SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

KELLY v RAYMOR (ILLAWARRA) PTY LTD

WOOTTEN J

18 November 1982 -

Wootten J The Raymor group of companies gets its name from a combination of the second names of two brothers, Mr Paul Raymond Kelly, the principal plaintiff in this case, and Mr William Mortimer Kelly, the principal defendant. The manufacturing engineering business around which the many companies in the group revolve was started by Mr Paul Kelly many years ago. Later Mr William Kelly, who had trained as a medical practitioner, came in to handle the business side of the operation. After a period the brothers had various disagreements and Mr Paul Kelly withdrew from active participation in the belief that he owned and would continue to own half of the whole business. He continued to be a director of the companies, or most of them, and usually attended annual meetings and maintained some other contact with the business. However, he left its day to day management to his brother.

Despite the disagreements of the two brothers, they shared one consuming passion, a desire to pay as little tax as possible. It is apparent that the problem of avoiding taxation occupied many of their waking hours, and dictated many of their actions.

In 1973 their search for new forms of tax avoidance led them to consider the possibilities of a superannuation scheme for employees of the group. It is apparent from what followed that the establishment of the superannuation scheme was not motivated in the least by any desire to benefit their employees, but to obtain taxation benefits for their companies it was necessary to set up a scheme which was in terms capable of benefiting the employees and, indeed, ostensibly designed to do so. However, the real purpose of the scheme was to enable a very large part of the profit of the group to be channelled into a superannuation fund, thereby avoiding the payment of tax on the sums so channelled. The trustee of the fund was one of the companies in the group, and as was usual in the group, the directors were the Kelly brothers and their trusted secretary, Miss Mawson. Once in the superannuation fund without having been eroded by tax, the money, still under the control of the group, could be lent back to the group as operating capital at whatever rates of interest suited, without encumbering the companies' business or assets. Of course steps could be taken to ensure that the Kelly brothers themselves, and anyone else whom they wished to favour, could ultimately benefit from substantial superannuation payments. Indeed, at one stage Mr William Kelly enrolled in the superannuation fund three children, then aged six, seven and eight, on the pretext that they were employees of his private company in the role of musicians.

For several years the scheme was carried on with the making of the maximum allowable contributions in respect of every employee of the group, thereby denying the revenue very large sums in taxation, and providing the group with a ready source of working capital. So heavily was the fund used for this purpose that within the space of five years the maximum allowable provision had been made for every employee of the companies, and its usefulness as a method of tax avoidance was temporarily exhausted.

Mr Paul Kelly had been privy to the establishment of the superannuation scheme and its purpose. His only concern appears to have been to ensure that the maximum provision for his possible benefit was made. Although not working, he drew a salary from a company in the group, and was made a member as its employee.

In 1979 he apparently began to suspect that his brother might be arranging things so that the equality in ownership of everything no longer existed, or at all events that his brother was getting benefits that he was not getting.

He sought legal advice from a firm of solicitors and pursuant to that advice started in 1980 to make various enquiries about the affairs of the group. One matter that attracted particular attention was the superannuation fund, apparently in part because some of his advisers commented on the size of the contributions to the fund, and partly because he learned that his brother had borrowed money from the superannuation fund. It does not appear that Mr Paul Kelly had any objection to this beyond the fact that his brother might be getting benefits which he was not getting, because his only action at the time was to make an application to the fund to lend him $333,000 at three per cent per annum for a period of five years. This application was not agreed to by his brother.

Mr Paul Kelly changed his solicitors, going to his present legal advisers who have obviously from there on taken a very active role. In late January and early February 1981 his solicitor made written demands on behalf of Mr Paul Kelly as a director of Raymor (Illawarra) Pty Ltd, the trustee of the superannuation fund, that he be permitted to inspect all books and records relating to the management of the fund, together with an accountant. As a result of certain conversations following these letters, Mr Paul Kelly made an arrangement with Miss Mawson to attend the offices of the group on Wednesday, 11 February. He was given some documents to inspect and, while he was photostatting them, his brother, Mr William Kelly, invited him to go into Miss Mawson's office. When he arrived there he found that Miss Mawson and a Mr Richard Cook were also present. His brother announced that it was a meeting of the directors of Raymor (Illawarra) Pty Ltd, the trustee of the superannuation fund. The meeting then proceeded to decide, against Mr Paul Kelly's objection, that Raymor (Illawarra) Pty Ltd should retire from the position of trustee of the fund. That meeting was closed, and Mr William Kelly then purported to declare open a meeting of directors of Raymor Pty Ltd, which proceeded to appoint a new company, Mitexa Pty Ltd, of which Mr Paul Kelly was not a director, as trustee of the superannuation fund. Next, Mr William Kelly purported to declare open a meeting of directors of Raymor Industries Pty Ltd, which proceeded to terminate Mr Paul Kelly's employment by that company, on which his eligibility to be a member of the fund depended.

