Brown & Ors v Hodgkinson & Ors

[2009] NSWSC 262

CITATION:	Brown & Ors v Hodgkinson & Ors [2009] NSWSC 262 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	7, 8, 9 and 10 October 2008, and written submissions received from the Defendants on 18 October and 13 November 2008, and from the Plaintiffs on 13 November and 12 December 2008.
JUDGMENT DATE :	8 April 2009
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
DECISION:	Judgment for Defendants on Amended Statement of Claim; judgment for Cross Claimants on Cross Claim.
CATCHWORDS:	CONTRACT – Informal agreement – highly complex commercial transaction involving interests in real estate – whether parties only agreed in principle or whether intended to be bound immediately – question of fact.
LEGISLATION CITED:	Civil Procedure Act 2005 (NSW) – s 100 Conveyancing Act 1919 (NSW) – s 54 Trade Practices Act 1974 (Cth)
CATEGORY:	Principal judgment
CASES CITED:	- Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 - GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 - LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2001] NSWSC 886
PARTIES:	Justin John Brown (First Plaintiff) Sharlotte Pty Ltd (Second Plaintiff) Abadeen Group Pty Ltd (Third Plaintiff/1st Cross Defendant) Lighter Quay Investments Ltd (Fourth Plaintiff) Greenberg Investments Development Ltd (Fifth Plaintiff) Brooke Brown (2nd Cross Defendant) Lance Hodgkinson (First Defendant) Bluestone Property Services Pty Ltd (Second Defendant/1st Cross Claimant) 230 Palmer Street Pty Ltd (Third Defendant) Daniel Hausman (Fourth Defendant) Namsauh Holdings Pty Ltd (2nd Cross Claimant) Crown Street Developments Pty Ltd (Fifth Defendant) 519 St Kilda Road Developments Pty Ltd (Sixth Defendant/3rd Cross Claimant) Gorcha Pty Ltd (Seventh Defendant)
FILE NUMBER(S):	SC 2008/08; 4043/08
COUNSEL:	B.A.J. Coles QC, J.P. Donohoe (Plaintiffs) P. Durack SC, Ms R. Francois (Defendants)
SOLICITORS:	Pattin Bell Davey Law (Plaintiffs) Clayton Utz (Defendants)

2008/08 Brown & Ors v Hodgkinson & Ors
4043/08 Bluestone Property Services & Ors v Abadeen Group & Anor

JUDGMENT

8 April, 2009

Introduction

1    The First Plaintiff, Mr Brown, the First Defendant, Mr Hodgkinson, and the Fourth Defendant, Mr Hausman, were friends and property developers. Through their various companies, now parties to these proceedings, they entered into joint ventures to develop two large properties, one in Miller Street, Cammeray, and the other in St Kilda Road, Melbourne. The developments were worth many millions of dollars. 2    By late 2005, Mr Brown wished to sell out of the Cammeray joint venture. He, Mr Hodgkinson and Mr Hausman began discussing the terms of an agreement by which Mr Brown’s interest would be purchased by the interests of the other two. The negotiations did not progress quickly enough for Mr Brown. By early August 2006, he was coming under considerable financial pressure for funds for other real estate developments. He became increasingly annoyed at the delay in resolving the terms of the agreement for the buy-out. 3    On the afternoon of Saturday, 12 August 2006, Mr Brown met Mr Hodgkinson and Mr Hausman at the Lord Dudley Hotel in Paddington to discuss the buy-out. A lengthy discussion ensued, over a number of drinks in the public bar. It covered not only Mr Brown’s interest in the Cammeray development but also his interest in the St Kilda Road development. A document was produced in the course of the discussion. It was handwritten, mostly by Mr Brown, in a felt-tipped pen on a single sheet of A4 lined paper torn from a notebook. It was signed by the parties. It has come to be called “the Lord Dudley Agreement” and I will continue to use that term. 4    Mr Brown contends that the Lord Dudley Agreement evidences an immediately binding and enforceable agreement whereby Mr Hodgkinson and Mr Hausman or their respective nominees are obliged to buy out his interests in the Cammeray and St Kilda developments. By proceedings 2008 of 2008, he and companies controlled by him seek orders for specific performance, and damages. 5    By their Defence, Messrs Hodgkinson and Hausman contend that the Lord Dudley Agreement:


– was not intended to be immediately binding and was no more than a note of an agreement in principle to be embodied in a formal legal document;

– is so vague and uncertain in its terms as to lack contractual validity;

– is unenforceable pursuant to s 54A Conveyancing Act 1919 (NSW).

6    Alternatively, they say that if the Lord Dudley Agreement has contractual validity:


– it contains a term that performance by Messrs Hodgkinson and Hausman is subject to the obtaining of the necessary finance and that that condition has not been fulfilled;

– it has been terminated for breach of a fundamental term by Mr Brown’s companies.

7    Companies controlled by Messrs Hodgkinson and Hausman commenced a separate proceeding (4043 of 2008) against a company controlled by Mr Brown (Abadeen Group Pty Ltd – “Abadeen”) and against Mr Brown’s wife. They say that a total of $950,000 was paid or allowed to Abadeen and Mrs Brown in anticipation of the parties reaching a concluded and binding agreement in accordance with the terms agreed in principle under the Lord Dudley Agreement. No such binding agreement having been concluded, they claim repayment of the monies on the ground of unjust enrichment. 8    By their Defence, Abadeen and Mrs Brown in essence rely upon the enforceability of the Lord Dudley Agreement. 9    The two proceedings have been heard together and the second proceeding has been treated as a cross claim. For convenience I will refer to it as such.


The Lord Dudley Agreement

10    It is as well to start with the terms of the Lord Dudley Agreement itself. When one looks at the original document and at its physical characteristics one appreciates more fully the arguments in support of, and against, its contractual validity. 11    The handwriting is sometimes difficult to read. The following is a transcription:
“ Cammera y

24 24 50

40 18.33

800K paid next week

450K paid 30 October

250K paid 15 November

30K to be paid on or before 15 December 2006 – if the above amounts are not paid in full by the 15 December then interest of $20K per month will be paid.

JB will exchange and settle 230 Palmer St with by 15 Dec 2006. Both JB/LH to cover costs.

Crown St will be made available for settlement by JB by 30 March May 2007 or earlier

Brooke’s apt will be reduced by 150K and settled within 4 months or earlier, subject to capital consent.

