| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : SINGH -v- SINGH [2004] WADC 211 CORAM : DEANE DCJ HEARD : 25-27 FEBRUARY, 19-21 JULY 2004 DELIVERED : 29 OCTOBER 2004 FILE NO/S : CIV 5 of 2002 BETWEEN : SARDUL SINGH Plaintiff
AND
MAN MAHAN SINGH
Defendant
Catchwords: Sale of restaurant business - What representations if any were made by the plaintiff (vendor) to defendant (purchaser) - If made were such representations false - Was the defendant induced by representations to enter into an agreement to purchase the business - Was the contract repudiated - Was the agreement terminated - Did the plaintiff agree the representations were false - Was there a subsequent agreement entered into by the parties
Legislation: Nil
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Result:
Defendant liable to plaintiff for damages
Damages assessed
Defendant's counterclaim dismissed in its entirety Representation:
Counsel:
Plaintiff : Mr E Carlose
Defendant : Mr R W H Tan (25-27.2.2004)
In person (19-21.7.2004)
Solicitors:
Plaintiff : E Carlose
Defendant : Tan & Tan
In person
Case(s) referred to in judgment(s):
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638
Case(s) also cited:
Spotless Catering Services Ltd v Commonwealth of Australia [1998] WASC 62
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1 DEANE DCJ: This matter involves in large part a dispute regarding the sale of a business, the Taj Tandoor restaurant in Murray Street, Perth, by the plaintiff to the defendant. In 1998 the owner of the restaurant was Keprim Pty Ltd which was a trustee for the Taj Tandoor Family Trust. Keprim Pty Ltd was the original plaintiff in this action but during the course of these proceedings, before the matter came to trial and for reasons which it is unnecessary to elaborate upon, Keprim Pty Ltd assigned its rights, title and interest in the action to the current plaintiff, Mr Sardul Singh.
2 On the pleadings the plaintiff asserts that on 14 May 1998 Keprim Pty Ltd agreed to sell to the defendant the Taj Tandoor restaurant business for $150,000. In consideration of payment of that sum the plaintiff agreed the defendant would in effect take over and solely manage the business including taking over responsibility for maintaining the books and financial records of the business as well as responsibility for prompt and regular payment of associated outgoings and expenses including payment of rental for the premises. As a result of the agreement, which it is said was reached between the parties, the defendant would be entitled to 75 per cent of the net profits of the business with the balance of 25 per cent being paid to Keprim Pty Ltd. 3 The plaintiff further pleads that pursuant to the performance of the agreement reached on 14 May 1998, in approximately February 2000 at his request the defendant took over the sole conduct and running of the business. However, according to the plaintiff's case, the defendant breached that 1998 agreement by failing or refusing to pay the whole of the balance of the purchase price and associated outgoings and expenses of the business, failing to carry on the business properly and efficiently which included prompt payment of associated outgoings and expenses and finally in mid-June 2001 the defendant ceased managing and conducting the business and on the plaintiff's assertion abandoned the business premises. The alleged conduct on the part of the defendant is said to have caused Keprim financial loss including $128,500 being the balance of the purchase price due and owing to Keprim Pty Ltd, outstanding debts of $41,109 (which at the close of trial was reduced to $20,000 by agreement) owed to creditors of the business and damages for past and future loss of income equivalent to 25 per cent of the net profits of the business which in the plaintiff's submission amounts to a sum in the order of $30,000. 4 Three defences were filed on behalf of the defendant, the contents of each will be touched upon in due course, but the final re-amended defence dated 12 June 2003 in effect admits the agreement made in May 1998.
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However, it alleges that the plaintiff orally represented to the defendant that the business was profitable and its purchase would eventually meet the requirements of the defendant's permanent residence application to reside in Australia with his family. The defendant also alleges that the plaintiff told him Keprim Pty Ltd would secure an assignment of the lease for the premises to the defendant at an affordable rent. 5 Further the defendant claims that in a document called the proposed business plan for Man Mahan Singh in Perth, Western Australia the plaintiff represented to him that the defendant would be able to use financial figures in the document with respect to the sales, expenses and profitability of the business as well as evidence from wages to support the claim that the business required at least three full-time employees as reflected in the proposed business plan in support of the application for migration. 6 According to the defendant's case, Keprim Pty Ltd was unwilling and unable to perform its obligations pursuant to the May 1998 agreement because it failed to fix a settlement date, failed to renew the lease and handed conduct of the business to the defendant without receiving payment of any money towards the purchase price. Further the defendant asserts that Keprim Pty Ltd transferred no shares to the defendant nor did it appoint the defendant as a director of Keprim Pty Ltd or in the alternative include the defendant's name as a partner in the business by execution of the relevant document and that Keprim Pty Ltd repudiated the written agreement in late January 2000. 7 In par 7 of the re-amended defence the defendant pleads that there was an oral agreement in February 2000 in which the plaintiff agreed that his representations to the defendant were wrong and misleading because the turnover of the business was inadequate to enable the defendant to submit an application for permanent residence and that any such application would be unsuccessful because the business was operating at a substantial loss, one consequence of which was that it was unable to support the employment of three full-time employees which was a requirement for a successful application for permanent residence or a permanent residency visa. 8 The defendant claims that Keprim Pty Ltd through Mr Sardul Singh, the plaintiff, would hand over to the defendant the conduct, as distinct from possession and/or ownership of the business, from the beginning of February 2000 and thereafter the defendant would conduct the business until such time as the plaintiff could locate a buyer for the business or the
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defendant could himself find a suitable alternative business. As part of that alleged oral agreement in February 2000 the defendant pleads that he would conduct the business for 12 to 18 months and improve it in order to satisfy the requirements necessary for the defendant to obtain permanent residency in Australia and that the defendant would pay Keprim Pty Ltd $5,000 for existing stock and $10,000 relevant to unpaid bills of the business. 9 It is further alleged that it was agreed as between the parties that in the event the business did not met the requirements for the defendant to obtain permanent residency Keprim Pty Ltd would within the nominated period resume conduct of the business and in the event that the business did not improve to the extent that it enabled the defendant to meet the requirements to obtain permanent residency Keprim Pty Ltd would take over conduct of the business. If the defendant was able to obtain permanent residency he claims the plaintiff assured him he would secure a lease of the premises for the defendant at an affordable price. 10 In addition the defendant says the plaintiff agreed that Keprim Pty Ltd would attempt to sell the business to a third party if it did not meet the defendant's requirements for permanent residency and that in the interim the defendant was at liberty to search for an alternative business that would meet the necessary criteria. 11 It is against this background that the defendant claims he took over conduct of the business in February 2000 and continued in this role until mid-June 2001 when he claims that he and the plaintiff, on the plaintiff's own behalf and that of Keprim Pty Ltd, agreed that the February 2000 agreement be terminated because the business did not meet the requirements for the defendant to obtain permanent residency and further the plaintiff could not obtain a new lease for the premises. In addition the defendant claims that if he owed any money to Keprim Pty Ltd up until the time the business reverted to that entity in mid-June 2001, that sum did not exceed $20,000. 12 The defendant claims that in about mid-June 2001 when the conduct of the business was returned to Keprim Pty Ltd and the agreement terminated, he and the plaintiff in his personal capacity and as a director of Keprim Pty Ltd, acknowledged that the plaintiff owed the defendant $20,000 in the plaintiff's personal capacity and that the defendant would relinquish his claim against the plaintiff for that sum.
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13 Further it is alleged that the plaintiff undertook and agreed to pay Keprim Pty Ltd the defendant's debt of $10,000 or debts not exceeding $20,000 rather than pay that amount to the defendant.
