Bachour Enterprises Pty Ltd v Munzer

The plaintiff's case

1. The plaintiff contended that it was agreed that Mr Munzer would sell the business to Bachour Enterprises or, alternatively, to Mr Bachour, being the "full business", including all of its assets, equipment and fittings. The purchase price was $100,000 plus the value of the stock of the business. Mr Munzer was to transfer the lease to the plaintiff or, alternatively, to Mr Bachour. The agreement was to be recorded in written form, and was so recorded, initially in the Heads of Agreement.
2. The plaintiff submitted that the Heads of Agreement was a binding and enforceable contract. Clause 2 made plain that it is intended immediately to be binding. The contract fell within the first category described by the High Court in Masters v Cameron (1954) 91 CLR 353, being "one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect": at 360-362. It might also be characterised as falling within the "fourth category" identified by McLelland J in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628, being "one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms". Either way, the parties intended that the Heads of Agreement would immediately bind them, including as to the obligations in cl 3(d).
3. As the defendants' case evolved at trial and in closing submissions, I did not understand the defendants to dispute these propositions subject to the matters raised in the defence and cross-claim which remain pressed, and to which I now turn.

Who were the contracting parties?

1. The defendants relied on description of the Vendor in the Heads of Agreement and the form of the signature block to submit that the contract was between the plaintiff and the second defendant. The plaintiff submitted that the suggestion that Mr Munzer was not a party to the Heads of Agreement was not pleaded or raised by the defendants at trial and should be dismissed on that basis alone. In any event, the submission was misconceived.
2. As to the pleading point, the defendants repeatedly stated in the Amended Defence that they disputed "the entity of the transacting parties", in answer to paragraphs 20 to 27 of the Statement of Claim. Accepting that this issue was not squarely raised during the trial, I consider that this matter was pleaded.
3. As to how this Court ought determine the parties to the contract, one need go no further than Brereton JA's summary in Mills v Walsh [2022] NSWCA 255 at [73]: (citations omitted) The parties to a contract are identified according to the objective theory of contract, which involves ascertaining the intention of the parties from their communications and the circumstances in their mutual knowledge, including their evident commercial aims and expectations; their subjective beliefs and intentions are irrelevant, save insofar as they are manifest and shared. However, the post-contractual conduct of the parties may more readily be resorted to for this purpose than for the purpose of construing contractual terms.
4. That is, what would a reasonable observer of the communications that led to entry into the contract, together with the background facts known to the parties, conclude that the parties intended that the contract would be with: Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 at [54] (Campbell JA; Beazley and Basten JJA agreeing).
5. The legal onus is on the party asserting that a particular party is in fact and law a party to the contract: Pethybridge at [54]. As Judge Rein (as his Honour then was) observed in Blackmore Design Group Pty Ltd v Mudge (2006) 4 DCLR(NSW) 30 at 36; [2006] NSWDC 160, the question of who in fact were parties to the contract is a mixed question of fact and law and "is often a very difficult question": at [23], citing pertinent examples of Southdown Publications Pty Ltd v ACP Magazines Pty Ltd (2003) 60 IPR 367; [2003] NSWCA 347; MacMilllan v Mumby [2006] NSWCA 74.
6. Looking first at the Heads of Agreement, the Vendor is described on the coversheet and in the opening clauses of the Heads of Agreement as "PARADISE Charcoal Chicken (ABN … 435)". On the execution page of the Heads of Agreement, the same signature block appears for the Vendor and Purchaser. For the Vendor, the signature block recorded, "EXECUTED for and on behalf of PARADISE Charcoal chicken (ABN … 435) in accordance with section 127(1) of the Corporations Act 2001." Mr Munzer signed as "Sole Director and Sole Secretary".
7. The ABN ending 435 was registered to Mr Munzer and had been used in the Mt Druitt business since 2008. The business name had been registered to Mr Munzer since 2013 and was linked to the ABN. Mr Azzi prepared financial statements for "Simon K Munzer Trading As Paradise Charcoal Chicken ABN … 435". The revenue and expense items in the financial statements match the figures declared in Mr Munzer's individual tax returns. Mr Munzer's tax returns disclosed that his business was "Paradise Charcoal Chicken" with the ABN ending 435 and operated at the Mt Druitt premises. That is, Mr Munzer owned the Mt Druitt business trading as "Paradise Charcoal Chicken" with the ABN ending 435.
8. Paradise CC Corp had nothing to do with the Mt Druitt business. That company was established to run the Marsden Park business: see [27]. Mr Azzi also prepared financial statements for "Paradise CC Corp Pty Ltd Trading As Paradise Charcoal Chicken ABN … 884". The company tax return filed for Paradise CC Corp disclosed that it operated a chicken shop at Marsden Park. While Paradise CC Corp became the lessee for new chicken shops at Eastern Creek and St Clair, Mr Munzer remained the lessee of the Mt Druitt shop.
9. Mr Munzer obviously knew that he owned the Mt Druitt business. As the sole director of Paradise CC Corp, he also knew that the company had nothing to do with the Mt Druitt business. By the time that the Heads of Agreement was executed, Mr Bachour had been Mr Munzer's close friend since the Mt Druitt shop was opened and while the Marsden Park and other shops were progressively opened. Mr Bachour had also been working for Mr Munzer for two and a half years as a bookkeeper. Most likely, Mr Bachour was aware of who owned which business. The mutual knowledge of the contracting parties was that Mr Munzer owned the Mt Druitt business.
10. All communications between these gentlemen from August 2022 on referred to Mr Munzer selling the Mt Druitt business. There was no reference to Paradise CC Corp, aside from the fact that, after Mr Bachour took over the shop, the plaintiff purchased foodstuffs from that company.
11. As such, a reasonable observer of the communications that led to entry into the Heads of Agreement, together with the background facts known to the parties, would conclude that the parties intended that the contract would be with Mr Munzer, who owned the Mt Druitt business, and not with Paradise CC Corp, which did not.
12. The description of the Vendor in the Heads of Agreement could have been clearer. The signature block pre-supposed that both parties were corporations, rather than that the Vendor was an individual. This minor error is likely referable to the fact that this was one of the first documents which Mr Adams drafted in his legal career. Clause 11 of the Heads of Agreement, "Interpretation", assists: unless the context otherwise requires, "Words importing persons include firms, companies and corporations and vice versa".
13. A drafting error in the signature block does not change the party to the contract, where "if the literal meaning of a written contract is absurd and the Court can confidently identify how the absurdity should be resolved, then the process of construction can omit words or insert new words or alter the existing language": QBT Pty Ltd v Wilson [2024] NSWCA 114 at [78] per Leeming JA (Bell CJ and Ward P agreeing). As a matter of contractual construction, the Vendor was the entity trading as "Paradise Charcoal Chicken" with the ABN ending 435, which was Mr Munzer. This defence fails.

Misrepresentations

1. The defendants allege that Mr Bachour and the plaintiff engaged in misleading conduct in breach of s 18 of the Australian Consumer Law, by making false representations to Mr Munzer on 3 September 2022 at the St Clair office, when executing the Heads of Agreement, that: 1. the written agreement was for the purposes of providing a licence to Ms Ghrayyeb to operate the business; and 2. the one page of the document presented to Mr Munzer for signature constituted the entire agreement for the licence of the business.
2. In fact, the defendants note that the Heads of Agreement was more than one page. In fact, the Heads of Agreement was for the sale of the business, not a licence to operate the business. Further, the Heads of Agreement was said to have been prepared by Mr Bachour's solicitors and not the solicitors for the defendants. The one page presented to Mr Munzer was not interpreted into Arabic before he signed it. Nor did Mr Munzer receive legal advice before executing that page. Rather, Mr Munzer relied on Mr Bachour and his honesty, given their long association and friendship. Mr Bachour, in the past, was said to have operated businesses for Mr Munzer, given business advice to him, interpreted legal documents from English to Arabic and introduced staff to work in various businesses for Mr Munzer.
3. The defendants submitted that, on 3 September 2022, the plaintiff by its director, Mr Bachour, represented that the one page of the Heads of Agreement presented to Mr Bachour for signature was the entire agreement. That representation was made in trade and commerce, was misleading, and inevitably led to error by concealing relevant facts: Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8 at [80]-[83]; Google Inc v ACCC (2013) 249 CLR 435 at [7]-[8], [89]; Concrete Construction (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661; Duxbury v Pierce [2009] FCA 367 at [36]-[37]. The representation was said to be a deliberate statement designed to induce Mr Munzer to sign the Heads of Agreement: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 at [37].
4. When determining whether conduct is misleading or deceptive, it is necessary to consider that conduct from the perspective of a reasonable person in the position complaining of it: Ireland v WG Riverview Pty Ltd [2019] NSWCA 307; (2019) 101 NSWLR 658 at [65], citing Butcher v Lachlan Elder Realty. The conduct of the person alleged to have engaged in misleading or deceptive conduct must be viewed as a whole; it invites error to look at isolated parts of a corporation's conduct: Butcher at [109]; Ireland v WG Riverview at [66].
5. Further, as McClelland CJ in Eq explained in Watson v Foxman (1995) 49 NSWLR 315 at 318: Where the [alleged misleading] conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases … the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. His Honour proceeded to note the fallibility of human memory of conversations given the passage of time and intervention of litigation, where "the processes of memory are overlaid, often subconsciously, by perceptions or self-interest": at 319.
6. As to the allegation that the plaintiff represented that the Heads of Agreement was for the purpose of providing a licence to Ms Ghrayyeb to operate the business, Mr Munzer attributed these words to Mr Bachour, which he denied. I have preferred the evidence of Mr Bachour to Mr Munzer where their evidence contradicts and do so on this occasion. I feel no actual persuasion that Mr Bachour said the words attributed to him.
7. As to the suggestion that only the last page of the Heads of Agreement was presented to Mr Munzer, I am not satisfied that that occurred as it depends upon acceptance of his evidence in preference to that of Mr Bachour.
8. As to whether Mr Bachour represented that the last page comprised the whole agreement, there is no suggestion that Mr Bachour told Mr Munzer that this last page was the only page of the agreement. Nor can the simple fact of presenting the last page to Mr Munzer for signature - if that is what Mr Bachour did - be considered to amount to a representation that this was the whole contract, where the page itself indicated clearly that the agreement comprised more than that page.
9. The page of the Heads of Agreement which bears Mr Munzer's signature has, at the top, the final sentence of the last clause of the agreement, being cl 14 "Survival": "Termination or expiry of this Agreement does not affect the rights and remedies of the parties that accrued before the date of termination or expiry." Then follows the attestation clause for the parties to sign, "EXECUTED AS AN AGREEMENT". Self-evidently, the last page formed part of a multi-page document. The sentence at the top of the page was part only of a clause which had begun on a previous page. It did not make much sense by itself.
10. At the bottom of the page, the footer notes "Page 6 or 7". Mr Munzer had signed enough contracts in his time to appreciate that the execution page was the last page of a longer document. It was obvious. A reasonable person in the position of Mr Munzer would not have been misled, such that the conduct, if it occurred, was not misleading or deceptive. This representation has not been made out either.

Non est factum

1. The defendants contended that they relied on Mr Bachour, who assisted them with business decisions as a trusted adviser, worked in their business and provided advice and guidance to Mr Munzer as he did not speak, read or write English as a first language. Mr Munzer relied on Mr Bachour to assist him in making business decisions. Mr Munzer relied on and trusted Mr Bachour to clearly translate the Heads of Agreement, which did not occur. Mr Munzer was under a special disability in relation to signing of the Heads of Agreement, believing that the document was a licence for the business for a five year period rather than the sale of the business. Mr Bachour was said to have exploited this special disability by giving a single page of the Heads of Agreement to Mr Munzer and representing that it was a licence agreement, not a sale of business agreement. Mr Munzer was said to have made out the defence of non est factum: Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; (2004) 219 CLR 165 at [42]-[47], [57]; Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 at [33]; Petelin v Cullen [1975] HCA 24; (1975) 132 CLR 355; Ford by his tutor Watkinson v Perpetual Trustees Victoria (CA) (2009) 75 NSWLR 42 at 52-56.
2. The general rule is that "a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document": Toll v Alphapharm at [57]. The defence of non est factum (meaning "it is not my deed") is concerned with "the injustice of holding a person to a bargain to which he has not brought a consenting mind": Petelin v Cullen at 359. The scope of the defence is limited, as described in Petelin v Cullen at 359-360: "The class of persons who can avail themselves of the defence is limited. It is available to those who are unable to read owing to blindness or illiteracy and who must rely on others for advice as to what they are signing; it is also available to those who through no fault of their own are unable to have any understanding of the purport of a particular document. To make out the defence a defendant must show that he signed the document in the belief that it was radically different from what it was in fact and that, at least as against innocent persons, his failure to read and understand it was not due to carelessness on his part. Finally, it is accepted that there is a heavy onus on a defendant who seeks to establish the defence."
3. Mr Munzer does not fall within the class of persons described in Petelin v Cullen. He is not blind or illiterate. I do not accept the defendants' submission that the evidence supported a finding that Mr Munzer had difficulty with his eyesight. The evidence is that Mr Munzer wore glasses when reviewing the document on the computer screen, before it was printed.
4. Mr Munzer is an experienced businessman. Having previously signed leases, contracts for sale of business, licence agreements and service agreements without the assistance of a translator, I am not satisfied that a short Heads of Agreement illuded his comprehension as to what the document was about, particularly where he participated in telephone conferences with Jameson Law and gave instructions as to its contents. Nor do I accept that the document was "radically different" to what Mr Munzer thought he was signing, noting that the 'case theory' that he only ever intended to licence the shop to Ms Ghrayyeb has been abandoned.
5. I am not satisfied that Mr Munzer was reliant on others for advice as to what he was signing. Accepting that he may not have understood every word without translation, he likely understood a great deal and was able to call on Mr Bachour to translate particular words if need be. If, as Mr Munzer said, he signed the document without even looking at it, his actions were "carelessness on his part", such that this narrow defence does not assist him. As Latham CJ observed in Wilton v Farnworth (1948) 76 CLR 646 at 649: … In the absence of fraud or some other of the special circumstances of the character mentioned, a man cannot escape the consequences of signing a document by saying, and proving, that he did not understand it. Unless he was prepared to take the chance of being bound by the terms of the document, whatever they might be, it was for him to protect himself by abstaining from signing the document until he understood it and was satisfied with it. Any weakening of these principles would make chaos of every-day business transactions.
6. This defence fails.

Unconscionable conduct and undue influence

1. The defendants contended that Mr Bachour procured Mr Munzer's execution of the Heads of Agreement by unconscionable conduct or undue influence on the basis that Mr Bachour "exploited the special disability of [Mr Munzer] and merely gave a single page to [Mr Munzer]". Mr Munzer was never provided with a copy of the full Heads of Agreement, and no one ever explained the document to him. Further, Jameson Law acted only for Mr Bachour in relation to the Heads of Agreement and Mr Munzer had no legal representation. Mr Munzer had limited English skills and relied upon Mr Bachour to read and explain documents to him. Mr Bachour was a trusted advisor to Mr Munzer in relation to business decisions and Mr Munzer relied upon advice provided by Mr Bachour.
2. The defendants submitted that Mr Munzer was subject to a special disability arising from his lack of education, a lack of English skills and reliance upon Mr Bachour as a trusted adviser. This was compounded by the fact that Mr Munzer did not receive any independent legal, accounting or financial advice. Seized with the knowledge of the special disability that afflicted Mr Munzer, Mr Bachour sought to exploit that by having Mr Munzer sign only the final page of the Heads of Agreement to conceal the nature of the transaction. While Mr Munzer was clearly a businessman with some skill and experience, his administration and running of a business was poor, such that Mr Bachour's involvement was essential to its smooth operation. Mr Bachour was seized with confidential information about Mr Munzer and his businesses and was able to utilise that information for his own personal benefit at the expense of Mr Munzer. The defence of unconscionable conduct was said to have been made out: Commercial Bank of Australia Ltd v Amadio (1983) CLR 447; Blomley v Ryan (1956) 99 CLR at 405; Hurley v McDonald's Australia Ltd [1999] FCA 1728; Burt v ANZ Banking Group Ltd (1994) ATPR 46-123. The defence of undue influence was also said to have been made out: McCulloch v Fern and Anor [2001] NSWSC 406 at [67].
3. So far as the general law is concerned, unconscionable conduct occurs where "a party makes unconscientious use of his superior position or bargaining power to the detriment of a party who suffers from special disability or is placed in some special situation of disadvantage … the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position: Amadio at 461 (per Mason J); followed in Louth v Diprose (1992) 175 CLR 621 at 626 (per Brennan J); Thorne v Kennedy at [38] (per Kiefel CJ, Bell, Gageler, Keane and Edelmann JJ); Stubbings at [39] and [45] (per Kiefel CJ, Keane and Gleeson JJ).
4. A party alleged to have engaged in unconscionable conduct must have actual or constructive knowledge of the special disadvantage, the latter arising from "knowledge of facts from which a person ought to have known that another person was suffering under the relevant special disadvantage": Nitopi v Nitopi [2023] NSWCA 162 (per Bell CJ at [6]). Constructive notice is insufficient, being notice of facts that might lead on inquiry to the discovery of the existence of a special disadvantage: Nitopi (per Bell CJ at [9]; Ward P at [121]).
5. Equity will not intervene to relieve a plaintiff from the consequences of their own foolishness but, rather, to prevent their victimisation: Louth v Diprose at 638 (Deane J). Nor will equity intervene to relieve a plaintiff from the consequences of improvident transactions, where a plaintiff voluntarily engages in risky business, absent conduct on the part of the defendant which makes it just to require the defendant to restore the plaintiff to their previous position: Kakavas at [20].
6. What amounts to undue influence was considered in Thorne v Kennedy at [30]-[34], which summary I gratefully adopt. Kiefel CJ, Bell, Gageler, Keane and Edelman JJ there noted that, although undue influence and unconscionable conduct overlap, they also operate distinctly: at [40]. Their Honours adopted Mason J's explanation of the key difference between undue influence and unconscionable conduct in Amadio. In a case of undue influence, "the will of the innocent party is not independent and voluntary because it is overborne": Amadio at 461.
7. Undue influence can immediately be put to one side. The suggestion that Mr Munzer's will was overborne when executing the Heads of Agreement was not explored in the defendants' closing submissions and was not established.
8. The first question is whether Mr Munzer suffered from a special disability or was placed in some situation of disadvantage. As observed in Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 399 ALR 300 (per Kiefel CJ, Keane and Gleeson JJ) at [40]: In this field of discourse, "special disadvantage" means something that "seriously affects the ability of the innocent party to make a judgment as to his [or her] own best interests". While the factors relevant to an assessment of special disadvantage have not been exhaustively listed, Fullagar J in Blomley v Ryan considered that special disadvantage may be inferred from "poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary". No particular factor is decisive, and it is usually a combination of circumstances that establishes an entitlement to equitable relief.
9. The fact that the party is at a serious disadvantage in negotiating a commercial transaction is unlikely to suffice in the case of an experienced business person. In Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2002] FCAFC 4; (2002) 117 FCR 301, the Court observed, "At least in the case of an experienced business person there must, in our opinion, be something more than commercial vulnerability (however extreme) to elevate disadvantage in to special disadvantage": at [64].
10. Lack of English proficiency will not mean that a party has a special disadvantage unless it seriously affects their ability to make a judgment as to their own best interests: Australia and New Zealand Banking Group Ltd v Couanis [2020] WASC 125 at [218] (per Archer J). There may, however, be situations in which the inability to speak or read English in the context of a transaction that involves executing documents, such as guarantees and the like may, in all the circumstances, constitute a situation of special disadvantage: Li v So [2019] VSC 515 at [60] (per Croft J).
11. For example, in Luong v Du [2013] VSC 723, Emerton J observed, "the fact that Hong and Hue had a limited capacity to read and understand documents written in English does not mean they were incapable of making a judgment about their best interests": at [123]. Whilst her Honour accepted that Mrs Hong had poor English and was not capable of reading the documents or understanding the documents without assistance, she and her husband were well capable of making further inquiries and consulting a solicitor when they felt the need: at [123]-[124]. Likewise, in Dinh v Commonwealth Bank of Australia [2021] WASCA 127, a party's poor English did not constitute a special disadvantage in circumstances where they were experienced in financial matters, had been given a simple explanation of the terms of an agreement in the presence of person who could translate, and they actually understood the essential terms of the agreement: at [251] (per Buss P, Murphy and Mitchell JJA). In Rozenbilt v Vainer [2019] VSC 316, whilst the plaintiff had a limited grasp of the English language, he had numerous individuals available who would act as his interpreter, whether in meetings or in relation to the transaction and business documents; the documents had been explained to him by one of these persons; he was not disadvantaged to the point that he was unable to make a judgment as to his own best interests: at [107] (per Sifris J).
12. As to whether Mr Munzer had a special disability, Mr Munzer's proficiency in the English language was imperfect but could not be said to seriously affect his ability to make a judgement as to his own best interests, where he wrote and read emails in English and had previously executed lengthy transaction documents without the assistance of a translator. Nor is it correct to say that Mr Munzer had no legal representation at the time. Jameson Law was then acting for both Mr Munzer and the plaintiff but had indicated that it was not prepared to do so for more detailed transaction documents. I do not accept the defendants' submissions that the law firm was then acting for the plaintiff only.
13. I accept that Mr Munzer was not provided with an explanation by the law firm of the Heads of Agreement; nor was Mr Bachour. Mr Bachour agreed that he did not suggest to Mr Munzer that he take the document to a lawyer to get legal advice. Nor did he suggest that Mr Munzer take the document to Mr Azzi to look at. Mr Bachour accepted that he knew that Mr Munzer relied on him and trusted him, including to interpret words that he did not understand. Mr Bachour agreed that he was Mr Munzer's trusted advisor and they had a very strong friendship, "more than a brother".
14. The content of the term "trusted advisor" should not be passed over. Beyond the fact that Mr Bachour was a close friend of Mr Munzer, there is no evidence that Mr Bachour had any particular qualifications or experience in relation to business or legal or accounting matters beyond some experience in bookkeeping. True it is that Mr Bachour had a greater English competence and could translate English words into Arabic. But to the extent that the words being translated referred to business or legal concepts, there is no evidence that Mr Bachour had any particular experience in either field which would have enabled him to understand the content of these words any more than Mr Munzer.
15. The evidence does not support a conclusion that Mr Bachour was Mr Munzer's business advisor, as opposed to a trusted friend. Mr Munzer had retained Mr Azzi as his business advisor and, from time to time, had also instructed solicitors in relation to his business. Of the two gentlemen looking at the Heads of Agreement on 3 September 2022, the more experienced in business matters and transaction documents was Mr Munzer.
16. I have not found that Mr Munzer was only given the last page of the Heads of Agreement. Rather, I prefer the evidence of Mr Bachour that both gentlemen reviewed the document on the computer screen. The whole document was printed. The last page was signed. There was no special disability. Mr Bachour made no unconscientious use of a superior bargaining position. This defence fails.

Mistake

1. The defendants alleged that the Heads of Agreement was executed by Mr Munzer by mistake and on the basis of the parties' mutual mistake that "the Defendants wished to actually enter into the Written Agreement ... to a third party and not to Fouad Bachour or to interests associated with him." While the defendants accepted that a mutual mistake had not been established, there was said to be a well recognised exception to the principle that a party who makes a unilateral mistake is bound by what he has signed. Where the mistake is the result of conduct by the other party that is essentially dishonest, the mistaken party may be entitled to have the contract rescinded or rectified. The impugned conduct must however have that necessary quality of legerdemain that justifies the intervention of equity. The conduct requisite to enliven the remedy has been described as "equivalent to fraud" or "involving a degree of sharp practice". In Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 the majority spoke of a party who "deliberately sets out to ensure that the first party does not become aware of the existence of his mistake" (at 432) or who, knowing of the mistake, "engages deliberately in a course of conduct which is designed to inhibit discovery of it": at 433. See also Johnston v Arnaboldi [1990] 2 Qd R 138 at 144; Easyfind (NSW) Pty Ltd v Paterson (1987) 11 NSWLR 98 at 104-108; Riverlate Properties Ltd v Paul [1975] Ch 133; A Roberts & Co Ltd v Leicestershire County Council [1961] Ch 555; May v Platt [1900] 1 Ch 616 at 623. This defence was said to have been made out.
2. I take the defendants' reference to dishonesty, fraud and sharp practice to be a reference to the allegation that Mr Bachour provided only the last page of the Heads of Agreement to Mr Munzer for execution, while representing that the document was for the purposes of providing a licence to Ms Ghrayyeb to operate the Mt Druitt shop. Certainly, no other allegation of dishonesty, fraud or sharp practice was particularised.
3. As earlier mentioned, I am not satisfied that Mr Bachour only provided the last page of the document to Mr Munzer. Nor am I satisfied that Mr Bachour made the alleged representations. It follows that the defence of unilateral mistake fails.
4. In any event, I am satisfied that Mr Bachour and Mr Munzer reached an oral agreement in the terms described by Mr Bachour. There was no mistake. The Heads of Agreement aligned with the oral agreement. Further documents were in the course of being prepared, to more fully document the sale of the business along the lines of the documentation used for the sale of the Eastern Creek and St Clair businesses. However, before this suite of documents was executed, Mr Munzer changed his mind and brazenly re-took possession of the Mt Druitt shop.

REMEDIES

1. As each of the defences have failed, it follows that the Heads of Agreement is binding. The remaining issue is what relief, if any, should be granted.

Specific performance

1. The plaintiff seeks the aid of the Court to compel the defendants to perform their obligations according to the terms of the contract: Waterways Authority of New South Wales v Coal & Allied (Operations) Pty Ltd [2007] NSWCA 276 at [62] (per Beazley JA); Paolucci v Makedyn Pty Ltd (2021) 20 BPR 41,749 at [10]-[11] (per Leeming JA, White and McCallum JJA agreeing). As Leeming JA explained in Paolucci v Makedyn, in requiring the performance of a contractual term, equity is acting in aid of the plaintiff's legal rights: at [16]. However, "… equity will not intervene to grant the remedy unless there is some good ground for doing so … It is thus necessary for the plaintiff to prove that damages are not an adequate remedy. … This is the major hurdle that a claimant seeking specific performance must overcome": at [17], quoting R E Megarry (1960) 76(302) The Law Quarterly Review. In Lucas Stuart Pty Ltd v Hemmes Hermitage Pty Ltd (2012) 28 BCL 226; [2010] NSWCA 283, Campbell JA observed, "The only justification for equity ever involving itself in providing a remedy for breach of a common law obligation is if the remedy provided by the common law is inadequate": at [5]; see likewise Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 223 CLR 660 at [11] (per Gleeson CJ, Gummow, Hayne & Callinan JJ).
2. As to whether damages are an adequate remedy, the test is whether it is just in all the circumstances that the plaintiff should be confined to damages: Coulls v Bagot's Executor & Trustee Co Ltd (1967) 119 CLR 460 at 503 (per Windeyer J) ("the remedy, damages, cannot satisfy the demands of justice"); Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 424; [2008] NSWSC 852 at [97] (per Brereton J), quoting Evans Marshall & Co v Bertola SA [1973] 1 WLR 349 at 379 (per Sachs LJ), followed in Paolucci v Makedyn at [17].
3. The Court will almost invariably grant specific performance in aid of a purchaser, where a piece of property under a contract for sale of land or a business under a contract for same is seen as unique: Ryan v UPG 322 Pty Ltd [2023] NSWSC 1293 at [22]-[24] (Parker J) and the cases there cited.
4. There is no doubt that Mr Munzer will not perform his obligations under the Heads of Agreement unless compelled to do so. I do not consider it just that the plaintiff should be confined to damages as the contract was for the purchase of a particular business, which may be regarded as unique. In addition, the quantification of any damages may prove difficult given the cash nature of the business and the deficiencies in the business records discovered by Mr Munzer notwithstanding a succession of court orders requiring disclosure. I am satisfied that orders for specific performance should be made.

An account

1. Having determined that the Heads of Agreement is a valid and binding contract, the defendants are liable to the plaintiff for damages or an account of profits given the plaintiff's inability to operate the business since 31 October 2022. It was agreed during the trial that the most efficient way to assess this amount was by the appointment of a referee, with appropriate terms of reference and instructions from the Court. Counsel agreed to liaise and endeavour to settle terms for the reference and instructions, in the event that such an order was made. I have since been provided with agreed orders for referral, for which I am most grateful, albeit I understand that the defendants did not respond to the plaintiff's suggested referee.

ORDERS

1. For these reasons, I make the following orders: 1. Declare that an agreement made between the plaintiff and the first defendant dated 3 September 2022, whereby the first defendant agreed to sell to the plaintiff the business operating from Shop 2, 3 Cleeve Close, Mt Druitt, NSW and to assign to the plaintiff the first defendant's lease of that premises is a valid agreement and binding upon the first defendant. 2. Order the first defendant to specifically perform and give effect to the agreement. 3. Dismiss the cross-claim. 4. Pursuant to Part 20 rule 4 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), refer to Fiona Bateman (Chartered Accountant at Doleman Bateman) (Referee) for enquiry and report the matter in the schedule hereto. 5. Direct that (without affecting the powers of the Court as to costs) the parties (namely Bachour Enterprises Pty Ltd, Fouad Bachour, Simon Munzer and Paradise CC Corp Pty Ltd) be jointly and severally liable to the Referee for the fees payable to the Referee. 6. Direct that the parties deliver to the Referee forthwith a copy of these orders together with a copy of Division 3 of Part 20 of the UCPR. 7. Direct that: 1. subject to (b) and (c) below, the provisions of Pt 20 r 20 of the UCPR shall apply to the conduct of proceedings under the reference; 2. the reference will commence immediately unless otherwise ordered by the Referee; 3. the Referee consider and implement such manner of conducting proceedings under the reference as will, without undue formality or delay, enable a just determination to be made including, if the Referee thinks fit: 1. the making of inquiries by telephone; 2. site inspection; 3. inspection of plant and equipment; and 4. communication with experts retained on behalf of Referee; 1. any evidence in chief before the Referee shall, unless the Referee otherwise permits, be by way of written statements signed by the maker of the statement; and 2. the Referee submit the report to the Court in accordance with Pt 20 r 23, addressed to the Equity Division Registrar, on or before 14 March 2025. 1. Amendments to the Schedule, whether by agreement or on a contested basis, are to be the subject of an order made by the Court. 2. If for any reason the Referee is unable to comply with the order for delivery of the report to the Court by 14 March 2025, the Referee is to provide to the Equity List Judge: 1. an Interim Report setting out the reasons for such inability; and 2. an application to extend the time within which to deliver the report to the Court to a date when the Referee will be able to provide the Report. 1. Grant liberty to the Referee or any party to seek directions with respect to any matter arising in proceedings under the reference upon application made on three days' notice or such less notice ordered by the Court. 2. Reserve the costs of the reference. 3. Stand the proceedings over for further directions on 21 March 2025. Schedule In this Schedule: Mount Druitt Business means the restaurant business (ABN 83 214 850 435) trading as "Paradise Charcoal Chicken" at Shop 2, 3 Cleeve Close, Mount Druitt NSW. Ordinary Course of Business means the ordinary conduct of the Mount Druitt Business prior to 31 October 2022. These questions arising in the proceedings: 1. For the period since 31 October 2022, what were the revenue earned, expenses incurred and profits made by the Mount Druitt Business? 2. Over the period (or any part of the period) since 31 October 2022, were any assets of the Mount Druitt Business disposed of or otherwise dealt with other than in the Ordinary Course of Business, and if so, which assets and how? 3. If, in answer to paragraph 2 above, assets of the Mount Druitt Business were disposed of or otherwise dealt with other than in the Ordinary Court of Business, what would have been the revenue earned, expenses incurred and profits made by the Mount Druitt Business in the period since 31 October 2022 had those assets not been disposed of or otherwise dealt with other than in the Ordinary Court of Business?

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