Robin Hood Dev Pty Ltd v Apadana Dev Pty Ltd
[2022] VCC 1925
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
General List
Case No. CI-20-04142
| ROBIN HOOD DEV PTY LTD & ANOR | Plaintiffs/Defendants by Counterclaim |
| v | |
| APADANA DEV PTY LTD & ORS | Defendants/Plaintiffs by Counterclaim |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21, 26, 27, 28, 29, 30 September and 3, 4, 5, 6, 7, 11, 13, 14, 18, 19, 21 October 2022 | |
DATE OF JUDGMENT: | 14 November 2022 | |
CASE MAY BE CITED AS: | Robin Hood Dev Pty Ltd & Anor v Apadana Dev Pty Ltd & Ors | |
MEDIUM NEUTRAL CITATION: | [2022] VCC 1925 | |
REASONS FOR JUDGMENT
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Subject:
Catchwords: Joint venture – Purchase of subject land and joint venture agreement alleged to be the result of misleading or deceptive conduct – Purchase transaction “restructured” based on apparent stamp duty consideration – No evidence in admissible form as to value of land at the date of purchase or joint venture agreement – No valuer called to give evidence – Misleading or deceptive conduct established – Whether damages can be fixed in the absence of evidence of the value of land and first plaintiff’s interest therein – Whether relief may be granted pursuant to Part IV of Property Law Act 1958 – Counterclaim based on alleged loan transaction
Legislation Cited: Building Act 1993; Penalty Interest Rates Act 1983; Evidence Act 2008, Civil Procedure Act 2010; Civil Procedure Amendment Act 2012; Duties Act 2000; Property Law Act 1958
Cases Cited:Turner v Minister of Public Instruction (1956) 95 CLR 245; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; Yorke v Lucas (1985) 158 CLR 661; Briginshaw v Briginshaw (1938) 60 CLR 336; Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413; Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191
Judgment: Orders: 1. Within 14 days of this date the parties must bring in short minutes to give effect to these reasons. 2. Costs reserved.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Ms K Anderson | AMS Ivanhoe Lawyers |
| For the Defendants | Mr B Harding | Jeremy Johnson & Associates |
HIS HONOUR:
Background
1Mr Maddah, the second plaintiff in this proceeding was born in Iran in 1981. (Court Book (“CB”) 2778). He lodged an application dated 26 April 2015 with the Commonwealth Department of Immigration and Border Protection seeking a Business Innovation and Investment (Provisional) Visa. According to his application, in his native Iran, he was “Director Manager and Shareholder” of a company engaged in manufacturing kitchens and distributing kitchen appliances, in particular kitchen rangehoods, sinks and gas stoves”. The registered name of this company was said to be “Rabin Ghomes Co”, carrying on business as “Rabin Kitchen Appliances”. (CB 2787-2791)
2Mr Maddah said he arrived in Australia in October 2016 with the benefit of a “Business Visa Subclass 188”. (Transcript (“T”) 76, Lines (“L”) 12-17) He is resident in Australia at present in accordance with the terms of a bridging visa. (CB 517-519, T77, L10-12) According to Mr Maddah’s visa application, as at April 2015, his “main language” was Persian, also referred to as Farsi. He claimed to “have at least functional English language ability”, though he had not taken an English language test within the previous 36 months from that date. (CB 2789) In those circumstances, he was required to undertake 510 hours of English language study. A training provider known as AMES determined his International Second Language Proficiency Rate as at 12 December 2016. According to Mr Maddah, “the level was negative one, …minus one”. (T78, L4-7) The assessment itself rated him for speaking, listening, reading and writing at “1-”. (CB 2759) Mr Maddah, it seems, read this as “minus one”, viz, a negative value. I would have read it as a positive number, albeit less than one; for instance, 0.75. Almost six years since this assessment, Mr Maddah has completed only approximately 100 of the prescribed 510 hours of English study. (T304, L24)
3Mr Maddah sought to migrate to Australia under these arrangements with his wife, Elahe, and his son, Sam. (CB 2781-2784)
4According to the 2016 application, Mr Maddah’s highest educational attainment was a high school diploma in “computer” obtained from the Iran computer industry technical school in 1997. (CB 2765-2766) His wife, however, was the holder of a Bachelor’s Degree in German Language Translation obtained from Islamic Azad University in central Tehran. (CB 2766) Mrs Maddah attended the premises of AMES on the same day as her husband for assessment of her English language skills. (T304, L8-10)
5Mr Maddah understood that his application for an Australian resident visa required him to invest between $500,000 and $600,000 in Australia. (T78, L28‑31) To comply with this condition, according to Mr Maddah, “because I didn’t have good language skills and nobody whom I knew in Australia. I became familiar with a group of Iranians, and also based on the advertisements on TV in Australia … It was Iranian television [presumably Farsi language program screened in Australia], and also Facebook.” (T79, L2-8) Mr Maddah said he “saw on Facebook, advertisement by Mr Nikfar, who introduced himself as the owner of the Apadana building.” (Ibid, L14-16) Apadana Developments Pty Ltd is the first defendant in this proceeding. The “Apadana building”, to which Mr Maddah referred, is situated at number 3 Red Hill Terrace, Doncaster East. As will appear, this proceeding centres around a development site on the opposite side of the same street at number 10. (Ibid, L25-30)
6According to Mr Maddah, number 3 was an apartment building comprising some 37 units. (T80, L5-8) This building was under construction in 2017. Mr Maddah said he telephoned Mr Nikfar on the telephone number “based on advertisement” [presumably as quoted on Facebook]. (T80, L22-23) Mr Maddah said he [Mr Maddah] “asked him [Mr Nikfar] information and he also asked me for some information. What I was doing in Iran. And I also in return asked, ‘What are you doing here and how long have you been in Australia?’ And the answer was that, ‘I have been here for a long time, and I am here as a developer and construction builder’.” (Ibid, L14-19)
7It seems Mr Maddah then attended a meeting with Mr Nikfar at the Apadana building, explaining to Mr Nikfar that he (Mr Maddah) was seeking investment opportunities to meet the requirements of his visa. (T80, L29-T81, L3) He said Mr Nikfar told him he was aware of the visa requirements “because there are quite a number of people with that type of visa who came here and I assisted them.” (T81, L6-8) Mr Maddah explained that he needed “to bring to Australia five to six hundred thousand dollars and invest here.” (Ibid, L12-14)
8According to Mr Maddah, Mr Nikfar first referred him to a friend of his who owned a restaurant which he was willing to sell, telling Mr Maddah, “You go and have a look and, if you decided to buy, I can help you to buy this.” (Ibid, L17-18) Mr Maddah said he discussed his own business experience in Iran, telling Mr Nikfar that his “father was in development and construction work, but it is many years that he has passed away, and I have a factory of kitchen cabinets and rangehoods.” (Ibid, L21‑25) Mr Maddah said he told Mr Nikfar that he had “apartments and also a factory in Iran.” (T82, L23)
9Mr Maddah said, “The next meeting I had with him and his partners at a coffee shop in Doncaster.” This was about a week after his first meeting with Mr Nikfar in early 2017. (T82, L31‑T83, L7) He said this was “coinciding with the time that I was doing the [English] course.” (T83, L12‑13) Mr Nikfar and Mr Maddah had had dinner at the Mexican restaurant which Mr Nikfar had recommended to Mr Maddah as an investment. This dinner was about a month after the first meeting onsite at number 3 Red Hill Rise, the Apadana building. Mr Maddah said he told Mr Nikfar that his English was not good enough to enable him to operate as a restaurateur. (T84) Mr Nikfar said he migrated to Australia in the year 2000 with his then wife, Ms Shams. (T852, L20‑22) They are both defendants in this proceeding. According to Mr Nikfar:
“When I came to Australia I starting as a construction labour job. I done any job, tiling and painting, and from 2006 – I forgot exactly, I went for a school – I forget the date exactly, which date, it will be in the court book. And I got a certificate for the Master Building Association.” [scil, the Master Builders Association] (Ibid, L24‑29)
10He said this qualification was a “Masters in Building”. (Ibid, L30‑31) He and Ms Shams worked on the renovation of some six to seven properties. According to Mr Nikfar:
“Most of them was the domestic one, we purchasing, like, the old house, we renovate it and we put it on the market to sell it. And sometimes during that time we find a property has a potential for a permit, we get an architect to apply for us to get a permit and at that time the architect, I believe, for sure is famous in the Doncaster area, and we put it on the market to sell.”
(T853, L13-31)
11Mr Nikfar’s work was a small residential rather than major buildings. (T854, L18‑20) According to Mr Nikfar, he and his family are renowned in the expatriate Iranian community:
“We are on the social media, almost nearly 2.5 million we have followers and we showed the Iranian people the corruption of the Iranian Government. Our group convinced the United States and Australia to Iran not (indistinct) but we more talked with the Iranian Government …”.
(T852, L2-7)
12Mr Nikfar said that he and Ms Shams “separated in 2013” (T851, L15), though, as will appear, they continue to cooperate in business matters. Mr Nikfar says that he has suffered psychological problems. He said:
“I was nearly two years when the Iranians kidnapped a friend of mine, Mr Zam, I get a problem for my mental and I get depression very badly and when I heard about the Iranian Government has been torturing and hanging my partner, Mr Zam, I get a bad depression and from that day I was under the psychologist and psychiatrist too.” (Ibid, L20-26)
13He continued, “And from 2015 … I became activated for the human rights”. (T852, L13-14)
14Mr Nikfar placed his first meeting with Mr Maddah on-site at 3 Red Hill Terrace, East Doncaster in May 2017. (T854, L23-28) When Mr Maddah telephoned, Mr Nikfar believed he was looking to buy an apartment at number 3. (T855, L19-23) This “Apadana building” was under construction in 2017. Mr Nikfar was on-site to discuss apartment sales with any Iranian people who might attend the site. (T856) The meeting, he said, took place in a site constituted by a shipping container. (T856, L22 – T857, L2) This was the area used by the builders, not a dedicated sales office. (T857, L15)
15Mr Nikfar said that Mr Maddah showed photographs of high rise buildings in Tehran. (T857, L18 – T858, L5) He said Mr Maddah told him that he:
“had a company in the Persian, Robin Hood, and I was surprised Robin Hood, because Iran doesn't like the name of – it is like robbing, I said, 'How could you get this name in Persia?', he said, 'From the corruption, we pay to get this name, exactly this one, it has been so hard', control of the Islamic revolution and it is impossible for normal people, they get such a name like Robin Hood.” (T858, L8-16)
16As to the qualifications, according to Mr Nikfar, Mr Maddah told him he had “a licence in the concrete”. (Ibid, L22-23) According to Mr Nikfar, Mr Maddah said that his family owned a site in Tehran of 5,000 or 2,000 square metres, which he said was worth 100 million Australian Dollars. (Ibid, L26-29)
17Mr Nikfar said that following this initial meeting, Mr Maddah was “every day [on-site at number 3] without any welcome”. (T860, L4) He said Mr Maddah told him, “I love the construction, sometimes when I have the time to come to visit at the site”. (Ibid, L19-21)
18Mr Nikfar said he showed Mr Maddah the basement at number 3:
“and he was so interested for the concrete and at that time I believe level basement - I think (indistinct) basement and the ground floor has some problem of concrete and I was so upset, has some like broken scratching on the concrete, I was so upset with the builder. And Mr Maddah mentioned to me, 'I'm so qualified to construction, I'm happy to visit that one to give you advice if you want' and I accepted. And I showed him the cracked one on the side, the metal. He said, 'It's normal. In the construction it happens'.” (T860, L27-31 – T861, L1-6)
19Whilst Mr Nikfar did not accept this, he ultimately discovered that it was correct following advice from an engineer. (T860, L29 – T861, L13)
20Mr Nikfar remembered the dinner at the Mexican restaurant being a Taco Bill franchise in Chapel Street. (T870) He said the discussion on that occasion was about “the Iran politics”. There was loud singing and dancing, which limited discussion on any subject. (T872)
21Mr Nikfar remembered a telephone call to his residence at what he regarded as an unduly late hour, namely 8.30pm to 9.00pm. This was in early June 2017. (T873) According to Mr Nikfar, Mr Maddah said: “I have to see you to discuss about business … I have some project I want to show you”. Mr Nikfar said he agreed to meet Mr Maddah the following morning. (Ibid, L22-30)
22At the meeting, according to Mr Nikfar, Mr Maddah had a folder of documents and his laptop computer. The folder contained materials relative to six or seven projects, being plans and planning permits. (T875, L26-30) Mr Nikfar said that Mr Maddah explained that he had obtained this material from an estate agent and had “checked” with Manningham City Council (the municipal council governing the Doncaster area). (T876, L1-3)
23According to Mr Maddah, his next meeting with Mr Nikfar was at a coffee shop with “a Mr Lokhmani and Dodwa, who are in a joint ownership with the wife of Mr Nikfar [viz, Ms Shams]”. (T84, 31 – T85, L3) Mr Maddah said, “The wife [viz, Ms Shams] and the other two, Lokhmani and Dodwa, were jointly owning the Apadana building”. (T85, L5 and 6) It would seem this was a reference to the shareholding and directorship of the developer company, Nestco Pty Ltd.