14 It is said that the plaintiff agreed to do this because in November or December of 1999 the plaintiff requested a personal loan of $20,000 from the defendant, repayable on demand, and in response the defendant through a third person gave a National Australia bank cheque in that sum made payable to S Singh & Associates. As a consequence the defendant claims that Keprim Pty Ltd accepted the plaintiff as Keprim Pty Ltd's debtor in the amount of $10,000 or at least an amount not exceeding $20,000 and through accord and satisfaction or novation the debt between Keprim Pty Ltd and the defendant was thereby discharged. 15 In the alternative the defendant claims that Keprim Pty Ltd has engaged in misleading and deceptive conduct through its director, the plaintiff, in breach of s 52 of the Trade Practices Act and s 10 of the Fair Trading Act. The defendant asserts that the plaintiff was a director of Keprim Pty Ltd and with its authority made representations to the defendant concerning the sale of the Taj Tandoor restaurant business orally and through the delivery of the proposed business plan, which were misleading and deceptive in that the impression created was that the business was profitable and could eventually meet the criteria necessary for the defendant to obtain permanent residency. In reliance on the alleged truth and accuracy of these impressions the defendant claims he entered into the agreement to purchase the business and oversaw its operation between September 1999 and January 2000 after which time the defendant took over the conduct as distinct from possession or ownership of the business. 16 He claims that he undertook these responsibilities without receiving payment or the benefit of a secured lease and that if he had known the business would not eventually satisfy the criteria for permanent residence the defendant would not have entered into the written agreement nor would he have taken over conduct of the business as from February 2000. 17 The defendant counterclaims for loss and damage while conducting the business during which time the defendant claims he was responsible for associated expenses, exposing himself to financial loss and further that he had to spend time and money operating a business which in the end result could not meet the requirements whereby he could obtain permanent residency. Whilst he was engaged in this exercise the
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defendant was unable to pursue business interests that would have enabled him to fulfil the requirements to obtain permanent residency. 18 As a result of the alleged misleading and deceptive conduct of Keprim Pty Ltd and the plaintiff, the defendant claims he was entitled to rescind the written agreement in February 2000 or alternatively pursuant to s 87 of the Trade Practices Act and s 77 of the Fair Trading Act the defendant is entitled to seek the Court's discretion to have the entire written agreement declared void ab initio. 19 The counterclaim allegations are entirely rejected by the plaintiff as are the allegations of misrepresentation and misleading and deceptive conduct and the allegations concerning accord and satisfaction and novation.
Chronology of events 20 It was evident at trial that credibility was a critical issue. Before turning to an examination and assessment of the evidence it should be noted that in addition to the pleadings the parties filed an amended statement of agreed facts as well as a bundle of agreed documents and a separate chronology of events. In a very general way referring to those documents and in due course to the oral evidence and exhibits it would appear that certain facts are not in dispute. 21 The plaintiff, Mr Sardul Singh, is an accountant practising under the name S Singh & Associates and both he and his firm were authorised to act on behalf of Keprim Pty Ltd. Prior to May 1998 Keprim Pty Ltd owned the Taj Tandoor restaurant business which had been operating from its Murray Street premises since 1989. At the material times the directors of Keprim Pty Ltd were the plaintiff and his wife, Jeswant Kaur Singh. Prior to February 2000 Mrs Jeswant Singh managed the restaurant business which operated an account No 089-542660-5 with Bankwest in St George's Terrace. 22 The defendant is a younger brother of the plaintiff and was ordinarily resident with his family in Malaysia where he was employed in the stockbroking industry and as a business development manager with Sentrafield Sdn Bhd as evidenced by Exhibit 3, the defendant's business card. In the 1980's the defendant's wife, Satwant Kaur Singh, was unsuccessful in an application to migrate to Australia. Nonetheless between 1992 and 1998 the defendant on occasion with his family travelled to Perth at least once a year and on those visits he had contact with family members, including the plaintiff, and he regularly attended
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the premises of the Taj Tandoor restaurant. It would appear that at one point the defendant, intending to migrate to Australia with his family through the services of a migration agent, applied unsuccessfully for a temporary residence visa based on his experience in the stockbroking industry. 23 Significantly it is agreed on behalf of both the plaintiff and defendant in their respective chronology of events that on 14 May 1998 there was an agreement between the defendant and Keprim Pty Ltd for the sale and purchase of the Taj Tandoor restaurant for the agreed price of $150,000 which would entitle the defendant to a 75 per cent share of the business and its profits. Following this in July 1998 the defendant applied for a temporary residence visa (which was granted in July 1999) based on his experience in the restaurant business and his stated commitment to carry on that business upon his arrival in Western Australia. The settlement date relevant to the sale was to be 14 November 1998 but that settlement did not proceed and the date for settlement was extended to 14 February 1999. 24 In September 1999 the defendant entered Australia on his temporary residence visa and commenced working in the restaurant or at least on the defendant's case and chronology, overseeing the operation of the restaurant business. The following month the lease for the restaurant expired and was not renewed. In February 2000 the defendant took over the restaurant business pursuant to the agreement. In approximately March or April 2001 the defendant and his wife negotiated with the lessor's managing agents for a renewal of the lease of the premises but in mid-June 2001 the defendant ceased carrying on the restaurant business and left the premises with the defendant claiming he returned the business to the plaintiff. From that date until 13 September 2002 when it went into liquidation, the plaintiff managed the business. At about that time Keprim Pty Ltd assigned its rights, title and interest in the claim in this action to Sardul Singh who was later substituted as the plaintiff in the action pursuant to a minute of consent orders in September 2003.
