Westend Investments Pty Ltd v Genovese - [2000] WADC 171

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: WESTEND INVESTMENTS PTY LTD -v- GENOVESE & ORS [2000] WADC 171

CORAM: COMMISSIONER LEY

HEARD: 7 - 10 MARCH 2000

DELIVERED : 5 JULY 2000

FILE NO/S: CIV 2447 of 96

BETWEEN: WESTEND INVESTMENTS PTY LTD (ACN 009 345 948)
Plaintiff
AND
FRANK JOHN GENOVESE
First Defendant
CLAYFIELD NOMINEES PTY LTD (ACN 008 815 245)
Second Defendant
SAVERIO PULITANO
Third Party

Catchwords:

Claim for monies lent - Monies had and received - Undue influence - Breach of fiduciary duty - Credibility - Demeanour of witnesses - Objective facts - Turns on own facts.

Legislation:

Nil

Result:

Plaintiff's claim dismissed

Representation:

Counsel:

Plaintiff:     Mr I A Morison
First Defendant             :     Mr M H Zilko
Second Defendant         :     Mr M H Zilko
Third Party                   :     Mr D H Solomon

Solicitors:

Plaintiff:     Chris Martin & Associates
First Defendant             :     Pullinger Stewart
Second Defendant         :     Pullinger Stewart
Third Party                   :     Solomon Brothers

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

Nil

Case(s) also cited:

Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1
Bank of Credit & Commerce International S.A. v Aboody [1990] 1 QB 923
Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30
Bridgewater v Leahy (1998) 194 CLR 457
Harris v Jenkins (1922) 31 CLR 341
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
James v ANZ Banking Group Ltd (1986) 64 ALR 347
Johnson v Buttress (1936) 56 CLR 11
National Westminster Bank Plc v Morgan [1985] 1 AC 686
Pavan v Ratnam (1996) 23 ACSR 214
Stambulich v Ekamper (1998) 41 ATR 169

COMMISSIONER LEY:

The Proceedings

This is an action by Westend Investments Pty Ltd ["the plaintiff"] against Frank John Genovese ["Genovese"] and Clayfield Nominees Pty Ltd ["Clayfield"]. The proceedings were issued on 23 July 1996. The plaintiff claims:
(a)From Genovese or, alternatively, from Clayfield, $175,524;
(b)Alternatively, an order that a disposition of monies totalling $175,524 made by, or for, the plaintiff to Genovese, or, alternatively, to Clayfield, be set aside and that Genovese, or, alternatively, Clayfield, pay the plaintiff $175,524;
(c)Further, or in the alternative, from Genovese, equitable compensation;
(d)Interest.
The plaintiff's primary claim for $175,524 is made on the basis that it lent that amount to Genovese or, alternatively, to Clayfield, and that no part of the monies so lent has been repaid. Alternatively, the plaintiff claims the same amount from Genovese, or, alternatively, from Clayfield, as monies had and received.
Further, or in the alternative, the plaintiff alleges that the amount of $175,524 was paid by the plaintiff to Genovese or, alternatively, to Clayfield, as a result of undue influence exerted by Genovese on Stefano Carmelo Pulitano ("Steve Pulitano"), a director of the plaintiff. It is on that basis that the plaintiff seeks an order that the "disposition of monies" be set aside.
Finally, the plaintiff alleges that Genovese was under a fiduciary duty to the plaintiff which he breached by procuring the payment of $175,524 by the plaintiff to him or Clayfield. This is said to be the basis for the claim for equitable compensation.
In their defence, Genovese and Clayfield deny that the plaintiff is entitled to payment of the sum of $175,524 or any amount on any of the alternative bases pleaded. They deny that the plaintiff lent either or both of them $175,524 or any amount. They admit that the plaintiff and another company, Austra Holdings Pty Ltd ("Austra"), paid various amounts totalling $175,524 to and on behalf of Clayfield, but say that those amounts were paid pursuant to an agreement made between the plaintiff, the defendants and Austra to discharge a liability originally owed to Clayfield by Saverio Rocco Pulitano ("Sam Pulitano"), a director of Austra and the elder brother of Steve Pulitano.
After these proceedings had been on foot for nearly two years, Genovese and Clayfield obtained leave to issue a third party notice against Sam Pulitano in which Genovese and Clayfield sought from him an indemnity against the plaintiff's claim for $175,524.
Third party directions were obtained and pleadings were filed and served. Pursuant to the third party directions, the third party appeared on the trial and was represented by counsel. However, during the course of the plaintiff's opening, Mr Solomon, who appeared for the third party, informed me that his client and the defendants had reached agreement whereby the third party proceedings could be disposed of. Accordingly, I then made, by consent of the defendants and the third party, an order granting the defendants leave to discontinue the third party proceedings on certain terms as to costs. The trial then proceeded as between the plaintiff and the defendants only.

Background

The directors of and shareholders in the plaintiff are and were at all material times Steve Pulitano and his wife, Maria.
Genovese is a certified practising accountant who practises on his own account in Mount Lawley. He has practised as an accountant for 38 years and has practised on his own account since 1973. Clayfield is his family company of which he is a director and in which he is a shareholder.
Both Sam and Steve Pulitano were born in Italy and came to Australia as children. Sam is three years older than Steve. Both Sam and Steve are bricklayers by trade but, during the course of their careers, have become builders and property developers. I have already mentioned that Sam is a director of Austra. He is also a shareholder in and apparently the controller of Austra.
Both Steve and Sam Pulitano were clients of Genovese for many years. Steve first became a client of Genovese in 1974 when he (Steve) was working in his trade as a bricklayer and enlisted Genovese's assistance to establish a building company which Steve set up with a man called De Stefano.
Steve remained in business with De Stefano for about three years but then left that business in order to start a building and property development business with Sam. Genovese assisted Steve and Sam to set up that business by establishing two companies called Pulitano Building Company and Trend Developments.
Steve and Sam remained in business together until about 1990 [approximately 13 years] and did many developments during that time.
When they decided to go their separate ways, in 1990, Sam retained Pulitano Building Company and Trend Developments. Steve, on the other hand, again with the assistance of Genovese, set up two new companies: the plaintiff and a company which was called Westend Developments Pty Ltd ("Westend Developments"). The directors of and shareholders in both companies were Steve and Maria Pulitano. Westend Developments was established to undertake property development and the plaintiff was established for the purpose of acquiring the property which was to be developed.
The main project undertaken by the plaintiff and Westend Developments was the development and construction of the Mandurah Gate Resort in Mandurah ("Mandurah Gate"). The plaintiff and Westend Developments purchased the land and developed Mandurah Gate by borrowing money from Perpetual Finance Ltd ("Perpetual"). The amount borrowed was approximately $1.8 million.
During 1992 and 1993, Steve Pulitano and his companies, the plaintiff and Westend Developments, were experiencing severe financial difficulties. Perpetual was requiring the loan debt of $1.8 million to be re-financed and, in addition, they owed approximately $400,000 to their creditors. The creditors were threatening to petition the Supreme Court to have the plaintiff and Westend Developments wound up. Therefore, in all, Steve Pulitano and his companies needed finance of approximately $2.2 million.
Sam Pulitano had also had financial problems. However, by 1992, he had resolved those to some extent by liquidating assets. However, he still had liquidity problems.
Steve and Sam are very close and have obviously supported each other both financially and emotionally over the years. In 1992 and 1993, Sam's company, Austra, paid out some large amounts of money to support the plaintiff. Part of Austra's funds had been provided a number of years earlier by an aunt of Steve and Sam who lived in Italy. She had transferred an amount of approximately $130,000, which had been paid into the account of Austra, but was apparently paid for the purpose of assisting Steve with any financial problems which he had.

