Anzaway v Maroun Corporation

CATCHWORDS : TRADE AND COMMERCE - misleading and deceptive conduct - recovery for economic loss - causation Employees Liability Act 1991 (NSW), s 3 LEGISLATION CITED : Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5 Trade Practices Act 1974 (Cth), ss 52, 75B, 82, 87 Briginshaw v Briginshaw (1938) 60 CLR 336 Giorgianni v The Queen (1985) 156 CLR 473 Glensaugh Pty Ltd v Registrar-General [2001] NSWSC 1114 (4 December 2001, Santow J) CASES CITED : Jones v Dunkel (1959) 101 CLR 298 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Shellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121 Yorke v Lucas (1985) 158 CLR 661 Anzaway Pty Ltd (P1) Neville James Green (P2) Frederick Geoffrey Marles (P3) Warren Gilbert Scott (P4) PARTIES : Maroun Corporation Pty Ltd (D1) Fribeau Pty Ltd (D2) Joseph Maroun (also known as Joseph Boutros) (D3) Estphan (Estephan) Maroun (also known as Steve Boutros) (D4) Michael Doueihi (D5) Joe Nasr (D6) FILE NUMBER(S) : SC 3403/00 N Cotman SC with G Thomas (P) COUNSEL : D Officer QC with J Armfield (D1-D4) S D Robb QC with M Dicker (D5) A J Meagher SC with A G Bell (D6) K O'Malley, Jones & Williamson (P) SOLICITORS : Tress Cocks & Maddox (D1-D4) Acuiti Legal (D5) Corrs Chambers Westgarth (D6)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3403/00 ANZAWAY PTY LTD & ORS V MAROUN CORPORATION PTY LTD & ORS JUDGMENT (revised to correct typographical and similar errors) HIS HONOUR: Introduction 1 This is a case about misleading and deceptive conduct, causation and damages. The plaintiffs negotiated the sale of their development project to purchasers called "Maroun" for a price that was effectively $700,000 (after taking into account the cost of acquisition and stamp duty). Then the Marouns withdrew from the transaction. Subsequently the plaintiffs were approached on behalf of proposed purchasers called "Boutros", with whom they negotiated, selling the development project to the second defendant, a company, for $400,000. The people who dealt with the plaintiffs on the second occasion in the name of "Boutros" in fact included Estephan Maroun, the fourth defendant. For reasons I shall explain, my finding is that he engaged in misleading and deceptive conduct on behalf of the second defendant, which created the impression, in the minds of the plaintiffs, that the Boutros buyers were different people from the Marouns. 2 The plaintiffs seek to recover, as damages, the difference of $300,000 (or $400,000, on a basis that disregards stamp duty). But they cannot establish that they have suffered any loss. They dealt with the Boutros buyers at arms' length and agreed to a negotiated price. It has not been shown that the value of the development project was any higher, at the time of sale, than the negotiated sale price. The plaintiffs' claim for recovery of damages against the first four defendants under the Trade Practices Act therefore fails. For the same reason, their claim under the Trade Practices Act against the solicitor for the Marouns (the fifth defendant), and an employed solicitor designated as acting for the Boutros buyers (the six defendant), also fails. The proceeding and the parties 3 The plaintiffs are Anzaway Pty Ltd ("Anzaway") and its three directors and shareholders, Mr Marles, Mr Green and Mr Scott. The first four defendants may be described, approximately, as "the Maroun interests". The first defendant is Maroun Corporation Pty Ltd. There is no evidence of its directorship and shareholding, but I shall assume that it is a company in which Joseph and Estephan Maroun are interested, as the case was conducted by all parties on that basis. The second defendant is Fribeau Pty Ltd, which was registered on 11 March 1999. Joseph and Estephan Maroun became its directors on 17 March 1999. Fribeau was the corporate vehicle used by the third and fourth defendants for the purchase. I shall refer to the third defendant as Joseph Maroun or Joseph, and I shall refer to the fourth defendant as Estephan Maroun or Estephan, although they are sometimes referred to in the evidence, respectively, as Joseph and Steve Boutros. The fifth defendant, Mr Doueihi, was a solicitor acting for the Maroun interests in the circumstances I shall describe, and the six defendant, Mr Nasr, worked as an employed solicitor for Mr Doueihi at all relevant times. 4 The plaintiffs sue Maroun Corporation and Fribeau for damages for misleading and deceptive conduct under ss 52 and 82 of the Trade Practices Act 1974 (Cth). They sue Joseph and Estephan Maroun on the basis that they engaged in conduct giving rise to accessorial liability under s 75B in respect of the misleading and deceptive conduct of the two companies. They sue the solicitors, Mr Doueihi and Mr Nasr, for damages for accessorial liability under s 75B. The plaintiffs seek orders for exemplary damages against each of the defendants. 5 In their pleading the plaintiffs assert that Mr Doueihi and Mr Nasr are also liable to them in common law negligence. However, at the hearing the only cause of action pressed by the plaintiffs in submissions against Mr Doueihi and Mr Nasr was accessorial liability under s 75B. I should note, however, that my findings in favour of Mr Doueihi and Mr Nasr with respect to accessorial liability and causation of loss imply that the claims against them for negligence would not succeed. There was also a contention in the plaintiffs' pleading that Mr Doueihi directly engaged in misleading and deceptive conduct, but that allegation was not pressed. 6 All of the defendants have denied liability under ss 52, 75B and 82, and Mr Doueihi and Mr Nasr have also denied any breach of a duty of care owed to the plaintiffs. Mr Nasr has filed a cross-claim against Fribeau, Joseph and Estephan Maroun and Mr Doueihi, seeking contribution and indemnity in the event that he is found to be liable to the plaintiffs. A second cross-claim has been filed by Mr Doueihi, against Maroun Corporation, Fribeau, and Joseph and Estephan Maroun, also seeking contribution and indemnity. 