Brims, Brims, Hahndorf Investments Pty Ltd & Ors v Siganto & Oxenford [1991] QSC 262

TRANSCRIPT OF PROCEEDINGS State Reporting Bureau, 4th Floor, The Law Courts, George Street, BRISBANE, 0. 4000 Tel. (07) 227.4360 (Copyright in this transcript is vested in the Cro'\'1!11. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION DOWSETT J No 1005 of 1989 JOHN RAYMOND BRIMS and MARILYN JEAN BRIMS and HAHNDORF INVESTMENTS PTY LTD and GARRY PATRICK BRIMS and JOAN MARY BRIMS and G & J BRIMS CONSTRUCTIONS PTY LTD and REVISED COPI.ES ,ISSU 0 ED I Court Reporting Bureau ! Date, .... 8 .OCT ,l9 91 f First Plaintiff Second Plaintiff Third Plaintiff Fourth Plaintiff Fifth Plaintiff Sixth Plaintiff HENRY WILLIAM SIGANTO AND DORIS MARY OXENFORD (as personal representatives) Defendants 1 -- 1 of 55 -- 10 BRISBANE .,. DATE 17/9/91 9.00 A.M. JUDGMENT HIS HONOUR: In this matter there will be judgment for the defendants against the plaintiffs in respect of both aspects of the claim. I publish my reasons. 10 20 20 30 30 40 40 50 50 60 60 Govt. Printer, Old. 2 -- 2 of 55 -- IN THE SUPREME COURT OF QUEENSLAND Sc No. 1005 of 1989 Before Mr Justice Dowsett BETWEEN: JOHN RAYMOND BRIMS - and - MARILYN JEAN BRIMS - and - HAHNDORF INVESTMENTS PTY. LTD. - and - GARRY PATRICK BRIMS - and - JOAN MARY BRIMS - and - First Plaintiff Second Plaintiff Third Plaintiff Fourth Plaintiff Fifth Plaintiff G. & J. BRIMS CONSTRUCTIONS PTY. LTD. Sixth Plaintiff - and - HENRY WILLIAM SIGANTO AND DORIS MARY OXENFORD (as personal representatives) Defendants JUDGMENT - DOWSETT J. Delivered the Seventeenth day of September, 1991 Counsel: Solicitors: Mr. P.H. Morrison Q.C. with Mr. G.J. Radcliff for the plaintiffs Mr. W. Sofronoff Q.C. with Mr. M.R. Bland for the defendants Robinson & Robinson for the plaintiffs Corrs Chambers Westgarth for the defendants. Hearing Dates: 24th, 26th, 29th, 30th April and 1st May, 1991. -- 3 of 55 -- IN THE SUPREME COURT OF QUEENSLAND BETWEEN: JOHN RAYMOND BRIMS - and - MARILYN JUNE BRIMS - and - HARDANDOF INVESTMENTS PTY. LTD. - and - GARRY PATRICK BRIMS - and - JOAN MARY BRIMS - and - No. 1005 of 1989 First Plaintiff Second Plaintiff Third Plaintiff Fourth Plaintiff Fifth Plaintiff G. & J. Brims CONSTRUCTIONS PTY. LTD. Sixth Plaintiff - and - HENRY WILLIAM SIGANTO AND DORIS MARY OXENFORD (as personal representatives) Defendants JUDGMENT - DOWSETT J. Delivered the Seventeenth day of September, 1991 This action arises out of alleged transactions concerning two separate blocks of land on the Pacific Highway at Oxenford. The two transactions are independent, but as will be seen, they touch at numerous points. For many years prior to his death on -- 4 of 55 -- 2 18th June, 1975 Jesse Siganto owned a substantial amount of land to the east of the old Pacific Highway and to the south of the Oxenford Hotel. The Pacific Highway now runs to the east of the subject land. Jesse Siganto had one son, Dion Siganto who inherited this property and died, unmarried and without issue, on 23rd October, 1987. The defendants are his personal representatives. The first and third plaintiffs are brothers. The second and fourth plainti-f f s are their respective wives. The fourth plaintiff's maiden name was Siganto. She.was cousin to Dion. The involvement of the corporate plaintiffs will emerge in due course. Exhibit 4 is a recent -aerial photograph of the relevant area. It shows the current Pacific Highway (with dual carriageways) and the. old Pacific Highway roughly parallel to it. In the top, lefthand corner of the photograph can be seen the Oxenford Hotel with its prominent "XXXX" sign near to the northbound carriageway. To the south of the hotel is a road opening on to the old highway to the west and the·new highway to the east. This latter access has not always been available. Opposite the hotel can be seen a building with a red roof. That building is referred to in the evidence as the butcher's shop or post office, it having accommodated both functions at one time or other. To the west of that building is what appears to be an open space which is the forecourt of the service station the subject of these proceedings. It can be seen to the south of the forecourt. To the south of the service station is a house with a green roof which also features in this action. To the south again is an open area with sheds and cultivation. This area is -- 5 of 55 -- 3 also subject of this action. At the extreme southern end is a discrete area of cultivation immediately to the north of what appears to be a storage yard. This area of cultivation is not presently relevant. I have said that the aerial photograph gives a reasonable indication of the area as it presently is. As will appear, it has changed substantially over the years since about 1973 when the relevant incidents for the purposes of this trial commenced. It is asserted by the first plaintiff that he is entitled to ownership of the land upon which the service station is located. This land is part of a parcel described as Lot 2 on Registered Plan 195867 which includes both the service station and the post office. See ex. 19. The plaintiffs make no claim to the post office. The land passed from Jesse_Siganto to Dion Siganto and then to the present defendants. The primary basis of the first plaintiff's claim is that in mid-197 3, Jesse Signato agreed with him that if the latter would renovate and operate the service station at his own cost, maintain and service Jesse Siganto's vehicles free of charge and store certain of Jesse's property on the premises, Jesse Siganto would give him the land upon which the service station stands. Pursuant to this agreement, as it is alleged, the first plaintiff performed substantial renovation works upon the premises, eventually conducted a service station business there and otherwise complied with the terms of the contract. Alternatively, it is said that Jesse, and after his death, Dion Siganto stood by and allowed the first plaintiff to do work on the premises with the knowledge that the plaintiff understood -- 6 of 55 -- 4 himself to be the owner of the property. Thus it is said that Dion Siganto' s personal representatives are estopped from denying that the first plaintiff is entitled to ownership of the service station site. As both Jesse Signato and Dion Siganto are now dead, the only direct oral evidence of the original agreement came from the first plaintiff, although some of the other witnesses supported him in his claim. I turn now to summarise the evidence of John Brims. r will make some findings in the course of summarising that evidence. I am satisfied that the first plaintiff was well-known to Jesse and Dion Siganto for many years prior to 1973. Dion and he had grown up in the Oxenford area and both had close ties to it. Jesse had, for many years conducted a number of small businesses in th~ area including the running of the school bus, deli very o_f newspapers, the butcher's shop and post off ice. There had, at one stage also been a larger shop conducted in an old timber building on the present service station site. The families had been friendly for a long time. Jesse Signato' s land . included all of the subject land and a substantial amount in addition thereto. Prior to 1973, the first plaintiff had been employed in connection with motor vehicles and their maintenance, including employment as a mechanic in a number of service stations. I accept that he had, from to time worked at service stations patronised by Jesse Siganto. The first plaintiff asserted that Jesse Signato was very particular about the maintenance of his motor vehicles and that he had expressed confidence in the first plaintiff's ability to attend to that -- 7 of 55 -- 5 maintenance. I neither accept nor reject that evidence. After leaving school, Dion Siganto was apprenticed to his father in the butcher's trade although he did not thereafter work for him continuously. In 1972, the first plaintiff was working in another service station at Oxenford but was looking for opportunities to establish such a business of his own in partnership with another man. At this time, he was also working for one Brian Oxenford who was a farmer with substantial machinery needing continual maintenance. He also drove a truck for Oxenford. Jesse Siganto had constructed his service station some years prior to 1973, although the exact date is not certain. I accept that this business had not been a success and had been abandoned. Probably, this was at least partially caused by the closure of the old Pacific Highway. By 1973, the building was quite dilapidated and most of the necessary equipment, including_ the pumps had been removed . I accept that by 1973, the service station was derelict. At some stage, probably in 1973, the first .. plaintiff learnt that Jesse Siganto wanted to speak to him. The first plaintiff asserted that, "I knew what he wanted but I didn't know, you know, and it wasn't a real big issue because it didn't appeal to me at the time, I guess." (Seep. 174, lines 22-26.) When he eventually saw Jesse at the Oxenford Hotel, Jesse enquired as to what he was doing and why he was working for Brian Oxenford. The first plaintiff replied, "It's something that will keep me going till I find something else". The first plaintiff -- 8 of 55 -- 6 asserted that Jesse then replied, "Start over there at the service station". Conversation ensued, according to the first plaintiff, in which he said he didn't think that was a very good idea, that it wasn't feasible, notwithstanding his ability to take custom away from his present employer. The main reason why he thought it not a good idea was that the highway no longer passed the service station. There was, at that stage, no direct access to or from the new highway at the eastern end of the road running between the hotel and the service station. When asked again about this conversation (at p. 176) the first plaintiff said:- "He basically said, 'Get over there, its yours. You can do what you want with it'. That went straight over the top of my head. I figured he was very disappointed it never f1red - I knew that - and he said I could have it and I said, 'Well, that's fair enough' . I just walked away, sort of thing, and looked at it and said, 'I will have a look at it'. You know". He said that he didn't believe it, but he looked at the property the next day and on subsequent occasions and discussed the matter with his wife. She wasn't particularly impressed. For some reason, he subsequently, "got serious and went in and started making notes of what I needed". At p. 177 he was asked, "Was there any discussion between you and Jesse or you and Dion or the three of you, as to arrangements between you and Je~se'?" to which he replied, "Jesse just wanted me to look after his vehicles as always. That was a foregone conclusion, I would have thought". Mr. Morrison asked, "Did he say so?" and the witness replied, "He did, yes". At p. 178, this passage appears:- -- 9 of 55 -- 7 "I said, 'We will have to get all these tanks done.' I said, 'There is just not enough money in the world that is going to get this thing up and running with me being nothing short of a miracle man'. I reckoned I was good and I had a following of people, I reckoned, but, 'I don't think I can do this one, the service station is buggered'. And he sort of looked at me - Jesse is one of those blokes who just looks at you - and he said 'Yes, you can'. I said, 'Jesse, I have