Talbot v Boyd Legal (A Firm)[2023] QSC 8

13. [13]
    In or about 2015, Amanda became dissatisfied with Boyd’s conduct as administrator of the estate. That dissatisfaction culminated in the commencement of the present proceeding by Amanda, Alexandra, Claudia and their associated entities.

14. [14]
    The first and second defendants commenced third party proceedings against two solicitors who acted for Alexandra and Claudia during the relevant time periods, and against Boyd as administrator of the estate, claiming contribution should the defendants (or either of them) be found liable to the plaintiffs (or any of them).

The Proceeding

15. [15]
    In summary, the plaintiffs’ claim:

1. (a)
   damages for professional negligence, breach of contract, and breach of fiduciary duty against Boyd:

1. (i)
   in drafting the 2002 Will and in failing to appropriately advise the deceased’s as to its terms.
2. (ii)
   in failing to provide continuing advice to the deceased after execution of the 2002 Will in respect of a further Will.
3. (iii)
   in  failing  to  prepare  a  codicil,  interim  Will  or  new  Will  between November 2007 and the date of the deceased’s death.
4. (iv)
   in accepting a pro-bono retainer of him by Amanda in relation to the deceased’s estate.
5. (v)
   in accepting an appointment as administrator of the deceased’s estate and trustee of its trusts as and from June 2012.

1. (b)
   Damages for losses associated with the appointment of the executor under the 2002 Will and Boyd’s actions as administrator of the deceased’s estate.
2. (c)
   Damages for negligence against the second defendant:

1. (i)
   in failing to advise Amanda of a claim against Boyd in respect of the 2002 Will, as a consequence of which that cause of action became statute barred.
2. (ii)
   in failing to advise Amanda of a claim against Boyd in respect of a proposed new Will, and consequence of which that cause of action became statute barred.
3. (iii)
   in failing to fully and properly advise Amanda, Alexandra and Claudia against the appointment of Boyd as administrator, with the consequence that each suffered loss in the administration of that estate.

1. (d)
   Declarations as to the proper construction of the bequests to them in the 2002 Will. The third defendant was joined as an interested party in respect of this aspect of the proceeding.^[2]

Evidence

2002 Will

16. [16]
    On 6 December 2000, Boyd received instructions to prepare a Will for the deceased. By that stage, Boyd had had experience in the preparation of Wills and in obtaining a grant of probate. He also had prior experience of estate administration and litigation. He did not, however, hold any specialist qualifications in those areas.

17. [17]
    Boyd had a broad understanding of the financial structure of the deceased’s interests from work he had previously undertaken for the deceased. Boyd was first retained to undertake legal work for the deceased in 1995. That work related to litigation concerning a shareholder’s dispute. It was resolved in 1997. Thereafter, Boyd sporadically undertook legal work for the deceased and his related entities.

18. [18]
    Boyd’s legal work had never involved having a detailed look through all of the relevant entities. The deceased used other solicitors for the majority of his legal work. Boyd described the deceased as forthright; if he disagreed, he told you in terms. He was also generous and loyal. Boyd would also speak frankly to the deceased.

19. [19]
    The initial instructions came from the deceased in a cassette tape which accompanied a handwritten note dated 6 December 2000. The note stated:

Bill,

Can you prepare a will for me please.

My instructions are set out on the following tape.

Once it’s drafted, I have additional instructions before it can be finalised.

Please hold until I contact you in about 1 week.

K Talbot.”

20. [20]
    The cassette tape was transcribed by Boyd’s secretary.^[3] Boyd made notes on that transcript for a later meeting with the deceased.

21. [21]
    The notes concerned paragraphs 2.1 (“Probate here”); 2.2 (“? separate Will” and “…but if there’s a Court challenge…how does a ben. know what they got and what their rights are?”); 2.3 (“What control over t/tee?” and “? die part way through a divorce.”); 2.4 (“Country + appointment mechanism. + ?? control mechanism.”); 2.5(c) (“? Fetter on discharge of duties.”); 2.6(a) (after circling “Official Trustee”, there was a notation “i.e. the trustee?” and at end “? Probate.”); 2.6(b) (“deadlock”); 3.2, category 2 (“- trustee – control; appointment – allocate amongst bens.; if all); 3.1, category 3 (“ditto”); 6.1(b) (“? Identify estate details to all bens.”); 7.2 (“-from…?”); 7.3 (“- from…?”); and 7.8(b) (“structure”).

22. [22]
    Boyd met with the deceased on 19 December 2000. Boyd said he first raised a personal concern that the task may be beyond his expertise. Boyd suggested the deceased use a firm with an established deceased estates specialty. The deceased said he wanted to keep his Will arrangements very confidential and separate from the rest of his legal work. Boyd discussed another option; if Boyd thought other expertise ought to be obtained, they could look to a specialist solicitor or Counsel. The deceased wanted to pursue that course.

23. [23]
    Boyd said he discussed with the deceased, that his Will could deal with personal assets, not corporate or trust assets. Those assets belonged to those entities and sat in the control of the directors who had obligations under corporations law and the constitutions of those companies. Similarly, trust assets would be subject to the trustee’s exercising their discretions and controls. Boyd said the deceased replied he was unconcerned; he could rely upon the directors of the companies and those controlling the trusts, to act in accordance with his wishes. Boyd said he told the deceased he would be able to map out what those wishes looked like, but he would not be in a position to bind them.

24. [24]
    Boyd said he discussed with the deceased the Will being administered outside Australia. Boyd recommended against an offshore administration. There would need to be a significant body of work done to be comfortable that whatever offshore jurisdiction was chosen, that would be appropriate. Boyd said he also advised the deceased that his desire to keep the Will private and confidential was not achievable. The deceased had assets in the jurisdiction; there would have to be a grant of probate here, with a copy of the Will going on the public record. To that extent, the scheme was doomed to fail.

25. [25]
    Boyd said the deceased was quite determined to pursue that structure. The deceased was essentially looking to put into place “a situation where the estate was administered almost behind a curtain, as it were, so that people got what they got and, in his view, should have been happy with whatever that was”.^[4]

26. [26]
    Boyd said he also advised the deceased he was “a bit bemused”^[5] by the trustee being a nominee of a particular country. Boyd had never heard of such thing; could not imagine how it was going to work; and believed it unworkable. Boyd advised it was the deceased’s role, as the maker of the Will, to select who would administer the estate. The deceased replied he would take that on board and do something about it. Boyd said there was no discussion about who the person might be; the deceased was going to get back to Boyd.

27. [27]
    Boyd said he advised the deceased that his concern about appointing a sole trustee was that they were offshore and alone in a foreign jurisdiction. It would be preferable for there to be more than one executor and, ideally, located in Australia. That arrangement had the benefit of a familiar jurisdiction. Further, the administration of the estate was likely to be a substantial task. Additional manpower was a good reason for having more than one executor. Also, people with complimentary skills could be appointed to give better coverage to what would be required during the administration. There was less risk of defalcation if you had multiple people looking over other’s shoulders.

28. [28]
    Boyd said the deceased’s response was that the people appointed to these decision making roles were people the deceased inherently trusted and who the deceased was comfortable to rely upon to execute his wishes or instructions without undue technicality. The deceased wanted to stick with one executor.

29. [29]
    Boyd accepted his notations, made in advance of that meeting or at the meeting itself, did not record those warnings. Boyd regarded them as so obvious as to not require recording.

30. [30]
    Boyd said he advised the deceased he had never seen anything akin to the concept of international friends; and did not know whether that could work. Boyd’s immediate concern was whether it would act as a fetter on the executor and trustee which, generally, was not a permissible circumstance. There was a genuine risk this might be a “toothless tiger”.^[6] Boyd suggested, as an alternative, the appointment of the international friends as executors. The deceased declined, saying he did not want them to be actively on the job but sitting there in a supervisory capacity.

31. [31]
    Boyd said by the end of the meeting, he had been “singularly unsuccessful”^[7] in persuading the deceased to change; the deceased was wedded to the structure of the Will. That approach was consistent with previous experience. The deceased was a unique client who set his own timelines and had his own set of priorities. As a client, he tested advice at every turn. On occasions, the deceased found legal advice inconvenient. Boyd said there would be one of three outcomes; the deceased would not take the advice at all; the deceased would come back with an alternative scheme designed to avoid the issues identified in the advice; or the deceased would yield and follow what had been recommended.

32. [32]
    Boyd made a file note of his meeting on 19 December 2000:

“Wants to do interim Will while we look @ the longer term structure. Kt to revert with instructions in Jan. 01.

Concern re F. Ct is protection of wife and family members. Wants prop. to stay in trust rather than going to individuals.

1. –Advised re obligation to make adequate provision
2. –discussing that.”

33. [33]
    Boyd said reverting with instructions in January 2001 was a reference to Boyd having given the deceased a copy of his transcription of the tape. The deceased was going to come back to Boyd in relation to that transcription. The ‘concern re FCt’ related to the Family Court. The deceased had a contentious divorce from his first wife in the early 1990s. It left an indelible impression; he did not want Amanda or his children to be exposed to that unhappy experience. The deceased’s concern was that if assets were left to Amanda and their children and they found themselves in a Family Court situation, their wealth might be diminished on a property settlement. The deceased wanted their interests under the estate to sit in trust, not within their direct control. The reference to adequate provision was that as a testator, the deceased had an obligation to make provision for his family. The concept of everything sitting in trust outside their control, was unlikely to discharge that obligation, leaving the Will susceptible to challenge after death.

34. [34]
    On 12 January 2001, Boyd received from the deceased handwritten notes on the copy of the transcription. Boyd incorporated those additional notes and hand delivered a revised transcription to the deceased on 16 January 2001. Boyd said delivery by hand was consistent with the deceased’s desire to keep everything in relation to the Will confidential.^[8]

35. [35]
    Boyd agreed that in the revised transcription, he had not recorded any warning next to the clauses that related to the assets that would have included corporate or trust assets. Boyd said having received instructions from the deceased that he was set on a particular course, Boyd regarded his role as being to implement, as best he could, the deceased’s instructions. Boyd accepted there were occasions and iterations of the document where he made a note to raise something with the deceased for his response, but said the issue as to whether the Will could be efficacious to deal with the bulk of the assets controlled by the deceased was a preliminary point, so obvious as to be unexceptional and not noteworthy.

36. [36]
    On 23 February 2001, Boyd received another revision from the deceased. Relevantly, it had these further additions:

“8.3.2 On attaining the age of 30 years it is my wish that the inheritance payable to Liam, Courtney and Alexandra be applied as follows:

1. (a)
   10% of the inheritance should be made available to them absolutely to do with at they so wish.

2. (b)
   30% of the inheritance should be made available for investment into a business investment.

3. (c)
   The remaining 60% should be retained in the family trust.

The above wishes with regard to inheritance should remain in force with regard to my children for a period to be determined according to the formulae given below dependent on their age at the date of my death. Thereafter the inheritance should be made available to the respective child absolutely. Should any child wish to retain additional moneys in the family trust it is my wish that you do so and that you should be guided by the wishes of such child with regard to any funds so held.

Below 30 years – The later of a period of 10 years or until they reach the age of 36.

30 to 39 – A period of 6 years

40 to 49 – A period of 4 years

50 to 59 – A period of 2 years

60 or above – A period of 1 year

At the time when each child becomes entitled to the income of their inheritance absolutely in accordance with the formula above, it is my wish that they be entitled to receive 1/6 (one-sixth) of the inheritance absolutely. A further 1/6 (one-sixth) should be made available to them after a period of five years and a further 1/6 (one-sixth) after a period of ten years. At all times my children should be able to retain the funds to which they become entitled in the family trust and should they choose to do so you should be guided by their wishes with regard to any funds so held. Again, I would like my Trustees to counsel my children in this regard for their own protection encourage my children to retain these funds in the family trust where possible. In addition my children should be advised that any investments that they may wish to make should, where possible, be retained in the family trust.

…

10. Talbot Foundation

I would like the Foundation to invest a maximum of one (1) million dollars per annum, with each beneficiary having responsibility of allocating $250,000 per annum.

I would request that all beneficiaries meet every six (6) months to discuss and coordinate donations made.

I would also request all beneficiaries to give priority to investing in charities/community projects whereby the maximum moneys are invested “at the coal face” and not diluted by management fees.

11. Overriding Conditions

With regard to all beneficiaries excluding Amanda Dianne Talbot the following conditions must be met before they are able to receive any distributions other than for their education, maintenance and advancement:

1. Each beneficiary on attaining 30 years of age should obtain written confirmation from 3 (three) independent doctors that they are not alcoholics or drug users.

2. Each beneficiary should pass a diploma course for Company Directors in Australia (to be paid for by the estate).”

37. [37]
    The further revised transcription was reviewed by Boyd on 7 June 2001. He made notes on his copy. Those notes concerned the deceased’s continued theme of keeping the Will confidential and, in the section headed “Overriding Conditions”, Boyd queried the need for a sub-Will, dealing only with the Australian assets and the need for a default to trustee clause, should a beneficiary fail to satisfy those overriding conditions.

38. [38]
    Boyd prepared an outline, dated 14 June 2001. It did not refer to a warning about corporate and trust assets. Boyd said it was an internal document for his use only. Boyd agreed you would expect to see that issue included as a drafting aid but said he was not going to keep “nagging at [the deceased] with that same point over and over again”.^[9] That was not the way they worked. Boyd accepted there was no record of this matter being raised with the deceased. Boyd said the documents do not record his saying that estates was not his area of expertise; “[t]here are some things which don’t make their way into my notes and often, in the context of my note taking, it’s more directed towards action items and progressing the file as much as recording the conversation… or the advice which had been given.”^[10]

39. [39]
    On 19 July 2001, Boyd sent to the deceased a list of questions. Boyd spoke to the deceased that same day, to advise he was forwarding these questions. The questions were random, dealing with matters Boyd wanted the deceased to consider before further preparation of the Will. They concerned the trustees, the international friends, the identification of estate assets and relevant trusts, the distribution of various assets, and the structure and management of the foundation.

40. [40]
    Boyd said he had limited insight into the administrative and management structure built around the deceased. He accepted the reference to property undoubtedly included trust property, which was to be disposed of as part of the estate. He accepted nowhere in that document was there even a hint of reservations about the ability for the deceased to dispose of those assets by Will. Boyd said there were many times, when giving advice, where the deceased would not take the advice and continue to pursue a particular course. Boyd was now facilitating preparation of a document rather than continually coming back and readvising on the point.

41. [41]
    Boyd said he did not receive a response from the deceased. He did not have any further discussions with the deceased about the Will until May 2002. Boyd did not consider the passage of time unusual. It was consistent with the deceased not regarding the matter as pressing at that time. Boyd said he telephoned the deceased on 2 May 2002, to follow up three outstanding matters, one being instructions in respect of his Will. The deceased said he would come back to Boyd about the Will. Boyd made a diary note “Will: realises he owes me inst.”.

42. [42]
    Boyd did not receive further instructions about the Will. On 5 June 2002, Boyd placed another telephone call to the deceased seeking to follow up the deceased in respect to his instructions concerning the Will. The deceased did not return that call.

43. [43]
    On 3 October 2002, Boyd met with the deceased to try and progress the Will. The deceased gave Boyd a copy of the previous revised Will instructions on which the deceased had made handwritten notes in red pen. The handwritten notes recorded: a change of the named trustee (clause 2.4); CPI for monies to the international friends (clause 2.6(b)(v)); an addition to provide similarly for the trustee (a new clause 2.6(b)(vii)); the retention of management for two years, not one year (clause 5.2); the gifting of the Paris apartment to Claudia (who had been born the previous year) with an amendment, in the event she did not survive the deceased, that the nominated beneficiary would first be Alexandra, with Courtney, Liam and Amanda to follow (clause 7.3); an even distribution of the wine collection to Amanda, Liam, Courtney, Alexandra and Claudia (clause 7.5); the reallocation of the 70% of the remaining estate to 18% to Amanda, 24% to each of Liam and Courtney and 17% to each of Alexandra and Claudia with a corresponding amendment to reflect his expectation that Amanda would make provision within her Will for Alexandra and Claudia, being the reason he had allocated a combined 52% to Amanda, Alexandra and Claudia (clause 7.8); “drip feed conditions” to apply to clause 7.8, as outlined to clause 8.3.2; amendments to clauses 8.1, 8.2 and 8.3.2 to include Claudia; a condition instructing the chairman of the board of directors of Macarthur Coal (a new clause 8.4); and an addition to clause 12, to include Claudia.

44. [44]
    Boyd had also made notes on a copy of the previous revised draft, in preparation for the conference. Those notes were in blue ink. Boyd made further notes on this copy during the conference, in red ink. Boyd said he discussed the matters noted by the deceased and Boyd. Boyd said he told the deceased the Will was particularly complex and required more work; that he was in some way stretching the bounds of what could be achieved legally. Boyd gave, as an example, the deceased’s intention that the Paris apartment remain in the family forever. Boyd said he explained to the deceased that in our legal system there was the rule against perpetuities and in order to keep an asset in the family forever, it would need to be in some sort of trust structure which would necessarily have a life of its own. There were also issues with how a property moved through other owners within the family with it being more difficult to administer as the family grew. Boyd told the deceased the best they could do was put something in place which gave expression to his wish and then it would be in the luck of the Gods as to how it ultimately panned out over an extended period of time.

45. [45]
    Boyd also discussed with the deceased the issue in relation to corporate assets and personal assets; and that he would need to review the control aspects of the trust and corporate set up to make sure there was no potential leakage with third party interests that they might struggle with after death. The conversation about personal versus corporate assets was quite short. They had had it before and it was essentially just a reminder that the Will could only deal specifically with personal assets and that so far as the assets sitting within the structures were concerned, given that the deceased was taking an approach of dividing the estate up amongst his family in percentages, that would require the cooperation of directors and trustees to achieve a particular outcome.

46. [46]
    Boyd said the note he made on the amended instructions document during his meeting with the deceased on 3 October 2002, “assets specific” was a note of the fact that he had discussed with the deceased that the Will would need to be asset specific, in the event that there was some specific assets that he wanted dealt with privately, rather than just dealing broadly in the percentages thus far featured in his instructions.

47. [47]
    Boyd said the deceased raised preparing a statement so that his thoughts on the estate generally and parties’ behaviours and reactions to it could be recorded for the benefit of any mediation or settlement process. Boyd raised whether, having regard to the need for probate, a sub-Will be prepared, limited to particular assets.

48. [48]
    Boyd said they discussed Boyd’s concerns in relation to a Court challenge resulting in production of the Will and supervision with the Will to be administered overseas. Boyd remained concerned about the administration being done offshore. Boyd said during the meeting, the deceased nominated Paul Bret as executor. There was not a lot of detailed discussion. Bret was someone the deceased spoke about, both fondly and respectfully. Boyd said he repeated his previous urgings to appoint more than one executor and someone local.

49. [49]
    Boyd said they discussed the international friend role and succession on death or incapacity. Boyd referred to an appointer type role, explaining to the deceased that one of the typical powers of an appointer was the ability to remove and appoint new trustees. The deceased was happy for the power of appointment of a new trustee to be with the international friends but instructed that because of his concern about the potential for dispute within the family group, he did not want to burden the international friends or anybody else with the role of removal. He preferred the Court determine any removal of a trustee.

50. [50]
    Boyd said he also raised with the deceased the relationship between the international friends and the executor and trustee. The international friends were to have the power to basically oversee every decision made by the executor and trustee. Boyd told the deceased the supervision regime may not work and may be ignored. The deceased said he was happy to rely on the people he appointed to discharge their job. Boyd said there was no discussion about who were to be the international friends. They were already part of the instructions.

51. [51]
    Boyd said the deceased wanted the property at McConnell Street, Bulimba, held on trust for the use of Amanda and the family. It was to be specified that Liam and Courtney were to have access to the property because of the deceased’s concerns about family disharmony. The Paris apartment was to be left to the youngest of his children who was able to hold property. The deceased instructed there were substantial fees payable each time the property passed from one family member to another. The deceased wanted to minimise those fees but wanted the property held in the family forever, for everyone’s use.

52. [52]
    The deceased said he was going to speak further with Georges Sabbagh and he would let Boyd know whether there was any change needed to that regime. Boyd’s notation, “George should advise re French laws”, was a reference to the conversation concerning Mr Sabbagh. The notation, “forever”, was a reference to the deceased’s wish for the Paris apartment to remain in the family. Boyd also recorded, “query French law on holding as trustee and ability to move the apartment down the line”, which was a reference to the Paris apartment.

53. [53]
    Boyd said they discussed his notation, “Full particulars req’d. Who to act as trustee on death. Means of appointment”. Boyd was aware there were trusts in respect of which, one of the deceased’s former solicitors was appointee and that solicitor’s company was trustee. There was a risk there were potential third party control issues in the event of the deceased’s death. At that time, the deceased’s relationship with that solicitor was “terrible”.^[11] Boyd made a notation in the course of the meeting, in red, to speak to two people who worked for the deceased. There was no discussion about timeframes in dealing with those issues.

60. [60]
    On 4 November 2002, Boyd telephoned the deceased’s office. He was told the deceased was away all week. The deceased’s assistant later called him back to advise the deceased was in Melbourne. Boyd told the assistant the deceased should get back to Boyd “re Will”.

61. [61]
    On 15 November 2002, the deceased’s assistant advised Boyd the deceased was away next week and wanted to sign his Will today. Boyd forwarded by email the draft Will and a second document, being the deceased’s philosophical thoughts on the arrangements, which was an attachment to the Will. Boyd’s email stated:-

“If Ken can let me have his instructions on the highlighted points in the Will, I can finish the document today so it can be signed. I don’t actually need to be present for the signing but I have a meeting at APC at 1pm, so could be available before or after that if required.”

62. [62]
    On 27 November 2002, Boyd spoke with the deceased about his Will. Boyd made handwritten notes, recording the deceased’s instructions in respect of matters he had highlighted on the draft forwarded to the deceased by earlier email. Those instructions related to an inconsistency in ongoing employment contracts for management; the deceased’s wish that the family home be gifted to Amanda but go into a trust if Amanda married or took on a de facto (Boyd advised the deceased that if he wanted to protect against that eventuality, it could not go to Amanda in the first place and would have to be held by the trustee for her use); instructions about the family home after the children had left home as well as which part of the estate would be responsible for its upkeep and for transferring the Paris apartment to Claudia; whether the deceased wished to continue to provide for a maximum of $1,000,000 per annum by way of donations by the foundation (Boyd advised that with the arrival of Claudia, the previous allocation of $250,000 each per annum no longer added up); and a lack of understanding of what the deceased wished to do in the distribution of capital in clause 15.7. Boyd re-drafted the Will later that day.

63. [63]
    On 29 November 2002, the deceased executed the Will. His signature was witnessed by Boyd and the deceased’s assistant. Boyd’s file note recorded that the deceased had given instructions for Boyd to talk to his assistant “re structure for full blown doc”. By that stage, Boyd had not heard back from the deceased in relation to the enquiries about French law.

64. [64]
    On 2 December 2002, Boyd sent the deceased two copies of the executed Will. The accompanying letter stated that the Will was an interim document which broadly reflected the way the deceased wished to distribute his estate. Boyd recorded that there was a considerable amount of extra work to be done at a detailed level and that he would contact the deceased’s assistant to commence that work.^[16]

65. [65]
    Boyd said he had not had the opportunity to complete a full review of the structure of the various entities to ensure the deceased had control. However, the need to undertake that work became less necessary after one of the senior accounting people within the deceased’s office confirmed to Boyd, in early 2003, that the various entities were within the deceased’s control. That person also mentioned there were other matters under consideration in relation to the corporate structure.

66. [66]
    Boyd said when he was working on another matter, in March 2003, he told the deceased he had spoken to a representative in the deceased’s office who had told Boyd that in terms of the control of entities in the Talbot structure, there were no third party interests which would be in a position to influence their operations after the deceased’s death. This representative also made reference to work being undertake in relation to the corporate structure which was at a fairly preliminary stage. Boyd said he told the deceased that was potentially of interest in the control of the structure, and that if there were any issues arising out of the advice obtained, the deceased should contact Boyd. Boyd said the main thrust of his discussion with the deceased was that he was satisfied now that the structure had been sufficiently confirmed, to park that work for the time being on the basis that if we needed to do anything in relation to the share issue, we could do the whole process again.

67. [67]
    Boyd did not accept that his recall of the 2003 discussion was better than his recall of the meeting with the deceased at the end of 2002 in preparing the final draft of the Will. Boyd said the discussion in 2002 was based around a document where they were working through that document. That style of conversation meant he needed to have the document in front of him to be able to recall particularly what was said in respect of particular clauses.

68. [68]
    Boyd said this discussion closed out whether the 2002 Will should be treated as an interim Will. Boyd’s concern about the 2002 Will had been the status of the structure, in circumstances where the deceased was content to rely on people in positions of authority to act in a particular way. Boyd said his experience of the deceased, from previous work, was that there were times where his understanding of the legal technicalities of his structure were not great. Boyd said what was important was to ensure there were not gaps and the potential of third party control in the event of the deceased’s death. There was now no need to push that as a high priority item. Boyd accepted he had no diary note of any of those conversations.

69. [69]
    Boyd said his final conversation with the deceased on the point was that the deceased needed to bear in mind that there was this issue about his ability to gift assets out of the corporate and trust structures and if at any stage in the future he wanted to do that, the deceased needed to tell Boyd so that they could look to see what could be done. Otherwise, it was a matter for the deceased to come back to Boyd if and when he wanted to revise his instructions. Boyd considered the signed Will fit for purpose and should no longer be treated as interim.

70. [70]
    As far as Boyd was concerned, the retainer in respect of the 2002 Will concluded at that point. Boyd said he was regularly retained to perform other legal work for the deceased and his entities and he had regular contact with the deceased. At no time did the deceased raise the question of a new Will.

New Will

71. [71]
    Boyd said he was prompted to raise a new Will in 2006/2007 as it had been a few years since the Will had been prepared and he was aware the deceased’s asset position was constantly changing. By 2006, the deceased had acquired and sold half a dozen hotels. He had also acquired and sold his CBD real estate interests. Boyd did not know whether that was going to give rise to a need to revisit the 2002 Will.

72. [72]
    Boyd said he wanted to prompt the deceased, in case he thought it was something that needed to be revisited at that time. Boyd said he knew, given how long it had taken to get the 2002 Will prepared, that the deceased would probably give it a low order of priority, versus his commercial interests.

73. [73]
    Boyd initially raised a review of the deceased’s Will by email on 1 September 2006. The deceased’s assistant was asked to pass on to the deceased that “we are probably overdue to review his will”. The email said if the deceased wanted to go ahead “apart from his instructions, I would also need some input from Don^[17] on the business operations/setup side of things”. Boyd thought this email was preceded by a conversation or two with the deceased about having another look at his Will. Boyd did not receive a response to his email.

74. [74]
    In October 2006, the deceased became the subject of an investigation into making corrupt payments to a Minister of the Queensland Government. That investigation culminated in the deceased being charged, in January 2007, with criminal offences. Whilst the deceased engaged other solicitors to act in the criminal proceedings, Boyd assisted in obtaining documentation and other information.

75. [75]
    In May 2007, Boyd commenced practice in the name of the first defendant. The deceased was happy to back the new firm. Thereafter, Boyd undertook extensive legal work for the deceased and his entities. By the time of death, more than half of his firm’s work involved acting for the deceased and his entities.

76. [76]
    On 25 September 2007, Boyd sent a further email, via the deceased’s assistant:-

“Ken

As I read through “My Word is My Bond” I was prompted to remind you that we really need to revise your will. The current one is well and truly dated, particularly in the context of your altered circumstances since it was made. Can we put this on the agenda for discussion when you are back in Brisbane?”

77. [77]
    Boyd said he was referring to a document the deceased had prepared in the defence of his criminal prosecution. The altered circumstances was a reference to the deceased having stepped down as Chief Executive Officer of Macarthur Coal. The deceased had commenced and operated Macarthur Coal since 2001. His equity was later transferred into shares in a listed company. Boyd agreed that the deceased’s wealth structure remained constant, with the majority in Talbot Group entities and associated trusts. Boyd received no response to that email.

78. [78]
    On 12 November 2007, Boyd sent another email to the deceased, via his assistant, reminding the deceased about the need to update his Will “because the more you are doing with overseas property and recent investment acquisitions, the further you are moving away from the regime in your current will.” Boyd said the deceased had acquired an apartment in Shanghai in 2006, owned the Paris apartment and was acquiring a villa in Italy.

79. [79]
    On 23 November 2007, Boyd met the deceased to discuss his instructions for a new Will. There were notes on a whiteboard in the deceased’s office. The deceased’s assistant later emailed a copy to Boyd. It contained the following:-

“1.Pre-amble

• KT’s wishes to be respected
• Category of assets

• Obj; conversion to cash, support education and self development

• Drip feed
• Protection
• Charities

2. Dependents
   • Who
   • Split (56,22,22)

3. Share Portfolio
   • Trustee’s control
   • Orderly sale over 2 year period

4. Immediate Arrangements
   • Amanda -95/99 McConnell Street
   • Liam
   • Courtney
   • Alex
   • Claudia

5. Other Assets
   • Paris apartment
   • Shanghai apartment
   • Italy villa

Plus

• Real estate, Australia
• Cash investments
• Aeroplane (including hangar)
• Cars

6. Education/Self Development
   • AICD courses
   • 3x AIM courses

7. Drip Feed Provisions
   • Drug test
   • Scheme, age 40 (threshold)
   • Investment of interim funds

8. Protection
   • Off-shore will
   • Trustees
   • Loan provisions

9. Charities
   • Talbot foundation (decision)
   • Responsibilities (decision)
   • Discretionary investments (decision)”

80. [80]
    Boyd said the discussion opened with a reminder about expertise and the distinction between personal, corporate and trust assets. The deceased was relaxed about that distinction and confident in the way it had been previously dealt with, such that it would not be an issue when the time came to administer his estate.

81. [81]
    Boyd said he and the deceased discussed the Talbot estate trust, to be split between Amanda, Liam and Courtney, with Amanda receiving 56% (on the expectation Amanda would provide for Alexandra and Claudia in her Will) and Liam and Courtney each receiving 22%. Boyd said he advised the deceased he did not think that would discharge the deceased’s obligation to make adequate provision for Alexandra and Claudia. Boyd said in an estate of his size, there should be direct provision for them, in the way he had in the 2002 Will. The deceased replied that if that was the case, he would probably have to revert to something along the lines of the 2002 Will, in order to treat the children fairly. Boyd said it was agreed that topic would be “parked” for further discussion, as the process rolled out.

82. [82]
    Boyd did not agree that it was made apparent to him that the deceased was no longer instructing him that it should be 56% for Amanda. Boyd said, “he gave the initial instruction about the 56 per cent. I gave him the advice and then he said if that’s the case he would look at reverting to something along the lines of the current will. And I then said to him “Well, look, let’s leave that and we’ll develop that as the process goes on”. So, in a sense, it’s kind of left up in the air.”^[18] Boyd said he received no further instructions in relation to it at the time.

83. [83]
    Boyd said when he later delivered a brief to Counsel, he was still working on that having been the deceased’s initial instruction, with the understanding between them that they would keep it under review. That is why it came to be repeated in the brief to Counsel. Boyd said he understood it was agreed between them because when Boyd said they would keep it under review as the process progressed, the deceased agreed. Boyd did not accept that they had even reached the point that there would be agreement as to separate figures. Boyd said “I don’t even know that it actually went that far. It was simply, as I’ve described, that I’d told Mr Talbot he would need to change that but in terms of him totally resiling from that or – I don’t know how you would describe it”.^[19] Boyd said it was left as an open item.

84. [84]
    Boyd said he next discussed the trustee. Boyd reminded the deceased of his concern about offshore executors. Boyd also reminded the deceased the Will could only deal with personal assets, and he would be reliant on the people with control of corporate and trust assets to administer them in accordance with his wishes.

85. [85]
    Boyd agreed there was a discussion about particular assets. The deceased wanted Amanda to have a first option on the plane. It was owned by a corporation. There was a discussion about a villa in Italy. The deceased had already purchased the Shanghai apartment. Boyd was enquiring as to the registered ownership. Boyd accepted the deceased’s instructions, as listed on the whiteboard, were that the Will deal with assets owned by corporations. Boyd said he was seeking an organisational structure so he knew what corporations and trusts were under the deceased’s control, to see how the Will instructions would ultimately sit with those structures. Boyd said apart from the villa and the aircraft, there was nothing in the deceased’s instructions as to assets specifically coming out of a trust or corporate structure.

86. [86]
    Boyd said they discussed housing for Amanda, Alexandra, Claudia, and Courtney. Liam already had his own house. They discussed the apartments in Paris and Shanghai and a property in Italy. The deceased’s instructions were that although each property was to be accessible to all, especially Liam and Courtney, the properties were to be left to Amanda. It was not a matter, as in the 2002 Will, for selection by Amanda.

87. [87]
    Boyd said the inclusion of those pieces of real estate reduced the amount of cash or other assets available to Amanda as the deceased’s instructions were that those pieces of real estate were to form part of Amanda’s percentage. Boyd said if there was to be a variation of the percentages as between Amanda and Alexandra and Claudia, that might give rise to issues as to the ability for Amanda to take all of the real estate. There was a need for sufficient cash and other assets in Amanda’s inheritance to be able to afford to own and run those properties. Boyd said that topic was also left for discussion, as the new Will progressed.

88. [88]
    Boyd agreed those properties were not likely to have a large upkeep costs for somebody of the deceased’s wealth but said Amanda was not going to be a billionaire. Boyd said Amanda’s interest under the current Will was 12.6% of the estate. Percentages were, therefore, a critical thing.

89. [89]
    Boyd accepted his diary note of the meeting recorded the percentages but did not record any reference about a discussion about a family provision application, or about the percentages being put on hold, or as to Amanda’s capacity to receive the assets contemplated by the deceased. Boyd said the only reference in his notes was that the real estate formed part of the percentage. Boyd accepted that as at that date, he had no idea of the cost of their upkeep but said “my expectation is that expensive real estate in foreign jurisdictions is likely to be expensive to maintain”.^[20]

90. [90]
    Boyd said they discussed liquidating the local real estate over two years, with the beneficiaries having the ability to nominate, oldest to youngest, a property as part of their percentage. There were to be separate trusts for each of the children beneficiaries. Each was to receive their entitlements by drip feed to age 40, with full access thereafter. Amanda was to receive full advances against loans as ultimate entitlements, with the protection of assets against another marriage and the same protection for children. This related to the deceased’s previous concerns about their inheritance being held in trust so they did not have access to and control over it.

7. Mr Talbot wishes to leave 30% of his total estate to charity. The vehicle is to be a charitable trust currently being established. The trustee of that trust is Talbot Family Foundation Pty Ltd. He also wishes 10% of the annual income of the beneficiaries’ personal trusts to be paid into the foundation.

8. Mr Talbot is concerned to ensure that his testamentary arrangements remain as confidential as possible and, to this end, has requested that consideration be given to the preparation of separate wills dealing with any property that will necessarily involve documents going onto the public record in the form of probate and/or transmission applications.”

101. [101]
     Boyd said he deliberately drafted the instructions in general terms as he wished to obtain Counsel’s advice. This particularly related to leaving 56% of the estate trust to Amanda, with Amanda having responsibility to provide for Alexandra and Claudia. Boyd wished to see whether Counsel had a similar concern about providing specifically for Alexandra and Claudia.

102. [102]
     Boyd said he prepared a document for inclusion in the brief, to describe assets controlled by the deceased but not in his name. This was to assist Counsel to better understand the deceased’s financial affairs. Boyd said in his instructions to Counsel, he specifically referred to the fact that the instructions had been given without consideration for the constraints imposed by the structure of the deceased’s affairs. He was looking for Counsel’s advice in relation to the Will and steps the deceased needed to take so that assets he controlled could be gifted at his direction in the event of death. Boyd said he did not brief Counsel with all of the documents related to the various changes of trustees and names as his review has established that the trusts were efficacious, with one exception. Boyd queried whether one of the deceased’s former solicitors had been effectively removed as principal, in his instructions to Counsel.

103. [103]
     Boyd agreed that nowhere in those instructions did Boyd identify any concern he had in relation to a family provision application. His preference, when briefing Counsel, was to put it there for Counsel to see and deal with it with fresh eyes rather than for Boyd to potentially take Counsel off on a particular tangent or influencing Counsel’s views. Boyd also accepted that nowhere in those instructions did he express his concerns around a smaller percentage not being able to accommodate the deceased’s wishes regarding the real property going to Amanda, or about the value of the properties or their upkeep.

104. [104]
     On 20 October 2008, Counsel advised Boyd, by telephone, that having a foreign bank as executor was less than desirable. Counsel said names of international people could be chosen in lieu of a bank. Counsel was also thinking about having different Wills in different jurisdictions and queried whether something should be prepared in the interim to cover the essentials. It was arranged to meet with Boyd on 13 November 2008. Counsel did not request Boyd do anything.

105. [105]
     On 13 November 2008, Boyd met with Counsel. They discussed a number of matters, including whether the deceased’s former solicitor had been effectively removed. Counsel suggested a Court application may be necessary. Counsel was to undertake further work on that aspect. Counsel also discussed the trustee nominated by the deceased. He asked whether there should be someone legal or somebody else, perhaps in Australia and overseas. Counsel spoke about an Australian Will and separate Wills for foreign properties. There was a need to look at succession duties overseas and possible capital gains and residency requirements.

106. [106]
     Boyd said Counsel suggested they look at life insurances and superannuation, for both the deceased and Amanda. Boyd said he did not think life insurances and superannuation were in the frame, given the deceased’s wealth, but Counsel said he generally gave advice to do a financial plan as part of any estate planning. Counsel also suggested guidelines for the children as a schedule to the Will and making sure there was enough cash for Amanda to live on for life. Counsel wanted Boyd to review the trust minutes for all transactions and to review the companies.

107. [107]
     Boyd said Counsel also advised there should be a direct percentage to Alexandra and Claudia, not 56% to Amanda. There would be a family provision claim if there was no specific provision. Counsel suggested there be a trust for each of the children with specific percentages assigned to them. This was in the expectation of more formalised Will or Wills.

108. [108]
     Boyd accepted that the instructions he listed to Counsel, whereby the deceased wished to leave 56% of the estate to his wife on the footing it was her responsibility to provide for their two children, was a common method, even among very wealthy people, of providing for infant children in their Will. Boyd said he adopted the language “broadly speaking” to provide a quiet caveat on the instructions he was communicating to Counsel. If Counsel had not picked up on the point, Boyd would have asked Counsel about it. Boyd accepted that his diary note was consistent with Counsel having expressed reservations about that approach. Boyd said Counsel’s view was the same as Boyd’s but accepted that Boyd’s own view was not expressed in his instructions to Counsel or in Boyd’s diary note or in any of the written notations Boyd made regarding his earlier conference with the deceased.

109. [109]
     Boyd accepted that a trade off in the preparation of a Will is, on the one hand, the risk of a family provision application by infant children, not provided for separately, and on the other hand, the logistics around infants having somebody else having to manage their wealth. He agreed reasonable minds and family circumstances might differ about the relevant merits and demerits of that trade off.

110. [110]
     Boyd said his note of his meeting with Counsel recorded relevant considerations raised in respect of the deceased’s instructions in respect of the new Will, as well as other matters raised by Counsel. The reference to an interim Will was a reference to Counsel’s view that there should be something to reflect the deceased’s instructions.

111. [111]
     Boyd agreed that the preparation of an interim Will was referred to by him in his correspondence with the deceased on 10 December 2009. Boyd made no reference to any concerns previously expressed about a family provision application and there was no reference to the deceased coming back to him in relation to that issue. Boyd said it was partly a matter of not going into matters which are too personal in email communications to the office. The deceased did not have a private email account. Boyd denied the lack of references was consistent with the fact that he had not had this discussion with the deceased. Boyd said “whatever may be the apparent consistency, it’s not the fact”.^[24]

112. [112]
     On 13 November 2008, Boyd received from Counsel, by email, an estate instructions table. Counsel had advised Boyd this was a standard document he prepared, recording instructions, not advices or issues. Boyd did not identify from it any further enquiries he needed to make at that time. The chief item of homework for Boyd was the resolutions for transactions in the companies and the trust.

113. [113]
     On 4 December 2008, Boyd received an email from the deceased. The subject of the email was “Will”. The email stated, “How are we going? We should aim to knock it off the table.” Boyd did not agree that the tenor of that email was of somebody expecting Boyd to be able to produce the Will for him. The deceased knew that Boyd was conferring with Counsel in relation to the matter and it was going to be the subject to further advice.

114. [114]
     On 10 December 2008, Boyd replied to that email. Boyd said that the specialist barrister had Boyd reviewing some of the structures in considerable detail and that was quite a complex exercise. The barrister also had some trust issues that needed close attention. Boyd said that he and the barrister had agreed that in the interim, Boyd should prepare a broad form of Will which encompassed the deceased’s current instructions, so that those instructions were documented and signed and in place while they worked on the other tasks. It would then be replaced by a number of interlocking documents. Boyd said it was most likely they would need to call in some legal assistance in France, Italy and China.

115. [115]
     Boyd did not accept that his evidence was that he did not have instructions. Boyd said he had instructions which were the subject of further review as an open item. Boyd said his plan was to prepare a document which he could give to the deceased which would form the basis for further discussion and instructions.

116. [116]
     Boyd did not accept that the deceased’s current instructions were for the Will to deal with assets controlled by the deceased, via corporations and trusts. Boyd said it was always the situation that the deceased had a trivial amount of his wealth in his own name, and the performance of the directors and trustees was going to be informed by their own considerations and obligations. Strictly speaking, the directors and trustees could not be bound by what the deceased did in his Will. Boyd said that insight into Counsel’s thinking was shown in the draft Will subsequently prepared by Counsel which provided, in a memorandum of wishes, for what sits within corporations and trusts. Boyd said the deceased’s instructions were not to deal with specific assets, controlled via corporations and trusts; the deceased instructions was essentially a percentage distribution.

117. [117]
     Boyd said, in the email dated 10 December 2008, he was planning to have something to discuss with the deceased in the following week. Boyd said no discussion took place in the following week. The next communication between Boyd and the deceased was in January 2009. During this period, Boyd created an electronic document titled “KT’s 2009 Will (V1).DOC”.^[25] It was an entirely boiler plate document apart from the first two paragraphs. He added guardians but that was “about as far as it got”.^[26] Whilst clause 6.4 of that document, by its operation, could contemplate that the trustee be able to carry on a business owned by the deceased via a corporation, that was not a conscious drafting of that clause, it was simply part of the boiler plate.

118. [118]
     Boyd said he considered there was no point in persisting with that task, given the issues with regard to the percentage distributions as between Amanda, Alexandra and Claudia. If any real estate going to a beneficiary was to form part of that beneficiary’s overall percentage, there needed to be consideration, when you took the value and maintenance expenses of that real estate into account, that there was actually enough cash left in the percentage interest for the beneficiary to live and move forward. Whilst the deceased was talking about a 56% interest to Amanda, it was not a problem. However, given the deceased had said that if he had to give percentages for the four individual children, he would look at reverting to something like the current Will, Boyd could immediately see that the percentage interest available for Amanda was going to run into issues vis-à-vis the value of real estate and available cash to fund her lifestyle.

119. [119]
     Boyd said that without instructions from the deceased on how that percentage was to be handled, the creation of a document was not a particularly efficient way to go at that stage. Boyd’s preference, in dealing with the deceased, was to give him a document he could work with meaningfully. The risk of finishing the document Boyd had prepared was that it would either not be meaningful or was just going to be a replica of the 2002 Will. Accordingly, Boyd abandoned the task after about an hour of work. Boyd said he had not inserted the names of the executor or trustee as a consequence of his conversation with Counsel, who had expressed an adverse view about offshore executors, particularly about appointing a bank.

120. [120]
     Boyd agreed he did not say to Counsel, when he was told to prepare an interim Will, “Well I’ll prepare a draft and try and get instructions on outstanding matters”. Boyd said the discussion he had with Counsel on the topic of the interim Will was Counsel saying it should provide for specific percentages for Alexandra and Claudia. Boyd was going to adopt that approach when preparing a document, for consideration by the deceased. When asked why he did not prepare a document that reflect what had occurred by either putting in amounts to be agreed totally 56% or simply amounts to be agreed, Boyd replied, “Because once you destabilise the 56 per cent instruction at the start, that flowed through to the real estate as well, and you then start to introduce so many possible permutations and combinations of outcome that the document becomes quite, in my mind at the time, quite unwieldy and unhelpful, particularly where we had a document that actually had percentages and the ability to choose real estate. I mean, one approach would have been to take the existing will and fiddle with the percentages. That would have been quite straightforward. And the existing will had considerable complexity in its structure which made it rather more fit for purpose than an interim will which simply dealt with percentages and real estate, for example. It was a far more substantial and sophisticated document”.^[27] Boyd did not accept that a way of illustrating that point was to prepare a document to discuss with the deceased; “Based on the way Mr Talbot and I worked, my judgment was to the contrary”.^[28]

121. [121]
     Boyd said he spoke to the deceased in January 2009. He did not make a note of that conversation. Boyd said his mother passed away and he was in and out of the office. The deceased telephoned to offer his condolences. During this conversation, Boyd said he gave the deceased a quick summary of Counsel’s advice in relation to the executor, the percentages and the real estate.

122. [122]
     Boyd said he told the deceased that Counsel had advised, in conference, that there needed to be specific provision made in terms of percentages for Alexandra and Claudia, rather than 56% going to Amanda with her being responsible to provide for them in her Will. Boyd said he told the deceased that obviously this would also impact on the allocation of real estate, depending on where he went with those percentages. At that point, the deceased said, as he had said earlier, that he would have to potentially revert to something along the lines of his current Will in order to treat the children fairly.

123. [123]
     Boyd said he also told the deceased that Counsel had concerns about a bank as executor and particularly about offshores executors for the Will and suggested looking at local people. Boyd told the deceased he had attempted to prepare something in the way of an interim Will but found that without that level of detail, it was not something he could meaningfully progress. Boyd advised the deceased that the position started to look an awful lot like his current Will. Boyd said he asked the deceased whether he could give him those instructions. The deceased replied, no, that he wanted to consider that so the interim Will was left at that point.

124. [124]
     Boyd said he advised the deceased that until there was more clarity around the percentages and real estate, there was nothing he could usefully do by way of an interim Will. Further, Boyd thought his existing Will actually handled it quite well. The percentages were ones the deceased had hitherto been comfortable with and the mechanism in the Will, for a beneficiary to select assets, particularly real estate, as part of their inheritance, gave Amanda the ability, depending on what her share of the estate ultimately proved to be, to select any property, according to her preferences and financial circumstances.

125. [125]
     Boyd did not ask the deceased when he would be able to give him the instructions. It was his practice not to ask for a timeframe from the deceased. The deceased would get back to him, in accordance with his own priorities. That was not just a matter for the Will; that was generally how he worked with the deceased. If timeframes were imposed, they were from the deceased.

126. [126]
     Boyd said he did not receive any further communication about the new Will from the deceased between the conversation in January 2009 and June 2009. During this period, the deceased had Boyd undertake work for various companies. The deceased had also identified a project in Sri Lanka.

127. [127]
     Boyd said he thought, either in the January conversation with the deceased, or in a July 2009 conversation at the State of Origin match, he took the opportunity to update the deceased on work he had been doing in relation to the C and D class shares. Boyd’s concern was that there was a potential issue in terms of Liam and Courtney receiving a higher distribution out of Talbot Group Investments by virtue of those shareholdings. Boyd asked the deceased whether he remembered what had been the product of the work done by McCullough Robertson and KPMG back in 2003. The deceased replied he did not know but would look into it. That was left as an item which required further attention as well.

128. [128]
     Boyd agreed he was specifically seeking instructions on those matters that were outstanding and that the deceased said he was not in a position to give those instructions. Boyd held no instructions on those topics. Boyd said the question of percentages remained an open item upon which he held no instructions. Boyd accepted there was no note of that matter being raised as an issue with the deceased.

129. [129]
     On 6 March 2009, Boyd asked Counsel to prepare a draft Will. Boyd said he did so on his own initiative. He did not receive specific instructions from the deceased. Whilst Boyd was, at that stage, awaiting final testamentary instructions from the deceased, Boyd thought it appropriate to use that period, however long, to progress preparation of a Will rather than do an interim Will.

130. [130]
     Boyd did not accept there was now a greater urgency for a preparation of the final Will. Boyd said it was more a matter of wanting to progress the matter. Boyd accepted that Counsel had, at the end of 2008, twice raised with him an interim Will for the purpose of ensuring that important matters were in place while a larger Will could be prepared. Boyd did not accept it would now be a priority for him to impress upon Counsel the preparation of a final Will because there was no interim Will. Boyd accepted there was no diary note of him telling Counsel the position he had reached in relation to the interim Will.

131. [131]
     Boyd followed up Counsel, leaving messages on 18, 19 and 27 May. On 28 May 2009, Counsel told Boyd he would forward a draft. Counsel said he had made provision for an immediate legacy for Amanda so she had money on death. There could be difficulties with continued funding through the companies. Further, Counsel preferred to have separate Will executors and testamentary trustees. Boyd accepted that Counsel was having a discussion specifically about what Amanda would receive under the Will but that nowhere in the note did he record any discussion on the question of apportionment or the fact that the interim Will had not been prepared because he did not have instructions on the apportionment yet. Boyd said he could not recall whether it was a likely topic of discussion with Counsel. Boyd said his diary notes are not transcripts and not all matters make it in there.

132. [132]
     Counsel’s draft Will sought further instructions, on the wisdom of appointing the bank or anybody absent from the country to be his trustees (clause 4(a)); who the deceased may like to be the trustees of the respective testamentary trusts (clause 4(b)); the transfer of the family home in the event of Amanda’s death (clause 5(b)); whether other real estate was to be inserted such as the Italian real estate and the half share in the Shanghai apartment, although Counsel’s advice was to have separate short Wills dealing with the real estate in those jurisdictions (clause 5(c)); the payment of legacies by lump sum for Amanda or the other children who may have an urgent need for cash (clause 5(d)); a list of personal assets including cars (clause 5(e)); any club memberships and interests (clause 5(f)); the payment of the 30% to the trustees of a charitable foundation yet to be established (clause 5(g)(i)); 56% of the remaining residue being left to Amanda absolutely (Counsel said Boyd should advise the deceased that provision should be specifically made for the two infant daughters as he could be found to have not made sufficient provision for them) (clause 5(g)(ii)(A)).

133. [133]
     Boyd agreed that the draft Will sent by Counsel referred to Amanda receiving 56% of the remaining net residue, with an accompanying note that provision should be made specifically for the two infant children. Boyd accepted that nowhere in that note did Counsel refer to any discussions with Boyd about having had a view on the 56% or about Boyd having expressed views that the instructions on this issue were actually on hold or that the interim Will Boyd had agreed to be prepared in the meantime had not occurred.

134. [134]
     Boyd accepted there was no note from Counsel that Villa Calvi, which was owned by a corporation, could not be dealt with under this or another Will. Boyd did not accept that Counsel contemplated the disposition by Will of assets controlled by the deceased outside his name. It dealt with personal assets including shares in companies, but not the assets owned by the companies or trusts.

135. [135]
     In Boyd’s view, the draft Will was not in a form which could be sent to the deceased. Some of the questions raised and the clauses drafted seemed to be “rather undeveloped vis-à-vis the instructions”^[29] Boyd had received from the deceased. Boyd wanted to get from the deceased his instructions on the executors, on the percentages and on the real estate so the document could be fleshed out with the benefit of the work Counsel had done.

136. [136]
     On 1 July 2009, Boyd emailed the deceased’s personal assistant, inquiring when the deceased was expected to return to Brisbane. Boyd said the deceased was always travelling and getting time to see him face to face was quite difficult. Boyd was advised by return email that the deceased was due back in Brisbane late on the afternoon of 11 July but was travelling to New South Wales on 12 July, before returning back into the office on 13 July 2009.

137. [137]
     On 15 July 2009, Boyd attended the State of Origin match, at the deceased’s invitation. Whilst there, Boyd said he had a brief discussion with the deceased, at the back of the box, about his Will. Boyd told the deceased he had Counsel prepare a draft Will, that the issues previously discussed with the deceased, that is executors, percentages and real estate, were still outstanding, and Boyd needed instructions in order to progress the new Will. Boyd said the deceased did not express any concern about delay in the preparation of his Will.

138. [138]
     Boyd said the discussion had with the deceased on that evening was the same as in January. He asked the deceased, “Give me those instructions”^[30] and the deceased replied, “No, I can’t at the moment.”^[31] Boyd accepted there was no reference in any diary note, at any time after that date to the date of death, of such a discussion. Boyd could not offer an explanation. For whatever reason, he did not make a note.

139. [139]
     Boyd agreed that if a matter was important, Boyd would record it in writing, although he drew a distinction with the deceased’s personal affairs. In his experience, from conversations with people within the Talbot Group, matters Boyd had written to the deceased about had become general knowledge around the office. As a consequence, Boyd’s process was if the matter was sensitive from a personal perspective, he chose to minimise his written communications with the deceased to avoid that circumstance. Boyd said that was reflected in the 2002 Will process of exchanging documents in hard copies rather than emailing documents to one another, except right at the end.

140. [140]
     At about this time, Boyd said he was working for the Talbot Group, effectively full-time, seven days a week. There were two acquisitions. One was a big acquisition in Mozambique. Work for it went off the charts, requiring coordination with legal firms in South Africa, Mozambique, Mauritius, and the British Virgin Isles. Boyd was also continuing to assist in the defence of the criminal prosecution. A substantial task was the identification of 104 transactions between the deceased’s entities and the State Government in which it was possible for the Minister to have had some input. The deceased also wanted Boyd involved as a sounding board because he had much of the history of the Talbot Group at his fingertips.

141. [141]
     On or about 31 July 2009, Boyd received a letter from Counsel seeking a conference to discuss further the deceased’s succession planning and advice. Counsel sought confirmation of the current status and as to whether Boyd required his further assistance. Boyd had no record of any contact with Counsel in response. Boyd said he was still awaiting instructions.

142. [142]
     In September 2009, Boyd received instructions in relation to the C and D class shares held by Liam and Courtney. The deceased wanted that shareholding arrangement changed so that the deceased became the sole beneficial owner of those shares. Boyd contacted other advisors of the deceased in an attempt to trace the history and circumstances of that ownership. He drew “a complete blank”^[32]

143. [143]
     Boyd spoke to the deceased about the C and D class shares by telephone on 2 November 2009. During that conversation, Boyd said he reminded the deceased that he had a draft Will which Boyd and the deceased needed to discuss at a convenient time. The deceased did not indicate a convenient time. Boyd’s diary note recorded that he advised the deceased of the enquiry in relation to the share trusts in TGI and that he had a draft that they needed to discuss at a convenient junction. Boyd agreed the reference to a draft was the draft Will. Boyd accepted he did not ask the deceased for instructions on this occasion, in relation to the 56% issue.

