[2022] NSWSC 882 (1 July 2022)  
Last Updated: 3 July 2022  
Supreme Court  
New South Wales  
Case Name:  
In the matter of Beverage Freight Services Pty Ltd  
[2022] NSWSC 874  
Medium Neutral  
Citation:  
Hearing Date(s): 4, 5, 6, 7, 11, 12 and 13 May, 2 June 2021  
Date of Orders:  
Decision Date:  
Jurisdiction:  
Before:  
1 July 2022  
1 July 2022  
Equity - Corporations List  
Williams J  
Decision:  
See paragraph [410]  
Catchwords:  
CONTRACT – oral agreement – identity of the parties to oral  
agreement – persons alleged to have breached contract were not parties  
to the contract  
PARTNERSHIPS – whether shareholders in company and/or persons  
standing behind shareholders were in partnership – where company  
established as structure through which each shareholder would  
continue to operate its own freight services business to a particular  
client who wished to deal with one entity rather than several entities –  
where company not intended to make profit – no partnership  
EQUITY – fiduciary duties – whether directors of company owed  
fiduciary duties to one of the company’s shareholders and/or one of the  
principals standing behind that shareholder – no fiduciary duties owed  
Legislation  
Cited:  
Corporations Act 2001 (Cth), ss 180-184 and 191  
Partnership Act 1892 (NSW), ss 1, 2, 32  
Cases Cited:  
Air Tahitii Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299; [2009]  
NSWCA 429  
Barnes v Addy [1874] UKLawRpCh 20; (1874) LR 9 Ch App 244  
Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWCA  
199  
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales  
(1982) 149 CLR 337; [1982] HCA 24  
Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd  
(1991) 22 NSWLR 389  
Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012]  
NSWCA 184; (2013) 29 BCL 329  
Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654  
Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd  
[2014] NSWCA 158  
Eaton v Rare Nominees Pty Ltd [2019] 2 Qd R 222; (2019) 373 ALR  
386; [2019] QCA 190 at [62]  
ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR  
128; [2021] NSWCA 24  
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22  
Gulf Pacific Pty Ltd v Londish [1992] FCA 502  
Hospital Products Ltd v United States Surgical Corporation (1984) 156  
CLR 41; [1984] HCA 64  
In the matter of David Ireland Productions Pty Ltd [2014] NSWSC 1411  
John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010)  
241 CLR 1; [2010] HCA 19  
John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC  
451  
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8  
Lawfund Australia Pty Ltd v Lawfund Leasing Pty Ltd [2008] NSWSC  
144  
Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218; [2019]  
NSWCA 102  
Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342  
Re BBY Limited (Receivers and Managers Appointed) (in liq) and BBY  
Holdings Pty Ltd (Receivers and Managers Appointed) (in liq) (No 2)  
[2022] NSWSC 30  
Streetscape Projects (Australia) v City of Sydney [2013] NSWCA 2;  
(2013) 85 NSWLR 196  
United Dominions Corporation Limited v Brian Pty Ltd [1985] HCA 49;  
(1985) 157 CLR 1  
Warner Capital Pty Ltd v Shazbot Pty Ltd [2020] NSWCA 121  
Watson v Foxman (1995) 49 NSWLR 315  
Texts Cited:  
The Honourable Justice Gageler in “Expansion of the Fiduciary  
Paradigm into Commercial Relationships: The Australian Experience”  
in P Devonshire and R Havelock (eds), The Impact of Equity and  
Restitution in Commerce (Hart Publishing, Oxford, 2018)  
Category:  
Parties:  
Principal judgment  
J and E Vella Pty Ltd (ACN 077 719 049) (First Plaintiff)  
Joseph Gregory John Vella (Second Plaintiff)  
Brian Charles Hobson (First Defendant)  
Hynadam Pty Ltd (ACN 002 478 828) (Second Defendant)  
Brett Soper (Third Defendant)  
Mechita Pty Ltd (ACN 063 519 915) (Fourth Defendant)  
Beverage Freight Services Pty Ltd (ACN 097 919 769) (Fifth Defendant)  
Beverage Distribution Australia Pty Ltd (ACN 160 140 287) (Sixth  
Defendant)  
Hynadam Nominees Pty Ltd (ACN 160 135 900) (Seventh Defendant)  
McIntyre Holdings NSW Pty Ltd (ACN 160 137 271) (Eighth Defendant)  
Representation:  
Counsel:  
Mr G Sirtes SC with Mr D Birch (Plaintiffs)  
Mr M Ashhurst SC with Ms M Castle (Defendants)  
Solicitors:  
Yates Beaggi Lawyers (Plaintiffs)  
McEvoy Legal (Defendants)  
File Number(s): 2015/157614  
Publication  
Restriction:  
N/A  
JUDGMENT  
Introduction  
1. The fifth defendant in these proceedings, Beverage Freight Services Pty Ltd (BFS), was  
incorporated in August 2001. From the time of its incorporation until August 2012, BFS  
provided freight services to Cadbury Schweppes Pty Ltd and Schweppes Australia Pty  
Ltd (together, Schweppes).  
2. The founding shareholders of BFS included the first plaintiff, J & E Vella Pty Limited  
(JEV), the second defendant, Hynadam Pty Ltd (Hynadam) and the fourth defendant,  
Mechita Pty Ltd (Mechita).  
3. At the time BFS was incorporated, each of its founding shareholders operated its own  
freight services business. It is common ground that the founding shareholders and/or  
directors entered into an agreement when BFS was incorporated about the manner in  
which Schweppes work contracted to BFS would be allocated between BFS shareholders,  
invoiced and paid (the 2001 agreement). There is a dispute about the parties to and  
terms of the 2001 agreement and whether the 2001 agreement established a partnership  
between the shareholders of BFS and/or the persons standing behind those  
shareholders.  
4. The proceedings arise out of certain events that culminated in a meeting concerning BFS  
on 28 August 2012, the incorporation of the sixth defendant, Beverage Distribution  
Australia Pty Ltd (BDA) immediately after that meeting and the subsequent  
performance by BDA of Schweppes delivery work that had previously been performed by  
JEV, Hyndam and Mechita through BFS.  
5. There is a dispute about what was resolved or agreed at the meeting on 28 August 2012.  
The plaintiffs claim that the subsequent events constituted a breach of the 2001  
agreement and/or a breach of fiduciary duties allegedly owed by Mr Brian Hobson (the  
first defendant) and Mr Brett Soper (the third defendant) to the plaintiffs.  
6. For the reasons that follow, the plaintiffs’ claims fail.  
Summary of evidence and findings of fact  
Dramatis personae  
7. As will emerge from the detailed summary of the evidence and findings of fact below, the  
following persons and entities have played a role in the events giving rise to these  
proceedings.  
8. The first plaintiff, JEV, was a founding shareholder of BFS and remained a shareholder  
at all relevant times.  
9. The second plaintiff, Mr Joseph Vella, was a director of JEV at all relevant times. He and  
his wife, Mrs Elizabeth Vella, each owned 50 per cent of the shares in JEV at all relevant  
times. Elizabeth Vella is not a party to these proceedings.  
10. Mr Michael Vella is the son of Joseph and Elizabeth Vella. At times relevant to these  
proceedings, he worked for JEV as a driver and also participated in the management of  
the business.  
11. Michael Vella became a director of BFS when that company was incorporated in August  
2001 and remained a director at all times relevant to these proceedings. It is common  
ground that, in the events giving rise to these proceedings, he acted as an agent for JEV.  
Michael Vella is not a party to these proceedings.  
12. The second defendant, Hynadam, was also a founding shareholder of BFS and remained  
a shareholder at all relevant times. The first defendant, Brian Hobson, was the sole  
director and a shareholder of Hynadam and a director of BFS at all times relevant to  
these proceedings.  
13. The fourth defendant, Mechita, was also a founding shareholder of BFS and remained a  
shareholder at all relevant times. Mechita was owned by the third defendant, Brett  
Soper, together with his wife Mrs Deborah Soper and his business partner Mr Ralph  
Sobara. Brett Soper was the manager of Mechita at the time of the relevant events in  
2001 and was a director of that company from June 2003 until 17 June 2019. He was  
also a director of BFS at all relevant times.  
14. BFS was incorporated on 22 August 2001 with six equal shareholders: JEV, Hynadam,  
Mechita, Alderton Transport Pty Ltd (Alderton Transport), Evermay Pty Ltd  
(Evermay) and Sterling Freightlines Pty Ltd (Sterling).  
15. Mr Glen Alderton was a director and shareholder of Alderton Transport. Mr Stephen  
Phillips was a director and shareholder of Evermay. Glen Alderton and Stephen Phillips  
were appointed as directors of BFS, together with Michael Vella, Brian Hobson and Brett  
Soper, when BFS was incorporated. Glen Alderton ceased to be a director of BFS on 23  
October 2003 and Alderton Transport ceased to be a shareholder of BFS at about the  
same time. Stephen Phillips ceased to be a director of BFS on 23 September 2010.  
Although Evermay had no involvement in performing the freight services provided by  
BFS to Schweppes after that time, it remained a shareholder of BFS. Evermay was  
deregistered on 10 August 2014.  
16. Glenn Alderton, Alderton Transport, Stephen Phillips and Evermay are not parties to  
these proceedings.  
17. Sterling was owned jointly by Brian Hobson, Glen Alderton and Stephen Phillips.  
Sterling ceased to be a shareholder in BFS at some time prior to 2012. Sterling is not a  
party to these proceedings.  
18. Mr Peter Versluis and Mr Robert Fielding of Risk Connect Australia were engaged in  
about July 2012 to facilitate discussions between Michael Vella, Brian Hobson and Brett  
Soper with a view to resolving disputes arising from the business and operations of BFS.  
Mr Versluis and Mr Fielding produced a discussion paper in advance of a meeting that  
they facilitated on 28 August 2012 between Joseph Vella, Michael Vella, Brian Hobson  
and Brett Soper. As the meeting was held at the Ingleburn RSL club, the parties refer to  
it as the Ingleburn meeting. I shall adopt the same term in these reasons.  
19. The sixth defendant, BDA, was incorporated on 30 August 2012 with Hynadam  
Nominees Pty Ltd (Hynadam Nominees), Mechita Nominees Pty Ltd (Mechita  
Nominees) and Coastal Beverage Logistics Pty Ltd (Coastal Logistics) as equal  
shareholders.  
20. Hynadam Nominees is the seventh defendant in these proceedings. It was incorporated  
on 30 August 2012. Brian Hobson was (and remains) the sole shareholder of Hynadam  
Nominees, and he and his son, Mr Brett Hobson, were (and remain) the directors of that  
company.  
21. Mechita Nominees is the eighth defendant in these proceedings. It was also incorporated  
on 30 August 2012. Brett Soper was its sole director and one of its shareholders. He  
ceased to be a director and shareholder on 31 May 2019. Mechita Nominees  
subsequently changed its name to Accolade Advisory No 1 Pty Ltd in September 2019  
and then to McIntyre Holdings NSW Pty Ltd in December 2020, but I will refer to the  
company as Mechita Nominees in these reasons.  
22. Coastal Logistics is not a party to these proceedings. The company is owned either  
directly or indirectly by Mr Erron Jameson.  
23. The directors of BDA at the time of its incorporation were Brett Soper, Brett Hobson and  
Erron Jameson. Neither Brett Hobson nor Erron Jameson are parties to these  
proceedings. In June 2019, Brett Soper ceased to be a director and Brian Hobson was  
appointed as a director of BDA.  
24. At all relevant times, Mr Robert Aikin was the Transport Manager for Schweppes with  
whom Brian Hobson and Brett Soper corresponded in relation to freight services  
provided by BFS to Schweppes in the period from August 2001 until September 2012.  
25. Because several parties and witnesses share the same surname, and some witnesses have  
different surnames but share the same first name, I will refer to all persons by their first  
name and surname in order to avoid confusion.  
Introductory observations about the testimony of witnesses  
26. Each of the witnesses in these proceedings gave evidence about events and conversations  
that occurred in 2012 or earlier. As the plaintiffs submitted, it is therefore necessary to  
be mindful of the following well-known observations of McLelland CJ in Eq in Watson v  
Foxman (1995) 49 NSWLR 315 at 319 in assessing the evidence of each witness:  
“... human memory of what was said in a conversation is fallible for a variety of  
reasons, and ordinarily the degree of fallibility increases with the passage of time,  
particularly where disputes or litigation intervene, and the processes of memory  
are overlaid, often subconsciously, by perceptions or self-interest as well as  
conscious consideration of what should have been said or could have been said. All  
too often what is actually remembered is little more than an impression from  
which plausible details are then, again often subconsciously, constructed. All this is  
a matter of ordinary human experience.”  
27. The factors referred to by his Honour require primary emphasis on the objective  
surrounding facts that are either undisputed or established by contemporaneous  
documents, and the inherent probabilities and improbabilities: Fox v Percy (2003) 214  
CLR 118; [2003] HCA 22 at [28]- [31] (Gleeson CJ, Gummow and Kirby JJ); Moubarak  
by his tutor Coorey v Holt (2019) 100 NSWLR 218; [2019] NSWCA 102 at [77] (Bell P,  
Leeming JA and Emmett AJA agreeing). Indeed, in any commercial litigation,  
contemporaneous documents “generally furnish the most reliable source of evidence as  
to what occurred or, at the very least, provide a generally reliable reference point from  
which to assess the reliability of witness testimony”. Although the accuracy and  
reliability of witness testimony must be treated with caution given the fallibility of  
human memory, witness testimony may still be of value and importance, including by  
providing evidence of the context in which relevant documents and events must be  
understood: ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128;  
[2021] NSWCA 24 at [25]- [29] (Bell P, Bathurst CJ agreeing).  
28. The following observations of Hammerschlag J (as the Chief Judge in Equity then was)  
in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94]-  
[1]  
[96] are apposite in this case:  
“Where a party seeks to rely upon spoken words as a foundation for a cause of  
action, including a cause of action based on a contract, the conversation must be  
proved to the reasonable satisfaction of the court which means that the court must  
feel an actual persuasion of its occurrence or its existence. Moreover, in the case of  
contract, the court must be persuaded that any consensus reached was capable of  
forming a binding contract and was intended by the parties to be legally binding.  
In the absence of some reliable contemporaneous record or other satisfactory  
corroboration, a party may face serious difficulties of proof. Such reasonable  
satisfaction is not a state of mind that is obtained or established independently of  
the nature and consequences of the fact or facts to be proved. The seriousness of an  
allegation made, inherent unlikelihood of an occurrence of a given description, or  
the gravity of the consequences flowing from a particular finding are  
considerations which must affect the answer to the question of whether the issue  
has been proved to the reasonable satisfaction of the court. Reasonable satisfaction  
should not be produced by inexact proofs, indefinite testimony, or indirect  
inferences ...  
The sensation of feeling an actual persuasion, after a contest, that an event has  
happened or that something exists is one which is well known and recognised by  
experienced trial judges for what it is.  
[The plaintiff] has the onus of establishing the agreement for which it contends.  
This entails proving to the reasonable satisfaction of the court that the words said  
to give rise to the agreement were actually said, and that the alleged consensus was  
capable of forming a binding agreement and was intended by the parties to be  
legally binding.”  
29. The parties’ numerous challenges to the credibility of each witness are addressed  
throughout the summary of evidence and findings of fact below.  
The 2001 agreement establishing BFS  
30. Prior to 2001, JEV, Hynadam, Mechita, Evermay and Alderton Transport each operated  
a freight services business in the beverage freight transport industry. Some of them had  
a long history of providing freight services to Schweppes. JEV had commenced providing  
services to Schweppes more recently following Schweppes’ acquisition of the rights to  
distribute Pepsi products that JEV had been transporting for several years.  
31. In about 2000, Brian Hobson and Michael Vella each became aware that Schweppes  
wished to have all of its freight services provided by one company rather than  
contracting with several freight companies. Brett Soper and his business partner Ralph  
Sobara became aware of this through Brian Hobson. As the plaintiffs submitted, this was  
a matter of administrative convenience for Schweppes.  
32. In January 2001, Brian Hobson, Brett Soper, Ralph Sobara, Joseph Vella, Michael Vella,  
Stephen Phillips and Glen Alderton met at Ralph Sobara’s home in Greystanes (the  
Greystanes meeting).  
33. Brian Hobson and Brett Soper gave evidence of the discussion at the Greystanes meeting  
in different terms, but there is no material difference between their respective accounts.  
Joseph Vella agreed with Brett Soper’s account of the meeting. Michael Vella gave  
evidence of a series of statements that he says were made during the course of the  
Greystanes meeting, the substance of which does not differ from the evidence of Brian  
Hobson and Brett Soper in any material respect. In cross-examination, Michael Vella  
agreed with Brett Soper’s account of the meeting. Brett Soper’s evidence is that:  
“At the beginning of the Greystanes Meeting, Brian said words to the following  
effect:  
‘As you all know, Schweppes is buying Pepsi. I have been talking with Schweppes  
about making a new company that provides all of the freight transport services.  
Would you all like to be a part of it? If we can sort it out together we can make a  
good business and make some money. This is the only way forward now. If you  
want to go it by yourself there will not be any work with Schweppes or Pepsi.’  
I said words to the effect of:  
‘You know I want to be a part of this. I think making one company that provides  
all of the freight is a good idea.’  
Everyone else present at the Greystanes Meeting also said words to the effect of:  
‘Yes this is a good idea.’  
Brian then said words to the following effect:  
‘We will need to set up a company that the work will be allocated to and that can  
invoice Schweppes. Our companies can then be paid from that company.  
Everyone’s companies can have an equal share in the company. The directors of  
each of the companies can be directors of the new company.  
We will equal out the work from Schweppes. Everyone will have equal work as  
long as they show up. If we need to get subcontractors in to fill in any gaps we  
can do that.  
We also need to make sure we meet any requirements of Schweppes. If they want  
us to do something we have to do it.’  
Everyone at the Greystanes Meeting, including myself, said words to the effect that  
we agreed.”  
34. Joseph Vella then informed those present at the meeting that he wanted Michael Vella to  
be JEV’s nominated director of the new company. This was followed by a discussion  
about trailers which is the subject of some dispute that need not be resolved. According  
to Brett Soper’s account with which Joseph Vella and Michael Vella agreed, the  
discussion then continued:  
“... Brian also said words to the effect of:  
‘... I have been talking with Ralph and the boss at Schweppes and I think we need  
a manager, someone who is on the ground with Schweppes. I could be the  
manager if everyone is happy with that, since Schweppes want me to be their  
contact person. We will also need someone to do the finance side of things. Steve  
would you like to do this? Is everyone happy for me to be the operations  
manager?’  
Stephen said words to the effect of:  
‘OK, I can do that, and I am happy for you to be manager.’  
The rest of the members of the group responded with words to the effect of:  
‘We agree with doing it that way.’  
During the course of the Greystanes Meeting, Brian also said words to the  
following effect:  
‘I have been thinking of a name for the company and I think we should call it  
Beverage Freight Services.’  
The rest of the group said words to the effect of:  
‘Ok.’”  
35. The statements that Michael Vella deposed were made at the Greystanes meeting  
include a statement to the effect that “we will each employ our own drivers for our  
trucks and make sure that the trucks comply with any contract requirements set out by  
Cadbury Schweppes as well as any government requirements”. The defendants do not  
dispute that this was discussed and agreed at the meeting.  
36. In cross-examination, Michael Vella gave some further evidence about the roles of Brian  
Hobson and Stephen Phillips discussed at the Greystanes meeting. According to his  
evidence, it was agreed at that meeting that the new company would employ Brian  
Hobson and Stephen Phillips as the operations manager and financial manager  
respectively, that the new company would pay their salaries and that they would be  
answerable to the new company’s board of directors.  
37. Michael Vella gave evidence that it was agreed at the Greystanes meeting that the  
directors of the new company would make all the major decisions of the company.  
38. Michael Vella also gave evidence that nobody at the Greystanes meeting said anything  
about the shareholders in the new company guaranteeing the new company’s debts, and  
nobody asked any questions about the financial capacity of any of the companies that  
were intending to become the equal shareholders in the new company  
39. In cross-examination, Michael Vella gave evidence that it was his understanding  
following the Greystanes meeting that the sole purpose of the new company was to  
create a single entity to receive instructions from Schweppes for the delivery of its  
products, to provide those delivery services to Schweppes and to invoice and receive  
payment from Schweppes for those services. The new company was essentially to  
provide an administrative service to Schweppes to facilitate the existing companies  
making the Schweppes deliveries. It was agreed at the Greystanes meeting that those  
existing companies, who would become shareholders in the new company, would  
continue to own and maintain their own trucks, would be responsible for those trucks  
and their drivers and would continue to operate as independent entities. Each of the  
shareholders would independently invoice the new company for any delivery work that  
the shareholder performed in delivering Schweppes products. The new company would  
consolidate those invoices and would pay the shareholders for the delivery services they  
had performed, after retaining a percentage of the amount received from Schweppes to  
cover the new company’s administration costs. The new company was never intended to  
make a profit.  
40. Although there was a discussion at the Greystanes meeting about equal allocations of  
Schweppes work to each shareholder in the new company, there is no evidence that  
anybody said that the income of the new company would be distributed to shareholders  
equally. As stated above, each shareholder was to invoice the new company for the  
deliveries it performed and the new company was to pay that invoice to the shareholder.  
Michael Vella gave evidence in cross-examination that the Schweppes deliveries were to  
locations throughout New South Wales and the amount paid by Schweppes for each  
delivery varied depending on the distance to be travelled and the time required to  
complete the job. Michael Vella understood that there would be equality of income  
between shareholders, but only in the sense that he expected that the average monthly  
amounts paid by BFS to each shareholder in respect of that shareholder’s invoices for  
freight services were likely to be approximately equal to the average monthly amounts  
paid to the other shareholders in any given period of several months. There is no  
evidence that this was discussed, and Michael Vella did not expect that shareholders  
would make payments to one another to equalise the amounts that BFS paid to them.  
41. BFS was incorporated on 22 August 2001 and Brian Hobson, Brett Soper, Michael Vella,  
Stephen Phillips and Glenn Alderton were appointed as its directors. Equal  
shareholdings in BFS were issued to JEV, Hynadam, Mechita, Evermay, Alderton  
Transport and Sterling. Each of those founding shareholders signed the constitution of  
BFS. The constitution modified to some extent the replaceable rules which then applied  
under the Corporations Act 2001 (Cth). The replaceable rules (a copy of which was  
attached to the constitution) relevantly provided that the business of the company was to  
be managed by or under the direction of the directors and that resolutions of directors  
must be passed by a majority of votes cast by directors entitled to vote on the resolution.  
The constitution did not modify that replaceable rule.  
42. It is common ground that some agreement was made at the Greystanes meeting. There is  
little dispute about the terms of that agreement. However, the identity of the parties to  
the agreement is in dispute.  
43. The plaintiffs plead that the agreement was made between:  
(1) JEV, Hynadam, Mechita and Evermay; and/or  
(2) Joseph Vella, Brian Hobson, Brett Soper and Stephen Phillips.  
44. The defendants plead that the agreement was made between JEV, Hynadam, Mechita  
and Evermay only.  
45. Notwithstanding the involvement of Glenn Alderton and Alderton Transport in the  
Greystanes meeting, the plaintiffs and the defendants ignored them as potential parties  
to the agreement made at that meeting.  
46. The identity of the parties to the agreement must be determined objectively from the  
surrounding circumstances: Air Tahitii Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299;  
[2009] NSWCA 429 at [28] (Allsop P and Handley AJA, Hodgson JA agreeing) and the  
authorities there cited.  
47. On the basis of the evidence referred to at [30]-[40], I find that the agreement made at  
the Greystanes meeting was an agreement between JEV, Hynadam, Mechita, Evermay  
and Alderton Transport. Those companies were providing freight services directly to  
Schweppes at the time of the Greystanes meeting. They owned the trucks and employed  
the drivers that would be used to provide those services to Schweppes through the new  
company under discussion at the Greystanes meeting. The proposal that was discussed  
and agreed was for JEV, Hynadam, Mechita, Evermay and Alderton Transport to  
continue to own and maintain those trucks and employ drivers and to provide the same  
services to the new company, which would in turn invoice Schweppes. The new company  
would receive payment from Schweppes and the existing companies would in turn  
receive payment from the new company. The new company was not intended to make a  
profit. Self-evidently, the profit that each shareholder would make from the Schweppes  
delivery work invoiced to the new company would depend on that shareholder’s costs of  
doing the work, including wages paid to its drivers and the costs of maintaining its fleet  
of trucks.  
48. The role of Joseph Vella, Brian Hobson, Brett Soper, Stephen Phillips and Glen Alderton  
in the agreed arrangements was to be directors of the new company. Their agreed  
entitlement to be directors of the new company flowed from their existing positions as  
directors of JEV, Hynadam, Mechita, Evermay and Alderton Transport. In Joseph  
Vella’s case, his request for Michael Vella to be a director of the new company in his  
place was not opposed.  
49. The agreement did not touch on the functions of the directors of the new company or  
how they would discharge their responsibilities. That subject matter was covered by the  
constitution and the Corporations Act. It was agreed between the putative shareholders  
of the new company that it would retain Brian Hobson and Stephen Phillips in  
managerial roles, and that they would report to the directors of the new company.  
Evidence referred to later in these reasons indicates that the directors did cause BFS to  
retain Brian Hobson and Stephen Phillips (who was later replaced by Brett Soper) in  
managerial roles after BFS was incorporated. Although those retainers gave effect to part  
of the agreement made at the Greystanes meeting, they were separate agreements  
between BFS (after it was incorporated) with each of Brian Hobson, Stephen Phillips and  
Brett Soper.  
50. For those reasons, Joseph Vella, Brian Hobson, Brett Soper, Stephen Phillips and Glen  
Alderton were not parties to the agreement made at the Greystanes meeting. JEV,  
Hynadam, Mechita, Evermay and Alderton Transport were parties to that agreement.  
The position of Sterling is unclear. There is some evidence to suggest that its inclusion as  
a shareholder of BFS was decided upon after the Greystanes meeting. There is no  
evidence that its inclusion as a shareholder was controversial at the time, and no party  
directed submissions to the question of whether Sterling was a party to the agreement  
made at the Greystanes meeting. I do not find it necessary to resolve that question.  
51. As indicated earlier in these reasons, it is convenient to refer to the agreement made  
between JEV, Hynadam, Mechita, Evermay and Alderton Transport at the Greystanes  
meeting as the 2001 agreement.  
52. It is common ground that the 2001 agreement included terms to the following effect:  
(1) JEV, Hynadam, Mechita, Evermay and Alderton Transport would incorporate a  
new company, to be called Beverage Freight Services, for the purpose of providing  
freight services to Schweppes;  
(2) JEV, Hynadam, Mechita, Evermay and Alderton Transport would continue as  
independent entities, operating their own businesses with their own assets;  
(3) Schweppes delivery jobs directed to the new company would be allocated by a  
representative of the new company to its shareholders on the basis that each  
shareholder would receive an approximately equal share of the Schweppes work  
provided that representatives of that shareholder turned up for work;  
(4) as shareholders in the new company, JEV, Hynadam, Mechita, Evermay and  
Alderton Transport would continue to own and maintain their own trucks and be  
fully responsible for the trucks and drivers to be used for their Schweppes  
deliveries, including ensuring that their trucks complied with relevant legislative  
and regulatory requirements and any contractual requirements of Schweppes;  
(5) each of the shareholders in the new company would independently invoice the  
new company for any delivery work that the shareholder performed in delivering  
Schweppes products;  
(6) the new company would consolidate all of those invoices and issue a single  
invoice to Schweppes, and the new company would pay each shareholder for the  
Schweppes deliveries that the shareholder had performed as invoiced to the new  
company;  
(7) the new company would charge an administration fee on each invoice to cover  
its administrative costs;  
(8) Brian Hobson would be retained as the operations manager and Stephen  
Phillips would be retained as the financial manager of the new company, they  
would report to the board of directors of the new company and their salaries would  
be paid by the new company; and  
(9) Brian Hobson would be the new company’s contact person for Schweppes.  
53. There is a dispute about whether the 2001 agreement included an implied term that the  
shareholders of the new company would share responsibility equally between  
themselves for any outstanding debts of the new company. The plaintiffs acknowledged  
that no such term was expressly agreed, but submitted that “it remains open for the  
Court to find that the agreed basis of the venture was that the individual directors /  
shareholders would agree to meet any outstanding debts of BFS equally” having regard  
to the following matters:  
(1) Michael Vella’s understanding following the Greystanes meeting was that  
liabilities of the new company would be shared equally by the shareholders;  
(2) this (the plaintiffs submitted) was the only basis on which Brian Hobson and  
Brett Soper could reasonably have expected Michael Vella in 2012 to provide a  
guarantee for the obligations of BFS under its lease of premises at Arndell Park;  
and  
(3) none of the directors of BFS appear to have dissented from the proposition  
recorded in the discussion paper prepared by Mr Fielding in August 2012 that the  
directors were to “share operational, staff and management responsibility, as  
well as current and future financial obligations and guarantees equally”, and this  
attitude of the directors in 2012 is consistent with the implication of the term for  
which the plaintiffs contend in the 2001 agreement.  
54. As I understand that submission, the plaintiffs contend that a term should be implied  
into the 2001 agreement as a matter of fact that the shareholders of the new company  
would share liability equally between themselves for any outstanding debts of the new  
company.  
55. I reject that submission. It suffices to say that it was neither necessary to give business  
efficacy to the 2001 agreement nor so obvious that it went without saying that the  
directors or shareholders of the new company should be liable for any outstanding debts  
of the company, contrary to ordinary principles of company law: Codelfa Construction  
Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 346-347;  
[1982] HCA 24. Any contrary subjective understanding that Michael Vella may have had  
at the conclusion of the Greystanes meeting, which was not based on anything said at  
that meeting, does not make the suggested implied term necessary or obvious. The  
suggested term contradicts the corporate structure agreed at the Greystanes meeting.  
Matters that arose in 2012 concerning directors guaranteeing specific obligations or  
liabilities of BFS in respect of which the relevant creditors required guarantees provide  
no support for the implication of the much wider suggested term in the 2001 agreement  
made more than a decade earlier.  
56. For those reasons, I find that the 2001 agreement included no express or implied term  
that the directors or shareholders of the new company would share liability equally  
between themselves for any outstanding debts of the new company.  
57. For completeness, I note that the plaintiffs made no submissions in support of their  
pleaded contention that the 2001 agreement included an express or implied term that  
each party to the agreement owed the other parties a duty of good faith, mutual trust and  
confidence and was obliged to devote themselves to the welfare of the business of BFS.  
There is no evidence that the 2001 agreement included such an express term. The  
plaintiffs pleaded that a term to that effect was implied “from the nature of the business  
arrangement to jointly and equally supply freight services to Cadbury Schweppes  
through the one corporate entity for their joint benefit, from the provisions of the  
[2]  
Partnership Act 1892 (NSW), particularly Part 2 Division 3 thereof and custom”.  
58. Without the benefit of submissions addressing this aspect of the plaintiffs’ case, I  
understand the substance of the plaintiffs’ contention to be that the pleaded term is  
implied from the nature of the relationship between the parties which the plaintiffs say  
was a partnership. The suggested implied term, which would require each shareholder to  
subordinate their individual interests to the interests of BFS, goes far beyond the  
obligation of good faith that has sometimes been implied in commercial contracts:  
Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184; (2013) 29  
BCL 329 at [144]-[145] (Bathurst CJ, Macfarlan and Meagher JJA agreeing). I have  
determined that there was no partnership or fiduciary relationship for the reasons  
explained at [373]–[407] below. I therefore reject the plaintiffs’ contention that the 2001  
agreement included an implied term that each party owed the others a duty of good  
faith, mutual trust and confidence and was obliged to devote themselves to the welfare of  
the business BFS.  
59. The plaintiffs’ submissions also failed to address their pleaded contentions that the 2001  
agreement included express or implied terms to the effect that each of the “partners”  
was entitled to participate in the management of the business and that all major policy  
decisions were to be made jointly and consensually by the directors of the new company.  
There is no evidence that any such terms were expressly agreed. In circumstances where  
it was agreed at the Greystanes meeting for each shareholder in the new company to  
appoint one director to the new company, the suggested implied terms were not  
necessary to give business efficacy to the agreement and were not obvious. It is  
customary for directors of a company to make decisions by resolution passed by a  
majority of votes, as provided for in the replaceable rules that the shareholders agreed  
would govern BFS when they later signed its constitution in August 2001. If and to the  
extent that the plaintiffs’ pleaded contentions concerning those express or implied terms  
were pressed, I reject them for those reasons.  
60. The following two further terms pleaded by the plaintiffs appear to have been  
abandoned by not being mentioned in closing submissions:  
“All work would be allocated between the Corporate Partners on a rotating or  
otherwise equal basis to ensure the net income earned (after payment of expenses)  
incurred by the Corporate Partners in carrying out the work for BFS would be  
approximately equal.”  
“The net profit earned would be divided equally between the Corporate Partners as  
the BFS shareholders.”  
