Bachour Enterprises Pty Ltd v Munzer

[2024] NSWSC 1601

Supreme Court

New South Wales

Medium Neutral Citation:

Bachour Enterprises Pty Ltd v Munzer [2024] NSWSC 1601

Hearing dates:

29 – 31 October 2024; last submissions 9 December 2024

Date of orders:

13 December 2024

Decision date:

13 December 2024

Jurisdiction:

Equity - Expedition List

Before:

Rees J

Decision:

Orders made for specific performance, an account and costs.

Catchwords:

CONTRACTS – sale of business – businessman in need of cash sells one of his businesses to his bookkeeper – bookkeeper pays for business and begins operations – parties sign Heads of Agreement while more detailed transaction documents are prepared – businessman changes his mind, fires the bookkeeper and re-takes possession of the business – whether businessman bound by his agreement – absolutely.

CONTRACTUAL CONSTRUCTION — ascertaining parties to contract — principles at [125]-[127] — vendor described by business name and ABN – both registered to the businessman – signature block assumed vendor was a corporation – drafting error corrected through contractual construction, at [135].

UNCONSCIONABLE CONDUCT – special disadvantage – principles at [154]-[162] – English not first language of businessman – bookkeeper translated some words into Arabic – businessman was the more experienced of the two.

MISREPRESENTATIONS – principles at [139]-[140]

– not persuaded that bookkeeper represented that the Heads of Agreement was a licence – not satisfied bookkeeper gave the businessman only one page and represented it comprised the entire agreement, where page clearly part of a larger document on its face.

NON EST FACTUM – principles at [147], [150] – not established.

Legislation Cited:

Australian Consumer Law, s 18

Uniform Civil Procedure Rules 2005 (NSW), Part 20 rule 4

Cases Cited:

A Roberts & Co Ltd v Leicestershire County Council [1961] Ch 555

Australia and New Zealand Banking Group Ltd v Couanis [2020] WASC 125

Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2002] FCAFC 4; (2002) 117 FCR 301

Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 223 CLR 660

Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622

Blackmore Design Group Pty Ltd v Mudge (2006) 4 DCLR(NSW) 30 at 36; [2006] NSWDC 160

Blomley v Ryan (1956) 99 CLR

Burt v ANZ Banking Group Ltd (1994) ATPR 46-123

Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592

Commercial Bank of Australia Ltd v Amadio (1983) CLR 447

Concrete Construction (NSW) Pty Ltd v Nelson (1990) 169 CLR 594

Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460

Dinh v Commonwealth Bank of Australia [2021] WASCA 127

Duxbury v Pierce [2009] FCA 367

Easyfind (NSW) Pty Ltd v Paterson (1987) 11 NSWLR 98

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471

Evans Marshall & Co v Bertola SA [1973] 1 WLR 349

Fabre v Arenales (1992) MVR 303; (1992) 27 NSWLR 437

Ford by his tutor Watkinson v Perpetual Trustees Victoria (CA) (2009) 75 NSWLR 42

Ghazal v Government Insurance of New South Wales (1992) 29 NSWLR 336

Google Inc v ACCC (2013) 249 CLR 435

Hurley v McDonald’s Australia Ltd [1999] FCA 1728

Ireland v WG Riverview Pty Ltd [2019] NSWCA 307; (2019) 101 NSWLR 658

Johnston v Arnaboldi [1990] 2 Qd R 138

Li v So [2019] VSC 515

Louth v Diprose (1992) 175 CLR 621

Lucas Stuart Pty Ltd v Hemmes Hermitage Pty Ltd (2012) 28 BCL 226; [2010] NSWCA 283

Luong v Du [2013] VSC 723

MacMilllan v Mumby [2006] NSWCA 74

Masters v Cameron (1954) 91 CLR 353

May v Platt [1900] 1 Ch 616

McCulloch v Fern and Anor [2001] NSWSC 406

Mills v Walsh [2022] NSWCA 255

Nitopi v Nitopi [2023] NSWCA 162

Paolucci v Makedyn Pty Ltd (2021) 20 BPR 41

Payne v Parker [1976] 1 NSWLR 191

Petelin v Cullen [1975] HCA 24; (1975) 132 CLR 355

Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154

QBT Pty Ltd v Wilson [2024] NSWCA 114

Riverlate Properties Ltd v Paul [1975] Ch 133

Rozenbilt v Vainer [2019] VSC 316

Ryan v UPG 322 Pty Ltd [2023] NSWSC 1293

Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8 at [80]-[83]

Southdown Publications Pty Ltd v ACP Magazines Pty Ltd (2003) 60 IPR 367; [2003] NSWCA 347

Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 399 ALR 300

Ta Lee Investment Pty Limited v Antonios (2019) 19 BPR 39153; [2019] NSWCA 24

Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422

Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; (2004) 219 CLR 165

TullettPrebon (Australia) Pty Ltd v Purcell (2008) 175 IR 424; [2008] NSWSC 852

Waterways Authority of New South Wales v Coal & Allied (Operations) Pty Ltd [2007] NSWCA 276

Watson v Foxman (1995) 49 NSWLR 315

Wilton v Farnworth (1948) 76 CLR 646

Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661

Texts Cited:

The Law Quarterly Review R E Megarry (1960) 76(302)

Category:

Principal judgment

Parties:

Bachour Enterprises Pty Ltd (Plaintiff)
Simon Munzer (First Defendant)
Paradise CC Corp Pty Ltd (Second Defendant)

Representation:

Counsel:
A Byrne (Plaintiff)
DC Eardley (Defendants)

Solicitors:
Cordoba Legal (Plaintiff)
Orison Law Group (Defendants)

File Number(s):

2022/355581

JUDGMENT

1. HER HONOUR: Two years ago, the plaintiff paid $100,000 for a ‘charcoal chicken’ business in Mt Druitt, plus an amount for stock, and began operating the business. The landlord was asked to assign the lease to the plaintiff. The business’ suppliers were notified of a change of ownership. The vendor and purchaser proceeded to sign a Heads of Agreement. But the vendor changed his mind, regained entry to the shop and excluded the plaintiff from the premises. The vendor has continued to run the business in the two years since.

2. The plaintiff, Bachour Enterprises Pty Ltd, now seeks specific performance of the agreement, together with an assignment of the lease of the premises. Initially, the proceedings were defended on the basis that the plaintiff’s director, Fouad (Frank) Bachour, only “had discussions” with the vendor about granting a licence and sub-lease to shop manager, Maha Ghrayyeb, to operate the shop for five years. The $100,000 was said to be a licence fee, paid by Mr Bachour on behalf of Ms Ghrayyeb as a loan to her. By closing submissions, however, this ‘case theory’ was abandoned. The remaining issues are:

1. Was first defendant, Simon Munzer, the vendor or was the Heads of Agreement with his company, the second defendant, Paradise CC Corp Pty Ltd?

2. Is Mr Munzer absolved from compliance with any obligations under the Heads of Agreement by reason of misleading and deceptive conduct, unconscionable conduct and undue influence said to have been perpetrated by Mr Bachour, or the defences of non est factum or mistake?

3. What remedies, if any, should be granted to the plaintiff, including orders for specific performance, an account of profits, damages or, alternatively, restitution of the purchase price and payment for stock?

3. For the reasons which follow, the plaintiff is entitled to the relief sought. Mr Munzer sold the business to his long-time friend for $100,000, as he was in need of funds. But Mr Munzer changed his mind and, quite audaciously, re-took possession of the shop. The only person who was exploited in this matter was Mr Bachour.

Witnesses

4. The plaintiff relied on the evidence of Mr Bachour, Ms Ghrayyeb and former solicitor Christian Adams.

5. The defendants relied on the evidence of Mr Munzer, accountant Ziad Azzi and IT consultant Naji Ghebar.

6. Witnesses (other than Mr Adams) were bi-lingual, speaking both Arabic and English. Witnesses other than Mr Azzi were cross-examined.

7. Mr Bachour did not call his niece, Cynthia Bachour-Choucair, who was the solicitor initially instructed to prepare the transaction documents and also Mr Adams’ “boss”. Mr Bachour said he did not speak to his niece “due to family issues, I went through divorce”. The defendants submitted that this was an unsatisfactory explanation as to why a legal practitioner would not come to Court to give evidence; the Court should infer that her evidence would not have assisted the plaintiff.

8. Before drawing a Jones v Dunkel inference, a missing witness must be a person who it would be natural for one party to call; the witness might be regarded as “in the camp” of one party or “a witness likely to be friendly to the interests of the party”: Payne v Parker [1976] 1 NSWLR 191 at 201-202 per Glass JA; Ghazal v Government Insurance of New South Wales (1992) 29 NSWLR 336 at 343 per Kirby P with Mahoney and Clarke JJA agreeing. If the witness is equally available to both parties, the condition for drawing the inference usually stands unsatisfied: Payne v Parker at 202.

9. Ms Bachour-Choucair was initially retained by Mr Munzer on various transactions, before being retained by both Mr Bachour and Mr Munzer to prepare the Heads of Agreement. Thereafter Ms Bachour-Choucair proceeded to act for Mr Bachour only on the purchase of the Mt Druitt business, while Mr Munzer retained new solicitors for that purpose. Mr Munzer continued to retain Ms Bachour-Choucair on other transactions. In these circumstances, I consider that the solicitor was equally available to both parties to call.

10. Further, if the failure to call a witness is explained, the inference cannot be drawn. In Ta Lee Investment Pty Limited v Antonios (2019) 19 BPR 39153; [2019] NSWCA 24, it was sufficient explanation that the plaintiff no longer spoke to the missing witness: at [118], [137] per Bathurst CJ, Beazley P and Macfarlan JA. The witness may be “hostile”: Payne v Parker at 202 per Glass JA. It may be the case that the witness would not be expected to co-operate by way of prior consultation or providing a proof of evidence, and a party is not obliged to call a witness ‘blind’ in order to avoid the inference being drawn against them: Fabre v Arenales (1992) MVR 303; (1992) 27 NSWLR 437 at 449-450 per Mahoney JA.

11. Mr Bachour was not challenged on his evidence that he did not speak to his niece; it appears that there was some family conflict. The plaintiff’s failure to call Ms Bachour-Choucair was explained. The plaintiff was not obliged to call Ms Bachour-Choucair ‘blind’ in order to avoid the inference being drawn. I decline to draw the inference.

12. Turning to the witnesses who did give evidence, and were cross-examined, Mr Bachour appeared straightforward and articulate. He gave evidence in a precise manner and appeared to have a good recall of events. Mr Bachour gave evidence against his own interest, immediately accepting that he was paid cash wages by Mr Munzer and did not declare this as income. Mr Bachour accepted that he knew this was dishonest at the time. Mr Bachour has since amended his tax returns on the advice of counsel.

13. Mr Adams was a young solicitor, who was newly admitted to practice at the time of these events. No issues of credit arose. Mr Bachour’s niece did not render an invoice for the legal work done for her uncle on this transaction. Perhaps as a consequence, there do not appear to be any file notes kept by her. Mr Adams’ file notes, however, assisted in determining what happened.

14. Ms Ghrayyeb appeared scared. She gave evidence through an Arabic translator. It was apparent that this was a good idea; Ms Ghrayyeb did speak and apparently understand limited English. No issues of credit arose.

15. Mr Munzer gave evidence through an Arabic translator. Mr Munzer can read and write in English but said that he prefers to have the assistance of an Arabic interpreter, although the service is not essential. Mr Munzer has been in Australia for 30 years “and I do admit that I know English. I know how to speak English. But I get … muddled with few things English, particularly with emails and difficult terms.” Mr Munzer’s former solicitors, Jameson Law, did sometimes include an Arabic translator in conferences with Mr Munzer, thus confirming their perception that the involvement of a translator was warranted on occasion: see [91]. Day-to-day, however, Mr Adams spoke to and emailed Mr Munzer in English.