The evidence

Pursuant to case management directions, the parties filed and exchanged signed witness statements made by the witnesses to be called at the trial. Each party also filed and served substantial notices of objection to the evidence to be called by its opponents.
At the trial, there was some preliminary discussion about the use that should be made of the signed witness statements and the manner in which the various objections should be dealt with. In the result, I decided that the most expeditious way of dealing with the matter was to encourage the parties to confer in an effort to resolve the various objections prior to the witness giving evidence, to allow there to be an argument as to those objections that could not be agreed, to rule on those objections and then to bring the witness in to the witness box to verify his or her witness statement without the need for the witness to read the statement aloud in court. As a result of some of the objections and for various other reasons, it was also often necessary for a party to seek leave to adduce oral evidence to clarify certain matters in a witness statement. That was invariably granted. After the witness statement had been admitted into evidence and the additional oral evidence had been led, the witness was cross-examined and, finally, re-examined.
I will now deal with each of the witnesses in turn.

Steve Pulitano

Mr Pulitano said that, in the first half of 1992, he was working out of Genovese's office in Walcott Street, Mount Lawley. He said that, one day during that period, he was discussing with Genovese his need to re-finance Mandurah Gate. Genovese had said that he had a "good friend" who might be able to assist and offered to contact him on Steve's behalf. Steve agreed to that.
Steve said that the "good friend" to whom Genovese had referred was Ron Studman ("Studman"), a real estate agent and developer who, with an associate, traded as Ideal Realty and Glendower House Pty Ltd ("Glendower"). Genovese had met Studman through Rotary International of which they were both members. Steve said that Genovese telephoned Studman that day and that, as a result, he and Genovese attended a meeting with Studman at the office of Glendower a couple of days later. Steve said that the meeting lasted about two hours and was also attended by Studman's associate, Bridget Paterson ("Paterson"). At the meeting, Studman said that he could probably re-finance the plaintiff if "it all stacked up". He said that the plaintiff's properties, which would be the security for any re-financing, would need to be valued. Paterson said that she knew a valuer called Patrick Littleburn ("Littleburn") from L J Hooker who could do the valuation "at the right price". Studman and Paterson said that they had some people coming from overseas (apparently connected with the financing) and that Littleburn could do the valuation quickly.
Steve said that he attended another meeting about the re-financing at Studman's office approximately a week later. Also in attendance at that meeting were Studman, Paterson, Littleburn and Genovese. At the meeting, Littleburn was briefed to do the valuation and Genovese agreed to provide the financial statements of the plaintiff necessary to make a submission for finance.
Steve said that, after Littleburn had done the valuation, he attended yet another meeting. The other people in attendance at that meeting were Studman, Paterson, Genovese, Sam Pulitano and two other people. That meeting lasted approximately two hours.
Steve said that, some time later, Studman told him that Rynx Capital Management Group Ltd ("Rynx"), an overseas company which was apparently the proposed financier, had declined finance because there were some outstanding summonses against Steve or the plaintiff. However, Studman said that he would re-finance the plaintiff himself with money that he was bringing in from overseas. Steve said that Studman provided him with a letterhead of Glendower, in which it was said that that company would re-finance the plaintiff. That letter was not tendered and, in any event, the plaintiff was not re-financed by Glendower.
Steve said that, by early 1993, he had still not been able to arrange re-financing for the plaintiff. He was then still conducting his business affairs from a room in Genovese's office on a daily basis. He said that, one day during that time, Genovese called him into his office and told him that he was "in strife" because he had lent $150,000 to Studman when his wife, Lynne Maree Genovese ("Lynne") had not wanted him to and Studman had not paid it back. Genovese said that Lynne did not like or trust Studman.
Genovese also told Steve that he had borrowed the money which he had lent to Studman. He said that the mortgage he had taken out to raise the funds was coming up for repayment and that the mortgagees were not prepared to extend. He said that he had no way of getting the money to pay out the mortgage. He said that Lynne was upset and was "threatening to leave him". In seeking to explain why he had lent the money to Studman in the first place, Genovese had said that he had only done it because Sam Pulitano had made a telephone call to him.
Steve was rather vague about that part of the conversation. Under cross-examination, he denied that Genovese had said that he had lent the money to Studman at Sam's request. However, he did say (both in chief and under cross-examination) that Genovese had said that he had lent the money "for Sam".
Steve said that Genovese asked him to lend him the money to pay out the mortgage. Genovese said that he had helped Steve with his financial difficulties and that now Steve should help him. Genovese said that he also wanted Sam to help with the money he was holding which was set aside for Steve. Steve took this to be a reference to the money being held by Austra which had originally been sent by Steve's aunt in Italy.
