Diransson Pty Ltd v Hassan El Dirani

[2019] NSWSC 617

Supreme Court

New South Wales

Medium Neutral Citation:	Diransson Pty Ltd v Hassan El Dirani [2019] NSWSC 617
Hearing dates:	11, 12, 13, 14, 15, 18, 19 and 20 March, oral submissions 4 & 5 April 2019
Date of orders:	31 May 2019
Decision date:	31 May 2019
Jurisdiction:	Equity - Expedition List
Before:	Sackar J
Decision:	See para [608]
Catchwords:	EQUITY- oral contract- post contractual conduct- constructive trust- restitution – proprietary estoppel
Legislation Cited:	Australian Consumer Law Competition and Consumer Act 2010 (Cth) Evidence Act 1995 (NSW) Limitation Act 1969 (NSW)
Cases Cited:	Ardestani v Doss [2018] NSWSC 1084 Australian Estates v Palmer [1989] NSWCA 11 Fox v Percy (2003) 214 CLR 118 Gestion Pty Ltd v Kit Digital Aus Pty Ltd (in liq) [2014] NSWSC 1547 John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 Raphel Shin Enterprises Pty Ltd v Waterpoint Shepherds Bay Pty Ltd [2014] NSWSC 743 Re Centura Global Holdings Pty Ltd (2016) 111 ACSR 185; [2016] NSWSC 62 Textralian Enterprises Pty Ltd v Perpetual Trustees Victoria Ltd [2000] NSWCA 176 Watson v Foxman (1995) NSWLR 49
Texts Cited:	n/a
Category:	Principal judgment
Parties:	2018/259014 2018/103105 2018/103113   Diransson Pty Limited Anors (First Plaintiff) Ibrahim El Dirani (Plaintiff) Mohammed Dirani Anors (First Plaintiff) Hassan El Dirani (First Defendant) Youmna El Dirani (Second Defendant)
Representation:	Counsel: M Pesman SC, C Alexander (plaintiff in 2018/103105 & 2018/103113) Ms A Power (Plaintiffs in 2018/259014) S Balafoutis, Ms E Doyle-Markwick (Defendants in all 3 matters)   Solicitors: Tully & Chipper Lawyers (Plaintiffs in 2018/103105 & 2018/103113) Matulich Lawyers (Plaintiffs in 2018/259014) One Group Legal (Defendants in all matters)
File Number(s):	2018/259014, 2018/103105, 2018/103113,
Publication restriction:	n/a

Judgment

Background Facts

Procedural History

Parties

Hassan’s Business Model

Peak Hill Proceedings

Hill Top Proceedings

Oaks Proceedings

Evidence

Peak Hill Plaintiffs’ witnesses

Peak Hill Plaintiffs’ documents

Hill Top and Oaks Plaintiffs’ witnesses

Hill Top and Oaks Plaintiffs’ documents

Defendants’ Witnesses

Defendants’ Documents

Peak Hill Plaintiffs submissions

Hill Top Plaintiffs and Oaks Plaintiff submissions

Defendant submissions

Peak Hill Proceedings

Hill Top Proceedings

The Oaks Proceedings

Rebates

Consideration

Peak Hill

Hill Top Proceedings

Oaks

Conclusion

Judgment

Background Facts

Procedural History

1. Three separate proceedings were commenced in 2018 all seeking that a Mr Hassan El Dirani, specifically perform certain contracts relating to alleged promises to transfer land and businesses. Given the commonality in the Defendant and the alleged similarity of factual circumstances, I made orders on 29 September 2018 that the three matters be heard together.

2. The evidence was heard over 8 days from 11 March to 20 March 2019. Final oral submissions were then heard on 4 and 5 April 2019.

Parties

3. Given commonality of surnames as well as the multiple proceedings, the parties and witnesses in this case are generally referred to by their first names. The proceedings are generally dealt with in chronological order.

4. The Defendant common to all these proceedings is Hassan El Dirani (the ‘First Defendant’) and his wife Youmna El Dirani (the ‘Second Defendant’) who together are the directors of Fenikia (the ‘Third Defendant’) (together the ‘Defendants’). Hassan has been buying, selling and managing grocery businesses for some years now.

5. In the first matter, (2018/259014) Mohammed Dirani (the ‘First Plaintiff’) and Yousef Dirani (the ‘Second Plaintiff’) (together the ‘Peak Hill Plaintiffs’) sues the Defendants. The matter concerns a grocery business in Peak Hill. Mohammed is Yousef’s father and together they operated Hassan’s grocery store in Peak Hill from August 2009 to December 2012. Yousef is generally referred to as Joe. The Peak Hill Plaintiffs primarily seek a declaration for breach of contract and a sum of $473,200 for amounts paid to the Defendants, as well as damages. They further seek a declaration that the Defendants held on constructive trust for the Plaintiffs their interest in the Peak Hill Land and Peak Hill Business (PH ASOC [1]-[3]). The Plaintiffs make further claims for certain rebates paid to the Defendants as well as relief under Australian Consumer Law (PH ASOC [5]-[6]). In the alternative the Plaintiffs seek equitable damages (PH ASOC [7]) and other consequential relief (PH ASOC [11]).

6. In the second matter, (2018/103105) Diransson Pty Ltd (the ‘First Plaintiff’) and Imad Al Dirani (the ‘Second Plaintiff’) and Noura Choukhair (the ‘Third Plaintiff’) (together the ‘Hill Top Plaintiffs’) sues the Defendants. The matter concerns a grocery business in Hill Top. Imad and Noura are husband and wife and together are the directors of Diransson. Imad and Noura have operated Hassan’s grocery store in Hill Top since August 2011 and continue to do so. The Hill Top Plaintiffs are primarily seeking that the Defendants specifically perform the agreement to sell to the Plaintiffs the land and business related to the Hill Top Store. They further seek a declaration that the Defendants hold on constructive trust for the Plaintiffs their interest in the Peak Hill Land and Peak Hill Business (HT FASOC [1]-[5]). The Plaintiffs make further claims for certain overpayments made to the Defendants, and for the rebates paid to the Defendants, as well as relief under Australian Consumer Law (HT FASOC [4A],[6]-[13]). In the alternative, the Hill Top Plaintiffs seek a declaration that the parties hold on constructive trust for each other the other’s interest in the Hill Top Land and Hill Top Business as tenants in common, and further consequential relief (HT FASOC [5]). The Defendants filed a cross-claim against the Hill Top Plaintiffs seeking damages and restitution of $192,069 for stolen stock, as well as possession of the Hill Top Land (HT ASOCC [1]-[5]).

7. In the third matter, Ibrahim El Dirani (the ‘Oaks Plaintiff’) sues the Defendants. The matter concerns a grocery business in the Oaks. Ibrahim is Imad’s brother. Ibrahim has been operating Hassan’s grocery store in the Oaks since May 2015 and continues to do so. The Oaks Plaintiff is primarily seeking that the Defendants specifically perform the agreement to sell to the Plaintiff the business related to the Oaks Store including the lease for the Oaks Land and a declaration that the Defendants hold on constructive trust for the Plaintiff their interest in the Oaks Land and Oaks Business (O FASOC [1]-[5]). The Plaintiff makes further claims for certain rebates paid to the Defendants as well as relief under Australian Consumer Law (O FASOC [4A], [6A]-[11]). In the alternative, the Oaks Plaintiff seeks a declaration that the parties hold on constructive trust for each other the other’s interest in the Oaks Land and Oaks Business as tenants in common, as well as further consequential relief (O FASOC [5]). The Defendants filed a cross-claim against the Oaks Plaintiff seeking damages and restitution of $237,574.28 for stolen stock, as well as possession of the Oaks Land (O ASOCC [1]-[5]).

Hassan’s Business Model

8. All of the parties sought to, at one point or another, draw conclusions about probability or improbability of certain arrangements by reference to Hassan’s Business Model.

9. Briefly, Hassan bought a grocery store business in Lawson in 2000 and then the land upon which it operated in 2010 (generally referred to as the Lawson Store). Paul Kabashi operated the Lawson store in about 2000 and states that he paid Hassan a weekly amount and kept the profits (Kabashi [4]-[5]).Hassan himself then operated the store until 2010 when his nephew Marwan took over. Marwan operated the store for six years and stated that he paid Hassan a weekly amount and kept the profits (Marwan 1 [6]-[7]). Hassan sold the business a year later but still owns the land.

10. In 2005, Hassan bought a grocery store in Blackheath and bought the land in 2017. From 2005 to 2010, Hassan’s niece and brother in law (Carolyn and Abdou) ran the store. Hassan states that they paid him a weekly amount and kept the profits (Hassan 1 [24]). Since 2010, Hassan’s brother in law Mouhamed Haidar has operated the store, he states that he pays Hassan a weekly fee and keeps the profits (Haidar [7]-[9]).

Peak Hill Proceedings

11. Hassan and Youmna used to own a grocery store in Peak Hil (Peak Hill Business) and the land on which it operated (Peak Hill Land). Together, referred to as the Peak Hill Store.

12. The Peak Hill Plaintiffs previously operated the Peak Hill Business.

Events prior to the alleged contract

13. Mohammed and Hassan met during childhood in Lebanon (Mohammed 2 [11]).

14. Mohammed owned and operated a grocery store in Werrington in around 2008. The business struggled post GFC and he was forced to sell in January 2009 (Mohammed 2 [10]). Mohammed then began working for Hassan at Hassan’s Lawson store (Mohammed 2 [15]).

15. In around 2008 Joe was studying at TAFE and working to help support his family (Joe 1 [13]).

16. Mohammed states that in early 2009, Hassan told him he wanted to help him get back on his feet and that he would buy Mohammed a grocery business (Mohammed 2 [13]). He alleges that together he and Hassan discovered that a business in Peak Hill was for sale. Mohammed recalls visiting the store with his family and speaking with the owners (Mohammed 2 [16]-[22]).

17. Mohammed states that in about April 2009, he had a conversation with Hassan, that Hassan would purchase the Peak Hill Store for Mohammed and his family, and that Mohammed and his family would operate the shop and pay Hassan back for the business and land over time (Mohammed 2 [23]-[24]).

18. Hassan states that there was an initial conversation with Mohammed in around 2008 in the following terms (Hassan1 [31]):

Mohammed: Hassan would you consider buying a shop and we have the same arrangement for me that you do with Abdou and Carolyn. I am going to lose my house in Cambridge Park if I don’t start making money and paying the bank.

Hassan: If I find a new business to buy, I can give you the same deal as I give them – you can work in the business and keep the profits, you just pay me a certain amount each week.

19. Hassan states that he then became aware of a business and property for sale at Peak Hill. Hassan states that he visited the store without Mohammed to make inquiries (Hassan 1 [32]-[33]).

The alleged contract

20. The Peak Hill Plaintiffs plead that on or about June 2009, Hassan made a business proposal to Mohammed. Hassan would purchase the Peak Hill Land and Peak Hill Business as well as the stock for Mohammed and his family. Upon Mohammed paying back the amounts Hassan had paid for the Peak Hill Land and the Peak Hill Business and the stock, Hassan would transfer the Peak Hill Land and Peak Hill Business to Joe. Mohammed accepted this proposal thus forming an agreement enforceable by law (PH ASOC [21]-[22]).

21. Mohammed states that in about June 2009, he had the following conversation with Hassan(Mohammed 2 [27]):

Hassan: Mohammed, I have purchased the shop and freehold for $300,000 plus stock. I will give you more stock. In total it will be $110,000 for the stock

Mohammed: So there is already about $50,000 worth of stock and you will be giving me another $60,000 worth.

Hassan: correct.

22. Also in June 2009, Mohammed recalls the following conversation with Hassan (Mohammed 2 [29]):

Hassan: I want you to work hard and give 100 per cent to the business. I am not worried about the money now. It is your business and your property. I suggest we put the business in Joe’s name and he will eventually own the business. In a few years time you won’t be able to work in the business in the shop. When you pay me back I will transfer the business and the property to Joe.

Mohammed: Okay. That is fair as Joe has given up his job. He has given up everything for the business.

Hassan: After you take over we will need to fix up the shop. It’s too old. I will pay for it and you can do the work.

23. Joe recalls the following conversation with Hassan (Joe 1 [25]):

Hassan: This shop should make a turnover of $30,000 per week which means you can pay me $13,000 a month to repay the loan for the business and the property.

Mohammed and Joe: Okay

Hassan: Once the amount is paid back I will transfer and put the Property and the business in your name [addressing Joe] as it will be for you. You [addressing my father] are getting older and the kids will look after the business for you

24. These proposals form the terms of Mohammed’s alleged contract.

25. Before purchasing the store, Hassan states he made an offer in the following terms, which Mohammed accepted (Hassan1 [35]):

You will pay me $500 per week, and pay for all of your own expenses. Otherwise, you can keep the profits.

We will do this for one year, and then either one of us can end the agreement with three months’ notice. We can renegotiate the amount after a year if your turnover increases.

There is some stock in the store. But I will buy some more.

You will have to reimburse me for all the stock when you are making enough money.

For buying stock, I can open an account with Metcash for you in my name. If I do that I will keep the rebates, because I am taking the responsibility for the account, and the rebates are paid based on the orders for a few stores that I have. You could open it in your own name, but you would have to give security over a property or provide a bank guarantee

26. This offer forms the terms of Hassan’s alleged Peak Hill agreement.

Performance of the alleged contract

27. On 14 August 2009, Hassan and Youmna bought the Peak Hill Store for $330,000 plus stock of about $110,000 (Hassan 1 [37]). From about August 2009, Joe and Mohammed ran the store.