7 The hearing took an unusual course in two ways. First, the plaintiffs' case shifted and developed during the course of the hearing, especially on the question of causation. As I shall explain, they eventually amended their pleading, with leave, in a way that affected the admissibility of evidence that they wished to tender. Secondly, after the plaintiffs had presented their case in chief, the defendants decided to adduce no evidence, except on some specific and very limited points. I allowed the plaintiffs to re-open so as to tender parts of the affidavits of Mr Doueihi and Mr Nasr, claimed to contain admissions. When the evidentiary cases had closed, however, the question presented for the Court was whether the plaintiffs' case, untrammelled by any substantial evidence on the part of the defendants, had been proven. Pleadings and documentary evidence 8 In the Amended Statement of Claim that was before the Court at the beginning of the hearing, the plaintiffs claimed damages of $400,000, particularised as follows: "If the Plaintiffs had been warned or otherwise made aware of the true identity of the Third and Fourth Defendants as former prospective purchasers, the Plaintiff would have insisted upon compliance with the original offer and acceptance at $2.9 million or otherwise would not have sold the properties and the development site to the Third and Fourth Defendants or their corporate nominee at all." 9 The pleading asserted that if the property had been sold at $2.9 million, the exercise price payable by the plaintiffs being $2.1 million, they stood to make a profit of $800,000. (For the sake of clarity, I should explain that in my opinion, this calculation overlooks stamp duty of about $100,000 that would have been payable by the plaintiffs, and so the correct claim for profit on the sale at $2.9 million, disregarding agent's commission, should have been $700,000.) They sold the options for $400,000, and therefore they claimed the difference of $400,000 (correctly, $300,000) by way of economic loss or damage. 10 Although the quoted part of the pleading contended, as one of two alternatives, that the plaintiffs would not have sold, there was no assertion that the plaintiffs would have exercised the options and acquired the properties for themselves, or that they would have done these things and then developed the site and made a profit by selling residential units and commercial space. 11 When Counsel for the plaintiffs made his opening address, he said that Joseph and Estephan Maroun deceived the plaintiffs into believing, on 17 March 1999, that the Boutros buyers were different people from the previous purchasers, the Marouns. He asserted that if his clients had been aware that the Boutros buyers were in fact the people who had recently reneged on the $2.9 million transaction, then his clients would not have dealt with them or would not have dealt with them at less than $2.9 million. Therefore the deception allowed Joseph and Estephan Maroun to "re-start the clock", in terms of negotiation, bidding up from $2.4 million to $2.5 million ($2.6 million if stamp duty is taken into account), rather than being held their bargain at $2.9 million or told to go away, or at the very least being required to commence further negotiations by negotiating down from $2.9 million. 12 During the course of the hearing, counsel for the plaintiffs endeavoured to tender the following evidence: (i) evidence of the plaintiffs' financial capacity to exercise the options themselves and complete the ensuing purchase of the Rockdale properties (tender bundle, documents 3, 8, 41, 65, 66, 69, 70, 71, 72 and 90, which were banking and financial records of the partners); (ii) evidence going to the availability of finance for the development project (documents 76, 77 and 78, which were internal records of, or communications with, the Arab Bank concerning an application for finance by the Marouns); (iii) valuation evidence. 13 The defendants objected to the tender of that evidence, on the ground that it was not relevant to the pleaded case or the case outlined by counsel for the plaintiffs in his opening address. Eventually, in the course of seeking to justify the tender of this evidence, counsel for the plaintiffs expressed his clients' claim for damages in a manner that seemed to me to re-formulate it. Although he disavowed any claim to a lost opportunity to make development profits, he made it clear that his clients wished to assert, as one of two alternative bases for recovery of damages, that if they had not been deceived and misled they would have retained their rights to the development project rather than selling to the Boutros buyers. 14 I decided that if the plaintiffs wished to make that case, they should be given leave to amend their pleading. It seemed to me that, so long as there was no assertion, on the second alternative ground, that the plaintiffs would have exercised the options and settled the purchase of the properties for themselves, or that they would have done that and then developed the site and made development profits, the amendments would not introduce any substantial new evidentiary topic that would need to the answered by the defendants, and consequently to allow the amendments would not expose the defendants to any substantial risk of prejudice. The amendments were duly made, and the current pleading is now, in effect, a Further Amended Statement of Claim ("FASC"). 15 The FASC puts the plaintiffs' claim for damages on two alternative bases: (a) if the plaintiffs had been warned or otherwise made aware of the true identity of the Boutros purchasers as the Marouns, the former prospective purchasers who had withdrawn, they would have insisted on compliance with the original accepted offer at $2.9 million; (b) alternatively, if they had been so warned or made aware, they would not have sold the properties, and would have retained the value of what they then had, namely options reflecting a property value of $2.9 million. 