Steve said that Genovese did not ask him to arrange for him to be lent the whole $130,000 held by Austra but asked rather for $70,000 out of those funds. Genovese also requested that the plaintiff advance him a further sum of $100,000, when Mandurah Gate was re-financed. Steve said that, at that time, the plaintiff had made an application for a loan through Blackburne & Dixon, mortgage brokers, to re-finance Mandurah Gate but that no loan had been approved.
In relation to the amount of $100,000 and in view of the fact that it would not be available for some time, Steve said that Genovese requested that the plaintiff pay him interest (extraordinarily, on the amount of $100,000 to be advanced by the plaintiff to Genovese) until such time as the money was advanced. Under cross-examination, Steve gave evidence that Genovese had said:
"Until you get re-financed, I've got to show Lynne, demonstrate to Lynne that I am getting this money in whatever time it happens and I've got to show the interest that I am getting interest on it. If I don't show an interest component that I am getting per month until it eventuates, she is not going to believe that the mortgage is going to be paid out."
Steve said that he told Genovese that he would talk to Sam about Genovese's request. He said that he spoke to Sam and agreed with him that he and Sam should meet with Genovese. Steve said that he felt terrible that Genovese's wife, Lynne, was upset and threatening to leave him. He believed that Lynne would leave Genovese.
Steve said that he and Sam met with Genovese in his office a few days later. He said that Genovese showed Sam the default notices he had received from the mortgages of his property. He said that the following exchange then took place:
Genovese:"Where am I going to get the money?" (To Sam) "You could help me out. I have helped you before and now you should help me out."
Sam:"In all fairness you haven't given me anything at all. You lent money to somebody else. I don't even know the details. Frank, we are skating on the skin of our pants, you know the monies I have are held for my brother in case anything happens."
Genovese:"Sam, you made the phone call. I helped you before. Why can't you help out now?"
Sam:"You understand my brother's situation. He has creditors on his back and that is what I am holding the monies for."
Genovese:"That will be all right. I've gone to a meeting of Steve's creditors and that sort of thing and that should be no problem." (To Steve) "You will get your money. You will all get your money."
Steve said that Sam then agreed to lend Genovese $70,000 from Austra's account with Citibank Limited ("Citibank") and that, on behalf of the plaintiff, he (Steve) agreed to lend Genovese $100,000 when the plaintiff was re-financed through Blackburne & Dixon and to pay him interest until that loan was made.
Steve said that on, 3 May 1993, he drove to Sam's house, picked up Sam, drove to Genovese's office, picked up Genovese, and drove into the city. He drove to the offices of Citibank and waited in the car while Sam and Genovese went inside. They came out with some cheques and Steve drove them to the Land Titles Office. He said that the three of them went into the Titles Office but that he waited in the foyer while Sam and Genovese went into a room. When they came out they said to him words to the effect that it was all done. He then drove them back to Genovese's office and Sam left shortly thereafter. Steve said that he then said to Genovese:
"Frank, in all fairness now we have got to have something in writing."
Steve said that Genovese replied:
"What I will do is I will call a meeting with Ron Studman. You don't tell Ron that we have paid this off, that you have given me this money because I don't want him to know. He thinks there is still a mortgage. Otherwise he will relax and won't do anything. We'll see what Ron is going to say."
That seems rather odd. Steve did not say what money, if any, had changed hands at Citibank and the Land Titles Office. However on his version, it could only have been the sum of $70,000 being paid by Austra. The sum of $100,000, from the re-financing of Mandurah Gate, had not yet come through. The sum of $70,000 alone would not have been sufficient to discharge the mortgage.
At a later point in his evidence, Steve said that he had "assumed" that Genovese had put up the other $100,000 himself on 3 May 1993. However if Genovese could do that, one wonders why it would have been necessary to borrow that amount from the plaintiff, particularly when the plaintiff could not make the money available when he needed it.
Steve said that he later attended a meeting at Genovese's office. The others present at the meeting were Genovese, Studman and Sam. He said that, at the meeting, the following exchange took place:
Genovese:"Ron, you know what we are here for. The money I loaned you hasn't been paid back because your money hasn't come in, and what has happened now is I have got a letter that the lenders are going to close in. They want to call up the mortgage. They want their money back."
Studman:"You have got to hang in there. You know that I am a man of my word and no matter what happens you know that I will look after you. As soon as I get the money I'll give it to you. What do you want? Do you want me to write it in blood or what? I'll do whatever you want me to do."
Genovese:"Lynne is really upset because she never wanted to lend the money."
Studman:"I'm sorry to hear that but I am sure you can handle your wife. She is your wife. You can do something without hurting her."
Genovese:"Nothing is eventuating and she is getting upset and what she predicted about this is coming true."
Studman:"What do you want me to do? I will tell you in front of your wife that no matter what I will give you your money."
Genovese:"Ron, please could you give me an undertaking that you will give me my money back."
Studman:"Yes. I've got no problem with that. I'll go back to my office and write it out and you'll have it on your desk this afternoon or first thing in the morning. You can come and collect it or whatever. I will even fax it to you so that you can see that it is what you wanted. There is no problem. There is nothing to it."