24Mr Maddah said that Mr Nikfar broached the subject of a development site at number 10 Red Hill Terrace, stating: “John Troiano is a friend of mine and I purchased the land for Apadana from him”. (T85, L13-14) Mr Maddah was asked by his counsel, Ms Anderson, what was said about “the land” in the meeting at the coffee shop, and Mr Maddah replied: “Mr Nikfar and the partners, they all said that this is a good land for investment and has very good return”. (Ibid, L16-19)
25The reference to “the land” has some ambiguity. Mr Maddah had referred, immediately prior to this statement, to two pieces of land, namely number 3 and number 10. In context, however, the reference to “the land” would appear to be to number 10, which is the subject of this proceeding. Mr Maddah said that no other investment opportunities were raised or canvassed at this meeting, which he said lasted for an hour and a half. (Ibid, L24, 29-30)
26It will be seen that on Mr Nikfar’s account, number 10 as an investment opportunity was identified by Mr Maddah and not by him, Mr Nikfar, and it was Mr Maddah, and not Mr Nikfar, who attempted to “sell” number 10 as an investment opportunity. Mr Maddah’s account and case is that number 10, as an opportunity, was raised by Mr Nikfar and not by him, Mr Maddah, and was advocated by Mr Nikfar, and not by him, though Mr Maddah did decide to invest in number 10 via his company, the first plaintiff, which seems to have been named for his factory in Iran and the corporation which operated it.
27According to Mr Maddah, he had a further meeting about a month before the joint venture companies executed the initial contract to purchase number 10. Mr Maddah said that he met Ms Shams, “In the company with Nikfar”. He said, “Ms Shams and Mr Nikfar explained to me regarding this parcel of land to be purchased [viz, number 10] and that it is going to be a profitable business”. (T101, L18 – 102, L3) No documents were considered. According to Mr Maddah, “It was verbal discussion [viz, oral]”. (T103, L2) Mr Maddah said the discussion on that occasion was “solely on this project and the discussion was that the owner of this property is a close friend of us [viz, Mr Nikfar and Ms Shams]”. (Ibid, L9-12)
28Asked about this meeting, Mr Nikfar said, “Your Honour, we don’t have any meeting on the restaurant”. (T1068, L18-19) Mr Nikfar continued “We had just one times in the restaurant and I have a video that I’m happy to show you. In that video, it was the music so loud in there, you can see about this.” (Ibid, L24-27) Mr Nikfar, it seems, was referring to the meeting at Taco Bill.
29Robin Hood Dev Pty Ltd was incorporated in Australia on 12 July 2017, with Mr Maddah as its director and secretary and Mr Maddah as its shareholder. (CB 467‑8)
30Mr Maddah said that the meeting concluded on this note, “I was told that if you bring your money, and if you bring your money quickly, you can purchase this land.” (T86, L1-3)
31Asked in-chief whether he had any further meetings with Mr Nikfar, Mr Maddah said:
“I was told if you bring the money for investment soon, Mr Nikfar is going to go to Hong Kong and he’s there to purchase for the 37 units at Apadana. He can also purchase materials for your building as well, and this could be much more profitable.” (Ibid, L6-11)
32Mr Maddah said, “the idea was to join with Mr Nikfar, because I did not know the language nor I was familiar with the law here”. (Ibid, L13-15) He continued, “We discussed the price of the land and also the cost of construction”. (Ibid, L17-18) This, according to Mr Maddah, transpired at the coffee shop meeting attended by the individuals whom he described as Mr Nikfar’s partner. (Ibid, L19-21)
33Thereafter, Mr Maddah said he received an email “from Nazanin [viz, Ms Shams]”. The email and attached invoice appears at CB 881-2, with most of the text in Farsi. A translation appears at CB 883. The invoice was on the letterhead of “Apadana Dev Pty Ltd [viz, the first defendant]”, and it was headed “10 Red Hill Terrace, Doncaster Easter, Vic, 3109” and included the following text:
“For building three units as agreement
Mr Ehsan CEO of Robin Hood company must pay $1,120,000 and 40% owns share.
A development corporation is established between Apadana Company as the executor of the entire project with the ownership of 60% of the shares under the management of Ms Nazanin Shams and Robin Hood Company with the ownership of 40% of the shares with the management of Mr Ehsan Maddah.
According to this cooperation agreement, Ms Nazanin Shams is appointed the executor of the project with full authority and Mr Ehsan Maddah is appointed the investor and the employee of the Company.
Upon signing the contract, Mr Maddah is obligated to purchase a land and deposit an amount of $100,000.00 to Apadana company’s account followed by the payment of $300,000.00 at the end of September 2017 and an amount of $480,000.00 to be deposited to Apadana Company’s account by the end of October. The remaining $240,000.00 shall be paid to Apadana Company’s account over a period of 8 months.
This invoice is legally binding. It becomes legally binding once it is signed.
With great appreciation.
Nazanin Shams, Director
Apadana Company
This invoice should be signed by Mr Ehsan Maddah at the presence of Nazanin Shams, the Director of Apadana Company.
Thank you for your business.”
34The invoice was designated “Number 1” and referred to a quantity of one item at a rate of $1,120,000, making a total amount of $1,120,000. No GST was provided for, and the invoice concluded: “Balance due $1,120,000”. The invoice was dated 18 July 2017 and stated “Due date: 17 August 2017”. There was a heading “Bill to: Robin Hood Dev Pty Ltd”. (CB 883)
35A document which assumed some significance in the narrative, was a document headed “FEASIBILITY 10 Red Hill Terrace, Doncaster East, 3 Penthouse Apartments, 3 Level Building – Developer’s View” dated 12.4.2017”. This document appears at CB 1701 and projected a total project cost described as “Grand Total” of $2,793,839, with a total net profit of $596,961, representing a 24 per cent return on invested capital and a 21 per cent return on project costs. The “asking price” for the land “with a permit” was stated to be $1,300,000, to which were added a variety of additional items such as legal fees, rates and taxes, interest holding costs at 5.5 per cent, a borrowing cost of 1 per cent, and stamp duty of $71,500, making a sub-total attributed to “land costs” of $1,447,986.
36I asked Mr Maddah during his evidence-in-chief: “Did you first see this page, the feasibility, before or after you signed the contract?” Mr Maddah replied, “After the signature”. (T124, L14-16) This was a significant statement because the plaintiffs’ principal claim here is for damage suffered by reason of misleading or deceptive conduct. The damage is said to flow from Robin Hood’s entry into a contract to purchase number 10.
37If, as Mr Maddah’s answer just quoted, indicated he first sighted this feasibility only after the contract was signed on behalf of his company, and it was committed, the feasibility would be causally irrelevant to any loss said to flow from the first plaintiff’s entry into the contract. It was for this reason, presumably, that two days after Mr Maddah gave this evidence, though still in the course of his evidence-in-chief, the plaintiffs’ counsel, Ms Anderson, asked him: “Is it correct that you first received that feasibility study after you got back from Iran?” Mr Maddah answered: “Yes”. The transcript describes that answer as “direct” [viz, given without intervention of the interpreter]. (T236, L12-14)
38As the narrative hereafter will show, Mr Maddah’s trip to Iran was after the contract for the purchase of number 10 was entered into by Robin Hood, Mr Maddah’s company, by signature on its behalf by Mr Maddah.
39Following further questions from Ms Anderson, Mr Maddah said:
“I was told that John Troiano has worked on the profit that you could have from this joint venture and also I was told, 'We have also investigated that with our partners and this has a good profit in it' and he showed me these figures and the profit in it.” (T236, L29 – T237, L3)
40I pointed out that his earlier evidence was that he had only received the booklet which contained the “feasibility” after his return from Iran, which would place the matter some months after Robin Hood signed up to buy number 10 [viz, his signature]. Mr Maddah replied, “It could be my mistake. I had not been given this to me before travelling and I was given this when I came back from travel, but I had seen it before.” (T237, L11-13)
41Mr Nikfar said that Mr Maddah had already made his own feasibility study prior to the meeting and had it available in electronic form on his laptop. The narrative, he said, was “in the Persian language”. (T879, L11-15) He said this feasibility included an amount of $5,000 for bribes. (Ibid, L29-30) Mr Nikfar said that Mr Maddah asked him to contact Mr Troiano as putative vendor of number 10 seeking some information. Mr Nikfar said Mr Maddah asked if Mr Troiano still owned number 10, and he replied it was still under his control. (T880, L5-7) Mr Nikfar said that Mr Troiano delivered a box of documents relative to number 10 and other pieces of land. (Ibid, L21-30)
42Perhaps, surprisingly, according to Mr Nikfar, he did not, in his initial conversation with Mr Troiano relative to number 10, seek the asking price. (T881, L9-13) It seemed to him that there was some reference to price, but Mr Troiano replied, “I bring for you the document and we can discuss”. (Ibid, L20) He said Mr Troiano added, “I am a negotiable person”. (Ibid, L26) Once the box arrived, according to Mr Nikfar:
“Mr Maddah, he carrying the box and we went to the site office and almost two or three hours we discussed about the paperwork and having a look at the plan, the plan it was amazing really. And I wasn't happy with the feasibility at that time.” (T882, L21-25)
43According to Mr Nikfar, the box of documents produced by Mr Troiano included a booklet comprising various plans and drawings and the feasibility study already referred to (CB 1701), and a further booklet containing a different feasibility study. This one was dated “1.3.2017”, but otherwise had the same heading as the other feasibility study. It described the asking price as $1,450,000 in contrast to the $1.3 million on the other feasibility. The total land cost was put at $1,635,445. The total development cost was shown as $2.640.366, with the total development cost, “the grand total” of $3,030,815, yielding a total at profit of $1,069,505, representing a 41 per cent return on invested capital and a 35 per cent return on project cost. (CB 2216)
44Also included in the box of documents from Mr Troiano, according to Mr Nikfar, was a valuation of number 10 by Savills, as at 28 April 2017. This valuation gave an “as is” market value of $1,070,000 excluding GST or a “project related site assessment of $1,260,000 excluding GST”. The latter valuation, which made allowance for the land’s potentiality, would appear to be the appropriate evaluation for present purposes. (Turner v Minister of Public Instruction (1956) 95 CLR 245) It will be seen that this valuation appears to line up with the first feasibility which refers to an “asking price” of $1.3 million.
45The Savills valuation was made on the basis of the pre-sale of apartments 1 and 3 for $1.2 and $900,000 respectively. Both sales were said to have been made on 12 April 2017, with a 10 per cent deposit, the purchaser for unit 1 being Anita Paterson, and the purchaser for unit 3 being John Hassan. Ms Anderson observed the “asking price” of $1.45 million in the second of the higher of the feasibility studies was reached without the existence of either of those pre-sales dating back to March with the pre-sales said to have occurred in April.