16 Since it is now clear that there is no claim that the plaintiffs would have purchased the properties for themselves, or that they would have done so and then developed the site for a profit, the evidence in categories (i) and (ii) is irrelevant and inadmissible. 17 As to valuation evidence, the plaintiffs sought to tender a valuation report made in January 2002 by Mr Cameron Hubbard. In that report Mr Hubbard valued the properties at $4 million. Subsequently Mr Doueihi obtained a valuation report by WK Wotton & Partners, which is not in evidence, and the plaintiffs instructed Mr Hubbard to comment on it. In his letter dated 3 February 2003, Mr Hubbard revised his valuation opinion from $4 million to $2.9 million, on certain stated assumptions. Counsel for the plaintiffs sought to tender the report and letter by Mr Hubbard in order to prove that the value of the properties in March was $2.9 million. 18 Once the plaintiffs had revised the substance of their pleading on causation and damages, I decided to admit into evidence Mr Hubbard's revised statement of opinion, in his letter of 3 February 2003, but not his original valuation report (except for material regarding his qualifications), on the ground that he had abandoned his original opinion and therefore his report had become irrelevant. 19 The tender bundle initially included a valuation by Laing and Simmons Commercial, valuing the property at 2-6 Market Street as at 24 May 1999 at $3.63 million. It appears that the valuation was obtained by the Marouns for the purpose of satisfying the requirements of their lender. The tender of the valuation report was objected to and I deferred my decision on admissibility until after final submissions were received. My view is that a valuation report as at 24 May 1999, obtained for the Marouns, is not relevant to any issue I have to determine, having regard to the amended pleading. Additionally, the document was not served as an expert's report in the proceeding and could not be relied upon as such. It is inadmissible. The witnesses 20 Affidavit and oral evidence was given by three witnesses on behalf of the plaintiffs, namely Mr Marles, Mr Green and Mr Hubbard. The only affidavit read by the defendants was a short affidavit by Philip Merhi, an accountant, read on behalf of Mr Doueihi. Mr Merhi was not cross-examined and no issue arises about his evidence. The defendants accepted that Mr Hubbard was a witness of truth, although they challenged his valuation opinion. They accepted that Mr Green was a witness of truth. The defendants challenged the overall credibility of the evidence of Mr Marles. 21 Mr Marles was in poor health and he explained that his illness had affected his short-term memory, though he said his loss of memory "mostly" did not affect his recollection of the events of 1998 and 1999. Observing him in the witness box, I formed the view that his evidence was not impaired by his ill health. 22 Counsel for the first four defendants made the general criticism of Mr Marles' evidence in cross-examination that he was evasive, because his answers were frequently along the lines, "it is a very difficult question to answer but perhaps, on balance, the answer may be yes [or no]." I agree with counsel that Mr Marles frequently tended to respond in this general fashion. However, I regarded such answers as amounting to an effort to be precise, rather than evasive. Part of the problem for Mr Marles was that the cross examiners' questions were not always entirely clear (for example, sometimes failing to distinguish between sale of the options and sale of the properties after the exercise of the options), warranting the kind of cautious responses that they received. 23 I was more troubled, however, by what appeared to have been a selective recollection of the events of 1999. In particular, Mr Marles could not recall a series of offers for the purchase of the Rockdale site, which according to Mr Green's evidence were communicated to Mr Marles and were accepted by the plaintiffs. I find it implausible that Mr Marles should have forgotten about these offers, when he appeared to have a good recollection of other approximately contemporaneous events. Mr Green's evidence on these matters was clear and candid, and unchallenged. Mr Marles' unconvincing answers with respect to these offers has led me to take a cautious approach to his evidence in general. However, I have decided that this concern is not sufficient for me wholly to reject the part of his evidence that was uncorroborated. 24 I should mention a matter of some significance upon which I have decided to reject Mr Marles' evidence. He gave oral evidence that he had a discussion with Mr Green and Mr Scott after the Marouns had withdrawn from the sale at $2.9 million, in which they agreed that they would not deal with the Marouns any more. But Mr Marles' evidence of a specific discussion and decision at that time was not corroborated by Mr Green in cross-examination. Mr Green said it mattered to him whether it was the Marouns the Boutros buyers who were the purchasers, but he did not give evidence of any conversation of the partners in which they decided to refuse to deal with the Marouns. Mr Scott did not give evidence, although he was present in court. Mr Marles did not depose to any such discussion and decision in his affidavit. I have therefore decided, on balance, that such a discussion and decision did not occur. Commencement of the development project 25 Mr Marles had known Mr Green and Mr Scott for at least 8 or 10 years when, in 1998, they took steps to acquire a development site in Market Street, Rockdale. They had previously worked together on a business deal concerned with property development. Mr Marles, an oral surgeon by profession, had previous experience in real estate investment and had held a real estate licence for about 20 years. It appears that Mr Scott was engaged in property development through his company, Austasia Industries Pty Ltd, since on its business card the company describes itself as a property developer. 26 Mr Marles, Mr Green and Mr Scott operated in the Rockdale development as "partners", in the sense that each of them participated in decisions, although strictly they were directors of the trustee company of a trust of which the beneficiaries were their respective corporate entities. According to Mr Marles, he did most of the work, and he was the primary point of contact between the partnership and estate agents in respect of the Rockdale project when he was in Sydney. Having identified 2-4 Market Street Rockdale as a suitable development site, the "partners" obtained an option from the owners and made a development application to Rockdale City Council. They subsequently acquired an option over 6 Market Street, in order to satisfy Council's requirements. The option agreements 27 The option agreement for 2-4 Market Street Rockdale was dated 11 March 1998. It was an option to purchase the properties for $1.15 million, expiring on 11 September 1998. The option price was $5,000 and the grantees were Messrs Marles, Green and Scott. The grantors agreed, if requested by the grantees before expiry of the option, to extend it for two additional periods of four months each, in consideration of an additional $5,000 on each occasion. Thus, if twice extended, the option would expire on 11 May 1999. 28 On 5 March 1999 the grantors' solicitor wrote to the plaintiffs' solicitor offering a further extension to 11 September 1999 for $5,000, upon terms requiring the purchaser to make allowances in respect of rent and other matters. The plaintiffs' solicitor accepted the offer by letter dated 11 March 1999. 29 The option agreement for 6 Market Street Rockdale was dated 26 May 1998. It was an option to acquire the property for $950,000, expiring on 25 November 1998. The option price was $5,000 and the grantees were Messrs Marles, Green and Scott. The grantors agreed, if requested by the grantees before expiry of the option, to extend it for two additional periods of three months each, in consideration of payment of an additional $1 on each occasion. If twice extended, the option would expire on 25 May 1999. 30 Although only one of the options was due to expire in May 1999, in cross-examination Mr Marles agreed with the proposition that, to maximise the value of the options by attaching to them the development approval, both options had to be sold to a single purchaser in time for both of them to be exercised. 31 Although the options were acquired in their own names, Mr Marles, Mr Green and Mr Scott set up a structure for the purpose of dealing with the Market Street development site. Anzaway, a company of which they were the directors and shareholders, became trustee of the Rockdale Unit Trust. The beneficiaries of the trust were Fynox Pty Ltd (a company of which Mr Marles was a director and the sole beneficial shareholder), Muck Pty Ltd (a company of which Mr Green was the sole director and shareholder) and Austasia Industries Pty Ltd (a company of which Mr Scott was the sole director and shareholder). Development consent 32 Mr Marles, Mr Green and Mr Scott engaged architects and had discussions with the Council before obtaining the option over 6 Market Street. The option over that property was acquired after Council indicated that the development would be approved in principle provided that Anzaway increased the site area of the development. Anzaway experienced considerable delay in the lodgement of the application, because the area of the proposed development was affected by a more general Control Plan. Anzaway's representative made submissions for variation of that Plan. On 7 July 1998 the architects lodged a formal development application with the Council on behalf of Anzaway. The application was for a mixed commercial/residential development containing 65 residential units, a commercial tenancy and associated car parking. 33 There was further delay contributed to by issues concerning the Control Plan, and on 28 October 1998 Rockdale City Council approved the development application. The consent was for a period of two years, and although it was subject to many conditions, none of them is relevant to the present case. 34 A focus of attention in cross-examination of the plaintiffs' witnesses was whether the plaintiffs ever had in contemplation that they might acquire the properties otherwise than for the purpose of simultaneous on-sale. Once the plaintiffs' pleading was amended to become the FASC, in my opinion the issue ceased to be relevant. Nevertheless, in case my opinion is wrong, I have decided to make factual findings on the matter, since it was fully agitated. 35 In cross-examination Mr Marles agreed with the proposition that, from the time he and his two co-plaintiffs acquired the options, it was their intention, when the development application was approved, to sell the development site with the development consent. However, he said that "there were other matters involved", and he and his colleagues did not devote their energies exclusively to the sale of the site with the development consent, because they could have gone ahead with the project themselves. He insisted that finance could have been obtained for that purpose, and he said that he believed that one of his co-plaintiffs made an informal application for finance. However, he agreed that until 17 March 1999 when the options were sold and transferred, Anzaway did not carry out any development proposal or any investigations to determine potential selling costs and building costs. While he said that there were some investigations "in note form", there was no report from any quantity surveyor and the architects were not engaged except for the purpose of obtaining development approval. 36 Mr Green gave evidence that he and his partners "always had the alternative of being able to exercise the options", and he said the possibility of doing so was discussed by him and Mr Marles when they received an offer to buy for $2.4 million, which was an unacceptably low price, and also was discussed in late January or early February 1999. Mr Green believed that if the plaintiffs exercised either of the options in March 1999, they would have been called upon to pay the purchase price in May 1999. In cross-examination Mr Green agreed with the proposition that the plaintiffs' "preferred option" was to on-sell the Rockdale development by exercising the options and simultaneously selling the properties, or by selling the options. 37 I accept that Mr Green and Mr Marles both believed that Anzaway could have exercised the options. However, my view is that to do so was not part of their planning or intention in March 1999. Mr Marles gave evidence that in his opinion, it was necessary to settle the sale before expiry of the options. I accept his evidence that he believed, in March 1999 (and apparently up to the hearing) that Anzaway could not agree to an extended period for settlement if the settlement date was after the date of expiry of the options, unless the options were extended. Significantly for the defendants' case, that evidence implies that Mr Marles did not intend that Anzaway would exercise the options itself, except in the context of a simultaneous sale of the properties. 38 Mr Green gave evidence that the partners did not want to disclose the expiry date of the options to potential purchasers, because that would reveal that they were anxious to sell. This evidence tends to reinforce the conclusion that the partners did not intend that Anzaway would exercise the options and acquire the properties itself. The appointment of agents 39 On 25 November 1998 Mr Marles signed an exclusive agency agreement for six months with Raine and Horne Brighton-Le-Sands for the purpose of sale of the development site at 2-6 Market Street together with the development approval. He dealt with Colin Shade. His evidence was that he selected that firm without consulting Mr Green or Mr Scott, because Max Raine was an old friend of his and he liked the company generally. 40 Mr Marles said that his arrangement with Raine and Horne was that he could nominate any other agent for Raine and Horne to deal with on a conjunction basis. Raine and Horne made conjunction agency agreements with Thane Property Strategists, LJ Hooker Mascot, Colliers Jardine, and perhaps also Cartel Property Services. 41 According to Mr Green, whose evidence I prefer on this point to the evidence of Mr Marles, the partners initially agreed that the property would be marketed for $4 million, a price calculated by reference to a base price per residential unit of $65,000, disregarding the commercial space. During the process of marketing it became apparent to the partners that their original assessment of $65,000 per residential unit was above the market for high-rise development sites, and in January 1999 Anzaway decided to reduce the sale price to $3.5 million, based on approximately $55,000 per residential unit. Accepted offers during February 1999 42 There is written evidence that several offers were made for purchase of the development project in February 1999, through conjunction agents. The evidence is as follows.

(1) On 5 February 1999 Mr Higgins of LJ Hooker Mascot wrote to Mr Marles, Mr Green and Mr Scott confirming "the successful negotiation for the sale of your property at 2, 4, 6 Market Street Rockdale". The price and purchaser were not named.

(2) Mr Higgins of LJ Hooker Mascot wrote to Mr Marles on 8 February 1999 "further to our telephone conversation with yourself and Warren Scott". The letter confirmed a sale by transfer of the option to "Deiri or their associated company", for a sale price of $2.8 million with a stated commission "as agreed in accordance with your instructions". The letter said Mr Higgins had organised a conjunction agreement with Colin Shade of Raine and Horne Brighton.

(3) On 18 February 1999 Thane Property Strategists wrote to Mr Williamson, the plaintiffs' solicitor, advising that Thane Property Strategists as selling agent in conjunction with Raine and Horne nominated a buyer named Sezone Pty Ltd, for a purchase price of $2.6 million, the transaction to be by assignment of the options. On the same day Thane Property Strategists wrote to Mr A Brawn of Sezone confirming that the option holders had agreed to sell the property to Sezone for $2.6 million.

(4) Also on 18 February 1999, Thane Property Strategists wrote to Mr Michael Teplitsky of Rommark Corporation attaching development plans. The letter said "we have received an acceptance to your offer of $2.6 million", and invited Mr Teplitsky to confirm the purchasing company entity.

(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:

(i) In his defence Mr Nasr admitted that he was an employed solicitor working for Mr Doueihi at all relevant times. The evidence shows that he was described as an "associate" on the letterhead of Doueihi Lawyers, that he was born on 31 July 1973 and was therefore about 25 years old in 1999, and that he was admitted as a legal practitioner on 5 June 1998. There is no suggestion in the evidence that Mr Nasr conducted any practice on his own account.

(ii) In his defence (paragraph 63) Mr Nasr admitted that he knew that Mr Doueihi acted as legal representative for Fribeau and Joseph and Estephan Maroun (using the surname Boutros) in relation to the assignment of the options over the Rockdale properties to Fribeau.