144. [144]
     Boyd did not accept that he could have prepared an interim Will, in similar terms to that prepared by Counsel. Counsel’s draft was quite broad. Boyd’s expectation was to descend to something along the lines of detail of the current Will for things to be clear and certain. Boyd did not accept that if he had had a conversation with Counsel about suspending the agreement in relation to preparation of an interim Will, he would have made a note of that discussion. Boyd said making no note was not unusual; “my record keeping is not perfect.”^[33]

145. [145]
     Boyd said he had a further conversation with the deceased on 17 December 2009. The deceased unexpectedly came to Boyd’s office following a lunch, accompanied by the chair of a servicemen’s organisation Boyd had been assisting in respect of a gift of property by one of its members through his Will. The three of them went to the Port Office Hotel. Boyd said when the other man was out of the bar area, Boyd told the deceased they needed to do something about finalising his Will. The deceased replied that he was mindful of needing to get back to Boyd about the new Will but “he hadn’t made his mind up”.^[34] Boyd made a brief diary note of the meeting when he returned to the office.

146. [146]
     Boyd said in the following months the deceased was regularly overseas, often for extended periods. He did not receive further instructions from the deceased about preparation of the new Will.

147. [147]
     On 8 February 2010, Boyd sent an email to Counsel to elevate the removal of the former solicitor issue into the current list of jobs. Boyd had recently run into that solicitor and explained they needed to document conclusively his removal as principal of the relevant trust.^[35] At the start of that email, Boyd recorded that “getting any time with Ken continues to be an issue”. Boyd said that was a reference to obtaining instructions from the deceased in relation to the new Will.

148. [148]
     Whilst Boyd did not receive any further instructions from the deceased, Boyd undertook inquiries. On 10 February 2010, Boyd emailed the Italian lawyer who looked after the villa in Italy, seeking a referral to ascertain the French law relevant to disposing of the Paris apartment by Will. That lawyer replied on 16 March 2010. In April 2010, Boyd also obtained details of the ownership of the apartment in Shanghai and a property at Hamilton Island, from the deceased’s assistant. Boyd said he wished to understand their structure and ownership in preparation for completion of the new Will. By email dated 19 April 2010, Boyd replied to the deceased’s assistant advising he was going to need a referral to the Chinese legal parties who assisted in the purchase of the Shanghai apartment. Boyd did not receive a response.

149. [149]
     Boyd said these inquiries continued, even though the deceased was not pressing Boyd to complete a new Will, as he wanted to have the relevant advice to progress the Will when he heard back from the deceased. Boyd was also mindful that the trial of the criminal proceeding was scheduled for the end of August. Some things needed to be progressed before that trial, lest there be a negative outcome. The Will was one. There was also some work looking at the management of the Talbot Group in the event of a conviction. At no stage throughout this period did the deceased ask Boyd about the progress of the Will.

150. [150]
     On 11 April 2010, Boyd took Counsel’s draft and created a version of a draft Will on which he commenced work, dealing with the issues he could address at that point of time, including any concerns he had about Counsel’s draft. Boyd left open the matters on which he was still needing instructions from the deceased, namely, the executors, percentages and real estate.

151. [151]
     The document created by Boyd commenced “Lord Mountbatten House in Sri Lanka”.^[36] Boyd said that was an aide memoir of a matter that needed to be addressed in the Will. The deceased had purchased a historical property in Sri Lanka known as Lord Mountbatten House, with the intention it would become the family home in Colombo. Boyd did not know how that property was held and what were the arrangements.

152. [152]
     Boyd said he next spoke to the deceased in relation to the new Will on the morning of 5 May 2010. Boyd had attended the offices of the Talbot Group for a conference call in relation to the Sri Lankan project. His meeting was to be with two executives, Anthony Conomos and Ewan Walker. Boyd said on 18 April 2010, the Talbot Group received an anonymous email advising there was to be a corruption investigation into their operations in Sri Lanka. As a consequence, the offices in Sri Lanka were closed and personnel repatriated to Australia. Records had also been returned to Australia. The deceased was putting in place arrangements for associates in Brazil to take over the deceased’s interest in that Sri Lankan project. It was proposed the deceased would provide the requisite funding “behind the scenes”.^[37] That was the basis for the conference call on 5 May 2010.

153. [153]
     Boyd said the investigation into the Sri Lankan operations had resulted in the resignation of one of the long-term directors of the Talbot Group, Denis Wood.^[38] Wood told Boyd he had raised concerns with the deceased about the Sri Lankan activities. He was particularly concerned about the potential investigation and was not comfortable staying on as a director. Boyd described Wood as having very deep experience in the affairs of the Talbot Group. Wood had introduced many of the deceased’s good deals and was effectively “his right hand man”.^[39]

154. [154]
     Boyd said before the conference call started, the deceased entered the board room. Boyd was not expecting to see the deceased that day. The deceased thanked Boyd for the work he had been doing on the Sri Lankan project. Boyd said the deceased also told Boyd he wanted to change his instructions in relation to the Will but had not yet made up his mind. Boyd asked whether the deceased was talking about percentages or asset specific. The deceased replied he was thinking in terms of the percentages particularly. Boyd said he asked the deceased whether the changes were something he could deal with quickly, before the deceased went away. The deceased replied no, it should be left until, “after the hangar and the trip”.^[40] Boyd understood the hangar to be a reference to a mock courtroom hearing, to be undertaken in an aircraft hangar, for the upcoming criminal trial. Boyd understood the trip to be a reference to the deceased leaving at the end of the week to travel with his family to Europe and down into Africa for a board meeting. Boyd said the deceased did not seem to want to be drawn any further at that stage. The two other executives were in the room and Boyd expected the deceased did not want to say too much more in their company.

155. [155]
     Boyd made separate contemporaneous file notes of his meeting with the executives that day, and of the conference call. The file note of his meeting with executives recorded the time as 0750/0905 and its first entry as, “KT: ok re draft letter”. Boyd said that was a reference to a letter which had been bouncing backwards and forwards between the deceased, Walker and Boyd over the previous days. The note recorded Talbot’s instructions to him when he walked into the room that he was okay with the draft letter. Boyd said the entry following, “Use of lawyer assoc’d with Prabath. Cont. KT won’t change.”, was a reference to the need for legal advice in Sri Lanka. They had sought a referral to a lawyer. Boyd had concerns the lawyer was close to some parties whose interests were contrary to those of the deceased. Boyd said he had asked the deceased whether they should find somebody else who did not have that conflict issue. The deceased wanted to continue to use this referral.

156. [156]
     Boyd said this part of the notes recorded a conversation he had had with the deceased in the room that morning. Boyd’s next note recorded, “Teleconference as per attached.” That was a reference to the separate note he prepared in respect of the conference call itself. Boyd said he made a separate file note of the telephone conference discussion as he generally tried, where possible, to keep separate notes of separate things. The note thereafter dealt with conversations he had with Walker and Conomos after the conference call.

157. [157]
     Boyd said he made a separate file note of his conversation with the deceased about the new Will, when he returned to the office, after the conference call. The file note contained the time 0800 and the date, 5.5.10. It related to re “Will”. It recorded attending “KT”. The note was thereafter in the following terms:

“Discussing.

Kt wants to ▲ instructions and will advise when made up his mind. Been rethinking %’s in particular.

Timing?

Leave till post hangar/following trip.”

158. [158]
     Boyd accepted his diary note for the meeting with the executives recorded the time of the meeting, not his time out of the office. Further, the note he made in relation to the teleconference itself, which recorded the time as starting at 8am and finishing at 8.55am, recorded the period of the actual conference call. Boyd said the time recorded on his separate note of his conversation with the deceased about the new Will was an estimate, having regard to the fact he made that note upon his return to the office.

159. [159]
     Boyd accepted that in relation to the conversation with the deceased on 5 May 2010, Walker and Conomos were present in the board room, at the time of that conversation. Boyd denied it was glaringly improbable that a man who generally was concerned about his privacy would “breeze into a room as an important meeting is about to start, in front of two staff, and have a discussion with you about changing his instructions regarding his will”.^[41] Boyd replied, “I was actually very surprised when he said that in the presence of two other people”.^[42] Boyd agreed it was wholly out of character.

160. [160]
     Boyd accepted he would, if the deceased had wanted, have remained after the meeting but said the deceased left because he was going into the city for conferences in relation to the prosecution. The teleconference meeting was about to start in a matter of minutes. Boyd accepted the deceased could have asked him to step out of the room. Boyd said the deceased did not ask Boyd to do so. Boyd said when they were talking, the deceased seemed reluctant to be drawn further on the discussion, in the presence of Walker and Conomos, in terms of descending to the detail of any changes.

161. [161]
     Boyd did not accept that his contemporaneous diary notes made no reference to the deceased coming into the room. The first line was a reference to the deceased because they spoke about the draft letter which he had prepared for dispatch to Sri Lanka. Boyd did not accept the deceased was there for the bulk of the period between 7:50 and the commencement of the teleconference at 8:00. Boyd said it was a very short drop in, a matter of a few minutes.

162. [162]
     Boyd did not accept that if the deceased had truly joined the meeting, even for part of it, he would have been in the attending part. On occasion, Boyd’s diary notes would record discussions with the deceased and somebody else present. Boyd would note everybody who was present and that it covered a range of topics. Boyd said the diary note of 5 May 2010 occurred in circumstances where the deceased was a drop in. Drop ins were not necessarily going to be recorded in his file note.

163. [163]
     Boyd accepted his practice, where possible, was to make a note contemporaneously. He accepted he could have made a note contemporaneously of this conversation and that he did not. Boyd said his practice would include a number of options. He might make a standalone note, in full, at the time. He might make rough scribbled notes to capture the main points, which he would record in a fuller note when he returned back to the office. It might be that he would make a note when he got back to the office as the first note or it might be that he overlooked it completely.

164. [164]
     The teleconference note recorded the teleconference as commencing at 8 o’clock. That was its commencement time. Boyd accepted that his note of his conversation with the deceased about the Will also recorded it as starting at 8 o’clock. He said that notation was due to a lack of precision for time on that note. It suggested the notes were something he wrote when he returned to the office.

165. [165]
     Boyd said he took the deceased’s statement “he wants to change instructions” as referring to changing instructions from those originally given to Boyd. Boyd said at that stage, the deceased had not made up his mind on the change. The deceased said he would advise Boyd when he had made up his mind. Boyd did not accept that his question about timing was inconsistent with his practice not to ask the deceased when he would come back with instructions; “No, that wasn’t a question about timing of him coming back to me with instructions. That was a question about timing as to whether he wanted me to do anything about it because, obviously, I was particularly aware that he was about to go overseas for an extended period of time. The question was whether he wanted me to do something in the way of a document imminently”.^[43] Boyd did not accept there was nothing to be rethought. The percentages were to be rethought and settled on.

166. [166]
     Boyd said he had no further conversations with the deceased concerning his Will. The mock Court hearing ran from 10 to 13 May 2010, in Brisbane, Boyd was present for each of those days. Boyd obtained instructions from the deceased on Sri Lanka whilst there. The deceased left the country the next day. Amanda agreed that whilst the deceased was in Brisbane, he was very distracted by the need to be properly prepared for the criminal trial listed to commence around 31 August 2010.

167. [167]
     Boyd said he did not consider he had finalised testamentary instructions from the deceased; from “our very first meeting in November of 2007, his testamentary intention was an open issue because of the conversation about the need to make provision for Alex and Claudia and him talking then about reverting to something along the lines of the current will.”^[44]

168. [168]
     Boyd received a communication from the Italian lawyer on 19 May 2010, in reply to Boyd’s email sent on 16 April 2010, in relation to French laws. On 21 May 2010, Boyd received an email from the deceased’s assistant responding to his previous request in relation to the Shanghai apartment. It advised they had had an Australian lawyer based in Shanghai. Boyd asked the assistant to send an introduction to that lawyer. The assistant did, by email on 26 May 2010.

169. [169]
     On 16 June 2010, Boyd sent that lawyer an email advising he was acting for the deceased in respect of succession planning and was trying to gain an understanding of the ownership structure of the Shanghai apartment and the applicable law in China on death.

Plane crash and its aftermath

170. [170]
     The deceased’s plane was initially reported as missing. When the plane was found two days later, Don Nissen telephoned Amanda to advise there were no survivors. At that time, Amanda, Alexandra, Claudia and Courtney were staying at the apartment in Paris. The deceased’s death was officially confirmed on 22 June 2010. On that day, Boyd sent an email to Amanda expressing his condolences. He asked her to let him know if he could provide any assistance.

171. [171]
     On 24 June 2010, Boyd telephoned the executor to inform him of the deceased’s death and of his appointment. The executor said he was not aware of having been appointed executor and expressed some concern about whether he could act in that role. It was agreed Boyd would email a copy of the Will to him.

172. [172]
     Boyd sent an email to the executor after that conversation, setting out details of the circumstances of the deceased’s death and confirming; that he had represented the deceased in personal legal affairs for a number of years; that he was holding his Will dated 29 November 2002; that the Will appointed the executor as sole executor and appointed a long-term French friend and colleague, Georges Sabbagh and the managing director of BNP Paribas as international advisors to the executor; that the beneficiaries were made up entirely of the deceased’s immediate family and a charitable trust (Talbot Family Foundation) established two years ago; that the estate was comprised of widely spread international assets, mostly in early stage resource projects, as a consequence of which there would be a need for those charged with the administration of the estate to become involved fairly promptly; that the business had established executives and senior employees and was currently under the control of Nissen as sole director; that Nissen had worked for the deceased for many years and that the business was still able to function and was in good hands; that the deceased’s Will was highly confidential; and that he and Boyd were currently the only people who were privy to this level of detail.

173. [173]
     Boyd accepted that his reference to the estates assets was a reference to not only assets in the deceased’s own name but those controlled by him. Boyd agreed that on the same date, 24 June 2010, he saved a version of the deceased’s Will electronically so that it could be sent to the executor.

174. [174]
     On 28 June 2010, Boyd conferred with Nissen, Shane Edwards and Walker about the deceased’s estate. He advised that the controllers of the estate were the executor and the international friends. Boyd discussed steps to be taken by the directors of the Talbot Group entities. Boyd dictated a memo concerning that meeting. Boyd recorded he had recommended that all decisions be carefully minuted so that the reasons are recorded and available to the executor, the international friends and the beneficiaries in the future.

175. [175]
     Boyd also prepared a short, separate file note in which he recorded that Edwards had mentioned seeing a note by the deceased in July 2009 about needing to get back onto his Will. Boyd said there was no further discussion about that issue.

176. [176]
     Prior to that meeting on 28 June 2010, Boyd wrote to his professional indemnity insurers, Lexon Insurance. Boyd said he could not see any circumstances giving rise to a claim, particularly in the context of not having received final testamentary intentions from the deceased:

“but when you’re dealing with a client of his wealth, and the circumstances of him having passed away, whilst a will was under preparation, it seemed to me that the prudent thing was to do that. And the other factor in mind at that particular point in time was that, given that these insurance policies are claims made policies, at the end of June there was the annual renewal process, and whilst the Lexon cover dealt with the first two million dollars, my top-up insurers tended to change from year to year, depending on what the syndicate looked like, and so I felt that prudent thing was to make sure that notice was given to the then insurer so that there wasn’t any risk of a late notification issue being raised by the new insurer.”^[45]

177. [177]
     Boyd’s letter to Lexon stated he was writing to give notice of circumstances which may give rise to a claim against his firm. After detailing the circumstances of the deceased’s death, his last Will and the instructions for a new Will, Boyd stated:

“My final conversation with Mr Talbot on this topic was at his East Brisbane offices on 5 May 2010 when he said that he wished to change his instructions and would let me know when he had made up his mind. I was aware that he was due to leave the country for about six weeks on 15 May 2010 and inquired whether he wished to deal with the matter before then. He said not, to leave it until his return.”

Boyd went on to detail his work in relation to the C and D class shares.

178. [178]
     On 28 June 2010, Boyd gave notification in similar terms to AON Insurance, his excess professional indemnity insurer.

179. [179]
     Boyd said the circumstances which caused him to make the initial notification was that he had a client who was making a Will who had died. To his mind, that was enough to warrant a notification. Boyd did not think there was any prospect that he ought to have acted in a different way because the deceased had not instructed him of any finalised testamentary intention. Further, the time factor was wholly explicable in terms of the way the deceased and Boyd worked together. It confirmed there was no pressure, as there had been with the 2002 Will, to get something done promptly. For that reason, the notification was given, but not with any belief there was a potential liability.

180. [180]
     Lexon and AON acknowledged Boyd’s notification by letters dated 29 June 2010. Lexon’s letter stated Lexon was treating the matter as a mere notification of circumstances which may give rise to a claim. It requested Boyd complete attached claim forms.

181. [181]
     On 5 July 2010, Boyd completed those forms. Boyd described the potential claim as “disappointed beneficiaries”, nominating those who may bring the claim as “beneficiaries of the estate” of the deceased, with the claim to relate to “New Will instructions” and “Shareholdings falling outside the estate” of the deceased. Boyd recorded the prospects of success of a claim “to be low” with no liability on the basis he “awaited further instructions”.

182. [182]
     On 8 July 2010, Boyd received an email from the executor asking for an interpretation of clause 6 in the Will. Boyd replied that Sabbagh was a long-time friend and business colleague of the deceased and was close to the deceased’s family. Sabbagh would make himself available as required and would be a thoughtful contributor. Boyd said he did not know whether the managing director of BNP would have the time to be involved in all matters. Boyd said clause 6 was inserted at the deceased’s request to remove any ambiguity about the roles and relationships of the trustee, the international friends and the advisors.

183. [183]
     On the same day, Boyd received Counsel’s invoice “to draw testamentary trust, complex matter, being remainder as per costs agreement”, for $15,000 plus GST. The invoice was paid personally by Boyd. Boyd said there were two reasons, first, at the time he asked Counsel to undertake that work, he did not actually have instructions from the deceased to ask Counsel to draft the Will. Boyd said he was trying to stay ahead of things and move the work forward in a productive way. Second, from a personal perspective, Boyd felt that the deceased had actually received no personal value for that work and he could not bring himself to invoice it. Boyd had previously rendered an invoice in respect of work he had done for his first engagement to deliver the brief to Counsel. The invoice had been paid in respect of that work.

184. [184]
     Boyd denied he paid the invoice because he had not pursued the topic diligently. Boyd said that did not alter anything. Boyd also denied he was concerned to send an invoice in circumstances where TGI executors were, at the same time, asking about references to a new Will in the deceased’s papers. Boyd said that would ultimately have been a matter for the executor.

185. [185]
     On 9 July 2010, Boyd sent an email to the executor saying he had met briefly with Sabbagh, Amanda and Wood with a scheduled meeting on the following Monday with Sabbagh; that the media interest had been intense; and that the team was keen for the executor to give guidance as to whether it would be business as usual.

186. [186]
     On 10 July 2010, Boyd received an email from the executor’s attorney onforwarding, at the executor’s request, an email between the attorney and the executor. It advised that the executor was unable to attend the funeral because of his own mother’s health; and that the executor and the attorney would come to Brisbane the following Monday, 19 July. The email listed action items, such as applying for a grant of probate and discussing with Boyd the feasibility of waiving the giving of notice and of sealing the papers. It also raised discussing with Boyd whether another jurisdiction might be more suitable for overseeing administration of the estate. Other items to be raised include meeting and collaborating with the management of the Talbot Group and the Talbot Family Foundation.

187. [187]
     On 10 July 2010, Boyd responded to the executor’s email advising he was in complete agreement about what was being proposed and that there would be no issue with relevant people making themselves available. Boyd also advised that the emails remained private between them and that whilst the Talbot Group executives were aware he was communicating with the executor, they were not aware of the content of the deceased’s Will. The only people in possession of a copy were the executor, his attorney, Sabbagh and Boyd.

188. [188]
     On 12 July 2010, Boyd arranged a telephone conversation with the executor’s attorney. His diary note recorded that Boyd explained about the new Will instructions he had received from the deceased and the process after receipt of those instructions. He discussed the estate administration, death certificate, probate and queried letters of administration. There was a discussion of family circumstances, the role of the international friends, a report on assets, the status of the TGI shareholding and management retention, and the foundation.

189. [189]
     Boyd said he could not recall the detail of the discussions in relation to the new Will instructions or the international friends. The discussion about TGI shareholding included discussions about the work being done on the C and D class shares. The reference to the foundation was about the existence of the Talbot Family Foundation established during the deceased’s lifetime. Boyd said they also discussed the fact that the executor would be an offshore executor and whether that would impact on the way the process occurred in Australia.

190. [190]
     On 13 July 2010, Boyd sent an email to Nissen confirming the executor and his attorney were travelling to Brisbane on 19 July 2010 to stay for a week to meet with all relevant parties. He passed on a request for information from the executor’s attorney in respect of six specific investments. Boyd also detailed the people that the executor and his attorney would like to meet during that week.

191. [191]
     On 16 July 2010, Boyd received an email from Edwards enclosing a copy of a list contained in the deceased’s notebook. Item 8 read:

“Will

• Fix it up make it relevant”

Boyd responded asking Edwards as to the timing of that note. Later that same day, Edwards advised Boyd, by email, that the entry appeared in a notebook commencing November 2007, completing December 2007, and that the commencement of the deceased’s notes for his book said “I decided to commence scoping the outline for a book in Mid 2008”. Edwards observed the note would post-date this.

192. [192]
     On 16 July 2010, Nissen advised Boyd it was okay to call Amanda to explain what happened next. Boyd telephoned Amanda that day. Boyd told Amanda the deceased’s last Will was 2002. He said they had been in the process of updating it, but it was not finalised before the deceased’s death. Amanda told Boyd the deceased went to discuss his Will with her but she had declined on the basis it was up to him and she would not have wanted to influence him. Boyd made a diary note of that conversation and of his conversation with Nissen.

193. [193]
     Amanda said she first heard from Boyd after the deceased’s death when he sent an email confirming the plane had been found and there were no survivors. Boyd expressed his sympathies and let Amanda know he was there for her and the girls if they needed anything. Amanda said the day after she returned to Brisbane, she was advised Boyd wanted to see her. In the subsequent days, she was reminded Boyd wanted to see her. An appointment was made for them to meet at the deceased’s office. During this meeting, Amanda said she asked Boyd about the deceased’s Will. Boyd replied, “I can’t tell you anything”.^[46] Amanda accepted that response.

Executorship

194. [194]
     The executor, his attorney and his valuer arrived in Brisbane after the deceased’s funeral. Prior to their arrival, they had discussions about Boyd acting as the executor’s local lawyer. Boyd said that discussion was part of a lengthy call of over an hour with the attorney where Boyd talked him through the general Talbot Group structure. The attorney did not have any immediate tasks he wanted Boyd to perform at that stage. Boyd said he was providing information, in the same way a company secretary might be able to explain the nature of the business.

195. [195]
     One of the topics discussed by Boyd with the executor’s attorney was the fact that the executor would be an offshore executor and whether there was any particular requirement in the context of a probate process arising from the fact of his being an offshore party. Boyd said he may also have discussed that with senior Counsel. Boyd made no diary note of his discussion with senior Counsel.

196. [196]
     On 19 July 2010, Boyd spoke by telephone to Lexon and, subsequently, a representative of AON. The context of that discussion was that Boyd had been asked by either the executor or his attorney to represent the executor in relation to probate and the estate. Boyd wanted to know whether that particular request sounded any concern in the context of the notification given to Lexon. Lexon expressed the view that it was not an issue as far as they could see.

197. [197]
     In this discussion with Lexon, Boyd raised at a high level the possibility of a revocation or partial revocation of the 2002 Will and the operation of s 18 of the Succession Act 1981 (Qld) (the Act). Boyd said that discussion related to whether there would be something in his file that may either have been an informal Will or an informal document that varied the existing Will. Boyd said the only document he had from the deceased which could potentially have operated in that way was the email with the whiteboard notes. It was a low level concern. Boyd accepted that in his note of his discussion with Lexon, there was no reference to a prospect of a s 18 Will simply a reference to seeking advice from Counsel. Boyd thought he touched on s 18 with Lexon but not in any detail.

198. [198]
     Boyd said he had a preliminary discussion with senior Counsel around that time as to whether there might be something which satisfied s 18 of the Act as an informal Will. Boyd said he thought the prospect was really remote but given he was potentially going to be engaged in an application for probate, it became somewhat more acute because having been the recipient of instructions from the deceased and then being asked to advise the executor on what he should or should not disclose on a probate application, it needed some thought. Boyd did not think there was anything in there but said that was not always the determinant. Boyd did not see himself as a prospective defendant.

199. [199]
     Boyd’s note of the conversation with Lexon contained reference to something emerging from the beneficiaries once informed of the contents of the Will, which related to a challenge that might arise, such as a family provision claim, which impacted on his ability to act for the executor. His reference to in the course of instructions was talking through the process the deceased and Boyd had undertaken between 23 November 2007 and the date of death.

200. [200]
     Boyd agreed that in his discussion with Lexon he did not feel constrained not to reveal anything for reasons of confidentiality owed to the executor or legal professional privilege. Boyd said the file contained material which he undoubtedly regarded as privileged but that his understanding was that in dealings between himself and insurer he had an obligation to disclose and questions of privilege would not arise. Boyd said he was free to discuss the matter fully with the insurer. Boyd said he had a mirror call with AON but that he did not descend to the same level of detail with those representatives.

201. [201]
     Boyd maintained a separate file for the professional indemnity notifications. The 2010 and 2011 notifications were on the same file. A 2015 notification might have been a separate file. They were just notification files. They were not provided to the solicitors acting for him in this proceeding until very recently, when disclosure of the files was requested.

202. [202]
     Later that day, Boyd spoke to Amanda. He also exchanged emails with her in relation to the process of realisation of the estate. Amanda expressed concern about the number of people who had come over with the executor. Boyd said he explained the process. Later Amanda responded by email, stating that she had spoken to Liam and Courtney and they all agreed that we need to get on with everything. Amanda ended “So bring it on!”. Boyd said he understood all three had agreed that whatever the process be for administration of the estate, they needed to move it forward. The expression, “So bring it on!” was Amanda communicating her apprehension. The arrival of the party from Texas perplexed her a little. Boyd said he tried to explain to Amanda what it was they were doing and why they were doing it. It was in that context that she said well, lets get on with it. Boyd said he replied, “Bravo”, indicating his agreement that they did need to get on with everything.

203. [203]
     On the night of 19 July 2010, Boyd attended a dinner with the executor, his attorney, his valuer and Sabbagh. It was a working dinner containing a general discussion about the Talbot Group, how it was all structured, who was there and what was being done. The executor expressed concerns about the involvement of BNP, stating that past transactions had not been satisfactory. There was a discussion about the roles of KPMG and McCullough Robertson. There was a reference to a request from Amanda for the reading of the Will on the next day.

204. [204]
     Boyd said there was also a discussion about the deceased’s new Will instructions. Boyd said he talked through the receipt of the instructions on 23 November 2007, the confirmation of the contents of the whiteboard and the process which followed thereafter. They just listened. Boyd said he mentioned s 18 as the attorney was not a local lawyer and not familiar with our legislative system. Boyd told them “about would be required to be admitted as an informal will, which either revoked or partially revoked or had no effect at all on the 2002 will, that, as the proponent of a probate application, it would be [the executor’s] obligation to fully inform the court and that I thought, in the circumstances of an estate of this size, that it was worth getting specialist advice just to rule out the risk that the whiteboard notes constituted some sort of testamentary document”.^[47] Boyd agreed he was recommending the briefing of Counsel to the executor. Boyd said the topic was raised not because he believed there was any basis for revocation but because the executor needed to be aware of a requirement to disclose all relevant matters when applying for probate.

205. [205]
     Boyd accepted his notes of the dinner meeting of 19 July 2010 had no record of any change of instructions at the 5 May meeting. Boyd said his note did not descend to any detail of what was discussed but he was quite certain he discussed that topic.

206. [206]
     Amanda said that when Sabbagh was in Brisbane for the deceased’s funeral, there was a dinner with the Talbot Group executors and Sabbagh. Boyd was present. Amanda said the next day, Sabbagh told her there was some notes for a new Will. She asked Boyd about some notes and would they ever see them. She thinks Boyd asked why she wanted to know about the notes. Amanda estimated she raised that with Boyd around five times. His response was that he could not tell her.

207. [207]
     On 20 July 2010, Boyd send the attorney an email about meetings and other matters. Relevantly, the email stated:

“Regarding the revocation point we have been discussing, I refer you to s 18 in the Succession Act 1981 (Qld). The attached materials are an email dated 23.11.07 from Ken’s PA (confirming whiteboard notes he made that day) and two recent Queensland Supreme Court decisions on the application of section 18.

We spoke last night about retaining specialist Counsel to advise about this issue. My suggestion regarding the choice of Counsel would be Robert Bain QC (who has worked extensively with Ken in the past on civil matters) and Joe Morris (a relatively junior Counsel in chambers with Mr Bain) on the basis that Mr Morris would carry out the preliminary work, consult with Mr Bain as required and then produce a joint advice from them. They are available to attend to this on an urgent basis”

Boyd accepted that in this email, there was no reference to a change of instruction but said that was because it had been discussed the night before.

208. [208]
     On 23 July 2010, Boyd met in conference with the attorney and the valuer. There was a discussion about various assets of the estate and of the costs associated with the defence of the criminal proceedings. Boyd also provided a copy of his costs disclosure documents. Boyd advised he did not propose to charge for the estate work. The attorney advised Boyd another solicitor was to advise on the s 18 point and to do probate. Boyd’s services would not be required in that regard.

209. [209]
     Boyd’s note of the meeting recorded: “questioning about why I thought it appropriate to raise the s. 18 point and suggest they get advice about it. Disavow/variation”. Boyd agreed the attorney was unhappy about the issue having been raised by Boyd. Boyd described it as fairly aggressive questioning as to why he thought it was necessary. Boyd said his explanation was to repeat what he had said at dinner, which was that the attorney was from out of town and needed to know about it. Boyd thought, because of the obligations with regard to probate and the size and nature of the estate, it was just one thing which prudently should be advised upon before anything further was done. Boyd agreed he was asked to send the original Will and original death certificate to the other solicitor.

210. [210]
     Boyd’s note of the meeting also recorded that the attorney asked who Boyd was acting for and queried whether it was other parties dealing with the Talbot Group. Boyd replied no. The attorney also queried whether it was the family. Boyd explained the nature of the relationship but stated he had no retainer for Amanda or Courtney. He had one minor personal matter for Liam. Boyd said he had represented the deceased personally as well as the Talbot Group entities. Boyd’s note thereafter recorded that the attorney asked what Boyd understood to be the powers of the international friend. Boyd replied it was for advice, with an ultimate power of veto on discretionary matters. The attorney advised that the other solicitor said the veto was contrary to trust law. Boyd was asked to comment. He said he had none at this time. Boyd said the attorney was not as firm in expressing a view that the international friend would not have a right of veto as he was “for example, on the s 18 point”.^[48]

211. [211]
     Later that same day, Boyd received a telephone call from Amanda. She advised the deceased’s Will was to be read that weekend. She requested Boyd be present. Boyd agreed to do so.

212. [212]
     On 24 July 2010, the Will was read in the presence of the executor, his attorney, Amanda, Liam, Courtney and Boyd. Boyd made a diary note. It recorded that the attorney took them through the Will, clause by clause, distinguishing between mandatory and non-mandatory matters. Boyd’s note said “refers to will as most unconventional, extremely thoughtful, and genius in level of detailed thought”. Boyd also recorded the executor saying this would be his last job. Amanda described the process as not monumental. She said at that stage, she had had no experience in legal matters or in the administration of estates.

213. [213]
     On 26 July 2010, Boyd had a discussion with Amanda. Amanda expressed concern about disorganisation regarding the reading of the Will; the lack of any clear direction as to the process to be followed by the executor and his attorney; and the number of people coming out to Australia and the associated cost. Boyd explained to Amanda why the arrangements had been made in that way. He noted the costings were to be advised by the executor and his attorney.

214. [214]
     Boyd said it looked, at that stage, as though the executor had a separate legal advisor for probate and estate matters which left Boyd free to give the family some guidance. Boyd said he also explained to Amanda there were constraints on who he could advise and on what subject matter. For example, as the solicitor involved in the drafting of the Will, there may be a requirement for Amanda to obtain independent legal advice in the future. Boyd said he also told Amanda he had duties of confidentiality about the deceased’s Will and his instructions and that those duties were now owed to the executor.

215. [215]
     On the afternoon of 26 July 2010, Boyd had a telephone discussion with the other solicitor. Boyd’s note recorded there was a proposal to file for probate. There was also a discussion about the commission payable to the executor. Boyd was asked if he still had the Will file. He replied, yes. He also advised of incomplete instructions for a new Will. The solicitor advised Boyd that the attorney had shown him the email of the whiteboard. He had told the attorney it could not be proved as a Will.

216. [216]
     Boyd accepted he did not, at any stage, send the whole of the new Will file to that solicitor and he did not discuss with him any discussions he had had with senior Counsel or that he had notified his professional indemnity insurer. Boyd accepted there was no reference to the 5 May meeting in his note of his discussion with the other solicitor. Again, Boyd was quite certain he disclosed it to him.

217. [217]
     On 30 July 2010, Boyd received an email from Amanda stating it was “Great news that you think it will be okay to look after the family side of things as well”. Amanda requested Boyd have a chat with Liam and Courtney (especially Liam). Boyd responded that he would make it a priority to ensure everything “is moving in the right direction”. Boyd concluded “It is never a bother to pop over so don’t feel as though you are ever imposing on that front.”^[49]

218. [218]
     Boyd said there were regular comments from Amanda about the directions in which Liam and Courtney were moving. Liam and Courtney frequently moved in different directions from Amanda. It was not an uncommon situation. Boyd said throughout this period, Amanda was, at times, very disgruntled about the way Liam and Courtney were dealing with the executor and his attorney. They were not as strident as Amanda in their attitudes. Liam and Courtney seemed to be more cooperative and willing to progress things in a way which reached agreement.

219. [219]
     Boyd said it was not until quite late in 2011 that Amanda, Liam and Courtney started to get some alignment as to the approach to the executor and ultimately, efforts to have him removed. Boyd agreed that Amanda had never sued either Liam or Courtney to his knowledge. Boyd said they took somewhat oppositional positions in relation to the charitable foundation application.

220. [220]
     Amanda agreed there was a poor relationship with Liam and Courtney. They did not see eye to eye on many things. She accepted one of the deceased’s concerns, in providing for Liam and Courtney, was that he apprehended Amanda would not provide for them in her Will. Amanda agreed that apprehension was accurate.

221. [221]
     Boyd said he had known Amanda through seeing her from time to time at the offices of the Talbot Group. He did not know her well but felt an obligation to the deceased and his family. Accordingly, he offered to “look after the family side of things” by way of assistance from a legal perspective. Amanda was almost instantly unimpressed by the executor and his US attorney. Her early interactions with him convinced her he was greedy and arrogant. She did not believe he would respect the deceased’s wishes or his family.

222. [222]
     Amanda said she had first met the appointed executor in about 1997. He had subsequently travelled to Australia and they had gone to Noosa together. Apart from that, he had called their home looking for the deceased, maybe once every six months. Amanda did not recall him being mentioned in the later years. Amanda described the executor as “strutting around”.^[50] She found his approach “distasteful” and thought him “appalling”. She soon came to see his attorney as “menacing”. By contrast, Amanda described Boyd as a very trusted person in the Talbot circle. She saw him as a “steady person to have on the ship”.^[51] He always seemed to be around at the offices. She said he was “part of the furniture”.

223. [223]
     Amanda said she had been really alarmed by the executor’s behaviour. He had told Talbot Group executives they were not allowed to talk to the family and had suggested the adult beneficiaries would need to have an allowance from the estate and would have to submit a budget. In the course of putting together that budget, Walker had said she would need to add something extra to pay for legal fees. Amanda saw a friend who was a legal person who said she would send her to see somebody in Melbourne after Amanda had difficulty answering her friend’s questions about the companies’ structure and about the trusts.

224. [224]
     On 31 July 2010, Boyd received an email from Amanda stating a friend had suggested she speak with a retired Judge in Melbourne. Amanda requested Boyd travel with her to Melbourne to meet with the retired Judge. Earlier that day, Amanda had emailed to Boyd her latest contact with the executor. The executor had forwarded an email, with the subject title, “Re Responsibilities and duties of the executor/trustee”. He was seeking a time to speak with Amanda. Boyd responded shortly after, “Will be interested to see if you receive anything beforehand.”

225. [225]
     Boyd responded to Amanda’s request to travel to Melbourne the following morning. He advised he would be free next week. The email further stated:-

“One thing I should mention before committing to this is the scope of my constraints in participating in this meeting. There are two areas where I am presently subject to obligations of confidentiality. The first is Ken’s Will instructions and the second is the actual make-up of his estate (pending Paul Bret reporting to the beneficiaries). As I’m not sure exactly what [the friend] had in mind when suggesting this meeting, I thought I should raise this now. Perhaps best to have a chat by phone later today (I’ll be available after 11).”

226. [226]
     Boyd said he did not want unrealistic expectations as to the extent of his contribution to any discussion with the retired Judge. Further, the executor had not given a report in relation to the estate assets. Boyd took the view it was the executor’s business as to what he disclosed to the beneficiaries, how and when, and it was inappropriate for Boyd to pre-empt that by disclosing things he knew as a result of the legal work done for the Talbot Group.

227. [227]
     On 3 August 2010, Boyd and Amanda met the retired Judge. Amanda presented a two-page organisational structure for the Talbot Group which had been provided to her by Walker. She also handed the retired Judge the responsibilities memorandum which had been prepared by the executor’s attorney. Amanda described Boyd as doing all the talking, which was a relief to her. That “solidified” her reliance on Boyd and his involvement in all aspects of the deceased’s estate.

228. [228]
     Boyd’s diary note of this meeting recorded that the history of the deceased and the general content of his estate and the Talbot Group was outlined to the retired Judge. Boyd recorded that he advised of the constraints he had as to confidentiality. Boyd agreed that at no stage did he alert the retired judge to the fact that he considered there may arguably be a s 18 document. Boyd said that by that stage, the s 18 issue had been ruled out. Boyd denied that the only thing that had changed for him was that the attorney had taken exception to the fact he had raised the issue and indicated he would not be acting for the estate.

229. [229]
     Boyd said the other solicitor had told him he had looked at the document and advised the attorney it was not admissible as a Will. Boyd accepted that solicitor had one document whereas Boyd had the benefit of the whole file and of the discussions with senior Counsel. Boyd disagreed it was a matter he thought ought to have been raised with the court: “No, it wasn’t. That was my point. At the start I said there was only one document which I thought was in contention from Mr Talbot which was the whiteboard notes. Personally, I didn’t believe that it was a section 18 issue, but I thought it was something that should be considered and formally ruled out by someone with expertise in the field. And so then the trail followed, which I’ve described, finishing with Mr Whitney confirming formally that he confirmed that view and advised the executor as such”.^[52] Boyd accepted he did not advise the retired judge or Amanda that he had notified his professional indemnity insurer.

230. [230]
     During the meeting, the retired Judge advised there was a need for Amanda to have access to independent legal advice. He suggested two partners of the second defendant, Ross Paterson, whose expertise was in estates and succession planning, and Henry Lanzer, on the corporate side. He advised Amanda she should get advice about the adequacy of the provision made for her in the Will. Amanda replied she had no issue. The executor’s attorney had indicated her interest in the estate was $100 million to $130 million. The retired Judge discussed the executor’s fees and charges and those of his attorney. The retired Judge also explained probate.

231. [231]
     Towards the end of the meeting, Lanzer joined them, having been contacted by the retired Judge. Amanda said she was happy to retain the second defendant. Lanzer said he would organise a retainer. Lanzer suggested that rather than potentially upsetting the equilibrium between Amanda and the executor by the second defendant coming in as her legal representatives and perhaps causing unnecessary formality or tension, Lanzer ghost Amanda in her dealings with the executor.

232. [232]
     Following the meeting with the retired Judge, Boyd said he discussed with Amanda an investment the deceased had as well as the deceased’s superannuation being outside the Will. Boyd advised that the executor did not have to be involved in that matter and his preference was for it to be handled separately but would hear what the executor had to say.

233. [233]
     On 6 August 2010, Boyd had a telephone conference with Amanda who advised that the executor wanted her to sell everything and that he wanted it all “liquid and fluid”. The executor was discouraging Amanda from keeping the villa on Lake Como (“Villa Calvi”).^[53]

234. [234]
     The second defendant sent a retainer letter to Amanda on 9 August 2010. It recorded Amanda’s initial instructions being:

“(a) review and understand, and assist you to understand, the Will of your late husband, Ken Talbot and the structure of the Talbot Group;

2. (b)
   provide Mrs Talbot with advice (initially in conference or by teleconference) in relation to the action you should be taking immediately in relation to her rights and entitlement under the Will.”

235. [235]
     Amanda attended Boyd’s office on 13 August 2010. Whilst there, she signed the second defendant’s retainer letter. She requested Boyd return it to the second defendant. The retainer letter specifically asked Amanda to advise if the second defendant had misstated her instructions. Nothing was said by Amanda when returning the retainer letter to the second defendant. Amanda accepted she would have read the letter. She agreed she signed no other retainer with the second defendant and there was no written retainer letter between anyone else on behalf of Alexandra and Claudia and the second defendant.

236. [236]
     Notwithstanding that engagement, Amanda said Boyd was like an interpreter, or translator, as she was so out of her depth. If Amanda had a call with ABL, it would be set up through Boyd, who would be present. Amanda said Boyd did all the talking and she was very grateful for his involvement. Any correspondence she received from ABL was discussed with Boyd. She was in his office a lot. Whenever ABL required instructions or information, Boyd was involved in that process. Amanda described her talking role as minimal. People were telling her what should be done next. It was her practice to agree. Amanda said she was so concerned about the time it was taking, that she offered to pay Boyd. He replied it was not necessary; he was doing it out of respect for the deceased and his family.

237. [237]
     Ross Paterson was the partner in the second defendant who had primary carriage in acting in relation to the deceased’s estate. His specialist area included estate and succession planning. He was assisted in the carriage of that retainer by Leon Zwier, a senior litigation partner at the second defendant. Zwier’s assistance commenced in about March 2011, and continued through to about June 2012. Paterson and Zwier were also assisted by Christine Fleer, a senior associate at the time and now a partner of the second defendant.

238. [238]
     Paterson was told the firm would be acting for Amanda. He caused the preparation of a retainer which was executed by Amanda and returned to the second defendant. Paterson said Amanda often communicated through, or in the presence of, Boyd. Paterson came to understand that Boyd too had been retained to act as Amanda’s solicitor. He was provided with a copy of Boyd’s retainer. Paterson said Boyd actually returned ABL’s retainer letter after it had been signed by Amanda.

239. [239]
     Paterson said he understood Amanda had been referred to the second defendant following the unexpected death of her husband and anxiety in relation to the manner in which the executor was treating her; that Amanda had two infant children; that there were two adult children from an earlier marriage who were represented separately; and that Amanda was looking to the second defendant to provide advice to her in her dealings in relation to the estate. Paterson assumed Amanda did not have legal qualifications but said she was “a very smart woman”.^[54] He did not assume she had no experience in business.

240. [240]
     On 15 August 2010, Boyd forwarded to the executor’s attorney emails between him and the BNP representative. In those emails, the BNP representative referred to a letter of Boyd describing the deceased’s Will as an “interim document”. Boyd provided the following background on that letter:

“McCullough Robertson were Ken’s primary legal advisers at the time the will was prepared. It was prepared without access to their records and on the understanding between Ken and myself that there would need to be a review of Ken’s corporate structure to ensure that his detailed instructions about the estate meshed with the structure. That didn’t proceed at the time because, as I recall it, a relevant matter was under review between McCullough Robertson and KPMG and I was to await further instructions. Based on documents I have seen subsequently, I think that matter was the C and D class shares in Talbot Group Investments Pty Ltd. I’m not sure how or how far that matter progressed but, in any event, my further instructions were not received until late 2007 and I’ve already copied you with the email version of Ken’s whiteboard notes from that occasion.”

241. [241]
     On 15 August 2010, the attorney responded to Boyd’s email. He interrogated Boyd as to how the BNP representative had a copy of Boyd’s letter, asking whether it had been given to Sabbagh by Boyd. He also referred to the fact that under the Act there was no statutory or common law based legal or recognised office of “international friend”. Boyd said by that stage; “I think the best way to describe it is I was treating [the attorney] cautiously”.^[55] Boyd was affording him the professional courtesy of a fellow practitioner. Boyd agreed that by this stage, he was seeing an abrasive edge “which to me seemed unnecessary and out of place”.^[56],

242. [242]
     Boyd accepted that in his response to the attorney’s query about BNP’s reference to an interim Will, he did not state it was interim when he finalised it because of corporate structure concerns but in March the following year, competent people were able to ally his concerns and that he had passed that on to the deceased. Boyd said he was attempting to convey to the attorney that there were matters of potential further instructions for the deceased at that particular point in time. Boyd accepted one way to respond to the attorney’s concern was to say, “It was interim when it was completed but that which had made it interim, I found out in March of the following year, had changed and I told Mr Talbot that”.^[57] Boyd said that was not the one he chose. Boyd denied the reason he did not choose that response was because there were no such discussions.

243. [243]
     In August 2010, Amanda had further meetings with the executor and his attorney. One topic of conversation was allocation of assets. Amanda wanted Villa Calvi allocated to her. She told them it meant a great deal to her and Alexandra and Claudia. Amanda said that was not a good thing to say as they used it as weapon against her. After that conversation, Amanda said the executor’s attorney telephoned saying they wanted to meet because they had an agreement for them to sign. Amanda telephoned Boyd. Boyd told her not to sign anything.

244. [244]
     When Amanda met with the executor and his attorney, Courtney and Liam were also present. They were given an agreement for their fees. They were told they did not need to have any legal advice before signing the agreement. Amanda said Boyd’s advice was “ringing in my ears”.^[58] She told them she would take it away to have a read through it. Amanda later found out the executor and the attorney took Liam out to dinner and Liam had signed the agreement at dinner.

245. [245]
     Amanda said she took the agreement to Boyd. He advised her not to sign it. Amanda said she never did sign the agreement, despite receiving text messages and telephone calls from the executor’s attorney asking her to sign the agreement before they return to the United States. During one of those telephone calls, Amanda was reminded the family home was now in the executor’s name.

246. [246]
     Boyd had a note of a telephone discussion with Amanda on 23 August 2010. By this stage, probate had been granted on the 2002 Will to the executor. Boyd’s note recorded that Amanda told him the executor was agreeable to what she was thinking about the Villa on Lake Como. There was a discussion about whether Amanda could afford it. Amanda said it had been suggested it should go to Alexandra and Claudia or to all three of them. Boyd said the way the Will was arranged, the assets were to be valued at the date of death and treated as part of a beneficiary’s percentage interest. If the Villa went to Amanda alone, the entire value of that property would be deducted from her interest, whereas if Alexandra and Claudia participated, the percentage of the date of death value would be attributed partly to them, reducing the impact on Amanda’s balance of the inheritance.

247. [247]
     Boyd had notes of two telephone conversations with Amanda on 24 August 2010. In the first, Amanda advised the executor had told her she would be receiving the income of Alexandra and Claudia’s trusts. The executor wanted a private meeting with her next day with no attorneys present. In a subsequent conversation that afternoon, Amanda told Boyd the executor was talking again about Villa Calvi going to Alexandra and Claudia and that Amanda was thinking a split between herself, Alexandra and Claudia on the basis of 50%, 25% and 25%. The executor had also asked her to flag the proposed assets to be allocated to them. Amanda noted there was still no valuation for any of these pieces of property.

248. [248]
     Amanda said she had a further meeting with the executor. He invited her to lunch. The executor told her that because of the ages of Alexandra and Claudia, he would be their trustee for many years and that their trust funds were potentially worth a billion dollars in time. The executor said if Amanda signed his agreement, he would give her the income of their trust. Amanda said she was absolutely appalled at the proposal. The executor also talked about an insurance claim for the deceased’s life, asking “what was his life worth, a billion dollars?”. Amanda thought the executor was “an utter disgrace”.^[59]

249. [249]
     After that lunch, Amanda went to Boyd’s office and gave him a report on the meeting. Boyd made notes. The executor had asked Amanda not to tell anyone about their conversation, particularly Boyd. Amanda said their discussions included the executor mentioning a variety of numbers which Boyd thought was a reference to her expected inheritance and possibly that of Alexandra and Claudia, as well as the suggestion that the estate might sue in a wrongful death claim. The executor again suggested Villa Calvi go to Alexandra and Claudia. The executor said there would be much money coming to Amanda from Alexandra and Claudia’s income entitlement but emphasised that was a matter within his discretion.

250. [250]
     On 25 August 2010, Boyd had a further conversation with Lexon. Boyd advised of the visit of the executor, attorney and valuer; that probate had been granted; that there was no indication of challenge to the Will from any beneficiary, to the contrary in fact; that he was not acting in the estate but continuing in commercial dealings for the Talbot Group; that another firm of solicitors was advising the executor concerning the TGI shares and that the executor seemed intent on resolving this issue consistently with the deceased’s intended course of action; and that Boyd was not involved in this process any longer. Boyd agreed that he did not tell the Lexon representative about his discussion with the other solicitor or that he was acting for Amanda. Boyd said at that stage, he was not formally on retainer for Amanda; he was acting by way of assistance. Boyd did not believe that he subsequently informed Lexon of a retainer agreement signed by Amanda.

251. [251]
     On 27 August 2010, Amanda attended Boyd’s office. She provided Boyd with a copy of a proposed deed of agreement with the executor, Amanda, Liam and Courtney, together with a memorandum from the executor’s attorney to the adult beneficiaries of the estate. Boyd forwarded a copy of the deed of agreement and memorandum to the second defendant, at Amanda’s request. The deed related to the executor’s proposals for his remuneration.

252. [252]
     On 29 August 2010, Boyd spoke with Denis Wood, a director of both Talbot Group Investments Pty Ltd (“TGI”) and TGH, about the executor’s proposal for his remuneration. Boyd advised Wood he would not attempt to advise on the deed and preferred the beneficiaries to obtain independent advice.

253. [253]
     On 29 August 2010, Boyd had a further telephone conversation with Amanda. Amanda told Boyd she thought Liam had already signed the deed. Amanda was concerned about it becoming binding. Boyd said he advised Amanda it would need to be signed by everyone before it would take effect. He told her that seeking independent advice for her and also Courtney was a good thing for them to do.

254. [254]
     Boyd’s diary note of this conversation with Amanda recorded also that Amanda had spoken to the executor again. She had told him she was unfamiliar with these matters and would like some independent advice. The executor had said okay but if anything was to be sorted out, talk to him, not do it between attorneys as they only made it more difficult. Amanda said the executor had also said the deed needed to be signed before going forward.

255. [255]
     Amanda said at one point, Boyd prepared a written retainer agreement for her to sign. She asked if it was something to do with what they discussed as confidential. He replied yes. Amanda said she signed the agreement without reading it. Amanda said that whilst she had no real experience in major commercial matters or estate matters, she did not ever communicate that inexperience to ABL. However, she said she told Boyd, “I have no idea what people are talking about. Absolutely no idea”.^[60]

256. [256]
     Boyd said he prepared a retainer agreement for signature by Amanda on 31 August 2010. It provided for the following retainer of the first defendant, by Amanda:-

“Limited retainer for the provision of legal services on a pro bono basis as requested from time to time in relation to the estate of Kenneth Talbot, including:

• liaising with lawyers appointed to provide you with independent legal advice and facilitating the obtaining of such advice; and

• liaising with other advisors such as financial and taxation advisors.

We disclose that we are:

• subject to existing obligations of confidentiality; and

• in possession of legally privileged documents and information,

(referred as privileged matters) as a result of our dealings with Kenneth Talbot and entities comprising the Talbot Group over a period of approximately 15 years. This retainer does not require us to disclose any privileged matters to you and we will not advise you about any privileged matters. We will refer you for independent legal advice if you ask us to advise you about a privileged matter.”

257. [257]
     Boyd said he considered it appropriate to formalise the terms of that retainer as there was going to be a lot of legal advice being given to Amanda by the second defendant. In the essentially translating role Boyd had adopted, he was going to be receiving documents which were privileged as between Amanda and the second defendant. Boyd did not want to place the privilege at risk.

258. [258]
     Boyd said that prior to having Amanda sign the document on 1 September 2010, he explained to her why it was important to have a retainer agreement reduced to writing. He drew her particular attention to the description of the work. Boyd said he acted on a pro-bono basis for the following reasons:

“I saw my role as one in a setting where Mrs Talbot had just lost her husband. This was very unfamiliar territory to her. There were obviously high level legal issues which were arising at this early stage of the administration of the estate. She was unfamiliar with all of that. I think she struggled with the complexity of some of the concepts and the legal advice and the language. And so what I was wanting to do was just assist her to, firstly, understand what was going on; secondly, get her as comfortable as I could in that; thirdly, to get her to the point of ultimately being able to stand on her own two feet. So it was to de-stress the situation for her as much as I could. To my mind, that was a job that I would essentially be doing as a matter of respect for Mr Talbot and it was not one that I thought was appropriate to charge for.”^[61]

259. [259]
     Amanda said that in seeking advice from Boyd, she always had the interests of Alexandra and Claudia in mind. A particular instance related to the C and D shares held by Liam and Courtney. Boyd said there was no discussion about doing work for and on behalf of Alexandra and Claudia. Throughout the process, Alexandra and Claudia, on a number of occasions, had independent representation.

260. [260]
     On 3 September 2010, Boyd emailed to the second defendant requests for advice from Amanda in relation to the right of Amanda’s daughters to call for their respective trust to be vested once they turn 18 and as to whether there was any basis upon which a trustee could be required to enter into an arrangement to provide the beneficiary a level of assurance against defalcation by the trustee. Paterson accepted that was a topic upon which they were willing to give advice and did give advice. A letter dated 24 September 2010 to Amanda provided their preliminary views in response to those and three other questions.

261. [261]
     Paterson agreed that they also briefed Counsel to advise on, among other things, whether Alexandra and Claudia upon reaching the age of 18 or otherwise being of full legal capacity could call their interest in the estate to be distributed to them. Counsel advised, in a conference with the second defendant and Amanda and Boyd, and a subsequent written advice, that Liam and Courtney had the right to immediately call for their entitlement upon it being established and upon reaching the age of 18, and Claudia and Alexandra could do the same.

262. [262]
     On the morning of 8 September 2010, Boyd had a meeting with Amanda prior to a telephone conference with Lanzer and Paterson. Amanda advised she had received an email from the executor’s attorney saying she needed to state her position within five days. The teleconference with Lanzer and Paterson proceeded thereafter. Boyd made a diary note of it as well as his earlier conversation with Amanda.

263. [263]
     Boyd said Amanda wanted to remove the executor and his attorney. Courtney wanted to negotiate and wanted all of them to be happy if they had to live with them. Amanda was unsure if Liam had an opinion. Boyd said that Amanda’s position had developed over the month leading up to this meeting, but it was an expression of her concluded position. That was where Amanda remained for the rest of the time until his appointment as administrator.