16. Mr Munzer professed to have a bad memory, with no recollection of affidavits which he had made quite recently. In these circumstances, I attach little weight to his recollection of key conversations that occurred years earlier. Mr Munzer blamed everything on others. His answers were variously vague, non-specific and, on occasion, evasive. He made a few speeches. He was argumentative. His evidence seemed unlikely on occasion. For example, Mr Munzer said he did not hand over handwritten cash records, as he believed the cash would be declared for tax later on. In the result, I do not accept the evidence of this witness unless it is corroborated by the evidence of another reliable witness, contemporaneous documents, or was against interest.

17. Given the manner in which Mr Munzer approached his obligations of discovery, the Court may not have before it all relevant contemporaneous documents either: see [117]-[119]. Mr Munzer’s answers in respect of compliance with orders for discovery were defensive, variously saying that he did not recall what had been discovered and then suggesting that he may have printed MYOB and Abacus records and given them to his solicitor. There were no further documents produced by his solicitor in answer to a call for production. Mr Munzer variously blamed his failure to comply with orders for discovery on: anxiety and depression; “extreme personal circumstances”; not having the energy to find the material; family issues “and I left the house”; and his son having mental health issues and needing his constant presence and care. Ultimately, Mr Munzer said he had not produced the documents “because this is nothing to do with the sale of the shop.”

18. Regrettably, Mr Ghebar was in Court while the plaintiff’s witnesses gave evidence. He remained in Court after his evidence was concluded. Mr Ghebar’s evidence had a partisan quality. Mr Ghebar appears to have taken over Mr Bachour’s role in Mr Munzer’s businesses, after Mr Bachour was relieved from his duties (or as Mr Munzer put it, “Naji started helping me when Mr Bachour abandoned me”): see [99]. Mr Munzer agreed that Mr Ghebar had assisted him in collecting evidence in these proceedings. Mr Ghebar’s recollection of key conversations was inconsistent with known surrounding circumstances: see [53], [93]-[95]. I initially approached his evidence with caution. Having now looked at the evidence in its totality, I do not accept Mr Ghebar’s evidence as to these conversations.

19. Overall, I preferred the evidence of Mr Adams to Mr Bachour in respect of the extent of the work performed by the solicitor. Otherwise, I have generally preferred Mr Bachour and Ms Ghrayyeb’s evidence to that of Mr Munzer and Mr Ghebar.

FACTS

20. Mr Munzer and Mr Bachour both hail from Lebanon. Both gentlemen speak the same Arabic dialect. Both emigrated to Australia, where they became friends.

Building the business

21. The defendants submitted, and I accept, that Mr Munzer is an experienced businessman who has been involved in the chicken and fast-food industry for many years and prior to this, worked in construction.

22. In 2000, Mr Munzer obtained an Australian Business Number (ABN) ending 435. He initially used the ABN for a business trading as “Global Earthmovers”. This ABN gained prominence, as it appears on the Heads of Agreement in circumstances where Mr Munzer disclaims that he is a party to that agreement.

23. In 2008, Mr Munzer established “Paradise Charcoal Chicken” in Mt Druitt. He proceeded to use the same ABN for this business.

24. In 2010, Ms Ghrayyeb began working at the Mt Druitt shop as a kitchen hand. By 2013, Ms Ghrayyeb was the shop manager, albeit Mr Munzer continued to have ‘hands on’ involvement in the business. Ms Ghrayyeb worked six days a week. Ms Ghrayyeb became a key member of staff, who was known on a ‘first name’ basis by regular customers from the local community. Given her background in traditional Arabic cuisine, Ms Ghrayyeb also began making some of the food products sold in the shop.

25. Mr Bachour was then working for Centrelink as a multicultural services officer. He became an accredited Arabic interpreter. From time to time, Mr Bachour directed people who were looking for work through Centrelink to the Mt Druitt shop for a job. Mr Bachour also helped Mr Munzer to run the shop from time to time, being mostly when Mr Munzer was overseas. Ms Ghrayyeb described Mr Bachour’s help as infrequent and irregular.

26. In 2013, Mr Munzer registered the business name “Paradise Charcoal Chicken”. The business name was linked to the same ABN ending 435.

27. Mr Munzer retained Mr Azzi as his accountant and business financial adviser. In 2016, Mr Munzer incorporated the second defendant, Paradise CC Corp Pty Ltd, and became the sole director and shareholder of that company. Mr Munzer opened another “Paradise Charcoal Chicken” shop in Marsden Park. According to Paradise CC Corp’s tax return, it operated the Marsden Park shop. A different ABN and business name was registered for the Marsden Park shop.

28. In 2018, Mr Munzer acquired the domain name, paradisechicken.com.au.

29. In 2019, Mr Munzer opened two more “Paradise Charcoal Chicken” shops, one in St Clair and the other in Eastern Creek. He incorporated a new company for each shop, being Paradise CC St Clair Pty Ltd and Paradise CC Eastern Creek Pty Ltd. Mr Munzer was the sole director and shareholder of each company. Paradise CC Corp entered into the lease for the Eastern Creek shop. Mr Munzer signed the (101 page) lease as sole director of Paradise CC Corp.

30. In sum, in the 11 years after Mr Munzer opened the first ‘charcoal chicken’ shop in Mt Druitt, business appears to have prospered. Mr Munzer took steps to register the business and domain names, retain an accountant, establish corporate entities and open three more shops. That is, he gained business experience.

The bookkeeper

31. In early 2020, Mr Bachour began helping Mr Munzer a few days a week, doing bookkeeping for the shops. Mr Munzer paid Mr Bachour in cash. Mr Bachour worked in an office at the back of the St Clair shop. Mr Bachour prepared invoices for payment by Mr Munzer, but did not have access to the bank accounts nor pay the invoices. Mr Bachour prepared spreadsheets in respect of the profit and loss of the Mt Druitt and Marsden Park shops. From time to time, Mr Bachour responded to queries from Mr Munzer’s accountant.

32. Mr Bachour prepared spreadsheets in respect of employees’ wages. Some staff were paid into their bank account, while others were paid in cash. Ms Ghrayyeb said “we used to ask [Mr Munzer] to put us on the tax, on the tax books, but he used to refuse because he didn’t want to pay the super and other stuff.” Mr Munzer said that Ms Ghrayyeb and Mr Bachour were responsible for paying employees in cash, “they were the ones that were sort of fixing it and sort of dealing with it.” Mr Munzer later said, "I paid them some cash. … I was telling the truth that I did not need to … register them".

33. In evidence are a series of WhatsApp messages between Mr Munzer and Ms Ghrayyeb, in which Mr Munzer requests the hours that staff have worked and Ms Ghrayyeb provides these details, dividing the hours and wages into those to be paid by “bank” or “cash”. From time to time, Mr Munzer queried the amounts being paid in cash or “on the books”, “I just checking Nader done 60 hours in cash is that right??”; “I thought you p[u]tting Nader’s hours all on the book??” ; “moris have to be on the book 20 hours”; “I will give her cash”; “Last week was 9 hours. On cash”. Clearly enough, Mr Munzer was responsible for the policy of paying employees in cash and his instructions were implemented by Ms Ghrayyeb. No doubt Mr Bachour became aware of this practice through his involvement in the shop and, indeed, was paid in cash himself.

34. The business used an external point of sale (POS) system linked to the cash registers of the shops, called “Abacus”. Mr Bachour recorded the cash receipts for the day from looking at the registers. Mr Bachour said that Mr Munzer “has a system for cash, and a system for on the book.” When Mr Bachour first started working at the business, Mr Munzer told Mr Bachour to delete the cash transactions at the end of each month from Abacus. Mr Munzer denies this. I prefer the evidence of Mr Bachour, particularly having regard to the fact that Mr Munzer’s disclaimer of his role in paying employees in cash is inconsistent with the contemporaneous WhatsApp messages.

31. Mr Munzer and others made communal use of an email account, [email protected], set up by the business’ IT consultant, Mr Ghebar. Mr Bachour had access to the email account and was told by Mr Munzer to use it. Mr Bachour did not know the login or password for the account, but the computer in Mr Munzer’s office was already turned on. Mr Bachour saw other staff, including Ms Ghrayyeb and Mr Ghebar, using the computer, as well as Mr Munzer.

32. Mr Munzer said, and I accept, that Mr Bachour assisted Mr Munzer and Ms Ghrayyeb in drafting emails in their names from this email address from time to time. I do not accept, however, Mr Munzer’s evidence that he did not know how to draft, construct or write an email at all; Mr Munzer said, “I don’t even know how to turn on a system.” That Mr Munzer drafted and sent emails from this account is plain beyond doubt, as Mr Munzer continued to send emails from this email address after Mr Bachour ceased to have access to the email account: see [109], [115]. Nor do I accept that Mr Munzer’s command of the English language was so limited that he was unable to read or write an email in English.

33. Having now read all of the emails sent from this address which are in evidence, it appears that Mr Munzer or Mr Bachour generally added their name at the end of an email sent by them or, if Mr Bachour was sending the email on behalf of Mr Munzer, Mr Bachour wrote no name at all. Mr Bachour’s command of written English appears to have been better than that of Mr Munzer, such that stylistic differences are evident. But the use of a communal email address does mean that one cannot be definitive as to who sent any particular email.

Selling some shops

38. In August 2020, Mr Munzer took steps to sell the Eastern Creek business. He retained Lionheart Lawyers, who prepared a Sale of Business Agreement, Employment Agreement, Deed of Licence and Services Agreement. The solicitor sought further instructions in respect of the draft documents, noting a potential risk that the proposed arrangement may be one to which the Franchising Code of Conduct may apply and “your desire to avoid entering into a franchise agreement”. On 27 August 2020, the accountant emailed further instructions to the solicitor, copied to Mr Munzer, noting “These are changes approved by [Mr Munzer] and [the purchaser] following our meeting this week.”

39. In March 2021, Lionheart Lawyers sought further instructions from Mr Munzer, noting that the landlord of the Eastern Creek shop required the parties to enter into a licence agreement for the period between exchange and completion. The transaction documents were now agreed ‘in principle’ and a further copy of the documents was circulated. Mr Munzer’s instructions were sought on various matters.

40. In May 2021, the sale of the Eastern Creek business was completed. Mr Munzer executed a Contract for sale of business, Business Licence Agreement, Deed of Licence of Business Name and Services Agreement. Mr Munzer executed some of these documents as sole director of Paradise CC Eastern Creek and others in his own capacity. Some of Mr Munzer’s signatures were witnessed by his solicitor, who apparently did not consider it necessary to have any of the documents translated for Mr Munzer. In June 2021, Mr Munzer’s solicitor provided him with a copy of the transaction documents for his records, together with a tax invoice.

41. The structure of the transaction was essentially as follows:

1. Paradise CC Eastern Creek sold the business for $240,000 payable in instalments over two years.

2. Over those two years, the purchaser would operate the business under a business licence granted by Paradise CC Eastern Creek.

3. The purchaser would occupy the business premises under a licence granted by Paradise CC Corp, until the lease was assigned to the purchaser on completion.

4. The business name “Paradise Charcoal Chicken” and intellectual property did not form part of the sale, but continued to be owned by Mr Munzer and used by the purchaser under a licence.

5. Paradise CC St Clair would supply products to the purchaser under a Services Agreement.

42. Mr Munzer maintained that Mr Bachour used to help him with emails in relation to this transaction. Even though Mr Bachour had nothing to do with the deal, “He was the one who opened the email. He used to read the email to me. He used to tell me what was in those emails.” Mr Munzer added that the negotiations were in Arabic “and he knew about them, and he was helping me lots.” When it was pointed out that the emails between Mr Munzer, Mr Azzi and the solicitors were in English, Mr Munzer said that that was why Mr Bachour used to send the emails on his behalf “so he could run my work.” Having reviewed each of these documents, there is no evidence that Mr Bachour was involved in Mr Munzer’s sale of the Eastern Creek business. The solicitor’s tax invoice rendered in June 2021 does not refer to any dealings with Mr Bachour.