Abadeen’s apartment (val of 750K) will be made available by March 2007 – part of Cammeray buyout

Chevron 387 – whatever consultants costs have been
paid by bluestone Abadeen will pay and any Development management fees up to 40K will also be paid by Abadeen.


JB will take $2.55 mill of his choice of apartments from lighter Quay renouncables at no cost. 30 March May 2007

JB has no further costs going forward.

$18,333 payable to Lance by JB.

(three signatures at foot of document)”
12    Mr Coles QC, who appears for the Plaintiffs with Mr J. Donohoe of Counsel, well appreciated the impression that this document creates, not only its physical form but when one bears in mind that it was brought into existence in a public bar over a number of schooners of beer. At once grasping the nettle, Mr Coles said:
“Take one look at it and your Honour might say goodness me there'll be a whiteboard next and heavens above there'll be coasters with squiggles on the back of it and we are straight away in GR Securities and Baulkham Hills Hospital territory.”
13    No doubt Mr Coles would accept that the physical appearance of the document, and the circumstances in which it was produced, are factors to be weighed in assessing whether all of the circumstances, taken objectively, evidence an intention on the part of the parties that the document have immediate binding effect. 14    Reading the document, one notices immediately that:


– it does not identify the persons or corporations which were to make payments;

– it does not identify the persons or corporations which were to receive payments;

– it does not identify the consideration for which the payments in paragraphs 1.1, 1.2, 1.3 and 1.4 are to be made;

– it does not identify the terms upon which “230 Palmer Street” and “Crown Street” are to be transferred;

– it does not identify the interests in land to be sold.

15    Mr Coles’ response is that Messrs Brown, Hodgkinson and Hausman were experienced businessmen who had been negotiating this “buy-out” for months. While the words in the Lord Dudley Agreement are meaningless to the uninformed reader, Messrs Brown, Hodgkinson and Hausman, he says, knew exactly what they meant, so that the terms of the agreement were clear to them and they intended by their signatures to indicate that their agreement should be immediately binding. The strongest evidence in his favour, says Mr Coles, is the fact that, prior to any formal agreement being executed, Messrs Hodgkinson and Hausman caused Abadeen and Mrs Brown to receive the payments and benefits provided for in the Lord Dudley Agreement. 16    The explanation for the payments to Abadeen and Mrs Brown given by Messrs Hodgkinson and Hausman in their affidavits seems unconvincing on a mere reading. Mr Hodgkinson said that after the Lord Dudley Agreement was signed, Mr Brown was very persistent in demanding that money be paid to him immediately because he needed it urgently for other transactions. Mr Hodgkinson said that he still regarded Mr Brown as a friend and wished to help him by making whatever payments he could, in the expectation that the terms of the Lord Dudley Agreement would be worked out properly and incorporated in a formal document. However, if that did not happen, Mr Hodgkinson said, he expected that Mr Brown would repay the money. Mr Hausman also said that he felt very pressured by Mr Brown’s persistent demands for money after execution of the Lord Dudley Agreement. 17    Messrs Hodgkinson and Hausman are very experienced, large-scale real estate developers. It is hard to imagine them succumbing to no more than verbal pressure to pay large sums of money where there is no legally enforceable agreement to do so. However, having seen and heard Mr Brown at some length in the witness box, and having read the e-mails which he sent, I can appreciate the character of the pressure to which Messrs Hodgkinson and Hausman refer. In the light of that appreciation, their evidence takes on an entirely different complexion, as I shall explain shortly.


The circumstances at the time of the Lord Dudley Agreement

18    There is no dispute about the following facts and circumstances. 19    Mr Brown, then Managing Director of Colliers Residential Australasia, met Mr Hodgkinson in 2001. Mr Hodgkinson was a property developer and consultant to the building and finance industry. They formed a professional and personal relationship. 20    Between 2001 and 2003, Mr Brown and Mr Hodgkinson worked together on the development of three properties, 213 Palmer Street Darlinghurst, 230 Palmer Street East Sydney, and 282 Oxford Street, Bondi Junction. 213 Palmer Street was sold in 2006. 21    230 Palmer Street is a mixed residential and commercial development. Mr Brown and Mr Hodgkinson each had a 50% interest in the development through Sharlotte Pty Ltd (“Sharlotte” – Mr Brown’s company and the Second Plaintiff), and Bluestone Property Services Pty Ltd (“Bluestone” – Mr Hodgkinson’s company and the Second Defendant). 230 Palmer Street Pty Ltd (a joint venture company and the Third Defendant) borrowed $4,448,000 to finance the development. 22    Mr Brown and Mr Hodgkinson also each had a 50% interest in 282 Oxford Street through a unit trust. Bluestone holds 50% of the units and Abadeen (Mr Brown’s company and the Third Plaintiff) holds 50%. 23    In 2003, Mr Hodgkinson and Mr Hausman acquired a property in Crown Street, Darlinghurst, for redevelopment. It was acquired through a company called Crown Street Developments Pty Ltd (“Crown Street Developments” – the Fifth Defendant). By August 2006, Crown Street Developments had borrowed $6.1M to finance the development. 24    From 2003 onwards, Mr Brown, Mr Hodgkinson and Mr Hausman worked together on two large developments called the “Cammeray Development” and the “Chevron Development”. As at August 2006, the position was as follows. 25    The Chevron Development comprises some three hundred residential units in St Kilda Road, Melbourne. The property is held by 519 St Kilda Road Developments Pty Ltd (“SKR”). The shareholders of SKR are Bluestone and Mr Hausman’s company, Emily Nominees Pty Ltd (“Emily Nominees”). The directors of SKR are Mr Hodgkinson and Mr Hausman. 26    However, Mr Brown is a “silent partner” in the Chevron Development through a company called Greenberg Investments Development Ltd (“Greenberg”). Greenberg is incorporated in the British Virgin Islands but apparently it is administered in, and carries on business in, Hong Kong. Mr Brown is neither a director nor a shareholder, but he controls the company, although how and to what extent is not clear from the evidence. Greenberg is said to control one-third of the equity in the Chevron Development. Greenberg is the Fifth Plaintiff. 27    SKR had borrowed more than $127M for the Chevron Development from a number of financiers, including Capital Finance. Bluestone and Emily Nominees had given supporting guarantees and charges. As at August 2006, sixty-eight of the residential units were nearing completion and about one-third of the units had been sold. Results of the sales effort had been poor. 28    SKR had entered into contracts for sale of seventeen of the units in the Chevron Development to Lighter Quay Investments Ltd (“LQI”). LQI is a company incorporated in New Zealand and is controlled by Mr Brown. It is the Fourth Plaintiff. The contracts were called by the parties the “Lighter Quay Renounceables” because they provided that SKR could terminate them without penalty within a certain period. 29    SKR had also entered into a contract to sell Unit 728 in the Chevron Development to Abadeen and another unit in the development to Mrs Brown for $425,000. 30    The Cammeray Development comprises thirty-nine residential units and five thousand square metres of retail space. It is held by Gorcha Pty Ltd (“Gorcha” – the Seventh Defendant). As at 12 August 2006, the shares in Gorcha were held as to 40% by Greenberg and as to 30% each by Bluestone and Emily Nominees. The directors were Messrs Brown, Hodgkinson and Hausman. 31    Gorcha had borrowed about $17M for the Cammeray Development from financiers, including Capital Finance. Messrs Brown, Hodgkinson and Hausman, Bluestone, Emily Nominees and Greenberg had given supporting guarantees and the companies had given charges over their shares in Gorcha. 32    As at 12 August 2006, construction of the Cammeray Development was expected to commence in early 2007.


Discussions for buy-out

33    Discussion between Messrs Brown, Hodgkinson and Hausman about a buy-out of Mr Brown’s interests began in about September 2005. The discussions concerned Mr Brown’s interest, through Greenberg, in the Cammeray Development. Mr Hodgkinson and Mr Hausman needed to obtain additional finance to fund the buy-out. They applied to Investec Bank (Australia) Ltd (“Investec”) in the names of Bluestone and Mr Hausman’s company, Namsauh Holdings Pty Ltd (“Namsauh”). 34    On 4 July 2006, Investec offered a facility of $2.5M. The purpose was “to fund buy-out of third partner’s interest in [the Cammeray Development], working capital and capitalised interest for nine months” . The securities included the 230 Palmer Street property, specific units in the 282 Oxford Street property and in the Crown Street property and two other properties. Also required were fixed and floating charges over the assets of Bluestone and Emily Nominees. The assets of those companies included their shares in SKR and Gorcha and thereby their interests in the Chevron and Cammeray Developments. Capital Finance already held charges over those shares as security for funding those developments and its consent would be required for the further charges in favour of Investec. 35    Shortly after 4 July, Mr Hausman had a conversation with Mr Brown in which Mr Hausman told him of the Investec offer but said that it was $500,000 less than they had sought because Investec had reduced the Loan to Valuation Ratios offered as security. Mr Brown’s response – and it was typical of his attitude throughout the whole of the negotiations – was that how Messrs Hausman and Hodgkinson financed the buy-out was their problem – all he wanted was his money and he wanted it immediately. 36    The parties carried out a great deal of their negotiations for the buy-out by e­­-mail, so that there is a contemporaneous record of the progress of the discussion. It is not necessary to recount in detail each step backwards and forwards. A summary will suffice. 37    On 14 July 2006, Mr Brown sent an e-mail to Mr Hausman proposing certain terms in six points. Even with the background knowledge which I have recounted above, the reader would find the terms cryptic to the point of obscurity. However, one can glean that Mr Brown proposed a cash payment of $1.2M out of the proceeds of the Investec loan within a month. Amongst the terms was a proposal concerning the purchase of Mrs Brown’s apartment in the Chevron Development. 38    Mr Hausman responded by e-mail later that day. He said:

“I agree all 6 points are integral elements of our deal, the specifics of which still need to be agreed by both Lance and myself.

We need to internally work through Points 1 & 2 as Investec as you are aware have clipped us back $500k.

I also need to table the Land Tax issue at Chevron. Are you in a position to contribute anything?”
39    On 19 July, Bluestone had obtained a valuation of 230 Palmer Street, showing a market value of $5.1M. On 25 July, Crown Street Developments obtained a valuation of its units in the Crown Street Development, showing a market valuation of $8M. 40    In an exchange of e-mails between Mr Brown and Mr Hausman on 27 July, Mr Brown sought final agreement to the terms of the buy-out for his interest in the Cammeray Development. Mr Hausman responded, outlining the difficulties with raising the finance necessary for the buy-out and saying, inter alia, that the agreement was “subject to Investec draw-down of funds” . He also referred to cash flow problems with the Chevron Development. 41    On 11 August 2006, Investec wrote to Bluestone and Namsauh, making a revised offer for finance. The maximum amount offered was $2.1M; the purpose of the facility was as stated in the 4 July letter.


The Lord Dudley Hotel meeting

42    Messrs Brown, Hodgkinson and Hausman have each given accounts of the meeting in the Lord Dudley Hotel on 12 August. The accounts are different in certain respects, some minor and some major. Mr Hodgkinson and Mr Hausman conceded that they do not have a clear recollection of much of the detail discussed. 43    In his affidavit of 25 March 2008, Mr Brown gives a very detailed account of what was said at the meeting. It is necessary to set it out in full:

“I said: ‘I am not happy with your proposal of postponing some of the initial payments. I am paying $25,000 interest per month on second mortgage finance with Freestyle because you haven’t performed. It is not my problem if you have issues, you have strung me out for nearly a year and you have embarrassed me.’

Lance said: ‘The deal was always subject to finance.’

I said: ‘Whatever, you said you could do it.’

Lance said: ‘That’s the deal we can do, or no deal.’

I said: ‘Well, I’m not amused, but this time I want certainty. I’m not chasing you. This time this will not be subject to finance.’

Lance said: ‘Fine, we have the finance.’

I said: ‘How are you going to do it, is it all geared?’

Lance said: ‘Justin, that is what I do, it is all organised.’

I said: ‘Fine, I want it in writing and I want interest if you don’t perform.’

Lance said: ‘Fine, but you will need to allow for 2nd mortgages to be put on Oxford St and Crown St.’

I said: ‘If you have to, when can you refinance the 2nd mortgages out?’

Lance said: ‘By March next year.’

I said: ‘Fine, but I want you and Lance to cover my second mortgage costs which is $25,000.00 per month.’

Daniel said: ‘That should be fine, I will confirm with Lance, we need to sort some things out as well.’

I said: ‘In relation to Cammeray you said you could pay $1.2 million now and $300,000 by October.’

Daniel said: ‘We can honour the amounts but we have some issues that we need to sought [sic] out internally.’

I said: ‘That not my fucking problem, I want my money.’

Daniel said: ‘What we can do is pay you $800,000 next week, then $450,000 end of October and a further $250,000 in mid November.’

I said: ‘That’s not fucking good enough.’

Lance said: ‘That’s the deal, if you don’t like it then there is no deal.’

I said: ‘That’s fucking ordinary. Still, I want my second mortgage interest costs paid for because I don’t trust you guys and I want finite dates.’

Daniel said: ‘How much will that cost?’

I said: ‘I want $30,000 to be paid by December. And if you blokes are not paid up to date by then I want $20,000 a month going forward so that I am not out of pocket and I gather there is no change to the rest of our agreement.’

Daniel looked and Lance nodded and Daniel said: ‘Yes OK.’

I said: ‘I want this in an agreement that we all sign and agree to tonight.’

Daniel said: ‘Fine.’

I said: ‘Can I borrow your pad and fountain pen?’

I then wrote clauses 1, 2, 3 and 4 in the handwritten agreement and we had the following conversation:

I said: ‘As long as you guys do these things then I can settle 230 Palmer Street by 15 December 2006.’

Lance and Daniel said: ‘Yes.’

I then wrote down clause 5 in the handwritten agreements.

Daniel, Lance and I then had a further conversation:

I said: ‘Now Crown Street you are giving it to me for the value of $6.1 million which is the debt you have on it for Bankwest.’

Daniel said: ‘Yes.’

I said: ‘We have agreed that I have the ability to sell these things down.’

Lance said: ‘You know there will be a second mortgage on it.’

I said: ‘That’s fine we will make the sales subject to simultaneous settlement. And I get the Chevron apartment before we settle Crown Street as I need the apartment for my loan to debt ratio’s and Daniel it is valued at $750,000.’

Daniel said: ‘Yes it is that is what Knight Frank value it at.’

I said: ‘And the purchase price for Brooke’s (i.e. Mrs Brown’s) apartment at Chevron is to be reduced by $150,000.00. When are you blokes going to be able to settle Brooke’s apartment.’

Lance said: ‘By the end of the year.’

I then wrote 6, 7 and 8 of the handwritten agreement.

I then handed the handwritten agreement to Lance and Daniel for them to check.

I then went outside and had a cigarette and called my wife.

I came back in the Lord Dudley and Lance, Daniel and I had the following conversation:

Daniel said: ‘We just have to make a couple of amendments.’

I said: ‘What are they.’

Lance said: ‘You and I have to cover the 230 Palmer Street costs until settlement.’

I said: ‘Fine.’

I then observed Daniel write in 230 and add “JB and LH to cover costs” and then the conversation continued as follows:

Lance said: ‘We will need to get Byrne’s approval (the loan manager from Capital Finance) to get the $150,000 discount for Brookes apartment.’

I said: ‘Can you do it.’

Lance said: ‘Its just like Brett’s discount on his apartment.’

I said: ‘Fine.’

I then observed Daniel wrote in ‘or earlier subject to Capital consent’ in clause 7 of the handwritten agreement.

Daniel, Lance and I then had further conversation:

Daniel said: ‘Why don’t we agree on a deal to take you out of Chevron as well, to make it clean, as we are going to be doing all the work?’

I said: ‘You are doing all the work because you are getting paid for it. Fine, but I want it all linked together with set dates.’

Daniel said: ‘That’s fine, what do you want?’

I said: ‘$3.2 million that gives you guys an extra $1.1 million on your figures of $4.3 million.’

Daniel said: ‘You will need to take apartments.’

I said: ‘That’s fine, I will take them out of the Lighter Quay renounceables, as I have other trading stock in that company and it is tax effective.’

Daniel said: ‘That’s fine.’

Lance said: ‘We can’t do $3.2 million though, we can only do $2 million on Chevron.’

I said: ‘I will not accept $2 million. Your feasibility indicates $13 million plus profit and I think you have left things out of it.’

Daniel said: ‘We need to compromise.’

I said: ‘I’ll agree to $2.75 million.’

Lance said: ‘’Mate, $2.5 million is it.’

I said: ‘I want $2.55 million and obviously I have no cost going forward.’

I said: ‘Lets put it all on the one page and then we have one agreement.’

Daniel said: ‘Fine.’

Lance said: ‘I want the other issues with the consultants being paid on 387 Alfred St and you owe my $18,333.00 in costs.’

I said: ‘Do you want to make reference to the buyout on 282 Oxford Street as we are finalizing all of our JV’s.’

Lance said: ‘No Baxter prepared a second document for that, when can you sign it.’

I said: ‘In the next couple of days.’

…

I then wrote down in the presence of Daniel and Lance point Chevron and point 1 and 2 under the heading Chevron on the handwritten agreement and we had a further conversation:

I said: ‘Are you guys 100% that you can meet these deadlines.’

Lance said: ‘I told you I can.’

I said: ‘That fine lets sign it.’

I completed the handwritten document and I signed and handed it to Daniel and Lance.

I observed Daniel and Lance look through it, and we had the following conversation:

Lance said: ‘I think we should change the Lighter Quay sales (Chevron clause 1) to May.’

I said: ‘Can you perform?’

Lance said: ‘Yes but this gives us some comfort because we are organizing a take for the Capital Finance funding on the residual stock on Chevron, I have already spoken to Martin Smeadhills.’

I said: ‘I want the Crown Street settlement to be made to May as well because it will make my life easier if I can’t sell down the product because I will have approximately $11.3 million worth of property and only about $6.5 million worth of debt, including stamp duty, when I make the Crown Street purchase.’

I then observed Lance make changes March to May in Clause 6 of Cammeray and clause 1 of the Chevron clause. I then observed Lance and Daniel sign the agreement.

The handwritten agreement was handed back to me and Lance and I had a further conversation:

Lance said: ‘What about the outstanding stuff on 387 Alfred Street.’

I said: ‘Fine.’

I then wrote in clause 3 under Chevron. I then passed the document back to Daniel.

Lance said: ‘We need to put in the $18,333.00 that JB owes me.’

I said: ‘Fine, and also the Abadeen apartment is in the Cammeray buyout in March and not May.’

I then observed Daniel make the following changes in clause 8 ‘part of the Cammeray buyout’ and at the bottom of the document wrote $18,333.00 payable to Lance by JB’.

I said: ‘We are all agreed thank god for that. I will take the agreement. I will get it typed up.’

We all shook hands at this juncture.

…

Soon after this conversation Daniel then went to the bar to get drinks. Lance and I had a further conversation as follows:

Lance said: ‘You got a good deal.’

I said: ‘I think you guys have, anyway, just perform this time. It is ruining our friendship; you can’t treat people like this.’

Lance said: ‘I think you are a willing seller, and you have a willing buyer in Daniel. I told you, I have the finance in train.’

I said: ‘Good luck to you, it’s not my issue now.’

Lance said: ‘You’re right.’ ”
44    The affidavit was sworn some nineteen months after the event. The parties to the discussion had been drinking. Clarity of recollection was obviously an issue. 45    Mr Durack SC, who appears with Ms Francois for the Defendants, began his cross examination by asking for Mr Brown’s recollection of certain conversations which he had recounted verbatim in two affidavits sworn only days before the commencement of the trial. Mr Brown asserted that he had clear recollections of the discussions but whenever he was asked about any of them with any particularly, he paused before answering to look at what he had said about them in his affidavits. He continued to do so even after he had been repeatedly asked to refrain not only by Mr Durack but, finally, by me. 46    Without the prompt of what appeared in his affidavits, Mr Brown was unable to recall with any particularity the conversations to which he had deposed. He repeatedly said “without my affidavit I cannot tell you exactly what the conversation was” . After a few minutes, when asked to recount the substance of conversations which he had set out in these very recent affidavits, Mr Brown simply resorted to repetition of the formula “I refer to my affidavit” and gave no further answer. He did this at least four times before Mr Durack came to ask him about the conversation which produced the Lord Dudley Agreement. 47    The following ensued:

“Q. Now Mr Brown, what was said at the Lord Dudley Hotel? Mr Brown, just put aside your affidavits for a moment if you please. What was said …

HIS HONOUR: Mr Brown, I think it is going to make matters a little smoother if you close your affidavits and put them to one side so Mr Durack does not have to keep reminding you of this, all right? Mr Durack?

DURACK
Q. Now Mr Brown, what do you say was said at the Lord Dudley Hotel about Palmer Street in connection with a proposed buy out of Cammeray?
A. I refer to my affidavit.

Q. Are you able to tell the Court, sitting there in the witness box now, what was said in substance about Palmer Street at the Lord Dudley Hotel on 12 August 2006?
A. In accordance with my affidavit.

Q. Do I take that answer to be that you are not able to give the Court, sitting there in the witness box now, any recollection whatsoever as to what was said at the Lord Dudley hotel about Palmer Street in connection with the proposed buy out?
A. My recollection is as set out in my affidavit.”
48    A few moments later, the following exchange occurred:

“HIS HONOUR: Mr Durack, in fairness to the witness, I think I should explain to him, in case he is unwittingly dealt an injustice.

Q. Mr Brown, Mr Durack is asking you questions about what you can recollect about the conversations, for example, the topic of the Crown Street transaction in the Lord Dudley discussion. The object of those questions is to see what recollection you presently have. The answer ‘I refer to my affidavit’, does not indicate to me what recollection you presently have.

In fairness to yourself, if you have a better recollection or a recollection of what was said in various conversations that Mr Durack is asking you about, you should give that now. If you don't have any better recollection or if you have no recollection you can say so but I think you should appreciate what is the object of this question?
A. Your Honour, may I ask a question to you?

Q. Yes?
A. Is it unreasonable for me to request why I am getting these pointed questions asked at me that are actually referred to in the document that I have sworn to?

Q. The issue, Mr Brown, to assist you, is to enable the Court to form an appreciation of the degree of your actual recollection. They are legitimate questions and you should do your best in fairness to yourself to answer them?
A. Okay.”
49    Mr Durack continued:

“Q. Mr Brown, you remember near the commencement of my cross examination today I asked you what recollection you had about what had been said about the Palmer Street property in connection with the buyer at the Lord Dudley Hotel? Do you remember I asked you about that?
A. You did and I believe – I recall my answer was ‘please refer to the affidavit’.

Q. I think that was the effect of your answer. Now, sitting in the witness box today, are you able to tell the Court such recollection as you do now have as to what was said about the Palmer Street property in context with the buy out at the Lord Dudley Hotel?
A. There was discussion at the Lord Dudley Hotel regarding myself and Lance having to continue paying the costs, ongoing costs, of Palmer Street until the settlement.

Q. Can you recall anything else now sitting in the witness box that was said about the Palmer Street property on that occasion?
A. Are you still suggesting I can't refer to my affidavit?

Q. Yes?
A. Thank you. That's my recollection. You are making my life very difficult without letting me refer to the affidavit.”
50    Mr Brown, however, repeatedly insisted that he had a commercially binding agreement when he left the hotel with the Lord Dudley Agreement. 51    I am satisfied, not only from what Mr Brown said in his cross examination but also from the way that he said it, that he has very little actual recollection of what was said in the discussions at the Lord Dudley Hotel. The detailed account of the conversation given in his first affidavit is very largely, if not entirely, a reconstruction, based upon the words in the Lord Dudley Agreement and coloured by his own very strong view that what was said and done amounted to a legally binding agreement. 52    Mr Hodgkinson and Mr Hausman deny any words attributed to them in the Lord Dudley Hotel meeting which would indicate an express agreement of all parties to be immediately and legally bound by the Lord Dudley Agreement, without qualification or condition. They say that it was agreed that the parties would refer the terms to their solicitor, Mr David Baxter, and that a formal legal document would be prepared. 53    In my opinion, it is inherently improbable that Mr Hodgkinson and Mr Hausman would have said anything to indicate an intention to be immediately and unconditionally bound by the terms of the Lord Dudley Agreement. First, they were clearly having difficulty raising the finance for the buy-out of Mr Brown’s interest in the Cammeray Development and they had earlier made known those difficulties to Mr Brown. Those difficulties had not been resolved by 12 August. 54    Second, and more importantly, the buy-out of Mr Brown’s interest in the Chevron Development was raised for the first time as an afterthought at the tail end of the discussion. It was a complex and very large development and Mr Brown’s interest in it, held through Greenberg, was far from transparent. Yet, Mr Brown asserts that, notwithstanding the other parties’ difficulties in securing finance for the buy-out of his interest in the Cammeray Development, they agreed almost on the spur of the moment to bind themselves unconditionally and immediately to buy out Mr Brown’s interest in the Chevron Development as well. 55    For these reasons, I am not satisfied that the parties during the discussion at the Lord Dudley Hotel said or did anything which evinced a common intention that what they had written in the Lord Dudley Agreement should be immediately and unconditionally binding.


Conduct after the meeting

56    On 14 August, the Monday following the meeting at the Lord Dudley Hotel, Mr Brown sent by e-mail to Messrs Hodgkinson and Hausman the following memorandum:

“Gents,

I have had our handwritten agreement tidied up and typed in order for David Baxter to establish a Heads of Agreement, as follows:

1. Cammeray Buyout

a. Greenberg will be paid $800,000 by 11 August 2006
b. Greenberg will be paid $450,000 by 30 October 2006
c. Greenberg will be paid $250,000 by 15 November 2006
d. Greenberg will be paid $30,000 by 15 December 2006 for interest contribution
e. In the event all monies are not paid by 15 December 2006, a $20,000 per month interest fee will be paid to Greenberg
f. Justin Brown will exchange and settle 230 Palmer Street by 15 December 2006. Both Justin Brown and Lance Hodgkinson to cover holding costs till this date. Justin Brown will have rights to sell all or part of the properties by settlement
g. Crown Street will be made available for settlement by Justin Brown by 30 March 2007 or earlier. Justin Brown will have rights to sell all or part of the properties with settlement occurring not before 30 March 2007
h. Chevron apartments:
i. Brooke’s Chevron apartment will be reduced by $150,000 and to be made available for settlement within 4 months, subject to Capital’s consent
ii. In the event Capital’s consent is not granted, then the $150,000 will be made available at settlement of the property
iii. Brooke will be able to lease the property immediately
iv. Abadeen’s apartment will be made available at no cost by March 2007 as part of the Cammeray buyout

2. Chevron Buyout
a. Lighter Quay will have the choice of up to $2,550,000 of apartments from Lighter Quay renounceables, to be made available at no cost on or before 30 May 2007 or apartment refinancing, which ever occurs earlier
b. Greenberg may elect to rescind Abadeen contract and take up to $750,000 of value from Lighter Quay renounceables
c. Justin Brown has no further costs going forward

3. Other items
a. Abadeen will be able to use the Cammeray and Chevron project for marketing purposes as an acknowledged involvement
b. Justin Brown acknowledges he owes Lance Hodgkinson $18,333.00
c. Bluestone currently owes Colliers $50,000 from the 2EB project
d. Justin Brown and Lance Hodgkinson agree a fee in total of $70,000 is owed to Bluestone. A reconciliation of any part of this outstanding amount and any other consultants costs for the 387 Alfred Street project paid by Bluestone
e. Points 3a, 3b, 3c and 3d above, to be reconciled, then Justin Brown will pay outstanding amount to Colliers. This is to occur prior to 18 August 2006.”
57    The first and most obvious point to note is that Mr Brown refers at the outset to tidying up the Lord Dudley Agreement so that David Baxter, the parties’ solicitor, can “establish a Heads of Agreement” . Mr Brown, as an experienced property developer, uses “Heads of Agreement” as a term of art: a preliminary document which will contain the main points of an agreement and may, or may not, be expressed to be legally binding: see e.g. LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2001] NSWSC 886, at [23] per Barrett J. If Mr Brown intended Mr Baxter to prepare a preliminary agreement in the form of “Heads of Agreement”, it suggests that what he had obtained in the form of the Lord Dudley Agreement was no more than a note containing points which the parties had signed to acknowledge that, at least thus far, they were in agreement. 58 Mr Brown’s memorandum of 14 August supports the evidence of Messrs Hodgkinson and Hausman that at the meeting at the Lord Dudley Hotel there was an express statement by Mr Hodgkinson that he wished Mr Baxter to draft an agreement properly. When asked in cross examination whether there was any reference to Mr Baxter at the meeting, Mr Brown at first evaded the question and then repeated his stock answer “I refer to my affidavit” : T116.3-.9. 59    The next point to note is that in Mr Brown’s ‘tidied up’ version of the Lord Dudley Agreement, he adds some terms not agreed in the Lord Dudley Agreement. For example:

– he changes the date for “settlement” of Crown Street to 30 March 2007 when in the Lord Dudley Agreement it had been amended to 30 May, and he adds an apparently immediate right to sell the properties so long as settlement does not occur before 30 March;

– he adds a right to lease immediately the apartment in the Chevron Development to be sold to Mrs Brown;

– he adds a right to Greenberg to elect to receive $750,000 in Lighter Quay Renounceables instead of the apartment;

– he refers in “other items” to a number of adjustments in the accounts between the parties which still have to be worked out.

60    Mr Coles says that these are all matters of detail: the parties had reached final agreement, as set out in the Lord Dudley Agreement, and could thereafter agree upon further points. If they did not agree, then the terms agreed in the Lord Dudley Agreement would continue to be binding. That is not the impression as to the parties’ common intention which I receive from the evidence as a whole. 61    The addition of further terms in the memorandum of 14 August suggests that Mr Brown regarded the “agreement” of the parties as still open to negotiation and that additional terms should be incorporated in the memorandum so that they could be embodied by Mr Baxter in the documentation which he was to prepare. 62    The “matters of detail” to be clarified in the Heads of Agreement to be prepared by Mr Baxter were not insignificant. Neither were they obvious from what had already been agreed and set out in the Lord Dudley Agreement. As Mr Durack points out, the Heads of Agreement would have to clarify:


– what were the rights to be transferred – for example, was it to be Greenberg’s shares in Gorcha or was it to be control of Greenberg itself – an issue that emerged subsequently;

– when were the interests to be transferred;

– which entities would acquire what assets;

– what steps were subject to the performance of other steps;

– what was to happen if part of the Cammeray transaction or part of the Chevron transaction could not be achieved because financiers’ consents could not be obtained;

– was Greenberg’s interest in the Chevron Development to be transferred if its interest in the Cammeray Development could not be transferred, and vice versa;

– what special conditions, if any, applied to the transfer of interests in land;

63    These questions, and many more, would require a great deal of discussion and careful instructions before a prudent lawyer could prepare a Heads of Agreement which he or she could confidently advise the parties to acknowledge as legally binding. It should be noted, incidentally, that Mr Baxter was called by neither party. 64    Thus far, the evidence overwhelmingly suggests that the parties manifested no common intention to be bound legally unless and until their agreement had been cast into proper legal form by Mr Baxter. Mr Coles says, however, that such a conclusion is negated by the fact that Messrs Hodgkinson and Hausman actually went ahead with performance of the Lord Dudley Agreement notwithstanding that no formal agreement had been executed. 65    It is necessary to have regard to what was done by Messrs Hodgkinson and Hausman, when and why. 66    On 23 August 2006, Mr Hodgkinson caused Bluestone to pay $400,000 to Abadeen. The payment of that amount was not in accordance with any express term of the Lord Dudley Agreement or of the 14 August memorandum. The payment was not expressly attributed to any part of the consideration which was to flow from Mr Brown or his interests under the Lord Dudley Agreement. There was nothing in the Lord Dudley Agreement or the 14 August memorandum which required payment to Abadeen rather than to Greenberg, which held Mr Brown’s interests in the Cammeray and Chevron Developments. 67    Mr Hodgkinson says that he arranged the payment in response to pressure from Mr Brown, both in telephone messages and in e-mails. He says that Mr Brown said that he was desperate for money for his other real estate transactions. He said that he still regarded Mr Brown as a friend and believed that he really needed money. He believed that the buy-out of Mr Brown’s interests was still being worked out and that if it could not be implemented Mr Brown would repay the money. 68    The e-mails which Mr Brown sent to Mr Hodgkinson at this time support Mr Hodgkinson’s evidence, at least as to the pressure being exerted by Mr Brown. On 22 August, Mr Brown sent the following e-mail to Mr Hodgkinson:

“Lance,

You are clearly on email, as you were able to respond with a ‘thanks mate’, however, you seem unable to respond with any detail, such as ‘YES, you will have your $800K tomorrow’.

I’m sick of having to ask over and over and over again for confirmation of your payment to me.

If you’re going to pay, then let me know when, if not, then it’s about time you let me know.

A clear response is required immediately … no more of this cowardice behaviour.

Are you paying me 800K tomorrow or not???????????????”

Mr Hodgkinson responded:
“JB, as this is a settlement of three Properties settlement will take place once all the paperwork is tickoff.
Regards
Lance”

Mr Brown rejoined:

“Lance, I don’t understand … I ran around madly trying to get this done for yourself and Daniel and everything you’ve asked for I’ve bent over backward to get done.

If you value our friendship, the $800K will be in my account tomorrow morning, with confirmation of such tonight. Otherwise, I will be calling Brendan at Investec myself at 9.30am, informing him that David Baxter has released documents to Investec prior to my approval and notification, as I specifically advised against.

I’ll also be advising Brendan that yourself and Daniel have received the money but have no intention of paying Greenberg what is owed.

Lance, this is now beyond a joke. You play when it suits you to be a friend, however, you seem, particularly of late, to go out of your way to place me in difficult situations to advance yourself.

That’s not a friendship, and if this is not sorted out as detailed above, I will treat our friendship in the same manner I perceive you too … non existent.”
69    From my observation of Mr Brown in the witness box, he is blunt, assertive and forceful, often to the point of being aggressive. I accept that he used all of his powers of persuasion to induce Mr Hodgkinson and Mr Hausman to make payments to him as quickly as possible in anticipation that the buy-out would eventually be fully worked out and documented. 70    I conclude that the payment of $400,000 by Bluestone to Abadeen on 23 August was not made pursuant to a specific term of the Lord Dudley Agreement and did not evidence a common intention of the parties that the Lord Dudley Agreement was immediately binding and enforceable. It was an attempt by Mr Hodgkinson to appease Mr Brown by making a payment on account of a transaction yet to be fully negotiated and concluded. 71    On 30 August 2006, Mr Hausman arranged payment of $150,000 from Namsauh to Abadeen. Again, there was no term in the Lord Dudley Agreement referring to this payment. On 15 September 2006, a payment of $250,000 was made to Abadeen, comprising $200,000 from Bluestone and $50,000 from Namsauh. Mr Hausman says that the reasons for these payments were that he believed that Mr Brown needed the money and that the parties had a framework for the proposed buy-out. Further, he says, Bluestone and Namsauh had received $800,000 from Investec which was to be used for the buy-out, when it occurred. 72    I am satisfied that in August 2006 both Mr Hodgkinson and Mr Hausman were endeavouring to make payment of the amount $800,000 referred in the Lord Dudley Agreement. However, they were not doing so in recognition that a concluded agreement existed but, rather, were making the payments in a spirit of co-operation with Mr Brown and at his forceful insistence. 73    On 14 September 2006, 230 Palmer Street and Sharlotte entered into a contract, fully documented in the usual way, for the sale to Abadeen of specific lots in the 230 Palmer Street development for $5.1M. There was no deposit. The completion date is specified as 15 December 2006, which reflects paragraph 1.5 of the Lord Dudley Agreement 74    In his opening submission, Mr Coles QC explained how this contract was made in performance of paragraph 1.5 the Lord Dudley Agreement. He said that the 230 Palmer Street property had been valued at $5.1M. It was mortgaged to St George Bank for $4.5M, leaving an equity of $600,000. The property was to be transferred to Mr Brown’s interests (ultimately Sharlotte) subject to the mortgage and for no consideration, so that by the transfer Sharlotte would receive property with an equity of $600,000. That sum was part of the consideration for the buy-out. 75    However, the contract for the sale to Sharlotte is inconsistent with this explanation of paragraph 1.5 of the Lord Dudley Agreement. The contract provides for a consideration of $5.1M to be paid and the property is not sold subject to the existing mortgage to St George Bank. As far as the terms of the contract disclose, the title to the property is to be transferred to Sharlotte free of encumbrances. That would mean that Sharlotte would have to find $5.1M to settle the purchase. 230 Palmer Street would have to discharge the mortgage to St George Bank on settlement, keeping for itself the equity of $600,000. Mr Coles conceded that the contract for sale does not “fully” reflect the Lord Dudley Agreement. I would go further to remark that it is inconsistent with the Lord Dudley Agreement, at least as it is explained by Mr Coles. However, Mr Coles says that the apparent inconsistency is “a matter of performance” and “part of the machinery” : T35.43-36.33. 76    It is quite possible to speculate as to what the parties might have agreed and done in order to accommodate the 230 Palmer Street contract for sale to Sharlotte with the terms which they had written in the Lord Dudley Agreement. Mr Coles engaged in some speculation along these lines for some time: T36.49-39.1. However, the question is not what the parties might have done but, rather, whether the 230 Palmer Street contract is in accordance with what they had agreed in the Lord Dudley Agreement. 77    The 230 Palmer Street contract is put forward as performance of a term of the Lord Dudley Agreement, thereby manifesting a clear common intention of the parties to be bound by that agreement immediately. However, I cannot see, on the face of the contract for sale, how it reconciles with paragraph 1.5 of the Lord Dudley Agreement, as explained by Mr Coles. There is no evidence to explain why the contract for sale is inconsistent with Mr Coles’ explanation of paragraph 1.5 or as to how that contract could be performed consistently with paragraph 1.5. Accordingly, I cannot accept that the 230 Palmer Street contract supports Mr Brown’s case. 78    Exactly the same problem arises with paragraph 1.6 of the Lord Dudley Agreement and a contract for sale which was entered into between Crown Street Developments and Abadeen on 14 September 2006. The contract price is $8M. The property is subject to a mortgage to the Bank of Western Australia for about $6.1M. Mr Coles says that by paragraph 1.6 of the Lord Dudley Agreement Mr Brown was to be transferred, in effect, Crown Street Developments’ equity in the property of $1.9. However, the contract does not transfer the title to the property subject to the mortgage and for no consideration. As far as the terms of the contract show, Abadeen is required to pay $8M on settlement and Crown Street Developments, after discharging the mortgage, is entitled to keep the equity of $1.9M. 79    There is no evidence to the effect that the terms of the Crown Street Developments contract, or those of the 230 Palmer Street contract, were mistaken or that there is a ‘side agreement’ between the parties which conforms those contracts with the Lord Dudley Agreement. Mr Brown does not seek an order that the contracts for sale be rectified to accord with the Lord Dudley Agreement. 80    The 230 Palmer Street and Crown Street Developments contracts have purportedly been terminated by the vendors for non-performance by Sharlotte and Abadeen. Mr Brown, Sharlotte and Abadeen seek orders for the specific performance of both the Lord Dudley Agreement and the 230 Palmer Street and Crown Street Developments contracts for sale. Mr Coles does not explain in his submissions how the Court could order performance by the same parties of inconsistent contracts. 81    On 12 December 2006, SKR settled the contract for sale of a unit in the Chevron Development to Mrs Brown. The contract price was $425,000 but SKR accepted on settlement $275,000, i.e. it allowed a reduction of $150,000 in accordance with paragraph 1.7 of the Lord Dudley Agreement.


Conclusions

82    I accept, as Mr Durack submits, that what has happened is that those parts of the Lord Dudley Agreement which were easily performable – i.e. the payment of cash and the reduction of the purchase price of Mrs Brown’s apartment – were performed in anticipation that the complicated parts of the buy-out transaction would be worked out in detail and embodied in a legally binding document drafted by Mr Baxter. There were many complications to be worked out. When the parties tried to implement the complicated parts of the transaction – e.g. the transfer of interests in 230 Palmer Street and Crown Street Developments – the transactions unravelled because their implications had not been properly thought out and agreed. 83    I do not accept Mr Brown’s evidence to the effect that the parties said anything at the Lord Dudley Hotel meeting to assert expressly an intention that the Lord Dudley Agreement would be immediately binding. I accept Mr Hodgkinson’s evidence to the effect that he said he wished Mr Baxter to advise on the transaction. This evidence is supported by Mr Brown’s memorandum of 14 August 2006. 84    I find that the circumstances in which the Lord Dudley Agreement was made lead to the conclusion that the parties’ common intention was no more than to record briefly as an aide memoire, and to acknowledge accordingly, points of an agreement to be worked out in more detail later and incorporated in a binding legal document. Those circumstances are:


– the nature of the proposed transaction, its complexity and the size of the amounts involved;

– the fact that a substantial part of the transaction, the buy-out of Mr Brown’s interests in the Chevron Development, was raised for the first time in the course of the Lord Dudley Hotel meeting;

– the informality of the meeting place;

– the informal and rudimentary nature of the handwritten document produced at the meeting;

– the omission from the document of many critical terms as to how the transaction was to be implemented;

– the presumption that people expect that agreements for the transfer of real estate will not be binding until contracts are exchanged;

– the circulation on 14 August of a memorandum by Mr Brown referring to the preparation of Heads of Agreement by Mr Baxter.

See generally: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, at 548E-550C, 551B-D; GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631, at 634C-G.

85    Accordingly, the Plaintiffs’ claim for specific performance of the Lord Dudley Agreement must fail. 86    The Plaintiffs’ claims for specific performance of the 230 Palmer Street contract for sale, the Crown Street Developments contract for sale, and a contract for sale of the Lighter Quay Renounceables depend upon the enforceability of the Lord Dudley Agreement. Those claims must also fail. 87    Mr Brown and his companies plead causes of action in fiduciary duty, estoppel and under the Trade Practices Act 1974 (Cth). No submission was made that any of these claims would succeed if the Lord Dudley Agreement were held not to be binding and enforceable. Those claims must also fail.


The Cross Claim

88    The Cross Claim pleads that if it is found that the Lord Dudley Agreement is not binding and enforceable then Abadeen is liable to repay $600,000 to Bluestone and $200,000 and Namsauh as money had and received to their use – i.e. a claim for unjust enrichment. Similarly, SKR claims that the deduction of $150,000 allowed to Mrs Brown for the purchase of her unit in the Chevron Development was made without consideration so that she is liable to repay it as she would be unjustly enriched by the retention of the benefit. 89    The Defence to the Cross Claim founds squarely on the enforceability of the Lord Dudley Agreement. Additional defences of estoppel, breach of fiduciary duty and under the Trade Practices Act were pleaded but were not pursued. As the Lord Dudley Agreement is not enforceable and no other defence to the Cross Claim has been made out, the Cross Claim must succeed.


Orders

90    In proceedings 2008 of 2008, there will be judgment for the Defendants on the Amended Statement of Claim. 91    In proceedings 4043 of 2008:


– there will be judgment for the First Plaintiff against the First Defendant in the sum of $600,000;

– there will be judgment for the Second Plaintiff against the First Defendant in the sum of $200,000;

– there will be judgment for the Third Plaintiff against the Second Defendant in the sum of $150,000.

92 I will hear the parties as to costs and as to the time from which interest on the judgments under s 100 Civil Procedure Act 2005 (NSW) should run.
– oOo –

14/04/2009 - Requested by Mr P. Durack SC, Counsel for the Defendants - Paragraph(s) Cover sheet - amended initials of Mr Durack from "J.P." to "P.".