264. [264]
     During this telephone conference, Paterson advised it would be difficult to remove the executor without the support of Courtney and Liam. Amanda needed to park her desire to remove him for now, as it was unproductive to spend time opposing him without the other two being on board. Paterson said there needed to be a strategic approach and consistency. They would have to set up grounds. Such an application would be damaging to their relationship and should only be brought if there were really strong prospects. He advised it would be worthwhile to engage Counsel if Amanda was really unhappy. It was agreed the second defendant would talk to the legal representatives for Courtney and Liam.

265. [265]
     On 9 September 2010, the executor and his attorney held their first joint meeting with the directors of the Talbot Group entities. Prior to that meeting, the executor’s attorney sent an email stating the overarching theme of each director’s meeting:

“(i) what is a prudent diversification of these investments and properties among the various asset classes, and (ii) is there an adequate cushion of liquidity so that the cash needs of the six beneficiaries of Mr. Talbot’s estate can be accommodated in an orderly fashion during the next six months and in the long term.” ^[62]

266. [266]
     Walker agreed that remained a standing instruction throughout the executorship. During the executorship, there was also a standing instruction to endeavour to realise the assets and found the trusts promptly. Walker did not recall a specified period of two years. He also agreed a distinction was generally drawn between resource investments and non-resource investments. As at the date of death, the three large resource investments were the Mozambique project, Karoon and Sundance resources.

267. [267]
     On 14 September 2010, Boyd forwarded to Amanda an email from Paterson about her communication with the executor. Boyd advised Amanda that now the second defendant’s role was out in the open, it would be more productive for the legal representatives to deal with one another directly. The second defendant and Courtney’s solicitors should also be in contact with one another about the approach to be taken, rather than working separately. Amanda replied that same day, noting it was a good idea for everyone to be dealing directly with each other.

268. [268]
     On 22 September 2010, Amanda sent Boyd an email advising that Sabbagh had suggested she ask Paterson if the international friends held a certain power to withdraw a decision. She also asked if it was possible for beneficiaries to nominate a professional representative to the TGH board to represent their interests and whether the executor was authorised to be the CEO of the TGH and therefore, an employee of TGH. Boyd responded the same day, advising he would pass her email on to Paterson. He said it was probably best for Paterson to answer her questions rather than Paterson deal with some issues and Boyd deal with others. Boyd said it was important Paterson have control of all of the issues.

269. [269]
     On 24 September 2010, the executor’s attorney sought from Wood the contacts of investment banks the directors would be using to provide valuation reports as to Karoon and Sundance. Wood replied that for Sundance he would be using Royal Bank of Canada (RBC), noting that RBC had been doing work for the Talbot Group for some time and it had established a level of trust with RBC. A resolution at the directors meeting held on 24 September 2010, was that there be a process to properly evaluate the merit of a sale of Sundance, Karoon and Mozambique. The process was to include a fairness opinion.

270. [270]
     In her initial discussions with ABL, Amanda indicated she did not wish to challenge the 2002 Will. She was happy with its provision to her and Alexandra and Claudia. However, on 5 October 2010, Paterson sent a letter to Amanda raising the possibility of an application for family provision, bringing to her attention there was a nine month limitation period.^[63] Paterson said an issue at the time was that a significant portion of the shares in TGI, which was the very valuable company in the Talbot Group, were held by Liam and Courtney. It was therefore possible for dividends or capital distributions on liquidation to be streamed to Liam and Courtney, to the exclusion of the estate, thereby significantly reducing the value of the shares held by the estate.

271. [271]
     Amanda recalled discussing with Boyd, in the second half of 2010, a possible challenge to the provision made under the Will after the second defendant told Amanda there was a time limit in which she could make a family provision claim. Amanda said Boyd advised she must not do it; it would make her look greedy. Boyd said she had been well provided for under the Will.

272. [272]
     On 13 October 2010, a directors meeting was held with the executor’s attorney. The minutes of that meeting, prepared by Walker, recorded that Ken MacDonald, a solicitor at Allens Arthur Robinson, had been engaged by the executor as an advisor and that he noted that additional prudence was required by the companies, given the estate, including documenting the broad process it would follow for divestments and timeframes and having an independent advisor review and approve the “process / plan”. MacDonald’s notations were under the agenda item “Development and Approval of Directors’ Processes for selling TGI’s and TGH’s Big Three Investments (KAR, REVUBOE, and SDL).”^[64] Walker agreed that the need for an independent advisor to review an approval process remained a standing instruction to the directors until he left as a director and was a point that was particularly important under the executorship. He also agreed a fairness report was so that the directors could demonstrate they had sold at a reasonable price.

273. [273]
     On 13 October 2010, Boyd participated in a teleconference with Amanda, the second defendant, and Counsel briefed by the second defendant. Boyd had prepared a list of items for discussion. They were executor commission; removal of the executor and likely replacement; the ability for Alexandra and Claudia to terminate their respective trusts on reaching 18; international friends, including the status of the provisions in the Will and the ability of beneficiaries to enforce; and, as also open for discussion, extension of asset allocation date; the valuation date (whether the date of death or the formation of the Talbot Estate Trust); the Sundance claim; the C and D class shares in TGI; the appointment of beneficiaries board representative; a follow up on valuations; and Villa Calvi.

274. [274]
     Boyd said the meeting largely followed that agenda. Boyd recalled Counsel gave advice that the Court would not remove the executor because Amanda did not like him. She would need something akin to a refusal to administer the estate. Counsel also advised it was clear the executor must follow the instructions of the international friends, under the terms of the Will.

275. [275]
     Boyd said subsequent to that conference, he received, by email, a copy of the advice Counsel provided to the second defendant. That advice contained a brief summary of the matters discussed in conference. Relevantly, it recorded that Courts were singularly reluctant to remove an executor chosen by a testator. Accordingly, unless the executor refuses to carry out his task or carries it out in a way which can be demonstrated to be causing real loss and damage to the estate, or acts in a way which is totally at odds with the relevant directions contained within the Will, there would be no prospect of persuading a Court to remove him as executor.

276. [276]
     On 19 October 2010, the second defendant prepared a discussion paper in which there was reference to allocation of assets. The second defendant queried whether Amanda wanted to explore nominating any other assets to be allocated to her or to Alexandra and Claudia and whether Amanda required advice and assistance in this process. Paterson said the purpose of the discussion paper was to seek Amanda’s instructions. Paterson said Amanda was the mother of Alexandra and Claudia. He agreed that as infants they were not in a position to give instructions but said their mother was concerned for their wellbeing and welfare. Paterson recalled there was a discussion in which Amanda suggested that Alexandra might want a boat on Lake Como. He later sent a letter on 28 January 2011 indicating that Amanda, on behalf of Alexandra and Claudia, would like some of the Brisbane properties to be allocated to them and specifying those properties. Paterson said the letter was written on the instructions of Amanda.

277. [277]
     On 11 November 2010, Walker was appointed as company secretary of the Talbot Group entities. The minutes of the directors meeting held that day recorded there had been a meeting with KPMG to sign the appointment letter in relation to the fairness opinions with that agreed process to cover the sale of all assets.

278. [278]
     On 2 December 2010, ABL reiterated to Amanda the specific risk that a substantial part of the wealth of the estate was held by TGI and during his lifetime, the deceased held 80% of TGI on trust for Liam and Courtney (the C and D class shares). ABL advised Amanda that if Liam and Courtney were to claim 80% of the assets of TGI, she may take a different view of the adequacy of the provision made for her out of the estate. This issue had arisen as the executor’s Australian solicitor had informed Paterson that a process was in motion for the C and D class shares to be transferred to Liam and Courtney and then purchased by the estate.

279. [279]
     On 16 December 2010, a further directors’ meeting was held. Its minutes noted that KPMG was working on valuations for Sundance and Karoon. Walker agreed the Sundance stake was sold during the executorship. A purchaser came to the Talbot Group and made a successful bid.

280. [280]
     In December 2010, the executor engaged the Royal Bank of Canada (RBC) as a consultant. A letter from RBC, dated 24 December 2010, to the executor, confirmed their engagement to act as an exclusive financial advisor and broker in liquidating the estates portfolio of resource focused assets. That letter provided that RBC would utilise the most appropriate sales methods to optimise the sale of each asset in the portfolio, with the goal of maximising proceeds, minimising the risk of adverse market conditions and liquidating the portfolio in a timely manner. The letter noted RBC’s understanding that the desire of the executor was to complete the liquidation process by the second half of 2011. An email dated 30 December 2010, confirmed that RBC’s brief encompassed providing written advice on the fairness/appropriateness of any transaction contemplated, as required.

281. [281]
     Walker agreed the mandate signed with RBC, although dated 13 April 2011, had been negotiated before Christmas with MacDonald ultimately advising that on the assumption the financial advisor brief encompassed providing written advice on fairness and the appropriateness of any transaction contemplated, it was in order for the executor to sign the mandate. That was consistent with MacDonald’s earlier advice that it was acceptable to get valuation evidence from somebody in the position of RBC, even if they were in the business of selling the shares.

282. [282]
     Walker noted that the Talbot Group also was obtaining an independent fairness opinion from KPMG. The practice adopted by KPMG was that all of its reports were draft reports and only became a fairness opinion to be used as such when there was an offer on the table. Indicative valuations were not fairness opinions. They were part of updates the directors were receiving from the professional advisors. Walker understood broker targets to not be a reference to the value of the stock today. It was where the target was in 12 months’ time. Walker did not agree the only reliable guide was the current value. You can have future valuations. That is what people build in as an estimate or judgment of what will unfold going forward.

283. [283]
     Walker agreed that RBC’s remuneration, in respect of the sale of shares like Karoon “was to be obtained out of achieving a sale and being paid a fee.”^[65] Walker agreed the executor engaged RBC to act as a financial advisor and broker in relation to the liquidation of the resource focused assets, both listed and unlisted, with instructions to maximise the proceeds from the sale of each investment in the portfolio. The executor had determined these investments were inappropriate given the provisions of the Will and by their very nature, were risky investments with a process of orderly realisation to be embarked upon and to reinvest the proceeds in more stable and diversified investments. Walker said that was the executor’s decision, not the directors’ decision. Walker said the proceeds were to be reinvested, not distributed to the beneficiaries. The Talbot estate trust had long tail beneficiaries. It would be in existence for some time.

284. [284]
     By 9 March 2011, the purchase of the C and D class shares from Liam and Courtney still had not occurred. Having regard to the limitation period, Paterson had a telephone conversation with Amanda on 9 March 2011 to seek her instructions to commence a family provision application. In that conversation, Amanda advised Paterson that her father wanted to challenge the Will. Amanda said she did not personally want to do so because of the publicity and the potential effect on asset values which were in the process of being sold, as well as the time and stress a challenge would cause Amanda, and the effect on relationships with Liam and Courtney. Further, she wanted to honour the deceased’s wishes.

285. [285]
     On 10 March 2011, Boyd met with Amanda. Boyd made a file memo, recording the meeting. The first item Amanda raised came from Sabbagh. It was a query whether Sabbagh ought to introduce Courtney, who was in Paris, to the BNP representative so that he could explain the trust to her and give her his view on the executor’s performance. Boyd replied he could see no harm and it might be helpful for Courtney to have an outside view of the executor’s performance.

286. [286]
     Amanda next asked Boyd what he thought about commencing proceedings to challenge the deceased’s Will. Boyd said he told her that because of his position, he could not give any advice. Paterson was there to advise her on that topic. Boyd told Amanda that Paterson would discuss all matters relevant to the proceeding but she could not really defer a decision on that for too much longer because of the need for documents to be prepared in advance.

287. [287]
     Boyd said he asked Amanda whether the motivation to take the proceeding was the C and D class shares issue or whether she was otherwise unhappy with the provisions in the Will. Amanda replied she simply wanted the deceased’s Will administered in accordance with the terms. Whilst Liam and Courtney may have received too much and too much may have been left to the foundation, everyone’s share had risen since the making of the Will. It was only the prospect of the estate being diminished by the C and D class shares which caused her concern.

288. [288]
     Boyd said he spoke to Amanda about the fact that Paterson would give her advice on that subject, hopefully after receiving preliminary advice from Counsel. They would probably speak about the voting rights which attached to the A, B and E class shares and whether it would be an appropriate exercise of the executor’s discretion to direct any part of the estate to the C and D class shares.

289. [289]
     On 11 March 2011, Amanda met with Paterson in Melbourne. She was accompanied by her father. Amanda reiterated her concerns about commencing any proceeding for family provision. Her view was that a proceeding by the widow of the deceased challenging the Will would attract publicity. The time limit for commencing a family provision claim was, however, to expire on 19 March 2011. Amanda instructed ABL to commence proceedings but to not serve it pending resolution of the C and D class share issue which was “imminent”.^[66]

290. [290]
     ABL suggested a Brisbane town agent, Gleeson Lawyers, be engaged to prepare the necessary court documents. Gleeson confirmed, by email of 11 March 2011, that, having regard to the private and sensitive issues concerning Amanda, proceedings should be commenced by one the deceased’s infant children, via a litigation guardian. Once that application had been filed within time, other applicants could commence their own separate proceedings by joining that initial application.

291. [291]
     Amanda gave ABL instructions to engage Gleeson, as their town agent, to prepare the application and documentation. ABL sent the necessary material to Gleeson, who prepared documents for the commencement of a family provision application by Amanda’s father, as litigation guardian of Alexandra and Claudia. Those documents were prepared as a town agent of the second defendant.

292. [292]
     Paterson said it was intended to simply file the proceeding so that it was commenced within the limitation period. Paterson said there was a discussion about whether the proceedings would be prosecuted if the C and D class shares issue was resolved to the satisfaction of the executor. Paterson said there was not a general Will challenge. It was a question of the C and D shares. If that issue was resolved, by Liam and Courtney transferring their beneficial ownership of the shares to the estate, the proceedings would be withdrawn.

293. [293]
     Paterson said the proceeding was commenced in this way because Amanda’s instructions were that she did not want to personally be the applicant in the proceeding for the reasons previously expressed by her. Paterson said Amanda’s instructions were to have the proceedings issued, in the name of her daughter, but to hold serving the document until further instructions. In reality, they were her proceedings. She did not want to personally be the applicant. The letter forwarded to Gleeson was a way of instructing Gleeson. For those limited purposes, Paterson accepted the second defendant was acting for Amanda and Alexandra and Claudia but only for that sole purpose. Amanda’s father was appointed as litigation guardian for those proceedings.

294. [294]
     Paterson said he asked Zwier to attend the meeting on 11 March 2011 because it appeared to have the potential to turn litigious very quickly. Leon Zwier specialises in litigation and dispute resolution.

295. [295]
     Zwier said he first met Amanda on 11 March 2011. Prior to that meeting, Paterson gave him a summary. Zwier understood he was at the meeting to discuss the potential family provision application. Zwier understood the substantial portion of the assets of the estate were held in Talbot Group companies and that the two adult children of the deceased from an earlier marriage had entitlement to C and D class shares in those companies. Zwier understood there was a pending limitation period which would expire on 19 March 2011.

296. [296]
     Zwier said that at the meeting they discussed the deceased’s Will. It was talked about as being an unusual Will. They also discussed the issue of the shares. There was a discussion about a deal being done at $2.5 million for each of Liam and Courtney but that the deal was incomplete. Amanda was disappointed it was not yet done. Zwier said Amanda was a sophisticated woman. He had heard that Amanda was an extremely capable woman from Paterson.

297. [297]
     Zwier said Amanda explained that the last thing she wanted to do was to become embroiled in litigation in relation to the estate. She did not want to attract publicity. Amanda explained that the deceased was a private man and wanted to keep things private and confidential. Zwier said there was a discussion about the fact that if there was to be a family provision application it had to be made within the nine month period, in order to stop distribution of assets.

298. [298]
     Zwier said Amanda also spoke about being under a great deal of pressure and duress from all of the problems with the estate. Amanda spoke about the deceased putting certain things into the Will that the deceased wanted followed. Amanda raised a concern about a single signatory for the executor. Amanda said the executor had asked for commission from the beginning and it had divided the parties rather than brought them together. Amanda considered the executor quite devious. Zwier said that showed the level of Amanda’s sophistication. Amanda also expressed concerns about the executor having his attorney, noting they had enough solicitors; they had the international friends to give directions; it was not necessary to have the attorney. She also referred to the estate being a big business with executors running the business. Amanda was upset that decisions were being made without consultation. Amanda said the only time she was consulted was when they wanted money.

299. [299]
     Zwier said the decision to commence proceedings was to preserve the position to see what happened in relation to the C and D class shares. Zwier said he spoke to Gleeson on the day he saw Amanda. Gleeson later sent an email confirming the contents of that discussion. In that email, Gleeson confirmed he had no conflict in the firm acting as the second defendant’s Brisbane agents. Gleeson also confirmed his advice that once an application had been filed within time, other applicants could commence their own separate proceedings by joining the initial application. Given the private and sensitive issues concerning Amanda, Gleeson recommended proceedings be commenced by one of the deceased’s infant children via the litigation guardian. Gleeson also discussed the notion that the proceedings be commenced but not served with the thinking that if the C and D class share issue resolved, it would be unnecessary to prosecute the proceeding.

300. [300]
     Zwier said Gleeson’s suggestions were discussed with Amanda. She provided instructions to commence proceedings on behalf of her children in the Supreme Court of Queensland, and to retain Gleeson for that purpose. She also instructed the proceedings not be served unless the C and D class shares were not resolved. Gleeson took the steps necessary to have someone appointed as litigation guardian. It was Amanda’s father. The proceedings were commenced and discontinued on or about 7 April 2011 as the C and D class share issue had resolved in the interim.

301. [301]
     Zwier said the second defendant put together a bundle of papers to be sent to Gleeson. Zwier agreed that the memorandum sent to Gleeson identified that the second defendant acted for Amanda and Alexandra and Claudia. Zwier said the second defendant was never retained to act for the infant children but there was a common interest between Amanda and her children and a pressing deadline so for the purposes of this application, the second defendant gave instructions to Gleeson to commence the proceeding.

302. [302]
     Zwier said he advised that an application be made and that they ought to get a Queensland lawyer to commence the proceeding as it would have the effect of protecting Amanda’s position going forward. If the C and D class shares were resolved, the proceedings could be discontinued. Zwier thought he probably said to Amanda that they did not even need to be served to preserve the status quo.

303. [303]
     Zwier said that in respect of the family provision application, there were two issues. One was that Amanda did not wish to be seen to be taking proceedings in relation to her husband’s Will. She respected him and wanted to honour his wishes. She did not wish to be an applicant in a proceeding in relation to that Will. The other issue was the issue of privacy, which was consistent with the way she explained her husband wanted his affairs managed and that was a theme in the Will. There was the risk of publicity also undermining sales of assets. An issue about the validity of the Will or a challenge to the Will might have an adverse effect upon the asset realisations. Zwier said they were issues he would raise with the Queensland lawyers.

304. [304]
     Zwier said he did not recall speaking in the meeting about who would be the applicant. After he had spoken to Gleeson, who was given the background of not wanting media and publicity, Gleeson suggested the children, by a litigation guardian, would be a better applicant. Zwier said it was a good idea because Amanda did not want to be seen to be in anyway commencing proceedings about her late husband’s estate.

305. [305]
     Zwier said on this topic, Amanda and Alexandra and Claudia’s interests were aligned. If the adult beneficiaries from the first marriage were to get a disproportionate share of the estate through the C and D class shares, it would have a deleterious effect on the other beneficiaries, being Amanda and her two children. There was a perfect alignment between Amanda and the two children on this issue.

306. [306]
     Zwier said after the discontinuation of those proceedings, Gleeson continued to act for those children in a number of matters. In none of those matters did Gleeson do so on instructions from the second defendant. Zwier said there was no occasion, apart from the family provision application, that the second defendant engaged Gleeson to act on behalf of the infant children or, that the second defendant acted on behalf of those children.

307. [307]
     In preparing the application, Gleeson met with Amanda and her father on 14 March 2011. Documents were prepared to appoint the litigation guardian and to commence the proceedings. As part of that process, Amanda’s father signed an affidavit.^[67] It recorded his observations of the Talbot family relationship. Amanda accepted that those observations were false. Her father had not met Alexandra or Claudia until the deceased’s funeral. Amanda knew those false observations were being provided for an affidavit to be filed in Court.

308. [308]
     Boyd said he discussed with Amanda the proceedings commenced by Amanda’s father, as litigation guardian, on 16 March 2011. There had been an approach from a Senior Counsel in the Northern Territory, on behalf of Sabbagh, recommending a draft letter be sent to the executor. Boyd considered the communication potentially inflammatory and inconsistent with the advice Amanda had been receiving from the second defendant. That approach could bog down the resolution of the C and D class shares. Boyd also expressed a concern that the commencement of the proceedings could sideline him, having regard to his role as a potential witness.

309. [309]
     Boyd said he had conversations with Courtney on 17 and 18 March 2011. Courtney emphasised very emphatically that they were doing their best to progress the C and D class shares. Courtney wanted Amanda to be made aware of that fact. Courtney was struggling to get Amanda to accept that Courtney was doing everything she could as quickly as possible.

310. [310]
     Boyd said he received a telephone call from Amanda on 18 March 2011 to advise that Paterson said there would be a story in the Courier Mail the following day and that Channel 10 had been calling Gleeson. There also had been calls from the executor saying the Sundance shares had been sold for about $190 million. Boyd understood the story was about the family provision proceeding.

311. [311]
     Boyd said he received a telephone call from Courtney later that afternoon. She said the commencement of the proceeding was a slap in the face. Courtney had told Amanda the day before that the shares would be transferred but they would need to fix a tax liability. Boyd said he gave Courtney some background to the C and D class shares issue and said each side had to go through the process and that just as Courtney needed time to do things, Amanda had to issue proceedings as a matter of caution. Boyd said the relationship between Amanda and Courtney was very tense. Courtney was contacting him regularly to ask him to relay to Amanda that they were using their best endeavours. Boyd said he had become aware by that stage that the executor had changed solicitors to De Groots.

312. [312]
     Shortly after filing, the C and D class share issue resolved and the family provision proceeding was discontinued on 7 April 2011. Gleeson said he would close his file. Paterson said that was the conclusion of his engagement to act in respect of the two children. Amanda accepted that was the conclusion of any suggestion of a challenge to the Will.

313. [313]
     In early 2011, an issue arose in relation to the beneficiaries’ interests in the Paris apartment. Whilst Amanda received advice from the second defendant, Boyd advised Amanda that Alexandra and Claudia would need independent advice. He recommended a Brisbane based solicitor, Brian Bartley.

314. [314]
     On 7 February 2011, Paterson wrote to Bartley, asking if he was prepared to provide an opinion, as independent lawyers representing Alexandra and Claudia, in relation to the apartment. The letter advised that if he needed to obtain any instructions, he could do so by contacting Amanda, giving her details. Paterson said he had received a letter from the then executors’ solicitors, dated 27 January 2011, which advised they had been liaising with a French lawyer and that as there were two minor children involved there was a requirement for an affidavit from a law firm or independent legal Counsel representing the interests of those children describing Australian law in relation to their representation regarding certain issues in France.

315. [315]
     Paterson did not accept he engaged Bartley. He requested Bartley prepare an affidavit opining on the operation of Australian law. Paterson said he told Bartley to contact Amanda directly if he needed instructions because Paterson was not acting in connection with this issue. He was facilitating something the then executors’ solicitors required to get advice on the operation of the ownership of the Paris apartment. Paterson felt it was better for Bartley to deal directly with Amanda on that issue.

316. [316]
     Paterson accepted that Amanda emailed him on 14 June 2011 asking whether she should contact Bartley for an update. Amanda said, “He acts for the girls but I have never heard anything from him”.^[68] Paterson replied on the same date by email advising he had left a message for Bartley. He agreed he chased up Bartley. Bartley subsequently sent an email to Paterson on 4 August 2011, enclosing a draft affidavit. The attachment advised that Bartley had recently met with Amanda and the children and sought his views on the draft affidavit. Paterson could not recall whether he spoke to Bartley. Paterson said he advised Amanda that Bartley was acting for Alexandra and Claudia. His task was to opine as to the applicable law.

317. [317]
     Amanda also sought the second defendant’s advice in relation to the allocation of Villa Calvi to her as part of her share of the estate. The executor was insisting on any transfer being at a valuation significantly higher than that accepted by Amanda. The dispute was ultimately resolved by the beneficiaries agreeing to a notional valuation at the almost mid-way point between the valuations pressed by Amanda and the executor. A figure of €12 million euro was agreed as the relevant valuation for that transfer. It was agreed between Amanda, Liam and Courtney. It was proposed there be some formal documentation entered into to carry the transfer into effect. As part of that arrangement, there was a need for an independent third party to represent Alexandra and Claudia’s interests.

318. [318]
     Paterson said he spoke to Gleeson to ascertain whether there could be such a person. Paterson said he spoke to Gleeson because both the lawyers for the executor and the lawyers for Liam and Courtney required independent legal advice to be obtained for Alexandra and Claudia, because the documentation in respect of Villa Calvi required various releases and indemnities, including on the part of Alexandra and Claudia as beneficiaries of the estate. Paterson said at that time, Gleeson was representing Sabbagh and there was a concern whether he could independently advise Alexandra and Claudia whilst acting for the international friend.

319. [319]
     Paterson said he was checking to see whether Gleeson was able to act for Amanda’s father as litigation guardian for Alexandra and Claudia in respect of the transfer of Villa Calvi. Gleeson advised he could act, and that was conveyed to Amanda. Gleeson was retained by Amanda’s father, as litigation guardian for Alexandra and Claudia, to advise in relation to this allocation. That retainer was to the knowledge of Amanda.

320. [320]
     Paterson agreed that the transfer of the Villa arose in circumstances where the executor was indicating he was not going to continue to fund the Villa. Amanda wanted to have the Villa, irrespective of its condition. Paterson said the Villa was actually owned by a trust. Considerations had to be given to the best way to transfer effective ownership to her. Paterson said a deed was prepared but never signed.

321. [321]
     On 29 April 2011, Boyd had a conference with Amanda. Amanda was concerned about the risk of moving to remove the executor. She was thinking they would just have to live with him. Boyd suggested that any advice regarding removal be sought by Amanda alone at that stage and that it would need to be strong advice before taking the risk of proceedings. Amanda said she would talk to Paterson and Zwier. Amanda raised the ability to remove the executor as trustee for the estate trusts of Alexandra and Claudia. Amanda expressed concern the executor would be in their lives for a long time. Boyd told Amanda to speak to Paterson.

322. [322]
     Boyd said he and Amanda agreed it would not be wise, at that time, to involve Liam and Courtney in any discussions about removal. Amanda’s concern was that if she said things to Liam and Courtney about the potential removal of the executor, that would find its way straight back to him. Further, Liam and Courtney had not demonstrated any particular interest in the removal. They seemed to be more willing to live with him than Amanda was at that time. Amanda told Boyd she had been talking to US attorneys, asking them to do some background checks on the executor. They had asked for copies of the weekly reports being given to the beneficiaries by the executor. Boyd said he understood from Amanda that the executor was selling assets and getting the proceeds into the estate.

323. [323]
     Boyd said there was a discussion with Amanda about a suggestion a Texas Court be asked to restrain the executor from going to a weekend meeting with one of Talbot Groups co-shareholders in the Mozambique project. Amanda’s concern was that the executor was not professional in his approach and ought not to be representing the estate or the Talbot Group. Boyd said they also discussed a retainer letter Amanda had from a Parisian lawyer with experience in French property owned by deceased foreigners. Amanda was also waiting for a referral from a Chinese business associate of the deceased in relation to the Shanghai apartment. Amanda said she needed advice and mentioned that the executor had not disclosed his advice on Shanghai. Boyd said to his knowledge, inquiries about the Paris property and the Shanghai apartment were matters being dealt with by the executor.

324. [324]
     On 11 May 2011, Boyd had a discussion with Amanda who was under pressure to make a decision about taking Villa Calvi by Friday or the executor would stop work on the renovation of the property. Boyd said at the time the deceased passed away, a major renovation of the Villa was in its infancy. The executor continued with that work. It was a very substantial, multi-million dollar project that took through to about 2012. The work was being funded through the estate. The executor was getting impatient about the terms on which the Villa would be allocated to Amanda.

325. [325]
     Boyd received from Amanda on 12 May 2011, a copy of an email Amanda had received from Paterson in relation to the allocation of Villa Calvi. Boyd responded asking if Amanda needed an overall estate valuation in order to better understand her likely ultimate entitlement before making a decision about the Villa. Amanda responded by email that she did need an estate valuation. She advised that Paterson was reluctant to raise that in his letter. Amanda said Villa Calvi was an expensive asset; if she could not afford it then it did not matter how badly she wanted it. Courtney and Liam were apparently in agreement in principle to Amanda taking the Villa. Amanda said Alexandra and Claudia’s interests were to be represented by Brian Bartley or Paul Gleeson. Amanda said she was to raise those matters with Paterson the next day.

326. [326]
     Boyd had a further conversation with Amanda about Villa Calvi on 13 May 2011. He explained why it was appropriate for the executor to want clarity because he would be exposed to the other beneficiaries if he allowed money to be spent in an unproductive way. Boyd said the executor may be motivated against Amanda but justifiable on legitimate grounds, having regard to the valuation of the property. Boyd suggested Amanda allow the valuation process to work its way through the system; check on the qualifications of the people who had provided the existing valuations; have it confirmed that funding would continue whilst this was being done; get a valuation of her interest in the estate; and get confirmation that the estate will continue to fund the works out of her share if she still wants the property.

327. [327]
     During this conversation, Boyd also discussed the international friends. Boyd said if there was action taken, he would be sidelined concerning the proceedings involving the Will. Boyd said Sabbagh may need to actively engage with the executor in the international friend’s role with tactical advice and assistance from Paul Gleeson, so as to build up a history that would provide fodder for a claim if the executor resisted at every turn. That may also assist the beneficiaries in establishing additional grounds on which to seek the executor’s removal. The executor’s refusal to recognise the international friend’s role may also assist in convincing Liam and Courtney to join a challenge.

328. [328]
     On 27 May 2011, Amanda sent Boyd an email seeking his views in relation to the ownership of the family home at Bulimba. Amanda did not agree with Sabbagh’s suggestion that she buy our Courtney and Liam. Amanda said that the deceased had bought Liam and Courtney their own houses and under the Will had given them a greater percentage than Alexandra and Claudia. Amanda continued:-

“I understand why he did that but last year when he spoke of updating his will he told me that he would make all the kids equal. This is the only point which I knew he was going to change, we didn’t discuss any other details.”^[69]

329. [329]
     Boyd said that was the first occasion Amanda mentioned to him that she had had that conversation with the deceased. Boyd replied by email stating that he was on his way to Melbourne and it was easier to discuss the matter next week.

330. [330]
     On 30 May 2011, Boyd had a telephone conversation with Amanda. She was due to see the second defendant the next day. They spoke about the constitution for the charitable foundation, the valuation of Villa Calvi, and the family home at Bulimba. Boyd understood that any arrangement in relation to the family home would be contingent on a deal being done to have the executor exit from his role. Amanda said Courtney was adamant she did not want lawyers involved in the process.

331. [331]
     Late on the afternoon of 30 May 2011, Boyd received a further email from Amanda:

“Bill, I have been thinking about our conversation about McConnell Street. Is there a period of time that passes and then you are able to tell me Ken's motivation for the way he dealt with the house. Or you are never "allowed" to reveal that? Obviously, what he told me is completely different to why he really did it. I was very upset when he told me that he was treating his 2 older children differently to his 2 younger children. So when he wanted to talk to me about his will I told him that I didn't want to discuss it because whatever he decided to do was his business. And really the only other detail I wanted to know was about this house. Then last year he told me he needed to update his will and make the kids equal. He also says in his book that he "needs to make his will relevant". Anyway after all that blah, blah will I ever really know?”^[70]

332. [332]
     Boyd responded that evening, by email, asking that Amanda discuss that matter with Paterson. Boyd said the email was the first time he had seen any expression of the deceased thinking in terms of making the children equal in his Will.

333. [333]
     In late May 2011, Zwier said he became aware that an issue had arisen with respect to the identity of the foundation to receive the charitable bequests in the Will. Paterson provided some background information to him prior to a meeting to be held on 31 May 2011. Zwier was told that after the deceased had made the 2002 Will, he had established what is now called the Talbot Family Foundation; that the deceased had proposed to but had not in fact updated his Will; that Amanda thought if he had done so, he would have left the bequest to that existing foundation; that Amanda wanted the bequest left to that foundation rather than to a new foundation to be established by the executor; and that Amanda had expressed dissatisfaction with the executor.

334. [334]
     Zwier agreed that by the meeting of 31 May 2011 three issues were important. First, the conduct of the executor and concerns about the manner in which he was conducting the estate. There was a need for him to properly explain and account to the beneficiaries. Second, Villa Calvi. Its allocation was very important to Amanda. Third, the foundation.

335. [335]
     On 31 May 2011, Zwier attended a meeting with Amanda, her father, Paterson and Fleer. Paterson said Amanda’s father was there as support for Amanda. He was not there in his capacity as litigation guardian for Alexandra and Claudia. Paterson said he would probably not have held the meeting in those circumstances, without Gleeson being present as the legal representative for Alexandra and Claudia.

336. [336]
     The first issue discussed was about 30% of the estate going, by way of charitable bequest, to a new foundation. Amanda did not want a new foundation established by the executor. She wanted the charitable bequest to go to the foundation established by the deceased during his life. Zwier said that was problematic because the express terms in the Will enabled the executor to set up a new foundation.

337. [337]
     During this meeting, Zwier said there was a discussion about the deceased, to better understand an unusual Will with unusual provisions. There was also a discussion about the role of the executor’s attorney and Amanda’s dissatisfaction in relation to him; and about trying to get the executor to understand some of the issues and work with the international friend. Amanda raised the possibility that the executor be removed as she was not happy with him. Amanda recognised it would be a cumbersome and difficult process.

338. [338]
     Zwier said there was a suggestion that the executor and his attorney were dividing and conquering the beneficiaries. Amanda was concerned Liam and Courtney wanted to cut a deal with the executor and that her children would be stuck in the middle. Amanda was also concerned, when it came to Villa Calvi, that the executor had been opinion shopping to get different valuations because of the structure of the Will and the nomination of that property to her. There was reference to enquiries being made with the executor’s employer.

339. [339]
     Zwier said in discussing Amanda’s preference that the charitable bequest go to the existing foundation, it was raised that there should be support between all the adult beneficiaries. The only hope of convincing the executor would be if it could be said that all adult beneficiaries wanted to use the foundation established by the deceased. Zwier said it was a very big issue to make sure that the adult children supported what was going to be done in relation to the foundation. Zwier said Amanda understood the importance of that issue and took on board their advice.

340. [340]
     Zwier said the discussion turned to the deceased’s intentions. Zwier thought if there could be a better understanding of those intentions, that might persuade the executor, if there was the support of the other beneficiaries, to do what Amanda wanted and cause the charitable foundation established by the deceased to be the beneficiary of the charitable bequest under the Will. Zwier said knowing what a testator intended is always very persuasive in negotiations. Even if it was no more than a broad expression of intention in relation to the existing foundation, it would be helpful. A file note, something to enable Zwier to say to the executor, the deceased did not want this, he wanted the foundation he established to receive the charitable bequest.

341. [341]
     Zwier suggested that if they could get information about that, it could be useful. Amanda said the only person who would know would be Boyd. Zwier did not know Boyd. Paterson did, and had a good relationship with him. A plan was developed to have Paterson ring Boyd to explore whether they could extract from him some acknowledgement that the deceased had intended that his charitable foundation be the recipient of the bequest under the Will. Zwier said Amanda had said the deceased intended to make a Will but had died before doing so.

342. [342]
     Zwier said they did not expressly talk about anything other than file notes, that is, that there might be a file note of a conversation about the deceased’s intentions. There was never a discussion about looking for a new Will. The discussion was about looking for a file note that might be persuasive in respect of the foundation. They were “pushing it up a hill because, as a express provision of the will, and we have to convince the executor to change position away from the express terms of the will to satisfy the adult beneficiaries. So anything that gave us ground to argue is what we were looking for.”^[71]

343. [343]
     Zwier said the discussion about Bill Boyd was not in the context of the Will file. That was “absolutely wrong”.^[72] It was in the context of the foundation and whether or not the existing foundation should have received the charitable bequest under the Will. Nobody from the second defendant said “can we get access to this document?”.^[73] Zwier said it was he that raised the idea of getting a document, file note, anything which might assist in a negotiation.

344. [344]
     Paterson agreed it was probably Zwier’s suggestion to find out from the executor’s solicitors whether there were any notes of the deceased’s intention to update his Will in relation to the foundation. It was considered that would be supportive of trying to convince the executor to use the existing foundation rather than establish a new foundation. Amanda gave instructions to write to the executor’s solicitors.

345. [345]
     Zwier did not accept there was an agreement that Paterson would call Boyd to inquire about what materials he might have in relation to an alteration to the 2002 Will. They were not discussing the Will. It was “quite wrong to put it in the context of a will. We’re talking about trying to find a document or something which might assist us in relation to the foundation.”^[74]

346. [346]
     Zwier said Amanda approved the arrangement that Paterson speak with Boyd. The plan was to have an initial oral discussion with Boyd and then write to the executor’s solicitors about it. Paterson said he felt it was important to speak to Boyd directly to ascertain whether the deceased did discuss updating his Will with Boyd. There was no point in writing to the executor’s solicitors if it was just going to draw a negative in that there were no notes or no intention to update the Will to include the existing foundation.

347. [347]
     On 2 June 2011, Boyd had a telephone conference with Paterson. Paterson said Boyd was prepared to speak “off the record”.^[75] He volunteered there were two things the deceased did discuss in changing his Will. One is that the bequest to the charity was going to be the existing 30% but it would go to the existing charitable foundation. The second was that the deceased wanted to update his executors.^[76]

348. [348]
     Paterson told Boyd the executor was proposing to establish a foundation himself, when complying with the charitable foundation provision in the Will. Amanda, in particular, was pressing for the existing Talbot Family Foundation to be treated as the foundation named in the Will. Paterson said he was proposing to write to the executor’s solicitors about that issue.

349. [349]
     Boyd said he told Paterson he had constraints around the confidentiality of his instructions, but off the record he could confirm the deceased was looking at a different charitable arrangement from what he had in his Will. Boyd said the charitable foundation aspect of the Will was the focus of his conversation with Paterson that day.

350. [350]
     Amanda agreed she told the second defendant, early in their retainer, that the deceased’s last Will was the 2002 Will and that he had proposed to make a new Will but had not finalised it before his death.^[77] She also agreed that her concern about the establishment of the charity under the Will was that the executor would have control of the foundation. She not only disliked the executor. She was concerned he might not include members of her family in decisions about the charity and might in fact establish the charity in the United States, which would have been contrary to the deceased’s wishes.

351. [351]
     Amanda also agreed she instructed the second defendants, that she believed that if her husband had updated his Will, he would have used the existing foundation. She agreed Zwier said it would be useful if any documents could be produced showing that the deceased proposed to update his Will, to benefit the existing foundation so as to persuade the executor to use that foundation. It was discussed and agreed that Paterson would write to the executor’s solicitors to enquire whether there were any such notes. She gave instructions for them to do so at the meeting on 31 May 2011. Boyd did not accompany her on this occasion.

352. [352]
     On 8 June 2011, Amanda forward to Boyd a copy of a draft letter the second defendant was proposing to send to the executor’s solicitors in respect of Villa Calvi. It sought copies of all information relevant to the valuations of the Villa. Boyd responded by email of 8 June 2011, noting it was important Liam and Courtney and their legal representatives agreed with the views in the letter, otherwise there was a risk it could threaten current harmony.

353. [353]
     In June 2011, Gleeson advised Boyd he had instructions to act for Sabbagh. Gleeson had retained a leading New Zealand Silk to give advice to Sabbagh on how to have his position as international friend recognised and respected by the executor. Gleeson asked to speak to Boyd about his instructions in relation to the 2002 Will and, particularly, the international friends’ provision in the Will.

354. [354]
     By email dated 22 June 2011, Boyd advised Gleeson that, in absence of consent of the executor, Boyd was not able to accommodate Gleeson’s request. Boyd stated he was prepared to seek the executor’s consent but thought it more appropriate that request come from Gleeson.

355. [355]
     On 23 June 2011, Gleeson advised Boyd he did not want the executor to know what they were doing until he had Counsel’s advice. He raised with Boyd discussing the issue with the ethics department of the Law Society or alternatively, providing a limited statement of what Boyd believed the role to be for the international friend. Boyd said he spoke to the Law Society. That practitioner agreed with Boyd’s concerns. Boyd relayed that position back to Gleeson. As Boyd recalls it, the matter went no further.

356. [356]
     On 14 June 2011, Paterson forwarded to Boyd a copy of the letter he had received from the executor’s solicitors. The executor’s solicitors stated in the last paragraph:-

“In the final paragraph to your letter you make reference to Bill Boyd and your client's understanding that Mr Talbot wanted to make some changes to his will. We have spoken with Bill Boyd and have on file a number of emails exchanged between Bill Boyd and our client shortly after Ken's death. However, regardless of any discussions that may have taken place, administration of the estate in accordance with the will dated 29 March 2002 reposes in our client as executor pursuant to probate of that will granted by the Supreme Court of Queensland.”^[78]

357. [357]
     The letter from Paterson had requested the executor’s solicitors confirm whether they had sought access to Boyd’s file or made enquiries on the issue of the potential update of the Will or any discussions about substituting the 2008 foundation as the correct recipient of the 30% bequest.

358. [358]
     Boyd spoke by telephone to Paterson on 15 June 2011. Paterson asked Boyd if he could make available the emails referred to by the executor’s solicitors. Boyd replied he did not believe he could, to the extent they discussed the deceased’s instructions. Boyd advised that none of the emails related to the foundation. Boyd suggested Paterson write to him and ask whether the deceased intended to update his Will and whether one of the things was the foundation. Boyd replied if he did so, he would refer that letter to the executor’s solicitors.

359. [359]
     Amanda was sent an email by Paterson on the same date in relation to Villa Calvi and other matters. In response to that email, Amanda referred to Paterson’s letter to Boyd asking about the foundation and said, “Does he notes from Ken on this item?”. Paterson responded later that afternoon to advise he had spoken to Boyd and Boyd did not think he had any notes from the deceased on this issue.

360. [360]
     On 16 June 2011, Boyd received a letter from the second defendant. It referred specifically to the provision for the establishment of the Talbot Foundation as a vehicle for donations for charitable purchases and the Talbot Family Foundation, which had been established by the deceased in 2008 as a vehicle for the Talbot family to pursue their philanthropic activities. The letter said:-

“Amanda has advised us that Ken intended to update his Will after the establishment of The Talbot Family Foundation, and he may have had discussions with you in relation to this.

Would you please therefore advise us:

1. (a)
   whether Ken had any discussions with you, or whether there was any correspondence between Ken and you, in relation to amending or otherwise updating his Will;

2. (b)
   if so, did any of those discussions or correspondence relate to The Talbot Family Foundation or indicate an intention of Ken to change his Will so that the portion of the balance of his Estate which he wanted to devote to charitable purposes, would be left to the newly established Talbot Family Foundation rather than a separate foundation to be established under the Will.”^[79]

361. [361]
     Boyd forwarded that letter to the executor’s solicitors by email on 16 June 2011. Boyd said he forwarded the letter for the purpose of obtaining a formal response about whether or not privilege or confidentiality was being claimed on behalf of the executor. Boyd received a follow up request from Paterson on 21 June 2011.

362. [362]
     Amanda agreed the suggestion there be access to Boyd’s file in respect of the foundation was consistent with wanting to know whether there were notes suggesting that the deceased intended to substitute the existing foundation as the recipient of the request in charity in his new Will. She agreed the letter sent by the second defendant to Boyd seeking such documentation on 16 June 2011 was consistent with her instructions to the second defendant. She agreed she asked Paterson, in an email on 16 June 2011, whether Boyd had notes from Ken on the foundation and that was the point of contacting Boyd.

363. [363]
     Amanda agreed she also asked Paterson to speak to Wayne Bennett, who was a director of the existing foundation, to see if he could exert some influence on Liam and Courtney to ensure they were on the same page. Bennett reported he had spoken to Liam and Courtney and they were 100% committed to keeping the family foundation in the family. Amanda agreed she advised Paterson of this information by email. In that email Amanda also expressed a concern that anything said at a family meeting would likely be reported back to the executor by Liam and Courtney. Amanda accepted she called off a meeting with Courtney because of that concern and that she requested the second defendant produce a confidentiality agreement for Courtney to sign before talking to Amanda.

364. [364]
     Zwier accepted that at a meeting on 21 June 2011, it was quite possible he said it might be worthwhile to find out whether or not the deceased had an intention to appoint a different executor had he completed another Will. That would be some evidence that might assist in persuading the executor if they ever got to it, to resign or it might be useful in a future application for removal. Zwier said he did not have any doubt about the privilege claim made by the executor when they were advised by Boyd that the executor did not waive privilege.

365. [365]
     On 22 June 2011, Paterson forwarded a letter to the solicitors for Liam and Courtney. It was headed, “Talbot Family Foundation”. It recorded Amanda’s belief that it was the deceased’s intention that his charitable bequest go to the existing Talbot family foundation and raised Amanda’s concerns about the executor’s intention to establish a new foundation and the risks that the executor would be in control of that foundation from the United States, to the exclusion of the Talbot family. The letter stated that Amanda wanted all family members to be involved in the foundation. Prior to sending that letter, Paterson sent a copy to Amanda, asking her to review the letter and advise of any comments or questions. The email also stated that they would contact Wayne Bennett to discuss that matter with him. Amanda responded by email on 22 June, advising she did not have any comments.

366. [366]
     On 23 June 2011, Paterson spoke to Wayne Bennett in relation to the Talbot family foundation. He sent an email later that day to Bennett, confirming the contents of their discussion. The email recorded that it was discussed that Amanda wanted to involve Courtney and Liam more heavily in the foundation and needed Liam and Courtney’s full support to apply pressure to the executor to do as the deceased would have wanted and transfer the 30% to the Talbot Family Foundation.

367. [367]
     On 28 June 2011, Boyd received a response from the executor’s solicitors. It stated:

“Our understanding of the lawyer client privilege in Queensland is such that, whenever legal advice of any kind is sought from a professional legal adviser in his or her capacity as such, the communications related to that purpose, made in confidence by the client, are at his or her direction permanently protected from disclosure by either himself or herself or by the legal adviser, unless there is a waiver. Ken Talbot came to you seeking advice about the planning for his estate, including the formation of a foundation in his Will. Those communications were presumably intended to be confidential and protected from disclosure. Our client, as Ken Talbot's personal representative under the Succession Act 1981 (Qld), is entitled to the same protection from disclosure as would be Ken, were he still alive. Our client does not waive this privilege. Therefore, we request that you inform Mr. Paterson that our client has not consented to such a waiver and that, accordingly, you are not at liberty to disclose to him your client's confidential communications regarding the foundation or any other topic.

In any event, it is clear that nothing that was discussed between you and Ken Talbot has or could have impacted upon the validity of the will dated 29 November 2002 which has been probated by the Supreme Court of Queensland.”^[80]

368. [368]
     On 28 June 2011, Boyd sent an email to Paterson advising the executor did not waive privilege attaching to any confidential communications between the deceased and Boyd in relation to the foundation or any other matter. Paterson said at first blush, he considered the executor’s claim for privilege justifiable. He discussed it with other partners in the firm. They advised the claim for privilege was likely correct.

369. [369]
     Zwier said he was copied into the email communications in which Boyd indicated that the executor did not waive privilege attaching to any confidential communications between the deceased and Boyd in relation to the foundation or any other matter. Zwier considered the assertion of privilege and confidentiality both valid and correct. It was a correct view of the position being taken by the executor. Zwier said it was agreed with others in the firm that on its face, it was likely to be instructions to a lawyer and lawyer’s advice to the client.

370. [370]
     Zwier said an assertion of privilege raised by the executor’s solicitors was important, depending on the context. For example, getting a file note in relation to a foundation is an issue confined to persuading the executor to change position and act inconsistently with the terms of the Will. Selling Villa Calvi based upon an inflated valuation or shutting out Amanda might have led to litigation. The foundation issue was inapt to be litigated if you could obtain a satisfactory solution by negotiation.

371. [371]
     On 30 June 2011, Boyd gave notice to his professional indemnity insurer of circumstances in relation to the deceased’s estate. Boyd referred to his earlier letter of notification on 28 June 2010. The matter he now gave notice about dealt with controversy which had arisen between the appointed executor and the appointed international friend. The catalyst for that notification was Boyd having been contacted by Gleeson, on behalf of Sabbagh, to discuss the possibility of an application by Sabbagh, in his capacity as international friend, with regard to construction of the Will. If those proceedings had concluded with a finding that the provision in respect of the international friend was ineffective, that possibly may give rise to a claim against Boyd.

372. [372]
     Boyd said he saw it as being very remote but consistent with being conservative in such matters, he gave notice. Boyd recorded that he had declined to discuss with Gleeson his instructions on the roles and powers of the international friends, on the ground they were subject to privilege which continued in favour of the executor. Boyd said the executor had, in another context, declined to waive privilege in respect of his instructions from the deceased.

373. [373]
     Boyd said he wanted the notification to be given during the current year in order to avoid the potentiality for a late notification issue being raised by that insurer in the following or later years. In his view, there was no basis for such a claim against him or the firm. Boyd said he was unsure how such a finding could give rise to a compensable loss being suffered by any party, either in connection with the drafting of the 2002 Will or the fact the new Will was not finalised prior to the deceased’s death, but noted the instructions for the new Will, such as they were, did not contemplate the adoption of the international friend’s regime again.

374. [374]
     Boyd said he gave this notification after considering Gleeson’s suggestion that his view about confidentiality of instructions was possibly incorrect. In doing so, Boyd had a preliminary consultation with Senior Counsel, as a result of which the potential for a claim emerged as a possible issue. Boyd stated in the accompanying forms he did not believe there to be any liability.

375. [375]
     Boyd received an acknowledgement from the professional indemnity insurer on 13 July 2011. Boyd said that thereafter, no proceeding was filed by Gleeson on behalf of Sabbagh. Boyd did not hear anything more about that matter.

376. [376]
     On 30 June 2011, the second defendant sent a letter to the executor’s solicitors raising a number of issues, including that it was Amanda’s belief that the deceased’s intention was that his charitable bequest go to the existing foundation. The executor was asked to advise what steps were being taken in relation to the charitable bequest. Another issue raised in the letter was a failure to account to the beneficiaries. Zwier said the second defendant was seeking to identify defects in the executor’s administration of the estate which could ultimately be relied upon to support a claim for his removal.

377. [377]
     In the letter, there was reference to the executor’s claim for legal privilege in relation to communications between him and his advisors regarding the valuation of Villa Calvi. The letter rejected that claim and requested they be provided a list of all communications over which such a claim was made, including details of the facts relied upon so it could be considered by the second defendant. Zwier said a view had been formed that the claim for legal professional privilege in respect of those communications was not valid. The second defendant wanted to signal that Villa Calvi might trigger court proceedings. The letter was expressly written to try to make them understand that Villa Calvi was a serious issue. Zwier said the list of documents was never provided by the executor.

378. [378]
     Paterson went on leave between 7 and 25 July 2011. Whilst he was away, a proposal was made for joint correspondence to be sent to the executor on behalf of the beneficiaries. A draft form of letter was sent to the solicitors for Liam and Courtney and to Gleeson, acting on behalf of the litigation guardian for Alexandra and Claudia. Liam and Courtney’s solicitors responded outlining their understanding of the agreement in relation to the sending of a joint letter to the charitable foundation. They expressed preference to leave out of the joint letter proposed comments regarding Sabbagh, the issue of professional privilege in relation to Boyd’s file and Villa Calvi.

379. [379]
     On 7 July 2011, a family meeting was held with Amanda and Liam and Courtney. Zwier attended with Fleer. Zwier said the object of the meeting was to try and persuade Liam and Courtney to get on board Amanda’s approach of using the existing foundation. It was agreed there should be joint correspondence sent to the executor’s solicitors and that if proceedings had to be commenced on the foundation issue, single representation might be desirable. Zwier suggested using Liam and Courtney’s legal representatives to draw greater alignment between the parties. They agreed with that suggestion.

380. [380]
     A draft letter was sent to Amanda. The covering email asked Amanda to pass the letter onto her father, as litigation guardian, for approval on behalf of her daughters. Amanda approved of the letter and said her father approved of it on behalf of Alexandra and Claudia. Amanda agreed Gleeson represented them in respect of that issue. Gleeson subsequently advised Paterson that he had no objection to the letter content, on behalf of Alexandra and Claudia.

381. [381]
     As part of that letter, ABL wished to record Amanda’s concerns in relation to the executor’s actions. Reference was made to the issue of privilege in relation to Boyd’s file and Villa Calvi. The legal representatives for Liam and Courtney were not agreeable to those matters being raised in the letter. On 11 July 2011, Fleer sent Amanda an email enclosing the correspondence between them and the solicitors for Liam and Courtney. The email expressed the view that whilst the second defendant did not necessarily agree with the preference to remove those issues, the letter had been amended to take into account that preference.

382. [382]
     Amanda responded by email that she was happy with the amended letter, stating she would have been “very surprised” if Liam and Courtney’s solicitors had approved the original letter. The amended letter was forwarded to the solicitors for the executor on 12 July 2011.

383. [383]
     Amanda could not recall the second defendant ever informing her of steps she could take to challenge any claim for privilege over the papers Boyd held in relation to the making of a new Will or as to the confidentiality of those documents. Amanda also did not believe the second defendant ever gave her advice of any potential conflict of interest between Boyd and Amanda, Alexandra and Claudia in acting as their solicitor or in relation to his appointment as administrator of the estate.

384. [384]
     Amanda said she first received a copy of the file that Boyd had maintained in relation to preparation of a new Will after she received new legal representation in 2018. Amanda said that one of the things she mentioned to those new legal representatives was that there were notes for a new Will. They asked what had been done about it. Amanda replied nothing had been done about it. They pursued the issue and the “notes turned out to be a pretty extensive will file”.^[81]

385. [385]
     On 14 July 2011, senior Counsel provided advice, in respect of a range of issues, including the charitable bequest and the prospects of success of an application to remove the executor. Senior Counsel’s advice was a removal application would be difficult, expensive and public and did not have any prospects of success at this stage. Further, any application to court in relation to the charitable bequest should be kept separate from an application seeking the executor’s removal. Zwier said senior Counsel encouraged them to be more reasonable and mild in their communications in expressing complaints about the executor.

386. [386]
     Zwier said he agreed with senior Counsel’s view as to prospects. That was relevant to his approach in carrying out Amanda’s instructions. They had to find a way to negotiate the removal of the executor. It was not going to be done by a court application. They had to find a strategy which would bring the executor to the table to try and get an agreement to resign the position.