28. Mohammed states that in about September 2009, he and Hassan had a further conversation in the presence of Joe and Hassna (Mohammed’s wife). In that conversation, Hassan advised that Mohammed needed to start paying Hassan back for the Peak Hill Store by way of cash repayments of $13,000 each month (Mohammed 2 [37]; Joe 1 [25]; Hassna 1 [26]).

29. Mohammed states that he made many improvements to the store although Hassan paid for many of the materials (Mohammed 2 [32]). Hassan said he made a number of improvements to the store during this time which he paid for or undertook himself (Hassan 1 [41]-[42]).

30. Hassan states that he and Joe signed a lease (Hassan 1 [38]) (Ex P5). Joe denies signing this (Joe 2 [7]).

31. Hassan applied to Metcash for an account in his name (Hassan 1 [43]). In October 2009, Hassan entered into an agreement with Metcash for the Peak Hill, Lawson and Blackheath stores (Hassan 1 [45]). Hassan states that because he had multiple accounts across different stores he was entitled to rebates (Hassan 1 [43]-[47]). When Mohammed and Joe ordered stock through the Metcash account, rebates were paid to a company called Foursquare Stores (Q’ld) Pty Ltd, and that company in turn remitted rebates to Hassan and Youmna.

32. Joe and Mohammed say that over the years they paid Hassan $473,200 consisting of $433,500 cash and $39,700 by way of bank transfer (PH subs [15(d)]). They state that from October 2009 until December 2012, they made cash repayments of $433,500, which they recorded in an exercise book (Ex PA) (Joe 30/10/19 [48]; Mohammed 2 [51]). From December 2011 until December 2012, Mohammed also made repayments totalling $39,700 to Hassan by way of bank transfer (Ex MD-1, 24-37).

33. Hassan says that during the time that Mohammed and Joe managed the Peak Hill Store they paid Hassan an amount equivalent to $500 a week (Hassan 1 [48]). Hassan reported these earnings to his account, who recorded it as ‘lease’ or ‘business’ income in an amount between $23,000 and $26,000 each year: (Hassan 1 [49]). Hassan states Mohammed and Joe never repaid Hassan for the $110,000 in stock (Hassan 1 [51]).

Breach of the alleged contract

34. According to Mohammed and Joe trading at the Peak Hill Store was difficult and they struggled to make ends meet (Mohammed 2 [55]; Joe 1 [58]). Joe left in December 2011. In July 2012, he leased another property owned by Hassan in Hazelbrook and ran a café there.

35. Mohammed and Joe allege that Hassan promised to transfer to them the Peak Hill Store once they had paid Hassan $400,000 for the store and the stock. On Mohammed and Joe’s evidence, by December 2012 they had paid Hassan $473,200 (Mohammed 2 [52]).

36. Mohammed alleges that Hassan did not transfer the property upon payment of $400,000 and instead instigated the sale of the shop in December 2012 (Mohammed 2 [82]).

37. Mohammed states that Hassan refused his request to transfer the Peak Hill Store pursuant to Mohammed’s alleged contract. Mohammed states that Hassan said to him, words to the effect (Mohammed 2 [82]):

While the shop and property are in my name, I want it sold.

If it doesn’t sell, we will burn it down and we can go halves in the insurance payment.

38. Hassan sold the shop to a third party sometime in December 2012.

39. Hassan alleges that by 1 December 2012 Mohammed had told him that he wanted to leave the Peak Hill Store and return to Sydney (Hassan 1 [60]). It is agreed that:

1. By this time, Mohammed’s three children had moved to Sydney (Mohammed 2 [63]-[64]).

2. Mohammed was struggling financially and with his mental health (Mohammed 3 [27]; T483/29-50; T372/21-372/35; T559/06-29).

3. By 1 December 2012 Mohammed had applied for a new ABN for a Food Works business in Oakdale (T485/28-50). On 3 December 2012, Mohammed paid a bond for the purchase of the supermarket (T487/1-3). A week or so prior, Sahar (Mohammed’s daughter) had secured a personal loan so that he could use the money to purchase a new business (T487/22-48; T567/28-30). On 8 December 2012, Mohammed registered the Oakdale Food Works business name (Ex D6).

Events after the alleged breach

40. In about July 2012, Hassan says that he told Joe (Hassan 1 [70]):

I know you feel unhappy because you didn’t make much money at Peak Hill. You are young, I will help you if I can. When I sell Peak Hill, if I make a profit on the same, I will try to give you some of the proceeds to help you (Hassan1 [70]).

41. On 16 December 2012, Hassan sold the Peak Hill Business to his brother in law Abdou (CB6, 534); he sold it at a loss.

42. After Hassan sold the Peak Hill Business, he states he told Joe (Hassan 1 [72]):

When I sold the Peak Hill business to Abdou I lost money. So there are no profits I can give you.

43. Mohammed went to see a lawyer about his dealings with Hassan in 2013.

44. In 2017 Joe sent Hassan a text message, thanking Hassan for all that he had taught him.

Hill Top Proceedings

45. Fenikia owns a grocery store in Hill Top (Hill Top Business) and the land on which it operates (Hill Top Land). Together these are the Hill Top Store.

46. The Hill Top Plaintiffs currently run the Hill Top Business.

Events prior to the alleged contract

47. Hassan and Imad first met sometime in around November 2010 shortly after Imad had arrived in Australia (Hassan 1 [79]).

48. Imad states that in about June 2011, Hassan first raised a possible business proposal. Imad recalls the following conversation (Imad 1 [12]):

Hassan: Imad, you seem an honest and mannered person and if I find you a business, I will buy it for us to work together. I want you to own your own business and be a successful businessman.

Imad: Thank you so much. It will be an honour to work with you.

49. Hassan states that sometime in 2010, he told Imad about his business model stating (Hassan 1 [82]):

My nephew, Marwan El Dirani and my brother in law Abdul El Dirani work in my supermarket. The arrangement I have with them is I buy the supermarket, they work in the supermarket and they pay me an amount weekly. Anything left over is profit them to keep…

I am always looking for new shops. If I find one, and you are in a position to do so, you can work in it. You would have to pay a weekly amount to me, but you could keep the rest of the profits for yourself.

50. Imad states he found a business for sale in Colo Vale and inspected it with Hassan, Hassan ultimately decided that the business was not a good opportunity (Imad 1 [13]-[15]; Hassan 1 [86]). Hassan and Imad then visited the Hill Top Store together, but Hassan was the only one involved in negotiating the purchase of the store. Imad did not ask about the purchase price or about the weekly takings (Hassan 1[88]-[89]).

The alleged contract

51. The Hill Top Plaintiffs plead that in or about early August 2011, Hassan met with Imad and made a business proposal to Imad. Hassan would purchase Hill Top Land and Hill Top Business as well as the stock and Imad would run the business. Imad would pay Hassan $11,000 per month (which would include $2,000 per month rent), all outgoings and expenses including future stock and a one-off payment of $300,000 for the Hill Top Land. Upon making these payments Hassan would then transfer to Imad in July 2015 the Hill Top Land, the Hill Top Business and all remaining stock (HT FASOC [14]). Imad and Noura accepted this proposal thus forming an agreement enforceable by law.

52. Imad states that in about August 2011, prior to Hassan purchasing the Hill Top Store, Hassan told him (Imad 1 [22]):

I have worked out the terms with the owner to purchase the Friendly Grocer in Hill Top and the property. I want you to run the business and then you can buy the property off me in June 2015, when you have saved some money.

You pay all the daily operating costs of the business and I will charge you $11,000 per month with includes $2,000 per month for rent on the shop. You will pay all the outgoings and council feels. You will pay me $11,000 in cash per month until the end of June 2015. You will need also to pay me for the stock I will buy from the previous owner in cash. In July 2015, I will transfer the business to you and also sell the property to you for $300,000.

53. This proposal forms the terms of Imad’s alleged contract.

54. Hassan states that in August 2011, he made the following proposal to Imad (Hassan1 [90]):

I am going to buy that business we saw in Hill Top and the land as well. You can work there if you want to, but you and your wife would have to move from Sydney, and I know you might not be able to do that. You would have to pay me $500 a week and then, when you are making money, you would have to pay me back for the stock.

You would pay for all the expenses for the shop. I would open an account with Metcash in my name for you to buy the stock for the business, because they will not give you an account without any experience. They also need a cash guarantee, a bank cheque or a property as security to open an account. But you would have to pay for the stock yourself.

We will do this for one year; after that, either of us can end the deal by giving three months’ notice

55. This offer forms the terms of Hassan’s alleged Hill Top agreement.

Performance of the alleged contract

56. On 11 October, Fenikia bought the Hill Top and Land and Business for $200,000 and $250,000 respectively plus $66,000 in stock (Hassan 1 [97], [99]). Imad had no role in negotiating the agreements (Hassan 1 [97]).

57. On 25 August 2011, Hassan states he and Imad and Noura signed a Retail Lease for the Hill Top Store (Hassan 1 [96]) (Ex P6). Imad denies signing this lease (Imad 3 [12]), Mr Haidar, the named witness on the lease recalled signing the lease (T878/26).

58. Hassan states that shortly after Imad told him he didn’t want Noura on the lease so they signed a second lease without her name on it (Hassan 1 [96]) (Ex P7). Imad and Noura as well as the named witness Nader Slaibi deny signing the lease (Imad 3 [12]; Noura 2 [3]; Nader [6]).

59. Imad has operated the Hill Top Business since about October 2011.

60. Hassan and Youmna obtained an account for the Hill Top Store with Metcash (Hassan 1 [95]). Imad placed orders on that account between October 2011 and March 2018. Again Hassan states that because it was his account, he was entitled to the rebates (Hassan 1 [123]-[127]).

61. Hassan has made several improvements to the store since 2011, Imad has not paid for any of these improvements (Hassan 1 [100]; Imad 2 [14]).

62. Imad states that he has paid Hassan $9,000 per month in instalment payments, and $2,000 per month as rent (Imad 1 [Annexure A]).

63. On 7 July 2014, Imad and Noura incorporated Diransson. Since around that time, Diransson has owned the registered business name for the Hill Top Store and has paid all of the operating expenses associated with the store, including making payments to Hassan (Imad 1 [47]-[51]).

64. Hassan states that Imad has paid him for the stock that he bought for him, and has paid amounts equivalent to $500 per week (Hassan 1 [102]-[103]). Hassan reported these earnings to his accountant who recorded them as ‘rent received’ or ‘rent Hill Top’.

Breach of the alleged contract

65. According to Imad’s alleged contract, in July 2015, Hassan was to transfer the Hill Top Store to Imad if Imad had paid Hassan $11,000 per month and an additional $300,000 for the Hill Top Land.

66. Imad states that he had paid all of the monthly instalments and in October 2015 told Hassan that he and Noura were ‘ready to purchase the property for $300,000’. Imad states that Hassan then refused to transfer the store to him and demanded that Imad continue paying Hassan $11,000 per month (Imad 1 [69]).

67. Hassan denies having any conversation of this kind with Imad (Hassan 1 [119]).

Events after the alleged breach

68. Imad decided to continue operating the business and keep paying $11,000 per month to Hassan (Imad 1 [70]). He states he continued making those payments until January 2018 (Imad 1 [76]). He then did not make any payments to Hassan from January 2018 to May 2018 (Hassan 1 [134]; Imad 1 [76]).

69. Just before commencing the Hill Top Proceedings, Imad ordered about $200,000 of stock on the Hill Top Account (Imad 3 [29]-[30]); Hassan 1 [129]-[130]). Imad did not pay for this stock, forcing Hassan to do so (Hassan 1 [130]-[131]).

70. In these circumstances, Hassan stated he terminated the Hill Top Agreement (Hassan 1 [135]-[137]).

Oaks Proceedings

71. Fenikia owns a grocery store in the Oaks (Oaks business) and leases the land on which it operates (Oaks Land) (Hassan 1 [17]). Fenikia’s lease for the Oaks Land expired on 20 May 2018 (Hassan 1 [18(b)]). Together the Oaks Business and Oaks Land are the Oaks Store.

72. Ibrahim has run the Oaks Store since May 2015 and continues to do so. Ibrahim is Imad’s brother.

Events prior to the alleged contract

73. Hassan first met Ibrahim in about 2013 (Hassan 1 [139]).

74. Ibrahim states that Hassan told him in Lebanon in 2013 (Ibrahim 1 [11]):

Hassan: When you arrive in Australia, I will help you out as I have helped your brother, so you can own your own business.

75. Ibrahim moved to Australia in late 2014, and worked in the Hill Top Store for Imad. Here he spoke to Imad about his arrangement with Hassan (Ibrahim 1 [15]-[16]).

76. Ibrahim states that in March 2015, Hassan said the following to him (Ibrahim 1 [18]):

Hassan: There is a Friendly Grocer in the Oaks for sale, It is about half an hour driving from your brother Imad’s shop and the person who owns the shop is related to us, I will speak to him and let you or Imad know whether I will buy it for you to run.

77. Hassan states that Ibrahim’s father asked Hassan to help Ibrahim out when Ibrahim moved to Australia from Lebanon in late 2014 (Hassan 1 [140]). Hassan states that in early 2015 he said to Ibrahim a few times, words to the effect of “I will let you know if I purchase a new business; I could allow you to work there” (Hassan 1 [141]). In early 2015, Hassan discovered that the Oaks Business was for sale. Hassan inspected the business and negotiated to purchase the business (Hassan 1 [143]).

The alleged contract

78. The Oaks Plaintiff pleads that in or about late March or early April 2015, Hassan met with Ibrahim and made a business proposal to him. It was proposed that Hassan would acquire the Oaks Business and that Ibrahim would work in the store and pay rent to the landlord, owner of the Oaks Land. When Hassan returned from Lebanon, they would discuss how much Ibrahim would need to pay Hassan and on what terms in order for Ibrahim to eventually take over and own the Oaks Business. Ibrahim accepted this proposal and began operating the store and paying rent to the landlord (O FASOC [14]-[15]). In or about late September 2015, when Hassan returned to Australia, Hassan proposed that Ibrahim would continue to run the Oaks Business and pay all rent owing to the landlord on the lease (at that time $3410 a month). Ibrahim would also pay to Hassan, $2,200 for the first nine days of operation of the Oaks Business and thereafter $10,000 per month from June 2015 onwards until the total amount of $290,000 had been paid. Thereafter, Ibrahim would pay $1,000 per week until he could make a one-off payment of $150,000 for the stock. Upon Ibrahim having paid all the amounts, Hassan would transfer to Ibrahim the Oaks Business and the lease (O FASOC [21]). Ibrahim accepted this proposal thus forming an agreement enforceable by law.

79. Ibrahim states that in March 2016 he had the following conversation with Hassan (Ibrahim 1 [19]):

Hassan: I am buying the shop in the Oaks. I want you to go there and meet the owner’s sons and start training tomorrow. I want you to run the business.

Ibrahim: I will start tomorrow with the training. How will our business arrangement work?

Hassan: The previous owner did not run the business properly. I want you to start running the business and when I come back from Lebanon at the end of 2015, I will tell you how much you will need to pay me and the terms of our arrangement for you to take over the business in the future. But for now, you will pay the $3410 per month rent for the landlord and all of the daily operating expenses for the business.

80. Ibrahim states that he started operating the Oaks Business and paying $3,410 monthly in rent to the landlord (who was not Hassan) in May 2015 before he had a final deal with Hassan (Ibrahim 1 [19], [31]). Ibrahim states that the terms of the agreement were finalised in late September 2015 when Hassan said to Ibrahim (Ibrahim 1 [34]):

I want you to pay me $2,200 for the first nine days you operated the business and $10,000 per month from November 2015 onwards. You are to continue to pay the rent to the landlord. Once you pay me back the $290,000 I paid for the business you will then pay me $1000 a week until you have the $150,000 for the stock on hand. You need to pay me for the stock in one payment and then you need to pay me anything else and I will transfer the business and the lease to you.

81. Together these conversations form the terms of Ibrahim’s alleged contract.

82. In about late March 2015, Hassan states that he made an offer to Ibrahim (Hassan 1 [144]-[145]):

If you agree to work there, I will buy the business and the stock. You will pay me $500 per week, plus the rent and any outgoings. You will buy your own stock from Metcash, but I will put an account in my name for the business. That means I will get a rebate for the stock, but if you put the account in your name you will have to give a guarantee. We can do this for one year and then either one of us can terminate the agreement with three months’ notice. You can pay me for the stock I buy in one or two years when you have earned enough money.

83. This offer forms the terms of Hassan’s alleged Oaks agreement.

84. This alleged agreement was entered into only a week or so before Hassan apparently repudiated Imad’s alleged contract.

Performance of the alleged contract

85. On about 21 May 2015, Fenikia bought the Oaks Business for $230,000 plus stock of about $154,000 (Hassan 1 [151]).

86. Hassan and Youmna obtained an account for the Oaks Store with Metcash (Hassan 1 [164]). Ibrahim placed orders on that account between about May 2015 and March 2018 (Hassan 1 [165]). Again, Hassan receives the rebates for these orders.

87. Ibrahim states that from May 2015, he paid $10,000 per month to Hassan (Ibrahim 1 [41]). By January 2018, Ibrahim states he had paid $312,200 in cash to Hassan (Ibrahim 1 [49]). Hassan denies he received this amount of money (Hassan 1 [160]).

88. Hassan states that Ibrahim paid Hassan (the equivalent to) a weekly fee of $500 in cash through Imad (Hassan 1 [156]-[157]). Hassan reported these earnings to his accountant as ‘income’ because Fenikia did not own the Oaks land.

Alleged breach of the agreement

89. According to Ibrahim, Hassan was to transfer the business to him once he had paid $2,200 for the first 9 days, monthly payments of $10,000 totalling $290,000 and thereafter $1,000 a week until making a one off payment of $150,000 for the stock.

90. Ibrahim states that he had paid the $290,000 by October 2017, but accepts that he has never paid the $150,000 for the stock nor did he make the continuing payment of $1,000 a week (Ibrahim 1 [56]).

91. Ibrahim states that after he had paid the $292,200, Hassan demanded that Ibrahim continue paying him the $10,000 monthly payment in breach of Ibrahim’s alleged agreement.

Events after the alleged breach

92. Ibrahim did not pay anything to Hassan between January and May 2018 and only paid $2,000 per month since May 2018 because the Court ordered him to do so (Hassan 1 [158]).

93. Just before commencing the Oaks Proceedings, Ibrahim ordered about $200,000 of stock on the Oaks Account (Ibrahim 2 [28]-[29]); Hassan 1 [169]-[170]). Ibrahim did not pay for this stock, forcing Hassan to do so (Hassan 1 [170]-[171]).

94. In these circumstances, Hassan terminated the Oaks agreement (Hassan 1 [174]-[175]).

Evidence

95. In cases such as these where there is a sea of oral representations said to amount to a legally enforceable agreement, the absence of, on one view, adequate contemporaneous documents, raises significant questions of the credibility of the witnesses. In this case, I am not satisfied of the veracity of many of the witnesses.

96. Furthermore, there is a serious issue here whether many of the alleged ‘contemporaneous’ documents are or should be regarded as such, as will become clear from the consideration. I am satisfied there was a good deal of creativity and contrivance when it came to producing documents relied upon in this litigation.

97. Although a great many witnesses purported to give evidence about relevant events, by reason of a lapse in time and absence of objective contemporaneous material, I found it difficult to accept, wholly at least, the evidence of many witnesses. Indeed, the witnesses of both sides gave evidence that was, in many cases, diametrically opposed and included, at times, substantial inconsistencies within a witness’s own account.

Peak Hill Plaintiffs’ witnesses

Mohammed Dirani

98. Mohammed swore three affidavits for the proceedings on 17 August 2018, 26 October 2018 and 31 January 2019.

99. Mohamed migrated to Australia in 1987 (Mohammed 2 [9]). Mohammed previously owned a business, which was a fruit shop, he was forced to close this business in January 2009 and lost a lot of money (Mohammed 2 [10]).

100. Mohammed met Hassan about 30 years ago in the village in Lebanon (Mohammed 2 [11]). After Mohammed closed his business he had discussions with Hassan about whether there was any work available for him. He states that in February 2009, Hassan indicated that he would buy a business for Mohammed who could then slowly pay Hassan back (Mohammed 2 [12]-[13]).

101. Mohammed worked in Hassan’s Lawson store for a few months in 2009 (Mohammed 2 [15]). He states that during this time he discovered the Peak Hill Business for sale (Mohammed 2 [16]). Mohammed inspected the business and the land with his family; he stated he believed it was a new opportunity for him (Mohammed 2 [22]). He told Hassan that he and his family would be happy to move to Peak Hill. Mohammed states Hassan made an offer in accordance with Mohammed’s alleged agreement at [20]-[24] above (Mohammed 2 [23]-[24]).

102. Mohammed states that he was aware from the internet advertisement that the Peak Hill Land was for sale for $230,000 and the Peak Hill Business was available for $100,000 plus about $50,000 of stock (Mohammed 2 [26]). Mohammed later stated that Hassan purchased the land and the business for $300,000 plus additional stock of $110,000 (Mohammed 2 [27]). Mohammed stated that he visited the Peak Hill Store with Hassan many times while finalising the purchase (Mohammed 2 [29]).

103. Mohamed states that he never signed a lease in relation to the Peak Hill Store (Mohammed 3 [7]).

104. Mohammed states that from August 2009, himself and Joe carried out significant work to the Peak Hill Store, including painting and replacing the flooring, as well as purchasing a chicken rotisserie (Mohammed 2 [32], [34]). He notes that Hassan bought most of the materials needed for the improvements (Mohammed 2 [33]).

105. Mohammed recalls that Hassan visited Peak Hill Store in September 2009 and asked that Mohammed start paying him the $13,000 monthly (Mohammed 2 [37]).

106. Mohammed states that he and Joe made the following payments for the Peak Hill expenses (Mohammed 2 [46]);

1. Council Rates,

2. Restocking,

3. Building and business insurance, and

4. Utilities, water, electricity, telephone, internet.

107. Mohammed states the following about his payments to Hassan:

1. From October 2009 he and Joe paid Hassan $13,000 in cash payments. They would gather the money together and then deliver it at Hassan’s home. Mohammed recalls Hassan recording the payments in a black book (Mohammed 2 [48]-[50]).

2. Mohammed states that Joe kept an exercise book to record the date of the payments made (Mohammed 2 [51]).

108. Mohammed recalls that trading was very difficult (Mohammed 2 [57]-[58]). Joe had to borrow money from the bank (Mohammed 1 [33]) and later Mohammed took a loan from Mary Wright (Mohammed 1 [41]). Joe left Peak Hill in November 2011 (Mohammed 2 [60]). Shortly after this, in December, Mohammed states Hassan agreed to monthly payments of $9,000 a month (Mohammed 2 [62]). Mohammed states that the business encountered further difficulties in February 2012 when road works started outside the Peak Hill Store, he struggled to make the repayments and became depressed (Mohammed 2 [63]-[64]).

109. Mohammed states that in July 2012, Hassan returned from Lebanon and visited the Peak Hill Store. He requested that Hassan transfer the business but Hassan refused and demanded continuing payments of $6,000 per month (Mohammed 2 [67]-[69]).

110. Mohammed states that from 14 October 2009 to December 2012 he paid Hassan $433,500 in cash and $44,700 in bank transfers, totalling $478,200 (Mohammed 2 [53]). He states that this included an overpayment of $78,200 (Mohamed 2 [75]).

111. Mohammed states that in December 2012, he became aware that Hassan intended to sell the Peak Hill Store. He states that Hassan told him that they would go halves in any profit from the sale (Mohammed 2 [81]-[82]). Mohammed stated that the shop should now be his, but Hassan denied this was the case (Mohammed 2 [83]).

112. Mohammed left the shop in December 2012, he states that he left behind $56,700 worth of stock that he had paid for (Mohammed 2 [87]).

113. Mohammed recalls a conversation with Hassan where he asked for his money back, Hassan refused stating that Mohammed still owed him money. Mohammed states that in early 2013 he went to see a lawyer and drew up a witness statement (Mohammed 2 [91]).

114. Mohammed states that in early 2018, Joe told him that Imad and Ibrahim were taking Hassan to court. He states that he got their phone numbers from a family friend who was Imad and Ibrahim’s aunt (Mohammed 3 [34]).

115. Mohammed stated that he would never have moved to Peak Hill to run the business unless he considered that the store would be transferred to him or Joe (Mohammed 2 [47]).

116. During the hearing, Mohammed was questioned extensively about the terms of his alleged contract. He maintained that he was to pay Hassan back the purchase price in instalments and confirmed that no rent was payable to Hassan (T437/8-17). Mohammed insisted that they paid Hassan every month (T458/49-459/10). Although he maintained that he and Hassan had this particular agreement in place, he made several concessions:

1. Mohammed admitted that he had purchased his home as well as several other businesses in the past, he stated that he had engaged a solicitor and signed a written agreement when doing so (T438/28-439/23).

2. Mohammed confirmed that it was Hassan who purchased the Peak Hill Store and was involved in the negotiations (T432/13-20). He admitted that he did not ask the previous owners about the price of the business or the land (T431/41-50).

3. Mohammed accepted that Hassan had in fact paid for many of the improvements to the store (T447/50-448/25; 448/49-449/30).

4. Mohammed confirmed that he was struggling financially and with his health in 2012 (T483/29-50). He admitted that he had applied for an ABN for a new business and paid a bond for the purchase of a supermarket by 3 December 2012 (T485/28-50; T487/1-3). A week or so prior he had asked Sahar to secure a personal loan to fund this purchase (T487/22-48).

5. Mohammed admits that he did not see a lawyer in December 2012, despite the alleged repudiation of the agreement by Hassan (T492/49-50). He admits that when Hassan and others visited Peak Hill in 2012 he was friendly and invited the party to stay at his house (T494/24-495/07).

6. Mohammed admitted that Joe told him that Hassan had said there would be no profits from the sale of Peak Hill and they would get no money from the sale (T500/45-501/17). After this conversation Mohammed saw a lawyer (T498/18-23).

7. Mohammed admitted that he spoke with Imad and Ibrahim about their dealings with Hassan (T535/30-37).

Yousef (Joe) Dirani

117. Joe swore two affidavits for the proceedings on 30 October 2018 and 31 January 2019.

118. Joe states that he was born in Sydney, and married Nouha Dirani in February 2012 (Joe 1 [1]-[2]). Joe recalls that his family experienced financial hardship in 2008 and lost of a lot of money (Joe 1 [11]-[12]).

119. Joe recalls that his father told him Hassan, an old friend, would help them buy a business. He recalls that Mohammed found a business in Peak Hill and that Hassan would buy it for them (Joe 1 [14]-[16]). He recalls that he visited Peak Hill Store with Mohammed (Joe 1 [20]).

120. Joe denies signing any lease with Hassan. He states he has never met Ajaj Slaibi, the witness on the alleged lease. Joe further notes that the address on the lease was not his address at the time that the lease was allegedly signed (Joe 2 [7]) (Ex P5).

121. Joe recalls that Mohammed told him about Mohammed’s alleged contract and how much Hassan purchased the Peak Hill Store for (Joe 1 [21]-[22]). Joe recalls attending a meeting with Hassan and Mohammed were Hassan told them to pay him monthly repayments of $13,000 until they had repaid him for the business and the property (Joe 1 [25]).

122. Joe states that the Peak Hill Business name was registered and put into his name for taxation purposes (Joe 1 [27]).

123. Joe recalls that he and Mohammed made renovations to the store, including fixing the floors, shelving and painting (Joe 1 [30]). Joe recalls that Hassan asked to be paid in cash (Joe 1 [30]).

124. Joe recalls the following about the payments made to Hassan:

1. Payments started in September 2009 of monthly instalments of $13,000 (Joe 1 [41]-[42]).

2. Each week he would put aside money for Hassan and count it (Joe 1 [43]).

3. He or Mohammed would drive to Hassan’s home every month to pay him in cash (Joe 1 [44]). If Hassan was not in the country, they would wait until he returned. Joe recalls one instance where Hassan had been away for three months, they paid him $39,000 in cash (Joe 1 [44]).

4. Joe recalls that Hassan recorded the payment in a small black diary (Joe 1 [46]).

5. Joe recorded the payments in an exercise book, Mohammed recorded some of these payments (Joe 1 [48]-[50]).

125. Joe recalls that the Peak Hill Store struggled financially (Joe 1 [58]). He left the store in December 2011 (Joe 1 [66]). He was told later by Mohammed that the monthly instalments had decreased to $9,000 (Joe 1 [68]). Joe recalls that in July 2012, Mohammed told him that Hassan had refused to transfer the Peak Hill Store and demanded $6,000 monthly instalments (Joe 1 [73]). Joe states that he occasionally inquired about receiving receipts or invoices but that Hassan deemed this unnecessary (Joe 1 [46]).

126. Joe bought a café in Hazelbrook in July 2012. Hassan and Michael Saba owned the shops in which the café was situated and Joe signed a lease with them for a particular shop. Joe states that he felt more comfortable dealing with Hassan in circumstances where there was an agent involved (Joe 2 [22]).

127. Joe states that in October 2012, Mohammed told him that Hassan had informed him he wished to sell the shop (Joe 1 [89]). Joe said that he and Mohammed asked for the money back which they had paid, Hassan refused stating that Mohammed and Joe still owed him money (Joe 1 [95]). He states that they explored legal options however did not pursue these (Joe 1 [96]).

128. In May 2017, Joe sent Hassan a text message in which among other things, he forgives Hassan for the trouble he caused his family (the text message is discussed below). Joe states he sent this message after attending a Tony Robbins ‘Date with Destiny’ event and was encouraged to forgive and let go of the past (Joe 2 [25]).

129. Joe was cross-examined extensively about Mohammed’s alleged contract with Hassan. Although he maintained that Hassan had told him that the Peak Hill Property would be his, there were several concessions that were made throughout the course of the trial:

1. Joe confirmed that Hassan did not consult with him about the terms of the purchase or the price of the business and property (T334/14-46).

2. Joe accepted that Hassan had paid for much of the improvements made to the shop including purchasing new equipment (T335/04-335/36).

3. Joe admitted that when he left Peak Hill in December 2011, he left to pursue another business opportunity and that he never intended to work in Peak Hill again (T373/49-374/13).

4. He admitted that in July 2012, he believed he could have a good business relationship with Hassan and had no complaints about Hassan (T377/17-19; T380/41-43). Joe then signed a lease for a property that was part owned by Hassan. He admitted that he was happy to enter into another business relationship because it was through an agent and there were real documents (T380/29-33)

5. Joe admitted that Hassan had told him that there had been no profits upon the sale of the Peak Hill Store, so there was no money to share. Joe stated he was not happy with this conversation (T386/36-387/06).

6. Joe stated he had seen Mohammed’s 2013 statement before giving evidence in these proceedings (T388/15-389/1).

7. Joe admitted that he spoke with Imad and Ibrahim about their dealings with Hassan (T415/31-36).

130. Further there were several inconsistencies and uncertainties evident in Joe’s testimony:

1. When asked about why the Peak Hill Business was in his name, and what ‘taxation purposes’ meant, Joe was vague and didn’t directly answer the question (T332/09-333/21).

2. He admitted he had met Ajaj Slaibi earlier, despite denying it in his affidavit (T344/05-345/20).

3. When questioned about the significant financial investment that Hassan had made to improve the business, Joe for the first time stated that the alleged purchase price agreed to (that is 300,000 plus 100,000 of stock), included this ‘equipment’ as part of the stock amount (T335/38-336/14; T340/32-342/20).

Hassna Dirani

131. Hassna, Mohammed’s wife, swore two affidavits for the proceedings on 26 October 2018 and 1 February 2019.

132. Hassna states that she emigrated to Australia when she was a young child and married Mohammed in 1988 (Hassna 1 [2]-[4]).

133. She recalls that her family suffered significant financial hardship in 2008 and 2009 (Hassna 1 [6]-[7]).

134. Hassna recalls Mohammed telling her about a business in Peak Hill and that Hassan would buy it for them. She recalls visiting the shop and inspecting the property in April 2009 (Hassna [12]-[15]). She states that later Mohammed told her that Hassan had bought the shop for them, and that it would be transferred to Joe after they had paid him back (Hassna 1 [16]-[23]).

135. She states that on a few occasions she went with Mohammed to make the cash payments to Hassan (Hassna 1 [28]). Hassna recalls that business was tough (Hassna [29]).She recalls that Hassan visited the shop in July 2012,she states Mohammed asked whether they now owned the shop, Hassan said no and demanded further payments of $6,000 a month (Hassna [44]).

136. Hassna recalls that in December 2012, Hassan visited and stated he wished to sell the shop and informed Hassna and Mohammed that they could go halves on the profit (Hassna [51]). She moved back to Sydney in December 2012.

137. She recalls that Mohammed told her in January 2013 that Hassan stated that they still owed him money (Hassna [55]).

138. Hassna was cross-examined about her recollection of Mohammed’s alleged contract. She confirmed that she knew how much money was being paid to Hassan because she used to count it (T556/47-49) She maintained that she recalled particular conversations where Hassan promised to transfer the property, but admitted that she had not taken any notes of the conversation at the time (T553/07-23;T55/15-28).

139. She made several concessions throughout her testimony:

1. She had seen and read a copy of Mohammed’s 2013 statement before she prepared her own affidavit (T533/41-534/03; T552/05-17).

2. She admitted that Mohammed had been depressed at Peak Hill (T559/06-29).

Peter John Adams

140. Peter John Adams swore one affidavit for the proceedings on 31 January 2019.

141. Mr Adams was the lawyer Mohammed saw in 2013 in relation to the arrangement with Hassan (Mr Adams [1]).

Zeinab Dirani

142. Zeinab Dirani, the daughter of Mohammed and sister of Joe, swore one affidavit for the proceedings on 4 February 2019.

143. Zeinab states that it was her understanding that Hassan had bought the Peak Hill Store for Mohammed and Joe, and that upon paying back the full purchase price Hassan would transfer the property to them (Zeinab [4]).

Sahar Dirani

144. Sahar Dirani, the daughter of Mohammed and the sister of Joe, swore one affidavit for the proceedings on 4 February 2019.

145. Sahar states that Mohammed told her that Hassan had bought the Peak Hill Store for him and that he had to pay him back in instalments and then the property would be transferred to Joe (Sahar [3]). Sahar recalls one occasion when she and Mohammed delivered the monthly payment to Hassan (Sahar [4]).

146. Sahar stated that in about mid 2011 she got a $30,000 personal loan from the Commonwealth Bank to help her family make the repayments (Sahar [7]).

147. Sahar recalls that in late 2012, Mohammed told her that Hassan was kicking him out of the shop. She then got a $50,000 personal loan from NAB to help Mohammed set up a new shop in Oakdale (Sahar [12]-[13]).

148. Sahar admitted under cross-examination that she had had no direct conversation with Hassan about the alleged agreement (T562/47-48). She admitted her recollections were based on what her father had told her in 2009, but she had made no notes of the conversations at that time (T563/28-48; T564/24-565/23). She was not cross-examined on the reason for her obtaining a personal loan in 2011.

Ahmad El Dirani

149. Ahmad El Dirani, husband of Zeinab, swore one affidavit for the proceedings on 5 February 2019.

150. He recalls visiting the Peak Hill Store in 2011, and Joe telling him that he was feeling overwhelmed and stressed about paying Hassan $13,000 a week (Ahmad [5]).

151. Ahmad admitted in cross-examination that these conversations had likely occurred in 2014 or 2015 (T362/1-363/11), that is, after Joe and Mohammed had left Peak Hill.

Peak Hill Plaintiffs’ documents

152. The Peak Hill Plaintiffs relied upon several documents in the proceedings, of particular note were the following:

Peak Hill Notebook

153. Mohammed and Joe state that they recorded the payments made to Hassan in an exercise book (Ex PA; CB5/156).

154. The Peak Hill Plaintiffs state that this is a contemporaneous record of the cash payments made to Hassan between October 2009 and December 2012. Joe also used the other side of the notebook to record various debts and plan his wedding which took place in February 2012 (T410/2-27).

155. There have been pages torn out and cut from the notebook. Under cross-examination Joe and Mohammed could not explain this (T394/26-395/05; T526/24-26).

156. The entries from November 2009 until 30 December 2011 record payments of exactly $13,000 per month. However Joe stated that they did not pay Hassan every month, nor did they pay exactly $13,000 each month (T404/45-405/30).

157. It appears that the entire list from 14 October 2009 to 30 December 2011 was written on one occasion, and that the word ‘paid’ was also written at the same time for each entry (T405/32-41).

158. The notebook did not record payments that Mohammed made by way of bank transfer (T550/33-47).

159. The notebook was not exhibited to Mohammed’s 2013 statement (T515/33-50; T525/11-47). The 2013 statement records that Mohammed had paid Hassan $410,500 whereas the notebook records payments of $433,500.

160. There is no entry in the notebook that refers to an agreement to sell the Peak Hill Store. The inside cover of the exercise book contains the terms “Rent $2,166”. Joe recognised the writing as that of his father (T406/48-407/02), Mohammed denied this (T529/22-40).

Mohammed’s 2013 statement

161. In July 2013, Mohammed saw a lawyer about his dealings with Hassan and made a statement about the alleged Peak Hill agreement (CB6/697; PB).

162. The Defendants noted several errors within the statement, including mistaking the seller’s agent, the vendors, the purchase price, and the amount of money Joe took out a loan for.

163. The Defendant noted that there were several differences between the 2013 statement and the 2018 affidavits.

Plaintiff Tax Returns

164. The Peak Hill Plaintiffs produced numerous tax returns for the proceedings.

165. Joe was responsible for the finances of the Peak Hill Business and his personal tax returns include the business details (T346/29-35). Joe gave Z reports and invoices to an accountant to prepare the tax returns (T346/39-347/15). Joe’s FY2010 tax return discloses an income of $36,197 plus the payment of $37,850 in salaries to the family (EX PC, tab 1). Joe’s FY2011 tax return discloses an income of $38,810 plus the payment of $37,848 in salaries to the family (EX PC, tab 2). This is insufficient to pay the alleged $321,000 of 24 months to Hassan. Joe explained these discrepancies by stating that he had falsely recorded about $150,000 of income as expenses (T353/47-49; T355/06-46; T356/6-8).

166. The tax returns reflect payment of ‘rent’ to Hassan (EX PC, tab 1, tab 2), of roughly equivalent to $500 a week. Joe stated that this rent figure should actually read zero (T315/43-317/01; T318/32-37) but could offer no explanation about where the entries came from (T350/12-36).

‘Date with Destiny’ Fact sheet

167. The Peak Hill Plaintiffs produced a fact sheet from the ‘Date with Destiny’ Tony Robins event that Joe attended before he sent the 2017 text message to Hassan (PD).

Diary Note dated 26/11/2013 and Bernatatos White Solicitors Letter dated 4/10/13

168. The Peak Hill Plaintiffs rely on the diary note (PE) and the solicitors letter (PF) as evidence of when later sales of the Peak Hill Business and Peak Hill Land took place.

Hassan’s letter to solicitors

169. The Peak Hill Plaintiffs (as well as the Hill Top and Oaks Plaintiffs) rely on this letter (P13, 75A) as evidence of the likely turnover for the Peak Hill shop. The letter is evidence of Hassan informing his solicitor of the expected $25,000 a week turnover.

Craig Dunbar’s Business Development Plan for Peak Hill

170. The Peak Hill Plaintiffs (as well as the Hill Top and Oaks Plaintiffs) rely on this development plan (CB5/64-72) as evidence of the likely turnover for the Peak Hill shop. This plan was annexed to Hassan’s affidavit and stated that the assumed turnover for the Peak Hill Business was $25,000 per week.

Peak Hill Lease

171. Hassan states that at about the time he bought the Peak Hill Store, he entered into a Retail Lease (Ex P5) for the business with Joe which prescribes a weekly rent of $500.

172. Ajaj Slaibi was a named witness on the lease. Joe initially denied having met Ajaj, but changed his mind in cross examination (T344/5-345-20). As noted above, Joe denies signing this lease. Ajaj Slaibi was the witness on the lease but wasn’t in Australia at the time it was allegedly signed (P13, 94). Joe’s address on the lease was not his address at the time it was allegedly signed (Joe 2 [7]).

Bank records of payments to Hassan

173. The Peak Hill Plaintiffs rely on a number of bank records that they say are contemporaneous records of the repayments to Hassan.

174. A number of these bank statements record transfers from Mohammed to Hassan which describe the payments as “Hassan’s rent” (CB 10/120, 138, 142; Ex MD-1, 24-37).

175. A number of other bank statements record transfers as “Hassan goods” (CB10/82) or “Hassan’s bill” (CB10/116). Hassan states that these payments are Mohammed repaying him for the $61,000 worth of stock he bought them (Hassan 1 [51]). Mohammed states that Hassan told him what to put the description as but accepts that at the time of these repayments he did in fact owe Hassan tens of thousands of dollars for the stock (T468/24-469/08; T471/06-20).

176. None of Mohammed’s personal or business bank accounts record withdrawals of $13,000 to pay Hassan (EX D4; T458/17-23).

177. Mohammed stated that from January to June 2012 he had paid Hassan $9,000 a month, sometimes in cash, sometimes by bank transfer (Mohammed 1 [62]). There is no record of any transfer to Hassan of $9,000 (CB10/33-37, 47-54, 69-83, 107). Mohammed then stated that Hassan did not want to give him bank details (T462/46-463/23), however he had already transferred money to Hassan in December 2011 (CB10/29).

Hill Top and Oaks Plaintiffs’ witnesses

Imad Al Dirani

178. Imad swore three substantive affidavits for the proceedings, on 2 April 2018, 19 August 2018 and 31 January 2019.

179. Imad states that he first came to Australia in October 2010 (Imad 1 [7]). He was employed at a variety of businesses including at an aluminium factory, a clothing store, a taxi company and at a service station (Imad 1 [8]). He married Noura Choukair in October 2011 and they now have three children (Imad 1 [7]).

180. Imad first met Hassan in late 2010, Hassan is Imad’s father’s cousin (Imad 1 [9]). Imad states that approximately the third time he met Hassan in June 2011, Hassan raised with him a possible business venture in the future (Imad 1 [12]). Imad recalls becoming aware of a service station for sale in Colo Vale, he and Hassan then travelled to look at the business, Hassan decided that the service station was not a good investment (Imad 1 [13]-[14]). Imad recalls that he visited the Hill Top Store with Hassan but wasn’t involved in discussions with the owner (Imad 1 [15]-[17]).

181. Imad recalls that in August 2011 he had a discussion with Hassan in which Hassan made an offer in the terms of Imad’s alleged contract (as at [51]-[53] above). Imad also recalls at this time that Hassan requested that he be paid in cash and that Imad not talk to Marwan or Mouhamed Haidar about the deal because Hassan was offering Imad a better arrangement than them (Imad 1 [22]).

182. Imad states that after talking to Noura and his parents he decided to accept Hassan’s offer (Imad 1 [25]). Imad states that Hassan told him they didn’t need any written agreement because they trusted each other (Imad 1 [26]). Imad states that shortly after accepting the offer he met with Hassan who gave him some documents to sign. Imad states he did not read these nor did he get a copy (Imad 1 [28]). He states that Hassan told him the documents were for ‘tax purposes’ (Imad 3 [11]).

183. With regards to the leases, Imad states that to his knowledge, him and Noura never signed the leases. Nor did he recall Mr Nader Slaibi or Mouhamed Haidar ever witnessing their signatures (Imad 3 [12]).

178. Imad states that he went into possession of the Hill Top Store in October 2011 (Imad 1 [36]).

179. Imad states that he spoke to the previous owner of the Hill Top Business, who had told him that the price of the business was $280,000 plus $66,200 for the stock (Imad 1 [39]). Imad states, by reference to a title search, he believes Hassan purchased the Hill Top Land for $220,000 (Imad 1 [40]).

180. Imad states that he has paid the following expenses for the Hill Top Store, both as a partnership with his wife and later through his company Diransson (Imad 1 [43]-[50]);

1. $2,000 monthly rent to Hassan,

2. $9,000 monthly instalment amount to Hassan,

3. The costs of restocking and buying goods for the store,

4. Electricity, telephone, accountancy, internet,

5. Council rates, and

6. Business insurance and security.

187. Imad recalls the following about the payments to Hassan:

1. He recalls that he saved cash of $4,000 a month to repay Hassan for the initial $66,000 worth of stock (Imad 1 [52]).

2. He recalls that he saved cash to pay the monthly instalment amounts. This was not paid monthly but saved up then paid to Hassan or Mr Saba (at Hassan’s direction) when directed to be paid (Imad 1 [53]).

188. According to Imad the payments to Hassan can be summarised as follows:

Date	Amount paid	Circumstances
January 2012	$27,500	Imad delivered the money with Noura to Hassan’s house. They had dinner with Hassan
Late February/early March 2012	22,000	Paid before Hassan left to Lebanon, Hassan visited the store to collect the money
May 2012	33,000	Delivered to Hassan’s brother in law, Mr Haidar at the Blackheath store
December 2012	77,000	Hassan visited Imad’s home to collect the money
December 2012	50,000	For the initial stock
January 2013	11,000.	Hassan visited Imad’s home to collect the money
April 2013	33,000	Delivered to Mr Saba at the Rooty Hill
July 2013	33,000 plus $16,200 for the stock	Cannot recall where this payment was made or to whom it was made
January 2014	$55,000	Hassan visited the store to collect the money
February 2014	$22,000	Hassan visited the store to collect the money
May 2014	$33,000	Delivered to Mr Saba at his home
July 2014	$22,000	Hassan visited Imad’s home to collect the money
March 2015	$88,000	Hassan visited the store to collect the money
May 2015	$22,000	Hassan visited the store to collect the money
5 June 2015	$11,000	Imad paid Hassan after he, Hassan and Ibrahim had been to dinner at Greenacre
October 2015	$44,000 plus $52,200 on behalf of Ibrahim	Hassan visited Imad’s home to collect the money
December 2015	$22,000 plus $20,000 on behalf of Ibrahim	Hassan visited Imad’s home to collect the money
May 2016	$55,000 plus $50,000 on behalf of Ibrahim	Hassan visited Imad’s home to collect the money
August 2016	$33,000 plus $30,000 on behalf of Ibrahim	Imad visited Hassan’s home to pay the money
November 2016	$33,000 plus $30,000 on behalf of Ibrahim	Delivered to Mr Saba at his home
February 2017	$33,000 plus $30,000 on behalf of Ibrahim	Hassan visited Imad’s home to collect the money
4 July 2017	$44,000 plus $40,000 on behalf of Ibrahim	Delivered to Mr Saba at his home
August 2017	$22,000 plus $20,000 on behalf of Ibrahim	Paid to Hassan
21 October 2017.	$22,000 plus $20,000 on behalf of Ibrahim	Hassan visited Imad’s home to collect the money before he visited Lebanon. On this occasion Imad and Hassan visited another store in Unaderra
3 January 2018	$22,000 plus $20,000 on behalf of Ibrahim	Paid to Mr Saba at Mr Saba’s home with Ibrahim

189. Imad states that in about April 2015 he spoke to Ibrahim about Ibrahim going into business with Hassan. Imad stated that he encouraged Ibrahim and that he trusted Hassan (Imad 1 [62]-[63]).

190. Imad stated that by June 2015 he had paid Hassan all of the $11,000 monthly instalment amounts totalling $489,500 plus $66,200 for the stock (Imad 1 [66]).

191. Imad states that in late September 2015, he spoke to Ibrahim. Ibrahim told him he could not afford to pay the $10,000 per month to Hassan and Imad offered to help him make the payments (Imad 1 [68]). Imad states that in October 2015, he met with Hassan and requested that Hassan transfer the business. Hassan refused to transfer and stated that Imad was to keep paying the $11,000 a month until he wanted to leave the business (Imad 1 [69]).

192. Imad states that he decided to keep paying the $11,000 a month so that Hassan would not kick him out of the business (Imad 1 [70]).

193. Imad recalls that in 2017 he received a phone call from Hassan who complained about Ibrahim’s laziness in running the Oaks Store (Imad 1 [75]). Imad states that Hassan said he would ‘fuck him [Ibrahim] up’ if he was ever rude to Hassan again (Imad 1 [75]). Imad could not recall when in 2017 the conversation happened (Imad 3 [19]). He states that following this incident, he and Ibrahim went to extra effort to keep Hassan on side (Imad 3 [21]).

194. In March 2018, Imad sent a text message to Hassan stating that he needed more time to gather the money for the monthly instalment.

195. Since proceedings have commenced, Imad has opened his own account with Metcash (Imad 3 [32]), however he can no longer order stock on credit and must pay on delivery of the stock (Imad 3 [33]).

196. Imad states that in about mid 2018 he discovered his insurance premiums had increased (Imad 3 [36]). Imad believes Hassan increased these premiums (Imad 3 [37]).

197. Imad was questioned extensively about his agreement with Hassan.

198. He did make several concessions:

1. Imad conceded that he had signed tax returns on behalf of his wife and his brother, but insisted that his accountant had told him to do this (T34/34-35/09;36/08-36/15; T37/08).

2. Imad admitted that he didn’t know what the Hill Top Business or Hill Top Land would cost despite agreeing to purchase it (T23/10-26;T26/31-44). He admitted that he had never worked in a grocery business before (T22/30).

3. Imad denied that he signed the lease (Ex P6) despite acknowledging that the signature looked like his and accepting that he had signed some documents with Hassan at the relevant time (T38/1-24).

4. Imad accepted that Hassan had made improvements to the store and that he did not pay for them (T47/10-27).

5. Imad confirmed that he had made no contemporaneous record of the payments he made to Hassan (T47/43-48/10).

6. Imad admitted that upon Hassan’s alleged repudiation in 2015, he had not seen a lawyer, had not written to Hassan, and hadn’t complained to anyone else about Hassan’s conduct (T96/35-97/24).

7. Imad admitted that he had ordered the extra stock to protect the business, although he denied that it was deliberately done to fund the litigation (T142/15-23; T141/6-7).

8. Imad admitted that he spoke regularly with Ibrahim about their dealings with Hassan (T174/35-48)

9. Imad could not explain why, in his affidavit, he had recalled in almost precisely the same words as Ibrahim, a conversation the two had over three years ago (T175/08-176/41).

10. Imad admitted that he is very close friends with Mohammed and Joe (T150/14-16), and that they speak regularly about the proceedings (T152/09-32) and their dealings with Hassan (T155/41-44).

199. There were further several inconsistencies in Imad’s evidence:

1. He could not remember fundamental facts such as the price of the land and the business and refused to concede he was wrong when shown documents that contradicted him (T42/30-45; T43/11-31; T44/13-18; T44/43-45/4).

2. In his affidavit evidence he stated that Hassan agreed to transfer Hill Top Land to him for $300,000 in July 2015 (Imad 1 [22]), in cross-examination Imad stated that the transfer would take place when he had enough money and there was no time limit in place (T23/49-24/39). Imad could not say what would happen after July 2015 if he did not buy Hill Top Land (T26/01-23).

3. In his affidavit, Imad recalled specific details about the payments he had made to Hassan. In cross-examination, Imad could not recall the same details (T53/01-55/49; T72/3-46; T101/43-104/21; T114/44-115/2; T119/30-120/6).

Ibrahim El Dirani

200. Ibrahim swore three affidavits for the proceedings, on 2 April 2018, 19 August 2018 and 31 January 2019.

201. Ibrahim states he arrived in Australia in December 2014. He was initially employed by Imad on a casual basis to work in the Hill Top Store. In May 2015 he married his wife Sassee (Ibrahim 1 [13]-[17])

202. Ibrahim states that he first met Hassan in 2013 at a wedding in Lebanon. He states that at this time, Hassan offered to help him out when he moved to Australia (Ibrahim 1 [8]-[13]). In March 2015, Ibrahim states he met with Hassan who stated he was considering buying a business in the Oaks for Ibrahim to run (Ibrahim 1 [18]). A few days later Ibrahim said Hassan made an initial offer to him to run the store and pay the landlord rent on business expenses, Ibrahim states that Hassan told him the agreement would be finalised upon his return from Lebanon (Ibrahim 1 [19]). Ibrahim states that the final agreement was in the terms of Ibrahim’s alleged contract as at [78]-[81] above.

203. Ibrahim states that he went into possession of the Oaks Store in May 2015. He began paying expenses as well as $3,410 a month to the Landlord (Ibrahim 1 [34]). When Hassan returned in September 2015, it was agreed that Ibrahim would also pay Hassan $10,000 a month starting in September.

204. Ibrahim states that the existing stock in the store was for $150,000. Ibrahim states that he spoke to the previous owner of the Oaks Business, who informed him that Hassan had bought the business for $290,000 (Ibrahim 1 [27]-[29]).

205. Ibrahim states that although he became aware in late 2015 that Hassan had not honoured Imad’s alleged contract, he kept paying him because he was scared (Ibrahim 1 [39]).

206. Ibrahim states that he has paid the following expenses for the Oaks Business, (Ibrahim 1 [41]);

1. $3,410 monthly rent for the shop, paid by bank transfer,

2. $10,000 monthly instalment amount to Hassan, paid to Imad who would then give the cash to Hassan,

3. The costs of restocking and buying goods for the store,

4. Electricity, telephone, accountancy, internet, and

5. Business insurance and security.

207. Ibrahim states that between September 2015 and January 2018, he would give Imad $10,000 a month to pay Hassan. Ibrahim states that once in 2018 he visited Mr Saba with Imad to pay the monthly instalment, he states that at this time he paid $20,000 (Ibrahim 1 [47]-[48]).

208. Ibrahim states that he personally bought equipment to use in the store including a slushy machine and an air-conditioner (Ibrahim 3 [14]).

209. Ibrahim recalls that on one occasion in 2017 Hassan yelled at him in front of his customers. He states that he heard from Imad that Hassan was going to fuck him up and he felt scared and intimidated (Ibrahim 1 [53]-[54]).

210. Ibrahim states that the $290,000 owing under Ibrahim’s alleged contract was paid on about 31 October 2017. He states that according to the agreement he only had to pay Hassan $1,000 a week until the final lump payment, however he was too scared to raise this with Hassan so continued paying the $10,000 a month (Ibrahim 1 [56]).

211. Ibrahim states that by January 2018 he had paid Hassan approximately $312,000 in cash (Ibrahim 1 [49]).

212. Ibrahim states that he ordered extra stock prior to commencing litigation so that the store could continue to trade while proceedings were on foot (Ibrahim 3 [28]).

213. Ibrahim was questioned extensively about his agreement with Hassan, he confirmed that under the agreement he would run the Oaks Store between March and September 2015 while paying no money to Hassan (T203/32-48). He confirmed that he made no enquiries about the purchase price of the business (T189/45-190/21) and did not know the particulars of the lease arrangement (T198/31-42).

214. He did make several concessions:

1. Ibrahim could not explain why, in his affidavit, he had recalled in almost precisely the same words as Imad, a conversation the two had over three years ago (T205/16-206/47).

2. Ibrahim agreed that Hassan would not be making any money on his investment under Ibrahim’s alleged contract (T196/3-6).

3. Ibrahim admitted that he ordered the extra stock to keep the business running and because they needed money to help them come to court (T232/30-35).

215. Further, Ibrahim made mistakes about critical aspects of his evidence:

1. He maintained that the purchase price for the Oaks Store was $290,000 however the contract for sale discloses a price of $230,000 (T191/44-192/8).

2. Ibrahim was unable to recall his apparent obligation to pay Hassan $2200 for the first nine days he occupied the business (T200/18-201/22).

Paul Waterhouse

216. Paul Waterhouse is a licensed valuer. He swore two affidavits for the proceedings, on 7 September 2018 and 31 January 2019.

217. Mr Waterhouse provided a valuation of Hill Top Land (CB7/1088).

218. During cross examination it was revealed that:

1. Mr Waterhouse valued the wrong property (T260/45-262/07).

2. Mr Waterhouse stated he determined the value by reference to comparable sales but did not provide evidence of those sales (T262/49-263/09).

3. Mr Waterhouse failed to take into account the most recent sale of the subject property, being that which occurred in 2011 (T266/28-36).

Noura Choukhair

219. Noura, Imad’s wife, swore two affidavits for the proceedings, on 19 August 2018 and 31 January 2019.

220. Noura states that she was born in Sydney and that she met Imad in December 2010. Prior to marrying, she was employed as a childcare teacher (Noura 1 [3]-[6]).

221. Noura states she first met Hassan in 2011 when he attended her engagement party (Noura 1 [8]).

222. Noura recalls that in August 2011, Imad met with Hassan to discuss the Hill Top Store, she recalls that Imad was excited over the opportunity to purchase the business from Hassan (Noura 1 [12]).

223. She states that Imad told her that Hassan had bought the Hill Top Business for $280,000 and Hill Top Land for $220,000 (Noura 1 [24]).

224. Noura recalls that she was present at the stocktake and that the stock was worth $66,230. She recalls that Mr Slaibi and Mr Saba paid this amount to the previous owners (Noura 1 [21]).

225. Noura states that she and Imad took possession of the shop in October 2011 (Noura 1 [23]). She denies ever signing a lease (Noura 2 [3]).

226. Noura recalls Hassan visiting her home in 2013 and telling her not to worry about the hard work because soon the business would be hers and Imad’s (Noura 1 [40]).

227. Noura recalls the following about the payments made to Hassan:

1. She states that on the first payment to Hassan, she and Imad visited Hassan’s home for dinner. She and Imad counted out $27,500 to pay Hassan.

2. She states that she and Imad used to count the money together and that she was often present when Hassan visited their home to collect the cash (Noura 1 [29]).

3. She further recalls that Imad paid Hassan for the stock amount of $66,230, she states she remembers counting the money (Noura 1 [32]) and witnessing the payments (Noura 1 [48]).

228. Noura recalls that by June 2015 she and Imad had paid Hassan $489,500 plus $66,230 for the stock (Noura 1 [33]). She states that when Hassan returned from Lebanon in October 2015 he refused to transfer the Hill Top Store.

229. Noura was cross-examined about her understanding of Imad’s alleged contract with Hassan. She maintained that Hassan had promised to transfer the business and she was not challenged on the fact that she used to count the money being paid to Hassan. There were several concessions made that suggested her memory may be unreliable:

1. Noura was mistaken about the price of the Hill Top Land and the Hill Top Business (T243/32-244/2).

2. Noura accepted that she was not a party to Imad’s conversations with Hassan and accepted that she had spoken about the agreement with Imad many times since then (T244/12-31).

3. She was unable to explain why she and Sassee apparently recalled having almost the same conversation with Hassan in separate incidents (T250/44-253/8).

Sassee Makke

230. Sassee, Ibrahim’s wife, swore one affidavit for the proceedings on 19 August 2018.

231. Sassee states that she was born in Sydney, she met Ibrahim in 2013 and they married in May 2015 (Sassee [4]-[5]). Prior to marrying she was working as a sales assistant at Myer (Sassee [9]).

232. Sassee states that she first met Hassan in 2014 in Lebanon (Sassee [6]). She recalls that in April 2015, Ibrahim told her that Hassan had bought them a store in the Oaks to run (Sassee [10]). She states at this time, based on what she knew about the arrangement with Imad and Noura, she believed she would eventually own the grocery business (Sassee [11]).

233. She recalls that Ibrahim told her that Hassan had bought the Oaks Business for $290,000 and the stock for $150,000. She states that the previous owner had told Ibrahim this (Sassee [17]).

234. Sassee recalls that she and Ibrahim took possession of the Oaks Store in May 2015 (Sassee 1 [18]). She recalls that when Hassan returned from Lebanon in about September 2015, Ibrahim met with him to finalise the deal. She recalls being worried that they wouldn’t be able to afford the payments to Hassan. Ibrahim reassured her that Imad would help with the payments (Sassee [20]-[21]).

235. Sassee recalls that in about September 2015 Hassan visited her in the shop, she states that Hassan said to her not to worry about the hard work because the shop would be hers soon (Sassee [23]).

236. She recalls finding out in October 2015 that Hassan had not honoured the agreement with Imad (Sassee [26]).

237. She states that she recalls counting out $10,000 each month to pay Hassan (Sassee [30]-[31]).

Nader Slaibi

238. Nader Slaibi, is a businessman and alleged witness on the Hill Top leases. He is also Hassan’s brother in law but they do not speak (Nader [7]). He swore one affidavit for the proceedings on 31 February 2019.

239. Mr Slaibi states that he had not seen the leases prior to being shown them for these proceedings, he denies witnessing the lease, he denies that the signature on the lease is his (Nader [5]-[6]).

Ali Faeeh

240. Ali Faeeh, Imad and Ibrahim’s accountant, swore one affidavit for these proceedings on 31 January 2019.

241. Mr Faeeh states that he prepared Imad and Noura’s tax returns for 2012, 2013, 2014 and 2015. He states he also prepared the tax returns for Diransson in 2015 (Faeeh [3]).

242. Mr Faeeh recalls making a file note on Imad and Noura’s 2012 tax returns. He recalls that Imad told him that Hassan had purchased a business for him and that upon Imad paying Hassan $11,000 per month until 2015, Imad could then claim ownership (Faeeh [6]-[7]).

243. Mr Faeeh was cross examined about preparing Imad and Ibrahim’s tax returns. He did concede:

1. Mr Faeeh confirmed that he was convicted of four counts of making a false statement to obtain money in 2010 (T269/10-12), but was evasive about these convictions. He suggested that the convictions had all been overturned on appeal when in fact three out of the four had been upheld (T270/10-272/14).

Stephen Tully

244. Stephen Tully, solicitor for the Plaintiffs in this matter, swore one affidavit for the proceedings on 6 March 2019.

245. Mr Tully produces two text messages in response to the notice to produce filed by the Defendants on 20 February 2019. These text messages are then translated.

Hill Top and Oaks Plaintiffs’ documents

246. The Hill Top and Oaks Plaintiffs relied upon several documents in the proceedings, of particular note were the following:

Hill Top Leases

247. Hassan produced two leases for Hill Top, allegedly signed between him and Imad.

248. P6 was made between Hassan, and Noura and Imad. Imad and Noura deny signing this lease, although Imad admits that Hassan asked him to sign some documents for ‘tax purposes’. Hassan admits that he added the words Noura Choukair on the first page (T643/14). Mouhamed Haidar is witness on the lease, he recalls signing it (T878/26).

528. The Defendants of course also rely upon tendency evidence to the effect that the Defendant showed a propensity to engage others to operate his grocery businesses permitting him to retain profits in return for the payment by them of a weekly sum and the covering of all operating expenses. In my view, given my findings on the Plaintiffs’ alleged contract, it is unnecessary for me to make any express findings in that regard. However I will say this, the Defendant struck me as a businessman used to dealing with this type of business and, if I may say so, striking what might on one view be regarded as particularly tough bargains. I do think the evidence called by the Defendants does support in broad terms the structure of his business activities which are quite contrary to the way in which the Plaintiffs put their case, because it would be rather exceptional for him to do so. One thing which is relatively clear is that he hardly knew Joe and Mohammed. They certainly were not family and he did not strike me as being altogether philanthropic in his business dealings.

529. In addition to contract the Plaintiffs in this case plead remedial and constructive trust, proprietary estoppel, misleading conduct and make a claim for restitution. I will deal with these causes of action in turn.

530. For a constructive trust to arise, in broad terms at least, the parties seeking relief, have to point to some joint relationship or endeavour where expenditure is shared for the common benefit, where the joint endeavour has ended without attributable blame, and that it would in essence be unconscionable for any party to obtain the benefit of any moneys attributed by a particular party. To a very large extent the claim is contingent unsurprisingly upon the very nature of the relationship forged between the parties. Here in my view the relationship was purely each party pursuing its own interests so as to permit each to make a return out of the business. The Plaintiffs were in difficult financial circumstances, Mohammed having failed in his earlier endeavours. The Plaintiffs agreed to pay rent to the Defendants as I find there was no agreement to transfer any property or any business, and the financial opportunity afforded the Plaintiffs was to retain such profits as they could by reason of their own industry. In my view therefore the principles governing constructive trust has no application.

531. For the proprietary estoppel claim to be made out the Plaintiff requires proof of the relevant representation, reliance upon that, and then conduct to the detriment of the Plaintiffs. In my view having found that there was no contractual promise of the kind asserted, and there being no difference in substance between that and the representation which it is alleged induced or cajoled the Plaintiffs, accordingly then the Plaintiffs case would fail at the first hurdle. In any event the Plaintiffs rely upon representations made to Mohammed, yet any apparent loss was actually suffered by Joe. In the circumstances it is impossible to comprehend how Joe has a case of proprietary estoppel at all.

532. Even however had the representations been made as alleged, there does not appear to me to be any evidence that Joe would have acted differently had he known the alleged assumption would not have been fulfilled, although Mohammed does purport to give evidence to that effect in his first affidavit at [47]. However that goes nowhere because I am not satisfied that such a representation that the transfer of business and sale was ever made. In any event Mohammed was quite frankly desperate, and in my view did take up the opportunity to pocket the profits which was a good deal better, as nothing else was on offer for him. It follows that I do not regard the Plaintiffs as having satisfied me that they acted therefore accordingly to their detriment.

533. For similar reasons, in my view the misleading conduct having not arisen, that cause of action then fails. As far as restitution is concerned in my view the Plaintiffs have not really elaborated upon their claim in any relevant sense at all and it does not fall to be considered in the light of the absence of that argument.

534. Lastly the Defendants rely upon Limitations defence. Proceedings were commenced on 23 August 2018. The events in question occurred in or about June 2009 which is about 9 years prior to the commencement of the proceedings. The Plaintiffs submit that the cause of action accrued upon Hassan’s refusal to transfer the business and the land in December 2012 after Mohammed requested that he do so. The Defendants, on the other hand, submit that, on the Plaintiffs’ case, the cause of action should accrue at the point in which Mohammed and Joe said that they had paid the total amount liable and the property would be transferred. On the Plaintiffs’ case, they had paid the total amount owing to Hassan by June 2012, more than 6 years prior to them commencing proceedings, and it is at this point, when transfer did not occur upon payment that the damage properly arose. The Defendants therefore rely upon Limitation defences pursuant to Section 141(a) of the Limitation Act. Alternatively laches in relation to the Plaintiffs’ equitable claims.

535. Although not necessary, given that I have already found no such contract as alleged by the Plaintiffs, in my view, the Plaintiffs would be time barred. The cause of action, would have relevantly arisen upon payment of the alleged amount owing. Indeed it is true that Hassan was in fact out of the country, but this would not have prevented some sort of communication to him about the failure to transfer. Even if it were the case that the Plaintiffs had not physically paid the money owing to Hassan by June 2015 and instead were waiting till his return to make a lump sum payment of the remaining money owing, this would then suggest that both their exercise book (Ex PA) as well as Mohammed’s contention that they paid Hassan ‘every month’ as contrived.

536. I finally note that the Peak Hill Plaintiffs are not entitled to any money from the rebates. There was no evidence adduced that the Hassan had, at any point, made a representation to them that they would be entitled to such rebates as were available and I am not convinced that the Plaintiffs have articulated any other basis for their claim to them.

Hill Top Proceedings

542. In this case again the Plaintiff alleges an oral agreement made in 2011. The Defendants’ company, Fenikia, owns the grocery store in Hill Top and the land on which it operates. The Plaintiff, Imad, says the Defendant agreed to sell him the Hill Top store, and as a result he has an equitable or legal duty to do so. The Defendants maintain that there was only a rental agreement in place and there was no promise to transfer any property. Again counsel for the Defendants emphasised three key issues with the Plaintiffs’ case, being the onus, the implausibility and the lack of any contemporaneous documents.

543. The Defendants have brought a cross claim, the substance of which is to assert that Imad breached his agreement with Hassan by failing to pay for around $200,000 worth of stock which he ordered in Hassan’s name and by refusing to pay a weekly amount to occupy the store. The Defendants say those breaches entitled Hassan to terminate the agreement, which he has done, and to recover the money Hassan paid on behalf of Imad.

544. Although there was much sought to be made by analogy with the earlier agreements formed with Marwan and Mouhamed Haidar, the principal focus of course in any proceedings are on the particular facts of the case. Here again the Defendants submit that although there were multiple text messages sent dating back to 2015 and passing between Imad and Hassan, none referred to the sale of the business or the property in any way, and they don’t use any terminology suggestive of any agreement to that effect.

545. The Defendants of course submit that this is unsurprising. Imad was not involved in the negotiations for the purchase price requested by the owners. It was Hassan who made all relevant enquiries and negotiated the price for the business and the land. This is really not controversial.

546. The two versions of what occurred in relation to Imad working in the business are of course diametrically opposed in content. Hassan’s version is that in August 2011 he put a fairly broad proposition to Imad that he would pay rent, pay for the stock, pay all the expenses and that initially the arrangement was only to be for one year. Imad’s version has some similarity but he expressly asserts that Hassan said he would charge Imad $11,000 a month until June 2015, which included $2,000 for rent for the shop, and that he would pay all outgoings. Imad then alleged that Hassan promised to sell him the business and the property for a one off payment of $300,000.

547. In my view, such contemporaneous documents that exist and which go to the terms of the arrangement, on balance favour the Defendants.

548. Again, in this case there are alleged lease documents. On the first lease dated 25 August 2011, Imad and the named witness Nader Slaibi deny signing the lease. However there was an earlier lease in the name of Imad’s wife Nora (CB265). Nora denies signing the lease but the signature seems to me to be that of Imad’s on the lease. He had signed a number of documents on his wife’s behalf including her tax returns. The lease was also signed by Mouhamed Haidar. Mr Haidar explained that he signed the lease in English but that he sometimes signed in Arabic. Whether or not these leases are authentic in the end it seems to me is not determinative of the issue, although it does reflect adversely on Hassan and for that matter, on Imad.

549. The Plaintiffs rely on the evidence of Noura, who recalled a particular conversation with Hassan, to corroborate Imad’s evidence of the alleged agreement with Hassan. Noura recalls that Hassan made certain representations to her, while she was pregnant, that she was not to worry, the business would soon be hers. This conversation occurred in remarkably similar terms to another alleged exchange between Sassee and Hassan. I am altogether satisfied that these representations were made.

550. The problem in my view for the Plaintiffs, is not only the absence of contemporaneous materials, particularly the absence of any mention of a transaction of the sort alleged in any of the multiple text messages, but also in a number of witnesses, who I accept, who gave evidence consistent with Hassan’s version of events. In the latter category Ramsey Zreikat, Hassan’s accountant, who was told by Hassan that Hassan bought businesses and leased them to other people. Also Joseph Bechara a sales representative who sold chocolates to some of Hassan’s stores and gave evidence that Hassan told him in about 2011 that he had bought the Hill Top store and that Imad was there “on a sub-lease”.

551. Marwan asserted that Imad told him in about 2014 that he asked Hassan if he could buy the shop but was told Hassan did not want to sell. Marwan also said that Imad never told him that he was paying some $10,000 per month to Hassan.

552. Michael Saba said that around the time that Hassan bought the Hill Top store he told Mr Saba that he bought it for his children, it was run down and that he was going to improve it but that he was sub-leasing it to his cousin Imad.

553. Fouad Slaibi said that Hassan told him in 2011 that Imad was going to work in the store “under a sub-lease”. Much was made in cross examination by Counsel for the Plaintiffs about the respective witnesses understanding of sub-lease. It is true that most of the witnesses who used that terminology had some difficulty in giving a precise and/or accurate description of the term. None the less, I am not satisfied that, although the term may well have been suggested by the solicitor assisting in the preparation of the statement, these witnesses merely adopted it either without thinking not falsely, or dishonestly to support Hassan’s case. I am satisfied that leaving Hassan to one side each of those persons who used that terminology meant to infer that Imad was in fact (on their understanding) renting the premises and the business from Hassan.

554. Again Imad accepts that Hassan purchased equipment for him to use in the store and that Hassan did not ask Imad to reimburse him, nor did Imad offer to do so (CB5355, T47.10-47.27). It is clear to me that Hassan was the one who paid for many improvements to the store, actions that are entirely consistent with his belief that the property and business was entirely his.

555. The Defendants financial records including Fenikia’s ledgers, financial statements and tax returns all refer to the rent received on Hill Top (CB6/410, 625, 715, CB7975, 118 and CB8/1435). Fenikia’s financial statements record Hill Top and the goodwill as “non-current assets” (CB6/412, 628, 730; CB7/993, 1178; CB8/1458) and further Fenikia’s tax returns record detail of the Hill Top store in the rental property schedule including rental income received (CB6/422, 638, 718; CB7/978, 1161; CB8/1439).

556. The Plaintiffs initially pointed to a certain file note on Imad’s 2012 tax returns made by Mr Faeeh. The file note records that Imad had apparently told his accountant that he was making payments towards the purchase of a business. Notwithstanding that this note only refers to a business and not land, it is of limited utility given that it is clear that it did not in fact become more than a file note and translate into any tax returns. Presumably this is because there was no evidence upon which Imad could substantiate this assertion. I would also note, that Mr Faeeh did not impress me as a reliable or honest witness, this is probably why the file note was strikingly absent from the Plaintiffs’ final submissions.

557. Imad asserts that he has paid Hassan $9,000 a month in instalments and $2,000 in rent. There are no contemporaneous bank documents or any receipts to support this assertion. All of the payments were allegedly made in cash. The Defendant submits that an analysis of the financial and taxation records for the Hill Top store from 2012 to 2017 reveal insufficient profits to pay the amounts as alleged. The Plaintiff responded to these assertions by providing certain proposed amended tax returns as well as Z-reports namely print outs from the cash register, that were produced quite late in the case (CB6/606; CB7/969) Although, as was conceded by the Defendants (T967/16-27), these reports seem to suggest that the Plaintiffs did have sufficient moneys to pay the amounts they allege, they are totally inconsistent with the Plaintiffs’ tax returns.

558. I am not at all satisfied that these reports are sufficient to establish the Plaintiffs’ case. Leaving to one side, the reliability of these reports given they were produced so late, it is further clear that these readings were not translated into tax returns. There is no doubt that Imad along with others in this case have in some cases grossly understated on any view of it monies actually received from the various business ventures. Leaving aside the dishonesty associated with such activity it makes it in my view near to impossible actually to assess the reliability liability of allegations made by Imad in this case. I cannot therefore, reasonably rely upon the readings as an accurate indication of the money paid. In any case, what’s more all payments are still described as ‘rent’.

559. Nobody, including those assisting him in which I include his wife Noura, apart from their say so have any independent and/or objective basis for substantiating the large dollops of cash it is alleged they paid Hassan. It must be said however that there is some support for amounts of this order being paid to Hassan being mentioned in numerous of the text messages passing between Imad and Hassan. But the payments are described as rent and they do not in my view determine whether or not an oral contract of the sort pleaded in fact existed. They are at best equivocal. The mere mention of a sale or purchase of transfer of something would be of relevance, but no such references exist.

560. The Defendants in this case as with Peak Hill raises the implausibility of such an arrangement. As to the implausibility it is clear that Imad had to concede in cross examination (T22/30) that he had never worked in a grocery store and that he knew nothing about such a business. Further (T23/14) Imad accepted that he did not know how much Hassan was proposing to pay for the land and that he had not looked into how much the land was worth. There is much force in my view in the Defendants’ proposition that it would be entirely implausible for someone to simply agree to commit to such a transaction.

561. But there is a further complication and that is that Imad appeared to embellish the transaction even further when he gave his evidence (T24/13). He appeared to indicate that the transaction as he understood it was that he was promised the land and the business only when he had enough money, and that in effect Hassan had given him an indefinite period of time in which to put his arrangements in order. Unsurprisingly having boxed himself into a corner Imad had to concede (T25/18) that come June 2015, if he did not have enough money that contingency was simply not discussed. A little later in the transcript as is pointed out by the Defendant (T26/9-10), Imad recalled apparently that if 2015 were to arrive and he did not have enough money he would simply pay rent.

562. The Plaintiffs’ case in effect is that he was entirely trusting of Hassan and so it seems was prepared to accept any deal at all which Hassan put on the table. The Defendants’ case is that given Imad had very little by way of other options, simply moving in and running the business, paying overheads, rent and pocketing the profits is much more plausible commercially both for Hassan and indeed for Imad. I agree. I regard it as implausible that Imad and/or his wife both of whom impressed me as intelligent people have accepted unequivocally years in advance to make a purchase in circumstances such as these when no investigation had been undertaken by either of them in relation to the prices paid for the business or the land. I am simply not satisfied that the Plaintiffs would have accepted such an arrangement.

563. Diransson of course was only incorporated in 2014, which leads to another problem for the Plaintiffs in the way in which they have pleaded their case. It could not have been relevantly subjected to the promises at the time they were made.

564. When people have a grievance or believe that they have been robbed, as is the case here, of a serious and important business opportunity, it is common indeed in many instances expected that someone will complain to either the person to whom they allege the arrangement existed or to others. Relevantly speaking during many of the years when it would be understandable if he did, Imad failed to complain to Hassan or for that matter to anybody else. Although not determinative, neither Imad nor his wife Noura gave me the impression that they would hold back from complaining if they felt they had been wronged. The mere commencement of the litigation years after the event to some extent addresses that issue as a matter of practical reality, but it is the failure most relevantly in 2015 to complain when it must have been apparent to Imad and/or his wife that Hassan was not going to abide by the arrangement, assuming such an arrangement had been promised.

565. It is worth briefly noting, as I have said above, I do not find sufficient evidence that there was collusion between the various Plaintiffs with regards to their evidence.

566. As far as the text messages are concerned the Defendants’ rightly point to the fact that there is no reference to any purchase by Imad of the land or business. He makes no assertion to that effect at all. Further the description in numerous of the text messages to the $11,000 etc the Defendants submit does not help the Plaintiffs either because of the liberal use again of the term “rent”. Forcefully they submit that the payment of “rent” is completely inconsistent with Imad and Ibrahim’s case. Ibrahim says he paid no rent at all to Hassan. The only rent he says he paid was to the landlord. Imad’s case on the other hand is that he only paid $2,000 worth of rent a month, certainly not $10,000 or $11,000. The text messages therefore insofar as they refer to any payments at all only refer to the payment of rent and do not refer to either instalments or payments towards a purchase.

542. The Defendants concede that the amounts being discussed are larger than what Hassan accepts was paid. But the real question the Defendants pose perfectly legitimately is that the payments are in respect of what? It does seem entirely inconsistent with the Plaintiffs case to describe the payments in the text messages as rent. Imad nor his wife gave evidence that the term “rent” in their own minds was interchangeable with the purchase price or payment on behalf of the purchaser. I am satisfied that Imad understood precisely what the term “rent” meant and that he was in no way confused as to what the term conveyed.

543. I relevantly note, that the Plaintiffs drew attention to the various inconsistencies in the Defendants’ financial evidence. In particular, the Plaintiffs note that contrary to Hassan’s emphatic assertion that the $500 a week rent was sufficient to cover any amount owing on the Hill Top Land and that in fact he was making a profit on Hill Top. However his records actually disclose a loss. It seems not unlikely, as the Plaintiffs’ submit, that Hassan was understating the income he was receiving in order to minimise certain tax liabilities. However, it is not necessary to reach a final conclusion on this matter. It is not the Defendants that bear any onus, and I am not satisfied, despite certain inconsistencies in the Defendants’ case, that the Plaintiffs have established their case on the balance of probabilities.

544. I find myself with great respect in agreement with Ward CJ in Eq in Ardestani v Doss [2018] NSWSC 1084, when her Honour observed in the absence of any written record or any record establishing money being paid, cases such as these ultimately turn upon the evaluation of which of the competing accounts is more probable and hence credibility and inherent implausibility is critical.

545. Here in this case the total failure on the part of the Plaintiffs to use any terminology reminiscent of a purchase or an acquisition of either the business or the land together in their contemporaneous communications with the use of terminology such as rent in circumstances where it would be entirely antithetical to use such terminology, are very potent factors in my mind. This as I have discussed leads me to reject the Plaintiffs claim for breach of contract. I am simply not satisfied that the contract as pleaded by the Plaintiffs can be made out on the evidence. It follows no remedy would be available for breach of contract.

546. Likewise in my view a remedial constructive trust is not available. I am not satisfied that the relationship can properly be described as a joint endeavour or exercise, it certainly was not a partnership. It was simply a case of an arrangement whereby rent was paid, overheads were paid and profits were pocketed. I do not see that arrangement, although cryptically described here more elaborately, otherwise amounts to the sort of situation anticipated in Baumgartner.

547. So far as proprietary estoppel is concerned, I am not satisfied that the oral contract as I have said as pleaded was made, nor am I therefore satisfied that any assurance was given to the Plaintiffs that they would acquire the Hill Top store or the business associated with it. It follows that no reliance nor detriment could arise therefore in these circumstances.

548. In any event Imad gave no evidence that he would have acted differently had he known that the assumption which he says he made would not be fulfilled.

549. Here in addition the Defendants rely upon Imad’s behaviour in taking almost $200,000 stock from the Defendants on the eve of the litigation as amounting to unclean hands. I think it does, but it does not strictly arise here because I am not otherwise satisfied he, his company or his wife have a cause of action.

550. So far as misleading conduct is concerned there are a number of difficulties associated with that cause of action. First of all I am not satisfied that any representations were made in accordance with the oral contract as pleaded. Second in so far as Diransson seeks relief, there is no evidence any representation was made to it by reason of the fact it was only incorporated in 2014.

551. Further in my view the Plaintiffs are not entitled to restitution. They paid for a business opportunity and indeed as a result of the bargain struck they may have overpaid. But that was the opportunity they took up, they made profits and they failed in any event to disclose the full extent of the profits received and so to that extent it is very difficult to determine with any precision the benefits they achieved. But they did indeed achieve benefits. In my view their claim for restitution likewise fails.

552. In my view in any event Imad has effectively taken stock from Hassan in the amount of nearly $200,000. He admits that, under any contract, he is required to pay for the stock, and has thus far failed to do so. Counsel for the Plaintiffs accepted that if they failed to establish the facts as they alleged, they would indeed be liable under Hassan’s cross-claim (T895/15-20). In my view Hassan is entitled to repayment for this amount.

553. In so far as the Hill Top Plaintiffs have pleaded relief against forfeiture, I don’t think it is appropriate to grant such relief.

554. I finally note that the Hill Top Plaintiffs are not entitled to any money from the rebates. There was no evidence adduced that Hassan had, at any point, made a representation to them that they would be entitled to such rebates as were available and I am not convinced that the Plaintiffs have articulated any other basis for their claim to them.

Oaks

580. The property in question here is owned by Fenikia which owns the business but leases the land from which the business is run.

581. The Defendants have brought a cross claim, the substance of which is similar to that case advanced against Imad, namely that Ibrahim breached his agreement with Hassan by failing to pay for $200,000 worth of stock which he ordered in Hassan’s name and by refusing to pay a weekly amount to occupy the store. The Defendants say those breaches entitle Hassan to terminate the agreement which has been done and they seek to recover moneys paid by Hassan on Ibrahim’s behalf.

582. Again the agreement here is said to be an oral agreement. The genesis of the agreement is Ibrahim’s father requesting Hassan to help Ibrahim out when Ibrahim moved to Australia from Lebanon in late 2014. However, it was Hassan who discovered the Oaks business was for sale. He visited the premises a few times and obtained information about earnings and decided to buy it. It is uncontroversial that Ibrahim did not visit the Oaks store at least in company with Hassan, nor did he make inquiries into the price of the leasehold or the business.

583. The Plaintiff alleges that in March or April 2015 Hassan met with Ibrahim at Imad’s home, at which Hassan proposed that he would acquire a business that was trading as the Oaks Friendly Grocer. They further allege Ibrahim would work in the business and pay rent to the landlord and upon Hassan returning from Lebanon they would discuss how Ibrahim would pay for the business which he would in due course own.

584. Ibrahim says that he accepted that proposal and in due course entered into possession of the business. The Plaintiff of course further alleges that in September 2015 an arrangement was consummated for the purposes of acquiring the business.

585. Hassan’s version of course is very different. He asserts that in March 2015 he asked Ibrahim whether he would be prepared to run the business for him and pay him rent plus any outgoings, and Hassan would buy the business and the stock. Hassan told Ibrahim he could undertake such an arrangement for about a year with each side being able to terminate on three months notice. I consider that a more likely version of events.

586. The Defendant adopted a similar submission with relation to Ibrahim’s case. The Defendant points out that the agreement said to have been consummated here, similar to the other proceedings, is that Hassan having spent his own time and money to locate a business and negotiate its acquisition and then buy it with his own money, only to immediately sell it for the same price some little time later to a person he barely knew, is improbable. The Defendant with some justification points to the uncommercial nature of such a transaction whereby Hassan would in effect be agreeing in advance to receive no return on his money in circumstances where, relatively speaking, Ibrahim was a stranger. It further seems highly improbable that Hassan would allow Ibrahim to run the shop for several months and demand no payment at all between the months of May and September 2015.

587. Again there are a number of witnesses who have given evidence supporting the Defendants’ version of events. First Ramsay Zreikat, Hassan’s accountant gave evidence that Hassan told him in effect about his business model including the Oaks Store. Ramsay says that Hassan told him that he bought businesses to lease them out to people to run them for him. When he prepared the Defendants’ tax returns he included two years worth of rental income for the Oaks Store for the financial year 2017.

588. Fouad Slaibi said that Hassan told him that in about 2015 he had bought a shop in the Oaks and he was going to get Imad’s brother to work there on a similar deal to that which he had arrived at with Imad namely the payment of $500 a week. In addition Michael Saba gave evidence that Hassan told him he bought the Oaks store and that he was going to sub lease it to Imad’s brother.

589. The Defendant points to the implausibility of certain evidence given by Ibrahim to the effect that he had no understanding as to how long he could stay in the property (T198/32 and T199/5).

590. The Defendant again makes the point that there is not one document referring to the so called sale of the business, and that there are no bank transfers or receipts establishing the amount paid, and the tax returns and financial statements are it is submitted inconsistent with Ibrahim‘s case.

591. Ibrahim’s case in summary is that he was obliged to pay Hassan $290,000 and then obliged to pay $1,000 per week until he paid $150,000 worth of stock to Hassan. Ibrahim accepts that he has not paid $150,000 stock and that he simply stopped paying $1,000 a week to Hassan. The Defendant submits with some considerable force that Ibrahim on his case and on his own admission is in breach of the agreement and that the time for Hassan to perform, even if the contract is found to have existed, has not yet arisen. Further Ibrahim like his brother bought $200,000 of goods on Hassan’s credit and has refused to pay. Hence Hassan has terminated legitimately, it is submitted, Ibrahim’s contract.

592. Of course it is submitted that by September 2015 Hassan had told Imad that he was not transferring the business and land across to him. Therefore by October 2015 both brothers knew that Hassan had allegedly broken a fundamental part of the agreement with Imad. The Defendants submit this adds to the implausibility that nonetheless Ibrahim had reached some arrangement with Hassan based apparently on some element of trust.

593. The Defendants submit that from any number of vantage points the arrangement asserted by Ibrahim is entirely uncommercial. I agree. It really makes no sense for Hassan to permit Ibrahim over an indefinite period to occupy premises on the promise that at some point in the distant future there would be a transfer of the business to Ibrahim. The arrangement was entirely uncertain as to time. Further the evidence rather supports the fact that Ibrahim did not enquire about the viability of the Oaks store before purchase and had no role in negotiating the purchase price. It seems to me he did not know what the purchase price of the business was, and did not ask to see the contract under which Hassan bought the business. It seems improbable in my view for someone not to show any interest whatsoever in these matters and yet commit to purchasing such a business.

594. Further Ibrahim clearly appreciated that Hassan did not own the land upon which the Oaks business was being conducted and could not have known how long he could stay on the land. In addition Hassan asserts credibly in my view that in 2017 he bought new flooring for the Oaks store and helped Ibrahim to install it. Ibrahim did not repay Hassan for the associated costs.

595. It is true as the Defendant forcefully points out that the absence of contemporaneous materials concerning the arrangement and/or the terms of it is quite significant. It is not that Ibrahim lacked opportunity to confirm the arrangement. The absence of a single text message or an email in relation to that exchange is rather odd.

596. I am satisfied that there was no such arrangement as alleged by Ibrahim. I am satisfied that there was an arrangement by which Ibrahim would pay rent and that is entirely consistent in my view with such contemporaneous documents that do exist.

597. In giving his evidence as the Defendants correctly point out, Ibrahim’s oral evidence exposed a degree of unreliability on his part. He conceded for example that he was mistaken in both his affidavit and oral evidence about the purchase price (T191.44-192.08). Equally he had difficulty in cross examination in recalling his apparent obligation to pay Hassan $2,200 for the first nine days that he occupied the business (T200.18-201.22). Ibrahim further sought to rely on the corroborating evidence of his wife, Sassee, who alleged that Hassan made certain representations to her, while she was pregnant, that the business would eventually be hers. Again, as I have already noted, this conversation occurred in remarkably the same terms as the alleged exchange between Noura and Hassan. I am reluctant to award this evidence any significant weight.

598. The assertion that Ibrahim made payments to Hassan pursuant to the alleged agreement runs contrary to his own financial documents. All of Ibrahim’s tax returns and financial statements for the period 2015 to 2017 describe payments for the Oaks Business as “Rent” not instalments payments or a purchase price.

599. In Exhibit D3, page 1 he records $60,386 “in rent expenses”. The Defendant points out that the rent payable for the land was $3,410 per month or $37,200 per year. The remainder, namely $23,636 reflects additional payments of more than $450 per week. It is submitted with some force that that is consistent with Ibrahim having told his accountant that his liability to Hassan was to pay about $5,000 in “rent” per week. That was for the financial year 2016. For the financial year 2017 (Ex D3, page 8) Ibrahim records $61,363 in “rent expenses”. Again deducting rent payable to the landlord that reflects payments of about $500 per week to Hassan.

600. The Defendant also submits that the tax returns disclose a profit insufficient to meet Ibrahim’s alleged payments to Hassan under the alleged contract of $120,000 per annum. The Plaintiff responded to these assertions by providing certain proposed amended tax returns as well as Z-reports namely print outs from the cash register, that were produced quite late in the case CB6/606/CB7/969). Again, as described above, even accepting that indeed the Z reports show an income sufficient to pay the amounts alleged, this is insufficient in and of itself to establish the contracts as alleged.

601. I am also satisfied that Ibrahim had manipulated his financial records. Ibrahim accepted as much in evidence when he acknowledged that he and his brother Imad had visited their accountant, Mr Mattouk so as to “fix up our documents”. (T219.11-219.24) The effect of the proposed changes to the financial year 2016 was to increase Ibrahim’s expenses by about $90,000 from his previous 2016 return to keep profits at the same namely, $32,403. The same exercise was undertaken in relation to the 2017 financial year by increasing the rent, increasing the income but keeping the profits the same. No amended tax returns have yet been filed. I am satisfied that these documents have been created to bolster Ibrahim’s evidence in these proceedings whilst avoiding any additional taxation liabilities. I cannot accept they are legitimate.

602. A fundamental problem even with the proposed amended financial records is that there is no reference in there to the payment of instalments or the acquisition of a business but rather simply the payment of rent. So again these documents recently created are entirely antithetical to the Plaintiff’s case.

603. It seems to me that the contract claim must be rejected, most importantly because I am simply not satisfied there was an agreement made as alleged by the Plaintiff. In any event he has terminated the contract by his own conduct and it seems to me specific performance could not be granted even if it satisfied such a contract existed. No question therefore of any damages arises.

604. For similar reasons as previously discussed I do not think a remedial constructive trust arises here. Further proprietary estoppel does not arise largely because I do not accept that Hassan made the representations or gave any relevant assurance to Ibrahim that he would acquire the business. In addition a claim for misleading conduct in my view cannot arise. Further I do not think this is a claim for restitution.

605. However in my view Ibrahim has effectively taken stock from Hassan contrary to their agreement. Ibrahim admits that in March 2018 he ordered $237,574.28 worth of stock on Oaks account which was in Hassan and Youmna’s name, and strongly suggested that he had done so in order to fund this litigation (T232/30-35). He admits under the contract he was required to pay for it and has failed to do so (CB1,Tab 7 at [8(f)], [10(g)] and [11]). Counsel for the Plaintiff accepted that if they failed to establish the facts as they alleged, they would indeed be liable under Hassan’s cross-claim (T895/15-20). In addition Ibrahim has failed to pay Hassan the $500 weekly fee. In my view, Hassan is entitled to repayment for this amount.

606. In so far as the Oaks Plaintiff has pleaded relief against forfeiture, I don’t think it is appropriate to grant such relief.

607. I finally note that the Oaks Plaintiff is not entitled to any money from the rebates. There was no evidence adduced that Hassan had, at any point, made a representation to Ibrahim that they would be entitled to such rebates as were available and I am not convinced that the plaintiff has articulated any other basis for his claim to them.

Conclusion

608. Upon careful analysis, and after some hesitation I am not satisfied that each of the Plaintiffs has made out their respective cases on the facts. It follows none has been successful and there should be judgment for the Defendants in each case. There should be judgment for the Defendants on their respective cross claims. I will hear the parties on the form of the appropriate orders, including any orders for possession in relation to the Hill Top and Oaks Stores, and on costs if that cannot be agreed.

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Decision last updated: 31 May 2019