43. The significance of these materials is that Mr Munzer was able to engage with his solicitor and accountant in relation to the sale of the Eastern Creek business, including giving instructions and executing transaction documents of some complexity, without any apparent difficulty. Mr Munzer thereby gained some experience in a transaction of this type, and the associated transaction documents.

44. I do accept that Mr Bachour provided some assistance in relation to the sale of the next “Paradise Charcoal Chicken” shop. In July 2021, Mr Munzer began negotiations to sell the St Clair business to the same purchaser as the Eastern Creek business. On 31 July 2021, a list of equipment to be included in the sale was emailed to the purchaser and Mr Azzi. Where the email sent from [email protected] did not note an author, it may well be that the list was prepared by someone else, perhaps Mr Bachour. In August 2021, Mr Munzer emailed the purchaser following a meeting regarding a potential trial period for the St Clair shop. In September 2021, Mr Munzer pressed the purchaser for an answer. Given the style of these emails, Mr Bachour may well have drafted them.

45. In November 2021, Mr Bachour attended a meeting with Mr Munzer and the purchaser of the St Clair shop. Mr Bachour followed up the meeting with an email, setting out the matters on which the parties had agreed. This is the first clear example of Mr Bachour being involved in the business beyond bookkeeping. Mr Bachour noted a somewhat unusual agreement: it appears to have been proposed that the purchaser would progressively deposit funds “according to their ability” to purchase the St Clair shop, with a view to depositing $100,000 by 31 October 2022. In that event, the moneys would be released to Mr Munzer and the St Clair shop would be sold to the purchaser, “Meantime, Simon have the right to keep using the kitchen and can leave at any time”. If this note was an indication of Mr Bachour’s business acumen, he could fairly be described as a beginner.

46. In December 2021, Mr Munzer executed a new lease (20 pages) in respect of the Mt Druitt shop. His signature was witnessed by Mr Bachour. On 23 March 2022, Mr Munzer executed a new lease (65 pages) on behalf of Paradise CC Corp in respect the Marsden Park shop, witnessed by Mr Bachour. Apparently, neither thought it necessary to retain the services of a translator to assist Mr Munzer when executing either document.

47. In February 2022, Mr Munzer met with a real estate agent in respect of the lease of another shop in Caddens. In March 2022, emails ensued between Mr Munzer and the real estate agent in respect of the proposed lease at Caddens. Mr Munzer asked about rent-free periods, contributions to fit-out and the transfer of existing equipment. He sought to negotiate a lower rent for the first year and a suitable date for the commencement of the lease. It is apparent from these emails that Mr Munzer was also speaking to the agent directly. The emails, unsurprisingly, display knowledge of such matters and were clearly communicated in English. Given the content and style, I think it is likely that these emails were penned by Mr Munzer.

48. Mr Munzer encountered difficulties with the sale of the Eastern Creek and St Clair shops. Mr Bachour’s niece, Ms Bachour-Choucair, was the principal solicitor of Jameson Law. Mr Bachour introduced Mr Munzer to the firm. In May 2022, Ms Bachour-Choucair sent a without prejudice offer to the purchaser of the Eastern Creek and St Clair shops, seeking to resolve various disputes in respect of overdue product invoices and allegations of overcharging. The same day, Mr Azzi sent Business Activity Statements (BAS) statements for the St Clair and Marsden Park shops to [email protected], noting “This is a temporary adjustment to assist in your current struggling cashflow only.” Perhaps by reason of these cashflow difficulties, Mr Munzer moved to sell the Mt Druitt shop too.

Selling the Mt Druitt shop

49. In May 2022, Mr Munzer told Ms Ghrayyeb that he was looking to sell the Mt Druitt shop. In the months which followed, Mr Munzer brought prospective purchasers into the shop and gave them a tour. It was put to Mr Bachour by the defendants’ counsel that he became aware that Mr Munzer wanted to get out of running the chicken shops as he had had enough of doing it, including the long hours; Mr Bachour agreed. By contrast, Mr Munzer denied ever having told anyone he wanted to sell the Mt Druitt shop.

50. In August 2022, Mr Munzer asked Ms Ghrayyeb whether she would be interested in buying the Mt Druitt shop. Mr Munzer offered to sell it to her for $100,000 plus stock; he would also arrange for the lease to be transferred. Ms Ghrayyeb said she would think about it, and did so. Ultimately, Ms Ghrayyeb decided that she did not want to buy the business, as she felt it would be too much of a financial burden. Ms Ghrayyeb said “Yeah, I didn’t have the money”. On 5 August 2022, Ms Ghrayyeb sent a text message to Mr Munzer, “if you have anyone that Is interested in the shop they can have it I’m no longer intrested”.

51. Mr Munzer then spoke to Mr Bachour. Mr Munzer said that he was not having any luck in selling the Mt Druitt business and he needed the money to buy a house. Mr Munzer asked whether Mr Bachour could help him out and lend him $100,000 and he would repay Mr Bachour when he could. Mr Bachour declined to lend him “that kind of money”, but said he would be interested in buying the business. Mr Munzer asked whether Mr Bachour would be prepared to buy the business for $100,000 plus stock. Mr Bachour was happy with the price and sought clarification that he would get the whole business, including equipment, fittings and a transfer of the lease. Mr Munzer agreed and said he would arrange for the lease to be transferred, “I’ll also arrange for a lawyer to prepare a document we can sign recording our deal.” Mr Munzer suggested that they arrange a time to do a stocktake. Ms Ghrayyeb was present and described the conversation in similar terms.

52. Mr Munzer denied Mr Bachour and Ms Ghrayyeb’s version of their conversation. Mr Munzer said he had no intention of giving the shop to Mr Bachour. Rather, Mr Bachour offered to pay $100,000 to assist Ms Ghrayyeb to buy the business, “There was a twisting to the story here”. Once Ms Ghrayyeb’s husband returned from overseas, he would pay Mr Bachour back. Mr Munzer said that the shop was to be sub-leased to Ms Ghrayyeb, but she became friends with Mr Bachour “and they played the trick on me” by putting the business in Mr Bachour’s name. Mr Bachour tried to get Ms Ghrayyeb out of the deal and to get the deal for himself, as Mr Bachour was familiar with the operations of the business and its earnings.

53. Mr Ghebar said that, at about this time, Mr Munzer asked him if he knew someone that would be interested in running and managing the Mt Druitt shop and said that he was thinking about Ms Ghrayyeb running the store “but I am also thinking if someone else would be interested in this as well”. Mr Ghebar’s evidence does not make sense, where Ms Ghrayyeb was already running and managing the Mt Druitt shop.

54. As earlier noted, Mr Munzer’s version of events was not pressed in the defendants’ closing submissions. In any event, I prefer the evidence of Mr Bachour and Ms Ghrayyeb on this subject, including having regard to Ms Ghrayyeb’s text message of 5 August 2022, the fact that the parties subsequently acted consistently with the verbal agreement as described, and the fact that the conversation as recalled by Mr Ghebar does not make sense when compared with known facts at the time of the suggested conversation.

Assigning the lease

55. On 9 August 2022, Mr Munzer emailed the managing agent for the Mt Druitt shop, requesting that the lease be assigned to the plaintiff. Mr Munzer assured the managing agent that the shop would continue to trade as “Paradise Charcoal Chicken”. Further, “The Use is the same and everything will stay the same. A friend of mine who you probably know and been working with me at St Clair paradise wants to take over the Lease.” Mr Munzer advised that Mr Bachour was happy to provide security, “I am happy to keep my name as security as we will be working together”.

56. Mr Munzer said that Mr Bachour sent this email, “He was opening my email, and … using my email, sending email, and receiving emails.” Stylistically, I would say the email was penned by Mr Munzer but, given the communal use of this email address, it is possible that Mr Bachour may have drafted the email. In that event, the question is whether Mr Munzer was aware that the email was being sent and was amenable to its terms, to which I will return at [109].

57. Mr Bachour wanted to keep Ms Ghrayyeb on as the manager of the shop. Ms Ghrayyeb was happy to stay. Mr Bachour said he was also thinking that he would like to register a business name including her name, “Maha”, given how familiar the local community and suppliers were with Ms Ghrayyeb. Mr Bachour thought this would send a positive signal to their customers and suppliers of continuity, notwithstanding a change of ownership of the restaurant. Ms Ghrayyeb agreed. On 10 August 2022, the plaintiff registered the business name “Maha Catering and Cuisine”.

The stocktake

58. On Sunday evening, 14 August 2022, Mr Munzer sent a text message to Ms Ghrayyeb, “I’m at Mt druitt if you want to come to do the stock take please and fouad coming to let me know thanks”. Mr Munzer initially said that the stocktake was done by Mr Bachour and Ms Ghrayyeb, “I wasn’t there.” When shown his text message, Mr Munzer agreed that they did the stocktake together, “Possibly. Yeah. Ok.”

59. Ms Ghrayyeb went to the shop and saw Mr Munzer and Mr Bachour do a stocktake. They agreed that a fair price for the stock was $7,514.76. Mr Munzer asked Mr Bachour to transfer this amount, together with the $100,000, as soon as possible. Mr Bachour said he would get him the $100,000 in the next few days but might need a few extra weeks to pay for the stock. Mr Munzer said that was fine and invited Mr Bachour to take over the business the next day. Mr Munzer gave Mr Bachour the remote control to open and close the shop shutter and said “The business is all yours now.” Mr Bachour understood that the remote control was the only one (although this proved to be incorrect). Mr Munzer said that Mr Bachour would be responsible to pay the monthly rent and provided details of the amount to be paid to the landlord. Ms Ghrayyeb described the meeting similarly.

The payment

60. On Monday, 15 August 2022, Mr Bachour opened a bank account in the name of the plaintiff, trading as “Maha Catering and Cuisine”.

61. On 16 August 2022, Mr Bachour transferred $100,000 from his personal account, with the narration “Payment for shop Mt Druitt”, into Mr Munzer’s bank account. Soon afterwards, Mr Munzer texted Ms Ghrayyeb, confirming that Mr Bachour had “transferred me the money god bless you”.

62. Mr Bachour also transferred $10,000 from his personal account to the plaintiff’s new bank account. The bank statements record that the plaintiff then began to attend to the payment of suppliers, wages and the like.

Transferring suppliers

63. During the course of 16 August 2022, Mr Munzer emailed “Door Dash Support” to confirm the change of ownership of the business, noting that the new owner was “Maha Catering and Cuisine” with a new email address “[email protected]”.

64. Mr Munzer also called and emailed EFTPOS provider, Tyro, copied to Mr Bachour and mahacuisine22 @gmail.com, to advise the change of ownership. Mr Munzer initially emailed:

As discussed on the phone

Please be advised that Mt Druitt shop have a new Owner. Any new invoices please send to

The New Owner detail

Maha catering and Cuisine …

Regards

Simon Munzer

65. After receiving a pre-filled application form to transfer ownership, Mr Munzer emailed Tyro again:

Hi Gary

I believe all done.

As explained this is taking over the business but the shop name staying as paradise.

Attached all documents needed.

They also sent you [ID] and other information that you requested from my email.

Thank you for your quick response.

Regards

Simon Munzer

66. Mr Munzer said he did not give Mr Bachour authority to take over the EFTPOS facilities with Tyro. In cross-examination, however, Mr Munzer agreed that he spoke to someone from Tyro on the phone but he understood that the shop was going to Ms Ghrayyeb and “they did some kind of fabrication … so they took the shop off me in a sort of … tricky way, I think.” Mr Munzer’s emails referred, in the subject field, to “Change of owner chip - to BACHOUR ENTERPRISES PTY. LTD. …” Mr Munzer attributed this to the fact that Mr Bachour “used to write things, draft things, the way he … wanted. … all what I knew that all this was going the shop to Maha rather.”

