney on 26 March 2008 that he and Melinda could "live with uncertainty re WPC control" but "the others can't", I do not accept that to be an accurate assessment of the true position. 651George King was also pursuing separate business opportunities in the lead-up to the 2008 settlement. They were substantial opportunities with substantial establishment costs. That is simply not the behaviour of somebody who regards his legal position as vulnerable or who is under pressure. 652Apart from the statement in September 2008 that he considered his father's position to be weak, George King reinforced the strength of his position to his mother on 7 July 2008: "It is my advice that you have three options ... commence litigation against me and argue against all the letters and advice of both Dad and GBH ... This option holds a significant financial risk to you ... it is my understanding that even if an action such as this proved to be successful for you then you would still remain as a minority shareholder..." 653George King also said to his lawyers several times, in effect, that he did not think his family had the stomach for litigation. When he did express the view that his family might litigate, it was in terms of them being irrational and not taking a commercial view. 654George King knew that he was represented by respected lawyers. The substance of the legal arguments he would have been able to make in support of his entitlement to his father's Somers shares are set out in the draft position papers prepared on his behalf. 655Neither Mr Cheney nor George King's wife was called. Mr Benecke argued that if, throughout 2008, George King was under pressure and paying 2.5 times more than he thought was reasonable, those are the people to whom he would likely have reported his concerns, so that it should be assumed that their evidence would not assist him. 656In evaluating George King's assertions that he was under pressure and regarded his legal position as weak, I am confronted with the absence of any supporting documentary evidence, and a large amount of objective documentary evidence to the contrary. No one else within his camp has been called to give evidence that he regarded his legal position as weak or (in the case of Mr Cheney) that he advised him that it was. 657In summary I consider that the following findings should be made. First, that George King did not believe his legal position to be weak at the December 2008 mediation or at any time. Secondly, that he was not under pressure by reason of a perception about lack of security of his legal position in December 2008. Thirdly, that he did not pay any more at the December 2008 mediation than he otherwise would have because of perceptions about lack of security of his legal position. Fourthly, that he agreed to the December 2008 settlement because it was within the range of values he considered to be "fair" and because it was a settlement he could comfortably afford that suited his wider business interests. Damages 658Having regard to the conclusions I have reached on causation, George King is not entitled to damages. Against the contingency that I am wrong on that issue, I have recorded in what follows the respective competing arguments of the parties on the quantum of George King's claimed loss and damage. George King's case 659The object of an award of damages, in the case of a tort, is to put the plaintiff in the position in which he or she would have been if the tort had not occurred: Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 at 412; Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351 at 355. In the case of breach of contract, the object is to put the plaintiff in the position in which he or she would have been had the contract been performed: Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; (1986) 160 CLR 1. 660The general rule is that damages for tort or for breach of contract are assessed as at the date of the breach, with the general rule giving way if some other date is necessary to provide fair or adequate compensation in the circumstances of the case: Johnson v Perez at 367 and 370-371. That may include cases where, if at the time damages are assessed, the court is aware of new and material facts relevant to the assessment. Those new facts will be taken into account because courts prefer actual facts to speculation, conjecture and guessing: McCrohon v Harith [2010] NSWCA 67 at [56]. 661A plaintiff who seeks to establish historical facts must prove them on the balance of probabilities. However, that standard of proof does not apply to the establishment of future possibilities and past hypothetical situations (such as what might have happened had the plaintiff not lost a chance) for the purpose of assessing damages: Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at 639-640 and 642-643; Poseidon Ltd & Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 at 349-350. 662In such cases, the court approaches the hypothetical situation in terms of the degree of probability of it occurring. So long as that probability is not so low as to be regarded as speculative, the court takes into account the chance of a hypothetical situation occurring, notwithstanding that the probability may fall below fifty percent. Damages are adjusted to reflect the degree of probability: McCrohon v Harith at [98]. 663There is no suggestion on the evidence that there were no available alternative structures for implementation of the share transfers. My Boyce provided various alternatives in his reports, none of which was challenged. Mr Benecke did not suggest there was no other available course. Each of the Peter Transaction and Berkeley Transaction could have been structured differently in the event that George King had been properly advised by Mr Benecke as to the existence of his father's appointor power and as to the uncertainties and risks associated with a mere promise to leave his Somers shares to his son in his will. In particular, the transaction could have been implemented in a way that foreclosed or minimised the possibility of uncertainty or insecurity over George King's position and would have prevented his father resiling from his promises. 664George King would have followed any competent professional legal advice given to him. He had a history of relying heavily on his solicitors for advice. During the period that the transactions were implemented, George King had written to Mr Benecke in relation to the negotiations to purchase the Bellamy shares stating "I have very little experience in this area and am relying heavily on your advice". The successful transfer of Peter King's and his father's shares was the critical step to obtaining the control of Whitney. The very point of the agreements he negotiated in 1999 was to obtain security over his future. The need for that security had arisen because of his concerns that his father had gone back on an agreement reached in 1996 not to sell down the property. He would have adopted whatever course he was advised to take in order to obtain that security over his future. 665On the balance of probabilities, Berkeley King and Peter King would have agreed to any appropriate alternative structure. The evidence conclusively demonstrates that the intention of each of them was to give him control. There is no evidentiary basis to suggest that either of them would have refused an alternative means for implementing the transaction. Indeed, everyone, including Mr Benecke, understood in 2000 and 2001, that the share transfers that had been implemented had conclusively given him that control. The evidence is clear that Peter King intended all his shares to go to George King. His father had made a promise to transfer his Somers shares and in 2004 was expressing openly his desire for that to happen. He acknowledged that the intention behind the share transfers in Weander was to transfer control of Somers to George King to give him the 22 percent interest in Whitney. The intent of those agreements could have been effected though appropriate share transfers, acknowledgements and documentation. That did not happen. 