(5) On 22 February 1999 a letter was written on behalf of Belmont NSW Pty Ltd to express interest in purchasing the property at $2.7 million. The letter was addressed to Cartel Property Services, which was named as agent in conjunction with Raine and Horne Brighton.
43 Mr Marles was cross-examined about these matters, and was shown the relevant correspondence. His evidence was that he had no recollection of the offers involving Deiri, Rommark Corporation, Sezone and Belmont NSW. He agreed that he was not in a position to deny that they were made and received.
44 Mr Green was also cross-examined about the offers. He said that the partners agreed to the offers by Deiri, Rommark Corporation, Sezone and Belmont NSW, but in the case of each of those offers other than the offer by Rommark Corporation, the purchasers decided not to continue. In the case of Rommark Corporation, he and his partners were concerned that the agent was trying to get details of the options and so they pulled back from the transaction. Mr Green said he and his partners did not want everyone to know the expiry date of the options, because if someone found out they would appreciate that the partners were more anxious to sell the properties than they wanted potential purchasers to believe.
Agreement with the Marouns
45 As I have said, Colliers Jardine were one of the conjunction agents working on the sale of the development site. Mr Marles said that he was contacted by Mr Jean-Paul Markopoulos on behalf of that firm in late January or early February 1999, and agreed that Colliers Jardine could market the property provided that conjunction arrangements were made with Raine and Horne Brighton. Colliers Jardine published newspaper advertisements for development sites including "Rockdale $3.25M" on 13, 20 and 27 February 1999. The advertisements identified the agent working on the sale at Colliers Jardine as Jean-Paul Markopoulos.
46 In late February or early March 1999 Mr Marles received a telephone call from Mr Markopoulos, who told him that he had a firm offer of $3.05 million from a developer client called Maroun. Mr Marles said he would speak to his partners but it was likely they would accept. Mr Marles subsequently obtained the consent of his partners to sell at that price, and the board of Anzaway passed a resolution accordingly. Mr Marles rang Mr Markopoulos and told him he and his partners would accept the offer of $3.05 million.
47 On 3 March 1999 Mr Doueihi wrote to Mr Markopoulos on behalf of "proposed purchasers". In his letter Mr Doueihi did not nominate the name of the purchasers but he expressed his understanding that Mr Markopoulos had been communicating with Stephen Maroun. Mr Doueihi's letter set out an offer of $3.05 million, with settlement seven months from the date of exchange, the contract to be subject to building approval. Mr Markopoulos supplied Mr Doueihi with a copy of the development consent conditions on the same day. Mr Marles gave evidence that Mr Shade gave him a copy of Mr Doueihi's letter.
48 Mr Marles subsequently telephoned Mr Markopoulos and told him that the extended period of settlement proposed in Mr Doueihi's letter was impossible for him and his partners to comply with, "as it is a date after expiry of the options we hold over the properties". Mr Marles and Mr Markopoulos met over coffee on 4 March 1999 and Mr Marles explained again that he and his partners could not comply with the condition about the delayed settlement date, explaining that the options had a limited time to run and would expire before the proposed settlement date. It was arranged that Mr Markopoulos would speak to the proposed purchasers again to see if they would make a revised offer. I have already pointed out the significance of Mr Marles' evidence that he believed it was necessary for the settlement of the sale of the properties to take place before the expiry dates of the options.
49 On 5 March 1999 Mr Markopoulos rang Mr Marles to tell him that a further offer had been made by Maroun at $2.9 million with no conditions and a 42 day settlement period. Mr Marles said, "Great. Take it".
50 On 5 March 1999 Mr Doueihi wrote again to Mr Markopoulos. He expressed his understanding that Mr Markopoulos had continued communication with Stephen Maroun with respect to the proposed purchase. Mr Doueihi said he wished to "re-submit" an offer for a purchase price of $2.9 million, settlement to be six weeks from the date of exchange.