67. The fact that Tyro’s email was sent to Mr Munzer’s Hotmail address, rather than [email protected], made no difference to his answer, as Mr Munzer said that Mr Bachour had access to that email as well, “I did not even open. He used to always open the email and reply to them without my presence and my knowledge.” The next day, Mr Munzer added in cross-examination that Mr Bachour “used to take the phone. I used to give him authority on the phone. And he used to speak on my behalf. … When I found it difficult to express, I used to pass it on to him so he could speak on my behalf.”

68. Stylistically, I would say that Mr Munzer’s emails to Door-Dash and Tyro were penned by him, but one cannot be definitive. The fact that Tyro emailed the pre-filled application form for change of ownership to Mr Munzer’s Hotmail account, rather than the communal [email protected], suggests that he received the email and replied, where there is no evidence beyond Mr Munzer’s assertion that Mr Bachour had access to Mr Munzer’s Hotmail account. I find that Mr Munzer spoke to and emailed Tyro and was amenable to the plaintiff taking over the EFTPOS facilities. Importantly, Mr Munzer’s emails record that the Mt Druitt shop had “a new Owner”, consistent with the fact that he had sold the business.

69. On taking over the Mt Druitt shop, the plaintiff purchased foodstuffs such as marinated chicken, dips and sauces from Mr Munzer and Paradise CC Corp. Mr Munzer issued invoices for these products, which were paid by the plaintiff. From 21 August 2022, these invoices were addressed to “Maha Cuisine”.

70. By 23 August 2022, a change of ownership had also been effected with UberEats. While Mr Bachour and Mr Munzer were making contact with the service providers to transfer the contractual arrangements to the plaintiff, Mr Munzer continued to collect the proceeds of sale from customers through the service providers and then transferred the proceeds back to the plaintiff. These funds were transferred from Mr Munzer’s bank account from 24 to 26 August 2022. In total, Mr Munzer transferred some $20,000, being: $157.86 for “Menulog payment”, $350.69 for “Door-Dash”, $455.56 for “YQME payment”, $2,724.65 for “Wings Fling payment” and $16,133.75 (with no narration). By 30 August 2022, Menulog confirmed the new ownership details for the Mt Druitt shop.

66. Mr Munzer said he did not give authority to Mr Bachour to take over UberEats, Menulog or Doordash. However, the fact that Mr Munzer collected and transferred proceeds of sale from customers from his bank account, whilst suppliers were being transferred to the plaintiff, suggests that he knew and agreed to these payments, where no-one suggested that Mr Bachour had access to Mr Munzer’s bank accounts. I do not accept Mr Munzer’s evidence that the plaintiff transferred these accounts without his knowledge or authority.

67. On 27 August 2022, Mr Bachour transferred $7,514.76 from the plaintiff’s bank account, with the narration “stocktake Paradise Charcoal Chicken”. The funds were transferred to the bank account for the Marsden Park Charcoal Chicken shop ending 8436. Tax invoices issued by the Mt Druitt shop from 28 August 2022 now contained the details of Maha Catering & Cuisine and its ABN. On 31 August 2022, the plaintiff made the first rent payment for the Mt Druitt shop.

Drafting the Heads of Agreement

73. Alongside these events in August 2022, Jameson Law was instructed to prepare a Heads of Agreement. Mr Bachour and Mr Munzer had a conference call with Jameson Law, in which Mr Munzer told Ms Bachour-Choucair that Mr Bachour had recently purchased the Mt Druitt restaurant. Ms Bachour-Choucair asked, “What did you do for contracts?”. Mr Munzer said it was just an oral agreement at that stage but asked the solicitor to prepare the same documents as she had done for the other Paradise Charcoal Chicken shops. Whilst he had sold the business, Mr Munzer said he had kept the name and the plaintiff would buy chicken and marinades from him for a fee. He asked Ms Bachour-Choucair to sort out the paperwork for them.

74. After the telephone conference, Mr Bachour followed up his niece and asked how long the documents were going to take, as he had already paid for the business and was already operating it. The solicitor said that, if Mr Bachour was concerned, they could draft a heads of agreement. This would take less time than the longer version of documents being prepared. Mr Bachour asked her to do so. He told Mr Munzer that this was underway.

75. A few days later, Mr Munzer and Mr Bachour had a telephone call with Ms Bachour-Choucair, in which she took instructions on the details of the sale. The solicitor asked whether they would be using the same structure as for the other shop sales and Mr Munzer confirmed that he would be transferring the lease and licencing the use of the name “Paradise Charcoal Chicken” to the plaintiff. The solicitor advised that she would have the draft heads of agreement sent to them shortly. Whilst the solicitor was happy to help both of them with the Heads of Agreement, she suggested that it would be better if they had separate lawyers for the more detailed documentation which would be entered into after the Heads of Agreement.

76. Mr Adams had been recently employed by Jameson Law as a commercial solicitor, starting work on 22 August 2022. Mr Adams was instructed by Ms Bachour-Choucair to prepare heads of agreement between Mr Munzer and the plaintiff in respect of the Mt Druitt shop. Mr Adams understood from his principal’s instructions that the parties had already agreed to the sale and the plaintiff had already paid $100,000 as consideration, with a further payment to be made based on a stocktake. Further, the Heads of Agreement was to be binding, although the parties intended to later more fully document the transaction in a Contract for sale of business and related documents.

77. Mr Bachour said that he and Mr Munzer participated in a telephone conference with Mr Adams and Ms Bachour-Choucair’s husband, James Choucair, for some 20 minutes. Mr Choucair often acted as an Arabic interpreter. Mr Adams explained the various clauses in the Heads of Agreement while Mr Choucair translated into Arabic the sentences and words that Mr Munzer did not understand. As Mr Adams did not refer to this telephone conference in his affidavit, I am not satisfied that it happened. It may be that Mr Bachour had in mind a telephone conference on 14 September 2022, which Mr Adams did described as including Mr Choucair as interpreter: see [90].

Signing the Heads of Agreement

78. On 31 August 2022, Mr Bachour received a call from Mr Munzer, who said that the lawyers had prepared a document for them to sign to record their agreement. Mr Munzer asked Mr Bachour to come to his offices at St Clair to sign it.

79. On 3 September 2022, Mr Bachour arrived at the St Clair office. According to Mr Bachour, Mr Munzer and he reviewed an unsigned version of the Heads of Agreement on Mr Munzer’s computer screen. Mr Bachour recalled that Mr Munzer “put his glasses on, and we had a laugh about him not seeing, having issues with eyesight. … so he put his glasses on, and we went through it.” Mr Bachour did not translate the whole document to Mr Munzer but “a couple of points that he asked me about”; there were certain words that Mr Munzer didn’t understand “which I told him”. Mr Bachour said, “Me and him, we read it together, and we both speak Arabic, so he understood everything. And he said - asked me sometimes, ‘what’s this here?’ And I explained it to him, sir.”

80. Mr Munzer asked Mr Bachour to print the document. Mr Bachour “pressed the print button … we printed the whole lot.” Mr Munzer picked the document up from the printer and handed to Mr Bachour. Mr Munzer and Mr Bachour signed the document.

81. Mr Munzer denied printing the Heads of Agreement or reading it on the computer screen with Mr Bachour. Rather, Mr Bachour put a document on the table and asked him to sign it, which he did, “I did not even look at the computer; I did not even read nothing. Because I trusted him in a 100 percent with all honesty and all clarity.” Mr Munzer said that Mr Bachour only put one page in front of him and he executed it because he trusted him and “I did not think that it was … that important.” Mr Munzer said he did not know that the document was a Heads of Agreement selling his business to the plaintiff. According to Mr Munzer, Mr Bachour said “I need you to sign this for the licence for the shop.” Mr Munzer said he understood that the agreement was for Ms Ghrayyeb.

The document itself

82. The Heads of Agreement is a seven page document, of which the first page is a coversheet and the last page is an execution page. On the coversheet and the opening provisions on page one, the Vendor is described as “PARADISE Charcoal Chicken (ABN … 435)”. The Purchaser is the plaintiff trading as “MAHA catering and cuisine”. The recitals to the Heads of Agreement note:

“(a)    The Vendor and Purchaser ("the Parties") have agreed on the sale of business known as PARADISE Charcoal Chicken from the Vendor to the Purchaser.

(b)    On 15th August 2022 the Vendor agreed to sell the business Paradise Charcoal Chicken, Mount Druitt … ("the Business"), to the Purchaser. …

(c)   On 16th August 2022 the Vendor received $100,000 AUD as full consideration for the purchase of the Business from the Purchaser excluding Stock.

(d)   The Vendor acknowledges that no further payment is required to be made by the Purchaser for the purchase of the Business.

(e)   The Parties agree to enter into a Sale of Business contract to facilitate the sale. In the interim, the Parties wish to reduce to writing such terms as have been discussed and agreed in principle.”

83. Clause 12 defined the Business as the business of selling charcoal chicken and Lebanese cuisine from the Mt Druitt premises.

84. Clause 2 provided:

Binding contract

This heads of agreement (“this Agreement”) forms a binding contract. The Parties intend to enter into Formal Contracts, including a Sale of Business contract on the terms of this Agreement.

85. Formal Contracts was defined as “any agreement necessary to transfer ownership and control of the Business from the Vendor to the Purchaser, including a Sale of Business Agreement”: cl 12.

86. Clause 3 provided:

3.   Terms

(a)   Price paid by Purchaser: $107,514.76 AUD

(b)   The Vendor acknowledges that no additional monies are payable by the Purchaser to the Vendor for the purchase of the Business.

…

(d)   The Vendor must transfer ownership and control to the Purchaser of all assets of the Business and everything necessary to operate the Business. This includes, but is not limited to the following:

…

(iv)   Stock; (amount of $7514.76 paid to Vendor separately on 27/08/2022)

…

(viii)   Permits and licences including a licence to use the Business name "Paradise Charcoal Chicken";

(ix)   Leases including the sublease for the premises …;

(x)   Agreements with third parties including Delivery Partners where these agreements can lawfully be assigned, novated, or otherwise transferred;

…

87. Delivery Partners meant third parties contracted by the Vendor to deliver products of the Business to customers, for example, Uber Eats: cl 12.

Moving forward

88. After the Heads of Agreement was signed, both men continued to work in Mr Munzer’s businesses. Mr Munzer continued to negotiate a lease for a new “Paradise Charcoal Chicken” shop in Caddens. By 13 September 2022, the electricity supplier for the Mt Druitt shop confirmed that the paperwork had been “sorted” to transfer the account to Maha Catering and Cuisine. On 19 September 2022, the plaintiff paid $920.77 to the Marsden Park bank account for “settlement for elec and gas until 15 August 22”. That is, the plaintiff paid for electricity and gas used at the Mt Druitt shop from the day when the plaintiff took over the business on 15 August 2022 until the utilities were transferred to the plaintiff.

89. On 14 September 2022, Mr Adams had a telephone conference with Mr Munzer, Mr Bachour, his principal and her husband (who, it will be recalled, often acted as an Arabic interpreter). They discussed the next steps for the preparation of the Formal Contracts. Mr Choucair interpreted in Arabic for Mr Munzer. According to Mr Adams, Mr Munzer said that, now that the business had been sold, they needed to move on with the lease transfer, licence to use the name “Paradise Charcoal Chicken” and a service agreement. Ms Bachour-Choucair said the firm would not be able to act for both Mr Munzer and Mr Bachour in relation to the Formal Contracts; they would need separate legal representation. Mr Munzer suggested that Jameson Law act for Mr Bachour and he would find another solicitor.

90. On 14 September 2022, Mr Adams emailed Mr Munzer at [email protected], attaching a letter requesting further information to prepare a Sale of Business agreement. Mr Adams said the request was set to Mr Munzer, “Because Mr Munzer wasn’t represented at the time, we asked him directly for the information as it pertained to the sale of business, because he was - it was his business, and we needed to get the matter underway. So we did ask Mr Munzer to provide information, yes”. Later that day, a reply email came from [email protected], providing the information sought. Mr Bachour provided the response: see [96].