been looking at another site down the coast'. I said, 'Quite frankly, all my gear is geared for city work, particularly the steam cleaner, and a bit of other work, particularly that sort of stuff, and other things, equipment'. And he sort of walked around in a circle a little bit, walked over and had a look at the tanks, walked back and said - he hummed and haahed and he-said, 'John, you get that going and I will give you the land and the service station'. I said, 'I don't believe you' . He said, 'I am telling you that' . I said, 'Why would you do that?' and he said, 'You are a nice bloke and you have always done the right thing by myself, my family, Dion and I have never heard you say a bad word about anyone' . And I looked at him and he just walked off." · Subsequently on that same day, as he alleges; the first plaintiff had a discussion with Dion in which Dion said:- "The old man · has given you the lot, the service station." The first plaintiff said that he replied: "That's what I am here for. To verify it again II Dion replied: "Well, the old man never 'jokes, he has given it to you because he told me about it at dinner time." At p. 181, the first plaintiff was asked whether he had ever made an offer to buy the service station to which he replied: "Not really, it was just that - I sort of hinted that I wanted to buy it and I said, 'Its not really worthwhile buying because I have got to spend to.o much money on it in any case'. He was then asked, "Did Jesse have something to say to you when you made this offer to buy or referred to an offer to buy?" to which he replied, "Well, that's when we - we never got heed -- 10 of 55 -- 8 of it. I said it just wasn't worth the effort, and he said, 'I'll give it to you, land, the whole bit, just get the damn thing going, prove that you are right and you can look after it'. That's when I was dumbfounded". I think that was another account of the conversation which occurred on the same day as the separate conversation with Dion, although this is not clear. At a later stage, John Brims said that he discussed the matter with his wife and said to Jesse : "I have told my wife you've given me this land and service station;. is that correct?". correct, my son". To this Jesse replied, "That is The first plaintiff then said to Jesse, as he claimed:- " I ' 11 do it now because I can spend the · money gradually instead of - we looked at a $15,000 or $20,000 one down the. coast.· We'd owned two units down the coast by that time and we certainly had the borrowing power and it just suited me to gradually sneak up on it, as we might say." This meant that he welcomed the opportunity to work up the service station gradually rather than expend his capital in buying a new site. In the evidence, there were numerous references to what the first plaintiff was going to do for Jesse, including maintenance of engines used in the butcher's shop and other equipment, including a "walker", used for walking horses. There were also vehicles which were to be stored from time to time at the service station. The first plaintiff claimed that he took possession of the service station in mid-1973 and commenced to rehabilitate the site. Tanks were installed for water supply, and the building was renovated. Equipment was scavenged from other sites and -- 11 of 55 -- 9 installed or used to repair existing equipment. I am willing to accept that the plaintiff spent significant amounts of time and money in this renovation project. During this time he was still employed elsewhere, and it was not until about 1976 that a petrol pump was finally re-installed at the premises. (Seep. 188 11. 4 and 5.) It may have been earlier as there is other evidence of trading in 1975. Two more pumps were installed later. Throughout this period, renovation work was continually undertaken. There was evidence of subsequent conversations between Jesse and/or Dion and the first plaintiff in which the latter complained about the amount of work involved and was allegedly encouraged by one or both of them with words such as, "You know you shouldn't be worried about things. into it - get going. It's yours boy. It I s yours,." or, "Get What are you worried about? Just look after it. Take your time and do it properly and there is no drama". He was asked, "What did you think when he said that?" to .. which he replied "Well, I knew what he said in the first place so, you know, he was just reinforcing me that the place was mine, but I still just couldn't grasp the time of how long it was going to take me. I knew I was right but he just was amazed at the work that had to be done on it". The first plaintiff said that no rent was ever paid to Jesse. After Jesse's death, according to the first plaintiff, he enquired of Dion whether he needed any financial assistance, _to which Dion replied, "You've got enough to keep yourself going -- 12 of 55 -- 10 here and I don't need the money, I've got plenty. You just spend it wisely here on what you are doing. Its fine". At a later stage there was a conversation in which the first plaintiff offered to buy some other land which Dion was considering selling to which, as it is alleged, Dion said "No Brimso ... we might have a falling out over it. You are going to end up with more than me. You've got the garage up there and now you've got the bottom block, and plus the fact it is only a shit bit of stuff down there. If you start digging it up and there is drama down there you would come up and get right into- me". He gave evidence of num~rous conversations with Dion in which the poss·ibili ty of regularising the title was discussed and deferred and other conversations in which Dion conceded that the first plaintiff was th~ owner of the land. There was discussion about the payme~t of rates. Dion said he didn't want to pay rates on the garage but deferred further discussion about the matter. Mr. Brims said that unlike the arrangement with Jesse pursuant to which he serviced Jesse's vehicles for nothing, he serviced Dion's vehicles at what was described as "cost". He said that with respect to rates, he and his wife made regular contributions on account of rates. After Jesse died on 18th June, 1975 Dion moved into the flat behind the service station, abandoning the house to its rear where he had previously lived. It was sa.id that this move was suggested by Mr. Brims. Dion did not pay any rent in respect of his occupation. -- 13 of 55 -- 1 1 There is a continuing theme throughout the evidence, both in respect of the service station and in respect of the nursery site which I will consider later, that Dion Siganto and the Brims families, that is the first, second, fourth and fifth plaintiffs had a long-term plan pursuant to which their interests would be sold at some unspecified time in the future and the proceeds used to establish a business together further north, possibly in the vicinity of Rainbow Beach. Although most of the evidence concerning this topic related to the disposition of the.nursery business, John Brims said that the service station was also to be sold to fund the new venture. At pp. 223-4, the following passage appears:- Question: "In your discussions about what was to be done with the business, in the way Dion· would say it, how was it to be sold - what was to be sold?" Answer: "When the final analysis came down, I was going to sell the garage in connection with the nursery, alright? Then, because that gave them equal share in the service station and I was quite happy with that because we were using the back of the service station for the, the nursery in any case. Then Dion was just going to sell whatever was left there at the post office and then we were going to split it up equally three ways or take a big chunk of it and invest it, and then just divvy out some dividends because none of us had taken a wage for years, and it was something we'd sort of get back in perspective again." "So you'd get something back for what you put in? -- Exactly." By His Honour: "What was going to be sold? Was it the service station and the post office as well? -- The whole lot." -- 14 of 55 -- 12 "And you were all to participate in all the proceeds of the sale? -- That's correct, Your Honour." By Mr. Morrison: "How - how were you going to participate, equally? -- Equally. I probably was the one that was to lose a little bit, in my opinion, but it didn't worry me at the time." There was also evidence from Mr. Brims that Dion had, at one stage said:- "You've probably spent enough money on this place to buy it four times over if you had to buy instead of down the coast, .... " Mr. Brims' claim had not been regularised at Jesse's death. In November, 1981 the service station business ( until then, conducted in partnership by the first and second plaintiffs) was sold to the third plaintiff as trustee of a family _trust for Mr. Brims' family. The land was not then transferred to the third plaintiff, the explanation being that it was overlooked at the time. A cheque butt identified by the first plaintiff as being in the handwriting of Dion Siganto is ex. 39. It shows payment of $75 tow. Dallinger, said to be for "Repairs S/stn". Mr. Brims' explanation for this was that it may have been paid by Dion because of its small amount. Mr. Dallinger suggested in evidence that it was, in fact for work not connected with the service station. In cross-examination, it was pointed out to Mr. Brims that the numerous items of equipment mentioned in para. 7 of the amended statement of claim (ex. 21) do not appear in the depreciation schedule to the partnership tax return filed on -- 15 of 55 -- 13 behalf of the first and second plaintiffs for the year ending 30th June, 1975. One would normally have expected those items to be in such a schedule. In view of the importance of Mr. Brims as a witness in respect of both the service station and nursery sites, it is appropriate that I make some observations about my impressions of him now. For a variety of reasons, I was not greatly impressed by him as a witness. His recollection of the various conversations with Jesse and Dion was fragmentary and suggestive of conscious reconstruction rather than recollection of actual conversations. There was a lack of precision and inconsistency about his evidence which cannot.be explained away merely by the passage of time. Other objective facts also contradict or are inconsistent with this claim. Firstly, it was not consistent with an agreement of the sort alleged that no steps were actually ever taken to regularise the title at Jesse's death. Secondly, at the time of the noting of the transmission by death to Dion, the latter swore that he knew of no outstanding claims to the land. See ex. 35. Thirdly, al though there may have been· good business reasons for not transferring the land to Hahndorf when the business was transferred, this was not the explanation given for not doing so. Rather it was said to have been overlooked. It was also surprising that Mr. Brims should have expected that the proceeds of any future sale of the service station would go to himself, his brother and Dion, suggesting that the issue of ownership was not very important. -- 16 of 55 -- 14 On 23rd December, 1988 Mr. Brims' solicitors wrote a letter to the solicitors for the estate (ex. 36). This letter alleged that the service station land was held by Dion Siganto as trustee for Mr. and Mrs. Brims pursuant to an agreement between Dion and the Brims