51 On 8 March 1999 Mr Markopoulos wrote to Mr Doueihi, saying that Colliers Jardine acted for Anzaway, the vendor. The letter said that the offer to purchase for $2.9 million with settlement in six weeks was acceptable provided that contracts were exchanged by 11 March. On the same day Mr Markopoulos issued a sales advice at $2.9 million to Mr Shade of Raine and Horne, and to Mr Williamson. The sales advice identified "Maroun Corporation or nominee" as the purchaser, and Doueihi Lawyers as the purchaser's solicitor.
52 Mr Williamson prepared a draft contract for sale at that price. The contract was delivered by hand to Mr Doueihi on 8 March. It was executed by Anzaway on about the same day. Mr Doueihi wrote to Mr Williamson on 9 March, commenting on some aspects of contract. On the same day he wrote to Rockdale City Council, referring to telephone discussions in which, it appears, he was told that the development application was still under evaluation and had neither been approved nor refused. Mr Doueihi said in his letter that this information was contrary to what he had been told by Colliers Jardine, to the effect that the development application had been approved on 28 October 1998. The Council replied on 11 March 1999, saying that the development application was determined and approved by Council on 28 October. Mr Williamson wrote to Mr Doueihi on 11 March, asking for the identity of the purchaser and referring to various other matters. He said that if the purchaser was to be a company, personal guarantees by the directors would be required.
53 According to Mr Marles, on about 11 March 1999 he received a telephone call from Mr Markopoulos who told him that the Marouns had "done the dirty", and were then offering $2.4 million, $500,000 less than the previous price. Mr Marles said there had been agreement at the higher price, and Mr Markopoulos said he would confront the Marouns. I accept that a conversation in these terms occurred.
Withdrawal of the Marouns and negotiations with the Boutros buyers
54 Mr Marles agreed, in cross-examination, with the proposition that he had a discussion with Mr Shade concerning the stamp duty that may be saved by Anzaway if the options were transferred to the purchaser, rather than being exercised by Anzaway, which would then sell the freehold. Mr Marles said he had in mind a saving of $100,000. The timing of that conversation was not specified in evidence, but it seems to me likely that it occurred after the Marouns withdrew their offer of $2.9 million on 11 March, and before the events of 12 March that I am about to relate. Mr Marles said he discussed the stamp duty question with Mr Green and Mr Scott. I accept his evidence on these matters.
55 Mr Marles also gave evidence that he did not work out that an offer of $2.6 million had the financial equivalent (from the plaintiffs' perspective) of an offer of $400,000 for the assignment of the options, allowing for the purchase price on exercise of the options of $2.1 million and a saving of stamp duty of $100,000. I regard that evidence as implausible and I reject it. It is inconsistent with the evidence of Mr Green on the point.
56 According to Mr Marles, on about 12 March 1999 he received a telephone call from Mr Shade of Raine and Horne. Mr Shade said that some people called Boutros had come into his office to look at a duplex site, and when they asked for something more substantial he showed them the Rockdale property. They offered $300,000 for the options. Mr Marles said he would speak to his partners. Later that day Mr Marles met with Mr Green and Mr Scott and they decided that Anzaway would accept $400,000 for assignment of the options. Mr Marles told Mr Shade. Later on 12 March Mr Marles received a telephone call from Mr Shade, who said he had the Boutros buyers with him in the office, and he put the call on loudspeaker. They had a conversation in which Mr Marles insisted on $400,000 and the buyers eventually agreed to that figure.
57 I accept the evidence of Mr Marles on these matters, subject to one qualification. Mr Green said that the offer by the Boutros buyers was $2.4 million for the properties, rather than $300,000 for the options. It was the plaintiffs who proposed sale of the options, by making a counter-offer to sell the options for $400,000. I accept Mr Green's evidence.
58 In cross-examination, Mr Marles agreed with the following propositions:
· at the time he and the Boutros buyers concluded their negotiations, $400,000 was a figure he and his partners were prepared to accept for the options, and was nominated by them as being an acceptable figure;
· he made the counter-offer of $400,000 to the Boutros buyers on the basis that this figure was an appropriate commercial stance for Anzaway to take;
· when agreeing to accept $400,000, he took into account the fact that one of the options was exercisable in about nine weeks' time;
· whatever the Marouns/Boutros did, it was open to Anzaway if it wished, to decline to sell the options and exercise them itself;
· at the time, he believed and understood that the potential purchasers knew that Anzaway only had options.