46Mr Nikfar said that he and Mr Maddah were looking at another property in a street called Gallon Way, also in the Doncaster area, with a permit for two units. Mr Maddah favoured Red Hill Terrace, remarking: “10 Red Hill is 1.45 [million dollars] for three”.(T897, L27-28)
47Mr Nikfar said, “When Mr Maddah convinced me and I called John Troiano, I said, ‘Yes, we are interested in your project’.” (T898, L8-10) Mr Troiano, according to Mr Nikfar, said “just organise the pay for everything”. (Ibid, L15) He said he made the decision in principle that it would be profitable “for us” to buy number 10, remarking: “Mr Maddah convinced me”. (Ibid, L24-28)
48After lengthy cross-examination by Ms Anderson, Mr Nikfar agreed that he told Mr Maddah in substance: “It’s a very good project, it’s a good site”, referring to Number 10. (T1048, L17-28)
49Meanwhile, Mr Nikfar said he had planned to take a business trip to Hong Kong “to check the quality of the 3 Red Hill Terrace [materials]”. (T900, L6-9) Mr Nikfar said:
“I tell Ms Shams, this guy came from Persia, he would like to do some business with us, he has fantastic knowledge. Ms Shams said, 'Definitely answer is no. The project is small for me and I'm busy with 3 Red Hill Terrace.' And I didn't push her because we have some personal problem in the family. I said, 'Okay, you're the boss, I will come back to Mr Maddah and tell Ms Shams didn't accept it.' And I tell Mr Maddah Ms Shams didn't accept it, she is the director of Nestco, I said, 'Let me try and I will discuss with Ms Shams', he said, 'Most welcome.' And Mr Maddah then to see Ms Shams, it was 3 Red Hill Terrace, Doncaster East with the computer and some hard copy, but I wasn't present at that time. When Mr Maddah came back he said, 'She loved the plan when I explained it', 'I have to think about it.'.” (T899, L12-28)
50Mr Maddah said:
“With the coordination with Mrs Shams and together and her daughter, we went to a district called Kew and at a commercial building. We entered an office and we sat there and Mr John Troiano came and it was the first time that I met Mr John Troiano.” (T122, L14-18)
51This, it seems, occurred on 20 July 2017. The signatures of Ms Shams on behalf of Apadana, the first defendant, and Mr Maddah on behalf of the second plaintiff, Robin Hood Dev Pty Ltd, appear on a contract for the purchase of 10 Red Hill Terrace, Doncaster East from Lextrip Pty Ltd, a company apparently associated with Mr Troiano. Mr Troiano’s signature with the same date appears on behalf of Lextrip. (CB 153)
52The price for the property was $1,450,000, with a deposit of $145,000, $72,500 of which was expressed to have already been paid, with the balance payable 7 August 2017, with a balance of $1,305,000 payable. (CB 154) Settlement was due on 21 November 2017. (CB 155)
53The vendor’s solicitor, who apparently drew the contract and associated documentation, was Sergio Guerra, with the purchasers’ solicitors being shown as Mahons Lawyers, Mr Roger Johnson. Mr Roger Johnson was called as a witness for the defendants. He said that he had acted for Mr Nikfar and Ms Shams over a number of years “in relation to property development and commercial matters” and had known them for eight years. (T400, L15-20) Since the events of 2017, he had retired from practice on 31 March 2021. (Ibid, L14)
54Mr Johnson said that he met Mr Maddah for the first time when Mr Maddah drove Mr Nikfar and Ms Shams “to VCAT, to do a directions hearing”. (Ibid, L22-23) Mr Maddah drove Mr Johnson back to Mahons and then drove Mr Nikfar and Ms Shams back to their home. (Ibid, L24-27)
55As will appear, Mr Johnson was involved in drawing a joint venture agreement. Whilst Mr Mahon, as a partner of the firm, had overall responsibility for the conveyancing relative to number 10, in practice this conveyancing element was dealt with exclusively by conveyancer, Mr Ken Chalmers. (T427)
56At some stage, the parties executed a document styled “Joint Venture Operations Deed”. (CB 128) Precisely when and in what circumstances this document was executed was in dispute between the parties. It is common ground that Ms Shams signed the document on behalf of Apadana Dev Pty Ltd, and Mr Maddah signed on behalf of Robin Hood Dev Pty Ltd. The document included a Schedule which assigned a 60 per cent participation interest to Apadana, and a 40 per cent participation interest to Robin Hood. (CB 149-150)
57Clause 6.1(b) required Robin Hood to contribute $1,120,000, $100,000 of which was expressed to have been paid to Apadana already; $300,000 was to be paid by 30 September 2017; $480,000 “on or before 31 October 2017”; and the balance of $240,000 was payable “on or before 8 August 2018”. (CB 139)
58According to Clause 3.2, under the heading “Participant’s Acknowledgments“ paragraph B(ii):
“Robin Hood: in addition to providing Robin Hood’s financial contribution, Robin Hood will provide the services of Eshan Maddah who will be employed by the manager as a site manager at a salary of $40,000 per annum which is a joint venture expense”. (CB 138)
59The project the subject of the joint venture was defined as the maintenance, division into the lots, development, partition and distribution in kind of the land in accordance with the plan of sub-division or as determined by the manager. The land was defined to mean 10 Red Hill Terrace, Doncaster East. The manager was defined to mean Apadana which, according to the definition at CB 134, was “appointed by this agreement to manage the affairs of the joint venture and carry out the project”.
60Clause 6.3 obliged Apadana to open a joint venture account and participants’ account.
61Clause 11.1 restricted the entitlement of participants unilaterally to deal with its interest in the land or the joint venture. (CB 143)
62A 50 per cent or more change in the underlying beneficial ownership of the shares in Robin Hood or Apadana was designated as an event of default. (CB 131-132) There was also a covenant on the part of Robin Hood not to “DISCLOSE OR AGREE TO DISPOSE OF AN INTEREST IN ANY JOINT VENTURE ASSETS OR THE JOINT VENTURE OPERATION OTHERWISE THAN PURSUANT TO THIS DEED”. (Clause 3.1.2(K), CB 137)
63Mr Johnson produced a diary note dated 25 July 2017 of a meeting which he said occurred at his office attended by Mr Nikfar, Ms Shams and Mr Maddah. He said, “and the purpose of the meeting was for the joint venture participants to provide me with the terms to enable me to prepare the joint venture agreement”. (T402, L12-15) It was not suggested that the joint venture agreement as drawn, and already referred to, departed from the instructions recorded in the diary note.
64The meeting was conducted in English and Mr Johnson said he spoke to Mr Maddah in English. (T403, L25-26) He said it seemed to him, Mr Johnson, that Mr Maddah was understanding what transpired. From time to time he sought clarifications from Ms Shams, who provided them to him in Farsi. (T404, L6-12)
65Mr Johnson’s belief that Mr Maddah understood what was being said derived not so much from his speaking up and engaging in conversation, but, rather, remaining silent and looking sage. (Ibid, L13-17). Mr Johnson said that this was the one and only conference held at his offices relative to the joint venture. (T410, L14-17)
66As noted, according to Mr Johnson, his one and only meeting with the parties in this proceeding was to take instructions as to the provisions to be included in the joint venture agreement. By definition, the agreement was not available for signature on that day. According to Mr Maddah, however, there was a further meeting at which the agreement was executed and discussion was had between Mr Nikfar, Ms Shams and Mr Johnson, with Mr Nikfar and Ms Shams providing explanations to Mr Maddah of at least part of what Mr Johnson was saying. (T137‑9) Mr Maddah seemed uncertain as to whether there were two meetings with Mr Johnson or only one. At any rate, he put the meeting at which he signed the joint venture agreement before his departure to Iran on 14 August 2017. (T140‑1)
67Whilst Mr Johnson did not investigate his former firm’s time ledger to exclude the possibility that there was a second conference, his memory was that none occurred. (T423) He categorically denied that the joint venture agreement was signed at his office. (T423, L27 – T424, L1) Mr Johnson said he remembered telephoning Mr Nikfar to follow up the fate of the joint venture agreement asking, “What’s happening with the joint venture agreement?” and being told it had been signed, he said he needed an original and one was dropped into his office. (T424, L3-7) In contrast to the document as executed, the final page of the version as prepared by Mahons omits a final blank page contained in the execution copy, something which would be unusual and somewhat unprofessional for a document prepared by a law office. In addition, the format of the document as executed is irregular. Most of the print in the execution copy is in the customary capitals and lower case. However, in paragraph 1.2 to the end of paragraph 3.3 of the document as executed the clauses are all in block capitals, again a feature which would appear unprofessional in a document prepared by a law office. Indeed, within the island of block capitals, a further island of orthodox caps and lower-case print appears at paragraph 1.3. (CB 1090)
68The next document chronologically, assuming the correctness of the date which it bears, is a document styled “Agreement” between Apadana and Robin Hood of the first part, ascribed as the ‘Developer’, and Hassan Developments Pty Ltd ascribed as the ‘Project Dealer’. This agreement (CB 317) bears the date 20 October 2017, that is, some three months after the date of the real estate sale agreement relative to number 10 and prior to the date in November scheduled for completion of that contract.
69The agreement appears to be executed by Hassan Developments via an attorney, Mr John Troiano, by Apadana via the signature of Ms Shams as its Director and by Robin Hood by way of signature by its director, Mr Maddah. (CB 329) The terminology in the agreement is inconsistent. It refers to Hassan Developments in the heading as “The Project Dealer” and Apadana and Robin Hood collectively as “The Developer”, but refers to them in the operative clauses and the recitals as “TD” [viz, Apadana and Robin Hood] and Hassan Developments as “TPD”.
70The purpose of the agreement, according to the recitals, was a wish by Apadana and Robin Hood to reimburse Hassan Developments “all costs it has incurred for the creation of the Project on the Property including any interest in the land, the plans conceived, marketing material and any other items belonging to ‘TPD’ relating to the property as described in the schedule. (“The Property”) and the parties are now formalises [sic] their arrangement outlined in this agreement.” The property is described in the schedule as being number 10. The reimbursement sum is $785,000 with $145,000 expressed to be payable to Hassan Developments “on the Signing of this Agreement”, $155,000 payable to Hassan’s “Lawyers trust account on the Signing of this Agreement and released to [Hassan] when the Developer and the Registered Proprietor, Anna Darroch, exchange a Contract of Sale for the Property herein”, and the balance of $485,000 said to be payable on the settlement of the property. (CB 328)
71Mr Maddah agreed that he had signed this agreement (T185, L21-25) with Mr Troiano and Ms Shams signing at the same time. Mr Maddah also agreed that initials appearing at various places on the agreement were his. (T186, L11-13) Mr Maddah said, “Wherever they asked me to put my initials, I placed my initials.” (T187, L28-29) Mr Maddah also identified his signature appearing on a contract for the purchase of number 10 from a Ms Anna Darroch for a total sum of $630,000. The sale agreement bears the date 23 October. Mr Maddah said, “I didn’t go anywhere on 23 October to sign anything.” (T188, L19-20) He said he did not write the date on the document. (Ibid, L30) Mr Maddah said that he signed the Darroch agreement, “In Troiano’s office where Mrs Shams signed and I signed above it.” That is, he said he signed the Darroch contract on 20 July 2017, not 23 October, the date which it bears. (T189, L15-17) CB 2280 includes a Deed of Mutual Surrender as between Ms Darroch and Lextrip. The contract so surrendered is not in the Court Book.
72Mr Maddah’s account would seem to have it that he, as a non-English speaker, was ignorant of the various manoeuvres and was simply led blindly to execute documents inspired by others without his appreciating what was going on, even in the broadest terms.
73The Hassan agreement included a special condition (CB 327) on a page subscribed apparently by Ms Shams, Mr Maddah and Mr Troiano, on behalf of Hassan Developments, in the following terms:
“PRICE ADJUSTMENT DISCOUNT
In the event that the deposit is released in accordance with Item 3 stages 1 and 2 of the schedule herein then this agreement shall be discounted by the sum of $485,00 (FOUR HUNDRED & EIGHTY FIVE THOUSAND DOLLARS)”
74Mr Nikfar gave a different account of how these documents purporting to have been executed in October 2017 came into existence. According to Mr Nikfar, when he returned from Hong Kong after the execution of the original contract with Lextrip on 20 July, Mr Maddah called on him “with the computer, he showed me again the feasibility. On his feasibility he show but he pay around $89,000, something like that, $82 [viz, $82,000] or $89,000 for the FIRB.” [viz, Foreign Investment Review Board] (T915, L13-16)
75According to Mr Nikfar the parties [viz, Ms Shams’ company and Mr Maddah’s company] were “trying to save their FIRB and stamp duty. (Ibid, L20-21) Mr Nikfar said, “Every single day Mr Maddah, he said, ‘if I was in Iran we can do many things to save for the legal cost all the stamp duty’ they call them in Iran in different way. And I tell Mr Maddah, ‘Regardless, we sign it three days, we finished’ [a reference to the cooling off period] and he said, ‘Why you shouldn’t ask him, John Troiano, maybe we can sell the contract and get a new one.’” (T917, L29 – T918, L4) Mr Nikfar said he spoke to John Troiano who was enthusiastic to solve the problem. (T919, L11-17)
76The effect then, according to Mr Nikfar, was that these documents were brought into existence to minimise stamp duty or some levy made by the Foreign Investment Review Board. Ms Shams said Mr Maddah’s account of having signed the Darroch contract at Mr Troiano’s office on 20 July was “Completely lie”. (T567, L14‑19).