Steve said that, about a week after the meeting with Studman, he asked Genovese whether he had received any letter from Studman. Genovese had told him that he had not received any letter and that when he had rung Studman's office he was told Studman was not in. Genovese then asked him to start making the interest payments. He said that if he could not show his wife that interest was being paid she would not believe that the amount of $100,000 would be paid in September 1993. Steve said it was then that he began signing interest cheques. Between 7 May 1993 and 30 July 1993, the plaintiff drew the following cheques in favour of Clayfield:
(a)      $1,000 on 7 May 1993;
(b)      $1,000 on 7 June 1993;
(c)      $1,000 on 1 July 1993;
(d)      $500 on 9 July 1993;
(e)      $1,000 on 30 July 1993.
Each of the cheques was written out by Genovese and then signed by Steve. Genovese also made the notation on the cheque butt in each case but he (Steve) did not see or could not remember seeing what he wrote. The cheque butts were admitted into evidence and bore the following notations:
(a)Butt dated 7 May 1993 – "Clayfield Nominees P/L Interest on loan 2/5/93 to 1/6/93";
(b)Butt dated 7 June 1993 – "Clayfield Nominees PL Interest";
(c)Butt dated 9 July 1993 – "Clayfield Nominees PL / Int to 17/9/93";
(d)Butt dated 30 July 1993 – "Clayfield Nominees Interest".
Steve said that those payments were made by the plaintiff to Clayfield so that Genovese could demonstrate to his wife that he was being paid interest on the money he had lent to Studman. He said that it was intended that Genovese would show the cheques to his wife. He could not say how that would satisfy Mrs Genovese when the cheques were all drawn by the plaintiff and not by Studman.
Steve said that, in about August 1993, Genovese wrote out one of the plaintiff's cheques for $100,000 and post-dated it 17 September 1993, which was when the plaintiff was expecting to receive monies from the re-financing of Mandurah Gate through Blackburne & Dixon.
The butt of the plaintiff's cheque for $100,000 dated 17 September 1993 was also put in evidence. The notation on the butt is "Clayfield Nom P/L repayment of loan".
Steve said that he agreed to cause the plaintiff to lend $170,000 to Genovese because of the pressure that Genovese's wife was putting on him (Genovese). He also said that Genovese had made him feel guilty about Sam telephoning him (Genovese) and because he thought that he would need Genovese's support in the future.
Steve also gave evidence about some financial statements of the plaintiff which were prepared by Genovese, as the plaintiff's accountant, on 29 July , 30 July and 8 September 1993. The first of these was a trial balance for the plaintiff for the period ending 30 June 1993. It showed that the plaintiff had borrowed $70,000 from Austra and $100,000 from Clayfield and that it had incurred a capital loss of $170,000 in respect of "loan fees". The second document, which was also a trial balance for the period ending 30 June 1993, showed the same thing. However, the third document, again a trial balance for the plaintiff for the period ending 30 June 1993, did not contain those entries.
In his evidence-in-chief, Steve said that he approached Genovese (apparently after having seen the first two trial balances and having noted that they included the loan of $100,000 from Clayfield) and said:
"This is not correct. I don't owe you any money."
He said that Genovese replied:
"All right. I will redo the statements."
Under cross-examination, Steve recounted the exchange a little differently. He said that his solicitor, Howard Ginbey, who was apparently endeavouring to gather evidence to establish that the plaintiff was solvent, in order to resist a winding up petition, brought to his attention that the first two trial balances prepared by Genovese showed that the plaintiff owed Clayfield $100,000. Steve said that he said to Ginbey:
"That's new to me. I don't owe anybody any money like that."
He said that he then telephoned Genovese from Ginbey's office and said to him:
"Frank, how do I owe you this money? How can you put this down on this paperwork here that I owe you this money? I don't owe you this money. Did you give me any money?"
He said that Genovese replied:
"Okay. I will prepare another document and we'll take it off."
Steve agreed that it was extraordinary and even "terrifying" that he had caused the plaintiff to lend Genovese's company, Clayfield, $100,000, and that Genovese, as the plaintiff's accountant, had then had the temerity to write in the plaintiff's accounts that it was the plaintiff which owed Clayfield the sum of $100,000 and not the other way around. He said that, notwithstanding that, he continued to use Genovese as his accountant for "the next couple of years". He explained that by saying that Genovese had acted promptly in amending the accounts when he had been asked.
Steve said that, notwithstanding demands made by him of Genovese, neither Genovese nor Clayfield ever repaid the loan of $100,000 made by the plaintiff to Clayfield or the loan of $70,000 made by Austra to Clayfield.

Sam Pulitano

The only other witness called for the plaintiff was Sam Pulitano. He said that, in late 1991, he had attempted to re-finance all of Austra's borrowings by obtaining an overseas loan through Rynx. He said that to obtain that finance, Austra was required to pay Rynx a "blocking fee" of $250,000 to ensure that the finance would be available when it was requested. He said that Austra borrowed money to pay the blocking fee but then did not go ahead with the borrowing through Rynx and the blocking fee was lost. He said that Austra then endeavoured to improve its financial position by selling properties.
Sam said that it had been Studman who had attempted to arrange finance for him through Rynx. He said that he had been introduced to Studman by Genovese. He said that, in February or March 1992, while he was still endeavouring to obtain a loan through Rynx, Studman had telephoned him and had asked him if he knew anyone who had money. He said that Studman had told him that he was entering into a joint venture with Rynx and that he needed a large sum of money for the "blocking fee".
Sam said that he then had several telephone conversations with Studman and Paterson which had culminated in Studman asking Sam if he would telephone Genovese to ask him if he would lend Studman the money.
Sam said that he had then telephoned Genovese and had told him that Studman was looking to borrow money to set up his finance through Rynx. He said that Genovese had expressed interest and had told him to tell Studman to telephone him. Sam then telephoned Studman and told him that Genovese was prepared to talk to him about a loan. He said that Studman did not speak to Genovese on his behalf and that he had never asked Studman to speak to Genovese.
Sam then spoke about a number of discussions which he had with Steve and Genovese at Genovese's offices in 1993. He said that, in one of those discussions, Genovese had told Steve and him that he had loans which were overdue and had to be repaid. He said that he understood that Genovese was asking for assistance from Steve and Sam to repay the loans.
That was somewhat different from Steve's version. Steve said that Genovese had made the initial approach to him, that he had spoken to Sam and he and Sam had agreed to meet with Genovese to discuss the matter.
In any event, Sam said that, in one of the discussions in 1993, he told Genovese that he (Genovese) had never given him (Sam) anything and that he did not want to get involved. However, he said that he then spoke privately with Steve and Steve asked him to let him (Steve) have some of the money which Austra held from their aunt in Italy so that he (Steve) could lend Genovese the money he needed. Sam said he did not know why Steve wanted to lend Genovese money except that "Genovese's wife had threatened to leave him". Sam agreed to let Steve have that money.
Sam said that, a couple of days before 3 May 1993, Steve asked him to meet him and Genovese at the offices of Citibank at 225 St George's Terrace, Perth. Sam agreed to that and said that he subsequently met Steve and Genovese at Citibank's offices on 3 May 1993. It seems that before he went there, Sam did not know the purpose of the meeting. However, when he got there, Steve told him he needed a bank cheque for $70,000. Without question, it seems, Sam purchased a bank cheque for $70,000 which was withdrawn from Austra's account with Citibank and made out two cheques, each for $62.00, in favour of the Registrar of Titles and a further cheque for $900. He gave all the cheques to Steve.
This evidence does not tally with Steve's either. Steve said that he picked up Sam in his car, drove to Genovese's office, picked up Genovese and then drove the three of them to Citibank. Steve did not say anything about asking Sam to purchase the bank cheque or draw the other cheques. In fact, he said that he did not even go into Citibank's offices but waited in the car while Sam and Genovese went in.
Sam said that when he obtained the bank cheque and drew the other cheques, he gave them to Steve. Steve did not mention that.
Sam said that the three of them then left Citibank's offices on foot and walked up to the offices of Kott Gunning. He said that Genovese dropped off an envelope at reception. He said that that envelope was taken inside the offices of Kott Gunning and that a short time later someone came out and handed another envelope to Genovese. In his evidence, Steve did not mention going to Kott Gunning. He said that after the three of them left Citibank, he drove them to the Titles Office.
Sam said that after the three of them left the offices of Kott Gunning, they walked up to the Land Titles Office. He said that Steve or Genovese handed over the two cheques for $62 made payable to the Registrar of Titles and that one of them also handed over other documents. He said that Steve and Genovese left the Titles Office together and that he went back to his office. Again, that is different from Steve's account. He said that he waited in the foyer of the Titles Office while Genovese and Sam went into a room. He said that he then drove the three of them back to Genovese's office.
Sam said he recalled having a meeting with Genovese, Studman and Steve after 3 May 1993. In his witness statement, which stood as his evidence– in-chief, he said that he did not recall the exact terms of the conversation but said that par 60 to par 70 of Steve's statement set out the conversation at the meeting in the same general terms as he recalled it. However, those paragraphs of Steve's witness statement do not set out the conversation in general terms. They purport to set out verbatim what was said at the meeting. Under cross-examination, Sam was asked to say, in his own words, what was said at the meeting. He said that he could not recall because it was all "mixed in". Nor could he explain why he and Steve were at the meeting at all when, on his version of events, the sole purpose of the meeting was for Genovese to put pressure on Studman to extract from him the money which he owed Genovese.

