Taouk v Assure (NSW) Pty Ltd - [2017] NSWSC 534

Supreme Court

New South Wales

Medium Neutral Citation: Joseph Taouk v Assure (NSW) Pty Ltd [2017] NSWSC 534
Hearing dates: 6, 7, 8, 9 February 2017, oral closing submissions 16 February 2017, Defendant’s closing cross-claim submissions 20 February 2017, Plaintiff’s closing submissions and closing submissions on the Defendant’s cross-claim 21 February 2017, Defendant’s closing submissions 27 February 2017, Plaintiff’s responses to particular claims regarding Mr Taouk’s asserted payments 2 March 2017, Defendant’s reply to Plaintiff’s Document 9 March 2017.
Decision date: 04 May 2017
Before: Sackar J
Decision:
See para [381]

Catchwords: Construction of contracts – construction of contracts to vary – oral agreements – promissory estoppel – estoppel by convention – unjust enrichment – credit of witnesses.
Legislation Cited: Corporations Act 2001 (Cth)
Evidence Act 1995 (NSW)
Cases Cited: Ashton v Pratt [2015] NSWCA 12
ASIC v Hellicar (2012) 247 CLR 345
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560
B&B Constructions (Aust) Pty Ltd v Brian A Cheeseman & Associates Pty Ltd (1994) 35 NSWLR 227
Beale v Government Insurance Office of NSW [1997] 48 NSWLR 430
Blatch v Archer (1774) 1 Cowp 63
Caringbah Investments Pty Ltd v Caringbah Business and Sports Club Ltd (in liq) [2016] NSWCA 165
Christmas v Nicol Bros. Pty Ltd and Anor (1941) 41 NSWSR 317
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Commissioners for Her Majesty’s Revenue and Customs v The Investment Trust Companies (In Liquidation) [2017] UKSC 29
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226
Cubillo v Commonwealth (No 2) (2000) 103 FCR 1
Dabbs v Seaman (1925) 36 CLR 538
Dare v Pulham (1982) 148 CLR 658
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640
Fox v Percy (2003) 214 CLR 118
Gould v Mount Oxide Mines Ltd (In liq) (1916) 22 CLR 490
Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641
Ho v Powell (2001) 51 NSWLR 572
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 82 ALJR 419
John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
Jones v Dunkel (1959) 101 CLR 298
Jones v Sutherland Shire Council [1979] 2 NSWLR 206
Legione v Hateley (1983) 152 CLR 406
Lowick Rose LLP (in liquidation) v Swynson Ltd and anor [2017] UKSC 32
Moratic Pty Ltd v Gordon [2007] NSWSC 5
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (S99/2015; S102/2015) (2015) 256 CLR 104
Murtagh v Murtagh [2013] NSWSC 926
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Pavlovic v Universal Music Australia Pty Limited (2015) 90 NSWLR 605
Pennimpede v Pennimpede [2009] NSWSC 85
Portsmouth City Football Club Ltd v Seller Properties (Portsmouth) Ltd [2004] EWCA Civ 760
R v Navarolli (2009) 194 A Crim R 96
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603
Simic v New South Wales Land and Housing Corporation [2016] HCA 47
Skyrise Consultants Pty Ltd v Metroland Funds Management Ltd [2011] NSWCA 406
South Sydney Council v Royal Botanic Gardens (1999) 10 BPR 18,961
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) and Others (1999) 160 ALR 588
Thompson v Palmer (1933) 49 CLR 507
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106
Vroon BV v Foster’s Brewing Group Ltd [1994] VR 32
Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27
Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387
Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300
Watson v Foxman (1995) 49 NSWLR 315
Wood v Capita Insurance Services [2017] UKSC 24
Texts Cited: J W Carter, The Construction of Commercial Contracts (2013) Hart Publishing
Hon JJ Spigelman AC, "Truth and the Law" (2011) 85 (11) Australian Law Journal 746
J D Heydon, Cross on Evidence, 9th ed (2013) LexisNexis Butterworths
Lewison and Hughes, The Interpretation of Contracts in Australia (2012) Thomas Reuters (Professional) Australia Limited
Category: Principal judgment
Parties: Joseph Taouk (plaintiff)
Assure (NSW) Pty Ltd (defendant)
Representation:
Counsel:
F Corsaro SC, M Auld (plaintiff)
J Stoljar SC, P Reynolds (defendant)
Solicitors:
Gardner | Ekes Lawyers (plaintiff)
MLH Lawyers (defendant)

File Number(s): 2016/264640
Publication restriction: N/A

Judgment

Proceedings
Glossary – affidavits and submissions
Affidavits
Plaintiff’s affidavits
Defendant’s affidavits

Submissions
Plaintiff’s submissions
Defendant’s submissions

Background facts
Principles of law
Construction of contracts generally
Construction of contracts to vary
Oral agreements
Promissory estoppel
Estoppel by convention
Unjust enrichment
Credit of the witnesses

Overview of the case and considerations to follow
(1) Preliminary Questions on Liability – an overview
The Plaintiff’s Claim
The Defendant’s Cross-Claim

(2) Parties’ submissions – preliminary comments
(3) Credit of Mr Taouk and Mr Harsany – preliminary comments
Credit of Mr Taouk
Credit of Mr Harsany

(4) The Alleged Conversations
Alleged January 2012 conversation
Alleged April 2012 conversation
Alleged May 2012 conversation
Alleged 27 June 2012 conversation
Alleged March and May 2013 conversations
Alleged 22 June 2013 conversation
Alleged August 2014 conversation
Alleged February and March 2015 conversations
Alleged November 2015 and January 2016 conversations
Alleged February, March and May 2016 conversations
Alleged early/May 2016 conversation

(5) Preliminary Questions on Liability – consideration
Preliminary Question 1 - Breaches of Agreement
1. Express terms under the Agreements
2. Implied terms under the Agreements
3. Express and implied terms under the alleged oral agreements

Preliminary Question 2 – The Estoppels
1. Estoppel based on alleged June conversation
2. Estoppel based on alleged February 2014 conversation
3. Estoppel based on alleged February 2015 conversation

Preliminary Question 3 - Section 21 of the Australian Consumer Law
Preliminary Question 4 - Unjust Enrichment
Preliminary Question 5 - Alleged Paragraph 8 Payments
$200,000 Contribution
$80,000 on 1 September 2013
$27,000 on 1 October 2014
$5,300 on 15 October 2014
$220,000 on 23 December 2014
$15,000 on 23 December 2014
$20,000 on 15 January 2015
$12,000 and $10,000 on 15 January 2015

Preliminary Question 6 - Alleged Tab 33 Schedule Payments
a) Payments made by Edifice
b) Payments made by third parties
c) Payments from Mr Taouk’s credit card

Preliminary Question 7 – Breaches of Agreement, Cross-Claim
Preliminary Question 8 – Liability as Guarantor and Indemnifier, Cross-Claim
Assure’s claims
Mr Taouk’s estoppels

Preliminary Question 9 – Section 21 of the ACL, Cross-Claim

Summary of findings

Judgment

Proceedings

This case concerns a payment dispute surrounding a joint venture agreement for the development and construction of a townhouse complex in Berowra Heights.
The defendant Assure (NSW) Pty Limited (Assure) engaged Berowra Developments Pty Ltd (Developer) to work at 6-12 Kita Avenue, Berowra Heights NSW (Berowra Property) to develop 17 townhouses (Berowra Development). The parties entered into an agreement on 12 June 2012 together with the plaintiff Mr Joseph Taouk who provided Assure with a guarantee and indemnity in relation to the Developer’s performance (Development Agreement). The Development Agreement was varied by deed on 28 May 2015 (Variation, collectively the Agreements).
Together with the Agreements, the Developer entered into a building agreement with HGH Construction Pty Ltd (now Edifice Australia Pty Ltd) (Builder) on 20 May 2012 to carry out the building work under the Development Agreement (Building Agreement). Mr Taouk is also the sole director, secretary and shareholder of the Builder. The building work was not completed by the completion date and the Developer was ultimately deregistered, so Assure retained a third party to supervise completion of the work.
Mr Taouk is seeking a monetary judgment against Assure claiming he is personally owed money by Assure for his contributions to the costs of construction and development of the Berowra Development. Mr Taouk’s case is based on multiple claims. In short, Mr Taouk alleges against Assure breaches of both express and implied terms in written and oral agreements, estoppels of various forms, breaches of section 21 of the Australian Consumer Law (ACL), and unjust enrichment or quantum meruit.
By way of relief, Mr Taouk seeks a declaration Assure breached the Development Agreement, an order of specific performance or an order Assure make payments in accordance with the Development Agreement, a declaration Assure engaged in conduct in breach of section 21 of the ACL, an order Assure account to Mr Taouk for all expenses and costs on the Berowra Development and for any amount as determined by the Court, a declaration Assure was unjustly enriched, damages or any other alternative remedy against Assure, restitution, compensation on a quantum meruit basis, and a declaration Assure is estopped from denying Mr Taouk’s contribution to the acquisition of the Berowra Property was in accordance with the Variation.
Assure made a cross-claim against Mr Taouk for breach of the Agreements and breach of Mr Taouk’s guarantee and indemnity (Cross-Claim). In defence to the Cross-Claim, Mr Taouk claimed additional breaches by Assure of section 21 of the ACL

Glossary – affidavits and submissions

I have adopted the following terminology for affidavits and submissions in this case for ease of reference.

Affidavits

Plaintiff’s affidavits

(1) JT1: Affidavit of Joseph Taouk dated 14 September 2016;

(2) JT2: Affidavit of Joseph Taouk dated 21 September 2016. There was a second affidavit also dated 21 September 2016, but this deals solely with interlocutory issues which are not relevant to these proceedings;

(3) JT3: Affidavit of Joseph Taouk dated 16 November 2016;

(4) JT4: Affidavit of Joseph Taouk dated 2 December 2016;

(5) JT5: Affidavit of Joseph Taouk dated 1 February 2017; and

(6) JT6: Affidavit of Joseph Taouk dated 7 February 2017.

Defendant’s affidavits

(1) DH1: Affidavit of Denis Harsany dated 20 September 2016;

(2) DH2: Affidavit of Denis Harsany dated 19 December 2016; and

(3) DH3: Affidavit of Denis Harsany dated 6 February 2017.

Submissions

Plaintiff’s submissions

(4) Plaintiff’s Outline of Submissions dated 3 February 2017 (Plaintiff’s opening submissions);

(5) Plaintiff’s Outline of Submissions dated 21 February 2017 (Plaintiff’s closing submissions);

(6) Plaintiff’s Outline of Submissions on the Defendant’s Cross-Claim dated 27 February 2017 (Plaintiff’s submissions on the Cross-Claim); and

(7) Plaintiff’s Responses to Particular Claims regarding Mr Taouk’s Asserted Payments dated 2 March 2017 (Plaintiff’s Question 6 submissions).

Defendant’s submissions

(1) Defendant’s Outline of Opening Submissions dated 3 February 2017 (Defendant’s opening submissions);

(2) Defendant’s Outline of Closing Submissions on Cross-Claim dated 20 February 2017 (Defendant’s submissions on the Cross-Claim);

(3) Defendant’s Outline of Closing Submissions on Plaintiff’s Case dated 27 February 2017 (Defendant’s closing submissions); and

(4) Defendant’s Reply to Plaintiff’s Document of 2 March 2017, dated 9 March 2017 (Defendant’s reply to Question 6 submissions).