77Ms Shams summarised the arrangements apparently made in October 2017 as follows. “Cancel the Lextrip … enter to the Hassan … Because we try to settle directly with the Anna Darroch and we have to pay the people who operating the plan and permit for that property, which is, they had a caveat with the vendor at the time.” (T562, L5-15) She referred to the schedule to the Hassan Developments Pty Ltd agreement and the $485,000 which according to Item 3 of the schedule was “payable on the Settlement of the Property”, the final payment provided for in that agreement. Ms Shams said, “we pay $785,000 as part of the land price. This is part of the land price.” (Ibid, L27-29) She said settlement of the Darroch contract took place on 3 November 2017. (T565, L6-7) She said funds provided by Mr Maddah were used to settle the Darroch contract and the Hassan Developments contract was settled with money provided by her. (Ibid, L8 and 9) According to Ms Shams, this $485,000 was paid in cash, literally, viz, in bank notes, not by computer transaction or bank cheque. She said she had the cash as a receipt from two purchases of apartments, presumably at number 3. (T564) Ms Shams said, “I ask Mr Nikfar to carry the money and hand it to Mr Troiano.” (Ibid, L26-27)
78As to Robin Hood’s obligations under the joint venture agreement, Mr Maddah said, “I [viz, Robin Hood] honoured the payment according to the schedule in the document.” (T147, L21-22) He said a payment of $100,000 was deposited in Apadana’s bank account on 21 July 2017. (T149, L17-21) An ANZ deposit slip appears at CB 310. A further deposit of $300,000 was recorded on an ANZ deposit slip dated 2 October 2017 at CB 311. Mr Maddah said that Ms Shams, Mr Nikfar and he went to the ANZ Bank Donvale Branch to make the deposit. (T150, L1-6) He said, “The arrangement was that an account be opened and the amount be deposited into that account.” (Ibid, L5-6) The deposit was made he said by transferring the funds from the Westfield Branch of the bank, presumably from an account controlled by Mr Maddah or Robin Hood, to the newly established Apadana account. (T150, L10-11) Court Book 312 includes a photocopy of a cheque drawn on Robin Hood’s account at ANZ Donvale for $480,000 payable to “Apadana Dev”. The cheque is dated 20 October 2017. Mr Maddah said that the cheque was written out by Mr Lokhmani, who Mr Maddah described as “a business partner with Ms Shams”.
79It will be recalled that Mr Lokhmani was a director of Nestco, the developer of number 3. (Ibid, L19-31) Mr Maddah said that the next payment due by Robin Hood under the joint venture agreement was $100,000 payable in February 2018. At CB 341, there is a printout of a “transfer withdrawal … at the Pines Shopping Centre Vic” relative to a Westpac Business One account. Mr Maddah said that he went to the bank branch at the Pines Shopping Centre with Mr Nikfar to affect this transaction. (T154, L21-25) Mr Maddah said that Mr Nikfar provided him “with the account details”, presumably the details of the account into which the transfer was to be credited. (T154, L21-26) The making of these several payments on behalf of Robin Hood is common ground between the parties.
80A further payment said to have been $100,000 in total, consisting of bank cheques for $30,000 and $70,000 respectively, drawn by the Commonwealth Bank of Australia is disputed. Copies of these bank cheques appear at CB 344 and 345. They are both expressed to be payable to a company known as “Australian MIS Pty Ltd”. Mr Maddah explained that though the $100,000 was not then due by Robin Hood under the joint venture agreement, “They [presumably Mr Nikfar and Ms Shams] asked me to pay earlier.” (T155, L12-13)
81An ASIC extract at CB 505 printed out as at 27 July 2020, shows that on that date “Strike-Off Action” was “In Progress” in relation to this company. It had been incorporated on 7 May 2015. Its shares were owned by Mr Nikfar and he was its sole director. Mr Maddah explained that Robin Hood had an account at Westpac but also another one with the Commonwealth Bank. (T156, L20-21)
82Mr Maddah said that he was on site, presumably at number 3, with Ms Shams and Mr Nikfar and they requested the payment. It was Mr Nikfar who stipulated the bank cheque. He said the payment in pursuance of the joint venture agreement was made to Australian MIS at Mr Nikfar’s request. He gave the bank cheque to Mr Nikfar. (T157) Mr Maddah said it was only when he saw the cheque that he realised it was payable to MIS. (T158, L6-7) The bank teller had required Mr Maddah’s signature because it was Robin Hood’s account that was to be deducted. (Ibid, L13-16) Mr Maddah said Mr Nikfar had told him that he had a company named MIS. (T159, L2-4) The process a couple of days later with respect to the further bank cheque for $30,000 was, according to Mr Maddah, “exactly the same as before”. (T159 L31 – T160, L1)
83There was an email in Farsi which was translated by the interpreter engaged on behalf of the defendants as reading, inter alia: “The above amount was received from Ehsan … and the amount is $70,000 plus $30,000” - plus $11,000.” (T161 L21-23) The email was from Mr Nikfar but addressed to Ms Shams.
84A certified translation of that email appears at CB 2757.
85Mr Maddah said that, according to his understanding of the joint venture arrangements, his $40,000 salary for acting as site manager “would be paid … as a lump sum”. (T181, L14-17) He said this was the subject of a discussion with Mr Nikfar and Ms Shams. (Ibid, L20-22)
86Mr Maddah said they told him, ‘“Because you have given us the money early [viz, certain joint venture subscription monies] you don’t need to pay the $40,000”’. (T182, L6-7) He said Mr Nikfar and Ms Shams continued, “`Because your salary will be $40,000, you don’t need to pay now, So that $40,000 salary is for this payment.’”. (Ibid, L10-11) He said this discussion occurred when the last of the instalments under the joint venture was due from Robin Hood [viz, the beginning of 2018]. (Ibid, L12-15)
87Mr Maddah envisaged that his salary of $40,000 would be payable upon the commencement of the development. According to plaintiffs’ counsel, the development never commenced and so the salary was never payable. (T199)
88A building agreement relative to the development of number 10 was signed and dated 31 January 2019. (CB 386, 389) The parties to that agreement were a company, 10 Red Hill Operations Pty Ltd as “principal” and Bluesky Building and Construction Group Pty Ltd (“Bluesky”) as “contractor”. Mr Ahmad Hamoud [or, Mr Ahmad], the principal of Bluesky, also executed as guarantor. (CB 391) The contract was signed on behalf of the “principal” by Mr Nikfar, and Mr Ahmad as guarantor, with his signature witnessed by Mr Maddah, and by Mr Ahmad as director and secretary of Bluesky. (CB 393)
89Mr Maddah said, “For 10 Red Hill, Mr and Mrs Nikfar decided to register new company and they said, ‘We want to make a contract with Ahmad’s company with the new company that we create’.” He continued, stating that Mr Nikfar and Ms Shams said, “`We want to make a new company so that (indistinct) [scil, Mr Nikfar] and Shams do not have any role in it and if we have difficulty – face difficulty with the builder, the land won’t be in danger’”. (T201, L22-30)
90Mr Maddah said that the exclusion of Apadana and Robin Hood as parties was not discussed with him. (Ibid, L21-22) The contract included general conditions of contract published by Standards Australia Limited. (CD2, CB 399) The general conditions were AS 4000 – 1997 as amended. (CB 400)
91On 13 February 2019, Mr Nikfar sent Mr Maddah a text partially in Farsi and partially in English. The Farsi portion translated as “Hello Ehsan my dear! I have sent you the construction permit”. Mr Nikfar signed off with the salutation, “God is kind”. (CB 1456-7) The “permit” in question was granted under the terms of the Building Act 1993 by Mr John Grimbos, building surveyor. (CB 1459-61) It covered “Stage One – To Permit Bored Piers, Capping Beam and Excavation Works Only”.
92Mr Maddah said that on 15 February 2019, Mr Nikfar invited Mr Maddah to call at Mr Nikfar’s residence. Mr Nikfar, according to Mr Maddah, told him that he had to sign some documents which were contained in a large green folder. According to Mr Maddah, Mr Nikfar told him “Nazanin [viz, Ms Shams] has signed all of these documents and you need to sign all of them”. Mr Maddah continued, “and the pen by which Mrs Shams had signed the document was included in the folder. I took that folder and took it home.” (T204, L11-27)
93Mr Maddah said that, amongst the many documents for signature, were documents pertaining to the building contract. In addition, he said: “I saw several invoices and one of the invoices was with the letterhead of my own company and had written a text in it”. (T205, L1-3)
94Mr Maddah identified the invoices to which he referred as being in the Court Book at 449-452. The first of those documents was on what purported to be Robin Hood letterhead. It stated:
“I Eshsan Maddah the director of Robin Hood Pty Limited, authorize your company 10 Red Hill Operations Pty Ltd to choose any builder, with agreed price, to build according to Manningham Council approved plan of three apartments.
Regarding your salary as a director we will be happy when the construction is finalized and I receive your final invoice then I will settle the account within 14 days.”(CB 449)
95A second document in similar form but on the letterhead of Apadana was expressed to be from “Nazanin Shams”. The text was corrected in manuscript so that the document described her as a director of Apadana rather than Robin Hood. The document appeared to have been signed by Ms Shams on 15 February 2019. (CB 450)
96Next, according to Mr Maddah, there was a tax invoice on the letterhead of a company “10 Red Hill Pty Ltd” (not “10 Red Hill Operations Pty Ltd”, the name of the company that entered into the building contract with Bluesky). This purported to charge Apadana $275,000 for “superintendent – building cost control at the site 10 Red Hill Terrace”. Goods and Services Tax of $27,500 was allowed for with the invoice total being $302,500. This document also purported to have been signed by Ms Shams on 15 February 2019, though her name in English is printed in manuscript and was misspelled as “Shmas”.
97The last of the documents which attracted Mr Maddah’s attention, on his account, was another tax invoice in the name of “10 Red Hill Pty Ltd”. Once again for “superintendent – building cost control” at number 10, there was a charge of $275,000 but no allowance for Goods and Services Tax. Again, the document purported to have been signed by Ms Shams on 15 February 2019, and the printed manuscript of her name in English was correctly spelled. (CB 452)
98Mr Maddah said that his lack of English language skills required him to refer these documents to his wife, who does read the English language. (T214, L25-31) Mr Maddah said that as at 2017, his wife was unable to speak English but, having attended English classes since, she had acquired the skill to read English by 2019. (T215, L1-9)
99Mr Maddah was apparently troubled by the demand that he sign all the documents in the folder. He said:
“I can vividly remember that it was a Friday afternoon. I was told that, ‘You need to take all of them to me by next Monday’. I looked at all of the documents [having referred them to his wife he continued] … I became extremely worried. From Monday, the whole of the documents, I took it to my accountant and because he was working in a company and very proficient in English, because my English was not up to it, I ask if he could make sense of the documents.” (The accountant spoke Farsi) (T216, L9-24)
100After referring the documents to his wife and his accountant, Mr Maddah said, “I realised that I no longer can trust Mr Nikfar and particularly with regard to a blank page that had been signed already”. (T216, L28-31)
101On Monday, he said Mr Nikfar rang him wanting him to hand over the signed documents. (T217, L1-6) He said Mr Nikfar pressed for the signed documents and Mr Maddah declined to sign. Mr Maddah then refused to take Mr Nikfar’s phone calls, and Mr Maddah transmitted a series of text messages in Farsi which translated in English stated:
“Can I call you later?
If you bring all my documents by 12:00 am tomorrow, that would be OK. Otherwise, we will come there by the Police.
Ehsan Maddah: Sorry, I can’t talk right now.
We are coming to your house.
I really hope you act like a man.
Be at home in the next 2 minutes.
I am at the door. Come out because I don’t want to enter your house.
I am at the door, step out the door.
Didn’t you tell me that I am hallucinating? Come out the door.