61. If and to the extent that those pleaded terms were pressed, I find that the 2001  
agreement did not include express or implied terms to that effect. There is no evidence  
that the agreement included any such express terms. It is neither necessary nor obvious  
to imply the terms in circumstances where there is evidence that BFS was not intended  
to make a profit and the net income or profit earned by each shareholder in carrying out  
Schweppes deliveries invoiced to BFS would depend on what expenses were incurred by  
that individual shareholder in conducting its own business. The expenses incurred by  
each shareholder were unknown to and beyond the control of each other shareholder.  
62. In short, the terms pleaded by the plaintiffs and rejected at [53]-[61] bear no  
resemblance to the arrangements actually made between JEV, Hynadam, Mechita,  
Evermay and Alderton Transport at the Greystanes meeting to establish a single  
corporate interface for Schweppes to deal with for its freight requirements that each of  
those separate companies wished to continue servicing as part of their separate, ongoing  
businesses. References in these reasons to the business of BFS are references to the  
administrative and other activities undertaken by BFS in order to act as that single  
corporate interface and facilitate its shareholders continuing to perform Schweppes  
delivery work.  
Management and operation of the business of BFS: 2001-2012  
63. On 10 September 2001, Brian Hobson and Ralph Sobara wrote to Schweppes on BFS  
letterhead setting out the rates and terms on which BFS offered to provide bulk delivery  
and stock transfer haulage services to Schweppes. The letter stated:  
“At your request all the bulk owner-drivers, who have until now been individually  
contracted to Schweppes Cottees at Alexandria and PCBA at Huntingwood, have  
formed a new Company. This company Beverage Freight Services P/L has been  
formed specifically to meet the stock transfer and bulk delivery services Schweppes  
Cottee’s requires in Sydney. This proposal is offered by the new company.”  
64. After setting out the proposed rates and terms, the letter concluded:  
“Beverage Freight Services is offering to carry out all bulk deliveries and stock  
transfers. Obviously if all stock transfers were offered to Beverage Freight Services  
the following advantages would be available to Schweppes Cottees:  
1. A single management team to manage all bulk truck movements.  
2. A single invoice covering all bulk delivery costs.  
3. Opportunity to maximise vehicle utilisation and find cost efficiencies  
that can be passed on to Schweppes Cottees in a reduced rate.  
If Schweppes Cottee’s management decide not to engage Beverage Freight Services  
to carry out the stock transfer work the services of the individual bulk owner-  
drivers for delivery work will be available to Schweppes Cottee’s and appropriate  
rates and conditions can be negotiated.”  
65. It is common ground that BFS supplied freight services to Schweppes under various  
fixed term contracts from about September 2001 until August 2012.  
66. Schweppes issued work orders to BFS, and BFS then allocated the work to its  
shareholders or, on some occasions, subcontracted the work to a third party. The  
allocation of work was determined by Ralph Sobara, Brian Hobson or employees of BFS.  
Those matters are not the subject of any dispute. I do not find it necessary to resolve the  
dispute about who was performing the allocation work on a day to day basis at specific  
times during the period from 2001 to 2012.  
67. The parties adduced evidence directed to the question of whether Schweppes work was  
in fact allocated equally to the BFS shareholders. That evidence was directed to the  
plaintiffs’ pleaded claim that Brian Hobson and Brett Soper had breached fiduciary  
duties allegedly owed to JEV and Joseph Vella by failing to allocate Schweppes delivery  
jobs, or the “higher net income deriving jobs”, equally between JEV, Hynadam and  
Mechita. The plaintiffs abandoned that claim during the hearing and it is therefore not  
necessary to make any findings about whether Schweppes work was in fact allocated  
equally between the BFS shareholders according to any of the various concepts of  
equality deployed by the plaintiffs at various times before abandoning that claim. As will  
become apparent later in these reasons, the ongoing dispute about work allocation was  
the subject of discussions prior to and at the Ingleburn meeting and the existence of the  
dispute and the occurrence of those discussions informs my assessment of the evidence  
about what was said and done at the Ingleburn meeting.  
68. A BFS shareholder to whom work had been allocated sent its own truck and driver to  
Schweppes’ head office to collect the relevant stock and transport it to the locations  
required by Schweppes. That shareholder then invoiced BFS for the work completed.  
BFS invoiced Schweppes for the amounts invoiced by the shareholders plus a 10 per cent  
margin to cover BFS’s administration costs. Upon receiving payment from Schweppes,  
BFS paid each shareholder’s invoice issued to BFS in respect of the relevant work. None  
of those matters are in dispute.  
69. It is common ground that Brian Hobson was responsible for negotiating contract terms  
and liaising with Schweppes on behalf of BFS, project management, day to day running  
of BFS, allocating or overseeing the allocation of Schweppes work to the BFS  
shareholders, legislative compliance, and liaising with truck drivers. The plaintiffs  
describe this role as operations manager and I will adopt that term in these reasons.  
70. Although it had been agreed at the Greystanes meeting that Stephen Phillips would be  
retained as the financial controller for BFS, it is common ground that Brett Soper  
performed that role from about December 2001 and that his duties included preparing  
and issuing invoices to Schweppes and verification and payment of invoices issued to  
BFS.  
71. Brian Hobson and Brett Soper operated out of the BFS office located within Schweppes’  
head office, which was initially located at Alexandria and later moved to Prospect.  
72. JEV, Hynadam, Mechita and the other BFS shareholders from time to time were not  
wholly devoted to the Schweppes delivery work through BFS. Each of them continued to  
operate their own businesses, which included providing freight services to other  
customers. In the case of JEV, this included freight services provided under the name  
NSW Freightlines. Michael Vella described the Schweppes delivery work as seasonal,  
with lower volumes of work in the winter months. He gave evidence that JEV purchased  
the NSW Freightlines business in order to have another source of work for its trucks.  
According to Elizabeth Vella’s evidence, JEV acquired the NSW Freightlines business  
(including six truck trailers, a utility vehicle (a “ute”) and two cars, warehouse racking,  
forklifts and the NSW Freightlines trading name and client list) in about March 2007.  
Joseph Vella gave evidence that Mr Bill Kinnane was employed by JEV as General  
Manager and was responsible for sourcing freight work for JEV through its NSW  
Freightlines business. Michael Vella gave evidence that, by August 2012, the NSW  
Freightlines business was more profitable to JEV than its Schweppes delivery work  
undertaken through BFS.  
73. The evidence tendered in these proceedings included financial statements for BFS for  
the 2002 to 2013 financial years. Those documents show that BFS earned income of  
several million dollars each year, all of which was derived from “sales” and almost all of  
which was expended each year on “transportation costs”. BFS also incurred some  
expenses for “contract payments” and “management fees” and other miscellaneous  
matters such as accountancy fees and insurance. BFS’s income and costs are  
significantly lower in the 2013 financial year than in earlier years, reflecting the  
cessation of its business after the Ingleburn meeting, as referred to later in these  
reasons. BFS either earned a modest profit or made a modest loss in each year, which  
was carried over into the following year. There were no distributions of the modest  
profits to shareholders. As referred to at [39] above, BFS was never intended to make a  
profit. No partnership accounts were prepared for BFS.  
Disputes between BFS shareholders as at August 2012  
BFS shareholders as at August 2012  
74. By August 2012, Sterling and Alderton Transport were no longer shareholders of BFS  
and Glenn Alderton was no longer a director. Evermay had ceased doing Schweppes  
delivery work through BFS in about 2010 as a result of certain health problems suffered  
by Stephen Phillips. ASIC records show that Stephen Phillips ceased to be a director of  
BFS on 23 October 2010. However, Evermay remained a shareholder of BFS as at  
August 2012. There is no evidence that any steps had been taken by the active  
shareholders to request Evermay to transfer or relinquish its shares in BFS, or that any  
such request had been resisted by Evermay.  
75. Thus, of the original BFS shareholders, only JEV, Hynadam and Mechita were  
undertaking Schweppes delivery work through BFS by August 2012.  
76. Two companies with similar names to BFS had been established in the period since the  
incorporation of BFS.  
77. Beverage Logistics Pty Ltd (BLPL) was incorporated on 21 October 2004 with Brian  
Hobson, Ralph Sobara and Brett Soper as its shareholders and directors. Brett Soper was  
unsure why BLPL was incorporated but thought that it might have been intended to  
undertake bulk freight delivery work. Brian Hobson could not recall the reason why  
BLPL was incorporated, but said that the company had never traded. The plaintiffs do  
not suggest that BLPL traded. By 2012, the company was no longer in existence, having  
been deregistered on 12 March 2010.  
78. Beverage Logistics Services Pty Ltd (BLS) was incorporated on 7 February 2011 with  
Brian Hobson, Brett Soper and Michael Vella as its equal shareholders and directors.  
There is no evidence and no allegation is made by the plaintiffs that BLS ever entered  
into any freight contract or operated any business.  
79. Brian Hobson gave evidence in cross-examination that BLS was “possibly” incorporated  
in February 2011 because “we thought that we were going to have trouble originally  
with Mr Phillips retiring out of that business”. Brett Soper could not recall why BLS was  
incorporated but accepted in cross-examination that one the reasons may have been to  
create an entity that included only the active participants in BFS’s business as  
shareholders. When it was put to Brian Hobson in cross-examination that, in August  
2012, “[t]here was still the issue that his [Stephen Phillips’] shares were on the books, so  
to speak”, he answered: “Nobody ever raised that issue to me, ever”. I understand Brian  
Hobson to have been referring to August 2012 when he gave that answer.  
80. In his affidavit sworn on 3 February 2021, Michael Vella deposed that he had a  
conversation with Brian Hobson in about August 2012 in which Brian Hobson said to  
him words to the effect that:  
“I have got legal advice and we have to get Stephen Phillips out of the company  
altogether. We have to stop paying him dividends if he is not contributing. We  
should close BFS and start a new company.”  
81. In cross-examination, Michael Vella gave inconsistent evidence about the issues that  
were discussed with Robert Fielding in August 2012. He initially gave evidence that  
those issues were limited to the matters referred to in Robert Fielding’s discussion paper  
as operations, allocation, income distributions, lost earnings, warehousing and  
[3]  
guarantees, making no reference to Stephen Phillips or Evermay. When it was put to  
him that he had no recollection of any discussion of Stephen Phillips, Michael Vella  
abruptly changed his evidence and described Stephen Phillips as “the major reason” for  
the Ingleburn meeting and the preparatory discussions between Robert Fielding and  
each of JEV, Hynadam and Mechita in August 2012. I accept the defendants’ submission  
that this demonstrates Michael Vella’s willingness to change his evidence to suit his  
understanding of the plaintiffs’ claims and case theory. I reject the plaintiffs’ submission  
that the inconsistency in Michael Vella’s evidence is explained by his answer in cross-  
examination that “we” believed that the issue of Evermay’s shareholding in BFS had  
already been addressed by incorporating a new company. Michael Vella’s evidence that  
Stephen Phillips was “the major reason” for the August 2012 discussions and the  
Ingleburn meeting demonstrates that he well knew that the incorporation of a new  
company did not change anything unless and until the business of BFS was transferred  
to that new company.  
82. In attempting to explain the nature of the alleged problem concerning Stephen Phillips,  
Michael Vella said in cross-examination that he “went along with” what Brian Hobson  
told him and that:  
“I’m told the reason was that the Beverage Freight Service was still paying our  
directors fees. And although Steven [sic] wasn’t contributing to the company, he  
was still entitled to be paid directors fees. And that’s what made it necessary to  
invent the new company so those contributing to the company could continue and  
on with the work.”  
83. In his affidavit sworn on 4 December 2015, Michael Vella referred to Stephen Phillips  
leaving BFS in about September 2010. He deposed that two of Evermay’s trucks and  
drivers were subcontracted to JEV for a period of time thereafter and JEV used those  
trucks and drivers for JEV to provide Schweppes delivery services through BFS. In  
relation to Evermay’s continued shareholding in BFS, he deposed that:  
“There was no redistribution of the shares of BFS upon the departure of Phillips so  
he is still a shareholder of BFS. I do not know why this was not done despite the  
departure of Phillips other than that we were all friends and had worked together  
in the industry for many years, so we just continued on as we were.”  
84. Michael Vella’s evidence referred to at [80]-[82] above is inconsistent with his affidavit  
evidence six years earlier referred to immediately above in which he described  
Evermay’s continued shareholding in BFS as unproblematic and something that the  
other shareholders were content to leave unchanged. It is also inconsistent with his  
evidence referred to at [97] and [160] below that the Ingleburn meeting was arranged  
after he accepted Brian Hobson’s suggestion that they engage an independent person to  
facilitate a discussion between them about their dispute concerning the Arndell Park  
lease as an alternative to Michael Vella proceeding to take what he described as “the  
legal route”.  
85. As referred to in more detail later in these reasons, the discussion papers created by  
Robert Fielding prior to the Ingleburn meeting contain no reference to Evermay’s  
continued shareholding in BFS as a problem or issue that JEV, Hynadam or Mechita  
wished to resolve. Robert Fielding gave evidence that he could not recall Evermay’s  
shareholding in BFS having been raised with him as an issue to be addressed and, if it  
had been raised in any of his discussions with JEV, Hynadam or Mechita, he would have  
included it in the discussion paper. I accept this aspect of Robert Fielding’s evidence,  
which was not challenged in cross-examination. The discussion paper, which is set out at  
[139] below, referred at item 1.11 to the “difficulties encountered by the parties  
pertaining to Beverage Freight Services Pty Limited” and it is inherently plausible that  
any issue relating to Evermay would have been included there if it had been raised.  
86. The later iterations of Michael Vella’s evidence referred to at [80]-[82] above are  
internally inconsistent and also inherently implausible when considered in light of the  
following objective facts:  
(1) there is no evidence of Evermay seeking an allocation of Schweppes deliveries  
or asserting any rights as a shareholder of BFS after Stephen Phillips ceased to be a  
director of BFS on 23 October 2010. Indeed, Michael Vella’s own evidence referred  
to at [83] above is to the contrary effect;  
(2) there is no evidence that Evermay (or any other shareholder of BFS) was ever  
[4]  
paid dividends and it is therefore implausible that Brian Hobson had any  
conversation with Michael Vella in August 2012 in terms to the effect claimed by  
Michael Vella at [80] above;  
(3) there is no evidence that Stephen Phillips was paid or was entitled to any  
“directors fees” at any time after he ceased to be a director of BFS on 23 October  
2010 merely because Evermay continued to be a shareholder in BFS, and it is  
therefore implausible that Brian Hobson told Michael Vella that it was necessary to  
remove Evermay as a shareholder because BFS was paying directors’ fees to  
Stephen Phillips, as Michael Vella claimed in cross-examination (inconsistently  
with his affidavit evidence concerning dividends referred to immediately above);  
and  
(4) at the same time as Evermay’s shareholding in BFS was having no impact on  
the operations of BFS or its other shareholders, there were other disputes between  
Michael Vella, Joseph Vella and JEV on the one hand and Brian Hobson,  
Hynadam, Brett Soper and Mechita on the other hand that had given rise to a high  
degree of acrimony between them and this was affecting the conduct of BFS’  
business. These are the disputes identified in item 1.11 of the discussion paper and  
referred to in detail at [91]-[159] below.  
87. I accept Brian Hobson’s evidence that nobody was raising Evermay’s shareholding in  
BFS as an issue in August 2012 because it is inherently plausible for the same reasons  
that Michael Vella’s evidence is inherently implausible. As explained later in these  
reasons, I reject the plaintiffs’ submissions that Brian Hobson was not a credible or  
reliable witness.  
88. It follows that I reject the plaintiffs’ submission that, if Brian Hobson and Brett Soper  
had perceived Evermay’s residual presence as a shareholder of BFS as problematic in  
February 2011, “there is every reason to conclude that they continued to hold that view  
in August 2012”. The evidence provides no support for that conclusion for the reasons  
already canvassed above. Whatever difficulties might have been anticipated at the time  
when BLS was incorporated in February 2011, there is no evidence of any difficulties  
having subsequently materialised.  
89. For completeness, I note that the plaintiffs did not take the opportunity to put to Brian  
Hobson or Brett Soper in cross-examination that they held the view in August 2012 that  
Evermay’s shareholding in BFS was a problem that needed to be addressed. I accept that  
the plaintiffs were not obliged to do so because there was an agreement between senior  
counsel for the parties not to take Browne v Dunn points. However, implausible theories  
that are not put to witnesses are not imbued with weight or credibility that they do not  
otherwise have merely because there was no obligation to put them to the relevant  
witnesses.  
90. For all of those reasons, I reject Michael Vella’s evidence referred to at [80]-[82] above  
and I reject the plaintiffs’ submission that Brian Hobson and Brett Soper viewed  
Evermay’s “residual presence” as a BFS shareholder as a problem for BFS as at August  
2012.  
91. The problems that did exist in August 2012 were disputes between JEV, Joseph Vella  
and Michael Vella on the one hand and Brian Hobson, Hynadam, Brett Soper and  
Mechita on the other hand about:  
(1) whether Schweppes delivery work was being allocated equally between JEV,  
Hynadam and Mechita;  
(2) a lease of premises at Arndell Park that BFS had entered into in June 2012; and  
(3) whether JEV had taken adequate steps to stop its trucks speeding on  
Schweppes delivery runs, and the manner in which Brian Hobson and Brett Soper  
had responded to Schweppes on behalf of BFS about Schweppes’ requirements for  
trucks to be fitted with speed limiters and for the operation of those speed limiters  
to be certified.  
Disputes about work allocation  
92. Joseph and Michael Vella had been raising concerns for some time prior to August 2012  
about whether Schweppes delivery work was being allocated equally between the BFS  
shareholders.  
93. During the final hearing of these proceedings, the plaintiffs abandoned their claim that  
Brian Hobson and Brett Soper breached fiduciary duties allegedly owed to the plaintiffs  
by not allocating work equally. In those circumstances, it is not necessary to make  
findings of fact about work allocation prior to August 2012. It suffices to note that the  
plaintiffs’ allegations were strenuously maintained in the discussions leading up to and  
during the Ingleburn meeting, as referred to in detail at [130]-[223] and [272] below. As  
referred to at [151] below, Michael Vella and Joseph Vella believed that Brian Hobson  
and Brett Soper were greedy and dishonest in the manner they allocated Schweppes  
delivery work between BFS shareholders. The plaintiffs continued to maintain those  
allegations in these proceedings, claiming that Brian Hobson and Brett Soper had  
breached fiduciary duties allegedly owed to JEV and/or Joseph Vella in allocating work,  
until they abandoned those claims during the final hearing.  
Disputes about the Arndell Park lease  
94. It is common ground that BFS began transporting Schweppes bottled water products  
labelled “H2O to Go” from Albury to Sydney in about March 2012. In June 2012, Brian  
Hobson and Brett Soper caused BFS to enter into a lease of warehouse premises at  
Arndell Park in anticipation of that particular line of work expanding. Brian Hobson and  
Brett Soper guaranteed the obligations of BFS under the lease, and signed the lease as  
directors of BFS and in their personal capacity as guarantors.  
95. There was a dispute between Michael Vella on the one hand, and Brian Hobson and  
Brett Soper on the other hand, about whether BFS should enter into the lease and  
whether Michael Vella should provide a guarantee together with the other two directors  
of BFS. The plaintiffs contend that this dispute arose before Brian Hobson and Brett  
Soper executed the lease on behalf of BFS and as guarantors. The defendants initially  
contended that the dispute arose only after the lease had already been executed, but  
ultimately accepted that the dispute may have been known to Brian Hobson and Brett  
Soper when they executed the lease.  
96. It is not necessary to make findings about the order of events. What is relevant for  
present purposes is that, in August 2012, Michael Vella was very upset because he  
considered that Brian Hobson and Brett Soper had caused BFS to enter into the Arndell  
Park lease without his agreement. This was another issue that Michael Vella attributed  
to greed and dishonesty on the part of Brian Hobson and Brett Soper, as referred to at  
[154] below.  
97. Michael Vella gave evidence that he had a conversation with Brian Hobson and Brett  
Soper in about August 2012 in which he complained that they had caused BFS to enter  
into the lease without his agreement and in circumstances where he did not want BFS to  
have its own warehouse because JEV already had a warehouse. He told Brian Hobson  
and Brett Soper words to the effect that “this is not good, this is not right, our  
friendship’s ending right now. Now it’s going to become legal ...”. Brian Hobson  
suggested that they arrange for an independent person to facilitate a discussion “to help  
sort it out” rather than taking “the legal route”. Michael Vella deposed that he agreed  
with Brian Hobson’s suggestion. This led to the meetings with Robert Fielding referred  
to below at [131] followed by the Ingleburn meeting facilitated by Peter Versluis and  
Robert Fielding on 28 August 2012.  
98. As referred to in more detail below, the Arndell Park lease, and the question of whether  
Michael Vella would guarantee the obligations of BFS under the lease, were some of the  
key topics of discussion at the Ingleburn meeting and in the preparatory meetings  
leading up to it. It is common ground that, once the Arndell Park lease was signed, it was  
Brian Hobson and Brett Soper (and not the landlord) who were advocating for Michael  
Vella to provide a guarantee in addition to the guarantees already given by them.  
99. The plaintiffs submitted that, “in light of how matters subsequently unfolded”, the Court  
should find that Brian Hobson and Brett Soper caused BFS to enter into the Arndell Park  
lease “as the first step in a potential plan to exclude the Vellas from the Schweppes  
business – in this case, by taking advantage of the potentially lucrative ‘H2O to Go’  
stream of work”.  
100. I reject that submission and decline to make any such finding. I assume that the  
plaintiffs’ reference to “how matters subsequently unfolded” is a reference to the  
incorporation of BDA following the Ingleburn meeting and BDA (rather than BFS)  
performing Schweppes delivery work thereafter. In light of my findings below about  
what occurred at and following the Ingleburn meeting, the evidence does not support the  
inference for which the plaintiffs contend. Moreover, If Brian Hobson and Brett Soper  
saw the Arndell Park lease as the first step in a potential plan to exclude JEV from the  
Schweppes business, it is inherently improbable that they would have caused BFS to be  
the lessee in circumstances where no steps had been taken towards removing JEV as a  
shareholder and Michael Vella as a director of BFS, and there is no evidence of any such  
steps being contemplated or discussed at the time that BFS entered into the Arndell Park  
lease. It is equally improbable that Brian Hobson and Brett Soper would have been  
pressing Michael Vella to become an additional guarantor under the lease in August  
2012. Again, I note that the plaintiffs did not take the opportunity to put to Brian  
Hobson or Brett Soper in cross-examination that their purpose in causing BFS to enter  
into the lease was to move towards excluding JEV and the Vella family from the  
Schweppes delivery work.  
101. I also note that there is a stark inconsistency between:  
(1) the plaintiffs’ contention that Brian Hobson and Brett Soper were planning to  
exclude JEV and the Vella family from Schweppes delivery work in June 2012 (see  
[99] above and [123] and [147] below); and  
(2) the plaintiffs’ contention that Michael Vella, Brian Hobson and Brett Soper had  
agreed prior to the Ingleburn meeting that the Schweppes delivery work should be  
moved from BFS to a different corporate entity in which the three of them were the  
directors and equal shareholders (thereby excluding Evermay), irrespective of  
whether or how the disputes about work allocation, the Arndell Park lease and  
speed limiters were resolved (see [80]-[90] above and [124], [133] and [143]  
below).  
102. The plaintiffs’ submissions did not identify any evidence capable of reconciling those  
inconsistent contentions.  
Disputes about dealings with Schweppes concerning speed limiting of trucks  
103. On 2 August 2012, Mr Aikin sent an email to Brian Hobson, Brett Hobson and Brett  
Soper attaching a document entitled “Beverage Logistics Services –Chain of  
Responsibility Infringement” (the COR Notice). The document stated:  
“I refer to my email of 23rd August, 2011 in which I requested all transport service  
providers to verify  
1. All vehicles required to have the speed limiter devices fitted actually  
have the devices fitted  
2. The speed limiter devices are set to a maximum of 100 kilometres per  
hour  
3. The speed limiter devices are inspected during regular maintenance  
to ensure they have not been tampered with  
During analysis of Beverage Logistics Services (BLS) KPI data for the period of  
April to June 2012, it was noted that particular vehicle’s [sic] of BLS are  
consistently exceeding the 100 kilometres per hour speed limited for heavy  
vehicles.  
There were 584 instances of BLS vehicles exceeding 105 kilometres per hour which  
is the tolerance level Schweppes Australia has allowed for overrun instances on a  
downhill decline.  
I have attached a spreadsheet which details the incidents  
Conclusion  
It is my belief that the vehicles detailed in the attached report:  
• Either do not have speed limiters fitted or,  
• If speed limiters have been fitted, they have been tampered with to  
allow the 100kilometre an hour speed limit to be exceeded  
• The drivers of these vehicles routinely exceeded the speed limit of  
100klms per hour  
Immediate Action  
Vehicles with registration numbers:  
AE60BE  
BB00SB  
BB01SB  
BE22JM  
BK03EK  
JNE001  
JNE013  
JNE019  
MEC400  
MEC500  
MEC600  
MEC800  
MEC900  
1. Are immediately suspended from performing work for Schweppes Australia  
2. These vehicle’s speed limiters are to be immediately serviced and reset to 100  
kilometres per hour  
3. Certification is provided by a recognised and accredited mechanical repair  
facility to acknowledge that the speed limiters have been reset and adjusted.  
4. A company memo is circulated to all drivers informing all of the requirement to  
adhere to legislative speed limits and fatigue management legislation, and that any  
driver tampering with speed limiter devices will be terminated immediately  
5. BLS are to provide documentary evidence of all the above processes having been  
completed prior to any of the listed vehicles being allowed to recommence working  
for Schweppes”  
104. It was common ground between the parties that the vehicles listed in the COR Notice  
with registrations commencing with AE, BB, BE and BK were owned by Hynadam, those  
with registrations commencing with JNE were owned by JEV and those with  
registrations commencing with MEC were owned by Mechita.  
105. The spreadsheet attached to Robert Aikin’s email bears an “MT Data” logo and is  
entitled “Trip Report by Vehicle”. According to Michael Vella’s evidence, MT Data was a  
compliance system that BFS used to track the speed and trip times for JEV, Hynadam  
and Mechita trucks on Schweppes deliveries. In respect of each trip recorded, the  
spreadsheet identified the vehicle registration, the start location and time for the trip,  
the finishing location and time for the trip, the kilometres travelled, any excessive idle  
time periods, the start and finish time of any breaks during the trip, the maximum speed  
of the vehicle and any speeding alerts.  
106. Contrary to the plaintiffs’ submission, the spreadsheet did indicate a significantly worse  
speeding history for JEV trucks than for Hynadam or Mechita trucks. My review of the  
spreadsheet identified two instances in which Hynadam trucks were recorded as  
speeding above 110km per hour, 54 instances for Mechita trucks and 71 instances for  
JEV trucks. As the defendants’ submissions identified, the spreadsheet recorded that  
speeding alerts had been issued for almost half of the JEV truck speeding incidents  
exceeding 110km per hour. The spreadsheet recorded no speeding alerts in respect of the  
speeding incidents for Hynadam or Mechita trucks.  
107. After receiving Robert Aikin’s email, Brian Hobson had a conversation with him about  
how the data should be interpreted, including whether some trucks were merely having  
an occasional speed spike when travelling downhill. The outcome of that conversation  
was that none of the vehicles listed in the email were immediately suspended from doing  
Schweppes deliveries provided that BFS could confirm that they were speed limited.  
108. Brian Hobson gave evidence that he had been speaking with Michael Vella about speed  
issues including asking him to slow the JEV trucks down and to get them speed limited  
for some time prior to August 2012. Michael Vella denies that Brian Hobson spoke to  
him about these issues prior to August 2012.  
109. On 16 August 2012, Brian Hobson (using Brett Soper’s email account) sent an email to  
Mr Aikin stating:  
“I have requested a report for the status of speed limiters in the vehicles which  
operate for BFS at Schweppes Prospect from the companies involved.”  
110. The email then set out:  
(1) a list of the Hynadam vehicles that had been identified in the COR Notice,  
stating the date of the last service at which the speed limiter had been checked and  
the upcoming date in August 2012 on which the vehicle was booked to have its  
speed limiter checked by Detroit;  
(2) a list of the Mechita vehicles that had been identified in the COR Notice, stating  
the date of the last service at which the speed limiter had been checked and the  
upcoming date in August 2012 on which the vehicle was booked to have its speed  
limiter checked by Detroit;  
(3) a list of the JEV vehicles that had been identified in the COR Notice, with no  
information for those vehicles under the headings “Speed limiter checked at last  
service drive test” and “Booked into Detroit for limiter to be checked”.  
111. Brian Hobson gave evidence in cross-examination that Detroit was the engine  
manufacturer. Whilst Hynadam and Mechita had been checking the speed limiter  
function when the trucks were serviced and could provide certification by a mechanic  
that the speed limiters complied with Schweppes’ requirements, they had not previously  
arranged for Detroit to certify the speed limiters as an independent third party. Brian  
Hobson considered that the nature of the certification that Schweppes was looking for in  
August 2012 was “a bit of a grey area”. Hynadam and Mechita therefore arranged for  
arranged for Detroit certification.  
112. Brian Hobson’s email conveys that speed limiters had already been fitted in the  
Hynadam and Mechita vehicles and that those speed limiters had been checked and  
were due to be further checked by the engine manufacturer. There was no evidence to  
the contrary in these proceedings. Brian Hobson’s email provided no such comfort in  
relation to the JEV vehicles.  
113. On 17 August 2012, Robert Aikin sent an email to Brett Soper (addressed to him and to  
Brian Hobson) stating:  
“Effective immediately, until the JNE vehicles are booked in for speed limiter  
checks and certified as set at 100kmh, these vehicles are not to be used for  
Schweppes work.”  
114. On 21 August 2021, Brett Soper sent an email to Brian Hobson, Brett Soper, Michael  
Vella and Elizabeth Vella stating that he had advised Schweppes on the status of speed  
limiters in the vehicles operating for BFS and setting out the list that he had emailed to  
Mr Aikin on 16 August 2012 referred to at [109]-[111] above. Mr Soper’s email  
continued:  
“I have now received correspondence from Schweppes advising effective  
immediately, that the following vehicles are not to be used in Schweppes work  
until each vehicle has been booked in for speed limiter checks and certified that  
those limiters are set to 100 KPH.  
The subject vehicles are JNE013, JNE019, JNE001, JNE011, JNE010.  
Brian I note that your vehicles are booked in for speed limiter checks this week; as  
are the vehicles provided by my company.  
Michael please arrange for J & E Vella Pty Limited to let me know when they will  
be booking in the above vehicles for speed limiter checks. Please also can you ask  
them to let me know whether they have other trucks which comply 100% with the  
Schweppes requirement which I may access to ensure we fulfil the Contract.  
In the meantime it will be necessary for Beverage Freight Services to source  
compliant vehicles from other sub-contractors to ensure that Beverage complies  
with the Schweppes agreement. This will be required until certification has been  
received for each of the JNE trucks referred to above.”  
115. In response, Michael Vella immediately sent three emails to Brett Soper in quick  
succession.  
116. Michael Vella’s first email attached certificates relating to speed limiters in the vehicles  
JNE011 and JNE001 on 20 and 21 August 2012.  
[5]  
117. Michael Vella’s second email to Brett Soper stated:  
“You f*** know that Brian has organised to get all of mine through the system as  
well you c***. I currently have 3 compliant and its only been 2 days.”  
118. Michael Vella gave evidence that language he used in that email reflected the anger he  
felt at the time.  
119. Michael Vella’s third email sent to Brett Soper at 2.59pm on 21 August 2012 attached an  
email that had been sent to Brett Hobson by Mr Luke Glover of NSW Freightlines at  
6.55am that morning. Luke Glover’s email stated:  
“As discussed the new guy (Tim) is taking JNE010 to Detroit this morning for  
fitting then he will be back to you to commence work as directed.”  
120. On 22 August 2012, Michael Vella forwarded to Brett Hobson a copy of a “Road Speed  
Governing Certificate” issued by MTU Detroit Diesel Australia dated 21 August 2012 in  
relation to JNE010.  
121. Michael Vella sent further emails to Brett Hobson on 22 and 23 August 2012 attaching  
certificates relating to tests conducted on speed limiters in the vehicles JNE019 and  
JNE013.  
122. It is plain from Luke Glover’s email referred to above and Michael Vella’s evidence in his  
affidavit sworn on 23 February 2017 that Brian Hobson liaised with Michael Vella during  
the period from 21 to 23 August 2012 to coordinate which JEV trucks were temporarily  
unavailable for Schweppes work while they were being tested at various times on those  
dates, so that BFS could manage the work with the other available trucks. That is to say,  
Brian Hobson acted contrary to Robert Aikin’s email dated 17 August 2012 and contrary  
to Brett Soper’s email dated 21 August 2012 by permitting JEV trucks to continue  
performing BFS deliveries for Schweppes. As the plaintiffs’ submissions acknowledged,  
Brian Hobson gave evidence to similar effect.  