Background facts

In or about December 2009, Assure purchased three of the four lots of the Berowra Property (being Lots 6, 10 and 12).
On 9 June 2011, Mitchel Brandtman (NSW) Pty Ltd conducted a quantity surveyor’s report of the Berowra Development, commissioned by Assure (Quantity Surveyor’s Report) (CB4/1390-1398). The Report estimated construction costs of approximately $3,350,000 inclusive of GST.
On 12 January 2012, Mr Denis Harsany, the sole director and secretary of Assure, met Mr Taouk for the first time. The two men met at the offices of a real estate agent, Mr Joe Owen to discuss a possible joint venture for the Berowra Development (12 January Meeting). The conversations that took place at the 12 January Meeting were disputed in proceedings, but relate to the construction costs and possibility of Mr Harsany receiving some cash from equity in the Berowra Property from Mr Taouk.
At 1:14PM that day, Mr Owen sent an email to Mr Taouk, with the subject line “agreement of beroara heights,” providing notes on the 12 January Meeting. The email read:

Joint Venture agreement between the vendor {Assure Trust, Trustees assure NSW PTY Ltd}, and Jihany Trust, trust company to be provided for the construction of the 17 town house site in 6-12 Kita St Berowra Heights
The 2 parties met and agreed to certain points that include
Land value 2.7 million
Construction costs up to 3.7 million
Land to be used as security for the construction loan
900,000 to be released to the owner on approval of the loan and signing of the Joint Venture agreement
Construction to start with 120 days from signing the agreement , completion 14 months after the start
Vendor to give notice to tenant’s property to be vacant possession after 90 days
CC cost and other related costs to be paid by the Builder, all fees include acquisition and construction are to be reimbursed to the builder on completion and Finance to arranged by the builder
Schedule of finish to be provided by the vendor both parties to a free on all inclusions,
(CB3/887)

While Mr Taouk’s version of events surrounding the 12 January Meeting varied throughout his affidavits, in essence he alleged at the 12 January Meeting he told Mr Harsany construction costs would be significantly more than $3.7 million, being around an extra $2 million because each unit would cost “at least $300k” to build (JT4 [4]). In response Mr Taouk alleged Mr Harsany told him he could only get finance for the $3.7 million construction costs and that he would need Mr Taouk to “tip in the rest” and would reimburse Mr Taouk at the end of the project from the sale proceeds (JT4 [4], JT4 [7]).
Mr Harsany disputed this conversation (DH1 [12] – [15], DH2 [13]). According to Mr Harsany Mr Taouk said he could build each townhouse for “about $170,000.” Mr Harsany allegedly agreed to this, as it was close to the Quantity Surveyor’s Report estimates. Mr Taouk allegedly said he would need some leeway for unforseen contingencies, so Mr Harsany agreed to cap it at $3.7 million including GST. Mr Taouk allegedly said “That’s plenty. It won’t go that high. Should be much less.” Mr Harsany also recalled Mr Taouk agreeing to apply for finance to pay out equity of about $900,000 on the Berowra Development (DH2 [13] – [15]).
On 21 March 2012, Mr Harsany alleged Mr Taouk arranged for the incorporation of the joint venture vehicle (Berowra Developments Pty Ltd (Berowra JV)). The directors and equal shareholders were a Ms Wei Han (Mr Harsany’s nominee) and a Mr Michael Tawk (Mr Taouk’s nominee) (DH2 [23] – [26]). Mr Taouk alleged this arrangement took place in late May 2012 (JT2 [11] – [12]).
In the same meeting that same day, Mr Harsany alleged a Mr Edmond El Khoury (Mr Taouk’s solicitor at the time) prepared a draft development agreement for the parties to review, which was based on a template from another project (DH2 [30]).
On or about 27 March 2012, a proposal was circulated between Assure and the Developer and Mr Taouk detailing the outline for the Berowra Development (Proposal). Mr Harsany alleged this followed a meeting between the parties and their solicitors at the office of One Group Legal (Mr Harsany’s solicitors at the time) on 21 March 2012 (DH2 [19]).
In or about April 2012, Mr Taouk alleged he had a conversation with Mr Harsany discussing the Berowra JV where both parties were to share the costs and the profits without a builder’s margin. Further, they allegedly agreed to Mr Harsany preparing a building contract for about $3 million, despite Mr Taouk allegedly predicting it would cost at least $300,000 a unit to build. According to Mr Taouk, Mr Harsany allegedly told Mr Taouk the parties to the joint venture would refinance later if the costs were greater than $3 million and Mr Taouk would be reimbursed for any funds he contributed to the shortfall from the proceeds from the unit sales (JT4 [9]). This conversation was disputed in proceedings (DH2 [21]).
In or about late May 2012 (but before 20 May 2012), Mr Taouk alleged he had a further meeting with Mr Harsany and both parties’ legal representatives at VA Lawyers (solicitors at the time for Mr Harsany) where they agreed on the Berowra JV (JT1 [6]; JT2 [11]-[12]). This conversation was disputed in proceedings, and Mr Harsany alleged the relevant conversation regarding Berowra JV occurred on 21 March 2012 (DH2 [22]).
On 20 May 2012, the Developer signed the Building Agreement with the Builder to carry out the building work under the Development Agreement within 15 months (being 20 August 2015) for a lump sum of $2,850,000 plus GST. Mr Taouk alleged prior to signing the Building Agreement, Mr Harsany told Mr Taouk the purpose of signing the Agreement was to get a loan from the bank. Further, Mr Taouk alleged Mr Harsany told him they would try to apply for a loan under the Developer and if that failed, Assure would apply (JT4 [14]-[16]). These conversations were disputed in proceedings (DH2 [27]).
On 12 June 2012, the Development Agreement was signed between Assure, the Developer, and Mr Taouk as Guarantor. Mr Taouk alleged the parties met at Blefield (JT1 [8]), JT4 [17]), whereas Mr Harsany alleged the parties met at the Berowra Property (DH2 [32]). Key terms of the Development Agreement included the following (adopting the Defined Terms of the document):

Developer is required to construct and develop the project by the Date for Project Practical Completion (being 20 May 2013) (clause 1.1, 13.1 and 15.1);

Developer indemnifies Assure for losses associated with defects it fails to rectify (clause 13.5(c)), and unreservedly accepts all risks relating to the project (clause 5.1) and is responsible for all costs in relation to the project subject to the agreement (clause 22);

Assure is to pay the Consideration Amount to the Developer, calculated with reference to the formula in Schedule 6 and payable upon the sale of the last lot (clause 4);

As noted in the Proposal which is annexed as Schedule 8, the maximum chargeable under the Development Agreement is $3.7 million, including GST. Further, the Developer is to arrange finance (including construction finance) for the project and the Developer or the Guarantor must contribute any shortfall;

Mr Taouk indemnifies (clause 24.1) and guarantees to (clause 24.2) Assure in respect of the Developer’s performance.

On 27 June 2012, Mr Harsany asked Mr Taouk to contribute $200,000 in funding to purchase the fourth and final lot of the Berowra Property (being Lot 8). Mr Taouk alleged he agreed to do so, and made arrangements to obtain a short term loan of $200,000, following which Mr Harsany agreed to pay Mr Taouk back from the sale proceeds (JT4 [19] – [21]). Mr Harsany agreed to asking Mr Taouk for $200,000, but alleged Mr Taouk said he would ask Mr El Khoury for the loan (DH2 [35]-[36]). In Mr Taouk’s most recent affidavit, he said he asked Mr El Khoury for the $200,000, who obtained the funds from Mr Ali Behamd, who then insisted Mr El Khoury be the lender (JT6 [35]-[44]).
That same day, on 27 June 2012, Mr El Khoury deposited the $200,000 in Assure’s account, as confirmed by an email that same day from Fiona Sephton of Lane & Lane (Assure’s solicitor at the time) to Mr Harsany which read “The funds are in. $200,000.00. Deposited by Edward Khoury…” (CB4/1402).

On 3 August 2012, the parties formalised this loan by executing a loan agreement between Mr El Khoury as the Lender, and Mr Harsany on behalf of Assure as the Borrower for the $200,000 (Loan Agreement) (CB3/1126-1135). Mr Taouk and Mr Harsany were the guarantors of the loan.
On 10 August 2012, Assure acquired Lot 8 in the Berowra Property. According to Mr Harsany, Assure purchased Lot 8 with the money from a loan with the Commonwealth Bank of Australia (CBA) and Mr El Khoury (DH1 [11]).
On 12 November 2012, Peter Hammond of Napier & Blakely Pty Ltd prepared the Initial Financier’s Quantity Surveying Report (Initial Financier’s Quantity Surveying Report). Mr Harsany did not recollect providing any information to Mr Hammond to assist with the report, and alleged Mr Taouk provided the information (DH2 [41]).
In or about late March 2013, Mr Taouk alleged Mr Harsany asked him to add to the construction facility as Guarantor because Assure as the borrower was struggling to get finance. Mr Taouk allegedly agreed to this, saying he would contact Westpac to obtain further finance (JT3 [17]). This conversation was disputed in proceedings.
On 12 April 2013, Mr Harsany received a copy of the Initial Financier’s Quantity Surveying Report.
In or about May 2013, Mr Taouk alleged Mr Harsany told him he would tell Westpac and the Quantity Surveyor the Developer was no longer the Special Purpose Vehicle (SPV), and that the joint venture was only between Assure and Mr Taouk (JT3 [21]). This conversation was disputed in proceedings (DH2 [49]).
On 31 May 2013, Mr Harsany sent an email to Mr Peter Hammond of Napier Blakely (Quantity Surveyors) informing Mr Hammond that Mr Harsany and Mr Taouk were considering removing the SPV and having a “simple Owner and Builder contract to complete the works” (CB2/782). Mr Taouk alleged that following this email, Mr Taouk told Mr Harsany he had told Mr Hammond Assure and not the Developer was the borrower, and Mr Hammond and Mr Taouk agreed to refrain from removing the Developer from the arrangement and instead keep the structure the same. Mr Harsany allegedly agreed to this and told him to “push Westpac to settle ASAP” because the Berowra Development needed finance and he was having issues with his wife that he wanted to keep her out of (JT3 [23]). This conversation was disputed in proceedings.
In or around the end of May 2013, Mr Taouk alleged a finance/loan facility was approved by Westpac for a total sum of approximately $5,200,000.00 for the purpose of refinancing the Berowra Development (Westpac Loan Facility) (JT1 [12]).
On or about 6 June 2013, Mr Taouk alleged Mr Harsany prepared progress claim No 1 using Edifice’s template and letterhead (JT4 [42]). This assertion was disputed in proceedings. Mr Harsany alleged the final version of the claim, invoice and statutory declaration were provided by Mr Taouk to the Quantity Surveyor for bank processing (DH2 [50]).
On 22 June 2013, Mr Taouk alleged Mr Harsany asked Mr Taouk whether he, being Mr Harsany, could be the site manager at the Berowra Development because he needed an income (JT4 [26]). Mr Harsany disputed this conversation ever taking place, and instead contended he reluctantly became site manager up until about late November or early December 2013 (DH2 [67]-[69]).
On or around 27 July 2013, Westpac made the Westpac Loan Facility available to Assure (CB4/1598-1601).
By 20 August 2013, being completion date under the Development Agreement, Assure alleged the Developer had not discharged its contractual obligations (DH1 [20]).
In or around September/October 2013, Mr Taouk alleged construction commenced on the Berowra Development. Mr Taouk alleged throughout the construction period, all progress claims were paid from the Westpac Loan Facility directly to Assure, to be paid to Edifice (JT1 [19]). This arrangement was disputed in proceedings, and Mr Harsany alleged at no stage did Assure enter into an agreement with the Builder (DH1 [17]).
In or about 1 September 2013, Mr Taouk alleged there was a shortfall of $80,000 on the Westpac Loan Facility which he paid at the request of Mr Harsany by asking his cousin Mary Succar to draw a cheque in favour of Westpac which Mr Taouk then delivered to Mr Harsany (JT6 [7]-[10]). Mr Harsany allegedly agreed to settle the contribution at the end of the joint venture (ASOC [8](a); JT1 [13]-[14]). This agreement was disputed in proceedings (DH1 [30]).
Around September/October 2013, Mr Taouk also alleged Mr Harsany told him he was going to use the GST construction refund from the ATO to take care of some personal expenses with his ex-wife, and that he would reconcile the GST account when the Berowra Development finished and pay Mr Taouk back (JT4 [49]). This conversation was disputed in proceedings (DH2 [72]).
Mr Harsany alleged at this time, around September/October 2013, he complained to Mr Taouk about the delays in the project, and Mr Taouk suggested claiming the GST credits for some cash flow (DH2 [72]).
On 10 November 2013, Mr Taouk alleged he made a payment in the sum of $6,732.00 from his personal credit card to Prestige Building Products for the supply of bricks at the Berowra Property (JT5 [44]).
From late 2013 until June or July 2014, Mr Harsany alleged there was a shortfall in the funds needed to continue construction on the Berowra Development. Mr Harsany said although he believed the Developer and Mr Taouk were obliged to pay the shortfall, he borrowed money to meet the shortfall (DH2 [75]).
In or about February 2014, Mr Taouk alleged there was a further oral agreement between the parties where they agreed any GST refunds received by Assure in respect of the Berowra Development would be paid 50% to Assure and 50% to Mr Taouk (ASOC [7]). Mr Taouk further alleged Assure received a GST refund of $336,000 and did not pay Mr Taouk 50% of this (ASOC [19]). Mr Taouk later alleged a conversation regarding a split of GST occurred in late November 2015 (JT2 [16]). This conversation was disputed in proceedings.
In or around August 2014, Assure made an application to CEG Direct Securities and obtained further funding of $500,000. Mr Taouk was guarantor of this facility (CEG Funding Facility).
Mr Taouk alleged at this time Mr Harsany asked him to pay $200,000 to the CEG Funding Facility and told him “I’ll pay it back. Anyway you are protected by the Joint Venture Deed and we’ll work it out at the end” (JT1 [25]). This conversation was disputed in proceedings. Mr Harsany alleged he said to Mr Taouk in August 2014 that he was willing to take a second tier loan, provided Mr Taouk released the $200,000 that was owing to the trust (DH2 [55]).
On 1 October 2014, Mr Harsany sent Mr Taouk an email about an interest payment for the CEG Funding Facility after speaking to Mr Greg Holt from Westpac (CB1/345-346). Mr Harsany asked Mr Taouk:

Do you have a solution for this today? I can’t get those funds from anywhere. I’m empty again now.
The St. George thing is also dragging out much longer than you indicated. We need to see much more happening with that too.
It’s killing me if I’m going to end up in a default situation for the second time during this project…

That same day, on or about 1 October 2014, Mr Taouk alleged he made a payment of $27,000 (ASOC [8](b)); Plaintiff’s closing submissions [60]-[63]). This payment was disputed in proceedings (Amended Defence [8] Defendant’s closing submissions [73]);
On or about 15 October 2014, Mr Taouk alleged he made a further payment of $5,300 towards interest or expenses on the CEG Funding Facility (ASOC [8](c); Plaintiff’s closing submissions [64]). This payment was disputed in proceedings (Amended Defence [8]; Defendant’s closing submissions [74]).
On or about 28 November 2014, Mr Taouk alleged he made a further payment of $12,000 toward discharging interest or expenses on the CEG Funding Facility ASOC [8](e); Plaintiff’s closing submissions [69]-[72]). This payment was disputed in proceedings (Amended Defence [8]; Defendant’s closing submissions [76]).
In or about December 2014 (although Mr Taouk’s affidavit, presumably mistakenly, reads December 2013 (JT17 [19]), Mr Taouk alleged Mr Harsany told him Westpac would pay out the CEG Funding Facility up to $300,000 and that “We need to pay out about $220,000 plus interest.” Mr Taouk allegedly agreed to this (JT6 [19]).
On or about 19 December 2014, Mr Taouk allegedly made a payment of $220,000 to the CEG Funding Facility in response to Mr Harsany’s request in December 2013. The funds came from a refinance of real property owned by St Peters Trust (Plaintiff’s closing submissions [70]; JT6 [20]). This payment was disputed in proceedings (Amended Defence [8]; Defendant’s closing submissions [75]).
On or about 12 January 2015, Mr Taouk alleged Mr Harsany asked him to urgently call CEG and pay them $10,000, which Mr Taouk said he did through payment on his personal credit card (JT6 [24]-[25]). This payment was disputed in proceedings (Amended Defence [8]; Defendant’s closing submissions [78]-[79]).
On or about 13 January 2015, Mr Taouk alleged he had a further conversation with Mr Harsany where Mr Harsany told him $10,000 was not enough and that he needed to pay a further $10,000 to CEG and call up CEG and speak to Jim. Mr Taouk alleged he made the phone call and then made a further credit card payment of $12,000 on his personal credit card (JT6 [26]-[27]). This payment was disputed in proceedings (Amended Defence [8]; Defendant’s closing submissions [78]-[79]).
In or about February 2015, Mr Taouk alleged he and Mr Harsany had conversations in the context of negotiating the Variation, to the effect that any payments made by or on behalf of Mr Taouk towards the development and construction costs of the Berowra Development were to be reimbursed by Assure when funds from the sale of the townhouses in the Berowra Development became available (JT1 [52], JT4 [59], [63]). Further, Mr Taouk alleged there was a conversation to the effect Mr Taouk was assured by Mr Harsany that the Variation would give Mr Taouk security for his contributions and ensure he was paid in priority to everyone once the mortgagee and outgoings were paid (JT2 [26]). These conversations were disputed by Mr Harsany in proceedings (DH1 [19], DH2 [77]-[79]). Mr Harsany alleged the conversation was to the effect that both said to each other “the purpose of the variation is to cap the ‘Gross Value’ that could be taken in account for the purposes of calculating the amount payable to Berowra under the Development Agreement” (DH2 [79]).
In or around March 2015, Mr Harsany obtained a variation of the Westpac Loan Facility (CB4/1602-1632).
In or around March 2015, Mr Taouk alleged he had a conversation with Mr Harsany about the restructuring of the joint venture. Mr Harsany allegedly told Mr Taouk he would get “any contributions you have made at the end of the project” (JT1 [52]).
On 28 May 2015, Assure, the Developer and Mr Taouk executed the Variation. The Variation, in short, primarily affirmed the Development Agreement, simplified the Consideration Amount formula, and stipulated development costs are to be paid before payment of the Consideration Amount. Mr Taouk alleged he signed the Variation on the understanding the Deed gave him priority to receive contributions made towards the refinance of the Berowra Property and the construction costs (JT4 [65]).
On 29 May 2015, Mr Harsany, in an email to Mr Taouk, told him he was happy to add clarity to clause 2 of schedule 6 of the Variation, suggesting the wording:

Notwithstanding any other terms within the agreement, the balance of the Development Costs are to be paid or reimbursed to relevant parties prior to payment of the Consideration Amount.

In or around June 2015, Mr Taouk alleged Mr Harsany told him the parties did not need to worry about the Developer as they had executed the Variation, and that Assure would ensure Mr Taouk was reimbursed for his contributions to the Berowra Development (Defence to Cross-Claim [18(a)])
On 22 June 2015, Assure retained Ken Evans of Devlan Project Management (Devlan) to supervise the completion of the Berowra Development.
In or around August 2015, Mr Taouk alleged he had a further conversation where Mr Harsany again told him not to worry about the Developer anymore and that Mr Taouk would still be paid back his contributions to the Berowra Development (Defence to Cross-Claim [18(a)]).
On 23 August 2015, the Developer was deregistered pursuant to section 601A of the Corporations Act 2001 (Cth).
In or about September 2015, Assure applied for a short term loan facility with Balanced Securities Limited of approximately $6,700,000. Mr Taouk alleged he was not informed of this loan (JT1 [31]), while Mr Harsany alleged he sent an email about it to Mr Taouk on 20 April 2015 (DH2 [60]-[62]).
In February, March and May 2016, Mr Taouk alleged Mr Harsany told him he would be paid his contributions from the sale proceedings (JT2 [4], [6], [7]). These conversations were disputed in proceedings (Defendant’s closing submissions [19]).
On or around 14 April 2016, Mr Harsany alleged he was informed by Devlan the cost of rectifying defects at the Berowra Development would amount to approximately $300,000 - $400,000. Mr Harsany applied for $290,000 from Baccus Investments Limited to rectify the defects (DH2 [66]).
On 22 April 2016, Mr Harsany sent Mr Taouk an email regarding Mr Taouk’s alleged contributions (CB1/305). Mr Harsany said the tax accountant Mr Van Huong Nguyen was confused about the $280,000 Mr Taouk alleged he paid, and then noted the following:

These are when significant contributions were made by you in approximate numbers –
1. 200K for the settlement of No.8 Kita Road.
2. 80K for the commencement of the original Westpac development loan
3. Around 200K to pay off the CEG loan
4. There have been some smaller amounts paid to Westpac later in the piece etc however Van is able to reconciled [sic] all these.
It appears that you are getting confused about items 1 & 2. These amounts were paid as described above. We didn’t get the $200L from you that was due to be paid as part of the development agreement.

In or around May 2016, Mr Harsany allegedly requested for the accounts of the Builder to be audited. At the time, Mr Taouk allegedly told Mr Harsany construction costs were at $5.2 million and he had covered the $2 million shortfall from his pocket. Mr Harsany allegedly said this could be verified by the audit and once it was complete, he could pay Mr Taouk out from the sale proceeds (JT2 [23]).
On 7 September 2016, Mr Taouk commenced proceedings in this court.
On 23 November 2016, I granted Mr Taouk’s application for an injunction on the distribution of the proceeds of sale of the townhouses that had been sold.

Principles of law

Construction of contracts generally

In Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (S99/2015; S102/2015) (2015) 256 CLR 104 (Mount Bruce Mining) at [46]-[52], French CJ, Nettle and Gordon JJ reaffirmed the approach to construing commercial contracts:

[46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.
[47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.
[48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.
[49] However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals.
[50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations.
[51] Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption "that the parties ... intended to produce a commercial result". Put another way, a commercial contract should be construed so as to avoid it "making commercial nonsense or working commercial inconvenience”.
[52] These observations are not intended to state any departure from the law as set out in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales and Electricity Generation Corporation v Woodside Energy Ltd. We agree with the observations of Kiefel and Keane JJ with respect to Western Export Services Inc v Jireh International Pty Ltd. (citations omitted)
(See the judgments of Bell and Gageler JJ at [119]-[121] and Kiefel and Keane JJ at [107]-[113] which are of similar effect).

Mount Bruce Mining was most recently approved by the High Court in Simic v New South Wales Land and Housing Corporation [2016] HCA 47 at [18] and [78] and applied by the New South Wales Court of Appeal in Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27 at [96].
Further guidance on the construction of commercial contracts was provided by Kiefel, Bell and Gordon JJ in Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12 at [16]-[17], citing Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640:

It is well established that the terms of a commercial contract are to be understood objectively, by what a reasonable businessperson would have understood them to mean, rather than by reference to the subjectively stated intentions of the parties to the contract (Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656 [35] and the cases at fn 58; [2014] HCA 7). In a practical sense, this requires that the reasonable businessperson be placed in the position of the parties. It is from that perspective that the court considers the circumstances surrounding the contract and the commercial purpose and objects to be achieved by it (Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656-657 [35] and the cases at fn 60).
Clause 4 is to be construed by reference to the commercial purpose sought to be achieved by the terms of the lease. It follows, as was pointed out in the joint judgment in Electricity Generation Corporation v Woodside Energy Ltd ((2014) 251 CLR 640 at 656-657 [35] and the cases at fn 60), that the court is entitled to approach the task of construction of the clause on the basis that the parties intended to produce a commercial result, one which makes commercial sense. It goes without saying that this requires that the construction placed upon cl 4 be consistent with the commercial object of the agreement.

