Yarra Valley Retail Centre Pty Ltd v Yakido Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 1045 of 2010

YARRA VALLEY RETAIL CENTRE PTY LTD (ACN 070 094 227)	Plaintiff
v
YAKIDO PTY LTD (ACN 138 006 514) & ANOR	Defendants

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	7, 8, 9 and 15 June 2010
DATE OF JUDGMENT:	24 August 2010
CASE MAY BE CITED AS:	Yarra Valley Retail Centre Pty Ltd v Yakido Pty Ltd
MEDIUM NEUTRAL CITATION:	[2010] VSC 292

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CONTRACT – Option deed signed by a director of optionor – Whether director had authority to sign – Whether optionee had notice of any lack of authority.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr L Glick SC	DLA Phillips Fox
For the First Defendant	Mr N O’Bryan SC with Mr J Castellan	B2B Lawyers
For the Second Defendant	No appearance

TABLE OF CONTENTS

Parties and background facts.......................................................................................................... 2

The defendant’s offer........................................................................................................................ 5

The CGT timing issue....................................................................................................................... 6

The 15 December meeting............................................................................................................... 7

Events leading up to the 17 December speakerphone discussion........................................ 12

The 17 December speakerphone discussion.............................................................................. 16

Immediate aftermath of the 17 December speakerphone discussion.................................. 23

The 18 December conversation..................................................................................................... 28

The dispute is crystallised............................................................................................................. 36

Resolution of the dispute............................................................................................................... 36

Conclusion and orders.................................................................................................................... 42

HIS HONOUR:

Parties and background facts

The plaintiff, Yarra Valley Retail Centre Pty Ltd, is the owner of a substantial shopping complex in Lilydale, Victoria, comprising a Coles Supermarket, a large video store, numerous speciality shops and approximately 270 car parking spaces (‘the retail centre’). Coles is the anchor tenant. Its current lease expires in October 2010. It has an option to renew for a further term. Further, the Coles lease contains a right of pre‑emption in the event that the plaintiff wishes to sell the retail centre.

The plaintiff owns the retail centre on behalf of a joint venture comprised of a number of investors. The investors hold shares in the plaintiff in the same proportions as they hold participating interests in the joint venture. Pursuant to the joint venture deed, the plaintiff acts as manager of the joint venture and agent of the investors.

At relevant times there were three active directors of the plaintiff: Andrew Sinn, Bernard Edmondson and Owen Turner. John Davis was an inactive director at relevant times.

Mr Sinn is a property consultant. He identified the retail centre and arranged for its purchase. With assistance from Mr Davis, he arranged for the plaintiff to be incorporated, and arranged the joint venture structure and documentation.

Mr Sinn is also a director of a company which provides management services to the plaintiff with respect to the retail centre. Another company associated with Mr Sinn holds a participating interest in the joint venture, as does Mr Sinn’s wife. In total Mr Sinn and related interests hold about 6 per cent of the joint venture.

Mr Edmondson and Mr Turner practise as chartered accountants under the name Edmondson Turner & Co. In that capacity, they act as accountants for the plaintiff and the joint venture. Approximately 55 per cent of the investors are clients of the firm. Mr Edmondson and Mr Turner each own a small participating interest in the joint venture.

Mr Sinn was removed as director of the plaintiff in April 2010.

In early 2008, Messrs Edmondson Turner and Sinn agreed that it would be an opportune time to sell the retail centre. The retail centre was marketed together with an adjoining office centre owned by a separate company, Yarra Valley Office Centre Pty Ltd, on behalf of a separate joint venture. Mr Turner and Mr Sinn were directors of this company. Mr Edmondson was not. Expressions of interest to purchase one or both properties were called for, with a closing date of 3 April 2008. The office centre was sold at this time but there was little interest in the retail centre and it remained unsold.

Messrs Edmondson, Turner and Sinn were also directors of Churinga Village Pty Ltd, a company which owned the Churinga Village Shopping Centre in Kilsyth on behalf of another joint venture. Edmondson Turner & Co acted as accountants for Churinga Village Pty Ltd and the joint venture. A number of their clients were investors in that joint venture. As appears below, the Churinga Village Shopping Centre was also marketed and sold in 2008.

The first defendant, Yakido Pty Ltd, which I will refer to as ‘the defendant’,[1] is a company within the Banco Group of companies. It is controlled by Mario Lo Giudice. During the course of 2008, two other companies in the Banco Group purchased the office centre and the Churinga Village Shopping Centre. All of the negotiations in respect of each of these sales were conducted between Mr Sinn and Mr Lo Giudice. Neither Mr Edmondson nor Mr Turner had any involvement, and did not meet Mr Lo Giudice at this time.
[1]The second defendant, the Registrar of Titles, took no part in the proceeding.

There was a dispute in the evidence as to whether Mr Sinn kept Mr Edmondson and Mr Turner informed of the details of the sale of the Churinga Village Shopping Centre (the ‘Churinga sale’). Mr Edmondson and Mr Turner said that they had no involvement at all, and went as far as saying that they were not even aware of the sale until it was concluded. It is unnecessary to resolve this dispute. On any view of the evidence, Mr Sinn conducted all of the negotiations and was responsible for the way in which the Churinga sale was structured, thus giving rise to an adverse capital gains tax issue for investors. That issue forms a significant background fact to the assessment of the probabilities concerning the central factual issue for determination.

The retail centre remained on the market. In late 2008, following discussions with Mr Sinn, Mr Lo Giudice commenced discussions with Coles concerning the terms on which it would renew the lease. As a result, he had discussions with an architect about a proposed re-development of the retail centre, and formulated a financing proposal under which a company in the Banco Group would finance the redevelopment in return for a share of the equity in the joint venture.

In about June 2009, Mr Sinn told Mr Edmondson and Mr Turner that he was concerned about a number of matters relating to the retail centre: (1) uncertainties surrounding Coles’ intentions at the expiration of the initial term of their lease; (2) the fact that Coles’ turnover was stagnant; and (3) the falling value of the retail centre in the current economic climate, which may have had the effect that the mortgagee would require capital repayments in June 2010 due to adverse changes in the loan value ratio.

In about mid‑2009, Mr Sinn mentioned to Mr Edmondson and Mr Turner that Mr Lo Giudice may be interested in developing the retail centre. On 30 September 2009, a meeting of the investors in the plaintiff considered Mr Lo Giudice’s financing proposal. During the meeting, Mr Sinn emphasised to those present that there were uncertainties surrounding the intentions of Coles and the mortgagee. The proposal was considered too complicated and did not progress.

At the conclusion of the meeting, Mr Sinn was instructed by the investors who were present to conduct further investigations and to report back to investors.

Mr Sinn reported back to Mr Edmondson in mid-October 2009. By this time, the uncertainties surrounding the intentions of Coles and the mortgagee had been resolved. In these circumstances, Mr Sinn advised Mr Edmondson of another uncertainty - the possibility of a new retail centre being developed nearby, with the consequent potential for direct competition with the Coles Supermarket in the retail centre. Mr Sinn said that this possibility, if realised, would ‘decrease the value of [the retail centre] even further’.

In November 2009, Mr Lo Giudice made an offer on behalf of the defendant to purchase the retail centre. Following negotiations in December 2009, the offer was re‑structured as an option to purchase and an option agreement was signed by Mr Lo Giudice on behalf of the defendant and Mr Sinn on behalf of the plaintiff. An option fee was paid by the defendant and accepted by Mr Sinn on behalf of the plaintiff. The defendant then placed a caveat on the title to the retail centre to protect its interests under the option.

In this proceeding, the plaintiff seeks to remove the caveat, on the basis that Mr Sinn did not have the plaintiff’s authority to enter into the option agreement and that Mr Lo Giudice knew that Mr Sinn lacked that authority. Both Mr Sinn and Mr Lo Giudice deny that Mr Sinn lacked the necessary authority, or that Mr Lo Giudice had knowledge of any lack of authority on Mr Sinn’s part.

The central factual dispute arises from conflicting evidence as to what was said and heard during the course of a single telephone discussion on 17 December 2009 between Mr Edmondson and Mr Turner at one end and Mr Sinn and Mr Lo Giudice at the other (the ’17 December speakerphone discussion’). In order to resolve that dispute, it is necessary to consider the surrounding facts in detail.

The defendant’s offer

On 27 November 2009, Mr Lo Giudice submitted an offer in writing to purchase the retail centre for $12.25 million, conditional upon the Coles Supermarket lease being renewed by 30 March 2010. Upon satisfaction of this condition, a 10 per cent deposit was payable, with the balance of the purchase money payable 12 months after execution of a formal contract of sale. The offer provided for the defendant to take possession upon payment in full of the deposit. From that time, the defendant offered to pay interest to meet the plaintiff’s interest commitment to its bank. If the offer was accepted, the resulting contract of sale would have been entered into in the 2009/10 tax year, but the balance of the purchase price could be payable as late as 30 March 2011. Accordingly, some or all of the investors would have had to pay capital gains tax before receipt of the balance of the sale price.

The CGT timing issue

At around this time, Mr Edmondson had been seeking advice from Dr Gerard Bean of DLA Phillips Fox, Solicitors, concerning the capital gains tax implications of the Churinga sale. Following discussions between Mr Edmondson and Dr Bean, Mr Edmondson sought formal advice by email sent on 30 November 2009. In summary, Mr Edmondson sought advice concerning the allocation of the sale price between the land component and depreciable assets included in the sale; in circumstances where the contract of sale did not specify any allocation.