666The only issue raised by Mr Benecke on this point was the tax implications of an alternative structure. It may be accepted that all parties had a common sense desire to minimise the amount of tax payable on the share transfers. However, the evidence shows that the tax costs of transferring the shares were relatively minor. 667Mr Benecke implemented the transfer of Peter King's shares with approximately $3,000 paid in stamp duty. The Berkeley Transaction involved an equivalent parcel of shares. Mr Benecke agreed that the same sum of $3,000 in stamp duty would have been payable if Berkeley King's 15 equity shares had been transferred: "HIS HONOUR Q. The $3,000 duty was payable finally? A. Correct, based on all the evidence supplied by George King to me. WILLIAMS Q. And had you gone about seeking to transfer Berkeley's 15 shares in about 2000, the same duty would have been payable on them, wouldn't it? A. If Berkeley wanted me to do that at that point, yes, if Berkeley instructed me." 668The evidence also demonstrated that Berkeley King's Somers shares were a pre-capital gains tax asset. 669In those circumstances, tax costs would not have prevented an alternative structure being implemented in accordance with competent professional legal advice. Indeed, Mr Benecke, on appropriate enquiry, should have been able to address each of those issues, as he did in the Peter Transaction, and to advise George King that if he was not prepared to accept the risk of having the shares in the BKST subject to his father retaining the appointor power, to implement or structure the transactions as a direct transfer of shares and pay the stamp duty. 670The evidence is that the transactions were not structured in a way that protected George King. Berkeley King was able to renege on his promise and because shares were transferred into the BKST rather than to his son, this gave rise to the risk that Berkeley King could resume ownership and control of those shares. That risk eventuated. 671When George King first came to negotiate with his father to acquire the Minority Shares, they were each negotiating upon the assumption that George King had a right to his father's Somers shares, that George King had majority control of Whitney, and what he was negotiating for were minority interests. The disagreements that arose at that time concerned the quantum of what should be the "fair value" for the Minority Shares. At the conclusion of those negotiations in July 2006, they were $250,000 apart. The disagreement could have been resolved by an expert assessment of "fair value", a term well known to the law in the context of share acquisitions. George King submitted that a valuation similar to Mr Ivey's January 2009 effort could have been performed. There seems to be little or no dispute that an appropriate "fair value" for the Minority Shares would have been in the range of from $1.4M to $1.7M. That was Mr Ivey's view. It is not far removed even from Mr Benecke's assessment of the value of the Minority Shares at $2,387,547 on13 August 2007, or $2,650.427 at 16 August 2007, each of which included a notional $808,780 value for Brumby Run. 672At the conclusion of the negotiations in 2006, Berkeley King wanted about $2M and George King had made an offer of $1.7M. 673What occurred in 2007 completely changed the dynamics of the negotiations. By the time of the October 2007 mediation, Berkeley King no longer wanted $2M and figures of $3M and $4M were mentioned Moreover, Berkeley King wanted those sums paid as a condition of implementing the promise for the transfer of his 15 Somers equity shares. He further leveraged his position by carrying through on the threat not to transfer them and by changing his will to bequeath them elsewhere. Those events led George King to realise that his negotiating position was not as it was in 2006. He began to explore figures far above what he considered to be the "fair value" of the Minority Shares. 674When he learned of the shares being transferred into Weander and his father's residual power to remove Weander as the trustee, he needed to resolve the matter. He offered $3M at the December 2007 mediation. That offer was rejected. Berkeley King's position had strengthened with offers now being made of $5M (ultimately reduced to $4M), and threats that if that offer was not accepted, moves would be made to exercise rights to sell the properties. 675The removal of the trustee occurred as George King feared in the first week of 2008. The parties' respective negotiating strengths once again changed as a result. There were competing threats of litigation. A formal mediation was ultimately organised in December 2008 and George King agreed to pay $3.55M to secure the shareholding that he should have already held if the agreement had been performed. The difference between the $3.55M paid and what was "fair value" for the Minority Shares is his loss. 676George King maintains that there ought be no dispute as to what the "fair value" figure should be. It falls within the range between Mr Ivey's calculation of $1.4M (with discount) and Mr Benecke's assessment on16 August 2007 of $1.77M without Brumby Run. 677In his 31 August 2010 affidavit, George King described his circumstances as at March 2008 as follows: "[199] At this time I was in a state of anxiety. I had lost control of all the shares from both Berkeley and Peter that I had negotiated in 1999. I had devoted the past 11 years of my life to managing Coombing Park and had no assets outside the company. The Wellness House looked like it was going to go into administration. My wife Melinda and I had significant personal liabilities arising from The Wellness House and, in the event that I lost all my ownership and control of Coombing Park I would have no means to support my young family and would inevitably be declared bankrupt." 678He was cross-examined about his claim to have been under significant pressure at the time: "Q. What was your state of mind at this time? Were you anxious to get the matter resolved or what was the position? A. Very anxious. I had had my solicitor turn against me and tell my father not to transfer the 15 Somers shares to me, I had all my assets removed through the removal of the trustee. Through the whole negotiations it's about increasing the leverage to extort more money out of me, and this was just another level of extortion. ... Q. I want to suggest to you that you did not feel at this stage that you were under any significant pressure at all? A. Ridiculous. I was under extreme pressure. ... Q. What was going on here, I want to suggest to you, as at May 2008 was simply a continuation of that which had been going on for some years, which was working out a fair value to give to your sisters? A. No. It was about them putting more and more pressure on me through more and more different ways, through more and more threats and through more and more attempts to extort more money, well above the asset backing of the shares. Q. What I want to suggest to you is that as at 27 May at the time you wrote the letter to Mr Cheney you did not feel you were in a weak position A. I did. Q. Vis a vis your parents, did you? A. I was in a very weak position. Q. In saying that you formed the view that you were in a weak position, do you mean to convey that you thought your parents and sisters were in a strong position over you? A. Stronger, yes. Actually, both sides were in an unclear situation because of what I had done with the Deerslayer shares by selling the voting shares out and transferring the ones that I had bought from Peter across to Deerslayer beneficially. It made it difficult for both sides because if I hadn't done that they would have been in an extremely strong situation and just sold the property out. Q. You were working towards a mediation at this stage with undertakings in place, weren't you? A. Yes. Q. Both parties were working towards that outcome, weren't they? A. Yes. Q. And your view at that time, I want to suggest to you, was that you were in a strong position; correct? A. Incorrect. Q. And that your father was in a weak position? A. Incorrect." 