The plaintiff's evidence 25 Mr Sardul Singh explained that the Taj Tandoor restaurant in 1998 was owned by Keprim Pty Ltd as trustee for the Tandoor Family Trust. The business was run by the plaintiff's wife with assistance from their two daughters from time to time. In addition it employed two full-time employees as well as casual employees and a chef, Mr Yi Yang, so overall he estimated that the business required four employees in order to run
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efficiently and properly. Whilst it did not make a great deal of money the business was profitable with an established client base. 26 Over the years during the 1980's the defendant and his family regularly visited the plaintiff and other family in Perth and indeed the defendant and his family would frequently patronise and dine at the Taj Tandoor restaurant. The plaintiff had been aware for a number of years that the defendant was keen to migrate with his family to Australia and his desire to do so apparently became more evident in the late 1980's and into the 1990's. 27 Although the defendant appeared to be successful in his work as a stockbroker in Malaysia he was nonetheless, as far as the plaintiff was aware, unsuccessful in an attempt to be sponsored by the plaintiff's own stockbroker in order to migrate to Australia. 28 In May 1998 the defendant was visiting another brother in Perth and the plaintiff was asked to meet with the defendant and his wife as well as the brother and the brother's wife. He could not recall if the defendant's migration agent, Mr Bajwa, was present at this particular meeting. The meeting did not occur in the plaintiff's office above the restaurant but elsewhere and at that gathering the plaintiff said there was a proposal put to him regarding whether he would consider selling the restaurant or an interest in the restaurant to the defendant in order that the defendant could then apply to migrate to Australia. The plaintiff said though he had received enquiries over the years he was not really interested in or anxious to sell the business. There was no detailed discussion at the time as to how this proposition might be realised but the next day the defendant attended the plaintiff's office and there was a discussion between them regarding the price and various dates of settlement and possession. At that time an offer and acceptance, Exhibit 11, was drawn up, which both the plaintiff and his wife signed on the company seal. 29 The plaintiff's recollection was that the defendant had to sign the document in the presence of a witness so the plaintiff took a copy of the document and gave the original to the defendant. His recollection was that the only other clause that was added to the standard document was one allowing for an extension as to the settlement date in the event that there could be delay occasioned by the defendant being unable to obtain a temporary residence visa. 30 Mr Sardul Singh was adamant that the defendant's migration agent, Mr Bajwa, was not present on that particular occasion. By way of deposit
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the defendant handed $1,500 in cash to the plaintiff which the plaintiff said he then credited to the trust account. Settlement was to be on 14 November 1998, six months after the offer and acceptance was signed and possession was to occur on completion of stocktaking on 14 January 1999. 31 The plaintiff said the defendant indicated to him that he had a range of ideas as to how he intended to expand the business and increase its revenue. The plaintiff gained the impression that the defendant had the knowledge to succeed in this endeavour. The defendant was to purchase 75 per cent of the Taj Tandoor restaurant profits for $150,000 exclusive of stock with Keprim Pty Ltd retaining the remaining 25 per cent. The plaintiff said that the defendant never asked him if the restaurant was a profitable business and the plaintiff denied that he ever told the defendant that the purchase of the restaurant business would enable the defendant to meet the requirements to obtain permanent residency in Australia. 32 The plaintiff said that as an accountant he had no knowledge of such matters and in any event as it was a very specialised area the plaintiff had no power to effect such an outcome even if that was his desire. The plaintiff further denied that during either of those two meetings with the defendant in May 1998 there was any discussion between them regarding the financial figures of the restaurant business or the defendant's proposed application for migration to Australia as alleged in par 1.3 of the re-amended defence. 33 Mr Sardul Singh agreed that he informed the defendant that he would assist him in obtaining an assignment of the lease and would attempt to obtain a rent reduction on the defendant's behalf, but denied he undertook to secure an assignment of the lease of the premises at an affordable rent to the defendant and stressed that it was for the defendant himself to seek and obtain such an assignment, although the plaintiff would attempt to assist him in that regard where possible. 34 After the offer and acceptance was signed the defendant with his migration agent, Mr Bajwa, attended the plaintiff's office and the plaintiff was requested to look at a business migration proposal, Exhibit 4, regarding what he claimed he was told were the intentions of the defendant regarding the business over the following two years. For that reason the plaintiff said in his view the business profile in the document related to the future rather than 1998.
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35 His recollection was that he saw all but the cover page of the document, which he claimed was not present at the time he viewed it. The plaintiff was adamant that he was not the author of the document and further he had no knowledge of the last page or its contents which related to the defendant's assets and liabilities. Nonetheless the defendant and his agent, Mr Bajwa, suggested to the plaintiff that he provide a cover page to the document in order to give it some credence, although in the plaintiff's view the profit and loss forecast figures contained in the proposed business plan were highly inflated. He also pointed out that his signature appears nowhere on the document and also it does not have a compilation page, which if he prepared it or had it prepared, he would expect would exist.
36 In Exhibit 1, being a bundle of agreed documents including financial statements relevant to Keprim Pty Ltd, the plaintiff went to page 16 and pointed out that the figures for 1999 show an entry of $1,500 being a deposit on sale of the restaurant business and further that in the column for the year 2000 referable to that same heading the sum of $21,500 refers to an additional amount of $20,000 which the plaintiff said was paid by the defendant towards the balance of the purchase price of the business. On page 15 of that bundle of documents under the heading of "receivables" the plaintiff pointed out that the defendant is noted as a beneficiary, because once the defendant handed over the moneys which were then deposited, it was the plaintiff's view that this entry needed to be made to show that the defendant now had an interest in the business. A similar entry is found on page 25 of Exhibit 4 under the heading "receivables" referable to the defendant as reflected in the balance sheet of the restaurant business as at 31 March 2001. 37 The plaintiff explained that he saw no need for a receipt to be issued relevant to the deposit of $1,500 paid by the defendant because in fact that was receipted by both parties in the offer and acceptance and further the plaintiff said he sent a letter to the defendant and his wife advising that they required an extension of the time period specified in the offer and acceptance as a result of which a $500 fee would apply. The extension was required on the plaintiff's understanding because the requisite information had not been supplied by the defendant to the Immigration Department and so at the defendant's request the contract of sale was extended as contemplated in the agreement for three months, in order that settlement could occur in February 1999. As at that date, however, the matter could not be finalised because, according to the plaintiff, the defendant was required to provide further medical reports to the authorities and these could not be obtained by that date. This is
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confirmed by a letter dated 25 February 1999 from the Australian High Commission in Kuala Lumpur to the defendant at page 4 in Exhibit 1. No further extension date was fixed because the defendant did not request one and also the plaintiff said that it was assumed between them that when the defendant's position regarding obtaining a visa was clarified the matter would then be finalised. 38 The plaintiff stressed in his evidence that he in his personal capacity and also as a director of Keprim Pty Ltd at all times intended honouring the contract with the defendant. 39 In late September 1999 the defendant travelled from Malaysia to Perth and worked within the restaurant business for approximately three months in order to familiarise himself with the business operations. In December 1999 the defendant returned to Malaysia but returned with his family to Perth in early January 2000 for a further short period of training. According to the plaintiff actual hand over and possession of the business to the defendant occurred in early February 2000. 40 Whilst the defendant was in Perth in about November 1999 the plaintiff raised the question of settlement and payment with the defendant, who indicated that he did not yet have his funds from overseas, however, he was in a position to advance the plaintiff the sum of $20,000 as part payment of the balance owed. The plaintiff said he credited this cheque to the trust account. Relevant to this sum the plaintiff denied that he ever borrowed the sum of $20,000 from the defendant or orally agreed with the defendant that the plaintiff would repay that $20,000 by way of the alleged loan to Keprim Pty Ltd, as part of the balance of the purchase price. 41 Later in his evidence the plaintiff said that the $20,000 cheque was placed into the S Singh & Associates account, which was a firm account for his practice, albeit that the journal entries in the bundle of agreed documents show that the amount was credited to Keprim Pty Ltd's account. 42 Although the plaintiff requested payment of the balance of the purchase price from the defendant prior to the defendant taking over the business, according to the plaintiff, the defendant provided a range of excuses or explanations as to why he did not have the funds available at that time. 43 Once the defendant had taken over possession and conduct of the Taj Tandoor restaurant business in February 2000 the plaintiff said that he