91. On 16 September 2022, Mr Adams sought further instructions from Mr Bachour in respect of the proposed Sale of Business Agreement, essentially checking that the instructions provided on 14 September 2022 accorded with Mr Bachour’s position. Obviously enough, Mr Adams was not then aware of the communal use of the [email protected] email, or that the reply already received had been provided by Mr Bachour.

92. Mr Ghebar said that in mid-September 2022, Mr Bachour called him regarding some computer issues. That Saturday, which appears to have been either 17 or 24 September 2022, Mr Ghebar went to the St Clair shop. While he was working on the computer, he heard a conversation between Mr Munzer and Mr Bachour. Mr Bachour told Mr Ghebar, “Maha will be managing the store, she will be taking out a sub-lease from Simon for the Mt Druitt store.” Mr Ghebar asked how Ms Ghrayyeb was going to pay for the sub-lease and Mr Bachour said he would lend her the money. Mr Ghebar asked, “The whole $100,000?”, and Mr Bachour confirmed this. Mr Ghebar commented as to how lucky Ms Ghebar was to have both Mr Bachour and Mr Munzer in her life.

93. Mr Ghebar’s recollection of this conversation does not make sense against the background that Ms Ghrayyeb had already told Mr Munzer that she was not interested in the shop and he should explore other interested parties. Mr Bachour had already paid Mr Munzer $100,000 on 16 August 2022 as “Payment for shop” and $7,514.76 on 27 August 2022 for “stocktake” and was running the business and paying wages.

94. Mr Ghebar agreed that he did not know that Mr Bachour had already transferred $100,000 to Mr Munzer. He maintained that the conversation had occurred as described, “that was a conversation that we had in the hallways of the office where they conduct business. … where the computer, he sits.” Mr Ghebar insisted that Mr Bachour said he was lending $100,000, “he said it to my face.” Mr Ghebar later said, “I was sitting at the computer, working on the computer, and Simon and Fouad were in the same room as myself.” Mr Ghebar’s evidence contained inconsistencies as to where this suggested conversation took place. This conversation also aligns ill with known events and contemporaneous records. I do not accept Mr Ghebar’s evidence.

95. On 30 September 2022, Mr Adams spoke to Mr Bachour in respect of the Mt Druitt sale. According to Mr Adams’ file note, Mr Bachour asked for an update “re his purchase of Mt Druitt from [Mr Munzer]”. Mr Adams advised that he was waiting for a response to his email of 16 September 2022. Mr Bachour advised that he had responded to the letter addressed to Paradise Charcoal Chicken on Mr Munzer’s behalf. Mr Adams obtained further instructions.

96. Mr Adams’ file note then records that Mr Munzer “walked in mid convers[at]ion”. Mr Adams reminded both gentlemen that he was only acting for Mr Bachour on the purchase. Mr Adams then noted further matters agreed by both gentlemen in respect of the sale. In particular, Mr Munzer was concerned as to what would happen if Mr Bachour on-sold the business “to a third party Maher (not sure re spelling)”. I take this to be a reference to Ms Ghrayyeb. Further, Mr Bachour was concerned as to the imposition of unreasonable conditions by Mr Munzer “if he on sold the business to the third party M.” Again, I take this to be a reference to Ms Ghrayyeb. Ultimately, the gentlemen agreed that there would be a sub-lease between them. The conference concluded with Mr Adams informing the parties that he would work on their agreements and would hopefully have the agreements to them early the next week.

97. Noteworthy, it does seem to have been in view that Mr Bachour may on-sell the Mt Druitt shop to Ms Ghrayyeb in due course. But it is also apparent from Mr Adams’ file note that Mr Munzer understood that he had then sold the shop to Mr Bachour.

98. Following the telephone conference, Mr Adams continued to draft further documentation to reflect the Heads of Agreement save that, instead of a transfer of the existing lease of the premises, there was to be a sub-lease. Mr Munzer retained a new solicitor to act for him on the sale of the Mt Druitt shop, while Jameson Law continued to be retained by Mr Munzer in respect of his sale of the Eastern Creek and St Clair shops.

Removing the bookkeeper

99. On Friday, 7 October 2022, Mr Ghebar received a call from Mr Munzer, asking him to go to the St Clair office on Saturday, 8 October 2022, as he was relieving Mr Bachour from bookkeeping duties. On 8 October 2022, Mr Munzer told Mr Bachour that he had brought in Mr Ghebar to take over his administrative duties. Mr Bachour asked for a week to hand everything over, but Mr Munzer said it was better if he left now as his new solicitor had advised him that Mr Bachour could not be the owner of the Mt Druitt business and also perform administrative duties for him and the Marsden Park shop.

100. On 10 October 2022, Mr Adams called Mr Munzer in relation to the sale of the St Clair and Eastern Creek shops. According to Mr Adams’ file note, Mr Munzer also enquired of Mr Adams’ progress on preparing the further documents in respect of the Mt Druitt shop. Mr Munzer wanted to know what the terms of the agreement were for the Mt Druitt store and whether a sub-lease would be provided. Mr Munzer asked when he would see the agreement. Mr Adams confirmed that a sub-lease would be provided and the agreement would be forwarded to his lawyer for review. Later that evening, Mr Adams emailed the Heads of Agreement and a Sale of Business Contract to Mr Munzer’s new solicitor.

101. On 14 October 2022, Mr Adams sent a follow up email to Mr Munzer’s solicitor. Separately, Mr Adams emailed Mr Bachour, advising that he had attempted to speak to Mr Munzer’s solicitor “several times over the past few days” and had been informed that Mr Munzer had requested some amendments to the contract. It would appear that Jameson Law was also having difficulty obtaining instructions from Mr Munzer on the sale of the Eastern Creek and St Clair shops, emailing Mr Munzer frequently and noting that the purchaser’s solicitor for the St Clair shop was threatening legal action if the agreement was delayed any further.

Attempted re-negotiation

102. On 18 October 2022, Mr Munzer’s new solicitor emailed Mr Adams, confirming that he was now instructed that the parties would enter into a sub-lease and licence agreement; the term on the licence agreement would be five years. By return email, Mr Adams sought clarification:

“It is my understanding that in addition to the contract for sale of business, the parties are to enter into a sublease for the premises and a services agreement (which contains a licence to use the business name). What does your client mean by ‘The parties to enter into a licence agreement.’ Is your client referring to the licence contained in the services agreement or is he referring to a licence for the occupation of the premises?”

103. Mr Munzer’s solicitor immediately replied: (emphasis added)

“Licence agreement to run the business

Sublease agreement to occupy the premises.

My client doesn’t want to sell the business.”

104. Mr Adams immediately called Mr Munzer’s solicitor, who advised that Mr Munzer was not willing to sell the business. Mr Adams responded, “What do you mean he isn’t selling? He’s already sold it. My client has already paid the money and taken over the business. The parties both signed a binding heads of agreement. Is your client now repudiating?” Mr Munzer’s solicitor asserted that the deal was that it was a licence arrangement. Mr Adams disagreed. Mr Munzer’s solicitor said he did not accept that the Heads of Agreement was binding. Mr Adams asked the solicitor to put his position in writing. Mr Munzer’s solicitor then emailed:

“I am instructed that my client was given this proposed document by your client at our client’s office, nothing was explained to my client and my client did not obtain independent legal advice in that regard.”

105. Mr Adams said this was the first suggestion that Mr Munzer had not understood the Heads of Agreement when signing it.

106. Mr Munzer then sought to negotiate a deal with Ms Ghrayyeb’s husband. On 22 October 2022, Mr Bachour and Mr Munzer met at the St Clair office. Mr Munzer said that he had changed his mind and did not want to sell the business, Mr Bachour protested. Mr Munzer apologised but said he had someone lined up who was interested in buying the business, taking a sub-lease and then returning the business to him after five years, “that works better for me. I don’t want to lose the business for good.” Mr Bachour said that Mr Munzer could not do that as it was not his business to sell anymore. Mr Munzer replied that he had built up the business for years and had decided he wanted it back after five years, “I only sold it to you because I needed the cash for my house. But I am happy to offer you the same terms in preference to this other buyer. Just to show you that I have someone lined up, I’ll give him a call now. It’s Said Ayoub.” Mr Bachour knew that this was Ms Ghrayyeb’s husband.

105. All concerned then met at the McDonalds in St Clair 30 minutes later. Mr Bachour said that he had already bought the business and it was no longer Mr Munzer’s to sell. Ms Ghrayyeb’s husband said that that presented a problem and he was no longer interested in buying the business. Mr Munzer said, “I want the business back, and then I intend to licence it out for five years only. Are you willing to sell it back from you?”. Mr Bachour was not interested.

106. On 25 October 2022, Mr Munzer emailed the Mt Druitt managing agent asking him to “disregard the lease transfer as this is no longer applicable.” Mr Munzer said that this email was also sent by Mr Bachour but, when it was pointed out that Mr Bachour was not working for him anymore said, “I don’t recall.” I note that Mr Munzer’s email included the earlier request sent on 9 August 2022, to transfer the lease to the plaintiff. Mr Munzer did not disclaim the earlier request but simply said it was “no longer applicable”. This suggests that Mr Munzer was aware of the initial request if, contrary to stylistic indications, it was penned by Mr Bachour.

107. On 27 October 2022, Jameson Law ceased to act for the plaintiff, as it was apparent that Mr Munzer was disputing the transaction and there was a potential conflict of interest.

Re-taking possession

110. On 31 October 2022, Mr Bachour decided not to open the Mt Druitt shop until the afternoon, as he had a staff shortage in the morning. However, Mr Bachour received a text message from his son, who told him that the business was open. Mr Bachour called the police and reported that someone had broken into the shop. Mr Bachour went to the shop and saw employees behind the counter, running the business. He asked what they were doing there and was told that Mr Munzer had opened up the shop for them. The police arrived, followed by Mr Munzer. Mr Bachour asked what Mr Munzer thought he was doing. Mr Munzer apologised and said, “I have reflected on things further and I’m just not willing to let the business go. I built it up over years and it’s mine. I’ve decided to cancel the sale.” The police left, followed by Mr Munzer. Mr Bachour closed the shop for the day and placed a chain and lock on the front door.

111. The next morning, when Mr Bachour attended the premises, the chain and lock lay broken on the floor. The police were called. As Mr Ghebar described it, he met Mr Munzer at the Mt Druitt shop. Mr Munzer said he was going to bring tools to cut the chains. Mr Bachour arrived before Mr Munzer returned with the tools to cut the chains and Mr Ghebar asked Mr Bachour to open the doors. According to Mr Ghebar, Mr Bachour said, “It’s my store I can do whatever I want and I want to run it to the ground.” Mr Bachour is said to have said that he did not want the store and wanted his money back. Mr Munzer owed him $100,000 and must pay him immediately, otherwise the store would remain closed. Mr Munzer opened the shop for trade. Mr Ghebar’s evidence is unlikely and I do not accept it.

112. Mr Munzer said he managed to take control of the business back. He engaged the services of a security company to stop Mr Bachour or his associates from entering the premises. On 3 November 2022, Mr Munzer texted Ms Ghrayyeb’s husband, asking “please call your wife to get out of my shop. Now please.” Ms Ghrayyeb left her job.

These proceedings

113. On 14 November 2022, the plaintiff’s new solicitor sent a letter of demand. A further letter of demand was sent on 22 November 2022. There was no reply. On 25 November 2022, these proceedings were commenced. On 9 December 2022, Parker J made orders to expedite the proceedings and tentatively listed the matter for hearing in February 2023. The defendants were ordered to transfer $116,282.82 into their solicitor’s trust account to be held until further order.