The obvious purpose of these manoeuvres was to stop Mr Paul Kelly's enquiries by removing his title to enquire either as a director of the trustee company or as a member of the fund. On 19 February 1981 he commenced these present proceedings by filing a summons seeking declarations that the purported removal of Raymor (Illawarra) Pty Ltd as trustee of the fund and the appointment of Mitexa Pty Ltd as trustee were invalid, and orders that a new trustee of the fund be appointed, and that Raymor (Illawarra) Pty Ltd and Mitexa Pty Ltd be restrained from dealing with or disposing of the assets of the fund. Following some interlocutory proceedings a statement of claim seeking the same relief was filed on 27 February 1981. Thereafter the proceedings grew as further information became available. The proceedings that actually came on for hearing before me were greatly expanded, both as to parties and as to relief claimed. A retired member of the fund was joined as a plaintiff, Mr William Kelly and Miss Mawson and Raymor Pty Ltd and two other companies were joined as defendants. Mr Paul Kelly and the other plaintiff sought between them to sue on behalf of all present and past members of the superannuation fund. In addition to the principal relief originally claimed, the statement of claim sought a declaration that Mr William Kelly and Miss Mawson were unfit to act as trustees of the superannuation fund or to control any company acting as trustee thereof, an order that Raymor Pty Ltd during such time as either Mr William Kelly or Miss Mawson were directors or shareholders thereof or controlled it directly or indirectly should be restrained from exercising its power of removal or appointment of trustees under the trust deed, a declaration that there had been no valid exercise by the trustee of its discretion under the deed in respect of members who had retired prior to their normal retirement dates, a declaration that loans made by the trustee to Mr William Kelly's companies were made in breach of trust, and for accounts in relation to the loans, a declaration that Mr William Kelly and Miss Mawson were liable to the members of the fund for all loss to the fund occasioned by the breaches of duty of the trustee company, and various other relief.

The breaches of duty by the trustee company for which it was sought to make Mr William Kelly and Miss Mawson personally liable included a failure to keep proper books and accounts, a failure to invest money of the superannuation fund at a prudent rate of interest, the lending of the fund's money without security and in breach of the trust deed, the admission of the three young children of Mr William Kelly to membership of the fund, and the failure to properly exercise discretion as to payments to employees who left before reaching normal retirement dates. There were numerous others, to some of which I shall refer.

Whether Mr Paul Kelly felt any indignation about the administration of the fund beyond concern that his brother was doing better out of it than he himself, and whether the co-plaintiff whose assistance Mr Paul Kelly enlisted had any great understanding of the proceedings, are both matters which may be open to doubt. It may be that Mr Paul Kelly simply saw the proceedings as a convenient stick with which to beat his brother, or that he was merely swept along on the tide of indignation with which his legal advisers reacted to the revelations about the fund. The revelations were particularly likely to have a strong effect on a lawyer trained in the equitable principles relating to the duties of trustees and fiduciaries, and familiar with the problems of conflicts of interests and abuse of position. I was left in no doubt as to the feelings of Mr Paul Kelly's counsel when he opened this case before me on 11 November 1981. The courtroom resounded to an address of such eloquence and passion as one is rarely privileged to hear in the staid precincts of Equity. It is not every day that a barrister can feel that he has not just a brief but a cause. There was no mistaking the situation on this day. Here was a barrister with his heart in his case, fighting not only for his wealthy client, but for the humble and oppressed members of the superannuation fund, who were pawns in the game of corporate manipulation. As in days of yore St George rode forth to impale the dragon who threatened the maiden, so this modern day St George set out to impale Mr William Kelly, the controller of the Raymor corporate empire, who manipulated the hundreds of company staff who belonged to the superannuation fund for his or his companies' ends.

During the next month I was treated to evidence which bore out a great deal of what had been said in the opening address, although it case doubt also on Mr Paul Kelly's entitlement to play the role of crusader. I will mention only a few matters.