The UK adopts a similar, although not identical, approach to contractual interpretation. In the recent case of Wood v Capita Insurance Services [2017] UKSC 24, the Supreme Court (leading judgment by Lord Hodge) described contractual interpretation at [12] as involving:

an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated…To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.

Construction of contracts to vary

In construing contracts to vary, the antecedent contract will always form part of the context of the later contract; Lewison and Hughes, The Interpretation of Contracts in Australia (Thomas Reuters (Professional) Australia Limited, 2012) (The Interpretation of Contracts in Australia) at [3.03]; Carter JW, The Construction of Commercial Contracts, (Hart Publishing, 2013) at [7]-[19]. In HIH Casualty & General Insurance Ltd v New Hampshire Insurance Co [2001] EWCA Civ 735 at [84], Lord Justice Rix notes:

…I do not see how the relationship of the two contracts can be decided without considering both of them. In essence there are, it seems to me, three possibilities. Either the later contract is intended to supersede the earlier, in which case the above principles apply. Or, the later contract is intended to live together with the earlier contract, to the extent that that is possible, but where that is not possible it may well be proper to regard the later contract as superseding the earlier. Or the later contract is intended to be incorporated into the earlier contract, in which case it is prima facie the second contract which may have to give way to the first in the event of inconsistency….

The prevailing view in Australia also appears to be that the antecedent contract is not just part of the context of the later contract, but may be taken into account in construing that later contract regardless of where there is ambiguity in the later contract; The Interpretation of Contracts in Australia at [3.06]. See also B&B Constructions (Aust) Pty Ltd v Brian A Cheeseman & Associates Pty Ltd (1994) 35 NSWLR 227; South Sydney Council v Royal Botanic Gardens (1999) 10 BPR 18,961 at [43], affirmed (2002) 240 CLR 45.
This approach also applies to construction of amended clauses, where regard should be had to the admissible evidence of background knowledge reasonably available to the parties at the time of the amendment; The Interpretation of Contracts in Australia at [3.03]; Portsmouth City Football Club Ltd v Seller Properties (Portsmouth) Ltd [2004] EWCA Civ 760 at [47] – [48] per Lord Justice Chadwick.

Oral agreements

In John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [93]-[94], Hammerschlag J summarised the principles relevant to the formation of an oral agreement:

[93] A binding agreement is made when a reasonable person would believe that, based on their words and behaviour, the parties intended to contract. This is an objective test, which in most cases can be administered by determining whether there has been an offer by one party to be bound on certain terms accompanied by an unqualified acceptance of that offer communicated by the other party to the offeror. See generally: Paterson, Robertson, and Duke, Principles of Contract Law, (4th ed 2011, Thomson Reuters) at [1.15] and [12.10]; J W Carter, Contract Law in Australia, (6th ed 2013, LexisNexis Butterworths) at [3.06].
[94] Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.

Formal language of offer and acceptance is not required for a contract to be formed; see Ashton v Pratt [2015] NSWCA 12 at [80] per Bathurst CJ, citing Vroon BV v Foster’s Brewing Group Ltd [1994] VR 32 at 79.
The commercial context and parties’ previous dealings are relevant to determining whether a binding agreement has come into existence between the parties: Pavlovic v Universal Music Australia Pty Limited (2015) 90 NSWLR 605 at [15] (per Bathurst CJ), [72], [84] (per Beazley P), [162] (per Meagher JA); Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548; Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 138. It is also appropriate to consider the object of the transaction between the parties: Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22] (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]; International Air Transport Association v Ansett Australia Holdings Ltd (2008) 82 ALJR 419 at [8] (per Gleeson CJ).
In cases involving alleged oral agreements that purport to supplement or supersede written agreements, the remarks of the Court of Appeal in Skyrise Consultants Pty Ltd v Metroland Funds Management Ltd [2011] NSWCA 406 per MacFarlan JA (Beazley and Meagher JJA agreeing) at [13]-[15] are instructive:

[13] If a prior oral agreement is consistent with the terms of a later written agreement, the proper conclusion may be that the agreement is partly oral and partly in writing. One issue to be addressed in that context is whether the written terms were intended to be an exhaustive statement of the parties' rights (see State Rail Authority (NSW) v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170 at 191 - 2). If they were, the parol evidence rule will preclude the conclusion that the contract is partly oral and partly in writing.
[14] Moreover where, as here, the terms of the prior oral arrangement contradict the terms of the written arrangement the conclusion that the contract is partly oral and partly in writing will not be available. As was said in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; 218 CLR 471 at 484 in relation to the facts there under consideration:
In another case it may leave open the possibility that the contract is partly oral and partly in writing. But that cannot be so here. The oral limited recourse terms alleged by the respondents contradict the terms of the written loan agreement. If there was an earlier, oral, consensus, it was discharged and the parties' agreement recorded in the writing they executed. It is the written loan agreement which governed the relationship between Rural Finance and each respondent." (citations omitted)
[15] The appellants did not contend that the oral agreement constituted a collateral contract. Such a contention would plainly not have been successful as a collateral contract may not contradict the terms of the main contract (see Hoyt's Pty Ltd v Spencer [1919] HCA 64; 27 CLR 133 and Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; 160 CLR 1).

Promissory estoppel

Promissory estoppel operates when the defendant has induced or acquiesced in the adoption by the plaintiff of an assumption that the defendant will not assert its strict legal rights, so to prevent unconscionable (or unconscientious) insistence by the defendant on its strict legal rights; Moratic Pty Ltd v Gordon [2007] NSWSC 5 (Moratic) at [33] per Brereton J.
The current leading authority on promissory estoppel in Australia is Brennan J’s formulation in Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 (WaltonsStores) at 428:

… it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.

Waltons Stores was most recently cited with approval by the New South Wales Supreme Court of Appeal in Caringbah Investments Pty Ltd v Caringbah Businessand Sports Club Ltd (in liq) [2016] NSWCA 165 at [72] per Bathurst CJ.

Estoppel by convention

Estoppel by convention operates alongside promissory estoppel, but as a creature of common law. The principles determining whether a conventional estoppel arises have been stated on numerous occasions. An estoppel by convention arises where the relevant parties make an assumption about the conventional basis of their relationship: Dabbs v Seaman (1925) 36 CLR 538 at 549; Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226 at 244-5. This usually arises where parties act on the basis of agreed or assumed facts and are ‘estopped’ from denying those agreed or assumed facts because such a denial will cause detriment to one of them: Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300 at 322-323; Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at [200] (Ryledar); Thompson v Palmer (1933) 49 CLR 507 at 547.
As Mason and Deane JJ in Legione v Hateley (1983) 152 CLR 406 (Legione) at 430 said, it is:

…the common law estoppel which precludes a person from denying an assumption which formed the conventional basis of a relationship between himself and another or which he has adopted against another by the assertion of a right based on it.

The “classic statement of [the underlying] principle” (Legione at 430) is said to be that of Dixon J in Thompson v Palmer (1933) 49 CLR 507 at 547:

The object of estoppel in pais is to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other’s detriment. Whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party. He may be required to abide by the assumption because it formed the conventional basis upon which the parties entered into contractual or other mutual relations, such as bailment; or because he has exercised against the other party rights which would exist only if the assumption were correct … ; or because knowing the mistake the other laboured under, he refrained from correcting him when it was his duty to do so; or because his imprudence, where care was required of him, was a proximate cause of the other party’s adopting and acting upon the faith of the assumption; or because he directly made representations upon which the other party founded the assumption. But, in each case, he is not bound to adhere to the assumption unless, as a result of adopting it as the basis of action or inaction, the other party will have placed himself in a position of material disadvantage if departure from the assumption be permitted.
(citations omitted)

His Honour shortly thereafter provided the following further exposition in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 675–676:

The justice of an estoppel is not established by the fact in itself that a state of affairs has been assumed as the basis of action or inaction and that a departure from the assumption would turn the action or inaction into a detrimental change of position. It depends also on the manner in which the assumption has been occasioned or induced. Before anyone can be estopped, he must have played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it. But the law does not leave such a question of fairness or justice at large. It defines with more or less completeness the kinds of participation in the making or acceptance of the assumption that will suffice to preclude the party if the other requirements for an estoppel are satisfied. A brief statement of the recognized grounds of preclusion is contained in the reasons I gave in Thompson v Palmer, and it is convenient to repeat it [his Honour then quoted part of the quote extracted above].

It is important to note that belief in the correctness of the facts or state of affairs assumed is not always necessary. Parties may adopt as the conventional basis of a transaction between them an assumption which they know to be contrary to the actual state of affairs.
The requirement the assumption be as to a state of facts (as distinct from law) has been discarded; see the authorities cited in Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300 (Waterman) at [79] per Brereton J.
The doctrine of conventional estoppel applies to post-contractual, not just pre-contractual, assumptions: Legione at 432. Therefore, as with equitable or promissory estoppel, in conventional estoppel, “after a formal contract is made, parties may so conduct themselves as to treat provisions of the contract as no longer relevant or varied in some way or suspended in operation”: Waterman at [82] per Brereton J.
The elements a plaintiff needs to establish for common law conventional estoppel are set out by Brereton J in Moratic at [32], approved in Ryledar at [200]:

(1) that it has adopted an assumption as to the terms of its legal relationship with the defendant;
(2) that the defendant has adopted the same assumption;
(3) that both parties have conducted their relationship on the basis of that mutual assumption;
(4) that each party knew or intended that the other act on that basis; and
(5) that departure from the assumption will occasion detriment to the plaintiff.

As further noted by Brereton J in Moratic at [37], there is no requirement either party has induced, or acquiesced in, the adoption of the assumption by the other, and in particular there is no requirement that either know that the other may incur detriment by reliance on the assumption. Rather, since the assumption must be common to both parties, and may involve a mistaken interpretation of the contract, the possibility that either party might incur detriment by reliance on it will usually not occur to the other.

Unjust enrichment

The plurality of the High Court (Hayne, Crennan, Kiefel, Bell and Keane JJ) in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at [78] affirmed the concept of unjust enrichment is not a definitive legal principle of direct application and thus does not form the basis of restitutionary relief in Australian law. In the context of discussing the concept of “disenrichment,” the plurality noted at [78]:

Such a "principle" does not govern the resolution of this case because the concept of unjust enrichment is not the basis of restitutionary relief in Australian law. The principle of disenrichment, like that of unjust enrichment, is inconsistent with the law of restitution as it has developed in Australia. Disenrichment operates as a mathematical rule whereas the enquiry undertaken in relation to restitutionary relief in Australia is directed to who should properly bear the loss and why. That enquiry is conducted by reference to equitable principles.

By way of example, two recent cases from the United Kingdom Supreme Court demonstrate the proper nature and application of unjust enrichment. In Lowick Rose LLP (in liquidation) v Swynson Ltd and anor [2017] UKSC 32, Lord Sumption (with whom Lord Neuberger, Lord Clarke and Lord Hodge agreed) treated equitable subrogation as the equitable remedy to reverse unjust enrichment, rather than recognising unjust enrichment on its own as a basis for restitutionary relief (see [22]-[24]). Further, Lord Reed (with whom Lord Neuberger, Lord Mance, Lord Carnwath and Lord Hodge agreed) in Commissioners for Her Majesty’s Revenue and Customs v The Investment Trust Companies (In Liquidation) [2017] UKSC 29 at [40] referred to unjust enrichment not as a free standing claim, but as “a unifying principle underlying a number of different types of claim.”