114. Mr Munzer continued to send emails from “[email protected]” address to suppliers, the purchasers of the Eastern Creek and St Clair shops, his accountant and his solicitor, all in English. Some of these emails may have been written by Mr Ghebar, who agreed that he sent emails from this email address to help Mr Munzer out, “If I’m there, and he wants me to write an email form him, yes.”

115. In May and June 2023, Mr Munzer continued to progress the sale of the St Clair and Eastern Creek shops, executing a Deed of Licence of Business Name, Deed of Agreement, Deed of Assignment of Lease and Transfer of lease. Self-evidently, Mr Munzer was able to progress these transactions without the assistance of Mr Bachour.

116. Orders were made for discovery. The defendants’ list of documents, verified by Mr Munzer, included only nine documents, being largely unsigned financial statements or unlodged tax returns. The plaintiff complained. Mr Munzer verified a second list of documents, adding contracts of sale of business in respect of Eastern Creek, St Clair and Marsden Park shops. The plaintiff complained. On 5 June 2024, Mr Munzer made an affidavit setting out the steps taken to comply with the discovery order. The details were brief. The plaintiff complained as to the lack of detail. On 7 June 2024, Mr Munzer verified a third list of documents disclosing “various” EFTPOS, PAYG, superannuation documents, bank statements and records in respect of Paradise CC Corp. On 25 June 2024, Mr Munzer made a further affidavit explaining that he may have misunderstood some of the orders for discovery, but had now supplied all of the information, “I have been going through a divorce and it’s been difficult in managing my personal life and other matters.”

117. On 26 June 2024, Hammerschlag CJ in Eq ordered the defendants to provide a further affidavit setting out steps taken to comply with the orders for discovery and to produce bank statements, “all cash ledgers for the period (or any part of the period) since 1 July 2021” and all emails sent by Mr Munzer from the “[email protected]” email address since 1 August 2022 in the course of operating the Mt Druitt shop. On 10 July 2024, Mr Munzer made a further affidavit as to his efforts to comply with the discovery orders, explaining any non-compliance with the orders as referable to a misunderstanding as to what was required or an error in what was produced, given the significant number of documents to be produced. He verified a fourth list of documents in respect of bank statements and PAYG. No reference was made to a cash ledger nor emails from “[email protected]”. This was pointed out by a letter from the plaintiff’s solicitor. On 18 July 2024, Mr Munzer verified a fifth list of documents in respect of “various” emails from 1 August 2022 on.

118. On 19 July 2024, Mr Munzer was cross-examined in respect of his compliance with the disclosure orders. Mr Munzer said that he recorded cash receipts manually on a piece of paper. Mr Munzer agreed that he had not produced these pieces of paper, but said that he could do so. Mr Munzer agreed that the business continued to use Abacus software, which recorded whether sales were made on credit or with cash, and he could produce the Abacus records. On 13 July 2024, Mr Munzer verified a sixth list of documents, adding various invoices from suppliers.

119. The plaintiffs complained in closing submissions that, although Mr Munzer admitted in the examination that he had documents that should have been discovered but had not been, including MYOB records, Abacus records, cash journals and ledgers and handwritten cash records, these documents were still not included in the final list of documents nor produced. If the documents tendered by the plaintiff as having been those discovered by the defendants are the universe of that material, then these complaints are well-founded.

The plaintiff’s case

120. The plaintiff contended that it was agreed that Mr Munzer would sell the business to Bachour Enterprises or, alternatively, to Mr Bachour, being the “full business”, including all of its assets, equipment and fittings. The purchase price was $100,000 plus the value of the stock of the business. Mr Munzer was to transfer the lease to the plaintiff or, alternatively, to Mr Bachour. The agreement was to be recorded in written form, and was so recorded, initially in the Heads of Agreement.

121. The plaintiff submitted that the Heads of Agreement was a binding and enforceable contract. Clause 2 made plain that it is intended immediately to be binding. The contract fell within the first category described by the High Court in Masters v Cameron (1954) 91 CLR 353, being “one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect”: at 360-362. It might also be characterised as falling within the “fourth category” identified by McLelland J in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628, being “one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms”. Either way, the parties intended that the Heads of Agreement would immediately bind them, including as to the obligations in cl 3(d).

122. As the defendants’ case evolved at trial and in closing submissions, I did not understand the defendants to dispute these propositions subject to the matters raised in the defence and cross-claim which remain pressed, and to which I now turn.

Who were the contracting parties?

123. The defendants relied on description of the Vendor in the Heads of Agreement and the form of the signature block to submit that the contract was between the plaintiff and the second defendant. The plaintiff submitted that the suggestion that Mr Munzer was not a party to the Heads of Agreement was not pleaded or raised by the defendants at trial and should be dismissed on that basis alone. In any event, the submission was misconceived.

124. As to the pleading point, the defendants repeatedly stated in the Amended Defence that they disputed “the entity of the transacting parties”, in answer to paragraphs 20 to 27 of the Statement of Claim. Accepting that this issue was not squarely raised during the trial, I consider that this matter was pleaded.

125. As to how this Court ought determine the parties to the contract, one need go no further than Brereton JA’s summary in Mills v Walsh [2022] NSWCA 255 at [73]: (citations omitted)

The parties to a contract are identified according to the objective theory of contract, which involves ascertaining the intention of the parties from their communications and the circumstances in their mutual knowledge, including their evident commercial aims and expectations; their subjective beliefs and intentions are irrelevant, save insofar as they are manifest and shared. However, the post-contractual conduct of the parties may more readily be resorted to for this purpose than for the purpose of construing contractual terms.

126. That is, what would a reasonable observer of the communications that led to entry into the contract, together with the background facts known to the parties, conclude that the parties intended that the contract would be with: Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 at [54] (Campbell JA; Beazley and Basten JJA agreeing).

127. The legal onus is on the party asserting that a particular party is in fact and law a party to the contract: Pethybridge at [54]. As Judge Rein (as his Honour then was) observed in Blackmore Design Group Pty Ltd v Mudge (2006) 4 DCLR(NSW) 30 at 36; [2006] NSWDC 160, the question of who in fact were parties to the contract is a mixed question of fact and law and “is often a very difficult question”: at [23], citing pertinent examples of Southdown Publications Pty Ltd v ACP Magazines Pty Ltd (2003) 60 IPR 367; [2003] NSWCA 347; MacMilllan v Mumby [2006] NSWCA 74.

128. Looking first at the Heads of Agreement, the Vendor is described on the coversheet and in the opening clauses of the Heads of Agreement as “PARADISE Charcoal Chicken (ABN … 435)”. On the execution page of the Heads of Agreement, the same signature block appears for the Vendor and Purchaser. For the Vendor, the signature block recorded, “EXECUTED for and on behalf of PARADISE Charcoal chicken (ABN … 435) in accordance with section 127(1) of the Corporations Act 2001.” Mr Munzer signed as “Sole Director and Sole Secretary”.

129. The ABN ending 435 was registered to Mr Munzer and had been used in the Mt Druitt business since 2008. The business name had been registered to Mr Munzer since 2013 and was linked to the ABN. Mr Azzi prepared financial statements for “Simon K Munzer Trading As Paradise Charcoal Chicken ABN … 435”. The revenue and expense items in the financial statements match the figures declared in Mr Munzer’s individual tax returns. Mr Munzer’s tax returns disclosed that his business was “Paradise Charcoal Chicken” with the ABN ending 435 and operated at the Mt Druitt premises. That is, Mr Munzer owned the Mt Druitt business trading as “Paradise Charcoal Chicken” with the ABN ending 435.

130. Paradise CC Corp had nothing to do with the Mt Druitt business. That company was established to run the Marsden Park business: see [27]. Mr Azzi also prepared financial statements for “Paradise CC Corp Pty Ltd Trading As Paradise Charcoal Chicken ABN … 884”. The company tax return filed for Paradise CC Corp disclosed that it operated a chicken shop at Marsden Park. While Paradise CC Corp became the lessee for new chicken shops at Eastern Creek and St Clair, Mr Munzer remained the lessee of the Mt Druitt shop.

131. Mr Munzer obviously knew that he owned the Mt Druitt business. As the sole director of Paradise CC Corp, he also knew that the company had nothing to do with the Mt Druitt business. By the time that the Heads of Agreement was executed, Mr Bachour had been Mr Munzer’s close friend since the Mt Druitt shop was opened and while the Marsden Park and other shops were progressively opened. Mr Bachour had also been working for Mr Munzer for two and a half years as a bookkeeper. Most likely, Mr Bachour was aware of who owned which business. The mutual knowledge of the contracting parties was that Mr Munzer owned the Mt Druitt business.

132. All communications between these gentlemen from August 2022 on referred to Mr Munzer selling the Mt Druitt business. There was no reference to Paradise CC Corp, aside from the fact that, after Mr Bachour took over the shop, the plaintiff purchased foodstuffs from that company.

133. As such, a reasonable observer of the communications that led to entry into the Heads of Agreement, together with the background facts known to the parties, would conclude that the parties intended that the contract would be with Mr Munzer, who owned the Mt Druitt business, and not with Paradise CC Corp, which did not.

134. The description of the Vendor in the Heads of Agreement could have been clearer. The signature block pre-supposed that both parties were corporations, rather than that the Vendor was an individual. This minor error is likely referable to the fact that this was one of the first documents which Mr Adams drafted in his legal career. Clause 11 of the Heads of Agreement, “Interpretation”, assists: unless the context otherwise requires, “Words importing persons include firms, companies and corporations and vice versa”.

135. A drafting error in the signature block does not change the party to the contract, where “if the literal meaning of a written contract is absurd and the Court can confidently identify how the absurdity should be resolved, then the process of construction can omit words or insert new words or alter the existing language”: QBT Pty Ltd v Wilson [2024] NSWCA 114 at [78] per Leeming JA (Bell CJ and Ward P agreeing). As a matter of contractual construction, the Vendor was the entity trading as “Paradise Charcoal Chicken” with the ABN ending 435, which was Mr Munzer. This defence fails.

Misrepresentations

136. The defendants allege that Mr Bachour and the plaintiff engaged in misleading conduct in breach of s 18 of the Australian Consumer Law, by making false representations to Mr Munzer on 3 September 2022 at the St Clair office, when executing the Heads of Agreement, that:

1. the written agreement was for the purposes of providing a licence to Ms Ghrayyeb to operate the business; and

2. the one page of the document presented to Mr Munzer for signature constituted the entire agreement for the licence of the business.

137. In fact, the defendants note that the Heads of Agreement was more than one page. In fact, the Heads of Agreement was for the sale of the business, not a licence to operate the business. Further, the Heads of Agreement was said to have been prepared by Mr Bachour’s solicitors and not the solicitors for the defendants. The one page presented to Mr Munzer was not interpreted into Arabic before he signed it. Nor did Mr Munzer receive legal advice before executing that page. Rather, Mr Munzer relied on Mr Bachour and his honesty, given their long association and friendship. Mr Bachour, in the past, was said to have operated businesses for Mr Munzer, given business advice to him, interpreted legal documents from English to Arabic and introduced staff to work in various businesses for Mr Munzer.

138. The defendants submitted that, on 3 September 2022, the plaintiff by its director, Mr Bachour, represented that the one page of the Heads of Agreement presented to Mr Bachour for signature was the entire agreement. That representation was made in trade and commerce, was misleading, and inevitably led to error by concealing relevant facts: Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8 at [80]-[83]; Google Inc v ACCC (2013) 249 CLR 435 at [7]-[8], [89]; Concrete Construction (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661; Duxbury v Pierce [2009] FCA 367 at [36]-[37]. The representation was said to be a deliberate statement designed to induce Mr Munzer to sign the Heads of Agreement: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 at [37].