However, this was not Mr Edmondson’s only concern at this time with respect to the capital gains tax implications of the Churinga sale. In addition, the Churinga sale documentation had the effect that the investors had incurred, and would have to pay, a capital gains tax liability before the receipt of the balance of the sale proceeds. This was because the contract of sale had been entered into in August 2008, but the balance of the purchase price was not due until June 2010. Naturally, investors in the Churinga joint venture were displeased with this situation, and Mr Edmondson received what he described as ‘constant comments from investors … about the delay in getting money and the timing of the tax liabilities that arose’. There was nothing Mr Edmondson could do about this, but he was determined to avoid this situation being repeated in relation to any sale of the retail centre. Mr Edmondson’s concern in this regard is not in dispute, and was shared by both Mr Turner and Mr Sinn. For convenience, I will refer to this as the ‘CGT timing issue’.

The 15 December meeting

A meeting was arranged by Mr Sinn for 15 December 2009 between Mr Edmondson, Mr Turner, Mr Sinn and Mr Lo Giudice. The meeting took place in Mr Sinn’s office in Bank Place, Melbourne (the ’15 December meeting’).

Prior to the 15 December meeting, Mr Edmondson, Mr Turner and Mr Sinn, together with David Carpi, an employee of the management company controlled by Mr Sinn, met privately for about 45 minutes. Their meeting commenced at about 10:15 am. Those present agreed to endeavour to persuade Mr Lo Giudice to increase the price by $500,000, to $12,750,000, and to alter the structure of the offer, to accommodate the plaintiff’s concerns about the CGT timing issue.

Mr Edmondson and Mr Turner said that they told Mr Sinn that they wanted to get legal advice about the CGT timing issue before committing the plaintiff to a contract of sale. Mr Sinn did not accept this. I prefer the evidence of Mr Edmondson and Mr Turner on this issue. Taking the evidence as a whole, their level of their concern about the CGT timing issue makes it likely they would have said this; and they in fact did seek legal advice about the draft option when it was received. Further, and in any event, as appears below, I accept the evidence of Messrs Edmondson, Turner and Lo Giudice that Mr Edmondson told Mr Lo Giudice at the 15 December meeting that he wanted the opportunity to get legal advice about the draft option before proceeding with the transaction.

Following this private meeting, Mr Lo Giudice joined the meeting. As appears below, there are some conflicts on the evidence as to what was said during the meeting with Mr Lo Giudice. However, there is no dispute that, following discussion concerning price and the CGT timing issue, Mr Lo Giudice said that he would submit a revised offer in the form of an option to purchase the retail centre.

An issue arose as to the manner in which Mr Sinn introduced Mr Lo Giudice and Mr Turner at the 15 December meeting. Mr Sinn had substantial previous dealings with Mr Lo Giudice in connection with the Churinga sale and the sale of the office centre. Mr Lo Giudice had never met Mr Edmondson or Mr Turner before. According to Mr Edmondson, Mr Sinn introduced Mr Lo Giudice to him and Mr Turner and then said to Mr Lo Giudice: ‘these are the two guys … who I have to get the consent with to deal on this matter.’

Mr Turner had a similar recollection about this issue. He said:

We were introduced and we exchanged business cards and then … Mr Lo Giudice said ‘for me to get this deal through, I need to talk to you two guys and to get your approval …’ or words to that effect.

Later, Mr Turner said that he recalled Mr Lo Giudice saying at the 15 December meeting that ‘Andrew Sinn had told him on a number of occasions that we were the two people that had to give approval to the deal.’

Both Mr Lo Giudice and Mr Sinn denied that there was any discussion to this effect. When Mr Lo Giudice was asked in examination in chief to describe the 15 December meeting, he commenced by saying: ‘We started the meeting by obvious introductions. I had never met … Edmondson or Turner, and we commenced going through my offer’. Mr Lo Giudice gave no evidence as to the form of the introduction.

In cross‑examination, Mr Lo Giudice said that the 15 December meeting was organised by Mr Sinn, and he didn’t know who he was going to meet. That evidence is most improbable and I reject it. Mr Lo Giudice is unlikely to have attended a meeting without knowing who he was going to meet or its purpose.

When the evidence of Mr Edmondson and Mr Turner was put to him, Mr Lo Giudice said that he did not believe that words to that effect were said, and suggested that Mr Sinn did no more than refer to Mr Edmondson and Mr Turner ‘as a party to this transaction’. Mr Lo Giudice initially acknowledged that Mr Sinn may have introduced Mr Edmondson and Mr Turner as directors, but said that was not ‘a point that was stressed’. Later, Mr Lo Giudice said that he did not know at the time of the 15 December meeting that Mr Edmondson and Mr Turner were directors of the plaintiff, but ultimately conceded that he learned this fact prior to the critical 17 December speakerphone discussion. He did not remember how he found out that Mr Edmondson and Mr Turner were directors of the plaintiff. Mr Lo Giudice was driven to finally make this concession because his own file note of the 17 December speakerphone discussion, which is set out below, refers to Mr Edmondson and Mr Turner as directors of the plaintiff.

Further, Mr Lo Giudice acknowledged that Mr Edmondson and Mr Turner were obviously at the 15 December meeting for a reason, but said that he did not put any thought into whether they were there as accountants or co-directors with Mr Sinn. He agreed that he was not suggesting that they were introduced as the accountants for the joint venture. His evidence in this respect was inconsistent with that of Mr Sinn. Mr Sinn said that he introduced Mr Edmondson and Mr Turner to Mr Lo Giudice in the following terms: ‘This is Mr Edmondson and Mr Turner … who are accountants and act for a number of investors in the joint venture’.

Taking the evidence as a whole, I prefer that of Mr Edmondson and Mr Turner. Their evidence was consistent and involved them recalling specific words, not just the substance of what was said, and accords with the probabilities. On the other hand, Mr Lo Giudice’s recollection on this issue was unreliable and inconsistent; he was evasive, reconstructed and speculated about the issues; and Mr Sinn’s evidence is improbable.

In reaching my finding on this issue, I have taken the following matters into account. Mr Sinn acknowledged that he would not have proceeded to finalise a sale of the retail centre without the consent of Mr Edmondson and Mr Turner as directors; acknowledged that he is not an accountant or a lawyer, and does not understand tax issues; and acknowledged that Mr Edmondson and Mr Turner were necessary participants to ensure that the CGT timing issue was addressed. Further, it is objectively likely that Mr Sinn would have told Mr Lo Giudice that Mr Edmondson and Mr Turner were directors of the plaintiff when he arranged the 15 December meeting with Mr Lo Giudice, if not beforehand. In addition, Mr Lo Giudice said Mr Edmondson did most of the talking at the meeting on behalf of the plaintiff. In particular, it was Mr Edmondson who sought to have Mr Lo Giudice increase the offer by $500,000. In his file note of the 15 December meeting, Mr Lo Giudice recorded that Mr Edmondson and Mr Turner were there ‘to crunch me on the price’. In circumstances where all prior negotiations had been between Mr Lo Giudice and Mr Sinn, it is unlikely that persons acting only as accountants would have been introduced to negotiate the price.

Accordingly, I am satisfied that, from 15 December 2009, Mr Lo Giudice knew he needed to convince Mr Edmondson and Mr Turner to agree to his offer before a contract to purchase the retail centre could be concluded between the parties; and knew that Mr Edmondson and Mr Turner were directors of the plaintiff and not merely accountants for the joint venture.

There was a substantial amount of discussion at the 15 December meeting concerning price. Mr Lo Giudice obviously attended the meeting prepared to justify his position, and to hold firm to the price which he had offered. In his evidence in chief, Mr Lo Giudice gave a detailed account of this part of the conversation, and it was obvious that he had a very good recollection of it. This is to be expected because Mr Lo Giudice is an experienced property investor and his business is the acquisition and development of properties. The detail of Mr Lo Giudice’s evidence in this respect, and the confidence with which he gave it, was in marked contrast to his evidence concerning the issues to be determined.

All present recalled that Mr Edmondson asked for another $500,000 and that Mr Lo Giudice flatly refused. There was no conclusion reached about the price, although none of those present could have been in any doubt that Mr Lo Giudice was not open to further negotiation concerning price. The conversation then turned to the CGT timing issue.

The witnesses all agreed that there was discussion concerning the CGT timing issue. Mr Edmondson and Mr Turner told Mr Lo Giudice about the complaints received from investors in the Churinga joint venture about that issue, and said that they wanted to avoid a similar issue arising on any sale of the retail centre. Mr Sinn said that Mr Edmondson and Mr Turner were ‘most anxious’ to avoid the CGT timing issue arising on any sale of the retail centre, and that he shared their concerns.

In the context of discussion concerning the CGT timing issue, the idea of structuring the proposed sale of the retail centre as an option, exercisable after 30 June 2010, was discussed. There was a dispute on the evidence as to who raised the idea of using an option structure. It is unnecessary to resolve that dispute, which involves different recollections about a collateral matter. In any event, the parties agreed that Mr Lo Giudice said that he would revise the structure of his offer and would provide a draft option agreement within a short period of time.

The recollections of those present varied as to whether Mr Lo Giudice said he would submit a draft option agreement within 24 hours, 48 hours, by Thursday or Friday or by the end of the week. Nothing turns on this. The matter was obviously urgent given the time of year and the desire to conclude a transaction in good time before the close of business for the Christmas vacation. In this regard, it was known to the parties that Mr Sinn was going overseas for the Christmas holidays. Mr Edmondson said that Mr Sinn told him that he was having dinner with his grandchildren on the evening of Thursday 17 December 2009 ‘prior to his departing’, but said that he did not know Mr Sinn was due to depart Melbourne on the early morning of Friday 18 December 2009, as was the fact. Given this planned departure time, the matter was particularly urgent for Mr Sinn.