allegedly made in or about 1973. On 23rd December, 1988 the first, second and third plaintiffs lodged a caveat (ex. 37) against the title claiming an estate or interest - "By virtue of a declaration by Dion Noel Siganto (Deceased) that he held the said land as trustee for the caveators pursuant to an agreement between thesaid Dion Noel Siganto (Deceased) and the caveators. made in or about the year 1973 creating a proprietary estoppet in that the caveators thereupon prqceeded to carry out improvements with the expectation that theydid hold such an interest." It is interesting to note that in the original statement of claim in this action, it was alleged only that in mid-1973, Dion and Jesse agreed to permit the first plaintiff, "to conduct a motor mechanic's business on part of the service station and post office site, in consideration whereof, John Brims agreed to service and maintain the vehicles . of · Siganto' s father and Siganto.,_ and store certain vehicles and chattels. thereon". It is then alleged that John Brims did certain things and that upon the death of Jesse Signato, he offered to purchase "certain lands" from Dion. It is alleged that - "In response, Siganto told John Brims that- ( i) John Brims did not have to purchase that land; (ii) (iii) that part of the service station and post off ice site upon which was situated the service station premises and business ("theservice station land and business") belonged to John Brims; · John Brims had "done the right thing" by Signato and Siganto's father; -- 17 of 55 -- 15 ( iv) John Brims had already spent enough money on the service station land and business; (v) Signato had always told John Brims that he (Siganto) 'would look after him'." It is not absolutely clear that the land in question was the service station land, but this is the most likely interpretation, although there was a suggestion that Brims had offered to buy other land from Dion Siganto. Whatever the meaning of this paragraph, it is clear that there have been a number of different versions, given by or on behalf of the plaintiffs as to this claim. Although this may have been as a result of inadequate instructions at an early stage, nonetheless it suggests that the specific allegations now made were not the first recollections recounted by John Brims to his solicitors. The story has improved. I should say that no specific challenge was made in cross-examination to any of the conversations alleged by John Brims. Nonetheless it was clear to me that the thrust of Mr. Sofronoff' s cross-examination was that there had been no such agreement made with either Jesse or Dion. I challenged Mr. Sofronoff upon this at a late stage in the proceedings. He said he considered that in the absence of express instructions as to those conversations, it was not possible for him specifically to challenge them. I doubt that he was correct in this. I think he could have at least suggested that particular conversations did not take place. I do not, however think that any inconvenience or unfairness has occurred as a result of his failing to do so. As I say, it should have been clear to everybody that the thrust of the defendant's case was to deny any -- 18 of 55 -- 16 such agreement or undertaking. This approach was taken by Mr. Sofronoff throughout the case. My observations similarly apply. There were some other aspects of the conduct of the parties and the contemporaneous documentation which were inconsistent with Mr. Brims' story. However these are more conveniently dealt with in considering the evidence of the second plaintiff, to which evidence I now turn. Mrs. Marilyn Jean Brims, the second plaintiff was primarily responsible for keeping the books of the service station business throughout its operation. Her evidence generally supported that of Mr. J.R. Brims as to his work ~istory prior to 1973 and his efforts to rehabilitate the service station. She said that no moneys were paid to Jesse Siganto during his lifetime but that after his death, she noticed that Dion seemed to be in financial difficulty. She therefore decided to reimburse him for rates and charges incurred incidental to the service station property which, of course he now owned - at least in law. There is no doubt that amounts were paid regularly to Dion by the partnership and some of the cheque butts describe payments to Dion as being for "rent". Mrs. Brims said that she calculated the amounts paid by reference to the rates which she was paying to the Gold Coast City Council in connection with property she and her husband owned in that city. The Oxenford property was in the Albert Shire. A great deal of time in evidence-in-chief and cross-examination was taken up in trying to extract an explanation of how she calculated the amounts payable to Dion. -- 19 of 55 -- 17 This matter assumed such importance because tax returns for the - partnership disclosed amounts paid by way of rental for the service station, and Mrs. Brims accepted that these amounts were paid to Dion. The tax return for the 1974/75 year included a profit and loss statement for the "Oxenford Service Centre". It is unlikely that very much business was carried on in that tax year as the gross income was only $3,378.33. However the statement shows an amount of $65 paid by way of rent. Mrs. Brims thought that might have been a refund to Dion or Jesse of a registration fee ~ayable in connection with the service station. Jesse died on 18th June, 1975, very close to the end of this tax year. The balance sheet for the partnership shows land owned at Labrador and garage, plant, equipment and tools but does not show the service station.land as an asset. It is possible that it was an asset of John Brims rather than the partnership, but this explanation was not offered by_Mrs. Brims. In an explanatory statement attached to the return, this passage appears:- Dion. "During July 197 4 we purchased various i terns of equipment and loose tools for use in a business. Little income was earned until we commenced renting a garage premises at Oxenford, Queensland, during May 1975." It is clear that the only person to whom rent was paid was If the above statement was correct, then Dion was the landlord. In the 1975/76 return, the profit and loss statement for the Oxenford service station shows rent at $520. Mrs. Brims also agreed that there were a number of cheque butts showing payments to Dion Siganto described as "rent". In the 1976/77 return, rent -- 20 of 55 -- 18 is shown at $780. In the return for 1977/78 rent is shown at $1,500. In the 1978/79 return, the amount of rental is $1,590. In 1979/80 the rent is shown as $1,560. In 1980/81 it is shown as $1,530. In 1981/82 it is shown as $755.84. In that tax year, the transfer of the business to the third plaintiff occurred. In the tax return for that year for the trust of which the third plaintiff was trustee, the item "rent and levies" is shown as $900. In. the 1982/83 tax year, the trust return shows an amount for rent and levies of $1,560. In 1983/84 the figure is $1,650. In 1984/85 it is a similar sum. In 1985/86 the figure is $1,6~0 and in 1986/87, $2,200. In the 1987/88 return the figure is $400. Dion died on 23rd October, 1987. One explanation for these entries was that on some occasions, directions were given to bookkeepers by use of the word "rent". It was also suggested that it was the accountants who so characterized such regular payments rather the Brims, or that the accountants at least so advised. These explanations are not impossible. The fact remains, however that the .. contemporaneous documents reveal payments to Dion which are described as "rent". The service station was described as being on rented premises. Dion was the legal owner of the land in question. I was not greatly impressed by any of the explanations given by Mrs. Brims. The attempt to show a connection between the amounts paid to Dion and the rates paid on the Gold Coast property was particularly unpersuasive. Mrs . Brims did not strike me as foolish. She is quite astute. Her demeanour as a witness was unsatisfactory. I was left with the impression that -- 21 of 55 -- 19 she was tailoring her evidence to fit undisputable facts as they emerged. I turn now to consider other witnesses supportive of this claim. Mr. K.M. Rangely said that he approached Dion in 1980 or 1981 with a view to acquiring the service station. He said that Dion said to him, "Keith, there is no chance, it is John's. If you·want to talk about the service station, go and see Johnny Brims. It's all his". Rangely said that he offered him $100,000 for the property, an amount in excess of the former's estimate of its real value. Rangely' s justification for offering a higher price was that he hoped to get some ben~fit in discounted fuel prices as he owned other service stations. Clearly, Mr. Rangely' s initial understanding. was that Dion then owned the property. This was at least le~ally correct. Dion's response may well have been consistent with John Brims' claim, but it does not necessarily prove it. The remarks were equally consistent with a commitment made by Dion to his good friend to allow him to continue to use the site. Nonetheless, Mr. Rangely' s evidence offers some support to Mr. Brims' evidence: Mrs. J.M. Brims, the fifth plaintiff also gave some evidence touching this matter. She said that she had conversations with Dion concerning the service station as follows:- "All that was said to me by Dion was that it was more or less John Brims' service station and land. He was just giving it - his father had given it to him". Inconsistent with Mr. Brims' case was the evidence of Mr. G.H. Alex~nder who at p.255 said that his understanding was that all of the land, including the service station was divided -- 22 of 55 -- 20 equally between Dion and the two Brims. I give no weight to such an "understanding". Mr. Woods, a solicitor who acted for Dion said that the latter always referred to the service station as "Brims' Garage". Mr. Dallinger said that Dion told him there had been an arrangement with Jesse that the service station property was to belong to John Brims. Allegedly, he was told this by Dion, "once every six months or so". He said that the subject arose because he enquired. His demeanour was unpersuasive. Indeed, I thought him the most uncomfortable witness I have ever seen. The account of such regular conversations about an unremarkable matfer is quite unlikely. The witness, Boyd said that he had a discussion with Dion about the ownership of .the service station. His evidence was:- "Yes, during that period of time the discussions we used to have with him, I put it to him one day - or he told me that his father had given John the garage in its entirety, apparently on the condition that John cleaned it up and to - and to make it operational, and I understand from what Dion told me that .. ·. well he just said that his father - Dion's father had given John the ga+age and the land around the garage, on the condition that he cleaned it up and made it operational." Mr. Boyd was also allegedly present at a conversation had with Mr. Rangely. His account was that Dion said, "Well if you want to purchase the garage you better go see John Brims. I don't own it. I have nothing to do with it", or words to that effect. He was also witness to another conversation between John Brims and Dion in which the prospective purchase of other land by John Brims was discussed .. He said that John said to Dion, "I told you I should have bought the bloody land from you" • To this, Dion replied words to the effect, "Well you've got enough -- 23 of 55 -- 21 land or property with what you - you own here now. You don't want any more". This was said to be a reference to the service station. In cross-examination, Boyd agreed that the reference to the gift of the service station and land to John Brims may have been a reference to the service station business, or so I understood him. He said that the information was communicated to him after he enquired, "Well what's - what's the set-up in the garage here?" He said he asked this question because Dion was living at the back of the garage. As Boyd was the local police officer, such an enquiry would be understandable. However once again, the account given was fragmentary and lacking in conviction. Thus there was some apparently independent evidence capable of supporting the proposition that Dion considered the service station to belong to John Brims. However most of that evidence was equally consistent with a belief that the service station would be available to the latter for as long as he wished to operate it, without any intended reference to the question of ownership of the land. I content myself with saying that the ·accounts given by the supporting witnesses were not convincing, relating as they did to casual conversations which occurred years ago. mind They were redolent of reconstruction. the loose way in which people of ten When one keeps in speak about the ownership of businesses conducted on land, I find myself as unpersuaded by the.evidence of the supporting witnesses as by the evidence of the principal characters. In the circumstances, I find myself unpersuaded on the balance of probabilities that either Dion or Jesse ever agreed -- 24 of 55 -- 22 with or indicated to John Brims that he would become owner of the land. At the most, he may have been told that he could use the land as a service station if he was willing to make the effort to clean it up and render it operational. I am not satisfied that any other commitment was made to him. I will make some other general comments about credit after considering the facts relating to the nursery site. The Nursery Site. The claim made is that Dion and either the first and fourth plaintiffs or the third and sixth plaintiffs entered into a partnership for the conduct of a nursery or landscaping business on land to the south of the service stati_on site owned by Dion. The sixth plaintiff is a family company of the fourth and fifth plaintiffs. It is alleged that a term of that partnership agreement was that Dion contribute the land to the partnership capital. Alternatively, it is alleged that the first and fourth plaintiffs or the third and sixth plaintiffs performed work on the site in reliance upon an understanding induced by Dion that they would thereby obtain interests, each of one third in the subject property. Principally, the evidence in support of this claim comes from the evidence of the first and fourth plaintiffs, although again, there is some other supporting evidence. The fourth plaintiff had known Dion Siganto since about 1957. In fact, the fourth plaintiff's wife, the fifth plaintiff and Dion Siganto were cousins. unaoubtedl:y, the first and fourth plaintiffs and Dion Siganto became good friends. Until some time in the mid-1970s, the fourth plaintiff was employed by the Main Roads Department, attaining the level of foreman. In the early -- 25 of 55 -- 23 1970s he left the Department.to start a carting business on his own account. Towards the end of the 1970s, the three· men established a small vegetable garden on part of the land to the south of the service station, which land was, of course owned by Dion. The cultivation was purely for domestic use. In 1979, the first and fourth plaintiffs entered into a partnership, carrying on the business of carting. A truck was bought by John Brims and driven by Gary. At some time, they arranged with Dion to park the truck on his land. Having received approval, they obtained a few loads of gravel to construct a turning apron. I should say that the· land was low lying in parts and swampy. This business continued for a couple of years. Allegedly, Dion approached -them, asking if he could also become a partner. They agreed to this and he paid $1,400 for his share. · It is somewhat difficult to understand why he was so interested in buying into this partnership as John Brims made it fairly clear that there was little or no money to be derived from it other than the wages ·being paid to the fourth plaintiff who was employed full-time about its business. John was deriving nothing from it. There was some suggest~on-by the fourth plaintiff that they were considering acquiring another truck, but nothing appears to have come of this. John Brims said that they had hopes of expanding. Dion's entry into the partnership occurred in about 1981. Shortly thereafter, a man called George Duncan who operated a bagging business in the area indicated an intention to sell it. This business, which was conducted on rented premises not far from Oxenford, involved the bagging of potting mix. It appears -- 26 of 55 -- 24 that the fourth plaintiff had done some work for him in the past, al though the extent of this work is not clear. When Duncan decided to sell, he asked the fourth plaintiff if he was interested in buying. The matter was discussed with John and Dion, and it was eventually agreed that the three men would acquire the business as equal partners. The purchase price of the business was $15,000. The decision to buy followed an examination of the books of the business by Dion. At this time, Dion was working full-time in the post office, and the first plaintiff was working full-time at the service station. The fourth plaintiff became the only full-time, paid.worker in the business. However the first plaintiff and Dion helped extensively after work on weekdays and at the weekends. In effect,· the cartage business and the bagging business were thereafter combined. The business name "Oxenfo.rd Soil Supplies" was registered la.te in 1981. Subsequently, at Dion' s suggestion, the operation was moved from the site previously used by Duncan to the site to the south of the service station which has been referred as the nursery site. This move was an obvious one, given that both Dion and the first plaintiff were working nearby. I accept that the move had the added advantage of avoiding rent. In order to carry on this business, it was necessary to increase the area of level land for the plant. This was achieved by dumping and levelling more gravel. Concrete footings were installed for the equipment. As the business. progressed, Dion assumed.responsibility for the bookwork. At some time after moving to the nursery site, the fourth plaintiff suggested to the other partners that they commence a -- 27 of 55 -- 25 landscaping business there. This was eventually accepted as a good idea. However it was recognized that a substantial amount of work was necessary in order to prepare the site for the conduct of a continuing business. At this point it is appropriate to try to capture the spirit of the fourth plaintiff's evidence. At p. 39 the following passage appears:- "So you discussed filling the site. What was Dion's reaction to that? He said: Yeah, that's all right." We discussed further on and we discussed what would happen, how we would organise the whole deal. Tell me about that? That was my contribution. I had to get all the fill which I knew quite a lot of people, especially from the Main Roads, and I coulq get most of the fill for nothing, which was a considerable amount of metres. You were to do that? And Dion said "Righto." He said, "The land's not much use to me here I will put the land into the partnership" he said, that will be my contribution." He said, "I am working at the post office. I can't do much here." And John's was to do all the fencing and put all the - stand all the posts and do any repairs and keep the bin going and all that. Any vehicles? And the vehicles too, all the vehicles. We didn't have many vehicles then. Was there any discussion as to funds? Not at that stage we were sort of going to try and do it. as we kept bagging and going on but we knew we couldn't in the end so we had to borrow some money." At p. 40 this passage appears: "You were discussing with John and Dion how things would be arranged, you said, or how things would be done, and you said you were to contribute the work in filling etc., John the fences, gates and mechanical side of things, and Dion said what? What was Dion? Dion had to put the land in. The land was going to be part of his parcel to the partnership in that respect. Did he say that? Yes, that was what was said. By His Honour: What did he precisely say? He said that he will put the land in. He said, "It is not much good the way it is and if we are going to do it up, it is going to cost a lot of money to get the fill -- 28 of 55 -- 26 in, so " He said, "My part of the parcel will be I will put the land in for my part of the partnership." It is alleged that at some later stage, Dion put a value of $5,000 or $6,000 upon the subject land. This seems unlikely as an area of 3.749 ha. (of which the nursery site comprised about one-quarter) was valued, probably for probate purposes, in 1975 at $39,450. See ex. 35. Dion would have known this. The filling and levelling took something like 12 months. (Seep. 42 11. 40-43.) The way in which it was done was that whilst the fourth plaintiff drove the truck and attended to the potting mix business during normal work hours, all three of the men worked at the development of the business out of hours . ( See p~ 42 .. 11. 48-50.) Some of the evidence suggests that the first and fourth plaintiffs did most of the filling work whilst Dion worked in the garden or at the bagging. I should stress that the thrust of the evidence was that all three men devoted virtually all of their spare time to the development of this business. Although the fourth plaintiff was employed full-time in the business, he was compensated for his normal working hours by way of wages. The other two received no wages. There is no suggestion that Dion was other than an effective worker in the partnership business, and quite apart from his physical contribution, he also kept the books. Some evidence suggested that the first plaintiff fabricated steel work for the business. at his. ser~i.ce station during normal working hours, but the extent of this undertaking was not clear. Although it was suggested that Dion agreed to contribute the land in consideration of the fourth plaintiff ·obtaining the fill -- 29 of 55 -- 27 because the latter had appropriate contacts, and John was to do the fencing, in fact, the three partners all worked in· the partnership on a more or less equal basis (excepting the paid work by the fourth plaintiff during normal working hours). As to the fourth plaintiff's contribution of fill, some fill was obtained free of charge, but other fill was paid for by the partnership. All actual outgoings were paid by the partnership. Thus to the extent that the evidence suggested that the fourth plaintiff was to contribute the fill, this was not the way in which the partnership developed. Al though I am willing to accept that the fourth plaintiff obtained' some free fill, either from Main Roads or.from the B.P. Service Station site as he claimed, nonetheless the only person who was, on this account, to make any real capital contribution to the partnership from his own assets was Dion. It was implied on a number of occasions during the trial that the fourth plaintiff had some particular expertise in the business of the partnership. Although he knew a little about the bagging business before the acquisition of that business from Duncan, he actually had very little experience, and there is no evidence that he had any prior experience in the landscaping business. In about 1982, money was borrowed for partnership purposes, and Dion made the land available as security. At some stage, there was a discussion with Dion about money and the partnership although the exact context is not clear. He apparently declined to draw a wage because no money was being generated but said, "All I will take out is the money to pay the rates and whatever else I have got to take out". -- 30 of 55 -- 28 In the years from 1984 until his death in 1987, Dion increased his involvement in the business, particularly after he obtained assistance in the post office and later leased the whole undertaking. He then worked full-time at the nursery but still did not draw a regular wage. This was from about June, 1985. He did thereafter take money out of the business, according to the fourth plaintiff. (Seep. 52 il. 36-45.) As previously mentioned, a continuing theme in the evidence was the long-term plan contemplated by the three ~en. This is outliqed at p. 54, where the witness said, "We were all after the one thing, was to build the whole place up,· get the plans and his idea was to advertise in -Melbourne, get some of those Melbournites up here, they'd buy the place." The idea was to then, '-'be heading up north. · That was the main ambition." The money from the sale of the bus~ness was allegedly to be split three ways. It was alleged that Dion made certain statements in connection with approaches to buy into the partnership. At p. 57 this passage.appears:- "In 1983,. before the main shed was built, did you and Dion receive an approach from a person, Ernie Bathe? Yes, we did, him and another person. Can you tell me about that? Well, it wasn't mainly Ernie. It was mainly a bloke by the name of Trevor Toohey. They were partners in a sand mining business, and Trevor's offsider, Trevor's mate in Melbourne had a potting mix business and Trevor was very interested in our potting mix business. He used to often come in and. sa.y you know, shoul:d ~ing this bloke up cipq scly do this and extend and this and extend that, and it went on. And then one day they said, how about we go buy into this. Was Dion there when they said that? He was. -- 31 of 55 -- 29 Did he make some response to them? Not that day, because they came back a few more times and then they_ said, well, come on, we know you are short of money which we always were, and Trevor had plenty of money, and he said, well, how about we go into it and we said no. Then they said, well, what is included if you do decide to sell, to give us a partnership, what is involved in it, and then Dion told him, all the land right over to the other side of the house near the service station. He said that is involved with everything, the whole nursery." A second offer was allegedly made by Keith Rangely to whom I have previously referred. The evidence as to this also appears at pp. 57 and 58 as follows:- "Were you also present when Keith Rangely made an overture? Yes. When did that happen? I think that was - could be around, around the same·year . .. In what circumstance did that happen? That was much the -same. As the last circumstance? He wanted to buy· into the business. What did Dion tell him? Exactly the same. By His Honour: What did he say? What did he say? Yes? He - Keith wanted to know what was involved if we let him buy into the business. I thought you said he wanted to know if he could buy into the business? He wanted to buy into the business. Keith did? Yes. And he said well, what is involved in it if you do decide to let me buy into it, and Dion told him, all the land; and he said how far does the land go, and Dion said, right over beside the service station. " It is curious that notwithstanding the apparent determination of the partners not to sell, nonetheless the potential purchasers sought information as to what was involved in the partnership, a matter which might more usually be sorted out before even the most casual offer. It was something of a -- 32 of 55 -- 30 coincidence that on each occasion, Dion should have taken the opportunity to outline so clearly the fact that the land was a partnership asset. One would expect that if the partners were interested in introducing new capital or disposing of their interests, they would make clear to a potential purchaser what was involved in the business. However given the fact that these enquiries were quite unsolicited and allegedly of no interest to the partners, it is somewhat strange that such specific statements.should have been made. Exhibit 30 was shown to the witness, and he was cross-examined at some length upon it.· I should say something about my understanding of this exhibit. It was discovered by the fourth plaintiff in his affidavit of documents as document 65. It was there described as, "General Ledger and Journal Book for the year 1982-83 to 1989-90". The evidence suggested that the books of the business were kept by Dion, but the partners also retained an accountant by the name of Imbruglia. From the fact of the presence of these accounts and other documents in the possession oft~~ fourth plaintiff, I infer on the balance of '~/1/-',.- probabilities that they ~ere prepared in consultation between Dion and Imbruglia up until Dion's death, and that thereafter, they were prepared by Mr. Imbruglia from information provided by the continuing partners. Whether or not this is precisely correct, I see no reason·to conclude that bookkeeping documents apparenbly relating to. Ox.er:iford Soi.l Supplies, in the possession of one of the partners are other than a genuine at tempt at accurately recording the affairs of that partnership. -- 33 of 55 -- 31 It may be that neither the first nor fourth plaintiff had much knowledge of their contents, but I see no reason to suspect that Dion would have kept the records in a way which was inconsistent with the mutual agreement amongst the partners. However to the extent that they are inaccurate, the plaintiffs have had an opportunity to demonstrate that inaccuracy. Having said that, I nevertheless approach ex. 30 with considerable care. The exhibit is relevant because .it records that some amounts were paid as "rent". This suggests that whoever·was responsible for keeping the books considered that the amount could properly.be so characterized. It could hardly be so characterized if the land was a partnership asset. ~ am conscious of the possibility of confusion between rent for land and lease payments or hire- purchase charges in connection.with chattels. It is sufficient to say that as one peruses these records, one can identify items relating to such outgoings apart from the items identified as rent. There is an inference open, I think, that rent was being paid or was payable in respect of the occupation of land, and the only land which the partnership was occupying was the nursery site. At the very least, given Dion' s involvement with the partnership books, one could infer that his conduct in allowing such entries was consistent with a belief that he still owned the land. Such an assertion might only mean that it was thought appropriate to claim that a payment was for rent to justify it as deductible for tax purposes. However, even the most determined and blatant tax cheat would not make such a claim if the land in question was owned by the entity making the payment, -- 34 of 55 -- 32 or at least such arrogance is unlikely. There is also an entry for rent relating to a period after Dion's death. Mr. Brims thought that any such entry would have been made by Mr. Imbruglia. One would reasonably expect that the surviving partners, or one of them assumed responsibility for supervising and instructing the accountant after Dion's death. Exhibit 31 comprises a bundle of tax returns for the partnership. Counsel for the plaintiffs were anxious to deny the identity of these returns, although they were apparently discovered by the plaintiffs to the defendants. Mr. Morrison for the plaintiffs said at p. 73:- "It cannot be said they· are the tax returns at all. They are - these are simply copies of documents which were given to my side and are - were listed as such. We don't know that they are the tax returns at all." It subsequently appeared .that accountants had provided these documents to the plaintiffs. It is common experience that accountants prepare tax returns for clients, and if the plaintiffs obtained copies of documents purporting to be partnership returns for a business named Oxenford Soil Supplies, which documents were apparently prepared by a tax agent called Imbruglia (who has been identified by the fourth plaintiff as the person who acted as the firm's accountant), I see no reason not to infer on balance that these are copies of returns. filed on behalf of the partnership. Indeed, some appear to be signed by one of the Brims . If the plaintiffs wished to rebut this inference or the accuracy of the returns, it was open to them to do so at the trial. I should add in this respect that I keep in. mind the fact that after Dion's death, a fire occurred on the nursery site which destroyed a shed in which were stored certain -- 35 of 55 -- 33 records. This placed all parties in some difficulty in reconstructing the affairs of the partnership. The tax returns show the partners as being Brims Constructions Pty. Ltd., the Darodyn Trust (the trustee is the third plaintiff) and Dion Noel Siganto in equal shares. Whether Brims Constructions Pty. Ltd. is identical with the sixth plaintiff, I do not know, but presumably that is the case. The return for 1982-83 shows an item for rent and levies of $600. There is another item for leasing charges in the expenses part of the return~ The land is not shown as an asset of the partnership. For the 1983-84 year, an'item of $1,000 is shown for rent and levies. Again, there are other amounts for leasing charges and hire-purchase charges, and again, the land is not shown as an asset. In 1984-85, the amount for rent and levies is $200. Again, there are other items representing hire-purchase charges and leasing charges. The land is not shown as an asset. In 1985-86, an item of $1,750 is shown for rent and levies as is an i tern of $2,420.22 for rates and taxes. There are also substantial leasing and hire-purchase charges. The land is not shown as an asset. In the 1-986-87 return, there is an item of $3,001.92 for rates and taxes and $2,600 for rent and levies. Again there are i terns for leasing charges and hire-purchase charges. Again the land is not shown as an asset. In the 1987-88 year, for the period up to Dion's death the return shows an item of $2,550 for rent and levies, nil for rates and taxes, and there are again amounts for hire-purchase charges and leasing charges. The land is not shown as an asset. The return filed for that part of the tax year after Dion's death discloses no -- 36 of 55 -- 34 payment by way of rent. I should say that in some of the later returns, there was a requirement to disclose payments made to associated persons. There was no disclosure of any payment made to Dion as perhaps there should have been if he was paying rent to himself. It was argued that there was no evidence that any of the plaintiffs had knowledge of the financial records of the partnership or the tax returns. It is always possible to write off unfavourable documentary evidence in this way, but when the balance of probability is involved, especially wher~ the other party to the transaction j,s dead, such an assertion must. be considered carefully. I turn now to consider the first plaintiff's evidence concerning the nursery site. Mr. J.R. Brims gave evidence of the initial business ventures by him and his brother. With respect to the trucking business he said that, "After a while Dion wanted something to do - a little more than what he was doing. He was sort of becoming very, very - just one-sided in himself and he wanted something to do. He frequented the pub and just had not a real big empire for himself, and he said, 'I want to get in on that truck' because he reckoned he could drive the truck". Dion had been assisting in providing two-way radio communication with the truck. The intention thereafter was that he do the bookwork associated with the business. At that stage, the business was not making any money beyond that being paid for outgoings, including wages to Gary Brims. It may be that the Brims had expectations of expansion, and perhaps this was why they were willing to let Dion join the partnership and make a -- 37 of 55 -- 35 contribution to capital. Subsequently, the three of them decided to buy the potting mix business, "because by that time Dion was very enthusiastic because he reckoned he was the gung-ho gardener and could really put some flair into it". Subsequently, according to Mr. Brims, the business was relocated to the nursery site because it was too far to go to its previous locations. Seep. 202, 11. 18-20. He acknowledged that there was also a saving in rent. He made it clear that Dion played an active part in the potting business, assisting in stitching the bags and doing the associated bookwork, including taking orders by telephone. On occasions, he also assisted with delivery of orders. Seep. 211, 11. 15-22. The account given .. by the first plaintiff of the discussions leading up to the establishment of the nursery business was as follows, commencing at p. 213:- "Well what I want to know is did the three of you start to discuss in more detail what would be done, how you would set it up?-- Yes. Tell me about those discussions. What did you discuss and decide between the three of you about how it would be set up, who would be involved and·how?-- Well, it was a long-term project for number one. We didn't know whether to change the bagging equipment from where it was or leave it where it is, or even just start putting plants in there and sell them from the bit of land we had left there that was feasible and working, and Gary said, 'No, you can't do that half- way. It won't work'. So, he said, 'I'm going to get a dozer in here. I am going to level everything and fill the damn thing up'. And then I said, 'Well, that's a big job because you have got a lot of stuff here, wrecks and cars and grass and full of water down the bottom of it'. The only good thing about it was it was going to get rid of all the snakes we had down there, and then Gary said, 'Well, we won't stop once we start', and Dion said, 'Get into it and let's get going with it because if we are going to do it, it is no good talking about it'. -- 38 of 55 -- 36 Well, tell us what was discussed between the three of you as to who would be involved, on what basis, who would put up what, how it would be operated?-- That was fairly obvious because---- BY HIS HONOUR: Morrison just conversation?--expertise in it Don't tell us what is obvious. Mr. wants you to tell us about Well, Dion said he would - he had no and I said I didn't either. Neither did Gary, did he?-- None of us did, Your Honour, on plants, and he just said, 'Well, if we're going to do it •.. ' - because Gary said, 'Well, if it's going to be done, it has got to be done right. We have got to have this signed up, fixed up, so everybody is in it together' and Dion said, 'That's easy enough son. The land is there. You can have that'. That is part of my contribution to the business and Brimso . · .. ' -- pointing to me - ' ... we will do all the fencing and you just make sure the thing is done right'. He emphasised to Gary, 'When you do it, do it right'. That was the way it was originally set up. Was. this only in one conversation or over a number?-- Over a couple but, you know, once Dion said something, or we said something - it was something you wouldn't just go and rant and rave on every day of the week. We knew which direction we were heading. Can you remember as close as you can the way 21 in which Dion said it, or the words that he used?-- He just said he will put the land in as part of the partnership, and then I said - I think I said at the time, 'Well, we will form a partnership, a proper partnership' . Was there any discussion between the three of you about how funding .would be obtained?-- Well, the funding at that time - I still had the truck and the accounts, I think, were still in my name - they were, because I had a fairly good track record with the National Bank - and I - well, I had come up with the $5,000 for George Duncan's and then it just went on from there. I just sort of said, 'Well, we will open up an account' and I forget the bank manager's name at the time, but he just said, '$5,000 will be enough'. D:i:d you come ·to the view, the three of you, that you would get some money from the National Australia Bank?-- We did. Was there any discussion about the topic of who would undertake the clearing and filling and levelling and so forth?-- Gary would do that. -- 39 of 55 -- 37 Was that discussed?-- Yes. BY HIS HONOUR: What do you mean by that, Gary would do that?-- Well, Your Honour, he was a supervisor high up in the Main Roads at the time and --- I thought he was driving a truck at the time?-- No, early in the piece rather, and he knew a lot of people and how to go about getting fill and that. You didn't mean he was going to do the work himself,that he was going to get the fill?-- That was his thing to do. I couldn't leave the service station and Dion didn't want to actually leave the post office at that time, so Gary had the_ truck and the contacts to go and grab the stuff when it suited htm. He was a full-time employee of the partnership in the sense that he was on a salary, wage?-- Yes. · BY MR. MORRISON: Was there discussion of what you would do?-- Well, my-job was automatic, keep the gear going for number one, and then any steel fabrication work that had to be done, benches or little things to hold pots and the fencing. Once it was basically all cleared or part there cleared and compacted and rolled, well, then we started to store a bit of gearthere •.. so we had to fence it and fence it pretty quickly." It appeared that Dion assisted in erecting the fencing although most of the parts were probably pre-fabricated by J.R. Brims at the service station. According to the first· plaintiff, Dion drove a roller to assist in the compa·cting and otherwise participated in the planning and layout of the facilities. He was also responsible for the bookwork. There was some evidence to the ef feet that Dion thought the land was virtually worthless, although it was also suggested that he had on one occasion suggested that it was worth $8,000 or $10,000. There was some suggestion that a sum of $4,000 or $5,000 had been spent on fence materials. Probably the partnership r.eimbursed the service station for such i terns. I have previously mentioned the evidence -- 40 of 55 -- 38 of this witness as to the long-term plan to sell up the partners' interests, split the money and buy into something "up north". There is one curiosity which appears from the cross-examination o·f this witness. In evidence-in-chief, he suggested that the purchase price of the original truck was $6,000. Seep. 208, 1. 31. However under cross-examination it was conceded that the figure was actually $3,000. He was then asked:- "How then did you justify demanding and getting $1,400 from Dion for a one-third share in the business'?-- That was what Dion wanted to pay to get into this and Gary and him sorted it out. Gary and Dion sorted that one out. They spoke on that one. I didn't want to let Dion pay a thing for it, to be quite frank with you, but he insisted. Did it have anything to do with an amount of money that y_ou needed then to buy another truck?-- No. This $1,400 was the amount you needed to buy anothertruck?-- No, it wasn't." (Seep. 228, 11. 30-42.) Initially, in evidence-in-chief, this witness sought to justify Dion's involvement in the business (which was unlikely to yield him any immediate return) on the basi·s that the business was about to expand. Thus one might have expected (as Gary Brims suggested) that the additional capital contribution would be put towards the acquisition of another vehicle. It is possible that Dion had available a particular sum of money, $1,400, and indicated a willingness to contribute it to the partnership as t,he price of his buying in. Perhaps the existing partners were willing to accept him on that basis. Nonetheless the evidence on this score does not seem ·entirely consistent or convincing. -- 41 of 55 -- 39 I now turn to the evidence of the second and fifth plaintiffs. Joan Mary Brims, the fifth plaintiff was undoubtedly quite close to Dion. I accept her evidence that he was not close to the other members of his family after Jesse's death. I do not, however accept that he felt continuing hostility towards them. I am satisfied that he simply did not have a close association with them. Mrs. Brims gave evidence of discussions with Dion about the establishment of the landscaping business. She said:- "Dion said, he thought it would be an exceptionally good idea. It was good for all of them concerned · because he was looking for an outlook.to give him more opportunities to do something more with his life. Did he say something to you about the land?-- The land - Dion had always told me that where the land was involved, he was putting the land into the business and Gary was to make sure that all the earthworks and that was done, and the other partner, he was to supply all the fencing equipment and build the gates. And the other partner was John?-- partner was John. And the other At the time these discussions were had between you and Dion, did he explain that he was putting the land - how did you put it - putting the land into the ·partnership?-- Yes. HIS HONOUR: Why don't you•ask her what she said?-- MR. MORRISON: I am trying to remember the witness' words. HIS HONOUR: I think it would be better if you asked her what she said. She was even led a little bit as to that. MR. MORRISON: Alright, Your Honour. BY MR. MORRISON: I am sorry, I was trying to remember you words. Can you te11 · me what Dion said, as closely as you can remember to what he said about it?-- Dion said that we were going to be a partnership and his position was that he would provide the land if Gary could do all the earthworks and the associated filling with it, and the other partner, which was John, would -- 42 of 55 -- 40 do the fencing and building the gates and so forth like that, the steel part. Did he say anything else about what he was going to do with the land or why he was doing that?-- Mainly to build it up because it was worthless to him beforehand. It wasn' t any use to him before that. BY MR. MORRISON: Did Dion say anything else about why he was doing that to the land? Or why he was taking that stand?-- Dion - yes, he said he was doing it that way because he only had himself to look after, that there was nobody else involved. Did he express any view about his plans otherwise for the land or his plans for the land in the future?-- Not as his plans, only as his plans, it was the wliole plans for the three of us. What did he say about that?-- Well, the three ~f us was to be built - to build up a business· and the whole lot of us then sell out and move away, preferably up north, maybe Rainbow Beach ar·ea." The next day her evidence on thi~ subject was re~canvassed at p. 98 as· follows:- "Did he say anything about the land?-- The land, yes. What did he say?--- He said that he would throw in tne land as his contribution to the partnership because the work that Gary would have to.do to it to bring it up to a viable state would probably be worth more than what the land was worth." Asked about discussions concerning the division of labour in the partnership, she said:- "Well, he said that he was - Dion's words was he was the brains and Gary and John were the brawns." She was cross-examined at some length about use of words such as "contribution" and "partnership". Her account of the vari.ous. c.onversaticms was not convincing as reflecting the actual words used. I would be reluctant to accept her evidence as having that degree of accuracy. Mrs. M.J. Brims had nothing to -- 43 of 55 -- 41 say about the nursery site. witnesses. I turn to the other supporting Mr. Rangely to whom I have previously referred claimed to have, on one occasion enquired as to the possibility of buying into the landscaping business on behalf of his son. He was told that it was, "a closed shop". The witness, Ian Douglas Avis knew all three partners and gave this account at p. 160:- "Did you have a conversation with Dion Siganto aboutthe business of the nursery at one stage?-- Yeah, there was Dion, Gary, John at the hotel there - the Oxenford Hotel. We were just talking about Dion,. with the land part. Dion had put the land in and Gary started doing all the fill and that in it and John handled the fence part and -all the maintenance and stuff like that - the hopper and that which they used to bag potting mix in and that. Dion was part of this conversation?-- Yeah, Dion was there. What did he say about his part of the arrangement?-- Well, Dion, his part was the land. Can you remember roughly what he said about it?-- As far as his part was he'd put the land and Gary would start putting all the fill in, which took a fair few months - all the filling to build it up for site level which they wanted it for, and they started -0n the fill and then later on they started to put the fence around it but they hadn't finished all the fill though." The witness Magunus Lars Moren gave evidence of approaching Dion late in 1982 or early in 1983 about acquiring some of the land which is now the nursery land. At p. 166 this passage appears:- "You asked Mr. Siganto whether there was a chance of leasing or buying it. What did you say - what did he say?-- He said that he couldn't decide about the land since he was starting up a partnership with Gary and John Brims and he was going to put the land into, into the partnership and they was going to do the rest of the work and putting the expertise into it, and I had -- 44 of 55 -- 42 to go and see Gary about, if the land was available or not." -A little later on that page, he was asked and answered:- "Can you remember - when Mr. Siganto replied to yourenquiry, can you remember pretty well the words heused? Can you put it into, as much as you can, the way he said it?-- He probably - he said it like - oh, he said, he couldn't decide what to be done with the land because he had put that into the, thepartnership, as I said, with John and Gary - yeah, Gary and John Brims. That was going to start up, expand the nursery, but at that stage they just had little - mainly a soil supply. They didn't have most of the - a nursery at all, and they were going to expand the nursery and start growing a lot more plants and he was·going to put the land into it and they were going to put the expertise and the work into it while he was still at the post office." The witness Frank Charles Alfred Stone had some opportunity to observe the workings of the partnership as he lived in a caravan at the nursery site for some time. answered at p. 248:- He was asked and "In those conversations, tell us in your own words - or as roughly as you can remember in /Dion' s words - what did Dion say about how it was, how it was to be set up and operated?-- It was to be a three-way partnership, as far as I can remember, and the land, Dion was .putting up the land; Gary was doing the improvements, and John was doing his part in the fencing and work on the nursery as well. Can you recall perhaps with.a little more precision the way in which Dion said that, or as close as you can the sort of words he used when he talked about how it was set up?-- I did approach him with some money at the time and I did approach him to be in it, and he said, no, it was a three-way thing and that was it. There wasn't going to be any more in it at the time. It was just between the three of them as a partnership but --- In. rel.ation to. .th.e l.and, c.an you X'emember w.i tl;:t m.o:r:e precision, or better precision, the way he talked about that?-- Well, he said it was going to be the three of them in it and he was putting the land up as his part of the partnership and the other boys were doing the ·rest of it." -- 45 of 55 -- 43 I have previously referred to the evidence of Mr. Alexander in connection with the service station. Mr. Alexander also had an opportunity to observe the nursery business and to discuss its structure with Dion. He had an overwhelming impression that everything involved in the various businesses conducted by the three men was shared equally. Although there was no discussion about the ownership of the land, this understanding extended to that land. Mr. Dallinger, whom I have already mentioned·, gave evidence of discussions with Dion about the nursery. passage appears:- At p. 262. this "In the course of the conversation was anything ever discussed about the land - the nursery land?-- The land at the nursery? Yes?-- It was to be all one. The nursery and the land was ·to be built up and then sold as one whole box and dice, whatever, and split the three ways. Did he tell you anything about his partnership and how it had been formed and what their contributions were. to be?-- Just everybody sort of worked in together and everybody had their bit to do; and it was going to be sold and split the three ways." I have already mentioned my dissatisfaction with Dallinger' s evidence. The witness, Lionel Colin Freiberg asked permission of Dion to use the nursery site to demonstrate or to test a machine which he was considering buying. Dion apparently said at that time, "I own the land". At some later stage he asked Dion, "What's happening with the land?" to which Dion replied, "It's going to be a nursery". The following passage then appears at p. 267:- "Did he say anything else about the land?-- He was putting the land into the nursery. -- 46 of 55 -- 44 Did he discuss with you in that conversation his partnership with John and Gary Brims?-- With John and Gary, yeah. What did he say about that?-- He just said his share was his land and it was going into the nursery part of it. He was running the post office and Gary and John would run the nursery at that stage." I return to the evidence of H.F.J. Boyd, the former police officer. He recalled being told by Dion that he had bought into the trucking partnership. He also said that it was Dion's idea to move the business down to the nursery site. He was asked at p. 270:- "Did Mr. Dion Siganto tell you anything about this nursery business?-- Yes, he did. He told me that his contribution towards the - to the business was that he was going to contribute the .land. I presume that would be the land between the church and the garage." At p. 271 this passage appears:- "You were a party to a conversation in which Mr. Siganto made you an offer concerning the nursery business; is that not the case?-- Yes. Tell us about that conversation - first of all, who was present for that conversation?-- Yes, there was myself and Dion and John Brims, and I was offered a third share - or a quarter share in the, in the actual - this is well after they purchased the potting business - I was offered a quarter share in that, but, but at the time I declined. What were the terms of this offer - first of all who made it?-- Dion made the offer to me, I was going to be in a partnership with the - in the - with the four of them. There was John, Gary and Dion. Yes. What were you to contribute or what was going to be your contribution to this? Well, money was suggested at that stage, and they asked me to - or were going to put a thousand dollars in each, and I cons.id.ered. tl:i.e 111c3,t,te:r: a:nd I declined it for, I suppose, for personal reasons to some degree. Was it explained - or did Mr. Dion Siganto tell you what the others would be contributing?-- Yes, they were contributing their time and they were going to put all their effort - all their time and effort into the business as well as Dion. -- 47 of 55 -- 45 Did he tell you what he was contributing?-- Well, he told me he is - his contribution to the set up was his block of land. The land that was between the church and the garage. BY HIS HONOUR: What were the others putting in?-- Well, the expertise - well---- Who had the expertise?-- Well, I suppose John. He was the motor mechanic. He was looking after the mechanical side of things. If anything broke down on the machinery side of things, he was doing the mechanical side. Gary was driving the truck and the - he was doing the nursery side of things." There are a number of observations I should make about the evidence concerni'ng the nursery site. As with the service station, the accounts of the principal character were fragmentary, having about them the aura of re-construction rather than actual recollection. With the supporting witnesses, that js the witnesses.other than the members of the Brims family, I have kept in mind two principal considerations. Firstly, a very long period of time has. elapsed since the conversations in question and even at the time, the conversations were mostly of a casual nature. Secondly, as with the service station, there is room for substantial ambiguity when talking about the way in which a partnership carries on business. To a layman, there is very little difference between a partner putting land into a partnership in the sense of intending that the land become an asset of the partnership and making the land available to the partnership for its use without such intention. As I observed in connection with the service station, there is very often a confusion of the distinction between the ownership of land and the ownership of the business being conducted on the land. When these various factors occur in conjunction as they do here, there is considerable room for error. -- 48 of 55 -- 46 I am not satisfied that any of the supporting witnesses was really relating conversations in which Dion indicated that he had transferred ownership of the land to the partnership or intended so to do. I have kept in mind also the long-term plan of the parties to sell up all of their assets and enter into some other business. It might be thought that this was consistent with an intention to pool assets. On the other hand, John Brims had it in mind that his service station would be sold and the proceeds so distributed, notwithstanding that he now asserts that he continues to own the land. It is quite possible that there was a common intention to realize the assets and inves~ the proceeds. However this does not necessarily mean tpat ·all the assets or any of them had ceased to be in individual ownership. With the supporting witnesses, the circumstances in which the alleged conversations occurred were generally unconvincing and the accounts were also somewhat superficial. I have used the word "fragmentary" to describe the impression made on me by some of the witnesses. By this term I mean that the accounts are of parts of conversations, without any indication of the context in which they occurred. Such fragmentary recollections tend to be unpersuasive. I would observe also that in the evidence of the principal witnesses (the Brims) and the supporting witnesses (including Mrs. J.M. Brims), the continuing theme of Dion bringing in the land whilst Gary provided the fil-1 ( including the. expertise) and John looked after the machinery and fencing does not stand up under close examination. To the extent that Gary was to work to any greater extent than the other partners, he was to be -- 49 of 55 -- 47 compensated for that. He claimed that he brought a special knowledge to the partnership in terms of access to the supply of fill. However there does not seem to be anything very unusual about his knowledge in this regard. Further, much of the fill was to be paid for in any event, even if in some cases it was at an allegedly favourable price. It is not likely that a close friend would set off this sort of knowledge as an asset against land, particularly when one keeps in mind that Dion also brought special knowledge to the partnership in terms of his ability to keep the books. I should also say something about the documentation, in particular the books of account and the tax returns. Although .. I have taken some time to indicate the areas in which those records seem contrary to the plaintiffs' case, I have nonetheless refrained from putting undue weight upon those documents. There can be any number of reasons for partnership and other business records being drawn in a particular way. Such transactions are often recorded in a way which does not reflect the reality of the situation. For this reason, I . would have been ·willing to overlook any inconsistencies between those records and the accounts given by the plaintiffs had they convinced me in their evidence that they were reliable and honest. However to the contrary, following the oral evidence in the trial, I was left with the distinct impression that both Gary and John Brims had manufactured the conversations alleged with Dion and in John Brims' case with Jesse. Perhaps with the passage of years, they have convinced themselves that it was Dion' s intention that they have the -- 50 of 55 -- 48 benefit of ownership of the service station and the nursery site, but I was not satisfied by the oral evidence that any conversations to that effect occurred. When I came to peruse the evidence of the various witnesses before writing this judgment, I found that if anything, my initial impressions were strengthened by the written record. In deciding whether to accept or reject the evidence of the Brims, in particular John .and Gary, I have had regard to all of the evidence. In the end, I find myse'if unpersuaded that Dion at any time indicated to either of them or to ·anybody-else that the nursery site was to become a partnership asset. He probably indic'ated that the partnership was to use the 1and. I am not persuaded by any of the supporting witnesses that he evinced any other intention to .them, although it is possible that something ambiguous was said and taken in a way favourable to the plaintiff's claim. As I understand it, the consequence of my findings, both in respect of the service station site and the nursery site is that there should be judgment for the defendants against the plaintiffs in respect of the relief claimed in paragraphs 15 (ii), (iii), (iv), (v) and (vi) and 29(1a), (iv) and (v) of the statement of claim. A question remains as to whether or not there is some basis for compensating the Brims for time and money expended in the improvement of the nursery site. It was faintly suggested that pursuant to the decision of the High Court in Harvey v. Harvey (19=70) 1,20 C.L.R. 529, there may be some bas.i.s for such a claim, although I think the possibility was raised by the defendants rather than the plaintiffs. -- 51 of 55 -- 49 Barwick C.J. expressed a view supportive of such a claim, but Menzies and Walsh JJ. took contrary views. Me~zies J. said:- At p. 556-7, "In the absence of an express agreement, the only way in which improvements can possibly be regarded as profits divisible among partners would be upon the sale of the improved property as such. In a case where a property does not become an asset of the partnership but is intended to be retained by one partner after the determination of the partnership it follows that there can be no basis for treating the difference between the value of the property as it was when it was made available for partnership use, and the higher value of the property at the end of the partnership due merely to improvements made by the partnership as a profit divisible among the partners. There can be· no profit realised without sale, and, in the circumstances, sale is negatived." After an extensive consideration of the authorities said to support the view adopted by Barwick C.J., Walsh J. concluded at p. 567:- "It is not necessary to decide that in no circumstances falling short of express agreement could a partner become liable to account for a share in an increase in the value o"f his property produced by partnership effort. It is sufficient to say that in my opinion there is no general principle that he ~ust do this unless it can be established that there was an agreement to the contrary. In my opinion the circumstances of the present case do not regui're or warrant a finding that the appellant is liable to such an account." No particular basis was advanced in the present case to justify ordering such an account, and I can see none. The parties expected that the partnership between them would last for a long time. Dion' s death was unexpected. That the partners may not have derived the full expected benefit from their outgoings is not a basis for intervening to fill an hiatus in their partnership agreement. In any event, they have had a substantial benefit from use of the land until the present time. -- 52 of 55 -- 50 I should mention the prayer for a declaration contained in paragraph 15(i) of the statement of claim. I do not understand that Hahndorf's ownership of the service station business was ever disputed. I see no reason for making such a declaration. It is appropriate that there be orders for winding up of the partnership and the taking of accounts. Such accounts should include partnership dealings up to Dion' s death and, to the extent that partnership assets were used, thereafter. A number of other issues are raised by the counter-claim. Clearly, the caveats should be removed. I would so order. Such tenancies or licences to occupy as there may have been in respect of the service station and the nursery·site were determined on a date not later than 19th May, 1991. See ex. 45. The parties have made only very general submissions with respect to the question of rent payable for the two sites. As Dion allowed John Brims to remain in possession of the service station on an informal basis, accepting such amounts as the first and second plaintiffs chose to pay him, there is some considerable difficulty in recovering rent for the period prior to J9th May, 1991. Although the identification of payments as rent in the partnership tax returns is evidence suggesting that the Brims did not consider themselves to be entitled to ownership of the service station, it does not follow that there was any agreement to pay :rent. It i"s p:roba.ble that no agreement was made as to the payment of rent prior to Jesse's death. Although there was a willingness on the part of the first and second plaintiffs to pay outgoings to Dion, and these were eventually characterised as -- 53 of 55 -- 51 rental in the accounts, I am not satisfied that there was a legal obligation to pay such amounts. The payments were voluntary, although the way in which they were characterized discloses a belief that the partnership could claim that rent was paid to Dion, thus suggesting that the partners considered him to be owner of the land. I can see no basis for ordering payment of rent for the period prior to the date of determination of the .tenancy, that is the expiry of the notice to quit referred to in ex. 45. Thereafter, .there may be a claim for mesne profits. There is evidence of valuation of the service station land and the n~rsery site in ex. 43, al though the pages of that exhibit seem to be out of order. As I read it, the estimated annual commercial rental for the service station site as at April, 1991 is $13,000 per annum. I would be inclined to suspend any order for possession until 19th January, 1992, unless compelling reasons were advanced for doing otherwise. I would award mesne profits from 19th May, 1981 until the present time at $1,083 per month.· The suspension of the order for possession would be conditional upon the plaintiffs continuing to pay such amounts to the defendants up to the .date of possession. As to the nursery site, it is clear that there was never any formal agreement that rent be paid. As I have said in respect of the service station, the items of so-called rent appearing in the documentation are not relevant as showing that rent was payable, but rather as showing the understanding of the partners as to ownership of the land and entitlement to receive rents payable in respect thereof. This is relevant evidence -- 54 of 55 -- 52 contradicting the claim made by the plaintiffs, but it does not necessarily prove an agreement to pay rent. Again, I would be inclined to allow the plaintiffs a reasonable period of time in which to vacate the premises and again, 19th January, 1992 would be appropriate in the absence of any compelling submissions to the contrary from the defendants. Exhibit 43 shows the commercial rental as at April, 1981 as $51,562 per annum. I would allow mesne profits to the present time at $4,296 per month from 19th May, 1991 . Again, the · suspension of the order for possession until 19th January, 1992 will be conditional upon the plainti~fs' continuing to pay at that rate until then. Following the deli very of these reasons, I will hear submissions as to the forms of formal orders, time for delivery of possession and costs. -- 55 of 55 --