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removed both himself and his wife as signatories to the Keprim Pty Ltd account at Bankwest and made the defendant and the defendant's wife the sole signatories to the continuing account. Exhibit 5 contains a number of statements for the business cheque account relevant to the Taj Tandoor restaurant for the period 20 May to 13 October 2000. When taken to these documents, cheque 001172 of 26 May 2000 a debit for $1,220 the plaintiff believed related to a mortgage repayment on the defendant's home because the code next to it indicated it was a personal drawing. Cheque 001203 of 28 July 2000 the plaintiff believed related to the payment of some education fees for one of the defendant's daughters. Cheque 001451 of 11 December 2000 in the sum of $8,662.40, the plaintiff believed was for a stockbroking firm. As to a number of other cheques he claimed that cheque 001475 of 16 February 2001 was for education fees relating to the defendant's nephew while cheque 001485 of 6 April 2001 for $7,750 would appear to relate to payment of some sort to the chef Yi Yang. Cheque 001229 of 11 October 2000 in the sum of $41,200 according to the plaintiff appears to be a cash withdrawal. 44 The plaintiff said that when the defendant and his wife took over the business a proper stocktake and valuation was carried out and given to the defendant's wife, along with the business cheque book and keys of the business. The plaintiff also said that he settled up with most of the creditors of the business and left sufficient funds, being about $3,000, in the business bank account to permit the defendant and his wife to make payment when financial adjustments were made at settlement. 45 Page 7 in the agreed bundle of documents, according to the plaintiff's evidence, is a list of bills he made out to satisfy the restaurant's outstanding accounts, inclusive of taxation and employee entitlements, which he kept as a record when payments were made in February and March of 2000. He regarded them as his debts which had accrued prior to the business being taken over, but he gave a copy of it to the defendant's wife as well as a list of stock he left behind in the business, which in due course he assumed the defendant and his wife would pay for on settlement. 46 The plaintiff denied that in February 2000 or indeed at any time, he orally agreed that the defendant take over conduct of the restaurant business as distinct from ownership and possession, stating that this would have been wrong and would have misled the Immigration Department, because the plaintiff's understanding was that the defendant had obtained a visa on the basis that he was going to purchase and run a business in
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Western Australia which was in turn supported by the offer and acceptance, Exhibit 11. 47 The plaintiff explained that as soon as the defendant took over possession and conduct of the Taj Tandoor restaurant business in February 2000 the plaintiff ceased to have anything to do with it, although he agreed he worked on the premises above the restaurant and lunched there very frequently, at least for the first six weeks or so after the defendant took it over. He raised the question of payment of the balance of the purchase price for the business with the defendant, who gave him a range of excuses as to why he did not have the funds available. According to the plaintiff he did not press the request for payment at the time because he had no immediate need for the balance of the funds and further he found it a rather delicate family situation making it awkward to press the request. 48 In June 2001 the defendant advised the plaintiff that he did not intend to continue running the Taj Tandoor restaurant and that he was going to vacate the premises. As a result on 1 July 2001 on behalf of Keprim Pty Ltd the plaintiff wrote to the defendant indicating his displeasure at the defendant's attitude and behaviour and advising that legal proceedings for damages would commence after assessment of all losses, page 5 of Exhibit 1. For some months after this date the plaintiff said he and his wife attempted to continue running the business, which by that stage was in a poor state, in the hope that they would find someone willing to purchase the enterprise and in that way mitigate their financial loss relevant to the outstanding balance of the purchase price, as well as moneys owing for stock and unpaid accounts. The business subsequently went into liquidation in September 2001. Further the plaintiff was unable to mitigate his loss to any significant degree as he was evicted by the landlord for defaulting in paying rental. 49 The plaintiff agreed that the lease for the restaurant premises was to expire on 31 October 1999 and explained he did not renew the lease as the defendant was intending to purchase the business so the plaintiff was of the view that it was in the defendant's best interest to have the lease put in his own name. The plaintiff, however, would assist the defendant if possible to have the landlord assign the lease to the defendant. 50 The plaintiff said that from late 1999 onwards he repeatedly requested the defendant to negotiate with the lessor with a view to getting the lease put into the defendant's name. One concern to the plaintiff in this regard was that he could not transfer the liquor licence to the
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defendant until the defendant undertook a special purpose course demonstrating that he would be a reputable licensee. The lease could not be transferred from the plaintiff to the defendant without that occurring as there was a liquor licence attached to it. The defendant ignored these requests so that after the lease came to an end on 31 October 1999 Keprim Pty Ltd continued on a monthly lease. It was the plaintiff's belief that after February 2000 the defendant himself conducted negotiations with the landlord relevant to the lease. 51 Mr Yi Yang, the chef at the Taj Tandoor restaurant between 1991 and mid-June 2001, was called on behalf of the plaintiff. It was his recollection that in 1999 the defendant came to the restaurant and began training in the business by working with Yi Yang in the kitchen. He was very clear in his evidence that at that time the defendant told him he was going to take over the restaurant and he wanted to use the business to assist him to apply for permanent residency. They had a discussion regarding how the restaurant business was to be improved in order to make it function more effectively. 52 Yi Yang took holidays in February or March 2000 and on return he informed the plaintiff that he was unsure if he could remain working in the restaurant because he was uncertain if he could work well with the defendant, whom he believed was going to take over the restaurant. He said that after this the defendant and the defendant's wife met with him and told him they wished him to stay and offered him a pay rise. The plaintiff was not part of that discussion. There was also discussion at that time regarding how the defendant and his wife proposed to implement a new system in order to make the business more efficient. As far as Yi Yang was concerned before he left his employment in mid-2001 both the defendant and his wife were very much involved in managing the day to day operations of the restaurant business, with the defendant working in the kitchen and his wife on the restaurant floor. 53 Prior to Yi Yang leaving the business he recalled that in late 2000 or early 2001 the defendant offered to sell him the restaurant as a whole business or suggested that they form a partnership to run the restaurant but these suggestions were not accepted by Yi Yang. He also said that at one point he lent money to the defendant who used Yi Yang's credit card to pay $8,000 for the defendant's daughter's school fees. He later repaid Yi Yang by cheque drawn on the Taj Tandoor restaurant account. This is confirmed by cheque No 001485 of 6 April 2001 in Exhibit 5 being a cheque drawn on the Taj Tandoor restaurant account.
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54 Yi Yang observed that prior to the defendant taking over the business it ran smoothly and had a regular clientele albeit that it did not make a large profit. However, once the defendant took over the business there were changes such as the sacking of two waitresses and a kitchen hand, which in his view did not enhance the business. The defendant claimed that Yi Yang was lying about this but this was never put to the witness in cross-examination. The defendant's children began to work in the restaurant, however, as they had no formal training in this field and did not wear uniforms in Yi Yang's opinion they lacked professionalism the end result of which was that there was a negative impact on the restaurant business. At one point the defendant also told Yi Yang he wanted to win lotto in order to pay money back to the plaintiff. Although the defendant denied this Yi Yang was not challenged on the point. Yi Yang said in his view in February 2000 the situation was considerably more than one whereby the defendant and his wife were simply working with him in the business or managing it, rather they were heavily involved because they made it plain to him that they had plans to improve the business. Furthermore they made all the decisions regarding the day to day running of the business, albeit he conceded that at the time he could not be certain as to who actually owned the business.
The defendant's evidence 55 The defendant told the Court that on a trip to Perth to visit family in May 1998 he was once more entertaining serious thoughts of migrating with his family to Australia and to this end asked the plaintiff about the best means to achieve this aim. He claimed that the plaintiff suggested that a possible means would be through the sale of the Taj Tandoor restaurant to the defendant and further suggested that the defendant consult with Mr Bajwa. As a result, according to the defendant, in company with the plaintiff he met Mr Bajwa in a hotel in May 1998 but as time was very short and the defendant had to return to Malaysia they could not discuss the matter in detail and he was informed by the plaintiff and Mr Bajwa that they would think of a plan or way for the defendant to migrate to Australia. 56 The defendant returned to Malaysia and in about June 1998 said he received in the post a copy of the proposed business plan and an application form for a temporary residency visa. He said he completed this form and in July 1998 he sent it with the proposed business plan to the Department of Immigration. He claimed that the proposed business plan was prepared by the plaintiff and he himself had no input into the document. He insisted the first occasion upon which he saw this
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document was in June 1998. Following this the defendant received a letter from the Australian High Commission requesting more information from him regarding the proposed business plan or activity. Mr Bajwa, the defendant's migration agent, responded on his behalf to this enquiry by letter dated 14 August 1998 outlining what the defendant and his wife intended regarding a genuine and realistic commitment to obtaining and maintaining ownership of a business in Australia. 57 By letter dated 24 September 1998, which is included in the agreed bundle of documents Exhibit 1, the Australian High Commission wrote to Mr Bajwa indicating that the department was still not satisfied that the defendant met the necessary requirements with respect to his proposed application and requiring further information. In response the defendant said he discussed the contents of the letter with both the plaintiff and Mr Bajwa and in November of 1998 the plaintiff contacted the defendant and his wife indicating that he would send more documents to them relevant to the enquiries being made as to evidence of further commitment on behalf of the defendant. 58 The defendant received a letter from the plaintiff dated 13 November 1998 on behalf of Keprim Pty Ltd reminding the defendant of the non-refundable fee of $500 for an extension of the offer to purchase 75 per cent of the Taj Tandoor restaurant business and stating it was due and payable as of 14 November 1998. That letter, Exhibit 9, further stated that as the defendant had asked him to do so the plaintiff had requested an extension from the vendors to 14 February 1999 and they had agreed to that request. 59 At this time the defendant claimed that he was sent the offer and acceptance agreement, Exhibit 11, which contained some crosses and so he telephoned the plaintiff to ask him about the document. This was the first time he saw this document. He said the plaintiff advised him to sign it and send it to the Australian High Commission. The defendant queried the deposit of $1,500 mentioned in the document, which he said he had not paid to the plaintiff. The defendant claimed he was further confused because the document was dated 14 May 1998 and yet the plaintiff sent it to him in November 1998. On some occasions in his evidence the defendant said he received Exhibit 11 in December 1998. 60 When he queried the plaintiff regarding the stated purchase price of $150,000 he said the plaintiff told him not to worry about the price, that the restaurant belonged to the plaintiff who was an accountant and the defendant was simply to submit the document in order to obtain a
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temporary residency visa. The defendant also said he did not pay the $500 required for the extension period. 61 In July 1999 after obtaining a temporary residency visa, the defendant and his wife travelled to Perth and he was informed by the plaintiff that he had to be seen downstairs in the restaurant and further that the Taj Tandoor restaurant business would meet the requirements of the proposed business plan. To obtain a permanent residency visa the defendant understood that he had to demonstrate he had assets of $100,000 and that any business he became involved with was required to have a turnover in the vicinity of $200,000 per annum and employ three full-time staff. He claimed that the plaintiff assured him the Taj Tandoor restaurant business would fulfil those requirements. 62 The defendant said he did little in the restaurant at that time but returned to Perth in September 1999 and was taken by the plaintiff and directed to work in the kitchen of the restaurant, but advised not to tell anybody what the defendant's intentions were. It was at that time the defendant claimed the plaintiff informed him he had financial problems and asked to borrow $20,000 from the defendant to pay for some shares. The defendant then arranged for the plaintiff to be given the loan by way of a $20,000 cheque drawn from the defendant's sister-in-law's account, as he did not have a bank account in Australia at the time and she kept this money in her account as a trustee. The defendant claimed his sister-in-law, Pritam, actually handed the money to the plaintiff. 63 According to the defendant when he returned with his wife from Malaysia to Perth in January 2000 he informed the plaintiff that from what he could see the purchase of the Taj Tandoor restaurant business was not going to meet the defendant's requirements for a permanent residency. He said that the plaintiff agreed that this was the case. However, the plaintiff pleaded with him to remain working in the restaurant until the plaintiff could find another buyer. As a result the defendant worked in the kitchen with Yi Yang. 64 In about March 2000 the defendant said the plaintiff suggested to him that he and the defendant's wife become signatories to the Taj Tandoor restaurant account at Bankwest. When the defendant advised him there was little point in doing so because he was not interested in taking over the restaurant business, the plaintiff explained that his accountancy office was upstairs above the restaurant and it was very inconvenient for the plaintiff to come downstairs on a regular basis to sign
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cheques for the business. It should be noted that this claim was never put to the plaintiff in cross-examination. 65 The defendant said that during the time he operated it the business had a poor financial turnover and equipment such as stoves were not working properly. Further he questioned the hygiene of the premises which he claimed was poor, in combination with furniture that was in a rundown and shabby state. 66 It should be noted that the plaintiff's wife, Jeswant Kaur Singh who was actually called on behalf of the defendant, gave evidence that she ceased being involved in the running of the Taj Tandoor restaurant in January 2000 when the defendant and his wife took the business over. Prior to this she had been actively involved in the business for 12 years. She said that in the preceding years of 1998 and 1999 the business was profitable and as at December 1999 employed three full-time employees including herself and three casual staff. 67 Her evidence was that in December 1999 and into January and February of the following year the stoves in the kitchen were in working order and indeed the premises were in a hygienic state as regular spraying occurred both for termites and cockroaches. The furniture was not in a rundown and shabby condition and in fact about three years earlier she had purchased new chairs for the restaurant. When pressed by the defendant in re-examination, the witness said that as far as she could recollect on her observations the weekly minimum takings of the restaurant in 1999 was about $3,500, although she stressed this was an estimate only and at best she could really say that the restaurant at the time was running at a profit. 68 The defendant said that in February 2000 when he took over the running of the business he was asked by the plaintiff to pay the plaintiff's outstanding accounts which came to about $15,000 including $5,000 for stock and was told the plaintiff would repay that amount of money when the business was sold. The defendant was unable to provide a great deal of detail regarding this claim and stated that his wife would be in a better position to provide that information. During the time that he and his wife and on occasion his daughter, worked in the business the defendant said none of them were ever paid wages or drew money from the business. This is clearly inconsistent with the evidence of payments made from the restaurant business bank account, Exhibit 5, for education payments, mortgage repayments and $41,000 paid to a stockbroker. When the defendant left the business in about June 2001 he claimed he advised the
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plaintiff that if there were any outstanding bills money had been left in the Taj Tandoor restaurant account to meet those expenses and in addition if there were funds remaining the plaintiff could keep them and he could offset the bills against the $35,000 he owed the defendant. 69 The defendant also said he left the business in June 2001 when requested to sign a set of accounts he believed were inaccurate. These accounts were not before the Court nor was the evidence of Mr Goddard who is said to have signed the accounts as witness. 70 In his counterclaim the defendant claims he left the plaintiff the $20,000 he says he gave to the plaintiff by way of a loan and a further $15,000 which the defendant alleges consists of moneys he used to pay $10,000 towards the plaintiff's outstanding debts to creditors of the restaurant and $5,000 for stock which to this date he asserts he has not been repaid. Although par 28 of the re-amended defence refers to alleged loss and damage suffered by the defendant, these claims are not particularised in the sense that no details are provided. 71 Whilst the defendant expressly denied ever purchasing an interest in the Taj Tandoor restaurant or its profits, he said when he realised it would not meet the criteria for him to obtain permanent residency, in response to the plaintiff's plea he agreed to assist the plaintiff to run the business while he found a purchaser. If that was unsuccessful Keprim Pty Ltd would resume running the business. It is to be noted that in both the original defence and the amended defence there was no pleading to the effect that in approximately February 2000 the defendant agreed to run the restaurant and attempt to improve its profitability until the plaintiff found a purchaser. These matters were only raised in the re-amended defence. Similarly the original defence made no mention of the $20,000 loan which the defendant now says he made to the plaintiff. 72 In cross-examination the defendant said he had no explanation for why those matters did not appear in the defence first filed on his behalf. An amended defence was filed on 6 March 2002 but made no mention of the oral agreement which the defendant alleges he reached with the plaintiff in February 2000 or the loan of $20,000 he allegedly made to the plaintiff. That amended defence does, however, plead that no deposit of $1,500 was ever paid pursuant to the offer and acceptance and therefore no settlement occurred nor was there any extension of time required for settlement and no assignment of lease was secured for the defendant.
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73 The defendant agreed, as it is obvious, that he could not conduct a business in Australia unless he was able to obtain a temporary residence visa and that therefore any settlement date on the contract of sale could not occur until after the date such a visa was obtained. The defendant also agreed that the settlement date was extended because at 14 November 1998 he had not been able to obtain a temporary residency visa and therefore could not run a business in Australia and further at that time he did not know if he would obtain a temporary residency visa or when that would occur. However, he accepted that the settlement date was extended to 14 February 1999 in the hope that he would obtain the visa by that time.
74 By letter dated 25 February 1999 to the defendant, the Australian High Commission in Kuala Lumpur indicated that his application for temporary residence in Australia could proceed no further until he provided up to date chest xrays. In the light of this he agreed that the plaintiff accommodated him with the extension of time. He was unable to explain why in his amended defence it was pleaded that the agreement to purchase the business lapsed because no settlement date was fixed after 14 November 1998. He agreed that given the fluidity of the situation and the fact that he did not know when he would obtain a temporary residency visa that a settlement date could not be fixed after the extension to 14 February 1999. 75 The defendant asserted that he was sent a copy of the proposed business plan in mid-1998 prior to applying for his temporary residency visa and he had nothing to do with the preparation of that document. The final page of the document, Exhibit 4, lists the financial assets for both the defendant and his wife. He said that his wife prepared that particular part of the document which he claimed was given to the plaintiff after the defendant initially received the proposed business plan. 76 He agreed that it was not in fact true or correct that in July 1998 when he says the proposed business plan was sent to him, he was a director of the Taj Tandoor restaurant business despite the fact this is what the document appears to say on its face. Relevant to the information contained under the heading "Proposed business" he accepted that he had not participated in a survey nor did he know of a survey which showed that genuine Indian restaurant's achieved their targets by way of income, although again that is what is said in the document. He denied that the suggestions for extending and increasing the profitability of the business outlined in the plan came from him and said he knew nothing of the information contained in the profit and loss forecast contained in the
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document. He claimed that the information in the document relevant to his personal profile must have been given to the plaintiff by the defendant's immigration agent, Mr Bajwa. The defendant did not ask Mr Bajwa about this matter when he called him as a witness. 77 The defendant claimed that from February 2000 he had no authority in relation to the restaurant or running the business but rather his role was confined to merely assisting in the kitchen until the plaintiff could find a buyer for the restaurant and that his wife's role was confined to running the front of the house, so that both he and his wife acted at all times on the plaintiff's instructions and directions. However, in the chronology filed on behalf of the defendant it is stated "February 2000 – the defendant took over the restaurant and thereafter solely conducted and carried on the business at the premises". 78 Further in par 9 of the re-amended defence it is pleaded on behalf of the defendant "pursuant to the said oral agreement referred to above, the defendant took over the conduct of the business and paid Keprim (through the plaintiff) the sum of $5,000 for stock and unpaid bills of about $10,000; commenced to conduct the business with his family to try to meet the permanent residence requirements and became responsible for the expenses and the profits/loss of the business". 79 In par 11 of that re-amended defence it is pleaded "the conduct of the business was handed over to Keprim on or about mid June 2001". The only explanation the defendant appeared to be able to offer for these somewhat major inconsistencies between the chronology and his pleadings as opposed to his evidence, was that he believed the chronology was incorrect. As the defendant insisted he did not pay a $1,500 deposit for the purchase of the business to the plaintiff, he was taken to the letter of 11 November 1998 in the agreed bundle of documents, Exhibit 1. That is a somewhat poor copy of a fax on E Malaysia Airlines letterhead to the plaintiff from the defendant's wife. In part that document says "as Satin mentioned on the telephone on Sunday last that you will be doing two letters. One backdated of payment of 5 per cent on purchase of business and may be you would want to issue a receipt. Second letter enquiring on the status of our business migration". 80 The defendant said that although his wife was in contact with the plaintiff and sent faxes to him, he could not comment on that part of the document and it was better if his wife did so. The defendant indicated to the Court on 19 July that he intended to call his wife as a witness on
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20 July. In the end result, however, he advised at the close of his case that he did not intend to call his wife. 81 Although it was not a discovered document, the defendant put before the Court a letter, which became Exhibit 22, on Taj Tandoor letterhead which was undated and addressed to the manager of Bankwest in St George's Terrace, Perth. It was signed by the plaintiff's wife and stated: "This is to confirm that Mr Man Mahan Singh is employed by this establishment as manager on an annual salary of $30,000 per annum". The defendant agreed that as his evidence was he had never received any income from the restaurant business the statement regarding his annual salary was in fact false, but he claimed the letter was given to him by the plaintiff's wife to assist the defendant to obtain a loan from the bank in order to build a house and that is why he presented the document to the bank. 82 The plaintiff's wife confirmed in her evidence that she prepared and signed the document. The defendant also claimed that the letter demonstrated an inconsistency in the plaintiff's case in that on the one hand the plaintiff claimed the defendant was a director of the business enterprise whilst Exhibit P22 nominated the defendant as a manager of the business. This proposition was never put to the plaintiff in cross-examination for his comment. Nor was it investigated with the plaintiff's wife when the defendant called her as a witness. 83 Whilst in his evidence on 27 February 2004 the defendant told the Court he had given a loan of $15,000 to the plaintiff, in par 8 of his re-amended defence it is pleaded that he paid $5,000 for stock and debts of $10,000 on the plaintiff's behalf, which does not suggest he gave a loan as such of this amount of money to the plaintiff. 84 Further in the defendant's chronology of events he states that in February 2000 when he took over the restaurant and solely conducted and carried on the business he paid Keprim Pty Ltd $5,000 plus he paid creditors of the business $10,000. There is no mention that a loan in this amount was made to either the plaintiff or Keprim Pty Ltd. 85 When the defendant and his wife left the business in June 2001 he said he knew nothing about outstanding rental of $13,000 and that this was a matter about which his wife should be asked when she gave evidence. In Exhibit 24, a letter dated 14 June 2001 on Porter Matthews' letterhead, Keprim Pty Ltd was advised that during the period of management under Porter Matthews it had fallen into rental arrears of
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$13,588.46 and that between February and June 2001 no rent had been paid. The defendant agreed that was the case but said the plaintiff directed him not to pay rent as the plaintiff wished to negotiate himself with Porter Matthews regarding the matter. He also said the plaintiff told him not to pay rent because the agent had an attitude problem. 86 Again this was a proposition that was never put to the plaintiff in cross-examination. The defendant claimed he personally never spoke to the landlords about this or other matters but that he believed his wife did so on the plaintiff's instructions. However, in Exhibit 20, being an affidavit of Satinderpal Singh Bajwa (a witness who was called on behalf of the defendant) par 7 states: "Sometime in March or April 2001, I went with the defendant and his wife, Satwant Kaur, to the office of Porter Matthews, who were then managing agents of the premises. The defendant informed me that he was having problems with the lessors and requested me to attend the meeting. I can categorically state that I attended the meeting and conducted negotiations on behalf of the defendant and Satwant Kaur and not the plaintiff." 87 In the remaining paragraphs of that affidavit Mr Bajwa states that it was obvious to him from the exchanges which occurred between the representative of Porter Matthews and the defendant and his wife as well as Mr Bajwa, that there had been previous discussions and negotiations between Porter Matthews and the defendant regarding matters pertaining to a proposed lease of the premises and Porter Matthews acknowledged and accepted the defendant and his wife as owners of the business and as lessees or prospective lessees of the premises and dealt with them as such. 88 Mr Bajwa also deposed that at the meeting the defendant and his wife offered Porter Matthews an initial and immediate payment of $5,000 towards part payment of arrears and to pay the balance by way of instalments. The defendant later informed Mr Bajwa that the issues that had been discussed earlier with Porter Matthews had been resolved. The defendant was not able to explain why on the one hand he gave evidence that the plaintiff instructed him not to pay any rent and then on the other hand the defendant made an offer to pay $5,000 in arrears of rent to Porter Matthews. 89 Further he said that he did not persist in advising the plaintiff that he would negotiate a lease with the lessors and claimed that when he did speak with Porter Matthews' representative in company with Mr Bajwa, it
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was a negotiation not on his own behalf but on behalf of the plaintiff. Despite the fact that the defendant's solicitors had apparently been in possession of Mr Bajwa's affidavit since approximately April 2002 the defendant did not question Mr Bajwa about its contents in that respect. 90 Mr Bajwa when called on behalf of the defendant confirmed he was a migration agent and said that relevant to the defendant's application for a temporary residency visa he checked the forms which the defendant had filled out and returned them to the defendant in order that he could submit them to the Australian High Commission, with whom from time to time Mr Bajwa was in correspondence regarding the issue of the proposed residency visa. 91 Mr Bajwa recalled having received a letter dated 24 September 1998 from the Australian High Commission requiring the defendant to demonstrate a genuine and realistic commitment to maintaining or obtaining ownership of a business interest in Australia. He contacted the plaintiff and showed him the letter suggesting that the defendant might do this by running up a contract or offer to purchase the business. He then said that he sent the contract to purchase a business to the defendant to submit all the documentation to the Australian High Commission in Kuala Lumpur and he believed Exhibit 11 was one of those documents. It is to be noted that in Exhibit 20, Mr Bajwa says on this point that he was aware that the defendant had concluded an agreement with the plaintiff to purchase the business sometime in 1998. 92 Returning to Exhibit 20, Mr Bajwa's affidavit of 2 April 2002, he states that in the latter part of 1998 he was a qualified and licensed migration agent who acted for the defendant in his application in 1998 for a temporary resident business migration visa. He further deposes that the defendant's application for the visa was predicated on the defendant having purchased the restaurant business Taj Tandoor at Ground Floor, 442 Murray Street, Perth, on his entry into Australia after being granted the visa. 93 He also deposes that in mid-September 1998 on receiving a letter from the Australian High Commission in Malaysia he responded to it representing that the defendant had the necessary skills, experience and knowledge to carry on such a business and intended to carry on the business on his entry into Australia. That response was based on instructions and information provided to Mr Bajwa by the defendant. Although the defendant gave evidence that he merely worked in the kitchen and oversaw the business generally on the plaintiff's direction and
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instructions, Mr Bajwa deposes in his affidavit that in March 2000 he worked at the Taj Tandoor restaurant as a chef for approximately one month and he did that definitely at the request of the defendant and the defendant's wife and not at the request of the plaintiff. The defendant claimed in his evidence that all Mr Bajwa did in the kitchen was to reheat the food. 94 During the time Mr Bajwa worked in the business his observation was that the defendant and the defendant's wife carried on the business and occupied the premises as though they were the proprietors and lessees respectively. In addition Mr Bajwa makes the point in his affidavit that for the defendant to merely work in the business as opposed to running it as a proprietor was specifically prohibited, as the temporary residency visa did not permit him to engage in any form of employment during its four year currency. It should be noted that as a qualified and licensed migration agent in my view Mr Bajwa is entitled to make such an informed assertion in his affidavit.
Issues and findings on the evidence 95 Among other matters it will be necessary to determine on the evidence whether the plaintiff has made out his case for damages in all or any respects, whether he made all or any of the representations as alleged by the defendant and if so whether such representations were false, misleading and deceptive. It is necessary to resolve whether if such representations were made the defendant relied on them or was induced by them to enter into the contract to purchase the Taj Tandoor restaurant and also whether the plaintiff and defendant entered into the alleged agreements of February 2000 and June 2001. 96 As has previously been stated assessment of credibility and reliability of witnesses, in particular the plaintiff and defendant, is critical to the outcome of these proceedings. In reviewing the plaintiff's evidence and indeed having had the opportunity to observe him at length as he gave evidence, there is little in his evidence which is inconsistent or reflects negatively on his credit as a witness. It is the case that in Exhibit 10, an undated letter to the then landlord, Mr Herbert Lo, the plaintiff said that the business was suffering financial loss but I accept the plaintiff's explanation that he made this statement to the landlord in an attempt to negotiate a reduction in the rent payable and that in that sense it was merely a business tactic to gain an advantage rather than a true reflection of the situation.
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97 Both Yi Yang and the plaintiff's wife whom I found to be credible and reliable witnesses also gave evidence that the business was running at a profit and without particular difficulty prior to the defendant taking it over. For approximately 12 years prior to that occurring the business had been run by the plaintiff's wife and family without any significant problems. I accept Yi Yang's evidence that this situation changed markedly as from February 2000 when the defendant began making a series of apparently unwise decisions, including sacking of staff which had a negative impact on the business. I also accept Yi Yang's evidence that in late 2000 or early 2001 the defendant offered to sell him the business or form a partnership to run it with Yi Yang. Obviously the defendant would not have made these suggestions if he did not have an interest in the business. I accept the plaintiff's evidence that as at May 1998 there was no particular reason why he should be anxious to sell or dispose of the business and on the evidence it would appear that the decision to do so came about as a result of some form of family pressure and no doubt a desire on the part of the plaintiff to assist his younger brother, the defendant, who was clearly anxious to migrate to Australia with his family. At that point in time, given their visits and communication with one another, it is evident that the two men had a close relationship.
98 Turning to the oral representations which the defendant alleges were made to him by the plaintiff, the first is that the business was profitable. Putting aside the plaintiff's evidence that this was not a matter discussed in any great detail with the defendant, I find on the unchallenged evidence of Yi Yang and the plaintiff's wife as well as the financial statements for the relevant period in Exhibit 1 which was tendered by consent, that in fact the business was making a profit. In my view it is not the case that the plaintiff told the defendant that the purchase of the business would eventually meet the defendant's permanent residence application in the sense of the meeting the necessary criteria because the plaintiff was hardly in a position to know this or to have any effect on the outcome of such an application. In addition the defendant had engaged the services of a professional migration agent, Mr Bajwa, and obviously that was at least in part for the very purpose of seeking and obtaining such advice. There would be no need for the plaintiff to proffer such advice and I find he did not do so. 99 I accept the plaintiff's evidence that it was he who insisted to the defendant that it was the defendant's responsibility to pursue the assignment of the lease of the premises to the defendant, although I have no doubt that as the plaintiff said in his evidence he would, where
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possible, assist the defendant in this regard. Whilst the defendant says that the representation in this regard also referred to an assignment of the lease at an affordable rent, this is a vague and somewhat uncertain phrase and the defendant in his evidence in no way explained what it meant or what he understood that it meant. If such a representation was made which I reject, in any event it is highly unlikely as it is lacking in any concrete meaning, that someone in the defendant's position would actually rely upon it. 100 It is clear from the evidence of both Yi Yang and the plaintiff's wife that as at February 2000 and indeed prior to that time the restaurant was supporting three full-time employees as well as a number of casual staff and so in that regard, if the material in the proposed business plan reflected this, it could be used to support an application for migration. 101 On the evidence I accept the submission on behalf of the plaintiff that the agreement alleged by the defendant between the parties in February 2000 makes little commercial sense to the point where it is improbable. The plaintiff is a qualified accountant and clearly well versed in commercial matters. It is extremely unlikely that he would agree to the defendant running the restaurant business for up to 18 months in an endeavour to improve it so it would meet his permanent residency requirements and in the interim provide the defendant with a living, without the plaintiff really obtaining any appreciable financial benefit. 102 It also runs counter to the defendant's evidence that at this time the defendant informed the plaintiff that the restaurant would never meet the permanent residency requirements. If this was the case there would be no purpose in arriving at the agreement alleged by the defendant. It makes no commercial sense at all that a man in the plaintiff's position would after a period of 12 to 18 months simply be willing to accept the return of a business which was not profitable, in the interim having received little or no financial benefit from the running of the business or indeed any further payments towards the purchase price of the business. 103 It is extremely inconsistent in my view, as the defendant asserts, with the proposition that the alleged agreement in part involved him taking over the conduct of the business for 12 to 18 months in order to improve its viability while at the same time having the right to seek an alternative business that would meet his permanent residence requirements. 104 Although on the evidence I find that the representations as alleged by the defendant were not made to him by the plaintiff, because of the nature (Page 29)
of the allegations raised by the defendant it is appropriate to consider even if such alleged representations were made whether they were false, misleading and deceptive as alleged and whether the defendant as a result was induced by them or relied on them relevant to entering the agreement in May 1998 as evidenced in Exhibit 11. As a matter of commonsense the defendant would have to demonstrate that such representations preceded the agreement in May 1998 to avoid his obligations pursuant to that contract. They would have had to have been in existence at the time in order for him to, as he claims, have been induced to enter the agreement. 105 I have no hesitation on the whole of the evidence in accepting that the agreement came about and was concluded in May 1998. In the first instance and of considerable significance the agreement for the sale and purchase of the restaurant is admitted in the defendant's chronology of events and in each of the defences filed on his behalf. That is really the end of the matter despite the fact that the defendant persisted in claiming that he did not see the document, Exhibit 11, until November or December 1998. No application was made to amend the pleadings in this respect, albeit that it would have been extraordinarily late in the day to make such an application at trial. 106 Returning to the issue of the alleged misrepresentations, the defendant's evidence was that the discussion he had with the plaintiff and Mr Bajwa in Perth in May 1998 was extremely brief and lacking in detail and in effect no representations were made to him at that time by the plaintiff. Further he said that he did not sight the proposed business plan until approximately June of 1998 when it was posted to him from Australia by the plaintiff. Even if that were correct, which I do not accept to be the case, any material in that document could not as a matter of logic have been relied upon when the defendant became a party to the agreement in May 1998. As an aside it should be noted that in Exhibit 20 Mr Bajwa deposed that the defendant's application for a temporary residency visa which was made in July 1998 was predicated on the defendant having purchased the restaurant business Taj Tandoor, which again as a matter of logic clearly suggests that the purchase of the business occurred prior to the application for the visa. 107 In the presentation of his case the defendant placed considerable emphasis on the representations contained in the proposed business plan which he said was sent to him unexpectedly by the plaintiff in June 1998. As he had given evidence that no oral representations were made to him by the plaintiff regarding the business on or prior to 14 May 1998, counsel for the plaintiff suggests that in order to succeed on the issue of alleged (Page 30)
misrepresentations, the defendant found himself in a position where he had to claim that the agreement of May 1998 occurred not then but after he received the proposed business plan. There is much force in this observation. 108 For that reason I accept that the defendant was at pains to attempt to demonstrate that the May 1998 agreement, Exhibit 11, was received by him and sent to the Department of Immigration in November 1998 in response to a request that the defendant demonstrate a realistic and genuine commitment to obtaining and maintaining ownership in a business in Australia. 109 There were a number of inconsistencies in the defendant's evidence regarding the proposed business plan which in my view reflected very negatively on his reliability and credibility as a witness. Initially he told the Court that he had no involvement in preparing the document, but when confronted with the final page of the document which is a list of his financial assets, he had to concede he had some involvement in the preparation of that part of the document, albeit that he suggested to the Court that his wife would be in a better position to provide information on that issue. 110 He then tried to suggest that when he received the business plan initially, that particular information was not included in it and he further suggested that the information in the personal profile of the document must have been provided to the plaintiff by the immigration agent, Mr Bajwa. The defendant's attempts to distance himself from a document of which he is patently in part the author and provider of information were in my view lacking in veracity and therefore most unconvincing. 111 At one point he also said that the business plan was sent to him by his agent, Mr Bajwa. The defendant was most reluctant to admit, which he finally did, that the representations in the proposed business plan were relevant to a forecast for the future operation of the business once he took over its conduct as distinct from prior to that time. Despite the cover sheet on the proposed business plan noting "prepared by Singh & Associates" in my view it is extremely unlikely that the plaintiff prepared that document and it is evident that the defendant, if he was not the sole author of the document, provided much of the information contained within it. 112 It is of considerable concern, relevant to an assessment of the defendant's reliability and credibility, that the agreements he alleged he (Page 31) reached with the plaintiff in both February 2000 and June 2001 were not pleaded in the original defence or the amended defence. His explanation in evidence as to why that was the case resulted in the answer "I can't explain". This reply is so unsatisfactory on its face in the context of this case as to require no further comment. 113 It should also be noted that although the original defence was simply a bald denial of the plaintiff's allegations for the most part, the amended defence was pleaded in some detail relevant to a number of allegations but omitted the two oral agreements referred to above as well as the alleged loan of $20,000 which the defendant now asserts he made to the plaintiff in late 1999. 114 These matters one would have thought are of such fundamental importance and so critical to the case that the defendant now presents in answer to the plaintiff's claim, that their omission admits of no other sensible or reasonable explanation than that they are untrue. The defendant simply could not explain why, although he was represented by solicitors, these allegations did not appear in his original defence or at least in his amended defence. 115 On the whole of the evidence it is apparent that the defendant had a somewhat intense desire to obtain first a temporary residency visa and then a permanent residency visa to enter and live in Australia. To this end in my view he was prepared to engage in making a number of representations to authorities that were not accurate but which he hoped would assist in this endeavour and again this reflects negatively on his general credit. 116 For some time he persisted in stressing that he and indeed his wife only worked in the business as distinct from having any meaningful role or control within it. Not only is that at odds with the plaintiff's evidence and that of the plaintiff's wife which I accept in this regard, but also it contradicts the evidence of Yi Yang whom I found to be a totally reliable and honest witness who has the advantage of being a neutral party in these proceedings. 117 The defendant must have been aware that whilst on a temporary residency visa he was not permitted to merely work in a business in Australia as it is inconceivable that an entity issuing such a visa would not make that plain to the recipient or that his migration agent, Mr Bajwa, would not have explained this to the defendant. That assertion on the defendant's part is also inconsistent with the representation made through (Page 32) Mr Bajwa to the Department of Immigration that the defendant had a genuine and realistic commitment to the business enterprise in Australia and intended in that regard to conduct and carry on the business when he entered Australia. This assertion clearly created a difficulty relevant to the defendant's allegation that the agreement reached in May 1998 had lapsed and thereafter he and his wife only worked in the business. 118 I accept that this is the reason underlying the pleading in his re-amended defence that he conducted the business from February 2000 until June 2001 and indeed he admitted changing his allegation from "working" in the business to "conducting" the business when no doubt he appreciated what Mr Bajwa was saying in part in his affidavit, Exhibit 20. In order to explain his assertion that he was no longer liable to pay the plaintiff the balance of the agreed purchase price, he then alleged an agreement which he said was made between himself and the plaintiff in February 2000. As has been noted such an agreement makes little commercial sense as it is almost completely to the defendant's advantage and almost entirely to the plaintiff's disadvantage. |