139. When determining whether conduct is misleading or deceptive, it is necessary to consider that conduct from the perspective of a reasonable person in the position complaining of it: Ireland v WG Riverview Pty Ltd [2019] NSWCA 307; (2019) 101 NSWLR 658 at [65], citing Butcher v Lachlan Elder Realty. The conduct of the person alleged to have engaged in misleading or deceptive conduct must be viewed as a whole; it invites error to look at isolated parts of a corporation’s conduct: Butcher at [109]; Ireland v WG Riverview at [66]. 

140. Further, as McClelland CJ in Eq explained in Watson v Foxman (1995) 49 NSWLR 315 at 318:

Where the [alleged misleading] conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases … the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition.

His Honour proceeded to note the fallibility of human memory of conversations given the passage of time and intervention of litigation, where “the processes of memory are overlaid, often subconsciously, by perceptions or self-interest”: at 319.

141. As to the allegation that the plaintiff represented that the Heads of Agreement was for the purpose of providing a licence to Ms Ghrayyeb to operate the business, Mr Munzer attributed these words to Mr Bachour, which he denied. I have preferred the evidence of Mr Bachour to Mr Munzer where their evidence contradicts and do so on this occasion. I feel no actual persuasion that Mr Bachour said the words attributed to him.

141. As to the suggestion that only the last page of the Heads of Agreement was presented to Mr Munzer, I am not satisfied that that occurred as it depends upon acceptance of his evidence in preference to that of Mr Bachour.

142. As to whether Mr Bachour represented that the last page comprised the whole agreement, there is no suggestion that Mr Bachour told Mr Munzer that this last page was the only page of the agreement. Nor can the simple fact of presenting the last page to Mr Munzer for signature – if that is what Mr Bachour did – be considered to amount to a representation that this was the whole contract, where the page itself indicated clearly that the agreement comprised more than that page.

143. The page of the Heads of Agreement which bears Mr Munzer’s signature has, at the top, the final sentence of the last clause of the agreement, being cl 14 “Survival”: “Termination or expiry of this Agreement does not affect the rights and remedies of the parties that accrued before the date of termination or expiry.” Then follows the attestation clause for the parties to sign, “EXECUTED AS AN AGREEMENT”. Self-evidently, the last page formed part of a multi-page document. The sentence at the top of the page was part only of a clause which had begun on a previous page. It did not make much sense by itself.

144. At the bottom of the page, the footer notes “Page 6 or 7”. Mr Munzer had signed enough contracts in his time to appreciate that the execution page was the last page of a longer document. It was obvious. A reasonable person in the position of Mr Munzer would not have been misled, such that the conduct, if it occurred, was not misleading or deceptive. This representation has not been made out either.

Non est factum

146. The defendants contended that they relied on Mr Bachour, who assisted them with business decisions as a trusted adviser, worked in their business and provided advice and guidance to Mr Munzer as he did not speak, read or write English as a first language. Mr Munzer relied on Mr Bachour to assist him in making business decisions. Mr Munzer relied on and trusted Mr Bachour to clearly translate the Heads of Agreement, which did not occur. Mr Munzer was under a special disability in relation to signing of the Heads of Agreement, believing that the document was a licence for the business for a five year period rather than the sale of the business. Mr Bachour was said to have exploited this special disability by giving a single page of the Heads of Agreement to Mr Munzer and representing that it was a licence agreement, not a sale of business agreement. Mr Munzer was said to have made out the defence of non est factum: Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; (2004) 219 CLR 165 at [42]-[47], [57]; Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 at [33]; Petelin v Cullen [1975] HCA 24; (1975) 132 CLR 355; Ford by his tutor Watkinson v Perpetual Trustees Victoria (CA) (2009) 75 NSWLR 42 at 52-56.

147. The general rule is that “a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document”: Toll v Alphapharm at [57]. The defence of non est factum (meaning “it is not my deed”) is concerned with “the injustice of holding a person to a bargain to which he has not brought a consenting mind”: Petelin v Cullen at 359. The scope of the defence is limited, as described in Petelin v Cullen at 359-360:

“The class of persons who can avail themselves of the defence is limited. It is available to those who are unable to read owing to blindness or illiteracy and who must rely on others for advice as to what they are signing; it is also available to those who through no fault of their own are unable to have any understanding of the purport of a particular document. To make out the defence a defendant must show that he signed the document in the belief that it was radically different from what it was in fact and that, at least as against innocent persons, his failure to read and understand it was not due to carelessness on his part. Finally, it is accepted that there is a heavy onus on a defendant who seeks to establish the defence.”

148. Mr Munzer does not fall within the class of persons described in Petelin v Cullen. He is not blind or illiterate. I do not accept the defendants’ submission that the evidence supported a finding that Mr Munzer had difficulty with his eyesight. The evidence is that Mr Munzer wore glasses when reviewing the document on the computer screen, before it was printed.

149. Mr Munzer is an experienced businessman. Having previously signed leases, contracts for sale of business, licence agreements and service agreements without the assistance of a translator, I am not satisfied that a short Heads of Agreement illuded his comprehension as to what the document was about, particularly where he participated in telephone conferences with Jameson Law and gave instructions as to its contents. Nor do I accept that the document was “radically different” to what Mr Munzer thought he was signing, noting that the ‘case theory’ that he only ever intended to licence the shop to Ms Ghrayyeb has been abandoned.

150. I am not satisfied that Mr Munzer was reliant on others for advice as to what he was signing. Accepting that he may not have understood every word without translation, he likely understood a great deal and was able to call on Mr Bachour to translate particular words if need be. If, as Mr Munzer said, he signed the document without even looking at it, his actions were “carelessness on his part”, such that this narrow defence does not assist him. As Latham CJ observed in Wilton v Farnworth (1948) 76 CLR 646 at 649:

… In the absence of fraud or some other of the special circumstances of the character mentioned, a man cannot escape the consequences of signing a document by saying, and proving, that he did not understand it. Unless he was prepared to take the chance of being bound by the terms of the document, whatever they might be, it was for him to protect himself by abstaining from signing the document until he understood it and was satisfied with it. Any weakening of these principles would make chaos of every-day business transactions.

151. This defence fails.

Unconscionable conduct and undue influence

152. The defendants contended that Mr Bachour procured Mr Munzer’s execution of the Heads of Agreement by unconscionable conduct or undue influence on the basis that Mr Bachour “exploited the special disability of [Mr Munzer] and merely gave a single page to [Mr Munzer]”. Mr Munzer was never provided with a copy of the full Heads of Agreement, and no one ever explained the document to him. Further, Jameson Law acted only for Mr Bachour in relation to the Heads of Agreement and Mr Munzer had no legal representation. Mr Munzer had limited English skills and relied upon Mr Bachour to read and explain documents to him. Mr Bachour was a trusted advisor to Mr Munzer in relation to business decisions and Mr Munzer relied upon advice provided by Mr Bachour.

153. The defendants submitted that Mr Munzer was subject to a special disability arising from his lack of education, a lack of English skills and reliance upon Mr Bachour as a trusted adviser. This was compounded by the fact that Mr Munzer did not receive any independent legal, accounting or financial advice. Seized with the knowledge of the special disability that afflicted Mr Munzer, Mr Bachour sought to exploit that by having Mr Munzer sign only the final page of the Heads of Agreement to conceal the nature of the transaction. While Mr Munzer was clearly a businessman with some skill and experience, his administration and running of a business was poor, such that Mr Bachour’s involvement was essential to its smooth operation. Mr Bachour was seized with confidential information about Mr Munzer and his businesses and was able to utilise that information for his own personal benefit at the expense of Mr Munzer. The defence of unconscionable conduct was said to have been made out: Commercial Bank of Australia Ltd v Amadio (1983) CLR 447; Blomley v Ryan (1956) 99 CLR at 405; Hurley v McDonald’s Australia Ltd [1999] FCA 1728; Burt v ANZ Banking Group Ltd (1994) ATPR 46-123. The defence of undue influence was also said to have been made out: McCulloch v Fern and Anor [2001] NSWSC 406 at [67].

154. So far as the general law is concerned, unconscionable conduct occurs where “a party makes unconscientious use of his superior position or bargaining power to the detriment of a party who suffers from special disability or is placed in some special situation of disadvantage … the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position: Amadio at 461 (per Mason J); followed in Louth v Diprose (1992) 175 CLR 621 at 626 (per Brennan J); Thorne v Kennedy at [38] (per Kiefel CJ, Bell, Gageler, Keane and Edelmann JJ); Stubbings at [39] and [45] (per Kiefel CJ, Keane and Gleeson JJ).

155. A party alleged to have engaged in unconscionable conduct must have actual or constructive knowledge of the special disadvantage, the latter arising from "knowledge of facts from which a person ought to have known that another person was suffering under the relevant special disadvantage": Nitopi v Nitopi [2023] NSWCA 162 (per Bell CJ at [6]). Constructive notice is insufficient, being notice of facts that might lead on inquiry to the discovery of the existence of a special disadvantage: Nitopi (per Bell CJ at [9]; Ward P at [121]).

156. Equity will not intervene to relieve a plaintiff from the consequences of their own foolishness but, rather, to prevent their victimisation: Louth v Diprose at 638 (Deane J). Nor will equity intervene to relieve a plaintiff from the consequences of improvident transactions, where a plaintiff voluntarily engages in risky business, absent conduct on the part of the defendant which makes it just to require the defendant to restore the plaintiff to their previous position: Kakavas at [20].

157. What amounts to undue influence was considered in Thorne v Kennedy at [30]-[34], which summary I gratefully adopt. Kiefel CJ, Bell, Gageler, Keane and Edelman JJ there noted that, although undue influence and unconscionable conduct overlap, they also operate distinctly: at [40]. Their Honours adopted Mason J’s explanation of the key difference between undue influence and unconscionable conduct in Amadio. In a case of undue influence, “the will of the innocent party is not independent and voluntary because it is overborne”: Amadio at 461.

158. Undue influence can immediately be put to one side. The suggestion that Mr Munzer’s will was overborne when executing the Heads of Agreement was not explored in the defendants’ closing submissions and was not established.

159. The first question is whether Mr Munzer suffered from a special disability or was placed in some situation of disadvantage. As observed in Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 399 ALR 300 (per Kiefel CJ, Keane and Gleeson JJ) at [40]:

In this field of discourse, "special disadvantage" means something that "seriously affects the ability of the innocent party to make a judgment as to his [or her] own best interests". While the factors relevant to an assessment of special disadvantage have not been exhaustively listed, Fullagar J in Blomley v Ryan considered that special disadvantage may be inferred from "poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary". No particular factor is decisive, and it is usually a combination of circumstances that establishes an entitlement to equitable relief.

160. The fact that the party is at a serious disadvantage in negotiating a commercial transaction is unlikely to suffice in the case of an experienced business person. In Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2002] FCAFC 4; (2002) 117 FCR 301, the Court observed, “At least in the case of an experienced business person there must, in our opinion, be something more than commercial vulnerability (however extreme) to elevate disadvantage in to special disadvantage”: at [64].

161. Lack of English proficiency will not mean that a party has a special disadvantage unless it seriously affects their ability to make a judgment as to their own best interests: Australia and New Zealand Banking Group Ltd v Couanis [2020] WASC 125 at [218] (per Archer J). There may, however, be situations in which the inability to speak or read English in the context of a transaction that involves executing documents, such as guarantees and the like may, in all the circumstances, constitute a situation of special disadvantage: Li v So [2019] VSC 515 at [60] (per Croft J).

162. For example, in Luong v Du [2013] VSC 723, Emerton J observed, “the fact that Hong and Hue had a limited capacity to read and understand documents written in English does not mean they were incapable of making a judgment about their best interests”: at [123]. Whilst her Honour accepted that Mrs Hong had poor English and was not capable of reading the documents or understanding the documents without assistance, she and her husband were well capable of making further inquiries and consulting a solicitor when they felt the need: at [123]-[124]. Likewise, in Dinh v Commonwealth Bank of Australia [2021] WASCA 127, a party’s poor English did not constitute a special disadvantage in circumstances where they were experienced in financial matters, had been given a simple explanation of the terms of an agreement in the presence of person who could translate, and they actually understood the essential terms of the agreement: at [251] (per Buss P, Murphy and Mitchell JJA). In Rozenbilt v Vainer [2019] VSC 316, whilst the plaintiff had a limited grasp of the English language, he had numerous individuals available who would act as his interpreter, whether in meetings or in relation to the transaction and business documents; the documents had been explained to him by one of these persons; he was not disadvantaged to the point that he was unable to make a judgment as to his own best interests: at [107] (per Sifris J).