387. [387]
     By letter dated 29 July 2011, the executor’s solicitors advised that having regard to the terms of the clauses in the Will, the existing foundation could not be used in respect of the charitable bequest as the existing foundation had been established for a different objective. Paterson discussed its contents with Fleer and another partner of the second defendant, specialising in the establishment of charitable foundations and in charities law. The collective view was that the existing foundation could not be used. Amanda accepted the advice.

388. [388]
     Paterson said the letter from the executor’s solicitors was the first time an explanation had been given as to why the existing foundation could not be used for the charitable bequest. Once it was accepted there were good reasons why the existing foundation could not be used as a recipient for the 30% bequest, steps were taken to communicate with the executor’s solicitors Amanda’s instruction that there be established a new foundation which met Amanda’s requirements. It was proposed that communication be sent with the concurrence of the solicitors for Liam and Courtney and Gleeson, representing Alexandra and Claudia.

389. [389]
     On 16 August 2011, Paterson attended a meeting with Zwier, the solicitors for the executor and the solicitors for Liam and Courtney, to discuss on a without prejudice basis a range of issues in dispute. The discussions included the structure of any new foundation. Paterson agreed that in the meeting, he queried why the executor’s solicitors had not responded to the second defendant’s request for documentation. Paterson said it was a sense of frustration with the lack of cooperation. It did not represent a new request for copies of the file relating to the foundation. There was no longer any need to get any notes to support using the existing foundation.

390. [390]
     Paterson said at no stage did Amanda instruct the second defendant that she believed or suspected that her husband had made or may have made a new Will or other testamentary instrument, or to investigate the possibility of a later Will or other testamentary instrument. Paterson said there was no reason to seek such instructions. The focus was only for any note relating to the foundation. At no stage did Amanda instruct the second defendant to obtain or consider the contents of any file Boyd had in relation to a new Will. Paterson said there were no practical means of attaining access to such communications when the executor had claimed confidentiality and legal professional privilege.

391. [391]
     Zwier also said for the first time the executor’s solicitors had provided detailed reasons explaining the problem with the existing foundation. Despite the second defendant seeking that information for some time at great expense, Zwier considered their response “a pretty good explanation”.^[82] It was a reasoned argument. Zwier and Paterson engaged another partner of the second defendant for advice. His advice was that the existing foundation was not an acceptable vehicle to receive the bequest under the Will.

392. [392]
     By 10 August 2011, the second defendant had reached the view there would need to be established a new foundation. Sheets were prepared to set out the desired terms of that new foundation. Zwier said once the second defendant came to the view that the existing foundation could not be used for the charitable bequest, there was no forensic purpose in seeking to obtain any notes from Boyd. It pivoted everyone to now find a different kind of solution for the foundation problem.

393. [393]
     Zwier said up to that point, Amanda had not instructed him, or to his knowledge anyone else, that she believed or suspected the deceased had prepared a new Will or other testamentary instrument. She had instructed them that the deceased proposed to do so but died before completing any new Will. At no stage did Amanda instruct him to consider or investigate the possibility of there being a new Will or a later testamentary document. At no stage did Zwier think there was a proper basis to seek instructions to that effect. Amanda had told them she was happy with the Will.

394. [394]
     Amanda agreed that once it was accepted the existing foundation could not be used, the search for notes of the deceased’s desire to change the bequest in favour of the existing foundation became irrelevant. The focus shifted to identifying the terms of a new foundation. She had in mind one which involved the family and was focused on Queensland or Australian charities which was administered, at least in part, by her, all of which was the opposite to what the executor originally proposed.

395. [395]
     Zwier said in August 2011, the second defendant received an unexpected approach from the executor’s attorney. It was with a view to trying to settle the matter. Paterson and Zwier went to Los Angeles to meet with the executor, his attorney and others, in an attempt to resolve the question of his retirement and to agree a price for that agreement.

396. [396]
     Prior to that meeting, the second defendants obtained Counsel’s advice as to the likely amount of commissions or fees to which the executor might be entitled on retirement. Counsel’s advice as to the range of commission was between $1 million and $6 million, with up to half a million annually for ongoing commission. Amanda gave instructions to offer up to $10 million, including the $1 million already received by the executor.

397. [397]
     Zwier said at the meeting in Los Angeles, he made an offer on behalf of Amanda of $10million. The executor counter offered $20 million. Zwier said whilst no agreement was reached, it was a successful negotiation as they had anchored the executor on a critical issue, namely, that the executor was willing to go, it was only a question of price. Zwier said that view was conveyed to Amanda.

398. [398]
     On 14 October 2011, Amanda received a letter from Gleeson, addressed to her father, care of her, enclosing a further memorandum of fees for acting on behalf of Alexandra and Claudia in relation to “matters concerning the estate administration, in particular the transfer of the Villa to Amanda and the establishment of the charitable foundation”. Amanda paid that invoice.

399. [399]
     Amanda accepted that Gleeson also sent a letter to the second defendant on 14 November 2011, indicating he had instruction from Sabbagh and Amanda’s father, as litigation guardian for Alexandra and Claudia, to act in application to the Court in relation to the international friends’ obligations, the foundation and removal of the executor. Amanda gave instructions for the second defendant to reply by email on 18 November 2011.

400. [400]
     A further issue arose in late 2011. Other lawyers proposed a wrongful death suit be brought on behalf of family members of those persons killed in the crash along with the deceased. The second defendant made enquiries. Amanda did not wish to join any such action. In the course of that correspondence, the solicitors proposing the wrongful death suit wrote to the second defendant asking whether they acted on behalf of Alexandra and Claudia. The second defendant advised Amanda, by letter of 4 November 2011, that as her father was representing Alexandra and Claudia, it was best he responded to those solicitors, after seeking the advice of Gleeson. Amanda passed that letter onto her father.

401. [401]
     On 16 November 2011, Amanda sent an email to Paterson advising she had received an email from Gleeson regarding fees for her father and that Gleeson mentioned that the executor’s attorney rang, wanting to know if he was still acting for her father. The executor’s attorney was very keen to know whether Zwier had proofread her father’s affidavit prior to it being signed and filed. The attorney was insistent that he needed to know because Zwier had advised him he had not had the opportunity to read it before signing and filing.

402. [402]
     On 14 November 2011, Zwier received a letter from Gleeson, confirming he had instructions to act on behalf of Sabbagh and Amanda’s father as guardian at litem for Alexandra and Claudia. Gleeson advised they had identified three applications which could be made to the Supreme Court in an attempt to obtain some clarity in the estate administration. The first concerned the rights and obligations of the international friend. The second concerned the foundation. The third concerned an application for the removal of the executor. In the accompanying email, Gleeson advised that the executor’s attorney had telephoned him asking whether he was still acting for Amanda’s father. He also sought confirmation as to whether Zwier had proofread Amanda’s father’s affidavit in the family provision application. Gleeson said the attorney “certainly seemed very interested about this.”^[83]

403. [403]
     Zwier said he had not personally proofread Amanda’s father’s affidavit. He understood the executor’s attorney thought that affidavit was falsely sworn. Zwier said he thought the attorney considered that if Zwier had been behind the affidavit, that would mean he could not deal with Zwier. Zwier subsequently became aware that there was an issue about the accuracy of parts of that affidavit.

404. [404]
     Amanda agreed the attorney was referring to false things said by her father. Amanda thought it best for her father to resign as litigation guardian. In evidence, Amanda initially said she did not know why her father resigned as litigation guardian. Later, she explained “because I had forgotten”.^[84]

405. [405]
     Zwier said his view was that the applications proposed by Gleeson absolutely should not be made. The critical application, to remove the executor, was likely to fail. If it failed, it would make things worse for a long period of time. It would probably prejudice the negotiations that were ongoing to have the executor agree to his removal. The application was also going to attract publicity, which is what Amanda wanted to avoid. It might also have a deleterious affect on the sale of assets, something Amanda had always said she did not want to happen. Zwier said he did not consider, for one moment, proceeding as Gleeson was proposing.

406. [406]
     Zwier met with Amanda, Paterson and another representative of the second defendant on 29 November 2011. They discussed the proposed applications. Zwier advised those applications should not be brought. An application for removal was fraught. It was a must win application. Otherwise, the executor will be entrenched in the position for a long time. Zwier also thought the timing was wrong.

407. [407]
     On 12 December 2011, the second defendant was advised by email that Amanda had commenced a personal relationship with Bartley. Thereafter, Bartley had input in reviewing documents and correspondence with Amanda. He corresponded in respect of those matters with the second defendant. He made suggestions in relation to any application in respect of the executor. Paterson agreed Boyd had very much been a conduit for the exchange of information between Amanda and the second defendant throughout 2010 and 2011 but that tapered off once Amanda had an involvement with Bartley.

408. [408]
     Boyd said he continued to receive communications from time to time from Amanda throughout the balance of 2011. Those occasions began to fall away from the middle of 2011 and eventually became close to non-existent as Amanda formed a relationship with Bartley. Throughout this period, Boyd was aware Alexandra and Claudia were separately represented.

409. [409]
     Paterson did not agree that Bartley came to perform the functions previously undertaken by Boyd. Paterson said that Bartley injected more of his own point of view. Boyd was a conduit in the initial stages but pretty soon thereafter Amanda was involved and had conference calls on which they were both present. Paterson said at that stage they were not sure how objective Bartley was having regard to his personal relationship with Amanda.

410. [410]
     Zwier later raised, by email to Bartley, a copy of which was forwarded to Amanda, a concern in relation to the capacity in which Bartley was receiving copies of the second defendant’s legal advice. Bartley responded that he had considered the privilege issue and that he was, amongst others, acting as Amanda’s legal advisor. Bartley continued to request correspondence be sent to him for his review, involving himself in proposed changes to draft communications and affidavits being prepared in support of any application to remove the executor. On occasions, Bartley provided instructions said to be on behalf of Amanda.

411. [411]
     Amanda agreed that by 2012, she had an absolute dislike and distrust for the executor. Her complaints, listed in a draft affidavit, prepared in consultation with Bartley, included that the executor and his attorney had conducted themselves with a heavy focus on the payment of commissions and fees including an early attempt to have Liam, Courtney and Amanda sign an agreement about fees without legal advice, which she found distasteful; that the executor exhibited greediness and took steps to transfer the title of the family home; that the executor failed to pay attention to the views of the international friends or advisors; his treatment of Villa Calvi and her request to be allocated it with the result that further valuations were obtained by the executor. Amanda thought the last valuation was dishonest and it was a source of tension between her and Liam and Courtney.

412. [412]
     Amanda agreed that in her affidavit she listed a number of complaints about refusal to provide information but did not reference any failure arising from the executor’s refusal to give access to Boyd’s notes, which may touch upon the identity of the foundation as a possible beneficiary under the new Will. She accepted by that time, that issue was irrelevant. She accepted she described the executor as representing, “everything Ken despised: greedy, unprofessional conduct, total lack of respect for his family”.^[85]

413. [413]
     On 23 February 2012, Zwier and Paterson flew to Brisbane for a meeting with Amanda, before meeting with Liam and Courtney and their legal representatives. Prior to that meeting, there had been no firm consensus reached about supporting Amanda’s approach for the removal of the executor. Zwier said there had been some ambivalence about it.

414. [414]
     During the meetings, there was a discussion about a dual track strategy. Zwier was advocating they work cooperatively together and pursue two tracks. One track was to remove the executor by negotiation. The second track, which would be parallel but not cross, was the preparation of an application to court to remove the executor because it was untenable for him to continue in that role. Zwier’s advice was to pursue the preparation of both tracks simultaneously, with both designed to have the ultimate goal of the removal or resignation of the executor. Zwier said Liam and Courtney and their legal representatives expressed concurrence with that strategy. That was the first time they had indicated agreement in relation to the executor.

415. [415]
     Zwier made reference to this dual track strategy, in an email sent to Bartley and copied to Amanda on 1 March 2012. Zwier referred to the caution to date to ensure that Liam and Courtney were in agreement with the proposed strategy and that senior Counsel agreed with the cooperative approach being critical to prospects of success. Zwier noted that until the recent meeting in Brisbane, Courtney and Liam were not aligned with Amanda but that they had left that meeting on the basis of a dual track strategy with litigation being the end game and not the primary next step.

416. [416]
     Shortly after those meetings in Brisbane, the second defendant began preparing an application and supporting affidavit for the litigious track. It was intended that the affidavit material could be deployed in any negotiations. Bartley exchanged emails with the second defendant, ultimately providing a draft affidavit which he said reflected what he and Amanda had gone through together. At Bartley’s request, both the second defendant’s version of Amanda’s affidavit and Bartley’s version were provided to senior Counsel later in the year, when seeking advice.

417. [417]
     By email on 7 March 2012, the executor proposed to move the Talbot Group business model to a holding company, passive in nature as opposed to one actively operational, requiring management. The proposal was to wind down the staff of the Talbot Group and to outsource most activities. Walker sent emails indicating which activities could be the subject of outsourcing, subject to the executor’s approval. By this stage, the Sundance shares had been sold and the Mozambique asset was under contract, leaving only Karoon as the remaining big asset.

418. [418]
     Walker said at the date of the deceased’s death, the Talbot Group did not operate any ongoing businesses. All of its holdings were investments. There were a lot of speculative investments in those holdings. The Mozambique project was on a similar path to Macarthur Coal in that the Talbot Group would be both a significant shareholder and have an executive role. Some other entities also had a more active involvement of staff. Karoon was just an investment.

419. [419]
     On 27 March 2012, Paterson received an email from Amanda suggesting a Queensland senior Counsel, who had previously acted for the deceased in the criminal proceedings, as a possible replacement administrator. Zwier said this was the first time any name had been put forward as a probable replacement.

420. [420]
     Amanda agreed that her most fundamental concern was to get rid of the executor. Amanda accepted she had been advised about her prospects of success in bringing an application for removal by Senior Counsel, Junior Counsel as well as the second defendant, with the advice being it was marginal at best and that the better option was to negotiate as if she was unsuccessful, her position would have been intolerable as he would be the executor into the future as well as being the trustee and in charge of the charitable foundation.

421. [421]
     Amanda agreed she was thinking about who could be a replacement administrator. Amanda recalled the second defendant suggesting somebody but did not accept she received advice to consider nominating two administrators to get the benefit of two minds, so as not to empower one person. She did accept there was advice that one at least should be independent of the family and agreed that suggested she was told she needed two. She agreed she was likely told it was preferable they have a person with experience in dealing with complex commercial enterprises and selling businesses and assets. She accepted the suggestion was made that someone like a liquidator or receiver should be one of the nominees and that that sentiment was told to her on more than one occasion by the second defendant. Amanda did not agree with the advice. Amanda thought there should be one person and not a receiver or a liquidator. She sought to persuade Liam and Courtney to that view.

422. [422]
     On 17 April 2012, three meetings were held in Brisbane. The first was between Zwier, Amanda and Paterson. The second was where the legal representatives for Liam and Courtney joined with them. The third was where all of them met with the executor, his attorney and solicitors.

423. [423]
     Prior to attending those meetings, Zwier turned his mind to the kind of person who ought to be a replacement administrator. It was a complex estate, with assets located around the world of a particular nature. Zwier thought a liquidator type, like Mark Korda, would be an appropriate person as one of the replacements. Such a person had experience in dealing with global assets, complex assets, realisations and was set up to do it. Zwier said he always thought there should be two replacement administrators. With one, there could be a replication of the problems that had arisen with the executor. Further, Zwier always liked having someone who was a trusted friend of the family and someone who was completely independent of the family. That way you had the benefit of both relationship and the right expertise to manage a complicated estate. Zwier said he called Korda, because it was such an unusual idea, to see whether he would be prepared to take on the appointment. Korda was prepared to take on that role.

424. [424]
     At the first meeting on 17 April 2012, there was discussion about the application to remove the executor. Zwier said it had serious risks of loss, but it was hoped the application would bring the executor to the table at a mediation. Zwier said he advised that such an application was not likely to be successful. There was insufficient evidence to enable a court to make an order removing the executor. Zwier said an unsuccessful application could entrench the executor. He returned to the dual track strategy. Zwier agreed he was absolutely against the bringing of an application for removal.

425. [425]
     Zwier said there was also discussion about a replacement trustee, if the executor agreed to resign his position. Zwier said there was a discussion about the type of person to be appointed. They talked about Korda and his willingness to act in that capacity. Zwier said he made a recommendation that there be more than one and gave his reasons why there should be two administrators.

426. [426]
     Zwier’s note of the meeting referred to Amanda raising the Queensland silk who was said to be close to Wayne Bennett and Don Nissen. Amanda said he would work well with the team. His note also recorded a reference to Walker, Nissen and Wood. Zwier thought that was a reference to a continuation of the management of the Talbot Group.

427. [427]
     Paterson said he was of the view that the replacement administrator should be two or three people and at least one of those should be used to dealing with, and selling, large complex assets. That person would have good legal, financial and commercial knowledge. Paterson could not recall whether he discussed those attributes at this meeting but said it definitely was spoken about on several occasions with Amanda prior to the mediation.

428. [428]
     Paterson said Zwier described Korda as having an enviable reputation as a court appointed liquidator or administrator who was used to dealing with complex matters, complex structures and the sale of assets. Paterson recalled that at one point, although he could not recall whether it was in this meeting, there was advice, in response to Amanda’s suggestion of the Queensland silk, that “a single QC might not be appropriate or acceptable to the court”.^[86]

429. [429]
     At the second meeting on 17 April 2012, with the legal representatives for Liam and Courtney, it was recorded that there was heated agreement from everyone at the meeting, that they could not work with the executor going forward. Zwier expressed the need for Liam and Courtney to join in any application.

430. [430]
     At the third meeting on 17 April 2012, with the executor, his attorney and his solicitor, there was agreement reached about a mediation to negotiate “a complete divorce”. The mediation was to deal with two topics, the executor’s removal and fixing his remuneration. Paterson said it was on Amanda’s instructions that the mediation be limited to those two issues. It was agreed not to commence litigation whilst there was a mediation and further discussion but that anyone could withdraw at any time and issue proceedings. Zwier sent an email to the executor’s attorney that evening confirming the agreement.

431. [431]
     On 18 April 2012, Amanda sent an email to Paterson and Zwier stating she was nervous about putting forward anyone's name from a big firm who will tie us up and perhaps over complicate things. She asked that they put forward Nissen, Walker, and the silk previously suggested by her as replacements for the executor.

432. [432]
     On 20 April 2012, Amanda sent Paterson and Zwier an email in which she stated she had discussed the current position with Bartley and set out their thoughts in relation to the mediation and other matters. Amanda stated “I will not accept Mark Korda as the executor. Unless there is some reason why a court would have reservations about [the Queensland silk] and Don Nissen as joint executors, then I will go with them because I am confident they can do the job.”^[87]

433. [433]
     Later that day, Zwier sent back to Amanda an email in which he set out his responses to that earlier email. In relation to the replacement executor, Zwier said:

“As you will appreciate we are making recommendations which enhance the likelihood of success. When we recommended Mark Korda, we did so not by reference to the person but to his office – official liquidator, Court officer and a person who may ordinarily be appointed receiver of large complex enterprises. Mark is known to and trusted by us. Frankly we need to propose alternate executors who the Court will be comfortable appointing. A QC may not alone meet the criterion. The former Talbot executives who are close to you may also be inappropriate to the Court. Our view is that it should be a combination of persons of the highest repute –preferably Queensland based - with the necessary legal financial and commercial skills.”^[88]

434. [434]
     In that email, Zwier also expressed his views on the suggestion that an application be filed to remove the executor. Zwier referred to senior Counsel’s previous advice that the application is “paper thin”. Paterson said he did not see Zwier’s comments prior to the email being sent on 20 April 2012 but agreed with them.

435. [435]
     On the afternoon of 20 April 2012, Bartley sent an email to Paterson and Zwier, expressing surprise to hear that the prospects are “paper thin”.^[89] He found it difficult to accept. However, Bartley observed he was too close to the parties to form an objective view and conceded that whilst the current position may be unbearable, it would be much worse if the application were to fail.

436. [436]
     On 27 April 2012, Paterson sent Amanda an email advising the legal representative for Liam and Courtney had said there was a need to endeavour to agree on a replacement administrator. Paterson observed that he agreed and thought there needed to be more than one and that two or three individuals would be ideal. Liam and Courtney’s legal representative thought two was the right number and mentioned a solicitor, who was presently the executor or trustee of a large deceased estate, and a person high up in the QUT Business School.

437. [437]
     On 29 April 2012, Amanda responded to Paterson’s email. She said she thought “we could do better in selecting the executors” observing that the solicitor does not practice in the area and did not have experience in the commercial/mining law areas and that she did not know much about the person from the QUT Business Executive. Amanda said she would much prefer people “who know and have the trust of the family, have knowledge of the business and relevant legal/commercial experience (rather than an academic)”.^[90] Amanda confirmed her first preference was Nissen and the Queensland silk but that if there was a problem with the Queensland silk, perhaps MacDonald would be an option. Amanda said Sabbagh agreed that Nissen would be the best person to be appointed and that he also supported the appointment of the Queensland silk.

438. [438]
     On 8 May 2012, Paterson attended a conference with Amanda, Bartley and senior and junior Counsel. Senior Counsel advised that he originally thought the prospects of any application to remove the executor were rather bleak but that he now thought it was a bit stronger, although he still did not think it was a strong case. Courts did not like interfering with trustees and that whilst beneficiaries might complain about an executor’s behaviour, an executor can throw up various materials, such as acting on advice. Whilst there were arguments available of justifiable loss of confidence in the executor, the executor’s argument would be that he had built up a significant store of knowledge and it would take someone of great experience to replace him. Senior Counsel expressed a view that the prospects of success were no better than 50/50, or the toss of a coin.

439. [439]
     Senior Counsel further observed that a contested application to remove was a difficult one and the support of Liam and Courtney was fundamental. Senior Counsel stated he had read the draft affidavits of Amanda. He expressed the view that there was a significant risk of failure and litigation would be hideous. Accordingly, there was a need to give mediation its best shot. Senior Counsel also referred to the need for a litigation guardian for Alexandra and Claudia.

440. [440]
     During the conference, Senior Counsel was advised of Amanda’s preference for the replacement administrator to be Nissen and the Queensland silk. Senior Counsel expressed the view that they seemed acceptable. Paterson said that shortly after the conference, he received an email from Amanda stating the Queensland silk no longer wanted to be executor.

441. [441]
     On 17 May 2012, Amanda sent a further email to Paterson referring to a conversation she had had with Courtney. Amanda said she had raised a possible executor with Courtney. Courtney replied that they were putting together a list of five names of people she did not know because “the court would not allow the new executor to be anyone that is associated in any way with the family.”

442. [442]
     Paterson said subsequent to those communications, he received an email from the solicitors for Liam and Courtney suggesting a face to face meeting, or if that was impractical, a telephone conference to discuss the possibility of a replacement administrator. Paterson forwarded that email to Amanda asking if she had had further discussions with Courtney or Liam on a replacement, noting there should be a discussion beforehand regarding possible replacements. Paterson noted that Amanda had previously suggested Walker but stated it would be beneficial to have an additional trustee who ideally should be independent and appropriately qualified.

443. [443]
     Amanda replied that she had met with Bennett, his solicitor and Counsel and it had been decided to see whether Liam and Courtney would accept Bennett as the replacement administrator. Paterson replied, asking whether Amanda was suggesting Bennett alone. Paterson said he asked that question because he thought it appropriate to have more than one. Amanda responded, “Yes, Wayne alone”. Amanda observed “it is extremely hard to have a conversation with Courtney regarding Executors because everything goes straight to [the attorney and the executor]”.

444. [444]
     Amanda accepted that Bennett would not meet the description of the kind of person the second defendant identified as being a recommended replacement. Amanda also accepted there was no doubt the second defendant was advising that one administrator was not enough. Amanda agreed she discussed with Bartley who should be the replacement administrator. They agreed the critical issue was to be able to remove the executor and that the prospects of doing so would be prejudiced if the beneficiaries were not in agreement about a replacement.

445. [445]
     Amanda accepted that, in the course of that discussion with Bartley, one of them came up with the idea of Boyd, with matters in his favour being that he had drafted the 2002 Will and would likely give effect to it in accordance with the deceased’s wishes. She agreed they accepted that Boyd probably did not have all the skills necessary to administer the estate but Amanda doubted any person would have those necessary skills and that any replacement would need to have access to and seek out the assistance of appropriate advisors which Boyd would be able to do. Another matter in his favour was that he was well known to the family, with a good knowledge of the business and its assets.

446. [446]
     Amanda agreed that Bartley and she decided that Amanda should not put forward Boyd’s name. Amanda and Boyd were personally very close; at times, exchanging of many texts late into the night most days, quite apart from the various meetings and telephone calls between them. Amanda accepted the texts were not business related texts. In that context, putting forward Boyd’s name could be seen as nominating someone who was too close to Amanda.

447. [447]
     On 29 May 2012, Paterson received a letter from Liam and Courtney’s solicitors. It requested, in anticipation of a telephone conference to be held with Paterson and Amanda, that they receive Amanda’s views on the number of persons proposed for the replacement role or if it is just one person only and the names of any persons considered as a suitable candidate for the role as well as Amanda’s expectations regarding that person and whether the locality of the person was of a particular concern. Paterson forwarded that letter to Amanda, asking that she telephone him to discuss. Amanda replied that she would telephone him but was concerned about any discussions with Courtney, noting that absolutely nothing was confidential. Amanda queried whether they needed to come up with ideas to which we could respond. Paterson said this was not the first occasion that Amanda had expressed concerns about confidentiality.

448. [448]
     On 29 May 2012, Paterson had a telephone discussion with Amanda. He received instructions to brief senior Counsel to give advice about the replacement. His note of that conversation recorded that there was still disagreement, with Liam and Courtney consistently wanting an independent lawyer/accountant.

449. [449]
     On 30 May 2012, Paterson sent a letter to Liam and Courtney’s solicitors, advising it was premature to have a conference to discuss the replacement. Paterson said there was a wish to confer with senior Counsel on that issue. In the meantime, he thought it helpful if a list of individuals acceptable to Liam and Courtney was provided by those solicitors.

450. [450]
     On 5 June 2012, Amanda met with Courtney and Liam. During that meeting, Courtney suggested Boyd as a replacement. Amanda was surprised; she thought Boyd would be perceived by Liam and Courtney to be in her camp. Amanda thought it was a very good idea. Liam also agreed. Amanda asked if they would mind ringing Boyd to see if he was interested in taking on the role. Amanda told them she was meeting with Boyd towards the end of the week and suggested they come to that meeting. They agreed to do so.

451. [451]
     Amanda said when Courtney suggested Boyd, she thought it was a brilliant idea. He knew the deceased, which was important to Amanda. He knew the assets and the estate very well. Amanda trusted him and had confidence in him. She thought he was a wonderful man. Further, the family relationships had been very strained and she felt he would unify the family. Until Courtney’s suggestion of Boyd, she had not been able to agree on a replacement with Liam and Courtney.

452. [452]
     Amanda said Boyd also had a great relationship with Sabbagh, who though highly of Boyd. Boyd knew the Talbot Group executives. Amanda assumed he would bring some of those key people back. She thought, “Fantastic. The team’s going to get back together”.^[91] Once the Mozambique asset was sold, there was still quite a few other things to attend to, although they were less complicated and would not take as long to get wrapped up. Amanda thought 12 months was a little unrealistic, probably two years.

453. [453]
     Amanda said as soon as she left them, she rang Boyd. She told him about the conversation with Courtney and Liam. She asked if he would take on the role. He said no. Amanda said, “Well, can you please think about it and we can talk about it on Friday and is it okay if Courtney and Liam come along?”.^[92]

454. [454]
     Boyd said the context of that telephone call was that if the executor was prepared to exit his role, there was a need for Amanda, Liam, Courtney and the litigation guardian for Alexandra and Claudia to agree on a replacement. Amanda told Boyd Courtney had suggested Boyd be the appointee, and Liam was comfortable with that suggestion. Amanda noted that Courtney had not yet discussed it with her solicitor. Amanda said they were still keen for two executors. Amanda wanted Boyd to attend a meeting to discuss the issue on the following Friday.

455. [455]
     Boyd said he had a subsequent telephone conversation with Amanda that evening. Amanda proposed Nissen as a second executor. Boyd told Amanda that in relation to the suggestion Boyd be appointed, they would need to get their lawyers to sign off on that arrangement because with Boyd having been out of the day to day contact with the administration for the estate for so long, he was unaware whether there were any issues in that context which would be a problem for his appointment. Boyd said he thought the suggestion of Nissen was Amanda talking; he did not think it was associated with Courtney and Liam at that stage.

456. [456]
     Boyd said he had quite a bit to do with the executor during the early part of the executorship but once they were through the initial phase, Boyd did not have much to do with the executor. He continued to work on the corporate side, during transactional work that he had done before the deceased’s death. That did not bring him directly into contact with the executor. Occasionally, he would have contact with the executor’s attorney. He heard plenty from Amanda and occasionally from Liam and Courtney. More so, he heard from the Talbot Group directors in relation to the executor and how things were being undertaken.

457. [457]
     On 5 June 2012, Paterson received an email from Amanda, advising she had had a long chat with Courtney and Liam. They were keen to have two executors she did not know. Amanda proposed they each choose one. She said she made it very clear she would only choose someone she knew because she did not want to leave the door open for opportunists. Amanda said Liam and Courtney did not see that would be a problem. Amanda said she suggested Nissen but they thought his age was against him. Courtney suggested Bill Boyd as one of the executors. Liam said he did not have a problem with Boyd and thought he would do a good job.

458. [458]
     Amanda continued, “Bill was going to be one of my choices if you asked for a list of names so I am really pleased that Courtney has thought of him. So now I am not sure if Bill is Courtney and Liam’s choice and I get to propose someone or not. The ideal would be [Nissen] and Bill as co executors. They get along well and are both very fair, practical, intelligent and sensible and neither has an ego that needs to be massaged”.^[93] For Paterson, this was the first occasion that Boyd’s name had come up as a possible replacement. Paterson said he had no reason for concern about Boyd as a replacement.

459. [459]
     On 6 June 2012, Boyd met with Courtney. Courtney told Boyd she understood he had heard from Amanda. Courtney said she could not think of anyone better to do the role and she expected Boyd would be fair and impartial. Boyd said he responded that he would do what he could to assist them noting that he felt a personal obligation to them and the deceased; that he had not considered the possibility of being administrator because he had been sidelined for so long and still had to think through the ramifications; whilst he was not aware of any matter that would disqualify him they all needed to get it signed off from their legal advisors; and that they needed to understand he would be totally impartial if he was able to take on the role. Boyd further said that he had a unique view of the situation because of his understanding of the deceased’s instructions. Courtney replied that was something they had thought about and they saw as an advantage.

460. [460]
     Amanda said she met Liam and Courtney on Friday 8 June 2012. Boyd was already there with Courtney. Liam turned up later. Boyd was speaking as if he had accepted the role. Amanda asked, “Have you decided to take on the role?”^[94] Boyd replied yes. Amanda said, “That’s great”. Amanda said she was very happy and relieved. Amanda could not recall if Boyd, at some point, mentioned the name of an accountant but agreed Boyd advised there should be someone in addition to him and mentioned an accountant.

461. [461]
     Boyd said that during this meeting, Boyd was advised that Liam and Courtney had just come from a meeting with their legal representatives, all of whom were in favour of Boyd taking on the role. There was also a discussion about whether Boyd would want a co-executor and with what qualifications. Boyd said he advised yes to a co-executor. Amanda said she had not yet spoken to her legal representatives. There was a general discussion about the mediation and the desire to remove the executor and his attorney from the scene. There was to be a full accounting provided before the mediation by the executor for the estate.

462. [462]
     On 8 June 2012, Boyd contacted Lexon and AON in relation to the request that he accept appointment as administrator. Boyd queried whether the insurer would want any input. The response was no and it was debatable if there were circumstances in any event. The appointment was seen as positive rather than giving rise to insurance issues. Boyd recorded that he could approach the insurer for consent if he wanted to do so but did not think that was at all necessary. Boyd said that was not what he had in mind.

463. [463]
     Boyd said the reference to the appointment being positive was a reference to the administration of the estate and his familiarity with the deceased’s affairs and also the beneficiaries. It was not positive from an insurance perspective. Boyd said the reference to “rather than giving rise to insurance issues” related to Boyd mentioning that he needed to understand whether, if there were to be claims in relation to the notifications, there was any issue with the continuation of his professional indemnity insurance in relation to the work he would perform as administrator. Boyd agreed he was wanting the insurers “blessing”.^[95]

464. [464]
     Boyd said he had a further telephone conversation with Amanda later that afternoon. Amanda said she had spoken to Paterson and Zwier about the executorship. They were speaking with Senior Counsel. There had been a meeting that day among the legal representatives in preparation for the mediation. Boyd was also told that Amanda had her application for removal ready and that Gleeson (for the litigation guardian) and Liam and Courtney’s legal representatives, said they would support that application.

465. [465]
     On 8 June 2012, Senior Counsel was sent a brief to advise. Amanda agreed she instructed the second defendant to ask Senior Counsel about a replacement, and particularly, Boyd. His written response, dated 12 June 2012, expressed the view that the court would be concerned with the best interests of the estate and that independence was not always vital, with the trust and confidence of the beneficiaries being at least as important. Senior Counsel further advised, “Someone like Mr Boyd would almost certainly be regarded as suitable (indeed, almost ideal) if unanimously supported by the adult beneficiaries and the guardian of the minors”.^[96] Senior Counsel advised that if two were to be appointed, Amanda’s suggestion that she pick one and Liam and Courtney pick the other was not ideal as it tended to encourage a perception that each is a representative in some sense of the nominating party which tended to be destructive of the confidence of the other parties and may increase the risk of dispute and/or stalemate. It was much better that both have, and are seen to have, the confidence of all beneficiaries.

466. [466]
     Paterson forwarded Counsel’s advice to Amanda by email that day, querying whether she wanted a second person or whether everyone would agree to just Boyd.

467. [467]
     On 14 June 2012, Amanda telephoned Boyd about a draft report into the deceased’s plane crash. Amanda told Boyd she had an email from Paterson, who had spoken to Senior Counsel. Amanda said all was fine with Boyd’s appointment. Amanda said Paterson and Senior Counsel did not like the idea of Amanda on the one hand and Liam and Courtney on the other hand, picking an administrator. They thought it could lead to a possible stalemate. Amanda told Boyd that Liam was talking about Bruce Hatcher but Amanda did not want an outsider. She wanted to keep it simple and leave Boyd as the sole appointee. Boyd said he raised with her a partner of an accountancy firm. That did not gain any traction. Boyd thinks he had previously mentioned that name to Amanda. Amanda asked Boyd whether he would charge executor’s commission if he was appointed executor. Boyd said he would not, he would simply charge his professional fees for the job.

468. [468]
     On 15 June 2012, Boyd spoke to Amanda by telephone. He told her they would need to be alert to whatever document the executor signed to appoint his successor. Boyd said he recalled that earlier in the period of the executorship, Amanda had mentioned that the executor had signed a document appointing someone to take over as trustee of the estate from the executor. Boyd was unsure of the timing and trigger for that appointment. Amanda asked Boyd if he had thought further about a sole versus co-executor. Boyd replied he would do it sole if that would resolve potential issues between the adult beneficiaries.

469. [469]
     On 15 June 2012, Amanda advised Paterson, by email, that she had spoken to Boyd, who had agreed to take on the role as a sole administrator. Amanda said she was waiting to hear back from Courtney and Liam as to whether they were agreeable to only having Boyd or if they wanted another as well. Amanda also expressed the wish that Bartley attend the mediation.

470. [470]
     On 15 June 2012, Paterson received a letter from Liam and Courtney’s solicitors. It advised that Liam and Courtney wished to reach accord as to the choice of potential replacement administrator/trustee and confirmed they wished to nominate, Boyd and Bruce Hatcher, a company director/accountant. The letter confirmed they sought the appointment of two persons. Paterson forwarded that letter to Amanda, with a request she telephone to discuss.

471. [471]
     In response, Amanda sent an email on 18 June 2012 stating:

“I do not understand why Courtney and Liam are intent on having an independent executor as well as Bill Boyd. I understand that Bruce Hatcher has a very good reputation and is well known to Wayne Bennett. For me that is not a good enough reason to involve him in Ken’s estate. I have never [met] the man and find it strange that I am expected to feel comfortable with agreeing to his proposed role.

Bill Boyd has agreed to take on the responsibility of executor. He is not interested in making a profit out of this role and indeed does not want the role. He has stated that he feels that it is his duty and he wants to do it for Ken and his family and that is why he has agreed to our request. Ken’s will calls for the executor to use any advice he needs to undertake his role. One of those people named in the will is KPMG who Ken has used for many years. Bruce Hatcher is an accountant who will come in and give a different point of view. You will recall that this is what happened with the C and D class share issue. Kaylie Burke wanted to check the KPMG valuation and delayed the process.

Liam told me last week that they are trying to decide whether or not to have a conversation (with Bill) before or after mediation about succession. Liam said that if something happens to him for example his mother “may miss out” and succession needs to be thought about. Kaylie Burke in her usual style will, I believe, try to complicate matters.

It seems to me that they want to change everything about the will. Succession, my entitlement to live in the family home, getting their trust funds vested etc are things that will become complicated down the track.

We have an International Friend who is willing and able to take on his responsibilities. Bill doesn’t need a co executor. I am trying to simplify things-I don’t want to replace Paul Bret and be faced with a whole new set of problems that we have created.

Please respond to Kaylie and politely tell her that I will not agree to any co executor who does not know our family and can we please just have Bill who will have every resource at his fingertips and go about settling this estate the way it should have been from the beginning.” ^[97]

472. [472]
     Amanda agreed that in that email she was advising Paterson of her belief that Boyd was a good appointee, even if he did not have the skills himself because he had the capacity to take advice from various people. She accepted that was her thinking at the time and that she wanted to persuade Paterson to put that to Liam and Courtney’s legal representatives to try and persuade them to change their minds. She accepted the resources included the executives of the company who actually owned the assets and were running the assets.

473. [473]
     Paterson said he took the contents of that email as his instructions. It was consistent with the instructions Amanda had given way back when she first started discussing a replacement. Paterson spoke to Liam and Courtney’s legal representative and forwarded an email to Amanda on the afternoon of 18 June 2012, advising he had explained that if there was to be a second person, he or she must be known to the family but Amanda was prepared to only have one, namely, Boyd.

474. [474]
     On 18 June 2012, Boyd received a telephone call from the legal representatives for Liam and Courtney, asking whether he was prepared to act as administrator. Boyd said he was, although he would prefer not to, but felt an obligation to the deceased and his family. Boyd was asked whether he was prepared to do it alone. Boyd replied he would do it alone if he had to. Boyd said the solicitor mentioned Hatcher, the name Liam had mentioned a number of times. Boyd said he did not know Hatcher. Boyd suggested the accountant he had identified to Amanda, as well as another accountant who had been closely involved in Talbot Group for a number of years. The solicitor asked Boyd to confirm he would do the job on hourly rates, with no commission. Boyd replied he would take on the role on that basis.

475. [475]
     Boyd said at the time, he did not have any particular experience or expertise in terms of mining shares, capital markets or mining companies. He did not recall the question of his expertise coming up in any discussion with Amanda. Boyd said he did give consideration, at the time of his appointment as administrator, to whether any previous matters, including the matters he had referred to his professional indemnity insurer might create a difficulty in acting as administrator. His view was there was no concern. Boyd said it was his intention to make the relationship with the international friends work, in the spirit intended under the Will.

476. [476]
     On 20 June 2012, Paterson received a letter from Liam and Courtney’s solicitor confirming their clients required two persons to replace the executor. The letter referred to recent discussions with Gleeson. Paterson said Gleeson was acting for the litigation guardian for Alexandra and Claudia. On the same date, Paterson forwarded that letter to Amanda, asking if she had any further thoughts or discussions with Liam and Courtney on a replacement and whether Amanda was able to come up with a second person.

477. [477]
     Amanda replied on 21 June 2012, by email. She reported she had just spoken to Bennett and he agreed there should be one replacement but that he did not want the beneficiaries to have a falling out if Courtney and Liam were intent on having two. Amanda reported that Bennett thought if there were two, Hatcher was a wonderful choice. Amanda said Bennett would give Gleeson instructions and she was seeing Courtney that morning. Amanda agreed Bennett was the litigation guardian for Alexandra and Claudia at this time.

478. [478]
     Paterson replied by email:

“Don’t stress out too much about agreeing on a second executor (if any) prior to mediation. It can be dealt with as part of the mediation, but only a matter to be resolved initially between Liam, Courtney and you.” ^[98]

479. [479]
     On the afternoon of 21 June 2012, Amanda forwarded an email to Paterson advising she had spoken to Courtney and queried why Courtney thought a second person was needed and what value it would add to settling the estate. Amanda said Courtney did not have an answer. Amanda said Courtney understood why Amanda was reluctant to ask an independent person to take on the role. Amanda said it was probably best to let the issue rest and resolve it at mediation.

480. [480]
     Amanda agreed she was trying to persuade Courtney she did not need a second administrator. Amanda accepted that her view was she did not want two administrators; she wanted one. She perceived one administrator would diminish the prospects of partisan disputes if she appointed one and Liam and Courtney appointed the other.

481. [481]
     On 24 June 2012, Boyd received a series of SMS messages from Amanda. Amanda said, “Don't doubt yourself-you will be a terrific executor. Back yourself”. Boyd replied he was only doing it for Amanda, the deceased and the rest of the family.

482. [482]
     A mediation was held on 25 and 26 June. Alexandra and Claudia were represented by Counsel and Gleeson, on the instructions of Bennett as litigation guardian. To the best of Paterson’s recollection, there was no discussions or negotiations at the mediation about whether there would be a second person as administrator. Zwier also did not recall having a discussion at the mediation as to the identity of the replacement. Zwier said it was generally accepted by then that everyone was happy with Boyd. There was an agreement reached at mediation that the executor would retire in exchange for a sum of money.

483. [483]
     On 26 June 2012, the executor executed a Deed Poll appointing Boyd as the trustee under the Will trust. On that same day, the executor’s solicitors forwarded to Boyd an application and affidavit to be finalised and executed by him for his appointment as administrator of the estate. Boyd completed the required details and returned the amended documents to the executor’s solicitors on 27 June 2012.

484. [484]
     Shortly after sending that email, Liam and Courtney’s solicitor sent an email to Paterson with the attached draft affidavit, advising that in order to satisfy Boyd, it was necessary to have Amanda, Liam and Courtney confirm to Boyd that they consented to his appointment. The email confirmed that Boyd had been forwarded Bennett’s affidavit. The draft affidavit noted that Boyd had been informed and believed that Amanda, Liam and Courtney and Wayne Bennett, as guardian ad litem for Alexandra and Claudia, consented to his appointment as administrator.

485. [485]
     Later that afternoon, Amanda forwarded an email to Paterson and Zwier stating she was still in shock that they had sent the executor and his attorney packing and said “The best $3 million dollars I will ever spend”.^[99] The email concluded by thanking them for all their work.

486. [486]
     On 29 June 2012, a grant of letters of administration with the Will was issued to Boyd. At the time, the same solicitors were still acting for the estate. Boyd believed those solicitors made an application, on behalf of the executor, for leave to retire from the role and for Boyd’s appointment as administrator. Boyd continued to retain those solicitors for the estate, after his appointment. Boyd understood that prior to his appointment, there had been a resolution for the retirement of the executor, both as executor and as trustee under the Will trust.

487. [487]
     The terms of settlement with the executor involved a payment of money. Boyd said there had previously been paid to the executor a sum of $1 million. The executor was paid $9 million, post-mediation, to make a total payment of $10 million. They were the only fees and commissions received by the executor. He would have received other payments for travelling charges and accommodation.

488. [488]
     Boyd said the $9 million payment had never been allocated within the estate. There was an agreement between the adult beneficiaries that it would be split a third each between Amanda, Liam and Courtney. Boyd said he intended to raise that with Paul Vincent, who was appointed by Court order on 20 September 2019 as co-administrator and by deed poll on 25 September 2019 as co-trustee of the Wills trust. The appointment of Vincent followed an application to the Court by Amanda.

489. [489]
     On 3 July 2012, a representative of the second defendant sent Amanda a congratulatory email and proposed dates for a celebratory lunch in Melbourne. Amanda replied to that email on 12 July 2012, stating she was absolutely thrilled and that Paterson and Zwier had done a wonderful job. She advised she would be heading to Villa Calvi later in the month for six months and would not be able to attend the celebratory lunch.

490. [490]
     Amanda said that whenever she sought advice from Boyd, she did so for herself and for the girls. Amanda said Boyd did not at any stage tell her there was any impediment to his appointment as administrator. He did not express any reason why she personally should not be willing to appoint him. He did not tell her about any deficiencies that had been asserted in the drafting of the 2002 Will or that he had received instructions to prepare a Will in 2007 and it was still not complete at the time of the deceased’s death. Boyd did not ever tell Amanda there was a conflict or potential conflict between his interests and the duties he owed to her as her solicitor. He did not ever tell her that Amanda, Alexandra or Claudia might have claims against him or that they were subject to limitation periods. She did not recall him ever suggesting she should seek legal advice in respect of those matters.

491. [491]
     Amanda said that at no time up to the lead up of Boyd’s appointment did she receive any advice from the second defendant that Boyd was unsuitable for that appointment. She did not recall the second defendant ever giving her advice that she or Alexandra or Claudia may have claims against Boyd in respect of the preparation of the 2002 Will; or in relation to the work on the new Will in between 2007 and 2010; or that Boyd may have a conflict of interest or potential conflict of interest in acting as her solicitor; or that Boyd’s approach to the preparation of the replacement Will was so dilatory he was an unsuitable person to be appointed administrator given the size and complexity of the estate.

492. [492]
     Paterson said after the appointment of Boyd, the second defendant’s involvement in doing things on behalf of Amanda gradually dropped off until they finally ceased acting for her in about September 2015. During that time, the second defendant gave Amanda advice in relation to the taxation implications of the executor being a non-resident trustee and in respect of some purported valuations. Amanda also consulted them about a potential wrongful death claim, and they liaised with French and Chinese lawyers to assist her to understand her interests in the apartments in Paris and Shanghai. Paterson said those items were not referred to in the retainer letter. Amanda specifically asked to know her rights and entitlements in relation to those properties. Paterson said at no stage apart from the engagement of Gleeson to commence and then discontinue the family provision application was the second defendant asked to represent Alexandra and Claudia. Paterson agreed that apart from occasions when he travelled to Brisbane for some meetings or to Los Angeles or Sydney, all of the work undertaken for Amanda was performed from Melbourne, utilising the second defendant’s staff and facilities in Melbourne.

493. [493]
     Paterson said he had occasion, back in 2010 and more recently to review the terms of the 2002 Will. From his review, he did not consider Boyd to be unsuitable as an administrator. He had no doubt the Will reflected the deceased’s instructions. Paterson said drafting a Will and the administration of an estate are two different skill sets. Paterson believed Boyd would act competently as administrator in seeking out and relying on advice, as necessary. Paterson said, to his knowledge, there did not exist a continuing retainer between Boyd and the deceased from about 2002 until 2007 for Boyd to advise about the ongoing appropriateness of the 2002 Will. The second defendant was never instructed to investigate whether there was such a retainer.

494. [494]
     Paterson said that since the commencement of these proceedings, he also had the opportunity to review the documents relevant to updating the 2002 Will. Nothing in that material suggested to him that Boyd was inappropriate to be appointed as administrator of the estate or caused him to believe there would be a disappointed beneficiary claim against Boyd. Boyd’s diary note of his conversation with the deceased on 5 May 2010 shows the deceased had not made final decisions on what any new Will would provide and in particular, the percentage split between the individual beneficiaries. Paterson agreed the documents showed activity from 2006, with an escalating activity from the end of 2007 through to the time of death. Paterson said he regularly acted for ultra-high net worth individuals in respect of estate planning and Wills. Such a time frame was not unusual. Doing a Will tends to drop down a priority ladder for such people. Paterson personally had experience with these kinds of things taking years.

Administration

495. [495]
     Euan Walker was a director of the Talbot Group entities on the commencement of Boyd’s administration. He had been appointed a director during the executorship. Walker said he was originally brought into the Talbot Group to develop a level of control and transparency. He was the Chief Financial Officer of TGH and TGI between 9 September 2009 and 31 December 2015, and secretary of those companies between 16 November 2010 and 18 December 2015. He was a director of those companies between 29 April 2011 and 1 January 2015.

496. [496]
     In those roles, Walker provided advice to the executor and the attorney, more in the nature of giving documentary evidence of what were the assets and thereafter ongoing reporting as to the status of those assets. He was not involved in obtaining advice as to the course to be adopted with respect to the assets of TGI and TGH. That was clearly within the ambit of the executor and his attorney. They sought external advice to his knowledge, engaging Allens Linklaters and RBC.

497. [497]
     Walker said during the executorship, various shares were sold on the instructions of the executor. The shareholdings remaining when Boyd took over as administrator were “the difficult children”.^[100] They could not be easily sold, either due to lower demand, low market cap or the reverse, they were so large there could be potential impacts on the market if they were sold. If those shares had been listed for sale within 12 or 18 months of Boyd’s appointment as administrator, they would have produced a very low return or may not have been able to be sold at all.

498. [498]
     Walker said the directors had to try and get the best possible price. Walker said dribbling shares into the market was considered in respect of some of the larger shareholdings. Given the reporting requirements, and the potential impact on the share price when it was known the Talbot Group was selling, the directors were told by both the executor and the administrator to be very careful. There were minor beneficiaries who were not receiving their entitlement for a longer period of time. The directors had to be careful of losing any potential upside. Walker said these shares were always available to be sold if an appropriate purchaser could be found at the right price, whenever an opportunity arose to do so.

499. [499]
     Walker accepted that in the first half of 2012, relations between the executor and the adult beneficiaries had deteriorated significantly. However, he was surprised to learn of the appointment of Boyd as administrator. He was not part of the process leading up to the executor’s departure.

500. [500]
     After Boyd was appointed administrator, Walker continued to seek and obtain direction in the same way he had sought and obtained it from the executor, although Boyd had a different mannerism to that of the executor. Walker would have given Boyd a comprehensive debrief on where the estate was financially. At that stage, Walker was both a director and undertaking the role of finance officer. He was heavily focussed on doing the financials. The other director at that stage was Wood.

501. [501]
     Walker agreed that after Boyd’s appointment, he told Boyd, in relation to Robust, that Wood wished to see the Talbot Group sell its shares to business associates of Wood. Walker said that was quite common. It was part of Wood’s role to introduce people. He knew the market; he knew people because it was a very speculative market.

502. [502]
     Walker said when Boyd took over as administrator, there were less assets to manage so the minute keeping exercise was not undertaken in the same format. Meetings were effectively quasi meetings, often with other parties attending. Walker generally stopped making minutes of meetings. The executor and his attorney had not been in the country, giving rise to the need for minutes. Under Boyd’s administration, they were meeting together.

503. [503]
     Upon his appointment as administrator and trustee of the Will trusts, Boyd said he undertook a review of the assets within the trusts and the estate. He prepared a list of the assets realised by the executor, from the records of the estate. Boyd also prepared a list of the assets sold in his administration. There remains, essentially, two assets left to be realised in the administration. The first is the Mozambique project. The second is Villa Calvi. The Paris apartment is to be transferred to the children as beneficiaries, in accordance with French Law. The deceased having specified that the property go to Claudia, Claudia received 25% which could be disposed of by Will, with the remaining 75% split equally amongst the four children, under French Law.

504. [504]
     Boyd said at the time of his appointment as administrator, he had a very good working relationship with the directors of the Talbot Group. Dennis Wood was a person he had been working with from about 2002 or 2003. Boyd described Wood as a mining engineer who had been involved in mining for decades and knew the industry extremely well. He was the resources expert. He had been with the deceased for a long period of time. He knew all of the assets very well. He was very commercial in his approach. Wood continued to maintain his own private investment interests whilst taking on directorships with Talbot Group entities.

505. [505]
     Boyd had been working with Walker for only two or three years. He described Walker as very thorough, very experienced in what he did on the financial side. He was very hands on commercially with a very good understanding of the assets. He also performed the role of company secretary and tax administration.

506. [506]
     Boyd said he consulted with Walker and Wood, as the directors of the corporate entities. He also consulted the then estate solicitors and retained them to continue as his solicitors in relation to the administration. He consulted KPMG in relation to the tax and advisory side of the business. He consulted RBC. He did not consult with the executor or his attorney. The relationship with them was such that Boyd did not think it was likely to be a productive process. Boyd had available all the people who had been advising them and who had the accumulated knowledge in relation to what had happened during the executorship. Boyd was content to rely upon a series of capable people who had been there for a long time who he felt could bring him up to speed on any issue.

507. [507]
     The Mozambique project was particularly busy in that initial period. The estate solicitors gave him copies of advices they had given and KPMG gave him some copies of advices but they were more around tax rather than any valuation work. The tax advice from KPMG was ongoing because to make distributions to the beneficiaries, you needed to follow a formula to transmit the money out of one of the corporate entities into the estate to then make a distribution. KPMG’s work went a long way beyond that focus. Boyd said the regime in place was for monthly payments to the beneficiaries, which kept them comfortably in cash. They were receiving significant amounts monthly on a tax free basis.

508. [508]
     The winding up of the estate was a far more complex affair. Assets still had to be realised and there were loan structures of “nightmarish proportions”;^[101] the loans flowed backwards and forwards. KPMG said they could not progress the modelling of the ultimate distribution until that part of the corporate structure had been fully realised. All of the money to be distributed to the beneficiaries involved realising assets owned by corporations and trusts, getting them into the estate so they could be distributed to the beneficiaries.

509. [509]
     Boyd did not keep records of meetings outside any diary notes. His action plan was a constant work in progress. The assets that were remaining were hard to deal with for their own individual reasons. It was not possible to plan with any particularity. Once the Mozambique transaction failed to complete, he was left with the difficult assets. The Mozambique asset also carried substantial funding and management requirements. They had commitments in Mozambique which had to be met in terms of work being done under the mining contract at minimum expenditure annually. It was a much larger, more complicated, unplannable set of assets than had been anticipated when he was appointed as administrator.

510. [510]
     Boyd described the assets that had been realised by the executor as being the assets that were easily realisable; “the low lying fruit”. The assets that remained were more difficult, with many of them constituting shares in unlisted entities. Boyd said each asset was monitored and opportunities were watched out for during the administration. Assets were managed on an individual asset basis rather than on a global plan, given that the estate had to achieve things with regard to realisation before you could achieve rationalisation of tax and ultimately distributions.

511. [511]
     Boyd said when he first commenced as administrator, the work at Villa Calvi was ongoing. He described the Villa as a property with about a 200 metre frontage to the shores of Lake Como. It comprised four buildings, some of which dated back to the 1800s. The renovation which had been commenced before the deceased’s death was very substantial. It involved the buildings being stripped right back. The main Villa had its roof taken off and floors taken out. A steel halo was placed around the outside, holding it up in place. Materials were brought in by boat or by helicopter. The end price of the renovation work was somewhere in the order of $10 million or $15 million. It was completed in late 2012, or early 2013.