Mr Edmondson said that he told Mr Lo Giudice that he wanted an opportunity to get legal advice about the proposed option agreement before proceeding with the transaction. Mr Lo Giudice did not initially accept this, although he did recall Mr Edmondson stating to him that he could not ‘assess the capital gains impact’ until he saw the draft option agreement. However, he eventually conceded in cross‑examination that either Mr Edmondson or Mr Turner told him at the 15 December meeting that they wanted ‘an opportunity to run by their lawyers the capital gains tax implications’ of the proposed option agreement.

Mr Sinn’s evidence on this issue differed from that of Messrs Edmondson, Turner and Lo Giudice. He denied that Mr Edmondson and Mr Turner said at the 15 December meeting that they wanted to get legal advice about the proposed option before it was signed. Based on the evidence of Messrs Edmondson, Turner and Lo Giudice, and my acceptance of the evidence of Mr Edmondson and Mr Turner that they told Mr Sinn this during the private meeting which had just concluded, I reject Mr Sinn’s denial.

Events leading up to the 17 December speakerphone discussion

On 15 or 16 December 2009, Mr Edmondson spoke on the telephone to Dr Bean concerning the Churinga sale. Dr Bean’s best recollection was that this conversation occurred on 15 December, but said it may have been on 16 December 2009. Nothing turns on this. In the course of that conversation, without identifying the transaction but with Mr Lo Giudice’s offer for the retail centre and the CGT timing issue in his mind, Mr Edmondson said to Dr Bean:

I have another one for you where we have an issue. We might want to avoid capital gains tax arising.

In response, Dr Bean said:

Look Bernard, look some people do use a structure involving a put option and a call option but there are Part IVA issues associated with that and I am not so keen on that – on those kind of things.[2]

[2]Emphasis added.

Also on 15 or 16 December 2009, Mr Lo Giudice sought tax advice concerning the CGT timing issue. He contacted John Brazzale of Pitcher Partners, accountants for the Banco Group, to discuss this issue. He did so for the obvious reason that he wanted to confirm that the proposed option would meet the plaintiff’s concerns about the CGT timing issue. Mr Lo Giudice said that he approached Mr Brazzale at this time ‘because obviously I wanted to get the contracts or the revised offer out’. I infer that Mr Brazzale advised Mr Lo Giudice that a call option which was not exercisable until after 30 June 2010 would meet concerns about the CGT timing issue.

On 16 December 2009, the internal solicitor employed by the Banco Group, James Lui, prepared a draft option agreement to reflect the discussions at the 15 December meeting as relayed to him by Mr Lo Giudice. The draft option agreement provided for a call option only, exercisable after 30 June 2010.

At 4:53 pm on 16 December 2009, Mr Lo Giudice sent the draft option agreement to Mr Sinn by facsimile. The draft was dated 16 December 2009. Mr Sinn then spoke with Mr Lo Giudice on the telephone, and they agreed to meet on the following morning at 10:30 am. Although Mr Lo Giudice initially gave evidence about what was said during the course of his conversation with Mr Sinn on the evening of 16 December, saying that he did recall it, he later conceded that the evidence was reconstruction and he could not recall the conversation.

Mr Sinn said that the effect of the conversation was that he invited Mr Lo Giudice to come into his office on the morning of 17 December ‘for me to sign off on not a draft but the actual document.’ He also asked Mr Lo Giudice to bring a cheque for the option fee. Mr Sinn said that he made this arrangement because the offer to enter into the option ‘was only available or open for 24 hours [it was in fact open until 4 pm on 18 December] and I needed to conclude the matter before I went on six weeks’ leave’.[3] Accepting that evidence, which is the only evidence of what was said and was not challenged, it appears that Mr Sinn intended to bring the transaction to a conclusion on the following morning, and to persuade Mr Edmondson and Mr Turner that this should be done. Of course, it was natural for him to wish to do so, in circumstances where he obviously wished to resolve this matter prior to departing for overseas on the morning of Friday 18 December.
[3]Emphasis added.

At 6:22 pm on 16 December, Mr Sinn forwarded the draft option agreement to Mr Edmondson by facsimile. His handwritten facsimile cover sheet is, relevantly, in the following terms:

Bernard/Owen
Please advise your agreement to my signing the following.
Mario is coming to my office at 10:30.

This facsimile confirms that Mr Sinn did not wish to proceed without the authority of Mr Edmondson and Mr Turner. By sending the facsimile, he was seeking that authority.

By the time this facsimile was received, Mr Edmondson and Mr Turner had left their office for the day. The facsimile came to Mr Edmondson’s attention when he arrived for work at 8:30 am the following morning, 17 December 2009. Mr Edmondson reviewed the draft option agreement immediately. Shortly afterward at about 9:00 am, Mr Turner arrived at the office and Mr Edmondson discussed the draft option agreement with him. As a result, Mr Turner suggested an amendment to clause 3 of the draft option agreement.

In his affidavit, which in this respect was not challenged in cross‑examination, Mr Edmondson swore that he then prepared a handwritten facsimile to Dr Bean, seeking legal advice, in the following terms:

Gerry,
Here is another shopping centre sale.
Can you have a look at this option agreement and advise us if it is suitable to avoid having to record the sale prior to the date of exercising the option.
We want to avoid the problem we have with the Churinga sale of selling in August 2008 with final settlement of the funds in June 2010.
We have agreed with the Purchaser the change to item 3.
Upon hearing from you, the agreement will be signed and exchanged.
Regards Bernard[4]

[4]Emphasis added.

As appears below, this facsimile was not sent until 10:53 am, following the 17 December speakerphone discussion. The fact that it was prepared when Mr Edmondson says it was may have some support in a handwritten annotation ‘9.50 [am]’ which appears on the top of the original of the handwritten facsimile. Mr Edmondson could not recall when he made that annotation. However, it is likely to have been made by him in the course of a process of reconstruction as to the order of relevant events. Notwithstanding that this evidence was not challenged, the evidence is in my view inherently improbable and unreasonable, and should be rejected on that ground.[5] It is contrary to human experience and probability that Mr Edmondson would write the words ‘We have agreed with the Purchaser the change to item 3’ before the change was even brought to Mr Lo Giudice’s attention. At the very least, that sentence and the final sentence are likely to have been written after the 17 December speakerphone discussion had concluded, and I so find.
[5]Hardy v Gillette [1976] VR 392, 395-7.

Mr Edmondson then telephoned Dr Bean some time prior to 9:51 am on 17 December. Dr Bean was not available. His personal assistant sent an email to him at 9:51 am referring to Mr Edmondson’s telephone call, in the following terms:

Bernard Edmondson telephoned. He will send by fax something for you to look at. Told him you were not available this morning but will be this afternoon.

Shortly after that telephone call, Mr Sinn telephoned Mr Edmondson, to confirm that he had received the facsimile attaching the draft option agreement. According to Mr Edmondson, he again told Mr Sinn that he wanted to get legal advice about the CGT timing issue before proceeding with an option arrangement. Mr Sinn denies this. I accept Mr Edmondson’s evidence. The note of Dr Bean’s personal assistant establishes that Mr Edmondson intended to seek legal advice, and this issue would have been uppermost in his mind when he spoke with Mr Sinn shortly afterwards. In these circumstances, it is likely that Mr Edmondson would have mentioned his intention to Mr Sinn. The telephone call ended with Mr Sinn informing Mr Edmondson that Mr Lo Giudice was coming to his office at about 10:30 am.

Following this telephone call, there was a short discussion between Mr Edmondson and Mr Turner concerning the draft option agreement. Mr Edmondson described this discussion as ‘leading up to the expected call from [Mr Sinn]’.

The 17 December speakerphone discussion

At approximately 10:15 am on Thursday 17 December 2009, Mr Sinn and Mr Lo Giudice met in Mr Sinn’s office. Mr Lo Giudice brought with him execution copies of the option agreement, in the same form as the draft provided the day before but dated 17 December 2009, and a cheque for the nominated option fee of $20,000. Mr Sinn then telephoned Mr Edmondson and Mr Turner. There was then discussion by speakerphone at both ends of the call (the ‘17 December speakerphone discussion’). Although there is some agreement, the evidence of the parties concerning this discussion is totally inconsistent in key respects.

For the plaintiff, Mr Edmondson and Mr Turner contend that, following discussion with Mr Sinn about an amendment to the option which they proposed, Mr Sinn was instructed not to sign or exchange the option until they had obtained legal advice confirming that the option structure met their concerns about the CGT timing issue; and that Mr Sinn accepted that instruction with the words ‘I will leave it on the table’ (Edmondson) or ‘I will keep the document on my table’ (Turner). For convenience, I will refer to this instruction as ‘the disputed instruction’.

For the defendant, Mr Lo Giudice and Mr Sinn deny the disputed instruction, and deny that Mr Sinn said words to the effect that he would leave the option ‘on the table’. Mr Lo Giudice said that he agreed to the amendment to the option which was proposed by Mr Edmondson and Mr Turner, and that he then said ‘thank you, the deal’s done’; following which he and Mr Sinn signed the counterparts of the option and exchanged them, and he handed Mr Sinn a cheque for $20,000 in respect of the agreed option fee. The telephone call was then terminated and Mr Lo Giudice shook hands with Mr Sinn and said ‘thank you, have a great holiday’.

