Genovesi v Affluence Pty Ltd - [2007] WADC 130

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: GENOVESI -v- AFFLUENCE PTY LTD & ANOR [2007] WADC 130

CORAM: BOWDEN DCJ

HEARD: 6-8 MARCH 2007 AND 29 MAY 2007

DELIVERED : 30 JULY 2007

FILE NO/S: CIV 1828 of 2004

BETWEEN: PAUL VICTOR GENOVESI
Plaintiff
AND
AFFLUENCE PTY LTD
First Defendant
CARMELO MEZZATESTA
Second Defendant

Catchwords:

Misleading and deceptive conduct - Breach of contract - Turns on its facts - Damages

Legislation:

Fair Trading Act 1987
Trade Practices Act 1974 (Cth)

Result:

Judgment for the plaintiff against the first and second defendants in the sum of $64,589 plus interest

Representation:

Counsel:

Plaintiff:     Mr M Cuerden
First Defendant              :     Mr G Rabe
Second Defendant         :     Mr G Rabe

Solicitors:

Plaintiff:     Verschuer Edward
First Defendant              :     Williams Ellison
Second Defendant         :     Williams Ellison

Case(s) referred to in judgment(s):

ACCC v Emerald Ocean Distributors Pty Ltd [2005] FCA 1703
Briginshaw v Briginshaw (1938) 60 CLR 336
Franich v Swannell (1993) 10 WAR 459
Helton v Allen (1940) 63 CLR 691
Henville v Walker (2001) 206 CLR 459
Houghton v Arms [2006] HCA 59
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170
O'Neill v Medical Benefit Funds of Australia Ltd (2002) 122 FCR 455
Quinlivan v Australian Competition and Consumer Commission (2004) ATPR 42‑010
Sykes v Reserve Bank of Australia (1998) 88 FCR 511

BOWDEN DCJ:
Introduction

The plaintiff claims damages as a result of misleading and deceptive conduct by the first and second defendant arising out of the purchase by the plaintiff of a half share of the first defendant, a company that carried on business as a real estate agency then trading under the name of Swan Districts Real Estate ["the business"]. Further and alternatively for breach of an oral agreement entered ["the initial agreement"] into on 3 June 2003 for the purchase of a half share of the business and for breach of a later oral agreement entered into on 18 June 2004 ["the subsequent agreement"] whereby the second defendant was to purchase from the plaintiff the plaintiff's share in the first defendant.

Background facts

The first defendant ("Affluence") was carrying on business at the material times as a real estate agency trading under the name Swan Districts Real Estate (SDRE) and was under the control of the second defendant ("Mezzatesta") who was the sole director and shareholder of that business.
The business had been established in 1998 under a previous name trading as SDRE since approximately 2002. The plaintiff ("Genovesi") and Mezzatesta first met in approximately 1999 when the plaintiff retained the services of Affluence to manage rental properties owned by him. In early 2003 some preliminary discussions had occurred between them regarding the plaintiff'’s potential involvement in the business. The plaintiff at that time was employed at Murdoch University and had been employed at the university since 2001, originally as a Student Liaison Officer (March 2001) and later as a manager of Student Services (June 2002).
The business was struggling financially having suffered losses for the years ending 30 June 2001 to 2003 of respectively $13,112, $45,069, $2,211 and making a modest profit of $3,653 in the year ending 30 June 2004. It is also clear from Mr Mezzatesta's own evidence that he was at the relevant times either stressed or under a lot of pressure.
The Business derived income from commissioned sales carried out by Mr Mezzatesta, a percentage of the commission earned by sales representatives employed by the business, and income from "the rent roll", being fees for managing and leasing properties.

The dispute

The crucial and disputed issues between the parties were:
a)what representations, if any, were made during the discussions of 3 June 2003 as to the income to be earned by the plaintiff in the business (the "income representation");
b)if representations were made, were they relied upon by the plaintiff;
c)the terms of the agreement reached on or about 18 June 2004 whereby it is alleged that the plaintiff agreed to sell his share in the first defendant for a sum of $122,000.19 (being moneys that the plaintiff had paid for the purchase of the share in the business).

Plaintiff's claims against the defendant's

The plaintiff claims:
(i)that representations were made by Mr Mezzatesta for and on behalf of Affluence and that he was induced and relied on those representations and entered into the initial agreement to purchase a share in the business;
(ii)those representation's were misleading and deceptive;
(iii)that those representations were made, by Mr Mezzatesta, as a director of Affluence for and on behalf of Affluence and therefore Affluence is liable for the conduct of its agent and Affluence was thereby engaged in misleading or deceptive conduct, contrary to s 52 of the Trade Practices Act (TPA);
(iii)that Mr Mezzatesta is liable personally on the basis that
(a)he, as a director of Affluence, was engaged in misleading or deceptive conduct on behalf of Affluence and as a person who acts on behalf of a corporation in trade or commerce himself was engaged in trade or commerce and falls within the ambit of s 10 of the Fair Trading Act 1987 (WA) (FTA);
(b)as he was selling an existing share in Affluence, he was by that act engaged in trade or commerce within s 10 of the FTA as a vendor of that share;
(c)he was knowingly concerned in, or a party to Affluence's misleading or deceptive conduct pursuant to the (Trade Practices Act s 75B) and is therefore liable on an accessory basis.

The Plaintiff's Case

Plaintiff's evidence

The plaintiff first met Mr Mezzatesta in 1999 while doing repairs on a property he owned in Eden Hill. He subsequently purchased another property and retained the management services of SDRE.
He told the Court that during the period between 1999 and 2001 he was self employed renovating properties however he commenced work on 13 March 2001 at Murdoch University, originally as a student liaison officer, and was subsequently promoted to the position of manager of student services on 12 June 2002, initially on a probationary period, being appointed to staff effective from 12 September 2002, earning a salary of $61,924 (Exhibit 5, 6 and 7). He stated that in general discussions Mr Mezzatesta inquired as to whether he had considered "getting into" real estate to which he replied he was happy at Murdoch and had not thought of a career in real estate.
By May 2003 he had been advised by Mr Mezzatesta that the offices of the business had been relocated from Bassendean to Midvale and was invited to examine the new premises.
He went to the new premises on 3 June 2003 attending, firstly, at those premises and after having briefly examined them, was introduced to the office manager and examined the web site, then travelled to the Pig and Whistle Tavern ["Pig and Whistle"] for lunch.
Over lunch the crucial discussion took place.
He was told by Mr Mezzatesta that he had done well with his investments and he would do well in real estate and he seemed to have an aptitude for it.
The plaintiff replied that he had a great job which was a permanent position involving international travel, that Midvale was a long way from his residence at Mount Pleasant which would involve him in travelling in peak hour traffic, that distance would affect his ability to do weekend home opens and that if he did proceed in a career in real estate he would not be able to do home opens.
He was told that the hours could be flexible, and the home opens carried out by Mr Mezzatesta and other representatives. The plaintiff asked what he could expect to earn if he did "come on board", advising in response to a query from Mr Mezzatesta that he earned approximately $70,000 per annum.
The plaintiff explained that this was of crucial importance to him because he had been the manager of student services for the international students office since June of 2002, had been appointed to permanent staff in September 2002, had a good job involving some travel and would not have left his employment if was not going to maintain his current earnings. He was advised several times by Mr Mezzatesta that he "would easily match that".
Discussions then took place about the value of the business, he being told that the business consisted of the income produced from the rent roll, the actual business premises, fixtures and furnishings, office equipment, plant and equipment and goodwill, the business being valued by Mr Mezzatesta at approximately $300,000 and a half share at $150,000.
Mr Mezzatesta told him they would each receive 100 per cent of commissions from their own sales, 50 per cent share of the income produced from the rent roll, a percentage of the commissions earned by other sales representatives which he thought was 25 per cent, and a share of the profits of the business and was advised that the average monthly expenses were $12,000 of which his share was $6,000.
The plaintiff agreed to pay $130,000 for a half share of the business, having made it clear he was not able to start until March 2004 because he had been promoted to the position of manager of student services and had important projects in the university which he wished to complete and he could not work in any capacity until he resigned from that position. He offered to do a REIWA course, a pre‑requisite for working as a real estate sales representative, stating that he would be prepared to do the course on a part‑time basis but was advised by Mr Mezzatesta that he could do it on a full‑time basis once he started.
He agreed to pay $130,000 and not $150,000 as asked because he was going to have nothing to do with the business until March 2004 and was to receive no income or be liable for any expense until commencing in the business, and he would pay the $130,000 as and when he could between the date of the lunch and the date of his anticipated commencement at SDRE (March 2004).
He considered he was buying half the business, half the rent roll, half the goodwill, half the plant and equipment.
He did not carry out any due diligence, relying solely on what he was told by Mr Mezzatesta and the representation that his income of about $70,000 would be matched was "absolutely important" because there was no way he was going to leave Murdoch with its permanency and travel package for less.
He also claimed that representations made to him that he would not have to do home opens on the weekend had alleviated his concern about the travel distance to and from his home and he was comforted by the fact that he would not have to disrupt his home life on weekends as Mr Mezzatesta or other representatives would do the home opens. As events turned out he did not request Mr Mezzatesta or any other sales representative to carry out any home opens.
He told the Court that there was never any discussion about being responsible for losses and he was never given any details of any losses and saw no accounting document whatsoever at that meeting.
The meeting concluded with a handshake. The agreement was not reduced to writing.
Both parties then travelled to the Midvale agency where he met Jennifer Thompson and was shown spreadsheets. On 3 June 2003 he made diary entries (Exhibit 8) detailing the place of the meeting, purchase price, commencement date, his share of the monthly costs, the commitment as to the home open and the crucial representation that he should easily earn the same money as Murdoch. I note the diary entry (Exhibit 8) refers to "should easily earn the same money as Murdoch", although his evidence was that in fact he was told by Mr Mezzatesta that he could "easily match that".
Subsequent to the discussions of 3 June he provided to Mr Mezzatesta details as to his name, date of birth, address, tax file number, Mr Mezzatesta later delivered to the plaintiff’s home papers for his signature being notification of share issue, share certificate, minutes of a meeting of directors held on 1 July 2003, request for an allotment of one ordinary share in the company, and a consent to appointment as director. (Exhibit 4.2‑4.6).
He signed those documents resulting in the issue of one ordinary fully paid share in the company and his appointment as a director.
In June 2003 pursuant to instructions received from Mr Mezzatesta on a piece of paper (Exhibit 10) he deposited into various accounts the amount of $62,354.19.
After June 2003 he received further calls from Mr Mezzatesta telling him that he needed money, nominating the amount required and providing the account details. In accordance with those instructions he deposited a further $30,000 on 17 July 2003, $10,000 on 30 September 2003, $5,000 on 19 December 2003, $5,000 on 25 March 2004, and $9,646 on 21 April 2004.
He resigned from Murdoch University on 16 January 2004, stopped work at the end of January 2004, spending February 2004 making repairs to his property, underwent a four‑week course with REIWA in March 2004, completing that course on 24 March 2004 (Exhibit 12). Whilst attending that course he received an urgent phone call from Mr Mezzatesta and was advised that there was a need to increase the overdraft of the business. When he made further enquires he was advised that a couple of settlements had fallen over and they "just needed to get through the month". He was assured that the business was rock solid. Mr Mezzatesta delivered to the REIWA offices, whilst the plaintiff was attending the course, documents relevant to increasing the overdraft and these documents were completed and submitted to the bank (Exhibit 14.3).
The bank declined to increase the overdraft causing Mr Mezzatesta to complain of stress and that either the plaintiff or the bank were not telling the truth because he couldn't understand how with the plaintiff’s properties the bank had declined to increase the overdraft. When the plaintiff enquired as to what had happened to the $100,000 paid to Mr Mezzatesta, the latter advised him that he taken $7,000 out of the business for personal use and he accepted in hindsight that this should not have occurred.
The plaintiff advised that there needed to be a buffer and commented that they could not afford to sail close to the wind and he recalled examining spreadsheets which showed repayments for the building prompting him to comment to Mr Mezzatesta that this was double-dipping as he had already paid for a half share of the building with his $130,000. Mr Mezzatesta responded that "it must be a mistake".
He was asked for more money however by this time had serious doubts about the financial viability of the company and told Mr Mezzatesta that he did not have access to any further funds, which was a lie, and would have to approach his brother for $5,000. He told the Court he did not want to portray the impression that he had unlimited funds. Mr Mezzatesta told him he would ask Jennifer Thompson if he could borrow money from her mother and said he was short of money selling a motor bike and other "stuff" and claiming to be tired and in need of a break.
As a result of this the plaintiff sold some shares and gave the proceeds of $9,646 to Mr Mezzatesta. This was paid to the Commonwealth Bank account of Affluence and was the last payment of moneys made by the plaintiff, bringing the total payment to $122,000.19.
Having completed the REIWA course the plaintiff commenced work at SDRE in April 2004 and worked in the business until 18 June 2004 during which time he sold seven properties (the defendant claimed that six properties had been sold but at the end of the day nothing turned upon this as the plaintiff was prepared to accept that it was six properties) and yet received no commission (valued at $31,522.73 on the defendant’s pleaded case) nor any moneys whatsoever from the company.
During June 2004 he tried on several occasions to speak to Mr Mezzatesta who advised him he was tired and stressed, on an occasion when they did speak there was discussions over a listing authority with both men claiming the client as their own and, during a later lunch conversation, over the employment of another real estate representative when the plaintiff light-heartedly remarked that he hoped it would be "better than the last one", Mr Mezzatesta told him if he did not like it, "to fuck off".
On Thursday, 17 June 2004, he attempted to have a meeting with Mr Mezzatesta who insisted that his partner Jennifer Thompson, be present. Mr Mezzatesta's attitude being that there was a meeting in the presence of Jennifer Thompson or no meeting at all. The meeting took place and became heated with Mr Mezzatesta telling the plaintiff to "fuck off", standing up, motioning to pick up the phone and threatening to call the police, the plaintiff telling him he could call who he liked and telling him to "to have a go" (which I take is a reference to an invitation for a physical altercation). Mr Mezzatesta then sat down.
The plaintiff then left the business premises, went home, returning on Friday, 18 June. Both parties resolved, according to the plaintiff, that they could not work the relationship out and it was agreed that Mr Mezzatesta would purchase his share in the business for $122,000.19 to be paid on the anniversary of the date the monies were paid by the plaintiff to the defendant. The plaintiff told Mr Mezzatesta to keep, the commissions earnt, which were listed on a whiteboard, however Mr Mezzatesta said to him, "No, you will get what is owing to you less your share of the expenses". The plaintiff stated that Ms Thompson was present during this meeting, standing at most two metres away.
On a date of which the plaintiff was uncertain he signed documents transferring his share in the business back to Mr Mezzatesta.
On Sunday, 20 June 2004, the plaintiff sent an email confirming the agreement of the 18 June. After the anniversary of the first payment, being 25 June, he rang Mr Mezzatesta, inquiring where the $62,354.19 now due to him was and was advised by Mr Mezzatesta that he did not have it but was making arrangements with the bank and he would get it to him as soon as he could.
On either 15 or 16 July 2004 he received the sum of $75,000 which was surprising to him because he was only expecting the $62,354.19, due on 26 June, although there was a further sum of $30,000 due on 17 July. He later contacted Mr Mezzatesta on two or three occasions to advise he had not received the balance owing and enquired when it would be received and was told it would be paid "when he could".
He made further calls over the next couple of days which were not returned and subsequently arrived, on a date which appears from other evidence to be 27 July 2004, at the offices at Midvale and spoke to Mr Mezzatesta about the balance of the money owing. When the plaintiff reminded him of the arrangement, Mr Mezzatesta's response was that he would "get it when he had it" and that he would get his money. The exchange became louder and the plaintiff was ordered out of the office, after refusing to go, Mr Mezzatesta threatened to call the police, the plaintiff continued to refuse to leave and ultimately Mr Oakes, an employed sales representative, came into the office and issued an instruction to the plaintiff to leave the office. As he was in the process of being frog‑marched out the plaintiff collided with the partitioning.
He eventually left the premises.
Some time later he attended the business premises, handed back the keys, listings and the like. He had on the 8 July 2004 obtained employment with the Bay Vista Property Group (Exhibit 18) and remained with them for two years. His taxable income from that employment for the year ending 30 June 2005 (Exhibit 20) being $19,782. During the periods 1 July 2004 to 30 June 2005 entitlements from Murdoch University and pursuant to a workers compensation claim were paid to him but no income other than from the Bay Vista Property Group was "earned" by him.

He told how he commenced proceedings in the West Australian Industrial Relations Commission (WAIRC), claiming that he was an employee of the company. The claim apparently being dismissed for lack of jurisdiction and subsequent to this he met Mr Mezzatesta at a hotel opposite the REIWA offices on a date unknown and was told by Mr Mezzatesta that the latter's claim, in the WAIRC that the plaintiff had accepted, $75,000, as full and final settlement had been made up because Mr Mezzatesta was angry at the plaintiff for commencing proceedings and had he not done so he would have been paid the money owing to him.
The plaintiff's position under cross‑examination did not materially change. He denied he had been employed by Murdoch University after serving out his notice period, was adamant that he had not agreed to commence at SDRE in July 2003 and was to pay $130,000 pursuant to the agreement prior to commencing with the business. He accepted that he had been involved in selling properties, renting properties and dabbling in the share market, but claimed that he was not aware when appointed as a director of Affluence of his obligation believing instead that he had no responsibilities. He accepted that as of 1 July 2003 he was the owner of half of the business and owned half of the assets but claimed that he was not liable for half of its liabilities and that he was having nothing to do with the business until March 2004, and wasn’t to derive any income or pay any expenses until March 2004. From March 2004 his income would not be by way of a salary, rather would depend on how many properties had been sold. He maintained that it had been represented to him that he "would easily match his income of $70,000" and on that basis he decided to join the business which had been described as rock solid and thriving.
He confirmed his belief that 12 months of employment at SDRE would equate to $70,000 per annum being the amount he had told Mr Mezzatesta he was earning at Murdoch. He ultimately accepted that he had used in answer to a question in the WAIRC the words "Yeah, mythical, hypothetical figures like, 'Oh, you'll easily get the $70,000 that you’re earning at Murdoch', yeah, those sort of figures". He explained under re‑examination that he used the words "mythical" and "hypothetical" in reference to the sum of $70,000 because he never received the figure and in that sense it was mythical or hypothetical. He consistently maintained that he had been told that the $70,000 that he was earning could be "easily matched" working at SDRE. He accepted that he had earned $32,000 in commission over a 10 week period at SDRE yet received nothing. He maintained that the representation relating to the $70,000 was not the only representation made however it was the deciding factor as he was not going to work for less than that.
He accepted that in the original writ issued, on 18 August 2004, there was only a claim for the balance of the $122,000.19 that remained unpaid and no claim for deceptive or misleading representation, and that even when an amendment was made to the writ of summons in April 2005 to add the claim based on the initial agreement there was no amendment to include a claim for misleading or deceptive conduct. The statement of claim being substituted in March 2006 to include for the first time such a claim. He stated that originally all he wanted was his money back and that the legal advice that he received was to pursue the return of his $47,000 which he considered to be fair and reasonable. He maintained that he had always told his lawyers the same story and left the decision as to which claims to proceed with to them.
He reiterated that it was his belief that he was buying into the business, consisting of a partner share of half the rent roll, half of the building, half of the goodwill, half of the office plant, furniture and equipment. He said there was no discussion in detail about whether there was one share or two shares in the corporation, claiming rather that half a share of the company was as detailed as it got. He maintained he was to have nothing to do with the business until March 2004. His attention was drawn to the diary entries of 3 June (Exhibit 8) and 30 September (Exhibit 17). The diary entry of 30 September (Exhibit 17) included the words "no income, no expense until then". He claimed that this entry had been made on that date in response to a phone call from Mr Mezzatesta requesting further money and during the course of the conversation he went over the points of the agreement of 3 June to make sure that they were still as he had understood them to be. That diary entry records the purchase price paid, the commencement date of work, and states that he is to receive no income and no expenses until then, that his share of the costs were to be $6000, and that other representatives were to do the home open and that he should easily earn the same money as at Murdoch (Exhibit 17).
He denied that the initial agreement had been made at the office, claiming that it had been made at the Pig and Whistle. He was adamant that it was agreed that he was to start in March 2004 because he was in full‑time employment and committed to Murdoch. He maintained that the spreadsheet, which was the only financial document he was shown on the computer, after returning from lunch at the Pig and Whistle to the office, gave no income of the business showing the company's expenses on a monthly basis and he was advised that certain of these expenses would be Mr Mezzatesta's responsibility. He was assured that the business was rock solid, thriving and prosperous and he could easily make his $70,000 per annum. He accepted that he had exercised bad judgment and relied solely on trust, not on research, denied that he knew the business was making a loss or that he was anxious to get a foothold in the real estate business, or that at the time each payment was made by him he was advised whether it was a payment for the capital purchase/or contribution to expenses/loss, or that he had agreed to accept $75,000 in full and final settlement, or that he had ever been in hospital as a result of memory loss, or told Mr Mezzatesta that he was in hospital although he did accept that he had suffered from a complete loss of memory over one particular weekend, the date of which he could not remember. He agreed that the payment of $9,646 had not be specifically requested by Mr Mezzatesta, and had been paid at a time when he was having doubts about the financial viability of the business, maintaining that this was part‑payment of the $130,000 purchase price which he accepted was his responsibility to pay.
He accepted that he had not disclosed to the bank his income from the sale of shares or from dividends and had completed the bank documents (Exhibit 14.3), stating that he had "nil income", claiming that when the form was signed on 14 March he had not earned any income and that he had been told by an unnamed representative of the bank that he could not put any projected income on the form. An examination of his taxation return shows that for the financial year ending 30 June 2004, under Income Dividends, had been declared to the Taxation Department an unfranked amount of $3,381, a franked amount of $27,664 with a franking credit of $11,855 (Exhibit 19). It is clear from an examination of the loan application (Exhibit 14.3) that although shares have been declared as an asset, the income received had not been declared.
The plaintiff accepted that he had spoken to Ms Brennan but was adamant that the discussions did not take place at his house. He recalled her basically indicating that she would not work for less than her current salary. He denied making any sexual advances towards Mr Mezzatesta although accepted that on one occasion in a motor vehicle he did say to Mr Mezzatesta that the latter would "sleep really well when he finished fucking him". He explained that this was made in a jocular fashion in an environment where jokes were readily made about gays, Aboriginals, lesbians and homosexuals by Mr Mezzatesta, and was made in the context of a proposed trip to Singapore and when Mr Mezzatesta was complaining that he would have trouble sleeping in an unfamiliar bed.
Subsequently Ms Jennifer Thompson told him that Mr Mezzatesta claimed he had been sexually assaulted. He denied any impropriety had occurred. He maintained that the meeting on Friday afternoon (18 June) was neither violent nor heated but a civilized meeting which ended with both parties shaking hands. He denied that the email of 20 June (Exhibit 15) had been created in an attempt to build a case based on a fictitious agreement and denied that when he attended SDRE on 27 July he said that he had been set up and should not have settled for $75,000, he accepted that Mr Oakes was in fact called and asked to remove him from that meeting and denied that this litigation was an attempt to destroy Mr Mezzatesta, claiming it was simply about getting his money back. He confirmed he resigned as a director on 21 June and transferred the share on 23 June and agreed that no mention had been made at the meeting of 18 June of any specific amounts of money, rather the agreement being that the money paid by him would be paid back in the same amounts on the anniversary of the date that they were paid and that he had not realised the first payment would be due some five days later until he returned home and was drafting the email (Exhibit 15).
He confirmed that in his evidence at the WAIRC he had stated that he had been assured by Mr Mezzatesta that "I would at least earn the equivalent of my current income at Murdoch" and maintained that he had not been told at the original meeting in June 2003 that Affluence was not able to pay its debts.

Reginald Ernest Oakes

Mr Oakes had formerly been employed as a police officer and a civilian radio officer within the police department. He is a Justice of the Peace, currently working as a real estate representative and had been employed by the plaintiff for approximately two months at the time of his evidence. He worked for Mr Mezzatesta for a period from March 2004 to July 2004, and then as his partner although the partnership had never been formally dissolved.
He told how the plaintiff had commenced work in the business in approximately April or May 2004 and he had been in the backroom on 27 July 2004 when after, Jennifer Thompson spoke to him, he went to Mr Mezzatesta's office. He saw the plaintiff and Mr Mezzatesta arguing over money, Mr Mezzatesta said to him "You saw him hit me". His evidence was that in fact he did not see the plaintiff hit Mr Mezzatesta and that there was a desk between them. Nor were there any marks visible on Mr Mezzatesta.
He said there was no indication the plaintiff was going to hit anyone, however, he did ask Mr Mezzatesta whether or not he wished to remove the plaintiff from his office. The plaintiff was maintaining that all he wanted was his money. Mr Mezzatesta was stating that he would get his money but insisting that he leave the premises and get out of the office. Mr Oakes then went to put his hand on the plaintiff's shoulders, the plaintiff swung his arm as if to brush him off, Mr Oakes bumped into a chair, the chair hit and damaged the petition, he then took the plaintiff by the shoulder, ushering him out of the office while the plaintiff continually asked when he would get his money and Mr Mezzatesta was yelling "Get out, you will get your fucking money". I observe that this conversation took place after the defendant had paid $75,000 to the plaintiff on or about 15 or 16 July 2004.
Under cross‑examination he accepted he had made a written statement (Exhibit 32) and agreed that it was his habit to make written statements soon after an incident and he maintained that the written statement was consistent with his evidence. Significantly the statement says that the plaintiff had said to him:
"Reg, I hope you get all your money. I’m only sorry I signed over my interest in the company for a miserable $75,000 when I could have got more."
When he was asked if he did not deny that this is what the plaintiff said at the time, he replied "Paul could have said that, if that's what I've put there, that's probably correct".

The Defendant's Case

Carmelo Mezzatesta

Mr Mezzatesta's evidence gave a brief history of his working career, stating that he had been a real estate salesman since 1982 and the business had operated under its current name since 2002. The business basically derived income from commissions earned not only by himself (100 per cent) but also from other sales representatives (50 per cent of their commission), from the rent roll including the letting, management and inspection fees. He agreed he first met the plaintiff around about 2000 when he was involved in leasing out properties owned by the plaintiff and found him to be a very hard worker and told him that if he was interested in taking on a partner, he would like the plaintiff to be his partner.
In approximately December 2002, when the business moved to new premises, he told the plaintiff that he needed somebody with his capabilities and financial backing to purchase a rent roll and in February 2003 there were some preliminary discussions. In around May 2003 he contacted the plaintiff and a meeting was organised. The crucial meeting of 3 June 2003 took place not at the Pig and Whistle tavern, but rather at his office in Midvale. The discussions centred around a purchase price of $150,000 which was negotiated down to $130,000. The agreement was that the plaintiff would receive 100 per cent of the commissions from his own sales, 50 per cent of the income from the rent roll, 25 per cent of commissions earned by employed sales representatives and the expenses would be shared equally. He said that it was his wish for the plaintiff to start straight away because the business had moved into new premises and he had plans and was looking to employ more people and needed help as he was getting tired.
He maintained that it was only after these discussions that they went to the Pig and Whistle where they discussed further the rent roll, and looking for bigger business premises to purchase or lease. The firm agreement between the parties was for the purchase of the business and the purchase of a rent roll as soon as they could obtain one.
Although the agreement was to buy a 50 per cent share of Affluence, he was unable to say if it was one share or two shares that was being purchased. After leaving the Pig and Whistle they returned to his office where the plaintiff was given figures for the 2002 financial year which he took home and he then asked the accountant to arrange the documentation necessary for the plaintiff to become a shareholder and director of the first defendant and this was done effective from 1 July 2003.
He was told some days later that the $130,000 could not be paid in one sum and it would be paid as and when the plaintiff was able to do so and he agreed to this. He thought that at the end of July he was told over the phone that the plaintiff had been given a promotion and could not start work until March 2004. This disappointed him as he felt the plaintiff had not been upfront about his commencement date and because this did not help his position. He accepted under cross‑examination that as at the date of the meeting (3 June) there had been no concluded agreement, commitment or undertaking as to the date when the plaintiff would commence work.
Mr Mezzatesta did not dispute that he had received the sum of $122,000.19, nor the dates it had been received. He advised the Court that on occasions he would ring the plaintiff and ask for money to go into the trading account so that he could keep the company afloat. He agreed that he had given Exhibit 10 to the plaintiff, specifying the amounts and accounts he wished the money to be paid into. Exhibit 10 was given to the plaintiff at the same time as the documents prepared by the accountant (Exhibit 4). The covering letter is dated 24 June 2003. The first payment in response to Exhibit 10's request for payments was made on 25 June 2003. I find that Exhibit 10 was given to the plaintiff on either 24 or 25 June 2003.
He stated that from 1 July 2003 the plaintiff was equally responsible for the management of the company, and entitled to half the profit and liable for half the losses even though the plaintiff was not involved in the running of the business, and of the $122,000.19 paid $65,000 had been received as the plaintiff's contribution towards either losses or expenses in accordance with the agreement.
He recounted that in September he contacted the plaintiff who advised he was in hospital for a week as the result of losing his memory. In those circumstances he did not wish to discuss matters and asked the plaintiff to call back later, when he did the plaintiff claimed that he did not know what he had bought and Mr Mezzatesta informed him he had bought 50 per cent of Affluence which owned a real estate business and building. In a later conversation he explained to the plaintiff that he was under a lot of pressure and wished him to commence work as soon as possible. The plaintiff advised him that he would be resigning in January and Mr Mezzatesta then made efforts to have him enrolled in the REIWA course. Whilst the plaintiff was undertaking that course it was necessary to increase the overdraft by $10,000 (from $15,000 to $25,000) and he took documents to the plaintiff for him to sign to effect this. That application was subsequently refused by the bank (Exhibit 14). This upset him because he thought that if he could not increase the overdraft by $10,000 he was concerned that they would not be able to purchase other items such as rent rolls, new premises and the like. He subsequently borrowed $10,000 from, his partner, Jennifer Thompson's mother.
He described in detail an incident in June 2004 when he said he was bent over a filing cabinet and the plaintiff came up behind him and stuck his semi‑erect penis into his backside and started pumping in and out. This distressed him greatly as he had been sexually assaulted as a 13 year old boy. He could not recall exactly what he did after this but he walked out of the office, went home, came back later and told Jennifer Thompson what had taken place. A few days later there was a discussion with the plaintiff about a business trip to Singapore and in view of the previous incident, notwithstanding that the plaintiff wished to share a room with him, he insisted on a separate room and told the plaintiff that he would have difficulty sleeping in a strange room to which the plaintiff replied by the time he "had finished fucking him, he would sleep all night". He made no reply and walked to his office. When the plaintiff came to the office and continued to speak to him further about the Singapore trip, he replied "Paul, if you don't like it, fuck off".
He said he lost all faith in the plaintiff finding his behaviour inappropriate and unexpected.
On 17 June or 18 June the plaintiff came to his office carrying on like a raving lunatic, grabbing him and dragging him around the office. Mr Mezzatesta insisted that he wanted somebody present during the discussions. He told the plaintiff that "This has got to end right here and now", to which the plaintiff replied "Give me $75,000 for my share and I’m out, gone", Mr Mezzatesta told him that provided the plaintiff signed over the company to him he would give him the money as soon as practical and that was the end of the story and to "just go away". The plaintiff also said, in a reference to the sales commissions which were written on a board in the office, that "You can stick them right up your arse". Both parties then shook hands on the agreement.
Some time later he paid the plaintiff $75,000.

He was not sure when he received the email (Exhibit 15), although it was probably on Monday, 21 June. He read the first few paragraphs, thought that it was ridiculous and deleted it. Arrangements were made for the share to be transferred to himself and for the plaintiff to resign as the director. He met the plaintiff in front of REIWA House and arranged for him to sign the appropriate documentation.
The next contact he had was when the plaintiff came to the office two or three weeks later returning some "for sale" signs. The plaintiff came into his office, said "You set me up, you bastard" and started pushing him around and hitting him saying "I never should have accepted your offer, you bastard". Mr Oakes came in, a scuffle broke out. They fell backwards onto some partitioning and eventually the plaintiff was thrown out.
Mr Mezzatesta stated under cross‑examination that he ceased work as a real estate agent in about August/November 2006. He later changed his position and conceded that he is in fact still working in the real estate industry on a part‑time basis. He accepted that when the plaintiff left the business in June 2004 Mr Oakes bought into the partnership and that partnership had ended probably in mid‑2006. He maintained that the financial report for the year ending 30 June 2002 had been given to the plaintiff after they had returned from their meeting at the Pig and Whistle, and had been taken by the plaintiff when he left.
He accepted the business had shown losses for the year ending 30 June 2001, 30 June 2002 (Exhibit 33) and 30 June 2003 (Exhibit 42) and was aware that by June 2003 the plaintiff was working at Murdoch University.
He claimed the business had a rent roll of appropriate 70 properties as at 2003 and the value of the rent roll was appropriate $3 per $1 of rent roll, so if a rent roll produced an income of $100,000 per year the rent roll would be valued at $300,000.
His evidence was that he wished to increase the size of the rent roll, that the business needed a larger rent roll to cover expenses and needed a rent roll of around about $300,000 which meant given that the current rent roll was appropriate $45,000, $750,000 was needed to purchase a rent roll of $250,000. He claimed to have discussed the need to purchase a larger rent roll with the plaintiff prior to his coming into the business but did not tell him he needed the plaintiff to spend about $750,000 to purchase a rent roll. He accepted the proposition that he did need somebody with financial backing to buy a rent roll and said that he had discussed this with the plaintiff while working at a house in Eden Hill.
He described the plaintiff as portraying himself as successful, clever and hard working. He accepted that he discussed with the plaintiff the need to purchase rent rolls but did not tell the plaintiff that this was required to cover expenses.
He accepted that he had called the plaintiff suggesting that he come and see the new premises. At the meeting which took place on 3 June 2003, he claimed, in his office, the sources of income of the business were discussed and it was agreed that the expenses would be shared equally, although he stated that the quantum of the expenses was not mentioned. He denied there was any mention by the plaintiff of earning $70,000 per annum. He said that the range of income that could be earned was discussed, that he used figures of people who had worked for him and other people in the industry and said that some people could earn $25,000 and there were a lot who earnt $200,000. He denied that he knew what the plaintiff was earning or made any enquiries in that regard stating there had only been a general discussion about what other people in the industry earned.
He told the plaintiff he earned up to $100,000 to $140,000 gross commission and although he wanted the plaintiff to start work straightaway, he received no firm response or commitment until he spoke to the plaintiff about one or two weeks later.
He maintained that a firm agreement was reached at the office before they went to the Pig and Whistle and the agreement was for the plaintiff to purchase a half share of the business for a purchase price of $130,000, each respective party to receive 100 per cent of their commissions from sales they made, 25 per cent of the commissions earned by other employed sales representatives and 50 per cent of the rent roll with expenses to be shared equally. It was his evidence that the plaintiff agreed to become responsible for losses from 1 July 2003 even though the plaintiff was not starting work until a considerable time later. When it was drawn to his attention that on his version of events the plaintiff had purchased a loss making business Mr Genovesi replied "unfortunately that's the way it worked out".
He was told two or three weeks after the discussion of 3 June that the plaintiff could not start until June 2004 and accepted that this conversation took place before the share transfers and other documents (Exhibit 4.2‑4.7, which he accepted was signed on or about 24 June) were signed and before he gave Exhibit 10 to the plaintiff. I observed that this is before he received any money from the plaintiff. Mr Mezzatesta was vague over dates, claiming he could not recall accurately or could not recall 100 per cent because of the lapse of time.
He claimed that at the Pig and Whistle discussions took place over the purchase of further rent rolls, expanding the business, and a proposal relating to sales representatives, but he was adamant the agreement to purchase was concluded in the office before travelling to the Pig and Whistle. After some further discussions, at the Pig and Whistle, they went back to the office and it was there that he gave the plaintiff the 2001/2002 financial accounts. His attention was drawn to his evidence at the WAIRC and in particular that there was no reference to a concluded agreement being made in the office his evidence on that occasion being:
"… I don't think anything was agreed on that particular date (a reference to a proposal be put in February) because we had another meeting again at the Pig and Whistle, that is where we went over again. We went over the, you know, the possibility of the income that can be earned, the price of the building, the income split again, went over on that day and then as Paul said previously we did go back to my office again, we confirmed that again. I offered Paul to get a valuation done on the business and he refused." (P 52-53 of the transcript of WAIRC – which was read to Mr Mezzatesta in Court).
Mr Mezzatesta was unable to offer any explanation as to the absence of any reference to a concluded agreement having been reached at the office as opposed to the Pig and Whistle.
Mr Mezzatesta accepted that at the meeting on 3 June the plaintiff had not told him that he would come to work straight away and accepted that the plaintiff had never committed to a specific date. In his defence of 22 September 2004 it is pleaded that it was an express term of the agreement that the "plaintiff was from 1 July 2003 to commence selling real estate under the licence held by Affluence" and in the amended defence and counterclaim of May 2003 it was pleaded that it was an express term of the agreement "the plaintiff was as soon as practicable on or after 1 July 2003 to commence selling real estate under the licence held by the first defendant" and in the re‑amended defence and counterclaim of 10 November 2005, a similar expressed term was pleaded, when questioned about this he said he did not know what any of this meant, that there had been so many claims and counterclaims and he could not answer any questions on these documents.
He said that as soon as the plaintiff had signed the documents (Exhibit 4.2‑4.7) even though he couldn’t have started work at the earliest until September 2003, he was responsible for the losses and it was just unfortunate that the plaintiff had brought a loss making business stating that he "wasn't led into it or forced into it. It’s just how it happened".
He claimed that from 1 July 2003 the plaintiff was equally responsible for the management of the company, he accepted that he had withdrawn cash for his own purposes from the business accounts when he was short of cash and claimed that all of these amounts were properly accounted for and taken into account as part of his wages estimating it was around about $5,000 or $6,000 in personal expenses, including child support, which were credited to him. He claimed to have told the plaintiff that he was paying these expenses in April 2004, even though these expenses were being paid from the company's overdraft which had being exceeded.
He repeated that he had a clear recollection of giving the 2002 financial accounts to the plaintiff at his office and when his attention was drawn to the transcript of proceedings in the WAIRC and their reference to the 2002/2003 accounts he claimed this was an error by the transcribing person and the only accounts that were shown were the 2001/2002 accounts.
He stated that from 1 July 2003 although the plaintiff had an entitlement to a share in the income of the business, he did not received any such income.
He said although the plaintiff was not involved in the business, he was liable for losses and he would call him saying words to the effect of "this month we have problems, we need this amount of money" and the money would be paid by the plaintiff.
He accepted that it had been specifically pleaded (since the defence of 22 September 2004) that the expenses would be calculated each month as close as possible to the end of each month to show that month's profit or loss. He accepted that on his version of events the plaintiff had paid some $65,000 pursuant to the agreement whereby from 1 July 2003 the plaintiff was liable to pay a half share of the losses and was entitled to a half share of the profits.
He agreed that at the date Exhibit 10 was given to the plaintiff (being either 24 or 25 June 2003) losses for the month of July 2003 had not been crystallised. He stated that Exhibit 10 included an amount of $20,000 to be contributed towards losses/expenses in accordance with the discussions between the parties. He agreed that Further and Better Particulars filed showed that loss as at July 2003 was approximately $27,000 (a half share of which would be approximately $13,500), yet according to Mr Mezzatesta the plaintiff had paid $20,000 for losses before 1 July 2003, ie before the losses had been calculated and an amount in excess of what his share of losses were and then paid a further $30,000 for losses on 18 July 2003 making a total contribution by the plaintiff towards losses by 18 July 2003 of approximately $50,000, the total losses on that calculation being $100,000. The defendant's own Further and Better Particulars established that the total losses for the period 1 July 2003 to 30 June 2004 were approximately $36,000, a half share being approximately $18,000. Mr Mezzatesta also contended that the plaintiff paid a further $10,000 towards losses on 28 September 2003 and a further $5,000 on 25 March 2004.
Mr Mezzatesta claimed that the requests made by him for moneys were not for any specific monthly loss but rather for the general overdraft.
Mr Mezzatesta's evidence was unconvincing on this point.
Mr Mezzatesta's evidence was notwithstanding the pleadings referring to the plaintiff's share of the calculated loss being paid monthly, his request for money from the plaintiff never went into "that degree". He would simply ring and say he needed some money to be put into the account.
He accepted that on his version of events the plaintiff had paid approximately $65,000 towards his half share of losses of the business and indeed the amended substituted defence pleads that fact. His evidence was that he would put the same amount in towards losses and "probably more" and had a made an equal capital contribution to that of the plaintiff.
He accepted that the Further and Better particulars showed he was entitled to approximately $38,892.78. He was then taken through the Swan District Real Estate Cash Disbursements Journal (Exhibit 49) for the period 1 July 2003 to 30 June 2004 and shown that in the first six months of the financial year he received from the business in the form of cash $34,407. He ultimately accepted that over the 12 month period the books showed that the amount that he had taken was $67,824. He further agreed that he had paid from the company account money towards his personal expenses, approximately $5,000, saying that "Everybody's short of cash from time to time". He agreed that he was making personal payments, including child support payments, using the company's overdraft without telling the plaintiff, even though the overdraft had exceeded its limit.
His attention was also drawn to a payment of $10,000 paid by the plaintiff on 30 September 2003 which showed in the Cash Receipts Journal as a payment from Mr Mezzatesta as opposed to a payment from the Plaintiff. He agreed that this could have been incorrectly recorded. This payment, he said, was a payment towards losses or expenses. When shown the bank records he accepted that this $10,000 paid on 30 September, was two days later taken out of the company account and transferred into his personal accounts. He then claimed this could have been a return of a loan or it could have been something else. He said he did have a loan agreement drawn by a solicitor enabling him to borrow money from the company. I note no such agreement is listed in the defendant's discoverable documents or produced to the Court.
Mr Mezzatesta was taken through the various pleadings. The amended defence and counterclaim of May 2005 showed as at 18 June 2004 the business suffered a net loss of $195,683. His answers to the request for further and better particulars of the amended defence and counterclaim filed in August 2005 showed a net loss as at 30 June 2004 of $35,981.35. The re‑amended defence and counterclaim filed in November 2005 showed a net loss of $212,793.63 as at 18 June 2004. The substituted defence (par 13) filed in June 2006 showed a net loss of $159,952 as at 18 June 2004 and Exhibit 47, being the financial statements for the company for the year ending 30 June 2004 showed a profit of $3653. Mr Mezzatesta did not have an answer as to how the various figures were arrived at stating that "you would need to talk to whoever prepared the documents".
He stated initially that he had not worked as a real estate agent since August or November 2004. He stated under cross‑examination that he had not totally ceased working as a real estate agent and still had listings that he was trying to sell. He had in fact started a new real estate business according to him either about six or seven months after the filing cabinet incident where he was allegedly assaulted, although he later said he established the business in around about August or September 2006. He conceded that he was still currently selling real estate on a part‑time business. When asked, he nominated two current listings. When shown a printout from the Internet (Exhibit 48) containing four properties on the market, he replied that he had not amended the web site for a long time. He agreed that he had not reported the alleged sexual assault to the police, although he had told a police superintendent friend of his. He had not sought any psychiatric treatment because he "didn't believe in that stuff". He accepted that he had used the words "If you don't like it, you can fuck off" and, although he could not remember the full extent of the conversation, said it was at the time that it was being suggested to him that rooms (for the Singapore trip) be booked together, and claimed that the plaintiff preferred him to his wife, and had used words such as "I love this man".
He maintained that on 18 June the plaintiff acted like a lunatic, pushed him around for probably about 15 to 20 minutes. During that period of time he was dragged around, pushed and shoved and within a period of 5 to 10 minutes of the pushing and shoving ending the plaintiff had said words to the effect of "Give me $75,000 and I’m gone". The plaintiff told him in effect that the commissions on the board could be kept by him. The parties then shook hands and the plaintiff left. He claimed that Jennifer Thompson was in the office at the time of the filing cabinet incident, the incident concerning the Singapore trip and the agreement of 18 June.
As to the email, [Exhibit 15], he had seen that on the Monday 21 June. He read the first paragraph, got half way through it and did not worry about it any more, Jennifer Thompson picked it up and read it to him, drawing his attention to the last paragraph. Although he denied reading the last paragraph, he accepted that within a few days of receiving the email Ms Thompson had brought it to his attention. He stated that the contents of the email were a nonsense. He denied ever having said to the plaintiff he had made up the story that the plaintiff had agreed to accept $75,000 in retaliation for the plaintiff having taken proceedings against him.

Jennifer Rita Thompson

Ms Thompson was in 2003 the de facto of Mr Mezzatesta and employed by SDRE, her duties included reception, banking, uploading photos onto the website, typing documents for settlement, data entry onto computers and the like.
She first met the plaintiff in March 2004 when he came to work in the business.
She said that at about 3.30 pm, on 17 June 2004 the plaintiff came to her office and she told him she would like to have a discussion about Mr Mezzatesta with him, to which the plaintiff replied that he wanted to know what was going on and said "He loved the man". She recounted what she had been told by Mr Mezzatesta about the alleged sexual assault. The plaintiff stood up and said "That's bullshit, I didn't do any such thing, that's bullshit. He doesn't want to go to Singapore, he doesn't want to share a room, this is bullshit", and later said "Look, there's nothing wrong with that behaviour. I act like that with my mates all the time". She described his eyes as being glazed over with rage, saying he was sick of this "bullshit". He then met with Mr Mezzatesta and started pushing Mr Mezzatesta, that he actually had him by the shoulder and was dragging him around the office and said eventually "See these commissions? I don't want a red cent of these". He was encouraging Mr Mezzatesta to fight by saying "Stand up and fight like a man", and thumping on the counter, however Mr Mezzatesta was composed. Ms Thompson said "Something has to be resolved" and the plaintiff then said "Okay. I don't want this anymore. I'm over it". "I want $75,000, you can have my share of the company" to which Mr Mezzatesta replied "That's not going to happen unless you sign the company over to me". Shortly after this the parties shook hands. Ms Thompson both described and demonstrated to the Court a fairly vigorous shaking of the hand. He then left, making a remark about some puppies being given to her by Mr Oakes to which she took offence.
She described a later meeting on 27 July when the plaintiff came to the office with a friend who sat on the couch. The plaintiff went to Mr Mezzatesta's office and pinned him against the wall with his shoulder pushing into the latter's chest. She immediately approached Mr Oakes in another part of the office and he came and asked the plaintiff to leave. As Mr Oakes went to grab the plaintiff, the plaintiff pushed him off. They both went over the chair. Mr Oakes then proceeded to make a sort of citizen's arrest, telling him he had to leave the office and walked the plaintiff to the front door. As he was being ejected the plaintiff said words to the effect of "I’m going to destroy you", got in his car and drove off. Police later attended.

She said she made a written statement within days of the incident of 17 June, typed and signed it. (Exhibit 50). The statement was prepared because she wanted to "document everything that had happened" and record on paper that the plaintiff had said he was taking $75,000, did not want his commissions and had shaken hands on it. She said she did this because Mr Oakes, who was a Justice of the Peace and a former police officer, knew the format of making statements and she was anxious to put in writing what the plaintiff had said and she made a further statement about the incidents of 27 July (Exhibit 51) on that date, because Mr Oakes was saying it was important for everybody to document what had happened and to be clear about it.
Under cross‑examination she agreed that she was Mr Mezzatesta's former de facto, having ceased that relationship in November 2006 when there had been a property settlement and Mr Mezzatesta had bought her out of the property. She accepted that she made the entries to MYOB but did not do the BAS statements. She would reconcile the accounts and give the MYOB to the accountants.
She could not explain why she recalled the exact date being 17 June, but stated she just recalled it.
She said that the plaintiff came in at 3.30 pm, the discussion took place over about 20 minutes and then Mr Mezzatesta came in at around 3.50 pm. She described it as being a physical altercation and repeated her assertion that the plaintiff had offered to quit the business for $75,000 and the parties then shook hands. She described it as a hostile aggressive meeting. She accepted that the plaintiff, when confronted with the allegations of the sexual impropriety, had said "This is bullshit, I didn't do it". She did not accept his denial.
She thought it was a serious incident and that afternoon made her statement unaided by Mr Oakes who was not present that day.
She said she wanted Mr Mezzatesta to press charges arising from the incident and receive counselling. She thought the statement was going to be given to the police and they would be interested in every detail that she could recall, including the conversations and where they took place and she felt she would have to give evidence about the conversations and claimed that main reason she made the statement was because of the conversations she had with the plaintiff and that somebody needed to know what she had witnessed.
She agreed that what had taken place were discussions about the sexual assault, then she had seen the plaintiff grab Mr Mezzatesta and heard him declaring that he wanted to end the business relationship saying that he would quit the business for $75,000. This was important to her because it wrapped up the partnership.
She accepted that the statement (Exhibit 50) contained no reference to either the conversation relating to the sexual assault, or to the physical assault and accepted, that some of the very reasons she gave for making the statement did not appear in the statement. The only details being recorded in the statement were the agreement to accept $75,000 and a reference to Mr Mezzatesta being able to keep the commissions.
The statement (Exhibit 50) commences with a reference to Mr Mezzatesta and the plaintiff being together at 3.30 pm, whereas on her evidence Mr Mezzatesta had not arrived until around 3.50 pm. She denied that she had made up the statement after becoming aware that the plaintiff had brought his claim to recover the balance of $122,000 from Mr Mezzatesta.
She agreed that she read the email (Exhibit 15) on Monday, 21 June, and discussed its contents with Mr Mezzatesta. She may have mentioned the plaintiff’s claim for the $122,000 but she was really upset about the part of the email that referred to Reg (Mr Oakes) owning "our arses".
She agreed Mr Mezzatesta had said "Well, if you don't like it, you can fuck off", but her recollection of this being said was when the plaintiff had been pushing Mr Mezzatesta around, had him in front of the whiteboard, and had stated "I can't handle all of this bullshit. I can't stand it". On that occasion the plaintiff was physically slamming Mr Mezzatesta around.
She said the statement (Exhibit 51) relating to the incident of 27 July was prepared by her. Mr Oakes suggested that everybody ought to do a statement, and suggested the manner in which it be set out for the police and that, it was a good time for it to be done because as a Justice of the Peace he could sign all the statements. She accepted that the statement was not signed by Mr Oakes as a witness. Her focus on that day was everything that had taken place, she wanted to record as much of what transpired as possible, what she had heard and what she had been involved in. She accepted that common to both statements was the reference to the plaintiff selling his share of the business for $75,000. She denied the suggestion that it was only after the plaintiff had commenced proceedings that she and Mr Mezzatesta put the statements together.
She described the alleged sexual assault as having a devastating effect on Mr Mezzatesta. In re‑examination she said that after the alleged sexual assault, Mr Mezzatesta had changed, was not sleeping, was getting up in the middle of the night and drinking, was not caring, did not want to go to work, was withdrawn, sullen and irritable and this went on for years.

Marlene Brennan

Ms Brennan described herself as a property manager with Ray White in Northbridge who was contacted by the plaintiff in April or May of 2004. She knew a relative of his and he was looking for a property manager and eventually there was a meeting at his home on the Esplanade in Mt Pleasant.
Ms Brennan said she went to his house and remembers a female, whom she assumed was his wife, two girls and a dog, and there being a general conversation about the plaintiff's involvement in rowing. She described all the people as fit, although the plaintiff had an arm injury.
Prior to attending his residence she had told the plaintiff she did not think they could afford her because she was earning $50,000 a year to which he replied "Not a problem".
She was to take on responsibility of the rent roll portfolio, bring it up to scratch and increase the portfolio.
She said that she cannot recall the date of the meeting but it was on a Sunday, probably in June of 2004 and the plaintiff described himself as a partner in the company. Later an employment agreement was forwarded to her. Prior to commencing employment she had never spoken to Mr Mezzatesta. She commenced in July of 2004 and worked for approximately three weeks. Her son had been involved in a serious accident overseas and her former employer had paid for her trip to see him. She told Mr Mezzatesta that she felt guilty about this and felt that she had done the wrong thing by leaving her former employer when he had been so good to her. Mr Mezzatesta told her to follow her heart. She subsequently left and went back to her previous employer.
She denied that the meeting had taken place at the cafe in Mt Lawley, clearly remembering the house in Mt Pleasant.
She recalled that she had been told by the plaintiff that they were looking to purchase a rent roll and that it would be profitable. She denied having a meeting with Mr Mezzatesta before commencing her employment. The first time she met him was in fact when she went to her place of employment. She took the employment without seeing the premises or the rent roll, the letter of employment she believed was signed by Mr Mezzatesta. When she started work in July the plaintiff was still coming to the office. He came about three times. On one occasion when she said "We hardly see you" he replied that it was closer to work from his home and his client base was in the Applecross‑Mount Pleasant area and he would be working from home.

Credibility

As to the general credibility of witnesses, I accept without reservation the evidence of Mrs Brennan, (called by the defendant). I found her to be an impressive, conscientious and persuasive witness. I have no hesitation whatsoever in accepting the truthfulness of her evidence. Her evidence, however, helps me very little. It is not relevant to the central issues to be determined.
I accept that there are some relatively minor inconsistencies between her evidence and the plaintiff in that Ms Brennan states that the meeting between the two of them took place at her house, and that he told her that he was working from home, and had a client base south of the river. These matters were put to and denied by the plaintiff. It is, in my opinion, not clear from Mrs Brennan's evidence that the statement by the plaintiff that his client base was in Applecross‑Mount Pleasant, and that he was "working from home" relates to the period of time that he was working for Swan District Real Estate as opposed to his new employment with the Bay Vista Property Group. The only other inconsistency between Mrs Brennan's evidence and the plaintiff's evidence is whether the discussions between the two of them took place at the plaintiff's home or at another location. I found Ms Brennan to be an impressive, conscientious and persuasive witness and I prefer her evidence on this point to the plaintiff's, however nothing of any significance at all turns on this.
I was also impressed by and accept the evidence of Mr Oates (called by the plaintiff). I find him to be a credible witness. I found the manner in which he gave his evidence was straightforward and his demeanour impressed me. I find him a witness of the truth.
He did not seem to me to be biased for or against any party. I accept that the written statement that he made shortly after the incident of 27 July (Exhibit 32) is an accurate account of the events of that day. I find that his statement was adopted by him in the witness box (T 184) and is thus evidence of the truth of its content as opposed to merely going to his credit. He was shown the statement under cross‑examination. He was asked to read and asked whether or not it was true. When his attention was drawn to the specific paragraph where he recounts that the plaintiff said "I'm only sorry I signed over my interest in this company for a miserable $75,000 when I could have got more", his reply was "My recollection, this is not dated and this is back in 2004 and I'm sorry". He was further asked "You don't deny that that is what Paul said at the time?" to which he replied "Paul could have said that. If that's what I've put there, that's probably correct". I do treat this as an adoption of the statement by Mr Oakes.
I find as a fact that the plaintiff did say to Mr Oakes on 27 July:
"I hope you get all your money. I'm only sorry I signed over my interest in the company for a miserable $75,000 when I could have got more."
Notwithstanding the denial of the plaintiff, I find that this was said. I note that Mr Oakes was called by the plaintiff. I have not placed any reliance on who called Mr Oakes to give evidence. It matters not whether the plaintiff or defendant called the witness. A witness's evidence is to be assessed, amongst other things, by their demeanour and the manner in which they give their evidence. I have assessed his demeanour and the manner in which he gave evidence and I was impressed by both. Although he indicated that the events occurred some time ago, and I do not attach as much reliability to his recollection of other things said to him on that date, this remark was recorded in a written statement shortly after it was made and adopted by him in his evidence and I accept that it was said.
His evidence as to what the plaintiff said to him on 27 July 2004 is significant. It is common ground that the sum of $75,000 had been paid to the plaintiff on or about 17 July 2004. The plaintiff denied making this remark. The remark which I find was made by the plaintiff to Mr Oakes clearly relates to the agreement reached at the meeting of 18 June 2004.
This is a significant admission against interest made by the plaintiff.
As to Jennifer Thompson, called by the defendant, I was not impressed by her.
I do not accept that she was impartial. I found her evidence was not convincing and I simply do not believe her evidence.
I observed Ms Thompson closely in the witness box. I find the evidence that she gave relating to the meeting of 17 June 2004 to be unreliable (I find that the meeting in fact took place on 18 June 2004 I do not consider the variance as to the date to be significant). I was not persuaded by her evidence. I do not accept her evidence. She specifically stated the reason she prepared the statement (Exhibit 50) was because she wanted Mr Mezzatesta, who was then her de facto, to press charges. She accepted that if charges were pressed, she would be important and would be required to give evidence about the conversation and what happened. She stated that, in effect, one of the main reason for making the statement was because of the conversations she had with the plaintiff, her evidence being she had discussed the alleged sexual assault with him, that she was also present when the plaintiff grabbed Mr Mezzatesta and she accepted that the police would be interested in every detail that she could recall of the conversations and the location of those conversations.
However, Exhibit 50 contains no details of the conversations relating to the alleged sexual assault, nor to the alleged physical assault by the plaintiff on Mr Mezzatesta. Several of the very reasons she gave for preparing the statement do not appear in the statement. I do not accept her as a witness of the truth. It is unnecessary for me to find whether this statement has been prepared to bolster the case of the defendant in these proceedings or in other proceedings or for some other reason, I simply do not accept her as a witness of the truth and doubt the accuracy and reliability of her evidence. I do not place any significance on the difference as to the date of the meeting. She refers to this meeting taking place on 17 June and the plaintiff refers to it taking place on 18 June. I do not place any significance on the different dates.
I am clearly entitled to accept part of what a witness has said and reject part of what that same witness has said and to find that a witness may have a correct recollection of events on some matters and not on others, however I do not accept Ms Thompson as a credible witness and I do not accept or rely upon her evidence as to the meetings of either 17 June or 27 July. I did not find her a satisfactory witness and I have doubts about accuracy and the reliability of her evidence.
As to Mr Mezzatesta, I do not accept that he is a witness of the truth. Under cross‑examination time and time again he was exposed as a person who was prepared to say anything that suited his purposes. He was at times unable to give explanations about matters which required explanation. He was quick to blame others ie the transcribers (when asked about his evidence at the WAIRC), lawyers (when asked about the pleadings) and accountants (when asked about the figures). I find that at the material time the business owned by Mr Mezzatesta was short of cash. It had, as is common ground, incurred losses for years ending 30 June 2001, 2002 and 2003. The business was clearly experiencing some financial difficulties as it evidenced by the losses for the years that I have referred to. Mr Mezzatesta, on his own admission, was at various times "stressed", "under a lot of pressure" or "tired and in need of a break". Efforts were made to increase the overdraft of the business (Exhibit 14) by $10,000, money was borrowed from his de facto partner's mother. He was using the company's EFTPOS card to pay personal expenses from the business account. He was making personal Esanda payments and child support payments from the company's account, even though the overdraft had been exceeded. Notwithstanding that the plaintiff had earned a commission of $31,522.73 (this amount is not disputed by the defendant) no moneys were paid to him. Moneys being paid into the account by the plaintiff were in one instance paid in on one day and taken out of the business on the next day by Mr Mezzatesta. I do find as a fact that Mr Mezzatesta was short of cash.
I found Mr Mezzatesta's evidence contradictory. At times in cross‑examination he gave inconsistent answers being definite about answers and then changing them and I felt that he was on occasions evasive. He initially claimed that he had not worked as a real estate agent since August or November 2004 and later conceded that he had not ceased working as a real estate agent and in fact had started a new real estate business. Initially he said he started the new business about six or seven months after the alleged sexual assault, which would place the start date at either late 2004 or early 2005 later in his evidence he stated the new business commenced in August 2006.
He stuck me as a person who was prepared to say anything which he thought would advance his case.
Mr Mezzatesta's whole case was that the plaintiff was in the business from 1 July 2003 and entitled to share in the income and liable for the expenses and losses from that date. Mr Mezzatesta accepted that on his evidence the agreement (and I add the various pleadings of the defendants) provided that there would be monthly accounting at the end of each month to calculate the monthly profit or loss. Mr Mezzatesta's evidence was that his request for the first payment (Exhibit 10) included an amount of $20,000 which he said was a contribution towards losses. This request was made, as I have found on either 24 or 25 June 2003. The request for the contribution towards loss was therefore made before the losses were calculated. The answer to request for further and better particulars of the amended defence and counterclaim (filed in August 2005) show a loss as at July 2003 was only $26,816. The plaintiff's half share of that loss would be $13,500 (approximately). Mr Mezzatesta further claims that the plaintiff paid a further $30,000 towards losses on 18 July (substituted defence at par 13), once again this payment is made prior to the end of the month and results in a total contribution by the plaintiff towards losses on the defendant's version of $50,000 however according to the answers to request for further and better particulars of the amended defence and counterclaim (filed in August 2005) the total losses as at the end of July 2003 were $26,816.47. On Mr Mezzatesta's version the plaintiff paid a further $10,000 on 29 September 2005, $5,000 on 25 March 2004 towards losses making a total payment towards losses of $65,000 (as pleaded in the substituted defence). By the end of March 2004 the total losses according to the answer to the request for further and better particulars of amended defence and counterclaim filed in August 2005 were $500.89 and the plaintiff's share therefore being approximately $250. I do not find the defendant's evidence to be credible. I do not accept his version of events that the plaintiff had in effect agreed to underwrite the losses of the business for approximately nine months prior to him commencing in the business. I find this inherently improbable. I have also commenced on the fact that the plaintiff had earned a commission of $31,522.73 from the period of March to June and received no payment.
He claims he had paid his half share of the losses of the business "and probably more" by leaving his commissions in the business. It emerged under cross-examination that he was claiming the plaintiff's contribution was being attributed towards losses or expenses before those losses or expenses had been crystallised on a monthly basis. When asked how those losses could be calculated before the month had been completed, he claimed that the requests he was making were not for any specific monthly loss but rather simply for the general overdraft however the fact remains that during a period of time when the plaintiff was paying in approximately $65,000 towards those losses or expenses, Mr Mezzatesta had taken approximately $68,000 from the business, even though on his own admission he was only entitled to approximately $39,000 (pursuant to the further and better particulars).

Further, the books of the company established that a payment of $10,000 made on 30 September 2003, which was paid by the plaintiff, was recorded as being paid by Mr Mezzatesta.
He stated in his evidence that the agreement was reached at his office, not at the Pig and Whistle. His evidence on a prior occasion to the Western Australian Industrial Relations Commission makes no reference to reaching the agreement at the office, indeed the references are to the "Pig and Whistle".
His attitude seems to have been cavalier towards the plaintiff in stating that it was "just unfortunate that the plaintiff had bought a loss making business". The plaintiff wasn't "led into it or forced into, it's just how it happened".
On his own evidence the business required an additional rent roll costing about $750,000, and the income produced from that rent roll to cover its expenses, yet he did not recall discussing this matter with the plaintiff. Even though personal expenses were being paid from the company's overdraft, he did not tell the plaintiff until April 2004.
Mr Mezzatesta made allegations of serious criminal conduct against the plaintiff. There is no independent evidence to support such an allegation. The relaying of the complaint by Mr Mezzatesta to Ms Thompson is not independent evidence of the truth of that allegation. It is only evidence as to the consistency of Mr Mezzatesta's conduct and therefore relevant to the assessment of his credit. The alleged sexual assault was not formally reported to the police and I do not accept Mr Mezzatesta's, allegation of the sexual assault.
I am mindful that where an allegation of a serious criminal offence is made I must be satisfied on the balance of probabilities in accordance with the test as laid out in Briginshaw v Briginshaw (1938) 60 CLR 336, Helton v Allen (1940) 63 CLR 691 and 711, Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 171:
"When an issue falls for determination on the balance of probabilities and the determination depends on a choice between competing and mutually inconsistent allegations of fraudulent conduct, generalisations about the need for clear and cogent proof, are likely to be at the best unhelpful and at the worst misleading … the most that can validly be said in such a case is that the trial Judge should be conscious of the gravity of the allegations made on both sides when reaching his or her conclusion. Ultimately, however, it remains incumbent upon the trial Judge to determine the issue by reference to the balance of probabilities."
I am conscious of the gravity of the allegation made and I am not satisfied on the balance of probabilities that the alleged sexual assault took place. I do not accept the evidence of Mr Mezzatesta.
The plaintiff's counsel made much of the fact that there had been no reply to the plaintiff's email of 20 June 2004 (Exhibit 15). Mr Mezzatesta denied that he had read the last paragraph but accepted that Ms Thompson had brought it to his attention, including the last paragraph. He described the email (Exhibit 15) as being totally ridiculous. The plaintiff asks me to accept that because Mr Mezzatesta made no attempt to dispute the plaintiff's email that this amounted to an implied admission or acceptance, at least of its contents. There are circumstances where the failure to respond may lead to an inference that you are acquiescing or accepting the contents of what has been put to you. However, it is an inference that may or may not be, dependant on the circumstances, drawn. In my assessment Mr Mezzatesta would not be the type of person who would be likely to respond to such an email to either signify his acquiescence or dispute its contents. He does not strike me as the type of person who would do anything or respond to any matter until he is literally forced so to do. I am not therefore prepared to draw the inference that failure by Mr Mezzatesta to dispute the plaintiff's email amounts to an implied admission or acceptance of its terms.
As far as the plaintiff is concerned, generally I accept and prefer his evidence. I accept that he was in full‑time employment at Murdoch University in a job that provided security and I find that he would not have left that employment if not promised the equivalent or better income. I find that the crucial income representation was made. In particular I find that during the course of the discussions of 3 June 2003, which discussions took place at the Pig and Whistle, inquiries were made by Mr Mezzatesta as to what income he was earning to which the plaintiff replied "About $70,000" and the plaintiff was assured by Mr Mezzatesta he "would easily match that". I accept that the plaintiff was told this on at least two or three occasions and I further find that the plaintiff told Mr Mezzatesta that he would not leave his employment if he was not going to receive an income matching his current earnings. I find that this representation was made and that in reliance upon that representation the plaintiff, in due course, left Murdoch University, completed the REIWA course and commenced employment in the business of SDRE. I have no hesitation in accepting that he would not have left his employment or entered the business unless he had been assured that he would have earned the equivalent to his then salary. I find that without that representation he would not have agreed to pay $130,000 for a share of the business.
The defendant's counsel made much of the use by the plaintiff of the words "mythical" or "hypothetical" in conjunction with the reference to the $70,000, when he was giving evidence in the West Australian Industrial Relations Commission. I think the proper context of that evidence is that by the time it was given in February 2005 the plaintiff was referring to the figure as being "mythical" or "hypothetical" because he had not received any of that money.
I place little reliance on the diary entries made by the plaintiff (Exhibit 8 and Exhibit 17). They are clearly self‑serving. As to whether they were made contemporaneously, there is no independent evidence. I am minded of the defendant's counsel's suggestions that the entries are both "too convenient" and in somewhat different terms to the plaintiff's evidence. The diary entries are of little significance.
I am mindful that in the Writ issued by the plaintiff on 18 August 2004 his claim was for the sum of $47,000 pursuant to the agreement of 18 June 2004 and there was no claim based on any misleading or deceptive conduct. The plaintiff maintained that he always told his lawyers the same story, leaving the decision of which claimed to proceed with them. He accepted that originally he considered the return of his $47,000 to be fair and responsible. I further note that in the email of 20 July (Exhibit 15) there is no suggestion of any misleading or deceptive conduct. I do accept the plaintiff's submissions on this matter, that Exhibit 15 was an email whereby the plaintiff was recording his version of what had been agreed as opposed to setting out the entire history of the various matters between the parties.
It was submitted by counsel for the defendant that it is inherently improbable that the second defendant would enter into an agreement whereby the plaintiff was acquiring half the assets, half the losses and half the profits of a company, yet at the same time receiving an assurance or representation that notwithstanding that purchase, he would be in essence guaranteed that he would earn $70,000. I simply do not find anything inherently improbable in the second defendant representing to the plaintiff that the plaintiff would easily match the income he was earning at Murdoch.
Nor do I attach any significance to the submissions made that it was inherently improbable that Mr Mezzatesta would have entered into an agreement in June 2003 for the plaintiff not to commence work until March 2004. It is clear from Mr Mezzatesta's own evidence that there had not been a specific agreement as to the date that the plaintiff would start in the business, and he had no firm commitment from the plaintiff. Prior to any moneys being paid Mr Mezzatesta had been advised that the plaintiff would not be starting until July 2004. The purchase price had been reduced from $150,000 to $130,000 in the course of negotiations and Mr Mezzatesta would continue to receive the profits of the business until the plaintiff joined the business. I do not find there to be anything inherently improbable in such a commercial arrangement.
The plaintiff's credibility in my opinion was not dented by his completion of Exhibit 14.2 and in particular the reference to having "nil" income. I accept the plaintiff did not disclose the dividends from his shares and he did not disclose the "prospective earnings" of $70,000 to the bank. It is understandable for a person not then receiving income to complete a form stating he had a "nil" income. It is not unreasonable to interpret a form requiring a person to disclose their income as requiring disclose of income actually received.
In any event, I do accept the plaintiff's evidence that he had contacted the bank to clarify that point and was advised not to declare prospective income. I have not overlooked the failure to disclose the dividends received from his share holding, however this has not caused me to doubt the explanation proffered by the plaintiff.
I accept that the plaintiff had lost his memory for a period of time. I am not, however, prepared to accept this has affected the reliability of his evidence in the absence of any medical expert testimony.
I am satisfied on the balance of probabilities that on 3 July 2003 the representation was made to the plaintiff by Mr Mezzatesta that he would easily match his then income of approximately $70,000 per annum. I am satisfied that a further representation was made that Mr Mezzatesta and other real estate representatives employed by the company would conduct weekend home opens on behalf of the plaintiff. In any event, the plaintiff did not request Mr Mezzatesta or other sales representatives to conduct weekend home opens and I do not find that this representation led to the purchase of the share in the business. I do find that the representation leading to the purchase of the share in the business and relied upon was the representation that the plaintiff would easily match his then income of about $70,000.
I find that in reliance upon that representation the plaintiff resigned from his employment, completed his REIWA course and commenced employment in the business as of 26 March 2004.
I further find that this was a representation in respect to a future matter within the meaning of s 51A of the Trade Practices Act and s 9 Fair Trading Act with the consequence that they are deemed to have been misleading unless Mr Mezzatesta had reasonable grounds for making them. Sykes v Reserve Bank of Australia (1998) 88 FCR 511 at 514‑515. O'Neill v Medical Benefit Funds of Australia Ltd (2002) 122 FCR 455 at [17]-[20]:
Once the Court is satisfied that the representation has been made, the defendant then bears the onus of proving reasonable grounds. ACCC v Emerald Ocean DistributorsPty Ltd [2005] FCA 1703 at [30].
The defendants do not allege that Mr Mezzatesta had reasonable grounds. They deny the representations were made.
The misleading or deceptive conduct need only be a material or non‑trivial cause of the loss and need not be the sole or dominant cause; Franich v Swannell (1993) 10 WAR 459 at 476, Henville v Walker (2001) 206 CLR 459.
The plaintiff's loss is the loss that he sustained as a result of his actions and reliance on the misleading or deceptive conduct and as I have found, in reliance on the misleading or deceptive conduct he purchased for $122,000.19 a share in the business, resigned his employment at Murdoch University and commenced to carry on work as a real estate representative in the business Henville v Walker (supra) at pars 119, 132 - 135, 153 - 162.
The relevant measure of the loss is the difference between the income that the plaintiff would have earned at Murdoch University and the income that he in fact earned after resigning that employment. It would seem on the authority of O'Neill v Medical Benefit Funds of Australia Ltd ((supra) at par 29) at least until his income reached its former level. However, in this particular case the plaintiff limited their claim for the income lost until 30 June 2005. The plaintiff specifically does not pursue any further losses.
It is clear from the evidence that during the period of time that the plaintiff was working at SDRE, notwithstanding he had earned commissions of $31,522.73, this had not been paid.
He commenced employment with the Bay Vista Property Group on 8 July 2004 and remained with that Group until the cut‑off point chosen by the plaintiff on 30 June 2005.
The defendant's counsel drew my attention to Exhibit 20.1 being the PAYG payment summary for the financial year ending 30 June 2005 and specifically that the payer's name was Prime Property Investments (WA) Pty Ltd, submitted that there was nothing to link Prime Property Investments (WA) Pty Ltd to Bay Vista Property Group. This submission overlooks the plaintiff's evidence that Prime Property Investments (WA) Pty Ltd traded as Bay Vista.
The plaintiff's salary, including compulsory superannuation, at Murdoch University was $67,497.16 from June 2002. Although there was a salary increase in June 2003, the plaintiff does not claim that salary increase but adopts and accepts the figure of a yearly income of $67,497.16.
That equates to a total of $84,371.45 over a 1.25 year period (from 24 March 2004 until 30 June 2005). The income earned by the plaintiff at Bay Vista from 8 July 2004 to 30 June 2005 was $19,782.27. The loss suffered therefore being $64,589.18, and accordingly there will be judgment for the plaintiff in the sum of $64,589.18.
The defendant's counsel drew my attention to Exhibit 20.2 (the plaintiff's income return for the year ending 30 June 2005) and specifically the entry in that tax return disclosing that $19,700 had been paid from Murdoch University, submitting that the plaintiff had said in his evidence that that payment was a workers compensation payment as a result of the September 11, 2001, terrorist attack in the United States, whereas Exhibit 21 which was a letter from the workers compensation insurer, referred to a payment of $13,550 gross or $10,568.82 net. The submission on behalf of the defendant was to the effect that as the amounts in Exhibit 21 did not correspond directly to the amount in Exhibit 20.2, the plaintiff's evidence on this point could not be accepted. The plaintiff's counsel was not able to explain this discrepancy. Irrespective of this, the plaintiff's clear evidence was that the payment referred to in Exhibit 20.2 as payment from Murdoch University of $19,710 did not reflect income for any work performed by him in 2005 being payment for other matters and although I accept that there is a discrepancy between the amounts disclosed in Exhibit 21 and Exhibit 20.2, I do accept the plaintiff's evidence that he did not receive any income for work performed from Murdoch University or other source during the period after he left their employment.
As to the misleading and deceptive conduct, Mr Mezzatesta was, I find, a director of the first defendant and a person whose conduct is, by operation of s 84(2) Trade Practices Act 1974 (Cth) and at common law, deemed to be conduct of the first defendant. At the time he was the sole director and shareholder of the first defendant. The second defendant's actions may be taken to be the actions of the first defendant. Moreover, Mr Mezzatesta was himself engaged in trade or commerce within s 10 Fair Trading Act 1987 on the basis that he was acting on behalf of the first defendant in trade or commerce: Houghton v Arms [2006] HCA 59.
Insofar that it is pleaded that Mr Mezzatesta is liable personally on an accessorial basis as he was knowingly concerned in, or a party to, the first defendant's misleading or deceptive conduct (TPA s 75B). The plaintiff must prove against Mr Mezzatesta that he had actual knowledge that the representation was made and had actual knowledge that it was misleading or, has to prove against Mr Mezzatesta as the accessory, what it is not necessary to prove against the first defendants, namely the absence of reasonable grounds for making the representation. This must be established without reliance on s 51A of the Trades Practice Act 1974 or s 9 of the Fair Trading Act 1987.Quinlivan v Australian Competition and Consumer Commission (2004) ATPR 42‑010 at 13.
As the case was presented and developed at trial, it was clear that the plaintiff relied on establishing Mr Mezzatesta's personal liability on the basis that he was a director of the first defendant and was engaged in misleading or deceptive conduct on behalf of the first defendant and as a person who acted on behalf of a corporation in trade or commerce, he was engaged in trade or commerce within s 10 of the Fair Trading Act 1987. I have found Mr Mezzatesta liable personally on that ground. It is therefore not necessary for me to consider the question of accessorial liability and is therefore of the onus under the respective Trades Practices Act.
The plaintiff does not press his claim for damages arising out of the alleged breach of the initial agreement and accordingly I am not required to make any findings on that matter.
As to the subsequent agreement of 18 June 2004 whereby the plaintiff claims an agreement was reached for him to sell to the second defendant his share in the first defendant for the sum of $122,000.19. I do not accept, the evidence of Mr Mezzatesta or Ms Thompson as to this meeting.
Although I found the plaintiff's evidence as to other matters to be satisfactory, in respect of the meeting of 18 June his evidence is insufficient to persuade me on the balance of probabilities that his version of that meeting is correct.
His remark to Mr Oakes that "I am only sorry I signed my interest in this company for a miserable $75,000 when I could have gotten more" could clearly be interpreted as an acknowledgement by the plaintiff of both his dissatisfaction with the agreement that he had made and the fact that he had entered into that agreement.
In view of the evidence of Mr Oakes as to the statement made to him by the plaintiff on 27 July 2004 I am not persuaded on the balance of probabilities that the plaintiff's version of events of the meeting of 18 June is such that it can be accepted. Mr Oakes' evidence has caused me to have sufficient doubts as to the plaintiff's testimony relating to that meeting such that I am not persuaded on the balance of probabilities that the subsequent agreement claimed by the plaintiff was reached.
As said, I do not accept the evidence of Ms Thompson, and I do not accept the evidence of Mr Mezzatesta as to the meeting of 18 June. I do not find Ms Thompson or Mr Mezzatesta credible witnesses for reasons that I have previously explained. I note that $75,000 was paid by Mr Mezzatesta to the plaintiff at a time when according to the plaintiff's own evidence a lesser amount was owing to him. On Mr Mezzatesta's version of events the total amount he was required to pay to the plaintiff was $75,000. He may well have considered that he had obtained a good financial deal particularly bearing in mind that he had been paid $122,000.19 by the plaintiff for the same share that he was now selling back to the plaintiff for $75,000. On the plaintiff's version of events the $75,000 was paid to him at a time when a lesser amount was owing to him. I do not think that Mr Mezzatesta would have paid any money to the plaintiff in advance of the due date.
It is not necessary for me to find as a fact that the subsequent agreement is as contended by the defendants. It is a question of whether or not I am satisfied that the subsequent agreement is as alleged by the plaintiff. As I have indicated a number of factors including Mr Oakes' evidence, the amount of the payment and the date of the payment leaves me in a position where I am not satisfied on the balance of probabilities that the subsequent agreement referred to by the plaintiff was made and accordingly the plaintiff's claim in the sum of $47,000.19 for the breach of the subsequent agreement will be dismissed.

There will therefore be judgment for the plaintiff against the first and second defendants in the sum of $64,589.18 plus interest at the rate of 6 per cent per annum pursuant to s 32 of the Supreme Court Act 1935 from 30 June 2005.