679George King contends in effect that his loss equates to the additional cost to him of acquiring what the agreement, if performed, would otherwise have given him. It is the difference between what he says he would have expected to pay negotiating on equal terms and the amount he was required to pay negotiating from a position of weakness. 680Early on in negotiations with his family in the first half of 2006, George King's offers were $572,720 and $643,604. Coombing Park was in the middle of a serious drought at that time and the amounts calculated by him were based on what he assessed the company could afford. At the facilitated meeting on about 22 June 2006, he increased his offer to $1,294,702. 681George King gave evidence that an implied threat was made by his father in about July 2006 that made him concerned about him changing his mind about his Somers shares that were to be left to him in his father's will. Following that threat, George King increased his offer to $1,761,412. From the time of this offer onwards George King's position was weakened. The fact that George King's offers after this time exceeded the fair value of the shares is confirmed objectively both by the expert evidence of Mr Ivey and the evidence of Mr Benecke's own valuations. 682Mr Ivey is a Chartered Accountant who provided two expert reports. He was not cross-examined. 683In his 19 July 2012 report, he valued the Minority Shares on an asset-backing basis at $1,787,107. Applying a minority shareholding discount of 20 percent, his figure became $1,429,686. 684George King contended that in determining the true value of the Minority Shares it s appropriate to apply a discount to account for the fact that the parcel comprises only a minority holding in a private company. The evidence of other recent arms-length negotiations for the purchase of shares in the companies all reflected a substantial discount over the asset backing value of the shares. 685The letter from Whitney King to Berkeley King dated 27 June 1997 proposed selling his 22.9 percent stake for $1.3M in circumstances where he considered the assets of the company to be worth $10M (equating to an asset backing of $2.2M). Whitney King ultimately sold his shares for $800,000. 686Patricia Bellamy's parcel of shares was equivalent to Berkeley King's. After protracted negotiations and litigation, the purchase of her shares was finally agreed in March 2006 at the sum of $125,000 plus a water licence. Mr David Sullivan, a registered valuer, gave evidence that the value of the water licence at the relevant time was approximately $850,000. Thus the total consideration accepted by Patricia Bellamy was approximately $975,000. 687By letter dated 17 September 2001, Mr Benecke had himself advised George King in relation to the negotiations with Patricia Bellamy that "[t]here is usually a discount of anywhere between 15 percent to 20 percent attributed to a valuation of a minority shareholding". 688George King and his father each had knowledge and direct involvement in the purchases from Whitney King and Patricia Bellamy. Those transactions provide good evidence of the true value of minority shareholdings being sold between family members in this case. George King submitted that it could be expected that a discount of 20 percent would have been applied to the asset backing value of the Minority Shares if the transaction had proceeded in accordance with the agreement. 689George King's loss in those circumstances would be in the order of $2M. 690George King additionally claimed interest on the sum due to his family and legal costs incurred. He gave evidence that he was unable to pay the final instalment of $1M to his family at the time it became due pursuant to the Settlement Deed. He has been paying interest on the sum at 8 percent per annum. 691The legal costs incurred by George King in seeking to recover control of Whitney from his father are summarised by Mr Ivey in his report. The total sum is $151,943. 692In addition, George King claims interest to judgment on the first instalment paid to his family pursuant to the Settlement Deed ($2.5M) less the approximately $1.5M fair value he would have paid in the event there was no breach. He also claims interest to judgment on the legal costs from the date of payment of those costs. Mr Benecke's case 693Mr Benecke submissions were brief in comparison. In contrast, he contended that the offers made by George King in 2006, when he was not aware of any weakness in his legal position, exceeded the $1.4M determined by Mr Ivey. There could therefore be no basis for saying that, but for Mr Benecke's negligence, he would have paid that sum. 694Further, George King's loss should be reduced by reference to the following benefits he received under the settlement, which Mr Ivey does not take into account: (a) the right to occupy the homestead ($500,000); (b) the disputed furniture ($263,050); and (c) the value of the release. 695The loss claimed in the form of interest paid on the $1M instalment he was due to pay on 31 December 2010 falls outside the loss pleaded in the amended statement of claim and should be rejected on that basis. It should also be rejected because George King has not established that he was unable to pay the instalment. He seems merely to have decided not to pay it for his own business reasons. 696Mr Benecke does not dispute that George King incurred legal costs of $151,943 in resolving the dispute with his family in 2008, but says that the claim for these losses should be rejected. 697First, the legal costs would, in all probability, have been incurred in any event. Given the position he has taken, George King was always going to end up in a dispute with his family about what was meant by "fair value", the treatment of Patricia Bellamy's shares and possibly also The Wellness House payments and other issues. He would have had that dispute even if the share transfers had been structured as he now says they should have been. It is not possible to say whether those costs would have been more or less than $151,943. George King has not proved this loss. 698Secondly, the probability is that if George King had commenced proceedings in February 2008 to remedy the removal of Weander, his costs may well have been significantly less. If, as the defendants submit, what stopped him doing so was principally his own misconduct in relation to The Wellness House, then Mr Benecke's alleged negligence was not the cause of the additional costs being incurred. They were caused by his independent knowingly wrongful acts, which circumscribed and constrained his legal options. 699Thirdly, some of the legal costs claimed were obviously incurred by reason of his lawyers having to address issues arising from his wrongful conduct. For instance, Mr Cheney had to respond to the family's allegations in relation to The Wellness House and the alteration of the BKST register. George King now admits his wrongdoing in relation to these matters (amongst others). The costs were only incurred because of his wrongdoing. No allowance has been made for these costs and they should not be recoverable from the defendants. Conditional conclusions on loss and damage 700In the event that George King were entitled to damages, I consider that his basic loss is the difference between the sum of $3.55M and the combined sums of $1,787,107 as calculated by Mr Ivey, but without a 20 percent minority discount, and $0.5M representing the value of the homestead vacant possession. The result is $1,262,893. 