Mr Sinn’s evidence was generally consistent with Mr Lo Giudice’s.

The parties agree that the proceeding will be determined by the Court’s finding as to which version of the 17 December speakerphone discussion should be preferred. If Mr Edmondson and Mr Turner gave the disputed instruction to Mr Sinn as they contend, it was accepted that Mr Lo Giudice must have heard that instruction and, in those circumstances, he cannot rely upon Mr Sinn having implied or ostensible authority to sign and exchange the option. If the disputed instruction was not given, the plaintiff must lose.

In his evidence in chief, Mr Edmondson described the 17 December speakerphone discussion in the following terms:

(1) First, he said that Mr Lo Giudice did not participate in the discussion at all. Although he believed that Mr Lo Giudice was probably present, Mr Sinn did not refer to his presence and he did not ask Mr Sinn if he was present. At one stage, Mr Edmondson maintained the inconsistent positions that he believed he and Mr Turner were having a private discussion with Mr Sinn while at the same time believing that Mr Lo Giudice was probably present.

(2) Second, Mr Edmondson recounted he and Mr Turner informing Mr Sinn of their proposed change to clause 3 of the draft option agreement. He said that Mr Sinn accepted the amendment without query, and may have used words such as ‘OK, fine’ without any real discussion.

(3) Third, Mr Edmondson said that he told Mr Sinn words to the effect ‘that this contract was not to be exchanged until after we’d received legal advice as to the CGT implication to the document’. In response, Mr Edmondson said that Mr Sinn said: ‘I will leave it on the table’.

(4) Fourth, Mr Edmondson said that the speakerphone conversation was ‘pretty short’ and ‘might have lasted 5, 10 minutes’.

Mr Turner’s evidence was to similar effect. He said:

Would you tell His Honour as best you can recollect, about the conversation with Mr Sinn which then occurred. Again the first person, direct speech if you can?---Mr Sinn was – we spoke to Mr Sinn about, or Mr Edmondson spoke to Mr Sinn about the document and pointed out the amendment that was – that we would like to be made to the document. Mr – Mr Edmondson also pointed out to Mr Sinn that this document had not been presented to our tax lawyer or any other lawyer for that matter for advice, and that we would not proceed with – on this document until those – until we had those reassurances.
Yes, now did Mr Sinn respond to that?---Ah well Mr Sinn did respond to that, and ah stated that ah he would ah keep the document on his table ah until we had, well that wasn't quite the word he said. "I will keep the document on my table".

In common with Mr Edmondson, Mr Turner said that Mr Lo Giudice said nothing during the speakerphone discussion and Mr Sinn did not refer to him as being present. However, he believed that Mr Lo Giudice ‘may have been in the room’.

Mr Turner made a file note of this conversation some days later, on 21 December 2009, after the dispute had arisen. In that note, Mr Turner recorded:

10:15 Discussion with Sinn re CGT issue & need to clear with the lawyer (at about 10:15 am)
While Mario there change made to agreement – re CGT.
A Sinn instructed do not exchange until tax lawyer vetted agreement which would be in PM +
[Mr Sinn] said he would leave on table until tax lawyer clearance.

After exhausting his memory about the 17 December speakerphone discussion, Mr Turner was asked whether his memory was jogged about any other matters discussed. In response, he said that, after the amendment to clause 3 was dictated to Mr Sinn, Mr Sinn ‘stated that he had included it in the agreement and he would get Mr Lo Giudice to sign off … on the change when he was there.’

Mr Lo Giudice’s evidence in chief concerning the 17 December speakerphone discussion was in the following terms:

I walked in, as I walked in Andy said, “Edmondson” - Edmondson or Turner I can't remember who it was, "Has just rung, let's ring them and let's go through the offer". He got them on the speaker phone …
…
Who is them?---Sorry, Edmondson, Mr Edmondson definitely, the other person I believe was - it was Turner, yes, because I didn't know his name at that stage, so it was Turner as well. Well there were two people on the other side.
All right, now as best you can please, as directly as you can recall it from what happened in this conversation on the speaker phone, tell His Honour what was said by the various people please, including yourself if you said anything?---Yes, well yes, well I - we - we went through the - Andy rang them, he went through the offer with them, with them being the other two parties, again I could hear it all. They made the comment that they wanted to change a paragraph and I agreed to that, they read it over the phone. I wrote it down, Andy wrote it down too by memory, and …
…
Do you know who was speaking when the words were dictated?
---Um, look, I - it was either Edmondson or Turner, I - I can't categorically say it was which one, but most of the conversation was Mr Edmondson, (indistinct).
You recognised his voice, did you?---Yes.
All right. I'm sorry, I should have asked you this, did the people on either end of the phone introduce themselves to one another?---Oh, Andy - Andy said, "I've got Mario here with me and, ah, he's got the offer in front of me and let's go through it all." And he - as I walked in, as I said to you, um, I, um - he said, "We'll ring Edmondson and Turner to go through the offer."
So you have a recollection of Sinn saying, do you, "I've got Mario here with me"?---Oh definitely, I was in the room and, yes, definitely told them that.
Did you say anything during the course of this discussion, Mr LoGiudice?---Well, I definitely said, "I'll accept this - this - the variation of this - this - this, um" - I definitely said I would accept the variation of this - these words and I'll accept the - the - how do you say it? I accepted that these words can be changed and I would initial the changes.
You recall saying those words out loud?---Definitely.[6]

[6]Emphasis added.

Mr Lo Giudice said that he then signed the option agreement and handed Mr Sinn a cheque for $20,000 in respect of the option fee. The following exchange then occurred:

All right. Was anything said by Sinn or by anybody else in the room when you were signing and handing over the cheque?
---Um, not that I recall. I - I said thank you, ah, I said thank you, the deal's done and - I think he hang up, he - he closed the phone afterwards.

Did Mr Edmondson say anything?[7]

[7]Emphasis added.

There was then an objection, after which the following exchange occurred:

Yes, yes, and what was said at the end of the conversation when the telephone call was terminated?---Nothing, just have a great – I think something probably to the extent of have a great Christmas, and deal done type of thing.
All right?---I mean it was an exchange of a contract, I can definitely remember there was an open conversation, there was a – we went through the terms and conditions of the variation of that offer and it was a final – and we finalized the deal over the phone, it's as simple as that. I mean, I'm sorry I don't understand if there's anything clearer to say than that.
Very good. Mr O'Bryan.
You mentioned the words, deal done?---Yes.
Do you recall those words having been spoken?---I just said that.
Who spoke them - - -

There was then a further objection, following which Mr Lo Giudice again confirmed that he said the words ‘deal done’ or words to that effect and the call then terminated.

Mr Lo Giudice was asked what happened after the call terminated. He replied: ‘I don’t know, shook Andy’s … hand said thank you, have a great holiday and I went off.’

Mr Lo Giudice said that ‘everything was signed and I handed in the cheque’ during the course of the 17 December speakerphone discussion.

The reason for the objections referred to above lay in the attempts by senior counsel for the defendant to give Mr Lo Giudice an opportunity to change his evidence that he said ‘deal done’ or words to that effect. When the opportunity was given to Mr Lo Giudice, he confirmed his evidence in that regard. This evidence was in direct contrast to his file note of the 17 December speakerphone conversation, which he contends was made in his car immediately following the termination of the conversation. It is also inconsistent with the version put by senior counsel for the defendant to Mr Edmondson: ‘you responded, “Congratulations, deal done.” Do you agree?’[8]
[8]Emphasis added.

Mr Lo Giudice said that he dictated his file note in his car on 17 December 2009, in accordance with his usual practice following meetings. Mr Lo Giudice’s file note is to the following effect:

I had a meeting with Andy Sinn regarding the purchase of the Yarra Valley Shopping Centre at his office. I handed him the final executed Option to Purchase Agreement. He contacted his joint Directors being Bernard Edmondson and Owen … We discussed with them on open telephone microphone the rewording of condition 3 to which I agreed to and exchanged the agreement with Andy Sinn.
They authorised Andy to sign the agreement and bank the cheque. Bernard said “Congratulations deal done” and that they were to forward the document to their Solicitor.
I wished Andy all the best for his holidays.

Mr Lo Giudice has written in hand at the bottom of the file note: ‘4.35 pm 17/12/09’. He said that he believed that this was the time his typist gave him the note. If so, that would be contrary to Mr Lo Giudice’s normal practice. In relation to a later file note made on 18 December 2009, Mr Lo Giudice said that he does not record when he receives typed file notes back from his secretary: ‘I don’t record when I get them back. I mean, they’re just a file note from my point of view.’

Mr Lo Giudice was asked in evidence in chief to read his file note and say whether it caused him ‘to recollect anything other than what you have given evidence about already from your memory’. Notwithstanding this opportunity, he did not notice that his file note records Mr Edmondson, and not him, saying ‘deal done’. He answered: ‘No .. It’s exactly what I said before’.

In opening, senior counsel for the plaintiff questioned the authenticity of Mr Lo Giudice’s file note of the 17 December speakerphone discussion, stating that the plaintiff did not accept that it was a contemporaneous note or, if it was, that it was a self-serving note which did not accurately reflect the content of the discussion. However, in cross-examination, it was not directly put to Mr Lo Giudice that the file note was not made contemporaneously. Notwithstanding this, the issue of authenticity of the file note remained an issue in the case; as it directly contradicts the plaintiff’s case. The issue concerning authenticity of this file note is resolved below.