(iii) The steps taken by Mr Nasr in respect of the purchase of the options were taken using Mr Doueihi's resources, and the transaction was one in which Doueihi Lawyers rather than Mr Nasr was acting. Thus, the fax number used was the fax number of Mr Doueihi's office; the telephone number written by hand on the sales advice note was telephone number of Doueihi Lawyers; the shelf company was ordered from Patricia Holdings on the letterhead of Doueihi Lawyers; Doueihi Lawyers was nominated as the lodging party for documents lodged with respect to Fribeau; Mr Doueihi admitted (in paragraph 13 of his defence) that he prepared the company appointment documents in respect of Fribeau, and according to the evidence he hand-delivered them to Mr Mehri, the Marouns' accountant.

(iv) Mr Nasr signed the deeds of assignment as witness, witnessing the execution of the documents by Steve and Joseph Boutros for and on behalf of Fribeau.

(v) Mr Nasr's defence admits or asserts that he was directed to undertake the transaction. The inference should be drawn that Mr Nasr acted in respect of the matter with the authority of Mr Doueihi, and that he did so with the knowledge of Mr Doueihi. The inference should also be drawn that Mr Doueihi was aware of the substance of the transaction being conducted under his supervision by Mr Nasr.

(vi) Mr Doueihi was, until 11 March, acting in respect of the $2.9 million transaction, and there is no evidence of any action by him on the transaction after 11 March. The inference should be drawn that work on the "new" transaction began after 12 March. 100 In my opinion these facts are correct, except that, as I understand the evidence, nothing was done with respect of the $2.9 million transaction on and after 12 March, and work commenced on the sale of the options to the Boutros buyers on that day. Otherwise I am prepared to draw the inferences contended for by the plaintiffs. In my opinion, however, this does not establish any accessorial liability against either Mr Nasr or Mr Doueihi. 101 There is no evidence upon which any inference could be based at that Mr Nasr was aware of the content of the previous negotiations involving the Marouns, although he was aware that Mr Doueihi acted for the Marouns in the option purchase transaction. Those prior negotiations involved Mr Doueihi only. The fact that Mr Nasr was aware that Joseph and Estephan Maroun were using the surname Boutros in the deeds of assignment does not justify the inference that he was aware either of the content of Mr Shade's sales advice note (and in particular its avoidance of any reference to Mr Doueihi), or of the content of the telephone conference on 12 March (other than the agreed price), or of any other aspect of Estephan Maroun's misleading and deceptive conduct for the purpose of causing the plaintiffs to believe, by using the name Boutros, that there were new purchasers with no connection with the Marouns. In my opinion in the element of knowledge of the facts constituting the misleading and deceptive conduct, and of the fact that the conduct was misleading or deceptive, has not been established against Mr Nasr. 102 Although evidence was not given by Mr Shade, Mr Markopoulos, or for that matter Mr Doueihi or Mr Nasr, in my view Jones v Dunkel (1959) 101 CLR 298 does not assist the plaintiffs. As counsel for Mr Nasr pointed out, for the principle in Jones v Dunkel to operate there must be grounds in the evidence to infer the conclusions which, in the absence of evidence from a person able to explain the matter, may be more confidently drawn. A Jones v Dunkel inference can only make particular evidence more probable, and cannot be used to make up a deficiency of evidence: Shellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121 at 143. 103 The position of Mr Doueihi is rather more straightforward, because he was further away from the misleading and deceptive conduct in the period from 12 to 17 March. The fact that Mr Doueihi knew that his clients had made a number of offers to purchase the properties on behalf of Maroun Corporation, and then secured an agreement in the name Boutros, did not, in my opinion, give Mr Doueihi actual knowledge of any misleading or deceptive conduct. There is no evidence, or reason to infer, that Mr Doueihi knew, prior to settlement on 17 March, anything about the bargaining process in the telephone conference on 12 March, or anything about the reasons why Estephan Maroun used the name Boutros in the negotiations, or why he and Joseph used the name Boutros in the deeds of assignment. 104 Mr Williamson sent a facsimile to Mr Doueihi on 11 March at the fax number of Doueihi Lawyers. On 15 March 1999 Mr Williamson sent a fax addressed to Mr Nasser at the same number, and on the next day he sent a further fax correctly addressed to J Nasr. This evidence does not establish what, if any, significance should have been derived, by Mr Doueihi, from the use of variants of Mr Nasr's name and various telephone and fax numbers. Mr Williamson did not give evidence. Therefore the Court does not know whether he, in sending all relevant facsimiles to the same fax number, understood that Mr Nasr was associated with Mr Doueihi. 105 My conclusion is that the element of knowledge of the facts constituting the misleading and deceptive conduct, and of the fact that the conduct was misleading or deceptive, has also not been established against Mr Doueihi. Reliance and Causation 106 The defendants submitted that if the use of the Boutros name was misleading in the circumstances, the plaintiffs were not induced to do or not to do anything as a result of that conduct. They say that if, contrary to that submission, the Court were to decide that the conduct of any of the defendants induced the plaintiffs to execute the deeds of assignment, the plaintiffs have not established on the balance of probabilities that they suffered a loss of opportunity caused by the conduct of any of the defendants, or that if there was any such loss of opportunity, it had some real value (see Glensaugh Pty Ltd v Registrar-General [2001] NSWSC 1114 (4 December 2001, Santow J), paragraph 70, summarising and applying the principles explained by the High Court in Sellars v Adelaide Petroleum NL (1994) 179 CLR 332. 