Frank John Genovese

The principal witness for the defendants was Genovese. He said that in about April 1992, he received a telephone call at his office in Mount Lawley from Sam and that the following exchange took place:
Sam:"I have a chance to raise more funds from overseas and I will be able to help Steve with his problems but I will need $150,000 just for one month. Can you help?"
Genovese:Sam, if you've got property I can try to arrange a loan for you."
Sam:"You know everything I've got is tied up. Do you know of anybody else who can lend me this money? It will only be for one month. I'll pay whatever it costs."
Genovese:"No. I don't know of anyone who will give you money without security."
Sam:"Can you help? I promise that it will not cost you anything and it will only be for one month."
Genovese:"Sam, I don't have that kind of money. All my funds are tied up in real estate. You know that if I could help you and Steve I would."
Sam:"Okay."
Genovese said that, about 15 to 30 minutes later, Sam telephoned him again and the following further exchange took place:
Sam:"If you are willing to put up your property as security, Ron Studman can arrange a loan. It will only be for one month and I will personally guarantee it."
Genovese:"All right. If it is only for one month. Okay."
Sam:"Thanks very much. You will definitely get repaid within one month. I personally guarantee that. You won't lose anything. I'll get Ron to ring you."
Genovese said that, about 30 minutes after that, Studman telephoned him and he gave him the details of four properties owned by Clayfield which could be used as security for the loan.
Genovese said that, that evening, he told his wife, Lynne, that Sam had rung him and said he needed $150,000 for one month to borrow money overseas to help Steve. He told Lynne that Studman was organising the loan and that he had agreed to put up the Clayfield properties as security. He told her that she would have to sign the mortgage papers. He said that she was upset by what he had done.
Genovese said that his wife eventually agreed to sign the mortgage papers. He said that, in approximately early to middle May 1992, Studman telephoned him. He said that he told Studman that he would be crabbing and fishing in Mandurah the next day with some friends.
Genovese said that, the following day, he was at his holiday house at 90 Tuckey Street, Mandurah when Steve's son, Anthony, came to his door and asked him to go with him to Mandurah Gate. He duly went with Anthony to Mandurah Gate and, in the lobby, Anthony introduced him to one Del Piano and another person from Reliance Finance and Mortgage Services, which was apparently the company which was arranging the mortgage. He said that Del Piano gave him some mortgage papers which he read. He saw that the mortgage was to be granted by Clayfield over its four properties to secure repayment of an amount of $175,000, which was the amount of $150,000 which Sam wanted and fees of $25,000. He said that he signed the mortgage on a coffee table in the lobby and then gave the papers back to Del Piano. He said that the papers were couriered to his wife the following day, 14 May 1993, and she signed them as a director and affixed the company seal of Clayfield.
Apparently during the meeting between Genovese and Del Piano at Mandurah Gate on 13 May 1993, a question had arisen as to the beneficiary of the loan funds of $150,000. Accordingly, Genovese telephoned Sam and asked him to whom the money was to be paid. Sam told him that the cheque was to be given to Paterson. Genovese then returned to Del Piano and told him that the money was to be given to Paterson. At Del Piano's request, Genovese then signed an authority in that regard.
The mortgage executed by Clayfield on 13 and 14 May 1993 was granted to a company called Walthamstow Pty Ltd and the term of the loan was only until 22 June 1992. Genovese said that between 13 May and 22 June 1992 he spoke to Sam about once a week and asked him when the monies he had lent to Sam would be repaid. He said that on each occasion Sam simply said "ring Ron" which Genovese took to mean that he should telephone Studman and ask him when the loan would be repaid.
Genovese said, towards the end of the term, he asked Sam about the loan and Sam said that there had been "some delay" and that he should telephone Studman. Genovese said that he had telephoned Studman and had asked him what was happening but got little satisfaction.
It seems that the term of the loan expired without the mortgagee putting any pressure on Genovese or Clayfield to repay the amount borrowed. It was not until late July or early August 1992 that Genovese sought to re-finance the loan because no repayment had been made by Sam. Genovese said that he was very upset about that but felt he had no option but to agree to re-finance the loan by causing Clayfield to grant a mortgage over the same four properties to some people called Scott. That mortgage was brought to him by Studman and was for an amount of $170,000 rather than for $175,000 as the first mortgage had been. Once again, both Genovese and his wife signed the mortgage and affixed the Clayfield seal. The date of the mortgage was 3 August 1992. The term was for six months to 3 February 1993.
Genovese said that, between 3 August 1992 and 3 February 1993, he telephoned both Sam and Studman on numerous occasions to find out when the monies would be paid. However, no monies were paid. In early April 1993, he received a notice of default from Kott Gunning, acting on behalf of the mortgagees. When he received the notice, he said he telephoned Studman and faxed him a copy of the notice. He said that he was angry and upset and said to Studman that he had received a notice of demand and asked him what he was going to do. He said he telephoned Sam and asked him the same question. He said that Sam responded:
"I'm sorry. Leave it with me. I'll contact Steve and see what we can do."
Genovese said that, one or two days later, Sam came to his office in Mount Lawley and the following exchange occurred:
Sam:"I can come up with 70,000. Steve is in the process of re-financing. Can you come up with a hundred for a few months until his loan comes through? Steve will pay all costs."
Genovese:"Why is Steve paying for it?"
Sam:"The loan was for him."
Genovese:"I didn't think the whole loan was for Steve. I thought it was for you and that you were going to help Steve."
Sam:"No. It was all for Steve."
Genovese:"Okay. Are you sure that Steve is re-financing?"
Sam:"Yes."
Genovese said that he then telephoned Steve and the following exchange took place:
Genovese:"Sam says that you are re-financing and that he can come up with 70,000 and that you will come up with the other 100,000 in a few months time when your finance comes through."
Steve: "Yes. That’s right."
Genovese:"In the meantime, I will borrow 100,000 from Citibank on my overdraft facilities. The interest rate is over 10 per cent but you are happy to pay all costs and interest. Is that right?"
Steve:"All right. Okay. Would 1,000 a month cover it?"
Genovese:"Yes."
Steve:"Thanks very much Frank. I appreciate what you're doing."
Genovese said that after he had spoken to Steve, he telephoned Kott Gunning and spoke to the solicitor handling the matter. He told her that he would pay the loan out on 1 May 1993. He said that, just before 1 May 1993, he rang the solicitor again and arranged a time to go in and settle the mortgage on that day. He said he then telephoned Sam and told him that he had arranged for settlement to take place at Kott Gunning's office and told him the date and time of the settlement. Sam had then said that he would pick Genovese up from his office half an hour before and go with him to Kott Gunning.
Genovese said that, on the day of the meeting, Sam picked him up from his office and drove him to Kott Gunning. He said that there they were met by the solicitor who took them into a conference room. He said that Sam gave the solicitor three bank cheques: one for $70,000, another for $900 and a third cheque for a lesser amount. Genovese said that he gave the solicitor a bank cheque for $100,000 which he had drawn on his Citibank account.
Genovese said that, a few days after the settlement, he spoke to Steve at his office and asked him how he was going to pay the interest. Steve said that he would give him a cheque then and every month he would give him a cheque for $1,000. Steve then gave him the plaintiff's cheque book and Genovese wrote out a cheque for $1,000 in favour of Clayfield and filled in the cheque butt. He did that several other times in the months that followed. On each occasion he said to Steve: "When is the $100,000 coming?" On the second last occasion on which interest was paid (probably in July 1993) Steve said that the plaintiff's re-financing would be happening "very soon".