701I see no reason to apply a minority discount, either historically upon the basis of past dealings within the family or as a matter a proper calculation of the value of the shares being purchased. The value of those shares is not to be calculated upon the basis that the vendors were anxious to sell and could find no other purchaser. In the context of this case I consider that the value of the shares being acquired is to be calculated as the value of the shares in the hands of George King immediately upon their anticipated acquisition. George King was himself an admitted anxious purchaser, so that the application of a discount is out of step with the competing interests of the bargaining parties. The value of the shares should be their value as part of an enterprise sold as a going concern, not as assets with no market other than a majority shareholder or the equivalent. 702George King would also have been entitled to a sum for legal costs incurred in the resolution of his dispute with the family. Doing the best I can, having regard to the sum claimed for these costs and Mr Benecke's submissions about them, I consider that a sum of $137,107 is reasonable and produces a total rounded sum of $1.4M. 703I do not consider that this calculation is affected in any way by Mr Benecke's submission that George King would have to take account of or give credit for the $2.5M wrongfully paid out of Whitney for his own purposes. As noted, the effect of the release that he obtained under the settlement was, on one view, to relieve him of that liability. Mr Benecke contended that George King would have to give credit for that amount in assessing his loss. I disagree. 704The $2.5M sum is relevant to the question of what competing pressures or influences inspired George King to settle for $3.55M. I have taken that issue into account in forming my views on the question of causation. In performing the current, but different, exercise of calculating loss, I must proceed upon the basis that the sum of $2.5M was taken into account by both sides of the equation in negotiating the final result. Once the settlement occurred, and Mr Benecke is treated (contrary to my view) as liable for George King's losses, Mr Benecke cannot inject into the equation a factor that George King's family must also themselves be taken to have included in the matters that influenced their final decision to settle. Put simply, the issue was relevant to causation of loss but not to the quantum of loss. Any other approach would result in what amounts to a double counting in favour of Mr Benecke. Failure to mitigate 705It is also unnecessary in the circumstances to deal with this issue. However, for more abundant caution I record Mr Benecke's submissions on the topic in what follows. 706Mr Benecke submitted that he should not be held liable for the consequences of George King entering into an unreasonable settlement for additional reasons. He submitted that his failure to mitigate was responsible for the whole of his loss of $2M being the "premium" that is claimed. His damages should be reduced by that amount. That contention was based on the following matters. 707Mr Benecke's primary submission is that George King was not under pressure by reason of his weak legal position and did not pay more than "fair value". There was therefore no causal connection between the two. If I were to find that he was under pressure and paid substantially more than "fair value" then the issue of mitigation arises. The same facts going to causation also go to failure to mitigate. 708In order to have reached this point it will have been found that (i) "fair value" means what George King says it means, so that the Minority Shares could have been acquired for about $1.4M and (ii) but for Mr Benecke's negligence, he would have been able to obtain the Minority Shares for that amount. 709Mr Benecke contended that if George King was really under pressure because of his weak legal position, and knew that he was paying 2.5 times more than he should have, he should have gone to court to enforce his rights. He had the funds and wherewithal to do so. He plainly was also prepared to do so. Even to have reached the issue of mitigation, it has to be accepted that if George King had gone to court to enforce the 1999 agreement he would have been successful. 710The issue of mitigation exposes the tension at the heart of George King's case. Mr Benecke put it this way. If the December 2008 settlement were such a bad deal, in that he was paying a "premium" of $2M, the reasonable thing to do would have been not to enter into it at all but instead to have enforced his rights in court. His case depends upon him having enforceable rights arising from the promise made by his father in 1999. Mr Benecke contends that the reason he did not do so lies in the fact that the December 2008 settlement was not a bad deal. The possibility that he might have had a claim against his solicitor may also have entered his thinking. 711It should be noted that the defences of failure to mitigate raise no matters in addition to the causation defences upon which Mr Benecke relies. 712For the reasons that I have given, that there was no causal relationship between Mr Benecke's conduct and George King's alleged losses, it is unnecessary to consider the question of whether or not there was a failure to mitigate the alleged losses. Proportionate liability - defences attributing blame to others 713It is also unnecessary to deal with this issue having regard to my earlier conclusions. However, for completeness I set out below the parties competing submissions on it. Mr Benecke's submissions 714The alleged concurrent wrongdoers are Cheney & Wilson, which acted for George King from November 2007, and the late Mr Simon Kerr SC, who acted for him from about February 2008. To establish the proportionate liability defence the defendants must establish that: (a) the claims in negligence against them are "apportionable claims" as defined in s 34(1) of the Civil Liability Act; (b) Cheney & Wilson and/or Mr Kerr are "concurrent wrongdoers", being persons whose acts or omissions caused, independently of each other or jointly, the damage or loss that is the subject of the claim: s 34(2); (c) Cheney & Wilson and/or Mr Kerr are to some extent responsible for George King's damage or loss: s 35(1). 715If those matters are established, the defendants' liability is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendants' responsibility for the damage or loss: s 35(1). 716The proportionate liability defence arises in the following context. 717There were steps that George King could have taken, including bringing proceedings, to alleviate any pressure caused by the changing of his father's will and the removal of Deerslayer as trustee. Save for obtaining written undertakings, those steps were not taken. The question is why they were not taken. 718The defendants' primary submission is that they were not taken because George King was not under any pressure, was content to have the dispute mediated because the parties were close to settling, to avoid scrutiny of The Wellness House, and because he had the benefit of an undertaking. Another possibility is that George King would not take the steps because his wrongful conduct in relation to The Wellness House constituted "disentitling conduct". In any case, George King will not have established causation and proportionate liability will not arise. 