123. The plaintiffs submitted that the speed issue raised by Schweppes on 2 August 2012 was  
not a genuine issue or alternatively was not regarded by Brian Hobson or Robert Aikin  
as needing to be urgently addressed because Brian Hobson had not previously made any  
arrangements to have the Hynadam and Mechita trucks “appropriately certified”. On  
the basis of their submission that the speed limiter issue “was not one which provoked  
any actual activity on the part of either Mr Hobson or Schweppes until shortly before  
the mediation on 28 August”, the plaintiffs further submitted:  
“The Court should find that the issue of speed limiters was a pretext generated to  
justify removing J&E Vella and the Vellas from the BFS business. ... the issue was a  
false one which was created as a pretext to poison Schweppes’ view of J&E Vella  
and to provide a justification for Mr Aikin to provide to his superiors as to why  
Schweppes’ freight business was being moved to a new company.  
The plaintiffs rely on Mr Hobson and Mr Soper’s communications with Schweppes  
as being conduct in breach of the various duties which they owed to J&E Vella and  
being conduct carried out in furtherance or in contemplation of the diversion of  
business to a new corporate entity which excluded J&E Vella and the Vellas...”  
124. The plaintiffs’ submissions made much of the fact that the COR Notice referred to  
“Beverage Logistics Services” rather than “Beverage Freight Services” and that Brian  
Hobson did not raise any question about this with Robert Aikin at the time. It was  
submitted that “the only plausible explanation is that prior to August 2012, Mr Hobson  
(and possibly also Mr Soper) had discussed with Mr Aikin their intention to divert the  
business of BFS to a new corporate vehicle, and had given Mr Aikin the name Beverage  
Logistic Services.” The plaintiffs rely on the discussion paper produced by Robert  
Fielding at the same time, which referred to BLPL (wrongly) as a company in which  
Michael Vella had a stake, as supporting this conclusion.  
125. I reject all of the plaintiffs’ submissions referred to at [123]-[124] above for three  
reasons.  
126. First, it is inherently improbable that Schweppes had no genuine concern about vehicles  
significantly exceeding their speed limit on Schweppes delivery runs. On the contrary, it  
is plain from the terms of Robert Aikin’s 2 August 2012 email that Schweppes had taken  
some action about this approximately one year earlier and was taking follow up action  
with BFS in August 2012. Schweppes’ persistence indicates that it was genuinely  
concerned about speed limit compliance. Whilst additional action was taken by Brian  
Hobson and Brett Soper in relation to the Hynadam and Mechita trucks in August 2012,  
the evidence does not establish that they had taken no action previously. Brian Hobson’s  
evidence referred to at [111] above identifies the action that had been taken previously.  
He was not successfully challenged about this in cross-examination.  
127. Second, the “plausible explanation” advanced by the plaintiffs for the COR Notice  
referring to BLS rather than BFS is fundamentally inconsistent with the plaintiffs’  
submission that Brian Hobson and Brett Soper intended to divert the business of BFS to  
a new corporate entity which excluded JEV and the Vellas. If Brian Hobson and Brett  
Soper had held that intention when dealing with Schweppes in relation to the speed  
limiter issues in August 2012 (which was not put to Brian Hobson in cross-examination  
and which Brett Soper denied), it is inherently improbable that they would have  
mentioned BLS to Robert Aikin as the potential new corporate entity. As referred to at  
[78] above, Michael Vella was a director and shareholder of BLS together with Brian  
Hobson and Brett Soper. The inconsistency within the plaintiffs’ submissions referred to  
at [123]-[124] above compounds the inconsistency referred to at [101] above. Moreover,  
if Brian Hobson and Brett Soper intended to divert the business of BFS to a new entity  
that excluded JEV, it is improbable that they would have invested the time and effort  
that they did in an attempt to resolve the ongoing disputes with JEV and the Vella family  
with the assistance of an external facilitator in August 2012. It is also improbable that  
Brian Hobson and Brett Soper would have facilitated JEV trucks continuing to do  
Schweppes delivery work after 17 August 2021 if they had held the intention alleged by  
the plaintiffs. As the defendants submitted, the plaintiffs’ submissions ignore that  
important fact.  
128. As the plaintiffs submitted, the evidence indicates that neither Brian Hobson nor Brett  
Soper forwarded the JEV speed limiter certificates on to Schweppes during the two or  
three business days between 23 August 2012 and the Ingleburn meeting on 28 August  
2012. At that time, BFS was continuing to allocate Schweppes work to JEV trucks as  
referred to above and the BFS shareholders were preparing for the forthcoming  
“mediation” (to use the plaintiffs’ term) at the Ingleburn meeting. In those  
circumstances, I do not consider a delay of a few days in passing on the JEV certificates  
to Schweppes supports an inference on the balance of probabilities that they intended to  
exclude JEV and the Vellas from the Schweppes work. It became unnecessary for BFS to  
provide the JEV certificates to Schweppes after the Ingleburn meeting for the reasons  
explained at [266] and following below.  
129. Third, for the reasons explained at [323] and following below, Brian Hobson and Brett  
Soper did not owe the pleaded fiduciary duties to the plaintiffs.  
Involvement of Risk Connect Australia  
130. It is common ground that tensions between the BFS shareholders led to the engagement  
of Peter Versluis and Robert Fielding. There is no dispute that Brian Hobson made the  
initial approach to Peter Versluis. Brian Hobson gave evidence that, at the suggestion of  
Mr Frank Zonaras (the accountant for BFS), he contacted Peter Versluis in about late  
July 2012 to see if he was interested in working with the BFS shareholders to explore  
ways in which they might resolve their disagreements. Peter Versluis was interested, and  
his involvement in turn led to the involvement of Robert Fielding. Both men are  
associated with a company or business known as Risk Connect Australia and both of  
them attended the Ingleburn meeting.  
131. Robert Fielding gave evidence that, between late July and early to mid-August 2012, he  
had an initial meeting with Brian Hobson, followed by a meeting with Brian Hobson and  
Brett Soper together with Peter Versluis (which the parties agree occurred on 24 July  
2012) and a separate meeting with the Vella family (in about early to mid-August 2012).  
After those meetings, Robert Fielding created a discussion paper dated 11 August 2012  
that he emailed to Michael Vella, Brett Soper, Brian Hobson and Frank Zonaras. There is  
no dispute between the parties about that sequence of events.  
132. Before addressing the substance of that discussion paper and the subsequent meetings  
between Robert Fielding and BFS shareholders leading up to the Ingleburn meeting, it is  
convenient to deal with a submission made by the plaintiffs in relation to the 24 July  
2012 meeting between Robert Fielding, Peter Versluis, Brian Hobson and Brett Soper.  
133. After the 24 July 2012 meeting with Brian Hobson and Brett Soper, Peter Versluis sent  
an email to Brett Soper attaching “some Notes and suggestions” and requested that he  
“review the attached and provide as much detail as you can”. The name of the attached  
document referred to in the email was “Risk Questionnaire 250712”. That email, without  
the attached document, was annexed to Robert Fielding’s affidavit sworn on 15  
September 2017, being his second affidavit sworn in these proceedings. The plaintiffs  
submitted that:  
“The Court should conclude that Mr Fielding’s affidavits were prepared on the  
basis that relevant documents which did not assist the defendants would not be  
included. On that basis, the Court can readily infer that this document would not  
have assisted the defendants’ case. There is no doubt that it is open to draw a Jones  
v Dunkel inference, by the failure to produce that evidence ...  
The inference is available that Mr Hobson told Mr Versluis and Mr Fielding about  
the intention to move the business over to a different company, jointly owned with  
Mr Soper and the Vellas, as early as the first meeting in late July 2012.”  
134. I reject those submissions for two reasons.  
135. First, the submissions assume that the “Risk Questionnaire 250712” was available to be  
annexed to Robert Fielding’s affidavit sworn more than five years later. That depends in  
part on whether the email annexed to the affidavit was available at that time in  
electronic form or only in paper form. The copy of the email annexed to Robert  
Fielding’s second affidavit bears handwritten annotations at the foot of the page, which  
tends to suggest that the email was available in paper form at that time. There is no  
other evidence that would support an inference that the “Risk Questionnaire 250712”  
was available at the time Robert Fielding’s second affidavit was sworn. If it was not  
available, then no Jones v Dunkel inference arises from the “failure” to include it in the  
annexures to the affidavit.  
136. Second, as the defendants submitted, any inference that Brian Hobson told Peter  
Versluis and Robert Fielding about “the intention to move the business over to a  
different company, jointly owned with Mr Soper and the Vellas” as early as his first  
meeting with them in late July 2012, would be contrary to the evidence of Michael Vella  
and Brian Hobson that it was Robert Fielding and/or Peter Versluis who suggested and  
promoted the idea of conducting the activities of BFS through a different company. The  
underlying idea appears to have been that the disputes between the BFS shareholders  
could be resolved by incorporating a new company with a shareholders’ agreement or  
rules governing each area of dispute and then conducting the BFS activities through that  
new company rather than through BFS. That idea is reflected in the discussion paper  
prepared by Robert Fielding and Peter Versluis which is referred to in more detail below.  
Michael Vella gave evidence in cross-examination that Robert Fielding had proposed the  
idea that “we could set up another company with rules that govern all of those matters,  
all of the six matters you’re worried about” and had then gone through the attributes  
that the new company could have to ask whether he agreed or disagreed with them.  
According to Brian Hobson, Robert Fielding said that “it was one way of overcoming  
the problem if we had a fresh company to share our grievances and set up properly  
and move forward” and “with new rules for the three of us to move forward with”.  
Robert Fielding gave evidence that the idea of a new company emanated from Peter  
Versluis.  
137. Neither Robert Fielding nor Peter Versluis suggested that a new company had been  
proposed as a solution for anything if the BFS shareholders were unable to resolve the  
substance of their existing disputes and agree about how they would address those  
matters in the future through the proposed new company. On the contrary, it is clear  
from Robert Fielding’s evidence in cross-examination that the new company proposal  
was dependent on the BFS shareholders and directors agreeing how that new company  
would be operated, including in relation to allocation of work and ownership and  
responsibility for trucks.  
138. I also note that the inference that the plaintiffs contend should be drawn from the  
defendants’ failure to adduce evidence of the “Risk Questionnaire 250712” attachment to  
the 25 July 2012 email referred to at [133] above (that Brian Hobson told Peter Versluis  
and Robert Fielding about “the intention to move the business over to a different  
company, jointly owned with Mr Soper and the Vellas”) exposes the inconsistency  
within the plaintiffs’ case theory that I have referred to at [101] above.  
139. I return to the draft discussion paper dated 11 August 2012, which bore the names of  
both Peter Versluis and Robert Fielding. The discussion paper stated:  
1.00 Background.  
Comments  
1.11 We have been provided with an overview of the  
difficulties encountered by the parties pertaining to  
Beverage Freight Services Pty Limited, particularly in  
Operations  
Allocation  
relation to Operations, Income Distributions, Lost  
Earnings, Warehousing and Guarantees. It will be  
relevant to finalise the matter of invoicing and  
payments to BFS by the three Director based  
companies; and the matter of the lease entered into for  
the property at Arndell Park.  
Income  
Distributions  
Lost Earnings  
Warehousing  
Guarantees  
1.12 A company “Beverage Logistics Pty Limited” (BLPL)  
has been incorporated. The Directors are Michael Vella,  
(MV) Brett Soper (BS) and Brian Hobson (BH). The  
Secretary is MV. The Shareholders are MV, BS & BH  
equally. Consideration is yet to be confirmed and  
transition of ownership to others to be discussed.  
New Operational  
Company  
1.13 BLPL is proposed to conduct ongoing operations of the Refer Obtain new  
beverage logistic operations provided it can secure a  
new contract from Schweppes.  
contract from  
Schweppes  
1.15  
1.14 The directors/shareholders require equality in the  
Refer Directors require  
distribution of work and profit distributions, including 3.12  
compensation for lost earnings in prior periods. [See  
also 1.11]  
equality in all  
things.  
1.15 BLPL to enter into an agreement with Schweppes for  
future distribution. Approach should be made to  
Schweppes.  
Refer Obtain new  
contract from  
1.13  
Schweppes.  
2.00 Operations.  
2.10 The Directors state that each of them own/control 4  
each of identical trucks suitable for company  
requirements. Those trucks are to be applied for the  
exclusive use of BLPL.  
Refer Each Director to  
Supply 4 identical  
2.12  
trucks for exclusive  
use of BLPL.  
2.11 BLPL to employ all staff, including an allocator. BLPL  
is to be responsible to ensure all staff are suitably  
qualified, properly inducted and trained and comply  
with legislative requirements.  
Staff Management,  
Training &  
Compliance  
2.12 BLPL to ensure the fleet comply with the Schweppes  
contract and requirements as well as legislative  
prescriptions.  
Refer Compliance with  
2.10 Schweppes  
Contract and  
relevant laws.  
2.13 The Directors to share operational, staff and  
management responsibility, as well as current and  
future financial obligations and guarantees equally. The  
responsibility for each of these functions should be  
identified and monitored by regular directors meetings.  
Refer Identify  
responsibility  
4.12  
for company  
&
operations and  
4.13  
structures.  
3.00 The Fleet.  
3.10 The fleet of identical twelve trucks (4 trucks each) be  
given for exclusive use of BLPL. Trucks to be based at  
an agreed site. [See also 1.11]  
Refer Supply of Trucks  
from each director.  
2.10  
&
2.12  
3.11 Those trucks can be  
(a) Acquired by BLPL – due consideration should be  
given to current valuations of each truck, current equity  
in each truck, current status of compliance, stamp duty  
on acquisition, ability of BLPL to raise capital for  
purchase. The net contribution of each  
Method by which  
trucks are obtained  
for exclusive BLPL  
use.  
director/shareholder would require adjustment so that  
equity contributions are equal and agreed.  
(b) Financed by BLPL – giving consideration to matters  
raised in 2.13  
(c) Rented/ Hired by BLPL from each respective  
director at a rate to be agreed.  
(d) rate to be agreed.  
3.12 Policies are to be agreed in relation of allocation of  
work, income flows, payment of contractors and  
operating expenses, guarantees for premises and future  
capital acquisitions and income distributions.  
Agreement needs to be made as to how to compensate  
MV for lack of earnings in prior periods.  
Refer Identify  
management  
1.14  
& operational  
responsibilities  
and income  
distribution  
equality.  
prior periods.  
4.00 Other Matters.  
4.10 Appropriate shareholders’ agreements to be  
established.  
Create  
Shareholders  
Agreements.  
4.11 Appropriate Buy/Sell Agreements to be put in place.  
Create Buy/Sell  
Agreements.  
4.12 Additional Independent Director/Secretary to be  
appointed to assist existing directors in the  
management of the company. This should be a person  
agreed to by all directors and the appointee should be  
an independent consultant and/or a member of the  
AICD.  
Refer Appointment of  
independent  
2.13  
director to be  
agreed.  
&
4.13  
4.13 Regular and properly constituted meetings of BLPL be Refer Regular &  
conducted.  
meaningful  
meetings to be  
held.  
2.13  
&
4.12  
4.14 Consideration should be given to the obtaining of  
contracts for future work and how those contracts can  
be properly executed.  
Refer Obtaining Future  
2.13 Work.  
The matters raised above are intended as a guide for discussion as a means of  
obtaining a framework that satisfies all parties and defines the mechanism which  
will allow the company to operate successfully in the future.  
Your comments and input are encouraged. Perhaps it may be possible to meet  
collectively again to further define the directors requirements and obtain a  
workable solution for all parties. In the meantime we will contact each director  
individually and arrange a time to meet with them as previously discussed.”  
140. As I have already mentioned above and as the defendants submitted, it is clear from the  
discussion paper read as a whole as well as from the evidence of Brian Hobson, Michael  
Vella Robert Fielding referred to at [136]-[137] above, that the new company proposal  
that had emanated from Robert Fielding and/or Peter Versluis was inextricably linked to  
a proposed shareholders’ agreement, policies or rules for the new company that would  
govern future work allocation and financial distributions and under which the new  
company would become the owner or lessee of the trucks performing Schweppes  
delivery work and the employer of the drivers of those trucks and would take on  
compliance responsibility for the trucks. The listing of those substantive matters in the  
discussion paper identified them as topics for discussion to see if agreement could be  
reached. These were substantive matters, and not mere formalities required “to properly  
formalise the operations of the new company” as the plaintiffs’ submissions suggested.  
The arrangements proposed by the Vella family concerning trucks, drivers and  
compliance responsibilities represented a fundamental change from the BFS  
arrangements referred to at [65]-[73] above.  
141. It is also clear that BLPL was referred to in the discussion paper on the mistaken  
understanding that Michael Vella, Brian Hobson and Brett Soper were the equal  
[6]  
shareholders and directors of that company. In circumstances where Robert Fielding  
and/or Peter Versluis were the instigators of the new company proposal, the references  
to BLPL in the discussion paper provide no support for either of the plaintiffs’  
inconsistent theories referred to at [101] and [138] above. That is so, regardless of who  
told Robert Fielding and Peter Versluis about BLPL (or alternatively about “Beverage  
Logistics Services”, which Robert Fielding may have then wrongly transcribed as  
“Beverage Logistics Pty Ltd”).  
142. In cross-examination, Brian Hobson accepted that it was possible that he had mentioned  
BLPL to Robert Fielding as a potential corporate vehicle that could be used for the future  
operation of the business but said that he had no recollection of doing so and no memory  
of how BLPL came to be referred to in the discussion paper. Contrary to the plaintiffs’  
submissions, there is no inconsistency between Brian Hobson’s acceptance of that  
possibility and his absence of recollection. The plaintiffs went further and submitted that  
Brian Hobson’s evidence on this subject was “not merely risible, it demonstrates that  
Hobson did not treat his oath solemnly and he was prepared to say anything to  
promote his case narrative.” I reject that submission. It is unfounded and, as the  
defendants submitted, absurd.  
143. I accept the plaintiffs’ submission that the evidence did not reveal any reason why  
creating a new company would solve any of the existing disputes between JEV and the  
Vella family on the one hand and Hynadam, Brian Hobson, Brett Soper and Mechita on  
the other hand. As I have explained above, the evidence is that a new company was not  
suggested as a solution by itself. It was raised as a possible way forward in conjunction  
with a shareholders’ agreement, policies or rules that would address the substance of the  
existing disputes. There is considerable force in the plaintiffs’ submission that this could  
have been achieved by creating a new shareholders’ agreement for BFS. The fact that  
Peter Versluis and/or Robert Fielding were unnecessarily advocating a new company as  
the starting point for resolving the disputes casts some doubt on their competence as  
facilitators or mediators claiming experience in the field of finance and insurance (in the  
case of Mr Versluis) and accountancy (in the case of Mr Fielding). Further doubt about  
the competence of Peter Versluis arises from his evidence that he attended and  
facilitated the discussion at the Ingleburn meeting without undertaking any preparation,  
armed only with “the skill set I would bring there to bring the parties together and try  
and form some type of resolution” and without any knowledge about BFS, including its  
assets, liabilities, employees or insurance arrangements which would have been relevant  
to any resolution of the issues recorded in the discussion paper. Further doubt about the  
competence of Robert Fielding arises from his failure to ensure that all three directors of  
BFS signed the minutes of the Ingleburn meeting or resolved to adopt the minutes  
[7]  
before they were signed by Brian Hobson. However, the instigation of the new  
company proposal by Peter Versluis and/or Robert Fielding provides no support for the  
plaintiffs’ submissions that “[t]he only rational reason to also suggest transferring the  
business from BFS to another company was to deal with the fact that Steven Phillips’  
company Evermay Pty Ltd remained as a shareholder of BFS” and that it must have  
been obvious to Brian Hobson and Brett Soper that this was the reason for the new  
company proposal. For all of the reasons already referred to at [74]-[90] above, the  
evidence provides no support for the contention that Evermay’s shareholding in BFS was  
the reason for the new company proposal. The plaintiffs’ submission is also inconsistent  
with Michael Vella’s evidence referred to at [136] above.  
144. As the defendants submitted, the plaintiffs’ submissions ignored the many substantive  
matters outlined in the discussion paper on which there was no agreement between the  
BFS directors and their respective companies. Those matters emerge from the evidence  
of the separate meetings that Peter Versluis and Robert Fielding conducted with each of  
Brian Hobson, Brett Soper and the Vella family after circulating the discussion paper on  
11 August 2012 and the further version of the discussion paper that Robert Fielding then  
prepared outlining their respective positions about the issues to be discussed at the  
Ingleburn meeting.  
145. In cross-examination, Michael Vella gave evidence that he recalled having two meetings  
in his office prior to the Ingleburn meeting. Robert Fielding attended the first meeting.  
Peter Versluis and Robert Fielding attended the second meeting. Michael Vella gave  
evidence that, at those meetings, he discussed with Robert Fielding the six matters  
identified in item 1.11 of the “comments” column in the discussion paper set out at [139]  
above. He was asked about the substance of each of those six matters and answered  
without making any reference to Stephen Phillips or Evermay. He gave evidence that  
those six topics were all of the issues then facing the shareholders of BFS and all of the  
issues that he discussed with Robert Fielding.  
146. Robert Fielding gave evidence that he and Peter Versluis took notes of each of the  
meetings he conducted after circulating the discussion paper, yet only the notes of their  
meeting with Joseph, Elizabeth and Michael Vella were annexed to Robert Fielding’s  
first affidavit. In cross-examination, he said that he had provided his file containing all  
of the notes to the defendants’ solicitors and the file had been misplaced by the  
solicitors. Thus, the notes are no longer available, with the exception of the notes of the  
meeting with the Vella family that were annexed to his first affidavit.  
147. The plaintiffs’ submissions sought to make much of this. It was submitted that the Court  
should infer that Robert Fielding’s notes of the meetings with Mr Hobson and Mr Soper  
would not have assisted the defendants’ case and that the Court could more readily infer  
that Brian Hobson and/or Brett Soper told Robert Fielding prior to the Ingleburn  
meeting that they were prepared to “transfer the business of BFS to ‘their own’  
company”.  
148. I reject those submissions. The implicit assumption that notes of the meetings with Mr  
Hobson and Mr Soper were relevant is doubtful because Robert Fielding produced a  
further version of the discussion paper prior to the Ingleburn meeting in which he  
recorded the responses of the Vella family, Brian Hobson and Brett Soper to each of the  
issues listed in the first version of the discussion paper. That further iteration of the  
discussion paper was annexed to Robert Fielding’s first affidavit. In addition, the second  
inference for which the plaintiffs contend exposes the inconsistency in the plaintiffs’ case  
theory referred to at [101] above.  
149. It is common ground that the second iteration of the discussion paper referred to above  
was provided to the Vella family, Brian Hobson and Brett Soper prior to the Ingleburn  
meeting and was used by Peter Versluis to structure the discussion at that meeting. It  
contained the same items with same numbering system as the first iteration of the  
discussion paper set out in full at [139] above, with three additional columns entitled  
“Vella”, “Hobson” and “Soper”. Those additional columns identify significant areas of  
disagreement between the three groups, including in relation to:  
(1) “Allocation”, “Income” and “Distributions”, with Michael Vella contending that  
there must be equality in all three areas and Brian Hobson and Brett Soper  
contending that allocations must be equal but that performance would dictate  
whether this resulted in equality of income/distributions;  
(2) JEV’s claim for lost earnings arising from alleged uneven allocation of work,  
which Michael Vella was pressing and Brian Hobson and Brett Soper were  
disputing and resisting;  
(3) a guarantee by Michael Vella for the Arndell Park lease, which Brian Hobson  
and Brett Soper were insisting on and Michael Vella was refusing to provide;  
(4) whether or not JEV’s vehicles had been compliant with legislative requirements  
and Schweppes’ requirements; and  
(5) Michael Vella’s proposal for “BLPL” to employ staff and rent from JEV,  
Hynadam and Mechita the trucks used for Schweppes delivery work so as to  
facilitate equal financial payments from BFS to each active shareholder. This was  
opposed by Brian Hobson and Brett Soper on the basis that they considered that  
JEV trucks were of inferior quality and value compared to the Hynadam and  
Mechita trucks.  
150. Michael Vella gave evidence in cross-examination that he and his parents told Peter  
Versluis and Robert Fielding at their meeting on 22 August 2012 that they required a  
“fair share” in the sense that JEV should be earning the same amount of money as the  
other BFS shareholders for providing the same amount of trucks to do the Schweppes  
delivery work. They wanted work allocation to be undertaken by somebody independent.  
151. Michael and Joseph Vella believed that Brian Hobson and Brett Soper were dishonest  
and motivated by greed in the manner in which they were allocating work and managing  
BFS. Michael Vella believed they were responsible for dishonestly taking something in  
the order of $100,000 from JEV by the manner in which work had been allocated over  
the previous 12 months. Elizabeth Vella was aware of those views held by Michael and  
Joseph Vella.  
152. The plaintiffs submitted that the evidence supports a finding that JEV was not seeking  
monetary compensation in the sum of $100,000, but was seeking favourable future work  
allocations to redress the alleged past inequality. In support of that submission, the  
plaintiffs relied on the manner in which perceived inequality of work allocation had been  
resolved in 2002 and 2004. The plaintiffs also relied on Michael Vella’s evidence in  
cross-examination to the effect that Joseph Vella had not told him that he expected JEV  
would be paid the $100,000 and that Michael Vella did not believe that JEV asked to be  
paid $100,000 at the Ingleburn meeting and “it would be silly ... to think that somebody  
would pay you that”. The plaintiffs also relied on the evidence of Elizabeth Vella, who  
was not present at the Ingleburn meeting, that Michael Vella did not want compensation  
but “[w]e asked for them to - if we could get extra loads to make up for the difference”.  
153. I reject the plaintiffs’ submissions referred to above. I do not consider that events in  
2002 or 2004 provide a rational foundation for any inference about the remedy JEV was  
asking for in 2012 to address what JEV claimed was dishonesty and greed on the part of  
Brian Hobson and Brett Soper. The plaintiffs’ submissions ignore that the second  
iteration of the discussion paper circulated to all participants prior to the Ingleburn  
meeting contained item 1.14, which read (my emphasis): “The directors require equality  
in the distribution of work and profit distributions, including compensation for  
lost earnings in prior periods. The response to item 1.14 in the “Vella” column  
recorded: “Agree apart from Premises and Guarantee”. The response in each of the  
“Hobson” and “Soper” columns was: “Require payment on performance then equality.  
Also require Guarantee.” The plaintiffs’ submissions also ignore Michael Vella’s  
evidence in cross-examination that, at the Ingleburn meeting and in the context of those  
responses, Joseph Vella said something like: “Well, what about the $100,000?”.  
Assuming (without deciding) that JEV and the members of the Vella family did not  
expect Hynadam and Mechita to pay $100,000 and were willing to accept future  
favourable work allocations to redress alleged unequal work allocations in the past, there  
is no evidence that they communicated this to Brian Hobson and Brett Soper prior to or  
at the Ingleburn meeting.  
154. Michael Vella also gave evidence in cross-examination that he believed that Brian  
Hobson and Brett Soper had been greedy and dishonest in causing BFS to enter into the  
Arndell Park lease for the benefit of Hynadam and Mechita and with no benefit to BFS.  
He and his parents told Robert Fielding and Peter Versluis at their 22 August 2012  
meeting that Michael Vella did not want to provide a personal guarantee for BFS’s  
obligations under that lease and, in fact, they wanted to have the lease “taken away  
from” BFS.  
155. The plaintiffs submitted that the issues concerning the Arndell Park lease and the  
guarantee were a “storm in a teacup” because:  
(1) the Vellas had indicated their willingness prior to the Ingleburn meeting to  
share responsibility for current and future obligations and guarantees equally with  
the other BFS shareholders; and  
(2) “Soper and Hobson’s apparent issue regarding a guarantee by Michael Vella  
was rather inchoate. They signed the lease and made no provision for Vella to  
sign as a guarantor.”  
156. I reject that submission. The first part of the submission relies on item 2.13 of the second  
iteration of the discussion paper, which stated that the Vella interests agreed to all parts  
of the following proposition: “The Directors to share operational, staff and  
management responsibility, as well as current and future financial obligations and  
guarantees equally. The responsibility for each of these functions should be identified  
and monitored by regular directors meetings.” By itself, that item of the discussion  
paper provides some support for the plaintiffs’ submission about the status of the  
Arndell Park lease guarantee issue immediately prior to the Ingleburn meeting.  
However, the plaintiffs’ submission ignores item 1.11 of that discussion paper, which lists  
“difficulties pertaining to Beverage Freight Services Pty Limited” including in relation  
to “Guarantees”. The response of each of “Vella”, “Hobson” and “Soper” in relation to  
“Guarantees” was “Refusal”, “Required” and “Required” (respectively). More  
importantly, the plaintiffs’ submission ignores the unequivocal evidence of their own  
witness, Michael Vella, that he did not want to provide a guarantee for the Arndell Park  
[8]  
lease.  
157. The second part of the submission fails to grapple with the obvious effect of two out of  
three directors of BFS guaranteeing the company’s obligations under the Arndell Park  
lease. In the event of default by BFS, the landlord would be entitled to make a demand  
on Brian Hobson and Brett Soper under their guarantees, but Michael Vella would not  
be liable to the landlord.  
158. The second iteration of the discussion paper does record agreement by each of Michael  
Vella, Brian Hobson and Brett Soper with items 1.12, 1.13 and 1.15 referred to at [139]  
above. However, I reject the plaintiffs’ submission that this demonstrates that “the basis  
upon which all parties entered the 28 August 2012 meeting was the directors were  
already willing to agree to transfer the Schweppes business from BFS to a new  
company, jointly owned by Michael Vella, Brett Soper and Brian Hobson.” As the  
defendants submitted, that contention is a fiction that relies on reading the agreement in  
relation to items 1.12, 1.13 and 1.15 in isolation from the disagreement recorded in the  
document about other matters that were fundamental to the business. There is no  
evidence of any purpose that would have been served by transferring the business of BFS  
to a new company without the parties having resolved the disputes that were the cause of  
anger and distrust (at least on the part of Michael Vella). The plaintiffs’ argument that  
the parties agreed prior to the Ingleburn meeting to transfer the business to a new  
company because Evermay remained a shareholder in BFS is inherently implausible and  
is rejected for all of the reasons explained at [74]-[91] above.  
159. I accept the defendants’ submission that by the time of the Ingleburn meeting the  
relationship between JEV, Hynadam and Mechita as the active shareholders of BDS and  
the relationship between Michael Vella, Brian Hobson and Brett Soper as the directors of  
BFS had substantially deteriorated and that there was a high degree of acrimony  
between those active shareholders and directors. That description of the state of  
relationship accurately reflects the evidence and the findings set out at [94]-[129] above.  
I reject the plaintiffs’ submissions to the contrary, which were based on highly selective  
parts of the evidence and cannot be sustained in light of the whole of the evidence and  
the findings set out above.  
The Ingleburn meeting: 28 August 2012  
160. As I have already mentioned, Michael Vella gave evidence that the Ingleburn meeting  
was organised after he accepted Brian Hobson’s suggestion that they engage an  
independent person to facilitate a discussion rather than Michael Vella and JEV taking  
[9]  
“the legal route” to sort out the dispute relating to the Arndell Park lease. In his  
affidavit sworn on 4 December 2015, Michael Vella deposed:  
“... We went through the agenda, we all said what we wanted to discuss and how we  
were going to do it. During this meeting, Hobson tried to explain to me the reason  
they had leased the warehouse stating that ‘Schweppes required somewhere to  
store freight’. I rejected this reasoning saying ‘Schweppes themselves store pallets  
in the thousands. Your warehouse would only store a couple of hundred pallets, so  
it is useless for that purpose.’  
The Risk Connect representative – I can’t recall his name – said words to the  
following effect:  
‘You should move the business to a new company and finish Beverage  
Freight Services off and that’s the only way to actually remove Steve  
Phillips as an owner. The three of you to be the directors and  
shareholders of the new company.’  
Hobson, Soper and myself agreed with this course of action and said  
words to the effect ‘I agree’.  
Hobson proposed ‘the new company should be called Beverage  
Logistics.’  
Soper and I both agreed and I said ‘no objection to that’.”  
161. That was the whole of Michael Vella’s evidence about the Ingleburn meeting in his 4  
December 2015 affidavit and, indeed, the whole of the plaintiffs’ evidence in chief about  
that meeting.  
162. It was common ground between all of the witnesses who were present at the Ingleburn  
meeting that it lasted for approximately two hours.  
163. In June 2016, the defendants served affidavits of Brian Hobson, Brett Soper and Robert  
Fielding. Each of those witnesses gave an account of the Ingleburn meeting.  
164. In their affidavits sworn on 17 and 20 June 2016, Brett Soper and Brian Hobson each  
denied the conversations recounted by Michael Vella in his 4 December 2015 affidavit  
about the purpose of the Arndell Park lease and about moving the business of BFS to a  
new company in order to remove Steven Phillips as an owner.  
165. Brian Hobson gave evidence that Michael Vella had proposed that BFS should purchase  
JEV’s trucks and he and Brett Soper had opposed that idea, following which there was a  
discussion about whether JEV’s trucks complied with Schweppes’ requirements, whether  
work allocation issues were attributable to JEV trucks not turning up for work or not  
working as they should and whether Michael Vella should guarantee BFS’s obligations  
under the Arndell Park lease.  