Genovese said that, at the beginning of September, Steve gave him an undated or post dated cheque for $100,000, apparently drawn by the plaintiff, and told him to hold it and not bank it until he (Steve) told him to. On 17 September 1993, Steve told him that he could bank the cheque and Genovese did so.
Genovese denied that the transaction had taken place in the way suggested by Steve and Sam Pulitano. He denied that the plaintiff had lent him or Clayfield any money. He denied that he had ever lent money to Studman or that his wife had ever threatened to leave him because he had lent money to Studman. He denied that he had attended the meetings with Studman that Steve had described.

Lynne Maree Genovese

Mrs Genovese also gave evidence for the defendants. She said that she had married Genovese in 1972 but they had separated in June 1999. She said that she had been a director of Clayfield since its inception and had resigned in June 1999.
Mrs Genovese said that, in the early 1990's, Genovese came home from work one day and told her that Studman was arranging a loan for Sam from overseas. He asked her to sign some papers to mortgage properties owned by Clayfield to enable Sam to borrow the monies. She told Genovese that she did not want to sign the papers because it was a large loan and she did not want to get involved. She said that Genovese asked her on a number of other occasions to sign the papers and she again refused. She said that Studman then telephoned her and, after that conversation, she agreed to sign the mortgage papers.
Mrs Genovese said that she had understood from Studman that the loan would be for only three weeks. After that period had expired, she asked Genovese whether the monies had been paid to him to allow him to discharge the mortgage. He said that they had not. She made many inquiries of Genovese in the months that followed and he always said that the monies had not been paid. She said that, after about eight months, Genovese told her that the mortgage granted by Clayfield had been discharged but that he had repaid $100,000 of the mortgage himself by using funds from their Citibank account. He also told her that Sam had paid the balance of the loan and that Sam or Steve would repay them the $100,000 together with costs.
Mrs Genovese said that, over the next four or five months that followed, she continued to ask Genovese whether they had been repaid the $100,000 and eventually he told her that it had been repaid.
In cross-examination, counsel for the plaintiff put to Mrs Genovese that she had held Studman in low regard. She rejected that. She said that she had not known him very well but that he had seemed liked "a nice enough person". Curiously, she was not asked whether she had threatened to leave Genovese because he had agreed to lend monies to Studman on the security of the Clayfield properties, which was what Steve had claimed Genovese had told him. Nor was she asked whether Genovese had ever shown her the interest cheques to satisfy her that interest was being paid on the outstanding amount of $100,000.

Gerardo Giustiniano

The only other witness who gave evidence in the case was Gerardo Giustiniano ("Giustiniano") who was called by the defendants.
Giustiniano said that he had known Genovese since about 1972 and had known Studman since 1988. He also said that Genovese had introduced him to Sam and Steve Pulitano in about 1985.
Giustiniano said that Studman sponsored him in obtaining his licence as a real estate representative. Upon obtaining his licence, he had worked for Studman and Paterson at their real estate business, Ideal Realty.
Giustiniano said that, in about 1990, in partnership with Sam Pulitano, Genovese and one Joe Italiano, he had purchased a property in Wanneroo Road. Approximately 12 months after they had purchased the property, Giustiniano and his partners placed it on the market. Giustiniano was the real estate sales representative handling the sale. He said that, on 22 August 1991, he had attended a meeting at the office of Ideal Realty. Also in attendance at that meeting were Sam Pulitano, Joe Italiano, Studman, Paterson and a prospective purchaser of the property, one Peter Talcon. Sam Pulitano and Joe Italiano entered the office together. When they did, Giustiniano introduced them to Studman and Paterson.

Credibility

As can be seen, the version of events given by the witnesses called by the plaintiff and the version given in evidence by Genovese are mutually exclusive and are poles apart. There is very little in the way of contemporaneous documents which might assist in determining which version of events is to be preferred. Therefore, that issue must turn entirely upon the credibility of the witnesses and the plausibility of their versions of events.