512. [512]
     There also remained the question of the ownership of Villa Calvi. Whilst agreement had been reached between all beneficiaries for Amanda to have that villa transferred to her at the agreed valuation of €12,000,000, no transfer had yet taken place.

513. [513]
     Boyd said he met with Amanda, Liam and Courtney on 4 July 2012. That was his first meeting with them as a group, post his appointment as administrator. He told them that the letters of administration had been issued and made the point that his role was an independent role. He advised they needed to retain their independent legal advisors as he would not be able to advise them on matters concerning the estate. Boyd said he would liaise with Sabbagh but not with BNP, who he understood had declined the position. Boyd further stated that in terms of the process specified in the Will, he considered that the time for KPMG and McCullough Robertson to report on the estate had passed. Boyd said he had retained De Groots in relation to the estate administration and Allens for the project in Mozambique. Allens had been acting in that role for some time. Boyd said KPMG would continue in their current role, being tax advisors. At that stage, there was an annual audit of TGI and KPMG also had a role on the corporate advisory side providing advice with regard to asset sales and valuations.

514. [514]
     Boyd said he told them he was still in the review phase on a number of items and what was or was not achievable under the Will. Boyd said he may seek a second opinion from the lawyers in Milan. At that point in time, there was no shared view about how the Paris apartment should be dealt with under French Law and what the interests might be as between Amanda and the four children. Boyd said their Brisbane based consultant was overseeing the renovations to Villa Calvi. Boyd said that the Mozambique project was at a very active and sensitive stage with the government and the buyer. He advised he would not be able to discuss the details but hopefully it would become clearer in the next few weeks.

515. [515]
     Boyd said DeGroots were instructed in relation to the Paris apartment before Boyd’s appointment as administrator. The difficulty has been with regard to the implementation of the Will, in the context of the French laws. For a time, alternative structures for ownership were being considered amongst the beneficiaries. There was a time when the sale of the apartment was desired with opinions and second opinions obtained in relation to whether Amanda had any relevant interest in the property. There was a period where Alexandra and Claudia obtained independent advice in relation to their interest and how it could be accommodated with regard to the transfer of the property. The apartment remained in the name of the deceased.

516. [516]
     Boyd said a difficulty had been the constantly changing ambitions of the beneficiaries as to what could or should happen to the apartment. The position under French law is quite clear, only 25% interest can be disposed of by a Will. The French system recognises the Will as conveying that 25% interest to Claudia, as the beneficiary named in the Will. The remaining 75%, under the law applied in France, is to be spread equally between Liam, Courtney, Alexandra and Claudia. The consequence is that the apartment cannot be transferred in the manner contemplated by the Will. The executor had not transferred it because the beneficiaries would not agree on how to do it.

517. [517]
     Boyd said at the time of his appointment as administrator the executor had been through a formal sale process in respect of the Mozambique project. The winning bidder had been identified but the negotiations had not progressed to a formal contract. When Boyd was appointed administrator, he was told by Wood and Walker and also by a solicitor from Allens, that there had been some late changes to the deal, under the executor’s auspices, which necessitated further negotiation. Those negotiations were concluded and a contract of sale was entered into on 24 July 2012, shortly after the meeting with beneficiaries. The price set for the sale, pursuant to the contract, was $540 million.

518. [518]
     Boyd said, regrettably, the purchaser terminated that contract in early 2013, as a result of an unsatisfied condition precedent. No subsequent buyer has been found for the project. A number of sale processes were undertaken to secure a replacement transaction. Each was unsuccessful. As a consequence, the value of the Mozambique asset has remained uncertain.

519. [519]
     That asset is not a working mine, it is an undeveloped site. The site owned by the estate will require a significant spend on infrastructure on site. The site has a very significant, high quality coking coal deposit and neighbours very large working mines with significant infrastructure, including a railway line to a port. The most likely buyer would be an adjoining owner.

520. [520]
     Its value was exacerbated by two things. One was the coal market internationally went into a very depressed period. Further, the neighbouring owner significantly wrote down the value of the neighbouring project in Mozambique which in terms of comparative sales value, was unhelpful. In Boyd’s view, the purchaser saw the deal not being as attractive commercially as when it signed up and relied on the special condition to terminate the contract. Boyd accepted that consequently, the shareholding in Karoon in relative terms, became more valuable in terms of the realisable assets of the estate.

521. [521]
     Boyd said that during the meeting with the beneficiaries on 4 July 2012, there was discussion about a wrongful death claim. Boyd advised he was awaiting legal advice. Boyd said that was a claim identified by the executor as something which should be pursued. The question was identifying whether there was in fact a claim, who the defendant might be and what the claim may be worth. There was a considerable amount of work to be done, both locally and overseas. Boyd said that claim never proceeded on the basis of the advice received relating to those matters. It was also fair to say that none of the deceased’s family had any interest.

522. [522]
     During this meeting, there was a discussion about the charitable foundation. Boyd said he was awaiting the advice of solicitors and draft documents. The solicitors had prepared a draft charitable foundation document for the executor and given the executor some advice. Boyd wanted to see that advice and documentation.^[102]

523. [523]
     Boyd said the structure of the estate was such that the estate never had a cash balance of its own. Whenever the estate needed cash to pay distributions to the beneficiaries or to pay the costs of running the estate itself, funds had to be advanced from Talbot Group entities. The estate then paid whatever needed to be paid. At the end of each financial year, in order to avoid any tax issues, there was a The charitable foundation was ultimately the subject of an application for judicial advice. dividend paid down from TGI to the estate as the holder of its shares. That amount was then paid back to the company to repay the loan which had been made progressively over the preceding financial year. For that reason funds marked for the foundation were sitting in cash in TGI.

524. [524]
     Boyd said during his meeting on 4 July 2012, there was a discussion about future communications. Boyd said his preference was to keep them open, as in amongst all the beneficiaries at once. During this part of the discussion, Boyd said Amanda said words to the effect, “And now do we find out what Ken wanted to do with his will?”. Boyd said that before his appointment to the role of administrator, Amanda had never directly asked him for a copy of the new Will file. There had, however, been some discussions about its content throughout the period of the second defendant’s involvement.

525. [525]
     Boyd said he replied that the initial instructions and discussions would have seen a similar outcome. Boyd said he was referring to what the deceased had said about reverting to his previous Will if he had to make provision for Alexandra and Claudia. Whilst there might have been variations within the percentages, there was, in his view, no material change.

526. [526]
     Boyd said at this point, Courtney said the executor had told them they were actually cut out of the deceased’s Will or would have been cut out of the deceased’s new Will. Boyd said he replied that the new Will process was incomplete. Boyd said he told them there had been a conversation, before the deceased’s final trip, in which the deceased advised Boyd he had changed his mind. Boyd said he was not privy to those details. Boyd also said the executors’ name had not come up in discussions about the executor.

527. [527]
     Boyd said during this meeting on 4 July 2012, there was a discussion about Villa Calvi. Amanda said she was going overseas at the end of July for an extended period. She was shipping over a container load of furniture. She also intended to send over some of the furniture from the family home in Brisbane. Amanda said she would have that catalogued and photographed and valued beforehand. Liam and Courtney said they had no objection to that process. Amanda also said she would be staying in Paris pending the completion of works at Villa Calvi.

528. [528]
     Boyd said on his appointment as administrator, he looked to the directors of the Talbot Group companies to manage the assets. They had a familiarity with those assets and the experience and skill set to manage those assets. The day to day running and decision making was left to the directors, Wood and Walker. He knew them well and had a very good relationship with them. He described it as a “very harmonious cooperative style of management”.^[103]

529. [529]
     Upon commencing as administrator, Boyd did not recall receiving any specific instructions or enquiries about the directions the executor had given which was still extant at the time of his appointment. His expectation was that as he was continuing with the same executors and advisors who had been brought in from the start of the estate, anything relevant was going to be brought to his attention. Boyd did not give any specific instructions in July 2012.

530. [530]
     Boyd said Wood and Walker reported regularly to him in terms of particular assets held by the companies. Contact was often multiple times a day. Both Wood and Walker also took advice from advisors and consultants in particular fields. They provided those advices to Boyd. He discussed corporate strategies with Walker and Boyd. At no stage did any matter come to Boyd’s attention or knowledge which caused him to consider removing them as directors or cause him to consider overriding any of their decisions and advice.

531. [531]
     One of the investments held by those companies was Karoon Gas, an Australian based ASX listed company involved in the oil and gas industry. It was an exploration company, holding tenements off the north-west of Western Australia, offshore Brazil and offshore and onshore Peru. The tenements of Western Australia held gas. The tenements in South America held oil.

532. [532]
     Other resource stocks held by the estate, included Bellzone Mining (listed on AIM Market in London, an iron ore mine with interests in Guinea and Africa); BrazIron (initially a private company incorporated in Bermuda but listed on the ASX during the period of the executorship); Chant West Holdings (previously Goldminex Resources, a mine with interests in Indonesia); Reliance Resources (a Canadian listed gold miner); Robust Resources (an ASX listed company based in Papua New Guinea with holdings in gold and other minerals); Southern Uranium (an ASX listed company with holdings in Uranium); and SITE Group (an ASX listed training organisation, which had operations in Australia initially but then set up a substantial base in the Philippines).^[104]

533. [533]
     Boyd said when he assumed the position as administrator, he also assumed the role of principal of a trust, the TET Trust. In that role, he had the power to remove the trustee if he thought it fit and appropriate. At no time during his administration was there any matter or event which caused him to consider removing the trustee of that trust. The trust held an interest in Xanadu Mines (an ASX listed company with mining interests in Mongolia) and interests in another registered training organisation and a retirement village complex, as well as a priority growth fund. TET also had intercompany liabilities.

534. [534]
     As a consequence of the combined shareholdings of TGI and TGH, the Talbot Group was a substantial shareholder in Karoon. As such, it had an obligation to notify movements of its shareholding greater than 1%. One thing of concern was the potential for the receipt of market sensitive information which could place the estate in the position where it was not able to deal with the shares. Care also had to be taken in dealing with other Karoon shareholders so as not to place the estate in a position of forming an association with them for the purposes of any conduct. Boyd said Karoon was also a volatile stock.

535. [535]
     Boyd said when he was first appointed as administrator, he spoke to Wood and Walker about the Karoon shares. They told him that during the executorship, an offer of $10 a share had been received for that holding but had been declined on the basis of advice from Nissen and with the concurrence of the executor. Boyd said he was not able to locate any documentary record of such an offer.

536. [536]
     Boyd said Wood and Walker also told him that on the basis of advice from Allens, there had been a process put in place by the executor where, in relation to all of the major assets, valuation advice was obtained from KPMG before the assets were disposed of, so that those involved in the administration and on the corporate side were informed in their decision as to how, when and what to sell and at what price. Boyd said KPMG had provided an indicative valuation of the Karoon shares to the executor, on 28 March 2012, of between $4.30 and $6.70 per share. KPMG noted that the Talbot Groups interest in Karoon may be considered a “blocking stake” for which an acquirer may be willing to pay a premium. It also noted that as at 23 March 2012, Karoon share price closed at $6.55 which was within the range of indicative value per share.^[105]

537. [537]
     Boyd said he utilised consultants other than RBC including UBS (in an advisory capacity from towards the end of 2012 through to October 2019); and Deutsche Bank (as a consultant and to provide advice in relation to the Karoon shares from early 2013 until about 2018); Allens Linklaters also provided advice. They had been retained prior to Boyd commencing as administrator. They continued to provide advice thereafter, on and off in relation to Karoon through to late 2016. KPMG was also engaged as consultants in respect of the Karoon share, providing valuation advice from time to time. A resources consultancy called RISC provided advice on the value of the assets within Karoon and also Karoon itself as an entity. Rothschild was also engaged from about 2015 to provide investment bank type advice in relation to the Karoon shares. They continued to provide advice through to October 2019. King & Wood Mallesons were engaged as solicitors for advising on and documenting any transaction for the disposal of the Karoon shares. In October 2019, Ord Minnett was engaged to provide advice.

538. [538]
     Boyd said the advice provided by the various entities took the form of conference calls, meetings and telephone calls occasionally one on one. RBC provided daily reports on price movements and some items of general commentary. RBC also provided copies of any ASX announcements. Periodically, more substantial advice was provided by these consultants, including research papers and price movements. Later, Boyd received weekly reports from Deutsche Bank giving a perspective not only on Karoon but also on other players in that market. Boyd personally reviewed each of those advices and communications. He regularly discussed their contents with, Wood and Walker.

539. [539]
     Boyd said that after his appointment as administrator, he had a conversation with RBC on 27 June 2012 in relation to Mozambique. RBC also advised they were waiting for things to happen in respect of Karoon and that the remaining assets were “rats and mice”.^[106] RBC suggested some be placed on hold in the current market. Boyd was also advised that the RBC mandate was to expire in June 2012.

540. [540]
     RBC had, up to Boyd’s appointment, been providing regular advice to the estate, pursuant to a mandate entered into between the executor and RBC. It provided for a monthly payment which was a significant sum. Boyd read the RBC mandate carefully. RBC came to see them on 30 July 2012.

541. [541]
     Boyd said the 30 July 2012 meeting with RBC was one of the most important meetings he had immediately after his appointment. RBC ran through asset by asset and where it stood in terms of realisation prospects and processes. His recollection of the discussion about Karoon was that it was a volatile asset. It was an exploration company which had done well. RBC suggested they would look at a sale recommendation in the range of $6.50 - $7.50 per share but said Boyd should await the results of exploration work then being undertaken. It was recommended by RBC that the situation be monitored. There was a discussion about value or desired price. Wood raised whether $10 a share was a sensible target price having regard to the drilling results still to come in. Wood spoke about Karoon having a good deal of blue sky. RBC did not cavil with that approach.

542. [542]
     In the 30 July 2012 meeting, RBC also advised on the sale of the remaining holdings. Xanadu Mines’ price was around 70 cents per share and had fallen. RBC queried whether it was a possible long term hold, if there was no immediate interest in selling those shares. Bellzone had also fallen in price. RBC queried whether it was a possible long-term hold if there was no need to sell. RBC advised the downside was negligible. In respect of Goldminex, RBC recommended not to sell now; the Talbot Group could not get out of it as it was not liquid. For BrazIron, RBC recommended against action if there was no need to sell. For Robust, RBC recommended against action, it was described as being illiquid. For Advent, RBC said it should be sold if possible but noted it was not a listed asset so there was no ready market. It would necessitate searching out a buyer for interest.

543. [543]
     Boyd said during this meeting there was a discussion about a continuation of RBC’s mandate going forward. RBC raised an issue with regard to the scope of the work on the Mozambique asset. The work undertaken went well beyond the scope imagined at the time of the mandate. It was proposed that after the conclusion of the 12 month period following expiry of the mandate, there be an extension on a monthly fee. Boyd said RBC were being paid a monthly working fee of $50,000, which reflected the extensive work done on the Mozambique sale. RBC indicated they would not enforce a 12 month tail fee, even if RBC were not involved in the next 12 months, except for Karoon, where they would insist on a tail fee. Boyd said the tail fee worked on the basis that if an asset was sold within 12 months after termination of the mandate, the Talbot Group would pay RBC the fee designated for the sale of the particular asset in the mandate. The mandate had different levels of fees depending on the circumstances of the sale. Boyd said RBC wished to negotiate an increased fee amount. Boyd replied that he would speak to Wood and Walker.

544. [544]
     Boyd said when RBC recommended, on 30 July 2012, that the estate hold the Karoon stock and wait for drilling results due in the next four weeks, the Karoon share price was $3.65. It had tracked down from the date of Boyd’s appointment, having risen to a high point of $4.49. This revised recommendation was contained in a written summary of RBC’s presentation provided to Boyd on 30 July 2012. That written summary provided a reason for that recommendation, namely, that RBC considered the downside from poor drilling results to be low/minimal from current stock price levels and Karoon was about to release drilling results and a potential outcome from Brazil Farmout. RBC said at the current share price levels, Karoon potentially became an attractive corporate target. Boyd said that latter topic came up a number of times over the life of the Karoon shareholding, with the prospect of Karoon being a potential takeover target and the Talbot stake potentially being significant in that context.

545. [545]
     At the meeting of 30 July 2012, Boyd received a written report from RBC in relation to Karoon, dated May 2012. It contained a summary of recent developments and an indicative risk assessment and concluded there would be a share price re-rating should news in relation to recent drilling be positive. It also contained a description of activities going on in adjacent areas by other entities. The report referred to the potential share price, upside from positive expiration results could be large, but noted that the expiration is risky and share price downsides should not be discounted. It gave a broker estimated 12 month share price target range between $7.50 and $11 per share. Boyd said it was in that context that there was a discussion of $10 being a sensible target.

546. [546]
     The document noted a risk if the Talbot Group, as a substantial share holder, attempted an overnight block trade of its holding in Karoon which was unsuccessful. The risk was that market would become aware the Talbot Group was an immediate seller of its interest which would potentially have the effect of creating an overhang which would in turn potentially hold the price of Karoon shares until such time as that overhang was removed. Factors which would contribute to the risk of a block trade not being executed was the volatility of the share price, or volatility in the daily volumes that were being traded. Boyd said he was advised that the best tine to sell was when there was a steady price and a steady volume, sufficient as a guide to the likely ability to actually offload the holding. The written document concluded that RBC’s recommendation was to hold and monitor the sale of the shares on a weekly basis.

547. [547]
     Boyd said that in the course of the meeting, RBC said the content of that document was now somewhat dated but contained essential information to inform Boyd. The recommendation on the day at the meeting was to hold and await the drilling results.

548. [548]
     Boyd said he discussed RBC’s recommendations with Wood on 31 July 2012. Wood considered RBC had been well paid for what they had done but had not performed well. Wood agreed there was no urgency in selling the remaining holdings. Goldminex and BrazIron were brought to the Talbot Group by RBC. Wood said there was no market for those stocks at the moment. Wood recommended talking directly to Karoon but noted a caution in hearing things that were not in the marketplace. Boyd said Wood’s view was that RBC did not have the ability to transact the sale of Karoon via a book build or block trade.

549. [549]
     Boyd said Wood and Walker were of the view that RBC had effectively done as much as they could and that the assets were better managed in house. It was decided to terminate the mandate. Boyd did not acquaint himself with how RBC had been selected by the executor.

550. [550]
     Walker’s letter of termination to RBC, dated 17 August 2012, specifically referred to a meeting of 30 July 2012, noting that discussions at that meeting related to RBC’s engagement and the remaining unsold assets. The letter continued “We concur with your assessment that the majority of the remaining assets are essentially a ‘hold’ proposition at this point in time.”^[107] The views set out in the termination letter were Walker’s views and those of Wood.

551. [551]
     Boyd said he had, by that stage, very limited exposure to RBC but the things which they said resonated with him and he was happy to endorse that view. Both Walker and Wood expressed to Boyd the view that the remaining assets were essentially hold propositions, as did RBC at the meeting on 30 July 2012. Boyd said there were various permutations and combinations around those assets but the main thrust of the RBC message was hold, with assets to be dealt with individually.

552. [552]
     Notwithstanding that termination, Boyd continued to receive advice from RBC because there was an arrangement where they had a tail fee which was payable for 12 months post termination. RBC continued to give daily reports on announcements and prices for the assets which they had and continued to keep in touch quite closely about Karoon.

553. [553]
     On 13 August 2012, Walker received an email from a broker indicating the broker had a client looking to buy 300,000 Karoon shares, at around $4.30 per share. The broker enquired whether the Talbot Group had any interest in selling shares. Walker emailed both Boyd and Wood stating, “I assume I reply in the negative”. Wood and Boyd replied that was correct. Boyd said he had a conversation about the approach with Walker. Boyd agreed with Walker’s sentiment that the response should be in the negative as the recent meeting with RBC had spoken of a target price of $6.30 to $7 per share. $4.30 was well below that and the number of shares was miniscule in terms of the Talbot Group shareholding.

554. [554]
     On 17 August 2012, Walker forwarded a letter to RBC advising that the Talbot Group concurred with RBC’s assessment that the majority of the remaining assets were essentially a hold position and that there was no need for RBC to have an ongoing engagement for those assets. Accordingly, the monthly work fee for $50,000 was no longer warranted and it was proposed that RBC services under the mandate letter be terminated from 24 August 2012. The letter noted that individual assets could thereafter be dealt with on a one off basis. Boyd said that letter reflected the position that the Talbot Group was no longer getting value from RBC.

555. [555]
     Boyd said Wood and Walker forwarded to him various email communications they received in relation to approaches to sell the Karoon shares on their behalf. One approach was from RBS Equity Capital. To Boyd’s knowledge, no meeting arose out of that approach. Another approach was from Pegasus Global Wealth. Its email, dated 21 September 2012, contained research documentation. The accompanying research material included a document, in which Macquarie Equities Research rated the shares as an outperform. That was equivalent to a buy recommendation, reflecting an expectation that the Karoon share would outperform the market. The price at the time of the production of that Macquarie document was $5.50 per share. The document gave a 12 month target price of $10 per share. Another research paper annexed to the email, by City Research, listed a target price of $9.99 per share. The email also attached a report from Morgan Stanley in relation to an announcement by Karoon. That report considered the announcement positive. Boyd said that nothing in the documents annexed to that email gave him any negative indication about Karoon’s prospects.

556. [556]
     In that email chain, Wood referred to a telephone call from the executor stating that the executor wanted Wood to keep an eye “on Karoon. It’s going up as per OUR plan”. Boyd said that was an acknowledgement the stock was going up consistently. Boyd said he did not know the executor’s plan. Walker said the reference to “as per OUR plan” related to an expectation of an increase in the Karoon price because of the drilling and Wood’s understanding of the stock.

557. [557]
     Walker received an email from Wood on 10 September 2012 in respect of an approach from a broker to discuss the Karoon stake. Walker responded that it was important for Wood, Walker and Boyd to meet together and that given there was no urgency, to advise a meeting when all three could meet together.

558. [558]
     Walker agreed that in March 2012 the executor had made it clear that the estate was to be wrapped up in the two years but did not agree that the description of there being no urgency reflected a change in approach by Boyd as administrator. Walker said it was a catch up, not a sales happening. Nothing had been communicated to Walker to suggest a change in the attitude to urgency. Walker said even under the executorship a sale of the Karoon shares had to be at the right price. That is why they had not been offloaded by the executor.

559. [559]
     Walker agreed the decision in relation to any recommendation by the professional advisors as to the sale of Karoon shares was one for the administrator. Walker said he and Wood would consider it, noting there were various options for disposal of that shareholding. Walker said it was not “as easy as disposing of it”^[108] but that ultimately the decision was for Boyd, as administrator.

560. [560]
     On 15 October 2012, Boyd was copied into an email sent by Walker to Wood in relation to Karoon’s upcoming AGM. It noted the Talbot Group was not in a rush to sell and said it may be good to show it was longer term investors in Karoon. Boyd said both Wood and Walker had told him it was important for the Talbot Group to be seen as a solid investor. They said if it was necessary to move on Karoon shares, they may need to do so quickly but did not want to signal in advance their plans.

561. [561]
     On 30 November 2012, Boyd met with Walker, Wood and RBC. Boyd was given an update document prepared by RBC in relation to Karoon. It referred to a significant drilling program in Australia and South America and the likely need for Karoon to raise new equity, with a consequent dilution in Talbot Group’s shareholding. The written document recommended the Talbot Group considered disposing of its Karoon shareholding prior to any expected equity raising.^[109]

562. [562]
     Boyd said he discussed the document during the meeting. RBC explained there was competition in the international LNG market. Karoon was considered too small to play in that market, with current protections that Karoon would need a significant capital input in 2014. Karoon was a stock with a wide range of potential values, swinging either up or down depending on the results of exploration. The Talbot’s Group stake was seen as strategic with a need to move reasonably quickly if a disposal opportunity came along. RBC’s thinking was that situation could be as early as the end of the first quarter of 2013. RBC advised it would monitor the situation and develop its thinking about disposal options. It was proposed they meet again at the end of January 2013. Boyd said at the conclusion of that meeting, RBC was not recommending the Talbot Group go immediately to market.

563. [563]
     On 15 December 2012, Boyd was copied into an email between Wood and Gordan Ramsey at UBS. Ramsey was a senior analyst with experience in oil and gas. The email was in response to an interest expressed in the Karoon holding. Wood advised he would reply once Wood, Walker and Boyd had time to get together to discuss Karoon. Boyd considered Ramsey suitable to be a consultant in relation to the Karoon shares. Boyd said that was the first occasion that Ramsey was raised and he believed he met with him shortly after that initial contact.

564. [564]
     On 25 January 2013, Boyd had a telephone conference with RBC. Karoon had announced they had found oil in Brazil. RBC described it as a solid announcement, noting it was a secondary target. RBC described it as a good indicator for the primary target. RBC considered Karoon could go “ultra crazy”. It had had a good run that morning. RBC raised options including selling the Talbot stake as a block trade or quick build or selling down to 5%. Boyd noted this was the challenge, balancing the risk in selling none or in lightening up by selling some of the holding. Boyd said at the end of that day, Karoon’s price closed at $6.15 per share. At the end of the preceding day, it was $5.39 per share.

565. [565]
     On 29 January 2013, Boyd was sent a copy of a research paper prepared by Deutsche Bank in respect of Karoon. It rated Karoon as a buy and set a 12 month price target of $8.80 per share. It listed key risks as including exploration outcomes, funding risks, project development and execution risks and farmed down outcomes. Boyd was also copied into an email from UBS to Wood. UBS noted Karoon had delivered a good result from its well offshore of Brazil, although it was early days and the field looked to be smaller than estimate pre-drill. UBS sent as an attachment to that email, a research paper it had prepared on Karoon. It gave a 12 month rating of buy, with a 12 month price target of $8.00. That research paper noted an upside scenario of a successful discovery of that magnitude being worth $11.86 per share net to Karoon; and a downside scenario of there being a significant weakness in the share price, should both be unsuccessful.

566. [566]
     On 19 February 2013, Boyd was sent an email from RBC advising that Karoon was listed as high as $6.95 that day, noting it was $5.30 on 23 January 2013 and $6.33 on 6 February 2013. Later that same day, Boyd was emailed by UBS, asking whether it was convenient to call on him that day. Boyd responded by email advising it would be best on the following Thursday or Friday. Boyd further advised, “Any substantive discussion about the Talbot Group’s Karoon stake will need to involve the two directors of Talbot Group Investments Pty Ltd (Ewan Walker and Denis Wood), both of whom are away from Brisbane at present.”^[110]

567. [567]
     On the afternoon of 19 February 2013, Boyd received a telephone call from RBC. Boyd was advised there was not much volume in sales of Karoon and that the Talbot Group should wait until the next drill result. Boyd said the closing price for Karoon that day was $7.06 per share.

568. [568]
     On 21 February 2013, Boyd had a telephone discussion with Wood who advised there was no urgency to talk to RBC. Wood noted that Karoon had broken $7 and was a stock that could find a lot of oil and go to $20 or $30 per share. Wood advised that between $8.50 to $10 was where you would see original investors bailing out. He advised more brokers were contacting him. He said the Talbot Group was not a strategic investor, and that Wood expected a bid for Karoon in a couple of months. He would recommend downloading some stock over $7 if the trading volumes were in the millions per day.

569. [569]
     On 25 February 2013, Boyd had a telephone conference with Walker, Wood and RBC. RBC noted the Karoon share price was $7.36 at the close, on volume of 1.1 million shares for the day. RBC wanted to look at the broader picture and what they were hearing in the market and the ramifications for the Talbot Group. RBC noted there were potential issues for Karoon with the potential squeeze by other operators. RBC advised they were hearing UBS was telling everyone they had the Talbot stake; that Karoon was looking to raise capital; and that UBS would put it together in a package and come to the market. RBC said the last capital raising was at $7 per share. It was understood Karoon was looking to do a book build for the capital raising at about $6.35 per share.

570. [570]
     Boyd said Wood advised Karoon was “on a lot of lips”. He had had a number of calls. Wood said he had heard nothing about UBS raising money or selling the Talbot Group’s stock. RBC assumed Karoon was generating some interest in the market and advised the Talbot Group would want to get ahead of the game. RBC thought $7 was the magical number. Wood said he had never had much confidence in $7, noting that with the action in Brazil, whatever had been done in the past was null and void. RBC agreed, but noted a concern in waiting for all good news and the placement being done. By that stage, everyone was full up with the stock, and the Talbot Group could not sell.

571. [571]
     Wood advised that the market was not there, at a million shares a day. RBC said not to rely on daily volumes noting you would have to build a book and sell in a line. Wood advised that if the price was getting close to $8, you would have to reconsider. RBC said it was getting very strong reliable feedback from good clients noting there were two triggers for capital raising, one was $7, the other was finding rigs to do the trials and appraisal drilling. RBC thought a decision was required and advised it would send a note outlining proposals. Boyd agreed that the overall summary of that advice was that RBC proposed making an offer to build a book and then to seek to sell the shares in the market.

572. [572]
     On 26 February 2013, Boyd received an email from RBC containing the offer foreshadowed the previous day. It involved RBC agreeing to purchase the Karoon holding, at a price not less than $7, at close of market. That price represented a 5% discount (the previous day close was $7.37 per share). An order book would be built around the $7 price for the Karoon shares overnight, and a final price agreed before the market re-opened. Settlement was to occur in three days post the transaction pricing. RBC proposed a 1% fee, payable on the $7 share price. If the shares were sold above the $7, RBC agreed to share the upside selling price. Boyd said the closing share price on 27 February 2013 was $6.89 per share.

573. [573]
     On 26 February 2013, Boyd sent an email to Ken MacDonald advising there had been a sizable movement in Karoon share price since December and the Talbot Group had received a proposal from RBC to take its entire holding of Karoon at $7 per share, with a percentage of any upside resulting from RBC’s book build. The email stated that Boyd’s understanding from Wood, was that under the executorship, a fairness opinion was obtained from KPMG. Boyd said there were varying views as to the utility of a fairness opinion for a greenfield operation like Karoon, and that he would be interested in MacDonald’s thoughts/guidance on that issue. Boyd noted that it had been suggested RBC could provide an opinion on price but said he had reservations about the utility of such an opinion if the proposal under consideration had emanated from RBC.^[111]

574. [574]
     Boyd described a fairness opinion as a form of indicative valuation. Boyd said that in the past, both RBC and KPMG have provided fairness reports. Obviously, in this situation, the Talbot Group would not be able to get a fairness report or opinion on valuation from RBC, as it was a bidder for the holding.

575. [575]
     Boyd said he spoke with MacDonald on 27 February 2013. MacDonald said he had advised the executor it was desirable to have a fairness report for the sale of the major assets. Karoon was not only major but also highly risky, noting that if the share price went to $20 per share in six months, it is more sensible to have a report. MacDonald described RBC as going from advisor to principal and said he had concerns, noting that if RBC wanted to propose a transaction, it was difficult for the Talbot Group to test it. MacDonald said RBC needed to decide which side of the fence it sat on and described it as a conflict between acting as broker and being a purchaser. MacDonald said RBC should join the queue of bidders. MacDonald said KPMG had done a draft indicative valuation in March 2012. He thought they should be able to update that quickly. Their range then was $4.30 to $6.70. MacDonald advised he would go to RBC for an opinion, only in writing, and also to KPMG.^[112]

576. [576]
     Shortly after that conversation, Boyd had a telephone conversation with RBC. Boyd advised that in relation to Karoon, he had spoken to MacDonald who had expressed a concern about RBC’s role, whether it was as an advisor or a bidder and the conflict inherent in those roles. RBC replied that if they had a mandate, they would be unable to bring a bought deal which is how this proposal would be described. RBC recognised there were still obligations in relation to the tail fee situation. RBC believed their offer maximised the outcome for the Karoon holding and considered the best way to maximise that outcome was to build the book and maximise a pricing outcome, together with entering the market at a volume, although it was noted that an opportunity had not been seen for a couple of years.

577. [577]
     RBC described the proposal as an underwritten position and advised it could not make a recommendation to the Talbot Group and that what MacDonald had said was a fair comment. RBC said it would only underwrite if it thought the demand was out there on the stock. RBC said underwriting gave a floor or safety level. If the Talbot Group waited for all the news and the price ran up, RBC observed that the market then was fully priced and it would be difficult to sell at that level. RBC’s view was that at roughly $7 per share, it was not too “toppy” and provided a way out. RBC observed that the feedback was that the shares had run up a lot and Karoon was not well held by institutions.

578. [578]
     Boyd had a further conversation with RBC later that day. RBC advised it had attempted to put a floor price and it did not see a conflict. RBC felt it had provided the Talbot Group a certainty. RBC understood the Talbot Group’s stake was being talked about in line with the fundraising, and that RBC was not out there shopping around the stake. Boyd said his question to RBC was whether it was a bidder or an advisor. RBC said two things had happened, its advice over time had been consistent at lows of hold, hold, hold, but that you had to leave something for others in the interesting range. RBC thought the proposal might be attractive and they had “been on the money with all advice so far”.^[113] RBC concluded that they saw themselves as advisors and would retract the proposal. Boyd agreed that at the end of the conversation, the proposed deal was no longer on the table.

579. [579]
     Boyd had a conversation with Wood later that afternoon. Wood advised that RBC could not do a book build on Karoon as it did not have the coverage in that market. Boyd advised Wood of his conversation with MacDonald. Wood said MacDonald had previously advised the executor that if an offer was in the range of a fairness report, the stock would have to be sold. Wood said a fairness report would be a problem, in his opinion. Wood also noted that the Karoon holding was, from time to time, being said to be out there in the market when there was no mandate for anyone to sell the shares. Boyd said it appeared RBC was complaining that UBS was out there with the holding and UBS was saying RBC was out there with those shares.

580. [580]
     Boyd said he received a telephone call later that day, from Karoon’s CEO, advising he had heard that RBC was offering the Karoon holding. Boyd advised they were not doing so on our instructions. He said the Talbot Group continued to watch the Karoon holding, but had no firm plans. The CEO told Boyd to call him if they needed a hand selling their shareholding.

581. [581]
     On 28 February 2013, Boyd received an email from the son of Karoon’s CEO forwarding correspondence received in the previous days in relation to RBC “spreading rumours and trying to build an interest in a sale of TGH stake in Karoon”.^[114] The email observed that RBC appeared to be conducting a mass market campaign rather than a discrete book build and this was very detrimental to the momentum of value in Karoon’s share price. The email requested Boyd consider making a public statement on the matter. Boyd responded to that email, on the afternoon of 28 February 2013, confirming his advice to Karoon’s CEO on the previous day that the Talbot Group had not mandated the sale of the holding. He also advised he had informed RBC of the matters raised with him by the Karoon CEO and that Boyd did not believe it appropriate to make any public comment. Boyd said he consulted with both Wood and Walker, before sending that response.

582. [582]
     On 1 March 2013, Boyd sent an email to KPMG advising that its proposal was acceptable to Boyd and the directors of TGI. Boyd noted that he looked forward to receiving the RISC proposal when available, asking if it could be done as soon as possible, within four weeks as the maximum. Boyd said KPMG had been asked to update their previous indicative valuation in conjunction with RISC. KPMG responded that morning advising it would prepare an engagement letter.

583. [583]
     On 1 March 2013, Boyd had a further meeting with RBC in which reference was made to a note sent to Boyd about an hour earlier referring to an opportunity that was imminent. RBC noted, in respect of Karoon, that there was volume at $6 to $6.50 per share and whilst analyst were bullish, there was not a lot of strong buying by institutions. RBC suggested the Talbot Group could walk the whole line out at low $6 per share, but that it would get harder to sell a line of that size without more news. The stock would have to be greater than $7 to get $7 for the holding as the average discount was about 5% to build this book. RBC said there were two scenarios. First, selling in one line, at a price which may not be attractive. Second, sell in two stages and be opportunistic once the holding was below 5%. RBC thought it hard but doable to sell the whole line at $7 and noted that if it was able to sell down the holding to 7%, that would reduce the risk which RBC would see as a win-win. Boyd said the closing share price on that day was $7.07. By a week later, the price had dropped to $6.75.

584. [584]
     RBC also provided Boyd with a report on Karoon, dated March 2013. That report recorded Karoon share prices being up 55% from 6 December 2012, primarily due to the success of an exploration well offshore from Brazil. The report listed various broker price targets ranging between $8 a share and $10 a share with the average 12 month price target being $8.78. The report concluded that RBC recommended the Talbot Group seek to sell its Karoon shareholding in the next couple of weeks, noting that timetable would limit the downside risks or execution challenges which would result from a Karoon equity raising or adverse drilling news flow.

585. [585]
     On 5 March 2013, Boyd sent an email to KPMG advising that RBC had foreshadowed that in light of recent share prices movements and the possibility of a capital raising, it was possible that a selling opportunity for the Karoon holding may emerge in the next couple of weeks. Boyd requested KPMG compress the timing for its fairness opinion. On the same date, KPMG advised timing was constrained by RISC, which had existing commitments and could not fit the work within the relevant timetable. KPMG said it could do the report and update it on receipt of RISC’s contribution.

586. [586]
     On 5 March 2013, Boyd had a further conversation with RBC in which RBC advised that if the stability issue in respect to the Mozambique sale was not resolved, and that sale was lost, there would be a public announcement, and people may draw a line to the Karoon stock and conclude the Talbot Group needed to liquidate Karoon. Whilst that was not the reality, that perception was possible. RBC suggested it could be opportune to have the Mozambique project in a holding pattern so that they could have a couple of weeks to sell Karoon.^[115]

587. [587]
     On 6 March 2013, Boyd spoke to Walker by telephone. He discussed the preparation of the fairness report by KPMG and the constraints with RISC. Walker advised that he did not see they had much choice, having regard to the process last time. Further, RISC would have new data which they needed to analyse.

588. [588]
     On 25 March 2013, Boyd received a presentation from KPMG indicating its indicative valuation of Karoon. It was in draft form and did not have within it the RISC analysis. It estimated a diluted value per share range of $6.23 to $8.18, excluding any premium for control. It noted the Karoon share price, as at 21 March The sale of the Mozambique project was terminated on 25 March 2013. 2013, closed at $6.23. It listed key risks including significant uncertainties in the prospects of a successful exploration and development program but observed that Karoon’s current share price already reflected, in-part, the potential inherent in Karoon’s early stage hydrocarbon assets. The report said that notwithstanding that factor, any exploration success arising from drilling campaigns may result in a material re-rating of the share price. Conversely, should there be a set back in the mineral development program, there would be an anticipated downward correction of the share price, commensurate with such news. Boyd said the outstanding information, in respect of that draft report being provided by RISC, was focused on the actual valuation of the resource assets held within Karoon, which in turn informed an indicative valuation to be provided by KPMG.

589. [589]
     Boyd said later that day, he received an email from KPMG advising that the share price had fallen by 7% at that time of day by reason of a release which had been issued by Karoon as to its exploration well progress. The release advised the well had not been successful. Boyd said that was the rationale for the share price dropping as quickly as it did that day. KPMG said, “we will need to take this into account in the next report.”^[116] Boyd said Karoon’s closing price that day was $5.60.

590. [590]
     On 27 March 2013, Boyd received an email from Deutsche Bank seeking a meeting. That email observed the Karoon share price continued to demonstrate significant volatility. It said Deutsche Bank would present some enhancements to block sales to provide any upside for a short period post sale or to allow a premium to market exit. In response, Walker suggested a meeting the following Thursday.

591. [591]
     Boyd met with Deutsche Bank and Walker on 4 April 2013. Deutsche Bank provided a presentation, suggesting it would be possible for there to be a mixture of approaches as between a straight block sale and a simplified form of derivative approach. The accompanying discussion paper provided by Deutsche Bank referred to Karoon entering a critical time, with significant risks emerging over the next 12 to 18 months. It noted a block trade may result in a 2% to 4% discount to market, depending on block size and market conditions.

592. [592]
     Deutsche Bank had, prior to the meeting that day, provided a number of what were called derivative options. They involved an added amount of risk and uncertainty in entering into a transaction unlike a block trade where there were fairly defined parameters. Boyd said advice had been received from Allens that a derivative style transaction was not one which the estate ought to contemplate, so the block trade was the focus of the attention as the sales methodology.

593. [593]
     Boyd said that up to this point in time, there had been a discussion about dribbling shares onto the market over a period of time. The reason for not adopting that process was a concern that once the market was informed that the Karoon holding was in the process of being sold, it would create the overhang which would depress the share price until such time as the stake had been cleared or at least been brought down below the 5% mark so there was no ongoing announcements. Boyd said there were two issues in relation to that process. One was that there would be a need to make an announcement each time shareholding was reduced by 1%. The second was the chatter that was in the market about the holding being for sale. At that stage, the preferred methodology for selling the Karoon holding was a block trade. Boyd said that was a view preferred by Wood and Walker and he shared that view.

594. [594]
     On 10 April 2013, Boyd received a further draft indicative valuation report from KPMG. It contained the assessment prepared by RISC. That report showed an indicative value per share range for Karoon of $4.40 to $7.99 per share, as at 5 April 2013. The valuation estimate was prepared on a marketable minority basis. The report recorded that if KPMG were asked to opine on a specific offer that is part of a change of control transaction, it would consider the indicative valuation estimate on both marketable controlling, and marketable minority bases, informing a view as to whether that offer is fair. The report also noted there were limited comparable companies and transactions involving contingent resources as their primary asset. Accordingly, KPMG had used resource multiples analysis solely as a cross-check to their valuation. Boyd said the closing price for Karoon that day was $4.58 per share.

595. [595]
     On 22 April 2013, Boyd received an email from KPMG asking if there were any comments in relation to the report and whether they were happy for KPMG to finalise the reports.

596. [596]
     On 28 April 2013, Boyd emailed Walker and Wood querying whether, in the absence of any transactions in the offing and given the current situation with the market and Karoon’s drilling program, KPMG should be asked to hold further work on the report, noting that the work undertaken to date should provide KPMG with a solid reference point from which to update their research and provide final reports when there was something concrete to consider. Boyd said his rationale was that if there was not a need for finalised advice in order to inform a decision about whether to sell or not sell Karoon, there seemed little point in getting KPMG and RISC to do whatever work was required to finalise their report at that particular moment. Boyd said the closing price for the previous Friday was $4.25, so Karoon was sitting below the KPMG valuation.

597. [597]
     On 29 April 2013, Boyd sent an email to KPMG and Walker, advising that there were no comments on either report and indicating a preference that they hold the reports in draft with a request to update and finalise the reports when there was a transaction to consider. KPMG responded to Boyd’s email the next day, advising KPMG would speak with RISC and come back in relation to the proposal to leave the reports in draft. KPMG said that subject to RISC’s comments, the concern was that the valuations only have a relatively short “shelf-life”. Accordingly, there may be a need to implement a process to keep the valuations current so that KPMG could quickly assess any offer. KPMG said that was similar to the process included in the original engagement.

598. [598]
     Subsequently, Boyd received a note from KPMG proposing a three phase approach. The first phase was to review the publicly available information and provide the directors with an indicative valuation to assist in understanding the value of the investment. The second phase was to monitor the performance and announcements of the listed investment and issue a quarterly update, or more often as required. The third phase was, on receipt of an offer, to quickly update any analysis and provide an opinion as to whether, based solely on publicly available information, the offer price appears fair. KPMG recorded that the valuation should not be considered as advice or a recommendation to proceed or not to proceed with any transaction, but was to assist a determination whether any agreed transaction price for the investment was fair. Boyd said his concern had been that the reports seemed to take some time to prepare. If KPMG kept themselves and RISC current with what was being announced on the market and what was happening in the industry, they would be in a position to complete their report fairly quickly.

599. [599]
     Boyd met with KPMG on 2 May 2013. They discussed future reporting and monitoring options. It was agreed that KPMG would monitor announcements and reports, especially the quarterly reports of Karoon and where technical matters were involved, refer that to RISC for comment. If anything material was announced, KPMG would consider convening a phone call to discuss and review.

600. [600]
     On 7 May 2013, Boyd, Walker and Wood received an email from RBC advising that Karoon had yesterday announced a second oil discovery and that Karoon shares had closed up 22.6%, at $4.89 per share yesterday and were up a further 4% today to $5.09. On 10 May 2013, RBC advised by email that there had been “a massive movement” in Karoon’s stock price this week, closing at $6.69 that day.^[117]

601. [601]
     On 10 May, Boyd received a telephone call from UBS. It was a courtesy call. UBS advised there was “noise” from the market that someone was trying to sell the Karoon holding. Boyd advised there was no one with authority, although the share price was then within our range. UBS suggested that someone might be trying to warm people up for a transaction. They could put an offer, but nothing had been done in the market by UBS. UBS also referred to advice from the technical director of Karoon that there was still work to do and observed there was conjecture about the size of the column at one of the wells.

602. [602]
     Boyd said at that stage the only broker that had been spoken to was RBC. Boyd inferred if there was any basis to the “noise” in the market, it could be attributable to RBC. Boyd said an issue arose about activity by RBC within the market and questions of confidentiality. There were occasions on which RBC came with a recommendation to the effect that there could potentially be an opportunity emerging and almost immediately after that approach, the Talbot Group received contact from either Karoon itself or from other brokers telling them there were rumours in the market that RBC was selling the Karoon holding or had it to sell.

603. [603]
     On 13 May 2013, Boyd received an investment research paper from UBS. It referred to a valuation of $8 per share but noted that as a high risk/high reward play, investors should expect significant share price volatility. The research paper recorded Karoon shares as a maintain/buy.

604. [604]
     On 13 May 2013, Boyd met with Walker, Wood and RBC. RBC discussed that there was to be another three weeks of news flow before Karoon went quiet, before further drilling. The volume of share trading in Karoon stock was reasonable, with 1 to 2 million shares a day. RBC was informed of the position about KPMG updating valuations. RBC said there was a window which could improve over the next few weeks and a likely lull thereafter. RBC noted there had been previous discussions about options. Wood said there would be announcements over the next three to six weeks. Further, Peru was quite an expensive location for exploration drilling. Wood thought it was beyond the financial capability of Karoon. In his view, the next couple of weeks was a time to perhaps move. Wood noted the present drilling had not hit the horizon, and that the horizon was expected to be a big one. The Talbot Group would take advantage of a big lift in price and volume. Everyone knew it was not a strategic investor. It was agreed RBC would refresh its note.

605. [605]
     On 14 May 2013, Boyd met with Walker and Wood. They advised they both had $8.50 per share in mind as the target price for Karoon, although that depended on drilling results, price movements and volume. A lack of volume had been an issue over an extended period. They also noted that further drilling results were to come and said they would be comfortable with selling Karoon above $7 a share if there was a lift now. They agreed to use RBC if they were selling on the market but were not so sure if it were to be a block trade. Later that day, Wood forwarded to Boyd and Walker an email received by Wood in relation to Bell Potter research. It suggested the Karoon shares might rise in value, above $10 per share soon, with $12.87 per share being attributed to the current exploration work. Boyd understood Wood to be saying there was some significant blue-sky good prospects which made the decision around a selling time, method and price more difficult. Boyd said on the day of that email, the Karoon share price was $6.62.

606. [606]
     On 15 May 2013, Boyd received a briefing paper from RBC outlining research analysis price targets for Karoon, together with sell down structures for consideration and a risk assessment. That paper noted the Karoon share price was up 70% from 18 April 2013. It proposed three options for a sell down of the Talbot shareholding in Karoon. Option one was to sell down 100% of the shareholding. Option two was to sell down to less than a 5% shareholding. Option three was to make an initial small sale and a gradual reduction thereafter. The research paper concluded there was a downside risk to the current share price and recommended selling the Karoon holding in the next couple of weeks. Such a timetable would limit downside risks or execution challenges which could result from exposure to an equity raising or poor drilling news flow.

607. [607]
     On 16 May 2013, Boyd had a telephone conference with RBC. Boyd advised the Talbot Group was in the happy position of being well cashed up and comfortable and the question for it was whether the next few weeks saw a spike to a level that they would consider selling some or all of the stock. Boyd further advised he would check with Walker and Wood. Boyd agreed that at that stage he knew Walker and Wood would be comfortable at selling at $7 per share, although they had $8.50 in mind. The share price on 16 May 2013 was $6.15. A week later it was $5.76.

608. [608]
     On 17 May 2013, Boyd had a telephone conference with Walker, Wood and RBC. RBC noted that the Talbot Group was seriously looking at the $7 per share mark in March and that no one has a target above $7 at the moment. RBC went through the sell down options given in the briefing paper. Wood advised there was no point in dribbling out the shares as it would pull down the market. Wood was hoping for a volume and price lift and needed more news out of the drilling. RBC advised that the Talbot Group needed to be prepared if there was an opportunity and there would be news flow in the next few weeks. Wood said if the price and volume went up, the Talbot Group were ready to move. It would hinge on the next announcement from Karoon. If it was bad news and the price fell, the Talbot Group would sit and watch. RBC said to wait and see what the next few weeks brought to the market.

609. [609]
     Boyd said at that stage, they had completed an account opening requirement with Deutsche Bank so as to provide the ability to transact through that organisation as well. However, as administrator, he had not reached a decision as to whether to sell the Karoon shares and at what price. Boyd had absolutely no reason to doubt what Wood and Walker were saying to him so that if they reached a point where they had a fixed view and suggested now was the time to transact, Boyd would almost certainly have backed them.

610. [610]
     On 20 May 2013, KPMG sent an email to Boyd and Walker setting out its view as to the movement of Karoon’s value since its previous report. KPMG advised that based on its analysis and RISC’s high-level analysis, KPMG estimated an undiluted value per share of $5.25 to $9.06 per share, compared to the value per share range of $4.40 to $7.80 per share, set out in the draft report. The report also noted that KPMG’s review indicated the broker target price were largely consistent with those set out in its draft report and most brokers were maintaining overweight/buy recommendations for Karoon.

611. [611]
     On 21 May 2013, KPMG sent Boyd an email asking if he was happy to leave the analysis as it was, or did he think that RISC and KPMG needed to update the valuation reports to incorporate the content of their email of 20 May 2013. On 21 May 2013, Boyd sent an email to Walker, in response to KPMG’s email. Boyd advised he was inclined to ask KPMG to hold off incorporating the latest analysis into the reports. Boyd was not envisaging taking any action until there was more news which would, in return, require further analysis and a refreshing of the reports in any event. By email dated 23 May 2013, Walker agreed with Boyd. Walker said that given the reports were up to date already, he did not see the additional time would cause a problem when there was a need to have them fully updated.

612. [612]
     On 28 May 2013, Boyd and Walker met with UBS to discuss Karoon. UBS provided a presentation. There was discussion about opening an account with UBS to enable a transaction of Karoon shares. UBS was advised that no one was mandated to sell the Talbot Group stock; that the ability to consider derivative style transactions was constrained; and there was no pressure to sell the Karoon holding. UBS was also advised the Talbot Group and its advisors had the shares under constant review and could move quickly, with no fixed view on a required price. UBS identified the best solution would be for UBS to come with a transaction. Walker and Boyd agreed with that proposal. It was noted there was an absence of current catalysts and long leads in respect of the Karoon tenements.

613. [613]
     UBS provided a written copy of its presentation. That presentation noted that Karoon had significantly outperformed its peers over the past year and that all but one broker was recommending Karoon as a buy with an average price of $7.92 per share. UBS also stated that a 100% sell down was achievable and had the benefit of avoiding market perception of overhang. Options for the sell down included block sales, gradual sell down or structured options. UBS recommended a block trade with UBS guaranteeing the underwritten fixed price for all shares. Boyd said nothing in UBS’s presentation contained any particular negative comments or indications of a sale price below that discussed previously by the directors.

614. [614]
     As at 28 May 2013, the share price for Karoon was $5.52, below what the directors had indicated was in their view, an acceptable price. Boyd said throughout the subsequent month, the price of the Karoon shares was monitored with daily reports coming from RBC and weekly research papers from Deutsche Bank. Occasional papers were also received from UBS. There was a watch list set up for all of the Talbot stocks so that they could be watched, sometimes multiple times a day.

615. [615]
     On 25 June 2013, Boyd received a research paper from Deutsche Bank. It dealt generally with the Australian energy sector. There was reference to Karoon. Deutsche Bank’s price target was said to be $8.50 per share. It noted Karoon last closed at $5.15 per share.

616. [616]
     On 7 August 2013, Boyd had a telephone conference with RBC. Boyd was advised that Karoon was on a trading halt with a $150 million capital raising. RBC was not sure how it was structured and as to whether it was an offering or a placement. RBC advised it was thought it would take the market by surprise, on the negative side, as it was a fair way off known capital commitments. The trading halt ceased the following day.

617. [617]
     On 9 August 2013, Boyd and Walker received an email from KPMG giving its view as to the moment in Karoon’s value since its May update. Its views were based on an assessment of the impact of announcements made by Karoon. Considering the trading halt on 7 August 2013, reports in the media, and a RISC value impact referenced by KPMG, KPMG estimated Karoon’s undiluted value per share at $5.10 to $9.25, noting that the high end of that valuation range was in line with the recent placement and share offer although at the top end of broker valuations.

618. [618]
     On 13 August 2013, Boyd and Wood were sent an email by Walker, advising that Walker had been contacted by Deutsche Bank to see if there was interest in selling a significant portion of the Karoon holding. Deutsche Bank had a mandate to sell four to six million shares but believed it could be increased to 12 to 13 million shares, being approximately 50% of the Talbot Group holding. Deutsche Bank thought there would be a discount to the current market price but not significant, but said there may be a request for a lockup period. Walker said he had advised Deutsche Bank that the Talbot Group had a recent valuation and believed there was still more value. Walker said he was comfortable in sitting tight. He asked if Boyd and Wood agreed. Wood replied it was a tough call, but agreed with Walker.

619. [619]
     Boyd said the reference to a lockup period related to an agreement not to trade in the stock for a particular period of time. Boyd thought a lockup was an unacceptable constraint. If there was to be a circumstance which occurred during that period at which the Talbot Group would sell, it would be prevented from doing so. Boyd said he sent an email to Walker and Wood on 13 August 2013 confirming he also was comfortable with Walker’s approach in respect of Deutsche Bank’s proposal. Boyd believed the sequence was that he replied first to Walker; that Wood replied thereafter, and that Walker then wrote to Deutsche Bank, on 14 August 2013, advising that, given the prevailing market prices and the Talbot Group valuations, the Talbot Group was currently not a seller of Karoon.

620. [620]
     On 26 August 2013, Boyd, Walker and Wood received an email from Deutsche Bank enclosing a newspaper article in relation to a purchase of a stake in Karoon’s Australian gas discovery. It stated that the price paid was well ahead of market valuations for the project.

621. [621]
     On 2 September 2013, Boyd and Walker received an email from UBS containing a research paper in respect of Karoon. It maintained a buy recommendation and set a valuation of $7.60 per share. The research paper note that the valuation had reduced from $8 per share following the recent capital raising, which raised $150 million at $5.10 per share. Boyd said Karoon’s share price was $5.18 on 30 August 2013 and $5.50 on 6 September 2013.