I swear by God, you are not a man.” (CB 1478)
102The only response made by Mr Maddah to any of these texts was “Sorry, I can’t talk right now”. (Ibid)
103As appears, Mr Nikfar came to Mr Maddah’s doorstep. Mr Maddah said he responded, “I don’t want to speak to you any more”. According to Mr Maddah, his wife had just delivered a baby. (T219, L29-31)
104Mr Maddah said, “she did not feel well … and … asked me not to go out and she had been really frightened [that he] would press the horn of his car and it was a very bad night for my family and I”. (T220, L3-11)
105Mr Maddah said that Mr Nikfar “started SMSing my wife and my wife had absolutely nothing to do with this”. (Ibid, L19-21)
106Mr Maddah said that these events caused him to consult his accountant again, “and I said that I have reached a conclusion that I do not want to have anything to do with Mr Nikfar any more, for the sake of serenity at my family and myself”. (T220, L29 – T221, L1)
107Mr Maddah said he then placed matters in the hands of a Mr Mansour Rahimi of Roxan Int Pty Ltd. He said at Mr Rahimi’s office he composed an email which was addressed to Ms Shams, Mr Nikfar and “Roger” (presumably, Roger Johnson at Mahons Lawyers, solicitor to the joint venture). He said Mr Rahimi translated it into English and transmitted it. (T221, L21-29)
108Mr Maddah’s accountant had referred him to Mr Rahimi, who “had a construction company and was a friend of my accountant”. (T222, L6-7) The email said that Mr Rahimi’s company was authorised to speak and act on behalf of Mr Maddah and, inferentially, Robin Hood in all matters relative to the development at number 10. (CB 1479)
109The following day, 23 February 2019, Mr Rahimi, on Mr Maddah’s behalf, sent an email to Mr Roger Johnson at Mahons headed:
“Re: The payment summary and compliance with clause 6.1(b) of the terms of the Joint Venture Operations Deed for the Development at 10 Red Hill Terrance Doncaster” (CB 1481)
110The email included text designated “Appendix A”, which, according to the email, was:
“a summary of all payments paid by our client via banks transfers and cash payments to the Joint Venture Operations Deed account and Apadana and its related entities under the instructions of Apadana’s management within Australia and Iran”. (Ibid)
111The appendix purported to identify some 10 payments made in Australia as follows:
“Payment 1- $100,000.00 Bank Transfer 21st July 2017
Payment 2- $300,000.00 Bank Transfer 02nd October 2017
Payment 3- $480,000.00 Bank Transfer 20st October 2017 [sic]
Payment 4- $100,000.00 Bank Transfer 12th February 2017
Payment 5- $70,000.00 Bank Cheque 14th May 2018
Payment 6- $25,000.00 Bank Cheque 12th April 2018
Payment 7- $5,000.00 Cash Payment 12th April 2018
Payment 8- $11,000.00 Cash Payment 12th April 2018
Payment 9- $5,000.00 Cash Payment 12th April 2018
Payment 10- $1,400.00 Cash Payment 12th April 2018
(CB 1482)
112Somewhat confusingly, this email dated 23 February 2019 was expressed to be responsive to a letter by email from Mr Johnson of Mahons to Mr Rahimi on behalf of Robin Hood and Mr Maddah, in which Mr Johnson made demand on behalf of Apadana for some $240,000 “that Robin Hood has failed to pay Apadana … which required payment on or before 8 August 2018. … we refer you to clause 6.1(b)(iv) of the [Joint Venture Agreement]”. (CB 1485)
113Mr Rahimi sent an email to Ms Shams as director of Apadana introducing himself, stating that his company had been engaged by Mr Maddah:
“to provide support and management consulting services to establish the framework and to represent his interest in the joint venture property development who he is sharing interest with you and your company said Apadana Development.” (CB 1486)
114He suggested a meeting with Ms Shams to discuss the project. (Ibid)
115Mr Maddah had executed a document styled “Service Agreement” on behalf of Robin Hood, appointing Mr Rahimi’s company to provide the following services:
· Management, business consulting and advisory services;
· Construction projects/program management services;
· Complete building and construction services where required. (CB 2546-9)
116The plaintiffs’ counsel, Ms Anderson, agreed the effect of this agreement was that “from here on [viz, 22 April 2019], Roxan was going to do the talking and exercise the powers of Robin Hood as a joint venturer”. (T226, L18-20) The first payment due to Roxan was $26,950. (T226, L29 – T227, L1)
117Mahons then served a document styled “Notice of Default”, given on behalf of Apadana and addressed to Robin Hood and demanding the sum of $255,148.49 by Tuesday, 19 March 2019 [viz, seven days from the date of the demand]. This amount was constituted by the $240,000 previously demanded and said to have been payable in August 2018, with interest of $14,268.49 and $880 costs. (CB 464-6)
118It will be recalled that Mahons had acted for the joint venture and set up the joint venture by drafting the agreement which constituted it. Mr Roger Johnson, who gave evidence on behalf of the defendants, conceded that it was a mistake for his firm having acted for both sides of the joint venture to take a partisan position on behalf of one against the other. He conceded that his willingness to do this derived from his perception that Ms Shams and Mr Nikfar were his “real clients”. (T445, L26-27, T446, L6-7)
119It boded ill for the joint venture that the parties were, by March 2019, communicating only via intermediaries. By the time the trial commenced I was told there were intervention proceedings in the Magistrates’ Court which had led to orders restricting contact between Mr Maddah, on the one hand, and Ms Shams and Mr Nikfar on the other.
120Mr Nikfar gave a different account of the breakdown of relations between the parties. According to him, a document styled “Meeting Minutes” and dated 16 February 2019 was at the centre of the breakdown. As translated, that document stated:
“MEETING MINUTES
Date: 16/2/2019
Parties:
Mr Ehsan Maddah (Borrower)
Address: Units 28-30 Winfield Road, Balwyn North
Mr Vafa Nikfar (Lender)
Address: 5 Friars Court Doncaster East
I, Vafa Nikfar, have deposited the entire amount specified below to the account of Mr Ehsan Maddah. Mr Ehsan Maddah is committed to return the entire principal in addition to 10% interest by 25/9/2019. If Mr Mr [sic] Ehsan Maddah fails to return the principal and the accrued interest by 25/9/2019, the interest will be increased to 15%.
The following is the list of dollar amounts deposited to Mr Ehsab Maddah’s account and his company, Robinhood, on the given dates:
1- 23/10/2017 $14,500 2- 24/11/2017 $5,000
3- 22/12/2017 $5,000 4- 16/02/2018 $$2,522
5- 21/02/2018 $$9,750 6- 19/03/2018 $3,500
7- 04/04/2018 $49,000 8- 07/06/2018 $14,500
9- 20/11/2018 $10,000 10- 02/11/2018 $$12,400
11- 29/03/2018 $5,850 12- 07/06/2018 $$5,850
13- 05/07/2018 $7,000 14- 13/07/2018 $5,500
15- 23/07/2018 $$2,200 16- 30/07/2018 $5,850
17- 17/04/2018 $2,200 18- 24/08/2018 $5,850
19- 25/09/2018 [illegible] 20- 15/10/2018 $5,850
21- 16/02/2019 $30,000TOTAL AMOUNT: $205,122.00
Ehsan Maddah [Signed]
Vafa Nikfar [Signed]” (CB 1476)
121It will be seen that this document purports to be an acknowledgment ex post facto of a series of advances totalling $205,122 made to Mr Maddah and/or Robin Hood over the period 23 October 2017 to 15 October 2018. Such a document would typically speak in the voice of the debtor – the classic promissory note being an acknowledgment of debt by the debtor or, as it is popularly rendered, “IOU”. Here, the document speaks in the voice of Mr Nikfar and the signature, or purported signature, of Mr Maddah constitutes, or purports to constitute, an acknowledgment or acceptance of the creditor’s assertion of an entitlement to repayment. Ideally, one might think that in the event of a series of loans there would be separate “IOUs” or promissory notes signed by the debtor for each advance. If no such notes were required at the time that the advances were made, why, one may ask, was acknowledgment sought in the form of “Minutes of Meeting”.
122Mr Nikfar said: “Mr Maddah, he trying to (indistinct) [scil, sell] his company to his brother-in-law or the friend who came from Germany”. (T934, L13-15) The “company” referred to was Robin Hood. (Ibid, L16-17)
123According to Mr Nikfar, Mr Maddah told him, “’I’m going out of this business’” (Ibid, L24-25) According to Mr Nikfar, he “agreed to meet with that young guy [viz, the brother-in-law or friend of the brother-in-law from Germany] at Carlucci’s Templestowe”. (T935, L4-5) This establishment is apparently an Italian restaurant. (Ibid, L10-11) Mr Maddah was also in attendance. (Ibid, L26)
124According to Mr Nikfar, the would-be purchaser said that Mr Maddah was “asking around $1.8 million for the land enterprise without the construction”. (T936, L6-7) According to Mr Nikfar:
“Mr Maddah explained, because he’s trying to run away from the FRIB [viz, FIRB – Foreign Investment Review Board] for the stamp duty, and I understand if I going to buy in completely the Robin Hood I don’t need to pay again for the FRIB.” (Ibid, L15-18)
125Mr Nikfar said that it would be preferable for Mr Maddah or Robin Hood to sell out to him or to Ms Shams. (T937)
126Ultimately, there seemed to be no clear explanation as to how the meeting at Carlucci’s bore on the Minutes of Meeting dated 16 February.
127Mr Nikfar referred to a complaint made by Mr Maddah to Victoria Police, which appears at CB 109. (T937, L28-31) Given that Mr Maddah’s statement to police was made 19 March 2021, it seems difficult to see this as in any way causative of Minutes of Meeting said to have been brought into existence some two years previously. The burden of the complaint is that the Minutes of Meeting which were the subject of a debt collecting demand by Mahons solicitors, and form the basis for the counterclaim in this proceeding, was a forgery.
128In the course of giving his evidence-in-chief, Mr Nikfar produced an email dated 16 February 2019 transmitted that afternoon at 4.25pm to Ms Shams and Mr Maddah, which he said responded to the proposal for Mr Maddah to sell his shares in Robin Hood. The email began, as translated from Farsi into English, “According to the conversation I had with the lawyer, we cannot transfer the shares of our company, we can only transfer units because the work has started and there is a problem in the book account …”. (CB 3323)
129Mr Nikfar said that Ms Shams was “so worried, she said, ‘What we have to do now, with this guy, is get a loan from us, so much messy’.” (T937, L18-20)
130Mr Nikfar said he responded: “Relax, I will get some paperwork from Mr Maddah to get evidence and later we’re going to the lawyer and we discuss with the lawyer”. (Ibid, L20-23)
131Mr Nikfar said that “the loan agreement” was drawn up “at our house”. (T941, L14) He said Mr Maddah stated, “I will get a copy and I will certify it and I will return it back to you”. (T941, L31 – T942, L1)
132The hostile texts or SMSs and the “screaming match” on Mr Maddah’s doorstep were, according to Mr Nikfar, not in relation to a green folder of documents, but rather the “loan agreement”. (T942)
133I asked him why his text or SMS referred to “all of my documents” when, on this account, he was seeking the return of a single document. Mr Nikfar responded, “Your Honour, this is a good question. I signing the paperwork with the Bluesky, he took that document too”. (T944, L30 – T945, L1)
134I asked, ‘What else did he take? And Mr Nikfar replied, “Bluesky contract of the building”. (CB 945, L2) He said that this contract included not only the legal clauses but specifications and plans: “it was maybe 1,000 pages including the plan and everything, when we sign the paper with Ahmad Hamoud, the builder. He took it himself [that is, Mr Maddah took it]’.” (T945, L23-28)
135Mr Nikfar said that he never recovered the original loan agreement or the original building contract. (T946, L14-15)
136The four contentious documents which, according to Mr Maddah, raised his concerns and led him to seek counsel from his accountant and ultimately placed matters in the hands of Mr Rahimi, namely the letters of authority in favour of Mr Nikfar’s company, 10 Red Hill Operations Pty Ltd, and the tax invoices purporting to be from that company, were discovered and included in the initial version of the Court Book.
137I enquired as to the fate of the “green folder”, given that 16 February seems to have been a pivotal date in the breakdown of the joint venture, and the parties’ accounts were so inconsistent. Further investigation seemed appropriate.
138In response to the interest which I expressed in this “bundle”, it was produced by plaintiffs’ counsel, Ms Anderson, on the morning of day 14 of the trial. It provided a zipper which could enclose all of the documents. It appeared to answer the description given to it by Mr Maddah. It included a number of documents relative to the development, including the legal clauses of the building contract with Bluesky.
139Mr Nikfar was correct in stating that that document had not been returned to him. Presumably, the other part of that contract would have been taken by Mr Ahmad of Bluesky. There was even a felt-tipped pen in a polythene sleeve, as described by Mr Maddah.
140As to the documents which were placed in the original version of the Court Book at 449-452, Ms Shams said they were fake. (T654, L25)
141Mr Nikfar identified a document in a polythene sleeve within the folder as a manuscript document in Farsi in his writing, albeit undated. (T1179) The Farsi document was similar to the document at CB 450. (T1180, L17-18) Mr Nikfar said, as to the latter, “This is a fake document. Because when Ms Shams – we agree and we sign it in the Persian language, doesn’t need it for me writing again for English and writing again fake document.” (T1180, L23-27)
142I asked what the difference was between the typed document at CB 450 and the manuscript document in Mr Nikfar’s handwriting in the bundle, and he replied: “The different, Ms Shams, under that one, is that must be – do it as – doesn’t have any value (indistinct) this paperwork must (indistinct) correctly from the lawyer”. [sic] (T1181, L10-13)
143I told Mr Nikfar that I did not understand what he had said. As best I could understand, he was meaning to convey that the handwritten document was “all subject to legal opinion”. (Ibid, L18)
144Asked about signatures on the documents in the folder purporting to be those of Ms Shams, Mr Nikfar said he did not think it was her signature. (T1182, L2) He had no idea whose signature it was. (Ibid, L6-7) He gave similar evidence with respect to a number of other documents purporting to have been signed by Ms Shams.