Mr Sinn’s evidence concerning the 17 December speakerphone discussion was largely consistent with that of Mr Lo Giudice. He said:

Yes, what was said?---Well um, I outlined that Mr LoGiudice was in my office, that he'd prepared a document, not - no longer a draft um, that he'd prepared a final copy of the offer ah, in the form of an option and that was - that he'd brought that to the - to the conference call and um, for my execution. Um, Mr Turner I recall requested an amendment to the document to one of the clauses. Um, which clarified that this was not a sale, it was a - an option to purchase.
…
Mr Turner dictated that clause to Mario and I and I noted it in my writing on the draft and eventually or subsequently Mr LoGiudice noted it in his copy of the original.
…
What then happened, who said what?---Then I said, "Is that satisfactory to you, Mr LoGiudice" and he said yes it was, I said, "Then we shall proceed with the option." And I signed the document, I asked him to sign it and he passed over a cheque for $20,000 being the deposit.
Now, was anything said to Edmondson and Turner by yourself or Mr LoGiudice further in the course of this conversation?---No.
Did either of Edmondson or Turner say anything further in the course of the conversation?---Well, not that I am aware of, no.
How did the conversation conclude, as you recall it?---Um, that's it.
…
So there were no farewells from anyone, is that what happened? It just - - -?---Not that I recall.[9]

[9]Emphasis added.

Mr Sinn said that the 17 December speakerphone discussion ‘was not short, it was probably 10 or 15 minutes’. However, he could not recall anything else about the discussion.

Immediate aftermath of the 17 December speakerphone discussion

After the 17 December speakerphone discussion concluded, Mr Edmondson sent his handwritten facsimile to Dr Bean seeking legal advice, attaching a copy of the option with the handwritten amendment to clause 3. The facsimile imprint on the copy received at Dr Bean’s offices indicates that it was received at 10:53 am that day. The time of receipt is supported by the records of the central communications centre at the solicitor’s office, which indicate that the facsimile was forwarded to Dr Bean at 11:06 am that morning, and was printed at 11:58 am that day.

The facsimile is set out above. For convenience, it is also set out below:

Gerry,
Here is another shopping centre sale.
Can you have a look at this option agreement and advise us if it is suitable to avoid having to record the sale prior to the date of exercising the option.
We want to avoid the problem we have with the Churinga sale of selling in August 2008 with final settlement of the funds in June 2010.
We have agreed with the Purchaser the change to item 3.
Upon hearing from you, the agreement will be signed and exchanged.
Regards Bernard[10]

[10]Emphasis added.

As stated above, Mr Edmondson said in his affidavit that he prepared this handwritten facsimile prior to speaking with Mr Sinn on 17 December for the first time, but did not send the facsimile until after the 17 December speakerphone discussion. For the reasons given above, I reject that evidence. However, even if that evidence is correct, and Mr Edmondson prepared his handwritten facsimile on the assumption that Mr Lo Giudice would agree to the proposed amendment to clause 3 but withheld sending the facsimile until that agreement had been confirmed, then the sending of the facsimile after the conclusion of the 17 December speaker phone discussion supports the defendant’s evidence that Mr Lo Giudice participated in the discussion and agreed to the amendment. Mr Sinn could not have agreed on his behalf.

In cross‑examination, Mr Edmondson sought to distance himself from this aspect of his facsimile. He said words to the effect that his reference to the purchaser agreeing to the amendment was intended to record that the purchaser had raised nothing to the contrary in the ½ hour that had elapsed since the conclusion of the 17 December speakerphone discussion. Mr Edmondson gave this explanation on the assumption, contrary to his affidavit, that the handwritten facsimile was prepared after the conclusion of the 17 December speakerphone discussion. In that regard, there was no ambiguity in his responses in cross‑examination. He said that his facsimile was written by him ‘about half an hour after, at least half an hour after discussions had been held with Andrew Sinn and no comment to the contrary had been made … about the change.’ The inconsistency in Mr Edmondson’s evidence in this respect demonstrates that his evidence on this issue was based on reconstruction and is unreliable. I reject it. It is also improbable that he would instruct Dr Bean that the change to clause 3 had been agreed ‘with the Purchaser’ if that was not the case.

Whether or not the handwritten facsimile was prepared before, or after, the 17 December speakerphone conversation, the penultimate paragraph – ‘We have agreed with the Purchaser the change to item 3’ – supports the evidence of Mr Lo Giudice and Mr Sinn that Mr Lo Giudice participated in the 17 December speakerphone discussion and agreed to the amendment to clause 3. On this basis, I find that Mr Lo Giudice did participate in the 17 December speakerphone discussion. Further, as appears below, this finding is supported by the initial letter of demand from the plaintiff’s solicitor to Mr Lo Giudice, in which it is stated that the solicitor was instructed that Mr Lo Giudice participated in the 17 December speakerphone discussion.

The final paragraph of the facsimile: ‘Upon hearing from you, the agreement will be signed and exchanged’, records Mr Edmondson’s consistent understanding and intention as to what was to occur. The fact that he sent the handwritten facsimile immediately following the conclusion of the 17 December speakerphone discussion, whenever he prepared that facsimile, supports the continuation of his understanding and intention in that regard. He is unlikely to have sent a facsimile in that form if, as a result of the words spoken during the 17 December speakerphone discussion, he believed that the option had already been signed and exchanged by Mr Sinn.

After Mr Edmondson had sent his facsimile to Dr Bean seeking advice, Mr Edmondson was notified by Mr Davis ‘out of the blue’ of a higher offer for the retail centre, in the sum of $13 million. Understandably, if the option was not then binding, Mr Edmondson and Mr Turner were keen to pursue the possibility of selling the retail centre for the higher amount. The offer was from another member of the joint venture, Drew Abercrombie (‘the Abercrombie offer’).

At the time of the Abercrombie offer, Mr Abercrombie was on a yacht in the Whitsundays. The offer was made orally and confirmed by SMS text message. Senior counsel for the defendant said in opening that it would be put that the Abercrombie offer was ‘a sham’, but this case was not pursued in evidence and was abandoned in final submissions.

Mr Abercrombie was present at the 30 September 2009 meeting of investors and considered Mr Lo Giudice’s financing proposal and associated material, including a valuation of the retail centre in the sum of $12.247 million. However, the circumstances surrounding the timing of his offer, and the odd fact that such an offer was made by mobile telephone from a yacht, were not explored in evidence. Mr Abercrombie did not give evidence. Nor did Mr Davis.

As a result of the Abercrombie offer, Mr Edmondson telephoned Mr Sinn at approximately midday and said: ‘You won’t believe this, but we’ve had another offer.’ There was a collateral dispute as to whether Mr Sinn was told during this conversation that the offer was from Mr Abercrombie. It is unnecessary to resolve that dispute. Mr Sinn said that he was indeed incredulous that another offer had been received at this time. He said that he told Mr Edmondson to get the offer in writing, and he would then discuss it with Mr Lo Giudice. In his affidavit, Mr Sinn said that he made this statement notwithstanding that he did not believe there was anything he could do to change the position unless Mr Lo Giudice agreed. It was put to him in cross‑examination that he would not have made such a statement unless he believed that there was some point in discussing the matter with Mr Lo Giudice, thus indicating that he did not believe that a concluded agreement had been reached. Mr Sinn said, in effect, that he made this statement to Mr Edmondson because he was seeking to deflect him, in circumstances where he did not believe that the offer was likely to be formalised and he thought ‘it was all a furphy’.

Mr Edmondson also gave evidence that he told Mr Sinn that the higher offer was from Mr Abercrombie and that Mr Sinn’s response was: ‘Oh that is higher … than Mario’s offer. I will not tell Mario.’ Mr Turner also recalled Mr Sinn stating that he would not tell Mr Lo Giudice.

Next, at approximately 2:45 pm on 17 December 2009, Mr Edmondson and Mr Turner (on speakerphone) telephoned Mr Sinn again. By this time, Mr Sinn was having lunch at a city restaurant. Mr Sinn acknowledges that he was then informed that the higher offer had been received from Mr Abercrombie. Mr Sinn remained sceptical, and there was then discussion about whether the offer was in writing and as to how Mr Abercrombie proposed to pay the deposit, given that he was on a yacht in the Whitsundays. According to Mr Edmondson [and Mr Turner] Mr Sinn terminated the telephone conversation, on the basis that the reception at the restaurant was poor and that he would call back. Whether or not this was said, Mr Edmondson and Mr Turner did not speak to Mr Sinn again during the relevant events.

It was common ground that, during this conversation, Mr Sinn did not inform Mr Edmondson and Mr Turner that he had exchanged the signed option agreement with Mr Lo Giudice and received the deposit on behalf of the plaintiff. Of course, on Mr Sinn’s version of events, there was no need for him to say this because the deal had been concluded during the course of the 17 December speakerphone discussion in which Mr Edmondson and Mr Turner participated.

On the morning of 18 December 2009, Mr Edmondson telephoned Mr Sinn ‘to ask him to clarify where Mr Lo Giudice’s offer stood’. The telephone was not answered. Subsequent telephone calls to Mr Sinn’s mobile were also not answered. He left a message on Mr Sinn’s mobile phone answering system for him to call back. A number of other calls went unanswered. In these circumstances, Mr Edmondson and Mr Turner came to believe that Mr Sinn had already left for his holidays. That was the fact. Mr Sinn said that he left for his holiday that morning.

Further, they began suspecting that Mr Sinn may have disobeyed their instructions that he was not to sign or exchange the option until legal advice had been received.

In these circumstances, Mr Edmondson and Mr Turner telephoned Mr Carpi. Mr Edmondson said they made this call ‘to try and find out if Andrew Sinn had left the document sitting on his table [unsigned] as he said he would do’. Mr Carpi told them that Mr Sinn had indeed left on holidays and was flying out of Sydney to Los Angeles that day. Mr Edmondson and Mr Turner decided that there was no point in making further efforts to contact Mr Sinn by telephone.

Also during the course of 18 December 2009, Mr Edmondson and Mr Turner asked Mr Carpi to check and see whether a deposit for $20,000 had been made into the plaintiff’s bank account. In his capacity as an employee of Mr Sinn’s management company, Mr Carpi had access to the plaintiff’s internet banking details. Between approximately 4:00 and 4:30 pm, Mr Carpi left a telephone message for Mr Edmondson, to the effect that a sum of $20,000 had been paid into the plaintiff’s bank account on 17 December 2009.

The 18 December conversation

Prior to receiving this telephone message from Mr Carpi, Mr Edmondson and Mr Turner had made endeavours to speak with Mr Lo Giudice. At approximately 4:15 pm on Friday 18 December 2009, Mr Lo Giudice returned Mr Edmondson’s call. He spoke with both Mr Edmondson and Mr Turner on the loudspeaker. Both parties placed considerable reliance upon the content of this telephone conversation (‘the 18 December conversation’).

In his evidence in chief, Mr Edmondson said that Mr Lo Giudice rang back at about 3:00 pm. However, as appears below, I accept that Mr Lo Giudice’s file note of the conversation, which states that the telephone call took place at approximately 4:15 pm, was made contemporaneously and is likely to be accurate. Mr Turner also said that the call took place at about this time.

Mr Edmondson’s evidence in chief concerning this conversation was most unsatisfactory, in particular because he did not give his evidence by reference to the sequence of the conversation. Reading his evidence in chief as a whole, and putting the evidence in its proper sequence, Mr Edmondson gave the following evidence about the conversation:

(1) Mr Edmondson asked Mr Lo Giudice ‘what was happening, what had happened with the documents’ – a reference to the draft option agreement. Mr Lo Giudice responded ‘that he exchanged documents with Mr Sinn and … he had a contract’.

(2) In response, Mr Edmondson said to Mr Lo Giudice that Mr Sinn had been instructed that he was not to exchange contracts with Mr Lo Giudice until the plaintiff had received legal advice on the CGT timing issue.

(3) Mr Edmondson then told Mr Lo Giudice that the plaintiff had received another offer.

(4) In response, Mr Lo Giudice said words to the effect: ‘I don’t know what game you guys are playing’, and the conversation became ‘very heated’.

(5) The conversation then became ‘more heated’, as Mr Lo Giudice reiterated his belief that he had exchanged contracts with Mr Sinn and that he had settled the matter by handing a cheque (for the option fee) to Mr Sinn; and that as far as he was concerned there was ‘a done deal’. Mr Edmondson and Mr Turner repeated their position that Mr Sinn did not have authority, and the heat in the conversation caused Mr Turner to bring it to an end.

(6) During the conversation, no reference was made by Mr Lo Giudice, Mr Edmondson or Mr Turner to the 17 December speakerphone discussion, or to the fact that Mr Lo Giudice was present in Mr Sinn’s office during that discussion.

Mr Turner’s evidence concerning the 18 December conversation was generally consistent with that of Mr Edmondson. Further, he recalled that Mr Lo Giudice said that the issue was between them and Mr Sinn and did not concern him. At this point in the conversation, Mr Turner recalls that he or Mr Edmondson apologised to Mr Lo Giudice for having called him, but stated that they ‘were trying to get to the bottom of what had happened in regard to the contract.’ In cross‑examination, Mr Turner said that this apology was given ‘out of courtesy’, and acknowledged that he and Mr Edmondson would not have contacted Mr Lo Giudice if they had been able to get in contact with Mr Sinn.

When it was put to Mr Turner in cross‑examination that he and Mr Edmondson would not, as a matter of logic, have apologised for contacting Mr Lo Giudice if they in fact believed Mr Lo Giudice had overheard them give the disputed instruction to Mr Sinn, Mr Turner replied that he and Mr Edmondson ‘were purely on a fact finding mission at this point’. I accept that evidence. Mr Edmondson and Mr Turner presented as cautious accountants. They had been engaged in a fact finding exercise throughout that day. Further, Mr Lo Giudice’s angry demeanour provides a logical explanation for their apology.

Mr Lo Giudice gave evidence in chief concerning the 18 December conversation, as follows:

…it was on the phone, it was on open speaker – not on my part, but on the part of Edmondson and Turner, there were two parties on the other side. My recollection was, again it was Mr Edmondson that I spoke to, um, who headed the telephone conversation. He rang me and said, "Just ringing up to see what the current status", or something to that effect, "Of the sale is", and I said, "Well we've exchanged as we discussed on the day and what's there to discuss?" He said – he made the comment and I said, "Why?" And he said, "Well we told Andy not to exchange." I said, "Well I'm sorry it's been exchanged, as far as I'm concerned we had a telephone conversation in Andy's office, we exchanged the contracts, I paid the deposit and the deal's done, I don't understand." And he said, "Oh well we told Andy", and this I remember because I was pretty livid by it all, um, he said, "We told Andy not to exchange the contract and subsequent to that we've got another – we've got another offer." And I said, "Well I'm sorry, that's – it seems ridiculous you've got an offer in a matter of 24 hours from – it's never been mentioned to me before that you've had anyone else looking at the offer and all of a sudden", I did use the – I did say that you've got a wood duck, who's what, just all of a sudden come along and bought the – paid a price to buy the property and what, they haven't seen a contract, they haven't done any due diligence on it, I've been working on this property for a good six to 12 or 12 months and what, someone all of a sudden comes into the – comes out of the woodwork to buy the property? And I made the comment to say, "Well you guys didn't even know that the property had three or four vacancies and now you're telling me a purchaser's come in and offered", I'm not sure – I can't remember if he said the figure of $13m but I know he mentioned it – I – I'm pretty sure he mentioned [t]he figure of we've got an offer of $13m. And I said, "Well, that's ridiculous, how could you get an offer of $13m, it's never been discussed, you guys are obviously playing games, Andy is playing games, someone's playing games against me, you've obviously taken my offer and shown it to somebody else and saying, 'Well, Mario's buying it, you know, I'm going to offer $13m.'" I said, "As far as I'm concerned, I've got a contract, or an agreement, I've signed it, I've paid the deposit", in fact I think they said, "Have you paid a deposit?" I said, "Of course I have. I've paid the" - in fact, by memory, I think they said, "Have you paid the deposit and who did you - who did you pay the deposit to?" And I said, "Of course, to Yarra Valley. Who else would I pay the deposit to?" And apart from jumping up and down a bit and, um, being quite annoyed about the whole conversation, I was just saying, um - that's it, we'd discussed it in that way. And you can picture that I was quite annoyed by it all, here I think I've signed a contract of sale, paid a deposit and all of a sudden I get a phone call from someone I didn't even know, or just met once before, telling me I haven't got a deal because someone else has paid a higher price, well, it's ridiculous.
How long did this discussion go on for, Mr LoGiudice?---Oh, I think it was terminated pretty quickly because I was getting a bit heated about it all.[11]

[11]Emphasis added.

Mr Lo Giudice took this telephone call in his office. He gave unchallenged evidence that he then, within minutes, ‘sat down calmly and dictated’ a file note of the conversation. The file note is set out below. The italicised words appear in Mr Lo Giudice’s handwriting on the typed note, and were added by him after he reviewed the typed note. The emboldened words are for added emphasis.

Bernard contacted me today and I rang him back at 4.15pm. He was on speaker phone and I presumed Owen was ~~on the other line~~ in the room also.
He asked me what is the current status and I said we have an exchanged agreement. He said that he has given Andy Sinn explicit instructions not to exchange until he sorted out the legal issues. He also said they received legal advice that the option does not protect them from capital gains. I contacted John Brazzale this afternoon (sent him copy of option agreement) and he said option agreement does protect them from capital gain tax event occurring until post 1/7/2010. Then in the afternoon an offer higher than mine came in. I said I don’t understand what games you guys are playing, as far as I am concerned I have an exchanged agreement.
I asked ~~of the~~ who submitted the other offer and they would not tell me who it was. I made the comment this is the first time I heard of another person looking at the property, why didn’t you mention it to me at the meeting at Andy Sinn’s office. He said the offer came out yesterday out of the blue.
I then made the comment so you have a ‘wood duck’ who contacted you without seeing the information and gave you an offer. They quickly changed tact [sic] and said he is an investor.
I was surprised at this because on the day we met they did not know about the arrears let alone an investor ~~from the transaction~~ who is once removed.
I said as far as I am concerned I have got a deal, its something between you and Andy Sinn to discuss. They agreed I was not involved and they had to contact Andy Sinn. The apologise[d] for contact[ing] me but they had to as they could not get a hold of Andy Sinn today. I said obviously you could not contact Andy Sinn as he is going overseas today.
I said the issues are 2 fold, if he [h]as a problem with the capital gains issues, I’m happy to ~~reflect their concerns~~ vary the contract to reflect their issues of concern. In regard to the price – too bad.
I said obviously someone contacted this ‘wood duck’ purchaser and told them of my price and someone’s playing games. Either your side or Andy’s side, as far as I am concerned, I have purchased the property.
They have asked me whether I have paid a deposit and I said, of course I have and asked who I made the deposit to and I said Yarra Valley.
I wished him all the best for Christmas and advised that I was here until Thursday, 24 December 2009 however will be away for Christmas.