622. [622]
     On 11 September 2013, Boyd received a copy of RISC’s valuation for Karoon. It was dated August 2013. Karoon’s asset portfolio, encompassing projects in Australia, Brazil and Peru was valued by RISC as between US $277 million and US $3.51 billion.

623. [623]
     On 12 September 2013, Boyd received an email from a broker advising the rumour mill was running that the Karoon holding was moving. It asked Boyd to let the broker know if he wanted to talk. Boyd replied that the rumour had no substance, and no one had a mandate to move the stock. The broker replied that he was not surprised at these prices. The broker was referring to a newspaper article published on 12 September 2013, stating there were rumblings that Karoon’s second largest shareholder, TGI, might be headed for the exit. The article concluded that it would make sense for Talbot to await on results from Karoon’s big exploration prospect. Boyd said Karoon closed at $5.17 on 13 September 2013.

624. [624]
     On 12 September 2013, Boyd and Walker also received an email from UBS which replicated the newspaper article of 12 September 2013.

625. [625]
     On 17 September 2013, Boyd emailed Walker and Wood to advise that RBC had raised the possibility of bringing their new head of equities to meet with them. Boyd said he was non-committal but observed he was uncomfortable about continuing with RBC in relation to Karoon. Boyd thought it was agreed that without a mandate, they were better getting commentary and guidance from UBS and Deutsche Bank who were better placed to ultimately handle any disposal. Both Walker and Wood replied by email expressing their agreement that they not continue further with RBC for Karoon and their belief they were currently receiving the best available advice from UBS and Deutsche Bank. Boyd said it had always been in the back of his mind, based on the commentary of Wood over time, that RBC did not have the capability to offload the Talbot stake anyway.

626. [626]
     On 18 September 2013 Boyd, Walker and Wood were all sent an email from UBS attaching an investment research paper. It maintained a buy recommendation in respect of Karoon, with a valuation of $8.10 per share, up from $7.60 per share.

627. [627]
     Boyd said from September 2013 through to the beginning of 2014, the Karoon price gradually trended down. At the beginning of October 2013, it was $4.90 per share. By the end of October 2013, it was $4.32 per share. At the end of November 2013, it was $4.19 per share. In late December 2013, it was $3.76 per share.

628. [628]
     On 31 January 2014, Boyd had a conversation with Wood. At that time, the Karoon share price was $3.44 per share. Wood referred to Karoon’s latest well as having water, not hydrocarbons in an exploration. Wood said that UBS said the hole was ambitious. Wood advised it did not change the asset, only the valuation for now.

629. [629]
     On 6 March 2014, Walker sent an email to a broker placing a purchase order for 20,000 shares in Karoon. Amanda was purchasing the shares in the name of one of her corporate entities. Walker said that after the deceased’s death, he continued to provide that sort of assistance to Amanda, Liam and Courtney from time to time. They did not intermingle their private affairs. Liam and Courtney later took theirs to an external provider. Walker had limited or nothing to do with those, probably within about six months. Amanda continued instructing him to do certain things. It was known by the executor that he was doing that from the Talbot Group offices.

630. [630]
     On 19 March 2014, Wood advised Boyd he had “been digging around”^[118] and was still comfortable with the Karoon investment. His view was that the asset base was still there and there was progress in Brazil or Peru, otherwise Karoon would be looking to raise cash. Wood said he could not understand why the share price was so low. Wood said he personally was not getting out of Karoon. Boyd said Wood was a fairly substantial shareholder in Karoon.

631. [631]
     On 1 May 2014, Boyd received an email from KPMG. It attached an email from RISC advising that RISC did not believe that any company reports in recent quarters will have materially impacted the range of values RISC had previously estimated for Karoon. RISC offered to undertake a more detailed look in a few weeks but did not believe it was warranted.

632. [632]
     On 5 May 2014, Boyd forwarded an email to Walker and Wood, attaching an announcement from the ASX advising of the suspension of the Karoon shares, at the request of Karoon. The notice advised that Karoon has been engaged in discussions with its stakeholders and potential new investors. On the same date, Boyd had a telephone conference with Walker, Wood and UBS. UBS advised that it was limited in what it could say, which Boyd took to mean that UBS was involved in whatever fundraising discussions were being held on behalf of Karoon.

633. [633]
     Boyd said UBS and Karoon went to the market to raise about $200 million and was looking for a cornerstone investor to underwrite. Some investors were vocal about Karoon’s performance. Karoon had drawn down over $116 million in recent months. There were corporate governance noises about the board and management. UBS had said there was likely to be a change in the board to form an independent board, and that the placement was a timing issue. The market had run out of confidence. UBS had advised that whilst the board should not have approved some of the decisions, it was fundamentally a good company with good assets. The value will start to come through, subject to the events of the next week.

634. [634]
     On 12 May 2014, Karoon sought an extension of the voluntary suspension.

635. [635]
     On 16 May 2014, Wood sent Boyd and Walker an email attaching notification of a farm out by Karoon of a 50% interest it had in an exploration permit. Wood advised that was only a small deal and a larger one was still being negotiated with a large Australian energy company.

636. [636]
     Boyd said that in late May 2014, Wood resigned as a director of the Talbot Group entities. Walker continued as the sole director.

637. [637]
     On 2 June 2014, Boyd discussed with Wood the required documentation around his resignation and noted his obligations of confidentiality. Wood said people continued to contact him concerning the Mozambique project. In respect of Karoon, Wood observed that he had not seen the details of that day’s releases but considered the valuation of the deal good and that it had saved the company.

638. [638]
     On 2 June 2014, Deutsche Bank sent Boyd, Walker and Wood an email enclosing Deutsche Bank’s initial commentary on a Karoon transaction announced that morning. The transaction related to the sale of two of its permits over gas fields. It noted the transaction looked to be in the ballpark.

639. [639]
     On 2 June 2014, Walker sent Boyd a copy of an email he forwarded to Deutsche Bank in response, advising that the news seemingly had removed the major overhang from Karoon, providing an immediate spike in the share price. Deutsche Bank had queried whether a sale of the Karoon holding would be of interest. It proposed two key avenues, an outright sale of all or some or downward protection via options to lock in some of the short-term performance. Walkers’ response was to advise that he was happy to keep the conversation with Deutsche Bank but wished to defer until early August to see the impacts of this transaction.

640. [640]
     On 2 June 2014, Boyd was also sent an email from Deutsche Bank enclosing a research paper. It viewed Karoon’s exit from some gas permits as offering multiple positives. It noted that Karoon’s closing price was $2.46 per share but set a target price of $6.60 per share and had a buy recommendation.

641. [641]
     On 3 June 2014, Walker, Boyd and Wood were sent a research paper by UBS. It recorded the sale by Karoon as a good outcome and set a valuation of $6.50 per share. On that day, Walker also forwarded to Boyd a copy of a research report by Wilson HTM on Karoon. Walker described it as “excellent outcome”. The research paper recorded Karoon as a buy, with a 12 month target price of $7.50 per share.

642. [642]
     The closing price for Karoon on 6 June 2014 was $3.27. It remained consistently at that level for the next two months. Boyd said at that stage, there was not any discussion or agreement about a specific price target at which the Talbot Group would be prepared to sell its Karoon holding, if there had been an available purchaser. His understanding was there had been no change from the position previously expressed of $7 per share.

643. [643]
     On 30 June 2014, UBS sent Walker and Boyd a copy of its energy update in respect of Karoon. It summarised investor feedback as generally happy with the deal, with the level of investor interest reasonable.

644. [644]
     On 11 August 2014, Boyd received discussion materials from Deutsche Bank in respect of Karoon. It noted that broker valuations remained high but that historically the stock had traded well below the consensus target price. It recorded stronger investor interest following recent announcements. The report said Deutsche Bank could offer a range of sell down methods for the Karoon holding. It noted the share price was $3.44. Broker valuations ranged between $5.48 and $7.73 per share.

645. [645]
     Boyd received an update from UBS on 14 August 2014. It noted broker target prices ranging between $4.50 and $7.50 with each broker having a buy recommendation. The report said the market was failing to ascribe proper value to Karoon.

646. [646]
     On 14 August 2014, Boyd had a telephone conference with one of Karoon’s directors. He told the director Wood was no longer a director of the Talbot Group. The director asked if Boyd needed an update from Karoon. Boyd said no and that the Talbot Group maintained a preference not to deal directly with Karoon. It was advised by a couple of broking houses familiar with the stock. The director asked the Talbot Groups intentions regarding Karoon and Mozambique. Boyd advised that the Talbot Group was not a Karoon seller at current levels and there was no commercial connection between Karoon and Mozambique. Boyd said at the time of this conversation, the Karoon share price was around $3.52 per share.

647. [647]
     On 15 September 2014, Allens sent an email to Boyd and Walker. It discussed a meeting held that morning with one of the independent directors appointed to Karoon. That director said he understood from a conversation previously held with Boyd, that the Talbot Group did not want any information about the company but said the company would like to share information with it as a major shareholder. The director advised that a small shareholder with short term interest was attracted to the big cash balance in Karoon and wanted to take advantage of this to the detriment of the long term interests of Karoon. The director advised patience was required and stability in the share register was important. He noted there used to be a good and close relationship and they would like the support of the Talbot Group.

648. [648]
     Allens advised that it would be useful to clarify the Talbot Group level of interest in Karoon. Boyd said the Talbot Group did not want to be characterised as a disinterested shareholder who was not looking after the interest of the beneficiaries. It was therefore useful to clarify that the Talbot Group would, at all times, welcome any discussions, as long as there was no communication to it about any price sensitive information that was not generally available as the Talbot Group could not compromise its ability to deal with its shareholding. Boyd said the newly appointed, independent director was an old professional acquaintance of Ken MacDonald at Allens. He became a contact point for the Talbot Group with Karoon. Boyd found him to be a conservative person, who was very easy to have a practical conversation with and devoid of salesmanship.

649. [649]
     Boyd said that from August 2014 through to November 2016, the share price of Karoon stayed generally low, moving down to $2 and $1 per share. In late 2016, a decision was taken to make an application to the Supreme Court for judicial advice in respect of the proposed sale of the Karoon holding. Boyd swore an affidavit in support of the application for judicial advice. Boyd said no beneficiary took an active role, although all were served with the application.

650. [650]
     In the statement of facts accompanying Boyd’s affidavit, Boyd recorded that soon after his appointment, he was informed by Walker and Wood that prior to his appointment, an offer to purchase the Karoon shares at $10 per share had been rejected by the then directors on the advice of Nissen, with the concurrence of the executor. Further, since his appointment, the price of the Karoon shares had been highly volatile and he had taken advice from numerous advisors as well as from the directors of the Talbot Group entities. His reason for now seeking advice in relation to the sales of the shares was their volatility; announcements recently made to the market which had resulted in an increase in the market price; advice he had received from professional advisors as to impacts on the price of the Karoon shares should the transactions not proceed and on other issues; as well as advice as to the window for executing such a sale together with the fact that a sale of the Karoon shares would enable not only taking advantage of a material increase in the market price, but the discharge of inter-entity loans and the utilisation of carrying forward capital losses to offset against income earned, thereby maximising the utilisation of these tax attributes, as well as enabling a consideration of what capital and/or income is not required to support the Mozambique investment and to fund other ongoing operational and holding costs.

651. [651]
     Boyd said the application was brought in circumstances where the Karoon share price had been sitting down in the $1 region for an extended period of time. As a result of further transactions made by Karoon, the Karoon price had increased up to the mid $2 quite quickly and held there fairly firmly. On the day the application for judicial advice was heard, the share price was about $2.31. Orders were made that provided for the sale of the shares, subject to a floor price of $1.71. That price was calculated by reference to the share price at the time of the sale, subject to whatever was the block trade discount.

652. [652]
     Boyd said the order was made on Friday, 18 November 2016. On the following Monday, Karoon was put into a trading hold, following an announcement that a Brazil transaction had been the subject of an injunction to prevent it from going ahead. When the Karoon shares came out of that trading hold, there were issues both in relation to the share price falling quite quickly and the volume of shares trading in the market starting to become either unusually high or unusually low. An aspect of the advice sought in relation to a block trade sale, was that it was desirable that there be stability in the market, both with respect to price and volume. Boyd said he was liaising on virtually a daily basis with their investment bank, getting advice about whether the market was susceptible to a block trade, with some reliable outcome. After taking that advice into account and a trading black out which occurred during the second week of December (the annual general meeting week for Karoon, and traditionally a week where people do not buy and sell large transfers of shares in a particular company), it was determined it was not an appropriate time to look to execute the sale of the Karoon stake.

653. [653]
     On 23 November 2016, Boyd received an email from Fisher who was by now, the director of the Talbot Group entities. Fisher provided an email from Rothschilds, to the effect that it was common for local shareholders to question asset sales in Brazil, noting that none to date had been successful in reversing a sale. Boyd said that when Fisher became the sole director of the Talbot companies, with effect from 1 January 2015, he had substantially driven the process of obtaining advice from Rothschilds, KPMG and RISC in relation to Karoon and in preparing the judicial advice application. Boyd said Walker had gone from being sole director working full-time to continuing only as CFO. Walker wanted to cut back on his workload.

654. [654]
     On 22 November 2016, Boyd sent Fisher an email seeking an update/advice from Rothschild/UBS. Fisher advised that Rothschild were meeting with UBS later that day and the key questions will be if there is a change of appetite or discount while the Court injunction was in place. Fisher recommended they seek feedback first before pushing for action. He noted there would still be a block out during the week of the AGM but a window thereafter for trade before Christmas.

655. [655]
     On 5 December 2016, Fisher sent Boyd a copy of a short draft paper on sale timing considerations, prepared by Rothschild. It recorded that if the announced Karoon transaction did not complete, Karoon’s price was likely to trade down significantly, but that should the injunction be removed, the share price will react positively, although it was unlikely to reach levels prior to the injunction announcement. The paper noted that the window for launching a sell down in 2016 would likely close in the week ending 9 December 2016, although it may be possible to undertake a sell down earlier in the week commencing 12 December, depending on market conditions and price performance. The window for a sell down would then re-open in mid to late January 2017. Rothschild recommended being in a “state of readiness” from 16 January should a trading window emerge. It noted that to undertake a sale prior to the outcome of the injunction proceeding carried higher execution risks and the likelihood of a higher discount whereas awaiting the outcome of the injunction proceedings would result in a lower execution risk.

656. [656]
     Boyd said at that stage, the Talbot Group was still waiting for a trading window to be able to sell the shares conformably with the order made, pursuant to the judicial advice application. Boyd said subsequent to this advice, the share price, taking into account the discount for a block trade, fell below the floor price in the Court order and essentially remained there. Whilst there was the ability to return back to Court for a variation of those orders, in the period following these events, the volatility remained in the share price and then the share price fell to a level which made doing so quite unattractive.

657. [657]
     In November 2018, Boyd was appointed a director of TGH. At the same time Rajat Kohli was appointed a director. Kohli resided in London. He was a personal friend of the deceased. Shortly prior to the deceased passing away, Kohli had come on board with the Talbot Group as a consultant to advise in relation to corporate strategy. He had significant experience as an investment banker in the resources industry. Kohli gave advice in relation to corporate strategy. After the deceased’s death, Kohli continued his association, firstly providing some advice to the executor and also in assisting Amanda for a period of time. Kohli was of particular significance in relation to any sale of the Mozambique asset. That fell within his area of expertise, although so did Karoon Gas. Boyd said he did not have much consultation with Kohli in relation to Karoon Gas or other assets, prior to Kohli’s appointment as a director of TGH. He was involved occasionally but his main contribution was after becoming a director.

658. [658]
     Boyd said he became a director in 2018, following a mediation between beneficiaries and advisors. It was agreed that various steps would be implemented, including the appointment of Boyd and Kohli as directors. It was also agreed, at that time, that Wood would be appointed, but before its implementation, Wood stepped back and another person Douglas was appointed in that position instead. Prior to these appointments, Fisher was the sole director of both TGI and TGH.

659. [659]
     Boyd said he had concerns that the relationship between Fisher and the incoming directors could prove to be challenging and his presence on the board was intended to try to keep the ongoing management of the company as smooth as possible so as not to lose the benefit of all of the accumulated knowledge which Fisher had in relation to Talbot’s affairs. The agreement reached was that Fisher would be removed ultimately as director. Boyd said Douglas had no previous relationship with Talbot Group; he was a mining engineer, particularly in the area of project delivery, with significant executive and board experience. Fisher ceased being a director in December 2018.

660. [660]
     Boyd said the Karoon shares were ultimately sold in four tranches, in November and December 2019. That sale followed a directors meeting. A resolution was passed to sell those shares. The proceeds were used to repay inter-company loans. Those proceeds were insufficient to extinguish the entire loan. The proceeds of the sale of the Karoon shares by TGI were set aside for the foundation, to the extent of its entitlement, and the rest became the subject of the dividend from TGI to the estate, on which the estate was ultimately required to pay tax.

661. [661]
     Boyd said that throughout the entire period of consideration of the sale of the Karoon shares, nothing arose in respect of either Talbot entity which caused him to consider removing the directors of those entities. Fisher was removed as a director in December 2018 but not as a consequence of any views or advice he had given relating to the Karoon shares. There were, at that stage, strong personality issues at play, together with some historical issues which added to the level of conflict.

662. [662]
     Boyd said at no time did he consider the directors of the Talbot Group entities were not carrying out their functions appropriately. Boyd placed reliance on not only the directors but also the advisors in making decisions in relation to the Karoon shares. He was guided in those decisions by their estimates and projections of value.

663. [663]
     Walker said that as a significant parcel of shares were held in Karoon, there were obligations in respect of ASIC in notifying changes to the shareholding. The Karoon shares were the subject of recommendations from time to time. Generally, the magic number for a target price was $9 per share. He did not recall the shares ever reaching that price during Boyd’s time as administrator. Karoon was such a large shareholding the Talbot Group needed to ensure it was getting the right advice and consistent advice. When Boyd became administrator, other professional advisors were consulted including Deutsche Bank and UBS. As a director, he took into account the valuations and recommendations of those professional advisors. He discussed that advice with both Wood and Boyd. He was not aware of any available buyer for the Karoon shares at an appropriate price.

664. [664]
     Walker agreed the preference was for a block sale, if there was an available buyer. It would avoid market overhang where the market decreased in price because it knew there were remaining holdings to be sold by the Talbot Group. Walker recalled a presentation from RBC in relation to the purchase of the Karoon shareholding at a certain price on an underwritten basis. It did not progress. Walker also recalled a proposal by Deutsche Bank to sell a portion of the shares with the probable consequence that there would be a lock up period in respect of the sale of the remaining holding. The view of the directors was that was a high-risk approach and the Talbot Group had to be able to sell if it could at an appropriate price.

665. [665]
     Walker said when the board received professional advice in relation to the non-Karoon shares, the directors followed the recommendation and advice of those advisors. Walker said he could not see any reason not to do so. They discussed every one of the shareholdings. If a credible buyer had become available, they would have considered the sale of those shares, if it was an acceptable price.

666. [666]
     In determining whether to sell Karoon or other shares held by the Talbot Group entities, Walker said the decision-making process between him, Wood and Boyd was collaborative. They would review the data in the same meeting, together. Walker and Wood would be asked their opinion. Boyd would have been the ultimate decision maker. Walker did not recall an occasion on which Boyd made a decision inconsistent with the discussion or advice provided by Walker or Wood.

667. [667]
     Boyd said in relation to the remaining resource assets, he continued to receive reports from time to time from the appointed consultants. He also received advice from the directors of the Talbot Group entities.

668. [668]
     Boyd said Walker and Wood were watching the Bellzone shareholding throughout 2012 and 2013. No opportunity arose to sell that shareholding at an acceptable price. In 2014, Bellzone shares were suspended, pending clarification of its financial position. The Talbot Group was asked to support a waiver of take over requirements to allow the purchase of additional shares by Chinese interests. Boyd was advised that participation would get the waiver over the line. If the Talbot Group was not prepared to support the waiver, it was likely the company would go into administration and ultimately, insolvency. Walker’s view was there was no option. Wood confirmed there was no real option or ability for Talbot to place conditions on signing the waiver. After forwarding the signed waiver, Boyd received a telephone call from Walker, advising he had confirmed the situation was as described by Bellzone.

669. [669]
     On 26 September 2014, Boyd received a telephone call from Bellzone’s representative. He advised they had enough votes but had revised the template to reduce the total buyout, the benefit being less dilution of the existing shareholders. Boyd was asked to sign an updated waiver. Boyd sought confirmation of the amount of additional funds to be contributed by that buyout and where that would leave Bellzone in its ability to fund future operations. Boyd advised Walker of the amended waiver and of his request for the additional information. He asked Walker to sign, scan and return the updated waiver. Boyd subsequently advised Walker, by email, that the information he had received from Bellzone was that the new party was the sole viable option for continuation of the company and that there was a plan to restructure the company moving forward. Boyd said an amended waiver was sent back to Bellzone after execution by Walker. In the end, Bellzone became insolvent. Nothing was realised in respect of that asset.

670. [670]
     Boyd said BrazIron, on assumption of his role as administrator, was a company with a low share price and a low to nil daily trading volume. The advice Boyd received was that he should hold the stock whilst the advisors continued to search for an exit strategy. Boyd said a buyer needed to be identified because with the volume being traded, you could not hope to trade the four million shares of the Talbot Group on the market. The BrazIron shareholding was sold in June 2016, as part of a proposal for BrazIron to be taken private and to be delisted from the ASX. Between the announcement of a trading halt in April 2013 and the sale in June 2016, no other opportunity presented for a buyer to acquire those shares. Throughout that period, the trading continued to be low to non-existent.

671. [671]
     Boyd said Goldminex was another asset where an actual buyer needed to be located to take the stock in a block. The Talbot Entities held 12.5 million shares and the average daily volume at that stage, through the ASX, was 35,000 shares. It was unsaleable into the market on a day-by-day type basis. Boyd said when he took over as administrator, Walker described Goldminex as “being shot”; it was not a readily saleable investment.

672. [672]
     Boyd said in his initial discussions with RBC, he was advised that Goldminex was an exploration play with potential management issues. RBC’s advice was not to sell now as it was not liquid. Boyd said on 10 August 2012, he had a discussion with Wood in relation to Goldminex and BrazIron. Wood advised that they had come to the Talbot Group from RBC and that RBC saw them as worthwhile investments. Wood believed their proximity to the companies should put RBC in a strong position to find a buyer for the Talbot Group shares. Wood’s advice was there was no market for Goldminex and that the Goldminex land was very prospective.

673. [673]
     Boyd said on 17 February 2015, Walker forwarded an email to Fisher, copied to Boyd. It advised that Goldminex had been purchased between 2007 and 2009, for an average original purchase cost of $1.36 per share and was currently trading at $0.02 per share. Walker noted the shares had not been actively managed for some time, given their low return. Boyd said the email was a summary being provided by Walker to Fisher, who had commenced as a director in January 2015.

674. [674]
     On 24 February 2015, Fisher forwarded an email to Walker and Boyd in relation to Goldminex. There was a proposed share consolidation and change of business which severely diluted existing shareholders, and rewarded the directors. Fisher advised voting against the proposed motions. Fisher said if there was any appetite, further actions could be taken to contact shareholders not aligned with the continuing directors to vote down the proposal and to see what was to happen to the Papua New Guinea tenements with a possibility of buying them for future sale.

675. [675]
     Boyd said following receipt of that email from Fisher, Walker forwarded an email to Fisher and Boyd supporting Fisher’s approach to the vote. Walker recorded that given the relative high risk for past performance of the company and the increased difficulty of working in Papua New Guinea in the resources sector, he would not support Fisher’s proposed further actions. Boyd responded on 24 February 2015 thanking them both for their emails and advising he understood and agreed with the respective comments and supported the negative vote at the general meeting. Boyd said Fisher had a conversation with Goldminex about his proposals. Fisher suggested that if the Talbot Group was not in a deceased estate context but in a commercial context, it could potentially look at trying to step in and take over the tenements but that was not part of the estate’s remit.

676. [676]
     Boyd said the restructure went ahead, as per the board proposal. The entity became Chant West Holdings Limited. The Talbot Group’s interests were sold in May 2018. The recovery was $62,284.00. Prior to that sale, on 23 May 2018, at no stage during Boyd’s administration had he become aware of any offer to acquire the Goldminex shares. None of the consultants brought an offer.

677. [677]
     Boyd said he continued to receive daily updates from RBC in relation to Robust and the other holdings until August 2013. On 26 February 2013, he received a telephone call from Wood, who advised not to do anything now. Robust had $28 million in the bank and was cashed up for the next couple of years.

678. [678]
     On 16 December 2013, KPMG sent an email to Walker and Boyd enclosing details of an announcement by Robust about entering into binding heads of agreement to acquire gold field holdings. That acquisition substantially depleted the cash Wood had spoken about earlier in 2013.

679. [679]
     Boyd said on 21 January 2014 he received an update from Allens Linklaters in relation to an export ban on ore by Indonesia. He forwarded it to Walker and Wood, querying what it meant for Robust, as it was a miner in Indonesia. Wood replied that the Indonesians would probably change their minds many times before Robust started mining, and even if they did not, a particular individual was likely to be able to get Robust an exemption for a fee. Boyd described that individual as a resource industry investor based in Indonesia, well known to Wood who “seemed to be able to achieve things that mere mortals couldn’t”.^[119]

680. [680]
     On 11 February 2014, Boyd forwarded to Walker and Wood an email advising that Robust had announced a non-renounceable rights issue at $0.31 per share. Wood’s response was to state that he assumed the Talbot Group were not participating.

681. [681]
     On 6 March 2014, Walker emailed Boyd and Wood to advise he supported Wood’s thoughts about not participating in the non-renounceable rights issue. Walker noted that the Talbot Group already held 9.8 million shares (about 11% of the issued share capital) which cost 57c per share and the offer would cost another $2.4 million for another 7.8 million shares, being 31c per share. Walker considered the cash was better kept for other commitments.

682. [682]
     On 2 May 2014, Boyd received an email from Wood in relation to the Robust holding. Wood advised there was an offer to take the shares for 31c per share, but that the offer had since dropped to 25c per share. If the Talbot Group were interested, Wood said he would try to push it back up to 31c a share. Walker supported a sale at 31c a share, as did Boyd. Wood was successful in getting the price back up to 31c per share and the Robust holding was sold at that price. Boyd said at no time between Boyd’s appointment and that offer, had there been an offer to acquire the Robust holding. Boyd said he was advised by Wood there had been an offer of $1.70 per share during the executorship, but that was in the context of a combined offer for both the Robust and Goldminex holdings.

683. [683]
     Boyd said the Site Group holding was the subject of discussion between Boyd, Walker and Wood on 5 July 2012. Walker sent an email proposing they not participate in a share purchase plan. Walker said it was highly speculative and they already had a significant holding which represented nearly 19% of the issued capital. He questioned its recoverability. Wood agreed with Walker. Boyd advised he could not presently comment on that holding but that if the shared view of the directors was that the investment fell into a highly speculative category, he would not cavil with the decision not to participate in the share purchase issue.

684. [684]
     On 25 November 2013, Walker emailed Boyd and Wood about a capital raising by Site Group. Walker noted the Talbot Group held about 13% of the issue capital, at an entry cost of 16.2c per share when the current share price was 15.8c per share, on thin trade numbers. If the Talbot Group did not participate in the raising and everyone else did, its holding would reduce to about 11.5%. Walker described the investment as high-risk and did not think the Talbot Group should participate in the capital raising. He thought it always was a ‘wait and see’ regarding the sale of the shares. Boyd agreed with Walker’s proposals, as did Wood.

685. [685]
     On 12 March 2015, Walker advised Boyd the current share price of Site Group was strong with small volume. Boyd said an issue with Site was that the trading volume on the market was always very low and the size of the holding meant it was not readily sold on the market at all. Walker queried whether the managing director of Site was selling and buying to keep the price up. He also mentioned there had been an increase in the stock put to the market. Walker’s information was to hold the stock, noting that if it was sold the cash would only earn interest at term deposit rates. Boyd said this discussion with Walker was taking place in the context of February monthly reporting.

686. [686]
     On 28 May 2015, Walker sent to Boyd and Fisher an email Nissen had sent on 17 June 2012 to Walker setting out the status of some of the non-resource assets. Nissen had listed the Site Group shareholding and noted the establishing costs were understated and revenues had never reached expectations. Nissen thought an exit strategy was appropriate, noting that trading liquidity was poor, and he could see no chance of disposal of the shareholding on the market. He advised he also had shares in the company and would watch the position. Boyd was advised Site Group was something the deceased had been close to as he was very friendly with the managing director and had supported it significantly with funding over time.

687. [687]
     On 24 July 2015, Boyd met with Fisher and Walker. Fisher wanted to leave getting a valuation done from KPMG in relation to Site Group, until KPMG had completed the Karoon valuation.

688. [688]
     On 18 November 2015, the Site Group was placed into a trading halt at its own request. Boyd said the shares in Site Group were sold in March 2019. At no stage until the sale of those shares was there any opportunity to affect a sale of its holding in Site Group. Boyd said the shares were sold as a block to the client of a broker.

689. [689]
     Boyd said that the Xanadu Mines holding was the subject of initial recommendation by RBC to sell as soon as there was board approval, noting that there did not seem to be any catalyst to drive the stock up. On 14 August 2014, Walker sent an email to Boyd and Wood advising that Xanadu was one of the securities that was previously agreed to sell as opposed to hold given its perceived value and immateriality. The Talbot Group paid 50c a share for 3 million shares, and the current market price was 18c per share. Walker queried whether were there was a need to refer the matter to RBC. Boyd responded that he thought you had to. Wood replied that a hedge fund had dumped a lot of shares over the past few weeks which should now stabilise as the process was over. Wood believed the stock value was high 20c per share so there was enough upside to risk non selling at this time.

690. [690]
     Boyd said at the time of the discussion with Wood, there had been a meeting with RBC the previous day where RBC had flagged there was a possible long-term hold in respect of Xanadu not withstanding what was published in the printed document. Wood also told Boyd there had been an offer of 70c a share prior to Boyd’s appointment as administrator.

691. [691]
     The shares in Xanadu were sold in May 2018. At no stage between July 2012 and that sale was there any other opportunity at which the shares could have been sold. Boyd said it was a very thinly traded stock, so selling even three million shares was a challenge on the market.

692. [692]
     Boyd said the Careers Australia holding was sold in two tranches. One before his appointment and one subsequent to his appointment. It was sold at a profit to the acquisition cost. In 2017, Boyd also approved the sale of the Village on the Downs, a retirement facility, at a profit. Boyd said the holding in Wilson HTM units was sold in April 2019, again at a profit to the acquisition cost.

693. [693]
     Boyd said that, in relation to the non-Karoon assets, he took advice from the directors of the Talbot Group in relation to how they should be dealt with, as well as the advice of professional advisors to an extent, although he noted there was not as much professional advice in relation to the non-Karoon shares. No fact or matter came to his attention which caused him to not follow the advice of the directors.

694. [694]
     Boyd said a relevant factor to be considered in the disposal of the remaining estate assets was taxation considerations. TGI was the beneficiary of substantial carry-forward income tax losses. TGI also had franking credits available, allowing franked distributions to shareholders. These were significant numbers for the beneficiaries. Boyd said that prior to 2016 they were looking at maintaining investments within the Talbot Group entities because of these losses and franking credits. It would allow assets to sit in those entities and to take advantage of those tax attributes, with the income to be distributed to the beneficiaries on a regular basis. Boyd said KPMG looked at those issues and concluded there were potential benefits for the beneficiaries, in making use of those tax attributes, of up to approximately $100 million. Boyd said that meant, both from the administrator and director’s point of view, it was something worth pursuing, but in order to do so you needed to leave assets within those entities.

695. [695]
     Boyd said Villa Calvi was acquired for €13.5 million and funded in Australian dollars through loans from Talbot Group entities. Since its purchase, there had been expended capital costs of $15,186,408.00 and operating and holding costs between 2011 and 2021 of $5,870,546.00.^[120] The executor obtained three valuations. The first, in July 2010, was for €7.56 million. The second, in October 2010, was for €8.23 million. The third, in June 2011, was for €16.25 million. Boyd also arranged valuations. In January 2015, the Villa was valued at €17.55 million. In January 2017, it was valued at €17.46 million.

696. [696]
     Boyd said from the date of death until 2017, the funding for both capital works and operating and holding costs came from the estate. From 2017 onward, it was paid by TGH itself, although because it was not an entity which had any cash, it received dividends out of TGI which it then applied in payment of those costs. There may also have been some direct funding out of TGI in those amounts, because in 2015, when a rental operation of the Villa was being considered to defray the holding costs, an entity was incorporated in Italy, which was to become the operating vehicle of the rental operation. Its shareholder was TGI so that the expenditure for that entity was funded by TGI.

697. [697]
     Currently, the loan balances, in respect of the Villa, were $16,993,072.00 owed to the estate, $22,317,686.00 owed to TGH as trustee for the Talbot Properties Trust and $280,778.00 to other entities.^[121] The agreed transfer cost to Amanda, as at 30 October 2015, would be $33,056,702.00. Boyd said the transfer cost related to a discussion during the executorship where agreement was reached between Amanda, Liam and Courtney, that Amanda would acquire the Villa for a price which was the aggregate of an agreed date of death valuation of €12 million, and the cost of additional work undertaken to bring the Villa up to the requisite standard for high end rental. In excess of another million dollars was spent on the Villa.

698. [698]
     Boyd said in April 2013, he discussed with Amanda the prospect of renting the Villa. He was concerned, from the estate’s perspective, about the costs of holding the Villa, and particularly with regard to Amanda’s desire to have the property allocated to her. As the Mozambique sale was not proceeding, there was uncertainty as to whether Amanda would be able to afford that property. Amanda replied that if she acquired the property, she would probably need to rent it anyway. Amanda mentioned, at that stage, a weekly rental of €30,000 was achievable.

699. [699]
     Boyd said the Villa had only been rented out sparingly. Accordingly, the holding costs have largely been incurred with no real income to offset them. As a consequence, advice was taken from a number of sources about renting the Villa on a more permanent basis. A very detailed feasibility study, taking into account rental was heavily seasonal in that part of Italy, was obtained by the estate.

700. [700]
     During the course of that feasibility study, there was discussion with Amanda about the furniture in the Villa. The estate was reliant on Amanda’s furniture in order for the commercialisation of the Villa. Boyd said Amanda was initially in agreement about her furniture being available for the rental of the property, at no charge. Boyd said when the whole proposition was relatively complete, he met with the beneficiaries. He advised he was prepared to permit the arrangement to be implemented. A process was undertaken to establish the entity in Italy and to authorise the additional works.

701. [701]
     Boyd said that in taking advice about potential management of the property, he received advice from an accountant that for tax purposes, the estate would not be able to let the beneficiaries stay there without charge because if the property was being operated commercially, in order for the costs of the operation to be deductible against the income, personal use would be a matter of concern. Amanda was unhappy about being asked to pay rent to stay in the Villa. She said if she was required to pay rent, she would require payment of rent for her furniture. Agreement could not be reached in relation to the use of the furniture.

702. [702]
     Boyd said his concern was that if there was to be a charge for the use of the furniture, the rental operation no longer had any prospect of being cash flow positive for many years, if at all. Rather than starting a rental operation which was just going to lose money, it seemed preferable that the whole thing come to a halt. Boyd said having reached that impasse, the position returned to having the property sitting there with significant annual holding costs and no income. The view of the administrators and the directors of TGH is that the property ought to be sold because of the cost impost of holding it. Boyd said it was proposed to make an application to the Court for approval to give effect to that sale. In the interim, Amanda had been using it once or twice a year. Boyd said he did not know how often she was there and for how long. There had been some very short-term rentals but otherwise, it sat unoccupied with an on-site caretaker.

703. [703]
     Boyd said there was a discussion about whether Amanda’s furniture should be removed from the Villa. There were a number of options. First, for the furniture to be removed. Second, for a Talbot Group Entity to buy the furniture from Amanda. Third, for the furniture to be left in situ for a sale process with the possibility of the furniture being sold to the ultimate purchaser of the property privately by Amanda, as part of an overall transaction or, with the furniture to be removed after a sale.

704. [704]
     Boyd said an agreement was reached in 2017. Fisher, as director of TGH, organised for a sale process to be implemented with an agreement reached for Amanda to remove the furniture in September 2017. Amanda was to be present at the property for the purpose of overseeing that removal. Shortly before that was to be effected and whilst there were removalists organised and people were otherwise on site, Amanda’s consent was withdrawn following communications from Italian lawyers representing Amanda. It was asserted Amanda had a claim to the property under Italian law. Despite attempts by Boyd to get an understanding of the claim and how it might be resolved, he received no further detail from those lawyers. Boyd said advice was also proffered that it was unlawful to handle Amanda’s furniture without her consent which effectively meant that nothing could be done by the owner of the property with regard to the furniture stored in it.

705. [705]
     Boyd said he obtained additional valuations for the purposes of making decisions about whether to hold or sell it. The point had been reached in 2017 where the commercialisation of the Villa had been brought to a halt. Boyd discussed with Amanda the annual holding costs of the Villa. Whilst the costs had varied from year to year, on average, since the completion of the work, the operating and holding costs have been a little over $500,000 AUD per annum. Amanda indicated she was not prepared to fund the ongoing holding costs. The director of TGH commenced a line of discussion with Amanda to the effect that if she was not prepared to fund the Villa, the property ought to be sold. Amanda consented to that course initially but withdrew that consent.

706. [706]
     Boyd said during his time as administrator, he had had discussions with Liam and Courtney. Both were adamant the agreement as to the transfer costs stands and ought to be enforced, particularly in the context where the trust was carrying debts which exceeded the market value of the property. The agreed transfer cost sat above the valuation. Liam and Courtney expressed concern that if Amanda was not taking the Villa for that transfer cost, the estate would see less money being returned to it on the sale of the Villa. Ultimately, Liam and Courtney took the view that if Amanda was not prepared to take the Villa for that price, it ought to be sold. That view was also adopted by the interests of the yet unformed charity.

707. [707]
     Boyd said he had not sought judicial advice about the Villa since 2017 as it had been a very contentious issue. In 2019, a proposal was considered where Amanda would rent the Villa from the Talbot Group Entities so that she could conduct commercial operations herself, either for the rental of the property or for the operation of functions, with Amanda in the role of renter of the property being responsible for substantially all of the operating and holding costs of the property. Those negotiations continued until 2021. When they failed, steps were commenced to prepare the property for sale. In the course that process, Amanda indicated she would oppose the sale of the property and that she would take proceedings in Italy or in Australia to prevent its sale.

708. [708]
     Boyd said there continued to exist related party loans within entities in the Talbot Group. When those loans were paid back, funds would flow back to the estate as dividends. However, it was unlikely that would occur before there was resolution of the sale of the Mozambique property and of the Villa.

Expert Evidence

709. [709]
     Bruce Cowley, a legal practitioner, opined that Boyd failed to meet the standard expected of a prudent administrator in relation to the realisation of estate assets. A prudent administrator would have paid particular attention to large and difficult to sell assets such as the Karoon shares, looking to dispose of those assets at the earliest possible stage, although taking into account professional advice. This was particularly so having regard to the volatility of the price of those shares, the fact that the shares did not produce income and the risk of a downward trend. A prudent administrator would have appointed an advisor who had the knowledge, skills and experience to undertake a sale of those shares and to have taken steps preparatory to their sale, no later than six months after the administrator’s appointment. If that had been done, the Karoon shares would have been able to have been disposed of within two years from Boyd’s appointment as administrator.

710. [710]
     Cowley further opined that in respect of the non-Karoon assets, a prudent administrator would have disposed of liquid assets promptly after appointment. The non-Karoon assets largely comprised shares in mining and resource companies which would be regarded as speculative investments. A prudent administrator would promptly appoint a broker to determine a strategy for their disposal. Had that been undertaken, except in most unusual circumstances, share sales ought to have been able to be completed within 12 months of appointment.

711. [711]
     Cowley said on the information available to him, the only steps taken by Boyd to address what should be done in respect of the Karoon shares was the company and Fisher (appointed from 1 January 2015) taking advice from various advisors which included RBC, UBS, Deutsche Bank, KPMG, RISC Allens and Rothschild, in the period between 2013 and 2015 as well as obtaining indicative and draft indicative valuations of the Karoon shares in March 2012, April 2013, May 2013, August 2013, September to November 2015, April 2016 and November 2016. Those steps were available to Boyd from the time of his appointment as administrator. Boyd should have taken steps within three to six months of his appointment.

712. [712]
     Cowley opined that in relation to the non-Karoon assets, there was no evidence of Boyd having acted to dispose of those assets promptly, such as by appointing a broker to advise on and give effect to the sale. In his opinion, those assets were liquid and relatively easily disposed of and subject to any contrary advice by a broker, there was no impediment in their prompt sale.

713. [713]
     In cross-examination, Cowley accepted that, RBC, UBS, Deutsche Bank, KPMG, RISC, Rothschild and Wilson HTM were an appropriate collection of consultants in the fields of dealing with the Karoon shares. Further, depending on the instructions given to the directors of TGH and TGI, it would be appropriate for an administrator to give close attention to the views of those directors in respect of the shares. Cowley accepted that block trades was the process likely to be adopted for Karoon shares. A process to dribble the shares would require a substantial shareholder notice to be given very regularly, which could impact on the value of the shares, depending on demand.

714. [714]
     Cowley accepted that Estates is not his speciality area, although he was one of two designated partners to be appointed if a client wished to appoint a partner as executor of their estate. He has acted in those roles for some 20 years. He agreed that the drafting of Wills and the administration of estates involves a different skill. Cowley also agreed that in determining what might be done with estate assets and when it was to be done, the structure of the estate and the wishes of the testator were relevant to decisions to be made by the administrator, although there comes a question as to the extent to which a testator should “rule from beyond the grave”,^[122] because the role of the executor is to act in the best interest of the beneficiaries.

715. [715]
     Cowley said the complication in the present case was that there was going to be a fairly lengthy period over which assets would be distributed, having regard to beneficiaries who have an immediate entitlement through to those who may not be entitled for decades. In that circumstance, an administrator needs to think about the nature of the portfolio to be held on behalf of the beneficiaries who may not vest for decades. Speculative or volatile investments which are non-income bearing, which comprise too greater proportion of the portfolio are not appropriate and need to be converted into cash or a professionally managed fund.

716. [716]
     In re-examination, Cowley said the views of directors, who had continued as directors after the deceased’s death, were helpful, but regard had to be had to the fact they were part of the deceased’s world, which was a person who liked to invest in resource companies. The executor needed to take their advice in that context because it was a new world where they had a new shareholder who had new responsibilities and new expectations of them as directors. They needed to act on the best interests of the company where the shareholders expectations had changed.

717. [717]
     Cowley further said that if the dribbling of shares was the course to be adopted for the sale of the Karoon shares, he would rely on the advice of the investment bankers as to the effect of that process. A disadvantage of a block trade is if it was unsuccessful, everyone knows the shares are on the market. A lot depends on liquidity. The Karoon shares were listed shares and a relatively well known and traded stock. The question would be how easy it would be, over a period of time, to let those shares go into the market without damaging the share price too materially. The fact that the deceased owned the shares might be a relevant factor, although the market would have known of his death and there would be a perception that at some point they would be on the market. Cowley accepted, as a sound proposition, that the fact that people who are known to be successful miners invest in a certain company gives some comfort to people who are buying in that company.

718. [718]
     Neil Summerson AM, a chartered accountant, opined that an executor holds common law fiduciary duties in relation to the estate and its beneficiaries. Generally, upon appointment, that person would review the documents as well as the assets and establish an orderly plan to sell assets. In respect of public company shares, the normal decision making process would be to take advice from more than one senior broker, obtain a valuation, and sell into the market taking into account volume effect on the selling price. In his opinion, it is not the role of a trustee to speculate on market movements. Speculative shares are a volatile asset class so preservation is a priority. Such assets should be sold as soon as possible and no more than six months after appointment. That opinion related both to Karoon and non-Karoon assets.

719. [719]
     In cross-examination, Summerson accepted he had had regard to letters of instructions he received from the plaintiff’s solicitors in preparing his report; that he was extensively experienced as a liquidator; and that one of the primary functions of a liquidator is the dissolution of the subject company. He could not recall whether the 2002 Will established a Will trust which expressly sought to provide for trust assets to be held for an extended period of time. He accepted that in determining whether to realise or sell the Karoon shares, it might be important to take legal advice. He accepted that Ken MacDonald was a commercial lawyer, experienced in capital markets and energy resources. Summerson said that whilst he did not read the Will closely, it is relevant, when considering as an administrator what to do in relation to assets, to consider how the Will is structured and whether it provides for maintaining assets for a period of time. The guiding document for an executor is the Will. It is important to follow the instructions within that Will. The general rule for an executor is to realise assets as quickly as possible, and to distribute in accordance with the Will. The general rule of thumb is to do that within a period of about 12 months, subject to legal challenges.

720. [720]
     Paul Radford, a solicitor, prepared two reports for this proceeding. The first was dated 22 November 2018. The second was dated 13 December 2021.

721. [721]
     In his first report, Radford opined that the 2002 Will was not drafted in a manner consistent with the practices of a reasonably prudent succession solicitor in 2002. The appointment of an executor, on the basis he was to follow the directions of other parties, was not consistent with prudent practice, particularly having regard to the complex financial affairs of the deceased, the scope for conflict within the family and the conditions present contained within the Will. In those circumstances, it would have been prudent to appoint at least two, and preferably three trustees. There were also practical difficulties associated with the appointment of a non-resident, sole trustee. There was no specific mechanism in the 2002 Will for the trustee of the estate trust to be removed and replaced. In circumstances where a sole trustee was appointed, it would have been prudent to include such a mechanism. The failure to do so had practical consequences, creating disadvantage and uncertainty for the trustee and the beneficiaries with consequent, escalating costs.

722. [722]
     Radford further opined that a solicitor who had been instructed to complete a new Will is expected to do so competently and in a timely manner. Boyd was, by 8 October 2008, in a position to complete his instructions, but failed to prepare a new Will. By that date, Boyd should have been aware the 2002 Will did not reflect the wishes of the deceased and was deficient in many respects. Although the deceased indicated on 5 May 2010, that he had been rethinking his percentages, Radford opined that had Boyd prepared a Will soon after 8 October 2008, it would have been a relatively simply exercise to alter the percentages when the deceased made up his mind. A reasonable prudent succession solicitor would, as minimum, do something to affect the deceased’s wish to not have the named sole executor in his 2002 Will as executor of his estate. This could have been achieved by preparation and execution of a codicil dealing with that discrete issue or by preparation of a Will on or shortly after 8 October 2008, and before 31 December 2008.

723. [723]
     In his subsequent report, Radford opined that as Boyd was aware by 8 October 2008 that the 2002 Will did not reflect the wishes of the deceased, and was deficient in many respects, a reasonably prudent succession solicitor would, in the circumstances, have given the deceased written advice as to the shortcomings of his instructions and as to the options available to him, together with a draft interim Will and other documents so that the deceased was able to make an informed decision. Further, it would have been prudent for Boyd to advise the deceased that he should review the original decision to appoint a sole executor, consider appointing at least two executors, with one having relevant experience, and revoke the 2002 Will and make a new Will. Finally, Radford opined that a competent succession law solicitor would have advised Amanda to consider a number of matters prior to agreeing to the appointment of Boyd, as the sole administrator of the estate. Those matters included the nature of the estate, Boyd’s skillset, age and health, the likelihood of any conflict of interest arising, that solicitors are not generally good administrators and that a professional trustee company or other candidates ought to be considered for the role. Additional matters would have arisen had a reasonably competent succession law solicitor had access to the new Will file, including why it took Boyd nearly two years to prepare the 2002 Will, why he did not follow up thereafter, and why he did not produce a new Will or address the deceased’s wishes in relation to changing the executor and the fact that Boyd had, or was likely to have, various conflicts of interest, having regard to those deficiencies.

724. [724]
     In cross-examination, Radford conceded that his opinion that the 2002 Will contained an inconsistency between clause 6.1(iii) and clause 15.16 was incorrect. Radford said he must have misread the clauses at the time. Radford also conceded that his opinion that if a client decided not to follow advice, a reasonably prudent solicitor would write to the client recording that they had instructed them to do something against that advice, was only for the purpose of providing some protection to the solicitor. A failure to write to the client to record the advice would not involve a breach of duty. Once advice had been given, the solicitor has discharged the solicitor’s duty to give proper advice to the client. Radford said sometimes people need convincing for their own benefit. Subsequently, Radford opined that not writing to the client would fall below the standard of acceptable conduct from the solicitor, opining, “I think it’s important to write to them so they – they might not accept your advice, but they might go away and think about it a bit more, by you having written to them and expressing it in strong terms what your advice was”.^[123]

725. [725]
     Radford said his concerns about the practical consequences of appointing a sole executor residing in another country was different time zones and a lack of ability to meet in person with advisors. Such an appointment tends to delay administration. Radford said it is usual practice to incorporate a mechanism for the removal and replacement of a trustee. The common mechanism is to have an independent person in a supervisory role over the administration of the trust, who is given the right to appoint an independent or another trustee, in circumstances where there is an issue with the current trustee. Radford said, in the present circumstance, that first person might have been someone like the international friends or advisors or the senior partner of a solicitor’s firm. He accepted the appointment of international friends in the Will was similar to the role of a protector in relation to a trust but said one of the most important aspects is an ability for someone to remove a trustee.

726. [726]
     Radford said the deceased’s instructions, on 5 May 2010, would not have had any causative effect on the preparation of an interim will. A will could have been prepared “with some percentages” and left to the deceased to alter another time. Radford accepted the deceased did not have a concluded instruction about percentages. Radford also said that in 2006 and 2007 a prudent solicitor would have given advice in relation to complicated investments including global markets, even though the deceased’s major investment at the time was an Australian company, Macarthur Coal. Radford said it might “have been sold in the future”.^[124]

727. [727]
     Radford’s opinion that “the appointment of [the executor], and the international friends, was patently not in the interests of any of his family members”^[125] was on the basis of a statement by the deceased instructing Boyd he did not want that person as an executor. Further, the provision for an international friend was not normal and not in the interest of the family. His focus was on the structure of the will which he did not consider to be usual. Radford said he would have tried to get the deceased to put all of them in together as a means of having a forum of people to discuss matters to try and agree but not have a sole executor in charge of such an amount of money. Radford accepted that if the deceased just wanted the one executor that was his decision.

728. [728]
     In cross-examination, Radford accepted that in his first report, he did not refer to the 2002 Will as an interim will. Radford agreed that the practice of a succession solicitor would involve obtaining as much detail as possible in the initial meeting with the client and undertaking title and company searches to review that information. Depending on the results of those enquiries, it may be necessary to prepare associated documents, including deeds of variation of trusts or a deed that allows for the succession of the role of the appointor. Radford did not think it would be necessary to obtain tax advice, if it is just variations about administrative matters, but you would if it was affecting the category of beneficiaries. It may be necessary to obtain instructions about seeking other advice before preparing a will. If you could not get instructions to finalise the will, you would wait some time before advising the client that the file had been closed. You would generally only do that after you had tried your hardest to get the client to do something.

729. [729]
     Radford accepted a certain percentage of clients will not ultimately sign a concluded document. He agreed there are circumstances in which a client would not follow advice. In that instance, he would prepare the Will in accordance with their instructions but send a letter setting out his concerns. Examples might be the appointment of one executor when the advice is to appoint at least two. Ultimately it is the client’s Will and the solicitor draws it in accordance with their instructions, even if it is against the solicitor’s advice.

730. [730]
     Radford agreed the appointment of two people can create difficulties. Executors may not get along and there may be applications for administration orders and the removal of an executor. It can be particularly difficult if one of the executors is said to be independent of the family and the other is attached to the family.

731. [731]
     Radford agreed that clause 6.1 of the Will contained a power directed at enabling the international friends to require the trustee to resign. He also accepted that the time reasonably required to draft a Will depends upon many factors, including the state of instructions. Radford opined it was the responsibility of a solicitor to hurry up an undecided client but not to push them into making a decision. Radford accepted that whilst it did not hurt to remind a client, “once the ball is in the client’s court about providing instructions, it’s a matter for the client to come back to the lawyer”.^[126] Radford agreed the making of a will was entirely a matter for the client.

732. [732]
     Radford accepted that Boyd did not have enough instructions to prepare a will capable of being signed in or shortly after October 2008 but said he was in a position to prepare a codicil that changed the executor and included a power of appointment. Radford said a prudent solicitor would have prepared something and presented it for the client to consider in order to get them moving to make a decision. Boyd could also have prepared a document which allowed the deceased to consider the percentages further. Radford said the document prepared would have gaps but it was not “not so much a skeleton but a fairly final draft”. He conceded that in order to get to the residue you needed to identify each and every bequest and that had not been done as of 8 October 2008.

733. [733]
     Radford conceded that his expert opinion was to be understood as to be read that Boyd could have prepared a document by that date. Radford accepted that based on the contents of the conversation on 5 May 2010 the deceased wanted to change his instructions and that it would await until his trip overseas. A reasonably prudent solicitor in 2010, receiving those instructions, would wait. Radford said he would have prepared something for the deceased to think about because once he decided the final percentages it was a simple exercise to alter that document. He accepted that is not what he had said in his final report.

734. [734]
     Radford agreed that on the deceased’s instructions on that date, it was clear to a reasonably prudent solicitor that the testator had not made up his mind about whatever it was he was reconsidering at that time. He would not be critical of a solicitor, who received that instruction not continuing to carry on in preparation although Radford would have done something in the meantime. He accepted that making contact with lawyers from overseas to obtain advice about foreign assets was the type of things that could be done in the interim. Radford said the reason he did not say in his report that a reasonably prudent solicitor, taking into account that file note, would be justified in stopping any work was because of the delay. Boyd was in a position in October 2008 to do something to give the client an opportunity to finalise the instructions.

735. [735]
     Radford opined that in reviewing the 2002 Will, a prudent solicitor would have raised consideration of replacing the named executor with two executors and raised the difficulty in appointing a person from another country. Radford accepted that on the file notes, Boyd had written in 2006 and 2007 suggesting to the deceased that it was time to do something with the Will and had not received a response for what was, in total, a year and a quarter. Radford agreed that if the file note of 5 May 2010 showed that the deceased was not in a position to express his concluded testamentary intention, there would be no claim that the beneficiaries could make against the solicitor. Radford said that if he was asked to give advice on the topic he would have advised that there was the potential for claims but accepted that succession practitioners may differ in relation to that conclusion.

736. [736]
     Anthony Samuel, a forensic accountant, provided reports dated 22 May 2019, 6 August 2020 and 12 June 2022 in relation to the calculation of losses incurred as a consequence of negligent drafting of the 2002 Will, the negligent failure to prepare a new Will and the negligent failure to advise Amanda of the potential ability to bring claims in respect of those matters and that she should as a consequence oppose the appointment of Boyd as administrator. Samuel’s calculations were prepared on three scenarios.

736. [737]
     Samuel accepted his reports were prepared on the basis that he was to assume that Amanda’s entitlement was either 52% of 70%, or 56% of 70% of the estate assets; that the loss was to be worked out at specified dates; and that all assets were to be treated as estate assets. His report did not deal with any taxation implications. The methodology adopted by him was an average price over the period in question, for each scenario. His opinion did not constitute a price on which he was saying the shares would have been sold, merely an estimate of the average over the entire period, determined by assuming a sale of shares evenly over the period although it did not have to be a sale on each day in that period.

738. [738]
     Samuel accepted that his calculations proceeded on the hypothesis that it was right to take into account the price on each of the trading days throughout that period. He also assumed an equal sale of the volume to be sold divided by the number of days, in practical terms. He accepted that, mathematically, his approach was indistinguishable from proceeding on the basis of selling a specified number of shares each day at the closing price. He also accepted that his hypothesis did not assume a block sale and did not seek to identify the manner in which the relevant estate asset would be sold and when. His approach also did not assume the sale of the entire shareholding on a single date or around a single date and did not assume the sale in two or more parcels over a couple of months.

739. [739]
     Samuel accepted that his hypothetical approach was not what did occur in relation to the sale of estate assets. He accepted that for shareholdings in the order of Karoon it was common for block sales but said it would not mean they were always sold as a block. He also accepted that the holding in Karoon was of a different order of magnitude to many of the other resource-type stocks held by the estate and that the approach adopted in relation to the sale of those other shareholdings did not “tell us about what you would do with Karoon in practice”.^[127]

740. [740]
     Samuel accepted that the estate shareholding in Sundance Resources was of the same order of size as Karoon and that the Sundance shareholding was sold by one transaction. Samuel accepted it was a transaction of a comparable size holding within the relevant period, which was sold in a block sale at a discount from the market price. He did not consider that sale relevant to mention when dealing with examples of common practice of selling Talbot Group holdings in resource companies. Samuel said he was not disputing that shares could be sold as a block but for the purposes of estimating damages it was not a practicable way. His approach was designed to minimise the risk of under or overstating that loss.

741. [741]
     Samuel agreed that a decision whether to sell shares and when takes into account a large number of considerations. Many of those had been listed by Lonergan in his report.^[128] There may be more. Samuel accepted that a block discount was to account for the impact of selling a relatively large parcel of shares at the prevailing price on a particular day or a few dates. A relevant factor is the size of the parcel relative to the number of issued shares and the average trading volume. The higher that proportion the greater the discount.

742. [742]
     Samuel accepted that the Karoon shares were sold in late 2019 in four tranches over two months such that it would properly meet the description of a block sale. In an active market such as the ASX a speculative and volatile stock would be more likely to attract a block discount or a bigger block discount than a stable and non-speculative stock. Further the nature of the general market outlook is relevant with a gloomy share or market generally attracting a bigger discount. If the parcel of shares is in the order of 10-15% of the total shares on issue that is a substantial component of the total volume of issue capital and the likelihood is the price would be discounted with the size of that discount being affected by various factors.

743. [743]
     Samuel agreed his hypothesis meant that whilst selling 26 million shares in Karoon in a block sale would result in a discount, selling 105,000 shares each day over the specified period would not have an impact on the price for those shares. He denied that was not a realistic proposition. He accepted that number of notional Karoon shares would represent a very large increase on the shares actually traded on days in the relevant period. He also accepted that putting such a large amount of extra shares into the market each day would have an effect of depressing the price of the shares. His calculations did not attempt to identify any allowance for that factor because that was not what was assumed in his methodology.

744. [744]
     Samuel said he was not an expert on the stock market. He was an expert valuer. He was not an economist but accepted that if on a given day they were selling 864 shares and you sold 105,300 more shares, it would have an impact on the price, and most probably would mean that the opening price the next day is lower. Samuel accepted that ASX listing rules required a person who was a substantial shareholder in Karoon to give notice if there was a change of 1% to that holding.

745. [745]
     Samuel accepted that in his report he had opined that the Karoon shares were sold at prices materially consistent with the quoted prices but that he had not mentioned in that report that those sales had occurred where there was a capital raising by Karoon resulting in the issue of an additional 123.5% of the existing Karoon shares with the consequence that it would dilute the estate’s Karoon parcel from 15% to 7% and that those shares were all issued by the company at a price which was a 16.5% discount. Samuel said that approach analysed any one sale at any one point in time; that was not his approach or his methodology. He also did not mention in his report that the company had, as a consequence of that process, been substantially de-risked by having $284 million cash in the bank.

746. [746]
     Samuel accepted that in respect of the non-Karoon assets he had adopted the same methodology but in his latest report imposed some discounts to allow for the fact that some were smaller companies and shareholdings which were not very liquid. He agreed the shares that were sold, based on his methodology, would have represented a significant increase in shares on a given day which would have had the effect of reducing the share price. In respect of some of the non-Karoon shareholdings his scenarios had proceeded on the assumption of the sale of shares before the shares had in fact been acquired by the estate. Samuel said he was not aware of that circumstance in preparing his report. He agreed that if a significant parcel of shares was offered on a given date it would have the effect of depressing the price on that day and probably on many other days. He agreed that allowing a discount for a general illiquidity problem was reasonable and with hindsight he ought to have applied it in his earlier reports but did not accept that the failure to do so evidenced a lack of reasonable care. Samuel said you had to make a judgment at the time as to the level of work required for an estimation of the loss.

747. [747]
     Anthea Kennedy, an accredited specialist in Wills and Estates law, opined that Boyd’s advice that the deceased’s wish to have the Will administered overseas and keep it secret would not work in reality, was appropriate, correct and consistent with the practices of a reasonably prudent succession solicitor at the time. An estate cannot be administered in secret. It is an obligation of an executor to be transparent with beneficiaries of an estate. Executors and trustees are also obliged to keep accounts and a Will becomes a public record once it is admitted to probate.

748. [748]
     Kennedy further opined that Boyd’s advice, that there were risks associated with appointing only one overseas based executor and that it would be preferable to have more than one trustee and executor and that they should be resident of Australia, was also appropriate, correct and consistent with the practices of a reasonably prudent succession solicitor at the time. A reasonably prudent succession solicitor at the time would act in accordance with a client’s instructions, despite those instructions being against his or her advice. A reasonably prudent solicitor is not obliged to encourage a testator to appoint more than one executor. The decision is ultimately that of the testator. The choice of an executor is very personal to the testator. There are many factors which influence this choice. Boyd was bound to follow the instructions of the deceased.

749. [749]
     Kennedy further opined that a reasonably prudent succession solicitor at the time ought to advise the deceased to appoint the international friends as executors, given the decisive nature of the role he wished to create. The powers given to the international friends under the clauses in the Will were not valid. An executor’s discretion cannot be fettered. A reasonably prudent succession solicitor at the time correctly would have advised that while the international friends may be consulted by the executor and in an advisory role, the executor is entitled to ignore this advice or not consult with them at all. Kennedy considered Boyd’s discussions as to the supervision of the trustee, the concept of international friends, the concept of an appointer type role and the appointment of a successor, consistent with the practices of a reasonably prudent succession solicitor. A prudent succession solicitor would also provide advice in relation to potential disputes that may arise from the drafting of a Will in a particular way. However, a solicitor can only provide such advice in the context of their instructions at the time.

750. [750]
     Kennedy further opined that it is consistent with the practices of a prudent succession law solicitor to verify the details of a corporate body being appointed as executor. However, it is not the obligation of the solicitor to check the names, addresses and other details of individual persons or to ensure that a person is willing to take on the role. That is a conversation more appropriately had between the testator and the person to be appointed. It would also be consistent with a reasonably prudent succession solicitors practices to advise a testator as to the validity and enforceability of the Will in the relevant jurisdiction. Where the solicitor is not familiar with the particular jurisdiction, it would be prudent to engage an experienced legal advisor to provide advice in this regard. Given the 2002 Will sought to deal with immovable property in France, it would have been prudent to engage a French solicitor. Kennedy observed that it appeared Boyd was aware the deceased had sought his own independent advice in relation to the French asset and a reasonably prudent succession solicitor at the time could not take steps beyond the scope of their instructions. Further, considering the statutory powers which exist in Queensland, Kennedy did not consider a prudent solicitor would be obliged to include mechanisms within a Will for a third party or parties to remove an estate trustee and appoint a replacement.

751. [751]
     Kennedy further opined that Boyd’s conduct at the 23 November 2007 meeting with the deceased, in which he reiterated to the deceased that his Will could not bind directors of corporations, trustees and principals of trusts and the deceased would be dependent upon them acting and exercising their duties and discretion in a way consistent with the terms of the Will and that if the deceased wished any specific assets held by a company or trust to go to specific individuals he should provide instructions which could be recorded in his Will or in a separate document if necessary, was correct advice and consistent with the practices of a reasonably prudent succession law solicitor. It was important for the deceased to be aware of the distinction between the treatment of assets, but the deceased may have had sound commercial reasons for assets of significance to be held outside of his estate.

752. [752]
     Kennedy further opined it was consistent with the practices of a reasonably prudent succession solicitor to brief experienced Counsel to review estate planning documents. The conversations Boyd had with the deceased in or about December 2008 or January 2009, in relation to the need for specific provision for the infant children, and against the appointment of overseas executors and trustees, were correct and consistent with the practices of a reasonable prudent succession solicitor. Given the complexity of the deceased’s estate, the existence of the 2002 Will and the uncertainty as to the deceased’s instructions, it would not have been appropriate for the deceased to be asked to sign an interim or informal Will. The testator’s testamentary intentions were not settled as at December 2008 or January 2009. There was no significant risk of the deceased’s imminent death or incapacity given his age and lifestyle. Further, the draft Will provided by Counsel was not in a form to be executed by the deceased. The deceased’s instructions were not settled and it would not have been appropriate for him to execute the draft Will as an interim or informal document. Similarly, as at 5 May 2010, as the deceased’s instructions were not settled, it would not have been appropriate for him to execute an interim or informal Will.

753. [753]
     In cross-examination, Kennedy agreed there was nothing in the new Will file which would lead her to the view that you would recommend against the appointment of Boyd as administrator. Kennedy agreed it is important to provide to the client an explanation of difficult matters that fall for instructions. The advice needs to be given in conference orally. Whether the client requires a written form of advice is up to the particular client. She agreed that her opinion in relation to provision directly for the infant daughters, was saying no more than that if you wanted to ensure they received a benefit directly, you would need to allocate it to them directly. Kennedy said a reasonably competent solicitor would need to look at the reasons for doing an interim Will rather than a final Will. An interim Will can raise more issues than it solves so there would have to be a specific reason. The solicitor would discuss with Counsel the reasons to have an interim Will.

754. [754]
     Robert Monahan, a specialist in Wills and Estate law, opined there is a general rule of thumb that a legal personal representative has an obligation to realise the estate assets, pay debts and expenses and distribute the estate within 12 months of the deceased’s death. However, the Australian Taxation Office recognises that estates may take a longer period to administer. The Talbot Estate was clearly a complex estate with multiple entities, with assets in a number of countries outside of Australia. Additionally, there were clauses in relation to when each of the children were to obtain the balance of the capital entitlement and there were inter-entity loans and taxation obligations. The process of realising assets would have been complex and certainly outside the concept of an executor’s year.

755. [755]
     In his opinion, it was not reasonable that the estate could have been fully administered by 31 August 2014. A relevant consideration for any trustee is the financial needs of the beneficiaries. However, by the time Boyd took over as administrator, assets worth some $217 million had been realised. There was no urgency to sell other investments. Further, there was no evidence of any requests being made of the administrator, based on financial need of any beneficiary.

756. [756]
     Monahan said it was important to understand the difference between estate and non-estate assets. The Karoon shares and the non-Karoon shares were not owned by the deceased. They were owned by TGH and TGI. TGH also held some group assets as a trustee. Boyd, as administrator, could not have sold or distributed those group assets. He could have called a shareholder meeting and passed a resolution requesting the directors sell some of the group assets. If the directors failed to act in accordance with that resolution, he could have taken steps to remove the directors and appoint new directors. However, the removal of company directors would not be a decision which a competent and reasonably prudent administrator would take without serious justification.

757. [757]
     Further, Boyd had ongoing and regular discussions with the directors and with advisors and brokers. There was no reason to believe the advisors were not competent to give their advice. Putting aside the benefit of hindsight, if Boyd had caused the sale of Karoon shares or non-Karoon assets, contrary to the advice of those professional advisors and the shares increased in value, his conduct could be criticised as he would have acted contrary to that professional advice. Boyd could be similarly criticised if he had taken steps to replace the directors and appoint directors who may have been more likely to follow his directions to sell some or all of the group assets, even if contrary to professional advice.

758. [758]
     The directors of TGI and TGH, at the time Boyd was appointed as administrator, had technical executive and director level experience in the coal industry. They also had worked with the deceased prior to his death and with the executor. There generally is a benefit in retaining the ongoing assistance of existing directors and employees. The removal of those directors, having regard to the nature of the estate and the complexity of its assets, was something a competent and prudent administrator would be reluctant to do unless there was clear evidence that the estate or its assets were at risk by their continued involvement. There was no evidence which would have justified Boyd removing any of the directors of TGH and TGI. Further, the removal by Boyd of TGH’s trustee of the relevant trust would have placed him in a potential conflict position. The beneficiaries of the Talbot estate were different to the beneficiaries to the trust.

759. [759]
     Whilst Boyd was not a professional trustee, Monahan opined that he performed his duties in a manner consistent with a competent and reasonably prudent administrator. Further, by seeking advice from the external advisors and the directors, Boyd acted prudently, and it was reasonable in all the circumstances for the directors of TGI and TGH and Boyd to act upon the advices with respect of the sale of the Karoon shares and the non-Karoon shares and assets.

760. [760]
     A competent and reasonably prudent administrator or trustee would not have done so. Boyd’s conduct as administrator was consistent with the conduct of a competent and reasonably prudent administrator with respect to the sale of the Karoon shares and in dealing with the non-Karoon shares and assets.

761. [761]
     In cross-examination, Monahan accepted a competent administrator would take steps to acquaint himself with the estate at that point in time and would want to know the investment or divestment strategy in relation to the assets of the estate. He agreed the administrator would want to bring your own fresh judgment as to whether to maintain those arrangements. You would also need to ascertain the nature of the assets under control. A competent trustee dealing with those assets should have a plan to deal with those assets in a timely way, but it is not necessary that the estate assets be actually sold. Nowadays, with the complexities around taxation and capital gains tax, the trend is not to realise assets unless there is a need to do so.

762. [762]
     Monahan said a trustee needs to obtain and consider independent and impartial advice and act reasonably in relation to it. The trustee’s obligation is to consider the advice, not to blindly follow it. The trustee, at every stage exercises his or her own judgment, as trustee. You would consider and take into account that advice and make a decision that is in the best interests of the beneficiary. A component in the assessment of risk was not only the character of the asset but also the proportion of the assets of the estate that it represents. Monahan said you have to assess it with regard to the needs of the beneficiaries, the duration of the expected trust and make a decision based on those factors and the advice that had been given. The fact that the Karoon shares were not paying dividends was a factor to be taken into account. However, you look at the advice being given as to the timing and method of selling those shares. There was a lot of fluctuations. At all times, the administrator and the directors were getting advice from a number of different sources.

763. [763]
     In the Talbot estate, there was a potentially long running trust. There was already significant funds available to benefit the beneficiaries. There was no urgency to realise shares against advice by independent sources. The administrator was also consulting with the directors of the relevant company. That was important because they had duties as director. There was a consensus and a collective decision made, after advice was obtained from the various advisors. Monahan said that in deciding whether it was appropriate to sell shares, you would have regard to the advice of the advisors who might give a target price but might also indicate that it was reasonable to wait rather than sell now even though the target price might be in 12 months time. Monahan said it all depended on the advice at the time.

764. [764]
     Monahan said that Wood and Walker had been involved in the company long before the administrator. He would assume they had knowledge of the investments. He would also assume there would be no conflict of interest or they would declare any conflict of interest. You would have regard to any warnings that a particular director might have an inclination to steer transactions in a particular direction. You would assess that warning with all other factors. An administrator was entitled to expect the directors would be complying with their obligations as directors.

765. [765]
     Monahan agreed the fact that Karoon was not producing dividends probably made it fair to say it was not a good long-term investment unless you were expecting to get a large capital gain at some point in time. If you were going to sell the asset, it is a matter of what is a reasonable price and getting advice to that effect. A competent administrator should make a determination as to whether it is an appropriate investment but views can change when you review a portfolio. Monahan opined that Boyd’s decision seemed reasonable having regard to the advice he was given. Monahan observed that in respect of RBC, there was an offer made which he could see from the information queried a conflict of interest.

766. [766]
     Monahan agreed that a trustee ought not to fetter the decision making but said that Walker and Wood were the directors of the two relevant companies. Any decision in relation to the sale of the shares, strictly speaking, should be made by them. It was those entities that had the interest in Karoon and the other shares. There needed to be a consensus between them to sell any of the shares. There was evidence about the vulnerability of a sale because the shareholding was in excess of 10%. It was not just as easy as saying to the directors sell the shares. That would put a dampener on both those shares and the shares owned by the trust.

767. [767]
     Monahan opined that Boyd’s evidence that, “unless and until Mr Wood and Mr Walker were both onboard with a particular course of action, I didn’t lend my support to whatever that course of action might be.” did not mean it was inappropriate conduct for a prudent administrator. The decision was outside the administrator’s area of expertise so the administrator was relying on the advice and recommendations of the directors, which would be reasonable. An administrator coming into an estate in circumstances where assets are held by a company or a company acting as trustee would appropriately consult with the directors or trustees to ascertain the asset position.

768. [768]
     Wayne Lonergan, a specialist valuer, opined that there were four serious errors in the methodology adopted by Samuel. First, there is no allowance for the daily price effect of the additional shares which are assumed to be sold each trading day over the relevant hypothetical sales period. Second, there is no allowance for the broader market reaction to a steady ongoing sale of shares by a major shareholder which would have to inform the market regularly about shareholding changes. Usually, when the market is aware of an impending sale, this has a depressing effect on price. Third, Samuel assesses the loss on the basis of a percentage of calculated total loss without regard to the actual ownership of the various assets. There is no explanation as to basis upon which the proceeds from asset realisations owned by a trust, of which Amanda, Alexandra and Claudia are not direct beneficiaries, could accrue to Amanda. Fourth, the loss is assessed without regard to any tax implications from the realisation and distribution of those assets. These implications could be significant and ignoring them would materially overstate the loss.

769. [769]
     Lonergan further opined that in using the closing price as the proxy for the price to be achieved for the hypothetical additional share sales traded each day, Samuel’s approach is flawed as the closing price reflects the last traded price for that day as opposed to the average price achieved over that day. Conventional valuation practice is to use volume weighted average price as this minimises distortions due to outliers. More fundamentally, the adoption of daily sales disposal assumptions is incorrect as it ignores the adverse market impact of consistent selling.

770. [770]
     Lonergan further opined that whilst Samuel contended his approach was unbiased, it was not because he ended up with a neutral position, namely, that the sale of the shares had no effect on the market. Shares are more likely to go up with the extra buying pressure and more likely to go down with the extra selling pressure. Samuel’s averaging process ignores the fact that on low volume days, what may not be a particularly large number of shares has an exaggerated impact if you are trying to sell them because, relative to the trade on that day, there is not enough market buying capacity to absorb the additional sales. Some of the shareholdings in the non-Karoon assets were very hard to get out of.

771. [771]
     Lonergan had personal experience in selling large parcels of publicly listed shares held by a substantial shareholder. The most appropriate method of effecting a sale of such a shareholding is a single off market block sale. If you try to sell such a shareholding slowly, over an extended period of time, you run into a number of issues. People hold back their purchasing decision because they know that you, as a significant shareholder, are selling and they wait for the price to go lower. There is a screen which tells potential buyers and sellers how many people want to buy shares at various prices and various volumes. That is readily identifiable. If the holding is bigger than 5%, each time you sell down 1% you have to formally notify the stock exchange. If you are selling a significant shareholding over a period of time, it becomes readily apparent and buyers take advantage by stepping back.

772. [772]
     In his opinion, dribbling the Talbot Group’s Karoon shares into the market on a daily basis would be very unwise and almost impossible to do. The Samuel approach, to sell at the closing price of the day, almost by definition, is simply impossible. It is also impossible in terms of numbers. The market is very well informed and closely studied by a large number of people. Selling down big holdings is done by block sale with varying discounts. For the purposes of this matter, the discount would broadly be about 10%, absent any other aberration.

773. [773]
     Lonergan agreed that market participants can be expected to act rationally in response to information that enters the market. A rational response means that if positive news is received in respect of a company, you expect to see its price go up and if negative information is received, you would expect to see its price go down, as long as it has not been anticipated before in the market. Lonergan said if you were an investor in a gold company and the gold price goes up significantly, you would reasonably expect that a producing gold mine would be more profitable due to the gold price effect. That is an example of a piece of information which may already have been factored in by the marketplace.

774. [774]
     Lonergan also agreed that supply and demand inform market price. If you add to the supply side and the demand side remains as it was, that will have a downward pressure on price. Conversely, if there is an injection to the buyer side, with no addition to the sell side, that would see prices go up. Lonergan accepted block sale discounts are idiosyncratic. It depends on the particular stock and the particular market sector. A company like BHP can have bought and sold quite a significant number of shares on a daily basis. A stock like Karoon, which had only 65% of its shares on issue because three significant and relatively long term holders held 35% of the shareholding, had a concentration of ownership issue as well as a daily turnover that could be quite small and sometimes zero. The number of investors is limited in respect of those types of companies.

775. [775]
     Lonergan did not accept that Samuel’s approach averaged away problems in the identification of the assessment of a loss. Lonergan said if the shares were to be sold against the background relied on by Samuel, the blockage discount would be in the order of 20%. Samuel makes no allowance for a block discount, despite the fact that in his own report, he put a block discount on Karoon when he first looked at it and despite the fact that when Karoon was in fact sold down in very different circumstances, there was a block discount.

776. [776]
     Samuel also recorded that he had assumed that the shares would have been sold on a regular basis throughout the relevant period. Lonergan’s criticism of Samuel’s calculation approach was that it worked on the basis of consistent sized sales. Lonergan accepted that one aspect of his criticism was that the existence of a single shareholder continually selling would create overhang in the market but said that the reasoning was defective for those other reasons, not just overhang. It was difficult to ascertain how adverse the impact on the market would be if you did such a non-typical thing as a significant shareholder.

777. [777]
     Lonergan said that a blockage discount typically ranges between two and a half and 10%. Something around 10% would be reasonable in this circumstance. He had ascribed a blockage discount of 20% for the Karoon shares because if they had been dribbled out, you would get a much worse answer than just the 10% discount. Constant progressive selling produces a worse answer. The Samuel approach is more destructive than a straight blockage discount because it ignores things like the overhang effect and the impact on the opening price the next day and the compounding effect of a gradual sell down.

778. [778]
     Lonergan accepted that if a liquidator is appointed to a company that holds a large shareholding in another company, an informed market would soon work out that that liquidator, sooner or later, will need to sell the shares. Everyone in the market knows a liquidator is basically a forced seller. A liquidator is not a long-term holder of shares. Lonergan did not accept the same would apply in respect of a deceased estate. It would depend on context. In the mining industry, and particularly smaller stocks, the considerations are very different. The lead time to get a project approved and to commence production is between five and 10 years and most likely the upper end of that range. They are very long term investments. If you are a significant holder in that company, the optimal way to realise your gain is to persevere through a period of subdued prices. You might take an entirely different view of a diversified portfolio. Further, if your beneficiaries are infant children, you might hold the shares because having to distribute the income often is not a good idea. It depends on the objective of the estate.

779. [779]
     Lonergan said averaging the daily volume held significant difficulties. For example, some of the non-Karoon shareholdings involved stock which had a volatile daily history of share sales. The daily volume makes an enormous impact on the ability to get rid of shares. Samuel’s approach of progressive disposal does not work. Lonergan said the professional advisors giving advice to the Talbot Group, when indicating smaller block discounts, were not dealing with Samuel’s progressive sell down methodology. They were dealing with a clean sale. Further, they were seeking to get a mandate to sell the stock. In relation to one of the professional advisors, the block discount was discussed in the context of an upside sharing arrangement. It was not a clean sale.

780. [780]
     Tony Sloan provided a report in relation to the taxation implication of the sale of the Karoon shares. The opinions expressed in that report were jointly held opinions with another tax accountant expert, Bannister, who adopted Sloan’s conclusions.

Consideration Generally

781. [781]
     Amanda impressed me as an intelligent, commercially savvy individual, confident in what she wants and willing to do whatever is necessary to achieve her objective. Her preparedness to allow a false affidavit to be used by her father, in proceedings on behalf of her daughters, and then to replace him with another when faced with the prospect of the falsity being revealed, was but one example.

782. [782]
     Another was her stated intention to destroy Boyd when he had the temerity to insist on the beneficiaries paying rent to use Villa Calvi, in circumstances where it was an asset of the Estate and Boyd, as administrator, had reasonably pursued renting it on a commercial basis to offset the substantial cost of its upkeep to the Estate. A request that the beneficiaries pay rent was a necessary requirement, if the Estate was to enjoy the tax advantages associated with such a commercial enterprise.

783. [783]
     Boyd impressed me as a cautious professional, genuinely trying to assist the widow and family of a long-term client, respected and admired by Boyd. The time period over which the 2002 Will was prepared and during which preparatory work was undertaken on an updated Will was, in my view, consistent with this cautious approach, rather than incompetence.

784. [784]
     Both Paterson and Zwier also impressed me as careful professionals who went about the tasks required of them, as part of Amanda’s retainer of the second defendant, with diligence and competence.

First Defendant 2002 Will

785. [785]
     I accept Boyd’s evidence as to the contents of the discussion he had with the deceased on 19 December 2000. I do not accept the topics covered therein were of such a nature that they could not have been dealt with as outlined by Boyd in what was recorded to be a 20 minute conference.

786. [786]
     I particularly accept Boyd’s evidence that in this conversation, he specifically raised that the preparation of Wills was not an area of speciality for him and that when the deceased responded that he did not wish to use the other firm referred to by Boyd, it was agreed between Boyd and the deceased that Boyd could, if necessary, procure specialist assistance.

787. [787]
     I also accept that in this conversation, Boyd specifically discussed with the deceased the fact that his Will could deal with personal assets, not corporate or trust assets, which would be subject to the relevant directors and trustees exercising their powers in accordance with their obligations.

788. [788]
     The fact Boyd made no note of those aspects of his conversation does not cause me to doubt the accuracy of his evidence. Boyd’s style of note taking was more directed towards action items rather than recording conversations or advice.

789. [789]
     In coming to those conclusions, it is significant to note that the deceased’s initial instructions listed categories of assets, with specific recognition some were held in trusts and in company names, where the deceased was the sole shareholder and sole director. Those instructions also recognised that in the case of public shares, the value of the shares were driven by an independent board of directors with their value to be realised so as to maximise that value and minimise any impact on the viability of the particular company. It is also significant that Boyd made a specific note, prior to the meeting, in respect of category 3 in Clause 3.1, consistent with Boyd having identified reference to those differing categories.

790. [790]
     I accept Boyd’s evidence that he reiterated the distinction between such assets in his conversation with the deceased on 3 October 2002. The fact that Boyd made no note of that matter does not cause me to doubt Boyd’s evidence in this respect. I accept the deceased responded, “Let us see how they go with it”. Having regard to the advanced nature of the document then being discussed, it is unsurprising such a confirmatory response would not be recorded by Boyd, having regard to his style of note taking.

791. [791]
     The fact that Boyd did not send any letter confirming his advice also does not cause me to doubt Boyd’s evidence. A consideration of Boyd’s file, in relation to the 2002 Will, and the preparation of a new Will, confirms Boyd’s evidence that the approach he took in relation to the deceased, having regard to the lack of any personal email and the deceased’s desire for privacy in respect of his personal affairs, was that Boyd customarily did not send letters confirming his instructions.

792. [792]
     That Boyd was aware of the importance of the distinction between personal assets and those owned by corporations and trusts, and had brought it to the attention of the deceased is supported by a consideration of the 2002 Will. Paragraph 9.4 expressly referred to the ownership of shares in companies in which the deceased acted as trustee and shares in companies which held property in their own right. Further, paragraphs 14 and 15, when allowing for the allocation of certain properties to particular beneficiaries, including an ongoing business, provided that “The Estate Trustee, my Advisers and management are requested to co-operate fully with any Beneficiary in determining any interest in the choice of any such property.” Those clauses contain acknowledgements as to the distinction between shareholdings in entities holding property and that the allocation of businesses in respect thereof to a particular beneficiary required the cooperation of the relevant entities.

793. [793]
     I accept that once the deceased indicated to Boyd, which I accept the deceased did, that notwithstanding that advice, that was the structure he wished to pursue, it was Boyd’s obligation to put into effect the deceased’s instructions. Both Radford and Kennedy opined that was the obligation of a competent estate practitioner.

794. [794]
     I also accept that Boyd discussed with the deceased the likely ineffectiveness of the Will remaining confidential and the difficulties associated with its administration offshore; and that Boyd specifically recommended against offshore administration and advised it would be preferable for there to be more than one executor. Boyd’s notations prior to the initial conference with the deceased specifically noted the necessity for probate here and queried a beneficiary’s entitlement to know their rights and the nature of the bequest. Further, the revised transcript provided by the deceased at their subsequent meeting specifically deleted reference to the Will being administered overseas “by people not a party to Australian Family Law” and reference to the trustee being a nominee of a particular country. Those revised instructions nominated a specified trustee, consistent with the deceased having received and accepted advice from Boyd as to it being his obligation to select the person who would administer the Estate.

795. [795]
     I also accept Boyd’s evidence that he did not receive a response from the deceased to the list of questions he forwarded to the deceased on 19 July 2001. Those questions raised practical matters in respect of which instructions were required before Boyd could undertake preparation of a Will. Significantly, it was Boyd who ultimately followed up the deceased in respect of those outstanding matters, in May 2002. Boyd’s note of that telephone conversation specifically records that the deceased was aware he owed Boyd instructions. I accept the accuracy of that note.

796. [796]
     I accept Boyd did not receive further instructions from the deceased and that it was Boyd who again followed up the deceased on 5 June 2002, without success. These non-responses are entirely consistent with a conclusion that the deceased did not see the making of this Will as having any urgency, and support a conclusion that the delay in the preparation of the 2002 Will was in large part due to the deceased affording it a low priority rather than incompetence on Boyd’s part. Such behaviour was consistent with what Paterson described as a not uncommon practice of high worth individuals giving the Will making process a low priority.

797. [797]
     I accepted that when the deceased did require a Will for execution, it was attended to promptly by Boyd.

798. [798]
     I accept Boyd’s evidence that in conference with the deceased in October 2002, Boyd raised specifically with the deceased, concerns as to the deceased’s ongoing insistence on an overseas based executor and to require that executor’s decisions to be overseen by the international friends. I accept Boyd also reminded the deceased that the Will could only deal specifically with personal assets, with the deceased being dependent upon the cooperation of directors and trustees in relation to assets owned within corporate and trust structures.

799. [799]
     I also accept Boyd’s evidence that the 2002 Will was structured to comply with the deceased’s instructions, which were persisted in notwithstanding the various concerns raised by Boyd in his conferences with the deceased. Whilst the terms of that Will were unusual, it is not the duty of a solicitor, to refuse to prepare a Will simply because it contains difficult and unusual terms. Both Radford and Kennedy accepted it is ultimately the solicitor’s obligation to draft a Will, in accordance with the testator’s instructions.

800. [800]
     I find Boyd prepared the 2002 Will in that form to give effect to the deceased’s specific instructions. Further, I find the executor appointed under the 2002 Will was appointed on the deceased’s instructions.

801. [801]
     I also accept Boyd’s evidence that the 2002 Will ceased to be the interim document referred to on execution, following the receipt of information from representatives of the Talbot Group in 2003. Boyd’s own letter, which made reference to the document being an interim Will, referred to the considerable amount of extra work to be done and referred to contacting the deceased’s assistant to commence that work. Once Boyd was advised there were no concerns as to third party contact, there was no need to prepare a new Will. The 2002 Will disposed of the deceased’s Estate, in accordance with his wishes. There is no suggestion the deceased wished to alter, in any way, that disposition at that time. It was Boyd who had raised the Will being interim, not the deceased.

802. [802]
     I accept Boyd spoke to the deceased about those matters in March 2003. Whilst it was submitted Boyd’s recollection of that conversation was much clearer than his recollection of his final meeting with the deceased prior to execution of the 2002 Will, there is substance in Boyd’s observation that the final meeting was in the nature of working through a document. It is hardly surprising that Boyd would have difficulty being able to recount the conversations undertaken in the course of such a meeting, without reference to the document. The 2003 discussion was in a very different category. It was a discussion with the deceased, as to Boyd now being satisfied as to a concern held by Boyd, not the deceased, at the time of the execution of the 2002 Will.

803. [803]
     That conclusion is supported by the fact that the deceased made no further contact with Boyd in relation to the preparation of a further Will. It was Boyd who raised the need for a review. Consistent with the deceased’s previous categorisation of this process as having a low priority, Boyd received no response to those initial requests made about 12 months apart in 2006 and 2007.

804. [804]
     It was submitted that Boyd’s evidence in respect of the Will no longer being interim ought not to be accepted as Boyd had no file note of his discussions with the deceased or the representatives of the Talbot Group and Boyd left the 2002 Will file open, inconsistent with it being a concluded file. Neither of those matters, either individually or collectively, cause me to doubt Boyd’s evidence.

805. [805]
     The lack of file notes is, in my view, consistent with the interim nature of the Will being of concern to Boyd, not the deceased. Once that concern was alleviated, and Boyd conveyed to the deceased his satisfaction that the 2002 Will was fit for purpose, in the context of a discussion about other issues, there was nothing to give rise to further action by Boyd.

806. [806]
     I accept there was no continuing retainer after execution of the 2002 Will to provide advice for a new Will. The fact that the 2002 Will file remained open in Boyd’s system is also unsurprising. Whilst Boyd considered his instructions in respect of the 2002 Will were concluded at that time, it does not follow it was necessary for Boyd to formally close that file, having regard to the ongoing nature of the client relationship with the deceased and Boyd’s evidence that he told the deceased that if his asset position changed, there would be a need to revisit it.

New Will

807. [807]
     I accept Boyd’s evidence in relation to the conversations had, and the steps taken, for the preparation of a new Will. Whilst that process was also accompanied by what, at first blush, may be described as inordinate delay, a consideration of the circumstances as a whole supports a conclusion that that delay was consistent with Boyd wishing to take care in establishing that the deceased had effective control of the corporate and trust structures, and consistent with delay in the deceased providing final instructions to Boyd in respect of the matters raised by Boyd.

808. [808]
     I do not accept that the deceased’s follow up email of 4 December 2008 is inconsistent with Boyd’s evidence that the deceased did not provide final instructions in relation to the percentages and other items. That email is consistent with the deceased knowing Boyd was conferring with Counsel and querying how the advice was going, not that he wanted a concluded document to sign.

809. [809]
     I accept Boyd’s evidence that when he met with the deceased to discuss his instructions for a new Will on 23 November 2007, Boyd specifically raised his expertise. The lack of any notation to that effect is consistent with Boyd’s practice. Further, the failure to raise it in a witness summary or pleading does not cause me to doubt Boyd’s evidence. He specifically raised the same issue with the deceased when preparing the 2002 Will. It would be surprising if he did not do so again.

810. [810]
     I accept Boyd’s evidence that he raised his concern in relation to the deceased’s stated intention to split the Talbot Estate trust between Amanda, Liam and Courtney, with Amanda receiving 56% on the basis she would provide for Alexandra and Claudia in her Will. Whilst there is no notation as to Boyd having raised a concern that that would not discharge the deceased’s obligations to make adequate provision for Alexandra and Claudia, it is significant that Boyd’s file note of his meeting with the deceased on 19 December 2000, to discuss his initial instructions for what ultimately became the 2002 Will, had a specific note of discussing with the deceased his obligation to make adequate provision.

811. [811]
     Whilst that discussion was in a different context, it is consistent with Boyd being aware of a testator’s obligations to make adequate provision for those having a rightful claim to the testator’s bounty. Having regard to the fact that in respect of the proposed new Will, the deceased had specifically altered his previous position of giving individual percentage distributions of the Talbot Estate trust to each of his children, it would be surprising if Boyd did not raise a concern in relation to the need to make adequate provision for his infant children. The fact that there is no notation of having done so does not cause me to disbelieve Boyd’s evidence in respect of this matter.

812. [812]
     I accept Boyd’s evidence that as a consequence of that discussion, the deceased indicated a likelihood to return to something akin to his existing Will, in that event. I accept that discussion ended on the basis the question of the percentages was to be the subject of further discussion as the Will progressed to a concluded document.

813. [813]
     The form of Boyd’s instructions to Counsel, when seeking advice in relation to the new Will, do not cause me to disbelieve Boyd’s evidence on this issue. If, as is contended, there was no discussion about the 56% allocation to Amanda, there would be no need for the additional words “broadly speaking” in those instructions. I accept Boyd’s explanation for the inclusion of those words. It is consistent with Boyd’s evidence that having raised the issue, the question of allocation of percentages had been “parked”, with Boyd wishing to have Counsel independently consider the question of an allocation to Amanda on the basis she would provide for their infant daughters, in the context of advising in respect of that new Will. In any event, Counsel specifically raised, in the context of the draft new Will, the need for a specific allocation to each of Alexandra and Claudia. I accept Boyd’s evidence that Counsel’s advice in respect of that matter was expressly brought to the attention of the deceased.

814. [814]
     I accept Boyd’s evidence that he raised with the deceased the need for instructions, in discussions had in July 2009 and December 2009. It was submitted that Boyd’s evidence of these conversations is inconsistent with the deceased’s express desire to keep matters confidential and his care in respect of his privacy. It is further submitted that the lack of a file note of the July 2009 conversation and the content of the file note of the December 2009 conversation, which it is submitted is different to Boyd’s evidence, favour a rejection of Boyd’s evidence.

815. [815]
     As to the latter, I find no material difference in the deceased’s evidence and the content of the file note. I accept the deceased’s evidence in relation to what was the conversation with the deceased on 19 December 2009. Similarly, the absence of a file note of the discussion at a State of Origin match does not cause me to reject Boyd’s evidence. The deceased gave no instructions in that conversation and expressed no concern as to delay. It is unsurprising there was no note made, having regard to those circumstances.

816. [816]
     Further, it is, in my view, not inconsistent with the deceased’s privacy concerns or need for confidentiality that such conversations took place. Boyd said each discussion occurred when he was alone with the deceased.

817. [817]
     A conclusion that the percentage allocation of the Talbot Estate trust was not the subject of any concluded testamentary intention is also supported by Amanda’s evidence of having a discussion with the deceased in 2010 about altering the percentages to be allocated to each of the children. Having regard to the deceased’s extensive travelling in 2010, I am satisfied, on the balance of probabilities, that it is more likely than not that that conversation took place between 2 and 15 May 2010.

818. [818]
     Finally, a conclusion that the deceased did not have a concluded testamentary intention is consistent with the conversation Boyd had with the deceased on 5 May 2010. I accept Boyd was approached by the deceased on that date, shortly prior to the commencement of the teleconference organised with Walker and Conomos and the overseas representatives and told by the deceased he wanted to change his instructions regarding his Will, that he was particularly rethinking the percentages and that it would await his return from overseas.

819. [819]
     Whilst it was submitted that the occurrence of such a conversation, when Talbot Group executives were present in the room, was inconsistent with the deceased’s desire for confidentiality, I find there was good reason why the deceased would wish to raise that matter with Boyd at that time. It was around that time that the deceased had his conversation with Amanda in which he said he needed to update his Will to make the children equal. Further, the deceased was leaving for an overseas trip.

820. [820]
     It was submitted that Boyd’s diary note of the meetings of 5 May 2010 was inconsistent with the deceased having attended the meeting on that day. Reference is made to the inconsistency in times between the primary note made by Boyd, and the specific note made by Boyd, on his return to his office, in relation to the conversation in respect of a testamentary intention. Reference is also made to the fact that in the primary note, there is no notation to the effect that the deceased was present at the meeting.

821. [821]
     As to the time, Boyd readily conceded that the note in relation to the testamentary intention conversation was made at a later time, after he had returned to the office. It is unsurprising that a time of 8am would be recorded when the conversation occurred but minutes before the commencement of the teleconference at 8am. The primary note records the time that Boyd was at the Talbot Group office in meetings that morning. The 10 minute difference does not persuade me that the notes made by Boyd falsely record events on the day in question.

822. [822]
     The second criticism is also unpersuasive. It is unsurprising that Boyd would not make a notation of the deceased being present at the meeting. The deceased was not present at the meeting. He came into the board room prior to the meeting and stayed for a brief, specific discussion with Boyd. Two matters were discussed with Boyd, one being a letter, the other being the outstanding instructions in respect of his Will. Neither of those relevantly pertained to the meeting. There would be no reason why, in those circumstances, Boyd would record the deceased as being present at the meeting. To do so would be incorrect. Further, there was no need to record the deceased’s presence in the room in that primary note. It was cursory and unexpected. The deceased did not contribute to the discussions which were the subject of that meeting.

823. [823]
     Importantly, the first part of the primary note is supportive of the deceased having been present on the day and of having a conversation with Boyd. It records the deceased’s instructions in relation to a letter that had been discussed between the deceased and Boyd at an earlier time, as well as instructions as to the continuation of the use of a particular person in respect of which Boyd had raised concerns with the deceased. I do not accept that note is merely recording what Boyd was told by others as to the deceased’s view of the letter and continued use of the individual. I accept the note records Boyd’s communication with the deceased on that day.

824. [824]
     The fact that there are three notes is also consistent with Boyd’s practice of attempting to have separate notes in respect of separate matters. Further, a separate note as to the Will is consistent with the sensitivities associated with the deceased’s wish for confidentiality in respect of his Will. Boyd made no reference in the primary note to the Will conversation. Instead, Boyd made a separate note, on his return to the office.

825. [825]
     It was submitted that Boyd’s evidence as to this conversation should not be accepted on the basis of its inherent unlikelihood and that it is inconsistent with other evidence. As part of this submission, the plaintiffs relied on the fact that Boyd had never pleaded, or stated in his witness summary, that Walker and Conomos were present; his primary note was not disclosed until after evidence-in-chief; and Walker did not address such an occurrence in his witness summary or in his evidence-in-chief.

826. [826]
     None of those matters, either individually or collectively, cause me to doubt the accuracy of Boyd’s evidence. The fact that Boyd did not refer to the presence of Walker and Conomos in the room is unsurprising. The relevant conversation, for the purpose of this proceeding, was Boyd’s discussion with the deceased about the new Will instructions. The relevant note in relation to that discussion was a separate note Boyd made upon his return to the office. Further, when regard is had to the breadth of the issues pleaded by the plaintiffs in the present proceeding, the omissions identified by the plaintiffs are explicable.

827. [827]
     It was submitted that an adverse inference should be drawn from the failure to call Walker and Conomos on the issue of the deceased’s presence on 5 May 2010. I am satisfied it is not appropriate to do so. The deceased’s presence was brief and there is no suggestion Walker or Conomos participated in the conversation between Boyd and the deceased. There is no basis to conclude that either could give relevant evidence as to the conversation had between Boyd and the deceased about instructions for the new Will. Whilst both may have been able to give evidence as to the deceased’s presence in the office that day. Walker was available to be cross-examined on this issue.

828. [828]
     It was further submitted that Boyd’s evidence in respect of this conversation should be rejected as Boyd, during cross-examination, initially identified important conversations in relation to the preparation of the new Will without mentioning the conversation of 5 May, but two days later did mention it whilst also referring to other conversations not the subject of a file note. I do not find those circumstances in any way persuasive in determining whether to accept the accuracy of Boyd’s evidence on this issue.

829. [829]
     In any event, the content of this conversation is the subject of not only a note made upon Boyd’s return to the office. It was the subject of specific reference by Boyd, when giving the initial notification to his indemnity insurer on 28 June 2010. Indemnity would be lost if Boyd deliberately misled the insurer in a material respect in respect of that notification. Against that background, it is illogical for him to include reference to that conversation in the notification if, in fact, it never took place. Those circumstances, in combination with my assessment of Boyd when giving this evidence, and in responding to cross-examination in relation to this issue, strongly favour a conclusion that Boyd’s evidence in respect of this aspect is truthful. The fact that he, after many days of giving evidence, failed to list this conversation as part of the important conversations about new Will preparations is more consistent with oversight than an untruthful witness.

830. [830]
     It was further submitted that Boyd’s evidence in respect of this matter would be rejected because his note records that the deceased wanted to change his instructions, consistent with the deceased up to that point having a concluded testamentary intention prior to 5 May 2010. The plaintiffs submit that conclusion is supported by the contents of the whiteboard instructions, the terms of Boyd’s instructions to Counsel and Counsel’s draft Will.

831. [831]
     That submission fails to have regard to the fact that the deceased’s conversation with Boyd referenced that the change was “particularly the percentages”, suggestive of the deceased’s change in instructions dealing with more matters than the percentages. That interpretation is consistent with the deceased not having a concluded testamentary intention. In any event, having regard to my finding that the deceased expressly told Boyd that having regard to Boyd’s advice as to the need to make specific provision for Alexandra and Claudia, he would likely return to his existing position, there is no basis to find that the deceased had a concluded testamentary intention in terms of the contents of the whiteboard or the instructions to Counsel, or the draft Will prepared by Counsel.

832. [832]
     I accept that from the time of the initial discussion about the need for specific provision, the deceased did not give Boyd any concluded instructions in relation to what was to be the percentage split.

833. [833]
     There is another significance in that conversation. Boyd specifically asked the deceased whether it was a matter to be attended to before he left for overseas. The deceased’s response was consistent with a conclusion that the deceased did not see the preparation of a new Will as having any urgency. The deceased was prepared for it to be deferred until after the upcoming mock hearing and his return from overseas. I find that the deceased did give Boyd those instructions on 5 May 2010. Those instructions were consistent with the conclusion that the deceased had, at that time, no intention to execute a further Will in any form.

834. [834]
     It was submitted that Boyd’s notation that he asked the deceased about a time frame was inconsistent with Boyd’s evidence that he did not ask the deceased for time frames. I do not accept there is any such inconsistency. As Boyd observed, the request was more directed towards whether Boyd had to urgently prepare some document for execution prior to the deceased leaving the country. It was not a request for the deceased to nominate a time period in respect of which he would give those instructions.

835. [835]
     Once it is accepted that the deceased was still making up his mind, in particular, in respect of percentages, there is no basis to find the deceased had a concluded testamentary intention as at the date of his death.

836. [836]
     The lack of any concluded testamentary intention in respect of a new Will, from the time of Boyd’s initial discussion with the deceased about the need to specifically provide for Alexandra and Claudia, is also supported by the deceased’s failure to respond on occasions to Boyd’s queries for further instructions. I accept that Boyd raised those queries, and that the deceased’s response was consistent with the deceased still thinking about his final testamentary position.

837. [837]
     I accept there was nothing that a reasonably competent solicitor could thereafter do in respect of the preparation of a new Will. The matters the subject of outstanding instructions were central to any Will. I accept drafting an interim Will, in those circumstances, would have been of no use. A solicitor can not make a testator sign a Will. The solicitor’s role is to obtain instructions, to advise in respect of those instructions, and thereafter to prepare the Will in accordance with those instructions, even if they be contrary to the solicitor’s advice.

Conflict

838. [838]
     The plaintiffs submitted that Boyd had an obligation to advise of a conflict in giving her advice and in taking an appointment as administrator, by reason of his failure to draft a new Will for execution by the deceased prior to his death. Two aspects were relied upon in support of the assertion that a conflict arose in all the circumstances.

839. [839]
     First, Boyd had raised with the executor and his attorney, the possibility of a partial revocation of the 2002 Will. Second, when Boyd gave notification to his professional indemnity insurer and top up cover insurer on 28 June 2010, he specifically referenced the issue of revocation. It was submitted by the plaintiffs that the raising of those issues was consistent with Boyd believing he had final concluded testamentary instructions which could have been executed by the deceased prior to his death.

840. [840]
     I accept Boyd’s evidence that the question of a revocation or partial revocation arose in the context of the executor’s obligation to disclose any relevant matters as part of any probate application. I find Boyd raised those matters as part of his cautious approach as a professional, not because he believed there was any basis to find there had been a revocation of the 2002 Will, either wholly or partially. Significantly, the conclusion reached by the solicitors appointed by the executor was that there was no revocation. Further, there has been no suggestion in this litigation that any such revocation arose, notwithstanding that all parties have now had access to Boyd’s new Will file.

841. [841]
     Further, whilst the notification to a professional indemnity insurer may suggest that Boyd believe there was potentially a claim against him in respect of his failure to prepare and have executed a new Will prior to the deceased’s death, a consideration of the circumstances of that notification, and its terms, support a conclusion that Boyd had no such concern.

842. [842]
     I accept Boyd’s evidence that there was a reason to give the notification, prior to the conclusion of the financial year. That reason related to the need to ensure no dispute could arise at a later time in relation to indemnity, and in particular, any top up insurer. Further, the terms of Boyd’s notification were consistent with Boyd not believing he had any liability in respect of that matter. Boyd specifically referred to the conversation he had with the deceased on 5 May 2010, when stating he did not consider he had any liability in respect of the issues the subject of that notification.

843. [843]
     These conclusions are supported by Boyd’s consistent approach of notifying his professional indemnity insurer and top up insurer, within the relevant financial year, when a potential issue arose which could lead to a claim. On each occasion, the terms of the notification clearly stated that Boyd did not consider he had any liability in respect of the subject of that notification.

844. [844]
     I accept those notifications do not constitute admissions by Boyd of potential liability. Further, I find those notifications provide no basis for a conclusion there was a conflict in Boyd providing advice to Amanda or in Boyd accepting the position as administrator.

845. [845]
     In any event, I accept that Boyd, early in his discussions with Amanda, specifically advised her on 26 July 2010, that he had been in the process of updating the deceased’s Will and that a position may arise where he has a conflict of interest, and she may need to obtain independent advice. I also accept Boyd specifically advised Amanda of his obligations of confidentiality and privilege and that they now were obligations owed to the executor.

846. [846]
     I also accept that that was not the only occasion Boyd gave such advice. I accept Boyd advised Amanda, by email, dated 31 July 2010, that he had obligations of confidentiality which would limit what he could discuss at the Melbourne meeting. Further, at the meeting on 3 August 2010, Boyd outlined his constraints in respect of confidentiality. Finally, Boyd’s retainer document dated 31 August 2010 specifically referred to his constraints in respect of confidentiality.

847. [847]
     Having regard to those circumstances, I accept Boyd did make proper disclosure to Amanda and that he was under no duty to advise further in relation to any conflict of interest and under no obligation to refuse to provide Amanda with advice or to refuse appointment as administrator.

848. [848]
     The plaintiffs submitted that an adverse view ought to be taken of Boyd’s evidence, having regard to his failures to disclose the notifications to his professional indemnity insurer in his summary of evidence and in his lists of documents. Boyd volunteered the giving of those notifications in response to a specific question in evidence in chief. It was responsive, not contrived. I draw no adverse inference from Boyd’s failure to include the notifications in the witness summary.

849. [849]
     Further, whilst there was an obligation to disclose those documents, I accept Boyd’s evidence that having regard to the fact that he was represented in this proceeding by his professional indemnity insurer, he assumed those notifications, and the documents associated with them, would have been the subject of disclosure in the ordinary course. Whilst he, as a solicitor, ought to have ensured disclosure had taken place, the circumstances of the non-disclosure of those documents are not of such a nature as to warrant adverse findings. This is particularly so where I am satisfied the notifications were given as a matter of prudence, not because of any concern that Boyd may have valid claims against him in relation to his provision of legal services to the deceased.

850. [850]
     Finally, I accept that Boyd only ever acted for Amanda. There was nothing in his retainer or his conduct which supports a conclusion that Boyd agreed to act for Alexandra and Claudia.

Second Defendant

851. [851]
     I accept that the second defendant’s retainer was with Amanda. There was no retainer to act on behalf of Alexandra and Claudia, and the second defendant did not, by conduct, assume such an obligation.

852. [852]
     First, the retainer is clear and specific in relation to the client. Second, the fact that the second defendant, in respect of an application for family provision filed but days before the expiry of any relevant limitation period, acted on behalf of Alexandra and Claudia, did not render the general retainer entered into between the second defendant and Amanda, a general retainer to act on behalf of Alexandra and Claudia. I accept those proceedings were, in truth, proceedings brought by Amanda, on her instructions. They were commenced in the names of her infant children, because of Amanda’s desire not to be seen to be challenging the deceased’s Will.

853. [853]
     It is significant that in respect of other matters that fell within Amanda’s general retainer, the second defendant consistently insisted on Alexandra and Claudia having independent legal representation in relation to the consequences of steps to be taken in Amanda’s interests, which may be contrary to their interests. Examples of those instances include the allocation of Villa Calvi to Amanda, any application to remove the executor; the appointment of an administrator; and the transfer of the Paris apartment.

854. [854]
     I do not accept those occasions of separate representation were consistent with the second defendant protecting their interests generally, except where they were in conflict with Amanda’s interests. They were consistent with the second defendant having a retainer with Amanda alone, not for Amanda and her infant children.

855. [855]
     It was submitted that the second defendant assumed an obligation to advise in respect of the interests of Alexandra and Claudia in respect of two matters. First, as to their entitlement to their trust funds upon turning 18. Second, as to the taxation implications of their entitlements under the Will. However, in respect of both matters, the second defendant’s instructions were from Amanda and were given in circumstances, where the advice in respect of such issues were for Amanda’s information and benefit, so that she may understand the rights and entitlements of her infant daughters on attaining majority and commencing to receive the benefit of their entitlements under the Will. As their mother, she had a personal interest in receiving advice in respect of those entitlements. It does not follow that because she had that interest, the advice given by the second defendant to Amanda in respect of those matters, was advice given on behalf of Alexandra and Claudia. I find that the advice given by the second defendant on each of those occasions was advice given to Amanda alone, as part of their retainer work.

856. [856]
     Finally, whilst the second defendant did know of Amanda’s infant children, the circumstances of the second defendant’s retainer support a conclusion that there was no assumption by the second defendant of an obligation to generally advise and protect the separate interests of Amanda’s infant children. Amanda’s instructions to the second defendant were clear from the outset. She did not wish to challenge the 2002 Will. She was happy with what she had received and with what her daughters had received. She wished to honour the deceased’s intentions. Her concern related to the conduct of the executor. Against that background there is no basis to conclude that it was ever within the purview of the second defendant’s retainer for the second defendant to give to Amanda, let alone her infant children, advice in relation to a challenge to the 2002 Will.

857. [857]
     The fact that the second defendant instructed town agents to commence proceedings in the name of Amanda’s daughter, does not detract from that conclusion. The non-resolution of ownership of the C and D class shares, in the Estate’s favour, had the potential to significantly deplete the deceased’s Estate of its assets, to the benefit of his two adult children. That issue did not impact on the terms of the deceased’s 2002 Will. It related to whether adequate provision had been made, having regard to the significantly depleted asset position of the deceased’s Estate should the C and D class shares ownership issue not be resolved favourably.