163. As to whether Mr Munzer had a special disability, Mr Munzer’s proficiency in the English language was imperfect but could not be said to seriously affect his ability to make a judgement as to his own best interests, where he wrote and read emails in English and had previously executed lengthy transaction documents without the assistance of a translator. Nor is it correct to say that Mr Munzer had no legal representation at the time. Jameson Law was then acting for both Mr Munzer and the plaintiff but had indicated that it was not prepared to do so for more detailed transaction documents. I do not accept the defendants’ submissions that the law firm was then acting for the plaintiff only.

164. I accept that Mr Munzer was not provided with an explanation by the law firm of the Heads of Agreement; nor was Mr Bachour. Mr Bachour agreed that he did not suggest to Mr Munzer that he take the document to a lawyer to get legal advice. Nor did he suggest that Mr Munzer take the document to Mr Azzi to look at. Mr Bachour accepted that he knew that Mr Munzer relied on him and trusted him, including to interpret words that he did not understand. Mr Bachour agreed that he was Mr Munzer’s trusted advisor and they had a very strong friendship, “more than a brother”.

165. The content of the term “trusted advisor” should not be passed over. Beyond the fact that Mr Bachour was a close friend of Mr Munzer, there is no evidence that Mr Bachour had any particular qualifications or experience in relation to business or legal or accounting matters beyond some experience in bookkeeping. True it is that Mr Bachour had a greater English competence and could translate English words into Arabic. But to the extent that the words being translated referred to business or legal concepts, there is no evidence that Mr Bachour had any particular experience in either field which would have enabled him to understand the content of these words any more than Mr Munzer.

166. The evidence does not support a conclusion that Mr Bachour was Mr Munzer’s business advisor, as opposed to a trusted friend. Mr Munzer had retained Mr Azzi as his business advisor and, from time to time, had also instructed solicitors in relation to his business. Of the two gentlemen looking at the Heads of Agreement on 3 September 2022, the more experienced in business matters and transaction documents was Mr Munzer.

167. I have not found that Mr Munzer was only given the last page of the Heads of Agreement. Rather, I prefer the evidence of Mr Bachour that both gentlemen reviewed the document on the computer screen. The whole document was printed. The last page was signed. There was no special disability. Mr Bachour made no unconscientious use of a superior bargaining position. This defence fails.

Mistake

168. The defendants alleged that the Heads of Agreement was executed by Mr Munzer by mistake and on the basis of the parties’ mutual mistake that “the Defendants wished to actually enter into the Written Agreement ... to a third party and not to Fouad Bachour or to interests associated with him.” While the defendants accepted that a mutual mistake had not been established, there was said to be a well recognised exception to the principle that a party who makes a unilateral mistake is bound by what he has signed. Where the mistake is the result of conduct by the other party that is essentially dishonest, the mistaken party may be entitled to have the contract rescinded or rectified. The impugned conduct must however have that necessary quality of legerdemain that justifies the intervention of equity. The conduct requisite to enliven the remedy has been described as "equivalent to fraud" or "involving a degree of sharp practice". In Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 the majority spoke of a party who "deliberately sets out to ensure that the first party does not become aware of the existence of his mistake" (at 432) or who, knowing of the mistake, "engages deliberately in a course of conduct which is designed to inhibit discovery of it": at 433. See also Johnston v Arnaboldi [1990] 2 Qd R 138 at 144; Easyfind (NSW) Pty Ltd v Paterson (1987) 11 NSWLR 98 at 104-108; Riverlate Properties Ltd v Paul [1975] Ch 133; A Roberts & Co Ltd v Leicestershire County Council [1961] Ch 555; May v Platt [1900] 1 Ch 616 at 623. This defence was said to have been made out.

169. I take the defendants’ reference to dishonesty, fraud and sharp practice to be a reference to the allegation that Mr Bachour provided only the last page of the Heads of Agreement to Mr Munzer for execution, while representing that the document was for the purposes of providing a licence to Ms Ghrayyeb to operate the Mt Druitt shop. Certainly, no other allegation of dishonesty, fraud or sharp practice was particularised.

170. As earlier mentioned, I am not satisfied that Mr Bachour only provided the last page of the document to Mr Munzer. Nor am I satisfied that Mr Bachour made the alleged representations. It follows that the defence of unilateral mistake fails.

171. In any event, I am satisfied that Mr Bachour and Mr Munzer reached an oral agreement in the terms described by Mr Bachour. There was no mistake. The Heads of Agreement aligned with the oral agreement. Further documents were in the course of being prepared, to more fully document the sale of the business along the lines of the documentation used for the sale of the Eastern Creek and St Clair businesses. However, before this suite of documents was executed, Mr Munzer changed his mind and brazenly re-took possession of the Mt Druitt shop.

REMEDIES

172. As each of the defences have failed, it follows that the Heads of Agreement is binding. The remaining issue is what relief, if any, should be granted.

Specific performance

173. The plaintiff seeks the aid of the Court to compel the defendants to perform their obligations according to the terms of the contract: Waterways Authority of New South Wales v Coal & Allied (Operations) Pty Ltd [2007] NSWCA 276 at [62] (per Beazley JA); Paolucci v Makedyn Pty Ltd (2021) 20 BPR 41,749 at [10]-[11] (per Leeming JA, White and McCallum JJA agreeing). As Leeming JA explained in Paolucci v Makedyn, in requiring the performance of a contractual term, equity is acting in aid of the plaintiff’s legal rights: at [16]. However, “… equity will not intervene to grant the remedy unless there is some good ground for doing so … It is thus necessary for the plaintiff to prove that damages are not an adequate remedy. … This is the major hurdle that a claimant seeking specific performance must overcome”: at [17], quoting R E Megarry (1960) 76(302) The Law Quarterly Review. In Lucas Stuart Pty Ltd v Hemmes Hermitage Pty Ltd (2012) 28 BCL 226; [2010] NSWCA 283, Campbell JA observed, “The only justification for equity ever involving itself in providing a remedy for breach of a common law obligation is if the remedy provided by the common law is inadequate”: at [5]; see likewise Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 223 CLR 660 at [11] (per Gleeson CJ, Gummow, Hayne & Callinan JJ).

174. As to whether damages are an adequate remedy, the test is whether it is just in all the circumstances that the plaintiff should be confined to damages: Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460 at 503 (per Windeyer J) (“the remedy, damages, cannot satisfy the demands of justice”); Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 424; [2008] NSWSC 852 at [97] (per Brereton J), quoting Evans Marshall & Co v Bertola SA [1973] 1 WLR 349 at 379 (per Sachs LJ), followed in Paolucci v Makedyn at [17].

175. The Court will almost invariably grant specific performance in aid of a purchaser, where a piece of property under a contract for sale of land or a business under a contract for same is seen as unique: Ryan v UPG 322 Pty Ltd [2023] NSWSC 1293 at [22]-[24] (Parker J) and the cases there cited.

176. There is no doubt that Mr Munzer will not perform his obligations under the Heads of Agreement unless compelled to do so. I do not consider it just that the plaintiff should be confined to damages as the contract was for the purchase of a particular business, which may be regarded as unique. In addition, the quantification of any damages may prove difficult given the cash nature of the business and the deficiencies in the business records discovered by Mr Munzer notwithstanding a succession of court orders requiring disclosure. I am satisfied that orders for specific performance should be made.

An account

177. Having determined that the Heads of Agreement is a valid and binding contract, the defendants are liable to the plaintiff for damages or an account of profits given the plaintiff’s inability to operate the business since 31 October 2022. It was agreed during the trial that the most efficient way to assess this amount was by the appointment of a referee, with appropriate terms of reference and instructions from the Court. Counsel agreed to liaise and endeavour to settle terms for the reference and instructions, in the event that such an order was made. I have since been provided with agreed orders for referral, for which I am most grateful, albeit I understand that the defendants did not respond to the plaintiff’s suggested referee.

ORDERS

178. For these reasons, I make the following orders:

1. Declare that an agreement made between the plaintiff and the first defendant dated 3 September 2022, whereby the first defendant agreed to sell to the plaintiff the business operating from Shop 2, 3 Cleeve Close, Mt Druitt, NSW and to assign to the plaintiff the first defendant’s lease of that premises is a valid agreement and binding upon the first defendant.

2. Order the first defendant to specifically perform and give effect to the agreement.

3. Dismiss the cross-claim.

4. Pursuant to Part 20 rule 4 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), refer to Fiona Bateman (Chartered Accountant at Doleman Bateman) (Referee) for enquiry and report the matter in the schedule hereto.

5. Direct that (without affecting the powers of the Court as to costs) the parties (namely Bachour Enterprises Pty Ltd, Fouad Bachour, Simon Munzer and Paradise CC Corp Pty Ltd) be jointly and severally liable to the Referee for the fees payable to the Referee.

6. Direct that the parties deliver to the Referee forthwith a copy of these orders together with a copy of Division 3 of Part 20 of the UCPR.

7. Direct that:

1. subject to (b) and (c) below, the provisions of Pt 20 r 20 of the UCPR shall apply to the conduct of proceedings under the reference;

2. the reference will commence immediately unless otherwise ordered by the Referee;

3. the Referee consider and implement such manner of conducting proceedings under the reference as will, without undue formality or delay, enable a just determination to be made including, if the Referee thinks fit:

1. the making of inquiries by telephone;

2. site inspection;

3. inspection of plant and equipment; and

4. communication with experts retained on behalf of Referee;

4. any evidence in chief before the Referee shall, unless the Referee otherwise permits, be by way of written statements signed by the maker of the statement; and

5. the Referee submit the report to the Court in accordance with Pt 20 r 23, addressed to the Equity Division Registrar, on or before 14 March 2025.

8. Amendments to the Schedule, whether by agreement or on a contested basis, are to be the subject of an order made by the Court.

9. If for any reason the Referee is unable to comply with the order for delivery of the report to the Court by 14 March 2025, the Referee is to provide to the Equity List Judge:

1. an Interim Report setting out the reasons for such inability; and

2. an application to extend the time within which to deliver the report to the Court to a date when the Referee will be able to provide the Report.

10. Grant liberty to the Referee or any party to seek directions with respect to any matter arising in proceedings under the reference upon application made on three days’ notice or such less notice ordered by the Court.

11. Reserve the costs of the reference.

12. Stand the proceedings over for further directions on 21 March 2025.

Schedule

In this Schedule:

Mount Druitt Business means the restaurant business (ABN 83 214 850 435) trading as “Paradise Charcoal Chicken” at Shop 2, 3 Cleeve Close, Mount Druitt NSW.

Ordinary Course of Business means the ordinary conduct of the Mount Druitt Business prior to 31 October 2022.

These questions arising in the proceedings:

13. For the period since 31 October 2022, what were the revenue earned, expenses incurred and profits made by the Mount Druitt Business?

14. Over the period (or any part of the period) since 31 October 2022, were any assets of the Mount Druitt Business disposed of or otherwise dealt with other than in the Ordinary Course of Business, and if so, which assets and how?

15. If, in answer to paragraph 2 above, assets of the Mount Druitt Business were disposed of or otherwise dealt with other than in the Ordinary Court of Business, what would have been the revenue earned, expenses incurred and profits made by the Mount Druitt Business in the period since 31 October 2022 had those assets not been disposed of or otherwise dealt with other than in the Ordinary Court of Business?

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Decision last updated: 13 December 2024