59 On 12 March 1999 Mr Shade telephoned Mr Williamson, and as a result of that conversation Mr Williamson noted "Col Shade - assign the options - $400,000 is the consideration". Mr Marles also contacted Mr Williamson and confirmed sale of the options at $400,000, and he instructed Mr Williamson to prepare documentation.
60 Mr Doueihi said, in that part of his affidavit tendered by the plaintiffs, that on the afternoon of 12 March 1999 Estephan Maroun came to his office and told him that he and Arthur had struck a new deal for a company (to be nominated by them) to buy the options over the properties for $400,000, and that they had used their family name "Boutros" during the negotiations and had nominated Mr Nasr as solicitor.
61 Mr Nasr said, in the part of his affidavit tendered by the plaintiffs, that he became involved in the matter when Mr Doueihi told him that the Marouns were buying a development property at Rockdale by way of assignment of options, and that he wanted Mr Nasr to look at the documentation and organise settlement, because he did not have time to do it himself. Mr Nasr said that his conversation with Mr Doueihi was the first time he had spoken with anyone about the Rockdale properties, and until that conversation he had never heard of the properties.
62 On 12 March 1999 Mr Shade wrote to Mr Williamson enclosing a sales advice note, for a contract price of $2.5 million described as "option assignment cost 2.1 million, option assignment fee to Anzaway Pty Ltd $400,000". The sales advice note showed the purchasers as "Boutros (Company name to be advised Monday), first names … Steve & Arthur". The purchaser's solicitor was described as "Joesph Nasser". The address given for Mr Nasser was not the address of Doueihi Lawyers, and may have been Mr Nasr's home address. The telephone number given was Mr Nasr's mobile telephone number. There was nothing on the face of the sales advice note to connect the purchasers to the Marouns, or to connect the purchasers' solicitor to Doueihi Lawyers. The printed part of the letterhead of Doueihi Lawyers contained the words "Associate Joe Nasr" although Mr Doueihi himself had handled the proposed sale to the Marouns. There was, however, a handwritten annotation of a telephone number, which was in fact a telephone number of Doueihi Lawyers, though not the telephone number on the firm's letterhead.
63 Mr Marles gave evidence that on about 15 March 1999 he received a telephone call from Mr Markopoulos. Mr Markopoulos told him, "These purchasers of Colin Shade are my purchasers". Mr Marles said he replied, "I couldn't care less, take it up with Colin Shade." Mr Marles gave evidence that at the time of the conversation he believed that the purchasers under the name of Boutros were different people from the previous purchasers under the name Maroun. In oral evidence he said he believed that the issue raised by Mr Markopoulos was just an issue about commission. He said he telephoned Mr Shade after speaking to Mr Markopoulos, to tell him that Mr Markopoulos had said that his buyers were the buyers of Mr Shade, "but not about whether they were the same people". He could not recall Mr Shade's response. His evidence was that he discovered that the Boutros buyers and the Marouns were the same people only after completion of the transfer of the options. He gave evidence of a telephone conversation with Mr Markopoulos on about 18 March in which Mr Markopoulos told him he was sure they were the same people and Mr Marles said, "You will have to sort it out with Colin".
64 I accept the evidence of Mr Marles on these matters. It is significant, however, that on 18 March, when he realised Mr Markopoulos was telling him that the Marouns and the Boutros buyers were the same people, he said nothing more than that the matter would have to be sorted out with Mr Shade, implying that the issue was still an issue of commission, in his mind, and also implying that he did not see the issue as one of deception causing loss to him and his partners.
65 On 15 March Mr Williamson sent a facsimile to "Joseph Nasser" at a facsimile number which was in fact the facsimile number of Doueihi Lawyers, enclosing copies of the options and promising to send more documents on the next day. On the same day Mr Shade sent a facsimile letter enclosing a copy of the sales advice note to Mr Nasr at the facsimile number of Doueihi Lawyers. The facsimile cover sheet described the recipient as "Joe Naser" while the letter addressed him as "Joe Nassar". On 16 March Mr Williamson sent another facsimile, this time to "Mr J Nasr", and on the same day Mr Nasr sent a facsimile to Patricia Holdings using the facsimile letterhead of Doueihi Lawyers, enclosing an application for a shelf company.