719If that submission is not accepted, there are two possibilities. First, that George King was properly advised of the steps he could take to alleviate the pressure he was under but failed to take that advice. In that case, he will have failed to take reasonable steps to mitigate his loss. Secondly, he was not properly advised about the steps he could take. 720George King has given no evidence of the verbal legal advice he received in relation to the negotiations with his family in 2008. He met with Mr Cheney and Mr Kerr on a number of occasions. The only advice he says he received is at [197] of his first affidavit. The defendants have sought findings on the advice he was given. The proportionate liability defence only arises if those findings are not made, in which case the defendants must proceed on the basis of the evidence given by George King as to what passed between him and his lawyers. 721The retainers of Cheney & Wilson and Mr Kerr extended to the giving of such advice. The advice that George King says he was given by Cheney & Wilson and Mr Kerr was clearly inadequate and there is no dispute about it on his evidence or on the documentary evidence. The particulars are set out in detail in the pleading and do not require further elaboration. 722It may well be that George King was given more or different advice to that to which he deposes. For instance, he may have been given advice that he should not litigate for strategic reasons, having regard to his misconduct in relation to The Wellness House, or because he was close to settlement and the deal was a reasonably good one for him. He has chosen not to put that advice into evidence. On the basis of the evidence he has given, he entered into a settlement by which he paid 2.5 times more than he should have without proper advice on the alternatives open to him. 723Accordingly, if George King's claims are made out, such that it is found that he suffered loss by reason of breaches of retainer and/or duty by Mr Benecke, then Cheney & Wilson and Mr Kerr are also responsible for that loss within Part IV of the Civil Liability Act. 724In terms of causal potency, the conduct of Cheney & Wilson and Mr Kerr is highly significant. They advised George King over the final year of the dispute and specifically on the December 2008 settlement. If it is the case that they failed to advise him and allowed him to participate in the 2008 negotiations under the serious disadvantage that he claims to have been under, they are solely or primarily responsible for his losses. There were relatively simple steps that they could have taken to allow him to participate in the negotiations with the disadvantage having being corrected. The defendants contend that it is appropriate for their liability to be reduced by at least 75 percent. George King's submissions 725It is clear from all of the evidence that Mr Benecke has admitted that he breached his duty to George King during 2000/2001 and that he committed additional breaches during 2007 and 2008 that were deliberately intended to pressure him into paying a greater sum of money to his father. Despite those admissions of serious wrongdoing, Mr Benecke refuses to take responsibility for the consequence of his actions and instead relies on a defence that alleges that any loss or damage suffered by George King was caused entirely by George King's own negligence or the negligence of his lawyers. 726Those allegations were first pleaded in September 2011, more than two years after the proceedings were commenced. Cheney & Wilson and Mr Kerr were at that time acting for him in relation to these proceedings. As a direct result of being named as concurrent wrongdoers by the defendants, Cheney & Wilson and Mr Kerr were prevented by reason of a conflict of interest from continuing to act. George King was forced to engage new legal representation, causing significant cost, disruption and delay. 727Despite having introduced those allegations into their defence, the defendants have not served or tendered any evidence to support them. There is simply no legitimate evidentiary basis to sustain them. George King's first proposition was that the defence should in those circumstances have been withdrawn. As it was not, he made these additional submissions. 728The defendants present a false dichotomy. Their submissions only make sense if one begins with the premise that "proper advice" can only have been that George King should or must take the steps allegedly available to him. The dichotomy is a false one because it excludes the possibility that, for example, some less categorical advice about those steps could appropriately have been given. 729The defendants have made no attempt to prove why it was incumbent on Cheney & Wilson and/or Mr Kerr to give categorical advice of that kind. Whether the discharge of their obligations to George King required them to give advice of that kind would depend on a number of matters, including what was made known to them. No evidence was led about the obligations of a legal practitioner in the circumstances in which Cheney & Wilson and/or Mr Kerr were retained or briefed, or about why reasonable or competent legal practitioners in their position would have acted differently. The suggestion that a legal practitioner, acting reasonably, ought to have recommended litigation that was likely to be expensive and complex in preference to alternative dispute resolution through mediation ought not be accepted. 730The submission that the conduct of Cheney & Wilson and Mr Kerr could have greater causal significance than Mr Benecke's wrongful conduct should be rejected. Cheney & Wilson and Mr Kerr were helping George King with the difficult legal position, which Mr Benecke accepts, that George King had been put into by reason of Mr Benecke's wrongful conduct. Those who put him in that position obviously bear more responsibility than those who allegedly failed to get him out of it. Conclusions on apportionable claims 731George King's submissions on this issue are unanswerable. Mr Benecke's contention that George King's lawyers were somehow at fault fail for a complete want of supporting evidence. 732Although there is a degree of intellectual unreality about the assessment of a contribution to harm allegedly caused by another in circumstances where I have found no harm to have been caused, the starting point for such an assertion must be proof based upon evidence. Mr Benecke's contention that George King's lawyers somehow contributed to his loss, proceeds upon the implication or inference of fault arising from an apparent failure by them to advise George King to pursue his rights to enforce his agreement with his father or perhaps even advising him that the settlement was adequate or not advising him that it was disadvantageous. These are all matters about which I could speculate at length, but I have insufficient material to form a view that George King's lawyers were or may have qualified as "persons whose acts or omissions caused, independently of each other or jointly, the damage or loss that is the subject of the claim." 733Mr Benecke's submissions in this respect stand unsupported by any credible evidence and the allegations should be rejected. Credibility of George King and Mr Benecke George King 734Mr Benecke argued that George King's evidence should not be accepted unless it is consistent with the inherent probabilities or corroborated by contemporaneous documents. It should, of course, be rejected in the many instances where it is inconsistent with the contemporaneous documents. Mr Benecke contended that George King was an unsatisfactory witness and that there are many instances where he exaggerated or gave false evidence in an attempt to address weaknesses in his case. 735For example, George King's purported "clarification" of his evidence on what he agreed to at the October 2007 mediation was contrary to documents under his own hand and plainly false. It was obviously an attempt to address a weakness in his case (being the fact that he had agreed to investigate making a payment of $3.5M in October 2007) that had only become apparent to him since he swore his first affidavit. Furthermore, there is his evidence that he considered his legal position to be "weak" in December 2008. Mr Benecke contended that such evidence was false. It is falsified by a contemporaneous letter under George King's own hand to his lawyer. Finally, George King's evidence on his financial position in 2008, including that he could not afford to commence proceedings and did not have any assets outside Whitney, was also false. This evidence is said to go to the heart of the issues I have to decide. George King sought to present himself in his affidavits as someone without means when in fact he had substantial means. 