The fund was set up in a great flurry in the last few days of the financial year 1972-1973. There seems to have been very little discussion of benefits to employees but a great deal about tax implications, and about the fact that the contributions made to the fund had to come back by way of working capital to the companies. Various minutes were produced in court, but those of no less than 10 of the participating companies were unavailable because they had, in the meantime, been the subject of Slutzkin tax avoidance schemes and the minute books had gone with the records of the companies. Some of the relevant minutes placed in the minute books were prepared years later.

For the year ended 30 June 1973, $384,948 was paid into the fund by way of contributions. Contributions were made to the maximum amount for which an income tax deduction could be claimed for the employing companies in respect of each employee. In respect of the five financial years ending on 30 June 1973 - 30 June 1977 over $2,750,000 was paid into the fund by way of contributions. By that time the fund was saturated from the point of view of gaining taxation benefits, and contributions ceased and have not been resumed. The money in the fund was lent to the group at interest rates varying from 2.7 per cent to 4.4 per cent per annum, resulting in the fund having an actual value on 30 June 1980 of close to $3,000,000. Evidence was given that had the fund been prudently managed with a view to making the most of authorised investments instead of being lent back to the group it could by 30 June 1980 have been nearly $800,000 higher.

Apart from lending money in the fund back to the group as operating capital at low rates of interest, other uses of the fund were made for the benefit of the group and its controllers. One example was a large loan to a company controlled by Mr William Kelly. Another was the use of the fund to provide tax free salary increases to senior executives. Instead of giving salary increases which would have attracted normal income taxation, these executives were given so called loans to be repaid out of the amount credited to them in the superannuation fund when they left the employment of the group. This no doubt allowed the group to retain the services of these executives without paying them salaries as high as they would otherwise have had to do.

But what of the ordinary employees of the group for whose benefit the scheme was supposedly set up and whose credits in the fund were the basis of the companies' enormous taxation savings? What benefits did they get? The answer is that for practical purposes they got none, and were never intended to get any.

There was, under the trust deed, only one circumstance in which an employee obtained a vested right to receive the sum standing to his credit in the accounts of the fund, and that was if he remained a member of the fund until his normal retirement date. If the member left before the normal retirement date or died before that date, the trustees had a discretion to pay the whole or part of the amount to his credit. However, the only person who ever received a discretionary payment was a senior executive who worked closely with Mr Kelly in the running of the companies. In fact, Mr William Kelly asserts that at the start he discussed the fund with his brother on the basis that it was to benefit "the key people", who of course included the two Kelly brothers, but very few others. Mr William Kelly was quite frank that he had no intention that ordinary workers who left before retirement were going to receive large sums from the fund, notwithstanding that it was the crediting of these large sums to these workers in the fund that enabled the group to get its enormous taxation benefits and low cost operating capital.

But what if employees did stay with the group until normal retiring age? It will come as no surprise that, until after this case had started, not a single employee of the group managed to stay until retiring age. This did not require such a great effort on the part of the management, as it is in the nature of the business that there is a quite high turnover amongst a large proportion of their employees. Miss Mawson kept a list (dubbed by counsel "the death list") which she showed regularly to Mr William Kelly of the employees who were due to reach retiring age within a few years. Of course, had they known that staying until retiring age would have entitled them to the large sums credited to them in the superannuation fund, many of them might well have stayed on. However, they were never told. Some vague publicity was given to the establishment of the fund within the company in 1973, but thereafter nothing was said and the impression was allowed to grow that the fund had never got going. Indeed, one employee, Mr Gilmore, who left by reason of illness about a year and a half before his retirement age, asked his supervisor about it and was told that the fund had been cancelled. In fact, unknown to him, there stood to his credit in the books of the fund contributions of over $50,000, for which his employer had obtained taxation deductions, which sum was redeployed as a forfeited benefit.

However, in 1980 there were three employees who were within a month of reaching retiring age. And what happened to each of them is instructive. Mr Mitchell was due to reach the retiring age of 65 on 11 March 1980. His supervisor asked him if he would mind leaving on 27 February, and he said that it did not make any difference to him, and he left. In fact, unknown to him it made a difference of $48,000, the sum credited to him in the books of the fund, for which his employer had obtained taxation deductions.

Mrs Lowndes was due to reach retiring age on 15 July 1980. At the end of June her employment was terminated on a Friday on the pretext that staff had to be kept down, and that as a married woman she was the obvious person to go. Nevertheless she was re-employed as a casual on the following Monday and was still working when the case came on for hearing before me. By this simple manoeuvre she was deprived of $53,639 which, unknown to her, had been credited to her account in the superannuation fund in pursuit of the group's taxation advantages.