66 Counsel for the plaintiffs prepared a "chronology" of phone calls based upon subpoenaed telephone company records, setting out the time, duration, sending number and receiving number for phone calls from Mr Doueihi's number and Mr Williamson's number, and from a mobile telephone number of Awtel Maroun, in the period from 12 to 17 March. In my opinion this information (and the material it summarises) is not probative of any relevant fact, because it does not establish the identity of the calling and receiving parties, but only the telephone numbers used.
Sale of the options to Fribeau
67 Mr Williamson prepared draft deeds of assignment in respect of numbers 2-4, and 6 Market Street and sent them to Mr Nasr by separate facsimile letters on 16 March. The drafts left blank the name of the assignee.
68 Mr Williamson made a file note on 16 March 1999 of the name "Fribeau Pty Ltd", an ACN number and an address. Fribeau was acquired as a shelf company from Patricia Holdings and Joseph and Estephan Maroun became its directors on 17 March 1999. Notification of their appointment as directors did not take place until 17 May 1999. Mr Merhi, the accountant for the Marouns, gave uncontradicted evidence that the delay in lodgement of the appropriate form with the Australian Securities and Investments Commission was caused by a misunderstanding between him and Mr Doueihi. I accept that evidence and therefore do not regard the delay in lodgement as, or as referable to, misleading or deceptive conduct.
69 Two interdependent deeds of assignment of options were executed on 17 March 1999, for 2-4 and 6 Market Street respectively. In each case the assignee was Fribeau. The instruments were executed on behalf of the assignee by "Steve Boutros for and on behalf of Fribeau Pty Ltd" and "Arthur Boutros for and on behalf of Fribeau Pty Ltd", and their respective signatures were witnessed by Mr Nasr. The transaction was settled on the same day, Mr Williamson receiving two bank cheques for a total amount of $400,000. In due course Fribeau became the registered proprietor of the properties.
70 I infer that the deeds were signed by Joseph and Estephan Maroun respectively as Joseph and Steve Boutros. The signature, not otherwise decipherable, appearing adjacent to "Steve Boutros" appears, on its face, to be the same signature as the signature of Estephan Maroun on the Form 304 (Notification of Change to Officeholders) lodged with the Australian Securities and Investments Commission on 17 May 1999. In my opinion it is more probable than not that Joseph Maroun signed the deeds in the name "Joseph Boutros", since Mr Nasr witnessed both signatures on the deeds and someone altered "Arthur" to "Joseph" on those documents.
71 At no time prior to completion of the transaction did Mr Nasr or Mr Doueihi disclose to Anzaway any connection or affiliation between Mr Nasr and Mr Doueihi Lawyers. Nor did they, or any of their clients, disclose to Anzaway any connection between the Marouns, the Boutros buyers, Maroun Corporation or Fribeau.
72 On 20 March 1999 Colliers Jardine advertised development sites including "Rockdale $2.9M 65 units and shops". The advertisement was repeated on 27 March and 3 and 10 April. The evidence does not explain how those advertisements came to be lodged, and in particular, it does not identify Colliers Jardine's client for the purpose of those advertisements.
Valuation evidence
73 The only evidence of the value of the Rockdale development project on 17 March 1999 is Mr Hubbard's evidence. As I had said, his valuation report was ruled inadmissible, but his letter of 3 February 2003 was received into evidence. In that letter he responded to an invitation by the plaintiffs' solicitors to comment on a valuation by WK Wotton & Partners, whose valuation given on behalf of Mr Doueihi is not in evidence.