There is a material difference between Mr Lo Giudice’s oral evidence and his file note. In the emphasised portions of his oral evidence, Mr Lo Giudice said that he referred to the 17 December speakerphone discussion in response to Mr Edmondson’s inquiry about the status of the transaction and his statement that Mr Sinn was instructed not to sign or exchange the option until legal advice had been obtained. There is no mention of the 17 December speakerphone discussion in the file note, which refers only to the 15 December meeting. I do not accept Mr Lo Giudice’s oral evidence in this regard. The evidence was given after senior counsel for the plaintiff had said in opening, while Mr Lo Giudice was present in Court, that the file note was inconsistent with the defendant’s case, because it makes no reference to the 17 December speakerphone discussion. Further, when pressed in cross‑examination as to why the note makes no reference to the 17 December speakerphone discussion, Mr Lo Giudice said:

I may have said that, I don't know what I said. I was - I was pretty annoyed at him ringing him to even say something like this. As far as I'm concerned I had an exchanged contract, why would he even bother ringing me? If he thought there was an exchanged - if he gave Andy Sinn that authority, why would he even be bothered ringing me then?[12]

[12]Emphasis added.

In the end, other than by trying to distance himself from his calmly dictated file note, by stating that ‘it’s obviously just a file note’ and ‘I did it when I was obviously pretty annoyed’, Mr Lo Giudice could not explain why the file note makes no reference to him referring to the 17 December speakerphone discussion in response to Mr Edmondson’s inquiry about the status of the transaction and his statement that Mr Sinn was instructed ‘not to exchange until he sorted out the legal issues’.

Prior to the 18 December conversation referred to below, Mr Lo Giudice sought advice from the accountant for the Banco Group, John Brazzale, about the capital gains tax consequences for the plaintiff arising from the amended form of the option agreement. Mr Lo Giudice’s personal assistant sent an email to Mr Brazzale at 3:41 pm that day, attaching a copy of the executed option agreement. The email reads:

Please find attached an Offer to Purchase document from Mario.
He would like to know what the capital gains would be for the Vendor?
Please ring Mario to discuss at your convenience.

Mr Lo Giudice and Mr Brazzale then spoke. The evidence does not establish whether this was before or after the 18 December conversation. In any event, Mr Brazzale made a handwritten note on the copy option which had been forwarded to him by Mr Lo Giudice’s assistant, in the following terms:

Discussed with Mario – confirmed that in my view the CGT liability would arise in the year that the option is exercised & Sale Contract is entered into.
[initialled] 18/12/09

Mr Brazzale did not give evidence.

Mr Lo Giudice gave most unsatisfactory evidence about the reason for him seeking Mr Brazzale’s advice on the CGT timing issue on 18 December 2009, prior to the 18 December conversation. He said in evidence in chief that:

I would have just - I would have asked her to, um, quickly grabbed - I would have given her the document, the 17 December document and I would have said to Anna, "Just quickly send this off to John" and over the phone dictated, "Please find attached offer to purchase."
All right, now do you recall doing that?---Yeah, I - I - yes, I - well, I recall doing it, yes.

In cross‑examination, Mr Lo Giudice maintained this theme: ‘I would’ve sent it to him as just part of the due course’; ‘just keeping him informed as I would all consultants I deal with’.

It was put to Mr Lo Giudice that the only reason for him to seek Mr Brazzale’s advice at this time was because he knew, from the 17 December speakerphone discussion, that the deal was conditional on legal advice as to the CGT timing issue, and Mr Sinn had been instructed not to sign or exchange until that advice had been received. Mr Lo Giudice denied this. Other possible reasons for him seeking advice at that time, for example because Mr Lo Giudice spoke with Mr Sinn or Mr Carpi prior to 3:41 pm on 18 December 2009, were not explored in the evidence. I reject Mr Lo Giudice’s explanation that he sought Mr Brazzale’s advice at this time as a matter of course. He obviously had a specific reason for doing so. Whatever that reason was, it is inconsistent with him having a belief that the option agreement had been finalised on the previous day during the course of the 17 December speakerphone discussion.

By letter dated 18 December 2009, the defendant’s corporate solicitor, Mr Lui, wrote to John Wardlaw, ‘a solicitor who Mr Sinn told me was acting for the plaintiff’, in the following terms:

[omitting formal parts]
By post and email …
Dear Sir,
Yarra Valley Retail Centre Pty Ltd to Yakido Pty Ltd
Option to Purchase: Yarra Valley Shopping Centre, Lilydale
I refer to the above and confirm I act for the grantee of an option to purchase the above property. I understand you act for the owner and grantor.
I enclose for your records a copy of the Option to Purchase agreement which was executed by the parties on 17 December 2009. I also confirm that the initial option fee of $20,000.00 referred to in the agreement has been paid to your client.
Yours faithfully
Banco Group of Companies
[signed]
James Lui
Corporate Solicitor

The evidence did not disclose whether this letter was in fact sent by email on that day or, if it was, when the letter came to the attention of either Mr Edmondson or Mr Turner.

Following the 18 December conversation, Mr Turner was most concerned about the plaintiff’s position. He thought about the matter over the weekend, and on the following Monday morning, 21 December 2009, prepared a handwritten file note concerning the events on 17 December 2009. After some preliminary summary comments, Mr Turner’s handwritten note reads as follows:

[1]10:15/- Discussion with Sinn re CGT issue & need to clear with the lawyer (at about 10:15am)
While Mario there change made to agreement – re CGT.
A Sinn instructed do not exchange until tax lawyer vetted agreement which would be in PM+
AS said he would leave on table until tax lawyer clearance.
[2]10:53 – Emailed GB re ~~document~~ agreement for his approval + stated to GB on hearing from him agreement will be signed + exchanged.
[3]After 11:00 ® JD rang + advised AA interest – BPE advised JD that AA was cutting it fine + ~~document~~ agreement is with tax lawyer + was to be exchanged ~~later in~~ in the PM.
[4]- Rang AS who was disbelieving ~~and asked what deposit etc terms –~~ but stated “~~well~~ “that’s a better offer” & wouldn’t advise Mario at this time
[5]- BPE sent SMS to AA asking for more specific information as to the terms of the offer.
[6]2:09 AA RANG
[7]2.37 A.A. S.M.S. BPE –
[8]After 2.37 Rang AS who was at lunch + advised him the details he said would’nt
[9]2.37 BPE – S.MS – cash settlement – etc & deposit –
[10]6.39 AA responded.
[11]Email – A.A. re NAB manager or YVRC.[13]

[13]Emphasis added.

The numbering does not appear in the handwritten note. It has been added to allow ease of reference to aspects of the note.

The dispute is crystallised

Mr Edmondson and Mr Turner then consulted the plaintiff’s solicitors. By letter dated 22 December 2009 to Mr Lo Giudice, the plaintiff’s solicitors demanded that the caveat be withdrawn and notified Mr Lo Giudice that the option fee was being returned. In that letter, the plaintiff’s solicitors stated, amongst other things:

You are put on notice the purported Option Agreement has not been ratified or approved by the board of directors of my client. I understand that the document was executed by Andrew Sinn, a director of my client. Mr Sinn however had not authority to execute that document on behalf of my client. He was not in any shape or form authorised to so act.
Further, I am instructed that you participated on that day in a telephone discussion between Mr Sinn, on the one hand and the other directors of my client, Mr Bernard Edmondson and Mr Owen Turner. In the course of that discussion, it was made clear to Mr Sinn, not only that the [sic] did not have authority, but that the other directors did not then approve of the document being executed.
Further, Mr Sinn acknowledged that that was the case in the course of that discussion and confirmed to the other directors that no exchange would take place.[14]

[14]Emphasis added.

Mr Edmondson and Mr Turner jointly instructed the solicitor who wrote this letter. The solicitor was not called to give evidence.

Resolution of the dispute

The case proceeded to trial without pleadings. Many possible factual scenarios were not explored in the evidence. Further, possible alternative claims or defences which the discipline of pleadings may have revealed were not pursued.

The two versions of the 17 December speakerphone discussion are so different that neither party contended that there was a misunderstanding. Each submitted that the witnesses for the other were telling lies. Each submitted that the witnesses for the other party were evasive, argumentative, engaged in reconstruction and speculation and gave inconsistent or improbable evidence. These criticisms were justified in respect of each of the four principal witnesses. There was no challenge to the evidence of Dr Bean.

In these circumstances, none of the witnesses impressed me to such a degree that I could feel comfortable in preferring their evidence generally over others. Accordingly, the dispute must be determined by the application of common sense and logic to the evidence as a whole. Both parties urged the Court to adopt that approach to finding which version of events is the most probable.

After giving anxious consideration to the evidence as a whole, and notwithstanding that I have rejected the plaintiff’s evidence that Mr Lo Giudice took no part in the 17 December speakerphone discussion, I have decided that the plaintiff’s version of the critical aspects of the 17 December speakerphone discussion is the more probable. I find that Mr Edmondson said to Mr Sinn and Mr Lo Giudice words to the effect that the option was not to be exchanged until after he and Mr Turner obtained legal advice that, in its amended form, the option met their concerns about the CGT timing issue; and, in response, Mr Sinn said words to the effect that he would leave or keep the document ‘on my table’. My reasons for this conclusion are set out below.

First, it was common ground that each of Messrs Edmondson, Turner and Sinn were ‘most anxious’ to ensure that any sale of the retail centre addressed the CGT timing issue, and avoided the adverse timing consequences of the Churinga sale. For this reason, Mr Sinn welcomed the involvement of Mr Edmondson and Mr Turner, who were the accountants for the joint venture. I infer that this was the principal reason why Mr Sinn arranged the 15 December meeting, and initiated the 17 December speakerphone discussion after the draft option had been provided by Mr Lo Giudice.

Second, provided that the CGT timing issue could be addressed, Mr Sinn was obviously keen for a sale to take place. He had been negotiating with Mr Lo Giudice for some time and, in discussions with Mr Edmondson and Mr Turner, and at the 30 September 2009 meeting of investors, sought to emphasise uncertainties which had an adverse effect on the value of the retail centre.

Third, for the reasons given above, Mr Lo Giudice knew, from at least 15 December 2009, that Mr Edmondson and Mr Turner were directors of the plaintiff and that their consent was required before a contract could be concluded.

Fourth, at the 15 December meeting, Mr Edmondson or Mr Turner told Mr Lo Giudice that they wanted an opportunity to obtain legal advice as to the capital gains tax implications of the proposed option agreement, when it was provided by Mr Lo Giudice. For the reasons given above, I reject Mr Sinn’s contrary evidence. Further, for the reasons given above, I find that Mr Edmondson or Mr Turner said words to this effect to Mr Sinn during their earlier meeting on 15 December 2009.

Fifth, I am satisfied that Mr Edmondson and Mr Turner did not, at any relevant time, change their minds and determine to proceed without first obtaining legal advice. This is demonstrated by Mr Edmondson’s telephone call to Dr Bean some time prior to 9:51 am on 17 December 2009 and by the handwritten facsimile sent by Mr Edmondson to Dr Bean at 10:53 am that day. These events establish that Mr Edmondson and Mr Turner remained cautious and wished to obtain legal advice about the CGT timing issue, notwithstanding Mr Lo Giudice’s agreement to amend clause 3 of the draft option. Further, the final sentence of Mr Edmondson’s handwritten facsimile: ‘Upon hearing from you, the agreement will be signed and exchanged’, is inconsistent with the defendant’s version of the 17 December speakerphone discussion; that the transaction was finalised during the discussion.

Sixth, because he knew that the conclusion of a successful deal was dependent upon him proposing an option which was structured so as to meet the plaintiff’s concerns about the CGT timing issue, Mr Lo Giudice himself sought accounting advice on 15 or 16 December 2009 about that issue.

Seventh, it is clear that both Mr Sinn and Mr Lo Giudice were under time pressure to conclude the proposed transaction. Mr Lo Giudice had a busy day with respect to other property deals, and had a scheduled meeting at 10:30 am. Mr Sinn appears to have had a Christmas lunch arranged that day, dinner that evening with his grandchildren and plans to leave Australia for a six week holiday on the following morning.

Eighth, I infer that both Mr Sinn and Mr Lo Giudice believed that the receipt of favourable legal advice would be a mere formality, because the draft option provided that it could not be exercised until on or after 1 July 2010 and Mr Lo Giudice had received advice from Mr Brazzale on 15 or 16 December that this would avoid the CGT timing issue arising. On this basis, and because of the time pressures facing them, they made arrangements to meet on 17 December 2009 to, in Mr Sinn’s words, ‘sign off on not a draft but the actual document’ and for Mr Lo Giudice to pay the option fee. Accordingly, Mr Sinn and Mr Lo Giudice approached the 17 December speakerphone discussion with that mindset. On the other hand, Mr Edmondson and Mr Turner approached the discussion on the cautious basis that they wished to obtain legal advice before contracts were exchanged.

Ninth, Mr Edmondson and Mr Turner gave consistent evidence that they gave the disputed instruction and, in response, Mr Sinn said words to the effect that he would keep the option agreement on his table. In my view, words such as this are likely to stick in the mind, as Mr Edmondson and Mr Turner both swore. Mr Turner’s file note made on 21 December supports this evidence: ‘[Mr Sinn] said would leave on table until tax lawyer clearance’.

Tenth, I do not accept that Mr Lo Giudice’s file note of the 17 December speakerphone discussion was made by him in his car immediately after the discussion, as he contends, or that it is accurate. My reasons are as follows:

(1) Mr Lo Giudice said that he did not turn his mind to the question of Mr Sinn’s authority to sign and exchange the option. He said that he never considered the issue, and that he approached the 17 December speakerphone discussion with the attitude that he was dealing with Mr Sinn on the other side of the transaction. This is evidenced from the following exchange in cross-examination:

What caused you to know that they were directors?---Andy could have mentioned it, um, I'm not sure. I'm really, um - again, I'm dealing to buy a piece of real estate, I don't give a continental who, with all due respect, I just know who I'm dealing with, I just - I bought a property a few months ago, I signed the contract and I presume the party on the other side had authority, I've never been in this position where it's ever been questioned and we don't buy a property once a year, we're buying properties - that's my business, I go to an auction and I buy a property I don't ask the person, "Are you a director?" You don't have to be a director to sign a contract, as I understand it, you have to be authorised or whatever the terminology is.
And I want - - -?---So I've never asked that question to anybody.
And I want to suggest to you that is exactly the attitude you took with you on the 17th when you went to Mr Sinn's office and the following occurred. You believed that Mr Sinn had the complete, absolute ability to sign up that agreement without recourse to anyone, did you not?
---Yes.
So that there was no need for him to get the authority of these two joint directors, was there?---Never considered it.
Never considered it?---I've entered into other agreements with him, which I've mentioned before and in exactly the same way, so why would that be any - why should this be any different?
And I want to suggest to you that you well knew that he was ringing his joint directors to get that authority?---Yes, he rang them on the day, yes.
To get that authority?---No, he rang them to discuss …[15]
[15]Emphasis added.

(2) If that was Mr Lo Giudice’s attitude on 17 December 2009, he is unlikely to have prepared a file note which, by the statement ‘They authorised [Mr Sinn] to sign the agreement and bank the cheque’, directly addresses the issue of authority. Mr Lo Giudice’s file note in that form indicates that he knew Mr Sinn’s authority was in issue at the time he prepared it.

(3) In his oral evidence, Mr Lo Giudice repeatedly stated that it was him who said ‘deal done’. This is contrary to his file note, which attributes these critical words to Mr Edmondson. If it was Mr Edmondson who said these words, as recorded in the file note, it is unlikely that Mr Lo Giudice would now be confused about such an important matter. The inconsistency between his oral evidence and his file note supports a finding that his file note has been manufactured to suit his case.

(4) The handwritten annotation ‘4.35 pm 17/12/09’ at the end of the file note also supports a finding that it was not made contemporaneously. As Mr Lo Giudice said, in respect of his 18 December file note, that it is not his usual practice to note the time that he receives a typed copy of a note dictated by him. I infer that he has added this note to the 17 December file note in an endeavour to give it an air of authenticity.

Eleventh, although Mr Turner gave some mistaken evidence about his 21 December file note, initially stating that he did not consult Mr Edmondson about it, I nevertheless find that it is an accurate reflection of his best recollection of events as at 21 December 2009. Mr Turner presented as a nervous and cautious man. He was clearly mistaken in his initial evidence that Mr Edmondson had no involvement in giving him some information which is included in the file note, about Mr Edmondson’s conversations with Mr Davis and his SMS text communications with Mr Abercrombie. But the fact Mr Turner spoke with Mr Edmondson about these matters does not detract from the authenticity of Mr Turner’s file note. In material respects, the note is consistent with the evidence of Mr Edmondson and Mr Turner concerning the 17 December speakerphone discussion (paragraph [1] of the note), the time of sending the fax to Dr Bean (paragraph [2]), the timing of the Abercrombie offer (paragraph [3]) and the timing of the telephone calls to Mr Sinn about the Abercrombie offer (paragraphs [4], [8]).

Twelfth, each party also relied upon the failure of the other to give full discovery. It was submitted that these discovery deficiencies affected the credibility of the opposing party’s case. For the defendant, reliance was placed on the late discovery of Mr Turner’s handwritten file note of events made on 21 December 2009, after the dispute had crystallised. However, although this note was not discovered until shortly prior to the commencement of the trial, it was discovered. Further, some documents concerning the 30 September 2009 meeting of investors were not discovered by the plaintiff. In my view, these documents were of marginal relevance only, and no inference can be drawn against the plaintiff or its witnesses arising from the failure to discover them.

On the other hand, the defendant did not discover some documents relating to a more important issue: the time on 18 December at which Mr Lo Giudice sought advice from Mr Brazzale concerning the CGT timing issue. The relevant documents were obtained on subpoena from the accountants during the course of the trial, and included an email from Mr Lo Giudice’s personal assistant to Mr Brazzale at 3:41 pm. The defendant ought to have discovered that email. The email indicated that Mr Lo Giudice sought advice on the CGT timing issue on 18 December 2009, after he contends that the option had been finalised but, on his evidence, before he learned that the plaintiff was disputing Mr Sinn’s authority to sign and exchange the option on 17 December 2009. The failure to discover this email was in my view significant, and adversely affects the credibility of the defendant’s case. Mr Lo Giudice had no credible explanation for why he sought Mr Brazzale’s advice at this time.

Conclusion and orders

For the reasons given above, I will order that the caveat be removed. I will hear the parties as to the form of the order, and as to costs.

[2010] VSC 292

24 August 2010