Credit of the witnesses

As will appear later in my judgment, a number of credit issues arose for determination.
In principle, a trial judge is not restricted in his or her assessment of a witness; he or she is not bound to accept all or any of that which the witness attests to. O’Loughlin J collected the authorities in Cubillo v Commonwealth (No 2) (2000) 103 FCR 1 at [118]-[123].
However, although judges are entitled to reject part or the whole of a witness’s evidence, even if there has been no cross-examination it is of course incumbent upon them to provide reasons for doing so. In any case where credibility is an important issue, the judge must give sufficient reasons so as to demonstrate he or she has not failed to use or has not palpably misused his or her advantage of first hand exposure in observing the witness; Beale v Government Insurance Office of NSW [1997] 48 NSWLR 430 at 445 per Meagher JA. Judges as do juries need to act reasonably and not perversely and capriciously in relation to accepting or rejecting a witness’s testimony; Christmas v Nicol Bros. Pty Ltd and Anor (1941) 41 NSWSR 317 at 322 per Jordan CJ; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) and Others (1999) 160 ALR 588 at 617 per Kirby J.
Further, in making assessments of credibility, trial judges should exercise restraint in drawing inferences too willingly from the demeanour of witnesses as they present in court. Primary deference should instead be given to contemporaneous documents. As noted by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy (2003) 214 CLR 118 at [30]-[31]:

30. It is true, as McHugh J has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in as appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d’Avances Commerciales (Société Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The “Palitana”):

“... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.”
31. Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility.

Whilst it is simplistic and arguably erroneous for a trial judge solely to be influenced in his or her findings by contemporaneous documents, they will often have an extremely potent part to play in that process, especially when they were created against interest. If they appear of course to be self-serving they may need to be viewed with some care. Effective cross-examination also will play an important part in assisting a judge to come to a view about the facts especially when inconsistencies are exposed which are not capable of rational explanation. In any fact finding exercise however a judge must always be astute in particular when drawing inferences carefully to distinguish in his or her mind between what is a reasonable inference as opposed to what may amount to no more than mere speculation; Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 222 per Mahoney JA.
The observations of McLelland CJ in Equity in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 should also be at the forefront of judge’s assessments of witnesses recalling oral conversations:

Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
…
Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration.
…
What I have said above as to the cause of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act) is equally applicable, mutatis mutandis, to the causes of action based on contract and on equitable estoppel (with the added requirements, in the case of contract that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding, and in the case of equitable estoppel that any representation alleged was clear and unequivocal and was relied on to the substantial detriment of the representee).
(my emphasis)

There are a raft of difficulties in cases based on perception and reliance on spoken words, some of which have been alluded to by the then Chief Justice Spigelman, in "Truth and the Law" (2011) 85 (11) Australian Law Journal 746 (at 756-759), and in cases such as Pennimpede v Pennimpede [2009] NSWSC 85 at [29] per Bryson AJ and Murtagh v Murtagh [2013] NSWSC 926 at [105]-[109] per Hallen J. These difficulties are only amplified by the passage of time.
The rule in Jones v Dunkel (1959) 101 CLR 298 (Jones v Dunkel) may also play a role in the assessment of the probability of a witness being accepted. The Jones v Dunkel rule is a particular application of the general principle in the law of evidence that "all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted"; Blatch v Archer (1774) 1 Cowp 63 at [65] per Lord Mansfield. The statement of the rule in J D Heydon, Cross on Evidence, 9th ed (2013) LexisNexis Butterworths at [1215] was approved in R v Navarolli (2009) 194 A Crim R 96 by Muir JA at [2]:

[2] What is known as the Rule in Jones v Dunkel is summarised in Cross on
Evidence (Aust ed) as follows:
First, that unexplained failure by a party to give evidence, to call witnesses, or to tender documents or other evidence or produce particular material to an expert witness may (not must) in appropriate circumstances lead to an inference that the uncalled evidence or missing material would not have assisted that party's case.

The rule can operate against a party who bears the onus of proof and against a party who does not; Ho v Powell (2001) 51 NSWLR 572 at [16] per Hodgson JA (with whom Beazley JA agreed).
The plurality (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) in ASIC v Hellicar (2012) 247 CLR 345 (ASIC v Hellicar) at [165]-[167] discussed the application of the rule in Jones v Dunkel:

165. Disputed questions of fact must be decided by a court according to the evidence that the parties adduce, not according to some speculation about what other evidence might possibly have been led. Principles governing the onus and standard of proof must faithfully be applied. And there are cases where demonstration that other evidence could have been, but was not, called may properly be taken to account in determining whether a party has proved its case to the requisite standard. But both the circumstances in which that may be done and the way in which the absence of evidence may be taken to account are confined by known and accepted principles which do not permit the course taken by the Court of Appeal of discounting the cogency of the evidence tendered by ASIC.
166. Lord Mansfield’s dictum in Blatch v Archer (1774) 1 Cowp 63 at 65 [98 ER 969 at 970 that “[i]t is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted” is not to be understood as countenancing any departure from any of these rules. Indeed, in Blatch v Archer itself, Lord Mansfield concluded (1 Cowp 63 at 65 [98 ER 969 at 970) that the maxim was not engaged for “it would have been very improper to have called” the person whose account of events was not available to the court.
167. This Court’s decision in Jones v Dunkel is a particular and vivid example of the principles that govern how the demonstration that other evidence could have been called, but was not, may be used. The essential facts of the case, though well known, should be restated. The personal representative of a driver who had died in a collision with another vehicle brought an action for damages on her own behalf and on behalf of the deceased driver’s dependants. The Plaintiffs’ case depended upon demonstration that the other driver’s negligence was a cause of the accident. The Plaintiff sought to demonstrate negligence by having the tribunal of fact (in that case a jury) infer from facts concerning the road and the two vehicles involved that the collision had occurred when the Defendant’s vehicle was on the wrong side of the road. One of the Defendants, the surviving driver, did not give evidence at the trial. The Court divided about whether the inference which the Plaintiff sought to have the jury draw about where the collision occurred was an inference that was open on the evidence. But the Court held (Jones v Dunkel (1959) 101 CLR 298 at 308 per Kitto J; see also at 312 per Menzies J; at 320-321 per Windeyer J.) “that any inference favourable to the Plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the Defendant and the evidence provides no sufficient explanation of his absence.”

Heydon J, in a separate judgment in ASIC v Hellicar at [232] made clear the rule in Jones v Dunkel does not extend to allowing inferences to be positively drawn that the absent witness’s evidence would have adversely affected the party who failed to call the witness:

…As the Court of Appeal said, two consequences can flow from the unexplained failure of a party to call a witness whom that party would be expected to call. One is that the trier of fact may infer that the evidence of the absent witness would not assist the case of that party. The other is that the trier of fact may draw an inference unfavourable to that party with greater confidence. But Jones v Dunkel does not enable the trier of fact to infer that the evidence of the absent witness would have been positively adverse to that party (HML v The Queen (2008) 235 CLR 334 at 437-438 [302]-[303]; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at 385 [64]).

Overview of the case and considerations to follow

Mr Taouk’s case primarily centred on two grounds. First, Mr Taouk alleged a string of conversations with Mr Harsany spanning from January 2012 to late 2016, which, in addition to the Agreements, entitled him to be reimbursed for his alleged financial contributions to the Berowra Development. These conversations amounted, according to Mr Taouk, to oral agreements and/or oral terms which either stood alone or alternatively were superimposed upon the existing Agreements. Secondly, Mr Taouk sought to prove he made, or had made on his behalf, these financial contributions to Berowra Development.
Assure, on the other hand, maintained the parties rights and liabilities were confined to those set out in the Agreements. Assure rejected the conversations alleged by Mr Taouk, and submitted any payments Mr Taouk did make were in accordance with his liabilities as a Guarantor of the Developer, and Indemnifier of the Development Agreement.
At hearing, the main issues in dispute turned on the credit of the witnesses, and whether any of the conversations Mr Taouk alleged took place not only did take place, but altered the rights and liabilities of the parties as understood under the Agreements.
Given the breadth of Mr Taouk’s claims, the parties agreed on nine ‘Preliminary Questions on Liability’ to determine the liability of issues in these proceedings (Preliminary Questions on Liability). I will proceed in setting out these Questions on Liability (1), before making some preliminary comments on the parties’ submissions (2) and the credit of the witnesses (3). I will then deal separately with Mr Taouk’s alleged conversations given the important role these conversations played in Mr Taouk’s case as a whole (4). Finally, having made these findings, I will address each of the Preliminary Questions on Liability to resolve the disputed rights and liabilities on both parties (5).

(1) Preliminary Questions on Liability – an overview

It is now convenient to set out the Preliminary Questions on Liability, as agreed upon between the parties.

The Plaintiff’s Claim

(1) Is the Defendant liable to the Plaintiff for alleged breaches of agreement pleaded at paragraphs [2]-[27] of the Amended Statement of Claim (Claim) and as traversed at paragraphs [2]-[27], [36]-[39] of the Defence to the Claim (Defence)? (Question 1 - Breaches of Agreement)

(2) Is the Plaintiff entitled to the estoppels alleged at paragraphs [28]-[31] of the Claim, the estoppels pleaded at paragraphs [3(c)], [4(e)], [8(b)], [18(a)] and [24(d)] of the Defence to Cross-Claim, or paragraphs [5], [14] and [16] of the Reply to the Defence? (Question 2 – The Estoppels)

(3) Is the Defendant liable to the Plaintiff for the alleged breach of section 21 of the Australian Consumer Law pleaded at paragraphs [32]-[33] of the Claim? (Question 3 - Section 21 of the ACL)

(4) Is the Defendant liable to the Plaintiff for unjust enrichment as alleged at paragraph [34] of the Claim? (Question 4 - Unjust Enrichment)

(5) Are the claims for payments pleaded in paragraph [8] of the Claim claims that the Plaintiff is entitled to bring against the Defendant? (Question 5 - Alleged Paragraph 8 Payments)

(6) Are claims for payments particularised in the schedule at Tab 33 of the Exhibit to the Plaintiff’s Affidavit dated 2 December 2016 as follows claims that the Plaintiff is entitled to bring against the Defendant:

Joseph Taouk made this payment through the bank account of Edifice. The working capital to make this payment was provided by Joseph Taouk as a director’s loan to Edifice and is recoverable as a contribution by Joseph towards the project (see in particular items 2-4, 7-12, 20, 89, 94, 107, 149, 166-167, 169, 172-176, 179-180, 191, 250, 292-294); (Question 6(a))
This is an expense incurred by Joseph Taouk for the project and Joseph Taouk directed his cousin Mikhael Tawk to make this payment on his behalf, in which Joseph Taouk reimbursed Mikhael Tawk for this payment (see in particular items 1, 6); (Question 6(b))
This is an expense incurred by Joseph Taouk for the project. Mr Taouk directed Micro Formwork to make this payment on his behalf, in which Joseph Taouk reimbursed Micro Formwork for this payment (see in particular item 5); (Question 6(c))
This is an expense incurred by Joseph Taouk for the project, in which Joseph Taouk directed another company Mint Development to make this payment (see in particular item 57); (Question 6(d))
This is a payment incurred by Joseph Taouk from his own credit card and is an expense incurred in the construction of the townhouses at Berowra Heights (see in particular item 7); (Question 6(e))
Loan was advanced by St Peter Holding on behalf of Joseph Taouk (see in particular item 121); (Question 6(f))
Were paid by Micro Formwork and later Joseph Taouk refunded Micro Formwork (see in particular items 253-254); (Question 6(g))

(Question 6 - Alleged Tab 33 Schedule Payments)

The Defendant’s Cross-Claim

(7) Is the Plaintiff liable to the Defendant for breaching the Development Agreement as alleged at paragraphs [2]-[30] of the Cross-Claim (Cross-Claim) as traversed at paragraphs [2]-[30] of the Defence to the Cross-Claim? (Question 7 – Breaches of Agreement, Cross-Claim)

(8) Is the Plaintiff liable to the Defendant pursuant to a guarantee and indemnity as alleged at paragraphs [31]-[33] of the Cross-Claim as traversed at paragraphs [31]-[33] of the Defence to Cross-Claim? (Question 8 – Liability as Guarantor and Indemnifier, Cross-Claim)

(9) Is the Defendant liable to the Plaintiff for the alleged breach of section 21 of the Australian Consumer Law at paragraph [35] of the Defence to Cross-Claim? (Question 9 – Section 21 of the ACL, Cross-Claim)

(2) Parties’ submissions – preliminary comments

I will provide some short comments on my impression of the parties’ submissions, but descend into a more detailed analysis of the substance of these submissions when considering each of the Questions on Liability.
By way of preliminary observation, the parties approached the submissions in a somewhat contrasting manner. In written submissions Assure took the course of a very detailed analysis of each of the various milestones relied upon by Mr Taouk.
Mr Taouk’s approach was to take what might be generously described as an economic approach in his written submissions. In a number of instances the submissions simply did not specifically join issue on many of the factual questions agitated by Assure. Mr Taouk’s submissions might best be characterised as thematic rather than a detailed analysis of the facts. In my view the latter is not only the practical approach, but indeed in the circumstances of this factually dense case, crucial. It is necessary on my part to deal with the detail of the various alleged meetings, conversations, and payments, and it would have been of great assistance to the court if Mr Taouk had chosen to engage in the detail in a similar fashion.

(3) Credit of Mr Taouk and Mr Harsany – preliminary comments

There were two witnesses in this case - Mr Taouk and Mr Harsany. The credibility of both witnesses was, in general terms, called into question, and was central to each party’s cases.

Credit of Mr Taouk

Mr Taouk’s ability accurately to recount historical material was an important focus in the trial, given his heavy reliance on his own recollection to support the majority of his claims.
In short, I did not find Mr Taouk to be a credible witness. I found it difficult, if not impossible, to believe and accept his various conversations and allegations.
As Mr Taouk’s various affidavits evolved so did his apparent recall of the details of some of his conversations especially with Mr Harsany. There were also examples of his recalling conversations which had not been referred to in earlier affidavits.
Not only did the allegations vary and often inflate or grow in detail over time, but most were plagued by a substantial inability on his part to corroborate them with contemporaneous records.
Further, I had the distinct impression by reason of the many answers Mr Taouk gave in cross-examination, that to a very large extent, Mr Taouk said whatever he thought was the most favourable answer he could give in the circumstances to advance his case, even in the face of contemporaneous documents to the contrary.
In summary I found Mr Taouk to be, at best, unreliable.

Credit of Mr Harsany

In my view, Mr Harsany’s case is much more aligned with the contemporaneous documents, in particular the important email of Mr Owen following the 12 January Meeting.
Mr Harsany impressed me as a careful, if not overly anxious, person who was acutely concerned to ensure there was not only a cap on construction costs, but for his and Mr Taouk’s obligations going forward were clearly established. This concern was partly promoted by reason of the fact he had persuaded his mother in law to lend monies for the Berowra Development.
Mr Harsany’s concern for certainty manifested itself in both the Development Agreement and the Variation.
My overall impression of Mr Harsany is that he gave truthful answers supported by contemporaneous material. His answers were responsive and direct, and in stark contrast to Mr Taouk’s responses.

(4) The Alleged Conversations

Mr Taouk’s allegations of conversations, mostly between him and Mr Harsany, concerning payments by Mr Taouk, and promises of reimbursement by Mr Harsany, were central to Mr Taouk’s response to most of the Preliminary Questions on Liability. I will therefore deal with the primary alleged conversations up front to avoid repetition and make clear my findings.

Even if Edifice borrowed money from Mr Taouk, I am satisfied with Assure’s submissions that the correct analysis was Mr Taouk and Edifice were in a relationship of borrower and lender, where Edifice was liable to repay Mr Taouk, not Assure. Further Mr Taouk, as Guarantor for the Developer was simply making payments he was obliged to make in light of the Developer failing to contribute.
I am also satisfied Assure was correct, in my view, in submitting Edifice was in any case reimbursed by Assure for its contributions to the Berowra Development. Assure submitted the Distribution Schedules, evidence of Mr Harsany, and banking records showed Edifice was in fact repaid for its contributions by Assure, and in certain cases was paid more than it was entitled to (Defendant’s closing submissions [87], [96] rows 1-28). Assure maintained, correctly in my view, Mr Taouk’s assertion of a shortfall was unproven and contrary to Mr Harsany’s evidence supported by bank statements, and based on the erroneous assumption Edifice had an entitlement to $3.7 million (when this was in fact the cap) and that it finished the work it was engaged for, and that Assure was liable to pay Edifice (Defendant’s reply to Question 6 submissions [17]).

b) Payments made by third parties

Mr Taouk submitted the payments made by third parties ought to be credited to Mr Taouk for the purposes of clause 2 of the Variation. Mr Taouk relied on his evidence that the payments made by him using Mr Mikhael Tawk’s (Mr Taouk’s cousin) credit card and Mr Taouk’s subsequent repayment to Mr Tawk were part of the usual course of borrowing and repaying with his cousin (Plaintiff’s closing submissions [83] – [85]; Plaintiff’s Question 6 submissions [45]-[47]; JT5 [29]-[32]).
Further, Mr Taouk asserted payments by Mirco Formwork, Mint Development, and Saint Peter Holdings were similarly made on Mr Taouk’s behalf and should be properly construed as payments by Mr Taouk himself (Plaintiff’s closing submissions [86]-[91], [95]-[100]).
Assure submitted payments by third parties did not give rise to a claim against Assure. There was no evidence of Mr Taouk directing the third parties make payments, and then reimbursing those parties for such payments. Further, what the evidence did show, Assure submitted, was Assure paid Edifice funds exceeding what it was entitled to under the Building Agreement, meaning Edifice either applied money it received or was given the money to do so (Defendant’s closing submissions [88]-[90]).
In my view, in respect to payments by Mr Tawk, it is plainly correct, as submitted by Assure, that those payments do not disclose any cause of action on the part of Mr Taouk against anyone, let alone Assure. Mr Tawk, did not give any evidence and therefore does not corroborate Mr Taouk’s account of the alleged arrangement. More to the point there is simply no evidence of any alleged payments being reimbursed by Mr Taouk.
There are, however, two items which need to be dealt with expressly – Items 1 and 6. Item 1 is evidenced apparently by a photocopy of a payment options sheet with Mr Taouk’s credit card details on it (CB5/2006). I am not sure what this document is meant to in fact prove. It is entirely unsatisfactory. There is simply no evidence of Mr Taouk reimbursing Mr Tawk.
Item 6 is again a matter in respect of which no evidence was led that Mr Taouk reimbursed Tawk. In any event the Distribution Schedule forwarded by Mr Taouk identifies that the amount was paid from progress claim 2 (PC2) (DH3 page 82). Mr Harsany’s evidence, which I accept, demonstrates with reference to the banking records that PC2 was paid therefore the Builder received money and likely applied it the specific invoice, but was certainly paid the moneys that would cover it.
Similarly, in relation to alleged payments by Micro Formwork on Mr Taouk’s behalf (Question 6(c)), again the evidence is entirely unsatisfactory. There is no evidence Micro Formwork paid the quote said to be at CB5/2011-2012 or that Mr Taouk reimbursed it. Mr Taouk said the payment was actually from Mr Tawk’s credit card and he told Micro Formwork’s director (another cousin Mr Jabbour) to refund Mr Tawk’s credit card from Micro Formwork’s funds and to deduct the same from future profits due to him (JT5 [34]-[39]). Mr Jabbour did not give evidence and I am simply unable to accept such evidence as there is. Again, whatever arrangement Mr Taouk in fact had with either member of his family, it is difficult to see how there would be a cause of action against Assure.
In respect of payments by Micro Formwork (items 253 and 254) (Question 6(g)), again I am satisfied that even if Micro Formwork made a payment at the direction of Mr Taouk and Miro Formwork was reimbursed, this does not give rise to any claim by him against Assure. In relation to Item 253 the evidence is wholly inadequate. There is no evidence of any invoice providing that Hornsby Council levied the alleged fee. There is a cheque stub and a bank statement (CB5/2014-5). This purports to show a payment by cheque to the Council. There is no evidence however connecting the payment to the Berowra Development. Further, there is no evidence in respect of either item of Mr Taouk reimbursing Micro Formwork.
In respect of alleged expenses incurred by Mr Taouk for the Berowra Development in which he directed another company Mint Development to make the payment (Question 6(d)), there is simply no evidence of Mr Taouk reimbursing Mint Development. The claim fails on that basis alone.
Similarly, with loans allegedly advanced by St Peters Holding on behalf of Mr Taouk (eg item 121) (Question 6(f)), there is no evidence whatsoever proving anything in relation to this item. For reasons previously given, even if money had been paid it did not give rise to a cause of action for Mr Taouk against Assure.

c) Payments from Mr Taouk’s credit card

Mr Taouk relied on his own evidence (JT5 [43]-[44]) and the fact Assure did not allegedly challenge Mr Taouk on this evidence to assert the payment from Mr Taouk’s credit card should be credited as a contribution by Mr Taouk for the purpose of clause 2 of the Variation (Plaintiff’s closing submissions [92]-[94]).
Assure submitted that even if Mr Taouk did make payments off his credit card, these payments must be examined in light of the parties’ contractual relationship. Assure maintained any payment Mr Taouk made because he was contractually responsible for doing so did not give any right of recovery. Further, any payment Mr Taouk made which Assure was not responsible for under the Development Agreement could also not give rise to a claim by Mr Taouk against Assure, and, at best would be against Edifice or the Developer who carried the contractual risk. Further, Assure alleged Mr Taouk’s credit card appeared to be paid by Edifice and Mr Taouk was reimbursed (Defendant’s closing submissions [91]-[93]).
In my view, Assure’s submissions are correct. The payments via Mr Taouk’s credit card did not give rise to a claim against Assure on any view and Mr Taouk as Guarantor was in fact liable for various amounts under the Agreements. In respect of item 7 which is a claim made under this category, Mr Taouk had an invoice with a corresponding payment (CB5/1927-9). The invoice at CB5/1927 is directed to Edifice from a company Prestige Building Products. The balance is $6,732. The date of the invoice is 2 December 2013. His credit card statement (CB5/1929) on the same day is for $6,732 but an internet payment from Edifice Australia is for $7,900. It appears Mr Taouk used his credit card to accumulate frequent flyer points. It also appears he was reimbursed in full (plus) on the same day. Further the Distribution Schedule forwarded by Mr Taouk identifies that this amount would be paid from progress claim 5 (PC5) (Exhibit DH3 page 82). The evidence of Mr Harsany which I accept demonstrates PC5 was paid for this amount. The claim therefore cannot succeed.

Preliminary Question 7 – Breaches of Agreement, Cross-Claim

This question is directed to determining Mr Taouk’s liability, if any, for breaching the Development Agreement as alleged in paragraph [2]-[30] of the Cross-Claim.
Assure submitted Mr Taouk breached the Development Agreement in that he did not pay for the entirety of the shortfall in finance and further amounts required to reach completion, as obliged by clause 7 of Schedule 8, and did not pay Assure for its equity in the land, as obliged by clauses 4 and 5 of Schedule 8 (Defendant’s submissions on the Cross-Claim [9]).
Assure relied on the Development Agreement, as well as Mr Taouk’s concession in his first affidavit (JT1 [20]) that any shortfall of the construction and development amounts were paid by Mr Taouk “in accordance with the JV agreement, and more specifically clause 7 of Schedule 8 of the JV Agreement” (Defendant’s submissions on the Cross-Claim [15]).
In regards to the shortfall, Assure noted it made payments totalling $3,266, 518.14 to Edifice, subcontractors and Devlan, and none of these funds came from finance or funds arranged by Mr Taouk (Defendant’s submissions on the Cross-Claim [18]). In regards to the equity in land, Assure noted Mr Taouk did not mount a case in respect of this claim, and that Mr Harsany put Mr Taouk on notice of a failure to pay for Assure’s equity in the land, being $200,000 (Defendant’s submissions on the Cross-Claim [20]-[21]).
In closing submissions Mr Taouk yet again provided cryptic responses to the allegations in the Cross-Claim. He submitted the claims in Preliminary Question 7 (as well as Preliminary Question 8) turned upon the existence of a binding contractual guarantee given by Mr Taouk. Mr Taouk submitted he did not breach any contractual guarantee because the proper construction of clause 2 of the Variation was that the contractual guarantee was intended to be displaced by the parties. Further, he submitted the parties abandoned a strict application of the terms of the Development Agreement, including the guarantee provisions, and this was known at the time of the Variation. Further, there was no transfer of the Berowra Property to the SPV which removed any ability for the Developer to meets its obligations and was a condition precedent to Mr Taouk’s guarantee, or, alternatively, a variation of the parties discharging Mr Taouk’s liability.
Mr Taouk also noted Assure did not make any contribution to the costs of construction beyond the Westpac Loan Facility, did not pass $3.7 million as contemplated as the maximum amount payable pursuant to the Proposal, and acknowledged (through Mr Harsany) that any forthcoming variation and adjustment of the profit share would replace the need to review competing claims and expenses on the project (Plaintiff’s submissions on Cross-Claim [2]-[3]). Other arguments along similar lines were advanced (Plaintiff’s closing submissions [3(e)(f) and (g)]).
In my view, Assure was correct in submitting Mr Taouk (and the Developer) was expressly obliged to pay any shortfall in finance and/or any smaller amount required for reaching completion. Under clause 7 of Schedule 8, the Developer was to engage a builder to complete works using a design and construct contract. An amount of $3.7 million including GST was to be the maximum amount chargeable under the contract. Any shortfall in finance or further amount required to reach completion was to be contributed by the Developer.
Further, clause 4 of Schedule 8 also required the Developer “to arrange finance of approximately $5,455,000 and pay costs of obtaining the finance excluding interest on borrowings and ongoing bank fees”. Clause 5 then required $2.2 million of the funding arranged by the Developer to be paid for certain purposes.
Pursuant to the contractual arrangements the Developer was obliged to arrange finance and that finance was to include a payment to Assure as partial payment for its equity in the land. The extent that the Developer did not arrange this, Mr Taouk, pursuant to clause 7 of Schedule 8, and being the party who had guaranteed the Developers performance under clause 24.2, was liable to pay it.
As noted by Assure, Mr Taouk conceded in his first affidavit (JT1 [20]), that he was liable to make payments of the sort identified in Schedule 8.
I am satisfied on this aspect of the matter that the evidence clearly demonstrates Assure raised funds to pay the Builder and subcontractors by borrowing money in its own name from lenders, including CBA, Mr El Khoury, Westpac, CEG Direct Securities, Balanced Securities, Bacchus and Mr Harsany’s family members (DH1 [11(a)], DH2 [36], [51], [55], [58]-[60] and [63]-[64] respectively).
Mr Taouk of course asserted he made substantial payments for financing and construction costs. I dealt with these already in preliminary questions 5 and 6.
Although I have already made this clear, in my view the evidence supports Assure’s claim that it made payments totalling at least $2,164,740.37 to the Builder, $866,861.05 to subcontractors, $216,259.37 to Devlan and $18,657.35 in further payments to subcontractors (DH3 [7]-[18]). The total of those payments is $3,266,518.14. There is no evidence that these moneys came from finance of funds arranged or provided by the Developer or Mr Taouk for that matter. There does not appear to be any issue in the trial and indeed Mr Taouk accepted that Assure had paid at least $3,113,126 (JT2 [23]).
As is plain from my reasoning above, I reject Mr Taouk’s assertion that he made numerous of the payments he asserted. I will not repeat that analysis. More particularly, I rejected above that Mr Taouk made any payment to Assure for equity in the land. Again I will not repeat my findings.
On these grounds, I am satisfied Mr Taouk was obliged under the Development Agreement to pay for the entirety of the shortfall in finance and further amounts required to reach completion, and pay Assure for its equity in the land. Further, in my view, the evidence shows Mr Taouk did not meet these obligations and is therefore liable for breaches of the Development Agreement.

Preliminary Question 8 – Liability as Guarantor and Indemnifier, Cross-Claim

This raises the question of whether Mr Taouk is liable to Assure pursuant to a guarantee and indemnity as alleged at paragraph [31]-[33] of the Cross-Claim. Mr Taouk relied on the same submissions for Preliminary Question 7 as it did for Preliminary Question 8 since both turn on the existence of a binding contractual guarantee given by Mr Taouk (Plaintiff’s submissions on Cross-Claim [2]).
The thrust of Mr Taouk’s response to the Cross-Claim was to allege Assure and Mr Harsany were the cause of any delay in the project and that by reason of the various conversations he called in aid they are precluded through either variation or estoppel from relying on the guarantee. However, in addition to general denials, Mr Taouk also made a number of positive assertions (namely, four estoppels) which I propose to deal with after addressing the positive claims submitted by Assure.

Assure’s claims

Assure submitted that as per clause 24 of the Development Agreement, Mr Taouk provided an indemnity and a guarantee. Assure submitted both the indemnity and the guarantee were engaged by the Developer’s failure to fulfil its contractual obligations.
Specifically, Assure maintained the Developer failed to complete the project as required under clause 13.1 and 15.1, failed to pay liquidated damages as required under clause 15.5 when the Developer failed to complete the Berowra Development by the date of Practical Completion, failed to make good defects as required under clause 13, and failed to refinance the existing mortgage over Lot 8, arrange and guarantee the construction finance for the building work, pay Assure for its equity in land, provide any shortfall in finance or other amount required to reach completion, and generally bear the cost and risk of the project. All these failings relevantly engaged the indemnity and guarantee, leaving Mr Taouk liable to Assure (Defendant’s closing submissions [24] – [48]).
Importantly the indemnity extended to the “actual amount of all losses, liabilities, costs and expenses” incurred by Assure in connection with the “occurrence, cure and attempted cure of any Default Event”. The guarantee extended to the “due and punctual performance by the Developer” of its obligations. The guarantee was also said to be “continuing”, “absolute and unconditional in any and all circumstances” and “irrevocable”.
I am satisfied the Developer engaged in a “Default Event” so as to engage the indemnity, and/or the Developer failed in the due and punctual performance of its obligations so as to engage the guarantee.
Under the Development Agreement the Developer had numerous responsibilities in respect of the Berowra Development catalogued to a large extent in clauses 13 and 14. The date of Practical Completion would have meant the project should have been completed by approximately 20 August 2013. That clearly did not occur. Indeed the evidence discloses that as late as 22 June 2015 Devlan was engaged to continue the work.
Pursuant to clause 15.5 the Developer of course was also obliged to pay liquidated damages if the project was not completed by the date for Practical Completion. There is little doubt here that the Developer did not pay any liquidated damages.
It follows that Mr Taouk was liable for his breach under the indemnity and guarantee. The guarantee is engaged in my view because the non-completion by the date for Practical Completion goes to the “due and punctual performance” by the Developer of its obligations (clause 15.1).
Unsurprisingly the Development Agreement also imposed upon the Developer an obligation to rectify defects (see clause 13.3(a)). There was no dispute the Developer was deregistered on 23 August 2015, before the work was complete and it was thereby incapable of complying with its obligations to make good any defects. That indemnity and guarantee provided by Mr Taouk also underwrites any failure on the part of the Developer to rectify the defects.
Although the question of quantum in connection with the costs of rectification is alleged to be determined at a later point, Mr Harsany gave ample evidence in support of the existence and ongoing nature of rectification process (DH1 [23], [26]).
The Developer had numerous funding obligations (clause 18.1(a), clause 22, clause 4 Schedule 8, clause 5 Schedule 9 and clause 7 Schedule 8). Under those provisions the Developer was obliged to refinance the existing mortgage over Lot 8, arrange and guarantee the construction finance for the building work and make payment to Assure for its equity in the land, provide any shortfall in finance and other amounts required to reach completion and generally bear the costs and risk of the project. It is plain from the evidence the Developer did not do this. On the evidence as I have analysed it, the only payments ever made by Mr Taouk were reimbursed by the Builder who in turn was paid by Assure. I have already dealt with these matters under Preliminary Questions 5 and 6.
So far as Preliminary Question 8 is concerned I am satisfied the Developer did not fulfil most, if not all, of its obligations, thereby engaging Mr Taouk’s liability as both an Indemnifier and Guarantor.

Mr Taouk’s estoppels

Mr Taouk also pleaded four estoppels in his Defence to the Cross-Claim, notwithstanding the express terms of the guarantee, and all of which Assure claimed should not be accepted (Defendant’s opening submissions [82]-[93]).

First Cross-Claim estoppel

Mr Taouk pleaded Assure was estopped from asserting the Building Agreement was for a maximum lump sum of $2.85 million and to be completed in 15 months based on the alleged April 2012 conversation (see para [17], [131]-[136] above) (Defence to Cross-Claim [3(c)]).
In response, Assure claimed, correctly in my view, the alleged April 2012 conversation was implausible, not promissory in nature, could not reasonably be relied on and entailed no unconscionable conduct on Assure’s part since it was not reflected in the Development Agreement.

There was no corroboration of the alleged April 2012 conversation, and more to the point it is implausible that Mr Harsany told Mr Taouk that he would be repaid money that he injected into the Development Agreement in April 2012 and yet this was not reflected in the Development Agreement signed in June 2012. In any event I have already dealt with this conversation and various other aspects of the estoppel claim earlier in this judgment.

Second Cross-Claim estoppel

Mr Taouk pleaded Assure was estopped from relying upon the 15 month completion period for the Development Agreement based on a “variation” of the Development Agreement arising first, from representations in a conversation between Mr Taouk and Mr Harsany, Assure would obtain planning approval and finance, and buildings works should have only commenced after obtaining approvals, and secondly, from an alleged convention adopted by both parties to this effect (Defence to Cross-Claim [4(e), 8(b)]).
As noted by Assure, the pleading gave no particulars as to alleged representations and did not pinpoint when the conversation occurred, despite Mr Taouk asserting he entered into the Development Agreement in June 2012 in reliance upon the conversation. The notion that such a conversation could amount to a “variation” before the June 2012 Development Agreement came into place makes no sense. The problem again is that the terms and conditions of the Development Agreement are entirely antithetical to such a conversation, particularly one which Mr Taouk alleged to have contractual force, having taken place beforehand. More to the point, Mr Taouk must have appreciated the Development Agreement was entirely different to the alleged understanding Mr Taouk apparently gained as a result of this conversation whenever it took place. The pleading is both confused and ambiguous.
I am also not satisfied there is any evidential basis whatsoever to support Mr Taouk’s allegations Assure delayed the project until July 2013 and failed to obtain finance until May 2013, and Mr Harsany, as project manager, caused extensive delays in additional costs being incurred. The evidence would tend to suggest Mr Harsany’s role in connection with the management of the construction was for a short period from early August 2013 to, at best, early September 2013. There is no evidence Mr Harsany caused delay by his conduct during this short period, or at any other time, in particular by changing designs issuing variations or requiring subcontractors to do work.
Further, I do not accept there was any conversation in which Assure, in particular Mr Harsany, agreed to accept contractual responsibility for the work in question or the obtaining of finance. This is contrary to the express terms of the agreement and precisely the task not only Mr Harsany but Mr Taouk assumed responsibility to achieve.
It follows that I am also satisfied, as submitted by Assure, the evidence does not establish mutual adoption by both parties of the alleged “convention” in departure of their written agreed contract.

Third Cross-Claim estoppel

Mr Taouk pleaded Assure should not be allowed to argue the Developer abandoned or failed to complete the project or that Mr Taouk was liable as a consequence because of conversations which allegedly took place in June and August 2015 in which Mr Harsany allegedly said the parties did not need the Developer any more (Defence to Cross-Claim [18(a)]).
Assure submitted Mr Taouk provided no evidence of any conversations in June or August 2015, the alleged representations were vague and not statements of fact or a promise, and the alleged 2015 representations did not have causative connection with the Developer’s failure to complete the work in 2012.
I do not accept the conversations took place. Again the difficulties with any conversations that occur in or near the vicinity of the Variation in and of themselves, by reason of that context, lack substantial credibility. Having consummated for the second time their rights and liabilities in a written agreement, it is in my view, stretching credibility to suggest a month or two later the parties were objectively agreeing to waive substantial objections.

Fourth Cross-Claim estoppel

Mr Taouk pleaded Assure was estopped from claiming liquidated damages under clause 15.5 of the Development Agreement based on Assure failing to appoint an Independent Assessor pursuant to clause 14 (Defence to Cross-Claim [24(d)]). Mr Taouk therefore submitted the Developer was not liable to pay liquidated damages or alternatively under the applicable formula the quantum should be nil. The quantum will be dealt with in due course.
Assure claimed clause 15.5 was not contingent on the appointment of the Independent Assessor. Assure submitted a proper construction of clause 15 was that the Developer (and not Assure) bore the responsibility for obtaining certification of on-time completion, or an extension of time, from the Independent Assessor.
Pursuant to clause 15.1(c) the Developer had to “procure the Independent Assessor to deliver to the Developer and the Project Administrator a statement under which the Independent Assessor certifies to the Developer and the Council that Practical Completion occurred within 7 business days of Practical Completion occurring”. The Developer therefore had a responsibility to procure a certification from the Assessor. There was no obligation on the part of Assure. In any event there was simply, as a matter of fact, no practical completion.
Clause 15.2 set out a regime whereby the Developer could obtain an extension of time to the Date for Practical Completion. The Developer was obliged to give written notice to the Independent Assessor and satisfy the Independent Assessor of certain matters. In other words the Developer was only entitled to an extension of time if the requisite certification was obtained. There was no obligation of Assure in this regard.
In addition, pursuant to clause 15.5, liability was imposed on the Developer to pay liquidated damages which was not contingent upon the appointment of the Independent Assessor doing anything. The relevant damages were to be paid if Practical Completion did not occur as agreed.
Further, clause 14.1 provided Assure would select the Independent Assessor from three consultants proposed by the Developer. The Developer had to initiate that process. In addition there is nothing that the Independent Assessor would indeed do when one considers the roles of such a person (clause 14.2) which relates to a claim for liquidated damages. I therefore do not see any basis, construction or otherwise that would, in the absence of an Independent Assessor being appointed, preclude Assure from otherwise claiming liquidated damages for the requisite breach on the part of the Developer and/or Mr Taouk. Nor do I see any point which conceivably arises by reason of the failure to serve any of the notices (assuming there was such an obligation) under the various provisions called in aid.
It seems to me therefore by reason of my analysis above that Mr Taouk was liable for liquidated damages pursuant to the indemnity and guarantee. None of the estoppels and/or other defences he raised are successful. Therefore there will need to be a quantification of the claim for liquidated damages in due course.

Preliminary Question 9 – Section 21 of the ACL, Cross-Claim

Mr Taouk in addition pleaded in defence to the Cross-Claim as a whole that Assure’s behaviour was unconscionable within the meaning of section 21 of the ACL having regard to the asserted oral conversations, and sought relief which would modify the Development Agreement to prevent Assure from advancing its arguments in the Cross-Claim (Amended Defence to Cross-Claim [35]).
Mr Taouk relied on alleged representations by Mr Harsany regarding the structure of the parties relationship, Assure’s agreement to obtain planning approval and finance and delaying the start of work, the Developer not being needed by the parties, and that Mr Taouk would be paid (Amended Defence to Cross-Claim [3](c), [4](e), [35]).
Assure submitted the representations relied on by Mr Taouk must be rejected on the same grounds Mr Taouk’s further estoppels pleaded in the Defence to the Cross-Claim should not be accepted (Defendant’s opening submissions [82]-[93], [109]). Furthermore, as noted in response to the Preliminary Question 3, Assure submitted Mr Taouk had no standing as there was no pleading of loss or damage, Mr Harsany was not supply goods or service and Mr Taouk only supplied a financial product, and Mr Taouk did not take into account or plead any of the factors set out in section 21(4) or section 22 of the ACL (Defendant’s opening submissions [107]-[110]).
Further, Assure submitted Mr Taouk did not make clear what element of reliance there was, how the allegations made against Assure amounted to “moral obloquy,” and what disadvantage Mr Taouk was at. On these grounds, Assure submitted the requisite level of unconscionability was not made out (Defendant’s opening submissions [11]). In closing, Assure noted there was nothing emerging from the trial which required further elaboration, except Mr Taouk was an unreliable witness and his evidence as to alleged conversations he relied on to claim unconscionable conduct could not be believed (Defendant’s closing submissions [81]-[82]).
For reasons I have already developed here in the context of consideration of this sort of claim, in my view there is no substance in the allegation, leaving aside my rejection of the alleged conversations. The absence of special disadvantage and importantly his opportunity to review the written terms and obtain legal advice makes any suggestion of unconscionability untenable.

Summary of findings

In summary, my findings in response to each Preliminary Question on Liability are as follows:

Question 1 - Breaches of Agreement: the Defendant is not liable to the Plaintiff for alleged breaches of agreement pleaded at paragraphs [2]-[27] of the Amended Statement of Claim (Claim) and as traversed at paragraphs [2]-[27], [36]-[39] of the Defence to the Claim (Defence);

Question 2 – The Estoppels: the Plaintiff is not entitled to the estoppels alleged at paragraphs [28]-[31] of the Claim, the estoppels pleaded at paragraphs [3(c)], [4(e)], [8(b)], [18(a)] and [24(d)] of the Defence to Cross-Claim, or paragraphs [5], [14] and [16] of the Reply to the Defence;

Question 3 - Section 21 of the ACL: the Defendant is not liable to the Plaintiff for the alleged breach of section 21 of the Australian Consumer Law pleaded at paragraphs [32]-[33] of the Claim;

Question 4 - Unjust Enrichment: the Defendant is not liable to the Plaintiff for unjust enrichment as alleged at paragraph [34] of the Claim;

Question 5 - Alleged Paragraph 8 Payments: the claims for payments pleaded in paragraph [8] of the Claim are not claims that the Plaintiff is entitled to bring against the Defendant;

Question 6 - Alleged Tab 33 Schedule Payments: none of the claims for payments particularised in the schedule at Tab 33 of the Exhibit to the Plaintiff’s Affidavit dated 2 December 2016 claims that the Plaintiff is entitled to bring against the Defendant;

Question 7 – Breaches of Agreement, Cross-Claim: the Plaintiff is liable to the Defendant for breaching the Development Agreement as alleged at paragraphs [2]-[30] of the Cross-Claim (Cross-Claim) as traversed at paragraphs [2]-[30] of the Defence to the Cross-Claim;

Question 8 – Liability as Guarantor and Indemnifier, Cross-Claim: the Plaintiff is liable to the Defendant pursuant to a guarantee and indemnity as alleged at paragraphs [31]-[33] of the Cross-Claim as traversed at paragraphs [31]-[33] of the Defence to Cross-Claim; and

Question 9 – Section 21 of the ACL, Cross-Claim: the Defendant is not liable to the Plaintiff for the alleged breach of section 21 of the Australian Consumer Law at paragraph [35] of the Defence to Cross-Claim.

In light of my reasons, I invite the parties to prepare short minutes and, if the need arises, to be heard on the question of costs.
Further directions may need to be given in light of my answers to Preliminary Question 7 and 8.

**********

Decision last updated: 04 May 2017

Medium Neutral Citation:	Joseph Taouk v Assure (NSW) Pty Ltd [2017] NSWSC 534
Hearing dates:	6, 7, 8, 9 February 2017, oral closing submissions 16 February 2017, Defendant’s closing cross-claim submissions 20 February 2017, Plaintiff’s closing submissions and closing submissions on the Defendant’s cross-claim 21 February 2017, Defendant’s closing submissions 27 February 2017, Plaintiff’s responses to particular claims regarding Mr Taouk’s asserted payments 2 March 2017, Defendant’s reply to Plaintiff’s Document 9 March 2017.
Decision date:	04 May 2017
Before:	Sackar J
Decision:	See para [381]
Catchwords:	Construction of contracts – construction of contracts to vary – oral agreements – promissory estoppel – estoppel by convention – unjust enrichment – credit of witnesses.
Legislation Cited:	Corporations Act 2001 (Cth) Evidence Act 1995 (NSW)
Cases Cited:	Ashton v Pratt [2015] NSWCA 12 ASIC v Hellicar (2012) 247 CLR 345 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 B&B Constructions (Aust) Pty Ltd v Brian A Cheeseman & Associates Pty Ltd (1994) 35 NSWLR 227 Beale v Government Insurance Office of NSW [1997] 48 NSWLR 430 Blatch v Archer (1774) 1 Cowp 63 Caringbah Investments Pty Ltd v Caringbah Business and Sports Club Ltd (in liq) [2016] NSWCA 165 Christmas v Nicol Bros. Pty Ltd and Anor (1941) 41 NSWSR 317 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Commissioners for Her Majesty’s Revenue and Customs v The Investment Trust Companies (In Liquidation) [2017] UKSC 29 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226 Cubillo v Commonwealth (No 2) (2000) 103 FCR 1 Dabbs v Seaman (1925) 36 CLR 538 Dare v Pulham (1982) 148 CLR 658 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 Fox v Percy (2003) 214 CLR 118 Gould v Mount Oxide Mines Ltd (In liq) (1916) 22 CLR 490 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 Ho v Powell (2001) 51 NSWLR 572 International Air Transport Association v Ansett Australia Holdings Ltd (2008) 82 ALJR 419 John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 Jones v Dunkel (1959) 101 CLR 298 Jones v Sutherland Shire Council [1979] 2 NSWLR 206 Legione v Hateley (1983) 152 CLR 406 Lowick Rose LLP (in liquidation) v Swynson Ltd and anor [2017] UKSC 32 Moratic Pty Ltd v Gordon [2007] NSWSC 5 Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (S99/2015; S102/2015) (2015) 256 CLR 104 Murtagh v Murtagh [2013] NSWSC 926 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 Pavlovic v Universal Music Australia Pty Limited (2015) 90 NSWLR 605 Pennimpede v Pennimpede [2009] NSWSC 85 Portsmouth City Football Club Ltd v Seller Properties (Portsmouth) Ltd [2004] EWCA Civ 760 R v Navarolli (2009) 194 A Crim R 96 Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 Simic v New South Wales Land and Housing Corporation [2016] HCA 47 Skyrise Consultants Pty Ltd v Metroland Funds Management Ltd [2011] NSWCA 406 South Sydney Council v Royal Botanic Gardens (1999) 10 BPR 18,961 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) and Others (1999) 160 ALR 588 Thompson v Palmer (1933) 49 CLR 507 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 Vroon BV v Foster’s Brewing Group Ltd [1994] VR 32 Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27 Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300 Watson v Foxman (1995) 49 NSWLR 315 Wood v Capita Insurance Services [2017] UKSC 24
Texts Cited:	J W Carter, The Construction of Commercial Contracts (2013) Hart Publishing Hon JJ Spigelman AC, "Truth and the Law" (2011) 85 (11) Australian Law Journal 746 J D Heydon, Cross on Evidence, 9th ed (2013) LexisNexis Butterworths Lewison and Hughes, The Interpretation of Contracts in Australia (2012) Thomas Reuters (Professional) Australia Limited
Category:	Principal judgment
Parties:	Joseph Taouk (plaintiff) Assure (NSW) Pty Ltd (defendant)
Representation:	Counsel: F Corsaro SC, M Auld (plaintiff) J Stoljar SC, P Reynolds (defendant) Solicitors: Gardner \| Ekes Lawyers (plaintiff) MLH Lawyers (defendant)
File Number(s):	2016/264640
Publication restriction:	N/A