The third person to constitute a threat to the policy of benefiting only key people was Mrs Denecker, who was due to reach retiring age on 18 June 1980. She had worked with the companies for 14 years. Twenty four days prior to that date she was persuaded to leave her employment and work for another nearby company with which Mr William Kelly has close connections. Just what Mr William Kelly's connections were with that company did not become entirely clear in the evidence, but what did become clear was his passionate desire to conceal them. Nobody told Mrs Denecker that this unsolicited offer of new employment was costing her over $40,000, credited to her in the superannuation fund in the group's quest for taxation advantages.

In the next year, which was the year I was hearing the case, one person did reach retiring age, and his case is no less instructive. Mr Jackson was due to reach retiring age on 24 August 1981, some six months after these proceedings were commenced. When he was contemplating the possibility of retirement he heard about the institution of these proceedings. He asked his supervisor about the fund, but the latter said that he thought the fund did not get off the ground. He then went through files and found a very general statement about the superannuation fund that had been published in 1973. He then asked the state manager about the superannuation fund, and whether it was in operation. The state manager's answer was that he would get anything he was entitled to. Subsequently, only six weeks before the actual hearing before me commenced, he received a cheque. The amount standing to his credit in the fund was $59,782 which, according to the terms of the trust deed, was to be paid to him "either as a capital sum or in some form of annuity, or pension, or in such other manner as the trustees may think". He asked that he receive the amount as a lump sum in order that he could carry out his retirement plans and preserve his benefits as an age pensioner. This was refused, the fund paying him approximately 25 per cent of the amount to his credit as a lump sum, to be followed by monthly payments of $715.60, less $125.60 tax deduction, giving him a total of $590 per month. It is obvious that Mr William Kelly's interest in minimising taxation did not extend to his employees.

If anyone should suppose, as Mr William Kelly maintains, that what happened to Mr Mitchell, Mrs Lowndes and Mrs Denecker, was mere coincidence, they might be interested in certain events as far back as 1975. First Mr William Kelly sought advice as to whether "Gorton type companies" might be used "to relieve the superannuation fund of its assets". On being told that this would be open to challenge as a breach of trust, he came back to his solicitors with these two questions:

"1. How may existing members of the fund be removed from membership?

"2. How may the funds constituting the superannuation fund be deployed for the use of Messrs P & W Kelly?"

The elaborate scheme which his solicitor produced in answer to question two was quickly rejected by counsel as a breach of trust. His only comfort was in the answer to question one:

"It is clear that in order for a person to cease to be a member of the fund he must leave the service of the employer before reaching his normal retirement date … We do not consider that a person would automatically become reinstated as a member of the fund if he were to be re-engaged by a company which fell within the definition of employer as set forth in cl 1(f) of the deed."

Here the programme ultimately implemented in 1980 is clearly laid out.

There can be no doubt that there was a deliberate policy of keeping employees in the dark about the existence of rights under the fund. The trust deed itself required that a person becoming a member should enter into an agreement to be bound by the provisions of the deed, in a form prescribed by the trustee. Had this provision been enforced, employees would have known when they became members of the fund, but this was never done. Miss Mawson, who looked after the records of the fund, is a most meticulous person and most devoted to the Raymor group. It is hard to believe that this was a mere oversight on her part. Nor can one accept that it was a mere oversight that every year when making out the taxation returns of the fund she made in her own hand the untrue statement that "all members have been notified of the existence of rights to benefits". This was to satisfy a requirement of the Commissioner of Taxation, who required advice as to whether all members had been notified in writing of the existence of their rights to benefits.

A superannuation consultant called by the plaintiff, in the course of his evidence, said that from his experience he would classify superannuation funds into two categories, genuine superannuation funds and tax avoidance superannuation funds. He said that the most extreme category of tax avoidance funds would have the following characteristics. The employees are often unaware of their existence. This is the result of the trustees not communicating information about the fund to the employees or the employer not communicating the fund to the employees by way of application forms, nomination of beneficiary forms, annual reports on the fund's financial progress - things of that nature which generally fall under "communication". The funds are very often non-contributory; if the employees contributed they would be aware of the fund's existence. The contributions to the fund are generally loaned back to the company, if not in total at a very high proportion of the total assets of the fund. These loans are usually, but not always, unsecured, and for very low to negligible rates of interest. The benefits to members are often structured so that there is no benefit on resignation, they quite often have a death benefit and occasionally disablement benefit, but they are often structured so that the benefit is only payable at a pre-determined retirement date. In the ultimate example the benefits on resignation are never paid and few retirement benefits are paid, and the fund simply rolls on as a fund of money.