74 In his letter of 3 February, Mr Hubbard noted that the letter of instruction from the defendants' lawyers to Wotton said that Anzaway had accepted an offer to sell the property at $2.9 million. He said that if this were true, and the property was freely available on the market with the vendor prepared to accept that price, then he would consider that the agreement on the subject would be the best evidence of value. He said he had not been advised of this agreed sale when preparing his own valuation report, and if the agreement for sale at $2.9 million was in accordance with the definition of market value, his assessment of $4 million would not have been ascribed. He said that if Anzaway was prepared to accept $2.9 million for the property at or about the relevant date, on an open market basis, there would be no contest as to the site's value in March 1999, because that evidence would be the most relevant.
75 Relying on Mr Hubbard's letter of 3 February 2003, counsel for the plaintiffs contended at the hearing that the value of the Rockdale properties was $2.9 million. The defendants submitted that the evidence showed only that the value of the property was no greater than $2.9 million. In cross-examination Mr Hubbard agreed that the evidence with respect to the offers accepted in February 1999 (by Deiri, Rommark Corporation, Sezone and Belmont NSW) was relevant to the value of the property in March 1999, and he acknowledged that he did not consider that evidence. He also agreed that the best evidence of the value of the property in March 1999 was evidence of the price paid in a completed sale at that time (the sale of the options for $400,000). He acknowledged that he did not take into account the sale price actually paid in March 1999 in forming his valuation opinion. He said his valuation was made by considering the price that a willing but not over-anxious vendor and purchaser would pay, and he said that if the seller was anxious the price in fact paid may be at a discount to the true value.
76 In my opinion Mr Hubbard's oral evidence implies a further qualification to his valuation opinion. His evidence establishes that the value of the properties in March 1999 was no more than $2.9 million and was probably somewhere in the range between $2.6 million and $2.9 million, though he was not able to say whether the figure was closer to one end of that range than the other.
The plaintiffs' contentions as to liability
77 According to the FASC, the claim against Maroun Corporation and Fribeau is that, by reason of their representations and conduct, each of them engaged in trade or commerce in conduct that was false or misleading or likely to mislead or deceive, contrary to s 52 of the Trade Practices Act. The claim against Joseph and Estephan Maroun, Mr Doueihi and Mr Nasr is that, within the meaning of s 75B of the Trade Practices Act, by reason of their representations and conduct, they aided, abetted, counselled, procured, induced and/or were the directly or indirectly knowingly concerned in or a party to the contravention of s 52 by Maroun Corporation and Fribeau.
78 It is unnecessary to describe here the well-known ingredients of s 52. As to accessorial liability under s 75B, it should be noted that the plaintiffs must establish intentional conduct by each of the defendants against whom accessorial liability is asserted, on the basis that the relevant defendant knew the essential matters making up the contravention: Yorke v Lucas (1985) 158 CLR 661, at 666-670. It is actual knowledge that must be established, not merely constructive knowledge: Giorgianni v The Queen (1985) 156 CLR 473 at 505; Yorke v Lucas at 667.
79 It follows that the plaintiffs must establish, against the relevant defendant, that the defendant:
(a) knew of the representations and conduct that gave rise to a breach of s 52;
(b) knew that they were misleading or deceptive or likely to mislead or deceive; and
(c) was in some way concerned in the making of the representations or with the conduct, or aided, abetted, counselled, procured or induced it (see Yorke v Lucas at 668).
80 The allegations of accessorial liability are serious, and the Court would need to be satisfied that they were established with certainty and not by inexact proofs, indefinite testimony or indirect inferences (Briginshaw v Briginshaw (1938) 60 CLR 336 at 362). Even applying that standard, my view is that accessorial liability has been made out against Estephan Maroun, for the reasons I shall state. However, whether the Briginshaw standard, or the ordinary standard of proof on balance of probabilities, is applied, my view is that the plaintiffs have failed to make out their claims for accessorial liability on the part of any of the other non-corporate defendants.