736Mr Benecke submitted that George King showed himself to be unreliable on the critical issues of whether he was under pressure by reason of his legal position in 2008 or, as a result, entered into what he says was an extraordinarily disadvantageous settlement. Mr Benecke 737George King mounted a long and sustained attack upon Mr Benecke's truthfulness and reliability as a witness. His submissions about the topic were as follows. 738George King maintained that the inconsistent and varying nature of Mr Benecke's evidence was apparent from the commencement of his cross-examination, which began on the topic of the negotiations to purchase the Bellamy shares. A review of his cross-examination reveals the constantly fluctuating nature of his evidence on that topic. He was initially steadfastly positive that George King was not his client in relation to the negotiations for the Bellamy shares: "Q. You were acting for Mr George King in connection with the purchase of the Bellamy shares at least up until the end of 2001, weren't you? A. Mr Williams, there was at that stage I don't believe there was any purchase. There was an attempt to acquire those shares, and there were negotiations being conducted with the legal firm of Hardings, a Mr Stammel, Scammel and a Mr John Knox, but nothing had been documented, nothing had been agreed, there were just ongoing negotiations about a price. Q. You were acting for Mr George King in connection with the retainer you have just described? A. Incorrect. Q. Who do you say you were acting for in connection with that retainer? A. Mr Berkeley King. Q. That's not true, is it? A. Yes, to the best of my recollection that is true. Q. It was George King who was seeking your advice in relation to the purchase of the shares from Bellamy, wasn't it? A. Incorrect. Q. Are you sure about that? A. Positive. Q. It was Mr George King to whom you were proffering advice about that matter, wasn't it? A. No, I was advising Mr Berkeley King. Q. It is from Mr George King that you were obtaining instructions in relation to that matter in 1999, 2000 and 2001, wasn't it? A. Not to my recollection." 739Mr Benecke was also adamant that he did not receive instructions individually from George King: "Q. May we take it from that that from time to time you were also receiving instructions individually from George King? A. No. Q. Are you sure about that? A. To the best of my recollection, that is correct. Receiving instructions from either Berkeley on his own, or George and Berkeley together. ... Q. I am wanting to suggest to you that there was a time at which it became clear to you that only Mr George King would be the proposed purchaser, that's right isn't it? A. Incorrect. Q. Are you sure about that? A. Except for one occasion. Q. When was that? A. When the deal was done George King came to me and said, "I want all of the Bellamy shares. I've done all the hard work. I want them, they're mine." Q. Mr Benecke, you actually acted for George King in putting offers to Ms Bellamy on his individual behalf in relation to that matter, didn't you? A. Incorrect. Q. You deny that? A. To the best of my recollection any monetary offer came from Berkeley King and was authorised to me. Q. You are quite sure about that recollection? A. That is my best recollection." 740Mr Benecke continued to deny that George King was his client despite accepting that he had invoiced him for the work. He denied giving advice to George King on the subject matter of taking over as managing director. He maintained the denial despite having personally signed a client file form naming George King as the client. Mr Benecke subsequently changed his evidence and in light of the overwhelming documentation conceded that it was correct that George King was his client: "HIS HONOUR Q. But if you take instructions from George, and you give advice to George, it's not a big step to conclude that he was your client, is it? A. Your Honour, that's quite correct. WILLIAMS Q. And upon reflection, when we now look at the client registration format, Tab 16, it is correct to describe George as the client is it not? A. Yes." 741Mr Benecke continued to accept that he acted for George King as at May 2000: "Q. In May of 2000 you were continuing to act for George in relation to this matter, weren't you? A. Sorry, are we in May? Yes, the file record indicates that." 742However, he then sought to qualify his evidence by asserting that he only acted for George King in his capacity as a company representative: "Q. You were attending that meeting, I suggest, as George's legal representative to assist him in the negotiations with Mr Knox, weren't you? A. The caption would seem to suggest I was there on behalf of the Whitney Pastoral Company Group. Q. You agreed, didn't you, that your client was Mr George King in relation to this transaction? A. On behalf of the Whitney Pastoral Company Group." 743During the following day (day 5 of the hearing) Mr Benecke continued to maintain that his actual client was the company, not George King: "Q. You and your firm continued to act on George King's instructions in relation to the dispute with Ms Bellamy up until 2006, didn't you? A. Correct. I did that for George King in his capacity as a managing director of Whitney Pastoral Co." 744That position appeared to change in the course of the following exchange: "Q. I understood you to say that you had instructions at least from George King either or both in his capacity as managing director of WPC or, alternatively, on behalf of WPC. Is that right? A. That's correct. Q. If you had instructions from him to acquire a shareholding interest that would have given him control of WPC, that would hardly be capable of being described as instructions either on behalf of the company or in his capacity as managing director of the company, wouldn't it? A. Correct." 745Despite the apparent logic in the proposition that had been put to him, Mr Benecke soon abandoned his concurrence with it: "Q. You will see it is dated 10 July 2000 and it involves you sending a memorandum of fees addressed to George King in respect of the Bellamy proposed purchase? A. I agree with that. In respect of the Bellamy and the Whitney Pastoral Group of companies. I agree. Q. But once again an indication that you considered George King to be your clients, I suggest? A. The managing director of the Whitney Pastoral Co. Q. Is that a yes? A. Yes. HIS HONOUR Q. I'm sorry, was he your client or was he the representative of the company? A. He was the representative of the company. ... [WILLIAMS] Q. You were acting for George personally, weren't you? Isn't that why you opened the file in his name? A. No." 746However, Mr Benecke later changed his evidence again, accepting that he was advising George King: "Q. So far as the first item under heading WPC is concerned, you will see that refers to the shares purchased from Patricia Bellamy; correct 1(a)? A. Yeah, I see that. Q. Those are matters in respect of which you have agreed you took instructions directly from George? A. George had asked me on behalf of WPC for some advice in relation to a selective buy back of shares. Q. We went through this at length the other day and I took you to the documents on your file that showed that George himself was personally asking you for advice about the matter; do you remember? A. Correct. Q. You agree that you were acting on his behalf, don't you? A. Advising George, yes." 747Far from giving the candid evidence that might be expected of a solicitor, Mr Benecke's evidence as to the identity of his client varied as it suited him depending on the questions being asked. 