Cappello v Scrivener - [2020] NSWSC 1748

Supreme Court

New South Wales

Medium Neutral Citation: Cappello & Anor v Scrivener & Anor [2020] NSWSC 1748
Hearing dates: 2, 3, 4, 5, 6, 11 and 12 November 2020
Date of orders: 7 December 2020
Decision date: 07 December 2020
Jurisdiction: Equity - Technology and Construction List
Before: Stevenson J
Decision:
First plaintiff entitled to declaration that there was a partnership with the first defendant and to equitable compensation for breach of that partnership

Catchwords:
CONTRACTS – oral agreement between first plaintiff and first defendant concerning proposed consolidation and possible development of three adjoining sites – where neither party made a note of the agreement – where neither party confirmed to the other in writing an understanding of the agreement – where no one else present when agreement made – where no dispute that a binding agreement was made concerning sharing expenses and profits of the venture – whether agreement was subject to the plaintiff finding buyer for the consolidated sites
CONTRACTS – oral agreement between first plaintiff and first defendant concerning proposed consolidation and possible development of three adjoining sites – whether parties’ post contractual conduct casts light on true nature of the agreement

Cases Cited:
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61
Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34
Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407
Lym International Pty Ltd v Marcolongo [2011] NSWCA 303
Management Service Australia Pty Ltd v PM Works Pty Ltd [2017] NSWSC 1743
Watson v Foxman (1995) 49 NSWLR 315

Texts Cited:
P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Thomson Reuters)

Category: Principal judgment
Parties: John Cappello (First Plaintiff)
Shaka Holdings Pty Ltd (Second Plaintiff)
John Sidney Scrivener (First Defendant)
Tuscany Corporation Pty Ltd (Second Defendant)
Representation:
Counsel:
D R Pritchard SC with D W Rayment (Plaintiffs)
D B Studdy SC with L Chapman (Defendants)
Solicitors:
RJI Legal (Plaintiffs)
Marsden Law Group (Defendants)

File Number(s): 2018/129029

Judgment

Decision
Hearing conducted on Microsoft Teams
Credit
Mr Cappello’s steps to secure the site
The critical conversation was on 20 August 2013
Mr Cappello’s affidavit account of the conversation
Mr Scrivener’s affidavit account of the conversation
Generally as to the conversation
Mr Cappello’s evidence before me about the conversation
Mr Scrivener’s evidence before me about the conversation
Post contractual conduct
Events following 20 August 2013
The meeting at the El Phoenician Restaurant
The Bannermans agree to enter a Due Diligence Deed
All three sites secured
Mr Scrivener tells Oracle Mr Cappello is “involved in the purchase”
Mr Scrivener’s negotiations with Oracle
“My joint venture partners”
The Verve Café Meeting
Further negotiations with Mrs Boon and government authorities
Further draft agreement between Tuscany and Oracle
The 88 Rouse Road Put and Call Option Deed
Events in January 2014
Possible sale to Sunland group - the Information Memorandum
“Our vendors”
“How it works”
Events in February 2014
25 February 2014 conversation
26 February 2014 conversation
Mr Scrivener’s 27 February 2014 email to Mr Aboud
The Sunset Date – 28 February 2014
Events following the Sunset Date
The events of 14 March 2014
April 2014
30 April 2014 meeting with Mr Stanley Lei
6 to 9 May 2014 – final attempt to sell to Sunland
The meeting with Mr Edgerton
Contribution to costs
June and July 2014
The 6 August 2014 Development Management Agreement
Events thereafter
Was the agreement subject to the Sunset Condition?
The result

Judgment

The first plaintiff, Mr John Cappello, is a licensed real estate agent and property developer based in north western Sydney. He is the sole director and shareholder of the second plaintiff, Shaka Holdings Pty Ltd.
The first defendant, Mr John Scrivener, is a property developer based in Queensland. He is the sole director and shareholder of the second defendant, Tuscany Corporation Pty Ltd.
On 20 August 2013 Mr Cappello and Mr Scrivener made an oral agreement to share the profits arising from securing control of and on-selling or developing three 5-acre contiguous parcels of land at Rouse Hill.
Those parcels of land are depicted in the attached plan (Annexure A (1227665, pdf)) and were then known as:

88 Rouse Road (originally owned by Mrs Valerie Boon);

104 Rouse Road (originally owned by Mr David and Mrs Margaret Bannerman); and

96 Cudgegong Road (originally owned by Mrs Kim Votano).

Neither Mr Cappello nor Mr Scrivener made a note of their conversation. Neither confirmed to the other their understanding of the agreement by way of letter, email or at all.
The controversy between Mr Cappello and Mr Scrivener is purely factual. The dispute between the two men is as to whether:

as Mr Cappello contends, he and Mr Scrivener agreed to form a partnership or joint venture in relation to the three sites and agreed to share equally the expenses and profits arising from securing, on-selling or developing the sites; or

as Mr Scrivener contends, the agreement was subject to a condition that Mr Cappello find a purchaser for the combined sites “prior to the expiry of the [due diligence] period”; that is, in the events that happened, by 28 February 2014. I will call this alleged condition the “Sunset Condition” and 28 February 2014 the “Sunset Date”.

By 15 November 2013, Tuscany had entered into “Due Diligence Deeds” (in effect, options to purchase) with the owners of the three properties and thereby secured control of the three sites.
By 14 March 2014, Tuscany in one case, and two companies incorporated by Mr Scrivener for the purpose in the two other cases, had entered into Put and Call Option Deeds with the owners of the three properties. The Put and Call Options entitled the grantee to acquire the properties for a total of $12.65 million.
Mr Scrivener secured financial assistance from a third party, Oracle Estates Pty Ltd.
By April 2015 a company jointly owned by Oracle and Tuscany exercised the call options and became the registered proprietor of the three sites upon payment to the vendors of the $12.65 million. At around this time Mr Scrivener had procured a Development Consent for the consolidated sites.
On about 17 July 2015, the Oracle/Tuscany jointly owned company sold the three sites to a Chinese developer, Tian Tong (Australia) Pty Ltd, for $37 million.
After payment to Oracle of the amount due pursuant to those arrangements, Tuscany received profits in the order of $9.26 million.
Mr Cappello claims to be entitled to, in effect, half of that profit.

Decision

I find that:

the agreement between Mr Cappello and Mr Scrivener did not include the Sunset Condition;

Mr Scrivener has not performed his obligations under that agreement; and

Mr Cappello is entitled to equitable compensation.

I will now invite submissions as to what, if any, further matters require resolution.

Hearing conducted on Microsoft Teams

Despite the factual contest about the agreement between Mr Cappello and Mr Scrivener and the concomitant point that credit is a central issue in the case, neither party applied for a “live” hearing nor raised any protest when my Associate informed them that I proposed to conduct the hearing on Microsoft Teams.
The trial proceeded on Microsoft Teams with only a few technical interruptions. Counsel are to be congratulated on the manner in which they adapted to the “virtual” environment.
In closing submissions, neither party contended that they had been disadvantaged by the conduct of the case on a virtual platform.

Credit

The credit of Mr Cappello and Mr Scrivener looms large in these proceedings. Both Mr Pritchard SC, who appeared with Mr Rayment [1] for Mr Cappello, and Mr Studdy SC, who appeared with Mr Chapman [2] for Mr Scrivener, made lengthy and detailed submissions on the subject.
1. For convenience and without disrespect to Mr Rayment, I will hereafter refer only to Mr Pritchard.
2. And, as with Mr Pritchard and Mr Rayment, I will from now on, and without disrespect to Mr Chapman, refer only to Mr Studdy.
There is a great deal of evidence as to what transpired between Mr Cappello and Mr Scrivener following their agreement on 20 August 2013, much of which is relevant to the probabilities of the true nature of their agreement, and much of which casts light on the reliability of their recollection.
Both Mr Pritchard and Mr Studdy referred to the familiar observations of McLelland CJ in Equity in Watson v Foxman [3] :

“[H]uman memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.”
3. (1995) 49 NSWLR 315 at 319.

I have kept his Honour’s memorable words in mind when considering the evidence in this case, particularly as:

neither Mr Cappello nor Mr Scrivener made a note of their understanding of the 20 August 2013 meeting;

between August 2013 and May 2015 (by which time it was clear to Mr Cappello that Mr Scrivener did not propose to share profit with him) neither Mr Cappello nor Mr Scrivener wrote or said anything to each other about what they contended the terms of their agreement to be;

it was not until June 2015 that Mr Cappello made a statement, to officers of Oracle, of his contention as to the terms of that agreement; [4] and

it was not until he swore his affidavit of 5 March 2019, five and a half years after 20 August 2013, that Mr Scrivener made a written record of the agreement as he recalled it.
4. See Mr Kennedy’s note of 11 June 2015 referred to at [423] below.

I see no alternative but to set out, in detail, the evidence of what occurred in relation to the Rouse Hill properties and to deal with the parties’ submissions as to credit as part of that process.
I will then analyse the evidence that thereby emerges and explain why I have concluded that, more probably than not, Mr Cappello’s recollection of the 20 August 2013 is to be preferred.

Mr Cappello’s steps to secure the site

Mr Cappello said that in 2011 during the course of working as a real estate agent “in the Hills area” Mrs Bannerman, one of the owners of 104 Rouse Road, contacted him with a view to him acting for her and her husband as a selling agent of that property.
Mr Cappello said he inspected the property and gave Mrs Bannerman an appraisal figure. Mr Cappello said that Mrs Bannerman did not give him a listing for the property but told him that her neighbour, Mrs Boon at 88 Rouse Road, was thinking of selling that property.
Mr Cappello said he first dealt with Mrs Boon by September 2012 when he attempted to obtain a listing from her for 88 Rouse Road. Ultimately, Mrs Boon appointed Mrs Sue Lobsey, another real estate agent in the area, as selling agent, as did Mrs Votano in relation to 96 Cudgegong Road. Mrs Lobsey was also in discussions with Mrs Bannerman about being appointed agent for the sale of 104 Rouse Road.
Mr Cappello said that by late February 2013, he had decided to attempt to “secure” 96 Cudgegong Road from Mrs Votano and 88 Rouse Road from Mrs Boon.
On 8 March 2013, Mrs Lobsey wrote to Mr Cappello:

“…I just spoke with Dominic Votano, he said he [sic; the property was owned by Mrs Votano] will happily do an option (2 years) but will not sell [96 Cudgegong Road] unless he gets $4.1”

On 19 March 2013 Mr Cappello wrote to Mrs Lobsey asking her to “submit the following offers to your vendors”.
The offers were:

an offer to enter an option to purchase 96 Cudgegong Road from Mrs Votano for $4 million with a non-refundable option fee of 1%, the option over 24 months; and

an offer to enter an option to purchase 88 Rouse Road from Mrs Boon for $4 million with a non-refundable option fee of 1%, the option over 18 months.

At around this time, Mr Cappello contacted Mr Michael Edgerton, who he described as “a business associate and a solicitor” because he thought Mr Edgerton “could assist me in procuring finance to secure the sites of 88 Rouse Road and 96 Cudgegong Road”. Evidently nothing came of that. As I describe below, Mr Edgerton played a later role in relevant events[5] .
5. See [333] to [365] below
In that context, Mr Cappello said in cross-examination that “at this time, I was the purchaser”, by which he meant that he was considering buying the property himself.
On 20 March 2013 Mrs Lobsey told Mr Cappello that Mrs Boon “wouldn’t sell under $4.1” in response to which Mr Cappello asked Mrs Lobsey to submit his “final offer” to Mrs Boon of an 18 month option to purchase 88 Rouse Road for $4.15 million.
On 31 July 2013 Mr Cappello told Mrs Lobsey that he was prepared to pay “1/2% for the extra 6 months” for 88 Rouse Road. Mrs Lobsey told Mr Cappello that Mrs Boon said “she is going to think about it”.
On 13 August 2013 Mr Cappello wrote to Mrs Lobsey with an offer to purchase, outright, 88 Rouse Road for $4.3 million with a proposed exchange date of 20 December 2013, a 12 month settlement, a due diligence period of 4 months and a due diligence fee of $5,000.
On 13 August 2013 Mrs Lobsey told Mr Cappello that Mrs Boon “would say yes today if it was a 90 day due diligence and a 10 month settlement” but that she wanted extra time to think about it and would let Mrs Lobsey know the answer on 15 August 2013.
It appears that Mrs Boon did accept Mr Cappello’s offer. There is no direct evidence of this but, on 16 August 2013, Mrs Lobsey sent an email to Mr Cappello:

“…spoke with [Mrs Boon] told her I will have all the information to her solicitors Monday and she will meet the clients Tuesday [20 August 2013]. She said Tuesday afternoon will suit her. She was very happy with that.”