There can be no doubt that the Raymor superannuation fund was of this extreme tax avoidance category. It was possible for it to be carried on in this way because the trustee of the fund, a company controlled by Mr William Kelly and Miss Mawson, was in no sense independent or impartial, but simply a creature of the employer group setting up the fund. The so-called trustee treated the fund as a convenience created for the taxation benefit of the employer, and no attempt was ever made to discharge the duties of a trustee towards the members of the fund. There was a hopeless conflict of interest.

All of this was demonstrated, indeed a great deal of it was not denied, in the course of the month long hearing before me. The case was then adjourned for the preparation of addresses. At the request of the parties it was stood over from time to time, and I was then informed that Mr Paul Kelly and Mr William Kelly had settled their differences and that the plaintiffs proposed to discontinue the action concerning the superannuation fund. It was apparent that the settlement was one which had regard only to the interests of the Kelly brothers. I inquired as to whether it was proposed to make any change in the trustee of the fund as a result of the settlement, and I was informed that it was not. I inquired whether there was any provision in the settlement for the cases of employees such as Mr Mitchell, Mrs Lowndes and Mrs Denecker to be reconsidered on the basis that the trustee's discretion had not been properly exercised in relation to them. I was informed that there was no such provision.

It was apparent that in the litigation, as in the establishment and separation of the fund, the employees of the Raymor group had been treated as pawns to be manipulated for the benefit of the controllers of the corporate empire. Where was the burning indignation with which the case was opened and pursued? What had happened to the quest for justice for the ordinary employees of the Raymor group? St George's client had lain down with the dragon, to feast on the victims he claimed to champion. Many weeks of this court's time had been devoted, at great expense to the community, to a hypocritical charade. Or so it seemed. But the story was not ended.

I indicated that I would consider what was said and whether I had any power to intervene. On 11 August 1982, the day I was to give my decision, I was informed that the settlement was "off". The reasons were not disclosed and I can only note among contemporary circumstances that the plaintiff, Mr Paul Kelly, had been found to be suffering from a terminal illness, and that the Commonwealth Government was evincing a retrospective interest in certain corporate tax arrangements.

To reduce the further public expense on this litigation, I directed the parties to submit addresses in writing. St George's enthusiasm revived. With commendable speed some 284 pages of well-argued submissions, together with substantial appendices, were prepared and filed. I quote but two paragraphs:

"It makes no difference that the trust fund is established without any contribution by the beneficiaries. If the fund is set up by the employers with a view to obtaining tax deductions, then the price the employer companies pay for their deductions is the establishment of a fund which is genuinely 'for the purpose of making provisions for superannuation benefits for' employees and in which the rights of employees to receive benefits are 'fully secured'. The courts as a matter of policy should avoid giving assistance in tax avoidance schemes. To recognise that the employers have obtained tax deductions by reason of the fund and yet to construe the duties of the trustee loosely or favourably to it so as to deprive the members of the reality of benefits from the fund is to give the court's sanction to a sham."

"In those circumstances the court would be lending assistance to a blatant tax avoidance device to permit the trustee and the employers to have the advantage both of a trust deed which on its face renders contributions tax deductible and also of an understanding between them that destroys the very basis upon which social policy allows tax deductions for contributions: That contributions are genuinely to be used to provide superannuation benefits for employees. To put it colloquially, the defendants have made their bed with the trust deed as it stands - now they must lie in it!"

The defendants' reply was more succinct. In 52 competent pages counsel replied to the plaintiffs' submission and relied on Mr Paul Kelly's involvement and acquiescence. Reliance was placed on the submission that the type of fund established was "by no means unusual", so-called "tax avoidance funds" being "quite well-known".

Once again the matter was listed for final oral submissions on 16 November 1982. On Wednesday 10 November 1982 Mr Paul Kelly died, and events have since moved rapidly. The facts are disclosed in the court file of administration proceedings taken by Mrs Paul Kelly, to which I was referred in her application to be substituted for her husband as plaintiff in these proceedings. On the morning of Friday, 12 November 1982 she received from the defendants an offer of settlement of all matters in dispute in all proceedings in which the Kelly brothers had been involved. On Monday 15 November she applied for and obtained from the Probate Division of this court a special grant of letters of administration of Mr Paul Kelly's estate, limited in effect to the continuation and compromise of all the various proceedings, including these proceedings which were described as "the proceedings relating to the fund". In the affidavit in support Mrs Kelly said, by way of explanation of the urgency:

"If all proceedings are to be settled, it appears that the final opportunity to do so is prior to the delivery of judgment in the proceedings relating to the fund. I am advised, and it appears to me, that the position of the parties will be so radically altered by the judgment in those proceedings, whatever the result, that settlement thereafter will be very remote."

A draft agreement was made an exhibit and referred to in the order. Broadly, it provided for the buying out by Mr William Kelly's interests of Mr Paul Kelly's interests in the Raymor group for a large sum of money, and the consequent settling of all proceedings. In relation to the present proceedings relating to the fund, it provided simply for the proceedings to be dismissed or discontinued with no order as to costs. As before, no provision is made for the protection of the members of the fund or the righting of the many wrongs so strongly asserted by the plaintiffs at such great public and private expense over such a long period. It is easy to see why the delivery of judgment in this matter might be thought to render the possibility of settlement remote. It is hard to characterise the use of these proceedings, invoking and then abandoning as they did the rights of ordinary members of the fund in the pursuit of ultimate settlement for the advantage of the principals, as anything other than the abuse of the process of the court. All that I have said above about the first proposed settlement still applies.

The question for me is whether the court can do anything about this situation. Rule 2 of Pt 21 of the Supreme Court Rules provides:

"Discontinuance-A party making a claim for relief may discontinue proceedings so far as concerns the whole or any part of any claim for relief made by him-
(a) in respect of a claim made by statement of claim-

(i) where the pleadings are not closed - without leave of the Court or consent of any other party;

(ii) where judgment has not been entered - with the consent of all other parties;

(b) in respect of a claim made by summons, where the party or his solicitor certifies that the party does not represent any other person and where judgment has not been entered - with the consent of all other parties;

(c) at any time - with leave of the Court."

If para (b) of this rule applied, viz, if the claim to be discontinued were made by summons, Mr Paul Kelly or his solicitors might be under great embarrassment in giving the necessary certificate. Though no representative order was made (it having been specifically requested that this matter be held over for debate after the evidence was concluded) the plaintiffs sought to represent past and present members of the fund.

However, although the case was initiated by a summons as to some of the issues it was, in fact, continued and expanded by statement of claim, and I do not think that I can escape the conclusion that the plaintiffs are now seeking to discontinue the proceedings so far as concerns claims made by statement of claim. It is not clear to me why the rules make this distinction between claims made by summons and claims made by statement of claim, and fail to require the same certificate in the latter cases as in the former. Perhaps it is because a statement of claim will reveal if the claim is made in a representative capacity, while a summons may not do so. However, if a claim made in a statement of claim may be withdrawn before judgment has been entered, with the consent of all other parties, and the leave of the court is not required, the fact that the representative capacity sought to be embraced by the plaintiff is disclosed in the statement of claim is of no avail.

Were the leave of the court required, I would be able to impose terms, eg, as to notice to members of the fund (r 4), although I could not make the parties go on with the proceedings if they did not wish to do so. Other parties could apply to be joined, and in any event as the discontinuance is not a defence to proceedings for the same or substantially the same cause of action (r 7), other proceedings could be instituted. This may of course still be done, but no doubt those in charge of the Raymor group will take care to see that their employees get an appropriate version of what has happened, and that they are discouraged from pressing any further claims, as they were previously discouraged when they inquired about the existence of the superannuation fund. In any event those concerned are largely unsophisticated people of modest means. There would be little risk that any of them would put his or her job on the line to embark on the hazards of an enormous and probably incomprehensible piece of litigation such as this.

Although there is nothing I can do about the termination of the proceedings, I do not think I am obliged to be indifferent to the brazen cheating of employees disclosed in the case, to the considerable public cost of a hypocritical proceeding, or to the losses to the revenue resulting from the manipulation which has been revealed in this case. I express no opinion as to whether the relevant authorities would be able to take any action in respect of the matters concerned, but I do think that they should be informed, even if only for future reference.

I propose therefore to direct that the Registrar send copies of this judgment to the Attorney-General for New South Wales and to the Commissioner for Taxation, and to direct that pending further orders the exhibits in the case be not released.

I would like to make it clear that nothing in these reasons is intended to cast any reflection on the legal representatives of the parties in this litigation. The conduct of the litigation obviously presented difficulties on both sides, and the legal representatives appear to me to have acted at all stages with integrity and a proper regard for their duties to their clients and the court.