Findings on misleading and deceptive conduct - the first four defendants
81 The plaintiffs pleaded that Maroun Corporation, Joseph and Estephan Maroun engaged in misleading and deceptive conduct or conduct likely to mislead and deceive in that:
(a) Joseph and Estephan Maroun represented to the plaintiffs that they were no longer interested in purchasing the properties (FASC, paragraph 45), a representation that was untrue;
(b) the offers to purchase the properties made by Maroun Corporation, Joseph and/or Estephan Maroun (FASC, paragraphs 32 (offer at 3.05 million), 34 (conditional offer at $3.05 million), 39 (offer at $2.9 million) and 44 (offer at $2.4 million)) were "ingenuine, false or misleading" or otherwise designed to obtain an unfair commercial advantage and benefit in their dealings with the plaintiffs to the detriment of the plaintiffs;
(c) on about 12 March 1999 Joseph and/or Estephan Maroun made a representation at the offices of Raine and Horne Brighton that their surname was Boutros, that they were new purchasers of the properties, that they first became aware of the listing of the properties on 12 March 1999, and that they had no association, connection or affiliation with the former prospective purchasers using the surname Maroun (FASC, paragraph 51).
82 In my opinion the plaintiffs have not established that, at the time when the Marouns withdrew from the transaction when their substitute offer of $2.4 million was rejected, any of the Maroun interests represented that they were no longer interested in purchasing the properties, or that if such a representation was made it was false (FASC, paragraph 45). Mr Marles' evidence, that Mr Markopoulos told him on 11 March the Marouns did not want to buy the properties at all, was ruled inadmissible. Even if there were admissible evidence to that effect, the evidence as a whole does not show that any representation by the Marouns, on 11 March, that they did not intend or wish to buy the properties, was untrue on that day. The plaintiffs did not rely on this element of alleged misleading conduct in their final submissions, and the evidence does not justify a finding in their favour.
83 Nor is there any basis in the evidence for finding that the various offers made by the Marouns were not genuine or were in themselves false or misleading (FASC, paragraph 49). The crucial question is whether the allegations in FASC paragraph 51 have been made out.
84 In my opinion the evidence of Mr Marles, which I have accepted on this point, shows that he participated in a telephone conference with Mr Shade and people in Mr Shade's office calling themselves "Boutros", in which an offer of $2.4 million was made for the properties and after negotiation, the price of $400,000 was agreed for the options. Later Estephan Maroun came to Mr Doueihi's office and told him that he and Arthur had struck a new deal for purchasing the options for $400,000 using the family name "Boutros", Mr Shade prepared a sales advice note showing the purchasers as Steve and Arthur Boutros, and deeds of assignment of the options were prepared and signed by Estephan and Joseph Maroun under the names Steve and Joseph Boutros. In my opinion this evidence provides an adequate basis for an inference, on the balance of probabilities, that Estephan Maroun was present in Mr Shade's office during the telephone conference.
85 While it has been shown that "Boutros" was part of Estephan Maroun's real name, the evidence establishes, in my opinion, that he used the name Boutros and not the name Maroun when he dealt with Mr Shade on 12 March, and in all dealings with Mr Williamson in the period from 12 to 17 March. It appears from the evidence that Mr Marles and his partners believed, in the period from 12 to 17 March, that they were dealing with purchasers named Boutros and not with the Marouns. Mr Marles did not understand Mr Markopoulos as telling him, in their telephone conversation on 15 March 1999, that the Boutros buyers were in fact the Marouns, but only that Mr Shade had put forward purchasers who were the purchasers of Mr Markopoulos for commission purposes.
86 That belief arose from the representation by Mr Shade that he was dealing with prospective purchasers by the name of Boutros, a representation made in the presence of Estephan Maroun. I infer that Estephan Maroun informed Mr Shade that his name was Boutros. That was in fact his middle name. The use of a middle name in such circumstances is misleading. It seems to me more probable than not that Estephan Maroun chose to use his middle name with the intention of deceiving Mr Marles and his partners into believing that Mr Shade was dealing with new prospective purchasers who had first become aware of the listing of the properties on 12 March when they came to Mr Shade's office, and who had no association with the Marouns.