Evidently, the “clients” to whom Mrs Lobsey was referring where Mr Cappello and Mr Scrivener.
Thus, Mrs Boon met Mrs Lobsey and Mr Scrivener on 20 August 2013 [6] .
6. See [51] below
Mr Cappello said that in late July or early August he discussed the Rouse Hill opportunity with Mr Scrivener [7] . It may be that Mr Scrivener’s name had then been mentioned to Mrs Lobsey and Mrs Boon.
7. See [48] below
On 17 August 2013 Mrs Lobsey told Mr Cappello that Mrs Votano “will take $4.1” for the sale of 96 Cudgegong Road.
On the same day, Mrs Lobsey told Mr Cappello she had been named as the selling agent for Mr and Mrs Bannerman’s property at 104 Rouse Road.
Thus, as Mr Pritchard put in closing submissions:

“Accordingly, by 17 August 2013, Mr Cappello had reached agreement with Valerie Boon as for a 4-month due diligence period, price and settlement date for 88 Rouse Road, and also knew that Mrs Votano would accept $4.1 for 96 Cudgegong Road.”

Apart from the reference in Mrs Lobsey’s 16 August 2013 email to Mrs Boon meeting the clients on 20 August 2013 there is no suggestion in the correspondence between Mr Cappello and Mrs Lobsey that Mr Scrivener played any role in these negotiations.
The position of Mr and Mrs Bannerman, however, was not yet clear.
What then followed was the critical meeting between Mr Cappello and Mr Scrivener on 20 August 2013.

The critical conversation was on 20 August 2013

Mr Cappello was not clear in his evidence that the meeting did take place on 20 August 2013 and, in cross-examination, said the meeting could have taken place on 18, 19 or 20 August 2013.
The meeting clearly did not take place on 18 August 2013, a Sunday, as on that date Mr Scrivener was in Brisbane and Mr Cappello sent Mr Scrivener an SMS asking him “What time are you flying down on Tuesday?”
Further, on Monday 19 August 2013, Mr Cappello sent a message to Mrs Lobsey stating:

“My partner in the acquisition of 88 Rouse Road Rouse Hill won’t be available until any time after 2pm tomorrow. Is that ok with [Mrs Boon]? Does she still want to meet?”

Mr Cappello agreed that it was not accurate for him then to describe Mr Scrivener as his “partner”.
Mr Cappello was firm in his evidence that he had had some discussion with Mr Scrivener on the telephone prior to this time and that Mr Scrivener had expressed some interest in the Rouse Hill possibility.
The fact that Mr Scrivener flew down from Queensland on 20 August 2013 is consistent with this, although Mr Scrivener did have other business dealings to attend to in Sydney on that occasion.
On 19 August 2013 Mr Cappello sent a message to Mrs Lobsey confirming a meeting for 3pm on 20 August 2013 and stating:

“You will be meeting John Scrivener from Tuscany Corporation – Solicitor will be Marsden Lawyers.”

There is no dispute that Mr Scrivener and Mrs Lobsey met Mrs Boon at around 3pm on 20 August 2013 at Mrs Boon’s property at 88 Rouse Road and that, after that meeting, Mr Scrivener and Mrs Lobsey returned to Mr Cappello’s office.
Mr Cappello did not accompany Mr Scrivener and Mrs Lobsey to the meeting with Mrs Boon because, he said, he thought that the fact that Mrs Boon knew he was a local real estate agent might cause Mrs Boon to wonder whether her agreement with him was the best deal she could get.
It is clear from these matters that the critical conversation took place on 20 August 2013.

Mr Cappello’s affidavit account of the conversation

Mr Cappello deposed that in late July or early August 2013 he had this discussion with Mr Scrivener:

“Cappello: I think I have a chance to secure control of two neighbouring sites at Rouse Hill zoned R3. Are you interested in partnering with me?
Scrivener: Rouse Hill is too far out. I want to concentrate closer in at Kellyville.”

Mr Cappello said that in the 20 August 2013 conversation the following was said:

“Cappello:   As indicated earlier, I want to revisit with you the potential of acquiring 88 Rouse Road, Rouse Hill and 96 Cudgegong Road, Rouse Hill. Land value in Schofields is in excess of $1 million per acre for similarly zoned land. It is only a matter of time before Rouse Hill catches up. I want to partner with you on the properties I have identified. You will be able to assist through your contacts with people able to lend money for a share of the profits.
…
Scrivener:   What are the terms and prices you have negotiated on the two properties?
Cappello:   I have negotiated 88 Rouse Road for $4,300,000 with a 5% deposit and 12 month settlement. I think I can get 96 Cudgegong for $4,100,000 on the same terms, with an exclusive 3 months due diligence period for $5,000 for each property.
…
Scrivener:   What do you propose?
Cappello:   I propose a 50:50 partnership between us. We share all of the expenses 50:50 and whatever we end up making from the properties we share equally.
Scrivener:   I agree.”

Mr Cappello said that “at this point in the discussion we shook hands” and that thereafter the following was said:

“Cappello:   We need to act quickly now John. Sue Lobsey is under pressure to get the sales advices out.
…
Cappello:   I also think it might be a good idea to leave my name off things at this stage as I have met Mrs Boon before.
…
Scrivener:   OK, we can use Tuscany as the company for our partnership and then we can add your entity at a later date.
Cappello:   I agree, Vince [8] can sort it out later.”

8. Mr Vincent Aboud, accountant of both Mr Cappello and Mr Scrivener.

Mr Scrivener’s affidavit account of the conversation

Mr Scrivener deposed that, on 20 August 2013 following a meeting he had with Mrs Boon and Mrs Lobsey at Mrs Boon’s property at 88 Rouse Road, he and Mr Cappello had this conversation:

“Scrivener:   The meeting with Mrs Boon went really well. So well in fact that we’re going to enter into a heads of agreement with Mrs Boon that allows for a 3 month DD (due diligence) period and a further 12 months’ settlement.
Cappello:   I am surprised that you got her to agree to anything!
Scrivener:   I am not surprised. With respect John, you couldn’t have gotten that deal done. She told us that there are agents and developers contacting her daily. You can just about see their tracks to her door. I am going to speak to Jim Marsden [9] to get this going as I think the other two will join in as well.
Cappello:   The market in Kellyville is picking up there are plenty of buyers out there. In fact, I already have buyers for a combined site. We can flick it on before the due diligence period is up.
Scrivener:   Yes but that will only work if I can get the 2 adjoining sites to sell as a combined site.
Cappello:   OK, well I have the buyers lined up so going forward, how about I pay half of all of your costs and we can split the profit?
Scrivener:   Look John, if we get to that Vince can sort it out. As long as you have a buyer it is worth a try. You know that there will need to be a deal in place prior to the expiry of the DD period, otherwise I’m out.
Cappello:   OK.”
(Emphasis added: this is the alleged Sunset Condition)

Generally as to the conversation

9. Mr Scrivener’s solicitor.

A number of observations can immediately be made about the competing recollections of Mr Cappello and Mr Scrivener of their conversation of 20 August 2013.
The first is that the agreement was made in a brief, relatively informal conversation.
The second is that neither Mr Cappello nor Mr Scrivener suggest they had earlier discussed coming to any agreement about the Rouse Hill properties.
The third is that they agree that they did make a legally binding agreement on 20 August 2013.
There is no suggestion in the proceedings that consideration did not pass between them, nor that the agreement is imprecise or uncertain. Neither party suggests the agreement is void for uncertainty or otherwise liable to be impugned.
What is clear from the accounts Mr Cappello and Mr Scrivener give of their conversation is that they agreed:

to endeavour to secure the three Rouse Hill sites;

sell the combined site at a profit;

pay equally “expenses” or “costs”; and

share equally any profit.

On neither Mr Cappello’s nor Mr Scrivener’s account of what was said between them was there any reference to the sharing of losses.
Mr Cappello’s recollection was that he said:

“I propose a 50:50 partnership between us. We share all of the expenses 50:50 and whatever we end up making from the properties we share equally.”

Mr Scrivener’s recollection is that Mr Cappello said:

“…how about I pay half of all your costs and we can split the profit”.

Mr Cappello gave this evidence in cross-examination:

“Q. You had no discussion as to sharing the losses 50/50 or otherwise if the proposal was unsuccessful. Correct?
A. We - we discussed a 50/50 - it was - it - it was discussed 50/50 in relation to expenses and profit.
Q. But nothing was said about what would happen if the venture was loss making. Correct?
A. Correct.”

However, in re-examination, Mr Cappello gave this evidence:

“Q. You were asked a question … in relation to the option deed and if it had been exercised, it was all at Tuscany's risk. Do you remember that?
A. Yes.
Q. And you said, "Not all the risk." Do you remember giving that answer?
A. Yes.
Q. What did you mean by that answer, "Not all the risk," in answer to that question?
A. Well, I always had 50% of the risk as per my agreement with John Scrivener and Tuscany.
Q. And to your mind, at least, how did that risk concern the exercise of the option by Tuscany?
A. Well, I was always going to be liable for - for anything apart - anything that - that Tuscany was liable for.”

My attention was not drawn to anything Mr Scrivener said about this.
I think the correct conclusion is that neither party addressed, in terms, what would happen if there was a loss but that it was implicit in their agreement that any losses be shared equally.
I have set out what each of Mr Cappello and Mr Scrivener said about their meeting in their affidavits.
Understandably, both Mr Pritchard and Mr Studdy devoted a considerable portion of their cross-examination of Mr Scrivener and Mr Cappello respectively to their recollection of the meeting.
I will deal with Mr Cappello and Mr Scrivener separately.

Mr Cappello’s evidence before me about the conversation

In closing submissions, Mr Studdy submitted that Mr Cappello’s recollection of the details of the meeting was “woeful” and that the answers that Mr Cappello gave in cross-examination showed that, in truth, he had no recollection of what was said at all.
Assessment of that submission requires a careful examination of the relevant passages of cross-examination.
In his affidavit, Mr Cappello expressed uncertainty as to when the critical meeting took place. He said:

“As best I can work out from available messages and emails, Scrivener and I have one or more meetings between 19 and 22 August 2013 during one of Scrivener’s regular trips to Sydney.”

In cross-examination Mr Cappello expressed uncertainty as to when, precisely, the meeting took place.
This exchange occurred:

“Q. And Tuesday was 20 August. Do you recall?
A. Yes.
Q. That’s when you had a discussion with Mr Scrivener about he potentially being involved in the acquisition of at least Mrs Boon's property. Correct?
A. That's not - not correct, sir.
Q. Why do you say that's not correct, Mr Cappello?
A. Because I - I recall - and I - I - I do not recall exactly which day - but I recall that John said he was flying - he was getting in before Tuesday. I can't - I can't remember if he got in on the Monday. But I don’t believe - I believe that he - he and I met on the Monday [19 August].
Q. Now, I suggest to you that you did not meet with Mr Scrivener until Tuesday the 20th. You disagree with that, do you, or you're just not sure?
A. I'm just not sure.
Q. And you can't point to any piece of paper which indicates that you and Mr Scrivener met on 19 August, can you?
A. No.
Q. You accept that you had no agreement with Mr Scrivener regarding the properties the subject of this litigation prior to you meeting on 20 August, don’t you?
A. No, I don’t accept that.
Q. You say, do you, that prior to 20 August 2013, you and Mr Scrivener had reached agreement in relation to the properties the subject of this litigation, do you?
A. No.
Q. Well, I put to you that you had not reached any agreement with Mr Scrivener about he being involved in the acquisition of these properties prior to your meeting on 20 August.
A. Well, I - I disagree, sir. That's - I disagree.
Q. You had not reached any agreement with Mr Scrivener prior to the meeting on 20 August about him being your partner in acquiring 88 Rouse Road. Correct?
A. Sir, I'm - I'm - I'm saying the meeting occurred on 19 August, so you're talking about 20 August.
Q. No, let's just be clear on this. I thought you accepted a few minutes ago that you can't say that there was a meeting on 19 August. Correct?
A. I cannot confirm, correct.
Q. And what I've also put to you is that you couldn’t point to any piece of paper that referred to any meeting occurring on 19 August, and you accepted that, didn't you?
A. Yes.
Q. What I'm suggesting to you is that the meeting took place on 20 August and not 19 August. Do you now accept that?
A. No, I - I can't be certain.
Q. You can't be certain, but you cannot give any answer to his Honour about any meeting occurring prior to 20 August other than to say you're not certain. That's right?
A. That's correct.”

and later:

“Q. Your evidence is you're not sure whether you met him on the 19th or the 20th, but you certainly do recall having a conversation at your office on one of those days when he’d come down to Sydney, correct?
A. Yes.”

and a short time later:

“Q. So you'd accept that the conversation that you had with Mr Scrivener actually took place on Tuesday the 20th?
A. I can't confirm. It could be on the 19th or the 20th.”

Mr Studdy then took Mr Cappello to his meeting with Mr Scrivener following Mr Scrivener’s and Mrs Lobsey’s meeting with Mrs Boon on the afternoon of 20 August 2013:

“Q. And you met with Mr Scrivener on 20 August 2013 when he returned from his meeting with Val Boon, didn’t you? Can't recall that one?
A. I - I - I would think that he would come back to the office, yes.
Q. Well, you're a bit unclear about this, by the sounds of it, Mr Cappello. You're thinking he would have come back to the office? Your recollection is not too clear about seven and a bit years. Is that right?
A. Yeah, yes, I think he would come - have come back to the office.
Q. You say you think he would come back to the office. Do you recall him coming back to the office and having a discussion with you?
A. I - I do not - I do not - I do not recall.
Q. And I suggest to you that Mr Scrivener and you had a conversation after he'd met with Val Boon, and he reported on his meeting with Val Boon. Do you recall that or not?
A. I don't recall a meeting.
Q. Do you recall any discussion or not?
A. I don't recall - I don't recall a discussion.”

Mr Studdy then put to Mr Cappello statements that Mr Scrivener had deposed were said at the 20 August 2013 meeting. Mr Cappello did not accept that those matters had been discussed.
This led to this final question and answer:

“Q. It's fair to say you don't recall having a conversation with Mr Scrivener on 20 August at your offices.
A. I don't recall.”

I think a fair reading of this evidence is that Mr Cappello was continuing to express uncertainty as to the date on which the critical meeting took place and not as to whether the conversation took place. The critical answers upon which Mr Studdy relied to make the submission that Mr Cappello did not have a recollection of what was said at his meeting with Mr Scrivener were directed to the date of the meeting rather than its content.
In particular, I read Mr Cappello’s answers, referred to at [83] above that “I don’t recall a meeting” and “I don’t recall a discussion” as being directed to his recollection of a meeting taking place on 20 August 2013; Mr Cappello repeatedly saying he thought the meeting took place on 19 August 2013.
Similarly, I read Mr Cappello’s answers that “I don’t recall” having a conversation with Mr Scrivener on 20 August 2013 as set out at [85] above as seeking to convey that he did not have a recollection of the conversation being on 20 August, as opposed to on 19 August.
Mr Studdy did not put to Mr Cappello that the account he gave of the 20 August 2013 conversation in his affidavit was not correct or that he had no present recollection of what was said. Overall, I am not satisfied that Mr Studdy’s cross-examination showed that Mr Cappello had no actual recollection of what was said on 20 August 2013.
Mr Cappello gave differing, although consistent descriptions of what his agreement with Mr Scrivener was. At first he said it was a “50-50 joint venture partnership” and later a “50-50 partnership” and then, although he was “not sure of the exact words”, it was “clear to the point” that it was “50-50 in relation to any profits and expenses”.
Mr Cappello was clear (“absolutely not”) that he did not tell Mr Scrivener that he “had buyers” at that stage for the combined site. There is no suggestion that Mr Cappello did have buyers for the combined site at that stage. Nor is there any suggestion in dealings between Mr Cappello and Mr Scrivener in the next few months that Mr Scrivener asserted to Mr Cappello that Mr Cappello had made any such statement. As I describe below, Mr Cappello did pursue negotiations with prospective buyers but that was the following year; 2014.

Mr Scrivener’s evidence before me about the conversation

On the other hand, there are some difficulties with Mr Scrivener’s account of what happened.
In his affidavit, he said that the first thing he said to Mr Cappello upon his return from the meeting with Mrs Boon was that the meeting with Mrs Boon went well and:

“ … we’re going to enter into a heads of agreement with Mrs Boon that allows for a 3 month due diligence period and a further 12 month settlement”.

Mr Scrivener said that Mr Cappello replied that he was surprised “that you got her to agree to anything” that Mr Scrivener said “you couldn’t have gotten that deal done”.
But the fact is, as the email correspondence to which I referred shows, Mr Cappello had reached an agreement with Mrs Boon to the effect of that Mr Scrivener says he described to Mr Cappello[10] . In those circumstances I think it unlikely that Mr Cappello reacted as Mr Scrivener asserted to Mr Scrivener’s statement that, in effect, he had reached the same deal with Mrs Boon.
10. See [34]-[38] above.
In cross-examination, Mr Scrivener said that “I discussed trying to move forward to try and amalgamate the three sites” as a “joint endeavour”.
In cross-examination this exchange occurred:

“PRITCHARD
Q. … You say, you had an agreement with Mr Cappello; correct? At this meeting on - you formed an agreement with Mr Cappello on the 20th; correct?
A. Yes.
Q. And the agreement was, effectively, ultimately - and you say other terms - but to share the profit; correct?
A. If the profit was achieved, possibly, yes.
Q. Yes. Sorry, sir; I interrupt.
A. In the event that he sold the property, yes.
…
Q. … So you agreed that you would have this profit share arrangement with Mr Cappello.
A. In loose terms, yes.
Q. Yes. And the terms were, in effect, you’d - you’d together look for the - on your case - together look for a purchaser for the land, or a developer?
A. No.
Q. Well, what was it?
A. He would supply one of his buyers, if I could amalgamate it.”

The luncheon adjournment then ensued.
Immediately after the luncheon adjournment, this exchange occurred:

“Q. Just asking you about the substance of the agreements you and Mr - you agree you and Mr Cappello say you reached on 20 August. Just so there’s no doubt about it, what agreement do you say you reached with Mr Cappello?
A. The agreement was that I would try to amalgamate the sites. He would on sell the sites. I would secure the - by DD I would secure the three properties. I would do the necessary due diligence that is required under those DD’s and he would sell it and after all expenses if there was a profit to be shared then our mutual accountant gets to work it out, taking into account expense and time and all that sort of thing.
Q. That’s - you’ve had a chance to think about it? That’s what you say the deal was, right?
A. Sorry?
Q. You had a chance to think about it and that’s what you say your deal was, correct?
A. I believe that is the deal.”

Shortly after this evidence, Mr Scrivener had said that he had refreshed his recollection of what he said in his affidavit about the agreement “yesterday”.
What is striking about Mr Scrivener’s answer to the open question put to him (“What agreement do you say you reached with Mr Cappello?”), is Mr Scrivener made no mention of any element of the agreement to the effect of the Sunset Condition.
Thus the cross-examination continued:

“Q. I asked you in an open-ended way to say what you understood to be the agreement was, remember?
A. Yes.
Q. You did not include in that description of the agreement anything about having to do a deal prior to the expiry of the DD period, do you agree with that?
A. That was the deal.
Q. You agreed a few minutes ago when I asked you in an open-ended manner about what the deal was, you did not include as an element of the deal that the sale had to be prior to the expiry of the DD period?
A. I didn’t say it.
Q. That was never mentioned on 20 August, correct?
A. Sorry, you’re breaking up. Are you moving or?
Q. No, I’m not really moving. I’m putting to you, sir, when I asked you in an open-ended manner what you say the agreement was, you did not say that an element of it was that the on sale had to take place prior to the expiry of the DD period, correct?
A. I said it had to be sold as part of that deal.
Q. But not by the DD period, correct?
A. I may have left those words out but that is the intention of the agreement.
Q. You left the words out, sir, because you couldn’t remember that part of, what you say in this case, is the agreement, correct?
A. That was the agreement.
Q. Sir, I need - this idea of a sale before the expiry of the DD period is just made up by you in this court case?
A. No, I disagree.”

Mr Scrivener swore the affidavit in which he gives his account of the 20 August 2013 conversation on 5 March 2019; some five and a half years after the conversation.
I think it likely that the first time Mr Scrivener came to reflect on, and record his recollection of what was said to Mr Cappello on 20 August 2013 was in the course of preparing that affidavit.
Thus Mr Scrivener gave this evidence in cross-examination:

“Q. And that's just so we, the Court understands, your recollection is contained in your affidavit of 5 March 2019, correct?
A. Yes.
Q. Now, it's correct, isn't it, that 5 March 2019 is the first time you came to record your recollection, came to set it down in writing, correct?
A. Am I able to look at that reference?
Q. No. Can you please answer the question? Is it true that the first time you came to record your recollection about what happened in 2013 was when you prepared your affidavit of 5 March 2019?
A. No.
Q. So when, prior to 5 March 2019 did you set down your recollection of the events of 2013?
A. I recall the sequence of events from the time of the discussion, so the time of my meeting with Mrs Lobsey and meeting with Mrs Boon.
Q. I'm asking you when you set down, that is, recorded in writing your recollection of those events. I'm sorry if there's some uncertainty in my question.
A. Honestly, no. I'd have to check my diary to see if there's only, any other notes in there.
Q. Well, presumably someone asked you for the purpose of this case to check your diary for the purpose of your affidavit, didn’t they?
A. Sorry?
Q. Presumably someone asked you to check your diary for the purpose of swearing your affidavit in this case, didn't they?
A. Yes, I believe so.
Q. So you don’t really think there are any other relevant documents in your diary that might assist the Court in determining what happened, do you?
A. I'm not sure.
Q. Well, sir, you're on oath here. Do you think there might be diary notes that aren't in your affidavit that will assist the Court?
A. I don’t believe so.
Q. So in other words, you believe you've searched everywhere you can and put before the Court in your affidavit or affidavits everything you have set out the relevant events. Is that right?
A. Yes.
Q. Now, turn to my question. You got nothing in writing before 20 August when you attended Sydney, I think, to assist your recollection of events, do you?
A. I don’t have notes on a specific conversation, no.
Q. Well, you don’t have anything else, either, do you?
A. No.”

Ultimately, Mr Scrivener produced an appointment diary for 20 August 2013 which showed no more than the name “Cappello” in the entry for 2pm.
As I have said, Mr Cappello also made no note of the meeting at the time although, as I set out below he gave an account of his recollection of the agreement to representatives of Oracle in June 2015. [11]
11. See [423] below.
Ultimately, my conclusion is that I must be cautious about the recollections of both Mr Cappello and Mr Scrivener as to the detail of what was said on 20 August 2013. What is clear is that they agreed to proceed with a venture involving the securing of the three sites, and their possible on sale or development, and agreed to share expenses and profits of that venture.
The vital matter that divides them is whether their arrangement was subject to the Sunset Condition.

Post contractual conduct

Post contractual conduct is admissible to show:

whether a contract was formed; [12] and

what the terms of the contract were, especially in the case of an oral contract. [13]
12. Eg Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [25] (Heydon JA); as I have said, there is no dispute about this.
13. Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 at [325] (Campbell JA) and the cases there cited; Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 [136]-[149] (Campbell JA; Basten JA and Sackar J agreeing); and generally P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Thomson Reuters) at [29.160].

The conduct of the parties after 20 August 2013, to which I make detailed reference below, makes a number of matters clear concerning the terms agreed on 20 August 2013.
One is that Mr Cappello and Mr Scrivener agreed that the means by which they would seek to secure the properties was by way of Due Diligence Deed. On Mr Cappello’s account of the conversation, he said he thought he could get “an exclusive 3 months due diligence period” for each of 88 Rouse Road and 96 Cudgegong Road. On Mr Scrivener’s account of the conversation he had actually negotiated a “3 month DD” with Mrs Boon, Mr Cappello had proposed “flicking on” the combined site “before the due diligence period is up” and Mr Scrivener had expressed the Sunset Condition in terms of “the expiry of the DD period”. Those matters, taken with the fact that, very shortly after 20 August 2013, Mr Scrivener caused Tuscany to enter Due Diligence Deeds with Mrs Votano in relation to 96 Cudgegong Road and Mrs Boon in relation to 88 Rouse Road[14] , point to the probability that this was the means discussed on 20 August 2013 to secure the properties.
14. See [117] to [128] below
Another is that Mr Cappello and Mr Scrivener agreed to use Tuscany as the corporate vehicle for the project. Mr Cappello said that he said “it might be a good idea to leave my name off things at this stage” and that Mr Scrivener suggested using Tuscany “as the company for our partnership”. Mr Scrivener denies these words were said but, almost immediately after 20 August 2013, caused Tuscany to enter the Due Diligence Deeds with Mrs Boon and Mrs Votano.
Another is that Mr Cappello was to have primary responsibility for finding a buyer for the project. There is, of course, a dispute as to whether, as Mr Scrivener contends, the whole agreement was subject to Mr Cappello doing so “prior to expiry of the DD period”: the Sunset Condition. But, as I describe below[15] it was Mr Cappello, rather than Mr Scrivener who located Sunland Group as a potential purchaser in January 2014 and prepared an Information Memorandum for that purpose. There is no evidence of any other communication between Mr Cappello and Mr Scrivener on this topic between 20 August 2013 and January 2014. I infer from this that, on 20 August 2013, it was either agreed or understood between the two men that Mr Cappello was to endeavour to find a buyer.
15. See [219]-[232].
The critical dispute is as to whether the agreement was subject to the Sunset Condition.
The conduct of the parties after 20 August 2013 persuades me that the agreement was not subject to the Sunset Condition. To understand my reasons for coming to that conclusion, it is necessary to examine, at some length, the course of dealings between Mr Cappello and Mr Scrivener from 20 August 2013.

Events following 20 August 2013

On 21 August 2013 Mrs Lobsey sent Mr Scrivener’s solicitor, Mr Jim Marsden, Sales Advices for the 88 Rouse Road and 96 Cudgegong Road properties. Those Sales Advice showed sales prices of $4.3 million and $4.15 million respectively, and identified Mrs Boon and Mrs Votano as the respective vendors, and Tuscany as the purchaser.
On 22 August 2013 Mr Marsden notified Mr Scrivener of his receipt of those sales advices and also sent him copies of the letters that Marsdens had sent to the purchasers’ solicitors confirming the sale agreement.
Mr Scrivener forwarded that email to Mr Cappello with the note “fyi”.
This was the first of numerous occasions on which Mr Scrivener forwarded to Mr Cappello email correspondence he had received concerning the transaction.
Mr Marsden prepared proposed “Due Diligence Deeds” in respect of the two properties.
On 28 August 2013 Mr Scrivener sent Mr Cappello the proposed Due Diligence Deed for the 88 Rouse Road property with a note:

“I am happy with this.
Please let me know your thoughts.”

Mr Scrivener said he did this simply “out of courtesy”. However, the email appears to me to bespeak Mr Scrivener’s state of mind that he should consult Mr Cappello about the form of the document.
Mrs Votano executed the Due Diligence Deed concerning 96 Cudgegong Road on 2 September 2013 and Mrs Boon executed the corresponding document in respect of 88 Rouse Road on 6 September 2013.
Mr Scrivener sent copies of emails he received from Mr Ben Wong, an associate at Marsdens, reporting on these matters to Mr Cappello “fyi”. Mr Cappello replied:

“Thanks buddy, hopefully will be done tomorrow”.

Each of the 96 Cudgegong Road and 88 Rouse Road Due Diligence Deeds called for non-refundable fee of $5,000. Tuscany paid those fees.
The 96 Cudgegong Road Due Diligence Deed expired on 16 December 2013 although on 11 December 2013 it was extended to 16 March 2014.
The 88 Rouse Road Due Diligence Deed had an expiry date of 20 December 2013 which was not extended.
In relation to each of those properties, Put and Call Option Deeds were ultimately entered into with the jointly owned Oracle/Tuscany Company exercising the call options and becoming registered proprietors.
A helpful schedule setting up the key dates, that Mr Pritchard handed up during his opening submissions, follows to assist understanding later events. (Annexure B (213519, pdf))
At this stage Mr and Mrs Bannerman had not yet committed to selling 104 Rouse Road.
Thus, on 23 September 2013 Mrs Lobsey wrote to Mr Scrivener and Mr Cappello:

“On Friday [20 September] when I spoke to you both, John S[crivener] you were going to speak to John C[appello] about how we should approach the Bannermans.
When you have both discussed it, and worked out are [sic: our] plan of attack, can you let me know”.

Mr Cappello replied:

“John [Scrivener] and I have decided not to do anything in regards to the purchase of the Bannermans’ property.
We are focusing on 96 [Cudgegong Road] & 88 [Rouse Road] at this stage.
Proceed to sell the property [ie 104 Rouse Road] to any other purchaser you may have.”

Mr Cappello said that prior to sending this email he had a discussion with Mr Scrivener in which he said:

“It will be difficult for us to get the Bannermans’ property … They will be too difficult to deal with and too unrealistic. The strategy now should be to say we are not interested and focus on the two sites we have secured. We can revisit the Bannermans, as their best option to sell their property, when we have determined the development potential of our two sites.”

Mr Cappello said that Mr Scrivener had responded by saying that he agreed.
Mr Scrivener did not refer to this conversation in his affidavit and in cross-examination denied the conversation had taken place.
Thus, he gave this evidence:

“Q. You don’t dispute, those words were said to you at about this time by Mr Cappello, do you?
A. Yes, I do.
Q. Well, are you aware, you don’t dispute that paragraph in your affidavit sworn 9 March 2019?
A. Well, I don’t think it’s in my affidavit, no.
Q. No. In your affidavit of 9 March 2019, you went through in considerable detail, and responded at some length to Mr Cappello’s affidavit, the one I’m showing you; correct?
A. To the relevant parts of it, I believe, yes.
Q. You did not respond to, deny or otherwise deal with this paragraph and the conversation alleged in paragraph 112, correct?
A. I think in the draft I just - I just denied it. That - that did not take place.
Q. In the draft, do you mean your sworn affidavit or something else?
A. No, in the - in the draft that I did to produce my affidavit.
Q. Will you accept from me for the purpose of the question anyway that there is no denial, response or other response in your affidavit to this paragraph 112. Will you just accept that from me for the question at least?
A. It’s not in the affidavit but I deny the statement.
Q. I’m just asking you why you haven’t denied it in your affidavit?
A. I don’t believe that that was relevant at that particular point in time because I just - I just denied it immediately when I went through this whole something 100 pages of this affidavit. And it clearly wasn’t put in my - my affidavit.
Q. Are you saying, so I understand, are you trying to tell this court during your draft affidavit you denied it but for some reason, you don’t know, that denial has come out of the affidavit that’s sworn? Is that what you’re trying to tell the court?
A. Well, no - what I don’t know is that it’s not in my affidavit but I definitely denied the statement.
Q. What I’m putting to you, sir, is you’re desperate - I withdraw that - what I’m putting to you, sir, is you’re prepared to deny things in the witness box when I’m putting things to you in cross-examination that you weren’t concerned about when you read them in the affidavit. You understand what I’m putting to you?
A. I agree it’s not in the affidavit but I’ve denied it from day one.
Q. You’ve denied it from day one as far as the world’s aware when you said it in the witness box - I withdraw that - as far as anyone but your own solicitors are aware, sir, do you agree that the first time anyone knew you denied paragraph 112 is when I asked you about it in the witness box five minutes ago?
A. That’s not in my affidavit, I agree with that.
Q. The reason it’s not in your affidavit, I want to put to you, is when you swore your affidavit you agreed with the contents of that paragraph?
A. No, I don’t.
Q. I put it to you, sir, you are now saying things, that is denying things, because you think that that will assist your case?
A. I disagree.
Q. Just so the court has it, what is your best explanation for why there is no denial of paragraph 112 in your affidavit sworn in these proceedings?
A. I don’t have an explanation why it’s not in there.”

In any event, Mr Scrivener agreed that:

“And my strategy was, from day one, to secure the first two properties, and then to then start discussing the Bannerman property.”

Mr Scrivener then gave these answers to questions from me and from Mr Pritchard.

“Q. Mr Cappello seems to be implementing the strategy I think that you just explained to me that you had about the Bannerman property?
A. Yeah, he’s telling Sue that, yes.
Q. Pretend you’re not interested and see if they come begging to you later?
A. Yes. As I understood the history of these projects, Sue Lobsey had a long time involvement with Mr Bannerman so I understood exactly what the process needed to be.
Q. It looks here as if Mr Cappello’s implementing the strategy you described to me re the Bannerman property?
A. Yes sir.
PRITCHARD
Q. So you’re acting together in this process of trying to secure the third DD, correct? This strategy?
A. He’s advising Sue of my strategy, that’s what that email says.”

I think it likely, in these circumstances, that the reason there is nothing in Mr Scrivener’s affidavit responding to Mr Cappello’s account of his discussion with Mr Scrivener concerning the Bannermans’ property is that when he came to swear his affidavit, he did not disagree with it.
I think it likely that the true position is, as Mr Pritchard put to Mr Scrivener, that he and Mr Cappello at this stage were acting together to develop a strategy with the aim of, ultimately, obtaining an option to purchase the Bannermans’ property with a view to consolidating all three sites.
This shows that at this stage Mr Scrivener and Mr Cappello were working together to promote their joint interest achieving control of the three properties.
It also suggests an inclination on Mr Scrivener’s part to deny, in cross-examination, matters hitherto undisputed that he saw as being unhelpful to his case.

The meeting at the El Phoenician Restaurant

In October or November 2013 Mr Cappello and Mr Scrivener had a lunch meeting with their mutual accountant, Mr Aboud, at the El Phoenician restaurant in Parramatta.
Both Mr Cappello and Mr Aboud gave evidence that Mr Cappello said, in Mr Scrivener’s presence, that he and Mr Scrivener had “formed a joint venture partnership” in respect of the Rouse Hill site.
Mr Cappello’s account of the conversation was that words were said to the following effect:

Cappello:    Vince, you are aware that John and I have formed a joint venture partnership over some sites at Rouse Hill.
Aboud:    Yes I am.
Cappello:    John Scrivener wants to continue to represent both of us with the guys at Oracle without me being on any paperwork for my share. What are your thoughts?
Aboud:    I have no problem with that. I think the less people and personalities at the corporate table during negotiations to form a deal the better. John Scrivener already has the relationship with the guys at Oracle.
Cappello:    OK Vince, if you are OK with it, so am I. We can add me, or my company, later.

Mr Aboud gave a similar account of the conversation:

“Cappello:    I have formed a joint venture partnership with John over some development sites at Rouse Hill.
Aboud:    Yes.
Cappello:    We are looking for investment funds from Oracle. John will represent both of us with without my name being on any paperwork for my share. What do you think.
Aboud:    I think the less people involved in negotiations the better. John already has a relationship with Oracle.”

Although in closing submissions, Mr Studdy submitted that I should be “hesitant” to accept Mr Aboud’s evidence, I see no reason to doubt the accuracy of Mr Aboud’s recollection. In any event, his account of what Mr Cappello said in Mr Scrivener’s presence at this meeting was not challenged by Mr Studdy in cross-examination.
In his affidavit, Mr Scrivener denied Mr Cappello’s account of the conversation. He said:

“There was no reference to a ‘joint venture’ taking place with Cappello. Also, as I have stated, Cappello would often call me ‘partner’ and/or ‘buddy’. Though I considered this presumptuous on his part, not having been offered anything other than the opportunity to market the site and split the profits if we were able to ‘flick’ it on prior to the expiry of the [Due Diligence] period, I just assumed he was embellishing his position to impress Aboud.”

But during his cross-examination, Mr Scrivener gave this answer in response to a question from me:

“Q. Just returning to your paragraph 62, Mr Scrivener, I do see that you said, you assumed that Mr Cappello was trying to impress Mr Aboud. So, on reflection, that does suggest that you were meaning to say here, doesn’t it, that he called you his partner at the El Phoenician restaurant, in Mr Aboud’s presence?
A. He might have said ‘a joint venture’, something like that, something along those lines. Yes, ‘joint venture’, I think.”

Thus, although my question was directed to the question of whether, consistently with Mr Cappello’s practice as Mr Scrivener had described it, Mr Cappello called Mr Scrivener his “partner”, Mr Scrivener offered that Mr Cappello “might have said a ‘joint venture’”. This was the very matter that Mr Scrivener had in his affidavit emphatically denied.
Mr Pritchard took the matter up as follows:

“Q. Can you give some explanation to this court on your oath why you say words like joint venture were in fact said when in this affidavit sworn in March 2019 you said they weren’t?
A. I think, in retrospect, I think he may have said joint venture partner so that could be 100 per cent right. I could be wrong.
Q. It’s certainly possible he said in the presence of Mr Aboud that you were his joint venture partner, correct?
A. Certainly possible, yes.
Q. It’s equally possible, isn’t it sir, that he said to Mr Aboud that you, Mr Scrivener, and he, Mr Cappello, had formed a joint venture partnership over some sites in Rouse Hill, correct?
A. He may have used those words.”

Mr Scrivener also agreed that Mr Cappello had said he did not want his name on the documentation and that it was possible that Mr Aboud had said that he thought the less people and personalities at the corporate table during negotiations, the better. This passage of the evidence causes me to doubt the reliability of Mr Scrivener’s recollection. It would also suggest to me that Mr Scrivener was in his affidavit prepared to deny matters he knew to be true if those matters were inconsistent with his understanding of the case he should seek to establish.
This evidence also shows that Mr Scrivener was by this time dealing with Oracle.

The Bannermans agree to enter a Due Diligence Deed

On 30 October 2013 Mrs Lobsey sent an email to Mr Scrivener:

“Bannermans called me today to see how everything is going”.

Mr Scrivener sent a copy of that email to Mr Cappello “fyi”.
On 1 November 2013 Mr Scrivener sent an email to Mr Justin Kucic at Oracle stating that “I think we should position ourselves to move on Bannerman”. Mr Scrivener sent a copy of that email to Mr Cappello “fyi”.
Later on 1 November 2013 Mrs Lobsey sent an email to Mr Scrivener conveying an offer from the Bannermans to enter a three month due diligence/option period on 104 Rouse Road with a purchase price of $4.2 million and a 12 month settlement. Mrs Lobsey said:

“The Bannermans would like an answer ASAP.
They are very anxious to get this underway, I really don’t think they’ll stuff you around John.
The tide has changed. They no longer have the control.
And they now want to sell.”

Mr Scrivener sent a copy of that email to Mr Cappello “fyi”.
There were further email negotiations, all of which Mr Scrivener copied to Mr Cappello, leading to Mr and Mrs Bannerman entering into a Due Diligence Deed with Tuscany on 15 November 2013. That document was in terms to the same effect as the Due Diligence Deeds entered into by Mrs Votano and Mrs Boon in respect of the other two properties. Again, Tuscany paid the $5,000 option fee called for the document.
The dates corresponding to those set out in a schedule prepared by Mr Pritchard concerning the Bannermans’ property (Annexure C (206088, pdf).

All three sites secured

Thus, by 15 November 2013, Tuscany had secured control of all three sites. At that stage, the Due Diligence periods expired on 16 December 2013 in the case of 96 Cudgegong Road, [16] 20 December 2013 in the case of 88 Rouse Road, and 13 February 2014 in the case of 104 Rouse Road. [17]
16. On 11 December 2013 extended to 16 March 2014.
17. On 13 February 2014 extended to 15 March 2014.
On 16 November 2013, Mrs Lobsey wrote to Mr Scrivener:

“Woke up this morning John still amazed we did it. Do you know how many agents tried to sell the Bannermans’ place over the years. I’m still a bit shocked.”

Mr Scrivener replied “we all make a great team” and forwarded that email chain to Mr Cappello with the note:

“Hey mate.
Diary note John Cappello said – ‘you won’t get Bannerman’.
The fish and chips are on the stove – now got 17 months to make sure I make it all happen.”

Mr Scrivener’s reference to a “diary note” was an ironic reference to Mr Cappello’s evidently earlier expressed scepticism that the Mr and Mrs Bannerman would agree to sell. Mr Scrivener’s reference to the “fish and chips” being “on the stove” was, I infer, his way of expressing satisfaction with the fact that Tuscany had now secured all three sites.
As Mr Pritchard pointed out in closing submissions, in this email, the only time frame to which Mr Scrivener referred was “17 months” and he allocated responsibility “to make sure it all happens” to himself.
Mr Scrivener does not here mention any expectation that Mr Cappello’s involvement process was subject to any step that Mr Cappello needed to take by the Sunset Date.

Mr Scrivener tells Oracle Mr Cappello is “involved in the purchase”

On 18 November 2013, Mr Scrivener had email communications with Mr Kucic from Oracle concerning commission payable to Mrs Lobsey on the sale of the Bannerman property.
Mr Kucic asked Mr Scrivener “was there a deal your [sic] cutting on this” to which Mr Scrivener replied:

“No deal except GST inclusive.
Thought Cappello could get conjunction or referral but as he is involved in purchase he can’t.”

Mr Scrivener sent this email exchange to Mr Cappello “fyi”.
Mr Scrivener’s point was he thought Mr Cappello might otherwise have been able to share the commission on the sale of the Bannermans’ property with Mrs Lobsey but that he could not do so because he was “involved in the purchase”.
Mr Scrivener gave this evidence in cross-examination:

“Q. So you were writing to Mr Kucic at Oracle informing him that Mr Cappello was involved in the purchase in a way that effectively precluded him from getting agency commission, correct?
A. Yes, that’s what it is, yes.
Q. So as you understood, you were telling Mr Kucic that Mr Cappello had a financial interest in this transaction, correct?
A. Yeah, he had an interest in it, yes.”

Mr Scrivener’s negotiations with Oracle

On 25 November 2013, “Draft 1” of a “Partnering Heads of Agreement” between Mr Scrivener, Tuscany and Oracle had been prepared.
That document referred to:

“…the acquisition, development, construction and sale of residential development sites as follows: …88 & 104 Rouse Road and 96 Cudgegong Road, Rouse Hill NSW. Comprises 15 acres at a cost of $12.734 mil to be developed into a mix of residential dwellings and apartments.”

The document also referred to other developments at North Kellyville which are not relevant to this dispute.
The document provided that Oracle would be responsible to provide “Seed Capital – prior to Land Settlement (stage 1)” and “Project Funding – upon and following Land Settlement (stage 2)”.
The document defined Stage 1 as being “where the sites are on-sold prior to settlement of the land and no further seed capital or equity is required beyond the $1.5 mil committed by Oracle” and Stage 2 as being “where the Site acquisitions are required to be settled prior to sale or development of the Sites and equity is required beyond the $1.5 mil committed by Oracle”.
In the events that happened, the Rouse Hill project only reached Stage 1. The draft Heads of Agreement provided that, in that event, profit share between Oracle and Tuscany would be 50:50.

“My joint venture partners”

On 9 December 2013 Mr Scrivener wrote to Mr Marsden referring to “my joint venture partners”.
I asked Mr Scrivener whether use of the plural (“joint venture partners”) included Mr Cappello. Mr Scrivener replied “It may well have at that time”. This is further evidence suggesting that, at that stage, Mr Scrivener understood himself to be in a joint venture partnership with Mr Cappello.

The Verve Café Meeting

Mr Cappello and Mr Scrivener agree that they met at the Verve Café in Cherrybrook. They also agree that, on that occasion, Mr Cappello asked to have their arrangement reduced to writing and that Mr Scrivener reacted angrily. However, Mr Cappello and Mr Scrivener do not agree when that meeting took place and give a different account as to a number of other matters that were said.
Mr Scrivener said the meeting took place on 11 December 2013. Mr Cappello said it took place on 16 May 2014. Both were adamant that their recollection was correct.
Mr Scrivener said in his affidavit:

“During that meeting Cappello was especially ‘pushy’ and said:
‘I want an agreement in my wife’s name to document my share.’

I took from that comment that Cappello was implying that he did not trust me to pay him his share if he managed to sell the Rouse Hill Site prior to the expiry of the due diligence period on 88 Rouse Hill [sic] Road. I was angry and offended by that comment. I was the one who had put hundreds of hours into this project and now he was impugning my integrity. I said to him:
‘John, let’s be very clear about this, as I have been from the beginning, this journey for you is over if the site is not sold before the DD period expires on 88 Rouse Road and Tuscany has to go unconditional. That’s it for you.’

I left immediately after that.”

Consistently with Mr Scrivener’s account, he made an entry in his appointment diary note 11 December 2013 reading “Verve”.
Further, on 17 December 2013, Mr Cappello sent an email to Mr Aboud, attaching the draft “Partnering Heads of Agreement” between Tuscany and Oracle and stating:

“Please find attached copy of the initial Partnering Heads of Agreement (which I wasn’t happy about as John Cappello is nowhere to be found on the document).”

Mr Cappello gave this account of what happened at the meeting in his affidavit:

“We had the following discussion:
[Cappello]:   John it’s time to get something down on paper about our deal.
Scrivener reacted by jumping up suddenly and the conversation continued with him raising his voice and very angry:
Scrivener:   Don’t you trust me?
[Cappello]:   John I do trust you. I’ve put over $125,000 into your bank account and reimbursed large amounts of shared expenses in cash. I’ve gone this far with you because I do trust you. But if something happens to you overseas, where does that leave me?
Scrivener eventually calmed down. The discussion continued:
Scrivener:   First, I expect you to cry at my funeral. Second, my son, Trent, will be looking after things while I’m away. He’s aware of our deal.
[Cappello]:   All right, send me Trent’s contact details.”

Mr Cappello’s reference to something happening to Mr Scrivener overseas is consistent with the fact that, as at 16 May 2014, Mr Scrivener was about to travel overseas.
It is also consistent with Mr Cappello’s account that he sent an SMS message to Mr Scrivener on 15 May 2014 in which he said:

“Hi John, can we meet at 8.15am tomorrow at Cherrybrook?”

There is also an entry in Mr Scrivener’s appointment diary at 8.00am on 16 May 2014 reading “Cappello”.
If Mr Scrivener’s recollection is correct, and the meeting took place in December 2013, Mr Cappello’s recollection of there being a reference to Mr Scrivener’s forthcoming overseas trip cannot be right as there is no suggestion that Mr Cappello knew of any such trip in December 2013.
Conversely, if Mr Cappello’s recollection is accurate, then Mr Scrivener’s recollection of what he said cannot be right. Mr Scrivener’s case is that the “journey” was “over” for Mr Cappello if Mr Cappello could not find a buyer “before the DD period expires”: that is, in the event that happened on 28 February 2014. That period had passed by May 2014.
I am not able to come to any confident conclusion about when this meeting took place.
I am inclined to conclude that Mr Scrivener’s recollection on this issue is to be preferred as it is consistent with Mr Cappello’s email, a few days later, complaining to Mr Aboud about a lack of reference to Mr Cappello in the documents.
However, if, as Mr Scrivener states, he told Mr Cappello on 11 December 2013 that the “journey” was “over” for him if the site was not sold “before the DD period expires” it is strange that Mr Cappello did not mention that in his email to Mr Aboud; and that this vital question was not mentioned in any email correspondence before or after what Mr Scrivener contends to be the critical date: 28 February 2014, the Sunset Date.

Further negotiations with Mrs Boon and government authorities

During December 2013 Mr Scrivener engaged in negotiations with Mrs Boon leading up to execution of the 20 December 2013 Put and Call option and generally with various regulatory authorities concerning the sites
Neither counsel took Mr Cappello or Mr Scrivener to the detail of those matters, nor addressed them in terms during final submissions.
However, on my reading of the email correspondence during this period, it is fair to say that it was Mr Scrivener that took up the running on these matters, albeit keeping Mr Cappello informed by copying him in on emails or sending him emails “fyi”.

Further draft agreement between Tuscany and Oracle

On 18 December 2013 “Version 3” of a “Partnering Heads of Agreement” between Tuscany and Oracle was created. “Version 2” is not in evidence.
Like the 25 November 2013 draft Partnering Heads of Agreement “Version 3” referred to “three projects” being the Rouse Hill project and two unrelated projects at Kellyville and proposed a 50:50 profit share if the Rouse Hill property proceeded only to Stage 1.
However, this document also provided for an “acquisition fee” of 2% in relation to the Rouse Hill Project (and not the other projects) and also provided that:

“The parties agree to give Zarzar [Mr Cappello’s real estate agency company]/Tuscany opportunity to sell stock (as applicable).”

When Mr Scrivener received a copy of “Version 3” on 18 December 2013 he forwarded a copy to Mr Cappello “fyi”.
In relation to this, Mr Scrivener gave this evidence in cross-examination:

“Q. You agree that if this proposal in December 2013 had gone ahead, that Mr Cappello would have been entitled to half of the acquisition fee of 2 per cent in respect to the Rouse Hill properties?
A. No.
Q. Why were you sending it to him then, sir?
A. I was - he was printing a lot of information for me. I - at that particular time he was providing secretarial services. There was so many things he printed. I’m not sure that if he printed - he probably printed this for me. He’d have a record of it for sure.
Q. Sir, let’s understand, so you now want to say that these emails I’ve been showing you - is this the case - where you forward them on to Mr Cappello were for the purposes only of him providing a secretarial service of printing them out? Is that what you--
A. No, what I’m saying is - what I’m saying is I don’t recall exactly which documents were sent for that purpose but there were many that were.
Q. Sir, I have to put to you, you are just making that up as you go along in the witness box?
A. I am not, I’m sorry.”

I do not accept that Mr Scrivener forwarded Mr Kucic’s 18 December 2013 email, and the attached copy of Version 3, to Mr Cappello in order that Mr Cappello could provide “secretarial services” of printing for Mr Scrivener a copy of Version 3.
That response did appear to me, as Mr Pritchard put to Mr Scrivener, to be one that came to Mr Scrivener for the first time when pressed on the subject. There was no dispute that Mr Cappello would share equally in the Acquisition Fee to be paid by Oracle to Tuscany.

The 88 Rouse Road Put and Call Option Deed

Tuscany’s option to purchase 88 Rouse Road under the 6 September 2013 Due Diligence Deed expired on 20 December 2013.
On that date, Tuscany entered into a Put and Call Option with Mrs Boon for 88 Rouse Road. The Put and Call Option Deed provided for an option fee of $250,000 and for a purchase price, were either option to be exercised, of $4.3 million.
Mr Cappello and Tuscany shared equally the payment of the $250,000 option fee. Mr Cappello did not himself have $125,000 to contribute and borrowed this amount from a number of sources.
There was some delay on Mr Cappello’s part in remitting his share of $125,000 to Mr Marsden’s trust account.
This led Mr Scrivener to send an email to Mr Marsden on 20 December 2013:

“I lodged my 50% of deposit.
My J/V partner apparently stuffed up.
Cleared Funds currently being transferred to your trust a/c…”
(Emphasis added.)

Mr Scrivener forwarded a copy of this email to Mr Cappello “fyi”.
He was thus evidently content to let Mr Cappello know that he had described Mr Cappello to Mr Marsden as his joint venture partner, suggesting, strongly in my opinion, that this was in fact Mr Scrivener’s state of mind.
The 20 December 2013 Put and Call Option Deed was subject to a “Condition Precedent” as follows:

“This deed is subject to and conditional upon [Tuscany] being satisfied of the drainage issues in relation to the development of the property in its absolute discretion by 28 February 2014 (Sunset Date).”

The effect of this Condition Precedent was that if Tuscany was not, in its absolute discretion, satisfied about the (undefined) “drainage issues” it could rescind the Put and Call Option and be refunded the $250,000 option fee.
If Tuscany did not so rescind the Put and Call Option Deed by 28 February 2014, Tuscany’s obligations under that document became “unconditional”.
Thus, 28 February 2014 - the Sunset Date - was, on Mr Scrivener’s account of the 20 August 2013 agreement, the date by which “there will need to be a deal in place”. To adopt the language Mr Scrivener says he used at the Verve Café meeting on 11 December 2013, that was the date by which “this journey” would be “over” for Mr Cappello unless he had by then secured a buyer for the sites.

Events in January 2014

On 6 January 2014 Mr Scrivener sent Mr Cappello an email stating:

“Our site shows $27m gross profit on [gross realisation] of $90m with land value of $15m.”

Mr Scrivener agreed that his reference to “our site” was to the Rouse Hill properties.
This again points to the conclusion that, at least at this stage, Mr Scrivener saw Mr Cappello as his joint venture partner.

Possible sale to Sunland group - the Information Memorandum

Mr Cappello was at this stage seeking to negotiate a sale of the property to Sunland Group Ltd.
My attention was not drawn to evidence showing how Sunland came to be on the scene as a prospective purchaser, although it seems Mr Cappello and Mr Scrivener had had earlier involvement with Sunland in relation to a different project.
Mr Cappello agreed that during January 2014 Mr Scrivener asked him how he was getting on finding a buyer for the site and that Mr Cappello said that Sunland had expressed an interest in the site and that he was preparing an information memorandum.
Mr Cappello was seeking to interest Sunland in purchasing the three Rouse Hill sites for $16.5 million.
To that end, he arranged with a graphic artist to prepare a coloured Information Memorandum entitled “Corner Rouse and Cudgegong Roads, Rouse Hill”.
On 16 January 2014 Mr Cappello sent Mr Scrivener the “First Draft” of that document. The front cover of the document was headed “Rouse Hill Development Site for Sale” and stated:

“Area – 15 acres
- Zoning – Predominantly R3
- Regular shaped corner site
- Strong North West Sydney Market
- Large strategic development opportunity
- Close to Rouse Hill Town Centre
- Close to the proposed Cudgegong retail centre
- Close to the proposed Cudgegong station
- Delayed settlement
Price - $16,500,000”

The final page of the document was headed “The Opportunity” and read:

“Tuscany Corporation currently has control of the site via Due Diligence and Put and Call Option Deeds.
Directors of Tuscany Corporation are John Scrivener and Gail Scrivener.
Shaka Holdings is a joint venture partner in the site with Tuscany Corporation.
Sole director of Shaka Holdings is John Cappello.
Asking Price - $16,500,000
Upon offer & acceptance with Tuscany Corporation, a nomination will be granted for the new purchaser to fill Tuscany Corporations position.
Upon nomination all monies above the negotiated contract price will be payable via a bank cheque.
Discussions between legal representatives will take place at this time to finalise details.
Timeframe
Circumstances only allow this opportunity to take effect by January 31^st, 2014.
Contact:
John Cappello
041X XXX XXX”
(Emphasis added.)

In the passage I have emphasised, this document stated that Shaka Holdings, the second plaintiff, was Tuscany’s “joint venture partner in the site”.
Within about 30 minutes Mr Scrivener replied suggesting several changes to the draft but without making any comment on the statement concerning Shaka Holdings being Tuscany’s “joint venture partner”.
Mr Scrivener concluded:

“Please send me next draft”.

The graphic artist prepared a further draft which Mr Cappello sent to Mr Scrivener the following day, 17 January 2014. The second draft incorporated Mr Scrivener’s 16 January 2014 suggestions. It continued to contain the statement that Shaka Holdings was Tuscany’s “joint venture partner”.
Mr Scrivener replied suggesting some further changes but, again, not making any comment about the “joint venture partner” reference.
Finally, on 17 January 2014, Mr Scrivener concluded by saying “Great job mate”.
Although Mr Scrivener in cross-examination spoke somewhat dismissively of the Information Memorandum as a “marketing document”, it clearly stated that Mr Cappello’s company, Shaka Holdings, was Tuscany’s “joint venture partner”. Mr Scrivener’s responses to the Information Memorandum show that he paid it careful attention. He must have seen the reference to Shaka Holdings being Tuscany’s “joint venture partner”. The fact the he made no comment about it in his communications with Mr Cappello about the Information Memorandum suggests to me that he agreed the description was accurate.

“Our vendors”

On 21 January 2014 Mr Scrivener wrote an email to Mrs Lobsey discussing a number of planning developments which had arisen in relation to the site.
Mr Scrivener sent a copy of this email to Mr Cappello with the note:

“Think we should update all our vendors.”

The fact that Mr Scrivener was referring to “our” vendors is a further suggestion of his understanding of the nature of his relationship with Mr Cappello.

“How it works”

On 30 January 2014 Mr Marsden sent an internal email to Mr Wong stating:

“I refer to our conference with John Scrivener this morning. In general terms, I note that we have secured the three properties with a total purchase price of $12,730,000. I also note that John has, most likely, secured a purchaser for all three properties at a total price of $16,500,000 thereby rendering to John a gross margin of $3,770,000.”

The “purchaser” to whom Mr Marsden referred was Sunland, and Mr Marsden continued:

“At this stage I note that we will, at some stage, be meeting with the purchaser to settle a mechanism for entering into a deal with the purchaser and exercising the Options with nominations. John has requested, and I agree entirely, that when that happens, a Partner of the firm should be in attendance with you.”

Mr Marsden then set out details as to how the matter should proceed once Mr Scrivener “has settled on the commercial terms of the deal with his potential purchasers”.
On 4 February 2014, Mr Scrivener sent a copy of that email to Mr Cappello with a note:

“ Hi mate
how it works”

I read that somewhat cryptic note as Mr Scrivener conveying to Mr Cappello that, if Sunland could be secured as a purchaser for $16.5 million, the manner in which the transaction would proceed was as set out in Mr Marsden’s advice.
Again, this is consistent with Mr Scrivener regarding Mr Cappello as his joint venture partner and keeping Mr Cappello informed of the advice he was receiving from Mr Marsden about closing a deal with the purchaser that Mr Cappello had introduced.

Events in February 2014

On 5 February 2014, Mr Scrivener prepared a draft of a letter that he suggested that Mr Cappello send to Mr Soheil Abedian, the chairman of Sunland Group.
Mr Scrivener said to Mr Cappello:

“Mate, add your bits and I will get Ben [Wong] to check.”

Later on 5 February 2014 Mr Cappello sent an email to Mr Abedian in substance in accordance with Mr Scrivener’s draft, and attaching a letter from Marsdens to Tuscany.
Mr Cappello’s email read:

“Thank you for taking the time to meet with me yesterday.
Further to my telephone call I confirm we have agreed to a figure of $15,300,000 for Sunland to acquire the Rouse Hill properties.
Attached is [the letter from Marsdens to Tuscany] outlining the details of the proposal along with the Solicitor’s details as requested.
As discussed, we have a window of opportunity to simply nominate Sunland without further stamp duty obligations, this window closes at 5pm Tuesday 11 February 2014.

On 6 June 2014 Mr Trent Scrivener forwarded to Mr Cappello an email from Mr Wong stating that Mr Wong had:

“…followed up Oracle regarding the finalisation of the [Development Management Agreement] and Investor Agreement with respect to the Rouse Hill development.”

On 16 June 2014 Mr Cappello sent an email to Mr Trent Scrivener:

“Can you please follow up Ben Wong for an update on Rouse Hill?”

Mr Trent Scrivener replied:

“John will be back in the country on July 2^nd and can signed [sic] the paper work before heading back to the Gold Coast the following day.”

On Mr Scrivener’s return in July 2014 he gave Mr Cappello a copy of a plan prepared by Davis Sommerville Pty Ltd of the proposed development of the three sites.
On the reverse side of that document Mr Scrivener had made handwritten workings of the likely gross realisation of the development on the assumption of 35,550 square metres of development, and assuming realisations of $1,100 per square metre to $1,400 per square metre. Those workings suggested that gross realisations of between $39.14 million and $49.77 million would, on those assumptions, be achieved.
Mr Scrivener said he gave this document to Mr Cappello only because Mr Cappello had the potential to sell the property as a real estate agent.
I think a more likely explanation is that, as Mr Pritchard submitted, Mr Scrivener gave Mr Cappello this document to assure him that the venture was likely to be profitable.

The 6 August 2014 Development Management Agreement

On 6 August 2014 Mr Scrivener’s companies, Tuscany, 96 Cudgegong Land Pty Ltd and 104 Rouse Land Pty Ltd entered a Development Management Agreement with Oracle.
Another party to that document was 88 Rouse Land Pty Ltd, a company jointly owned by Tuscany and Oracle and, ultimately, the purchaser of the three Rouse Hill sites and vendor of them to Tian Tong.
The Development Management Agreement defined the “Project” as:

Tuscany nominating 88 Rouse Land Pty Ltd as “purchaser” under the Put and Call Option Deed with Mrs Boon concerning the 88 Rouse Road property;

obtaining a development approval for the three Rouse Hill properties so as to subdivide them into separate residential allotments;

developing the properties by way of subdivision and sale; and

acquiring the properties from the respective vendors under the three Put and Call Option Deeds.

The Development Management Agreement provided for the division of the Project Proceeds, although this agreement was varied by a one-page “Agreement – Acknowledgement” executed by the parties to the Development Management Agreement on 10 June 2015, to which I will return.

Events thereafter

On 11 August 2014, Mr Cappello sent an email to Mr Scrivener:

“Oracle deal is great for us anyway. Thanks for everything you have done so far!”

Mr Scrivener did not suggest that it was inaccurate of Mr Cappello to opine that the “Oracle deal” was great for “us” as opposed to only Mr Scrivener.
In accordance with the terms of the Development Management Agreement, Oracle paid a 2% acquisition fee to Tuscany in the sum of $280,060.
On 19 August 2014, Tuscany paid half of that amount, $140,030, at Mr Cappello’s direction. [26]
26. Rather than the figure of $149,880.54 referred to in Mr Scrivener’s email to Mr Aboud of 26 May 2014 referred to at [372] above.
On the same day, Mr Scrivener paid $125,000 to Mr Cappello from his own funds representing repayment to Mr Cappello of the $125,000 he had paid on account of the Option Fee under the Put and Call Option Deed with Mrs Boon concerning the 88 Rouse Road property.
Mr Cappello travelled to Europe on holidays between late August and late September 2014.
He said that when he returned he spoke to Mr Scrivener who said:

“We are working through all the issues and are planning the site. I need you to look after [another site at Kellyville] as a priority and I will look after Rouse Hill. The Oracle guys have a relationship with a builder from Melbourne called Creation Homes. They want in on our deal. Our percentages might change but we will have a smaller share of a much bigger pie. Oracle want to keep going with more sites. This relationship is going to be great for us.”

Mr Scrivener denied having that conversation, although he did not refer to it in his affidavit evidence.
In November 2014 Mr Scrivener gave Mr Cappello a set of the plans about to be submitted to Blacktown City Council to seek development approval for a proposed subdivision of the Rouse Hill properties.
On 19 January 2015 Mr Scrivener caused to be sent to Mr Cappello’s employee further architectural drawings relating to the proposed development application.
Mr Scrivener said that the only reason he was forwarding these documents to Mr Cappello was to prepare for the marketing of the development.
On 20 January 2015 Mr Scrivener forwarded to Mr Cappello’s office an email he’d received from Mr Wong which said that:

“The option has been exercised and Contracts are dated 19 January 2015. Settlement will be 27 February 2015.”

Mr Scrivener said in cross-examination that the settlement referred to in this email was settlement of the transaction whereby 88 Rouse Land Pty Ltd became the registered proprietor of the three properties as a result of Tuscany, 96 Cudgegong Land Pty Ltd and 104 Rouse Land Pty Ltd having exercised their options under the Put and Call Option Deeds of 20 December 2013 and 14 March 2014 to call for the three Rouse Hill properties.
In April 2015 Mr Cappello learned from Mr Kucic at Oracle that the Rouse Hill site was to be sold to a Chinese developer.
Mr Cappello said in one of his affidavits:

“I became concerned because Scrivener had not told me about that sale. I did not call Scrivener immediately about the sale to the Chines buyer. I was confused by the news because I had not been told about that development by Scrivener and so I waited before discussing that development with Scrivener.”

Mr Cappello said that on 11 May 2015 he had this discussion with Mr Scrivener:

“Scrivener:   Rouse Hill will be sold to the Chinese.
Cappello:   Why didn’t you tell me?
Scrivener:   Oracle won’t honour its written agreement with Tuscany and I have been trying to keep this out of the Supreme Court.”

On 11 May 2015 Mr Cappello created what appears to be the only diary note he made about this transaction. The note read:

“John Scrivener called to advise Oracle will not honour written agreement. Will be sold to Chinese.”

Mr Scrivener denied saying anything to this effect to Mr Cappello.
However, Mr Studdy did not challenge Mr Cappello in relation to his diary entry. I see no reason to doubt the accuracy of the note and conclude that Mr Scrivener did say something to Mr Cappello to the effect that Mr Cappello has recorded.
There is no suggestion in the evidence that anyone from Oracle said that Oracle would not “honour” its “written agreement”. Indeed, Mr Scrivener agreed that it would not have been true to say that Oracle would not honour its written agreement. That suggests, as Mr Pritchard submitted, that Mr Scrivener was prepared to tell Mr Cappello things that were not true to dissuade him from asserting an interest in the project.
Mr Cappello said that on 21 May 2015 he received a telephone call from Mr Scrivener which he took on speaker phone in the presence of his brother, Mr William Cappello. Mr Cappello said the conversation was in these terms:

“Scrivener:   Hi John
[Cappello]:   Mate when are we meeting to talk about Rouse Hill?
Scrivener:   What for?
[Cappello]:   To talk about my share.
Scrivener:   I’m sorry I don’t understand what you mean. What do you mean?
[Cappello]:   I am entitled to 50% of the Tuscany share.
Scrivener:   You are not entitled to anything. You made a quarter of a million dollars. You got paid by Sue Lobsey.
[Cappello]:   I haven’t taken one dollar from Sue Lobsey.”

Mr Scrivener did not refer to this conversation in his affidavit but denied in cross-examination that it took place.
However, Mr William Cappello has sworn an affidavit in which he said:

“I was present, along with John’s assistant at that time, Lyn Batson, in John’s office when John took a call from John Scrivener. That would have been around the middle of 2015.
When the call came in, John put it on speaker phone and signalled to both Lyn and myself to listen. As a result, I gave attention to the phone call.
After almost 5 years I cannot recall the precise words used, but the gist of the discussion was words in or to the effect of the following:
[Cappello]:   When can we meet to talk about my share of the profit from Rouse Hill?
Scrivener:   What do you mean?
[Cappello]   I am entitled to 50% of what Tuscany made.
Scrivener:   No you are not, you made $250,000 in commission from Sue Lobsey.
[Cappello]:   I’ve taken nothing from Sue Lobsey. What I’m entitled to is half of what Tuscany made.
Scrivener:   You’ve got nothing in writing.
[Cappello]:   That doesn’t matter.
Scrivener:   Good luck if you want to try and get anything in court.”

Although in cross-examination Mr Scrivener said that “I totally deny that conversation” Mr Studdy did not cross-examine Mr William Cappello on his affidavit. In those circumstances, I accept that Mr William Cappello’s recollection is accurate. Thus Mr Scrivener’s response to Mr Cappello’s assertion that he was entitled to “half of what Tuscany made” was not to assert, consistently with his account of the 20 August 2013 agreement, that Mr Cappello’s entitlements were subject to him securing a purchaser by 28 February 2014, but, rather to say “You’ve got nothing in writing”.
Although my attention was not drawn to a document recording this fact, I was informed from the bar table that in May 2015, 88 Rouse Land Pty Ltd obtained approval from Blacktown City Council to develop the consolidated site as a medium density development.
On 10 June 2015 the parties to the 6 August 2015 Heads of Agreement signed the Agreement – Acknowledgement to which I referred at [395] above which provided, in effect, that the “Project Proceeds” will be divided:

“45.52% to Tuscany and 54.48% to Oracle (by way of background, being approximately 50:50 on one property and 2/3:1/3 on two properties”.

The following day, 11 June 2015, Mr Cappello visited Oracle’s offices and met with Mr Kucic, and another officer of Oracle, Mr Nic Kennedy.
Mr Kennedy’s note of that meeting is as follows:

”John Cappello requested a meeting with [Nic Kennedy] and [Mr Kucic] at Oracle on Wednesday morning 11th June at 10.30am.
He came and said he did not have good news however expressed that he had no concerns with Oracle and valued our working relationship.
[Mr Cappello] then explained that he had a problem with John Scrivener. [Mr Cappello] said that [Mr Scrivener] and he were partners on the Rouse Hill deal and that he was a silent partner with [Mr Scrivener]. He had provided funding for the initial deposit which had been repaid and he had been paid part of the acquisition fee from [Mr Scrivener].
[Mr Cappello] said that he had a verbal contract with [Mr Scrivener] and supporting documentation the he and [Mr Scrivener] are 50/50 partners on Rouse Hill project. [Mr Cappello [27] ] confirmed that it is 50% of what [Mr Scrivener] earns, and does not impact Oracle.
[Mr Cappello] said he did not want to impact Oracle and hoped that it would not get to a point where the project would be implemented, but did not say that it would not be implemented.
[Mr Cappello] explained he wants to continue on sales on Withers Rise project, however he does not want to deal with [Mr Scrivener] again, at all.
[Mr Cappello] said he tried to meet with [Mr Scrivener] to sort this issue out but [Mr Scrivener] would not meet him.
[Mr Cappello] said he did not act as an agent on Rouse Hill, and did not take any commission from Sue Lobsey the agent.
[Mr Cappello] reiterated that he did not want to implement [sic: implicate] Oracle or had any issues with Oracle and stated he likes working with Oracle and said the issue with [Mr Scrivener] is his issue.
[Mr Cappello] said he has legal advice and will be commencing action early next week, by sending a letter to Marsden’s lawyers.
Oracle stated that we do not want to be involved and any issue with [Mr Scrivener] should not include Oracle or its projects. Oracle did mention that if our projects are [implicated] in any proceedings in any negative way then we would have no choice but to commence legal proceedings.
[Mr Cappello] said he would keep us aware of events moving forward.”
27. Mr Kennedy attributed this, and later references in the note, to “JS” but it clearly should be “JC”: Mr Cappello.

I see no reason to doubt that Mr Kennedy accurately recorded what Mr Cappello said at this meeting [28] .
28. Subject to the matters referred to in the preceding footnote.
Nor do I see any reason to doubt that Mr Cappello was giving Mr Kucic and Mr Kennedy as accurate an account as he could of his agreement with Mr Scrivener. This account was given less than two years after 20 August 2013. As I have said, Mr Scrivener first turned his mind to recording his recollection of the agreement shortly before he swore his affidavit in these proceedings in March 2019: five years after the agreement was made.
On about 20 July 2015 88 Rouse Land Pty Ltd sold the three sites to Tian Tong.
Tuscany received $9,141,937.95 for the venture as follows:

Item

Amount

1

Cheque to Tuscany at Tian Tong completion

$8,500.000

2

Paid to Tuscany from the half deposit release

$550,000

3

Interest on Boon option fee since

$92,245

Total

$9,142,245

88 Rouse Land Pty Ltd received $2,276,586.52 on completion. Tuscany was a 50% shareholder in 88 Rouse Land Pty Ltd. My attention was not drawn to evidence showing what benefit Tuscany has received from this payment. On the face of it, it would appear Tuscany would be entitled to half.
Mr Cappello consulted his current solicitors in relation to this matter on 18 August 2015.
The following day he wrote to Mrs Lobsey:

“I refer to our recent discussions.
When I first negotiated a conjunction agreement with you under which we agreed to share commission, I was not aware that I would become involved as an investor in the project through my company, Shaka Holdings Pty Ltd.
As you know, I can’t have status as an investor and at the same time receive commission.
Thanks anyway, but I must return your cheque for $48,000. It’s a nice little bonus for you for all your hard work.
I look forward to working with you again in the future.”

Although Mr Studdy sought to make much of this email, the inference I would draw is no more than that, the day before, Mr Cappello received advice to the effect that it might appear inconsistent with his case were he to retain the $48,000 commission.

Was the agreement subject to the Sunset Condition?

Mr Studdy submitted that it was inherently improbable that Mr Scrivener would have entered an agreement with Mr Cappello that was not conditional on Mr Cappello finding a buyer for the combined site within a reasonable time.
Thus, Mr Studdy described the agreement for which Mr Cappello contends as “highly problematic”, a “commercial absurdity only to the advantage of Mr Cappello and to the disadvantage of Mr Scrivener” not “entirely implausible”, and “simply too far-fetched to possibly believe”.
Mr Studdy submitted that it was “plainly inconceivable” that Mr Scrivener would have entered an unconditional agreement because:

Mr Scrivener and Tuscany, and not Mr Cappello “would have to and did undertake the bulk of the effort putting together the project while [Mr Cappello] contributed virtually nothing towards that effort”;

Mr Scrivener and Tuscany, and not Mr Cappello were “‘on the hook’ financially without [Mr Cappello] being exposed to any liability under the agreement”; and

the “commercial documents” into which Tuscany and Mr Scrivener’s other companies entered and the “stark disparity in the relative contributions” of Mr Scrivener and Mr Cappello to the venture showed that “it is understandable that the agreement was subject to the conditions that [Mr Scrivener] imposed”.

Mr Studdy submitted that “a consequence of [Mr Cappello’s] failure” to secure a buyer was that Mr Scrivener and Tuscany “were required to go ‘unconditional’ on the project (when that was never the intention) and were required to seek the assistance of Oracle to do so”.
These submissions do not take account of the fact that, on any view of the matter, it was Mr Cappello who introduced Mr Scrivener to the project and thus made available to Mr Scrivener and Tuscany the opportunity from which they have now profited.
Nor do they take into account that the undisputed evidence that in December 2013, on Mr Scrivener’s account of it, [29] Mr Cappello asked that the arrangement between them be documented, the result of which would have been that Mr Cappello, or his wife, would have also been “on the hook” financially.
29. Mr Cappello said this occurred in May 2014, but for the reasons I have set out above at [193], I have concluded it probably occurred when Mr Scrivener says.
The submissions also overlook the relatively simple project that was in contemplation as at 20 August 2013. As at that date, the project involved following up on the negotiations Mr Cappello had had with Mrs Boon concerning 88 Rouse Road and with Mrs Votano concerning 96 Cudgegong Road, and endeavouring also to secure the third property from Mr and Mrs Bannerman at 104 Rouse Road.
The plan was to negotiate options to purchase with the three site owners [30] , with a contemplated option fee of $5,000 for each property and, according to Mr Scrivener’s recollection of what Mr Cappello was proposing, to speedily on-sell the consolidated properties at a profit. [31]
30. Ultimately, the Due Diligence Deeds.
31. “We can flick it on before the due diligence period is up”: see [61] above.
As things turned out, the project evolved into one far more ambitious than that contemplated on 20 August 2013. Mr Scrivener procured the active and substantial involvement of Oracle. The Put and Call Options were entered, and the vehicle for the Tuscany/Oracle joint venture [32] exercised the call options and acquired the sites. Development Approval was obtained and the combined site sold to Tian Tong to the significant profit of Oracle and Tuscany.
32. 88 Rouse Road.
In the meantime, as Mr Studdy submitted, once Mrs Boon’s Put and Call option became “unconditional” on 28 February 2014, and once Mr Scrivener’s companies entered the Put and Call Options with Mrs Votano and Mr and Mrs Bannerman on 14 March 2014, Mr Scrivener, through his companies, was exposed to the potential liability of being required to purchase the properties for the total price of $12.65 million, as well as to the various obligations arising from the arrangements with Oracle.
It is also true that, as things turned out, Mr Scrivener ended up putting many more hours work into the venture than did Mr Cappello.
But I see no basis upon which I could find that these developments were in the contemplation of Mr Cappello and Mr Scrivener when they made their agreement. Neither of them made any such suggestion in their evidence. Accordingly, I do not see how they can be used, retrospectively, to assess the probabilities of what was agreed on 20 August 2013; at a time when a far more modest project was in prospect.
I also accept that there were some aspects of the 20 August 2013 arrangement that would have made it reasonable for Mr Scrivener to impose a condition of the kind for which he contends.
For example, Mr Scrivener claims that Mr Cappello said on 20 August 2013 that “I already have buyers for a combined site”. Mr Cappello denied saying that. But there is no evidence that Mr Cappello did have buyers as at 20 August 2013. In those circumstances it may well have been understandable for Mr Scrivener to impose a condition along the lines of the Sunset Condition.

Similarly, Mr Cappello’s initial insistence “to leave my name off things”[33] meant that only Mr Scrivener’s name was to be “on things” such that only Mr Scrivener would, as things stood on 20 August 2013, be exposed to any liability under the venture. Again, in those circumstances it may well have been understandable for Mr Scrivener to impose a condition along the lines of the Sunset Condition.
33. See [60] above.
But the question is: did he?
The following features of Mr Scrivener’s conduct after 20 August 2013 persuades me that, probably, he did not:

Mr Scrivener’s 28 August 2013 enquiry of Mr Cappello as to his “thoughts” concerning the proposed Due Diligence Deed for 88 Rouse Road; [34]
34. See [122] and [123] above.

Mr Cappello’s involvement with Mr Scrivener in the strategy concerning Mr and Mrs Bannerman’s property in September 2013; [35]
35. See [131]-[143] above.

Mr Scrivener’s ultimate acceptance that, at the meeting at the El Phoenician restaurant in October or November 2013 that, without demur from Mr Scrivener, Mr Cappello described Mr Scrivener to Mr Aboud as his joint venture partner; [36]
36. See [144]-[154] above.

Mr Scrivener’s 16 November 2013 “fish and chips are on the stove” email to Mr Cappello where Mr Scrivener said to Mr Cappello that he “now got 17 months to make sure I make it all happen”; [37]
37. See [162]-[167] above.

Mr Scrivener’s 18 November 2013 email to Mr Kucic, copied to Mr Cappello, in which Mr Scrivener said that Mr Cappello could not get a “conjunction or referral” because “he is involved in [the] purchase”; [38]
38. See [168]-[172] above.

Mr Scrivener’s 9 December 2013 email to Mr Marsden in which he referred to his “joint venture partners”; [39]
39. See [179]-[180] above.

Mr Scrivener’s 20 December 2013 email to Mr Marsden referring to Mr Cappello as “my J/V partner” (in the context of Mr Cappello having “stuffed up” finding funds to provide the option fee for Mrs Boon’s Put and Call Option Deed); [40]
40. See [205]-[215] above.

Mr Scrivener’s 6 January 2014 email to Mr Cappello referring to “our site”; [41]
41. See [216]-[218] above.

Mr Scrivener’s evident acceptance of the accuracy of the statement in the January 2014 Information Memorandum prepared by Mr Cappello in relation to the proposed sale to Sunland Group of Shaka Holdings as being “a joint venture partner in the site with Tuscany Corporation”; [42]
42. See [219]-[232] above.

Mr Scrivener’s 21 January 2014 email to Mr Cappello saying that “we” should update all of “our” vendors; [43]
43. See [233]-[235] above.

Mr Scrivener’s 4 February 2014 email to Mr Cappello explaining “how it works”; [44]
44. See [236]-[241] above.

Mr Scrivener’s failure to assert, in his critical email of 27 February 2014 to Mr Aboud, the existence of any Sunset Condition despite expressing anxiety about Tuscany having “to go unconditional” the next day; [45]
45. See [259]-[264].

Mr Scrivener’s failure to assert the existence of the Sunset Condition on the Sunset Date itself in his email to Mr Cappello that day in which he said “Bannermans all sorted” and “thank you for your help”; [46]
46. See [265]-[269] above.

Mr Scrivener’s failure at any time after the Sunset Date of 28 February 2014 to assert the existence of the Sunset Condition;

Mr Scrivener’s 11 March 2014 statement to Mr Cappello that they were “moving in the right direction so far” despite the passing of the Sunset Date; [47]
47. See [273]-[274] above.

Mr Scrivener’s 14 March 2014 SMS to Mr Cappello, sent on the day that Mr Scrivener’s companies entered into the Put and Call Option Deeds in respect of 96 Cudgegong Road and 104 Rouse Road and on which Tuscany entered into the Loan Agreement with Oracle, “congratulations we own a site”; [48]
48. See [279]-[289] above.

Mr Scrivener’s emails to Mr Cappello keeping him informed of developments throughout April 2014; [49]
49. See [290]-[303] above.

Mr Scrivener’s suggestion that Mr Cappello meet the prospective purchaser, Mr Stanley Lei, from Anteus Group; [50]
50. See [304]-[312] above.

Mr Cappello’s involvement, to Mr Scrivener’s knowledge, in negotiations in May 2014 to interest Sunland in purchasing the sites leading to the 7 May 2014 email exchange in which Mr Cappello suggests that “we can move on” and Mr Scrivener replied that “we are wasting our time”; [51]
51. See [313]-[332] above.

Mr Scrivener’s acceptance of Mr Cappello’s statement in Mr Edgerton’s presence that if Oracle committed to the deal “we will split 50:50” and that “we’ll also split the profit from the acquisition of the sites 50:50”, which evidence finds objective confirmation in Mr Edgerton’s file note showing “50% to JS and JC (Tuscany)”; [52]
52. See [333]-[365] above.

the 26 May 2014 email exchange between Mr Scrivener and Mr Cappello concerning contributions to costs; [53]
53. See [366]-[383] above.

the provision by Mr Scrivener to Mr Cappello in July 2014 of his handwritten note concerning the likely gross realisations of the developed site; [54]

Mr Scrivener’s evident acceptance of Mr Cappello’s 11 August 2014 statement that “Oracle deal is great for us anyway”; [55]

Mr Scrivener’s disingenuous response to Mr Cappello’s challenge concerning what Mr Cappello had heard about the sale of the development to a Chinese developer; [56]

Mr Scrivener’s 21 May 2015 response to Mr Cappello’s assertion of an entitlement to “50% of the Tuscany share” which was not to assert the existence of the Sunset Condition and the lack of satisfaction of it but rather to say “you’ve got nothing in writing” and (ironically) “good luck if you want to try and get anything in court”; [57]

finally, Mr Cappello’s account of his agreement with Mr Scrivener to the officers of Oracle on 11 June 2015. [58]
54. See [388]-[391] above.
55. See [396]-[397] above.
56. See [411] to [415] above
57. See [416] to [419] above
58. See [422]-[423] above.

The cumulative effect of these matters leads me to have an actual persuasion of the mind[59] that Mr Scrivener did not, as he claims, refer to the Sunset Condition in the discussion with Mr Cappello on 20 August 2013 and that, accordingly, the Sunset Condition was not a term of the agreement between Mr Cappello and him.
59. Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 at 360-362, per Dixon J.
The evidence that I have set out shows that, consistently between 20 August 2013 and the Sunset Date, Mr Scrivener referred to Mr Cappello as his joint venturer or joint venture partner.
Further, and critically, after the Sunset Date, and when on Mr Scrivener’s account of it Mr Cappello was no longer his joint venture partner and that the “journey” for Mr Cappello was “over”, [60] Mr Scrivener behaved in a manner that cannot be reconciled with him truly believing that the Sunset Condition was part of their agreement.
60. The words Mr Scrivener claims he used at the Verve Café meeting on 11 December 2013.
As I have set out, Mr Scrivener was adamant that the Sunset Condition was a part of his agreement with Mr Cappello and gave evidence that he made this clear to Mr Cappello on a number of occasions, including at the Verve Café on 11 December 2013[61] and again in the conversations on 25 and 26 February 2014. [62]
61. See [183] above.
62. See [25] and [255] above.
Mr Scrivener was either giving evidence he knew to be false or else, perhaps more likely, he has now come to believe that what he said was true because, litigation has intervened and that the processes of Mr Scrivener’s memories have become overlaid, perhaps subconsciously, “by perceptions of self interest as well as conscious consideration of what should have been said or could have been said”. [63]
63. To repeat McLelland CJ in Eq’s words from Watson v Foxman.
However that may be, I have an actual persuasion of mind that Mr Scrivener’s recollection cannot be correct.
I have made references above to occasions when I was concerned as to the reliability of Mr Scrivener’s evidence and his recollection of events.
Those matters have informed my conclusion as to the probabilities of what occurred on 20 August 2013.
Overall, the evidence that I found to be most informative of what was likely to be the true nature of the agreement between Mr Cappello and Mr Scrivener’s own conduct, both by omission and commission.

The result

In closing written submissions, Mr Studdy said in conclusion:

“ … Mr Scrivener contends that in truth this relationship was an agreement that was subject to the performance of two conditions, which were not performed by Mr Cappello. Having failed to perform both conditions (noting that a failure to perform even one would have entitled Mr Scrivener to terminate) Mr Scrivener terminated, and that the termination was reasonable having regard to the circumstances prevailing at the time (not the least of which included that by Mr Cappello’s failure to find a purchaser, he effectively forced Tuscany to go unconditional which in turn required Mr Scrivener to take the action that he did (in approaching Oracle) to salvage the project …
On the evidence the only reasonable and available conclusion is that the agreement was subject to the performance by [Mr Cappello] of the two conditions. When [Mr Cappello] failed to perform the conditions, the agreement was terminated and [Mr Cappello] was repaid in excess of the entitlements that he was owed”.

There are a number observations to be made about this passage.
First, Mr Studdy referred to Mr Scrivener having “terminated” the arrangement with Mr Cappello, and of Mr Cappello then being “repaid in excess of the entitlements that the was owed”. My attention was not directed to evidence that Mr Scrivener ever “terminated” the arrangement with Mr Cappello. I infer that the reference to Mr Cappello being paid his ”entitlements” is a reference to the payments made to Mr Cappello on 19 August 2014. [64]
64. See [399] and [400] above.
Second, it is not correct to say that Tuscany approached Oracle “to salvage the project” by reason of a buyer not being located (by the Sunset Date). As I have set out above[65] Mr Scrivener spoke of having approached Oracle as early as October 2013; well before the Sunset Date.
65. See [146] and [147] (the El Phoenician restaurant conversation) and [173] to [178] above.
Third, and most important, Mr Studdy referred to Mr Scrivener imposing “two conditions” to the agreement with Mr Cappello.
One was of course the Sunset Condition, and I have explained why I do not accept Mr Scrivener’s case about that matter.
The second condition was, as Mr Studdy had put earlier in the written closing submissions, that Mr Cappello contribute equally to costs and expenses. Mr Cappello did not dispute this. As I have set out above, Mr Cappello accepted, indeed asserted that his arrangement with Mr Scrivener included an agreement that expenses be shared equally. Mr Studdy barely developed a submission that Mr Cappello did not comply with that condition. The email exchange on 26 May 2014[66] shows that he did.
66. See [366]-[383] above.
As I am persuaded that the first of Mr Scrivener’s asserted conditions was not a part of the 20 August 2013 agreement, and as I find there was no breach by Mr Cappello of the other condition relied on Mr Scrivener, I find that there was a partnership between Mr Cappello and Mr Scrivener of the kind for which Mr Cappello contends.
In any event, I think Mr Pritchard was correct to submit:

“The facts established in this case make are sufficient to establish a fiduciary relationship, even if there is no partnership.
Similarly, there is no dispute that the particular terms of the agreement are paramount. However, one of the key issues is the extent to which the parties are or are not vulnerable under the terms of the relevant agreement. Courts are reluctant to impose fiduciary obligations in a commercial setting when the agreement has been fully documented and sets out all of the parties’ rights and obligations because the consequences for breach are covered by the contract. As stated by McDougall J in Management Service Australia Pty Ltd v PM Works Pty Ltd [2017] NSWSC 1743 at [186]:
‘Where … parties have entered into a commercial contract and have negotiated and documented in full detail all of their rights and obligations, it would ordinarily be inappropriate to impose a fiduciary duty upon one of those parties. However, this is not because the contract is ‘commercial’ but, rather, because mere vulnerability to breach, where the consequences of breach are adequately covered by the contract, does not give rise to the need for the intervention of equity.’

There was of course no fully documented and carefully drafted commercial agreement in place between Mr Cappello and Mr Scrivener. The agreement was oral and, in any event, Mr Cappello was entirely vulnerable to Mr Scrivener and Tuscany abusing the trust he placed in them with respect to his share in the rights to control the Development Sites.
… This was not a case where the parties chose to conduct their business through a corporate vehicle. Mr Cappello was not a director or shareholder of Tuscany and there was never any suggestion he would be. Mr Scrivener had sole control of Tuscany and the commercial opportunities which arose from the agreement of the parties that the partnership be conducted on the basis that Tuscany held the partnership assets and Tuscany be the party entering into relevant due diligence deeds, option deeds and project management agreements, always in the context of 50% of the expenses and Boon option fee being paid by Mr Cappello as a partner.”

I propose to make a declaration to the effect of that sought by Mr Cappello, namely, that there was a partnership between themselves and/or their corporate nominees (Tuscany in the case of Mr Scrivener and a company later to be nominated by Mr Cappello) “which acquired the rights to control and sell the three contiguous properties situated at 88 Rouse Road, 104 Rouse Road, and 96 Cudgegong Road, Rouse Hill”.
In his Summons, Mr Cappello sought an order that an account be taken of the profits made by the defendants from the defendants’ use of the funds received by Tuscany.
In the alternative, Mr Cappello sought equitable compensation.
During closing submissions, Mr Pritchard informed me that Mr Cappello elected to receive equitable compensation.
I will list the matter for directions on a day convenient to counsel and hear submissions as to what, if any, further steps are needed to resolve the dispute between the parties.

**********

Endnotes

Decision last updated: 07 December 2020

Medium Neutral Citation:	Cappello & Anor v Scrivener & Anor [2020] NSWSC 1748
Hearing dates:	2, 3, 4, 5, 6, 11 and 12 November 2020
Date of orders:	7 December 2020
Decision date:	07 December 2020
Jurisdiction:	Equity - Technology and Construction List
Before:	Stevenson J
Decision:	First plaintiff entitled to declaration that there was a partnership with the first defendant and to equitable compensation for breach of that partnership
Catchwords:	CONTRACTS – oral agreement between first plaintiff and first defendant concerning proposed consolidation and possible development of three adjoining sites – where neither party made a note of the agreement – where neither party confirmed to the other in writing an understanding of the agreement – where no one else present when agreement made – where no dispute that a binding agreement was made concerning sharing expenses and profits of the venture – whether agreement was subject to the plaintiff finding buyer for the consolidated sites CONTRACTS – oral agreement between first plaintiff and first defendant concerning proposed consolidation and possible development of three adjoining sites – whether parties’ post contractual conduct casts light on true nature of the agreement
Cases Cited:	Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 Management Service Australia Pty Ltd v PM Works Pty Ltd [2017] NSWSC 1743 Watson v Foxman (1995) 49 NSWLR 315
Texts Cited:	P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Thomson Reuters)
Category:	Principal judgment
Parties:	John Cappello (First Plaintiff) Shaka Holdings Pty Ltd (Second Plaintiff) John Sidney Scrivener (First Defendant) Tuscany Corporation Pty Ltd (Second Defendant)
Representation:	Counsel: D R Pritchard SC with D W Rayment (Plaintiffs) D B Studdy SC with L Chapman (Defendants) Solicitors: RJI Legal (Plaintiffs) Marsden Law Group (Defendants)
File Number(s):	2018/129029

Item	Amount
1	Cheque to Tuscany at Tian Tong completion	$8,500.000
2	Paid to Tuscany from the half deposit release	$550,000
3	Interest on Boon option fee since	$92,245
Total	$9,142,245