107 Both Mr Marles and Mr Green gave evidence that if they had been aware of the connection between the Marouns and the Boutros buyers and the corporate entities used by them, they would not have entertained the negotiation with the Boutros buyers or Fribeau and they would not have agreed to assign the options to Fribeau, as in fact occurred. Counsel for Mr Doueihi submitted that this evidence was inconsistent with other evidence, and should not be believed. He referred to the evidence of Mr Marles that, on 15 March 1999, when Mr Markopoulos told him that Mr Shade's purchasers were his purchasers, Mr Marles said he could not care less. Counsel submitted that this showed that the identity of the purchasers was immaterial to Mr Marles. 108 I disagree with this submission. Mr Marles explained that statement by saying that he regarded the matter as a commission matter and did not realise that Mr Markopoulos was asserting an identity between the Boutros buyers and the Marouns. I accept this evidence, and I infer that the identity of the purchasers was not an issue in Mr Marles' mind when he said he could not care less. 109 While Mr Marles did not believe, during their conversation on 15 March, that Mr Markopoulos was asserting that the Boutros buyers were the Marouns, it was clear from his evidence that he understood that to be the assertion when Mr Markopoulos spoke to him again on 18 March. On that occasion he merely said that the matter would have to be sorted out with Mr Shade. That is a surprising response, if Mr Marles was of the view, at that time, that he would never have dealt with the Marouns at all. Nevertheless, on balance I accept Mr Marles' evidence to the extent that, up to the settlement on 17 March, he would not have entered into the transaction had he known the identity of the Boutros buyers and the Marouns. 110 The evidence of Mr Marles on this point was reinforced by the evidence of Mr Green. It may be that, objectively, the identity of the purchaser of property is, as a general matter, commercially irrelevant to the vendor provided that payment of a satisfactory commercial price is received in cleared funds on settlement. Here, however, Mr Marles and Mr Green regarded the Marouns as having withdrawn from an agreement in principle, and so normal commercial considerations were not necessarily paramount. I therefore reject the submission that the identity of the purchasers was not a material matter for the plaintiffs. 111 Nevertheless, I have decided to find against the plaintiffs, because no conduct on the part of any of the defendants caused the plaintiffs any loss. In the FASC, the plaintiffs asserted, as I have said, that they have suffered loss because, if they had known the true facts concerning the identity of the purchasers, either (a) they would have "insisted on compliance with the original offer and acceptance of $2.9 million"; or (b) they would not have sold to the Boutros buyers at all (and, therefore, would have continued their efforts to sell the properties or the options to third parties). 112 The defendants say that the first assertion is inconsistent with the evidence of Mr Marles and Mr Green (accepted by me), that they would not deal with the Marouns any more after they had taken back their offer of $2.9 million. I agree with this submission. That evidence implies that the plaintiffs did not lose any opportunity to negotiate with the Marouns (the Boutros buyers) for a higher price, because no such opportunity would have been taken. 113 Additionally, the defendants submitted that the negotiations with the Marouns with respect to the $2.9 million proposal rested on the written offer contained in Mr Doueihi's letter of 5 March 1999 and the letter and sales advice note from Mr Markopoulos dated 8 March 1999. Mr Doueihi's letter was expressed to be subject to formal contracts being entered into, and Mr Markopoulos' letter stipulated exchange of contracts before a specified date. Consequently there was no agreement between the parties in respect of which the plaintiffs could seek specific performance, and that being so, there was no legal basis upon which they could insist on compliance with the offer and acceptance at $2.9 million. 114 As to the second option, to succeed the plaintiffs would have to establish on the balance of probabilities that the contravening conduct caused the loss of a commercial opportunity which had some value, not being a negligible value. In the Sellars case, 179 CLR at 355, Mason CJ, Dawson, Toohey and Gaudron JJ expressed the point this way (at 355): "However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities." 115 The defendants say that the plaintiffs have failed to demonstrate the loss of a commercial opportunity of some value. This is because, on the plaintiffs own evidence, it is clear that if a truly independent party have emerged, offering $400,000 for the options, that price would have been acceptable to the plaintiffs and they would have accepted the offer. That, indeed, is what they believed they were doing when they assigned the options to the Boutros buyers. As I have found, they accepted offers of $2.8 million, $2.6 million (twice) and $2.7 million in February 1999, from persons unconnected with the parties to this proceeding. When one takes into account the saving of stamp duty of approximately $100,000, an offer of $2.6 million for the properties was economically equivalent to an offer of $400,000 for the options. Therefore the plaintiffs' acceptance of $400,000 for the options from the Boutros buyers was consistent with their own prior conduct in accepting offers for that price during the previous month. 116 I have summarised some concessions made by Mr Marles in cross-examination, to the effect that in March 1999 $400,000 was a figure he and his partners were prepared to accept for the options, and they made a counter-offer for that amount to the Boutros buyers on the basis that this figure was an appropriate commercial stance for Anzaway to take. In doing so, they took into account the fact that one of the options was exercisable in about nine weeks' time. This evidence supports the defendants' submission. As counsel for Mr Nasr pointed out, Mr Marles gave evidence of his understanding that it was necessary for him to enter into a contract for the sale of the properties which would involve settlement prior to the expiry of the options. On that basis, it was necessary to enter into a contract to sell the properties by no later than early April 1999, since the option contracts each provided for a six-week settlement period. If the options rather than the properties were assigned, it was necessary according to Mr Marles understanding that the assignment occur at the least by May 1999. Mr Green was apprehensive that the plaintiffs' position would be prejudiced if it became common knowledge that there was a limited time to run on the options. All of this tends to reinforce the conclusion that the plaintiffs did not suffer any loss of a non-negligible opportunity when they sold the options in March 1999. 117 No evidence has been adduced to indicate that if the transaction with the Boutros buyers had not gone ahead on 17 March, another purchaser would have emerged, let alone another purchaser offering more than $400,000 for the options or more than $2.6 million for the properties. 118 Counsel for Mr Nasr pointed out that there is no valuation of the options in evidence. I am prepared to infer, however, a value of the options in the range $400,000 to $700,000, on the basis of Mr Hubbard's evidence of a range of values of $2.6 to $2.9 million for the properties, and Mr Marles' evidence of stamp duty of $100,000. But importantly, in light of Mr Hubbard's answers in cross-examination, the evidence does not establish anything more than a range the low point of which is the very price paid by the Boutros buyers. 119 My conclusion, therefore, is that the plaintiffs have not established that the misleading and deceptive conduct that I have found to have occurred caused them any loss which they might recover from any of the defendants. Conclusions 120 The plaintiffs have established that the fourth defendant, Estephan Maroun, engaged in misleading and deceptive conduct on behalf of the second defendant, Fribeau, during the period from 12 to 17 March 1999, by representing that his surname was Boutros and not Maroun while negotiating and then contracting with the plaintiffs. Fribeau therefore contravened s 52(1) of the Trade Practices Act. By doing so, Estephan Maroun aided, abetted, counselled, procured or induced Fribeau's contravention, and was knowingly concerned in it, and therefore he was involved in the contravention for the purposes of s 75B. If there were some utility in the Court doing so, declarations could be made about those matters. However, I am inclined, subject to submissions, to make no declaratory orders, as I cannot see any utility in doing so in the absence of orders for substantive relief. 121 The plaintiffs have not established any grounds for relief against the first defendant, Maroun Corporation, or the third defendant, Joseph Maroun. 122 Apart from declaratory orders, the plaintiffs seek orders against the first four defendants for damages and exemplary damages under ss 82(1) and 87(2)(b). An order for damages of any kind is not available under those provisions unless a causal link is established between contravening conduct and the loss claimed by the plaintiffs. For the reasons I have given, the plaintiffs have failed to establish any such causal link between the contravening conduct of Estephan Maroun on behalf of Fribeau and any loss of theirs, and therefore they are not entitled to an order for damages against Fribeau or Estephan Maroun. 123 The plaintiffs have not established that the fifth and sixth defendants, Mr Doueihi and Mr Nasr, were involved in the contravening conduct of Estephan Maroun on behalf of Fribeau, for the purposes of s 75B. Even if the conduct of Mr Doueihi and Mr Nasr amounted to knowing involvement in misleading or deceptive conduct, the plaintiffs have failed to establish any causal link between that conduct and the loss they claim to have suffered. Therefore the plaintiffs are not entitled to any declaratory orders or other relief against Mr Doueihi or Mr Nasr. 124 As to the first cross-claim, Mr Nasr's claim for contribution or indemnity under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), or for equitable compensation, should be dismissed because the question of contribution by him does not arise, there being no finding of liability against him. His claim against Mr Doueihi for an order under s 3 of the Employees Liability Act 1991 (NSW), for indemnity in respect of loss or damage, including costs, has not been the subject of submissions. I shall hear submissions on that claim in conjunction with submissions with respect to costs. 125 As to the second cross-claim, Mr Doueihi's claim for contribution or indemnity under s 5 of the Law Reform (Miscellaneous Provisions) Act, like Mr Nasr's, should be dismissed because the question of contribution by him does not arise, in view of my findings as to liability. Mr Doueihi also makes claims against Maroun Corporation, Fribeau, and Joseph and Estephan Maroun, for indemnity based upon breach of contract or breach of the terms of an agency relationship. This, too, has not been the subject of submissions, and I shall entertain submissions when I hear the costs argument. 126 I shall stand the proceeding over to a convenient time for the purpose of making orders, and hearing and dealing with submissions as to costs and the outstanding matters on the cross-claims. **********

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