87 Those conclusions are reinforced by the terms of Mr Shade's sales advice note. The address of the purchasers was not an address that the plaintiffs or Mr Williamson would have recognised as an address of the Marouns. The phone number that was given for the purchasers was a mobile telephone number. The nominated solicitor was not Mr Doueihi, but someone identified in the sales advice note as "Joesph Nasser", at an address not connected with Mr Doueihi, and with a phone number that was Mr Nasr's mobile phone number (although the fax number was that used by Doueihi Lawyers). These facts give rise to the inference, which I draw, that the person or persons who supplied this information to Mr Shade did so with the intention of preventing the plaintiffs and Mr Williamson from linking the Boutros buyers with the Marouns.
88 The defendants contended that it is not misleading for an offeror for real estate to submit multiple offers in the names of different potential purchasers, or to take some other course that obscures the identity of the true offeror (such as by acting through an agent or on behalf of a company). I do not say that for an offeror to negotiate for the acquisition of property in a name other than the one by which he is commonly known, or even in a fictitious name, is necessarily and in all circumstances misleading or deceptive conduct. Everything depends upon the circumstances in which that conduct occurs. Here there is much more than simply the use of a name other than the name by which the Marouns were commonly known. There is the history of prior negotiations, the use of an agent other than the conjunction agent they had previously used, the identification of Mr Nasr rather than Mr Doueihi as their solicitor and the supply of information about their solicitor, and the preparation and execution of the formal deeds of assignment in the name Boutros. It is the combination of all the relevant circumstances that leads me to my conclusion that Estephan Maroun engaged in misleading and deceptive conduct during the period from 12 to 17 March.
89 I reject the contention that it was not misleading or deceptive for Estephan Maroun to use the name Boutros because Boutros was part of his family name. The plaintiffs issued a notice to produce directed to Joseph and Estephan Maroun requiring them to produce all documents relating to or in the name of or referring to the use of the names Joseph, Steve and Arthur Boutros or any of them. The only document produced was a marriage certificate for the marriage on 19 November 2000 of "Estephan Boutros Maroun". That marriage certificate, in translation, is in evidence. The failure of the Marouns to produce other evidence of the use of the name Boutros as a surname warrants the inference that Joseph and Estephan Maroun did not use the name "Boutros" commonly as their surname and were not commonly known by that surname, and tends to reinforce my conclusion that the Boutros name was used by Estephan Maroun with an intention to mislead and deceive.
90 The defendants contended that I should not reach this conclusion because of the unexplained absence of Mr Shade, Mr Williamson or Mr Markopoulos as witnesses for the plaintiffs. It was submitted that the absence of Mr Shade as a witness was critical, because the contention that the Marouns engaged in misleading and deceptive conduct was primarily dependent on what they said to Mr Shade, and the circumstances in which that discussion took place. But part of the discussion took place in a telephone conversation in which Mr Marles participated, and he gave evidence that was tested in cross-examination. The evidence of subsequent events, to which I have just referred, confirms and reinforces Mr Marles' evidence of the telephone conference. Assessing the evidence as a whole, I am persuaded that the allegations in FASC paragraph 51 have been made out against Estephan Maroun, notwithstanding the absence of any evidence from Mr Shade, Mr Williamson or Mr Markopoulos.
91 It appears that Estephan Maroun's misleading and deceptive conduct was undertaken, during the whole period from the telephone conference on 12 March to execution and completion of the assignment of the options on 17 March, with a view to the purchaser of the options being a shelf company to be obtained prior to completion of the transaction. That is shown by the terms of Mr Shade's sales advice note. The shelf company was obtained by Mr Nasr from Patricia Holdings and became the second defendant, Fribeau. In those circumstances, the misleading and deceptive conduct of Estephan Maroun was undertaken by him on behalf of Fribeau, and therefore Fribeau by its agent Estephan Maroun was a corporation that engaged in misleading and deceptive conduct, from the moment it was acquired from Patricia Holdings until, at least, settlement of the transfer of the options, and perhaps beyond that time. That conduct was in trade or commerce, because it related to the acquisition of a property development site. Therefore, by virtue of Estephan Maroun's misleading and deceptive conduct on its behalf, Fribeau contravened s 52(1).