Demeanour

Steve Pulitano was the first to give evidence. He presented as a very nervous witness. Throughout his evidence, he appeared in considerable discomfort, even when answering questions put to him by his own counsel.
Steve gave the impression of being a very simple man with a limited knowledge of the subtleties of the English language. However, after observing him in the witness box for a lengthy period, I began to think that impression was not entirely accurate. He had, after all, been involved in the property development business for a considerable time and was familiar with the nature and purpose of project financing involving millions of dollars. On occasions, his answers to questions indicated that he had much greater insight into the various issues in the case than might have first appeared. One such occasion was the following exchange in cross-examination:
"When needed, either for tax purposes or for getting a loan, Mr Genovese would prepare documents for you. For example, I think he said he prepared a statement of assets and liabilities on occasions? - - - Yes.
A statement of debtors and creditors? - - - Yes.
You would expect him to do that, wouldn't you, being an accountant? - - - Course. Yes.
And he tried to put the best light on your trading position so that borrowers – sorry, the financiers you went to had a good view of your prospects and your ability to repay the debt? - - - Could you explain to me, what you mean by 'best light'? You don't - -
He tried to present the documents in the best light. I can't really explain it any other way? - - - Well, I mean, the best light – you either telling me that he did something irregular or that he did whatever the books of account showed.
Right, he did whatever the books of accounts showed? - - - Right.
But it's true, is it not, that he tried to present the books of account in the best light? - - - Well, I take it that as if you're saying to him that he's buffing up my – my accounts.
No, I'm not doing that. You misunderstood me? - - - Well, that's how I understand that.
All right. Now that I have told you you needn't understand it like that - - - ? - - - I'm sorry, but I do."
In my view, the use of the phrase "buffing up my accounts" does not suggest naivety or inexperience in financial matters.
If anything, Sam Pulitano was even more nervous than Steve. On occasions, he visibly shook. However, that alone would not have made me conclude that his evidence was untruthful.
Sam's evidence was extremely guarded at all times. He even seemed suspicious of questions asked by his own counsel. The guarded nature of his evidence was best exemplified by the care and time he took to examine each and every page of documents which were put to him.
However, notwithstanding that guarding and care, his evidence was far from satisfactory. He often gave long, rambling answers that avoided the question. He would not accept the most obvious propositions if they were, in his view, damaging to the plaintiff's case.
Genovese, on the other hand, was extremely confident and composed when giving evidence. He was much more articulate than either Steve or Sam Pulitano, which gave him a decided advantage. However, even allowing for that, he at all times answered the questions put to him in cross-examination in a full and forthright way. He was prepared to make concessions, even if they were not particularly helpful to his case.
Most importantly, Genovese's evidence was corroborated in important respects by Mrs Genovese. She impressed as a witness of the truth. She did not attempt to overstate any part of her evidence and was quite prepared to say when she was asked about matters of which she had little knowledge. In addition, her credibility was not attacked to any significant degree. I have already mentioned that she was not asked whether she had threatened to leave Genovese because he had lent monies to Studman and was not asked whether she had ever seen the interest cheques given by the plaintiff to Genovese. Both of these matters were presented as essential parts of the plaintiff's case.
Quite apart from the demeanour of the various witnesses, however, there was other evidence which, in my opinion, bore critically on the issue of credit.

Interest cheques

Steve Pulitano said that when Genovese asked him to arrange for the plaintiff to lend him $100,000 when Mandurah Gate was re-financed, he also asked him to pay monthly instalments of interest. In other words, he said that Genovese was asking the plaintiff to pay interest on money which the plaintiff would subsequently be advancing to Genovese. It is impossible to imagine that any lender would agree to such a thing.
Steve endeavoured to explain the reason for the interest payments and why he agreed to them on the basis that Genovese had told him that his wife needed to be satisfied that Studman was paying interest on the money which he had borrowed from Genovese. Quite apart from the fact that it is difficult to understand how Mrs Genovese could be satisfied that Studman was meeting his obligations by seeing a cheque drawn by the plaintiff, there is no evidence that Mrs Genovese made such a requirement. Nor was it put to either Genovese or Mrs Genovese in cross-examination that she did.

Respective financial positions

It is clear from the evidence that, in early 1993, when Steve Pulitano said that Genovese asked him for a loan of $170,000, $100,000 which was to come from the plaintiff, both the plaintiff and Steve Pulitano were in serious financial difficulties. Steve Pulitano himself admitted that between April and December 1993 he was in "very, very serious financial difficulties". There was also evidence that the plaintiff was being pursued by its creditors, that it was the subject of a winding up petition and that it had received substantial financial support from Austra.
On the other hand, Genovese and Clayfield enjoyed very healthy financial situations. Clayfield owned the office premises from which Genovese conducted practice and also owned a house property in Mandurah, two other blocks of land in Mandurah, half a duplex unit in Halls Head and a triplex unit in Osborne Park. He and Mrs Genovese were also the registered proprietors of their matrimonial home in Cressbrook Way, Carine. Very little of that property was encumbered by mortgages.
In addition, Genovese had access to substantial bank overdraft facilities (which, even on Steve Pulitano's version of events, he used) and held a portfolio of blue chip shares.
In my view, it seems most unlikely that parties in the positions of Genovese and Clayfield would need to borrow $170,000 in the manner they are alleged to have done. Even if they did have a need to borrow money, it seems equally unlikely that parties in the position of Steve Pulitano and the plaintiff would be their first choice as lenders.

Mrs Genovese

I have already mentioned that I found Mrs Genovese to be witness of the truth and that there was no evidence that she had threatened to leave Genovese because he had lent monies to Studman or that she had ever required that Genovese show her interest cheques in order that she could be satisfied that the loan to Studman would be repaid.
Indeed, it was also a central part of the plaintiff's case that when Genovese had first asked Steve Pulitano to lend him money he had said that Mrs Genovese had been upset about him lending money to Studman because she did not like or trust Studman. Steve also said that at a meeting between Genovese and Studman, which he attended some short time after 3 May 1993, Genovese had said to Studman:
"Look, Ron it, what about – I've got this default notice. The money's being called up. I'm in a lot of strife. Lynne believes that what she said in the first place not to – she didn't trust you at all – it's coming true."
However, when, in cross-examination, Mrs Genovese was asked her opinion of Studman, she said:
"I didn't know him very well. I only knew him as an acquaintance of Frank's. He seemed a nice enough person to me."
The other significant aspect of Mrs Genovese's evidence was that she said she recalled Genovese coming home one day and telling her about a deal involving Sam Pulitano in which Studman was arranging a loan for Sam from overseas. She said that it was in that connection that Genovese told her that he had agreed to lend a large sum of money and requested that she sign papers granting a mortgage over properties owned by Clayfield. That evidence is, of course, entirely consistent with Genovese's evidence that he did not lend the sum of $170,000 to Studman but lent it to Sam Pulitano for whom Studman was acting in respect of his endeavours to obtain finance.

The trial balances

There is no dispute between the parties that, between 29 July and 8 September 1993, Genovese, as the accountant for the plaintiff, prepared three separate trial balances for the plaintiff for the period ending 30 June 1993. According to the documents, which were admitted into evidence, the first trial balance was prepared on 29 July 1993, the second on 30 July 1993 and the third on 8 September 1993. Those dates are all well before the date upon which these proceedings were instituted on 23 July 1996.
In both the first and second trial balances, there ware recorded as credits a loan of $100,000 from Clayfield and a loan of $70,000 from Austra. Also recorded were debit entries of $170,000 for "loan fees" and $2,000 with the notation "Clayfield Nominees Pty Ltd".
In the third trial balance the credit entries in respect of Clayfield and Austra do not appear and the $2,000 for Clayfield appears as a credit entry. The debit entry of $170,000 does not appear either.
I have already outlined how Steve Pulitano dealt with those matters in his evidence.
On the other hand, Genovese said that when he prepared the trial balances on 29 and 30 July 1993 he did so on the basis of his own understanding of the situation between the plaintiff and Clayfield and on the basis of what Sam Pulitano had told him concerning the payment of the sum of $70,000 by Austra.
Genovese said that, in late August or early September 1993, he met with Steve Pulitano to explain and verify the plaintiff's accounts. He said that, at that meeting, Steve told him to delete the credit entries of $70,000 in respect of Austra and $100,000 in respect of Clayfield and the debit entry of $170,000. He said that Steve said to him in relation to those entries:
"Take that out of there. That is to be treated as a loan between me and my brother".
Genovese said he took a contemporaneous note of that conversation which he wrote on a post-it note which was stuck to the third trial balance. The note reads:
"Reverse $170,000 loan as advised it is private between Sam and Steve do not show in accounts".
That is entirely consistent with Genovese's evidence about the circumstances in which he prepared and amended the trial balances and is also consistent with his evidence that he was told by both Sam and Steve that the plaintiff would assume responsibility for the repayment of the monies which had originally been advanced for Sam.
The other telling factor about the amendment of the trial balances is the implausibility of Steve's evidence that he found it "terrifying" that his accountant had borrowed $170,000 from Steve's company and then had the temerity to write up the company's accounts as though it was the company which owed the money to the accountant. Notwithstanding alleged conduct by Genovese which could be described as both dishonest and untrustworthy, Steve continued to use Genovese as his accountant for some years afterwards. It is inconceivable that a businessman would continue to retain an accountant who behaved in that way.

Letters from Chris Martin & Associates

Two letters from the plaintiff's solicitors, Messrs Chris Martin & Associates, to Genovese were admitted into evidence. The first is dated 8 August 1995 and the second 23 February 1996.
Although the first letter appears to be the first communication by the plaintiff's solicitors to Genovese, there is no mention in it of a loan or loans by the plaintiff and/or Austra to Genovese or Clayfield. Instead, the letter begins:
"We are instructed that in 1992 you paid an amount of $150,000 to Glendower House Pty Ltd which was intended to be utilised in association with a large offshore loan which Glendower House Pty Ltd were negotiating with Rynx Capital Management Group Ltd."
The use of the word "paid" and the absence of the word "borrowed" from the letter are, in my view, strong indications that the plaintiff's solicitors had not been instructed that Genovese and/or Clayfield had borrowed monies from the plaintiff and/or Austra. Indeed, there does not appear in the letter a demand for repayment of the monies. All that is requested is "documentation with Glendower House Pty Ltd" in order that the plaintiff and Austra can take some action against Glendower.
In addition, the passage from the letter which I quote above sounds very much like the loan which Genovese said Sam Pulitano told him he was endeavouring to obtain from overseas. When Steve Pulitano was asked about the meaning of that passage, he said that he knew nothing about it and that it was something more within Sam's knowledge. Sam, on the other hand, denied categorically and on several occasions that the letter had been written on behalf of Austra at all notwithstanding its terms.
In the second letter, demand is made for payment of $71,024 to Austra and $104,500 to the plaintiff. That is quite different from the claim in these proceedings. However, even that letter does not contain the specific allegation that those monies were advanced to Genovese or Clayfield.
In my opinion, that letter is also an indication that the monies were not lent by the plaintiff to Genovese or Clayfield.

Finding on credibility

On the basis of my observation of the demeanour of the various witnesses who gave evidence in this case and the various other matters to which I refer above, I find that the evidence of events given by Genovese is to be preferred in all respects to the evidence given by Steve and Sam Pulitano.

Other findings

On the basis of my finding on credibility, I further find that:
(a)In or about April 1992, Sam Pulitano requested Genovese to provide security to enable Sam to borrow $150,000 and Genovese agreed to do so;
(b)In respect of that loan transaction, Studman acted for Sam Pulitano but the monies raised by loan were paid at the direction of Sam Pulitano and not at the direction of Studman or Glendower;
(c)In late April or early May 1993, when Sam Pulitano had not arranged for the mortgage granted by Clayfield to be discharged, Sam agreed with Genovese that Austra would pay $70,000 towards the discharge of the mortgage;
(d)Also at about that time, Steve Pulitano told Genovese that the plaintiff would pay the other $100,000 of the mortgage debt when Mandurah Gate was re-financed and would also pay interest to Clayfield at the rate of $1,000 per month until such time as the balance of $100,000 was paid.
(e)In the meantime, Genovese paid the balance of the mortgage debt in order that the mortgage could be discharged.

Accordingly, I find that the plaintiff did not lend $175,524 or any amount to Genovese and/or Clayfield. The payment of $100,000 by the plaintiff to Clayfield on 17 September 1993 and the five payments totalling $4,500 made by the plaintiff to Clayfield between 7 May and 30 July 1993 were made in discharge of the obligation originally owed to Genovese and Clayfield by Sam Pulitano which the plaintiff had agreed to assume in or about April 1993.
In a reply which the plaintiff filed, with my leave, on the second morning of the trial, the plaintiff alleged that if the plaintiff had agreed with Genovese, in April or May 1993, to assume the balance of the liability of Sam Pulitano, such agreement was procured by Genovese exerting undue influence over the plaintiff or, alternatively, in breach of his fiduciary duty to the plaintiff.
However, on the view I take of the evidence, Genovese did not exert any influence at all over Steve Pulitano to persuade him that the plaintiff should assume the liability. That was something agreed between Steve and Sam which they then told Genovese about. Nor do I consider that making that agreement constituted a breach by Genovese of any fiduciary duty which he may have owed to the plaintiff.
Accordingly, the plaintiff's claim will be dismissed.