Adam v Hasabo

[2019] NSWSC 1167

Supreme Court

New South Wales

Medium Neutral Citation:

Adam v Hasabo [2019] NSWSC 1167

Hearing dates:

18 – 22 February 2019

Date of orders:

06 September 2019

Decision date:

06 September 2019

Jurisdiction:

Equity

Before:

Robb J

Decision:

See par 290

Catchwords:

RESTITUTION — Ineffective transactions — General principles — Restitution of money paid — Failure of consideration — Total failure rule — In context of joint venture or partnership — Where partner’s intention and behaviour such that the joint venture had no real existence

 

CONTRACTS — Misleading conduct under statute —Misleading or deceptive conduct within the meaning of s 18 of the Australian Consumer Law — Representations and course of conduct with no intention to make good on the promises made — Damages

 

CONTRACTS — Breach of contract — Breach of loan agreement/s — No repayments made to date — Damages

  CONTRACTS — Breach of contract — Breach of express term of deed of agreement for sale of business — Failure of condition subsequent — No repayment of amount advanced — Damages

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Competition and Consumer Act 2010 (Cth)
Taxation Administration Act 1953 (Cth)

Cases Cited:

Baltic Shipping Company v Dillon (1993) 176 CLR 344; [1993] HCA 4
Quistclose Investments Ltd v Rolls Razor Ltd (in liq) [1968] Ch 540
Williams v Pisano (2015) 90 NSWLR 342; [2015] NSWCA 177

Category:

Principal judgment

Parties:

Mohammed Hamed Elsair Adam (plaintiff)
Adam Iesa Ibrahim Hasabo (first defendant)
Lamar A Trading Pty Ltd (second defendant)

Representation:

Counsel:
A Moutasallem (plaintiff)

  Solicitors:
Asad Lawyers (plaintiff)
Self-represented (defendants)

File Number(s):

2017/83236

Judgment

The parties

1. The plaintiff in these proceedings is Mr Mohammed Hamed Elsair Adam. Mr Adam commenced the proceedings against three defendants by summons filed on 17 March 2017.

2. The first defendant is Mr Adam Iesa Ibrahim Hasabo, and the second defendant is Lamar A Trading Pty Ltd (Lamar). Mr Hasabo has, at all material times, been the sole director of Lamar. It may be that, for certain purposes, Mr Hasabo traded through Lamar. The role of Lamar in the events the subject of these proceedings is not entirely clear. As a practical matter, the evidence suggests that Mr Adam and Mr Hasabo generally dealt with each other personally.

3. Initially, Mr Adam made a claim against a third defendant, whose name need not be recorded. The third defendant had acquired a mixed business at a shop in Blacktown, in this State (the Blacktown Shop), which is one of the objects of dispute between Mr Adam and the first two defendants in these proceedings. Mr Adam initially, in his summons, sought interlocutory orders restraining the sale of the Blacktown Shop by Mr Hasabo, but that relief was not pursued.

4. As I understand it, it is not in dispute that both Mr Adam and Mr Hasabo came to Australia as refugees from Sudan.

5. There was some dispute between the parties concerning the circumstances in which Mr Adam and Mr Hasabo became friends. It is not necessary for the Court to attempt to resolve those differences, which depended entirely on competing and inconsistent oral evidence. What is clear is that the two men did form a friendship and developed a relationship of trust, until their relationship broke down in about September 2016. Were it otherwise, the transactions that they engaged in would not have been undertaken.

6. Both Mr Adam and Mr Hasabo speak Arabic, and both chose to give their evidence through interpreters. Mr Adam was represented by counsel, but, although Mr Hasabo had legal representation for the purpose of preparing his formal defence and his affidavit evidence, he represented himself at the hearing of the proceedings, which took place between 18 February and 22 February 2019.

7. Because both of the principal parties were Arabic speakers, and Mr Hasabo represented himself at the hearing, the Court adopted an unorthodox approach to the interpretation of the parties' evidence, and to Mr Hasabo's conduct of his defence. Each party had retained the services of a qualified Arabic interpreter. While, ordinarily, a single independent interpreter would be sworn or affirmed to interpret for all parties whose evidence or statements required interpretation, in all the circumstances of the present case it was proper and expedient for the Court to permit Mr Hasabo to use the services of his own qualified interpreter, with whom he felt comfortable. That was primarily because of Mr Hasabo's need to conduct his defence from the bar table, which included cross-examining Mr Adam and his witness. Although I was satisfied that Mr Hasabo's interpreter was impartial, as he was retained by Mr Hasabo I permitted Mr Adam to have his own qualified interpreter. The Court is fortunate that both interpreters were experienced and cooperated with each other to ensure that the proceedings were conducted with reasonable efficiency. The interpreters adopted a sensible and practical approach to their responsibilities, for which the Court is grateful, which enabled the proceedings to be conducted in what I believe was a reasonably orthodox and appropriate manner.

8. Notwithstanding the efforts of the interpreters, the need for the translation from Arabic to English, and then from English back into Arabic, of all questions and all answers between the parties, and all statements made by the Court and by counsel for Mr Adam, presented challenges for the Court in seeking to understand fully the cases put by the parties and the nuances of the oral evidence given by them.

9. Mr Adam filed an amended summons and a statement of claim, which, where convenient, I will call the SOC, on 12 April 2017. One aspect of the amended pleadings was that the claim against the third defendant was abandoned.

10. It is not necessary to refer separately to the amended summons, as the claims in the amended summons are the same as the prayers in the SOC.

The pleadings

11. For reasons that will be considered below, it will be important in this case for the Court to focus in a relatively precise way on the issues raised by the pleadings.

12. Accordingly, I propose to identify the issues in these proceedings by undertaking a formal analysis of Mr Adam's SOC and Mr Hasabo's defence filed on 23 May 2017.

Introduction

13. It is appropriate to start by noting that Mr Adam's claim is in two parts. The first part is a claim for $44,070 plus interest under s 100 of the Civil Procedure Act 2005 (NSW), in respect of a number of separate loans that Mr Adam claims he made to Mr Hasabo. Mr Adam claims that none of those loans has been repaid.

14. The second aspect of Mr Adam's claim concerns what he describes as a joint venture agreement (or sometimes a partnership) between Mr Adam and Mr Hasabo, concerning the establishment and operation, and ultimately the sale, of what I have defined above as the Blacktown Shop. It is probable that the relationship alleged was one of partnership, but nothing turns on whether it is described as a partnership or a joint venture. Mr Adam pleaded the second claim on a number of bases, including that he has an entitlement to damages for breach of contract, a claim for money had and received, damages pursuant to s 236(1) of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law), a claim that Mr Hasabo holds the proceeds of the sale of the Blacktown Shop on trust for Mr Adam, an account of profits, or alternatively equitable compensation.

15. It will now be appropriate to turn to a consideration of the issues raised by the parties' pleadings.

Loan claims

16. Mr Adam's claim for $44,070 is made in respect of three alleged loan agreements, and a fourth claim for rent paid by Mr Adam in respect of Mr Hasabo's operation of a shop at Merrylands in this State (the Merrylands Shop). Mr Hasabo admitted that, at all material times, he operated a mixed business at the Merrylands Shop. Note that, where I distinguish between Australian and United States currency, I will use the prefix AUD or USD. The use of the prefix $ will denote Australian currency.

17. By what Mr Adam called the First Loan Agreement (see SOC pars 5 and 6), Mr Adam alleged that, in about January or February 2016, he entered into an agreement with Mr Hasabo, under which Mr Adam would loan the first two defendants the sums of USD 4,000 and AUD 5,000, in return for an agreement that the defendants would repay him AUD 12,000. At the hearing, Mr Adam said that the AUD 12,000 was agreed to be the approximate value in Australian currency of the two amounts paid by Mr Adam to Mr Hasabo, who had a choice as to whether to pay that sum in Australian dollars, or to return to Mr Adam the amount loaned in the two separate currencies. The agreement is alleged to have been made orally. Mr Adam pleaded that he paid those sums to the defendants in cash. Mr Adam treated Mr Hasabo and his company, Lamar, as being indistinguishable.

18. In equivalently numbered paragraphs, the defendants responded in their defence by denying the claim, and alleging that, in fact, the agreement was that Mr Hasabo would exchange AUD 7,000 of his money for USD 4,000 of Mr Adam's money. The defendants alleged that that exchange took place, and that that was the end of that matter.

19. The defendants therefore accepted that there was a transaction, albeit one that was fundamentally different to the transaction alleged by Mr Adam. The defendants accepted that Mr Hasabo received USD 4,000 from Mr Adam. The question of fact therefore is whether Mr Hasabo paid Mr Adam AUD 7,000, or whether, instead, Mr Adam paid Mr Hasabo an additional AUD 5,000. If Mr Adam's evidence is accepted, the defendants are indebted to Mr Adam for AUD 12,000. If Mr Hasabo's evidence is accepted, then there is no balance owing.

20. By what he called the Second Loan Agreement (see SOC pars 7 and 8), Mr Adam alleged that, in about February 2016, Mr Hasabo asked Mr Adam to lend the defendants $15,000 for the clearance of some goods at Sydney Port, and Mr Adam agreed to lend $10,500, which he did in a payment of $7,000 in cash and then, about three days later, a further $3,500 in cash. The defendants simply denied the making of these loans.

21. By what he called the Third Loan Agreement (see SOC pars 9 and 10), Mr Adam alleged that, in about February 2016, approximately two weeks after the making of the Second Loan Agreement, he agreed with Mr Hasabo to lend the defendants a further $7,500 in cash to purchase goods for the Merrylands Shop, and made that payment via electronic money transfer. The defendants denied the allegations, and, in par 10 of the defence, alleged that what in fact happened was that Mr Hasabo gave Mr Adam $9,000, as part of an agreement that Mr Adam would transfer that amount to Mr Hasabo while Mr Hasabo was overseas.

22. Mr Adam then pleaded what he called the Merrylands Rent Loan Agreement, at SOC pars 11 and 12. This claim related to amounts of rent that Mr Adam alleged that he paid to a real estate agent on behalf of Mr Hasabo for the lease of the Merrylands Shop as follows: $3,060 on 5 April 2016; $3,000 on 17 May 2016; $3,010 on 20 June 2016; and $5,000 on about 1 October 2016. Mr Adam alleged that Mr Hasabo asked him to make the rental payments, and that Mr Adam agreed to do so.

23. The defendants’ response to the Merrylands Rent Loan Agreement claim was to deny the allegations, but then to positively plead in par 12(a) of the defence that: "All of the sums referred to in Paragraph 12 of the Plaintiff's Statement of Claim are monies that belonged to [the] First Defendant that the Plaintiff paid to a real estate agent at the request of the First Defendant."

24. As I understand the effect of this pleading, the defendants accepted that the monies were actually paid by Mr Adam to the real estate agent. However, the defendants say that the payments were not paid from Mr Adam's own money, but were paid from Mr Hasabo’s money. While the position may not be entirely clear, I came to understand from the way Mr Hasabo conducted his defence, that the defendants' case was that the rent payments were made out of the takings of the Merrylands Shop, so that they did not give rise to debts owed by Mr Hasabo to Mr Adam.

Joint venture claims

25. The foundation of Mr Adam's joint venture agreement claim is the allegation (see SOC par 16) that, in about February or March 2016, by an oral agreement made between himself and Mr Hasabo, he and the defendants entered into a joint venture agreement. The subject matter of the joint venture was the establishment and operation of the Blacktown Shop. The defendants' response was to deny the allegation, and to allege that Mr Adam and Mr Hasabo discussed the possibility of entering into business together at some point in the future, without ever reaching any agreement.

26. This response by the defendants is significant, in that they did not deny Mr Adam's allegation entirely. Rather, they accepted that there were discussions, but claimed that the discussions did not come to fruition. Consequently, any actions on Mr Adam's part, such as the payment of monies that could only be explained in terms of there being a joint venture agreement between the parties, would tend to be inconsistent with the defendants' response.

27. Mr Adam alleged the terms of the joint venture agreement at par 17 of the statement of claim. Those terms were, in substance, that Mr Adam and Mr Hasabo would operate a mixed business from the Blacktown Shop as equal partners; Mr Hasabo would arrange for the importation of goods from China and Dubai; Mr Adam and Mr Hasabo would both invest their money into the Blacktown Shop; they would share the profits as equal partners; and neither would sell or otherwise dispose of the Blacktown Shop without the consent of the other. Mr Adam alleged that the terms concerning the operation of the business and the importation of goods were express, and the balance was implied.

28. The defendants denied Mr Adam's allegation in SOC par 18, that, in around March 2016, Mr Adam and Mr Hasabo inspected the premises from where the Blacktown Shop was to be operated with a view to leasing the premises. The defendants admitted Mr Adam's allegation, in SOC par 19, that, on or about 21 April 2016, Mr Hasabo entered into a lease with respect to the Blacktown Shop.

29. The defendants also denied Mr Adam's allegation, in SOC par 20, that, from in or around April 2016, Mr Adam and Mr Hasabo operated the Blacktown Shop.

30. Mr Adam alleged, in SOC par 21, that, between around April and June 2016, Mr Adam worked in the Blacktown Shop on a daily or almost daily basis. The defendants denied this allegation, but elaborated the denial by pleading that Mr Hasabo permitted Mr Adam to be present at the Blacktown Shop from around May 2016 onwards, with a view to entering into a business arrangement in the future. The defendants alleged that Mr Hasabo permitted Mr Adam to sell stock belonging to Mr Adam from the Blacktown Shop. The defendants then alleged that Mr Adam moved stock worth approximately $60,000 from Mr Hasabo's Merrylands Shop to the Blacktown Shop without permission, thereby severely affecting the business viability of the Merrylands Shop. Finally, the defendants alleged that Mr Adam sold the stock that had been transferred to the Blacktown Shop, and that Mr Adam has not to date accounted for the profits made from the sale of the stock.

31. Mr Adam's case therefore was that there was a positive agreement to operate the Blacktown Shop as a joint venture, and that Mr Adam worked in the shop between around April and June 2016. The defendants' position was that the arrangement was permissive only, as the parties would decide in the future whether there would be a joint venture. The defendants accepted that Mr Adam sold stock from the Blacktown Shop, but claimed that $60,000 of that stock was Mr Hasabo's, and had been sold by Mr Adam without accounting to Mr Hasabo.

32. Mr Adam alleged, in SOC par 22, that, on or about 14 March 2016, Mr Adam paid Lamar $38,000, which was used to obtain a bank guarantee that was provided to the lessors under the lease of the premises from which the Blacktown Shop was operated. The defendants admitted that Mr Adam paid the amount alleged.

33. However, in par 22 of their defence, the defendants claimed that the $38,000 paid by Mr Adam related to an amount of approximately $65,000 that Mr Hasabo had given to Mr Adam in early 2016. I will explain this allegation more fully below, but the defendants pleaded that the $65,000 was given to Mr Adam on the understanding that he would deposit the money into a locked interest saver account for Mr Hasabo.

34. Mr Adam alleged, in SOC par 23, that, between March 2016 and November 2016, Mr Adam invested further monies in the Blacktown Shop pursuant to the joint venture agreement.

35. It is necessary to set out the particulars given by Mr Adam of these payments:

(1) The Plaintiff paid $50,000 in three instalments to the First Defendant: $20,000 on 8 March 2016, $10,000 on 30 March 2016 and $20,000 on 31 March 2016. The investment was made for the purpose of importing and purchasing stock from Dubai for the Blacktown Store. The investment was effected by the payment of those amounts, in cash, by the Plaintiff to the First Defendant.

(2) The Plaintiff invested US$11,000 on 1 July 2016 and US$5,000 on 4 August 2016. The investment was made for the purpose of [importing] stock from Dubai for the Blacktown Store. The investment was effected by a money transfer from the Plaintiff to the First Defendant.

(3) The Plaintiff paid $16,300 towards the cost of shop fitting at [the] Blacktown Store.

(4) The Plaintiff paid $3,019 to suppliers for various stock for [the] Blacktown Store.

(5) The plaintiff paid $10,000 for stock for the Blacktown Store on or about 9 June 2016.

(6) The Plaintiff paid $2,000 for stock for the Blacktown Store on 20 June 2016.

(7) The Plaintiff paid $8,000 for stock for the Blacktown Store on 29 June 2016.

(8) The Plaintiff paid $3,300 for an alarm system for the Blacktown Store in or around April 2016.

(9) The Plaintiff paid $1,380.92 for the construction of shop window [sic] on or about 28 June 2016.

(10) The Plaintiff paid Kennards Hire at Parramatta $800 for the storage of goods on 7 April 2016.

(11) The Plaintiff paid $400 on or about 22 July 2016 and $300 on 15 May 2016 to an internet service provider for internet services for the Blacktown Store.

(12) The Plaintiff paid $45,000 towards the rent for the Blacktown Store including $6,000 paid on 10 March 2016, $5,400 on 2 August 2016, $6,000 on 3 June 2016 and $1,950 on 1 July 2016.

(13) The Plaintiff paid $2,000 legal professional fees to Auburn Lawyers.

36. The total amount that Mr Adam claimed that he paid was AUD 142,499.92 plus USD 16,000. When the amounts that Mr Adam claimed to have paid under the loan agreements are added to these amounts, the total that Mr Adam claimed he paid was AUD $179,569.92 plus USD 20,000.

37. The defendants denied the claims made by Mr Adam in par 23(1), (4) to (7), and (9) to (13).

38. Although the defendants denied par 23(2), they alleged that Mr Adam wired Mr Hasabo's money to him while Mr Hasabo was in Dubai to purchase stock for the Blacktown Shop. The defendants therefore appear to have made the issue as being whether those payments were made out of Mr Adam's or Mr Hasabo's money.

39. The defendants admitted the allegation in par 23(3) that Mr Adam paid $16,300 towards the cost of shop fitting, but said that the amount was paid out of the $65,000 that Mr Hasabo claimed he had earlier paid to Mr Adam and which was to be kept for Mr Hasabo.

40. The defendants denied the allegation made by Mr Adam in par 23(8) that he paid $3,300 for an alarm system, but said that the amount paid was $2,000, which they alleged was paid out of Mr Hasabo’s $65,000.

41. Therefore, the defendants admitted in pars 22 and 23 of the defence that Mr Adam made three payments totalling $56,300, but said that the amount was paid out of the $65,000 that they claimed was earlier paid by Mr Hasabo to Mr Adam. It is not clear from the defence where the total of USD 16,000 referred to in par (2) to the particulars to par 23 of the statement of claim is intended to fit in. While the defendants say that those payments were made from Mr Hasabo's monies, they do not expressly say that the source of the two amounts was the $65,000. It seems clear, as a matter of arithmetic, and in the absence of other evidence, that the USD 16,000 could not also have been paid out of the $65,000.

36. Then, the defendants denied allegations made by Mr Adam that he only had access to the books and records of the Blacktown Shop for three months (see SOC and defence at par 24); that Mr Hasabo had access to those books and records at all times (see SOC and defence at par 25), and that Mr Hasabo did not provide Mr Adam with any income, profits or wages in respect of his work or investment in the Blacktown Shop (see SOC par 26 – the defendants allege at the corresponding paragraph in their defence that Mr Adam had no entitlement to these receipts).

37. The defendants admitted, at par 27 of the SOC and defence, that, in or about September 2016, Mr Adam and Mr Hasabo had a dispute over the Blacktown Shop.

38. Then, in pars 28 to 34 of the SOC, Mr Adam pleaded that he entered into two agreements with Mr Hasabo. The defendants admitted the agreements, although they did not admit that the agreements contained all of the terms alleged by Mr Adam.

39. The first agreement (called the 21 November Agreement in SOC par 28) was a written agreement entered into between Mr Adam and Mr Hasabo on about 21 November 2016.

40. The defendants denied that, under the 21 November Agreement, Mr Hasabo agreed to offer his share of the Blacktown Shop to Mr Adam for a price of $60,000.

41. However, the defendants did admit that there was an agreement that Mr Adam would pay Mr Hasabo $60,000, by four equal instalments on stated dates, and that all "responsibilities and accounts" for the Blacktown Shop would be transferred from Mr Hasabo to Mr Adam by 23 November 2016.

42. Mr Adam then pleaded, in SOC par 30, what he called the 25 November Deed of Agreement, which was entered into on about that date between Mr Adam and Mr Hasabo.

43. In their defence, the defendants denied that there was an express term of the 25 November Deed of Agreement that "the Plaintiff and the First Defendant took a lease in partnership at" the premises from which the Blacktown Shop was operated.

44. The defendants did admit that the 25 November Deed of Agreement contained an express term requiring Mr Adam to pay $60,000 to Mr Hasabo in the same instalments that were required by the 21 November Agreement. They admitted that Mr Hasabo agreed to hand over the business and the lease to Mr Adam; that Mr Hasabo would not make any claim on the business or the lease; that the deed was subject to the approval of the lessors to transfer the lease; and if the transfer of the lease was not approved by the lessors, Mr Hasabo agreed to refund the money paid by Mr Adam.

45. Finally, the defendants admitted in their defence that, on about 25 November 2016, Mr Adam paid to Mr Hasabo the sum of $15,000, being the first instalment; the lessors did not approve the transfer of the lease to Mr Adam; and that Mr Hasabo has retained the $15,000. The defendants' admission concerning the retention of the $15,000 was subject to the qualification that the defendants alleged that Mr Adam continued to trade in the Blacktown Shop from late November “…through to the Christmas and New Year period and beyond" and had kept the resulting profits from that period.

46. In pars 35 to 39 of his statement of claim, Mr Adam made allegations concerning the sale of the Blacktown Shop by Mr Hasabo to the person who was originally the third defendant, without Mr Adam's knowledge or consent, for the sum of $48,000. In corresponding paragraphs in the defence, the defendants admitted the sale, and that it was without Mr Adam's consent – they alleged that Mr Adam's knowledge or consent was not required. They admitted that the third defendant took possession on 4 February 2017, and commenced trading, and that, by 20 March 2017, Mr Hasabo had received amounts totalling at least $25,200 from the third defendant, and that Mr Hasabo has not accounted to Mr Adam for any of the amounts paid towards the purchase of the Blacktown Shop.

47. It will not be necessary for the Court to set out in detail the basis of the legal claims made by Mr Adam to support his claims for remedies against the defendants. It may be noted that, in substance, the defendants denied all of Mr Adam's claims.

48. Mr Adam made a claim for breach of the joint venture agreement, the 21 November Agreement and the 25 November Deed of Agreement (see SOC pars 40 to 42); a claim for monies had and received (see SOC pars 43 to 48); a claim for misleading and deceptive conduct (see SOC pars 49 to 55); and a claim for breach of fiduciary duties owed by Mr Hasabo (see SOC pars 56 to 59).