145Ms Shams said that during the meeting reportedly recorded in the “Minutes” dated 16 February 2019 attended by Mr Maddah, Mr Nikfar and her, Mr Maddah told her and Mr Nikfar, “I’ve got a really big problem. I’ve told you about problems before but this is really big”. (T592, L1-3) She said that, as a result of this big problem, Mr Maddah sought an advance to him or his company of some $300,000. In fact, Mr Nikfar and Ms Shams were only willing to make $30,000 available. She said the “loan agreement” or “Minutes” were in error in showing this advance as having been made on 16 February, that is, the date of the meeting at which it was signed. The advance was in fact made on 6 February. (Ibid)
146As to these items said to be loans, Mr Maddah said:
“these are the amounts that Mr Nikfar told me as reimbursement of things that I would buy or purchase with his instruction, like paying for Persian rugs, and he would reimburse me some time later, and it was related to the work done at 3 Red Hill Terrace and that I would, as part of my work, do for him and being reimbursed.” (T260, L11-18)
147By a letter transmitted by email, Mahons demanded repayment of a principal sum of $204,995, together with interest of $63,958.82 for the period 23 October 2017 to 14 July 2020, making a total sum demanded of $268,953.62. (CB 1592-3) Mr Maddah denies liability.
148The loans in question were said to have been made by Ms Shams, Apadana, Australian MIS Pty Ltd and Varvi Pty Ltd.
149The breakdown in relations between the joint venturers meant that the development at number 10 did not proceed. Bluesky claimed to have undertaken preliminary works onsite, including site preparation, excavations, soil removal, underpinning, piling and capping beams. It rendered an invoice dated 13 June 2019 in the sum of $126,569.05 (CB 1530).
150Mr Nikfar said that his company, 10 Red Hill Operations Pty Ltd, was dubious as to the validity of this claim and sought advice from a quantity surveyor. The claim was compromised for $85,000. (T1186) There seemed to be some confusion in Mr Nikfar’s evidence as to whether he had given a personal guarantee as director of 10 Red Hill Operations Pty Ltd, and that company’s obligations to Bluesky. Ms Anderson and I, and perhaps Mr Harding, had understood Mr Nikfar to say that he had, though no documents to that effect have been produced. According to the transcript, Mr Nikfar said: “I give him my personal guarantee (indistinct words) Bluesky as a director and I wouldn’t do it at all”. (T1186, L31 – T1187, L2) Whilst it seems to have been appreciated in the opposite manner when the evidence was given, a reading of the transcript shows Mr Nikfar saying he refused to give a personal guarantee.
151Ms Anderson, on behalf of the plaintiffs, put it to Mr Nikfar that in fact no stage 1 works had been carried out. She took him to a photograph at CB 2104, which she said made good that proposition. (T1188)
152Mr Nikfar said that a concrete structure which could be seen at the rear of the allotment, and which concealed some 26 piles, represented the preliminary work undertaken, apart from, one would imagine, some certain works involving the removal or redeployment of soil on the site. (T1189)
This proceeding
153Solicitors acting for Robin Hood and Mr Maddah filed a Writ dated 15 September 2020 commencing this proceeding.
Plaintiffs’ claim
154The plaintiffs sought relief for two distinct pieces of misleading conduct and also relative to what were characterised as “uncommercial transactions”.
155The first piece of misleading conduct was said to have arisen in this way. Mr Maddah was said to have approached Mr Nikfar to “ask for advice in identifying a suitable business or investment opportunity” for Mr Maddah to pursue. His approach was said to have been “oral”, preceded by a telephone call making an appointment and then occurring at 5 Red Hill Terrace, Doncaster East, presumably this is intended to be a reference to number 3 where Apadana was, at that stage, carrying out a large scale residential development.
156Mr Nikfar was said to have referred Mr Maddah to a friend who conducted a restaurant business known as “Jalisco Mexican Restaurant”, which ultimately did not interest Mr Maddah. Then, it is said that “in mid-2017” Mr Nikfar told Mr Maddah that Mr Maddah could invest in a property at 10 Red Hill Terrace, East Doncaster “with him” [viz, with Mr Nikfar]. This advice was said to have been given at Ampang Ria Coffee Shop in Blackburn Road, Doncaster East with a Mr Lokhmani and Mr Dalvand, described as Mr Nikfar’s business partners, in attendance.
157Next, it is said that Mr Nikfar arranged a meeting for Mr Maddah attended by Ms Shams and Mr John Troiano, whom Mr Nikfar is said to have described as “the owner of Red Hill Terrace”.
158The first set of misleading conduct was described as follows:
“In and about 20 July 2017 each of Nikfar and Shams on their own account and as officers and agents of Apadana represented to Ehsan Maddah and the Plaintiff that:
(a) the project was a great development and represented a great opportunity for the Plaintiff;
(b) the project would realise approximately $500,000 to $700,000 net profit when completed;
(c) the development would have a total cost of $2,800,000 and would sell for between $3.3 and $3.4 million;
(d) they were prepared to let the Plaintiff share in 40% of the costs and the profit;
(‘the investment representations’).” (CB 25-26) ”
159Mr Maddah, it was said, relying on the truth of these representations, signed a purchase contract for number 10 from a company, Lextrip Pty Ltd, such contract dated 20 July 2017.
160According to the Statement of Claim, “immediately following” the meeting where the contract was signed, Ms Shams was said to have “escorted” Mr Maddah to a meeting with Mr Nikfar at the offices of Mahons solicitors with one of its then partners, Mr Roger Johnson. Ms Shams, it was said, “purported to translate what was said by … Roger Johnson”. The joint venture agreement was produced for execution and was then and there executed.
161Further representations were alleged to have been made at that meeting in the following terms:
“In the course of the Mahons meeting Shams on behalf of the Defendants again represented to Ehsan Maddah and the Plaintiff that:
(a)purchasing and developing Red Hill Terrace with them was a good investment that would make him a lot of money;
(b)Mahon’s solicitors said that it was a great investment;
(c)Ehsan Maddah and the Plaintiff did not need their own solicitor as Mahons would look after things;
(‘the solicitor representations’). (CB 27)
162The contract for the purchase of number 10 from Lextrip Pty Ltd was said to be an “uncommercial transaction” because neither Mr Troiano nor his company Lextrip owned number 10, and its true value was “approximately $665,000”. The Statement of Claim next alleged the execution of the agreement dated 20 October 2017 between Apadana and Robin Hood and Hassan Developments Pty Ltd for the purchase of architectural plans and approval documents for $785,000. The final “uncommercial transaction” alleged was the interposition of Mr Nikfar’s company, 10 Red Hill Operations Pty Ltd, as contracting party with Bluesky.
163According to paragraph 23 of the Statement of Claim, “each of Nikfar and Apadana were knowingly involved in the making of the solicitor representations by Shams and were aware that those representations were false”. It was said that Apadana was also knowingly involved in the making of the “investment representations” by Shams and was aware that those representations were false”.
164The two species of representations were said to be “false” because the land was “purchased at a price that was commercially over-valued and not as part of an arms-length transaction, and the methods of developing the land intended by the defendants were uncommercial and would operate to syphon the investment funds away for uncommercial purposes”. Therefore, the project “would not be completed but rather the funds invested would be paid away and lost for unproductive purposes”, with the defendants applying all of the investment “for their own purposes or in an uncommercial manner”.
165Further, it was said that Mahons did not make a representation that number 10 “was a great investment” but, rather, acted only as solicitors to advise on documentation and risks inherent in the proposed transaction. Therefore, it was said, the two classes of representations were made in trade and commerce and, being misleading or deceptive, constituted a breach of s18 of the Australian Consumer Law.
166Robin Hood, it was said, had executed the contract to purchase the land in the joint venture agreement and paid funds “to the defendants” in reliance on the representations and, accordingly, has suffered loss and damage. The loss and damage was said to have been constituted by the funds outlaid by Robin Hood under the terms of the joint venture agreement, totalling $1,080,000. In the event, according to the Statement of Claim, “the joint venture works have not progressed and no building works have been carried out at the site. Apadana have not entered into a building contract.” No accounting had been given to Robin Hood relative to its outlays, and no participant account had been established by Apadana as required by the joint venture agreement. No account had been given by the defendants despite demands that they do so.
167Finally, it was said that the demand for repayment of monies under the “loan agreement” (presumably the one said to be constituted by a document styled “Minutes” dated 16 February 2019) was misleading or deceptive because “there was never any loan agreement”.
168The Statement of Claim sought relief by way of damages and orders for the taking of accounts, a declaration that neither of the plaintiffs had borrowed $204,959 from any of the defendants, a declaration that the “loan agreement” “is not a genuine document and has not been agreed to by either of the plaintiffs”, and an order that the defendants deliver up the original and all copies thereof.
236This payment was one of the largest disputed matters in the present proceeding, yet no documentary evidence has been produced. In particular, no settlement statement relative to the apartment sales which is said to have provided the funds to Ms Shams or Apadana.
237Had the cash come to Ms Shams in the manner which she described, the settlement statement for the apartment or apartments would record a credit in favour of the purchaser or purchasers for the intermediate payment or payments. There was no explanation as to why such documentation was not provided. I would adopt the finding of the special referee that no such contribution was made to the Joint Venture or for its benefit by the defendants. Independently of the special referee’s report, having heard Ms Shams and Mr Nikfar examined and cross-examined and considered their evidence, and considered the failure to produce the settlement statement or statements, I would reach the same conclusion myself.
Mr Maddah’s English
238Acceptance of the contention that Mr Maddah was hobbled by lack of ability to speak, write and understand English in 2017 means the plaintiffs’ case that he was led into the number 10 development proposal and the Joint Venture by the defendants becomes more plausible.
239Mr Maddah’s current English language skills are relevant, both because they shed light on his English language abilities in 2017, and either support or give the lie to a contention put by Mr Harding for the defendants in final submissions that Mr Maddah had “hidden behind” his interpreter.
240Mr Harding identified a number of instances in the transcript in which he said the transcribers attributed statements to “the interpreter” as a means of distinguishing these utterances from ones made directly by Mr Maddah in the course of his evidence. It was not clear to me that this was a correct interpretation of the transcript. I read these passages as occasions when the interpreter “stepped out of character” as Mr Maddah’s mouthpiece, and spoke directly on his own behalf.
241There was at least one occasion on which, according to the transcript, Mr Maddah gave a direct response and this is identified in the transcript by the word “direct”. The answer is followed-up with a repetition of the same answer via the interpreter. (T236) Perhaps more pertinently, I observed on a number of occasions that Mr Maddah reacted directly by way of body language to questions asked before they were interpreted for him, indicating that he understood the question in the English language. (T307)
242I asked Mr Maddah if it was possible the reason that he did not complete the 510-hour course with AMES, undertaking only about 100 of the 510 hours of instruction scheduled, that he acquired functional English sufficient to carry on business in Australia and no longer needed further instruction. According to the transcript, he replied “No”. I then put to him that there were insufficient Farsi speakers resident in Melbourne to enable him to conduct a business career here without being able to speak English. He replied that this was correct but that he managed to function with the assistance of his wife. This rather lengthier answer is described in the transcript as “through interpreter”, indicating the first answer was given directly, as was another answer earlier on the same page of transcript. (T307, L1, 17-31)
243For the purposes of this determination, it is Mr Maddah’s accomplishments in the English language as at 2017, rather than his present abilities, which are of the greatest importance. As to these, I accept Mr Johnson’s evidence that in 2017 Mr Maddah was able to speak “broken English”. Accepting that Mr Johnson believed, and perhaps reasonably believed, that Mr Maddah was following the discussion which he, Mr Johnson, had in conference with Mr Nikfar and Ms Shams, Mr Johnson’s concession that Mr Maddah’s contribution was “nodding sagely” rather than intervening in the conversations himself, indicates that Mr Maddah had limited appreciation of what was being discussed, or at least its detail. This is supported by the fact that Mr Johnson described Mr Maddah as receiving explanations from Ms Shams in Farsi from time to time during the conference.
244After living five years in an English-speaking society, it would be astonishing if a relatively young man like Mr Maddah did not achieve a very substantial improvement in his English-speaking skills. I believe he now has achieved what was described in the Immigration Department documentation as “functional English”.
245It would be going too far, however, to suggest that he “hid behind” the interpreter. As previously noted, Mr Nikfar has, in the past, resorted to the use of an interpreter, and at least one of his previous counsel advised him to seek the services of an interpreter. A person whose first language is not English involved as a witness in a trial in the English language is at a necessary disadvantage. Where the assistance of an interpreter at trial is sought, the balance may tip. The witness understands most of the questions as posed but, by having an interpretation in his or her mother tongue, has those questions further clarified and is given the opportunity for further reflection and, therefore, the opportunity to avoid a hasty or ill-considered answers.
246As far as the court is concerned, the use of interpreters might be thought to be a two-edged sword. It is generally far easier for a judge or magistrate to follow the interpretations of a professional interpreter than it is to follow the broken English of a witness whose first language is not English. On the other hand, since both question and answer must be interpreted, the length of time required to lead evidence from a witness with the assistance of an interpreter doubles from what it would have been had no interpreter been engaged. It would be wrong to accuse witnesses with limited English of hiding behind interpreters. The use of the interpreter might give the witness a net advantage which, on one view, is unfair. On the other hand, it could not be fair to require the witness and the party relying on that witness to accept the injustice of requiring the witness to give evidence without the assistance of an interpreter.
Whose idea was number 10?
247In 2017, in light of what I have said above, Mr Maddah did possess some skills in the English language. As Mr Harding observed, he had the opportunity to obtain professional assistance from a variety of sources, accountants, immigration lawyers and other legal practitioners, had he wanted to do so. Moreover, it seems his wife has and had greater facility with the English language than does Mr Maddah. (T307)
248He was not being led unknowingly into transactions which were beyond his understanding, both from linguistic and commercial reasons. Precisely what Mr Maddah’s business accomplishments in Iran before his arrival in Australia were remained unclear but, on his own account, he had been engaged in the construction and development industry in that country.
249Nevertheless, it is overwhelmingly more probably that he, as the newcomer to Australia, Mr Maddah would have deferred and relied upon the expertise of Mr Nikfar and Ms Shams, as relatively long-established operators in the building, development and construction industries in Australia, for guidance, in identifying a likely investment opportunity, to meet the requirements of his visa application. With his then “broken English”, however, the thought that he took the lead and the initiative and made extensive independent enquiries, both of estate agents operating in the Doncaster area and the Planning Department of the Manningham City Council, is difficult to credit.
The representations
250The thought that Mr Maddah, as the newcomer to Australia, would be relying on the established operators, Mr Nikfar and Ms Shams, to take the lead in identifying a development opportunity is as plausible as the thought that the newcomer, Mr Maddah, with only broken English and no history of work in building and development in Australia, would have identified his own opportunity and then “sold” the proposal to the old-hands, Mr Nikfar and Ms Shams, is implausible.
251Again, in the context of Mr Nikfar and Ms Shams taking the lead, the thought that they would have made the range of representations attributed to them in the plaintiffs’ Statement of Claim, and attested to by Mr Maddah’s evidence, is plausible and should be accepted. The thought that Mr Nikfar and Ms Shams would have “signed up” for the development without expressing any favourable view as to its likely outcome, as their evidence would suggest, is implausible and should be rejected.
Were the representations “misleading or deceptive”, as that phrase is used in s18 of the Australian Consumer Law?
252Section 18 of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 of the Commonwealth, provides inter alia:
“A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
253Self-evidently, the transactions with which we are dealing took place in trade or commerce. Speaking of this provision’s predecessor, s52 of the Trade Practices Act 1974 of the Commonwealth, Gibbs CJ said:
“The words of s52 require the Court to consider the nature of the conduct of the corporation against which proceedings are brought and to decide whether that conduct was, within the meaning of that section, misleading or deceptive or likely to mislead or deceive. Those words are on any view tautologous. One meaning which the words ‘mislead’ and ‘deceive’ share in common is ‘to lead into error’. If the word ‘deceptive’ in s52 stood alone, it would be a question whether it was used in a bad sense, with a connotation of craft or overreaching, but ‘misleading’ carries no such flavour, and the use of that word appears to render ‘deceptive’ redundant.” (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198)
254According to Ms Anderson the representations were misleading because number 10 was overpriced. It may be accepted, if that were true, that the transaction as undertaken was not a good investment and was not calculated to return a good profit. The difficulty facing the plaintiffs is the lack of admissible evidence to make good the contention that number 10 was overpriced.
255The Court Book contained numerous valuations. I have referred to some but not all of them already. None of those put into evidence, however, was presented in the manner required by Order 44 of the court’s rules. Nor did any valuer give evidence on behalf of the plaintiffs. A valuer was engaged and a report in Order 44 form was included in the Court Book, but that witness was not ultimately called.
256Commenting upon this, in a further submission made after the close of the trial with leave, the plaintiffs’ solicitor said:
“The special referee was appointed by order of Judge Burchell dated 8 September 2021 pursuant to r50.01(1)(b) of the County Court Civil Procedure Rules 2018 (‘Rules’). In those circumstances a party may not adduce evidence of any other expert on any issue in the report: see s60O(1) of the Civil Procedure Act 2010 (‘CPA’). Accordingly, the expert evidence of Mr John Sly was not called at trial, despite notice being given under O44 of the Rules on 6 August 2021.”
Section 65O of the Civil Procedure Act which was added by an amendment to that Act in 2012, states:
“(1)Except by leave of the court, a party to a proceeding may not adduce evidence of any other expert witness on any issue arising in proceedings if, in relation to that issue—
(a)a single joint expert has been engaged; or
(b)a court appointed expert has been appointed."
257The contention appears to be that Judge Burchell’s order appointing the special referee precluded the calling of an expert on the value of number 10 at trial. This contention is misconceived.
258Section 65O was inserted into the Civil Procedure Act in 2012 by amendments effected by the Civil Procedure Amendment Act 2012. Introducing the Bill which became the amending statute, the then Attorney-General, Mr Clark, said:
“The Bill gives discretionary powers to a court to order that two or more parties jointly retain an expert, or that a court appoint its own expert to assist the court in the proceeding. Using a single, joint expert or court-appointed expert to give evidence on a particular issue can reduce the time and costs associated with expert evidence on that issue and may assist in the efficient conduct of the proceeding more generally. These types of experts are used in other Australian jurisdictions, including Queensland and the Family Court, although the concept is relatively new to litigation in Victoria. The Bill therefore provides guidance to the courts as to when it may be appropriate and useful to appoint such an expert.
In addition, the Bill requires parties to seek leave of the court to adduce further evidence where a single, joint or court-appointed expert has given evidence on a particular issue. This ensures that the benefits associated with the appointment of a single, joint or court-appointed expert are not undermined by the unnecessary presentation of further evidence, while also ensuring that additional evidence can be presented if required in the interests of justice, or to ensure that a party is not prejudiced in the proceeding.” (Legislative Assembly 21 June 2012, 2948) (Emphasis added)
259The regime to which s65O of the Civil Procedure Act applies is one in which a single joint expert or a court-appointed expert is retained to give evidence at trial as part of a determination by a judge. It has no application to the pre-existing entitlement of a court to appoint a special referee under Order 50 of the Rules of the Supreme or County Courts.
260If I were wrong in this, s65O entitles a court to receive additional expert evidence if the interests of justice require it. Here, where the court is being invited to make a finding that the land the subject of this proceeding was overpriced, it is clearly in the interests of justice that admissible evidence as to the proper value of the land, as at the material time, be available to assist the court in its determination on that subject. Subject to anything that might have been urged on behalf of the defendants, I would have been receptive to an application for leave to adduce valuation evidence in admissible form if such leave were required.
261As it was, when I asked Ms Anderson on what basis I could find that $1.45 million constituted an excessive price for number 10, I was referred, first, to the price for the land under the Darroch contract, and secondly, to a valuation to be found in Annexure J to the special referee’s report which, as at the date of the commencement of the joint venture in July 2017, valued number 10 at $900,000. (CB 2358) To the best of my recollection, this valuation was mentioned by Ms Anderson for the first time at trial during her final submissions.
262During closing submissions I informed both counsel that whilst I could indirectly adopt the valuation by adopting the special referee’s report pursuant to Order 50, I could not myself make a direct finding based upon it because of the failure to comply with Order 44 relative to expert evidence. It occurred to me afterwards that I might retrospectively “otherwise order”. I sought further submissions from the parties as to this point.
263The defendants’ solicitor opposed my making any such order. Upon further consideration, I conclude it is inappropriate after the event for me to seek to receive this valuation as evidence of the correctness of the opinions which it expresses in circumstances where the valuer has not been produced for cross-examination. Moreover, there is other material available to me as to the appropriateness of the value of $1,450,000 for number 10.
264I reject the contention that the Darroch contract can provide a proper yardstick to judge the appropriate value of number 10 in 2017. As explained, it was part of a scheme to reduce the stamp duty which was payable on the transaction without expressing any view as to the legality of this scheme, its effectiveness under the Duties Act 2000, or whether its implementation entailed the commencement of any offences by any and if so what person. The Darroch contract must be seen in context. The value of number 10 must be judged by the total sums of money changing hands as part of the deal effecting its sale. This must include the amounts paid under the Hassan Developments contract.
265As Ms Shams herself said, $785,000 paid or payable under the Hassan Developments contract was “part of the land price”. ([77] above) This accords with fundamental land valuation principles as exemplified in the High Court’s decision in Turner’s case.
266For reasons explained above, however, I, like the special referee, have rejected the contention that some $485,000 was paid by or on behalf of the defendants or any one of them under the Hassan Developments contract. Number 10 was, however, transferred to the joint venture under Apadana’s management. It follows that the price of $1,450,000 is over the odds by almost half a million dollars. The fact that these transactions proceeded without the payment of $485,000 that was apparently payable, but remained unpaid, indicates that they were phoney – in at least some respects. It may be that whatever monies in fact changed hands, the total consideration for the land was potentially more than $1,450,000 minus $485,000. The clear probabilities are, however, that $1,450,000 represented a substantial exaggeration of the true price.
267Accordingly, a contravention of s18 of the Australian Consumer Law has been established.
Relief
268Section 236 of the Australian Consumer Law entitles a person who has suffered loss “because of the conduct of another person” which contravened, inter alia, s18 of the law, to recover “the amount of the loss or damage by action against that other person”.
269The plaintiffs’ case is that their outlays to the Joint Venture, including all those which were accepted as such by the special referee, together with the two bank cheques in the sums of $30,000 and $70,000 in May 2018 made payable to Aust MIS Pty Ltd, were made as a result of misleading or deceptive conduct by the defendants. Given that these outlays have resulted in Robin Hood’s being a co‑owner of number 10, they cannot be regarded as a total or dead loss. Ms Anderson contended:
“that the resulting loss or damage to the plaintiffs, pursuant to s 236 of the Australian Consumer Law, includes not just the payments made to the defendants, but also interest and the costs incurred as a result of the misleading and deceptive conduct.”
270She referred to Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388. She continued (closing submissions paragraph 88):
“ The plaintiffs also claim any increase in value of the Property [viz number 10], less any costs including transfer or sale costs, since its purchase. As the plaintiffs were looking to make an investment and did in fact contribute the full costs of the purchase price of the Property from Ms Darroch, it would be inappropriate for the first defendant as joint proprietors [sic] in equal shares with the first plaintiff to benefit from the increase in property prices when it did not contribute to its purchase and at best only contributed $286,000 to the joint venture.”
271This last proposition is problematic. How can it be right on the one hand for the plaintiffs to say that Robin Hood would not have involved itself in the joint venture for number 10 at all, such that Robin Hood should be compensated for its outlays on the one hand, but claim a share in the transaction which Robin Hood seeks to be relieved from on the other?
272In Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494, a group of borrowers represented by Mr Marks sought damages against GIO relative to borrowings which they had undertaken. The borrowers’ claim related to a loan facility described as an “Asset Accumulator Account”. GIO had told the borrowers that it would charge interest at a rate calculated by reference to a base rate plus a margin of 1.25 per cent per annum. The base rate was said to be the average for the month of the 90 day bank bill rate. GIO then exercised a power given to it by the loan contracts to increase the interest rate margin to 2.25 per cent.
273The trial judge, Einfeld J, held that GIO had engaged in misleading or deceptive conduct by leading borrowers to believe that the interest rate margin was fixed at 1.25 per cent, and gave damages calculated by reference to the difference between the interest calculated on a margin of 1.25 per cent compared to the interest charged at the higher margin of 2.25 per cent for the relevant loan period.
274The Full Court of the Federal Court held that such an award of damages, being by reference to expectation loss, was not authorised by s82 of the Trade Practices Act 1974 (the equivalent of s236 of the Australian Consumer Law). The borrowers appealed by special leave to the High Court of Australia.
275On appeal, the High Court held that it was wrong to restrict the damages awarded under s82 by reference to analogies drawn from common law or equitable damages. McHugh, Hayne and Callinan JJ said that s82, in empowering the award of damages for contraventions of the prohibition on misleading or deceptive conduct, mandated an inquiry that “is one that seeks to identify a causal connection between the loss or damage that it is alleged has been or is likely to be suffered and the contravening conduct.” ((1998) 196 CLR 494, 510 [38]) Their Honours said, therefore, that in assessing damages:
“[A] comparison must be made between the position in which the party that allegedly has suffered loss or damage is and the position in which that party would have been but for the contravening conduct. And even this inquiry may not conclude the question. Analysing the question of causation only by reference to what is, in essence, a ‘but for’ test has been found wanting in other contexts and it may well be that it is not an exclusive test of causation in this area either. But that is not a question which we need to consider in this case. For the moment it is enough to say that s82 requires identification of a causal link between loss or damage and conduct done in contravention of the Act.” ((1998) 196 CLR 494, 512-3 [42])
276Turning to the facts before them in the Marks appeal, their Honours said:
“A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted. Thus, the party that is misled will have suffered loss if a chose in action which was acquired was worth less than the amount paid for it. There may well be other ways in which it might suffer loss or damage. For example, consequential loss may be suffered. But no loss of that kind was alleged in this case and, putting that kind of loss to one side, we focus only on loss said to be suffered by the making of the contract.” ((1998) 196 CLR 494, 514 [48])
277They said:
“It is only if some alternative (less detrimental or more beneficial course) were available, that it can be said that the contract which was made was less valuable to the party that was misled than had been represented – for it is only then that a comparison of value can be made.” ((1998) 196 CLR 494, 515 [51])
278It was not shown in Marks’ case that the borrowers could have obtained a loan facility on a fixed margin of 1.25 per cent if they had not been misled or deceived into signing up for the Asset Accumulator Account with GIO. Logically, no investor has unlimited funds to invest. Deciding to undertake one investment necessarily precludes the use of the funds employed in another investment. By investing in one project, the investor necessarily suffers an opportunity cost in being precluded from investing in another project or a range of other projects. Were there evidence here of such an alternative project forgone, and the profit which might have been realised from it, for the purposes of s236 this opportunity cost could be regarded as recoverable loss or damage. No such evidence was adduced.
279The increase in value said to have occurred relative to number 10 cannot be regarded as loss suffered by reason of the plaintiffs or one or more of them being misled or deceived. Had they not been misled or deceived, upon the evidence I have heard, they would have had nothing to do with investing in number 10, or certainly not at the price of $1.45m. Even if I were wrong, there would surely be difficulties in making a damages award on this basis, since no “profit” has at this stage been realised on the land. It is notorious that with interest rates on the rise, and further rises threatened, real estate values are for the moment, and for the immediate future, depressed rather than buoyant. I have already commented upon the absence at trial of admissible evidence as to the value of number 10.
280Finally, as I have explained, I do not regard the Darroch contract as being a true indication of the value of number 10. Therefore, I cannot accept the proposition that the acquisition of number 10 has been wholly funded by Robin Hood as Ms Anderson contended.
281Mr Harding observed that the plaintiffs’ claim was for damages for misleading or deceptive conduct, not for an account. (T46-7) Yet as I previously observed, viewed solely as a claim for damages for misleading or deceptive conduct, the plaintiffs’ claim must necessarily take account of the value of the interest which Robin Hood acquired in number 10. To the extent that it has derived that value the outlays cannot be said to be dead losses.
282In his opening, Mr Harding said that these issues could be dealt with by proceedings under Part IV of the Property Law Act, which are generally within the exclusive jurisdiction of the Victorian Civil and Administrative Tribunal: the Property Law Act 1958, s234C. However, that is not the end of the matter. Subsection (4) of that section provides:
“The Supreme Court and the County Court have jurisdiction to hear an application under this Part if—
(a) in any proceeding which has commenced in the Supreme Court or the County Court (as the case requires), the issue of co-ownership of land or goods arises in the course of that proceeding; or
(b) * * *”
283What has occurred in the present proceeding, in my view, engages this provision, and, subject to the late stage that they have reached and the necessity to go beyond the pleading, it may be appropriate to consider exercising the Part IV jurisdiction here. Further, in so far as the contention is that Robin Hood should be regarded as having paid the entire price or more than its fair share for the acquisition of its co‑owned interest in number 10, such a contention, if made good, might be reflected in a finding as to the proportions in which the co‑owners hold their shares in number 10 in equity. Alternatively, there might be some invocation of the powers bestowed by s233 of the Property Law Act or s230 thereof.
284An alternative course would be to turn aside from Part IV and seek to deal with the plaintiffs’ claim solely as pleaded. Such a course would be embarrassed by the lack of admissible evidence as to the current value of number 10 or its value at some other date judged to be appropriate for the calculation of damages.
285In the circumstances, I believe I should hear further submissions as to whether I should consider granting relief under Part IV of the Property Law Act and/or fixing damages based on an allowance for the value of number 10 as at the date of the Lextrip contract, the Darroch contract, the date of judgment, or any other – and if so, what – date.
Rights and liabilities of the parties
286The narrative so far has dealt with the plaintiffs and the defendants as single units. It must be remembered, however, that there is a plurality of both plaintiffs and defendants, and the rights and liabilities of individual plaintiffs and defendants may not be strictly aligned with the rights and liabilities of other plaintiffs or defendants.
287Relief relative to misleading or deceptive conduct inducing the plaintiff Robin Hood to purchase number 10, or enter a joint venture with Apadana and place moneys under the control of Apadana as manager of the joint venture, would be available to the plaintiff Robin Hood but not to the plaintiff Mr Maddah. The liability of any one or more of the defendants depends upon its being established that such defendant contravened the Australian Consumer Law or was knowingly concerned in such contravention. According to paragraph 24 of the Statement of Claim:
“Apadana was knowingly involved in the making of the investment representations by Shams and was aware that those representations were false.”
288The narrative as to the making of the “investment representations” as narrated above is relatively complex. Precise dates could not and were not given in evidence as to when the various meetings took place. The purchase contract for number 10 in its original form was entered into on 20 July 2017 ([51] above). Apadana was incorporated on 13 July 2017: that is, seven days previously. (CB 477) Ms Shams is and was the sole office-holder and shareholder of Apadana. (CB 417-8) It seems likely that the investment representations were made before Apadana was incorporated.
289A person will only be knowingly concerned in misleading or deceptive conduct if that person intentionally aided, abetted, counselled, or procured the relevant contravention: Yorke v Lucas (1985) 158 CLR 661. Assuming that the investment representations were made before Apadana’s incorporation, it can be said that Apadana aided and abetted the misleading or deceptive conduct by, after its incorporation, joining in the execution of the purchase contract, the Darroch contract, and the Hassan Developments contract. These actions were knowing in the relevant sense because Apadana’s controller, Ms Shams, must have been well aware of the “phoney” nature of the price of $1.45m, both because of her association with Mr Nikfar and her pretence at having paid $485,000 in cash as part of the total consideration for the acquisition of number 10.
290To the extent that representations were made by Mr Nikfar and Ms Shams directly, as recorded above, they were principal contraveners of s18 of the Australian Consumer Law. Otherwise, according to the explanation which I have just given, they can be regarded as having been knowingly concerned in the contravention by way of misleading or deceptive conduct, given the knowledge which they had as close business associates and their actions in carrying into effect the transactions which the misleading or deceptive conduct was intended to induce.
291Robin Hood was incorporated on 12 July 2017 ([29] above). To the extent that any misleading or deceptive conduct was engaged in prior to that date, Robin Hood can be regarded as having been induced by that misleading or deceptive conduct to enter into the purchase contracts for number 10 and the joint venture agreement since Mr Maddah was the sole director, shareholder, and office-holder, and therefore its controlling mind. His inducement was its inducement.
Standard of proof
292I have made my findings, conscious of the principles stated in s140 of the Evidence Act 2008 and by Dixon J, as he then was, in Briginshaw v Briginshaw (1938) 60 CLR 336.
Miscellaneous plaintiffs’ claims
293At paragraph [99] of her closing submission, Ms Anderson sought on behalf of the plaintiffs the costs of a contravention notice issued by the Foreign Investment Review Board in the sum of $10,800. According to Ms Anderson, the liability for this contravention should lie upon the defendants, because if the plaintiffs had not been misled or deceived Robin Hood would not have purchased number 10, and Mr Johnson would not have advised Mr Maddah that no board consent or approval was required for Robin Hood’s purchase. If the incurring of this penalty was, as a result of defective advice from Mr Johnson, as alleged, the liability would lie with him and his former firm, not with the defendants, who did not hold themselves out, according to anything that I heard, as experts on this subject to advise.
294For purposes of causation, all that is required is that the alleged causal event be a cause of the loss claimed. It is not necessary to establish it as the sole or predominant cause. In Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413, the High Court held that a valuer which had provided a negligent valuation to a lending institution was liable in damages not only for the extent of the overvaluation but also for the lender’s losses incurred as a result of a subsequent market collapse, on the footing that but for the negligent valuation the lending transaction would not have taken place and the lender would not have been exposed to losses on that security property. Their Honours rejected the contrary approach adopted by the House of Lords in Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191. Kenny & Good’s case was in the common law of negligence, not for misleading or deceptive conduct. It represents, to my mind, an example of how far the “but for” test for causation may extend. As has been said by the High Court elsewhere, causation is ultimately a matter of common sense. With some hesitation, I conclude that the connection between the contravention fee and the misleading or deceptive conduct goes beyond what common sense would regard as causally linked.
295Likewise, a claim for the costs and services of Mr Rahimi, who, it will be recalled, acted as spokesperson and manager for Robin Hood and Mr Maddah after the “blow up” on 16 February 2019. Mr Rahimi’s commission, according to Ms Anderson’s closing submissions, was “to obtain the accounts for the joint venture”. He was not engaged to deal with the consequences of the misleading or deceptive conduct which I have held occurred relative to the purchase of number 10. Again, it must be accepted that had number 10 not been purchased, the issue relative to the invoices contained in the green folder would not have arisen. In my view, however, this stretches the causal link beyond what common sense would indicate.
296I am fortified in refusing to award the amount claimed for Mr Rahimi’s services because of the total absence of evidence as to precisely what he did, on what basis, according to what charge-out rates, and so forth.
Counterclaim
297The defendant makes a counterclaim in the sum of $95,600, representing amounts said to be outstanding relative to the loan agreement or acknowledgment constituted by the “minutes” of 16 February 2019. In so far as the alleged lender was Aust MIS Pty Ltd, these amounts are not the subject of any counterclaim because that company is not a party to this proceeding. The special referee said at paragraph 4.36 of his determination (CB 3148):
“While there does not appear to be any disagreement that Robin Hood received the ‘Remitted Money’, as to the question of whether those funds constituted a loan or were transferred for another purpose, it is my opinion that the available evidence, excluding the Alleged False Document [the minutes dated 16 February 2019], is inconclusive and thus I cannot offer any relevant findings. That said, if the Court regarded the narrations on the relevant bank statements as definitive, then it would follow that $36,522 of the ‘Remitted Money’ constituted a loan ...”
298He had earlier noted that the bank narration included references to Robin Hood and a loan. The special referee also noted at paragraph 4.35.5:
“Robin Hood has not, to the best of my knowledge, disputed receipt of the ‘Remitted Money’. Rather, it has asserted that those funds were in reimbursement of expenses it had paid in connection with unrelated property developments. What evidence has been provided by Robin Hood to support its position is, in my opinion, inconclusive.”
299I respectfully concur in the special referee’s characterisation of the evidence on those matters. Mr Harding said I should regard his finding as the allowance of the counterclaim to the tune of $36,522. Like the special referee I reach this conclusion based on proven cashflows and narrations in accounting documents, not the “minutes” dated 16 February 2018.
300One possible objection to the success of the counterclaim in this sum is the thought that the relevant dealings occurred only because of the misleading or deceptive conduct which led Robin Hood and Apadana to become joint venturers for the proposed development of number 10. Nevertheless, Robin Hood’s case, as noted by the special referee, was that these outlays were not directly related to the joint venture. Accordingly, in my view, there is no circuity or circularity in allowing Robin Hood’s claim for misleading or deceptive conduct on the one hand, and also the counterclaim in the sum of $36,522.
Disposition
301I will direct the parties within 14 days to bring in short minutes to give effect to these reasons. In light of what I have said above, it is likely there will be a need for further legal argument. Since I have heard no submissions on the question of costs, I will reserve them.
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