166. Brian Hobson deposed that the following discussion then occurred at the Ingleburn  
meeting:  
“Michael then said: ‘If you don’t want BFS to buy our trucks then I think we should  
set up a new company to do the Schweppes work, so that we can keep doing it. It  
can be separate and new from BFS.’  
I said: ‘I don’t have a problem using a new company, but you need to sort out the  
issues with upgrading the trucks and making sure they are available. Most  
importantly they must be speed limited, if not Schweppes will not use them.’  
Michael said: ‘My trucks are not speeding so it is not a big deal. Any that were I  
fixed it up.’  
We then had a conversation in words to the following effect:  
Michael said: ‘If you will not do what we propose with buying the trucks, or using a  
new company the way we want, then BFS should be wound up. We will go and  
work with Schweppes on our own.’  
I said: ‘Well we can wind BFS up, but Brett and I will continue to do Schweppes  
work if we can.’”  
167. Brett Soper also gave evidence that he and Brian Hobson had opposed a suggestion from  
Michael Vella that BFS should purchase JEV’s trucks. He deposed that a conversation to  
the following effect took place:  
“Michael said: ‘We could set up a new company that could do the work.’  
Brian said: ‘I don’t have a problem doing that but ... as I have told you. A new  
company won’t change that.’  
Michael said: ‘This is not true. You are just trying to cause trouble for me. If you  
won’t do it this way, then we don’t want to be part of BFS anymore. We should get  
rid of BFS and just do things by ourselves.’  
Joseph said: ‘Yes, I agree.’  
Brian said: ‘OK, what do you propose to do instead? We want to keep doing the  
Schweppes work. We will go to Schweppes to see if Brett and I can continue to get  
the work that we have through BFS.’  
Michael said: ‘Well, we will try and get that work from Schweppes, on our own. We  
don’t want to operate as part of BFS anymore.’  
Brian said: ‘Ok if you want to wind it up, we can wind up BFS.’  
Michael said: ‘Ok. Well I will not be a director or secretary anymore. I want the  
company to be wound up and finished, and you are not to use it anymore either.’  
Brian said: ‘Ok, well we will probably set up a new company to do Schweppes  
work.’  
Michael said: ‘Ok.’”  
168. Robert Fielding’s account of the Ingleburn meeting in his affidavit sworn on 16 June  
2016 did not include any discussion about the shareholding of Steven Phillips or  
Evermay. According to Mr Fielding, there was a discussion between Michael Vella and  
Brian Hobson about the allocation of work in the following terms:  
“Michael said: ‘We are unhappy about the allocation of work. We are not getting  
enough work. It should be equal.’  
Brian said: ‘We don’t have a problem making the allocation equal but you have to  
do a number of things. Firstly, you need to make sure the trucks are actually  
available for the work or BFS cannot allocate you work. Also, you have to upgrade  
your trucks like we have, and you have to make them all compliant as Schweppes  
has asked. You are not getting as much work because your trucks are not  
compliant, and when I do ask for your trucks they don’t rock up because of the  
mechanical and driver issues you are having, or they are off doing other work. We  
have had to get in other trucks to do that work. Look we are not against the Vellas  
being involved, we just want to sort this out, clean it up and get on with business.  
But you (pointing to Michael) have to sort out this compliance issue or we won’t be  
able to do it this way. Also your equipment isn’t up to scratch, we discussed  
needing to upgrade our equipment now for the work Schweppes wants us to do,  
and Brett and I have invested all this money as we had all agreed and you have  
bought cheaper equipment. It isn’t fair. Schweppes don’t want to use trucks that  
aren’t compliant or don’t have the right equipment.’  
Michael said: ‘They are compliant and those trucks work fine for the BFS work, you  
just aren’t giving us the work we should be getting.’”  
169. According to Robert Fielding, there was then a discussion (and disagreement) about  
speed and other compliance issues and the Arndell Park lease and guarantee followed by  
a discussion to the following effect:  
“Michael said: ‘If you won’t get rid of that warehouse and you won’t do it with the  
new company then why don’t we just wind it up? We will make our own  
arrangements. We won’t be paying for the warehouse either.’  
Brian said: ‘If that is what you want to do then fine we will wind it up, we will not  
run BFS with you anymore.’  
Michael said: ‘We don’t want to work with you. We will do things our own way. We  
cannot work with BFS as it has been running. We don’t want to be a part of it  
anymore.’  
Brian said: ‘If you do not want to work these things out then we cannot work with  
you either.’  
Michael said: ‘Ok. Well then BFS will not operate like it has been. We will get rid of  
the company BFS. The Vellas can do our own thing, and you can both do your own  
thing. We will see what Schweppes wants to do. Then we won’t have you causing us  
trouble anymore.’  
Brian said: ‘I was not trying to cause trouble. I was trying to help you. But if that is  
the way you want to do it, we still stop operating BFS. Brett and I will set up  
something different. We will intend on continuing to work with Schweppes though,  
just so you know.’  
Michael said: ‘We will as well.’”  
170. Later that day, Mr Fielding prepared a document styled as minutes of a meeting of the  
directors of BFS held at 2pm on 28 August 2012. The document records that Brian  
Hobson, Brett Soper and Michael Vella were present at the meeting and that Joseph  
Vella, Peter Versluis and Robert Fielding were also in attendance.  
171. The document states that all of the directors consented to the calling of the meeting at  
short notice.  
172. The document describes the purpose of the meeting as:  
“To discuss and resolve the current difficulties in the operations of the company”.  
173. The document then continues:  
GENERAL DISCUSSION:  
Much discussion was held between the directors in respect of the past operations  
of the company. The directors then discussed at length how the future operations  
of the company could be conducted for the benefit of all parties.  
Consensus from each director was achieved in respect of allocation of work, use of  
Beverage Logistics Pty Limited, attempting to obtain a new contract from Cadbury  
Schweppes with Beverage Logistics, that shareholder and management agreements  
be drawn up to the satisfaction of each party, that regular meetings of the company  
be conducted and controlled by an independent additional director to be  
appointed.  
However consensus was not reached in respect of income distribution to be equal  
after payment of work performed by each contractor, reimbursement of lost  
earnings to Vella, the warehouse at Arndell Park and the guarantees required on  
that property, the nature of cost of equipment operated by each  
director/shareholder did not promote equality, employment of staff in BFS,  
compliance of trucks operated by each director/shareholder, supply of trucks for  
the exclusive use of Beverage Logistics, the basis of proposed buy sell agreements  
that should be put in place and how the obtaining of future work should be  
conducted.  
COMPANY TO WIND DOWN AND CEASE OPERATIONS:  
By consensus of each director it was resolved that the operations of Beverage  
Freight Services be wound down and that all creditors were to be paid and  
thereafter the company was to cease trading.  
CLOSURE:  
There being no further business the meeting terminated at 4.35PM.”  
174. I note that Robert Fielding’s account of what was said at the meeting in his 16 June 2016  
affidavit did not include any proposal of or casting of votes on any resolution. As referred  
to at [221] below, Robert Fielding gave evidence in cross-examination that this was “the  
summation of what occurred at the meeting” rather than a resolution that was formally  
put to a vote. This is consistent with the description of the outcome in the minutes as a  
resolution “[b]y consensus of each director” rather than as a resolution passed  
unanimously or other language customarily used to describe the outcome of a vote.  
175. The minutes were signed by Brian Hobson. They were not signed by any other director  
of BFS or by Peter Versluis.  
176. A copy of the minutes of the Ingleburn meeting was annexed to Robert Fielding’s 16  
June 2016 affidavit and exhibited to Brian Hobson’s 20 June 2016 affidavit. In his  
affidavit sworn on 21 August 2017, Brian Hobson gave evidence that he signed them  
after satisfying himself that they were accurate. Robert Fielding deposed that he  
arranged for Brian Hobson to sign the minutes and that he then send a signed copy to  
Michael Vella by post. Michael Vella gave evidence that he had not received the minutes  
and neither he nor any directors meeting of BFS had approved the minutes.  
177. Joseph and Michael Vella replied to the June 2016 affidavits of Brett Soper, Brian  
Hobson and Robert Fielding in their affidavits sworn on 30 January 2017 and 23  
February 2017 (respectively).  
178. In his 30 January 2017 affidavit, Joseph Vella deposed that he did not have a full  
recollection of the conversations that occurred at the meeting, but that he could  
remember certain parts of the meeting. He disputed the account of the meeting given by  
Brian Hobson, Brett Soper and Robert Fielding. He deposed that he believed that “one of  
the main agenda items for this meeting was to discuss how to remove Steve Phillips as  
a director of BFS” and that “[w]e also needed to discuss what was needed to get his  
company removed as a shareholder” and “what improvements could be made to BFS”.  
Joseph Vella gave evidence that, early in the meeting, Robert Fielding said:  
“If you want to remove Steve Phillips as a shareholder, the best way to do it is to set  
up a new company with Michael, Brett and Brian to be the directors and  
shareholders. You can then move the business into that new company and finish  
up with BFS.”  
179. Joseph Vella deposed that he was not aware of any issues at the time of the Ingleburn  
meeting concerning JEV trucks requiring upgrades, that he had not been aware of speed  
limiter issues prior to August 2012 and that he understood from his discussions with  
Michael Vella prior to the Ingleburn meeting that the speed limiter issues had been  
addressed.  
180. Joseph Vella described “a bit of anger and frustration by Brian, Michael, myself and  
Brett at the beginning of the meeting”. He deposed that, after all of the discussion  
between them, Robert Fielding said: “If you guys can’t work it out together, then either  
one party or the other has to go”. According to Joseph Vella, there followed a discussion  
about who might go or “sell out from BFS” during which Brian Hobson referred to health  
problems and Michael Vella said that, if Brett Soper and Brian Hobson wanted to “pull  
out” then he would “probably buy you out”. Joseph Vella did not believe that this  
resulted in any firm agreement being reached. He deposed that the meeting “finished  
with us all shaking hands in a friendly manner” and that he walked out of the meeting  
together with Michael Vella believing that they were waiting for Brian Hobson and Brett  
Soper to get back to them about what each of them wanted to do with BFS as it appeared  
to him that neither of them wished to continue. He did not recall (although I note that he  
did not deny) Michael Vella saying words to the effect: “If you won’t do it this way, then  
we don’t want to be part of BFS anymore. We should get rid of BFS and just do things  
by ourselves.”  
181. Joseph Vella deposed that he did not recall Michael Vella saying words to the effect of:  
“why don’t we wind it up”, referring to BFS.  
182. In his 30 January 2017 affidavit, Joseph Vella also deposed that he did not want to leave  
BFS or stop doing the Schweppes work because it was worth about $1.2 million in  
revenue to JEV each year. Neither Michael Vella nor Elizabeth Vella expressed the view  
to Joseph Vella that they wanted JEV to leave BFS.  
183. In his affidavit sworn on 23 February 2017, Michael Vella deposed that Peter Versluis  
had telephoned him and told him that Robert Fielding wanted to come and ask him  
some questions about BFS and that everybody’s answers to a questionnaire would be  
summarised “and then we will meet to discuss what to do going forward”. Michael  
Vella deposed that:  
“It was my understanding that the purpose of the discussion was to work out what  
we legally needed to do since Steve Phillips was no longer providing services to  
BFS. The other issues that I believed required discussion were appointing an  
independent person to run BFS, the Arndell Park lease and ensuring a fair  
allocation of jobs between the BFS shareholders.”  
184. Michael Vella took issue with the truth of the statements that Brian Hobson, Brett Soper  
and Robert Fielding deposed were made at the meeting concerning the quality and  
compliance of JEV trucks.  
185. Michael Vella denied proposing at the meeting that BFS should buy JEV’s trucks.  
However, he gave evidence that he did suggest that one way of addressing the work  
allocation issue would be for BFS to own all of the trucks and then each of the  
shareholders could “take a third share” (referring, as I understand this evidence, to a  
share of BFS’s revenue that had hitherto been paid on to shareholders in the amounts  
invoiced by each shareholder to BFS for the Schweppes delivery work actually performed  
by that shareholder). Michael Vella denied saying: “If you won’t do it this way, then we  
don’t want to be part of BFS anymore. We should get rid of BFS and just do things by  
ourselves.” He deposed that: “I did not and would not have said this because JEV and  
NSW Freightlines did not have the capacity to do the Schweppes job by ourselves,  
either financially or logistically.” Michael Vella’s evidence about JEV’s capacity was  
admitted subject to an order limiting its use to evidence of his understanding. There was  
no evidence of what capacity JEV had to undertake Schweppes delivery work. There was  
no evidence that would support an inference that JEV lacked the financial or logistical  
capacity to continue by itself the work that it had been performing for Schweppes  
through BFS.  
186. Michael Vella deposed:  
“I recall that we all shook hands at the end of the meeting. I recall that a resolution  
was passed at the end of the meeting that BFS was going to be wound down and a  
new company set up (we discussed Beverage Logistics Pty Ltd at the meeting, but I  
believe the new company was ultimately called Beverage Distribution Australia Pty  
Ltd). I understood the reason for this change was so that Steve Phillip’s [sic]  
shareholding could be removed from BFS and we no long had to be pay him  
directors’ fees or dividends from the BFS/Schweppes business when he was not  
doing any work for it.  
It was not entirely clear to me what else we decided at the meeting. I understood  
that Brian Hobson and Brett Soper were going to revert back to us with their  
proposal as to what they wanted to do with BFS. If they wanted to leave BFS, then I  
understood that J&E may have to buy out their shares.”  
187. Michael Vella also deposed that Brian Hobson indicated that he may wish to retire for  
health reasons, and that Michael Vella had suggested that he and Brett Soper would “pay  
you out” in that event.  
188. Michael Vella denied saying “why don’t we wind it up” and deposed that those words  
were said by the Risk Connect representative “in the context of Steven Phillips leaving  
BFS as shareholder and director”.  
189. In affidavits sworn during the period July to September 2017, Brett Soper, Brian  
Hobson, Peter Versluis and Robert Fielding, responded to the evidence of Joseph Vella  
and Michael Vella in their affidavits sworn on 30 January 2017 and 23 February 2017  
(respectively).  
190. In his affidavit sworn on 14 August 2017, Brett Soper deposed that he did not recall  
Steven Phillips being discussed or raised by Robert Fielding at the Ingleburn meeting.  
Steven Phillips had resigned as a director years before the Ingleburn meeting and his  
trucks no longer did work for BFS. Brett Soper did not recall Robert Fielding saying “If  
you guys can’t work it out together, then either one party or the other has to go” or  
saying anything like that. He deposed that it was Michael Vella who said that the Vellas  
did not want to be part of BFS and that “we should get rid of BFS” and Joseph Vella had  
agreed. He was surprised when Michael Vella said this, but he was “also happy because I  
was sick of working with Michael because he always wanted to complain and argue,  
and sometimes fight”. He denied that there was any discussion about he or Brian  
Hobson selling out of BFS or walking away from the Schweppes’ work and denied that  
Michael Vella mentioned buying them out.  
191. Brett Soper also deposed that the minutes of the Ingleburn meeting accord with his  
recollection of the meeting, especially the outcome. He gave evidence that he recalled  
feeling relieved at the end of the of the meeting that he would not have to keep working  
with Michael Vella.  
192. In his affidavit sworn on 21 August 2017, Brian Hobson also gave evidence that he did  
not recall Steven Phillips being discussed or raised by Robert Fielding at the Ingleburn  
meeting. He deposed that he “did not think this was an issue for BFS at the time  
because Steve Phillips had resigned as being a director years before and his trucks no  
longer did BFS work.” Brian Hobson also gave evidence that did not recall Robert  
Fielding saying “If you guys can’t work it out together, then either one party or the  
other has to go” or saying anything like that. Rather, it was Michael Vella who said that  
the Vellas did not want to be part of BFS and that “we should get rid of BFS” and Joseph  
Vella had agreed. Brian Hobson deposed that his health was not good and he did recall  
saying something about not wanting to “carry on working like this”. However, he did  
not say that he wanted to retire and he did not mention or agree to selling out of BFS and  
did not recall Brett Soper offering to walk away. According to Brian Hobson, Michael  
Vella did not offer to buy them out. As a result of the resolution at the Ingleburn  
meeting, Brian Hobson thought his association with the Vellas was officially over and  
“we were all free to go out and compete for the Schweppes work”. He was happy about  
that because “being involved with Michael Vella had been causing me a lot of stress,  
which I did not need”.  
193. In his affidavit sworn on 15 September 2017, Robert Fielding recalled there being an  
argument about who had spent how much on trucks. He recalled Michael Vella  
suggesting that BFS could own all of the trucks and employ all of the drivers, but that  
Brian Hobson and Brett Soper disagreed with that suggestion.  
194. Robert Fielding denied saying the words attributed to him by Joseph Vella about moving  
the business of BFS to a new company in order to remove Steven Phillips as a  
shareholder: see [178] above. Robert Fielding did not recall any discussion about  
Stephen Phillips, director’s fees or dividends at the Ingleburn meeting. He deposed that:  
“I do not recall removing Steve Phillips as a shareholder being an issue of  
contention at the meeting or beforehand. I was aware he was not involved in the  
business of BFS but I was not aware that his company being a shareholder of BFS  
was a problem. If it was raised as an issue it would have been included in the  
questionnaire following the initial meetings with each of the directors of BFS.”  
195. Robert Fielding also denied saying: “If you guys can’t work it out together, then either  
one party or the other has to go”. He added that his role was a facilitation role and it was  
not for him to tell the parties what to do.  
196. Robert Fielding denied that Brian Hobson mentioned selling out of BFS and did not  
recall Brett Soper saying anything about walking away or doing other things. He could  
not recall Michael Vella mentioning buying out Brian Hobson and Brett Soper. He  
denied that the meeting ended with a possibility of Michael Vella buying out Brian  
Hobson and Brett Soper.  
197. Robert Fielding agreed with Joseph Vella’s description of the Ingleburn meeting as  
involving anger and frustration between Brian Hobson, Brett Soper, Michael Vella and  
Joseph Vella at the beginning, but finishing up with all of them shaking hands in a  
friendly manner.  
198. In his affidavit sworn on 27 July 2017, Peter Versluis described the discussion as being  
“wide ranging” and said that he could not recall agreement being reached on any topic.  
He described the debate as vigorous and animated, and said that harsh and loud tones  
were used at the start of the meeting. He agreed with Joseph Vella’s description of the  
meeting involving a bit of anger and frustration between the BFS directors at the  
beginning, but finishing with them all shaking hands in a friendly manner. He recalled  
discussion about the issue of BFS buying trucks and that no agreement was reached  
about that. He recalled vigorous discussion about the issue of whose trucks were or were  
not compliant with Schweppes’ requirements. He also recalled discussion about work  
allocation.  
199. Peter Versluis denied recommending that a new company be established or that the  
business of BFS be moved to a new company. He deposed that he did not recall the name  
of Stephen Phillips being mentioned at the Ingleburn meeting or any of the prior  
meetings that he was involved in. If he had been aware of a fourth shareholder, he would  
have wanted for that person to be contacted in order to ask if they wanted to be involved  
in the discussions.  
200. Peter Versluis gave the following evidence:  
“Towards the end of the meeting one of the directors (I cannot recall which) said  
something like:  
‘We’ve given this a try and it hasn’t worked. We can’t be in business  
together any more. We should close the company down, pay everyone  
off and move on.’  
Each of the others at the meeting, except Robert and I, said something to the effect  
of: ‘I agree’.  
I was surprised when this occurred because I understood I had been engaged  
because the parties wanted to explore ways to stay in business together through  
BFS. I noticed that each of the participants in the meeting looked resigned to the  
agreed outcome, even though none of them looked entirely happy. ...  
I said something like:  
‘As you all seem to have come to an agreement, we will leave Committee  
and come back to the formal meeting. Do the directors resolve by  
consensus that the business of BFS be wound down, the creditors paid  
and the company is to cease trading?’  
Each of the directors said something like: ‘I agree’.”  
201. Peter Versluis recalled everyone shaking hands at the end of the meeting after this  
resolution was passed. He deposed that he did not recall that the resolution to “wind  
down” BFS included a resolution to establish a new company.  
202. Peter Versluis deposed that he did not specifically recall Michael Vella saying words to  
the effect that “If you won’t do it this way, then we don’t want to be part of BFS  
anymore. We should get rid of BFS and just do things by ourselves”. However, he  
deposed that the effect of those words was said by one of the directors towards the end of  
the meeting and agreed to by all of the others.  
203. Peter Versluis also gave evidence that he did not recall Brian Hobson saying that he  
wanted to retire or Michael Vella offering to buy out Brian Hobson’s shares.  
204. The plaintiffs responded with a further round of affidavits of Michael Vella and Joseph  
Vella.  
205. In his affidavit sworn on 3 February 2021, Michael Vella denied saying at the Ingleburn  
meeting that the Vellas did not want to be part of BFS and that “we should get rid of  
BFS” and Joseph Vella had agreed: see [190] above. Michael Vella added: “I did not  
want to leave BFS at any time and risk losing a share of the Schweppes work, which  
was very profitable for J&E.” He maintained that it was his understanding that the  
agreement reached at the Ingleburn meeting was to wind down BFS and set up a new  
company and contended that “the discussion about any new structure of company was  
only because of the exit of Stephen Phillips and his company”. Michael Vella introduced,  
for the first time, his account of Brian Hobson having told him in August 2012 that he  
had received legal advice and “we have to get Stephen Phillips out of the company  
altogether. We have to stop paying him dividends if he is not contributing. We should  
close BFS and start a new company.” I have referred to Michael Vella’s evidence about  
this alleged conversation at [80] above and rejected it for the reasons explained at  
[84]-[90] above. Michael Vella disputed that statements to the effect deposed to by Peter  
Versluis at [200] above were made at the Ingleburn meeting. Michael Vella deposed that  
Peter Versluis said words to the effect: “We’ve agreed on a course of action to close  
down BFS and a new company being set up.”  
206. In his affidavit sworn on 3 February 2021, Joseph Vella deposed in response to Robert  
Fielding’s 15 September 2017 affidavit that he did not recall the parties agreeing to wind  
down the business and go their separate ways. Joseph Vella made no response to Peter  
Versluis’ evidence referred to at [200] above.  
207. The plaintiffs had leave to adduce oral evidence in chief from Joseph Vella in relation to  
specific matters. Joseph Vella was asked during that oral evidence on 6 May 2021 if he  
recalled whether anything was ultimately agreed upon at the Ingleburn meeting. His  
answer was that he could not remember. In cross-examination, Joseph Vella could recall  
meeting Robert Fielding and Peter Versluis at the Ingleburn meeting but had no  
recollection of having met them together with Elizabeth Vella and Michael Vella a few  
days before the Ingleburn meeting. He did recall that he believed that Brian Hobson and  
Brett Soper had been dishonestly diverting more of the profitable Schweppes deliveries  
to their own trucks and that JEV was claiming lost earnings.  
208. During his short cross-examination, Joseph Vella gave the following inconsistent  
evidence about the Arndell Park warehouse issue:  
“Q. Do you recall in August 2012 that an issue had arisen between you and Mr  
Hobson and Mr Soper about Mr Hobson and Mr Soper causing BFS to enter into a  
lease for a warehouse in Arndell Park?  
A. No, I don't remember that, no.  
...  
Q. Is this the case; you can't remember a single thing that was said at this meeting?  
A We spoke about the warehouse.  
Q. What warehouse?  
A. At Arndell Park.  
Q. The one that I just asked you about before that you said you didn’t know  
anything about; that one?  
A. Yep.  
Q. What was said about the Arndell Park warehouse, Mr Vella?  
A. That Mr Hobson and Soper got that warehouse without letting us know.  
Q. Was your position that that warehouse was only for their benefit, and not for the  
benefit of BFS?  
A. If so, why was BFS paying for the rental.  
Q. That's what you recall, either you or Michael saying at this meeting; why is BFS  
paying for this warehouse when its only for the benefit of Soper and Hobson?  
A. Right.  
Q. Do you recall that happening?  
A. Yes.  
Q. You were saying that one of the things you were demanding was that this  
warehouse be taken out of the name of BFS, correct?  
A Yes.”  
209. Joseph Vella gave the following evidence in cross-examination about Mr Phillips:  
“Q. You don’t actually have any recollection of anybody mentioning Mr Phillips at  
this meeting, do you?  
A. I do, sir.  
Q. Who said it? Who raised Mr Phillips at this meeting?  
A. Well – geez, I can’t really remember. But his words were mentioned at the  
meeting.  
Q. Whose words were mentioned at the meeting?  
A. Well, his name – Mr Phillips’s name was mentioned at the meeting.  
Q. And you don’t recall who said it?  
A. No, I don’t.  
Q. What was said about Mr Phillips?  
A. About his drinking problem and about his drugs, and that he was bad to the  
company.  
Q. And what was said after, you say, that somebody referred to Mr Phillips having  
a drinking and a drug problem and being bad for the company? What was said  
after that?  
A. That they wanted him off – off the books.  
Q. Did anybody explain or say what being off the books meant?  
A. Well, could have been another way. Unfortunately, I can’t explain that now.  
Q. So, you remember somebody saying, ‘We want Mr Phillips off the books because  
he’s drinking, and on drugs, and he’s bad for the company.’?  
A. Yeah.  
Q. Do you recall whether anybody at this meeting discussed how Mr Phillips could  
be taken off the books?  
A. Yeah, by closing down that company and opening up another one.  
Q. Did everybody at the meeting, do you say, agree to do that – close down one  
company and open up another one?  
A. Yes.  
Q. Mr Vella, you know that nothing of that type took place at this meeting, don’t  
you?  
A. It did.  
...  
Q. You say there was a resolution, do you - to cause Mr Phillips to be removed from  
the company, then BFS would be wound up and a new company entered into  
without Mr Phillips?  
A. That's right.  
Q. And you say, that’s what was said at this meeting?  
A. That's right.  
Q. What did you understand Mr Phillips’s involvement in the company was as at  
28 August 2012?  
A. What do you mean – what do you mean?  
Q. Well, were you aware that Mr Phillips had resigned as a director of the  
company, as at 28 August 2012?  
A. No, I wasn’t.  
Q. Was there any discussion at this meeting as to what Mr Phillips’s current  
involvement in BFS was?  
A. He had – he had two trucks there with Cadbury Shweppes.  
Q. Was there any discussion about other than the fact that Mr Phillips had two  
trucks there?  
A. Most of the – most of the time, they weren’t available.  
...  
Q. Do you say there was a conversation at this meeting about the fact that Mr  
Phillips’s two trucks were not usually available to do delivery work?  
A. That’s right. Yes.  
Q. Is it your evidence that that was the extent of the discussion about Mr Phillips’s  
involvement at BFS?  
A. Yes.  
Q. If that’s the situation, Mr Vella, why couldn’t BFS simply have stopped using Mr  
Phillips’s trucks?  
A. I – I don't know.  
Q. In any event, you claim that at this meeting, there was a resolution to form a  
new company that would cut out Mr Phillips?  
A. That's right, that’s what I’ve been told, yes.  
Q. That’s what you’ve been told?  
A. Yes.  
Q. Who told you that?  
A. So, Michael was telling me, and then, there was Brian Hobson and there was  
Brett Soper--  
Q. Sorry, after you said ‘Brett Soper’, you said something else. What did you say  
then?  
A. Nothing, sorry.  
Q. So, you say that at this meeting, Mr Hobson and Mr Soper said, ‘We need to do  
this to cut out Mr Phillips from the company’?  
A. Yes.  
Q. Did it occur to you that perhaps you could contact Mr Phillips to see if he agreed  
to leave the company, to transfer his shares to one of the other shareholders?  
A. No, I don't know.”  
210. Joseph Vella gave the following evidence in cross examination concerning the manner in  
which the Ingleburn meeting concluded:  
“Q. I want to suggest to you that Michael made a series of demands, Mr Hobson  
and Mr Soper said that they were not going to meet those demands, and then  
Michael said, ‘If you’re not going to do it our way, let’s wind BFS up and go our  
own ways.’  
A. Them words didn’t come from Michael’s mouth. I’m pretty sure – I’m a hundred  
per cent sure that they come from Mr Fielding’s mouth, that “wind the companies  
up.”  
Q. Did Mr Fielding say, ‘Let’s wind BFS up, and everybody can go their own way’?  
A. He did.  
Q. Did everybody agree to that?  
A. I don’t think so. No. I’d say no.  
Q. Did anybody agree to that?  
A. Well, we didn’t agree to it anyway.  
Q. So, you said, ‘No, we don’t agree to wind-up BFS’?  
A. Yeah.  
Q. You say, you never agreed to wind up BFS on any conditions, do you?  
A. The way - I thought that we were going to wind BFS up and open up another  
company.  
Q. You just had Mr Fielding saying, ‘Let’s wind up BFS, and everybody can go their  
own way’, and you say you didn’t agree to that – is that right?  
A. That's right.  
Q. But do you say that somebody else said at this meeting, ‘Let’s wind up BFS and  
enter into a new company together’?  
A. Yeah, I’m getting confused here, sir. I’m getting confused.  
Q. You don’t actually remember what was said at this meeting at Ingleburn RSL at  
all, do you, Mr Vella? Honestly.  
A. I - I - I remember a lot of them, yeah.  
Q. Do you say that you remember somebody at the meeting at Ingleburn RSL  
saying, ‘Let’s wind up BFS and enter into a new company’?  
A. That would’ve been Mr Fielding.  
Q. Firstly, do you remember anybody saying it?  
A. No, I don’t remember.  
Q. Do you recall shaking hands at the end of the meeting of 28 August at Ingleburn  
RSL?  
A. Yes, we all did. Yes.”  
211. In cross-examination, Michael Vella gave evidence that, whilst the directors had agreed  
at the Ingleburn meeting about the matters recorded in the minutes concerning the  
proposed new company (as recorded in the paragraph in the minutes commencing  
“Consensus from each director was achieved ...” under the heading “General  
Discussion”), the directors had not been able to reach agreement about other matters  
including reimbursement of alleged lost earnings to JEV, the Arndell Park warehouse,  
the guarantees for that lease, and whether the proposed new company would buy all of  
the trucks as “a way to guarantee equal earnings”. As to the last matter, Michael Vella  
gave evidence that Brian Hobson and Brett Soper had rejected his suggestion that the  
proposed new company own and operate the trucks so as to guarantee equal earnings for  
shareholders.  
212. Michael Vella gave evidence in cross-examination that he left the Ingleburn meeting  
with a clear understanding that a resolution had been passed to wind up BFS (and,  
according to his evidence, transition its business to a new company). He was unable to  
explain why he failed to mention the winding up resolution in his 4 December 2015  
affidavit, but denied that it was because he knew that it may harm the plaintiffs’ claim  
against Brian Hobson and Brett Soper.  
213. Brian Hobson accepted in cross-examination that his recollection of the Ingleburn  
meeting was by then, nine years after the event, “pretty poor ... to a degree”. He  
maintained that he had a good recollection that Michael Vella said at the end of the  
meeting something like: “If you won’t do it this way, then we don’t want to be part of  
BFS anymore” and “We should just get rid of BFS and just do things by ourselves”.  
According to Brian Hobson, “everybody had had the yelling and screaming going on,  
then Michael had the last say and he was very vocal about it. That was – he made it  
quite clear”. Brian Hobson then said something like: “Well, we can wind BFS up, but  
Brett and I will continue to do Schweppes work if we can.” In response, Michael Vella  
“most certainly” said something like: “We will go and work with Schweppes on our  
own”. There was no discussion that the work would be transferred over to a company  
equally owned by Brian Hobson, Brett Soper and Michael Vella. Michael Vella “made it  
quite clear he wanted out”.  
214. It was put to Brian Hobson in cross-examination that he had wanted the Vellas out of  
BFS before the Ingleburn meeting and he had a plan going into the meeting that he was  
going to shut down BFS and start up a different company that the Vellas had no  
involvement in. Brian Hobson denied this, saying: “Them walking away was the biggest  
headache I’d had”. I note that these propositions put to Brian Hobson are inconsistent  
with the plaintiffs’ submissions that Brian Hobson and Brett Soper had agreed to  
transfer the business of BFS to another company equally owned by Brian Hobson, Brett  
Soper and Michael Vella in order to have BFS’s operations conducted by a company in  
[10]  
which Evermay had no shareholding.  
215. Brian Hobson denied that he had tried prior to the Ingleburn meeting to “actively  
poison” Robert Aikin against the Vellas in relation to the speed limiter issue, saying: “I  
didn’t have to poison Rob Aikin. He had his access to the data. He’d seen – he was  
telling me what was going on. I was trying to cover it.”  
216. Brian Hobson gave evidence in cross-examination that he did not know prior to the  
Ingleburn meeting that the Vellas would decide to leave the BFS business. Whilst they  
had made suggestions about this over the years because they “were just never happy”,  
they had never previously made a decision or announcement to leave. They had been  
agitating their complaints about what they saw as unequal earnings by the three  
shareholders for years and, according to Brian Hobson, they were always saying that  
they were losing money yet they always seemed to be the biggest earners.  