49. It will be appropriate to note the representations that Mr Adam has alleged in par 49 of the SOC were made by Mr Hasabo in around February or March 2016 (all of which were denied by the defendants). They are that:

a.   the Plaintiff and the First Defendant would operate the Blacktown Shop as equal partners;

b.   the First Defendant would arrange the importation of goods from China and Dubai for sale in the Blacktown Shop to be operated by the Plaintiff and the First Defendant;

c.   the Plaintiff and the First Defendant would both invest their money into the Blacktown Shop;

d.   the Plaintiff and the First Defendant would share profits earned from the operation of the Blacktown Shop as equal partners;

e.   the Plaintiff and the First Defendant would not purport to sell or otherwise dispose of the Blacktown Shop without the consent of the other…

56. The representations in pars 49(a) and (b) were alleged to have been express and oral; and the balance of the representations was alleged to have been implied.

57. Although, in a formal way, at the end of the hearing, Mr Adam maintained his alternative claim for an account of profits and equitable compensation, on the basis that the Court may find that there was a real joint venture brought into existence between Mr Adam and Mr Hasabo, Mr Adam's primary case was that he is entitled to be repaid all of the money that he paid towards the establishment and operation of the Blacktown Shop, because, although Mr Hasabo had accepted or allowed Mr Adam to apply Mr Adam’s money towards the joint venture, Mr Hasabo's intention and behaviour was such that the joint venture had no real existence at all, because Mr Hasabo did not recognise it, or take any steps to ensure that Mr Adam received any benefit at all. Consequently, Mr Adam's preferred case is that the Court should find that, in a real and practical sense, the consideration for Mr Adam's payments totally failed, so that Mr Adam is entitled to be repaid everything that he paid on the faith of his belief that there would be a genuine joint venture between himself and Mr Hasabo, and that Mr Adam had real commercial prospects of sharing in the benefits of the operation of the joint venture.

58. As I understand Mr Adam's case, he has put forward the total failure of consideration as his primary case, because of the almost complete absence of records concerning the trading of the business at the Blacktown Shop. Mr Adam says that he ceased to have any involvement in the Blacktown Shop, after the collapse of the relationship between the parties, and lost control of such records as were kept of the trading of the business, and those records have not been brought to light by Mr Hasabo. The business conducted at the Blacktown Shop has, in any event, been sold to the person who was the third defendant. As I understand it, it is probably now impossible for any reasonably accurate accounting to be undertaken in respect of the operation of the joint venture at the Blacktown Shop. Further, much of the money that was invested by Mr Adam went towards the purchase of stock, which Mr Adam contends was a matter under the control of Mr Hasabo. Mr Hasabo has not brought forward any significant records of the transactions whereby stock was purchased.

59. On the other hand, Mr Hasabo’s case was that a substantial amount of the money that Mr Adam claimed he had advanced to the joint venture was in fact Mr Hasabo’s money or was otherwise earned through the sale of merchandise through the Blacktown Shop, or the Merrylands Shop, which Mr Hasabo claimed was under the control of Mr Adam while Mr Hasabo was overseas.

60. Mr Adam also maintained his claims for damages for breach of contract; money had and received; damages under s 236(1) of the Australian Consumer Law, for misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law; as well as his claim for equitable compensation and an account for breach of fiduciary duty by Mr Hasabo arising out of the joint venture agreement. However, these legal claims were only vaguely dealt with, and cannot be said to have been fully or substantially argued by either party on a separate or distinct basis during the hearing. The evidentiary problems in this case, together with the way in which it was actually run, requires the Court to deal with it with a practical approach.

Background

61. Mr Adam migrated to Australia with his family in about May 2004. Between about 2006 and 10 February 2011, Mr Adam was employed as a diesel mechanic. He then ceased work because he suffered an injury that has since prevented him from working.

Mr Adam’s compensation payment

62. In early 2016, Mr Adam settled a claim with an insurance company, as a result of which he received $195,000 net after payment of his legal fees and expenses. Mr Adam tendered evidence that showed he received a cheque for $170,000 plus a Medicare refund of $25,000.

63. Mr Adam put in evidence 12 pages of a Commonwealth Bank NetBank statement of account for the period 18 January 2016 to 14 January 2017. The opening balance was $762.69, and does not record a substantial balance until 15 February 2016, when Mr Adam banked the cheque for his compensation for $170,000, which led to a balance of $170,149.08.

64. Mr Adam gave evidence that, as a result of the receipt of the settlement money, neither he nor his wife were entitled to receive any social security payments until 2018. However, he has received Centrelink payments of $1,400 per fortnight for his children, $1,200 of which he pays towards rent. Mr Adam's wife is also unemployed.

Alleged Jamiah Committees

65. As stated above, Mr Hasabo admitted that Mr Adam paid some amounts to him or on his behalf, but said that many of these transactions were really repayments out of an amount of $65,000 that Mr Hasabo had already given to Mr Adam.

66. In pars 22 to 28 of his substantive affidavit dated 26 November 2017, Mr Hasabo gave evidence about what he called Jamiah Committees. Mr Hasabo gave this evidence:

22. I had also been an active member of multiple ‘Jamiah Committees’. The committees consist of a number of people who pay cash instalments (usually on a fortnightly basis) to a person who then distributes the amounts. The whole sum of the instalments goes to a different participant at the end of each period. The period varies. If the amount is large, the period is usually longer.

23. This is quiet [sic] common in our community as many people are unable to get loans from banks so they become part of a Jamiah Committee.

24. During 2015 I was a member of six different committees as I was looking to open a store in Blacktown. At this point I had acquired about $65,000 in cash.

25. Once [Mr Adam] had told me that he had a locked interest saver account in which he had saved some of his own monies. I remember he had come to my Auburn Arcade shop and also showed me a receipt for this account. The receipt showed he had approximately $50,000 in this account. This was sometime in 2015 I think.

26. Because of his money in the locked interest saver account, I knew he could repay any money that I gave him from the Jamiah money. This way, I could also save this money for any future store in Blacktown. Also [Mr Adam] said he wanted to use some of the money.

27. During late 2015 I had began [sic] handing cash amounts with [Mr Adam]. Over a period of two or three months, this amount equalled to $65,000. [Mr Adam] had many times acknowledged that my Jamiah money was safe with him.

28. These sorts of transactions are quiet [sic] common in Sudanese culture amongst men.

67. I should note that Mr Hasabo had the aid of the solicitor who was responsible for filing the defendants' defence for the purpose of preparing his affidavits.

68. The defendants did not call any evidence from any of the participants in any of the Jamiah Committees referred to in Mr Hasabo's affidavit.

69. In cross-examination (at T126.15), Mr Hasabo responded to the proposition that not a single one of the persons who Mr Hasabo claimed had participated in relevant Jamiah committees had signed an affidavit in these proceedings as follows: “Some affidavits were signed. I presented several signed statements, handwritten statements but my solicitor rejected it because he wanted the actual people to come to his office.”

70. Mr Hasabo’s solicitor, Mr Musabbir Hasan, affirmed an affidavit in these proceedings, but for some unexplained reason Mr Hasan’s affidavit was not read by Mr Hasabo, and he was not called for cross-examination. The forensic need for Mr Hasabo to have independent evidence of the existence of the Jamiah committees and the payment of the monies to Mr Hasabo was so obvious that it is inherently unlikely that Mr Hasan would simply have rejected the possibility of calling members of the committees to give evidence, solely because he had only been given written statements by them. Even assuming that the persons referred to by Mr Hasabo existed, and assuming also that they were not prepared to give formal evidence in Court, it is unlikely that Mr Hasan would simply have dropped the matter and not taken some steps to put independent evidence before the Court that could corroborate Mr Hasabo’s claims.

71. In his affidavit sworn on 29 January 2018, Mr Adam denied receiving the $65,000 that Mr Hasabo said he paid to Mr Adam from the Jamiah money. He also said that it was not common in the Sudanese community, among men, to pass money around in the manner alleged by Mr Hasabo.

72. Mr Hasabo's affidavit does not explain in any detail how he had received the $65,000 in cash from any of the Jamiah Committees, although it is implied that he did so in a number of unexplained instalments. Mr Hasabo was cross-examined concerning the instalments that he received that made up the $65,000: see T127.47, T132.6 and T153.8. I will consider this evidence below.

73. Although the Court had some evidence of bank statements and the like in respect of accounts held in the name of Mr Adam, there are no documents which have been shown to relate to what Mr Hasabo has called Mr Adam's "locked interest saver account", in respect of which Mr Hasabo claimed that he was shown a receipt that showed that, in 2015, Mr Adam had approximately $50,000 in such an account.

Evidence concerning alleged payments

74. The claims and counterclaims made as between Mr Adam and Mr Hasabo are complex, confusing, and inconsistent. There are a number of issues in respect of which the evidence of the two parties is so inconsistent that it must be that one or other party is incorrect, if not both.

75. In these circumstances, the most convenient approach for the Court to take is to start by analysing the evidence that has been tendered concerning the circumstances in which all of the payments that Mr Adam claims to have made were made.

76. The paragraph references in the sub-headings below are to Mr Adam’s 17 March 2017 affidavit and to Mr Hasabo’s 27 November 2017 affidavit respectively, which contain the primary evidence on the relevant subjects.

First Loan Agreement – Mr Adam [12-14]; Mr Hasabo [30-37]

77. Mr Adam gave evidence of conversations with Mr Hasabo that led to Mr Adam handing USD 4,000 and AUD 5,000 in cash to Mr Hasabo on an unidentified date in around January or February 2016, in return for Mr Hasabo's agreement either to repay the same amounts in the currencies in which they had been paid over, or alternatively AUD 12,000. Mr Adam's evidence was that he paid those amounts to Mr Hasabo.

78. It was Mr Hasabo's case that he initially intended to travel to China to acquire goods for the Merrylands Shop with USD 40,000 in cash. He had a conversation with Mr Adam in which Mr Adam said that he had USD 4,000 at home. Mr Hasabo gave evidence of the conversation in which Mr Adam agreed to sell the USD 4,000 to Mr Hasabo in return for around AUD 6,000. Mr Hasabo said that the parties exchanged these sums.

79. Mr Adam did not give any evidence of an agreement as to when Mr Hasabo would repay the money allegedly loaned to him.

80. As I understand Mr Adam's case, it was that Mr Adam had these amounts in cash at his home. As noted above, the $170,000 compensation payment was not paid into Mr Adam's bank account until 15 February 2016, and he did not receive the balance of $25,000 until 25 February 2016. Mr Adam did not point to any withdrawal from any bank account in respect of these monies, and did not explain their source.

Second Loan Agreement – Mr Adam [15]; Mr Hasabo [38]

81. Mr Adam's evidence was that, in about February 2016, approximately three weeks after the making of the First Loan Agreement, a conversation took place in which Mr Adam agreed to lend Mr Hasabo $10,500. Mr Adam said that he paid Mr Hasabo cash of $7,000 and then $3,500 about three days later.

82. Mr Hasabo's response was to deny outright that he ever borrowed $10,500 from Mr Adam.

83. Again, Mr Adam did not give any evidence of the terms of the loan. It is possible that, if this loan was made, that occurred after Mr Adam received his compensation money. However, Mr Adam's evidence does not identify any withdrawals from his bank accounts that could be matched with the two payments that he alleged were made.

Third Loan Agreement – Mr Adam [16-17]; Mr Hasabo [39-40]

84. Mr Adam's evidence was that, about two weeks after the Second Loan Agreement, Mr Hasabo asked him to lend him a further AUD 7,500 in order to buy more goods. Mr Hasabo said that he would refund the monies and needed Mr Adam to send them to Dubai, and for that purpose to use the services of a money transfer business called Al-Khair in Auburn. Mr Adam said that, on 7 February 2016, he attended the Auburn business and paid AUD 7,500 to be transferred to Mr Hasabo's nominated account in the amount of USD 5,000.

85. Mr Adam supported his claim by a document at Tab C to his affidavit which appears to support the transfer by Mr Adam of USD 5,000 to Mr Hasabo on 7 February 2016. It is a single page record that Mr Adam implies was issued by Al-Khair. The name of the firm does not appear on the page. The document records that, on 7 February 2016 (although the date is stated in the manner that is customary in the United States) 5,000 dollars was transferred to Mr Hasabo. Mr Adam gave evidence that the 5,000 dollars was in US currency, which equalled about AUD 7,500.

86. It will be convenient to note at this point that the record also shows USD 5,000 being paid for the benefit of Mr Hasabo on 8 April 2016, and USD 11,000 being paid to the same beneficiary on 1 July 2016. It will be appropriate later in these reasons to consider how those payments relate to other claims made by Mr Adam.

87. It is also material to note that the record shows, in addition to the three transactions for which Mr Hasabo was the apparent beneficiary, that a further 12 transactions took place over the period from 13 February 2016 to 7 February 2017, apparently to other named beneficiaries, in the total amount of USD 64,868. Mr Adam gave no evidence to explain these transactions. To the extent that Mr Adam paid USD 64,868 to persons other than Mr Hasabo, that money may not have been available to fund the payments that Mr Adam has alleged he made for the benefit of the defendants. However, as the evidence ignored these payments, the Court cannot know whether any of the amounts were returned to Mr Adam, so that they would be available to fund the various payments claimed by Mr Adam as having been made by him to Mr Hasabo.

88. Mr Hasabo agreed that he requested Mr Adam to transfer the USD 5,000, but asserted that the money came from the $65,000 that he had given to Mr Adam to deposit in an interest saver account.

84. Given Mr Hasabo's acceptance that the payment was made, the documentary record relied upon by Mr Adam is sufficient to establish that fact.

85. However, the payment was made before Mr Adam received the first $170,000 of his compensation payment on 15 February 2016. Mr Adam has not provided any explanation of where the AUD 7,500 that he claims to have paid to the money transfer business came from.

Rent payments for the Merrylands Shop – Mr Adam [18]; Mr Hasabo [87-90]

91. This claim concerns four payments that Mr Adam says he made in respect of Mr Hasabo's rental obligations for his Merrylands Shop. The alleged payments were $3,060 (5 April 2016), $3,000 (17 May 2016), $3,010 (20 June 2016), and $5,000 (1 October 2016).

92. Mr Adam did not give any substantial evidence of any conversations with Mr Hasabo that led him to make these payments. All he said was that Mr Hasabo asked him to loan the money to pay the rental for the Merrylands Shop.

93. Mr Adam supported this claim by including in the exhibit to his affidavit four receipts, apparently issued by the managing agent for the shop. It is unsurprising that the receipts are issued in Mr Hasabo's name, as he was the lessee. The first three receipts show that the payments were made in cash, and the final one only refers to a receipt of $5,000.

94. Mr Hasabo's response was that he was overseas at various places in the Middle East and Africa from 20 June 2016 until 6 September 2016, and that he told Mr Adam to pay the rent for the Merrylands Shop and the Blacktown Shop from the receipts from sales of goods at the two shops. It is Mr Hasabo's case that that is what happened.

95. It is to be noted that the first two payments were made on 5 April 2016 and 17 May 2016. Although Mr Hasabo did not provide a detailed explanation of the entries in his passport, which was in evidence, it appears that Mr Hasabo was overseas for most of April in 2016. Mr Hasabo said that he left Sydney again on 20 June 2016. Although Mr Hasabo said, at par 49, that he was in Sydney for parts of May and June 2016, he did not explain fully when he was out of the country. He is likely to have been in Sydney on 16 May 2016, which is the date on which the Blacktown Shop commenced to trade: see par 46 of Mr Hasabo’s affidavit.

96. On the other hand, while, by means of the tender of the receipts, Mr Adam has proved that all of the rent payments were made, and although the Court would infer that Mr Adam had possession of the receipts and that all of the payments were made after Mr Adam had received his compensation payments, Mr Adam has not identified the source of the funds that he used to make the payments in the statements of the various bank accounts that he included in his evidence.

Payment of bank guarantee – Mr Adam [24-27]; Mr Hasabo [51-66]

97. There is no issue between the parties that, on 14 March 2016, Mr Adam obtained a bank cheque for $38,000 that was paid to Westpac to secure a bank guarantee issued by Westpac in favour of the lessors of the premises from which the Blacktown Shop was operated.

98. There is a contest on the evidence between Mr Adam and Mr Hasabo as to whether Mr Adam made this payment on the basis that he and Mr Hasabo had agreed to enter into a joint venture in respect of the Blacktown Shop. That is an issue that will be considered later. For present purposes, it is sufficient to note that the evidence establishes that the payment was made to secure the issue of a bank guarantee of the lease that was granted, as I understand the evidence, in the name of Mr Hasabo.

99. Mr Hasabo asserted in his evidence that the $38,000 came from the $65,000 of Jamiah money that he had earlier paid to Mr Adam.

100. The evidence in fact establishes that Mr Adam withdrew the $38,000 on 14 March 2016 from one of his bank accounts with the Commonwealth Bank of Australia. That is an account into which Mr Adam had paid $180,000 of his compensation money on 1 March 2016.

101. It is to be observed that one significance of Mr Adam being able to point to some withdrawals from his bank account to support various payments that he alleged he made is to highlight the fact that there are other payments which Mr Adam has sought to prove that he made by relying upon evidence such as receipts, without there being corresponding evidence of the source of the funds. As, on the evidence before the Court, Mr Adam only had a finite source of funds, the Court must be careful of the consequences of simply adding together payments shown to have been made out of Mr Adam's bank accounts to other payments proved by receipts, where there is no evidence as to how those payments also came out of Mr Adam's bank accounts.

Cash payments to Mr Hasabo to acquire stock – Mr Adam [31(a)]; Mr Hasabo [70]

102. Mr Adam's evidence is that he paid $50,000 to Mr Hasabo in cash in three instalments of $20,000 (8 March 2016), $10,000 (30 March 2016) and $20,000 (31 March 2016). Each of these alleged payments was made after the time when Mr Adam asserts he agreed to enter into the joint venture with Mr Hasabo to conduct the Blacktown Shop.

103. Mr Adam supported this aspect of his case by relying upon bank statements in respect of his Commonwealth Bank and National Australia Bank accounts that showed withdrawals of the relevant amounts on the dates alleged. The relevant bank statements have markings such as asterisks and ticks next to the relevant entries, but no evidence was given to explain the timing of these notations being made on the documents.

104. Mr Hasabo's response was to deny outright that Mr Adam ever paid to him any of these three amounts.

Money transfers made by Mr Adam – Mr Adam [31(b)]; Mr Hasabo [71]

105. Mr Adam's case is that he made two money transfers to Mr Hasabo of USD 11,000 (1 July 2016) and USD 5,000 (4 August 2016), because Mr Hasabo said to him that he needed to buy more goods from Dubai for the Blacktown Shop.

106. Mr Adam supported his claim by relying upon the statement of account by Al-Khair, which shows that Mr Adam transferred USD 5,000 for the benefit of Mr Hasabo on 8 April 2016, and a further USD 11,000 on 1 July 2016. Clearly, it appears that Mr Adam has made a mistake in his affidavit, where he says that the USD 5,000 transaction happened on 4 August 2016. The transaction took place on 8 April 2016, as the record relied upon gives the dates in the style used in the United States.

107. Mr Hasabo accepted that he received these payments from Mr Adam but claimed that the monies came from shop sales. Mr Hasabo gave evidence that he used the money to purchase goods that were shipped to the Blacktown Shop, but that is not a matter that is in issue. Although the evidence proves that Mr Adam made the two transfers, it does not prove what the source of the money was, and, in particular, Mr Adam has not identified any withdrawals from his bank accounts that are referable to the payments.

108. The evidence does not address the question of why Mr Adam sometimes transferred money to Mr Hasabo by money transfer, and at other times paid him in cash. The first two money transfers took place when Mr Hasabo was apparently in Sydney. Nonetheless, Mr Hasabo accepted that he received the money.

Payments for shop fittings at the Blacktown Shop – Mr Adam [31(c)]; Mr Hasabo [72-77]

109. Mr Adam stated in his evidence that he paid $16,300 towards the cost of the shop fittings for the Blacktown Shop in cash, by way of instalments, in person to a shop fitter named Ibrahim Dafalla Habila (Mr Dafalla).

110. Mr Hasabo's response was that he paid the deposit of $5,000 for the shop fittings from cash in that amount given to him by Mr Adam out of the $65,000 Jamiah money. He then said that Mr Adam paid a further $4,000 from the sales receipts from the Merrylands Shop to Mr Dafalla, and that Mr Hasabo himself paid the remainder of $7,000 in cash to Mr Dafalla.

111. Mr Adam called evidence from Mr Dafalla, who swore an affidavit on 13 March 2017. Mr Dafalla was cross-examined by Mr Hasabo. As I will explain below, I formed the view that Mr Dafalla appeared to be an exceptionally reliable and credible witness.

112. Mr Dafalla's evidence, at par 8 of his affidavit, was that he received a deposit for the work of $5,000 by way of cash handed by Mr Adam to Mr Hasabo, who then gave it to Mr Dafalla. During the course of the work, Mr Adam paid cash and instalments of $11,300. Mr Adam also paid a further $400 for some extra work on the counter.

113. Mr Dafalla's evidence is plainly inconsistent with the evidence given by Mr Hasabo.

114. On the other hand, although Mr Adam said that he paid Mr Dafalla in cash by various instalments, Mr Adam did not give any evidence as to the source of those payments, and did not point to any withdrawals from his bank accounts.

Rent payments Blacktown Shop – Mr Adam [31(d)]; Mr Hasabo [78-80]

115. Mr Adam claimed that he paid $45,000 towards the rent for the Blacktown Shop. He only had specific evidence for some of the payments, and said that the $45,000 was an estimate "…because [I] have misplaced the other deposit slips."

116. Mr Adam referred to a withdrawal, from one of his Commonwealth Bank accounts, of $6,000 on 10 March 2016. The bank statement shows a withdrawal of that amount on that date and "(Rent)" written next to that entry. The circumstances in which the word Rent was written on the bank statement were not explained. Mr Adam said that this was a payment in advance of rent prior to the signing of the lease.

117. Mr Adam said that, at Mr Hasabo's request, Mr Adam regularly deposited the rental payments to Mr Hasabo's account which ended with numbers 8010. Mr Adam tendered three receipts for deposits into this account, being for $6,000 (3 June 2016), $1,950 (1 July 2016) and $5,400 (2 August 2016).

118. There is no evidence that the money paid into the account was paid out to the lessors of the Blacktown Shop premises.

119. Mr Hasabo's response was to say that he was overseas during this period, and he asked Mr Adam to deposit money from the sales of the Blacktown Shop into his bank account so that Mr Hasabo could pay the rent. Mr Hasabo claimed that Mr Adam was in possession of his business bank card and used the card to make the deposits. Mr Hasabo denied that Mr Adam made deposits that totalled $45,000.

120. Mr Hasabo tendered his Westpac bank statements for account number 58–8010 for the period 4 January 2016 to 30 December 2016. The bank statement records as credits the three deposits made by Mr Adam.

121. There are other credits that seem to have the same deposit information as the transactions relied upon by Mr Adam, but the evidence does not deal with those transactions.

122. It appears from the bank statements that the rent over this period was paid by way of debits containing the name "Matheson" in amounts of $6,284, or close thereto, on 3 June 2016, 1 July 2016, 2 August 2016, 2 September 2016, 4 October 2016, 31 October 2016, and 1 December 2016. The total of the rent payments over this period was about $43,988.

123. Although Mr Adam said that he made the three deposits that he could identify, he did not attempt to explain where that money had been withdrawn from in relation to his own bank accounts. I have reviewed the bank statements tendered by Mr Adam for his three bank accounts, and I cannot find withdrawals that match the payments relied upon by Mr Adam.

Payment of stock – Mr Adam [31(e)]; Mr Hasabo [81]

124. Mr Adam claimed that he paid $3,019 for stock for the Blacktown Shop, and tendered four invoices that were addressed to him, and have apparently been prepared in handwriting by a number of suppliers, in the total amount of $3,019.

125. Mr Hasabo's only response was to say that he had not seen these invoices before.

126. While the invoices may be sufficient to establish that Mr Adam paid this amount for stock, they do not prove from where he got the money to do so. Mr Adam has not attempted to prove that he withdrew the amount from his bank accounts, rather than using money from a business source, for example the takings from the shop.

127. The fact that Mr Adam was able to produce invoices for these purchases is significant for the Court's consideration of the next aspect of Mr Adam's claim.

Payments for stock – Mr Adam [32(a), (b) and (c)]; Mr Hasabo [82]

128. Mr Adam claimed that he paid money for goods and other stock for the Blacktown Shop as follows: $10,000 (9 June 2016), $2,000 (20 June 2016) and $8,000 (29 June 2016). Mr Adam supported this claim by reference to one of his Commonwealth Bank statements, which showed that he had withdrawn those sums on the dates stated.

129. Mr Adam did not support the claim by any invoices from suppliers, or even provide any explanation as to what he purchased and at what approximate cost. In relation to the uses to which he put the money which he withdrew, Mr Adam's evidence takes the form of bare assertions.

130. Mr Hasabo's response was simply to deny that Mr Adam had made the payments to suppliers, and state that he had no knowledge of the payments, and that the first time he heard of them was when he read Mr Adam's affidavit.

Payment for alarm system for the Blacktown Shop – Mr Adam [33(d)]; Mr Hasabo [83]

131. Mr Adam gave evidence that he paid $3,300 for an alarm system for the Blacktown Shop in April 2016. He tendered a tax invoice dated 9 February 2017 from OZZLINK Security Solutions addressed to him for a total of $3,300. Mr Adam said that he thought the reference to 2017 was an error, because he recalled paying the invoice in 2016.

132. Although Mr Adam tendered the invoice, he did not explain how he paid the invoice amount, or whether there is a record of the relevant amount being withdrawn from one of his bank accounts.

133. Mr Hasabo's response was that, when he returned from overseas, he paid a person called Salim, who installed the alarm system and CCTV, approximately $2,400 in two payments, being a cash deposit of $500 and the remainder of $1,900 after the job was completed. Mr Hasabo did not provide any documentary evidence to support this claim.

Payment for shop window – Mr Adam [32(e)]; Mr Hasabo [84]

134. Mr Adam claimed that he paid Mr Dafalla $1,380.92 for installing a shop window on 28 June 2016. That claim was supported by a reference to a withdrawal of that amount from one of Mr Adam's Commonwealth Bank accounts. The transaction details incorporated in the relevant bank statement states: "Cash Stop Financial Blacktown NSW".

135. Mr Hasabo's evidence was that there was never any window installed at the shop. Mr Hasabo said that he asked Mr Dafalla to install a glass display unit at the front of the shop in May 2016 before he left for overseas, and that Mr Hasabo paid Mr Dafalla (although he has lost the receipt).

136. Mr Hasabo referred to the transaction detail "Cash Stop Financial" and asserted that it was a reference to a short-term loan shop with high interest rates. Mr Hasabo said that he had not had dealings with that company.

137. Although Mr Dafalla was apparently involved in this transaction, he did not give any evidence about it in his affidavit.

Payment for Kennards Hire – Mr Adam [32(f)]; Mr Hasabo [85]

138. Mr Adam said that, on 7 April 2016, he withdrew $800 from his account to pay to Kennards Hire at Parramatta for storage of goods. He supported this claim by referring to a withdrawal for this amount from one of his Commonwealth Bank accounts.

139. Mr Hasabo agreed that he had asked Mr Adam to pay this money by giving it to Mr Hasabo's wife so that she could pay for the storage. Mr Hasabo claimed that the money would have been obtained from the shop sales of the Merrylands Shop.

140. Prima facie, the evidence demonstrates that the payment was made out of Mr Adam's own money in his bank account.

Payments for telephone and internet – Mr Adam [32(g),(h)]; Mr Hasabo [86]

141. Mr Adam claimed that he paid $300 for telephone and internet on 15 May 2016, and $400 for internet on 22 July 2016. He referred to withdrawals from one of his Commonwealth Bank accounts of those amounts on the stated dates.

142. Mr Hasabo responded by saying that the Merrylands Shop had internet and telephone services with a company called Exetel, and that he paid his bills for the service by direct debit. Mr Hasabo tendered one statement from Exetel for $91.76 dated 13 April 2016, addressed to Mr Hasabo. Mr Hasabo said that the Blacktown Shop did not have internet.

Text messages between Mr Adam and Mr Hasabo

143. Mr Adam relied upon 106 pages of transcripts of text messages between himself and Mr Hasabo that have been translated from the original Arabic into English. The translated pages cover a period throughout 2016, but have not been arranged in date order. The text messages primarily cover a period in April, and then a longer period after 29 July in which the dates of the text messages fall primarily in August and September. It seems that Mr Hasabo was out of Australia for the purpose of buying goods to be sold in the Blacktown Shop, and perhaps also the Merrylands Shop, during this period. It is not clear, from the text messages, when Mr Hasabo left and returned to Australia. However, Mr Hasabo gave evidence that he was overseas between 20 June and 6 September 2016. It seems that he was also overseas in April.

144. The meaning of most of the translated text messages is unclear and confusing. This may in part be a result of the brevity of the messages, and the difficulty of translating truncated messages into English. Many of the messages appear to be repeated, which may possibly be an artefact of the way the hard copies of the text messages were produced. There is some duplication in the pages. Not all of the pages show the date when the text messages were sent.

145. Mr Adam relied upon this evidence to support his claim that the relationship that he had with Mr Adam was more than one of shop proprietor and mere employee, but was one of joint venture or partnership. I am satisfied that a review of the text messages, overall, supports this submission. A substantial proportion of the text messages, in the first part of the period, involve the two men discussing the products that it would be advantageous for Mr Hasabo to acquire for the purpose of resale in Australia. The content and tone of the text messages is strongly consistent with the issue being discussed between equals. Mr Adam shows an interest in the purchases that is consistent with him having a stake in the business.

146. In the latter part of the period, a substantial proportion of the text messages involve the two men discussing pricing for the products for sale from the Blacktown Shop, and limits on the freedom to give discounts consistently with making a profit. By and large, the content and tone of these messages are also consistent with both men having a stake in the business.

147. One comment, apparently made by Mr Adam on 9 April 2016, is entirely consistent with there being a partnership arrangement between the two men. Mr Adam said, in the translation: "This cream has disappeared from our shop" (emphasis added).

148. There is some discussion about Mr Adam sending money to Mr Hasabo, or otherwise providing money for Mr Hasabo's purposes in Australia, but the sums involved are not substantial in total. The statements made in the text messages are generally obscure as to whether amounts were actually paid. On around 7 April 2016, Mr Hasabo referred to the need to pay a $815 bill for storage. There is a reference by Mr Adam on around 8 April 2016 to the need to send $5,000 the next day. On 21 June 2016, both men refer to a payment of $500. On 19 May and 26 June 2016, Mr Adam refers to making a payment (which may have been to Mr Hasabo's wife) of $400. An undated text message has Mr Adam saying that he would send $1,000 (at page 66 of 107). There are references to amounts of AUD 3,000, USD 1,000 and AUD 2,000 (at page 49 of 107) but it is not clear what amounts, if any, were paid. There are references to the payment of rent on around 2 September 2016, and on an unidentified date (at page 10 of 107). The significance of these entries in the text messages is not clear.

143. Mr Adam provided no analysis of the significance of the text messages, and did not explain the relationship between the statements made and his claims to have paid money to or for the benefit of Mr Hasabo or the partnership.

The index book

150. Mr Adam also gave evidence, in his affidavit sworn 31 July 2017, of an index book, in which he said Mr Hasabo, in his own handwriting, wrote some of the amounts that Mr Adam claims he is owed by Mr Hasabo. Mr Adam said that entries were made in the book from March 2016 onwards, and were made by Mr Hasabo after he agreed to a statement by Mr Adam: "we’d better make [a] record of my payments so that we don’t forget them" (at par 16).

151. The evidence annexed to Mr Adam's affidavit consists of copies of four pages of the index book. The first page appears to contain a single statement, of less than half a line, in Arabic. The second page contains a number of recognisable amounts of money in Australian or US dollars, but the descriptions are in Arabic. One part of the page (that includes "38,000 Deposit", plus other numbers and writing in Arabic) has been crossed out. The material crossed out appears to have been rewritten on the third page, with Arabic numerals (38,000, 6,300, 1,000, 1,000 and 20,000) and comments in Arabic.

152. The following appears to have been written on the fourth page:

Ibrahim Daf

1/4/016      5000

11/4/016    4000

18/4/00        600

25/˶ ˶           600

2/5/–           500

2/5/–           200

24/5/         2000

            12,900

153. There is a comment in what looks like Arabic beside the second entry for 2 May 2016.

154. Perversely, given that more than 100 pages of inconclusive text messages were translated into English for the purposes of Mr Adam's case, the Arabic comments written in the exercise book were not translated, and Mr Hasabo was not cross-examined about the pages.

155. No attempt was made in Mr Adam's case to relate the numbers in the index book to the separate amounts that are claimed in these proceedings by Mr Adam. Some of the numbers seem to compare with Mr Adam's claim, but the position is much less clear in relation to other numbers. There is no evidence of the period during which the entries were made in the index book. There is no explanation of why the index book does not apparently contain references to all of the amounts now claimed by Mr Adam.

156. The evidence is so obscure that it would not be safe for the Court to draw any inferences based upon it in favour of Mr Adam's case, save that the final page seems to refer to payments made to Mr Dafalla in respect of the shop fittings at the Blacktown Shop. This evidence is consistent to some extent with the evidence given by Mr Dafalla in par 8 of his affidavit, in that the first payment was $5,000, but otherwise the amounts deposed to by the two witnesses are not consistent.

157. Mr Hasabo said of the index book that the writing in it was his and contained his record of his expenditure at the Blacktown Shop.

Invoices tendered by Mr Hasabo

158. Mr Hasabo tendered a substantial amount of invoices in one annexure, relating to the goods that he purchased overseas for sale from the Blacktown Shop. It appears that a substantial quantity of goods was purchased, although not all of the invoices clearly disclose the cost, and it is not possible to calculate the total cost.

159. Mr Hasabo put into evidence in another annexure about 60 invoices for purchases of goods that he said he made in the Middle East in April, June and July 2016. It appears that nearly all of the suppliers were located in the United Arab Emirates. While the cost of the goods is stated on the invoices, it appears that the prices are in UAE currency, which is the dirham. While the total value of the purchases appears to be substantial, there was no evidence of the exchange rate between the Australian dollar and the dirham.

160. Mr Hasabo made no attempt to explain where he obtained the money to buy these goods, if it was not given to him by Mr Adam.

Written agreements between Mr Adam and Mr Hasabo

161. After the relationship between Mr Adam and Mr Hasabo broke down, the two men signed a number of agreements.

162. The first was signed on 22 November 2016, and was in the following terms:

Subject: Agreement between Two Partners of Adam Issa Offering His Share of A Mixed Business, located at Main St, Blacktown NSW 2148, and Mohamed Hamid Accepting That Offer.

Date: 22/11/2016

Today, 22nd of November, 2016, Mr. Adam Issa has agreed to offer his share of the mixed business valued the amount A$60,000 to Mr. Mohamed Hamid.

In response, Mr. Mohamed Hamid has accepted the offer of Mr. Issa's share with the amount of A$60,000 to be paid, so the agreement is effective on 22nd of November 2016.

Both parties have agreed that the payment should be done in the following manner of instalments starting:

Method of payment:

On 23rd of November 2016, A$15000; and

On 30th of November 2015 A$15000; and

On 15th December 2016 A$15000 and

On 29th of December 2016 A$15000

Furthermore, all responsibilities and accounts of the mixed business's revenue and liabilities, should be transferred to Mr. Mohamed by Adam Issa on 23rd of November 2016.

163. The document was apparently signed by Mr Hasabo and Mr Adam on 22 November 2016, under the respective descriptions "Share of Mixed Business Seller" and "Share of Mixed Business Buyer". The witness is named as Abdalla [sic] Adam.

164. Mr Adam gave evidence that this agreement was prepared by Abdallah Adam, who was a mutual friend of Mr Adam and Mr Hasabo, after a meeting suggested by Abdallah Adam between Mr Adam and Mr Hasabo to resolve their dispute. At par 37 of his 17 March 2017 affidavit, Mr Adam gave evidence that the discussion included the following:

…

I said: “I paid $38,00.00 [sic] for the bank guarantee; I paid 60K and 20K towards goods from Dubai; I paid $16,300.00 for the fitting; I paid $13,500.00 for the rentals of the Merrylands shop; I also lent him $30,000 and I also paid rentals towards Blacktown partnership business”.

Adam said: “this is true – I acknowledge all these payments. I don’t want this shop and provided that I get $100,000.00 I will get out of this shop/partnership”.

I said: “I don’t have $100,000.00 and beside the point, Adam is not entitled to this money as he never contributed to this business out of his own monies”.

…

165. Mr Adam said that Abdallah Adam said that $100,000 was excessive, given the contributions made by Mr Adam, and: “You must pay Adam [Mr Hasabo] $60,000.00 and if you don’t pay this money; you won’t get anything as everything is registered under the name of Adam”.

166. The agreement set out above was then prepared by Abdallah Adam and signed by Mr Adam and Mr Hasabo.

167. At par 38, Mr Adam explained why he signed the document in the following terms: “I felt pressured to sign this document as Adam [Mr Hasabo] made it clear that unless I signed and paid the money, I would lose the business and my rights in this business.”

168. A couple of days later, Mr Adam and Mr Hasabo went to a solicitor, Mr Musabbir Hasan, for the apparent purpose of having a more formal agreement prepared. That agreement was in the following terms:

DEED OF AGREEMENT

This Agreement is made on 25th of November 2016;

BETWEEN

Mohammed Hamed Elsair Adam of: 367, Cumberland Road Auburn in the (Party A)            State of New South Wales.

AND

Adam Hasabo of: 1/64 Dartbrook Road Auburn in the State of New South Wales

(Party B)

RECITALS

A.   Party A and B took a lease in partnership at Shop 2, 64-70 Main Street Blacktown NSW.

B.   Party A has agreed to pay to B an amount of $60,000 to be paid as follows:

1. $15,000 paid on 23 November 2016

2. $15,000 to be paid on 30 November 2016

3. $15,000 to be paid on 15 December 2016

4. $15,000 to be paid on 29 December 2016

C.   Party B agrees to hand over the business and lease to Party A in consideration to [sic] the amount paid.

D.   Party A agrees to undertake the business and lease.

E.   Party B will not make any claim in the business and the lease and waive all his right, title and interests in the business and the lease;

F.   Party A will deposit the money in Party B's account and provide the receipt every time he pays.

G.   This agreement is subject to the approval of the landlord to transfer the lease. If not approved by Lessor, Party B will refund the whole money.

169. The deed of agreement was apparently signed by both Mr Adam and Mr Hasabo in the presence of an unidentified witness.

170. In cross-examination, Mr Hasabo made an unsubstantiated claim that one of the two agreements was a forgery (T141.17-143.25). As I understand it, Mr Hasabo claimed that it was the 22 November 2016 document that was forged (T143.20). Mr Hasabo did not make this claim in his affidavits in response to Mr Adam’s affidavits, notwithstanding that Mr Hasabo’s affidavits were prepared by his solicitor.

171. Mr Adam gave evidence that he made the first payment of $15,000 in cash to Mr Hasabo. The making of that payment was admitted by the defendants.

172. The defendants, in par 23(13) of the defence, denied that Mr Adam, in addition, paid $2,000 in cash to the solicitor as his fee for advice concerning the partnership and the lease of the Blacktown Shop, as Mr Adam alleged in par 23(13) of the SOC.

Subsequent matters

173. The defendants accepted that the lessors of the premises at which the Blacktown Shop was operated did not give their consent to an assignment of the lease to Mr Adam. Consequently, the condition in cl G to the deed was not satisfied, and Mr Adam is entitled to a refund of the $15,000 that he paid as the first instalment of the purchase price.

174. There was a disagreement in the evidence between Mr Adam and Mr Hasabo as to whether Mr Adam operated the Blacktown Shop business for any period after the dates of the two agreements. Mr Adam claimed that Mr Hasabo demanded to be given the keys to the Blacktown Shop shortly after the date of the agreements, and that Mr Adam complied. On the other hand, Mr Hasabo asserted in his evidence that Mr Adam operated the shop from the end of November 2016 to around 10 January 2017. Mr Hasabo then sold the Blacktown Shop, with the new buyer taking possession from 28 January 2017.

175. There was no objective evidence to corroborate the claims made by either party. In any event, there are no records of the trading of the business in the period. The reason for Mr Hasabo asserting that Mr Adam had the benefit of operating the business for a period is Mr Hasabo’s claim that Mr Adam should bring to account the income that he earned from conducting the Blacktown Shop business for the period. The available evidence does not permit the Court with any confidence to determine the length of the period in which Mr Adam was able to conduct the business, if any. As there is no practical way of establishing whether any income was earned by Mr Adam from the Blacktown Shop, or what the income was, I propose to proceed on the basis that Mr Hasabo’s claim that Mr Adam earned income from operating the Blacktown Shop has not been proved to the requisite standard of proof, being on the balance of probabilities.

176. On 25 January 2017, Mr Adam’s present solicitor, Mr Mohammad Al-Shadidi, wrote a letter of demand to Mr Hasabo in which he required Mr Hasabo to pay to the solicitor on behalf of Mr Adam an amount of $240,500. The detail of the substantiation for Mr Adam’s claim was reasonably consistent with the claim made by Mr Adam in these proceedings.

177. Mr Musabbir Hasan, on behalf of Mr Hasabo, replied to Mr Al-Shadidi’s letter on 31 April 2017. He responded to each of the claims made on behalf of Mr Adam in a manner largely consistent with Mr Hasabo’s defence in these proceedings.

178. However, as counsel for Mr Adam pointed out in the cross-examination of Mr Hasabo at T138.34, Mr Hasan did not include any claim that the $38,000 paid by Mr Adam for the bond for the Blacktown Shop lease was the repayment of money given by Mr Hasabo to Mr Adam from Mr Hasabo’s Jamiah money. Instead, Mr Hasan said in par 4(d) of his letter: “Our client denies this and the rental bond was paid by our client.” That claim is contradicted by the evidence.

179. It should be noted that Mr Hasan, in his response, included a claim that Mr Adam had traded at the Blacktown Shop for “5 months from Ramadan”, and sold $120,000 worth of goods during this period. Taking Ramadan as ending in about early July 2016, this claim is inconsistent with Mr Hasabo’s assertion that Mr Adam was only involved in the operation of the Blacktown Shop in a peripheral way pending some agreement that the parties would enter into a joint venture or partnership at a later date. In any event, there was no evidence at all to substantiate this claim or allow the Court to determine the income received from the sale of stock.

180. Mr Adam’s evidence was that Mr Hasabo collected the cash takings, and that the payments for all credit card transactions were deposited by the card operators into Mr Hasabo’s bank account. Mr Adam gave evidence that Mr Hasabo employed someone else as a shop assistant at the Blacktown Shop. However, there was no specific evidence about how Mr Hasabo could have received the cash takings at times when he was not in Australia. Westpac bank statements in the name of Mr Hasabo, trading as Lamar Trading, show a significant number of deposits described as “Merchant Settlement”.

181. The settlement sheet, signed 1 December 2017, for the sale of the Blacktown Shop business by Mr Hasabo was in evidence as annexure D to the affidavit of Mr Adam sworn on 29 January 2019. It was provided by Mr Hasan to Mr Al-Shadidi. It shows a price of $48,000 less a deposit of $24,900. Mr Hasabo appears to have retained the deposit. Of the balance of $23,100, after settlement adjustments, the final payment was $17,189.90. On 31 January 2018, Mr Hasabo paid the $17,189.90 into Court, where it remains. As noted in par 52 above, in their defence the defendants only admitted that they had received $25,200 from the sale of the Blacktown Shop to the third defendant. However, I would infer from the settlement sheet that the deposit of $24,900 was paid to Mr Hasabo, and, in the absence of specific, persuasive evidence from Mr Hasabo, I would also infer that the balance of the price was paid by the third defendant at settlement, or otherwise he would not have been given possession of the Blacktown Shop.

182. The amount of $39,845.88, being the $38,000 amount paid to Westpac to secure the bank guarantee that it issued to secure the bond for the Blacktown Shop lease, plus interest, was paid into an account of Mr Hasabo on 28 March 2018. That amount was apparently garnisheed by the Commissioner of Taxation by a notice under s 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth).

183. The evidence establishes that the Commissioner of Taxation has agreed that, if this Court makes a declaration to the effect that the whole of the amount held by the Commissioner was held by Mr Hasabo on trust for Mr Adam, or was otherwise held for his benefit, then the Commissioner will disgorge the money to Mr Adam.

Credibility of the witnesses

184. The Court's judgments about the relative credibility of the witnesses will be important in this case, because of the number of payments that were alleged to have been made in cash, and the relative dearth of corroborating objective evidence.

Mr Adam

185. I am generally willing to accept that Mr Adam was an honest witness, who gave the best evidence that his recollection would permit.

186. Mr Adam was not well-served by the fact that he had to give his evidence and was cross-examined in Arabic, and was not professionally cross-examined. The process of translation often diminishes the capacity of the Court to make a confident judgment about the credibility of a witness. The need for translation compromises the immediacy of the exercise. Further, the Court can only understand what is said by the interpreters. The Court, therefore, necessarily loses some of its capacity to understand nuances in the questions and the witness' responses.

187. The exercise of judging Mr Adam's credibility was made harder in the present case because Mr Hasabo, being a layperson, did not focus on the detail of Mr Adam's case, or the probabilities that events occurred in the manner alleged by Mr Adam. Rather, Mr Hasabo tended to put his own version of events to Mr Adam, in a simple but forceful way, and the result was that there were verbal exchanges between the two men in which each simply adhered to his version of events.

188. It would be wrong in these circumstances for the Court not to give Mr Adam the credit to which he is due, but, while I am generally inclined to accept that Mr Adam was telling the truth, the circumstances were not such that I would readily accept his word alone, in the absence of corroborating evidence, or a conclusion based upon the other objective evidence, that the facts asserted by Mr Adam were more likely than not to be true.

189. There are a number of issues in dispute that can only be resolved by the Court accepting the evidence of one or other of the parties. There is no relevant objective evidence to assist in resolving these disputes. I have generally preferred the evidence of Mr Adam concerning these issues. First, I accept Mr Adam’s evidence that he did not manage Mr Hasabo’s Merrylands Shop for any period. Secondly, I accept Mr Adam’s evidence that he did not receive any return for working at the Blacktown Shop for a number of months from May 2016. Thirdly, I accept Mr Adam’s evidence that he made an agreement with Mr Hasabo that they would establish the Blacktown Shop as a joint venture or partnership between them, and that both would contribute funds for the establishment of the business and the acquisition of stock for resale, and the division of profits equally between them. The last finding is borne out, in particular, by the evidence of Mr Adam’s contribution of the $38,000 for the bond for the lease, and the later written agreements that confirmed that the parties were in partnership. It is also consistent with the overall tenor of the translated text messages that have been considered above, which strongly suggest that Mr Adam and Mr Hasabo were in a business relationship on equal terms. Finally, I accept Mr Adam’s evidence that, except for a few months, he did not have access to such records as were produced for the trading of the Blacktown Shop, and, after the breakdown in the relationship between the parties, he ceased to have any control of those records. In fact, it seems highly probable that trading was substantially in cash, that only rudimentary records were made, and that conventional financial statements have not been prepared.

190. One aspect of Mr Adam's evidence that caused me concern was that he did not keep a comprehensive record of all of the cash payments that he said he made to, or on behalf of, Mr Hasabo. That had the result that Mr Adam had to give evidence of cash payments from recollection. That necessarily involved reconstruction. It appears that Mr Adam has, to some extent, reviewed the records that he has, and done his best to deduce what payments were made for the purposes of Mr Hasabo or the joint venture. Further, to some extent, Mr Adam has had to admit that he cannot recall some individual instances of global payments that he claims to have made. In reality, Mr Adam may be saying that he knows that he expended a large sum of money, and, as he believes it was all paid to Mr Hasabo, or for the benefit of what he understood was the joint venture, the money must have been applied for those purposes, even though Mr Adam cannot now recall the circumstances in which all of the payments were made.

191. The evidence establishes that Mr Adam had a Commonwealth Bank NetBank account that he appears to have used as a day-to-day operating account, and into which his workers compensation payments were made, until he received his compensation payments. The transactions recorded in the statements for this account are generally unremarkable. The first compensation payment of $170,000 was deposited into this account on 15 February 2016, and the Medicare payment of $25,000 was deposited on 25 February 2016. Mr Adam withdrew $180,000 on 1 March 2016. Otherwise, the account was operated with relatively small balances.

$16,700 paid to Mr Dafalla

256. The next issue that may conveniently be considered is the payment by Mr Adam to Mr Dafalla of $16,700, in three payments of $5,000, $11,300 and $400. Mr Dafalla, whose evidence I unhesitatingly accept, said that these payments were made to him by Mr Adam. Mr Hasabo's only response was to say that these payments came out of the Jamiah money or the other sources asserted by Mr Hasabo considered in par 110 above. As I have rejected that claim, the amount claimed by Mr Adam should be added to the amount of the judgment that should be entered in favour of Mr Adam against Mr Hasabo, although as Mr Adam’s evidence was that he had paid Mr Dafalla $16,300, the amount of the judgment should be limited to that sum.

USD 21,000 transfers to Mr Hasabo

257. Mr Adam was able to tender evidence that he made three transfers of United States dollars to Mr Hasabo, using the services of a money transfer business, of USD 5,000, a further USD 5,000 and USD 11,000. The first of these payments was what has been described as the Third Loan Agreement. Mr Hasabo admitted receiving each of the amounts, possibly because of the existence of the documentary evidence that they had been paid to him.

258. Mr Hasabo said that the first payment was made out of the Jamiah money and that the second two payments were made out of the takings from the Blacktown Shop. As the second transfer of USD 5,000 in fact happened on 8 April 2016, rather than 4 August 2016, it was made before the parties opened the Blacktown Shop. It therefore could not have been paid out of the takings of the shop.

259. As I have rejected Mr Hasabo's explanations of how Mr Adam funded the transfers, and as it is clear that Mr Adam in fact made the transfers, the amount of USD 21,000 must be added to the judgment in favour of Mr Adam.

$14,070 in rent payments for Merrylands Shop

260. Mr Hasabo accepted that Mr Adam made rent payments of $3,060, $3,000, $3,010 and $5,000 for the Merrylands Shop. Mr Adam was in possession of receipts, the first three of which showed that these payments had been made in cash. Mr Hasabo’s only response was to assert that the money had been paid out of the takings from the Merrylands and Blacktown Shops. That had been necessary, according to Mr Hasabo, because Mr Hasabo was overseas.

261. Mr Hasabo was only overseas over the relevant period, on the evidence that is available, for most of April 2016 and between 20 June and 6 September 2016. Only the first rent payment and the third rent payment were paid during those periods (5 April 2016 and 20 June 2016 – see par 91 above). Also, I have not accepted Mr Hasabo’s claim that Mr Adam operated the Merrylands Shop and had access to its cash takings. In fact, Mr Hasabo had no positive means of knowing where Mr Adam got the cash to make these rent payments.

262. As I have generally accepted Mr Adam’s credibility, and am prepared to act upon his evidence where there is sufficient substantiation to satisfy me of the reliability of his evidence, I accept that Mr Adam has made out his claim for these amounts, and he is entitled to judgment against Mr Hasabo for $14,070.

$45,000 in rent payments for Blacktown Shop

263. Mr Adam claimed that he paid $45,000 towards the rent for the Blacktown Shop. Mr Adam identified a withdrawal from one of his Commonwealth Bank accounts of $6,000 on 10 March 2016. He was only able to tender receipts for deposits into Mr Hasabo’s bank account for three amounts, being $6,000, $1,950 and $5,400. Mr Adam identified the deposit of those three amounts in Mr Hasabo’s bank statement. Mr Adam gave evidence that he could not particularise the balance of the $45,000, because he had misplaced the other deposit slips. There was no attempt to identify the amounts paid by reference to Mr Hasabo’s bank statement.

264. Mr Hasabo did not deny that Mr Adam made payments of rent at Mr Hasabo’s request for the Blacktown Shop lease. He said that he asked Mr Adam to deposit money from the sales of the Blacktown Shop into the account while Mr Hasabo was overseas. The evidence does not support the assertion that Mr Hasabo was overseas when the $6,000 deposit was made on 3 June 2016. Mr Hasabo had no means of knowing where Mr Adam got the money to make these payments.

265. I am prepared to accept that Mr Adam made the identified payments from his own funds, but the balance of his claim is not sufficiently supported by the evidence, which has been put before the Court in too generalised a manner.

266. Consequently, on this aspect of Mr Adam’s claim he should be given judgment for $19,350.

$50,000 in payments to Mr Hasabo for acquisition of stock

267. Mr Adam claims that he made cash payments to Mr Hasabo for the purpose of the purchase of stock for the Blacktown Shop of $20,000 on 8 March 2016, $10,000 on 30 March 2016 and $20,000 on 31 March 2016. Entries in Mr Adam’s bank statements on those dates show withdrawals from a branch of the bank of those amounts. There is no independent evidence of those payments being made to Mr Hasabo. However, the timing of the withdrawals was coincident with the making of the agreement between Mr Adam and Mr Hasabo for the establishment of the Blacktown Shop. There is no suggestion in the evidence that Mr Adam made those withdrawals for some entirely different purpose. There was a positive need for stock to be acquired for sale from the Blacktown Shop. The evidence clearly establishes that Mr Hasabo spent considerable time in the United Arab Emirates, and other places, and purchased a substantial amount of stock. The evidence also establishes that Mr Hasabo was overseas acquiring stock in April 2016. Much of the text communications between the parties while Mr Hasabo was overseas generally dealt with the acquisition of the stock. As noted above, Mr Hasabo tendered a substantial amount of invoices proving the acquisition of stock and the prices paid. The amount spent seems to be relatively substantial, but in the absence of evidence as to relevant exchange rates, it has not been possible for the Court to determine the amount that was spent in Australian dollars. Nonetheless, it seems reasonable for the Court to conclude that the amount spent was relatively significant. Mr Hasabo must have incurred travel and living expenses as well, but there is no evidence of these expenses. Importantly, Mr Hasabo gave no evidence as to how he was able to fund his travel expenses and the cost of purchasing stock from any source other than money provided by Mr Adam. There is no reason to believe that the trading of Mr Hasabo’s Merrylands Shop yielded sufficient funds to enable Mr Hasabo to pay for the establishment and stocking of the Blacktown Shop. In these circumstances, on the balance of probabilities, I find that Mr Adam paid to Mr Hasabo the claimed amount of $50,000, and is entitled to judgment for that amount against him.

$3,019 for stock purchases

268. Mr Adam relied upon four handwritten tax invoices with dates in July and August 2016, addressed to him, which, on their face, record the sale of products of the type that were resold at the Blacktown Shop. The total amount of the invoices is not entirely clear, but they appear to support payments of at least the $3,019 claimed by Mr Adam. Mr Adam said that he paid the invoices himself from his own money. Mr Hasabo did not make any positive response to this claim, and was only able to say that he had not seen them before. I am prepared to accept that the invoices addressed to Mr Adam establishes that the goods were purchased, and I will accept Mr Adam’s evidence that he paid the price for the goods out of his own money. The amount of $3,019 should therefore be added to the amount of the judgment.

$20,000 for stock purchases

269. Mr Adam pointed to evidence that he had withdrawn from his Commonwealth Bank account $10,000 on 9 June 2016, $2,000 on 20 June 2016 and $8,000 on 29 June 2016. He said that he had used the money to pay for stock for the Blacktown Shop. Unlike the above claim for $3,019, Mr Adam was not able to support this claim with the tender of tax invoices evidencing the goods acquired and the price paid.

270. I have, above, accepted Mr Adam’s claim that he made payments totalling $50,000, in three instalments, to Mr Hasabo in March 2016 for the purpose of acquiring stock to establish the Blacktown Shop. Mr Adam’s bank statements prove the withdrawals, and the issue was whether Mr Adam paid those amounts to Mr Hasabo in the manner and for the purpose alleged. That was an evidentiary issue that could properly be determined by the Court making a decision as to which party’s evidence should be accepted, in the context of the events that were occurring at the time.

271. I consider Mr Adam’s claim for the $20,000 to raise different considerations. In essence, Mr Adam has claimed that he spent an amount of $20,000 for unidentified stock on unidentified occasions on which he paid unidentified amounts. There is no independent evidence that these transactions occurred and, if they did, what they involved. Mr Hasabo was in no position to answer these claims, because they depended entirely on the fact that Mr Adam could show that he withdrew round sums from his bank account, and then stated in a global way that he spent the money on stock.

272. While I am generally inclined to accept Mr Adam’s evidence, I do not think that this claim has been proved to the requisite standard of proof. Unfortunately, Mr Adam did not acquire any evidence that would independently support this claim. It is really no more than a broad assertion based upon Mr Adam’s understanding that he withdrew certain amounts from his bank account, and his recollection that he made further payments for stock. At this time, Mr Adam was operating the Blacktown Shop in the absence of Mr Hasabo, who was overseas. The business must have been enjoying some level of cash takings that would have been available for paying for some stock.

273. In the circumstances, and without rejecting Mr Adam’s evidence as being untrue, I think it is not sufficient to justify a positive finding that Mr Adam made the payments claimed from his own money, and, accordingly, I do not allow this claim.

$12,000 for First Loan Agreement

274. This claim by Mr Adam arises in respect of a loan that he claims he made to Mr Hasabo, at a time before Mr Adam received his compensation payments in February 2016. As noted above, Mr Adam made no attempt to prove how he came to have the cash money that enabled him to make these loans. He did not prove the source of the money, or put in evidence bank statements that he could point to, to show that he made withdrawals to fund these loans. All that the Court knows is that Mr Adam did have about $60,000 in a bank account at the beginning of March 2016 that did not come from the compensation money.

275. In some cases, for example in respect of Mr Adam’s claim that he made three payments to Mr Hasabo in the total of $50,000 for the purpose of acquiring stock for the Blacktown Shop, I have been prepared to find, on the balance of probabilities, that Mr Adam made the payments for the stated purpose, based upon the evidence that Mr Adam had and withdrew the amounts from his bank account, Mr Adam’s testimony, and the evidence of the surrounding circumstances. However, the Court also felt able to accept Mr Adam’s case in relation to those payments in part because it was clear that Mr Adam had the money to make the payments that he claimed to have made.

276. The position is, in my view, more difficult and uncertain for the period before Mr Adam received his compensation payments. The Court should hesitate to find that Mr Adam made loans to Mr Hasabo solely on the basis of Mr Adam’s own evidence to that effect. Where I have found above that Mr Adam did in fact make a payment to Mr Hasabo that he claimed to have made, I have looked to the existence of some independent and objective fact that, together with the context, justified a finding that Mr Adam had the money and paid it to Mr Hasabo in the circumstances claimed. It was an important forensic necessity for Mr Adam to address the issue of why the Court should accept that he had the money that he claimed to have in order to pay it to Mr Hasabo.

277. In relation to the claim in respect of the First Loan Agreement, Mr Adam pleaded that he paid to Mr Hasabo USD 4,000 and AUD 5,000 as part of an agreement that Mr Hasabo could either repay those amounts to Mr Adam, or he could simply repay AUD 12,000. Although there is no independent evidence that Mr Adam had those amounts, and no explanation at all as to where he got the money from, this claim has a special feature in that Mr Hasabo responded by admitting that there was a transaction, but claiming that its terms were that Mr Adam paid USD 4,000 to Mr Hasabo in return for around AUD 6,000 paid by Mr Hasabo to Mr Adam.

278. Thus, in the case of this claim, Mr Hasabo has accepted that Mr Adam had at least USD 4,000. That being the case, in my view it will be proper for the Court to determine this claim on the basis of which of the parties’ evidence it prefers. For the reasons that have been given above, in the absence of any contrary objective indication, I have preferred the evidence of Mr Adam to that given by Mr Hasabo. Accordingly, I will accept this claim by Mr Adam for judgment for repayment of the USD 4,000.

$10,500 for Second Loan Agreement

279. Mr Adam has claimed that, in about February 2016, he loaned to Mr Hasabo amounts of cash of $7,000 and $3,500. Mr Adam gave no evidence of the terms of the loan or any detail of the circumstances in which the payments were made. Mr Hasabo simply denied that he had ever borrowed these amounts from Mr Adam.

280. There is no evidence that Mr Adam had these amounts of cash to lend to Mr Hasabo, or what the source of such cash may have been. This raises a difficult forensic issue, because, as I have noted above, Mr Hasabo admitted in respect of the claim based upon the First Loan Agreement that Mr Adam had at least USD 4,000. When dealing above with the issue of whether Mr Adam made transfers of USD 21,000 to Mr Hasabo, I noted that the first transfer of USD 5,000 was the subject of the claimed Third Loan Agreement. The evidence showed that this payment had been made on 7 February 2016, which was before Mr Adam received the first instalment of his compensation money. As this amount was not shown to have come out of one of Mr Adam’s bank accounts, the conclusion may be available that Mr Adam had the AUD 7,500 in cash that he said was necessary to fund the transfer of USD 5,000.

281. The difficult forensic issue this raises is whether the Court ought to find that Mr Adam had the $10,500 to make the claimed payments to Mr Hasabo under the Second Loan Agreement, simply on the basis that the evidence shows, in an inexplicable way, that Mr Adam had cash available to make other payments to Mr Hasabo that I have accepted were made, or whether the Court should hold that the evidence must be sufficient in each case to independently establish that Mr Adam had the necessary cash, before the Court will find that the evidence is adequate to the requisite standard of proof to prove that each particular payment claimed by Mr Adam was made.

282. I have concluded that the preferable course for the Court to take is the latter one, and that it was incumbent upon Mr Adam to provide proof, satisfactory to the Court, that he had the cash available to make the payments to Mr Hasabo. Evidence that establishes that Mr Adam had some amounts of cash, when he has not proved the source of that money, should not be regarded as sufficient to establish that Mr Adam had all of the cash necessary to make all of the payments that he said he made to Mr Hasabo.

283. Accordingly, I will reject Mr Adam’s claim in respect of the Second Loan Agreement, on the basis that I am not satisfied that Mr Adam has provided an adequate evidentiary foundation for that claim.

Other claims

284. I will deal with the other claimed payments now, in a short-form manner. First, I accept Mr Adam’s claim for $800 in respect of the payment to Kennards Hire. Mr Hasabo effectively conceded this claim, as he agreed that he had asked Mr Adam to make the payment, and said only that the amount was paid from the Merrylands Shop takings, which I reject.

285. Secondly, I reject Mr Adam’s claim for $3,300 in respect of the alarm system at the Blacktown Shop. There was a contest as to who paid for the alarm system, and Mr Adam was forced to rely upon a tax invoice from a possible supplier dated 9 February 2017. Mr Adam provided no independent proof of payment. It may well be, as Mr Adam claimed, that the tax invoice was misdated. However, I am not satisfied that the evidence was sufficient for the Court to accept this claim.

286. Thirdly, I reject Mr Adam’s claim for $1,380.92 as a payment made to Mr Dafalla to install a shop window at the Blacktown Shop. Mr Dafalla was not asked to corroborate the receipt of this money. Mr Adam’s bank statement described the relevant withdrawal as “Cash Stop Financial Blacktown NSW”. For the reasons advanced by Mr Hasabo in his evidence, that does not appear to be a reference to Mr Dafalla. On balance, the evidence is not sufficient for the Court to accept this claim.

287. Fourthly, I do not accept Mr Adam’s claim that he paid $300 for telephone and internet on 15 May 2016, and $400 for internet on 22 July 2016, in respect of the Blacktown Shop. The evidence was not sufficient to resolve the issue of whether the Blacktown Shop had internet, or whether Mr Adam or Mr Hasabo made relevant payments.

288. Finally, Mr Adam claims that he paid a solicitor $2,000 in cash for advice given for the benefit of himself and Mr Hasabo. That claim is denied by Mr Hasabo. Mr Adam has only attempted to prove this claim with his unsupported oral evidence. Mr Adam did not apparently subpoena the solicitor, who may be expected to have kept proper records of payments that he received for his professional fees. Mr Adam ought to have been able to prove this claim with reliable evidence, and if Mr Adam had put before the Court the relevant records of the solicitor, the Court may have had a proper basis for assessing the validity of Mr Adam’s claim. In the circumstances, I am not satisfied that Mr Adam has done what is necessary to establish this claim on the balance of probabilities.

289. It will now be appropriate to summarise the results of the findings made above where the result has been that Mr Adam is entitled to relief against Mr Hasabo:

1. Mr Adam is entitled to a declaration that when the $39,845.88 security for the bank guarantee was paid into Mr Hasabo’s account by Westpac, Mr Hasabo held that money on trust for Mr Adam.

2. Mr Adam is entitled to a declaration that he is the beneficial owner of the $17,189.90 that Mr Hasabo paid into Court from the proceeds of sale of the Blacktown Shop, and to a direction that that amount be paid out to Mr Adam, referable to the $15,000 that he paid to Mr Hasabo under the November 2016 deed plus a small amount to compensate him for having been deprived of his money since the date the lessors declined to consent to the transfer of the lease to him.

3. Mr Adam is entitled to judgment against Mr Hasabo for the following amounts in Australian dollars: $16,300 paid by Mr Adam to Mr Dafalla; $14,070 for rent paid for the Merrylands Shop; $19,350 for rent paid for the Blacktown Shop; $50,000 paid to Mr Hasabo to purchase stock for the Blacktown Shop; $3,019 for stock paid for by Mr Adam for the Blacktown Shop; and the $800 paid to Kennards Hire – totalling $103,539.

4. Mr Adam is entitled to judgment against Mr Hasabo for the following amounts in United States dollars: USD 21,000 for the total amounts transferred through the money transfer business; and USD 4,000 being the amount the Court has accepted in respect of the alleged First Loan Agreement – totalling USD 25,000.

5. The only judgment that Mr Adam has established should be made against the second defendant, Lamar, as well as Mr Hasabo, is for the $14,070 paid in respect of the rent for the Merrylands Shop.

1. The Court will give Mr Adam an opportunity to prove the amount of pre-judgment interest that should be included in the judgment.

2. Mr Adam is also entitled to an order that the first and second defendants pay his costs of the proceedings. If Mr Adam wishes, I will permit him to make submissions concerning the basis upon which the costs order should be made.

Orders

290. For the reasons set out above, the Court makes the following orders in these proceedings:

1. Declaration that, at the time the Commissioner of Taxation garnisheed the amount of $39,845.88 standing in the name of the first defendant in a bank account held by him, that amount was held by the first defendant on trust for the plaintiff.

2. Declaration that the plaintiff is beneficially entitled to the amount of $17,189.90 that has been paid into Court in these proceedings.

3. Direction that the Registry pay the amount of $17,189.90 and any additional interest on that sum to the plaintiff.

4. Judgment for the plaintiff against the first defendant for the amount of AUD 89,469.

5. Judgment for the plaintiff against the first defendant for the amount of USD $25,000.

6. Judgment for the plaintiff against the first and second defendants jointly for the amount of AUD 14,070.

7. Direct the plaintiff to inform the associate to Robb J, within 14 days, of the amount of any pre-judgment interest claimed by the plaintiff, together with evidence justifying the calculation of interest.

8. Order the first and second defendants to pay the plaintiff’s costs of the proceedings.

9. Grant leave to the plaintiff, within 14 days, to provide to the associate to Robb J any submissions he wishes to make as to the basis upon which the first and second defendants should be ordered to pay the plaintiff’s costs.

10. Direct the plaintiff to provide the information referred to in orders 7 and 9 to the first and second defendants at the same time as it is delivered to the associate to Robb J, and provide the associate with proof of service.

11. Direct the first and second defendants to provide any response to the information served on them within a further 14 days both to the plaintiff and the associate to Robb J.

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Decision last updated: 09 September 2019