748During the course of cross-examination, Mr Benecke also repeatedly denied or disagreed with the evidence in his own affidavit when it was put to him. 749Mr Benecke's evidence as to the scope of his retainer to give advice to George King in relation to the Peter Transaction also fluctuated significantly: "Q. You accept, don't you, that you were retained by George to provide him with advice as to how to best protect his position in relation to his Uncle Peter's transfer of the interest in the family company or trust to him? A. No. ... "Q. Yes, but you understood that to be a request for advice from you as to how he could best protect his position to achieve the transfer of effective control of his uncle's shares to him, that's right isn't it? A. No." ... "Q. Were you intending to suggest by paragraph 12.3 of your defence that you were not retained to give any advice in relation to that transaction? A. No, not intending it at all. ... Q. You expected as a competent solicitor, didn't you, that when being retained in the fashion you have suggested in 12.3 that it would be incumbent upon you to advise the client about the manner in which that agreement was to be given legal effect? A. I agree. Q. Including the wisdom or otherwise of giving it legal effect through particular types of legal transactions? A. Correct. ... Q. You understood your duty at all times throughout the Peter transaction was to give George advice as to the various ways in which the intention could be achieved and the advantages and disadvantages of those methods, didn't you? A. If requested, yes. Q. You understood him to be requesting that of you, at least implicitly, didn't you? A. Yes, I did." 750Mr Benecke initially refused to accept that he owed a duty to advise George King in respect of the Peter Transaction. He subsequently accepted that he owed that duty but refused to admit that he had breached it: "Q. You considered it part of your duty at the time, didn't you, to give appropriate advice to your client as to the manner in which the transaction should be effected? A. No. Q. No? A. No. ... Q. I want to suggest to you that it was part of your duty at the time and even in the circumstances that you describe to give him advice as to whether that was a prudent or imprudent course. Would you agree? A. Correct. Q. Did you give him advice as to whether it was a prudent or imprudent course? A. No. ... Q. Don't you agree that in those circumstances you had a duty to give advice as to the advantages and disadvantages of structuring that transaction in the various possible ways? A. Yes. Q. And you told me, didn't you, that you gave no advice of that nature? A. To Mr George King? Q. Yes? A. In relation to the, his proposal that was shares be transferred to Weander? HIS HONOUR Q. No. As to the advantages or disadvantages in structuring the transaction in the way that it ultimately was? A. Correct. WILLIAMS Q. You accept therefore, don't you, that you breached your duty in that regard? A. If there was a duty to advise him of options, if I was asked to advise on alternative options yes, I didn't do that. Q. Do you have any difficulty accepting that you breached your duty in relation to that lack of advice? A. Yes, I guess I do. ... Q. If you had appreciated a disadvantage do you think it would have been your duty to tell him about it? A. Yes, I do. Q. And you now know that there was a disadvantage in carrying out the transaction in that way, don't you? A. I do. ... Q. Would you accept that you failed in your duty in failing to advise him as to the advantages and disadvantages of structuring the transaction in the various possible ways? A. No. ... Q. But you would accept, wouldn't you, that a responsible solicitor taking on those instructions would want to ensure that the client knew the advantages and disadvantages of implementing the transaction in that way? A. I accept that, Mr Williams. Q. You accept you did not in fact give advice about the advantages and disadvantages of implementing the transactions in the way you said? A. I accept that. Q. And to that extent you breached your duty? A. To the extent a duty exists in those circumstances, yes. Q. But you accept a duty did exist on you in those circumstances, don't you? A. No, I don't." 751Mr Benecke attempted to justify having acted for Berkeley King in December 2007 on the basis that it was two days before Christmas and Berkeley could not readily find alternative representation. The contemporaneous documents show that this was factually false: "Q. You see that is a copy of a letter written by you on Berkeley's behalf? A. Correct. Q. Not written two days before Christmas? A. Correct. Q. And you will see that you make reference to the emails of last Wednesday, the 12th. Do you see that? A. Yes, I see that. Q. There was no emergency situation that required you to continue to act for Berkeley at this time, was there? A. If Christmas was on the Monday, that probably would have been two days before Christmas. I don't know which day Christmas was on. Q. You got the documents on Wednesday, the 12th? A. Yes." 752Mr Benecke attempted to justify the use of George King's confidential information on the suggested basis that his father was a director and shareholder of Weander/Deerslayer and somehow had a legitimate entitlement or interest: "Q. And you shared privileged information from those files with your other client, Berkeley, didn't you? A. Yes, I did. Q. And you knew that was wrong to do that, didn't you? A. Berkeley King was a director and a shareholder in a trustee company previously called Deerslayer, now called I'm sorry, previously called Weander, now called Deerslayer, and I think it was probably important for him to be aware of things that were being done to that company and it changed the complexion of ownership and it was misreporting of the ownership of shares." 753That answer was factually false: "Q. You see by this stage, that is December 2007, Berkeley was neither a director nor a shareholder of Weander, was he? A. That I can't recall. I can't recall. Q. Really, Mr Benecke? A. I cannot recall." 754The answer was also a disingenuous explanation of Mr Benecke's conduct. The true position was that Mr Benecke had not even turned his mind to whether he had a legitimate basis to use the confidential information: "Q. Did you actually turn your mind to whether what you were doing was proper in December 2007, that is, using documents on George's file against him? A. Probably not." 755Mr Benecke approved the content of Garland Hawthorn Brahe's letter dated 1 February 2008, yet that letter contained numerous statements that Mr Benecke gave evidence he knew to be false. He then failed candidly to accept the falsity of particular aspects of the letter, culminating in the following exchange: "Q. If you go back to page 982, halfway down after item 6, 'We certainly do not agree that the action by Berkeley in removing the trustee of the trust is in conflict with any advice we have given to George or any action we may have taken on George's behalf.' You would regard that as a false statement, wouldn't you? A. I'm not sure that I would. HIS HONOUR Q. Why not? A. Your Honour, if the appointor exercises the power of a replacement of a trustee and the trustee does nothing to vest the trust, crystallise any entitlements, then, really, George's position has not been affected at all. Q. This is the real world, isn't it, Mr Benecke? If someone has a gun and it is loaded and it is pointed at you, it may not be worrying because you rather suspect that they won't squeeze the trigger but the potential is always there? A. Correct. Q. In a commercial setting, such as this, the fundamental and underpinning benefit of the transaction was dependent upon the issue about the appointment of the trust. We have gone over this many, many times? A. Sure. Q. I want to make it clear, whatever decision anyone comes to in this case, I think everyone would appreciate it would have to be made upon the basis of a commonsense understanding of commercial transactions, not a penny pinching, niggardly assessment of the particular words that might have been used, on the assumption that the benefit of who could appoint or remove the trustee was insignificant? A. I understand that." 756Mr Benecke steadfastly denied having a continued involvement after 1 February 2008. However, it is clear that he continued to be directly involved. He continued to communicate with Miller, drafted a letter dated 11 February 2008 and communicated with Berkeley King in relation to the assault. 757George King contended that this review of Mr Benecke's evidence demonstrated clearly that he was not a reliable or candid witness. To the extent his evidence was in conflict with George King, George King's evidence should be preferred. Conclusions on credit 758In my view there is little, if anything, that can be said in answer to George King's submissions concerning Mr Benecke's credit as a witness. I have concluded that Mr Benecke owed duties of the type and with the content alleged by George King and that he breached those duties in the way George King claims. A significant persuasive influence in coming to those conclusions was the exposure of reasonable and obvious propositions put to Mr Benecke during his cross-examination with which he was unable easily to deal. Whether this amounts to dishonesty or confusion is neither easy to determine nor particularly relevant. Either conclusion leads me to discard Mr Benecke's evidence on the questions of whether or not he was acting for George King at any particular time with respect to particular matters, and upon whether he fell short of his obligations as George King's solicitor to act in accordance with acceptable professional standards. The uncontested opinions of Mr Boyce serve only to shore up my views that Mr Benecke was consistently trying to avoid the unavoidable and to deny the undeniable. 759In the scheme of this case and in the light of the conclusions I have reached, Mr Benecke's credit is less significant than might at first sight appear. This is for a number of reasons. First, although he did not concede the existence or breach of the alleged duty or retainer, Mr Benecke's case on these issues was to my observation and to some extent conducted with at least some degree of resignation about the outcome. Counter intuitively, Mr Benecke's evidence reviewed above suggests that he may have been less inclined to recognise the strength of George King's case on breach and duty than those representing him. In any event, in general, my decision on these issues does not come down only or exclusively to a choice between whether or not Mr Benecke should be believed over George King or vice versa. 760Secondly, it is not necessary to compare Mr Benecke's evidence with George King's evidence on the critical issue of whether or not Mr Benecke's breaches caused George King to suffer loss. The existence of the pressure that George King says Mr Benecke created, or its influence upon the decisions taken by George King, are not matters to which Mr Benecke's testimony was, or could have been, legitimately directed. Indeed, in many respects George King would wish to embrace Mr Benecke's evidence about the events leading up to the settlement, such as Mr Benecke's curiously candid concession that he in effect conspired with Berkeley King to squeeze as much out of George King as they could. George King raises no criticism of Mr Benecke's evidence on such matters and a contest between them based on their credibility does not arise. 761The issue and importance of George King's credit is more significant. I have not accepted that he paid more in the 5 December 2008 settlement than he otherwise would because of the position in which Mr Benecke's defaults are said to have placed him. Assessment of that question does not stand or fall only by reference to George King's evidence about it. In analysing his decision to settle for $3.55M, Mr Benecke has emphasised and I have considered the circumstances at play at the relevant times revealed by documents that were brought into existence before this litigation began. These documents have a powerful and persuasive effect. 762For example, as has been discussed, George King appears in his own writing to agree to examine the viability of a the equivalent of a $3.5M settlement sum as "a basis for further discussion" at a time when the consequences of Mr Benecke's defaults were arguably yet to emerge. No issue of his father's will had arisen to influence him at this time and the power of appointment controversy was also not yet in bloom. My rejection of George King's evidence that the pressure was affecting him at this time can therefore be seen to be a combination of a rejection of what he said in evidence and a preference for the force of contemporaneous documents written by him. I find that George King did attempt to backdate the emergence of the relevant pressure to a time before he wrote summarising what occurred at the family meeting. 763I have also been influenced in my assessment of George King as a witness by my impression of him throughout the course of the historical events that both precede and give rise to this litigation. As uncharitable as it may sound, I formed the view that George King was a man who was incapable of waiting for his parents to die before receiving his inheritance. His expressions of concern for his own security if he returned to Coombing Park were no more or less in my estimation than a desire to wrest control of the property and the business from everyone else in the family as soon as possible. He showed himself in this respect to be as ruthless in his determination to convince his father that the salvation of Coombing Park as a family owned business depended upon meeting his terms of staying or returning to run it, as he was when finally negotiating, on his case from a position of intolerable and debilitating weakness, without making a single offer in response to his family's ever reducing demands. 764That ruthlessness and impatience is also evident in the arrogant disregard George King showed when dealing with Whitney's money for his own independent business purposes and purporting to alter the true nature of the BSKT share holding without any right to do so. George King did not give me the impression of a person who would do what he did not want to do, by reason of pressure or otherwise, if he were not entirely comfortable that it was in his best interests to do so. I remain disquieted by the fact that the position he says he was in is completely unreflected in a single document that I have seen contemporaneously complaining of his predicament. Paramount in all of this is the total absence of any reference to a complaint at or during the 5 December 2008 mediation that he was in an invidious or hopeless position of undue influence because of Mr Benecke's negligence. 765In short, I cannot accept what George King says were the things that influenced him to settle with his family as he did, and I am not otherwise satisfied there is any extraneous independent material that supports him. Orders 766In the circumstances I consider that the following orders should be made: 1. Verdict for the defendants. 2. Unless within 14 days I receive notice given to my Associate that either party wishes to contend for a different order, I will order that the plaintiff pay the defendants' costs. ********** Amendments 13 February 2014 - delete $2.4M and substitute $1.4M Amended paragraphs: 702 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. Decision last updated: 13 February 2014