858. [858]
     Against that background, it was entirely understandable and appropriate for the second defendant to give Amanda advice to commence proceedings in order to protect Amanda’s position, but to not serve those proceedings. Amanda instructed them to do so, but in her daughters’ names. The proceeding was commenced solely for that reason, in accordance with Amanda’s instructions. As soon as the C and D class issue was resolved in favour of the Estate, the proceeding was discontinued, with no suggestion of any challenge to the deceased’s 2002 Will.

859. [859]
     As to Boyd’s new Will file, I accept the evidence of Paterson and Zwier that at no stage did Amanda instruct them to obtain a new Will file. That position was consistent with Amanda having no interest in challenging the 2002 Will. Further, the correspondence sent in accordance with Amanda’s instructions was consistent with the evidence of Paterson and Zwier, that the interest in respect of any notes held by Boyd in relation to the preparation of the new Will related specifically to the foundation. Contrary to the plaintiffs’ submissions, the request was not a general request for documentation in relation to the preparation of the new Will. The inclusion of the words “if so”, before sub-paragraph (b) of the letter, are consistent with the enquiry being first, whether there were any notes and second, if so, were there any notes specifically in relation to the deceased’s intention for the charitable bequest to go to the existing foundation.

860. [860]
     It was submitted that Paterson and Zwier’s evidence was contradicted by the note made by Fleer of their conference of 31 May 2011. I do not accept that contention. Whilst that note does record “request Will file”, the next note says “ask [the executor] to request for purpose of [the foundation]”. That notation is entirely consistent with Paterson’s evidence and Zwier’s evidence. I find that what was being discussed in the course of that meeting was not the contents of a new Will file generally. The discussion was specific; obtaining details of what had been discussed with Boyd for a specific purpose, namely, to facilitate negotiations in relation to Amanda’s express wish for the charitable bequest to go to the existing foundation.

861. [861]
     Once Fleer’s note is read in its entirety, there is no basis to draw any inference adverse to the second defendant from the second defendant’s failure to call Fleer, notwithstanding that she was opened as a witness to be called by the second defendant. There is nothing in the evidence that could have been given by Fleer, consistent with the contents of her note, which would have contradicted the evidence given by Paterson and Zwier in respect of the matters raised in conference. Further, I had the benefit of hearing both Paterson and Zwier in relation to those matters. I have no hesitation in accepting their evidence as accurate. Nothing in Fleer’s note causes me to doubt the accuracy of that evidence.

862. [862]
     Similarly, the fact that the instructions to Counsel refer to Bill Boyd as having a file in relation to a new Will must be viewed in the context of what was the issue to be the subject of Counsel’s advice.

863. [863]
     The plaintiffs further submitted that the second defendants’ interest in the new Will file was not limited to the foundation. Zwier was also interested in whether the deceased had identified a new executor. That, it is submitted, remained a live issue until the executor retired after the successful mediation.

864. [864]
     There is no doubt that Zwier did express an interest in whether that also had been discussed by the deceased. However, I accept that was not the focus of the second defendants’ interest in obtaining details from Boyd about the new Will instructions. Further, even if it had been pursued by the second defendant, I find it would have been pursued in the same limited way as any notes in respect of the foundation. The existence of that issue does not support a conclusion that the second defendant ought to have advised obtaining production of Boyd’s new Will file.

865. [865]
     I accept the second defendant had no obligation to investigate whether any new Will file contained documentation which would have supported a revocation or partial revocation of the 2002 Will. The contents of the new Will file were of no relevance, having regard to Amanda’s specific instructions that she did not wish to challenge the 2002 Will and wished to honour the deceased’s wishes in respect of that Will. Once those instructions were given, seeking documentation for the purposes of ascertaining whether there was a partial revocation of the 2002 Will was completely outside the terms of the second defendant’s retainer. There was no obligation on the second defendant to disregard those specific instructions.

866. [866]
     The plaintiffs further submitted that the second defendants’ acceptance of the executor’s claim for privilege in respect of any new Will file was inconsistent with the second defendants’ approach to a claim for privilege in relation to documentation concerning the valuation of Villa Calvi. It was submitted that that inconsistency was supportive of a conclusion that the second defendant ought to have pursued access to the new Will file, notwithstanding that claim for privilege.

867. [867]
     I accept there was no comparison between those two issues. The documentation in relation to Villa Calvi was a current and live issue in respect of a property to be allocated to Amanda. That was an issue the second defendant had specific instructions to pursue, as Amanda viewed the most recent valuation as being deliberately inflated by the executor. Any instructions given in respect of that valuation, as well as other documentation relevant to the steps taken by the executor in respect of Villa Calvi, specifically related to that issue.

868. [868]
     No such live issue existed in relation to any new Will file, where there were clear instructions that the 2002 Will was not to be the subject of challenge and the interest in Boyd’s notes related to a specific matter which was quickly resolved without the need for further consideration of the deceased’s intentions in the preparation of any new Will.

869. [869]
     Finally, in respect of the new Will file, the plaintiffs submit that had the second defendant obtained the new Will file, it would have caused the second defendant to advise against Boyd’s appointment as administrator. I do not accept that contention.

870. [870]
     First, I accept the evidence of both Paterson and Zwier that nothing contained within that new Will file would have caused them to advise against the appointment of Boyd as administrator. The extended period over which the new Will was the subject of preparation was consistent with their experiences in relation to high wealth individuals; the preparation of a new Will had a low priority.

871. [871]
     Second, there was nothing in Boyd’s conduct of the preparation of the new Will which would have properly caused a reasonably competent succession lawyer to advise that Boyd was not appropriate to be appointed administrator of the deceased’s Estate. I did not find Radford’s evidence to the contrary persuasive. It was premised on Boyd having instructions sufficient to prepare an interim Will. I find Boyd did not have such instructions. The proposed draft Will in schedule h of the plaintiffs’ submissions simply highlights the many remaining outstanding issues requiring the deceased’s instructions.

872. [872]
     Significantly, that document assumes the appointment of specific executors, as well as the allocation of percentages without specific provision for Alexandra and Claudia. Those were issues still to be the subject of instructions from the deceased. Further, the allocation of percentages positively impacted upon the availability of specified properties to be allocated to particular beneficiaries, having regard to the fact that those properties were to be allocated as part of that beneficiary’s entitlement under any new Will. They were not to be in addition to that beneficiary’s percentage entitlement.

873. [873]
     In any event, I accept Amanda would not have followed the second defendants’ advice to that effect. Amanda was intent on only having appointed as administrator, a person she knew and who knew the family. Once Boyd was advanced as administrator by Courtney, with the support of Liam, Amanda was determined to have Boyd appointed as the sole administrator.

874. [874]
     Amanda was aware of the complexities associated with the Estate and specifically indicated, when she pressed for Boyd’s appointment as sole administrator, that he did not have the necessary skills but would have access to appropriate advice to allow him to act as administrator. Those communications evidence Amanda’s determination to have Boyd appointed as administrator.

875. [875]
     I find that even if the second defendant had given Amanda advice that Boyd was not a suitable person to take up the position of administrator, Amanda would have insisted on the appointment of Boyd, as sole administrator.

876. [876]
     That conclusion is supported by Amanda’s outright rejection of Zwier’s advice that there was a need to appoint two people as replacement administrators, one of whom should have commercial experience and expertise akin to a liquidator. Whilst Zwier nominated Mark Korda, his communication with Amanda on 20 April 2012 specifically stated that that name was an example of the type of people to be appointed, and that there ought to be two people. Amanda’s response was prompt and specific; Amanda was not prepared to accept such a person and was not prepared to accept a person she did not know.

877. [877]
     That conclusion is also supported by her communications with Liam and Courtney, subsequent thereto. Those communications were consistent with Amanda having a clear desire to have appointed as administrator, only persons of whom she had knowledge. Further, once Courtney suggested Boyd’s appointment, Amanda maintained a consistent approach thereafter that Boyd was the appropriate person and ought to be appointed alone as administrator.

878. [878]
     Finally, I accept Amanda would have agreed to Boyd’s appointment as administrator, irrespective of whether the second defendant received the new Will file. I do not accept that Amanda would have considered Boyd’s conduct in the preparation of a new Will and his failure to disclose the extent of the work undertaken in preparation for the new file, as supporting a conclusion that Boyd would prefer his own interests over those of the Estate. Even when Amanda was unhappy with Boyd’s performance as administrator, she rejected his offer to resign as administrator and encouraged him to remain in that position. That conduct was consistent with Amanda’s desire to have, in the position of administrator, a person who she knew and who knew the family and the deceased. That was particularly important for the purposes of ongoing harmony with Liam and Courtney.

Karoon/Non-Karoon shares

879. [879]
     It was submitted that a reasonably prudent administrator would have disposed of the remaining assets within two years of Boyd’s appointment as administrator. In support of that submission, the plaintiffs rely upon the executor’s stated intention to dispose of the assets by a date which ultimately was the date of his resignation. However, as Walker observed, the executor’s position in respect of the disposal of assets was not that they would be sold at any price. They would be disposed of “at the right price”. I accept Walker’s evidence in that respect. The fact that the executor had not disposed of the Karoon shares by the time of his resignation is consistent with that being the executor’s position in respect of what was one of the two remaining significant holdings in the Estate.

880. [880]
     When Boyd commenced as administrator, the executor had realised hundreds of millions of dollars of Estate assets. That circumstance meant there was no pressure to realise further assets. I accept the realised assets were properly to be described as “low lying fruit” and that the remaining assets were, to use Walker’s description, “problem children.” The nature of those assets, whilst being resource stocks with a level of volatility, are relevant when considering whether another administrator would have disposed of them by September 2014.

881. [881]
     A further relevant factor in the determination of this aspect of the plaintiffs’ claim, is that the Estate still held, as its most substantial asset, the interest in the Mozambique project. The contract for its sale, which ultimately did not proceed to completion, contained clauses which required the retention of sizeable sums within the Estate itself to satisfy a buyer of the financial viability of warranties given by the Talbot Group entities. The ongoing need for that certainty when disposing of such a large asset is relevant when considering whether there was an obligation on a reasonably prudent administrator to divest the remaining resource assets or, whether, having regard to the potential upside in relation to those assets, a reasonably competent administrator would defer their realisation to a later time.

882. [882]
     A third relevant factor in the determination of this issue, is that the Talbot Group entities had substantial tax losses and franking credits at their disposal. Having regard to the age of Alexandra and Claudia, and the terms of the deceased’s Will, there was to be a substantial period in which the Talbot Estate trust would exist, and it was ultimately in the beneficiaries’ interests for those tax losses and franking credits to be taken advantage of, in the administration of the Estate. To do so, there was a need for the Talbot Group entities to hold assets on an ongoing basis.

883. [883]
     I accept that in undertaking his administration of the Estate, Boyd relied heavily upon the opinions of the directors of the relevant Talbot Group entities, and of the professional advisors. I do not accept that the effect of Boyd’s evidence was that he deferred any decision on their disposal to the directors of those entities. A consideration of Boyd’s evidence as a whole supports a conclusion that it did not follow that had he disagreed with the views of the directors, he would not have exercised his independent powers as administrator. For example, Boyd, at one point, specifically advised Walker that there was a need to refer a holding to RBC, in circumstances where Walker was querying its necessity in the circumstances.

884. [884]
     The Karoon shares were the subject of detailed advice at the time of Boyd’s appointment as administrator and of monthly updates thereafter. Those updates consistently reported that Karoon had a buy recommendation amongst numerous brokers, with a target price in the order of at least $7.00 per share, which the directors had advised Boyd was the “magic figure”. Whilst the share price during that period sat below the target price set by the relevant advisors and other brokers, the advice being given to Boyd was that there remained significant upside and the market was not reflecting the true value of Karoon’s holdings. There was support for that advice in the fluctuating price of the Karoon shares which, on more than one occasion, rapidly increased upon positive announcements.

885. [885]
     I accept Boyd’s evidence that at no stage prior to September 2014 did there exist a viable opportunity to dispose of the Karoon shares, at a price consistent with the advice he was receiving from the directors and his professional advisors. I find it was reasonable for Boyd, as administrator, to act on those advices; doing so was consistent with his obligation to act with the necessary care and skill of a businessman managing the affairs of others.

886. [886]
     The plaintiffs submitted that Boyd had opportunities to sell. However, the proposal from RBC, in respect of the sale of the holding at $7.00 per share, was an underwriting proposition. I accept it was inappropriate for the Talbot Group to undertake such a proposition, in the circumstances. Significantly, MacDonald advised Boyd that he ought to have RBC determine what their position was, having regard to the clear conflict. I find a reasonably competent administrator would not have proceeded with that sale.

887. [887]
     The other opportunity in respect of the Karoon shareholding involved the sale of a proportion of it, with the likely requirement that the balance of the shareholding would be locked up for a period of time. I find a reasonably competent administrator would not have accepted such a proposal. As Boyd observed, it was inappropriate for the Estate to prevent itself from being able to dispose of its shares, if and when an opportunity arose within the market.

888. [888]
     There were other occasions when brokers approached Boyd in relation to the Karoon shares. I accept none of those occasions involved concrete proposals for a sale, at a price consistent with the then advice of the professional advisors. Some of those approaches involved disposals of relatively small parcels which likely would have caused a negative impact on the value of the shareholding, having regard to the price sensitivities of the Talbot Group entities being known sellers.

889. [889]
     Once those conclusions are reached, the evidence supports a finding that, from Boyd’s appointment as administrator to September 2014, Boyd received consistent advice from the directors, one of whom was an experienced resources industry veteran, that the Karoon shares should not be sold at under $7.00 per share. Further, Boyd received consistent advice from the professional advisors engaged by the Talbot Group entities that Karoon remained a buy proposition, with target prices at least in the order of $7.00 per share. Having regard to those advices, I find a reasonably competent administrator would not have sold the Karoon shares prior to September 2014.

890. [890]
     The plaintiffs submitted that Boyd ought not to have acted on the advice of Wood, as Boyd had been warned by Walker that Wood personally had a shareholding in Karoon and wished to dispose of estate assets to his “mates”. The fact that Wood had a personal shareholding in Karoon did not, in the circumstances, warrant a conclusion that his advice ought not to be relied upon by Boyd. Wood is hardly going to remain in a stock which he considers does not have upside. There is no suggestion Wood sought to dispose of his Karoon shares whilst advising that the Estate retain its shareholding.

891. [891]
     Further, Walker’s reference to Wood wanting to dispose of assets to his “mates” was made in relation to the Robust Resources holding and in the context of Wood being a person who was well known within the industry. Nothing in that conversation supports a conclusion that Boyd ought to have rejected Wood’s advice in relation to the continued holding of the Karoon and the non-Karoon shares between his appointment as administrator and September 2014.

892. [892]
     The plaintiffs also submitted that Boyd was under an obligation to actively sell those holdings, having regard to the fact the executor had identified the assets as inappropriate and Boyd, in his subsequent judicial advice affidavit, also accepted those holdings were speculative and inappropriate. Whilst it may be accepted that Boyd did have an obligation to actively pursue the sale of those shareholdings, I do not accept that Boyd acted in disregard of that obligation. I find that Boyd was actively monitoring the Karoon and non-Karoon shareholdings on an almost daily basis, for the very purpose of selling those holdings. Some of the smaller holdings were ultimately sold at a profit, consistent with Boyd’s primary focus, as administrator, being the realisation of the remaining assets at a price that maximised the return to the Estate.

893. [893]
     The plaintiffs further submitted that the failure to call Wood and Fisher supported a conclusion that their evidence would not have assisted Boyd. The plaintiffs’ ask for an inference to be drawn, notwithstanding the fact that Fisher was not a director of any of the relevant entities until 2015. I do not accept that such an inference ought to be drawn from a failure to call either witness.

894. [894]
     First, Wood’s advices were the subject of detailed evidence as the various email communications between Boyd, Wood and Walker were tendered in evidence at the trial. There was no suggestion that Wood, at any stage, had a different attitude to that expressed in those emails. Accordingly, there is basis to conclude there would have been further evidence given by Wood which would have altered the content and context of those advices.

895. [895]
     Second, the plaintiffs chose to plead a case which is premised on a reasonably competent administrator having an obligation to sell the Karoon and non-Karoon shares by August 2014. What view Fisher may have held at the time of his appointment as a director could only be on the basis of the information then available to him, which post dated the relevant period the subject of this proceeding. In those circumstances, I am satisfied it would not be appropriate to draw any adverse inference from the failure to call Fisher as a witness in these proceedings.

896. [896]
     In any event, I do not accept that a reasonably competent administrator was under such an obligation in respect of the deceased’s estate. The nature of the estate and of the trust created by the Will allowed a longer term view of the realisation of the remaining assets, particularly having regard to the taxation advantages in the utilisation of tax losses and imputation credits. I accept and prefer the opinions expressed by Monahan. It was not reasonable to expect the deceased’s estate to be fully administered by 31 August 2014.

897. [897]
     The plaintiffs further submitted that an adverse view of Boyd’s evidence and conduct ought to be drawn from his refusal to accept that he ultimately had control of the assets owned by the Talbot Group entities. I do not accept that the effect of Boyd’s evidence was that he did not have ultimate control of those assets, as administrator. Boyd consistently accepted that if the directors had not followed his instructions, he had the power to ultimately remove them as directors and to appoint new directors. Boyd’s evidence was that at no stage did he have any reason to consider the removal of those directors. I accept that evidence.

898. [898]
     It would be a very significant step for an administrator to remove the directors of the Talbot Group entities. I accept such conduct would be likely to have a material effect on the value that could be achieved for the remaining assets. I accept there was no good reason for Boyd to have considered taking such a step.

899. [899]
     As to the non-Karoon assets, I accept that many of those were difficult holdings to dispose of in the marketplace. I find that, having regard to the size of the holdings, and the daily volume of sales on the marketplace of each of those holdings, a market sale was not a reasonable proposition at any time between Boyd’s appointment and September 2014. Those assets that were disposed of successfully were sold at a profit. There is no suggestion, on the present material, they were sold at other than appropriate market value.

900. [900]
     I find that a reasonably competent administrator would not have sold the Karoon and non-Karoon shares between the date of Boyd’s appointment as administrator and September 2014.

Legal principles

901. [901]
     Both the first defendant and the second defendant owed duties of care and fiduciary duties in the performance of their retainers with Amanda. The legal principles applicable to such duties and their breach were uncontroversial and not in dispute.

902. [902]
     It was accepted that both the first and second defendants owed Amanda a duty to exercise the reasonable care, diligence and skill of a reasonably competent solicitor, with the content of that duty being dependent upon the particular retainer, and the particular circumstances of the individual client.

903. [903]
     It was also not in dispute that in respect of a fiduciary, liability arises where there is a conflict or significant possibility of conflict between the fiduciary’s duty and the fiduciary’s personal interest.^[129]

904. [904]
     It was also not in dispute that the test of what a reasonably competent solicitor would do, having regard to the terms of the retainer and the circumstances of the client, was to be determined having regard to the standard normally adopted by the profession and that a solicitor will not breach their duty to take certain precautions unless the risk was foreseeable; was not insignificant; and in the circumstances, a reasonable person in the position of the solicitor would have taken the precautions.

905. [905]
     Finally, it was not in dispute that insofar as s 22 of the Civil Liability Act 2003 (Qld) was relied upon by the first defendant, the onus was on the first defendant to show that he had acted according to widely accepted professional practice.

Findings

906. [906]
     I find Boyd prepared the 2002 Will to reflect the deceased’s specific instructions, after he had given appropriate advice in respect of the deceased’s wishes. Further, I find the 2002 Will accorded with the deceased’s concluded testamentary intentions, including as to the appointment of the executor and the absence of a provision for removal of a trustee.

907. [907]
     I find that Boyd’s conduct in advising the deceased and in preparing the 2002 Will was consistent with the standard of a reasonably competent solicitor. In respect of this issue, I accept and prefer the evidence of Kennedy. Her opinions were based on the factual circumstances, as found in this judgment. I do not accept Radford’s opinion to the contrary. Apart from those opinions being based on a misreading of some clauses of the 2002 Will, Radford’s criticism in respect of the failure to provide for the removal of a trustee, failed to give due regard to Boyd’s advice to the deceased in respect of that issue, and the deceased’s final instructions.

908. [908]
     There is no duty on an estate practitioner to insist a testator make a different Will. The duty is to use reasonable care and skill in giving effect to the client’s testamentary intentions.^[130] As Radford properly conceded, a solicitor drawing a Will is obliged to follow the client’s instructions.

909. [909]
     I further find that it was for the deceased to determine who was to be the executor of his estate and that having done so, despite advice from Boyd, there was no breach of duty by Boyd in preparing the 2002 Will with the named executor. The payment made to the executor, in exchange for his retirement, was not caused by any breach of duty on Boyd’s part.

910. [910]
     I find that Boyd did not breach any duty and did not act contrary to the standards of a reasonably competent solicitor in failing to prepare a further Will following execution of the 2002 Will. Whilst Boyd had referred to that Will as interim, once Boyd was satisfied as to what were then the outstanding issues of concern to Boyd, Boyd appropriately advised the deceased that there was no further need to revise the 2002 Will.

911. [911]
     I find that the first defendant, in preparing a new Will between 2007 and 2010, acted in accordance with widely accepted professional practice. I do not accept Radford’s opinion to the contrary. His opinion was based, in large measure, on a lack of understanding of the particular circumstances and dependent upon a non-acceptance of essential conversations with the deceased, which I have found did occur, with the consequence that Boyd was awaiting further instructions in relation to key matters such as the executor and the percentage allocations. Radford accepted that a solicitor could not make a client execute a new Will and that ultimately, a competent solicitor must act in accordance with their instructions.

912. [912]
     I prefer and accept Kennedy’s evidence in relation to Boyd’s conduct in respect of the preparation of the new Will. I find there was nothing in Boyd’s conduct which breached the duty of care owed by Boyd in respect of the preparation of a new Will. A practitioner has no duty to force a client to execute a Will and attempts to hurry up a client are fraught with danger.^[131]

913. [913]
     I find that Boyd did not breach his fiduciary duties. Boyd advised Amanda of the limitations he had, both in the giving of advice to Amanda and the duties of confidentiality now owed to the executor. Those advices were fulsome. There was nothing in his conduct in the preparation of the new Will which required the giving of further advices in order to satisfy his obligations to disclose the potential for conflict of interest in acting for Amanda, or in assuming the role of administrator.

914. [914]
     I find that Boyd did obtain fully informed consent to act on behalf of Amanda. I accept Boyd’s evidence that he specifically advised Amanda to seek independent advice. Whilst Amanda said she could not recall such advice, it is consistent with Boyd’s cautious approach that he would have given such advice in all the circumstances. Boyd’s cautious approach was exhibited in the drafting of a retainer on a pro bono basis, which specifically identified within it his inability to disclose certain things to Amanda.

915. [915]
     I find, having regard to my conclusions that Boyd never believed there existed any document which could constitute a revocation or partial revocation of the 2002 Will, that Boyd was under no obligation to advise Amanda of the potential of the existence of such a document. Accordingly, his failure to do so did not breach any duty of care or fiduciary duty.

916. [916]
     I find that had Boyd advised Amanda of those things, Amanda would not have sought independent legal advice about a potential claim in relation to the revocation or partial revocation of the 2002 Will. Amanda consistently gave her independent legal advisors, the second defendant, instructions that she did not wish to contest the 2002 Will; that she was happy with its content; and that she wished to honour the deceased’s wishes.

917. [917]
     I find that Boyd did obtain fully informed consent for his appointment as administrator. I accept that Boyd advised the beneficiaries of the need for independent advice as he could not advise on matters concerning the estate, and of his conversations with the deceased in the preparation of a new Will. Having regard to those discussions, I find there was no obligation on Boyd to advise of the contents of the new Will file.

918. [918]
     I find that even if Boyd breached his duty of care and fiduciary duty in failing to advise Amanda of the contents of the new Will file prior to his appointment as administrator, Amanda would still have agreed to Boyd’s appointment as administrator. By that stage, Amanda’s primary focus was to have the appointment of a person she knew and who knew the deceased and his family. Amanda expressly acknowledged that Boyd would not have the necessary skills in respect of resources and other matters.

919. [919]
     I find there is nothing in the alleged failures to disclose which would have caused Amanda to change her position of support for the appointment of Boyd alone, as administrator of the deceased’s Estate.

920. [920]
     I find the second defendant did not breach its duty of care in the provision of advice pursuant to its retainer with Amanda. Having regard to Amanda’s specific instructions at the commencement of that retainer, I find there was no duty on the second defendant to give Amanda advice in respect of a potential claim for revocation or partial revocation of the 2002 Will and there was no obligation, pursuant to its duty of care, to pursue disclosure of Boyd’s new Will file.

921. [921]
     I find that the second defendant did not fail in its duty to Amanda in not seeking access to Boyd’s new Will file. There was no general obligation to obtain any new Will file. Further, having regard to Amanda’s instructions that she did not wish to challenge the 2002 Will and wished to ensure the deceased’s wishes were respected and observed in relation to that Will, a reasonably competent solicitor would not have any legitimate reason to advise Amanda that she ought to receive any such file, let alone seek that it be produced in the teeth of a valid claim for privilege in respect of its contents. I accept that the claim for privilege made was well founded.

922. [922]
     I find the second defendant acted reasonably, in accordance with their retainer, in advising Amanda on that claim for privilege. The suggestion that the second defendant ought to have concocted some form of proceeding by which it could press for production of an affidavit in relation to the contents of any new Will file, is without merit. Such proceedings would be being instituted without any legitimate forensic purpose, there being no justiciable issue that Amanda wished to pursue in respect of any new Will.

923. [923]
     I find that even if the second defendant had obtained the new Will file, nothing in that file would have caused a reasonably competent solicitor to advise against the appointment of Boyd as administrator. The amount of work undertaken by Boyd and the time period over which it had taken place was consistent with a high wealth individual not placing a priority on the execution of the new Will rather than incompetence on the part of Boyd.

924. [924]
     I find that a reasonably competent solicitor would not have concluded that, in the circumstances, Boyd ought to have prepared an interim Will. The remaining outstanding instructions were central to any new Will, including the appointment of an executor and the percentage allocations to beneficiaries.

925. [925]
     Finally, I find that even if the second defendant had advised against the appointment of Boyd as administrator, Amanda would have continued to seek Boyd’s appointment as administrator. Amanda had expressly rejected the second defendants clear advice to appoint two administrators, with one having specific commercial and the other expertise akin to a liquidator.

Construction of 2002 Will

926. [926]
     It was submitted by the plaintiffs that on its proper construction, Amanda received 52% of the Talbot Estate trust under the 2002 Will. There is no merit in this contention.

927. [927]
     First, a consideration of the terms of the Will amply supports a conclusion that on its proper construction, Amanda received 18% of the Talbot Estate trust, with Alexandra and Claudia each receiving 17%. Clause 11.2(a) is not the operative clause. That clause contains an explanation for why Liam and Courtney received 24% of the Talbot Estate trust and Alexandra and Claudia received 17%. The operative clause is clause 15. Its terms are specific and unambiguous. Alexandra and Claudia each receive 17% of the Talbot Estate trust. Amanda receives 18% of that trust.

928. [928]
     I find that on its proper construction, the 2002 Will provides that Amanda is entitled to 18% of the Talbot Estate trust only, not 52%.

929. [929]
     In coming to this conclusion, I note that Amanda conceded in evidence that she, on no occasion, has believed she was entitled to 52% of the Estate. Further, Amanda entered into a Deed with Alexandra and Claudia, as a consequence of having made the claim in relation to the construction of the Will, to the effect that they would receive 17% each of the Talbot Estate trust, notwithstanding that claim. Having regard to the terms of that deed, there is no basis upon which Amanda could assert she has suffered any relevant loss, in any event.

Damages

930. [930]
     The conclusion that neither the first defendant nor the second defendant breached any relevant duty, and, further, in any event, any breach was not causative of loss to the plaintiffs, renders it unnecessary to consider the first defendant’s assertions that the plaintiffs’ claims are statute barred, or the subject of releases and indemnities. That conclusion also renders it unnecessary to consider the second defendant’s assertion that the applicable statutory regime would be the Wrongs Act (Vic).

931. [931]
     Those conclusions also render it unnecessary to assess damages. However, in the event that I be wrong in my findings, I shall briefly outline my findings on damages.

932. [932]
     First, I would have accepted that Samuel’s calculations were flawed. Whilst it is true that the plaintiffs could not specify a particular day on which any relevant breach occurred, and could not identify a particular transaction, there is no basis upon which it could be properly concluded that the disposal of the Karoon shares would have been undertaken by the sale of a similar number of shares per day at the closing price of each relevant day.

933. [933]
     Such a scenario, having regard to the size of the Talbot Group entities holding in Karoon and its obligations as a substantial shareholder, would have immediately created an overhang in the market which would have remained until disposal of all of the shareholding in Karoon. That overhang, I find, would have resulted in a significantly higher blockage discount than might otherwise apply to the block sale, in discrete tranches, of those shares.

934. [934]
     I also would have accepted that Samuel’s calculations contained an in-built bias as a consequence of the use of the closing price on each day. Samuel’s calculations are on the basis of shares being sold into the market. Regard ought to have been had to the average daily share price, rather than the closing share price.

935. [935]
     I found Lonigan’s criticisms of Samuel’s methodology highly persuasive. I would have accepted and preferred his evidence.

936. [936]
     That said, there was merit in the plaintiffs’ contention that it is ultimately a matter for the Court to assess the loss as best it can in all the circumstances.

937. [937]
     Allowing for those relevant factors, I would have accepted Lonigan’s evidence that the methodology adopted by Samuel for disposal of the Karoon shares would have resulted in a 20% blockage discount. Whilst that was higher than what Lonigan accepted to be the more usual discount of 10%, I would have accepted that the unusual premise contained within Samuel’s calculations, warrants an assessment of damages on the basis of an acceptance of Samuel’s calculations, less 20% for a blockage discount. That assessment would have been on the basis there was an assumed progressive sell down of the Karoon shares over a 24 month period.

938. [938]
     I would also have accepted the agreed transaction and other costs and the agreed taxation implications of such sales.

939. [939]
     Whilst those losses would be losses to the estate I would have found that Boyd, as administrator, would more likely than not have distributed the additional proceeds to the beneficiaries, as he did with the actual proceeds realised from the sale of the Karoon shareholding.

940. [940]
     Finally, I would have accepted that the non-Karoon holdings were largely illiquid shares with a practical impossibility of being traded successfully on the share market. There was no market and no viable opportunity to sell prior to September 2014. I would have assessed the loss in respect of the non-Karoon assets as nil.

Conclusions

941. [941]
     The plaintiffs’ claims are dismissed. The third party proceedings are also dismissed.

942. [942]
     I shall hear the parties as to the form of orders and costs.

Annexures

Annexure A

“TRANSCRIPT OF TAPE SUPPLIED BY KEN TALBOT

(TO BE TYPED AS A DRAFT)

TO WHOM IT MAY CONCERN

WILL OF KENNETH TALBOT

1. 1.Preamble
2. 1.1This Will supersedes any previous Will etc. etc.
3. 1.2Kenneth Talbot wishes to advise all beneficiaries of what he considers to be the important elements of life so that all beneficiaries can have a better understanding of his wishes with the foregoing Will as follows:
4. 1.3It is important to be, healthy wealthy and wise.
5. 1.4Kenneth Talbot has spoken to many people that have created wealth and have managed wealth.
6. 1.5Kenneth Talbot has dealt with people directly that have managed wealth on behalf of wealthy people who have advised that misery is directly proportional to the amount wealth created.
7. 1.6Whether you are healthy or poor it is not the important criteria. Kenneth Talbot is about making basic provision for all beneficiaries.
8. 1.7Above that basic requirement he encourages all beneficiaries to undertake the following initiatives during their lifetime:

1. (a)
   The need to do good things;
2. (b)
   The need to do interesting things;
3. (c)
   The need to achieve and have a sense of purpose and satisfaction.

1. 1.8Regarding health, Kenneth Talbot advises everybody that it is the number one priority and he had made provision in his Will for such requirements.
2. 1.9Without good health then most aspects of life are superfluous.
3. 1.10 Regarding wealth, Kenneth Talbot advises the following points:

1. (a)
   On paper, each of the beneficiaries are wealthy;
2. (b)
   The Will will provide adequate provision for education because of its importance to achieving good and interesting things during your lifetime as well as providing for your family.
3. (c)
   Kenneth Talbot considers that the worst thing he could do is to give any beneficiary, for example a $1m payout at age 21.
4. (d)
   As a consequence, beneficiaries will be kept on the drip feed until maturity;
5. (e)
   Be careful; families and friends will note your perceived wealth and seek a share;
6. (f)
   You will have many new friends of a temporary nature;
7. (g)
   Kenneth Talbot has built in protection within the Will against opportunists;
8. (h)
   My advice is to play down wealth and advise that the major beneficiaries of my Will are charities;
9. (i)
   Above all, do not be distracted from life, be yourself and people respect you for you.

1. 2.Administration of Will

My requirements are as follows:

1. 2.1No copy of the Will is to be available in Australia.
2. 2.2No copy of the Will is to be available in writing or in electronic form to any beneficiary.
3. 2.3The Will is to be administered overseas by people not a party to Australian Family Law (Bill, can you research what countries are not party to Australian Family Law).
4. 2.4The trustee is to be a nominee of that particular country (Kenneth Talbot to advise).
5. 2.5Assistants are to be appointed in Australia to advise the Trustee on an “as required” basis and are as follows:

1. (a)
   Managing Director KPMG Accountants, Brisbane or his nominee (a partner of KPMG and preferably familiar, but not essential, with Kenneth Talbot’s business interests);
2. (b)
   Managing Partner, McCullough Robertson, Solicitors or his nominee (a partner of McCullough Robertson preferably familiar, but not essential, with Kenneth Talbot’s business interests);
3. (c)
   The Trustee is appointed to administer the Will subject to the complete directions of international friends as follows:

1. (i)
   George Sebac, (check spelling) Paris;
2. (ii)
   Managing Director of BNP Banks, Paris who will nominate a division within his firm familiar will Kenneth Talbot’s business interests;

1. 2.6My instructions concerning the decision making of the Trustee and its advisers and friends are as follows:

1. (a)
   Re: Australian Law and Administration. Only the Official Trustee have a copy of the Will. He has no authority to provide a copy of the Will to any person, corporation or Government in Australia;
2. (b)
   The Trustee will take instructions solely from George Sebac and BNP Bank jointly subject to and taking account of advice provided by the Australian advisers, subject to the following:

1. (i)
   The Australian advisers are appointed as advisers only and the Trustee is not bound by that advice, however, the Trustee must have a serious reason to disregard the advice of the Australian colleagues of the Australian advisers;
2. (ii)
   If George Sebac does not survive Kenneth Talbot or is unable to provide meaningful advice to the Trustee then the Trustee will be solely directed by BNP Bank, Paris with its relevant subsidiary;
3. (iii)
   The Will is to be read in Paris;
4. (iv)
   Moneys are to be provided to all beneficiaries to travel to Paris with business class air fares, accommodation at the apartment and hotels as required for beneficiaries.
5. (vi)
   Similar moneys also to be provided for international friends such as George Sebac and the PNB Representative;
6. (vii)
   Provision to be made for appropriate spending money for each beneficiary at the rate of $5,000.00 for each adult over 18 years, $1,000.00 for each child between the ages of 10 to 18 years and $200.00 for each child between the ages of 0 – 10 years.

1. 3.Description of Assets
2. 3.1Ownership: Kenneth Talbot had subdivided his assets according to the following categories of ownership:

Category 1: In the name of Kenneth Talbot

Category 2: In family trusts existing.

Category 3: In  company  name  with  Kenneth  Talbot  as  the  sole shareholder and sole director.

Category 4: Cash.

1. 3.2Type of Holding: Kenneth Talbot has also subdivided his assets according to categories of holding as follows:

Category 1: Personal, for example family home, jewellery, furniture.

Category 2: Public shares that don’t require any administration essentially. In this category the value of shares are driven by an independent board of directors. The value of assets can be realised but should be managed to maximise the value of the asset and to have a minimal impact on the viability of that particular public company.

Category 3: This category comprises residential real estate assets that require minimal supervision. An example is a residential house that is rented.

Category 4: This category comprises commercial real estate that require management and without management the value of the asset can be diminished substantially;

Category 5: This category comprises cash and therefore does not require administration.

1. 4.Report on Assets
2. 4.1Prior to the meeting in Paris the international friends, George Sebac and BNP Bank, through the Trustee as appointed, will request the Australian assistants to the Trustee, that is KPNG Accountants and McCullough Robertson, Solicitors, to compile a report on all assets within 14 days.
3. 4.2If the management are employed at this time then they can materially prepare such report with a description of each asset, financial performance of same.
4. 4.3The assets will be grouped according to categories 1, 2, 3 and 4 (in clause 3.1 – Ownership) and categories 1, 2, 3, 4 and 5 (in clause 3.2 – Type of Holding).
5. 5.Retention of Management
6. 5.1Management have an important role in protecting the value of commercial assets.
7. 5.2The Trustee to immediately advise management that all management is retained on full salary and entitlements for a period of 1 year. (How can management be advised within 24 hours of such an outcome?)
8. 6.Choice for Beneficiaries

Kenneth Talbot wants all beneficiaries to consider a range of choices as follows:

1. 6.1The choice can only be made from adherence to the following procedure:

1. (a)
   Entitlement of each beneficiary to be defined by Kenneth Talbot in the subsequent section in this Will;
2. (b)
   If a beneficiary has any interest in an asset he should make that known to the Trustee within 3 months of the reading of the Will;
3. (c)
   The Trustee, the advisers to the Trustee and management are requested to co-operate fully with any beneficiary in determining any interest in the above;
4. (d)
   All fees regarding the above are to be taken from the estate.

1. 7.Allocation of Wealth
2. 7.1Property at 95 McConnell Street, Bulimba: For Amanda Dianne Talbot, with conditions.
3. 7.2Property at 63 Byron Street, Bulimba: For Amanda Dianne Talbot, no conditions. The estate to discharge the mortgage.
4. 7.3Apartment in Paris – 38 Avenue Hoche: For Amanda Dianne Talbot, with conditions.

The transfer of the property to the name of Amanda Dianne Talbot to be paid from the estate together with provisions for the renewal of the car parking lease in (I think) 15 years time.

1. 7.4Personal Effects: I leave my personal effects as per any interest shown by the beneficiaries.

I request sincerely that all beneficiaries are sensible and do not argue. I particularly ask all beneficiaries to demonstrate some give and take. However, in the event of any dispute, I would request McCullough Robertson to decide.

1. 7.5Wine collection: My wishes are that the wine collection be distributed evenly and fairly as follows:

Amanda Dianne Talbot: 25%

Liam Anthony Talbot 25%

Courtney Erin Talbot 25%

Alexandra Cecile Talbot 25%

1. 7.6Boats: The 3m punt(?) currently owned by Courtney Erin Talbot remains as her asset; In relation to all other boats including jet skis and associated trailers, I leave entirely to Liam Anthony Talbot.
2. 7.7Motor cars: Motor cars used predominately and consistently by Amanda Dianne Talbot, Liam Anthony Talbot and Courtney Erin Talbot are to remain the property of the above beneficiaries with any mortgages on the assets discharged through the estate.

The motor cars that Kenneth Talbot is driving should either be sold or if a beneficiary has an interest then they can advise the trustee accordingly.

1. 7.8Remaining estate: I advise that I wish the remainder of my estate to be subdivided into two portions as follows:

1. (a)
   70% to be allocated as follows:

Amanda Dianne Talbot: 20%

Liam Anthony Talbot 30%

Courtney Erin Talbot 30%

Alexandra Cecile Talbot 20%

I am allocating the above portions with conditions. I would expect Amanda Dianne Talbot as mother of Alexandra Cecile Talbot to make provision within her Will for Alexandra and that is why I have allocated a combined 40% to Amanda and Alexandra.

Again, I do not wish any of the participants to fight over the percentages allocated and as far as I am concerned there is more than enough for everybody and I want everyone to be happy and satisfied.

1. (b)
   30% remainder of my estate to be used to establish the Talbot Foundation as a vehicle for donations to community projects and charities.

1. 8.Conditions pursuant to the distribution of wealth.
2. 8.1Property at 95 McConnell Street, Bulimba.

…………………………………………………………………………………

1. 8.2Apartment in Paris:

…………………………………………………………………………………

1. 8.370% portion of assets after allowance of specific items:

…………………………………………………………………………………

1. 9.Additional Items:
2. 9.1Cash Advances as follows:

1. (a)
   Education to include fees, board and lodgings;
2. (b)
   Weddings;
3. (c)
   Visits to apartment in Paris
4. (d)
   Attendance at the Australian Institute of Company Directors Course or its equivalent providing the beneficiary has achieved a minimum age of 30 years and also provided that he is attending prior to age 35;

Remainder of Will to be drafted by Kenneth Talbot after Bill has prepared the above draft Will.”

Annexure B

“TRANSCRIPT OF TAPE SUPPLIED BY KEN TALBOT

(TO BE TYPED AS A DRAFT)

TO WHOM IT MAY CONCERN

WILL OF KENNETH TALBOT

1. 1.Preamble
2. 1.1This Will supersedes any previous Will etc. etc.
3. 1.2Kenneth Talbot wishes to advise all beneficiaries of what he considers to be the important elements of life so that all beneficiaries can have a better understanding of his wishes with the foregoing Will as follows:
4. 1.3It is important to be, healthy wealthy and wise.
5. 1.4Kenneth Talbot has dealt with people directly that have managed wealth on behalf of wealthy people who have advised that misery is directly proportional to the amount wealth created.
6. 1.5Whether you are healthy or poor it is not the important criteria. Kenneth Talbot is about making basic provision for all beneficiaries.
7. 1.6Above that basic requirement he encourages all beneficiaries to undertake the following initiatives during their lifetime:

1. (a)
   The need to do good things;
2. (b)
   The need to do interesting things;
3. (c)
   The need to achieve and have a sense of purpose and satisfaction.

1. 1.7Regarding health, Kenneth Talbot advises everybody that it is the number one priority and he has made provision in his Will for such requirements.
2. 1.8Without good health then most aspects of life are superfluous.
3. 1.9Regarding wealth, Kenneth Talbot advises the following points:

1. (a)
   On paper, each of the beneficiaries are wealthy;
2. (b)
   The Will will provide adequate provision for education because of its importance to achieving good and interesting things during your lifetime as well as providing for your family.
3. (c)
   Kenneth Talbot considers that the worst thing he could do is to give any beneficiary, for example a $1million payout at age 21.
4. (d)
   As a consequence, beneficiaries will be kept on the drip feed until maturity;
5. (e)
   Be careful; families and friends will note your perceived wealth and seek a share;
6. (f)
   You will have many new friends of a temporary nature;
7. (g)
   Kenneth Talbot has built in protection within the Will against opportunists;
8. (h)
   My advice is to play down wealth and advise that the major beneficiaries of my Will are charities;
9. (i)
   Above all, do not be distracted from life, be yourself and people respect you for you.

1. 2.Administration of Will

My requirements are as follows:

1. 2.1No copy of the Will is to be available in Australia.
2. 2.2No copy of the Will is to be available in writing or in electronic form to any beneficiary.
3. 2.3The Will is to be administered overseas.
4. 2.4The trustee is to be appointed as:

Ignacio Riveras

Gestimcoal

Alberto Aguilera, 8

28015 Madrid

phone 91 448 8397

fax 91 445 3780

1. 2.5Assistants are to be appointed in Australia to advise the Trustee on an “as required” basis and are as follows:

1. (a)
   Managing Director KPMG Accountants, Brisbane or his nominee (a partner of KPMG and preferably familiar, but not essential, with Kenneth Talbot’s business interests);
2. (b)
   Managing Partner, McCullough Robertson, Solicitors or his nominee (a partner of McCullough Robertson preferably familiar, but not essential, with Kenneth Talbot’s business interests);
3. (c)
   The Trustee is appointed to administer the Will subject to the complete directions of international friends as follows:

1. (i)
   George Sabbagh, Paris;
2. (ii)
   Managing Director of BNP Banks, Paris who will nominate a division within his firm familiar will Kenneth Talbot’s business interests;

1. 2.6My instructions concerning the decision making of the Trustee, its advisers and friends are as follows:

1. (a)
   Re: Australian Law and Administration. Only the Official Trustee have a copy of the Will. He has no authority to provide a copy of the Will to any person, corporation or Government in Australia;
2. (b)
   The Trustee will take instructions solely from George Sabbagh and BNP Bank jointly subject to and taking account of advice provided by the Australian advisers, subject to the following:

1. (i)
   The Australian advisers are appointed as advisers only and the Trustee is not bound by that advice, however, the Trustee must have a serious reason to disregard the advice of the Australian colleagues of the Australian advisers;
2. (ii)
   If George Sabbagh does not survive Kenneth Talbot or is unable to provide meaningful advice to the Trustee due to ill health then the Trustee will be solely directed by BNP Bank, Paris with its relevant subsidiary;
3. (iii)
   The Will is to be read in Paris;
4. (iv)
   Moneys are to be provided to all beneficiaries to travel to Paris with business class air fares, accommodation at the apartment and hotels as required for beneficiaries.
5. (v)
   Moneys also to be provided for international friends such as George Sabbagh and the BNP Representative to cover business class air fares and accommodation at hotels;
6. (vi)
   Provision to be made for appropriate spending money for each beneficiary at the rate of AUD$5,000.00 for each adult over 18 years, AUD$1,000.00 for each child between the ages of 10 to 18 years and AUD$200.00 for each child between the ages of 0 – 10 years.

1. 3.Description of Assets
2. 3.1Ownership: Kenneth Talbot has subdivided his assets according to the following categories of ownership:

Category 1: In the name of Kenneth Talbot

Category 2: In family trusts existing.

Category 3: In  company  name  with  Kenneth  Talbot  as  the  sole shareholder and sole director.

Category 4: Cash.

1. 3.2Type of Holding: Kenneth Talbot has also subdivided his assets according to categories of holding as follows:

Category 1: Personal, for example family home, jewellery, furniture.

Category 2: Public shares that don’t require any administration essentially. In this category the value of shares are driven by an independent board of directors. The value of assets can be realised but should be managed to maximise the value of the asset and to have a minimal impact on the viability of that particular public company.

Category 3: This category comprises residential real estate assets that require minimal supervision. An example is a residential house that is rented.

Category 4: This category comprises commercial real estate that require management and without management the value of the asset can be diminished substantially;

Category 5: This category comprises cash and therefore does not require administration.

1. 4.Report on Assets
2. 4.1Prior to the meeting in Paris the international friends, George Sabbagh and BNP Bank, through the Trustee as appointed, will request the Australian assistants to the Trustee, that is KPMG Accountants and McCullough Robertson, Solicitors, to compile a report on all assets within 14 days.
3. 4.2If management is employed at this time then they can materially prepare such report with a description of each asset, financial performance of same and order of magnitude estimate of asset value (note: where valuations can be obtained within 14 days, then such independent valuations should be obtained).
4. 4.3The report of assets will be grouped according to categories 1, 2, 3 and 4 (in clause 3.1 – Ownership) and categories 1, 2, 3, 4 and 5 (in clause 3.2 – Type of Holding).
5. 5.Retention of Management
6. 5.1Management have an important role in protecting the value of commercial assets.
7. 5.2The Trustee to immediately advise management that all management is retained on full salary and entitlements for a period of 1 year. (How can management be advised within 24 hours of such an outcome?)
8. 6.Choice for Beneficiaries

Kenneth Talbot wants all beneficiaries to consider a range of choices as follows:

1. 6.1The choice can only be made from adherence to the following procedure:

1. (a)
   Entitlement of each beneficiary to be defined by Kenneth Talbot in the subsequent section in this Will;
2. (b)
   If a beneficiary has any interest in an asset he should make that known to the Trustee within 3 months of the reading of the Will;
3. (c)
   The Trustee, the advisers to the Trustee and management are requested to co-operate fully with any beneficiary in determining any interest in the above;
4. (d)
   All fees regarding the above are to be taken from the estate.

1. 7.Allocation of Wealth
2. 7.1Property at 95 McConnell Street, Bulimba: For Amanda Dianne Talbot, with conditions.
3. 7.2Property at 63 Byron Street, Bulimba: For Amanda Dianne Talbot, no conditions. The estate to discharge the mortgage.
4. 7.3Apartment in Paris – 38 Avenue Hoche: For Alexandra Cecile Talbot, with conditions.

The transfer of the property to the name of Alexandra Cecile Talbot to be paid from the estate together with provisions for the renewal of the car parking lease in (I think) 15 years time.

Beneficiaries should note that the reason I have nominated Alexandra Cecile is that I wish to asset to remain in the Talbot family forever, for the use and enjoyment of the Talbot family.

By French Law, it means that every time we need to transfer title within the family, the estate has to pay 10pc of the asset value for notary fees.

As a result, the nominated beneficiary is the youngest member of the Talbot family to minimise such costs.

If Alexandra Cecile Talbot does not survive me, then the nominated beneficiaries would be in order as follows:

• Cortney Erin Talbot
• Liam Anthony Talbot
• Amanda Dianne Talbot

1. 7.4Personal Effects: I leave my personal effects as per any interest shown by the beneficiaries.

I request sincerely that all beneficiaries are sensible and do not argue. I particularly ask all beneficiaries to demonstrate some give and take. However, in the event of any dispute, I would request McCullough Robertson to decide.

1. 7.5Wine collection:   My wishes  are  that  the  wine  collection  be  distributed evenly and fairly as follows:

Amanda Dianne Talbot: 25%

Liam Anthony Talbot 25%

Courtney Erin Talbot 25%

Alexandra Cecile Talbot 25%

1. 7.6Boats: The 3m punt currently owned by Courtney Erin Talbot remains as her assets;  In  relation to all  other  boats  including jet skis  and  associated trailers, I leave entirely to Liam Anthony Talbot.
2. 7.7Motor cars: Motor cars used predominately and consistently by Amanda Dianne Talbot, Liam Anthony Talbot and Courtney Erin Talbot are to remain the property of  the  above beneficiaries with  any mortgages on  the  assets discharged through the estate.

The motor cars that Kenneth Talbot is driving should either be sold or if a beneficiary has an interest then they can advise the trustee accordingly.

1. 7.8Remaining estate: I advise that I wish the remainder of my estate to be subdivided into two portions as follows:

1. (a)
   70% to be allocated as follows:

Amanda Dianne Talbot 20%

Liam Anthony Talbot 30%

Courtney Erin Talbot 30%

Alexandra Cecile Talbot 20%

I am allocating the above portions with conditions. I would expect Amanda Dianne Talbot as mother of Alexandra Cecile Talbot to make provision within her Will for Alexandra and that is why I have allocated a combined 40% to Amanda and Alexandra.

Again, I do not wish any of the participants to fight over the percentages allocated and as far as I am concerned there is more than enough for everybody and I want everyone to be happy and satisfied.

1. (b)
   30% remainder of my estate to be used to establish the Talbot Foundation as a vehicle for donations to community projects and charities.

1. 8.Conditions pursuant to the distribution of wealth.
2. 8.1Property at 95 McConnell Street, Bulimba.

• to be considered as the family home
• if Amanda Dianne Talbot marries or takes on a de facto, then the asset to be transferred to a family trust
• reasonable access to be provided to Liam and Courtney Talbot

1. 8.2Apartment in Paris:

• to remain in family forever
• all children including Liam, Courtney and Alexandra, as well as Amanda, to share access
• Amanda to have prime responsibility for administration of the apartment; in the event of Amanda’s death, then the prime responsibility passes to Liam, Courtney and Alexandra in order
• Business class air fares to be provided to each of the above beneficiaries and their dependents every three (3) years for the purpose of visiting and enjoying the apartment

1. 8.370% portion of assets after allowance of specific items:

Allowance to be made from the estate for a number of items as follows:

1. (a)
   Education to include fees, board and lodging

The above provisions are to be made for each beneficiary whether they are singled or married.

1. (b)
   To cover health all beneficiaries and their dependents to be enrolled in the top scale of MBF or its equivalent in addition once beneficiaries achieve 30 years of age then the estate will provide for each beneficiary to have an annual check up at the Toby Ford Corporate Health Facility at the Wesley Hospital or its equivalent.
2. (c)
   Weddings

If any beneficiaries get married then moneys will be provided from the estate for the wedding ceremony and a three week honeymoon anywhere in the world with first class air tickets provided, full accommodation to be paid from the estate and AUD$20,000 spending money indexed for CPI.

1. (d)
   Business class air tickets to the apartment in Paris as previously stipulated.
2. (e)
   Attendance at the Australian Institute of Company Directors Course or its equivalent providing the beneficiary has achieved a minimum age of 30 years and also it is my wish that the beneficiary attend the course prior to the beneficiary attaining the age of 35 years

1. 9.Additional notes for beneficiaries wishing to acquire a family business

It is my wish that the assets can be allocated to the beneficiary but ownership to remain with the family trust. If the business is a going concern business like eg hotel, my wish is that management is retained and management to answer to the advisers of the trustee for the first two years following the beneficiary acquiring the assets.

Further, it is my wish that during that two year period the beneficiary works within the business.

A further condition of the assets being available to the beneficiary is that during the two year period the beneficiary must attend a number of courses as follows:

• Australian Institute of Company Directors course
• Four other management courses approved by the advisers in the areas as follows:

1. (i)
   Finance for non-financial people;
2. (ii)
   Supervisors course;
3. (iii)
   General management aimed at providing general exposure; and
4. (iv)
   Project management course dealing with critical path techniques.

I would request the advisers to work closely with management during the first year and confirm appropriate ongoing management of the asset for the second year.

It should be noted that management will get nervous re the assets being sold and understandably will seek to confirm a future for themselves.

Management should be advised about beneficiaries being offered a 90 day period to confirm interest and then the instructions to sell.

My instructions are that if there is no interest by beneficiaries the assets can be listed for sale at a time that their practical value can be obtained and proceeds retained in the family estate.

I would expect that the advisers would play a leading role together with management in the orderly disposal of these assets in the ordinary course of business.

In any event the advisers are to be retained by the family estate to audit management and confirm that management is acting in the best interest of beneficiaries and not a new potential owner.

1. 10.Contingency

The situation may arise where myself and Amanda pass on simultaneously.

I need to make provision for the ongoing custody of Alexandra Cecile Talbot.

My instructions re that until Alexandra Cecile Talbot reaches 18 years of age she will be in the custody of Susan and Clive Wills (Amanda Dianne’s parents) providing they are surviving and in reasonable health at that time and therefore can accept the custodial responsibility. I hereby advise that they be paid an allowance of AUD$30,000 per annum from the estate indexed each year for CPI.

In the event Susan and Clive Wills cannot undertake the above obligations then custody together with the above allowance will be given to Lisa and Angus McGiver.

In the event that Lisa and Angus are not surviving then the responsibility for custody to be vested with Courtney Erin Talbot.”

Annexure C

Annexure D