217. Brett Soper also acknowledged in cross-examination that he no longer had a good  
recollection of the Ingleburn meeting nine years earlier. However, he maintained that he  
did recall Michael Vella saying words to the effect: “If you don’t want to do it this way,  
then we don’t want to be part of BFS anymore; we should just get rid of BFS and do  
things by ourselves.” Brett Soper said that he and Brian Hobson were “dumb founded”  
when Michael Vella said that. He denied that he and Brian Hobson had decided prior to  
the Ingleburn meeting to “get Vella out of the business” and denied that he failed to send  
certificates for JEV trucks to Schweppes in August 2012 because he was “intending to  
poison” Michael Vella’s reputation with Robert Aikin.  
218. Robert Fielding acknowledged in cross-examination that his recollection of the  
Ingleburn meeting was, by nine years after the event, pretty poor. He gave evidence that  
there was a lot of animosity during the Ingleburn meeting but it did conclude with the  
parties shaking hands. There was “a lot going on” at the meeting but “[i]t was pretty  
much around about the same thing” and “basically, it was all on three points of  
contention”. Robert Fielding said that:  
“... a lot of it was them – if you were going to restructure a company and we were  
going to have shareholders’ agreements on – on how they think things is to operate  
in the future. We couldn’t get to that point because they couldn’t agree to agree.”  
219. Robert Fielding was cross-examined about the preparation of the minutes of the  
Ingleburn meeting. He gave evidence that he had prepared the minutes on the evening of  
28 August 2012 or early the next morning and had telephoned Brian Hobson and told  
him that the minutes needed to be signed. He then saw Brian Hobson – he could not  
recall where – who signed the minutes. Robert Fielding considered that only one  
signature was required because “[i]t’s customary on minutes to only have one  
signature”. He sent a copy of the signed minutes to the Vellas and Brian Hobson said  
that he would provide a copy to Brett Soper. Later that afternoon, Brian Hobson asked  
Robert Fielding to set up a company for him.  
220. Robert Fielding made handwritten notes of the meeting of about three or four pages but  
these were amongst documents that he gave to the defendants’ solicitors that he never  
received back. The notes were available to him at the time he prepared his first affidavit,  
yet the notes were not annexed to the affidavit and Robert Fielding was unable to explain  
any reason for this.  
221. Robert Fielding was cross-examined about the fact that his account of the Ingleburn  
meeting in his 16 June 2016 affidavit does not refer to any to any resolution being moved  
or agreed. He gave the following evidence:  
“Q. You don't record anywhere there in the narrative as set out in paragraphs 15  
through to the end of paragraph 15 on page 739 any resolution being moved or  
agreed, do you?  
A. No, I don’t.  
Q. You say that resolution was an important part of that meeting.  
A. Well, that - that was the summation of what occurred at the meeting. They  
agreed on some things, couldn’t agree on other things.  
Q. But you say the actual resolution that you have identified in the minute, you  
actually haven't recorded any discussion about that in your affidavit. Correct?  
A. Other than the bit that they all just agreed to agree to go the separate ways.  
Q. I want to suggest to you that at no stage during that meeting did Michael Vella  
say words to the effect, ‘We will do things our own way, we don't want to be part of  
it anymore.’  
A. I don’t agree.  
Q. At no stage during that meeting did he say, ‘The Vella’s can do our own thing,  
you can do your own thing. We will see what Schweppes wants to do. Then we  
won’t have you causing us trouble anymore.’ That was just simply not said, was it?  
A. Well, it was or words to the effect of.  
Q. There was nothing recorded the minute, was there, about that being said, ‘We'd  
go our own way’.  
A. No. No, it was just a resolution that they’d go their own way.  
Q. What I want to suggest to you is that you had no direct recollection of what was  
said in that meeting at the time you came to prepare your affidavit, did you?  
A. Well, I prepared the minute at the time.  
Q. But the recollection you’ve set out in paragraph 15--  
A. That’s a - that’s a vamoose. At the end of it, they all just agreed that they weren't  
going to - they weren't going to resolve their differences, and they agreed that  
they’d all just go and do their - their own thing.  
Q. What they did agree on as recorded in the minutes was that they agreed on the  
use of Beverage Logistics Pty Ltd, didn’t they?  
A. They would’ve, yes.  
Q. They agreed that they would go forward using the new company, as had been  
reflected in the discussions you’d had with all of them before this meeting. Correct?  
A. Yes.  
Q. What's reflected in the minute in terms of consensus were the things that they  
had already conveyed to you in the meetings that you had with them before the  
Ingleburn meeting about using Beverage Logistics Pty Ltd to move forward.  
A. Yeah, and that was reaffirmed at the meeting.  
Q. That's also not anywhere in paragraph 15 of your affidavit, is it?  
A. Doesn’t appear to be.  
Q. All you've done is you have set forth a very selected recollection of what  
occurred at that meeting in paragraph 15, isn’t it?  
A. Sorry, I didn’t hear.  
Q. It's a very curated recollection of what happened at that meeting in paragraph  
15, isn't it?  
A. Well, at the end of it, they all - they started off not agreeing and then at the end  
of it, they all agreed to agree and go their own way.  
Q. You tell her Honour, do you, that what was contained in paragraph 15 was  
something that was reflected in notes that no longer seem to exist. Is that the case?  
A. Yes.  
Q. You have no recollection as to why those notes didn't accompany the affidavit.  
A. I have no comment. I don't know.  
Q. If a new company was intended or they agreed for a new company to go forward  
with the business of doing Schweppes work, it was going to be necessary to wing  
down BFS, wasn’t it?  
A. Yes.  
Q. Indeed, what I suggest to you is that's precisely what occurred at that meeting,  
which was the directors agreed that they would utilise Beverage Logistics going  
forward in the future.  
A. I disagree with that.  
Q. That's what it says, isn't it? ‘Consensus from each director was achieved in  
respect to allocation of work using Beverage Logistics Pty Ltd.’  
A. Yeah, they agreed on that bit.  
Q. If they had agreed on that bit, what was the point of including any of what they  
agreed upon if you say ultimately what occurred was that they just decided to go  
their own way and wind down the company?  
A. Well, there was just - there was so much contention and so much - points that  
everybody really needed to agree on. I just tried to summarise. These are the bits  
that we agreed on, these are the bits that we didn’t agree on, and our decision was  
we were going to go our own way.  
Q. It doesn't say anything about going your own way, does it? It just simply says,  
“By consensus, the directors resolved the operations of Beverage Freight Services  
would be wound down.” Do you see that?  
A. Yes.  
Q. It doesn't actually even say that Beverage Freight Services would be wound up.  
A. That was the words that we used at the meeting that I recall. It was the word -  
the word liquidated or anything like that wasn’t used.  
Q. What did “wound down” even mean? Did it mean wind up?  
A. Wind up.  
Q. It didn’t say wind up. You didn’t use the word wind up. Correct?  
A. Nuh.  
Q. You’re an accountant, aren’t you?  
A. Yes.  
Q. You understood precisely that there was a significance attached to the concept  
of winding up a company, didn’t you?  
A. Yes.  
Q. You didn't use that expression.  
A. I didn’t.  
Q. Why did you use the expression wind down?  
A. Well, that was--  
Q. What were you meaning to convey by that?  
A. That was the words they used at the meeting.  
Q. Was that intended to mean some kind of gradual process?  
A. Well, there was some ongoing creditors that needed to be paid, ongoing BAS tax  
obligations that needed to be done, so over a period of time, that was all just to  
cease.  
Q. What, the company would continue until that point in time.  
A. No, it would - there would have been enough debtors and - and other things in  
there to - or debts to collect to pay bills.  
Q. Did you know that for a fact?  
A. I’d had a quick look.  
Q. At what?  
A. There was some finance - there was some financials there at the - the end so  
there - there was a little bit of wind up. They just can’t - they weren’t just going to  
sit there and just draw a line in the sand at the day.”  
222. As referred to below, Robert Fielding was involved in the establishment of BDA and he is  
the accountant for BDA. He is not the accountant for Brian Hobson, Hynadam  
Nominees, Brett Soper or Mechita Nominees. He was asked in cross-examination  
whether he had seen the affidavits of Brian Hobson and Brett Soper before preparing his  
own affidavit giving an account of the Ingleburn meeting. He said that he had not seen  
those affidavits, or the affidavit of any other witness.  
223. It was plain from the cross-examination of Peter Versluis that he has no recollection of  
what was discussed or resolved at the Ingleburn meeting independently of the minutes  
of that meeting. He gave evidence that, at the time he prepared his affidavit, he was  
unable to recall what the topics of the wide-ranging discussion at the meeting were. He  
did not recall that consensus was achieved in relation to the topics that the minutes refer  
to as the subject of consensus. Nor did he have a recollection that there was no  
agreement in relation to the topics in respect of which the minutes state that consensus  
was not reached. When questioned about the state of his recollection, Peter Versluis  
simply reverted to a position that the resolution had been reached at the meeting in the  
terms recorded in the minutes.  
Events in the immediate aftermath of the Ingleburn meeting: August – September 2012  
224. As referred to at [219] above, Brian Hobson sought Robert Fielding’s advice about  
establishing a new company on the afternoon of 29 August 2012 after he had signed the  
minutes of the Ingleburn meeting. In cross-examination, Robert Fielding gave evidence  
that Brian Hobson telephoned him that afternoon and asked if he could help him to set  
up a new company. Robert Fielding asked who the shareholders and directors would be  
and Brian Hobson said he would need to get back to him about that. In that context,  
Brian Hobson told Robert Fielding that he and Brett Soper were unable to do all the  
Schweppes work themselves and needed to enlist help. The following day, Brian Hobson  
told Robert Fielding that the directors would be Brett Hobson, Brett Soper and Erron  
Jameson. Robert Fielding asked about the shareholders and advised Brian Hobson that  
“you should probably put them in a trust”. He gave that advice for reasons that he  
described as “Tax and structuring, and being able to distribute income, and asset  
protection”. He denied having any concern that they were exposing themselves to  
liability by setting up the new company.  
225. In cross-examination, Brian Hobson gave evidence that he and Brett Soper needed to  
find a third shareholder in order to “pick up the slack” that was created from JEV not  
being there. They approached Erron Jameson of George McDonald & Sons, which was  
already a subcontractor to BFS with Schweppes-compliant trucks. Brian Hobson first  
contacted Erron Jameson on his way home from the Ingleburn meeting and asked him  
“could he help supply trucks because Michael had left – was leaving the business”. He  
had a further, separate discussion with Erron Jameson about becoming a shareholder in  
the new company the next day.  
226. Brian Hobson was unsure whether he had provided the instructions to Robert Fielding  
in relation to the creation of the new company, or whether this was done by Brett  
Hobson or Brett Soper. Nothing turns on this. Brian Hobson knew that the instructions  
had been given to Robert Fielding.  
227. The new company established by Robert Fielding is BDA. It was registered on 30 August  
2012 with Brett Hobson, Brett Soper and Erron Jameson as its directors and Hynadam  
Nominees, Mechita Nominees and Coastal Beverage Logistics Pty Ltd as equal  
shareholders. As referred to at [222] above, Robert Fielding is the accountant for BDA.  
In cross-examination, he described BDA as “just a clearing house, to collect the fees to  
pay to the other companies that own the trust and the property and do the running  
about”.  
228. On 30 August 2012, Michael Vella sent an email to Brett Hobson and Brett Soper  
stating:  
“Please let there be no mistake on the 28th, 29th and now again on the 30th of  
August you were informed we had 4 FOUR of what we all consider to be Beverage  
trucks at your disposal fully compliant full units including drivers. On each  
occasion you informed us that there wasn’t enough work for all of these vehicles .  
WHY then today do you have 5 FIVE trucks working and Mechita has 4 but we  
only need 3 of ours .”  
229. On 31 August 2012, Brian Hobson (using Brett Soper’s email address) sent an email to  
Mr Aikin, copied to other Schweppes personnel, which stated:  
“I hope that we do not inconvenience schweppes in any way but BFS and BLS will  
be going through a restructure to improve the way it operates and in doing so we  
will be merging together with George Macdonald and sons to improve our service  
to schewppes in interstate,country and warehousing.We are hoping that in the  
merge of these companies we offer schweppes alot [sic] of good savings in  
transport costs for the (H20 TO GO) work and any other new ventures we will be  
included in.There will be a new company formed with this merge taking place  
which will be called Beverage Distribution Australia PTY LIMITED which we  
would like to take affect [sic] as of the 3rd september 2012 if possible.”  
230. As the plaintiffs submitted, the use of the words “restructure” and “merger” were not  
accurate. However, it is clear from the terms of the email, read as a whole, that a new  
company was being established with different ownership than BFS and that the new  
company was seeking to do the Schweppes delivery work that was then being performed  
by BFS. It is also clear from Robert Aikin’s email sent to other Schweppes personnel on 5  
September 2012 referred to at [234] below that he understood this.  
231. The plaintiffs submitted that the reference to both BFS and BLS in Brian Hobson’s 31  
August 2012 email indicates that he had previously mentioned BLS to Robert Aikin and  
was “nowhere near candid with the Court about this”. I accept that the references to  
[11]  
BLS in both the COR Notice issued by Schweppes on 2 August 2012  
Hobson’s 31 August 2012 email  
and in Brian  
[12]  
indicates that it is likely that the existence of BLS had  
been disclosed to Schweppes prior to August 2012. However, BLS was equally owned by  
[13]  
Brian Hobson, Brett Soper and Michael Vella.  
A finding that Schweppes had been  
informed about the existence of that company at some time between its incorporation in  
February 2011 and August 2012 has no rational bearing on any issue in dispute in these  
proceedings. The plaintiffs’ submissions to the contrary are illogical and unfounded for  
the reasons already explained at [124], [127] and [136]-[144] above. I do not attribute  
Brian Hobson’s inability to recall or explain why he had referred to BLS in his 31 August  
14  
2012 email to lack o[14]candour, rather than imperfect recollection of events that  
occurred a decade prior to the trial and would not have appeared to be significant at the  
time.  
232. In cross-examination, Brian Hobson said he had not copied Michael Vella into his 31  
August 2012 email to Robert Aikin because “Michael moved on. He said he wanted to  
move on, didn’t want nothing to do with us anymore”.  
233. Michael Vella sent a further email to Brett Hobson and Brett Soper on 4 September 2012  
stating:  
“Please note I Have not yet received any answers as to why you are using 4 and at  
times 5 trucks from each of you but only 3 of mine. As you know we are all equal  
shareholders.”  
234. On 5 September 2012, Robert Aikin sent an email to Schweppes personnel, copied to  
Brett Hobson and Brian Soper, advising that “Beverage Freight Services will have a  
change of name including an ownership change” from 10 September 2012 and that the  
“new operating name” would be Beverage Distribution Australia Pty Ltd. The email set  
out the ABN and ACN for the new company and requested the necessary system changes  
to allow for processing of invoices issued by BDA from 10 September 2012. The  
plaintiffs’ submissions sought to make much of the fact that the email referred to a  
change of operating name. However, the terms of the email, read as a whole, make it  
clear that BDA is in fact a new company with its own unique ACN and different  
ownership compared to BFS.  
235. In his affidavit sworn on 4 December 2015, Michael Vella deposed that BFS’s contract  
with Schweppes had expired in mid-2012 and that Brian Hobson had told him at about  
that time that the new contract could not yet be signed because Schweppes wanted to  
make some amendments. Michael Vella deposed that Brian Hobson telephoned him  
“one day” in September 2012 and told him that BFS had been unsuccessful in renewing  
the contract and “[w]e’ve got till the end of the week and we’re out of a job. Schweppes  
doesn’t want BFS to do it anymore and they are going to use MacDonald & Sons.”  
According to Michael Vella, Brian Hobson told him that he had a letter from Schweppes  
stating that BFS had been unsuccessful in its tender. Michael Vella deposed that he  
asked Brian Hobson for a copy of that letter twice but he did not receive a copy.  
236. It is apparent from the timing of the subsequent events to which Michael Vella deposed  
in his 4 December 2015 affidavit and from his evidence in cross-examination that he  
places the conversation that he describes with Brian Hobson “one day” in September  
2012 as having occurred at some time after his 4 September 2012 email referred to at  
[230] above and prior to Monday, 10 September 2012.  
237. There is no evidence that, during the period between the conclusion of the Ingleburn  
meeting and the conversation that he says he had with Brian Hobson between 4 and 10  
September 2012, Michael Vella followed up Brian Hobson or Brett Soper to ask about  
the steps being taken or required to be taken in order to establish the new company that  
he says they had agreed to establish at the Ingleburn meeting. There is no record of any  
correspondence and no evidence of any conversation about the establishment of a new  
company during that period. When asked about this in cross-examination, Michael  
Vella’s only explanation was: “At that point in time, we – business as usual, there was  
no reference to – there was no need for the new company, no".  
238. According to Michael Vella’s 4 December 2015 affidavit, when he arrived at work “[t]he  
following Monday morning” after his conversation with Brian Hobson referred to at  
[235] above, all of JEV’s trucks that had delivered freight for Schweppes were in JEV’s  
yard at Minto. Michael Vella deposed that he rang Brian Hobson and had a conversation  
with him to the following effect:  
“MV: ‘What’s going on mate?’  
BH: ‘You know the job’s over, we’ve been sacked, there’s all your gear back.’  
MV: ‘So that’s it?’  
BH: ‘Yes.’”  
239. Michael Vella deposed that he telephoned Robert Aikin at Schweppes on or about 10  
September 2012, which must be the same day as the Monday referred to immediately  
above, for the reasons explained at [236] above. According to Michael Vella, they had a  
conversation to the following effect:  
“MV: ‘Robert, I want a copy of the letter you sent BFS terminating the contract  
because Brian won’t give it to me.’  
RA: ‘We no longer use BFS, there’s no letter from me. The directive came from  
BFS.’  
MV: ‘That’s not the case.’  
RA: ‘Michael, I don’t know what you’re talking about. We never terminated the  
services of BFS. Brian contacted me and told me that they wished to change the  
directors of the company and restructure and they’ll now be known as Beverage  
Distribution Australia and will continue on in the same terms.’  
MV: ‘That’s a load of shit.’  
RA: ‘It’s too late, the deal has already been done. You should speak with Brian, he  
is your mouthpiece. I don’t want a part of any of your disputes.’  
MV: ‘Thanks for your time.’”  
240. Michael Vella deposed that he later telephoned Brian Hobson and they had a  
conversation to the following effect:  
“MV: ‘I have spoken with Rob Aiken [sic]. He says the termination was by BFS and  
not by Schweppes. He said you told him that I wanted out and so you had to  
change the directors.’  
BH: ‘Mick, I did for my son, mate, you’d do the same.’  
MV: ‘Brian, if you can sleep at night good luck to you’.”  
241. In his affidavit sworn on 20 June 2016, Brian Hobson denied having had conversations  
with Michael Vella the effect referred to at [235], [238] and [240] above.  
242. In his affidavit sworn on 21 August 2017, Brian Hobson deposed that his allocation  
books showed that two or three of the JEV trucks that he was confident were speed  
limited stayed on the road for BFS until 7 September 2012 and that JEV trucks did not  
work for BFS from Monday, 10 September 2012. He could not recall exactly how this had  
occurred but it was his understanding following the Ingleburn meeting that JEV would  
stop working through BFS and would approach Schweppes directly to get work.  
According to Brian Hobson, BFS kept using JEV trucks for a short period because they  
could not get other trucks in as subcontractors. Brian Hobson deposed that he did not  
feel the need to respond to Michael Vella’s emails referred to at [228] and [233] above  
because of the agreement that he says had been reached at the Ingleburn meeting. He  
thought that, if he responded to the emails, he would just get into another argument  
with Michael Vella and he did not see the point in doing so because they had all agreed  
that they did not want to be in business anymore. Brian Hobson gave evidence to the  
same effect in cross-examination and added that he was personally beginning to pull  
back from the business at this time and his son was moving into his place. Given the  
agreement that had been reached at the end of the Ingleburn meeting, Brian Hobson did  
think it was odd that Michael Vella’s emails referred to them as all being equal  
shareholders but he did not engage with Michael Vella about this because “[h]e already  
knew he walked away from the business”.  
243. Robert Aikin gave a very different version of his conversation with Michael Vella in  
September 2012 than Michael Vella’s version set out at [239] above. In his affidavit  
sworn on 20 June 2016, Robert Aikin deposed that he received a telephone call from  
Michael Vella when he was at home after business hours in or about September 2012. He  
deposed that the conversation was to the following effect:  
“Michael said: ‘As you know we have decided to go our separate ways with Brett  
and Brian and BFS. However the Vellas want to keep doing the transport work for  
Schweppes through our own company NSW Freightlines, not BFS.’  
I said: ‘Michael in my view Schweppes gave you ample opportunities and time to  
react to the speed limiter compliance breaches that occurred with the NSW  
Freightline vehicles. You chose not to do anything about it. We will not load NSW  
Freightlines trucks because you continued to drive them without providing  
evidence that the speed limiters had been certified, after I asked numerous times. I  
got reports up until I suspended your vehicles that your vehicles were speeding.’  
Michael said: ‘That is not accurate. I don’t think the GPS reports were accurate, the  
NSW Freightlines trucks were not speeding. I didn’t see a need to get them  
certified when they were not speeding.’  
I said: ‘Well I don’t think you can tamper with a GPS Report. If the RMS got hold  
of these reports, they would use them to prosecute you and possibly me. Maybe if it  
was just one instance but there have been multiple instances and I have been  
getting these reports on an ongoing basis. As I said, Schweppes have a decision not  
to use NSW Freightlines trucks. Schweppes had a contract with BFS, Brian and  
Brett have notified Schweppes that BFS is no longer operating because you did not  
want to operate it anymore and have requested to perform the transport work  
through a new entity which Schweppes is happy with. Schweppes does not have a  
problem with them. We will not be using your company.’  
Michael said: ‘Well would anything change your mind. I think the Vellas did a good  
job for Schweppes. I do not think we deserve this treatment.’  
I said: ‘Before Schweppes would consider NSW Freightlines working for us, either  
with BFS or separately, it would have to demonstrate certification of compliant  
speed limiters. It would need to provide three months of data reports showing  
compliance with the speed limit. The company would need an audit done on it and  
it would need to pass the audit. Despite you saying your trucks are fine, I have not  
seen the evidence.’”  
244. Robert Aikin does not recall Michael Vella’s response to those requirements that he says  
he specified but deposed that the conversation ended shortly afterwards and he did not  
receive any certification or further documentation or correspondence from Michael Vella  
thereafter.  
245. In cross-examination, Robert Aikin said that he had given the detailed account of the  
conversation with Michael Vella set out at [243] above based solely on his memory when  
he swore his 20 June 2016 affidavit, almost four years after the conversation had  
occurred. He said that he had a clear recollection that Michael Vella said that he did not  
see a need to get the trucks certified and denied that Michael Vella said that his trucks  
had in fact been certified. He said that he believed Michael Vella may have asked for a  
copy of the letter of termination and he had told Michael Vella that there was no such  
letter.  
246. In his affidavit sworn on 23 February 2017, Michael Vella disputed Robert Aikin’s  
account of their conversation and maintained that it was in the terms set out in his 4  
December 2015 affidavit referred to at [239] above.  
247. By the time he swore his first affidavit on 20 June 2016, Robert Aikin was no longer  
working for Schweppes. He had resigned from Schweppes in March 2016 and retired one  
year later.  
248. As referred to earlier in these reasons, Bill Kinnane was the General Manager of JEV’s  
NSW Freightlines business from 2003 until about 2013. In his affidavit sworn on 17  
June 2016, Bill Kinane deposed that he had a conversation with Michael Vella in his  
office in about September 2012, in the presence of Elizabeth and Joseph Vella. Michael  
Vella told him that JEV was no longer doing Schweppes work. When Bill Kinnane asked  
what he meant, Michael Vella said:  
“Well we are not working with Brian and Brett as BFS anymore, I decided I wanted  
to do the work by ourselves because Brian was too much trouble. But now it seems  
Schweppes won’t work with us and is going to keep using Brian and Brett, and we  
don’t have the Schweppes work anymore. It is Brian’s fault. I am going to call Rob  
Aikin at Schweppes and see what I can do.”  
249. Michael Vella gave evidence denying that the conversation deposed to by Bill Kinnane  
took place.  
250. Each of Joseph and Elizabeth Vella gave evidence that they did not recall the  
conversation described by Bill Kinnane referred to above. In his affidavit sworn on 30  
January 2017, Joseph Vella deposed that he knew of no reason why Michael Vella would  
have said the words attributed to him by Bill Kinnane because he had discussed with  
Michael and Elizabeth Vella in August 2012 that they did not want JEV to lose the  
Schweppes work and that their financial commitments (including paying off the Minto  
warehouse and equipment) were too high for JEV to survive without the Schweppes  
work.  
251. In her affidavit sworn on 30 January 2017, Elizabeth Vella deposed that she and Joseph  
Vella had a meeting with Michael Vella in about the first week of September 2012 (being  
the week of her birthday which falls on 6 September) in which Michael Vella told them  
that BFS was being replaced by George MacDonald, JEV was no longer needed and  
Brian Hobson and Brett Soper were staying on for a short time to “show them the  
everyday running of the business”. Elizabeth Vella deposed that she was “mortified” by  
this news and that Joseph Vella expressed concern about how JEV would meet its  
financial commitments. Elizabeth Vella was of the view that she wanted to JEV to  
continue doing Schweppes work through BFS because it was worth about $1.2 million in  
income each year. She had previously had several conversations with Joseph and  
Michael Vella, including in August 2012, during which they had discussed that they  
could not afford to lose the Schweppes work. Michael Vella told her at the meeting in the  
first week of September 2012 that he had tried ringing Schweppes to speak with Robert  
Aikin but had not been able to get through.  
252. In cross-examination, Joseph and Elizabeth Vella each positively denied that the  
conversation described by Bill Kinnane occurred. This departed from their affidavits, in  
which they had each deposed that they did not recall any such conversation. Elizabeth  
Vella denied that the conversation had occurred on the basis that she would not have  
had a conversation with Michael and Joseph Vella “in front of the employee” (referring  
to Bill Kinnane) about the reason why JEV was no longer doing Schweppes work.  
253. The plaintiffs did not adduce any contemporaneous documentary or other objective  
evidence of JEV’s financial position as at August 2012. As mentioned earlier in these  
reasons, Michael Vella gave evidence that the NSW Freightlines business was more  
[15]  
profitable for JEV than its Schweppes delivery work by August 2012.  
254. Bill Kinnane also deposed to having overhead a conversation between Joseph, Elizabeth  
and Michael Vella in or about September 2012 in which Joseph Vella told Michael Vella  
that he “should have made those trucks speed compliant and done what Brian told you”  
and said “Brian told you to get them fixed you should have done what he said”.  
According to Bill Kinnane, Michael Vella replied: “This is Brian’s fault not mine.”  
255. Each of Joseph, Elizabeth and Michael Vella denied that any such conversation took  
place. In his 30 January 2017 affidavit, Joseph Vella deposed that he could not recall  
ever being angry at Michael “for any apparent delays in obtaining speed limiter  
compliance certificates”. In her 30 January 2017 affidavit, Elizabeth Vella deposed that  
she has never heard Joseph Vella speak to Michael Vella in the manner described by Bill  
Kinnane.  
256. Michael Vella was not shy of demanding information from, and expressing his views to,  
Brian Hobson and Brett Soper by email, as the correspondence referred to at [117], [228]  
and [233] above demonstrates. There is no evidence of any email or other  
contemporaneous document generated by Michael Vella that refers to Brian Hobson  
having told him that Schweppes had terminated BFS’s contract or seeking a copy of  
Schweppes’ letter of termination that he says Brian Hobson referred to. Michael Vella  
was given the opportunity in cross-examination to identify any such contemporaneous  
document and he was unable to do so.  
257. Robert Aikin gave evidence that, after the 5 September 2012 email referred to at [234]  
above, BDA provided freight services to Schweppes and was paid by Schweppes for those  
services. He deposed that he neglected until early 2015 to attend to novating the relevant  
contracts between Schweppes and BFS to BDA, including a master agreement and  
several addendums.  
Findings in relation to the Ingleburn meeting  
[16]  
258. The defendants contend that, at the Ingleburn meeting:  
(1) JEV, Hynadam and Mechita, as the members of BFS, expressed an intention  
that they would no longer be bound by the 2001 agreement; and  
(2) an agreement was reached between either the directors of BFS or the  
shareholders of BFS that BFS was to be wound up and cease trading.  
259. The defendants contend that if any partnership existed between JEV, Hynadam and  
Mechita and/or between Joseph Vella, Brian Hobson and Brett Soper (which is denied),  
[17]  
it was dissolved at the Ingleburn meeting.  
260. In reply, the plaintiffs contend that it was resolved at the Ingleburn meeting to wind  
down BFS at the same time as establishing a new company to carry on the business of  
[18]  
the existing partnership.  
261. During the hearing, I raised a question with senior counsel for both parties about who  
bears the onus of proof in relation to the disputed issues concerning the Ingleburn  
meeting.  
262. The defendants submitted that there is no dispute that Michael Vella stated at the  
Ingleburn meeting that he wanted to wind down and cease the business of BFS. The  
disputed factual issue is “whether there was also a final agreement to migrate the  
business to a new corporate entity”. It was submitted that the plaintiffs bear the onus of  
establishing this additional agreement because there is no evidence except their own  
assertions to support it.  
263. In my opinion, the defendants’ submission artificially separates the plaintiffs’ contention  
concerning the outcome of the Ingleburn meeting into two separate agreements. In  
truth, the plaintiffs contend that there was one agreement with two elements, as referred  
to at [260] above and [272] below.  
264. As the plaintiffs submitted, the defendants contend that the Ingleburn meeting  
concluded with an agreement limited to the first element, including that the parties to  
the 2001 agreement would no longer be bound by it and that each of JEV, Hynadam and  
Mechita was free to seek work from Schweppes. The defendants plead that this  
agreement had the legal consequences of dissolving the alleged partnership or fiduciary  
relationship (the existence of which they deny). I accept the plaintiffs’ analysis of the  
pleaded defence and their submission that it is for the defendants to establish the  
elements of that defence. I also accept the plaintiffs’ submission that the defendants  
therefore bear the onus of establishing on the balance of probabilities that the Ingleburn  
meeting concluded with an agreement to the effect contended for by the defendants.  
265. The defendants have discharged that onus.  
266. For the reasons that follow, I find that Brian Hobson, Brett Soper and Michael Vella,  
representing Hynadam, Mechita and JEV (respectively), agreed at the Ingleburn  
meeting to no longer be bound by the 2001 agreement and agreed that they would each  
be free to seek work directly from Schweppes. Further, they agreed that BFS would be  
wound up. They did not agree that BFS’s business would be transferred to another  
company of which they would be directors and equal shareholders. They did not  
expressly agree on a time frame for the winding up of BFS, but I infer from the nature of  
its operations that their agreement was formed on the basis of a mutual expectation that  
some time would be required for BFS to collect payment from Schweppes for invoices  
that had already been issued but not yet paid and/or for work done but not yet invoiced,  
and for BFS to make corresponding payments to Hynadam, Mechita and JEV against  
their invoices issued to BFS. Indeed, that is consistent with the minutes of the Ingleburn  
meeting which refer to BFS ceasing to trade after creditors had been paid. Contrary to  
the plaintiffs’ submissions, I do not consider that the use of the term “wound down”  
rather than “wound up” in the minutes has any significance that detracts from the  
defendants’ contentions or supports the plaintiffs’ contentions about what was agreed at  
the Ingleburn meeting.  
267. For the reasons at [76]-[91] and [158] above, I find that Evermay’s shareholding in BFS  
was not causing any operational or other difficulty for BFS and its active shareholders as  
at August 2012 and was not the subject of any discussions between the active  
shareholders or with Robert Fielding leading up to the Ingleburn meeting.  
268. For the same reasons and on the basis of the evidence referred to at [136]-[144] above, I  
find that the active shareholders and the directors of BFS had not reached any  
agreement prior to the Ingleburn meeting to transfer the business of BFS to another  
company. Rather, they had agreed that if they could resolve their existing disputes, they  
could establish a shareholders’ agreement and constitution for another company that  
would avoid or at least regulate any future disputes about those matters and transfer the  
business of BFS to that other company. The other company under contemplation was an  
existing company in which Brian Hobson, Brett Soper and Michael Vella were equal  
shareholders. That existing company was BLS, although Robert Fielding’s discussion  
paper mistakenly referred to BLPL which had already been deregistered.  
269. For the reasons at [159] above, I find that there was a high degree of acrimony at the  
Ingleburn meeting between Brian Hobson and Brett Soper on the one hand and Michael  
Vella and Joseph Vella on the other hand. Michael Vella was so upset about the Arndell  
Park lease that he told Brian Hobson and Brett Soper that “our friendship’s ending right  
19  
now”. [19]e believed that they had been greedy and dishonest in causing BFS to enter  
into and pay for the lease for a warehouse that he believed was for the benefit of  
20  
21  
Hynadam and Mechita and not for the benefit of BFS. [20]n his own evidence, [21]e  
did not accept the explanations offered by Brian Hobson at the Ingleburn meeting in  
relation to the Arndell Park lease. Michael Vella was so angry about the way in which  
Brian Hobson and Brett Soper had handled the speed limiter issue with Schweppes  
during August 2012 that he had fired off the abusive email to Brett Soper referred to at  
[117]-[118] above. Michael Vella and Joseph Vella believed that Brian Hobson and Brett  
Soper had been greedy and dishonest when it came to allocating Schweppes work  
between JEV, Hynadam and Mechita. They believed that this greed and dishonesty had  
cost JEV something in the order of $100,000 in the past twelve months alone and they  
were looking for what they regarded as a “fair share” for JEV going forward and some  
22  
form of compensation.  
270. Brian Hobson and Brett Soper had very different perspectives about each of these issues:  
see [149] above. However, contrary to the plaintiffs’ submissions, Brian Hobson and  
Brett Soper did not go into the Ingleburn meeting with a plan to exclude the Vella family  
from the Schweppes delivery work. I make that finding for the reasons at [123]-[129],  
[136] and [140]-[144] above.  
271. The plaintiffs’ closing submissions sought to make much of the fact that Brian Hobson  
had “forced out” Glenn Alderton and Alderton Transport from BFS in about October  
2003. It was submitted that Brian Hobson “was no stranger to orchestrating the  
exclusion of shareholders of BFS from the Schweppes work”. I assume that the plaintiffs  
were intending to convey by that submission that Brian Hobson’s conduct in relation to  
Alderton Transport in October 2003 rendered the plaintiffs’ contentions about what they  
say occurred at and immediately following the Ingleburn meeting more plausible and  
that the Court should therefore accept their contentions. I reject that submission. Brian  
Hobson’s unchallenged evidence was that Glenn Alderton resigned as a director of BFS  
and Alderton Transport and Sterling both gave up their shares in BFS after Schweppes  
raised safety concerns as a result of Glenn Alderton falling asleep at the wheel of his  
truck and crashing on the M4 whilst carrying a full load of soft drinks. Those events have  
no rational bearing whatsoever on what occurred at the Ingleburn meeting on 28 August  
2012.  
272. None of the witnesses suggest that any of the acrimonious disputes referred to at [269]  
above were resolved during the two hour course of the Ingleburn meeting. The only  
material issue about which their evidence diverges is whether they agreed at the end of  
the meeting to wind up BFS and transfer its business to a new company owned by the  
three active BFS shareholders (according to Michael Vella) or whether they agreed to  
wind up BFS and go their separate ways with each of them free to seek work from  
Schweppes (according to Brian Hobson, Brett Soper and Robert Fielding). On that issue,  
I accept the evidence of Brian Hobson, Brett Soper and Robert Fielding and reject the  
evidence of Michael Vella and Joseph Vella for the following reasons.  
273. In their first affidavits sworn in June 2016, almost four years after the Ingleburn  
meeting, Brian Hobson and Brett Soper each gave an account of what was said at that  
meeting in quite different terms, but the differences were not matters of substance. The  
effect of the different words that they each recalled was the same. Michael Vella  
proposed that BFS be wound up and that each of its active shareholders go and work  
[23]  
with Schweppes independently of BFS.  
Their accounts, given independently of one  
another and in different terms, corroborate one another. Robert Fielding’s account of the  
meeting in his affidavit sworn on 16 June 2016 is in different terms again and  
corroborates the substance of the separate accounts given by Brian Hobson and Brett  
[24]  
Soper.  
For the reasons explained below, I regard Robert Fielding as a witness who is  
independent from Brian Hobson and Brett Soper.  
274. Each of Brian Hobson, Brett Soper and Robert Fielding candidly acknowledged in cross-  
examination, approximately nine years after the Ingleburn meeting, that their  
[25]  
recollection of the meeting was by then quite poor.  
However, Brian Hobson and Brett  
Soper each maintained that they had a good recollection of what was said and agreed at  
[26]  
the end of the meeting because it had come as a surprise to them.  
That is inherently  
plausible in circumstances where Brian Hobson had suggested and arranged the meeting  
as a facilitated discussion to resolve their disputes and there is no evidence to suggest  
that he or Brett Soper intended or believed that the meeting would end their business  
relationship with JEV and the Vella family. As I have already found at [270] above, they  
did not have any plan to exclude JEV and the Vella family from BFS.  
275. The evidence of Brian Hobson, Brett Soper and Robert Fielding that Stephen Phillips  
[27]  
was not discussed or raised at the Ingleburn meeting  
the reasons at [74]-[91] above.  
is inherently plausible for all of  
276. I place no weight on the evidence of Peter Versluis for the reasons explained at [223]  
above.  
277. I reject Michael Vella’s evidence about the agreement that was reached at the conclusion  
of the Ingleburn meeting for the following reasons.  
278. First, according to Michael Vella, he, Brian Hobson and Brett Soper agreed with a  
suggestion by the Risk Connect representative (whose name he could not recall) that the  
business of BFS be moved to “a new company” and that the three of them were “to be  
[28]  
the directors and shareholders of the new company”.  
It is inherently unlikely that  
Robert Fielding or Peter Versluis made a suggestion in those terms at the Ingleburn  
meeting given that the discussion paper had already identified an existing company in  
which the three of them were the directors and shareholders and through which the  
business of BFS could be conducted if they could resolve their existing disputes and  
settle on a constitution and shareholders’ agreement to avoid or regulate such disputes  
[29]  
in the future.  
279. Second, there is a troubling inconsistency within Michael Vella’s evidence about the  
Ingleburn meeting. In his first affidavit sworn on 4 December 2015, as mentioned  
immediately above, he deposed that he, Brian Hobson and Brett Soper had stated that  
they agreed with a proposal made by the Risk Connect representative (whose name he  
could not recall) that: “You should move the business to a new company and finish  
Beverage Freight Services off and that’s the only way to actually remove Steve Phillips  
as an owner. The three of you to be the directors and shareholders of the new  
[30]  
company.”  
Michael Vella gave evidence to similar effect in his second and third  
[31]  
affidavits sworn on 23 February 2017 and 3 February 2021.  
However, he also gave  
evidence in his second affidavit that he understood at the end of the meeting that “Brian  
Hobson and Brett Soper were going to revert back to us with their proposal as to what  
they wanted to do with BFS. If they wanted to leave BFS, then I understood that J&E  
[32]  
may have to buy out their shares”.  
The notion that BFS was to be “finished off” or  
wound up and its business transferred to a new company is inconsistent with the notion  
that Hynadam and Mechita might sell their shares in BFS or that JEV would  
contemplate purchasing shares in a company that was to be “finished off”. This  
inconsistency casts doubt on the reliability and credibility of Michael Vella’s evidence  
about the Ingleburn meeting. However, my principal reason for rejecting his evidence is  
the implausibility of the evidence in light of the objective facts referred to at [78]-[91]  
and [278] above and [280]-[282] below.  
280. Third, Michael Vella’s evidence about what was agreed at the Ingleburn meeting was  
inextricably tied to the notion that it was necessary to remove Evermay as a shareholder  
of BFS and his evidence that this had been the subject of discussion in August 2012 prior  
to the Ingleburn meeting. I have rejected that evidence for the reasons explained at  
[78]-[91] above. I also reject Michael Vella’s evidence that Stephen Phillips and Evermay  
were discussed at the Ingleburn meeting. That is inherently implausible in  
circumstances where the BFS directors had ongoing and acrimonious disputes that they  
were trying resolve, Stephen Phillips and Evermay were not the subject of any such  
dispute, Stephen Phillips was no longer a director of BFS and Evermay’s shareholding  
was not causing any difficulty for the three active shareholders of BFS.  
281. Fourth, it is highly implausible that, having failed to resolve any of the disputes referred  
to at [269] above, the BFS directors agreed at the Ingleburn meeting to go to the trouble  
of transferring the business of BFS to another company in order to effectively remove  
Evermay as a shareholder in the business in circumstances where Evermay’s  
shareholding had no bearing on how the business operated and had no bearing on how  
the revenue of the business was being passed on to the active shareholders for the  
Schweppes deliveries that each of them performed. No dividends were being paid to any  
shareholders. Each shareholder was being paid only for the Schweppes deliveries it  
actually performed. This was the very reason why the dispute about the allocation of the  
delivery work between shareholders was significant and had become acrimonious.  
282. The implausibility referred to immediately above is in fact demonstrated by Michael  
Vella’s own evidence. As referred to at [237] above, when asked in cross-examination  
about the lack of evidence that he had any communication with Brian Hobson and Brett  
Soper after the meeting about what was being done or what needed to be done in  
relation to the “new company” that he says they had agreed to establish, Michael Vella  
answered: “At that point in time, we – business as usual, there was no reference to –  
there was no need for the new company, no".  
283. Michael Vella’s evidence is so implausible that I conclude that he made up the notion  
that Stephen Phillips and Evermay were a problem that needed to be resolved for BFS in  
August 2012 in order to explain the resolution to wind down BFS at the Ingleburn  
[33]  
meeting in a way that supports the plaintiffs’ claims in these proceedings.  
284. I reject Joseph Vella’s evidence about the Ingleburn meeting for the following reasons.  
285. First, his evidence that the removal of Stephen Phillips as a director of BFS was one of  
[34]  
the main agenda items for the meeting  
is implausible having regard to the objective  
fact that Stephen Phillips had ceased to be a director of BFS in September 2010. His  
evidence that Robert Fielding stated at an early stage during the meeting that, “[i]f you  
want to remove Steve Phillips as a shareholder, the best way to do it is to set up a new  
[35]  
company with Michael, Brett and Brian to be the directors and shareholders”  
is  
implausible for the same reasons explained at [277] to [280] above. I note that, although  
he gives evidence about the terms of this alleged statement in very similar terms to  
Michael Vella, Joseph Vella’s evidence that this statement was made early in the meeting  
is directly contrary to Michael Vella’s evidence which places the alleged statement at the  
36  
end of the meeting after the discussion about all of the disputed issues.  
286. Second, Joseph Vella’s evidence in his 30 January 2017 affidavit, his 3 February 2021  
affidavit and in his oral evidence in chief at the hearing varied between saying that he  
did not believe any agreement had been reached and deposing that he could not recall  
[37]  
any agreement having been reached at the conclusion of the Ingleburn meeting.  
In  
cross-examination, Joseph Vella gave evidence that everybody agreed at the Ingleburn  
meeting to close down BFS and “open” another company and that there was a resolution  
to cause Mr Phillips to be removed from BFS by winding up BFS and entering into a new  
company without Mr Phillips. In addition to being highly implausible for the reasons  
already canvassed, this evidence is directly inconsistent with Joseph Vella’s affidavit  
evidence and with his oral evidence in chief, given only a very short time earlier, that he  
could not remember whether anything was ultimately agreed at the Ingleburn  
[38]  
meeting.  
Joseph Vella acknowledged later in his short cross-examination that he did  
not in fact remember anybody saying at the Ingleburn meeting that they should wind up  
[39]  
BFS and enter into a new company.  
It became plain at that point that Joseph Vella  
had been falsely claiming in cross-examination to have a recollection of the meeting that  
he thought would assist the plaintiffs’ claims.  
287. Understood in the context of the genesis of and intention behind the “BLPL” proposal  
developed prior to the meeting and the conditional consensus in relation to that  
[40]  
proposal,  
the minutes of the Ingleburn meeting are consistent with the evidence of  
Brian Hobson, Brett Soper and Robert Fielding about what was said and agreed at the  
Ingleburn meeting. Contrary to the plaintiffs’ submissions, Robert Fielding did explain  
the inclusion of the paragraph in the “General Discussion” section of the minutes  
recording that consensus had been achieved in respect of the use of BLPL, shareholder  
and management agreements and the other matters stated in that paragraph. Robert  
Fielding’s evidence is set out at [221] above. He said that he “just tried to summarise.  
These are the bits that we agreed on, these are the bits that we didn’t agree on, and our  
decision was we were going to go our own way”. That approach to drafting the minutes  
– recording consensus about matters concerning a future structure for BFS’s business  
which became otiose due to the failure to achieve consensus about any of the disputed  
41  
substantive matters concerning the operation of the business [41] might be considered  
to be unusual. That is consistent with the unusual nature of the proposal that Michael  
Vella and Brian Hobson both say emanated from Robert Fielding to transfer BFS’s  
business to another company in circumstances where this would achieve nothing that  
could not be achieved by drafting a new shareholders’ agreement for BFS. The only  
decision or resolution recorded in the minutes, following the general discussion of all of  
the non-contentious and contentious issues, is that the operation of BFS be “wound  
down”, its creditors be paid and that it cease trading thereafter. The minutes do not  
record any resolution or decision to transfer the business of BFS to “BLPL” or any other  
entity. If the decision to wind down BFS had been coupled with a decision to transfer its  
business to another company as the plaintiffs contend, it is inherently likely that the  
minutes would have recorded that second and integral aspect of the decision.  
288. As the plaintiffs submitted, the minutes do not record any consensus or agreement that  
each of JEV, Hynadam and Mechita would pursue work from Schweppes independently  
of BFS. However, I do not consider that this casts doubt on the evidence of Brian  
Hobson, Brett Soper and Robert Fielding that this was discussed and agreed. Given the  
nature of BFS’s business and the business of each of its active shareholders, it was  
obvious each of its shareholders would attempt to continue its Schweppes delivery work  
independently of BFS. Their agreement that they would do so was not a decision that  
they needed to make together and was not something that needed to be formally  
recorded in addition to their decision to ”wind down” BFS.  
289. My findings at [266]-[272] above are based on my acceptance of the evidence of Brian  
Hobson, Brett Soper and Robert Fielding, and my rejection of the evidence of Michael  
Vella and Joseph Vella, for the reasons explained above.  
290. In accepting the evidence of Brian Hobson, Brett Soper and Robert Fielding after  
weighing it against all of the contrary evidence and the inherent probabilities and  
improbabilities in light of relevant objective facts, I have considered and rejected the  
plaintiffs’ lengthy submissions seeking to impugn the credibility of each of those  
witnesses.  
291. The plaintiffs submitted that each of the defendants’ witnesses was unable to explain  
why documents included references to BLPL and BLS and that the “communal inability  
of the defendants’ witnesses to explain their own words in their own documents  
demonstrated a lack of candour to the Court”. The plaintiffs further submitted that it  
was open to the Court to find that the witnesses were unable to explain those matters  
because they “each formed the view, or were told, that any mention of those companies  
would harm the defendants’ case (because it would lend credence to the Vellas’ position  
that the principal purpose of the 28 August 2012 meeting was to agree on the  
transition from BFS to a different corporate vehicle, so as to effect the removal of  
Stephen Phillips’ company as a shareholder of the company conducting the Schweppes  
work)”.  
292. I reject that submission. The references to BLPL and BLS are addressed at [74]-[91],  
[124], [136]-[144], [158], [229], [231], [278] and [288] above. The plaintiffs’ highly  
implausible “position”, which I have rejected, derives no support from those references  
to BLPL and BLS for the reasons already explained.  
293. The plaintiffs submitted that Brian Hobson should not be treated as a witness of  
reliability or credibility due to his alleged lack of candour and dishonesty in relation to  
the references to BLS and BLPL in contemporaneous documents, the speed with which  
Coastal Logistics was incorporated and became a shareholder of BDA following the  
Ingleburn meeting, the speed with which BDA was incorporated following the Ingleburn  
meeting, his alleged failure to inform Robert Aikin after the Ingleburn meeting that a  
new shareholder was being introduced, the detailed account of the Ingleburn meeting  
given in his 2016 and 2017 affidavits and his poorer recollection of events in cross-  
examination in 2021 (which the plaintiffs submitted indicated collusion with other  
witnesses). I have addressed the substance of all of those matters elsewhere in these  
reasons and none of the issues raised in the plaintiffs’ submissions warrants a finding  
that Brian Hobson was not a witness of reliability or credibility.  
294. The plaintiffs also submitted that Brian Hobson gave his evidence in a manner that was  
“cagey” in the sense that “any assent to a question was given hesitantly and with a  
rising inflection which suggested that he was seeking to anticipate where the question  
was leading”. That submission does not accord with my observation of Brian Hobson  
during his cross-examination. He answered questions in a slow and careful manner that  
indicated to me that he was doing his best to accurately recall the matters he was being  
asked about, nine years after the relevant events. As I have already mentioned, he  
accepted candidly and without hesitation that he no longer had a good recollection of  
those events. It is unremarkable that his recollection in 2021 was poorer than in 2016  
and 2017 when he swore his affidavits. To the extent that there was a rising inflection in  
his answers, this did not indicate to me that he was seeking to anticipate where the  
question was leading but rather that he was puzzled by the question because it appeared  
to be peripheral to the issues in dispute. That was a reasonable reaction in my view,  
particularly in relation to questions concerning BLS and BLPL. Brian Hobson  
nevertheless answered the questions asked of him, without becoming argumentative or  
endeavouring to evade the questions by simply proffering information of his choosing.  
295. The plaintiffs submitted that Brett Soper’s evidence was not credible or reliable. That  
submission invoked essentially the same themes as raised in the plaintiffs’ submissions  
concerning Brian Hobson referred to at [293] above. I have addressed those themes  
elsewhere in these reasons. They do not warrant a finding that Brett Soper was not a  
witness of reliability or credibility. I reject the plaintiffs’ submissions.  
296. The plaintiffs submitted that Robert Fielding was an unsatisfactory witness whose  
evidence should not be accepted unless it is consistent with the plaintiffs’ evidence,  
corroborated by contemporaneous documents or against the defendants’ interests. In  
developing that submission, the plaintiffs submitted that:  
(1) Robert Fielding’s evidence given in cross-examination was principally an  
exercise in reconstruction;  
(2) he treated cross-examination like a politician’s press conference by giving  
answers in which he stated “I have no comment on that” (which the plaintiffs  
characterised as a refusal to offer an explanation called for by the question) and  
refused to offer an explanation for his or Peter Versluis’ suggestion to introduce a  
new operating company;  
(3) he failed to offer any plausible explanation for not including his handwritten  
notes of the Ingleburn meeting and the preliminary meeting as annexures to his  
first affidavit, and the Court should not accept his evidence that the defendants’  
solicitors misplaced his file containing those notes after his first affidavit was  
prepared;  
(4) his evidence that he had made an error in referring to BLPL in the discussion  
paper was “at best an incomplete explanation and at worst actively misleading”  
because he “failed to explain that the error related only to the particular company  
name, omitting to mention that the documents did accurately record that there  
was an intention to use a company already incorporated with Michael Vella,  
Brett Soper and Brian Hobson as equal shareholders and directors”;  
(5) his evidence of what occurred at the Ingleburn meeting was a selective  
recollection because he “excluded any mention of the agreement reached at the  
meeting about using Beverage Logistics Pty Ltd as the new operational company,  
even though he appeared in cross-examination to recall that agreement”;  
(6) his evidence that it was not his role to make recommendations is contrary to  
how Brian Hobson appears to have understood his role and is difficult to accept  
given the lack of clarity and lack of contemporaneous documents evidencing the  
nature and scope of his role and the implausibility of BFS independently  
generating the list of discussion items;  
(7) his conduct in relation to the minutes of the Ingleburn meeting was irregular,  
partial only to the defendants and “unsupported by both Brian Hobson and Brett  
Soper” and this calls his credibility into question;  
(8) in procuring Brian Hobson’s signature on the minutes whilst being indifferent  
about Brett Soper and Michael Vella signing the minutes, Robert Fielding  
essentially treated Brian Hobson as the true client;  
(9) his obvious concern, almost as soon as the meeting was finished, was to  
undertake work for Brian Hobson and Brett Soper, which he has continued to do  
since that time;  
(10) the circumstances in which he undertook work for Brian Hobson and Brett  
Soper immediately after the Ingleburn meeting in circumstances where, on his own  
evidence, BFS was to be “wound down” gradually, reflect poorly on him and are  
akin to a mediator taking instructions from one party to a mediation the day after  
the mediation in relation to the subject matter of the dispute; and  
(11) the Court should find that his advice to Brian Hobson and Brett Soper to  
establish Hynadam Nominees and Mechita Nominees for reasons that included  
asset protection was at least partly motivated by concern about the manner in  
which BDA was being established.  
297. I will address each of these eleven submissions in turn.  
298. In relation to the first submission, I accept that it did became clear during Robert  
Fielding’s cross-examination that some of the evidence he was giving was evidence of a  
recollection based principally on his usual business practice. That is the case in relation  
to the example cited by the plaintiffs of Robert Fielding’s evidence concerning the  
posting of the Ingleburn meeting minutes to JEV after the meeting. As the defendants  
submitted, to the extent that Robert Fielding’s evidence in cross-examination involved  
reconstruction, this was clear from his own answers. He did not seek to obscure that.  
That reflects well, rather than poorly, on his credit.  
299. I reject the plaintiffs’ second submission. On the occasions when Robert fielding gave a  
“no comment” answer, it is clear from the context of the answer that he was simply  
conveying that he was unable to offer any explanation for or recall anything about the  
subject he was being asked about.  
300. I reject the plaintiffs’ third submission. For the reasons explained at [146]-[148] above,  
Robert Fielding’s explanation that it did not occur to him to instruct the defendants’  
solicitors to annexe all of his notes to his first affidavit is plausible. As the defendants  
submitted, Robert Fielding was not challenged in cross-examination on his evidence that  
42  
the defendants’ solicitors had misplaced his file containing his notes. I[42]ccept, as the  
plaintiffs submitted in response, that the cross-examiner is unlikely to have had any  
instructions or other basis for challenging that aspect of Robert Fielding’s evidence  
during cross-examination. The point is that nothing emerges from the plaintiffs’  
submissions that would provide a sound basis for rejecting Robert Fielding’s evidence.  
301. I reject the plaintiffs’ fourth submission. It is plain from Robert Fielding’s evidence in  
cross-examination that he was not suggesting that the discussion paper did not  
accurately record what he had been told about BLPL and that the error that he was  
referring to was the fact that BLPL had already been deregistered, which he had not  
known and he did not believe Brian Hobson and Brett Soper had known at the time of  
[43]  
their meetings in August 2012.  
Contrary to the plaintiffs’ submission, there was no  
intention to use another operating company equally owned by Brian Hobson, Brett  
Soper and Michael Vella unless their disputes concerning work allocation and the  
[44]  
Arndell Park lease could be resolved.  
302. I reject the plaintiffs’ fifth submission. As the defendants submitted, the plaintiffs  
misstate the substance of Robert Fielding’s evidence in cross-examination, which was  
that there was ultimately no agreement except that the shareholders would each go their  
own way because, whilst there were some “bits” that they could agree on (including using  
[45]  
BLPL), there were other “bits” that they did not agree on.  
303. The plaintiffs’ sixth submission is without substance. There is a vast difference between  
a suggestion or recommendation that an issue be discussed and a recommendation  
about what should be done.  
304. I reject the plaintiffs’ seventh and eighth submissions. As the defendants submitted,  
these go to matters of competence, not credibility. The competence issues have been  
addressed at [143] and [287] above.  
305. I reject the plaintiffs’ ninth and tenth submissions. The evidence is that it was Brian  
Hobson who approached Robert Fielding to assist him to establish BDA after the  
Ingleburn meeting. The plaintiffs’ submission that it was Robert Fielding’s “obvious  
concern” to do further work for Brian Hobson and Brett Soper immediately after the  
Ingleburn meeting is unfounded. The tenth submission goes to matters of competence  
rather than credibility. Reasonable minds might differ about whether an accountant,  
having facilitated discussions between three shareholders that have concluded in  
agreement to wind down their company and go their own separate ways, should,  
immediately after that agreement, accept instructions from two of those shareholders to  
establish a new company as the vehicle through which they would go their separate  
ways. Given the agreement that I have found was reached, I do not consider that Robert  
Fielding was obliged to decline the instructions to incorporate BDA or to incorporate  
Hynadam Nominees and Mechita Nominees for the purpose of holding shares in BDA.  
Even if I had taken the opposite view, I would have regarded this as an error of judgment  
rather than something that cast doubt on the credibility of Robert Fielding’s evidence in  
these proceedings. I accept the defendants’ submission that Robert Fielding’s role as the  
[46]  
accountant for BDA  
is hardly sufficient motive for him to confect his evidence.  
306. I reject the plaintiffs’ eleventh submission. Given his understanding of the agreement  
that had been reached at the conclusion of the Ingleburn meeting (which accords with  
my findings), Robert Fielding had no cause for concern about the incorporation of BDA  
two days following the meeting. Robert Fielding’s evidence was that he advised that the  
shares in BDA be held through trustee companies for a range of reasons that are  
common considerations for accountants advising their clients about the structure of  
their financial and business affairs. One reason was the ability to distribute income  
between the trust beneficiaries. Another reason was asset protection. The evidence does  
not support the plaintiffs’ attempt to extrapolate from this generalised reference to asset  
protection a concern about potential liability to the plaintiffs arising out of the  
incorporation of BDA.  
307. The plaintiffs also submitted that the Court should not accept that Robert Fielding was  
an independent witness for the eleven reasons above (which I have rejected) and for two  
further reasons.  
308. First, the plaintiffs submitted that “the Court should not seriously expect a man who has  
behaved in this way, and who has been BDA’s accountant now for 8 ½ years, to give  
evidence that would harm the interests of a client (BDA) for whom he owes a fiduciary  
obligation.” I reject that submission. I have already rejected the notion that any aspect of  
Robert Fielding’s conduct identified in the plaintiffs’ eleven submissions above casts  
doubt on his credibility as a witness. As I have said above, I accept the defendants’  
submission that Robert Fielding’s role as the accountant for BDA is hardly sufficient  
motive for him to confect his evidence. I note that he is not the accountant for Brian  
[47]  
Hobson, Brett Soper or any other company associated with them.  
The plaintiffs did  
not elaborate on how any fiduciary obligation owed by Robert Fielding to BDA in his  
capacity as its accountant (if any) would interfere with his ability to give truthful  
evidence to the best of his recollection in these proceedings about the events in which he  
participated in August 2012.  
309. Second, the plaintiffs submitted that “if Mr Fielding was an independent witness the  
question begs why he did not seek to assess all the evidence given by all parties to these  
proceedings as opposed to merely responding to the evidence given by Joe and Michael  
Vella”. I reject the submission that Robert Fielding demonstrated a lack of independence  
by not reviewing the affidavits of Brian Hobson and Brett Soper before preparing his  
own affidavits. If he had done so, I have no doubt that this would have been a further  
factor relied on by the plaintiffs in support of their collusion allegations that I have  
rejected. What Robert Fielding did was to give his own account of relevant events,  
without regard to how that account might accord with or differ from the evidence of  
Brian Hobson and Brett Soper. As the defendants submitted, it is entirely orthodox that  
they (as the parties choosing to call Robert Fielding) adduced evidence from him  
specifically responding to the affidavits of Michael and Joseph Vella.  
310. Finally (in relation to Robert Fielding), the plaintiffs referred to evidence that neither  
Peter Versluis nor Robert Fielding could agree on which of them had introduced the  
other to the role of facilitating the Ingleburn meeting and the preliminary discussions.  
The plaintiffs then submitted that if Robert Fielding had introduced Peter Versluis (as  
Peter Versluis contends), “that tends to suggest (contrary to the emphatic evidence of  
Mr Fielding and Mr Hobson) that there may have been an undisclosed pre-existing  
relationship between Mr Fielding and Mr Hobson”. This submission does not rise above  
the level of speculation. As the defendants submitted, it has an air of desperation. I reject  
it.  
311. The plaintiffs’ resorted to submitting that evidence given by Brian Hobson, Brett Soper,  
Robert Fielding (and also Robert Aikin) that contradicted the plaintiffs’ evidence was  
“self-serving” and therefore lacking in credibility and even suggestive of “collusion”  
between witnesses. That submission is itself self-serving, and lacks merit for all of the  
reasons that I have explained elsewhere for accepting the evidence of Brian Hobson,  
Brett Soper, Robert Fielding and Robert Aikin and rejecting the evidence of Michael  
Vella, Joseph Vella and Elizabeth Vella in relation to matters material to the  
determination of these proceedings.  
312. I address the defendants’ specific submissions concerning the credibility of Robert  
Aikin’s evidence at [327]-[338] below.  
313. In making the findings at [266]-[272] above, I have also considered and rejected the  
plaintiffs’ submissions to the effect that it is inherently implausible that JEV would have  
made the “boldly adventurous manoeuvre” of “throw[ing] away” their steady source of  
work from BFS in order to do work directly for Schweppes which had just suspended  
JEV’s trucks.  
314. As the plaintiffs submitted, there is no evidence that that Michael, Elizabeth and Joseph  
Vella had discussed amongst themselves prior to the Ingleburn meeting that JEV would  
cease to do Schweppes work. However, as the defendants submitted, there is ample  
evidence that the Vella family members had discussed amongst themselves that they  
regarded Brian Hobson and Brett Soper as dishonest and greedy. Michael and Joseph  
Vella each gave evidence that, despite holding that belief, they wanted to stay in business  
with them. I do not accept that evidence in view of my assessment of Michael Vella and  
Joseph Vella’s willingness to tailor their evidence in order to support the plaintiffs’  
[48]  
claims  
and in the absence of any objective evidence of any financial or other  
imperative for JEV to continue doing Schweppes delivery work through BFS in  
circumstances where:  
(1) they had been unable to resolve the disputes concerning the work allocation  
practices that Michael and Joseph Vella believed were cheating JEV out of  
significant volumes of work and/or revenue;  
(2) they were still at loggerheads with Brian Hobson and Brett Soper about the  
Arndell Park lease that BFS was paying for and they believed was solely for the  
benefit of Hynadam and Mechita;  
(3) they believed that JEV’s reputation with Schweppes was being damaged by the  
manner in which Brian Hobson and Brett Soper had handled the speed limiter  
issue.  
315. Michael, Joseph and Elizabeth Vella each gave evidence to the effect that they regarded  
the revenue that JEV derived from the Schweppes work as important to JEV. To the  
extent that this evidence referred to profitability rather than revenue, it did not rise  
above bare assertion and does not sit comfortably with Joseph Vella’s evidence that he  
believed Brian Hobson and Brett Soper had been dishonestly diverting more of the  
[49]  
profitable Schweppes deliveries to their own trucks  
and with Michael Vella’s  
evidence that NSW Freightlines’ business was more profitable for JEV than its  
[50]  
Schweppes delivery work by August 2012.  
316. It is important to note that the agreement that I have found was reached at the  
conclusion of the Ingleburn meeting was not that JEV would “throw away” its  
Schweppes delivery work or “walk away” from that work, as the plaintiffs’ submissions  
suggested from time to time. Rather, the agreement was that BFS would be wound down  
and each of JEV, Hynadam and Mechita would be free to seek Schweppes delivery work  
independently of BFS. In other words, as the defendants submitted, JEV decided to try  
to continue its Schweppes delivery work directly.  
317. The plaintiffs submitted that there is no evidence that any of those companies had the  
ability to “go it alone” and undertake all of the Schweppes work themselves. That is not  
in dispute insofar as it concerns Hynadam and Mechita. Brian Hobson gave evidence  
that this was the very reason why he telephoned Erron Jameson immediately after the  
Ingleburn meeting to ask if he was interested in supplying trucks and approached him  
the very next day about becoming a shareholder in a new entity. I reject the plaintiffs’  
theory that the speed with which Coastal Logistics was established and became a  
shareholder in BDA following the Ingleburn meeting supports a finding that Brian  
Hobson and Brett Soper had put restructure plans in place prior to the Ingleburn  
meeting to exclude JEV and then moved immediately after the meeting “striking swiftly  
to deliberately blindside the Vellas”. The establishment of private companies and the  
issue of shares in private companies are not difficult steps and they can be undertaken  
quickly. That is particularly so in circumstances where Erron Jameson’s company,  
George MacDonald & Sons, was already a subcontractor to BFS with Schweppes-  
[51]  
compliant trucks, as Brian Hobson said under cross-examination.  
The speed with  
which Coastal Logistics was incorporated and became a shareholder in BDA has no  
rational bearing on the parties’ dispute about what had earlier been agreed at the  
Ingleburn meeting. Contrary to the plaintiffs’ submissions, there was no occasion for the  
defendants to explain the speed with which they were able to achieve this in order to  
[52]  
avoid a Ferrcom inference and I decline to draw any such inference.  
For the same  
reason, I decline to draw a Jones v Dunkel inference in respect of the defendants’  
[53]  
“failure” to adduce evidence from Erron Jameson.  
In addition to the reasons just  
given, the matters referred to at [123]-[129] above weigh heavily against a finding that  
Brian Hobson and Brett Soper had planned a restructure excluding the Vellas prior to  
the Ingleburn meeting.  
318. I reject the plaintiffs’ similar theories in relation to the speed with which BDA was  
created for essentially the same reasons. The efficiency with which Brian Hobson and/or  
Brett Soper caused BDA to be established is not an “elephant in the room” as the  
plaintiffs submitted but merely a reaction to the resolution that I have found was made  
at the conclusion of the Ingleburn meeting.  
319. As the plaintiffs submitted, there is no evidence that JEV had the ability to undertake all  
of the Schweppes freight work. However, Robert Aikin’s evidence of his conversation  
with Michael Vella on or about 10 September 2012, which I have accepted for the  
reasons explained at [327]-[338] below, demonstrates that Michael Vella believed JEV  
had a shot at winning some work directly from Schweppes independently of BFS.  
Contrary to the plaintiffs’ submissions, it is not inherently implausible that Michael Vella  
decided to take that shot, even if may have been a long shot, rather than continue sitting  
within BFS believing that his fellow shareholders were responsible for “stitching up” JEV  
in relation to the speed limiter issue resulting in Schweppes suspending JEV’s trucks.  
For as long as JEV’s trucks remained suspended, JEV would not earn any income from  
Schweppes deliveries through BFS.  
320. I have also considered and rejected the plaintiffs’ submissions to the effect that Michael  
Vella’s conduct after the Ingleburn meeting referred to at [224]-[257] above was  
inconsistent with him having relinquished JEV’s participation in BFS.  
321. Contrary to the plaintiffs’ submissions, the fact that JEV continued to send trucks to BFS  
for Schweppes delivery work is entirely consistent with the agreement reached at the end  
of the Ingleburn meeting that the business of BFS would be wound down and each BFS  
[54]  
shareholder would be free to seek work directly from Schweppes.  
As the defendants  
submitted, JEV could hardly risk being seen as letting down BFS (and, indirectly,  
Schweppes) by failing to provide trucks that were required for Schweppes deliveries  
during the winding down period in circumstances where, according to Elizabeth Vella’s  
evidence, Michael Vella was attempting at that time to speak directly with Robert Aikin.  
322. Contrary to the plaintiffs’ submissions, I do not consider that the fact that Michael Vella  
“continued to rail against the lack of parity in allocation of work and did so  
emphasising to Brian Hobson and Brett Soper that they were equal shareholders”  
sheds any light on what occurred at the Ingleburn meeting. Michael Vella’s emails sent  
[55]  
on 30 August 2012 and 4 September 2012  
are entirely consistent with the objective  
fact that, at that stage, BFS was still providing freight services to Schweppes, and with  
Michael Vella being determined that JEV should have an equal share of that work. Even  
[56]  
if, as the plaintiffs submitted, the emails indicated to Brian Hobson and Brett Soper  
that Michael Vella had changed his mind, they had no obligation to engage with him  
about that change of mind.  
323. Significant aspects of Michael Vella’s evidence about the events after the Ingleburn  
meeting are internally inconsistent and inherently implausible.  
324. First, it is implausible that Michael Vella would have been surprised to find JEV’s trucks  
used for Schweppes deliveries sitting idle in its Minto yard on Monday 10 September  
2012 if Brian Hobson had told him during the previous week that Schweppes had not  
reviewed BFS’s contract and that BFS had “got till the end of the week and we’re out of a  
job” as Michael Vella claims. Michael Vella’s evidence that he rang Brian Hobson on  
Monday 10 September 2012 and asked “What’s going on mate?” is inconsistent with his  
evidence about the conversation he claims to have had with Brian Hobson the previous  
[57]  
week.  
325. Second, there is no evidence that Brian Hobson and Brett Soper benefitted, either  
directly or indirectly through Hynadam Nominees and Mechita Nominees, from  
establishing BDA and performing Schweppes delivery work through BDA rather than  
through BFS. They did not endeavour to do the work that JEV had previously performed  
through BFS. They brought in Erron Jameson, whose company, Coastal Logistics,  
became an equal shareholder in BDA together with Hynadam Nominees and Mechita  
Nominees. It is therefore implausible that Brian Hobson told Michael Vella that “I did it  
[58]  
for my son mate”, as Michael Vella claimed.  
326. Given the implausibility of these aspects of Michael Vella’s evidence and my findings at  
[283] above about his willingness to make up evidence to suit the plaintiffs’ case, I do  
not accept his evidence that Brian Hobson said the words that Michael Vella attributes to  
him in September 2012 or that he made the false claim that Schweppes had sent BFS a  
59  
letter of termination. [59]  
327. As to the conversation between Michael Vella and Robert Aikin on or about 10  
[60]  
September 2012,  
I prefer the evidence of Robert Aikin. Having regard to my finding  
that Michael Vella was prepared to make up evidence about the Ingleburn meeting in  
[61]  
order to support the plaintiffs’ claims,  
I do not accept his evidence unless it is  
corroborated by a reliable and independent source or consistent with the inherent  
probabilities. Michael Vella’s evidence about his conversation with Robert Aikin is not  
even corroborated by Joseph or Elizabeth Vella. Although she gives evidence of being  
“mortified” when Michael Vella told her in the first week of September 2012 that JEV  
was no longer needed for the Schweppes work and that he had been unable to speak with  
Robert Aikin, Elizabeth Vella does not give any evidence of Michael Vella having relayed  
[62]  
to her the substance of the conversation that he says he later had with Robert Aikin.  
328. I reject the plaintiffs’ submission that it is inherently unlikely that Robert Aikin could  
recall the conversation in the detail set out in his 20 June 2016 affidavit. It was the first  
[63]  
conversation he had ever had with Michael Vella  
and it is clear from his affidavit that  
he had a recollection of receiving the telephone call from Michael Vella when he was at  
home after business hours. Those are two circumstances that would logically set the  
conversation apart from other conversations that Robert Aikin had at or about this time  
in the course of his role as Transport Manager for Schweppes. Moreover, as the  
defendants submitted, it was not put to Robert Aikin in cross-examination that the level  
of detail in which he recounted the conversation in his 20 June 2016 affidavit was  
greater than the detail that he could honestly recall at that time. On the contrary, the  
cross-examiner put to him that his affidavit did set out his recollection of the  
[64]  
conversation based on his memory at that time.  
I accept the defendants’ submission  
that Robert Aikin is an independent witness. Having resigned from Schweppes in 2016  
and subsequently retired, he has no reason to have embellished or tailored his evidence  
to suit to the defendants in these proceedings. No such reason was put to him in cross-  
examination.  
329. I reject the plaintiffs’ submissions that Robert Aikin was generally not a credible witness.  
Those submissions were based principally on the plaintiffs’ illogical theory concerning  
the reference to BLS rather than BFS in the COR Notice issued by Schweppes on 2  
August 2012 and their unfounded contention that it would be unhelpful to the  
defendants case if it were found that Brian Hobson or Brett Soper had mentioned BLS to  
[65]  
Robert Aikin prior to August 2012.  
Robert Aikin acknowledged that Brian Hobson  
[66]  
may have mentioned BLS to him at one time.  
I reject the plaintiffs’ submission that  
his evidence that he had made an error in referring in the COR Notice to BLS constituted  
a “steadfast refusal to come clean” and demonstrated that “he knew that it did not help  
the defendants’ case to be candid with the Court”, that “he was in the defendants’ camp  
and was prepared to be dishonest under oath, for the sake of the defendants” and that  
“he lacked candour and was hardly an independent witness”. That submission is  
unsupported by any evidence. It is highly implausible that, some years after leaving  
Schweppes and retiring from the transport industry, Robert Aikin would be prepared to  
lie to the Court in an endeavour to assist the defendants’ case. As the defendants  
submitted, the submission is scandalous and ought not to have been made. A Browne v  
[67]  
Dunn agreement of the kind that senior counsel for the parties struck in this case  
not a licence to make serious allegations of dishonesty against witnesses without any  
rational basis.  
is  
330. The plaintiffs’ submissions seeking to impugn Robert Aikin’s credibility also attacked  
various aspects of the manner in which he managed the speed limiter compliance issue.  
It suffices to say that those submissions did not identify any conduct on the part of  
Robert Aikin that was inconsistent with the nature of his role or that has any rational  
bearing on the credibility of his evidence in these proceedings. The matters referred to in  
the plaintiffs’ submissions demonstrate that Robert Aikin formed certain views and  
made certain judgments based on his understanding of the MT data mentioned above at  
[105]. The plaintiffs’ submissions misrepresent the substance of that data, as referred to  
at [106] above. Contrary to the plaintiffs’ submissions, the evidence does not  
demonstrate that Robert Aikin was “in their thrall” (referring to Brian Hobson and Brett  
Soper) or “had some undisclosed antipathy toward the Vella family and/or Michael  
Vella”.  
331. Finally, in relation to Robert Aikin’s credibility, the plaintiffs submitted that the  
discrepancy between his evidence and Brian Hobson’s evidence about the number of  
telephone calls they had each day during the period in which BFS was performing  
Schweppes delivery work indicates that at least one, if not both of them, “are not being  
honest with the Court”. I reject the submission that a difference in recollection between  
the two witnesses about how often they spoke provides a rational basis for discrediting  
the evidence of either of them about any of the issues in dispute in these proceedings.  
332. The plaintiffs also submitted that Mr Aikin is not an independent witness because, “[i]f  
he was, it is difficult to comprehend why he would volunteer 30 pages of evidence  
directed largely against the Vellas”. That submission only needs to be stated to be  
rejected.  
333. Returning to Robert Aikin’s account of his conversation with Michael Vella, I reject the  
plaintiffs’ submissions that his account is implausible because, if he had said to Michael  
Vella that “[y]ou chose not to do anything about” speed limiter compliance breaches or  
that “[y]ou continued to drive [NSW Freightlines trucks] without providing evidence  
that the speed limiters had been certified”, Michael Vella would not have given the  
response described by Robert Aikin to the effect that he (Michael Vella) did not think the  
GPS reports were accurate and that the NSW Freightlines trucks had not been speeding.  
Michael Vella would instead have responded that the trucks had been certified and  
would have offered to immediately send through the certifications that he had already  
sent to Brett Soper as referred to at [116]-[121] above. The plaintiffs’ submissions are not  
without logical force. However, Robert Aikin’s evidence about Michael Vella’s response  
rings true, having regard to the substance of Michael Vella’s response to the same speed  
limiter compliance issue in his affidavits in these proceedings, which revealed a  
consistent pattern of Michael Vella responding in the first instance by protesting that  
there was never any speeding problem with JEV and NSW Freightlines trucks and  
drivers because those trucks had speed limiters fitted from the time of purchase and only  
one speeding allegation had ever been brought to his attention relating to a truck doing  
Canberra delivery runs where trucks speed limited to 100km/h could reach a speed of  
68  
115km/h travelling downhill if the driver did not apply the brakes. T[68] fact that  
Michael Vella had obtained speed limiter compliance certificates for five of JEV’s trucks  
shortly before the Ingleburn meeting was the second rather than the first element of his  
response. This was also reflected in the submissions made on behalf of the plaintiffs  
which described the speed limiter compliance issue as a “false issue” and a “stitch up”  
and erroneously asserted that the MT data did not demonstrate a worse speeding history  
69  
for JEV trucks than for Hynadam and Mechita trucks. R[69]ert Aikin’s evidence that  
Michael Vella said that he “didn’t see a need to get them certified when they were not  
speeding” it is not inconsistent with Michael Vella’s own evidence that, prior to August  
2012, he did not see any need to have his speed limiters certified in circumstances where  
he did not consider that there was any speeding problem with JEV and NSW  
Freightlines trucks.  
334. I also reject the plaintiffs’ submission that the conversation is unlikely to have occurred  
in the terms to which Robert Aikin deposes because JEV, not NSW Freightlines, had  
undertaken the Schweppes delivery work with additional trucks being provided by NSW  
Freightlines only when required. As the defendants submitted, the fact that Robert Aikin  
recalls Michael Vella referring to NSW Freightlines makes it somewhat more likely,  
rather than less likely, that the conversation occurred in the terms to which he deposes.  
If his evidence of the conversation were based on reconstruction rather than an actual  
recollection, one would expect Robert Aikin to have referred to both JEV and NSW  
Freightlines, having regard to his evidence in cross-examination that he understood that  
[70]  
both JEV trucks and NSW Freighlines trucks had been “working under the old BFS”.  
As the defendants submitted, NSW Freightlines was the growing part of JEV’s  
[71]  
business.  
There is no apparent reason why Michael Vella would not have mentioned  
it in a conversation concerning potential future work for Schweppes.  
335. As referred to at [243] above, Robert Aikin’s evidence of the conversation included him  
outlining for Michael Vella several requirements that NSW Freightlines would need to  
meet “[before] Schweppes would consider NSW Freightlines working for us, either with  
BFS or separately”. The plaintiffs submitted that the reference to “with BFS or  
separately” is “puzzling” in circumstances where Robert Aikin’s evidence is that Brian  
Hobson had already told him that BFS was no longer operating. The plaintiffs submitted  
that Robert Aikin was unable to explain in cross-examination the inclusion of these  
words in his account of the conversation and that this rendered his evidence about the  
conversation implausible. I reject those submissions. Robert Aikin acknowledged in  
cross-examination that his reference to NSW Freightlines potentially working for  
Schweppes in the future “either with BFS or separately” involved an element of  
72  
imprecision on his part. [72]e was plainly referring to a hypothetical possibility of the  
previous BFS structure being revived in some way. It is the same kind of imprecision  
that attended Robert Aikin’s reference in cross-examination to “the old BFS” in  
73  
circumstances where there was no new BFS. [73]t is the very kind of imprecision that is  
common for non-lawyers when referring to legal entities in general conversation. As  
senior counsel for the plaintiffs put to Robert Aikin in cross-examination, this was a  
74  
general conversation and not a legal conversation. [74]  
336. The plaintiffs’ submissions about the conversation between Robert Aikin and Michael  
Vella also referred to the implausibility of Michael Vella pitching for the whole of the  
Schweppes work previously performed by BFS. However, as the defendants submitted,  
Robert Aikin’s evidence of the conversation does not suggest that Michael Vella was  
pitching for the whole of the BFS work rather than the share of that work that JEV had  
been doing through BFS.  
337. As referred to at [245] above, Robert Aikin accepted in cross-examination that Michael  
Vella may have asked him during their conversation for a copy of the termination letter  
and that Robert Aikin told him there was no such letter. Contrary to the plaintiffs’  
submissions, I do not consider that this is “wholly consistent with the plaintiffs’ version  
of events and equally inconsistent with the defendants’ version”. Questions asked by  
Michael Vella of Robert Aikin about a letter of termination on about 10 September 2012,  
by which time Michael Vella knew that JEV’s trucks were no longer required by BFS, are  
consistent with several possibilities. One possibility is that Brian Hobson told Michael  
Vella that there was a letter of termination, as Michael Vella claims. Another possibility  
is that Michael Vella assumed that Schweppes would need to issue a letter of termination  
if it had ceased using the services of BFS. The Court will not engage in speculation  
between those possibilities, and the existence of the first possibility does not affect my  
reasons set out above for rejecting Michael Vella’s evidence that Brian Hobson told him  
that BFS had received a letter of termination from Schweppes. I also reject the plaintiffs’  
submission that there would be no reason for Michael Vella to ask for a copy of the  
termination letter if, as Robert Aikin deposed, he told Robert Aikin that “we have  
decided to go our separate ways with Brett and Brian and BFS”. Again, several  
possibilities arise, some of which are helpful, and some of which are unhelpful, to the  
plaintiffs’ submissions. Any choice between those possibilities would be an exercise in  
conjecture. One of the possibilities that is unhelpful to the plaintiffs’ submission is that  
Michael Vella simply wanted to check the date on which any termination letter issued by  
Schweppes stated that BFS had ceased or would cease to provide freight services to  
ensure that JEV received its “fair share” of work until the last day.  
338. The plaintiffs’ submissions sought to downplay the significance of the Court accepting  
Robert Aikin’s evidence of the conversation on the basis that Michael Vella seeking work  
from Schweppes would not, by itself, say anything about why he was seeking work from  
Schweppes, and this would be equally consistent with the Vella family being told that  
BFS had been “sacked”. However, Robert Aikin’s evidence is that Michael Vella told him  
that “we have decided to go our separate ways with Brett and Brian and BFS” before  
stating that “the Vellas want to keep doing the transport work for Schweppes through  
[75]  
our own company NSW Freightlines, not BFS”.  
As the defendants submitted, the  
statement made by Michael Vella leading into his request for work is fundamentally  
inconsistent with the plaintiffs’ case and consistent with the defendants’ case about what  
was agreed at the Ingleburn meeting.  
339. For the reasons at [320]-[338] above, I accept the defendants’ submissions that the  
events after the Ingleburn meeting referred to at [224]-[257] above are consistent with  
the evidence of Brian Hobson, Brett Soper and Robert Fielding that the Ingleburn  
meeting concluded with an agreement that JEV, Hynadam and Mechita would no longer  
be bound by the 2001 agreement and would each be free to seek work directly from  
Schweppes and that BFS would be “wound down”. In particular, Robert Aikin’s  
evidence, that I have accepted for the reasons explained above, establishes that Michael  
Vella approached him seeking Schweppes work for JEV and saying that “we have  
76  
decided to go our separate ways with Brett and Brian and BFS”.  
340. In short, for all of the reasons explained above, I feel an actual persuasion that towards  
the end of the Ingleburn meeting, Michael Vella said words to the effect that if Brian  
Hobson and Brett Soper would not agree to operate BFS under the new basis that he had  
proposed, then JEV did not want to be a part of BFS, BFS should be wound up and that  
JEV would try to work with Schweppes on its own. I am also persuaded that Brian  
Hobson and Brett Soper expressed agreement with this outcome, adding that they would  
also seek to continue working with Schweppes and that Michael Vella agreed to this.  
341. In making the findings at [266]-[272] above, I have not found it necessary to make any  
findings in relation to the competing evidence of Bill Kinnane on the one hand, and  
Michael, Joseph and Elizabeth Vella on the other hand, concerning conversations after  
the Ingleburn meeting. To do so would involve an unproductive satellite fact-finding  
exercise concerning the circumstances in which Bill Kinnane’s employment with JEV  
ceased in 2013 and whether he had an axe to grind with JEV and the Vella family as the  
plaintiffs submitted.  
342. Having regard to my findings at [266]-[272] above, I reject the plaintiffs’  
characterisation of BDA’s performance of Schweppes delivery work from 10 September  
77  
2012 as co[77]tituting a diversion of the work from BFS to BDA.  
Toll contract  
343. In about 2013, Schweppes was purchased by Asahi. BDA did all of the Sydney bulk  
freight work until 2015, when Asahi put that work out for tender and Toll was the  
successful tenderer. BDA then signed a five-year contract with Toll to provide delivery  
services on a subcontract basis. That contract was terminable on 14 days’ notice.  
344. Having regard to my findings at [266]-[272] above, I reject the plaintiffs’  
characterisation of BDA’s performance of Schweppes delivery work as a subcontractor to  
as constituting a diversion of the work from BFS to BDA.  
The operation of BDA  
345. The evidence included financial statements of BDA for the 2014 financial year (including  
comparative figures for the 2013 financial year), the 2020 financial year, and some  
financial years in between. Those statements show that BDA operated in essentially the  
same manner as BFS referred to at [73] above. That is to say, BDA earned several million  
dollars of income each year which was derived from “sales”, and almost all of its income  
was expended on “transportation costs”. BDA incurred some additional expenses of  
relatively modest amounts for “contract drivers”, “management fees” and accountancy  
fees and insurance and similar matters. BDA either earned a modest profit or made a  
modest loss in each year, which was carried over into the following year. There were no  
distributions of the modest profits to shareholders.  
Issues for determination  
Alleged partnership or joint venture  
346. The plaintiffs plead that the 2001 agreement was a partnership or joint venture  
agreement between:  
(1) JEV, Hynadam, Mechita and Evermay; and/or  
(2) Joseph Vella, Brian Hobson, Brett Soper and Stephen Phillips,  
with a view to making a profit through the business of providing freight services to Schweppes.  
It was an express term of this agreement that a special purpose corporate vehicle would be  
[78]  
incorporated to conduct that business and BFS was incorporated as that vehicle.  
347. The plaintiffs plead that each “partner” owed fiduciary duties to each other partner,  
[79]  
including:  
(1) a liability to account to one another;  
(2) a duty not to profit or benefit at the expense of the others when there was a  
possible conflict of interest or duty;  
(3) a duty not to profit or benefit at the expense of the others by reason of their  
fiduciary position;  
(4) a duty not to take advantage of an opportunity or knowledge derived from their  
fiduciary position to the detriment of the others;  
(5) a duty of good faith and to devote themselves to the progress and welfare of the  
business of BFS; and  
(6) a duty to refrain from pursuing, obtaining or retaining for themselves any  
collateral advantage in connection with the BFS business without the knowledge  
and informed assent of the others.  
348. The plaintiffs plead that Brian Hobson and Brett Soper, in their capacity as directors of  
BFS, owed the abovementioned fiduciary duties to BFS in addition to the statutory  
[80]  
duties under ss 180-184 of the Corporations Act 2001 (Cth).  
349. The plaintiffs plead that, by reason of their management roles as operations manager  
[81]  
and financial controller respectively,  
Brian Hobson and Brett Soper “owed the  
remaining Partners” fiduciary duties (defined by the plaintiffs as the “Management  
[82]  
Duties”):  
(1) “not to profit from their relationship with BFS without the Partner’s express  
informed consent”; and  
(2) “to avoid any conflicts of interest between themselves and the remaining  
Partners”.  
350. I note that the alleged management duties are pleaded in the Second Further Amended  
Statement of Claim in terms that make it clear that they are said to arise by reason of  
Brian Hobson and Brett Soper being partners in the alleged partnership or joint venture  
together with their management responsibilities. The Second Further Amended  
Statement of Claim does not rely on Brian Hobson’s and Brett Soper’s roles as directors  
of BFS as giving rise to any fiduciary duty allegedly owned to any “partner”. Nor is it  
pleaded that, as directors of BFS, they owed any fiduciary duty to shareholders of BFS  
(as opposed to the duties owed to BFS itself referred to at [348] above).  
351. In their Defence to the Second Further Amended Statement of Claim, the defendants  
deny that the 2001 agreement was a partnership or joint venture agreement. The  
defendants plead that it was a shareholders’ agreement made orally between JEV,  
[83]  
Hynadam, Mechita, Alderton Transport and Evermay.  
352. The defendants deny that JEV, Hynadam, Mechita, Alderton Transport and Evermay  
owed fiduciary duties to one another and say that their relationship was regulated by the  
[84]  
constitution of BFS and the terms of the 2001 agreement.  
353. The defendants accept that Brian Hobson and Brett Soper owed statutory duties under  
ss 180-183 and 191 of the Corporations Act and fiduciary duties to BFS as directors of  
[85]  
BFS,  
but deny that they owed fiduciary duties or the alleged “Management Duties” to  
[86]  
their alleged “partners”.  
354. In the alternative to their denial of any partnership, the defendants plead that any such  
partnership that may be found to have existed was dissolved under s 32(c) of the  
[87]  
Partnership Act upon the occurrence of the following events:  
(1) on or about 23 October 2003 when Alderton relinquished its shares in BFS and  
Glen Alderton resigned as a director of BFS;  
(2) on or about 23 September 2010 when Stephen Phillips resigned as a director of  
BFS; or  
(3) at the Ingleburn meeting on 28 August 2012 when each of JEV, Hynadam,  
Mechita and/or Joseph Vella, Brian Hobson and Brett Soper gave notice of their  
intention to dissolve the partnership or quasi-partnership.  
355. Section 32 of the Partnership Act provides:  
“Subject to any agreement between the partners, a partnership is dissolved—  
(a) If entered into for a fixed term, by the expiration of that term—  
(b) If entered into for a single adventure or undertaking, by the termination of that  
adventure or undertaking—  
(c) If entered into for an undefined time, by any partner giving notice to the other  
or others of the partner’s intention to dissolve the partnership.  
In the last-mentioned case the partnership is dissolved as from the date mentioned in the  
notice as the date of dissolution, or, if no date is mentioned, as from the date of the  
communication of the notice.”  
356. The defendants rely on the conduct of Alderton and Glenn Alderton in October 2003 and  
the conduct of Stephen Phillips and/or Evermay in September 2010 as constituting  
notice of the intention of those alleged partners to dissolve the alleged partnership at  
those times.  
357. In their Reply, the plaintiffs do not admit that the conduct of Alderton and Glenn  
Alderton in October 2003 and the conduct of Stephen Phillips and/or Evermay in  
September 2010 notified their intention to dissolve the alleged partnership and say that,  
if such notice was given, a new partnership was formed by the remaining partnership  
otherwise on the same terms as the existing partnership, and the remaining partners  
owed to one another the same duties as all of the partners had previously owed to one  
[88]  
another.  
358. The plaintiffs also deny that any party to the alleged partnership gave notice of their  
intention to dissolve the partnership at the Ingleburn meeting on 28 August 2012 and  
say that it was resolved at that meeting to “wind down” BFS and to establish a new  
[89]  
company to carry on the business of the existing partnership.  
Within this denial, the  
plaintiffs inserted a definition of the “existing Partnership” as “a partnership, quasi-  
partnership in the sense described in Crawley v Short [2009] NSWCA 410; (2009) 262  
[90]  
ALR 654 at [108]- [113], or joint venture agreement)”.  
In the Second Further  
Amended Statement of Claim, the plaintiffs had pleaded that a partnership was created  
by the 2001 agreement, with the partners being the same as the parties to the 2001  
[91]  
agreement.  
By this definition of “the existing Partnership” in their Reply, the  
plaintiffs introduced an alternative allegation that BFS was sufficiently closely held to be  
akin to a partnership and that the directors of BFS owed fiduciary duties to its  
[92]  
shareholders in addition to the fiduciary duties the directors owed to BFS.  
This was  
not, in truth, a response to the defence that any partnership had been dissolved. It was  
an amendment to the plaintiffs’ case made through the back door and without leave.  
However, the defendants took no objection to the introduction of the “quasi-  
partnership” allegation after the Reply was filed or after the plaintiffs served their  
written opening submissions in which the plaintiffs set out the passages from Crawley v  
Short on which they rely and submitted that the relationship between JEV and its  
co-shareholders and Brian Hobson and Brett Soper was a fiduciary relationship,  
irrespective of whether it was a partnership.  
359. I consider that the Reply, read together with the passage from Crawley v Short referred  
to in the Reply, put the defendants on notice of the plaintiffs’ intention to rely at the  
hearing on an allegation that Brian Hobson and Brett Soper as directors of BFS owed  
fiduciary duties to the shareholders of BFS by reason of BFS being a closely held  
company akin to a partnership. I reject the defendants’ submission, made for the first  
time in closing submissions, that those claims are outside the scope of the plaintiffs’  
pleaded case and must be dismissed for that reason alone. Pleadings are not an end in  
themselves, but merely a means to the attainment of justice between the parties. In this  
case, where the defendants were on notice of the claims introduced in the Reply, it would  
be contrary to well-established authority rejecting the culture of trial by ambush and  
adversarial tactics to permit those claims to be defeated by the pleading point taken in  
the defendants’ closing submissions: see Re BBY Limited (Receivers and Managers  
Appointed) (in liq) and BBY Holdings Pty Ltd (Receivers and Managers Appointed) (in  
liq) (No 2) [2022] NSWSC 30 at [22]- [33] and the authorities there cited.  
Alleged breaches of the 2001 agreement and fiduciary duties  
360. As I have mentioned earlier in these reasons, the plaintiffs abandoned their claims that  
Brian Hobson and Brett Soper breached their fiduciary duties allegedly owed to the  
plaintiffs by causing BFS to enter into the Arndell Park lease and by failing to distribute  
[93]  
Schweppes work evenly between JEV, Hynadam and Mechita.  
361. The plaintiffs maintained their claims that Brian Hobson and Brett Soper breached their  
fiduciary duties and “Management Duties” owed to JEV and Joseph Vella and breached  
[94]  
the terms of the 2001 agreement above by:  
(1) causing BDA to be incorporated in contemplation of BDA supplying freight  
services to Schweppes in place of BFS;  
(2) causing BFS not to renew or renegotiate its contract with Schweppes;  
(3) causing BDA to take over from September 2012 the provision of the freight  
services to Schweppes that had previously been provided by BFS; and  
(4) causing BDA to enter into the Toll Contract referred to at [343] above in about  
September 2015,  
without the knowledge or consent of the plaintiffs.  
362. The plaintiffs pleaded that Hynadam and Mechita were “knowingly concerned” in the  
alleged breaches by Brian Hobson and Brett Soper of fiduciary duties and “Management  
[95]  
Duties” owed to the plaintiffs.  
363. The plaintiffs also pleaded that, because BDA entered into the agreement to provide  
freight services to Schweppes and/or Toll “in place of BFS”, BDA induced the alleged  
breaches of the 2001 agreement by Brian Hobson and Brett Soper and was also  
knowingly concerned in their alleged breaches of fiduciary duties and “Management  
[96]  
Duties” owed to the plaintiffs.  
The plaintiffs pleaded the same allegations against  
Hynadam Nominees and Mechita Nominees on the basis that those companies caused  
BDA to be incorporated in contemplation of entering into a freight contract with  
[97]  
Schweppes and/or Toll “in place of BFS”.  
364. An additional allegation pleaded by the plaintiffs that Hynadam and Mechita breached  
fiduciary duties that they owed to the plaintiffs by providing BDA with transport  
[98]  
services  
was not mentioned in any of the plaintiffs’ lengthy written submissions or  
oral submissions. That allegation is therefore taken to have been abandoned.  
365. The plaintiffs claim that, by reason of their conduct referred to at [361]-[363] above,  
each of Brian Hobson, Brett Soper, Hynadam, Mechita, Hynadam Nominees, Mechita  
Nominees and BDA are liable to account to the plaintiffs for the advantage they have  
obtained from BDA performing work for Schweppes and Toll, and hold on constructive  
99  
trust the benefits they have received from the alleged breaches referred to above.  
366. The plaintiffs also claim that they have suffered loss and damage by reason of the alleged  
breaches of fiduciary duty and alleged breaches of the 2001 agreement referred to at  
[361]-[363] above. The plaintiffs particularised their loss as, relevantly, loss of the  
benefit or opportunity to obtain “the benefit of the one-third share of the ongoing  
contractual relations with Schweppes Australia since September 2012” and “BFS has  
lost the benefit of ongoing contractual relationships with Schweppes Australia since  
100  
September 2012”.  
367. In answer to these allegations, the defendants repeat their contentions referred to above  
concerning the parties to, and terms of, the 2001 agreement and repeat their denial that  
the 2001 agreement constituted or gave rise to a partnership, “quasi-partnership” or  
joint venture. The defendants also repeat their alternative contention that any  
partnership was terminated pursuant to s 32(c) of the Partnership Act no later than at  
the Ingleburn meeting. The defendants say that, in August 2012, BFS abandoned the  
business of providing freight services to Schweppes and Brian Hobson and Brett Soper  
caused BFS not to renew or renegotiate its contract with Schweppes. The defendants  
contend that Michael Vella permitted or acquiesced in that course. The defendants deny  
the alleged breaches of the 2001 agreement, fiduciary duties and “Management Duties”  
and deny that they are liable to account to the plaintiffs or that the plaintiffs have  
[101]  
suffered any loss.  
Plaintiffs’ claims for relief  
368. The plaintiffs claim:  
(1) a declaration that the conduct of Brian Hobson and Brett Soper in  
expropriating the Schweppes contract from BFS for the benefit of BDA and its  
members, contrary to the knowledge, understanding and agreement of Joseph  
Vella or Michael Vella, was in breach of the fiduciary duties owed by Brian Hobson  
and Brett Soper to JEV and Joseph Vella;  
(2) a declaration that Brian Hobson, Hynadam, Hynadam Nominees, Brett Soper,  
Mechita, Mechita Nominees and BDA hold on constructive trust for the plaintiffs  
any benefit that they have received by reason of the alleged breach of fiduciary  
duties by Brian Hobson and Brett Soper;  
(3) an order that Brian Hobson, Hynadam, Hynadam Nominees, Brett Soper,  
Mechita, Mechita Nominees and BDA account to the plaintiffs as at the date of  
judgment for all income or benefit that they have derived from or received by  
reason of the alleged breach of fiduciary duties by Brian Hobson and Brett Soper,  
and an order for payment to the plaintiffs of all sums found to be due from any of  
those defendants to the plaintiffs on the taking of such an account;  
(4) further or alternatively, damages for breach of contract;  
(5) further or alternatively, equitable compensation for breach of fiduciary duty  
and breach of trust.  
369. All of the plaintiffs’ claims for relief are made for their own benefit and not on behalf of  
BFS.  
Consideration and determination  
370. As will be apparent from the summary above, the plaintiffs’ pleaded claims that were  
pressed at the hearing are confined to claims for alleged breaches by Brian Hobson and  
Brett Soper of the 2001 agreement and/or fiduciary duties and “Management Duties”  
said to have been owed by Brian Hobson and Brett Soper to their other “partners” or to  
the BFS shareholders, and claims against Hynadam, Mechita, BDA, Hynadam Nominees  
and Mechita Nominees for inducing or being “knowingly concerned in” those alleged  
breaches. In determining those claims, I have considered all of the parties’ extensive  
submissions, irrespective of whether they are specifically referred to below.  
No breach of the 2001 agreement by Brian Hobson and Brett Soper  
371. For the reasons explained at [43]-[50] above, I have determined that JEV, Hynadam,  
Mechita, Evermay and Alderton Transport were parties to the 2001 agreement. Joseph  
Vella, Brian Hobson, Brett Soper, Stephen Phillips and Glenn Alderton were not parties.  
The plaintiffs’ claims against Brian Hobson and Brett Soper for breach of contract fail for  
that reason. The claims that BDA, Mechita Nominees and Hynadam Nominees induced  
breaches of contract by Brian Hobson and Brett Soper suffer the same fate.  
372. For completeness, I note that the plaintiffs’ submissions made no more than passing  
[102]  
references to their claim for damages for breach of contract  
and failed to identify  
any term of the 2001 agreement said to have been breached by Brian Hobson or Brett  
Soper. The claim in contract would have failed for that reason even if I had found that  
Brian Hobson and Brett Soper were parties to the 2001 agreement.  
No partnership  
373. From pleadings through to the last round of closing submissions, the plaintiffs’ case was  
marred by obfuscation about who were the parties to the partnership alleged to have  
[103]  
been created by the 2001 agreement.  
Nevertheless, it was clear from the Second  
Further Amended Statement of Claim that the partners in the alleged partnership were  
the same as the parties to the 2001 agreement.  
374. It follows from my finding referred to above in relation to the parties to the 2001  
agreement that JEV, Hynadam, Mechita, Evermay and Alderton Transport were the only  
potential members of the alleged partnership created by the 2001 agreement.  
375. The 2001 agreement did not give rise any partnership between JEV, Hynadam, Mechita,  
Evermay and Alderton Transport. That is because, as the plaintiffs acknowledged in  
closing submissions, they did not enter into a relationship of carrying on a business in  
common with a view to profit: Partnership Act, s 1. There was no intention for BFS to  
make a profit: see [39] and [73] above.  
376. The sole basis on which the plaintiffs submitted that the relationship created by the 2001  
agreement was a partnership was that some profits were in fact made by BFS from  
providing storage facilities to Schweppes and those profits were divided among the  
participants. That submission relied solely on the evidence of Brian Hobson that BFS  
leased various premises for storage and Schweppes paid a fee to BFS to store stock on  
those premises. Brian Hobson gave evidence that those fees were “normally used by BFS  
to pay various costs of the business, including payment of the rent for storage premises  
and for accounting fees. Any money remaining after costs of the business were paid  
was divided among the Companies equally.”  
377. There was no evidence as to whether the storage fees were set by BFS with a view to BFS  
making a profit, or with a view to generating revenue that would merely go towards  
covering its costs with surplus amounts resulting from time to time when only revenue  
unexpectedly exceeded costs. Nor was there any evidence of the amounts or frequency of  
any the payments to the BFS shareholders. The financial statements for BFS did not  
record any payment of dividends to the shareholders: see [73] above. I do not regard  
Brian Hobson’s evidence concerning these payments as supporting a finding that there  
was a partnership between the BFS shareholders: Partnership Act, s 2(3). In any event,  
Brian Hobson and Brett Soper were not partners in any such partnership and they are  
the only defendants alleged to have breached fiduciary duties said to have been owed as  
partners to their alleged co-partners JEV and Joseph Vella.  
378. For those reasons, the plaintiffs fail in their claims for relief based on alleged breaches of  
fiduciary duties said to have been owed to them by Brian Hobson and Brett Soper in  
their capacity as partners in a partnership within the meaning of the Partnership Act.  
No fiduciary duties owed to the plaintiffs  
379. The plaintiffs’ submissions focussed heavily on whether the relevant relationship was a  
joint venture, a “quasi-partnership” or one of trust and confidence.  
380. This is misconceived for two reasons.  
381. First, the plaintiffs continued to obfuscate about who were the parties to the relevant  
relationship alleged to be fiduciary in character. In circumstances where Brian Hobson  
and Brett Soper are the only parties alleged to have breached any fiduciary duty, the  
relevant questions are whether those two men owed any fiduciary duty to the plaintiffs,  
what was the content and scope of any such duty, and whether conduct of which the  
plaintiffs complain breached the duty. The first two questions fall to be determined at  
the time of the impugned conduct, namely during the period from 29 August 2012 in  
which BDA was incorporated and commenced performing Schweppes delivery work  
[104]  
(including through the subcontract that BDA entered into with Toll in 2015).  
382. Second, the question whether Brian Hobson and Brett Soper owed any fiduciary duty to  
the plaintiffs at the relevant time does not turn on whether their relationship could be  
described as a joint venture, a “quasi-partnership” or as one of trust and confidence:  
United Dominions Corporation Limited v Brian Pty Ltd [1985] HCA 49; (1985) 157 CLR  
1 at 10-11 (Mason, Brennan and Deane JJ, Gibbs CJ and Dawson JJ agreeing). In any  
event, the joint venture pleaded by the plaintiffs was a joint venture created by the 2001  
[105]  
agreement, to which Brian Hobson and Brett Soper were not parties.  
383. As emphasised by Mason J in Hospital Products Ltd v United States Surgical  
Corporation (1984) 156 CLR 41; [1984] HCA 64 (Hospital Products) and by the High  
Court in John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1;  
[2010] HCA 19 (White City) the “critical feature” of a fiduciary relationship is  
[106]  
that:  
“... the fiduciary undertakes or agrees to act for on behalf of or in the interests of  
another person in the exercise of a power or discretion which will affect the  
interests of that other person in a legal or practical sense. The relationship between  
the parties is therefore one which gives the fiduciary a special opportunity to  
exercise the power or discretion to the detriment of that other person who is  
accordingly vulnerable to abuse by the fiduciary of his position. The expressions  
‘for’, ‘on behalf of’ and ‘in the interests of’ signify that the fiduciary acts in a  
‘representative’ character in the exercise of his responsibility ...  
It is partly because the fiduciary’s exercise of the power or discretion can adversely  
affect the interests of the person to whom the duty is owed and because the latter is  
at the mercy of the former that the fiduciary comes under a duty to exercise his  
power or discretion in the interests of the person to whom it is owed.”  
384. Referring to extra-judicial writing of Justice Lehane, the High Court confirmed in White  
City that references in this context to an undertaking or agreement to act “for and on  
[107]  
behalf of” or “in the interests of” another person:  
“... must be understood in a reasonably strict sense, lest the criterion they  
formulate become circular... No doubt undertaking to act in this way is inherent in  
the position of trustee administering a trust, director participating in the control  
and management of a company, partner acting in the conduct of the partnership  
business and employee acting in the course of the business of the employer, for  
example. Further, such an undertaking may be found in the facts of a particular  
case.”  
[108]  
385. Their Honours continued:  
“[89] But, as Justice Lehane asked:  
‘[W]hen is a contractual stipulation inserted for the benefit of one party (even if  
offered by the other party) an undertaking to act for or on behalf of that party and  
therefore to act, in relation to the contract, solely in the interests of that party?  
When does an offer to enter into a contract proposed by one party as a deal which  
will benefit the other (as well as himself) become such an undertaking by the  
former to the latter?’  
[90] That leads to Justice Lehane’s second point. This is that the reason why  
commercial transactions falling outside the accepted traditional categories of  
fiduciary relationship often do not give rise to fiduciary duties is not that they are  
‘commercial’ in nature, but that they do not meet the criteria for characterisation  
as fiduciary in nature.”  
386. Descriptions of classes of fiduciary relationships, or even specific fiduciary relationships,  
as involving trust and confidence, dependence or vulnerability, must not be permitted to  
divert attention from the critical question whether the alleged fiduciary has agreed or  
undertaken to act for, on behalf of or in the interests of another person (in the  
reasonably strict sense referred to in White City) in the exercise of a power or discretion  
that will affect the interests of that other person in a legal or practical sense. Trust,  
confidence, dependence, vulnerability and influence are important only to the extent  
that they evidence a relationship suggesting that agreement or undertaking by the  
alleged fiduciary and a corresponding entitlement for the other party to the relationship  
[109]  
to expect that the alleged fiduciary will act in that other party’s interests.  
387. As the defendants submitted, mere vulnerability to breach of contract does not  
necessarily attract the intervention of equity. A fiduciary relationship may be found to  
co-exist with a contractual relationship, but the fiduciary relationship in such cases must  
conform to the express and implied terms of the contract. A fiduciary relationship  
“cannot be superimposed upon the contract in such a way as to alter the operation  
[110]  
which the contract was intended to have according to its true construction”.  
The  
application of these principles differs according to the circumstances of each case,  
including whether the contract is a detailed written contract or an oral contract with few  
details. However, the principles are the same.  
388. The plaintiffs acknowledged that the critical feature of a fiduciary relationship is an  
undertaking or agreement by the alleged fiduciary to act for, on behalf of or in the  
interests of another person in the exercise of a power or discretion which will affect the  
[111]  
interests of that other person in a legal or practical sense.  
The plaintiffs’ submissions  
nevertheless focussed on trust, confidence and vulnerability and failed to address  
whether Brian Hobson and Brett Soper had agreed or undertaken to act for and on  
behalf of JEV and/or Joseph Vella in the discharge of their respective roles with BFS.  
[112]  
The plaintiffs submitted that:  
“In this case ... all freight carrier work from Schweppes was allocated to BFS, but  
individual jobs were then internally allocated to an individual shareholder (e.g.  
J&E Vella, Hynadam or Mechita) which performed the work and then issued an  
invoice to BFS. BFS then issued an invoice to Schweppes.  
The plaintiffs contend that Brian Hobson was the ‘operations manager’ of BFS,  
while the defendants contend that he was the ‘managing director’. The defendants  
admit that his duties included the day to day running of BFS, sharing the allocation  
of Schweppes work between the BFS shareholders (at least form 2009) and liaising  
with Schweppes (BFS’s only client of any significance).  
It is also common ground that Mr Soper was the ‘financial controller’ of BFS and  
that Mr Soper’s duties included preparing and issuing invoices to Schweppes on  
behalf of BFS, verifying and paying the invoices issued to BFS (e.g. the invoices  
issued by J&E Vella and other shareholders), and paying BFS profits as dividends  
to the shareholders.  
...  
In a real commercial sense, the relationship of the parties was necessarily one of  
confidence and trust. The parties supplied freight services to Schweppes through  
one corporate entity for their joint benefit.  
However, J&E Vella entrusted Mr Hobson (and therefore Hynadam) with day to  
day control over the BFS business, with the sole contact with Schweppes and with  
the allocation of Schweppes work between the BFS shareholders. J&E Vella was  
vulnerable in the relevant sense to Mr Hobson (and therefore to Hynadam) and Mr  
Soper (and therefore to Mechita), each of whom had the opportunity to exercise  
their powers and discretions to the detriment to [sic] J&E Vella in a practical as  
well as a directly financial sense...”  
389. Putting the outcome of the Ingleburn meeting to one side for the moment, I reject the  
plaintiffs’ contention that Brian Hobson and Brett Soper owed fiduciary duties to JEV  
and/or Joseph Vella by reason of their roles and responsibilities within BFS as described  
in the plaintiffs’ submissions above.  
390. The responsibilities of Brian Hobson and Brett Soper to which the plaintiffs refer involve  
matters in which they undertook to act for, on behalf of and in the interests of BFS and  
not for Joseph Vella, JEV or any other shareholder of BFS. As the defendants submitted,  
[113]  
Brian Hobson and Brett Soper were directors and employees of BFS.  
BFS was a  
corporate vehicle formed by its shareholders in accordance with the 2001 agreement  
with the objective of each of them continuing to operate their existing businesses  
delivering freight for Schweppes through one corporate interface (BFS) as a matter of  
administrative convenience to Schweppes. BFS and its shareholders were subject to its  
constitution and the 2001 agreement. JEV and each other shareholder had a contractual  
right under the 2001 agreement to have Schweppes work allocated to it by BFS (through  
the employee that BFS charged with that responsibility from time to time) on the basis  
that each shareholder would receive an approximately equal share of that work,  
provided that the shareholder’s representatives turned up to perform the work. JEV and  
[114]  
each other shareholder had equal representation on the board of directors.  
Brian  
Hobson (as operations manager) and Brett Soper (as financial controller) reported to  
that board of directors.  
391. Contrary to the plaintiffs’ submissions, BFS had an obvious interest in performing its  
contractual obligations to Schweppes. Any breach of those obligations might have  
resulted in BFS being liable to Schweppes in damages. BFS needed its shareholders to  
perform the freight services that BFS contracted to provide to Schweppes. The 2001  
agreement governed the basis on which the shareholders had agreed to perform those  
services. BFS therefore had an interest in ensuring that its shareholders were allocated  
and performed that work in accordance with their 2001 agreement.  
392. As directors of BFS who were also employed to perform the functions identified in the  
plaintiffs’ submissions, Brian Hobson and Brett Soper did not agree or undertake to  
perform those functions for, on behalf of and in the interests of JEV. Nor did they agree  
or undertake to perform those functions for, on behalf of and in the interests of  
Hynadam, Mechita or any other shareholder of BFS. They agreed and undertook to  
perform their functions for, on behalf of and in the interests of BFS and were  
accountable to its board of directors.  
393. As the defendants submitted, JEV was not vulnerable to Brian Hobson and Brett Soper  
in any relevant sense relating their performance of the functions referred to in the  
plaintiffs’ submissions. To the extent that Brian Hobson and Brett Soper failed to  
perform their functions in accordance with applicable legal standards and BFS failed to  
take action requiring them to do so, JEV had a remedy in the form of a derivative action  
including for injunctive relief under s 1324 of the Corporations Act in respect of any  
contravention by Brian Hobson and Brett Soper of their statutory duties as directors of  
BFS.  
394. As the defendants submitted, the plaintiffs must demonstrate that the fiduciary duties  
that they seek to superimpose on the corporate and contractual relationships do not alter  
the intended operation of the contract in the context of the corporate structure. The  
plaintiffs made no attempt to address that question. They submitted, implicitly if not  
explicitly, that it was not necessary for them to do so because the 2001 agreement was an  
oral agreement made in 2001. I reject that submission. There was evidence about the  
terms of the 2001 agreement and many of those terms were common ground as referred  
to at [52] above.  
395. I also reject the plaintiffs’ submission that the fact that the 2001 agreement was not  
reduced to writing “tends towards the conclusion that the relationship was a fiduciary  
one”. The presence of a comprehensive written commercial contract is a factor that tends  
against characterising the relationship as including fiduciary duties. Contrary to the  
plaintiffs’ submission, it does not follow that an oral contract made many years prior to  
the proceedings “tends in favour of the recognition of a fiduciary relationship”.  
396. As the defendants acknowledged, there are some situations in which a director of a  
company owes fiduciary duties to a shareholder of the company: Brunninghausen v  
Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199 (Brunninghausen) at [100]  
(Handley JA, Priestley and Stein JJA agreeing). The applicable principles were explained  
in Warner Capital Pty Ltd v Shazbot Pty Ltd [2020] NSWCA 121 (Warner Capital) at  
[94]-[99] (Gleeson JA, Macfarlan and Meagher JJA agreeing):  
“[94] Although the legal principles are not in dispute, it is necessary first to say  
something about breach of fiduciary duty of the type found in Brunninghausen v  
Glavanics , particularly given that the High Court has spoken firmly against the  
imposition of prescriptive fiduciary obligations: Breen v Williams (1996) 186 CLR  
71; [1996] HCA 57 at 113; Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165;  
[2001] HCA 31 at 197-198, Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21  
at [74], and Howard v FCT (2014) 253 CLR 83; [2014] HCA 21 at [31], [32].  
[95] Brunninghausen v Glavanics involved a claim for breach of fiduciary duty  
owed to the plaintiff-shareholder by the defendant who was effectively the sole  
director and the majority shareholder in connection with the sale of the plaintiff’s  
shares to the defendant. The defendant had purchased the plaintiff’s shares at a  
price well below the price that a third party was willing to pay, without telling the  
plaintiff about the existence of that offer. The primary judge found that the  
defendant owed the plaintiff a fiduciary duty, which had been breached in the sale  
of his shares to the defendant and awarded equitable compensation. The defendant  
appealed.  
[96] Handley JA (Priestley JA and Stein JA agreeing) identified at [97]–[98] the  
particular circumstances of the case that gave rise to the fiduciary obligation owed  
by the director to a shareholder: (a) the plaintiff was effectively a disenfranchised,  
minority shareholder, locked into the company and any attempt to insist on his  
rights as a director would have led to his removal; (b) the plaintiff therefore was  
almost totally powerless; he had no legal rights as a shareholder to inspect the  
company’s books of account or financial records; (c) while he was entitled to copies  
of the annual accounts, realistically he chose not to exercise that entitlement, and  
importantly, that alone would not provide any real guide to the value of his shares;  
(d) he had no effective right to be informed of the negotiations for the sale of the  
company’s business by the defendant; (e) the defendant, as the sole effective  
director, occupied a position of advantage in relation to the plaintiff in terms of  
disclosing, if he saw fit, information about the pending negotiations for the sale of  
the business but could not be compelled to do so.  
[97] Adopting the language of Mason J in Hospital Products Ltd v United States  
Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 (Hospital Products) at  
96-97; [1984] HCA 64 , Handley JA said at [99], that this gave the defendant the  
capacity to affect the interests of the plaintiff ‘in a practical sense’ and in the  
context of negotiations with him ‘a special opportunity’ to exercise that capacity to  
the detriment of the plaintiff who was ‘at the mercy’ of the defendant and  
‘vulnerable to abuse’ by the defendant of ‘his position’.  
[98] After observing at [105] that unlike the sale to an outsider in which both  
shareholders participated and which involved no conflict of interest, the sale of the  
plaintiff’s shares to the defendant required a reconciliation of their competing  
interests in the transaction, Handley JA recognised at [106], consistently with  
Breen v Williams , that the fiduciary duty of disclosure should be expressed  
proscriptively in terms of the no conflict and no profit rules:  
[106] A fiduciary duty owed by directors to the shareholders where  
there are negotiations for a takeover or an acquisition of the company’s  
undertaking would require the directors to loyally promote the joint  
interests of all shareholders. A conflict could only arise if they sought to  
prefer their personal interests to the joint interest. That is the very  
conduct which would be proscribed by the duty.  
[99] While noting that it is true generally that a director’s fiduciary duties are owed  
to the company, Handley JA rejected as an absolute statement the defendant’s  
proposition, relying on Percival v Wright [1902] UKLawRpCh 125; [1902] 2 Ch  
421 , that a director’s fiduciary duties are owed only to the company. He said that  
the particular nature of the transaction may give rise to a fiduciary duty owed by  
directors to the shareholders: at [107].”  
397. For the reasons already explained above, the circumstances of the present case are far  
removed from those in Brunninghausen. JEV was not powerless or almost powerless.  
JEV had, and was entitled under the 2001 agreement to continue to have, a director on  
the board of BFS. That director was entitled to information, including reports from Brian  
Hobson and Brett Soper as to the performance of their functions. JEV was not at the  
mercy of Brian Hobson and Brett Soper performing their functions in a manner  
inconsistent with JEV’s rights under the 2001 agreement, including in relation to  
allocation of work. For the reasons already explained, that would be inconsistent with  
the interests of BFS in complying with its contractual obligations to Schweppes, and JEV  
had a remedy in the form of a derivative action if Brian Hobson and Brett Soper  
breached duties owed to BFS.  
398. The plaintiffs placed particular reliance on the judgment of Young JA (with whom Allsop  
P and Macfarlan JA agreed) in Crawley v Short [2009] NSWCA 410. Referring to his  
earlier judgment in Glandon Pty Ltd v Strata Consolidated Pty Ltd (No. 3) (unreported,  
Supreme Court of New South Wales, 4 June 1990), Young JA articulated six principles,  
including (at [108]):  
“Merely because a person is a director of a company will not necessarily mean that  
he or she will owe fiduciary obligations to the members of the company as such.  
...  
If the Court considers that the corporate entity is sufficiently closely held to be akin  
to a partnership it may consider that it is appropriate to hold that the directors  
have the same obligations to their co-members as a partner would have had.”  
399. At [112], Young JA said:  
“... Handley JA in Brunninghausen said that there were good legal and commercial  
reasons for not permitting a shareholder to sue where the shareholder sues for  
breach of an alleged fiduciary duty which is the same duty as the director owes to  
the company. That proposition is commonly accepted. The question in  
Brunninghausen and here is how far that proposition operates to deny a fiduciary  
duty when a director is buying or selling shares from or to another shareholder.”  
400. At [118]-[122], Young JA expressed the view that “[t]here will be a variety of situations  
in which a shareholder or director/shareholder holds a special position where he or she  
may owe duties to another shareholder.” Young JA identified the “critical question” as  
being whether, “in all the circumstances, there was a special opportunity for [the  
director] to act to the detriment of the other shareholders so that he owed a duty to  
them”. Without being exhaustive, his Honour described the situations in which a  
director may owe duties to a shareholder as including:  
“...where: one shareholder undertakes to act on behalf of another shareholder;  
where one shareholder is in a position to have special knowledge and knows that  
another shareholder is relying on her to use that knowledge for the advantage of  
another shareholder as well as herself; and where the company is in reality a  
partnership in corporate guise, nowadays termed a quasi partnership.”  
401. For the reasons explained at [390]-[393] and [397] above, Brian Hobson and Brett  
Soper undertook to act for, on behalf of, and in the interests of BFS, not JEV or any  
other shareholder of BFS. They did not derive special knowledge from the discharge of  
their responsibilities that they were entitled to withhold from BFS and its directors,  
including the director appointed to the board by JEV.  
402. For the reasons explained at [373]-[378] above, BFS was not in reality a partnership in a  
corporate guise. The plaintiffs’ submissions are not assisted by their reliance on cases  
such as Lawfund Australia Pty Ltd v Lawfund Leasing Pty Ltd [2008] NSWSC 144 in  
which it was held that the relationship between shareholders and/or directors in a  
company was, in substance, a partnership.  
403. Nor are the plaintiffs’ submissions assisted by their reliance on various other cases that  
turn on their own facts which are very different from the facts of the present case. Those  
cases include Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342, in  
which the shareholders in the relevant companies looked to those companies alone for  
their financial rewards and the shareholders had not subscribed to any contract amongst  
themselves. In the present case, the shareholders of BFS entered into the 2001  
agreement that, in conjunction with the corporate structure, governed their  
establishment and operation of BFS as a single corporate interface to deal with  
Schweppes in relation to the work that they had each previously performed and intended  
to continue performing as part of their separate freight businesses. The cases relied on  
by the plaintiffs also include Gulf Pacific Pty Ltd v Londish [1992] FCA 502. That was a  
case in which a director of one unincorporated joint venture partner was held to be liable  
to the other joint venture partner under the second limb of Barnes v Addy [1874]  
UKLawRpCh 20; (1874) LR 9 Ch App 244 for knowingly assisting in a breach by the  
director’s company of its fiduciary obligations to its joint venture partner. No such claim  
was pleaded in the present case.  
404. As the defendants submitted, the term “quasi-partnership” has been criticised as a term  
that can mislead. It is most commonly used in oppression cases and in winding up cases  
to refer to a company that has been founded on the basis of a relationship of mutual  
trust and confidence and a breakdown in that relationship is relied on in support of an  
application for winding up on the just and equitable ground under s 461(1)(k) of the  
[115]  
Corporations Act.  
As I have already said, the description of a relationship as a  
“quasi-partnership” in cases concerning alleged breaches of fiduciary duty does not  
circumvent the application of the principles referred to at [383]-[387] above in  
determining whether a fiduciary duty is owed and, if so, the content and scope of that  
duty. The Court of Appeal did not suggest otherwise in Crawley v Short, which was an  
oppression suit arising out of the acquisition by Mr Crawley’s interests of the shares held  
by Mr Short’s interests in two companies.  
405. The plaintiffs’ submissions characterise the relationship between JEV on the one hand  
and Brian Hobson and Brett Soper on the other hand as “a fiduciary one”, but do not  
articulate the content and scope of the fiduciary duties said to have been owed and  
breached by Brian Hobson and Brett Soper. As the defendants submitted, the matters  
relied on by the plaintiffs in characterising the relationship as “a fiduciary one” relate to  
allocation of work, invoicing and liaising with Schweppes. The plaintiffs’ submissions do  
not articulate how those matters are said to give rise to a specific fiduciary duty that  
would be breached by the alleged conduct referred to at [361] above.  
406. For all of those reasons, the plaintiffs have failed to establish that Brian Hobson and  
Brett Soper owed fiduciary duties to JEV and/or Joseph Vella during the period from the  
incorporation of BFS until the Ingleburn meeting. Even if I had reached the opposite  
conclusion, it follows from my findings concerning the Ingleburn meeting at [266] above  
that any such fiduciary duty would not have continued beyond the Ingleburn meeting  
and/or would not have been breached by the conduct of Brian Hobson and Brett Soper  
after the Ingleburn meeting in causing BDA to be incorporated and to provide freight  
services to Schweppes, including indirectly as a subcontractor to Toll from 2015.  
407. It follows from those conclusions that the plaintiffs have also failed to establish that  
Hyndam, Mechita, BDA, Hynadam Nominees and Mechita Nominees were “knowingly  
[116]  
concerned in” alleged breaches of fiduciary duty by Brian Hobson and Brett Soper.  
Plaintiffs’ claims for relief  
408. For all of the foregoing reasons, each of the plaintiffs’ claims for relief set out at [368]  
above fails.  
409. This is not a case that lends itself to stating the remedies I would have awarded to one or  
both of the plaintiffs if I had found in their favour in respect of their claims for breach of  
fiduciary duty. At the conclusion of the final hearing, the plaintiffs had not made an  
election between their alternative claims for an account of profits and equitable  
compensation. The plaintiffs submitted, with the concurrence of the defendants, that  
they should have an opportunity to consider and make that election following any  
finding in their favour and to then adduce further evidence and submissions. There  
would be no occasion prior to that election to address the myriad of issues of principal  
and quantum raised in the parties’ closing submissions concerning the two alternative  
claims.  
Conclusion and orders  
410. The proceedings are to be dismissed for all of the reasons above. The parties’ closing  
submissions indicated that they wish to be heard in relation to costs.  
411. The orders and directions of the Court are:  
(1) Order that the proceedings are dismissed.  
(2) Reserve for further consideration the question of the costs of the proceedings,  
to the extent that they are not the subject of costs orders previously made.  
(3) Direct the parties to send to the Associate to Williams J by 15 July 2022:  
(a) any agreed short minutes of order in relation to the costs of the  
proceedings; or  
(b) written submissions of no more than 5 pages in support of the costs  
orders for which each party contends.  
(4) Direct each party to send to the Associate to Williams J by 22 July 2022 any  
written submissions of no more than 5 pages in response to any submissions of the  
other party referred to in order 3(b) above.  
**********  
[1]  
Citations omitted.  
[2]  
2FASOC, particulars to paragraph 19, incorporating the particulars to paragraph 13.  
[3]  
See [139] below.  
[4]  
[5]  
[6]  
[7]  
[8]  
[9]  
See [73] above.  
Omitting offensive words, which were included in the email as sent.  
See [76] above.  
See [219] below.  
T114.35-114.40.  
See [97] above.  
[10]  
[11]  
A further example of the inconsistencies referred to at [101] above.  
See [103] and [124] above.  
See [229] above.  
[12]  
[13]  
[14]  
[15]  
[16]  
[17]  
[18]  
[19]  
[20]  
[21]  
[22]  
[23]  
[24]  
[25]  
[26]  
[27]  
[28]  
[29]  
[30]  
[31]  
[32]  
[33]  
See [78]-[79] above.  
T160.39-161.41.  
See [72] above.  
Defence, paragraph 36A.  
Defence, paragraph 13E; see [354] above.  
Reply, paragraph 4; see [358] above.  
See [97] above.  
See [154] above.  
See [160] above.  
See [149]-[153] above.  
See [166]-[167] above.  
See [168]-[169] above.  
See [213], [217] and [218] above.  
See [190] and [216]-[217] above.  
See [190], [192] and [194] above.  
See [160]-[161] above.  
See [136]-[144] above.  
See [160]-[161] above.  
See [183]-[188] and [205] above.  
See [186] above.  
As was put to him in cross-examination: T110.35.  
[34]  
[35]  
[36]  
[37]  
[38]  
[39]  
[40]  
[41]  
[42]  
[43]  
[44]  
[45]  
[46]  
[47]  
[48]  
[49]  
[50]  
[51]  
[52]  
See [178] above.  
See [178] above.  
See [160] above.  
See [180], [206] and [207] above.  
See [207] and [209] above.  
See [210] above.  
See [136]-[144] above.  
See [218] above.  
T271.19-271.35.  
T286.10-286.30.  
See [136]-[144] above.  
See [218] and [221] above.  
See [222] above.  
See [222] above.  
See [283] and [286] above.  
See [207] above.  
See [72] and [253] above.  
See [225] above.  
Commercial Union Insurance Company of Australia Limited v Ferrcom Pty Ltd (1991) 22  
NSWLR 389 at 418.  
[53]  
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 at 321; see also Doppstadt Australia  
Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158 at [81] (Gleeson JA, Ward  
JA (as the President of the Court of Appeal then was) and Emmett JA agreeing).  
[54]  
See [266] above.  
[55]  
See [228] and [233] above.  
[56]  
On their version of the Ingleburn meeting, which I have accepted.  
[57]  
See [235]-[236] and [238] above.  
[58]  
See [240] above.  
[59]  
See [235] above.  
[60]  
See [239] and [243] above.  
[61]  
See [283] above.  
[62]  
See [251] above.  
[63]  
[64]  
[65]  
[66]  
[67]  
[68]  
T314.1-314.17.  
T324.44-325.2.  
See [124] and [127] above.  
T308.40-309.5, 310.30-310.39.  
See [89] above.  
Michael Vella’s affidavit sworn 23 February 2017, paragraphs 77-83; Michael Vella’s  
affidavit sworn 3 February 2021, paragraph 44.  
[69]  
See [106] above.  
[70]  
T327.40-327.50.  
[71]  
See [72] above.  
[72]  
See T326.34-327.16.  
[73]  
See [334] above.  
[74]  
See T326.48-327.4.  
[75]  
See [243] above.  
[76]  
See [243] above.  
[77]  
See [234] and [257].  
[78]  
Second Further Amended Statement of Claim (2FASOC), paragraphs 13-15.  
[79]  
2FASOC, paragraph 20.  
[80]  
2FASOC, paragraphs 21-22.  
[81]  
See [69]-[70] above.  
[82]  
2FASOC, paragraph 28.  
[83]  
Defence, paragraphs 13-13A, 14-15.  
[84]  
Defence, paragraph 20.  
[85]  
Defence, paragraphs 21-22.  
[86]  
Defence, paragraph 28.  
[87]  
Defence, paragraphs 13C-13E.  
[88]  
Reply, paragraphs 2-3.  
[89]  
Reply, paragraph 4.  
[90]  
Reply, paragraph 2(a).  
[91]  
See [346] above.  
[92]  
Crawley v Short [2009] NSWCA 410 at [108(5)]; plaintiffs’ closing submissions 13/5/21,  
paragraph 274.  
[93]  
2FASOC, paragraphs 29-36.  
[94]  
[95]  
[96]  
[97]  
[98]  
[99]  
2FASOC paras 37-40A and 42.  
2FASOC paragraph 45A.  
2FASOC, paragraphs 43-44.  
2FASOC, paragraphs 46-47.  
2FASOC, paragraphs 40B and 45.  
2FASOC, paragraph 48.  
[100]  
[101]  
[102]  
[103]  
2FASOC paragraph 49.  
Defence paragraphs 37-49,  
Plaintiffs’ closing submissions 13/5/21, paragraphs 304 and 310.  
Plaintiffs’ opening submissions 28/4/21, paragraphs 4(a) and 10; plaintiffs’ oral opening  
submissions at T5.22; plaintiffs’ closing submissions 13/5/21, paragraphs 3, 4(a), 274-301;  
plaintiffs’ closing submissions 28/5/21; plaintiffs’ oral closing submissions at T422-431.  
[104]  
See [361] above.  
[105]  
See [346] above.  
[106]  
Hospital Products at 96-97; see also White City at [87].  
[107]  
White City at [88].  
[108]  
White City at [89]-[90]; see also Hospital Products at 100.  
[109]  
Eaton v Rare Nominees Pty Ltd [2019] 2 Qd R 222; (2019) 373 ALR 386; [2019] QCA 190  
at [62] (Philippides JA, McMurdo JA and Davis J agreeing), referring to extra-judicial writing  
of Justice Gageler (in turn referencing the work of Professor Finn) in “Expansion of the  
Fiduciary Paradigm into Commercial Relationships: The Australian Experience” in P  
Devonshire and R Havelock (eds), The Impact of Equity and Restitution in Commerce (Hart  
Publishing, Oxford, 2018), 173–174.  
[110]  
Hospital Products at 108; White City at [91]-[92]; see also Streetscape Projects  
(Australia) v City of Sydney [2013] NSWCA 2; (2013) 85 NSWLR 196 at [124] to [128] (Barrett  
JA, with whom Meagher and Ward JJA agreed).  
[111]  
Plaintiffs closing submissions 13/5/21, paragraph 286.  
[112]  
Plaintiffs’ closing submissions 13/5/21, paragraphs 288-292.  
[113]  
See [49] above in relation to their employment.  
[114]  
See [59] above.  
[115]  
See, for example, In the matter of David Ireland Productions Pty Ltd [2014] NSWSC 1411  
at [5] and the authorities there referred to.  
[116]  
See [362]-[363] and [365] above.  


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