PARTIES:		ELDERS RURAL FINANCE LIMITED FOSTERS BREWING GROUP LIMITED and ELDERS LIMITED

TITLE OF COURT: JURISDICTION: FILE NO: DELIVERED: HEARING DATES:

V

WILLIAM TAPP as representative of the Estate of CHARLES WILLIAM TAPP (Deceased)
and
WILLIAM REX TAPP, JOE TAPP, BEN TAPP, WILLIAM TAPP and DANIEL TAPP
SUPREME COURT (NT) SUPREME COURT (NT)
No 3 of 1992
Darwin 25 March 1993
21, 23 December 1992,
11, 12, 13, 14 January
1993, 25 March 1993

JUDGMENT OF:
CATCHWORDS:

Martin CJ.

Practice - Pleadings - Purpose - Amendment of -
Supreme Court Act, ss80, 81 -
Supreme Court Rules (NT), rrl.10, 36.01
Cropper v Smith (1884) 26 Ch D 700, applied.
Tildesley v Harper (1878) 10 Ch D 393, applied.
Clarapede & Co v Commercial Union Association (1883)
32 WR 262, applied.
Abela v Giew (1964) 81 WN (Ptl) (NSW) 344, applied. Clough & Rogers v Frog (1974) 48 ALJR 487, applied. Woodhead Aust (SA) Pty Ltd v The Paspalis Group of Companies, unreported 1 February 1991, considered. Trau v University of Sydney (1989) 34 IR 466, referred to.

Practice - Pleadings - Material Fact - Failure to plead essential element - No sufficient implication -
Unconscientious Dealing & Undue Influence -
Louth v Diprose (1992) 110 ALR 1, applied.
Allcard v Skinner (1887) 36 Ch D at 182-3, referred to.
Blomley v Ryan (1956) 99 CLR 362,referred to. Commercial Bank of Aust Ltd v Amadio (1983) 151 CLR 447, referred to.

National Aust Bank v Nobile (1991) 100 ALR 227,referred to.

Practice - Pleadings - Material facts - Fiduciary relation - Negligence claim - Lack of -
Hawkins v Clayton (1988) 78 ALR 69,referred to.
Practice - Pleadings - Material facts; supported by particulars - Connection.

Practice - Pleadings - Clarity - Use of words of Statement of Claim in same sense in Defence.
Practice - Pleadings - Evidence.
Practice - Pleadings - Stamp Duty - Deed of Assignment
- Inadmissible - Duty of Court - Equitable remedies -

Stamp Duties Act (NT) - Family Law Act (Cth) -
Taxation (Administration) Act (NT) ssl7(2) & 121 -
Petera v EA	J Properties Pty Ltd (1985) 7 FCR 375, applied.

Practice - Pleadings - Denial - 'fishing' - Purposes of monetary advances.

Practice - Pleadings - Particulars - function of - strict compliance -
Supreme Court Rules (NT), rl3.10 -
Millar v Harper (1888) 38 Ch D 110, applied.
Egg & Pulp Marketing Board v Karp Tocumal Trading Co
(1963) VR 378, applied.
Practice - Pleadings - Particulars - Money Lenders Act
- Excessive interest & charges; reference to standards to compare with - Harsh &  unconscionable; subjective test
- Relief sought &  requirements for defendant to equity

Money Lenders Act (NT) -
McDonald v McDonald (1965) ALR 166, considered.
Langman v Handover (1929) 43 CLR 334, applied.
Practice - Pleadings - Amendment - Discretionary.

REPRESENTATION:
Counsel:
Plaintiffs: WJN Defendants: T J First Receiver: Second Receiver:
Solicitors:

Wells QC Riley QC
(D Johnston) J (R W Cowling)

Stirk
J Noonan

Plaintiffs: Finlaysons & Ward Keller
Defendants: Philip & Mitaros First Receiver: McBride & Stirk Second Receiver: James Noonan

Judgment category classification: B Court Computer Code:
Judgment ID Number: mar93003 Number of pages: 92
NOT DISTRIBUTED

mar93003
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY OF AUSTRALIA

No. 3 of 1992

BETWEEN:
ELDERS RURAL FINANCE LIMITED FOSTERS BREWING GROUP LIMITED and ELDERS LIMITED
Plaintiffs
AND:
WILLIAM TAPP as Representative of the Estate of CHARLES WILLIAM TAPP (Deceased)
First Defendant
AND:
WILLIAM REX TAPP, JOE TAPP, BEN TAPP, WILLIAM TAPP and DANIEL TAPP
Second Defendants

CORAM:	MARTIN CJ.

REASONS FOR JUDGMENT
(Delivered 25 March 1993)

This is the fourth time upon which the Court has been called upon to consider defences (including counterclaims) raised by the first and second defendants. The previous history is detailed in reasons for judgment delivered on 6 August 1992.	Consequent upon the orders made on that occasion, leave was given to all defendants to file further defences which was done on 17 August.	The plaintiffs promptly applied to have parts of those defences

struck out and those applications were set down for hearing on 21 December.	When the matters were set down for hearing, the first and second defendants were respectively separately represented.	On 18 December they lodged a summons seeking leave to amend the defences filed in August.	Those applications were not able to be dealt with on 21 December,
but were held over to the period from 11 - 14 January 1993.

The plaintiffs vigorously pursue their consistent task of endeavouring to limit the issues which are to go to trial.	They do that not only by attacking the proposed pleadings, but also by raising a number of issues going to the exercise of the Court's discretion going beyond the usual considerations in that regard.	In what is hoped would be the best way of proceeding to most efficiently dispose of the applications, at least cost to the parties, it was ordered that the defendants' summons for leave to amend the August defences be heard first.	It was considered better that the Court deal with the case which the defendants wished to put forward at that stage rather than that which they had previously formulated.

The defendants contend that if the amendments proposed are allowed the defences (as amended) will narrow the issues for trial.	Some of the matters previously sought to be raised by the defendants have been dropped, but on the other hand there are some new matters raised.	However, such

2

a course in a complex case is not unusual and a determination of what has been dropped and what has been introduced and the balancing of the two is not likely to provide any significant assistance to the court in determining the merits of the defendants' application.

The plaintiffs have, without objection, taken the opportunity to attack much of the amended defences as filed in August as they will stand if the amendments now sought are permitted.	The course of argument encompassed the type of argument as might be anticipated upon an application to strike out a defence, as much as upon an application for leave to amend a defence.	Principles which guide Courts as to amendment of pleadings are well known and need no detailed repetition.	Reference should be made to ss80 and 81 of the Supreme Court Act and rrl.10 and 36.01.	The Courts are established to decide the rights of parties, and provided the party seeking to amend has not acted in bad faith, and provided any injury done to the appellant occasioned by the amendment can be compensated for by costs or otherwise, then the amendment should be allowed unless it is obviously futile (Cropper v Smith (1884) 26 Ch D 700 at 710 per Bowen LJ; Tildesley v Harper (1878) 10 Ch D 393 at
396 per Bramwell LJ; Clarapede & Co v Commercial Union
Association (1883) 32 WR 262 at 263 per Brett MR; Abela v
Giew (1964) 81 WN (Pt 1) (NSW) 344 at 345 per Taylor J.) and more recently in the High Court in Clough and Rogers v Frog (1974) 48 ALJR 487 at 482.	There is a general review of the

3

cases by Asche CJ. in Woodhead Australia (SA) Pty Ltd v The Paspalis Group of companies, unreported, 1 February 1991.
For an example of a case in which leave to amend was refused see Trau v University of Sydney (1989) 34 IR 466.	It appears at p476 that it was a case in which the applicant had been endeavouring for years, in a variety of tribunals, "to propound a variety of claims" and a third amended Statement of Claim had been struck out because of serious failures to comply with the rules of pleading.	By a series of amendments there emerged a Statement a Claim alleging causes of action "completely different from those contained in earlier versions" (p468} and it was noted that earlier statements of Claim had not foreshadowed what emerged later (p469).	It was also observed at p475 that "If one sees the plaintiff's lawyers are experiencing extreme difficulty in formulating with clarity and particularity their client's cause of action then that is often a very good indication that there is no cause of action".	That comment can as much be applied to a defendant's lawyers in relation to formulating a defence and counterclaim and particularly if it appeared that the amendments were being sought with a view to delaying trial, as opposed to giving rise to a delay as a consequence.

Notwithstanding that some of the pleas of the defendants to be now found in the August defences and in the proposed amendments thereto are not in the same form as in earlier versions (after all they were struck out because

4

they needed to be remedied), matters which the defences or some of them have previously unsuccessfully sought to raise, by way of defence or counterclaim, are embodied in the new pleadings.	The factual substratum sought to be relied upon remains much as it did previously.	The manner in which the facts alleged are sought to be applied for the benefit of the defendants may well be different and expanded, but that goes largely to the legal results which the defendants say flow from those facts.	They also seek additional and alternative forms of relief, and although it might be argued that some of the relief sought is extreme and unlikely to be granted, nevertheless, in so far as the relief sought by the defendants relies upon the exercise of discretion on equitable grounds, then there can be no objection to the pleading just because what is sought is more than what would be likely to be granted.

There has been no mala fides established on the part of the defendants or any improper concealment by them of the defences which they wish to raise.	Opacity, by reason of their inability to plead their cases in the correct way, there may well have been, but not improper concealment.	The case has not yet been set down for trial and any prospective hearing dates must of necessity be some months ahead bearing in mind the other business of the Court, even given some degree of priority being assigned to the matter.

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The plaintiffs continue to complain that there are insufficient particulars given to many of the material facts sought to be pleaded by the defendants.	They draw attention to the many references scattered throughout the defences to further particulars being provided upon receipt of particulars from the plaintiffs and after discovery and interrogatories.	It is easy to understand the plaintiffs frustration in that regard and their concern that the reference to discovery and interrogatories implies future delay.	It appears from other material that the course of discovery to date has not run smoothly, but it has been
extensive and apparently ongoing.	One of the difficulties
,
is that if the proposed amended pleadings are allowed the issues joined will cover a period of about twenty years and a substantial number of major and relatively minor transactions, particularly as between the plaintiff and the late Mr CW		Tapp ("deceased").		However, those considerations do not avail the plaintiffs.	If it is open to the defendants to raise the issues sought to be raised then, provided there is a sufficient plea of material facts to sustain a defence or counterclaim, the fact that the particulars may be numerous and cover a lengthy period of time cannot be an objection.	Nor can it be successfully objected that all of the particulars upon which the defendants may seek to rely are not contained in the pleading.	The rules clearly require that necessary particulars be contained in the pleading (r13.10), but also contemplate their being provided thereafter.		Among the

6

functions of particulars is the limitation of issues of fact to be investigated and avoidance of surprise.	That there may be a substantial number of particulars does not alter those objectives.

The second defendants cannot be supposed to have detailed or particular knowledge of many of the transactions between the plaintiffs, or any of them, and the deceased.
One or more of the plaintiffs do have knowledge of those transactions and they may be presumed to have or have had possession of the documents relating to them.	In these circumstances, provided the defendants can show that upon the material facts pleaded by them there is at least an arguable defence or counterclaim, then the Court should not regulate the procedure between the parties in such a way as to make it impossible for the defendants to go on (Millar v Harper (1888) 38 Ch D 110; Egg and Pulp Marketing Board v Korp Tocumal Trading Co (1963) VR 378.	In these circumstances it is not a sufficient answer for the plaintiffs to say that the course of discovery which may be productive of further particulars will delay the trial.	The speed with which the course is followed, at least in so far as discovery of documents is concerned, lies with the plaintiffs.

Leaving these general observations aside and turning to the pleadings, there follows a consolidation of the amended Statement of Claim and of the defences and

7

counterclaims as they would appear if the amendments sought to be made to the August defences were allowed.	Where the defences of the first and second defendants are identical they have been brought together in the one paragraph and, where required, minor differences indicated; major departures in the defendants' pleadings are treated separately.	There is incorporated such further amendments as were proposed by the defendants in the course of argument, including particulars.	Any necessary rulings follow in the appropriate place.

STATEMENT OF CLAIM

Each of the plaintiffs is a duly incorporated limited liability company capable of suing and being sued in its own name and style.	On 3 February 1982, the second-named plaintiff changed its name from Elder Smith Goldsbrough Mort Limited to Elders IXL Limited.
on 30 November 1990, the second-named plaintiff changed its name from Elders IXL Limited to Foster's Brewing Group Limited.
DEFENCES

Paragraph 1 of the Amended Statement of Claim is admitted.

Each of the second, third, fourth and fifth-named second defendants is the natural son of the first defendant ("Charles Tapp").	The first-named second defendant is the step-son of Charles Tapp.
Paragraph 2 is admitted.
By Memorandum of Mortgage dated 20	May 1986, Charles Tapp mortgaged to the second-named plaintiff all of his estate and interest in all that piece or parcel of land being Northern Territory Portion No 1363 and being the whole of the land comprised in Pastoral Lease No 979 entered in the Register Book of Crown Leases Volume 201 Folio 42 ("Killarney Station").
As to paragraph 3, the First Defendant and second Defendants admit that Charles William Tapp ("the

8

Deceased") executed a Memorandum of Mortgage dated 20 May 1986 ("the Killarney Mortgage").
The Memorandum of Mortgage of Killarney Station contained, inter alia, the following terms:
Charles Tapp agreed to pay to the second-named plaintiff the Principal sum, interest, charges and all other moneys secured by the said Memorandum of Mortgage upon demand (Clause 1);
Upon default being made by Charles Tapp under the Memorandum of Mortgage all moneys secured or payable or which may be secured or become payable to the second-named plaintiff by Charles Tapp either alone or jointly with any other person pursuant to any other advance accommodation agreement or security shall immediately become payable by Charles Tapp to the second-named plaintiff on demand and-all such moneys shall form part of the moneys secured by the Memorandum of Mortgage and shall be recoverable by the second­ named plaintiff from Charles Tapp under and in accordance with the terms of the Memorandum of Mortgage in addition to the Principal Sum and any other moneys secured by the Memorandum of Mortgage (Clause 7);

Upon default being made in payment at the respective times and in the manner mentioned in the Memorandum of Mortgage of the Principal Sum or any part thereof or of the interest thereon or any part thereof or upon default being made in the observance or performance of any of the covenants contained in the Memorandum of Mortgage or implied by the Real Property Act for the space of seven
(7) days the second-named plaintiff shall (notwithstanding any omission neglect or waiver of the right to exercise all or any of such powers on any former occasion) be at liberty immediately thereupon or at any time thereafter to serve upon Charles Tapp the notice mentioned in Section 132 of the Real Property Act which notice need not specify any amount but shall be sufficient if it requires payment of the moneys remaining due generally and if any such default shall be continued wholly or in part for the further period of seven (7) days after the service of such notice, the second-named plaintiff may exercise in reference to Killarney station or any part thereof all or any of the powers of a mortgagee under the said Act or conferred by the memorandum of Mortgage AND if at any time default shall be made in the due payment of the principal interest and other moneys secured by the Memorandum of Mortgage for seven (7) days next after the same

9

respectively shall become payable or in the observance or performance of any covenants or agreements on the part of Charles Tapp contained or implied in the Memorandum of Mortgage then the whole of the Principal Sum and interest thereon and any other moneys secured by the Memorandum of Mortgage shall immediately become due and payable and Charles Tapp will thereafter pay the same on demand (Clause 8);
Subject only to any restrictions which may be imposed upon the second-named plaintiff by the Real Property Act or any other law upon any default by Charles Tapp which shall not be remedied in the time limited in clause 8 of the Memorandum of Mortgage the second-named plaintiff shall have the powers and rights of and for the purpose of ascertaining those powers and rights be deemed to be the owner of Killarney Station with immediate right to possession.	In particular but without limiting the generality of the foregoing the second-named plaintiff may conduct himself in all ways as with an owner in relation to sale terms lease terms and matters involving the rents and profits of the land (Clause 9).
The second-named plaintiff will rely upon the Memorandum of Mortgage of Killarney Station at the trial of this action for the full force and effect of all the terms and conditions contained therein.
As to paragraph 4, the First Defendant and second Defendants admit that the document contains the terms therein alleged.

By Deed dated 1 December 1969, Charles Tapp mortgaged to the second-named plaintiff, by way of transfer of legal title, all of his interest in all sheep, cattle, pigs and horses together with the present and all future increase and progeny thereof brought or depastured upon or in transit to Killarney station or any lands used and worked in conjunction therewith or land or premises acquired and worked by Charles Tapp ("the Killarney Stock").
As to paragraphs, the First Defendant and Second Defendants:

admit that [1st Def: the Deceased] [2nd Def: Charles William Tapp ("the Deceased")] executed a Deed of Mortgage dated 1 December 1969 ("the Killarney Stock Mortgage");

admit that, by virtue of the Killarney Stock Mortgage, the Deceased mortgaged the cattle on Killarney station as at 1 December 1969 as

10

designated in the Schedule to that mortgage being 10,737 head;
say the effect of the terms of the mortgage did not extend to transfer legal title to the Second Plaintiff in or to:
any progeny of the livestock conveyed by tbe First Defendant to the Second Plaintiff on
December 1969; or
to any livestock other than those which were upon Killarney station on 1 December 1969.
PARTICULARS
By virtue of section 28 of the Instruments Act, the only livestock secured by the mortgage are the livestock referred to in the Schedule of the mortgage in the form of Schedule 5 of that Act.
That schedule only includes livestock actually on the property at the date of execution of the mortgage.
deny each and every other allegation contained in paragraphs;
shall refer to the Killarney Stock Mortgage.at the trial for its full terms and effect.
The Deed of Mortgage of the Killarney Stock contained, inter alia, the following terms:
Charles Tapp agreed to pay to the second-named plaintiff the indebtedness intended to be secured by the Deed of Mortgage of the Killarney Stock and interest thereon on demand (Clause 1);
Charles Tapp agreed that if default shall be made in payment of the indebtedness intended to be secured by the Deed of Mortgage of the Killarney Stock or any part thereof of or in the payment of any interest or in the observance or performance of any other covenant or provision on the part of Charles Tapp expressed or_ implied in the Deed of Mortgage of the Killarney Stock it shall be lawful for the second-named plaintiff at its discretion and Charles Tapp expressly licenses and empowers the second-named plaintiff with its agents and servants immediately and without notice and notwithstanding any payment of or on account of the indebtedness intended to be secured by the
. Deed of Mortgage of the Killarney Stock or any

11

interest to enter upon Killarney Station and to seize and take possession of all the Killarney Stock with full leave and licence for the second­ named plaintiff at its discretion to recover the same or any part thereof or to remain upon and occupy any lands upon which the Killarney Stock or any part thereof may be and to continue to depasture the said Stock and thereon for so long as it may think necessary and to employ such agents to superintend and manage the said stock at such remuneration as may be thought fit and generally to carry on the business of Charles Tapp for the purpose of obtaining the benefit to the fullest extent of the security made by the Deed of Mortgage of the Killarney stock to sell and dispose of the said Stock or any part thereof. (Clause 13).
The second-named plaintiff will rely upon the Deed of Mortgage of the Killarney Stock at the trial of this action for the full force and effect of all of the terms and conditions contained therein.
As to Paragraph 6, the First Defendant and second Defendants admit the Killarney Stock Mortgage contains the terms alleged therein.

By Memorandum of Mortgage dated 24 June 1981, Charles Tapp mortgaged to the second-named plaintiff all of his estate and interest in all that piece or parcel of land being Northern Territory Portion 699 and being the whole of the land comprised in Pastoral Lease No 665 entered into the Register Book of Crown Leases Volume
46 Folio 44 ("Maryfield Station").
As to paragraph 7 the First Defendant and second Defendants say:

the Memorandum of Mortgage dated 24 June 1981 therein referred to ("the Maryfield Mortgage") was purportedly executed for and on behalf of the Deceased by George Cridland ("Cridland") pursuant to Power of Attorney No. 97613;
Cridland's Power of Attorney did not enable him to validly execute the Maryfield Mortgage and accordingly the Maryfield Mortgage is void and of no effect;
Particulars
The Power of Attorney was not in the form of Schedule 13 to the Real Property Act (as it was on 24 June 1981) and accordingly, by virtue of Section 155 of that Act, the Power of Attorney was not

12

sufficient to enable Cridland to validly execute the Maryfield Mortgage.	Section
69 II of that Act renders the mortgage void.

shall refer to the Maryfield Mortgage at the trial for its full terms and effect.

The Memorandum of Mortgage of Maryfield Station contained, inter alia, the following terms:
Charles Tapp agreed to pay to the second-named plaintiff on demand in writing all advances moneys indebtedness and liabilities then due or owing or which may thereafter become due or owing to the second-named plaintiff by Charles Tapp whether alone or jointly with any other person or persons company or companies whomsoever and in any manner whatsoever (Clause 1);
Charles Tapp agreed to pay to the second-named plaintiff interest on all principal moneys thereby secured or intended so to be which for the time being may be owing or unpaid at the rate usually or for the time being charged by the second-named plaintiff upon moneys owing to it by its customers computed as from the day or respective days of the same respectively being advanced or paid to or becoming owing by Charles Tapp (Clause 2);
That the space of one day was thereby limited as the period of time for which the default mentioned in Section 132 of the Real Property Act must continue before the second-named plaintiff may give to Charles Tapp the notice in writing mentioned in such section and the further space of one day (or such longer period as may be required by law) from the time of such notice was thereby limited before the power of sale mentioned in Section 133 of the said Act may be exercised (Clause 3);
That after the power of sale given shall have arisen it shall be lawful for the second-named plaintiff to exercise the same and all other powers rights and remedies thereby given or thereby implied or given to mortgagees by virtue of the Real Property Act or any other Act for the time being in force in the Territory without the necessity for making any demand or giving any notice whatever anything in the said Act or any other such Act or elsewhere contained or provided or any usage or law to the contrary in anywise notwithstanding and if any default or breach shall be made as aforesaid the whole of the moneys thereby secured shall become due and payable and

13

recoverable and the adding of interest to principal and charging interest on the aggregate amount shall not amount to a waiver of default by non-payment of interest or of any other breach or prejudice or postpone any right remedy or power of the second-named plaintiff (Clause 4);
If breach shall be made on the part of Charles Tapp in the performance or observance of any covenant or agreement therein contained or thereby implied the whole of the principal sum and other moneys thereby secured shall thereupon immediately become and be deemed to be due payable and recoverable with interest at the rate and calculated in the manner aforesaid without the necessity for any demand therefore (Clause 7);
The second-named plaintiff will rely upon the Memorandum of Mortgage of Maryfield Station at the trial of this action for the full force and effect of all of the terms and conditions contained therein.
As to paragraph 8, the First Defendant and Second Defendants admit that the Maryfield Mortgage contains the terms therein alleged.

By Deed dated 26 November 1985, Charles Tapp mortgaged to the second-named plaintiff, by way of transfer of legal title, all of his interest in all sheep, cattle, pigs and horses together with the present and all future increase and progeny thereof brought or depastured upon or in transit to Killarney Station or Maryfield Station or any lands used and worked in conjunction therewith or land or premises acquired and worked by Charles Tapp ("the Killarney/Maryfield stock").
As to paragraph 9, the First Defendant and second Defendants:

admit that the Deceased executed a Deed of Mortgage dated 26 November 1985 ("the Killarney/Maryfield stock Mortgage");

admit that, by virtue of the Killarney/Maryfield Stock Mortgage, the Deceased mortgaged to the Second Plaintiff the cattle and horses actually on Killarney station and Maryfield station on 26 November 1985 as designated in the Schedule to that mortgage being 26,275 head of cattle and 498 horses;
say the effect of the terms of the Killarney/Maryfield stock Mortgage did not extend to transfer legal title to the second Plaintiff in or to:

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any progeny of the livestock conveyed by the First Defendant to the Second Plaintiff on
26 November 198S; or
to any livestock other than those which were upon Killarney station or Maryfield station on 26 November 1985.
Particulars
By virtue of section 28 of the Instruments Act, the only livestock secured by the mortgage are the livestock referred to in the Schedule of the mortgage  in the form of Schedules of that Act.
That schedule only includes livestock actually on the stations at the date of execution of the mortgage.

deny each and every other allegation contained in paragraph 9.

The Deed of Mortgage of the Killarney/Maryfield Stock contained the following terms:
Charles Tapp agreed to pay to the second-named plaintiff the indebtedness intended to be secured by the Deed of Mortgage of the Killarney/Maryfield Stock and interest thereon on demand (Clause 1);
Charles Tapp agreed that if default shall be made in payment of the indebtedness intended to be secured by the Deed of Mortgage of the Killarney/Maryfield Stock or any part thereof of or in the payment of any interest or in the observance or performance of any other covenant or provision on the part of Charles Tapp expressed or implied in the Deed of Mortgage of the Killarney/Maryfield Stock it shall be lawful for the second-named plaintiff at its discretion and· Charles Tapp expressly licenses and empowers the second-named plaintiff with its agents and servants immediately and without notice and notwithstanding any payment of or on account of the indebtedness intended to be secured by the Deed of Mortgage of the Killarney/Maryfield Stock or any interest to enter upon Killarney Station and to seize and take possession of all the Killarney/Maryfield Stock with full leave and licence for the second-named plaintiff at its discretion to recover the same or any part thereof or to remain upon and occupy any lands upon which the Killarney/Maryfield Stock or any part thereof may be and to continue to depasture the said Stock
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and thereon for so long as it may think necessary and to employ such agents to superintend and manage the said Stock at such remuneration as may be thought fit and generally to carry on the business of Charles Tapp for the purpose of obtaining the benefit to the fullest extent of the security made by the Deed of Mortgage of the Killarney/Maryfield Stock to sell and dispose of the said Stock or any part thereof.	(Clause 13).
The second-named plaintiff will rely upon the Deed of Mortgage of the Killarney/Maryfield Stock at the trial of this action for the full force and effect of all of the terms and conditions contained therein.
As to paragraph 10 the First Defendant and Second Defendants admit the Killarney/Maryfield Stock Mortgage contains the terms therein alleged.
By Memorandum of Mortgage dated 11 May 1988, Charles Tapp mortgaged to the first-named plaintiff all of his estate and interest in all of that piece or parcel of land being the whole of the land comprised in Pastoral Lease No 632 entered into the Register Book of Crown Leases Volume 44 Folio 59 ("Roper Valley Station").
As to	paragraph 11, the First Defendant and Second
Defendants:
admit that the Deceased executed a Memorandum of Mortgage dated 11 May 1988 ("the Roper Valley Mortgage");

say that, in light of the matters pleaded in paragraphs [1st Def: 42(a), (b) and (c)] [2nd Def: 36(a), (b) and (c)] hereof, by securing the execution by the Deceased of the Roper Valley Mortgage, the second Plaintiff unconscientiously took advantage of the Deceased's incapacities referred to in paragraph [1st Def: 42(a)J [2nd Def: 36(a)].

Particulars
The mortgage purported to enlarge the monies secured over Roper Valley station to include the Deceased's indebtedness from time to time to, not only the Third Plaintiff, but any company associated with the Third Plaintiff including the First and second Plaintiffs.
(o)		say that, further or in the alternative, in light of the matters pleaded in paragraphs [1st Def: 42 (a), (b) and (c)J [2nd Def: 36 (a), (b) and (c)J hereof, by securing the execution by the Deceased of the Roper Valley Mortgage, the second Plaintiff

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exercised undue influence over the Deceased in that it improperly used and took advantage of its position of ascendancy over the Deceased that arose by reason of the matters pleaded in paragraphs [1st Def: 42(a), (b) and (c)J [2nd Def: 36(a), (b) and (c)]

Particulars
The mortgage purported to enlarie the monies secured over Roper Valley Station to include the Deceased's indebtedness from time to time to, not only the Third Plaintiff, but any company associated with the Third Plaintiff including the First and second Plaintiffs.
(d)		in the premises, the First Defendant is entitled to [1st Def: and does hereby] avoid the Roper Valley Mortgage.

Defences based upon the alleged infirmity of the deceased and allegations of advantage being taken of him by the plaintiffs were foreshadowed in the earlier defences (for example see the reasons for judgment of 6 August in relation to paragraphs 29 - 36 of the defences which were then struck out).	The plaintiffs say that the matters pleaded in paragraphs 42(a)(b) and (c), for example, taken with this pleading, fail to show any material fact indicative of exploitation of the deceased by the plaintiffs or any of them.	They say there is no express pleading, by way of material fact on that point and no such exploitation can be inferred from anything which has been pleaded, including reference to the particular term of the mortgage entered into by the deceased; the defendants jump from allegations concerning the infirmity of the deceased, and his relationship with the plaintiffs to his execution of the mortgage and its terms and, because those terms confer

17

benefits upon the plaintiffs, it is alleged that the conclusion can be drawn that they unconscientiously took advantage of him, or exercised undue influence over him. Nothing is said about exploitation leading to the execution of the documents.

Although their Honours were dealing with a gift of property there is much in the reasons given in the High Court in Louth v Diprose (1992) 110 ALR 1, to support the plaintiff's proposition.	Mason CJ. at p4 referred to the appellant:

"By dishonestly manufacturing an atmosphere of crisis .... the appellant played upon the respondent's susceptibility where she was concerned.	Her conduct was unconscionable in that it was dishonest and was calculated to induce, and in fact induced, (the respondent) to enter into a transaction which was improvident and conferred a great benefit upon her".

Brennan J. in a more detailed exposition of the law generally, commencing at p4 speaks of the:

"·· concatenation of three factors: a relationship between the parties which, to the knowledge of the donee, places the donor at a special disadvantage vis-a-vis the donee; the donee's unconscientious exploitation of the donor's disadvantage; and the consequent overbearing of the will of the donor whereby the donor is unable to make a worthwhile judgment as to what is in his or her best interest".

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His Honour was there speaking of the jurisdiction of equity to set aside gifts procured by unconscionable conduct and goes on at p5 to say that a similar jurisdiction exists to set aside gifts procured by undue influence:

"Although the two jurisdictions are distinct, they both depend upon the effect of influence (presumed or actual) improperly brought to bear by one party to a relationship on the mind of the other whereby the other disposes of his property.	Gifts obtained by unconscionable conduct and gifts obtained by undue influence are set aside by equity on substantially the same basis".

Special attention is given to the element of exploitation by his Honour commencing at p7 and he observed that there is no distinction between a gift and a bargain in this connection.	At p8 reference is made to an inference which might be drawn where there has been a substantial gift where the donor stood in a specially disadvantageous relationship with a donee and the donee exploited the disadvantage.	Reference is made to the well known comments of Lindley LJ.	in Allcard v Skinner (1887) 36 Ch D at 1a2· - 3:

"Courts of equity have never set aside gifts on the ground of the folly, imprudence or want of foresight on the part of the donors.	The Courts have always repudiated any such jurisdiction .•••. It would obviously be to encourage folly, recklessness, extravagance and vice if persons could get back property which they foolishly made away with, whether by giving it to charitable institutions or by bestowing it on less worthy objects".

19

See also Deane J. at pl3:

"It has long been established that jurisdiction of courts of equity to relieve against unconscionable dealing extends generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party to the transaction with the consequence that there was an absence of any reasonable degree of equality between them, and (ii) that special disability was sufficiently evident to the other party to make it prima facie unfair or "unconscionable'! that that other party procure, accept or retain the benefit of the disadvantaged parties assent to the impugned transaction in the circumstances in which he or she procured or accepted it"

At pl4 his Honour speaks of the appellant in that case having created "a situation in which he could unconscientiously manipulate the respondent".	Dawson, Gaudron and McHugh JJ. at plB speak of the relationship between the parties and "the appellant's manipulation of it" and agree with the conclusions of Deane J.	Reference might also be made to what was said by Kitto J. in Blomley v Ryan (1956) 99 CLR 362 at 414; Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447 and National Australia Bank v Nobile (1991) 100 ALR 227.

Beyond reference to the transaction which is sought to be impugned, there is no plea touching upon any alleged exploitation of the deceased by the plaintiffs. such a reference could not of itself give rise to any sufficient implication of unconscientious taking of advantage or exercise of undue influence.	An essential

20

element of the defences based on those considerations has not been pleaded.

The Memorandum of Mortgage of Roper Valley Station contained, inter alia, the following terms:
Charles Tapp agreed to pay the principal sum to the first named plaintiff on demand in writing (sub-Clause 3(1));
The "principal sum" was defined to mean all liabilities whatsoever owed to the fist-named plaintiff or to any associated company being any present or future corporation which then or thereafter became related (within the meaning of Section 7 of the Companies (Victoria) Code) to the first-named plaintiff (Clause 1);
Charles Tapp agreed to pay interest upon the principal sum to the first-named plaintiff computed from the time or respective times of the principal sum being advanced at the rate or respective rates for the time being or from time to time charged by the first-named plaintiff upon moneys owing to it (sub-Clause 3(2));
If default should be made in payment of the principal sum or any part thereof or in the payment of any interest or in the observance or performance of any other covenant or provision on the part of Charles Tapp herein expressed or implied by the Real Property Act or payable under or expressed or implied in any Loan Agreement to which this security is given and whether on the part of Charles Tapp jointly or severally with any other Borrower or by any other Borrower jointly or severally to be observed or performed or if default be made as aforesaid in any collateral security therewith for the space of seven (7) days, the first-named plaintiff shall (notwithstanding any omission neglect or waiver of the right to exercise all of any of such powers on any former occasion) be at liberty immediately thereupon or at any time thereafter to serve.upon Charles Tapp the notice mentioned in Section 132 of the Real Property Act which notice need not specify any amount but shall be sufficient if it requires payment of the moneys remaining due generally and if any such default shall be continued wholly or in part for the further period of seven (7) days after the service of such notice the first named plaintiff may exercise in reference to the Roper Valley Station or any part

21	·

thereof all or any of the powers of a mortgagee under the said Act or conferred thereby AND if at any time default shall be made and due payment of the principal interest and other moneys secured thereby for seven (7) days next after the same respectively shall become payable or in observance or performance of any covenants or agreements on the part of Charles Tapp herein contained or implied then the whole of the principal sum and interest thereon and any other moneys secured thereby shall immediately become due and payable and Charles Tapp will thereafter pay the same on demand (Clause 10);
Subject only to any restrictions which may be imposed upon the first-named plaintiff by the Real Property Act or any other law upon any default by Charles Tapp which shall not be remedied in the time limited the first-named plaintiff shall have the powers and rights of and for the purpose of ascertaining those powers and rights be deemed to be the owner of Roper Valley Station with immediate right to possession.	In particular but without limiting the generality of the foregoing, the first-named plaintiff may conduct himself in all ways as would an owner in relation to sale sale terms lease terms and matters involving the rents and profits of the land (Clause 11).
The first-named plaintiff will rely upon Memorandum of Mortgage of Roper Valley Station at the trial of this action for the full force and effect of all of the terms and conditions contained therein.
As to paragraph 12, the First Defendant and Second Defendants admit that the Roper Valley Mortgage contains the terms therein alleged.

By Deed dated 11 October 1988, Charles Tapp mortgaged to the first-named plaintiff, by way of transfer of legal title, all of his interest in all sheep, cattle, pigs and horses together with the present and all future increase and progeny thereof brought or depastured upon or in transit to Roper Valley Station or any lands used and worked in conjunction therewith or land or premises acquired and worked by Charles Tapp ("the Roper Valley Stock").
As to paragraph 13 the First Defendant and second Defendants:

admit that the Deceased executed a Deed of Mortgage dated 11 October 1988 ("the Roper Valley stock Mortgage");
admit (subject to sub-paragraphs (d), (e) and (f)

22

herein) that, by virtue of the Roper Valley stock Mortgage, the Deceased mortgaged to the Second Plaintiff the cattle and horses actually on Roper Valley Station on 12 June 1988 as designated in the Schedule to that mortgage, namely 4905 head of cattle and 51 horses;
say the effect of the terms of the Roper Valley Stock Mortgage did not extend to transfer legal title to the second Plaintiff in or to:
any progeny of the livestock conveyed by the First Defendant to the second Plaintiff on 11 October 1988; or
to any livestock other than those which were
upon Roper Valley station on 11 October 1988.
Particulars
By virtue of Section 28 of the Instruments Act, the only livestock secured by the mortgage are the livestock referred to in the schedule of the mortgage in the form of Schedule 5 of that Act.
That schedule only includes livestock actually on the property at the date of execution of the mortgage.
say that, in light of the matters pleaded in paragraphs [1st Def: 42(a), (b) and (c)] [2nd Def: 36(a), (b) and (c)J hereof, by securing the execution by the Deceased of the Roper valley stock Mortgage, the First Plaintiff unconscientiously took advantage of the Deceased's incapacities referred to in paragraph [1st Def:
42 (a)] [2nd Def: 36 (a)].
Particulars
The mortgage purported to enlarge the monies secured over [1st Def: the Roper Valley stock] [2nd Def: Roper Valley station] to include the Deceased's indebtedness from time to time to, not only the Third Plaintiff but any company associated with the Third Plaintiff including the First and second Plaintiffs.
say that, further or in the alternative, in light of the matters pleaded in paragraphs [1st Def:
42 (a), (b) and (c)] [2nd Def: 36 (a), (b) and (c)] hereof, by securing the execution by the Deceased of the Roper Valley Stock Mortgage, the First

23

Plaintiff exercised undue influence over the Deceased in that it improperly used and took advantage of its position of ascendancy over the Deceased that arose by  reason of the matters pleaded in paragraph [1st Def: 42(a), (b) and (c)] [2nd Def: 36(a), (b) and (c)] hereof.
Particulars
The mortgage purported to enlarge the monies secured over the Roper Valley stock to include the Deceased's indebtedness from time to time to, not only the Third Plaintiff but any company associated with the Third Plaintiff including the First and second Plaintiffs.
in the premises, the First Defendant is entitled to [1st Def: and does hereby] avoid the Roper Valley stock Mortgage.

As to 13(d), (e) and (f) see remarks under 11(d) above.

deny each and every other allegation contained in paragraph 13;

The Deed of Mortgage of the Roper Valley Stock contained, inter alia, the following terms:
Charles Tapp agreed to pay to the first-named plaintiff the indebtedness intended to be secured by the Deed of Mortgage of the Roper Valley Stock and interest thereon on demand (Clause 1);
Charles Tapp agreed that if default shall be made in payment of the indebtedness intended to be secured by the Deed of Mortgage of the Roper Valley Stock or any part thereof of or in the payment of any interest or in the observance or performance of any other covenant or provision on the part of Charles Tapp expressed or implied in the Deed of Mortgage of the Roper Valley Stock it shall be lawful for the first-named plaintiff at its discretion and Charles Tapp expressly licenses and empowers the first-named plaintiff with its agents and servants immediately and without notice and notwithstanding any payment of or on account of the indebtedness intended to be secured by the Deed of Mortgage of the Roper Valley Stock or any interest to enter upon Roper Valley Station and to seize and take possession of all the Roper Valley Stock with full leave and licence for the first­ named plaintiff at its discretion to recover the same or any part thereof or to remain upon and occupy any lands upon which the Roper Valley Stock

24

or any part thereof may be and to continue to depasture the said Stock and thereon for so long as it may think necessary and to employ such agents to superintend and manage the said Stock at such remuneration as may be thought fit and generally to carry on the business of Charles Tapp for the purpose of obtaining the benefit to the fullest extent of the security made by the Deed of Mortgage of the Roper Valley Stock to sell and dispose of the said Stock or any part thereof. (Clause 13).
The first-named plaintiff will rely upon the Deed of Mortgage of Roper Valley Stock at the trial of this action for the full force and effect of all of the terms and conditions contained therein.
As to paragraph 14, the First Defendant and second Defendants admit the Roper Valley stock Mortgage contains the terms therein alleged.

The first and second-named plaintiffs each advanced moneys to Charles Tapp for the purposes of owning and operating first Killarney Station and later Maryfield Station and Roper Valley Station from the early 1970's to 1 July 1991.	From 1 July 1991, the third-named plaintiff has advanced moneys to Charles Tapp for the purposes of operating Killarney Station, Maryfield Station and Roper Valley Station.
As to paragraph 15, the First Defendant and Second Defendants:

admit that the Plaintiffs advanced certain monies to the Deceased (including those in Annexure "A" hereto) but cannot say, until after the First Defendant has received particulars, discovery and answers to interrogatories, what monies were so advanced to the Deceased;
deny that the monies that were advanced were so advanced for the purposes specified in the said paragraph, and says that at the least the monies listed in annexure "A" hereto were not advanced for those purposes, but cannot say, until after the First Defendant and Second Defendants have received particulars, discovery and answers to interrogatories, which other monies were also not advanced for these purposes (the monies that the First Defendant says were not advanced for the purposes specified in the said paragraph are hereinafter referred to as "the Other Advances").

The Statement of Claim asserts that the plaintiffs

25

at varying times advanced money to the deceased for specified purposes.		The defendants note that allegation and say that of the monies conceded to have been advanced they are presently unable to identify those which were for those purposes.	An attempt is made to provide particulars of advances which were not for those purposes, and in the annexure hereto are such particulars as have been provided during the course of the hearing of these applications. ·The process of discovery is ongoing and as further examples are found the defendants say they will provide details of them to the plaintiffs.	The speed at which they are found may well depend upon discovery which is in the hands of the plaintiffs.		An issue raised goes to whether all of the advances made by the plaintiffs to the deceased were for the purposes alleged by the plaintiffs, and the defendants are entitled to plead as they have.	Whether or not advances described by the defendants as "other advances", fall within the description of advances for the purposes alleged by the plaintiffs is a matter for argument.	There is some admixture of pleading of material facts and of obligations
to provide particulars, but it does not lead to any embarrassment.	Adequate particulars have so far been provided to demonstrate that the defendants are not "fishing", they have been able to identify advances which on the face of it, at least, were not for the purposes alleged by the plaintiffs, and there is no reason why they should not add to the list as a consequence of further discovery.
So far as it can be seen, there is no further allegation as

26

to advances by the plaintiffs to the def ndants for purposes· other than those described in para15 of the Statement of Claim.	The plaintiffs have chosen to put their case in that way and it is the plaintiffs who allege a material fact that the advances were made from the early 1970's.

The moneys advanced by the plaintiffs were advanced pursuant to agreements made between the plaintiffs and Charles Tapp from the early 1970's to 3 October 1991 ("the loan agreements").

Particulars

Each of the loan agreements contained a term that the plaintiffs would be entitled to charge interest on the moneys advanced at the plaintiffs' set rate from time to time calculated on minimum daily balances of indebtedness and compounded monthly, and:

account no 5220-864989-1: an overdraft facility provided by the second named plaintiff until 1 July 1991 and thereafter by the third named plaintiff in respect of the operational and other expenses of Killarney Station;

account no 5220-864989-2: an overdraft

27

facility provided by the second named plaintiff until 1 July 1991 and thereafter by the third named plaintiff for the operational and other expenses of Maryfield Station;

account no 5220-864989-3: an overdraft facility provided by the second named plaintiff until 1 July 1991 and thereafter by the third named plaintiff for the operational and other expenses of Roper Valley station;

account no 5220-864989-4: a term loan facility provided by the first named plaintiff for the purpose of purchasing Killarney Station;

(e)		account no 5220-864989-5: a term loan facility provided by the first named plaintiff for the purpose of purchasing Roper Valley station;

account no 5220-864989-6: a term loan facility provided by the first named plaintiff for the purpose of purchasing Maryfield Station;

account no 5000-052347-1: an overdraft facility provided by the third named

28

plaintiff for the operational and other expenses of Killarney Station;

account no 5000-05234-2: an overdraft facility provided by the third named plaintiff for the operational and other expenses of Maryfield Station;

account no 5000-052347-3: an overdraft facility provided by the third named plaintiff for the operational and other expenses of Roper Valley Station;

The loan agreements were written, and constituted by a course of dealings between the plaintiffs and Charles Tapp, and

insofar as the loan agreements were written, they were evidenced by the provision of monthly account statements to Charles Tapp;

insofar as the loan agreements were constituted by a course of dealings they comprised:

verbal communications;

the provision of monthly account

29

statements to Charles Tapp setting out current indebtedness;

the submission to the plaintiffs by Charles Tapp of operational budgets based on current indebtedness; and

the acceptance by the plaintiffs of those budgets and the provision of cash flow guidelines by the plaintiffs to Charles Tapp from time to time as a basis for further advances.

As to paragraph 16 the First Defendant and Second Defendants:

admit that the Deceased operated the accounts with the Plaintiffs particularized therein;

admit that the monies that were advanced to the Deceased were so advanced through the medium of these accounts;

deny	hat any express agreement was ever reached between the Plaintiffs and the Deceased with respect to the terms of these advances as alleged or at all;

30

admit that, an agreement to repay may be implied with respect to the advances aside from the Other Advances;

deny that there can be a term implied that the Plaintiffs would be entitled to charge interest on the monies advanced (aside from the other Advances) at the Plaintiffs' set rate from time to time calculated on minimum daily balances of indebtedness and compounded monthly as alleged or at all.	The First Defendant says that, the rate of interest that was impliedly agreed was	a
reasonable rate which the First Defendant says is the overdraft base rate then being charged by commercial banks from time to time calculated on minimum daily balances of indebtedness and compounded quarterly;

16(a) - (e) (It seems there is an omission or other error at the end of the first paragraph under the heading "Particulars" and before sub-para(a), but it does not trouble the parties).	The plaintiffs identify the agreements pursuant to which the advances referred to in para15 were made as "loan agreements", but that is by way of definition and nothing else.	Assuming that a loan agreement is an agreement relating to a loan, there are nevertheless many forms which such an agreement might take, and a multitude of terms and

31

conditions which may be found in any such form.	The difficulty facing the defendants is how to plead to the remainder of para16, bearing in mind what it has said in answer to para15, which sets out a basis for and a denial of the plaintiffs allegation that all of the advances were made for a particular purpose.		The defendants wish to avoid the possibility of making any admissions in relation to para16 which would be inconsistent with their response to para15.	The plaintiffs do not allege anything in relation to the terms of the "loan agreements", other than that they would be able to charge interest on the monies advanced pursuant to them.	Nothing is said as to how the advances were to be made or repaid, except in so far as they might be inferred by reference to the use of the words "overdraft facility" or "a term loan facility".
The defendants do not complain about that, but, the plaintiffs do complain as to the defendants' admission that the deceased operated the accounts.	If the plaintiffs really do not know what that means then the remedy lies in their hands.	No where do the plaintiffs say that "advances", the word it employs, means "loans" or anything else.	It cannot be objectionable that the defendants use the same word.	The defendants have made it clear that when they employ the word "advances" they are responding to the plaintiffs' use of it.	The term "other advances" is clearly intended to mean advances which do not fall within the type specifically

32

mentioned by the plaintiffs in para15.	There is no "playing around" with the word as the plaintiffs contend.

The essence of the defendants' pleas (aside from protecting their denial of any liability for the "other advances") is to deny that there were any express terms of the "loan agreements" as alleged and to admit that an agreement to repay may be implied.	They also deny
any term could be implied as to interest as alleged by the plaintiffs, but admit that a term can be implied as to payment of interest at a reasonable rate.	They inform the plaintiffs what they will contend at trial as a reasonable rate of interest and thus inform the plaintiffs the case in which it must meet on in that regard.	Looked at as a response to the plaintiffs' claims the defences are intelligible.

by reason of:
the matters referred to in paragraphs (1st Def: 42 (a),   (b) and (c)]  [2nd  Def: 36 (a),	(b) and (c)] hereof;
the fact that the other Advances were not made for the purpose of operating Killarney station, Maryfield station and Roper Valley Station [1st Def: but for the purposes set out in paragraph 44(a) hereof];
the First Defendant and Second Defendants deny that there can be any loan agreement implied in respect of the other Advances from the fact of and the circumstances surrounding the Other Advances as alleged or at all;

33

16(f) appears to be to be superfluous.	The issue of what amount was advanced to the deceased for the purpose outlined in para15 of the Statement of Claim (being the only advance claimed by the plaintiffs) and amounts advanced
which did not fall into that category has already been raised.	The defendants deny any implied loan agreement (whatever that may be) where there is no implied loan agreement alleged by the plaintiffs in respect of advances which do not fall within the purposes aileged as giving rise to the claim.

further, the First Defendant and Second Defendants say that if there were loan agreements between the Plaintiffs and the Deceased which contained a term that the Plaintiffs would be entitled to charge interest on the monies advanced at the plaintiffs' set rate from time to time calculated on minimum daily balances of indebtedness and compounded monthly as alleged or at all (which is denied), then, in respect of those agreements made after 1979, in the light of the matters referred to in paragraph [1st Def: 42(a), (b) and (c)] [2nd Def: 36(a), (b) and (c)]:
in securing the Deceased's agreement to this term the Plaintiffs unconscientiously took advantage of the Deceased's incapacities referred to in paragraph [1st Def: 42(a)] [2nd Def: 36(a)] in that the interest the Plaintiffs were able to charge pursuant to this term was substantially more than what was reasonable in the circumstances.
Particulars
The First Defendant and second Defendants say that a reasonable rate of interest was as specified in sub-paragraph (e) above.	The Plaintiffs in fact levied interest at a rate at least 3% per annum higher than this rate and capitalized interest monthly rather than quarterly.	Full particulars will be provided after discovery and interrogatories.
further and in the alternative, in securing

34

the Deceased's agreement to this term, the Plaintiffs exercised undue influence over the Deceased in that they improperly used and took advantage of their position of ascendancy over the Deceased that arose by reason of the matters referred to in paragraphs [1st Def: 42(a), (b) and (c)] [2nd Def: 36(a), (b) and (c)] hereof to secure the Deceased's agreement to this term pursuant to which the Plaintiffs were able to charge and obtain substantially more interest than was reasonable in the circumstances.
Particulars
The First Defendant and second Defendants say that a reasonable rate of interest was as specified in sub-paragraph (e) above.· The Plaintiffs in fact levied interest at a rate at least 3% per annum. higher than this rate and capitalized interest monthly rather than quarterly.	Full particulars will be provided after discovery and interrogatories.
accordingly, says that, in respect of the advances upon which the Plaintiffs are entitled to charge interest, they are entitled only to interest at the aforesaid reasonable rate.
ti)	further, by reason of the matters pleaded in the First Defendant's set-off and counterclaim, the First Defendant and Second Defendants say that the whole or alternatively part of the monies advanced since 1979 were not repayable by the Deceased and are not repayable by the First Defendant or, alternatively, are subject to a set-off.

16(g)-(i) See remarks as to parall(b)(c) and (d) above.

(j)	save as aforesaid, the First Defendant and Second Defendants deny each and every allegation of fact made in the said paragraph and the particulars set out therein as if the same were herein set out seriatim and specifically denied.
By Deed dated 8 December 1989, Charles Tapp acknowledged and agreed that:
He was indebted to the first and second-named plaintiffs in the sum of $7,893,823.00;

The sum of $7,893,823.00 was then due and payable to the first and second-named plaintiffs and he

35

had failed to pay that amount to the first and second-named plaintiffs; and
He was in default in respect of each of the memorandum of Mortgage of Killarney Station, the Deed of Mortgage of the Killarney Station Stock, the Memorandum of Mortgage of Maryfield Station, the Deed of Mortgage of the Killarney/Maryfield Stock, the Memorandum of Mortgage of Roper Valley station and the Deed of Mortgage of the Roper Valley Stock.

By reason of the matters pleaded in paragraph 17 hereof, on 4 July 1991, the first defendant was in default in payment of the principal interest and other moneys secured by the Memorandum of Mortgage of Killarney Station, the Deed of Mortgage of the Killarney Stock, the Memorandum of Mortgage of Roper Valley Station, the Deed of Mortgage of the Roper Valley Stock, the Memorandum of Mortgage of Maryfield Station and the Deed of Mortgage of the Killarney/Maryfield Stock and owed the plaintiffs
$10,031,845.50 on that account owed:
the first-named plaintiff $4,000,000.00; and
the second-named plaintiff $6,031,845.50
As to paragraphs 17 and 18, the First Defendant and second Defendants:

admit that the Deceased executed the Deed therein referred to:
say that in the light of the matters referred to in paragraphs [1st Def: 42(a), (b) and (c)] [2nd Def: 36(a), (b) and (c)] in securing the Deceased's agreement to this Deed the Plaintiffs unconscientiously took advantage of the Deceased's incapacities referred to in paragraph [1st Def: 42(a)] [2nd Def: 36(a)] in that:
they obtained the Deceased's agreement that the sum of $7,893,823.00 was then due and owing when, by reason of the matters pleaded in paragraphs 16 hereof, a sum substantially less than this was due.
Particulars
The First Defendant and Second Defendants say that the sum due was substantially less than $7,8931 823.00 but is unable to specify what precise sum was due, if any, at that time, until
36  .

after discovery and interrogatories.
they obtained the Deceased's agreement that interest was then accruing at the rate of 22.85% in respect of "Terms Loans Accounts" and at the rate of 23.5% in respect of "Seasonal Loan Accounts" when in fact the Plaintiffs were only then entitled to interest at the rate referred to in paragraph 16(g) above;
they obtained the Deceased's agreement that he was then in default of the securities in the schedule to the Deed when, he was not, in fact, in default of any of the said securities.

say that further and in the alternative, in the light of the matters referred to in paragraphs [1st Def: 42 (a), (b) and (c)] [2nd Def: 36 (a), (b) and (c)] in securing the Defendant's agreement in this regard the Plaintiffs exercised undue influence over the Deceased in that they improperly used and took advantage of their position of ascendancy over the Deceased that arose by reason of the matters pleaded in paragraphs [1st Def: 42(a), (b) and (c)) [2nd Def: 36(a), (b) and (c)) to obtain the benefits referred to in sub-sub-paragraphs (i), (ii), and
in sub-paragraph (b) above;
say that, accordingly, the Deed may be and
[1st Def: is hereby) (2nd Def: has been] avoided by the First Defendant;
deny further that, on 4 July 1991, the Deceased was in default in payment of the principal and interest and other monies secured by the securities referred to in paragraph 18 of the Further Amended statement of Claim and further that he owed on those accounts $4,ooo,ooo.oo to the First Plaintiff and $6,0311 845.50 to the second Plaintiff and says that, by reason of the matters pleaded in paragraphs 16 hereof, a sum substantially less than this was due.
Particulars
The First Defendant and Second Defendants say that the sum due was substantially less than
$101 031,845.50 but is unable to specify what precise sum was due, if any, at that time, until after discovery and interrogatories.

17(a)-(e) It has so far not be satisfactorily explained why
37

the plaintiff has pleaded the deed referred to in para17.	It smacks more of evidence than of a material fact.	As pleaded, the acknowledgments of debt in the deed have no connection with the advances referred to in paralS.	However, the defendants have not taken any objection or other action in regard to it, but have chosen to plead its defences instead.	They seek no relief in respect of the issues they raise in respect of it. Be that as it may, the defences based upon allegations that the plaintiffs were guilty of unconscionable conduct or exercised undue influence over the deceased, fall for the same reason as given above.		There is no express plea of material facts going to the exploitation of the deceased by the plaintiffs.	No such inference is to be drawn from the allegations set forth in sub­ paras(b)(i), (ii) and (iii).		Having pleaded in sub-para(d) that the deed is avoided by the first defendant, there does not appear to be any claim for consequential relief.

Paragraph 18 in the Statement of Claim causes some problems.	It says that as a result of the execution of the deed the deceased was in default in payment of the monies secured by the several securities, and owed the first and second plaintiffs the sums expressed in that paragraph as

38

at 4 July 1991.	The connection between the dates expressed in paras17 and 18 is not clear nor is the purpose which paral8 fulfils as a pleading.
It seems to achieve no more than to invite the defendants to again raise the issues surrounding parasl5 and 16 as they do in sub-para17(e) of their defences.

say that if the First Defendant may not avoid the Deed and further if the Deceased was in default as at 8 December 1989 as alleged (both of which are denied), then such default was cured by the performance by the Deceased of the terms of the Deed;

(i)

(ii)

(iii)

Particulars of Performance
The Deceased executed an Agency Agreement in terms of clause 2 of the Deed in or about December 1989.
The Deceased entered into a Destocking Agreement in terms of clause 8 of the Deed.
The Deceased, in or about December 1989, procured the written confirmation from the relevant Government Authorities (and in particulars the Department of Primary Industries) that the destocking programme had been approved, as required by clause 10 of the Deed.

The contents of the deed are not before the Court, thus whether the deceased performed as alleged in para17(f), and the legal effect of any such performance, are matters fo	trial.

(g) save as aforesaid, the First Defendant and second Defendants deny each and every allegation of fact made in said paragraph as if the same were herein set out seriatim and specifically denied;

39

First Defendant and second Defendants: No paragraph 18.	(See 17. above)
The plaintiffs by notice in writing dated 11 July 1991 given by their solicitors, Finlaysons, and duly served upon Charles Tapp demanded payment of the amount of
$10,031,845.50.	That demand has not been satisfied either in whole or in part.
As to paragraph 19, the First Defendant and second Defendants:
admit that a notice as alleged was given as alleged;
admit that no moneys have been paid as demanded;
say that, to the extent it is alleged that the notice demanded moneys on behalf of the Second Plaintiff, for the reasons set out in paragraph 27 herein, no moneys were then owing to the Second Plaintiff;
deny that the notice lawfully demanded the payment of moneys.

(i)

(ii)

(iii)

Particulars
no moneys were due by the Deceased to the Plaintiffs or any of them;
none of the Plaintiffs made demand for any particular amount due to it by the Deceased;
no demand was made therein by or on behalf of the second Plaintiff and, accordingly, the demand, made on behalf of the First and Third Plaintiffs only, was for an amount manifestly in excess of the amount alleged to be owing to those Plaintiffs;

further or alternatively, the notice demanded, on behalf of the First and Third Plaintiffs, moneys which are, in the Further Amended statement of Claim, alleged to be owing to the second Plaintiff, namely the sum of
$6,031,845.50.

The first-named plaintiff, by notice in writing dated 6 September 1991 and duly served upon Charles Tapp gave
40

notice in accordance with Section 132 of the Real Property Act of its intention to exercise its power of sale in respect of Roper Valley Station and also gave notice of default and intention to sell the Roper Valley Stock.
As to paragraph 20, the First Defendant and second Defendants:
admit that the notice was served as alleged;
deny that the notice was a proper or lawful notice pursuant to section 132 of the Real Property Act;
Particulars
For the reasons set out in paragraph 19 herein, no effective demand has been made by the First Plaintiff on the Deceased; and
The Deceased was not in default of the Roper Valley Mortgage;

deny that the notice was a proper notice of default and intention to sell the Roper Valley Stock;

Particulars
For the reasons given in paragraph 19, hereof, the monies demanded in the notice were not then due and owing.
The second-named plaintiff by notice in writing dated
6 September 1991 and duly served upon Charles Tapp gave notice in accordance with Section 132 of the Real Property Act of its intention to exercise its power of sale in respect of Killarney Station and Maryfield Station and also gave notice of default and intention to sell the Killarney/Maryfield Stock and Killarney Stock.
As to paragraph 21, the First Defendant and second Defendants:
admit that the notice was served as alleged;
deny that the notice was a proper or lawful notice pursuant to section 132 of the Real Property Act;
Particulars
For the reasons set out in paragraph 19 above, no effective demand bas been made

41

by the second Plaintiff on the Deceased;
The Deceased was not in default of the Killarney Mortgage or the Maryfield Mortgage;

deny that the notice was a proper notice of default and intention to sell the Killarney/Maryfield stock or the Killarney stock;

Particulars
For the reasons given in paragraph 19 hereof, the monies demanded in the notice were not then due and owing.

On 3 January 1992, Charles Tapp remained in default of payment of the principal interest and other moneys secured by the Memorandum of Mortgage of Killarney Station, the Deed of Mortgage of the Killarney Stock, the Memorandum of Mortgage of Maryfield Station, the Deed of Mortgage of the Killarney/Maryfield Stock, the Memorandum of Mortgage of Roper Valley station and the Deed of Mortgage of the Roper Valley Stock and owed the plaintiffs $11,131,081.71 on that account owed:

the first-named plaintiff $4,000,000.00;
the second-named plaintiff $6,588,386.74; and
the third-named plaintiff $634,748.75.
As to paragraph 22, the First Defendant and Second Defendants:
deny that the Deceased was in default as alleged
or at all;
deny that the Deceased owed each of the Plaintiffs the amounts set out therein or any amounts; and
deny each and every allegation contained in paragraph 22 as if each such allegation was herein set out seriatim and specifically denied.

As from 3 January 1992, Charles Tapp has remained and continues to remain indebted to the plaintiffs in the sum of $11,131,081.71 $11,223,135.50 with interest accruing thereon at the rate of $3,610.74 per day from that date in the following amounts:
(i)		in respect of the first-named plaintiff in the amount of $4,000,000.00 with interest accruing on that amount at the weighted average rate of eighteen (18) per centum per annum to 31 July 1992 compounded monthly; and

42

(ii)

(iii)

in respect of the second-named plaintiff in the amount of $6,588,386.74 with interest accruing on that amount at the weighted average rate of 15.67 per centum per annum to 31 July 1992 compounded monthly; and
in respect of the third-named plaintiff in the amount of $634,748.75 with interest accruing on that amount at the weighted average rate of 15.67 per centum per annum to 31 July 1992 compounded monthly.

As to paragraph 23, the First Defendant and second Defendants deny:

that the Deceased was or that the First Defendant remains indebted as alleged or at all;

that the First Defendant is indebted for interest as alleged or at all; and
deny each and every allegation contained in paragraph 23 as if each such allegation was herein set out seriatim and specifically denied.

on 7 January 1992, the first-named plaintiff served personally upon Charles Tapp a Notice of Entry into Possession of Roper Valley Station and the Roper Valley Stock.
The First Defendant and second Defendants admit the allegation contained in paragraph 24 but say that such notice was of no force and effect.
Particulars
The notice was of no force and effect because:
by reason of the matters referred to in paragraphs 16 and 19 hereof, the Deceased was not in default of the mortgages as alleged in the notices or at all, and accordingly the First Plaintiff was not lawfully entitled to serve a Notice of Entry into Possession in relation to either Roper Valley station or the Roper Valley Stock;
for the reasons set out in paragraphs 28A to
33 hereof, even if the Deceased was in default (which is denied), the First Plaintiff was estopped from relying upon the notice.

on 7 January 1992, the second-named plaintiff served personally upon Charles Tapp a Notice of Entry Into Possession of Killarney Station and Maryfield Station

43

and the Killarney/Maryfield Stock and the Killarney stock.

The First Defendant and second Defendants admit the allegation contained in paragraph 25 but say that such notice was of no force and effect as the Deceased was not in default.

Particulars
The notice was of no force and effect because:
by reason of the matters referred to in paragraphs 16 and 19 hereof, the Deceased was not in default of the mortgages as alleged in the notice or at all, and accordingly the First Plaintiff was not lawfully entitled to serve a Notice of Entry into Possession in relation to either Killarney and Maryfield stations or the Killarney and Maryfield Stock;
for the reasons set out in paragraphs 28A to 33, even if the Deceased was in default (which is denied), the Second Plaintiff was estopped from relying upon the notice.
In accordance with the Notices of Entry Into Possession referred to in paragraphs 22 and 23 hereof, on
7 January 1992:

The first-named plaintiff entered into legal and physical possession of Roper Valley Station and the Roper Valley Stock; and

The second-named plaintiff entered into legal and physical possession of Killarney Station, Maryfield Station, the Killarney/Maryfield Stock and the Killarney Stock.

As to paragraph 26, the First Defendant and second Defendants:
admit that the First Plaintiff attempted to enter into physical possession of Roper Valley station on 7 January 1992;
admit that the Second Plaintiff attempted to enter into physical possession of Killarney Station and Maryfield station on 7 January 1992;
say that, for the reasons set out in paragraphs 24 and 25 herein, the First Plaintiff and the Second Plaintiff had no lawful right to possession of the stations or the stock.

44

otherwise deny each and every allegation contained­ therein as if the same were herein set out seriatim and specifically denied.
since 7 January 1992, the first-named plaintiff has remained and continues to remain in legal possession of Roper Valley Station and the Roper Valley Stock.
(See 26A. below)
Since 7 January 1992, the second-named plaintiff has remained and continues to remain in legal possession of Killarney Station, Maryfield Station, the Killarney/Maryfield Stock and the Killarney Stock.
26A. For the reasons set out in paragraphs 24, 25 and 26 herein, the First Defendant and Second Defendants deny each and every allegation contained in paragraphs 27 and 28	as if each such allegation was herein set out seriatim and specifically denied.
On or about 9 January 1992, each of the second defendants wrongfully and inconsistently with the rights of the first and second-named plaintiffs compelled agents of the first and second named plaintiffs who were in physical possession of Killarney Station, Maryfield Station, Roper Valley Station, the Killarney Stock, the Killarney/Maryfield stock and the Roper Valley Stock to give up physical possession of Killarney Station, Maryfield Station, Roper Valley station, the Killarney stock, the Killarney/Maryfield Stock and the Roper Valley Stock.
26B. First Defendant:
Paragraph 29 contains no allegations against the First Defendant and the First Defendant does not plead thereto.
26B. As to paragraph 29, the second Defendants:
deny that agents of the Plaintiff were in physical possession of the stations or stock as alleged; and
deny they compelled agents of the Plaintiffs to leave the stations as alleged.
As from 9 January 1992:
in the case of the first defendant until his death on 23 May 1992; and
in the case of the second defendants to the date hereof and continuing,

45

the first and second defendants and each of them wrongfully and in breach of the first and second-named plaintiffs' rights continue to resumed and remained in physical possession of Killarney Station, Maryfield Station, Roper Valley Station, the Killarney stock, the Killarney/Maryfield stock and the Roper Valley Stock and have failed and refused to deliver up physical possession of the same to the first and second-named plaintiffs.
26C. First Defendant:
As to paragraph 30, the First Defendant:
denies that the Deceased resumed or remained in possession of any of the stations and stock as alleged;
does not plead to the remaining allegations as they contain no allegation against the First Defendant.
26C. Second Defendants:
As to paragraph 30, the second Defendants:
admit they continue to remain in physical possession of the stations and stock and refuse to deliver up physical possession of the same to the Plaintiffs; and
deny that such possession is in breach of any right of the Plaintiffs.

By reason the matters pleaded in paragraphs 29 and 30 herein, the first and second-named plaintiffs and each of them have suffered and continue to suffer loss and damage.

Particulars
As at the date hereof:
Costs of plaintiffs incurred in placing observers on Killarney station, Roper Valley Station and Maryfield Station including wages of 2-3 full-time and 2 casual observers, expert consultant fees and reports, vehicle expenses (including purchase and maintenance), accommodation expenses of observers, accommodation and travelling expenses of plaintiffs' executives to liaise with observers - totalling $244,511.00 to the date hereof.
Costs of plaintiffs incurred in taking possession of Roper Valley Station, Killarney station and

46

Maryfield Station on 7 January 1992 including professional fees of Garry Trevor and his employees and travel and accommodation expenses of plaintiffs' employees - totalling $90,613.24.
Costs of plaintiffs incurred in respect of the Court-appointed receivership and management of Killarney station, Roper Valley station and Maryfield Station pending resolution of the within proceedings including professional fees and disbursements of Mr Johnston and travelling and accommodation expenses of plaintiffs' employee to meet with Mr Johnston - totalling $99,147.00 to the date hereof.
Aggravated damages, full particulars of which will be provided prior to trial.

And the plaintiffs seek the following orders:
Judgment for the first-named plaintiff against the first defendant in payment of the sum of $11,131,081.71
$4,420,553.48 with interest thereon at the rate of 17.1 per centum per annum from 31 July 1992 compounded monthly to the date of payment of judgment;
Judgment for the second-named plaintiff against the first defendant in the sum of $7,219,119.56 with interest thereon at the rate of 14.75 per centum per annum from 31 July 1992 compounded monthly to the date of payment or judgment;
Judgment for the third-named plaintiff against the first defendant in the sum of $876,712.61 with interest thereon at the rate of 14.75 per centum per annum from 31 July 1992 compounded monthly to the date of payment of judgment;
(2)		Payment of interest at the rate of $3,610.74 from 3 January 1992 to the date of payment;
A declaration that the first-named plaintiff is lawfully in possession or alternatively is entitled to to (sic) immediate possession of Roper Valley Station and the Roper Valley stock;
A declaration that the second-named plaintiff is lawfully in possession or alternatively is entitled to immediate possession of Killarney station, Maryfield Station, the Killarney Stock and the Killarney/Maryfield stock;
An order that each of the first and second defendants do give up physical possession of Killarney Station, Maryfield Station, Roper Valley Station, the Killarney

47

Stock, the Killarney/Maryfield Stock and the Roper Valley Stock forthwith;
Damages as against the first and second defendants; and
Costs.

26D. Paragraph 31 is denied.

FURTHER DEFENCES
In respect of paragraphs 3, s,	7 and 9 of the Amended statement of Claim the First Defendant and second Defendants say .that, further to the matters already pleaded, on or about 1 July 1991 the moneys secured to the second plaintiff by the Deceased pursuant to the Killarney Mortgage, the Killarney stock mortgage and the Killarney/Maryfield stock Mortgage and the moneys alleged by the second Plaintiff to be secured to it under the Maryfield Mortgage were paid by the Third Plaintiff to the Second Plaintiff on behalf of the Deceased and thereupon such mortgages ceased to secure any moneys to the second Plaintiff.
Further, in respect of paragraphs s,	6, 9	10, 13 and 14 of the Amended Statement of Claim, the First Defendant and second Defendants say that the livestock which was on Killarney station, Maryfield station and Roper Valley station on 7 January 1992 was not the livestock which was transferred by the Deceased to the second Plaintiff by force of the Killarney stock Mortgage, the Killarney/Maryfield stock Mortgage and the Roper Valley Stock Mortgage.
Particulars
The First Defendant and second Defendants rely on the particulars to paragraphs S(c), 9(c) and 13(c) herein.
28A. Hereafter "the mortgages" means the Killarney Mortgage, the Killarney stock Mortgage, the Maryfield Mortgage, the Killarney/Maryfield stock Mortgage, the Roper Valley Mortgage and the Roper Valley stock Mortgage.
In respect of the whole of the Amended statement of Claim the First Defendant and second Defendants say that the Plaintiffs on 3 October 1991 represented to the (1st Def: Deceased] [2nd Def: Second Defendants] that:
each and all of the Mortgages were valid and enforceable, the Deceased was then in default of his obligations under the Mortgages, the P1aintiffs were then entitled to dispossess the

48

Deceased and the Second Defendants from Killarney station, Maryfield station and Roper Valley station and all livestock respectively thereupon ("the secured properties") and to seize possession thereof, and the Plaintiffs intended so to do; and
The Plaintiffs would refrain from taking possession if the Deceased immediately executed and delivered to the second Defendants an appropriate document of assignment to the Second Defendants of the full legal and beneficial interest in the secured properties and all of the other assets of the Deceased; and
if the [1st Def: Deceased immediately effected such assignment by execution of such document and the Second Defendants] [2nd Def: second Defendants immediately accepted such assignment and] contemporaneously entered into an agreement with the Plaintiffs under which the Second Defendants undertook to the Plaintiffs to:

(i)

(ii)

(V)

remain upon the secured properties, as proprietors,
at their own expense, to keep the secured properties in good order and condition,
at their own expense, perform the husbandry of the livestock the subject of the securities,
at their own costs, undertake responsibility to discharge the proper debts of the Deceased to the Plaintiffs; and
attempt to reduce those debts to the level satisfactory to the Plaintiffs by, at their own expense, engaging solicitors to draw tender documents and commission the Plaintiffs, for reward, to offer the secured properties, to the public for sale by tender, and

upon the execution of the said assignment and the giving of the undertaking referred to in paragraph 29(c) hereof the Plaintiffs would enter into serious discussions with the Deceased and the Second Defendants to achieve a reasonable reduction in the debt level; and
if by 7 February 1992
no purchase offers had been received,
49

no purchase offers at a level of price acceptable to the Plaintiffs and the Deceased and the second Defendants had been received, or
such purchase offers that had been received and were acceptable to the Plaintiffs and the Deceased and the second Defendants in respect of two or less of the secured properties, were insufficient to discharge the proper debts of the Deceased to the satisfaction of the Plaintiffs,

the Plaintiffs would enter· into serious discussion with the Deceased and the second Defendants with a view to agreeing the level of debt of the Deceased and upon such agreement being arrived at the Plaintiffs and the second Defendants would enter into an agreement (described by the Plaintiffs as a "work out" agreement) under which the Second Defendants would undertake to discharge and the Plaintiffs would accept payment of such debts within a time frame and by a means that was practical and achievable having regard to the circumstances of the beef industry at that time.
Particulars
The said representation was made orally on 3 October 1991.	The place at which the representation was made was at Katherine Frontier Lodge, Katherine, NT. The Plaintiffs made the representation partly through their servant and agent Lindsay Walter Wapper and partly by their solicitor Mr Stephen Gerlach.	The statements comprising part of the representation made by Mr Wapper occurred between 9.00am and 10.00am and at or about 4.30pm.	The statements made by Mr Gerlach occurred at or about 12.00 noon and at or about 2.00pm.	The persons present when the statements were made by Mr Wapper were the Deceased, the Second Defendants and their solicitor Athol Geoffrey James, and the servants and agents of the Plaintiffs Malcolm Alan Sparrow and Peter Francis Moffat, and the solicitor for the Plaintiffs Stephen Gerlach.		The persons present when the statements were made by Mr Gerlach were he and the said Mr James.

In reliance upon the representations of the Plaintiffs pleaded in paragraph 29, the Deceased effected the assignment referred to in paragraph 29(b) hereof.

As part of its estoppel plea, a plea based on

50

equitable,principles, the defendants say, incorporating reference to para29(b), the deceased executed and delivered to the second defendants an appropriate document of assignment of his full legal and beneficial interest in all of the properties referred to in para29(a) (that is, pastoral leasehold land in the Territory) and all of the other assets of the deceased.	They have clearly pleaded a document (which from other proceedings in the matter appears was executed in the Territory), but which certainly relates to property situated in the Territory.	Such a document may or	may not be liable for stamp duty in the Territory under the provisions of the Stamp Duties Act.		It has been suggested in the past that it may be exempt from duty by being a "maintenance agreement" pursuant to the provisions of the Family Law Act of the Commonwealth.	If it is liable to duty then it may not be pleaded (s121 Taxation (Administration> Act).		The document was brought to the attention of the Court in February 1992, and it appears from what occurred on 12 January 1993, that it has not been stamped either with the appropriate duty (if any) or marked not liable to duty pursuant to s17(2) of the Taxation (Administration} Act.	There has been ample time for that to be done and any argument with the Commissioner of stamps to be resolved.	The Court can not stand by any longer.	It has a duty (see Petera v EA		J Properties Pty Ltd (1985) 7 FCR
375 at 380).	There is no evidence of fraud or evasion, except in the sense of the defendants avoiding putting the question of the liability of the document to stamp duty to

51

the test by submitting it to the Commissioner of stamps.	In· all the circumstances, particularly as the defendants seek equitable remedies from the Court, there is no good reason why they should not now have that matter resolved.	This
sub-paragraph will only be permitted to remain upon condition that evidence be produced to the Court within 14 days (or such further time as may be allowed) that the document has been duly stamped or that the same has been marked as not being liable to duty by the Commissioner.

In reliance upon the representations of the Plaintiffs pleaded in paragraph 29 the second Defendants performed the matters set out in sub-paragraphs 29(b) and 29(c) hereof and in particular:
occupied the secured properties, as proprietors, from 3 October 1991;
employing their own efforts without recompense from any person, kept the secured properties in good order and condition from 3 October 1991 until the commencement of this proceeding;
employing their own efforts without recompense from any person, performed the husbandry of the livestock the subject of the securities from 3 October 1991 until the commencement of this proceeding;
at their own expense engaged solicitors to draw tender documents for an offer of the secured properties for sale to the public by tender;
commissioned the Plaintiffs, for reward, to offer the secured properties to the public for sale by tender; and
offered the secured properties to the public for sale by tender.
First Defendant:
In relying upon the representations of the Plaintiffs pleaded in paragraph 29 hereof the Deceased suffered detriment in that he assigned his interest in the secured properties to the Second Defendants.

52

second Defendants:
In relying upon the representation of the Plaintiffs pleaded in paragraph 29 hereof the second Defendants suffered detriment in that:
in remaining upon the secured properties, as proprietors, from 3 October 1991 until the commencement of this proceeding the second Defendants deprived themselves of gainful
opportunities to earn income from the performance
of work other than on the secured properties;

in keeping the secured properties in good order and condition from 3 October 1991 until the commencement of this proceeding the second Defendants incurred cost and expense which they paid and discharged from their own funds;
in performing the work, and providing associated services for the husbandry of the livestock the subject of the securities from 3 October 1991 until the commencement of this proceeding the second Defendants gratuitously performed onerous work and expended their own funds for the supply of consumable stores necessary for such husbandry;
in engaging solicitors to draw tender documents the second Defendants incurred and discharged onerous financial responsibility in respect of the professional fees of such solicitors.
By reason of the representations in paragraph 29 hereof, the reliance of the Deceased and the second Defendants thereupon pleaded in paragraphs 30 and 31 hereof and the detriment to the [1st Def: Deceased] [2nd Defs: Second Defendants] arising from such reliance pleaded in paragraph 32 hereof, the Plaintiffs are estopped from denying:
that on 3 October 1991 the Deceased assigned to the Second Defendants the full legal beneficial ownership of_ all of the assets of the Deceased, including the secured properties and the livestock the subject of the Mortgages, as the same were on 3 October 1991;
that the Plaintiffs consented to such assignment;
that the Plaintiffs on 3 October 1991 abandoned any right to enter into possession of the secured properties and the livestock based upon default of the Deceased;
that the Plaintiffs on 3 October 1991 gave up their rights derived from the Mortgages as against

53

the Deceased and the secured properties and accepted, in lieu thereof, the agreement of the second Defendants as pleaded in paragraph 29(c) hereof;
that the Plaintiffs were and remain obliged to enter into the said "Work out" agreement with the second Defendants.
In the circumstances pleaded in this Defence, the second Plaintiff was not on 7 January 1991, or at all, entitled to:
enter into possession of Killarney station;
enter into possession of Maryfield station;
(0)	take possession of the livestock then upon Killarney station;
(d)	take possession of the livestock then upon Maryfield station;
and the entry by the Second Plaintiff into and upon Killarney station and Maryfield station and the seizure of the livestock thereupon on 7 January 1992, was a trespass in violation of the rights of the [1st Def: Deceased. J [2nd ·Def: Deceased and the·second Defendants.)
In the circumstances as pleaded in this Defence, the First Plaintiff was not on 7 January 1992, or at all, entitled to:
enter into possession of Roper Valley station;
enter into possession of the livestock then upon Roper Valley station;
and the entry by the First Plaintiff into and upon Roper Valley station and the seizure of the livestock thereupon on 7 January 1992, was a trespass in violation of the rights of the [1st Def: Deceased.] [2nd Def: Deceased and the second Defendants.]

COUNTERCLAIM
First Defendant:
The First Defendant repeats and relies on paragraphs 1 to 17 inclusive of this Defence.
CLAIM UNDER MONEY LENDERS ACT
Further, and in the alternative the First Defendant

54

says that the Plaintiffs are all money lenders within the meaning of section 3 of the Money-Lenders Act ("the Act").

Particulars
The primary business of the Plaintiffs in the Northern Territory is money-lending.
Hone of the Plaintiffs have been exempted by the Minister pursuant to subsection 3(2) of the Act from the operation of the Act.
The amount of interest charged by the Plaintiffs in respect of the money actually lent by the Plaintiffs to the Deceased pursuant to the loan agreements was excessive.

Particulars
The interest charged by the Plaintiffs was at least 3% per annum higher than the overdraft base rate then being charged by commercial banks from time to time.
Full particulars will be provided after discovery.
The service charges imposed by the Plaintiffs upon money actually lent to the Deceased were excessive.

Particulars
Between 1969 and the present, contrary to accepted industry practice, the Plaintiffs imposed service charges of between 5% and 20% on all.moneys lent to the Deceased which were advanced by way of the payment by the Plaintiffs on amounts incurred by the Deceased.
Full particulars will be provided after discovery.
The terms of loan of the monies actually lent to the Deceased are harsh and unconscionable.
Particulars
To the knowledge of the Plaintiffs, the Deceased was disadvantaged by the loan agreements because, by reasons of the excessive interest and service charges pleaded in paragraphs 38 and 39, the Deceased was unable to service the debts created by them.
The Plaintiffs obtained excessive profits
55

from the loan agreements.
By reason of the matters contained in paragraphs 38, 39 and 40 herein:

the loan agreements and the mortgages should be reopened by the court pursuant to section 1 of the Act; and

account should be taken between the Plaintiff and the First Defendant; and

the First Defendant should be relieved from payments of any sum in excess of the sum adjudged by the court to be fairly due; and

the court should order the Plaintiffs to repay any excess paid by the Deceased to the Plaintiffs; and

the court should set aside the mortgages and the loan agreements.

The defendants now provide particulars of both the alleged excessive interest and excessive charges.	They do so by reference to standards by which they say the quality of excessiveness should be judged.	That is arguably a proper approach.	As to the additional requirement that the transaction be shown to be harsh and unconscionable, they focus firstly upon the condition of the deceased.	A subjective test may well be appropriate (McDonald v McDonald (1965) ALR 166 at 175 per Herron CJ.).	There is little readily available guidance on this subject and counsel have not referred to any authorities.	The plea that the terms of the loans were harsh and unconscionable because the plaintiffs obtained excessive profits is no more than another way of saying that the interest and charges were excessive and would not appear to be a very appealing proposition to meet the requirements of the statute.
However, if the remainder of the plea is to stand, there is
56

little lost if this part of it remains, and given the dearth of authority, the defendants should not be shut out on this account.

Paragraphs 37 to 41. can remain for the present.
If the piaintiffs wish to bring forward any submission as to what the court should do, bearing in mind the relief sought and the requirements for the defendants to equity, (Langman v Handover (1929) 43 CLR 334) they are at liberty to do so upon reasonable notice to the defendants.

BREACH OF FIDUCIARY DUTY
Further and in the alternative, at all material times
at least since 1979:
the Deceased was unable to properly manage or make rational decisions in respect of his financial affairs or to properly protect bis own interests and thereby suffered from incapacities;
Particulars
At all times from 1979 until his death on 23 May 1992, the Deceased was an alcoholic or drank alcoholic liquor with such frequency and to such degree as to be incapable of properly managing or making rational decisions in respect of his financial affairs or to properly protect his own interests.
the Plaintiffs knew that the Deceased was unable to properly manage or make rational decisions in respect of his financial affairs or to properly protect bis own interests as aforesaid.
Particulars
The Plaintiffs by or through their servants or agents, Bob cruise, Graham Higginson, Malcolm Kemp, Bob Gifford, Larry Davenport, Ian Millard, Hillary Osborne, Ian Liddell and Lindsay wapper, knew, at least since 1979, that the Deceased was an alcoholic or drank alcoholic liquor with such frequency and to

57

such degree as to be incapable of properly managing or making rational decisions in respect of his affairs.	These persons acquired their knowledge through repeated personal contact with the Deceased during this period and some have admitted that they were aware of this incapacity.	Further particulars will be provided after discovery and interrogatories.

Amongst other things, the plaintiffs complain that there are insufficient particulars relating to the alleged alcoholism or drunkenness of the deceased.	The allegation is that he was so affected "at all times since 1979".	If the first defendants intend to rely on expert evidence, then they must be compliant with the rules regarding disclosure of that evidence.	The material facts upon which the defendants rely are sufficiently set forth for present purposes.	The sentence commencing "These persons acquired
"their knowl.edge" in "the par"tic:ulars to sub-para42(b) seems
to relate to evidence, not particulars.	The plaintiffs say that they are embarrassed by these allegations.	since there is no requirement that the plaintiffs plead to particulars, it is difficult to envisage the source of the embarrassment; they have the advantage of knowing more about the
defendants' case than that to which they are entitled.	The reference to "further particulars" goes to the knowledge of the plaintiffs as to the alleged disability of the deceased.

the Plaintiffs had, and exercised, effective control over the Deceased's financial affairs and thereby occupied a position of ascendancy over the Deceased;

58

(i)

(ii)

(iii)

Particulars
At all times at least since 1979, the Plaintiffs were the Deceased's principal financier in that they provided the Deceased with finance for all purposes including the running of Killarney station, the purchase and the running of Maryfield station, and the purchase and the running of Roper Valley station.
The Plaintiffs required the Deceased to provide operational budgets and in return would provide cash flow guidelines which purported to be the basis for the further advances the Plaintiffs would make from time to time.
At all material times at least since 1979, the Plaintiffs also acted as stock agents for the Deceased in the purchase and sale of stock, and the purchase of equipment, stores and other goods to run the stations.

At all times at least since 1979, the Plaintiffs determined what funds the Deceased could have and for what purposes.

From 1983, the Plaintiffs acted as de facto receivers of all income of the Deceased.

Having alleged the disability of the deceased and the plaintiffs' knowledge of it, the first defendant asserts that the plaintiffs occupied a position of ascendancy over the deceased and gives particulars.	There is nothing in the particulars (i) and (ii), however, that supports the material facts alleged.	They smack of no more than ordinary commercial arrangements between creditor and debtor and principal and agent.	As to (c)(iii), it is unclear whether the allegation is that the plaintiffs determined what funds the deceased could have from the plaintiffs or from all sources.	If the former, then the issue is taken no further
59

than in (i) and (ii), if the latter, then it is singularly lacking in the particulars required to go somewhere towards supporting such an all-embracing power, and nothing appears elsewhere in the pleadings to lend weight to it.

by reason of these matters, the Deceased was dependent upon and vulnerable to abuse by the Plaintiffs in the exercise by the Plaintiffs of the power they bad over him and his financial affairs as aforesaid and, accordingly, the Plaintiffs were fiduciaries of the Deceased.

The allegation and material fact is that by reason of the matters referred to in 42(a)(b) and (c), the deceased was dependent upon and vulnerable to abuse by the plaintiffs in the manner described, and that accordingly the plaintiffs were fiduciaries of the deceased.

The basic defect with the plea in para42, by which the first defendant seeks to assert that a fiduciary relationship existed between the plaintiffs and the deceased, is that no where does it appear expressly or by necessary implication that the plaintiffs undertook or agreed to act for or on behalf of or in the interests of the deceased, or that the purpose of the relationship was to serve exclusively the interests of the deceased (Meagher Gummow and Lehane, Equity Doctrines and Re.medies, 3rd Edition, p130).	The allegation of the relationship of principal and agent, standing alone, is indicative of one of the accepted fiduciary relationships, but the first defendant does not choose to rest upon that basis.	It is
60

sought to establish a separate basis of the fiduciary relationship by reference to all of the matters alleged. The allegation as to the principal and agent relationship is limited to the purchase and sale of stock and purchase of equipment, stores and other goods to run the stations only. None of the allegations as to breach of the fiduciary duty outlined in para44 have anything to do with the relationship described in para42(c)(ii) with a possible exception of 44(g), and it does not give rise to a suggestion of a breach of fiduciary relationship.

The fiduciary duty that was owed by  the Plaintiffs to the Deceased was a duty to act in the Deceased's interests, and not exclusively in the Plaintiffs' interests, whilst exercising the aforesaid power they had over the Deceased's financial affairs, in order to protect the Deceased from loss and damage by reason of the Deceased's inability to properly manage or·make rational decisions in respect of his financial affairs or to properly protect his own interests that was caused by and arose out of his aforesaid incapacities.

Whether this paragraph (as amended in the course of argument) alleged that the plaintiffs owed a duty to act exclusively in the deceased's interest {as it should) or exclusively in the plaintiffs' interests (which the transcript would seem to indicate was intended), it does not matter.	The paragraph falls with para42 and it adds nothing to make up for the deficiencies already described.

In breach of the fiduciary duty they owed the Deceased and acting in their own interests and contrary to the Deceased's interests the Plaintiffs:

made further advances to the Deceased which the Plaintiffs knew or ought to have known would be

61

expended	by the Deceased:
for purposes not reasonably required for the proper operation of the stations;
for purposes unrelated to ownership or operation of the stations; and further, or in the alternative,
profligately and irrationally.
Particulars
Some of these advances are particularised in anne:xure "A" hereto. Further particulars will be provided after discovery and interrogatories.
on or about 26 May 1988, permitted and allowed the Deceased to purchase the Roper Valley station when the Plaintiffs knew or ought to have known that:

(i)

(ii)

(iii)

.(iv)

the Deceased's decision to purchase the station was not a rational decision;
it was not in the Deceased's best interests to purchase the station;
the Deceased was unable to properly manage the station; and
the Deceased's level of indebtedness to the Plaintiffs at that time was such that the additional interest payments that resulted from the further advances the Plaintiffs were required to make to allow the Deceased to purchase the station would be far in excess of the profit the Deceased was otherwise likely to make from the station and accordingly, the purchase of the station by the Deceased was likely to and did cause a deterioration rather than an improvement in the Deceased's financial position, an increase his indebtedness to the Plaintiffs and thereby caused the Deceased loss and damage;

between 1988 and 1991, failed to secure to themselves in order to reduce the Deceased's indebtedness to them the monies due to the Deceased for BTEC subsidies and diesel subsidies and further allowed or permitted the Deceased to expend these monies:
for purposes not reasonably required for
62

the proper operation of the stations;
for purposes unrelated to ownership or operation of the stations; and further, or in the alternative,
profligately and irrationally.
Particulars
Between 1988 and 1991, BTEC moneys in excess of $1,000,000.00 in aggregate were paid direct to the Deceased and wastefully expended by him.	Between 1988 and 1991, diesel fuel subsidies of
approximately $240,ooo.oo were paid
direct to the Deceased and wastefully expended by him.	Full particulars will be provided after discovery and interrogatories.

between 1979 and November 1991, charged the Deceased interest on his indebtedness at rates that were excessive in all the circumstances.
Particulars
Throughout this period, the Plaintiffs levied interest at rates that were at least 3% above the rates that were reasonable for the type of finance the Plaintiffs were providing to the Deceased.
in or about December 1989, permitted and allowed the Deceased to purchase Western Creek station when the Plaintiffs knew or ought to have known that-:

(i)

(ii)

(iii)

(iv)

the Deceased's decision to purchase the station was not a r·ational decision;
it was not in the Deceased's best interests to purchase the station;
the Deceased was unable to properly manage the station; and
the Deceased's level of indebtedness to the Plaintiffs at that time was such that the additional interest payments that resulted from the further advances the Plaintiffs were required to make to allow the Deceased to purchase the station would be far in excess of the profit the Deceased was otherwise likely to make from the station and
63

accordingly, the purchase of the station· by the Deceased was likely to and did cause a deterioration rather than an improvement in the Deceased's financial position, and increase his indebtedness to the Plaintiffs and thereby caused the Deceased loss and damage;
between 1988 and 1991, failed to require the Deceased to sell either Roper Valley station and/or Maryfield station and/or western creek station in order to reduce the level of the Deceased's indebtedness to the Plaintiffs when they knew or ought to have known that if the Deoeased's level of indebtedness was not so reduced, his financial position would deteriorate and he would suffer loss and damage accordingly;
between 1988 and 1991, advised the Deceased to purchase and sell stock which purchases it knew or ought to have known were ill advised and improvident and would cause loss to the Deceased;
Particulars of Sales and Purchases In April/May 1988, 300 boat steers were
purchased for $108,ooo.oo at sales at Elliot. In early 1991, cows and breading bulls were purchased for $100,000.00 at sales at Katherine.	In June 1991, cows and breeding bulls were purchased for $100,000.00 at sales at Katherine.	In August 1991, 1,000 bullocks were sold to Katherine abattoirs.	Further particulars will be provided prior to trial.

Defendants' Further and Better Particulars of Paragraph (44g) of the First Defendant's counterclaim and
Paragraph 39(g) of the second Defendants' counterclaim
The 300 boat steers that were purchased for $108,ooo.oo at sales at Elliot in April/May 1988 were purchased by the Deceased by reason of the encouragement of the Plaintiffs, were not reasonably required for the proper conduct of the stations and were sold approximately 2 years later for the same price.	The Deceased therefore suffered the loss of the interest on that sum over that period together with the cost of keeping the cattle. It was in the Plaintiffs' interest that these cattle were purchased by the Deceased at that time as the Plaintiffs obtained commission on the sale and further the fact of this sale caused an increase generally in the prices obtained at that sale (and therefore the other commissions obtained by the Plaintiffs) by creating the impression that there was a greater level of demand in the market.

64

The cows and breeding bulls that were purchased at sales in Katherine for $1000,000.00 in June of 1991 (which is the same sale as that which is described as occurring in early 1991) were purchased by the Deceased by reason of the encouragement of the Plaintiffs, were not reasonably required for the proper conduct of the stations and currently have a value equivalent only to their purchase price.		The Deceased and the First Defendant therefore suffered the loss of the interest on that sum over that period together with the cost of keeping the cattle.	Xt was in the Plaintiffs' interest that these cattle were purchased by the Deceased at that time as the Plaintiffs obtained commission on the sale and further the fact of this sale caused an increase generally in the prices obtained at that sale (and therefore the other commissions obtained by the Plaintiffs) by creating the impression that there was a greater level of demand in the market than there would otherwise have been had the sale not occurred.
The 1,000 bullocks that were sold to the Katherine
Abattoirs in August of 1991 for approximately
$300,ooo.oo were sold at the insistence of the Plaintiffs in circumstances where they were worth in fact $400,ooo.oo.

By reason of the Plaintiff's breach of fiduciary duty as aforesaid:
the Plaintiffs have made profits which in equity belong to the First Defendant or alternatively have been unjustly enriched at the expense of the First Defendant;
Particulars
The profits or enrichment received by the Plaintiffs are the fees and interest they received since 1979 in respect of the funds advanced to the Deceased and commissions earned on sales and purchases of stock in breach of or by reason of the breach of their fiduciary duty as aforesaid.
further and in the alternative, the First Defendant is entitled to a set-off against its indebtedness to the Plaintiffs or, alternatively, has suffered loss and damage.
Particulars
The First Defendant is entitled to a set-off or has suffered loss and damage in that the Deceased incurred indebtedness to the Plaintiffs that he would not otherwise have incurred and bas lost money that he would otherwise not have lost had

65

the Plaintiffs properly discharged their duty to the Deceased.	J'Ull particulars of the amount of the set-off claimed or counterclaim will be provided prior to trial.

As to paras44 and 45, since there is insufficient allegation giving rise to a conclusion that a fiduciary duty existed between the plaintiffs and the deceased, there can be no breach of such a duty and these paragraphs are related only to that cause of action.

AND THE FIRST DEFENDANT COUNTERCLAIMS FOR:
an order that the Roper Valley Mortgage and the Roper Valley stock Mortgage be set aside and the Plaintiffs be restrained from enforcing or retaining the benefit of all or any of them;
Declarations that:

(i)

(ii)

(iii)

(iv)

the Killarney stock Mortgage, the Killarney/Maryfield stock Mortgage and the Roper Valley Stock Mortgage secure to the Plaintiffs only their livestock specified in the Schedule to each of the Stock Mortgages;
the First	Defendant was not in default of any of the mortgages on 4 July 1991 and/or 3 January 1992;
the Notices served by the Plaintiffs on 11 July 1991 was invalid and of no effect;
the Notices served by the Plaintiffs on 7 January 1992 and each of them were invalid and of no effect.

an account of the profits made by the Plaintiffs by reason of the breach of their fiduciary duty to the Deceased or alternatively, restitution for the unjust enrichment of the plaintiff at the expense of the First Defendant;
further and in the alternative, equitable damages for breach of fiduciary duty;

66

orders pursuant to section 1 of the Money Lenders Act that:

(i)

(ii)

(iii)

(iv)

(V)

the loan agreements and the mortgages be re-opened by the Court pursuant to section 1 of the Act; and
account taken between the Plaintiff and the First Defendant; and
the First Defendant be relieved from payments of any sum in excess of the sum adjudged by the court to be fairly due; and

the Plaintiffs repay any excess paid by the First Defendant to the Plaintiffs; and
the Mortgages and the loan agreements (the existence of which is denied) be set aside;

a full and proper account be taken of all financial transactions between the Plaintiffs and the First Defendant;
interest; and
costs.

COUNTERCLAIM
second Defendants:
At all material times at least since 1979:
the Deceased was unable to properly manage or make rational decisions in respect of his financial affairs or to properly protect his own interests:
Particulars
At all times from 1979 until his death on
23 May 1992, the Deceased was an alcoholic or drank alcoholic liquor with such frequency and to such degree as to be incapable of properly managing or making rational decisions in respect of his financial affairs or to properly protect his own interests.
the Plaintiffs knew that the Deceased was unable to properly manage or make rational decisions in respect of his financial affairs or to properly protect his own interests as aforesaid.

67

Particulars
The Plaintiffs by or through their servants or agents, Bob cruise, Graham Higginson, Malcolm Kemp, Bob Gifford, Larry Davenport, Ian Millard, Hillary Osbourne, Ian Liddell and Lindsay Wapper, knew at least since 1979, that the Deceased was an alcoholic or drank alcoholic liquor with such frequency and to such degree as to be incapable of properly managing or making rational decisions in respect of his affairs.	These persons acquired their knowledge through repeated personal contact with the Deceased during this period and have admitted that they were aware of this incapacity.	Further  particulars will be provided after discovery and interrogatories.
the Plaintiffs had, and exercised, effective control over the Deceased's financial affairs;
Particulars
At all times at least since 1979, the Plaintiffs were the Deceased's principal financier in that they provided the Deceased with finance for all purposes including the running of Killarney station, the purchase and the running of Maryfield Station, and the purchase and the running of Roper Valley station.	The Plaintiffs required the Deceased to provide operational budgets and in return would provide cash flow guidelines which purported to be the basis for the further advances the Plaintiffs would make from time to time.	At all material times at least since 1979, the Plaintiffs also acted as stock agents for the Deceased in the purchase and sale of stock, and the purchase of equipment, stores and other goods to run these stations.	At all times at least since 1979, the Plaintiffs determined what funds the Deceased could have and for what purposes.

There is no material difference between paras36(a)(b) and (c) and those contained in paras42(a)(b) and (c) of the counterclaim of the first defendant.

68

the second Defendants:

(i)

(ii)

(iii)

(iv)

were some of the next of kin of the Deceased and were the persons who stood to inherit the Deceased's estate including his interests in Killarney stations, Karyfield Station and Roper Valley stations;
depended upon their employment with the
Deceased in the runninq or Ki11arney
stations, Maryfield station and Roper Valley station for their livelihood;
resided at Killarney Stations, Maryfield station and Roper Valley stations;
intended after the death of the Deceased to continue to reside at the said stations and to make their livelihood therefrom;
trusted and relied upon the Plaintiffs to properly exercise their control over the Deoeased's financial affairs in order to ensure that their aforementioned interest were not detrimentally affected;

the Plaintiffs were aware of the matters set out in sub-paragraph (d) hereof.
further, the Plaintiffs represented to the second Defendants that they would properly exercise their control over the Deceased's financial affairs in order to ensure that the Second Defendants' aforementioned interests were not detrimentally affected:·

Particulars
Particulars of the representations are contained in the Affidavits of William Rex Tapp sworn 22 January 1992, William Tapp sworn 14 January 1992, June Carolyn Tapp sworn 23 January 1992, Ben Tapp sworn 22 January 1992 and Joe Tapp sworn 22 January 1992.

The allegations in para36(d)(e) and (f) are in addition to those made by	the first defendant in regard to the relationship between the plaintiffs and the deceased, but leading to the same assertion, that is, that there was
69

thereby established a fiduciary relationship between the plaintiffs and the second defendants which it	is then alleged the plaintiffs breached.	Notwithstanding all of the above, there remains unspoken the undertaking or agreement of the plaintiffs to serve exclusively the interests of these defendants.	A representation by one person to a second, that that person would properly exercise control over the property and f nancial affairs of a third person in order to ensure that the second person's interests in the property and financial affairs of the third person would not be detrimentally affected, does not assert, expressly or impliedly, that the person making the representation would serve the interests of the second person exclusively.

Furthermore, as to para36(f), there are no proper particulars of the representations which are alleged to have been given by the plaintiffs to the second defendants.	The plaintiffs ought not to be obliged to delve through affidavit material to ascertain what the particulars are and nor should the Court.

to the knowledge of the Plaintiffs, the second Defendants trusted and relied upon the Plaintiffs to act in accordance with this representation;

by reason of these matters, the second Defendants were dependent upon and vulnerable to abuse by the Plaintiffs in the exercise by the Plaintiffs of the power they had over the Deceased's. financial affairs and the second Defendants financial affairs and livelihood as aforesaid and, accordingly, the Plaintiffs were fiduciaries of the second Defendants.

70

The fiduciary duty that was owed by the Plaintiffs to the second Defendants was a duty to act in the Second Defendants' interests, and not in the Plaintiffs' interest, whilst exercising the aforesaid control they had over the deceased and the second Defendant in order to protect the Second Defendants from loss and damage by reason of the Deceased's liability to properly manage or make rational decisions in respect of his financial affairs or to properly protect his own interest that was caused by and arose out of his aforesaid incapacity.

For the reasons already given, this paragraph does not advance the second defendants cause.

Further, and in the alternative, by reason of the matters referred to in paragraph 36 above, the Plaintiffs owed the Second Defendants a duty to properly exercise the aforesaid control they had over the Deceased and the second Defendants in order to protect the second Defendants from loss and damage by reason of the Deceased's inability to properly manage or make rational decisions in respect of his financial affairs or to properly protect his own interests that was caused by and arose out of his aforesaid incapacity.

In the alternative to the plea relating to fiduciary duty, the second defendants rely upon the same facts as constituting a claim of negligence.	The two causes are materially different.	As to the duty of care, an assumption of responsibility on the part of the plaintiffs is alleged (para36(f)), (but there are no proper particulars), as is reliance by the second defendants upon it (para36(g)) and foreseeability of loss (para39).	Those factors may well give rise to the requisite relationship of proximity between the plaintiffs and the second defendants (Hawkins v Clayton (1988) 78 ALR 69 at 95).

71

The second defendants' plea based upon an allegation of a fiduciary relationship between the plaintiffs and them fails for the reason that it does not allege any undertaking, express or implied, on the part of the plaintiffs to act exclusively in their interests.

As to the allegation that the plaintiffs owed the second defendants a duty of care, proper particulars of the representations alleged to have been made by the plaintiffs to the second defendants as contained in the affidavits referred to, are ordered to be given within 14 days of this date.	If those particulars are not given, or if particulars are given which do not meet the requirements of the rules, then the plaintiffs may make such further application as they are advised.

In breach of the fiduciary duty and further or alternatively the duty of care they owed the Deceased and acting in their own interests and not the Deceased's the Plaintiffs:
made further advances to the Deceased which the Plaintiffs knew or ought to have known would be expended by the Deceased:

(i)

(ii)

(iii)

for purposes not reasonably required for the proper operation of the stations:
for the purposes unrelated to ownership or operation of the stations; and further, or in the alternative,
profligately and irrationally.
Particulars

some of these advances are particularised in annexure "A" hereto.	Further particulars will be provided after discovery and interrogatories.

72

(b) on or about 26 May 1988, permitted and allowed the Deceased to purchase the Roper Valley station when the Plaintiffs knew or ought to have known that:

(i)

(ii)

(iii)

(iv)

the Deceased's decision to purchase the station was not a rational decision;
it was not in the Deceased's best interest to purchase the stations;
the Deceased was unable to properly manage the station; and

the Deceased's level of indebtedness to the Plaintiffs at that time was such that the additional interest payments that resulted from the further advances the Plaintiffs would need to make to allow the Deceased to purchase the stations would be far in excess of the profit the Deceased was otherwise likely to make from the station and accordingly, the purchase of the station by the Deceased was likely to cause a deterioration rather than an improvement in the Deoeased's financial position, increase his indebtedness to the Plaintiffs and thereby cause the Deceased loss and damage;

(c)		between 1984 and 1990, failed to secure to themselves in order to reduce the Deceased's indebtedness to them the monies due to the Deceased for BTEC subsidies and diesel subsidies and further allowed or permitted the Deceased to expend these monies:

(i)

(ii)

(iii)

for purposes not reasonably required for the property operation of the Stations;
for purposes unrelated to ownership or operation of the stations; and further, or in the alternative,
profligately and irrationally.
Particulars

Between 1988 and 1991, BTEC moneys in excess of $1,000,000.00 in aggregate were paid direct to the First Defendant and wastefully expended by him.	Between 1988 and 1991, diesel fuel subsidies of approximately
$240,000.00 were paid direct to the Deceased and wastefully expended by him.	Full particulars will be provided after discovery

73

and interrogatories.
between 1979 and November 1991, charged the Deceased interest on his indebtedness at rates that were excessive in all the circumstances.
Particulars
Throughout this period, the Plaintiffs levied interest at rates that were at least 3% above the rates that were reasonable for the type of finance the Plaintiffs were providing to the Deceased.
in or about December 1989, permitted and allowed the Deceased to purchase Western creek station when the Plaintiffs knew or ought to have known that:

(i)

(ii)

(iii)

(iv)

the Deceased's decision to purchase the station was not a rational decision;
it was not in the Deceased's best interests to purchase the station;
the Deceased was unable to properly manage the station; and
the Deceased's level of indebtedness to the Plaintiffs at the time was such that the additional interest payments that resulted from the further advances the Plaintiffs would need to make to allow the Deceased to purchase the station would be far in excess of the profit the Deceased was otherwise likely to make from the Station and accordingly, the purchase of the station by the Deceased was likely to cause a deterioration rather than an improvement in the Deceased's financial position, increase his indebtedness to the Plaintiffs and thereby cause the Deceased loss and damage;

between 1988 and 1991, failed to require the Deceased to sell either Roper Valley station and/or Maryfield station and/or Western creek station in order to reduce the level of the Deceased's indebtedness to the Plaintiffs when they knew or ought to have known that if the Deceased's level of indebtedness was not so reduced, his financial position would deteriorate and he would suffer loss and damage accordingly.
between 1988 and 1991, advised the Deceased to
74

purchase and sell stock which purchases it knew or ought to have known were ill advised and improvident and would cause loss to the Deceased;
Particulars of Sales and Purchases
In April/May 1988, 300 boat steers were purchased for $108,000.00 at sales at Elliott.	In early 1991, cows and breeding bulls were purchased for
$100,000.00 at sales at Katherine.	In June 1991,
cows and breading bulls were purchased for	·
$100,000.00 at sales in Katherine.	In August 1991, 1,00 bullocks were sold to Katherine abattoirs.	Further particulars will be provided prior to trial.
(See further particulars at paragraph 44(g) of defence of the first defendant).

By reason of the Plaintiff's breach of fiduciary duty and further or alternatively breach of duty of care as aforesaid, the Second Defendants have suffered loss and damage.

Particulars
The second Defendants have suffered loss and damage in that the value of their inheritance pursuant to the Deceased's estate has been substantially reduced by reason of their failure to properly discharge their duty to the Second Defendants.	Full particulars of the amount of the counterclaim will be provided prior to trial.
This claim is an alternative claim to the breach of fiduciary duty claim made by the First Defendant in its counterclaim and is only maintained to the extent that the claim fails.
SECOND DEFENDANTS
And the second defendants claim for equitable damages for breach of fiduciary duty and damages for breach of duty of care, interest and costs.

Other Discretionary Factors

None of the matters argued by	the plaintiffs in
support of a proposition that the proposed amendments
75

ought not to be allowed based upon discretionary considerations are such as to warrant the exercise of discretion against the defendants or any of them.

76

77

AMENDED ANNEXURE "A" (14/01/93)

DATE	PURPOSE

AMOUNT	CLAUSE 44(a)
(ii)	(iii)

16.02.90	Lease instalment for vehicles not		
	used in the operation of the stations	$18,473.00	Yes	Yes	No	
21.02.90	Accommodation in Darwin (Sheraton)
for recreation *{see note on last page)	

$785.00	

Yes	

Yes	

Yes	
05.02.90	Accommodation in Sydney (Boulevard) for recreation	

$5,935.96	

Yes	

Yes	

Yes	
08.02.90	Personal loan not related to station	

operations

$411.42	Yes	Yes	No

08.02.90

27.03.90

08.03.90

Accommodation in Sydney (Hilton)
for recreation	$10,794.79	Yes	Yes.	Yes

Cheque Custom Credit	$12,911.33

Cheque wages	$3,002.50

78

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

02.03.90	Personal expenditure not related to stations	
$5,000.00	
Yes	
Yes	
Yes	
30.04.90	Accommodation in Katherine (Crossways) for recreation	

$310.00	

Yes	

Yes	

Yes	
02.04.90	Cheque AGC P7130149536	
$330.00				
11.04.90	
Personal expenditure not related					
to stations	$5,000.00	Yes	Yes	Yes	
11.004.90	Accommodation in Darwin (Sheraton)
for recreation	$1,650.70	
Yes	
Yes	
Yes	
11.04.90	Payment of credit card debts
not related to stations	$6,155.00	
Yes	
Yes	
Yes	
29.05.90	Airfare for travel to Adelaide
and Sydney for recreation	$646.00	
Yes	
Yes	
Yes	

79

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

29.05.90	Airfare for travel to Adeliade and Sydney for recreation	
$928.00	
Yes	
Yes	
Yes	
02.05.90	Personal expenditure not related to stations	

$5,000.00	

Yes	

Yes	

Yes	
02.05.90	Accommodation in Darwin (Sheraton)					
	for recreation	$7,663.05	Yes	Yes	Yes	
08.06.90	Cheque wages CW Tapp	
$6,800.00				
05.11.91	
Cheque Bill Tapp					
	Adelaide to Darwin	$510.50				
17.08.91	
Personal expenditure not related			
	to stations	$4,002.50	Yes	Yes	Yes	
21.10.91	853833 Ansett B2373	
$1,016.00		
24.10.91	Accommodation in Darwin (Sheraton)			

80

DATE	PURPOSE	AMOUN'I'	CLAUSE 44(a)
(ii)	(iii)

	for recreation	$7,053.35	Yes	Yes	Yes	
02.09.91	Cheque wages CW Tapp	
$5,002.50				
10.09.91	Accommodation in Katherine (Paraway) for recreation	

$327.05	

Yes	

Yes	

Yes	
19.09.91	Repairs to Mercedes motor vehicle					
	not used in station operations	$1,830.10	Yes	Yes	No	
19.09.91	Repairs to Mercedes motor vehicle not used in station operations	

$504.74	

Yes	

Yes	

No	
27.09.91	Cheque Westpac Bank	
$2,181.11				
02.08.91	Cheque Westpac Bank	
$2,181.11				
19.08.91	Accommodation in Katherine					
(Gardean Hotel) for recreation	$335.65	Yes	Yes	Yes

81

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(i)	(ii)	(iii)

27.08.91	Panelbeating costs to vehicle	not		
	used in station operation		$1,830.10	Yes	Yes	No	
28.08.91	Personal expenditure not related to stations		

$2,002.50	

Yes	

Yes	

Yes	
29.08.91	Accommodation in Katherine						
(Gardean Hotel) for recreation	$181.90	Yes	Yes	Yes	
29.08.91	Cheque Westpac Bank		$2081.11			
28.06.91	Personal expenditure	not				
	related to stations		$2,002.50	Yes	Yes	Yes	
01.07.91	Personal expenditure	not				
related to stations	$3,502.50	Yes	Yes	Yes

29.07.91	Cheque National Bank	$5,002.50

Accommodation in Katherine (Paraway)

82

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

	for recreation	$1,083.15	Yes	Yes	Yes	

30.07.91	
Cheque Australia Airlines	
$1,114.50				
04.06.91	Cheque wages	
$5,002.50				
27.06.91	Cheque Westpac Bank	
$2,181.11				
06.06.91	Deposit to finance brokers	
$28,325.00	
Yes	
Yes	
No	
30.04.91	Personal expenditure not					
	related to stations		$2,181.11	Yes	Yes	Yes	
03.05.91	Cheque National Bank		
$5,002.50			
08.05.91	
Accommodation in Darwin for recreation	
(Travelodge)	

$274.61	

Yes	

Yes	Yes	
16.05.91	Cheque National Bank		
$5,002.50			

83

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

16.05.91	Payment of credit card debts not related to stations	
$5,002.50	
Yes	
Yes	
Yes	
30.05.91	Cheque Westpac Bank	
$2,181.11				
28.03.91	Cheque Westpac Bank	
$2,181.11				
03.04.91	
Accommodation·in Darwin (Sheraton) for recreation	

$8,321.59	

Yes	

Yes	

Yes	
01.03.91	Accommodation in Darwin (Sheraton)					
	for recreation	$4,592.37	Yes	Yes	Yes	
01.03.91	Personal expenditure not related					
	to stations	$7,089.50	Yes	Yes	Yes	
01.03.91	Personal expenditure not					
	related to stations	$1,132.50	Yes	Yes	Yes	
18.03.91	Accommodation in Darwin (Sheraton)					

84

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

	for recreation	$21,903.33	Yes	Yes	Yes	
31.01.91	Cheque wages CW Tapp	$5,002.50				
04.02.91	Accommodation in Darwin (Sheraton) for recreation	

$7,310.92	

Yes	

Yes	

Yes	
06.02.91	Personal expenditure not					
	related to stations	$5,322.50	Yes	Yes	Yes	
11.02.91	Freight for Mercedes motor vehicles					
	not used in stations operations	$470.00	Yes	Yes	No	
18.02.91	Personal expenditure not related	
to stations	$3,008.55	Yes	Yes	Yes

18.02.91	Personal expenditure not
related to stations	$3,002.50	Yes	Yes	Yes

Cheque Westpac Bank	$2,081.11

85

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

02.01.91	Cheque wages CW Tapp	$5,002.50		
02.01.91	Payment of credit card debts not related to stations	

$5,002.50	

Yes	

Yes	

Yes	
04.01.91	Accommodation in Darwin (Sheraton) for recreation	

$6,682.10	

Yes	

Yes	

Yes	
14.01.91	Personal expenditure not					
related to stations	$10,002.50	Yes	Yes	Yes	
23.01.91	Personal expenditure not
related to stations	$6,675.41	
Yes	
Yes	
Yes	
29.01.91	Accommodation in Darwin (Sheraton)
for recreation	$5,331.27	
Yes	
Yes	
Yes	
29.01.91	Personal expenditure not
related to stations	$3,012.50	
Yes	
Yes	
Yes	

86

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

30.01.91	Cheque Westpac Bank	$2,181.11		
30.11.90	Wages CW Tapp	
$5,002.50		
07.11.90	Wages CW Tapp	
$5,002.50		
07.11.90	
Payment of credit card debts			
	not related to stations	$5,002.50	Yes	Yes	
12.11.90	
Accommodation in Darwin (Sheraton) for recreation	

$1,257.95	

Yes	

Yes	
01.10.90	Personal expenditure not				

Yes

Yes

related to stations	$502.50	Yes	Yes	Yes

02.10.90	Wages CW Tapp	$5,002.50

Payment of credit card debts
not related to stations	$2,002.50	Yes	Yes	Yes

87

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

30.10.90	Cheque Westpac CW Tapp	$2,181.11		
10.09.90	Accommodation in Darwin (Sheraton) for recreation	

$481.06	

Yes	

Yes	

Yes	
10.09.90	Legal fees (Cridlands) for personal					
	work unrelated to stations	$11,700.90	Yes	Yes	No	
11.09.90	Personal expenditure not					
	related to stations	$5,000.00	Yes	Yes	Yes	
11.09.90	Accommodation in Darwin (Sheraton)					
for recreation	$7,198.00	Yes	Yes	Yes	
03.07.90	0289 KAT cheque wages CW Tapp	$5,000.00				
23.08.90	Accommodation in Darwin
for recreation	$1,000.00	
Yes	
Yes	
Yes	

8J

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

07.08.90	Personal expenditure not related to stations	
$8,965.60	
Yes	
Yes	
Yes	
27.08.90	Pay Westpac	
$2,181.11				
18.07.90	Payment of credit card debts not related to stations	

$2,500.00	

Yes	

Yes	

Yes	
25.07.90	Accommodation in Adelaide (Sheraton)					
	for recreation	$5,338.80	Yes	Yes	Yes	
01.08.89	
CRD EX Term Loan Account	
$1,550,000				
27.10.89	
Additional stamp duty for					
Plaintiff's securities	$12,800.00	Yes	Yes	No

06.12.89	Accommodation in Adelaide (Hyatt)
for recreation	$9,473.20	Yes	Yes	Yes

Accommodation in Sydney (Hilton)

89

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

	for recreation	$12,687.20	Yes	Yes	Yes	
13.12.89	Accommodation in Sydney (Hyatt) for recreation	

$5,544.00	

Yes	

Yes	

Yes	

15.12.89	Payment of credit card debts
not related to stations	$7,900.00	Yes	Yes	Yes

18.12.89	Accommodation in Darwin (Sheraton)
for recreation	$12,854.74	Yes	Yes	Yes

'27.12.89	Accommodation in Darwin (Sheraton)
for recreation	$3,981.75	Yes	Yes	Yes

$990.00	Yes	Yes	Yes	
$584.00	Yes	
Yes	
Yes	
$4,150.73				

27.12.89		Personal loan (AGC) not related to station operation

27.12.89	Accommodation for recreation

Sydney Lube Mob Inter

90

DATE	PURPOSE	AMOUNT	CLAUSE 44(a)
(ii)	(iii)

13.12.89	Car hire (Sydney) for recreational use	$689.00	Yes	Yes	Yes	
05.01.90		Accommodation in Sydney (Boulevard) for recreation	

$3,013.70	

Yes	

Yes	

Yes	
05.01.90	Cheque personal Xnat Darwin	
$5,000.00				
08.01.90	Repairs to Mercedes motor vehicle					
not used in station operations	$3,461.10	Yes	Yes	No	
f.pril	Accommodation in Sydney (Regent)					
1986/1989	for recreation	$200,000.00	Yes	Yes	No	
1987	Payment to June Tapp for					
Family Law property settlement.	$1,100,000.00	Yes	Yes	No	
*	Expenditure for the recreation undertaken by	the	
Deceased referred	
to in this	
Annexure,	
in light	
of the Deceased's circumstances and length of time and sums of money involved, was profligate and irrational.

ORDERS: made 19 March 1993

That the pleas of the defendants alleging unconscientious conduct and the exercise of undue influence by the plaintiffs over the first defendant be struck out together with everything consequent thereto (eg. parasll(b)(c) and (d); 13(d) and (e); 16(g) - (i); 17(a) - (d)).

The defendants to produce to the Court within 14 days of 19 March 1993 (or such further time as the Court may allow) the document referred to in para30, duly stamped or marked not liable to stamp duty by the Commissioner.

Paragraphs 42, 43, 44 and 45 of the counterclaim of the first defendant are struck out.

Paragraphs 36 and 37 of the counterclaim of the second defendants relating to fiduciary duty are struck out.

The second defendants are ordered to provide proper particulars of the representations alleged to have been made by the plaintiffs to the second defendants as contained in the affidavits referred to in para36(f) of the second defendants' counterclaim, within 14 days of
19 March 1993.

The allegations concerning fiduciary duty in paras39

91

and 40 of the counterclaim of the second defendants are
struck out.

Certified fit for counsel and senior counsel.

92