92 Estephan Maroun aided, abetted, counselled, procured, or induced, and was knowingly concerned in the contravention by Fribeau, because the contravening conduct was Estephan's own conduct. Therefore he was involved in Fribeau's contravention of s 52(1), for the purposes of s 75B. Consequently he had potential liability, with Fribeau, to pay compensation under s 82(1) to any person who suffered loss or damage by Fribeau's conduct.
93 In my opinion Estephan's misleading and deceptive conduct was not undertaken on behalf of Maroun Corporation. There is no evidence of any intention that Maroun Corporation would be, or would be connected with, the purchaser of the options. It had been in contemplation as the purchaser at the time when the Marouns made their offers to purchase for $3.05 million and $2.9 million, according to Mr Doueihi's letters communicating the terms of those offers. But I have found that the making of those earlier offers was not misleading or deceptive conduct, and that the circumstances of the Marouns' withdrawal on 11 March did not amount to or include misleading or deceptive conduct. My conclusion, therefore, is that the plaintiffs' case against Maroun Corporation fails.
94 The position of the third defendant, Joseph Maroun, is more difficult. The evidence of his involvement in the offers made by the Maroun interests up to 11 March is very sketchy. In his letters dated 3 and 5 March 1999, Mr Doueihi identified Stephen (Estephan) Maroun but not Joseph, although in a draft of the letter of 3 March the names Joseph and Arthur Maroun appeared but were changed by hand to Stephen Maroun. There is a file note suggesting that Joseph had a 20% interest in Maroun Corporation but no other evidence of that matter. The sales advice note by Mr Markopoulos for the sale at $2.9 million, dated 8 March, identifies the purchaser as Maroun Corporation or nominee and does not mention the Marouns.
95 There is less evidence of participation by Joseph Maroun in the events beginning with the telephone conference on 12 March. I am not able to conclude, on the evidence, that Joseph Maroun was present during the telephone conference. It appears from Mr Marles' account of the conversation that there was more than one Boutros buyer with Mr Shade, but the additional person (if only one) may have been Arthur Boutros, since Arthur was identified in Estephan's conversation with Mr Doueihi and in the sales advice note, and the deeds of assignment were prepared for signature by Steve and Arthur Boutros, the word "Arthur" being struck out and replaced by the word "Joseph" by hand.
96 The evidence I have summarised implies that until the execution of the deeds of assignment of the options on 17 March, it was Arthur rather than Joseph who accompanied Estephan and dealt with Mr Shade and Mr Marles. It is unnecessary for me to make any finding about the participation of Arthur, but I find, on balance, that the plaintiffs' case that Joseph participated in those events has not been made out. Joseph, with Estephan, became a director of Fribeau, and he signed the deeds in the name "Joseph Boutros" after they were altered by hand to substitute that name for Arthur's. As far as the evidence goes, that is the full extent of his participation in the events of 12-17 March.
97 The question is whether, by becoming a director of Fribeau, which I have found had engaged in misleading and deceptive conduct, and by executing the deeds of assignment of the options in the name "Joseph Boutros", Joseph became subject to accessorial liability under s 75B. In my view, the element of actual knowledge of the representations and conduct constituting the misleading and deceptive conduct, and knowledge that they were misleading or deceptive, has not been made out. While he knew that he and Estephan were signing the documents in the name Boutros while becoming directors of Fribeau in the name Maroun, I am not entitled to infer from the scant facts before the Court that Joseph knew anything about the telephone conference on 12 March (other than that a price of $400,000 for the options had been agreed at some time before the execution of the deeds), or about the contents of Mr Shade's sales advice note, or about any of the dealings between Mr Nasr and Mr Williamson. On the evidence before me as to what he knew, it was open to Joseph to believe that the Boutros surname was being used for a purpose and in a manner that was not misleading. Of course, there is no direct evidence as to his belief.
98 My conclusion, therefore, is that the ingredients of accessorial liability under s 75B have not been made out, as regards Joseph Maroun.
Findings on misleading and deceptive conduct - fifth and sixth defendants
99 Counsel for the plaintiffs sought to establish a case of accessorial liability against Mr Nasr, and also Mr Doueihi, by relying on the following matters, and inferences from them: