Baker & Ors v Ambridge Investments Pty Ltd

No appearance for the Second, Third and Fourth Respondents

1 I have had the advantage of reading the draft reasons prepared by Robson AJA. I would dismiss the appeal for the reasons stated by his Honour.

2 I have had the benefit of reading the reasons of Robson AJA in draft form, with which I agree.

3 Break Fast Investments Pty Ltd is the registered owner of an eleven story commercial building at 176 Wellington Parade, East Melbourne. Break Fast agreed to purchase the property at an auction held on 24 November 1999. The purchase price was $6 million. Break Fast had been incorporated on the day before the auction. The three shareholders of Break Fast were Mark Stanley, Theodore Baker and Chris Voukidis. They were also the three directors. Mr Stanley had located the property and the three had then agreed to bid for the property at the auction.

4 This appeal concerns whether Break Fast is the beneficial owner of that property or holds it on trust. The learned trial judge found that Break Fast was not the beneficial owner of the property. Rather, he found that Break Fast held the property as trustee for companies and associates of Messrs Stanley, Voukidis and Baker under a joint venture agreement.

5 The learned trial judge found that by 14 July 2000 a binding joint venture agreement had evolved out of the initial arrangement between Messrs Stanley, Voukidis and Baker to bid for the property. This joint venture agreement involved Break Fast holding the property on trust for joint venture parties. The appellants contend that the trial judge found the joint venture agreement had been made

between the relevant parties based on inferences that he drew from undisputed facts. The factual findings are not disputed on the appeal. Rather, the appellants contend that the inferences that the learned trial judge drew were not correctly drawn from the facts.

6 At the time of the purchase, Mr Stanley claimed that his company Ambridge Investments Pty Ltd was the joint venture party, rather than himself, and that Ambridge held half this interest beneficially and the other half on behalf of Greg Taylor through Mr Taylor's company Headland Properties Pty Ltd. For reasons that I will explain, Mr Taylor has appointed a receiver over Ambridge which is in liquidation.

7 Mr Taylor funded the receiver to bring the proceeding by Ambridge as plaintiff and has a direct interest in the outcome. Ambridge contends that it is beneficially entitled to a 25 per cent interest in the property. Ambridge is a respondent to the appeal. Mr Baker and Mr Voukidis contend that Break Fast is the beneficial owner of the property. Mr Baker and Mr Voukidis are defendants to the trial proceeding. Mr Baker and Mr Voukidis are appellants in the appeal.

8 Ambridge is the plaintiff in the proceeding and a respondent on the appeal. Up until 17 August 2004, Ambridge was under the control of Mark Stanley. Ambridge was in the business of syndication of investments in film production partnerships, retirement development partnerships, and the Wellington Parade Property syndication.

9 Prior to the auction, Ambridge carried out the initial feasibility work in assessing the suitability of the Wellington Parade Property as an investment. After the purchase it undertook management and refurbishment work on the building. Ambridge was responsible for the preparation of the accounts for Break Fast until late 2002 when Mr Voukidis took possession of Break Fast's books and records.

10 On 17 August 2004, Ambridge was placed in liquidation by order of the Supreme Court of New South Wales. A liquidator was appointed to the company. On 18 August 2004, H2O Company Pty Ltd, a company controlled by Greg Taylor, appointed a receiver to Ambridge pursuant to a charge originally given to the CBA in support of a loan to Ambridge that was subsequently assigned to H2O.

11 Mr Baker is the first defendant. He was appointed a director of Break Fast on its incorporation on 23 November 1999 and remains a director of the company. Two $1 shares in Break Fast of the four on issue were issued to Mr Baker.

12 Mr Baker is the managing director of a number of companies including an information technology company, Powerlan Technologies Pty Ltd, that is now listed on the Australian Stock Exchange. Powerlan Technologies has a significant business in Australia and Asia, with offices in all Australian capital cities as well as twelve offices in Asia including in Hong Kong and China. Mr Baker was first introduced to Mr Stanley in 1998. Up until 24 August 2009, he was a director of Career Path Australia Pty Ltd, the third defendant.

13 The learned trial judge found some key aspects of Mr Baker's evidence to be unsatisfactory.

14 Break Fast is the sixth defendant. It was incorporated on 23 November 1999. It became and remains the registered proprietor of the Wellington Parade property. It has four shares on issue, with a paid up capital of $4.00, there being $1.00 paid in respect of each share. Upon its incorporation, Messrs Baker, Voukidis and Stanley became directors of Break Fast. Mr Stanley resigned as a director on 12 December 2002. Messrs Baker and Voukidis remain as directors. There is a dispute as to whether Mr Taylor was appointed a director of Break Fast on 12 December 2002 in place of Mr Stanley and as to whether he is entitled to remain a director of the company.

15 Career Path is the third defendant. Mr Baker is a director of Career Path. Mr Baker nominated Career Path as the beneficial owner of his two shares in Break Fast.

16 C&O Voukidis is the fifth defendant. Mr Voukidis is a director of C&O Voukidis. He nominated C&O Voukidis as the beneficial owner of his one share in Break Fast.

17 Mr Ganis was a director of Powerlan Technologies. Initially, he was offered a 10 per cent interest in the venture but declined to proceed. He attended the auction. He drew the cheque for the deposit on the bank account of a subsidiary of Powerlan Technologies.

18 H2O is a company controlled by Mr Taylor. H2O loaned moneys to Ambridge. H2O has appointed the receiver to Ambridge.

19 IMF is the fourth defendant. Mr McGrouther, who took an interest in the joint venture, is a director of IMF.

20 Mr Jacobs was employed by Ambridge as its general manager from May 1998 to July 2003. From time to time between August 2003 and November 2003, he provided assistance to Ambridge. In his capacity as general manager of Ambridge, he was responsible for, amongst other things, the preparation of its financial statements.

21 He had a key role in the preparation of the accounts for Break Fast, at least until late 2002. He assisted in instructing solicitors for the preparation of draft joint venture agreements for the Wellington Parade venture. In his various roles with Ambridge, he took instructions from Mr Stanley. In some of his correspondence, he described himself as the 'financial controller' of Ambridge.

22 Mr Jacobs was a chartered accountant and a member of the Institute of Chartered Accountants. He had conducted an accounting practice for 16 years until 1993. In 1993 Mr Jacobs pleaded guilty in the County Court of Victoria to a charge of theft arising from his conduct in misappropriating client funds in the course of his practice and was sentenced to two years' imprisonment which he has now served.

23 The learned trial judge found that Mr Jacobs' evidence was central to Ambridge's case. The learned trial judge said that he had the advantage of observing Mr Jacobs giving his evidence under cross-examination over some one and one half days. The learned trial judge approached the evidence given by Mr Jacobs in the trial with caution.

24 Mr McGrouther is a director of the fourth defendant, IMF. He is a banker by profession and also a director of investment banking firm KTM Capital Pty Ltd. Mr McGrouther met Messrs Baker and Voukidis in the course of KTM providing advisory services to Powerlan Technologies in relation to the float of that company. Mr McGrouther left the management of his investment in the Wellington Parade venture to Messrs Voukidis and Baker.

25 The learned trial judge found Mr McGrouther to be a truthful witness. The learned trial judge said, however, that inconsistencies with an earlier signed statement exposed Mr McGrouther's account of a later recollection of a crucial conversation to considerable doubt. The learned trial judge was left with the impression that Mr McGrouther's recall of the details of his involvement in the Wellington Parade venture was hazy.

26 Oxley is the seventh defendant in the proceeding. It was incorporated on 16 January 2004. Mr Voukidis remains the sole director of Oxley since its incorporation.

27 Mr Baker started Powerlan Technologies, which is now listed on the Stock Exchange. Powerlan Technologies took a major lease in the property. Mr Voukidis was engaged by Powerlan Technologies to do accounting work on its behalf.

28 Mr Stanley was the sole shareholder and one of the two directors of Ambridge. He is also the eighth defendant. Mr Stanley was appointed a director of Break Fast from the time of its incorporation on 23 November 1999, until his resignation on 12 December 2002.

29 At the time of the trial, Mr Stanley was serving a term of imprisonment in Victoria. The sentence he was serving relates to convictions in the County Court of Victoria for several counts of theft. Mr Stanley filed for bankruptcy on 17 May 2005. The learned trial judge found that Mr Stanley conducted the affairs of Break Fast and his dealings with his co-venture partners in a dishonest manner.

30 The learned trial judge found that Mr Stanley's evidence was central to Ambridge's case. The learned trial judge said that he had the advantage of observing Mr Stanley giving his evidence under cross-examination over some two and a half days. He found Mr Stanley to be an unreliable witness. He did not accept his evidence on contentious matters unless it was supported by cogent independent evidence which he accepted or as to which he was otherwise satisfied on the balance of probabilities.

31 Mr Taylor is a solicitor holding a current practising certificate. He is also a property developer. Mr Taylor is the sole director and shareholder of Headland Properties Pty Ltd. For some years prior to 1999, Headland Properties and Mr Stanley's company Ambridge had been involved in various property projects together. Mr Taylor acted on behalf of Ambridge and assisted it in undertaking much of its management and refurbishment activity in relation to the Wellington Parade Property. Mr Taylor through Headland Properties has a half interest in Ambridge's interest in the joint venture.

32 The learned trial judge was satisfied that the other joint venture partners were not aware of Mr Taylor's participation in the Wellington Parade Joint Venture until December 2002.

33 Mr Taylor is registered in the records of ASIC as a director of Break Fast as from 12 December 2002 upon Mr Stanley's resignation. Messrs Baker and Voukidis took issue with this appointment.

34 The defendants were critical of a number of aspects of Mr Taylor's credit in the trial proceeding. The principal matter highlighted by the defendants involved the H2O loan transaction. As part of the loan transaction a charge was assigned to H2O by the original lender, the CBA, upon its loan being discharged.

35 The learned trial judge did not make any findings in relation to the H2O loan transaction. He did set out the allegations in relation to it. In substance, the defendants allege that H2O Company Pty Ltd loaned Ambridge $240,000 to enable Ambridge to repay a loan to it from the CBA. It is alleged that the H2O Loan Agreement was secured in part by a second ranking registered debenture charge over the whole of Ambridge's assets and its uncalled capital.

36 On 17 August 2004, Ambridge was placed in liquidation by order of the Supreme Court of New South Wales, and a liquidator was appointed to the company. The next day, Mr Taylor caused H2O to appoint a receiver of Ambridge pursuant to the CBA charge which had been assigned to it. Mr Taylor has funded the bringing of this proceeding by Ambridge via the receiver. H2O, and through it, Mr Taylor, have an interest in recovery of debt now said to be owing under the H2O Loan agreement, claimed to be about $4 million.

37 Mr Taylor is the person who stands behind Ambridge in the present litigation and has a direct interest in the outcome. Further, by reason of the H2O Loan and the security held by H2O over Ambridge in respect of it, his interest extends beyond the claimed interest of Headland Properties in Ambridge's alleged share of the Wellington Parade venture.

38 The learned trial judge assessed Mr Taylor's evidence with these matters fully in mind. However, having taken these matters into account, the learned trial judge was satisfied that Mr Taylor was a witness of truth in giving evidence as to the central matters in dispute in this proceeding.

39 Mr Voukidis is the second defendant in this proceeding. He is also a director of the fifth defendant, C & O Voukidis Pty Ltd and the sixth defendant, Break Fast.

40 He was appointed a director of Break Fast from the time of its incorporation on 23 November 1999 and remains a director of the company. Since 23 November 1999, he has been the company secretary of Break Fast.

41 In or about 1993, Mr Voukidis met Mr Baker. They developed a business relationship. Powerlan Technologies began engaging Mr Voukidis to do accounting work on its behalf. In or about 1994, Mr Voukidis commenced practice in his own accountancy firm known as Mason Voukidis Chartered Accountants. Mason Voukidis was a general accounting practice which included the provision of services to its clients in the areas of taxation, accounting and audit.

42 Since about 1994, Mr Baker was a personal client of Mr Voukidis and his firm. Mr Voukidis undertook all of Mr Baker's personal taxation work and provided him with accountancy and investment advice. Mr Voukidis also dealt with all taxation and accountancy matters for Mr Baker's company, Powerlan Technologies.

43 In or about mid 1999, Powerlan Technologies was preparing to list on the Australian Stock Exchange. It needed to engage a chief financial officer. Mr Voukidis was appointed to the position and left Mason Voukidis to assume his duties with Powerlan Technologies. Mr Voukidis was also appointed a director of Powerlan Technologies.

44 During the course of the trial, the learned trial judge found that Mr Voukidis engaged in dishonest conduct which he described as reprehensible. This conduct is fully set out in the learned trial judge's judgment.[1] There is no need for me to repeat it here.

45 The learned trial judge found that the evidence given by Mr Voukidis was central to the defendants' case. The learned trial judge said he had the advantage of observing him giving his evidence under cross-examination over some four days. He found Mr Voukidis to be an unreliable witness. He did not accept his evidence on contentious matters unless it was supported by cogent independent evidence which he accepted or as to which he was otherwise satisfied on the balance of probabilities.

The parties to the proceeding and to the appeal

46 The plaintiff to the proceeding was Ambridge. The defendants were Baker (first defendant); Voukidis (second defendant); Career Path Australia Pty Ltd (third defendant; Baker is a director); C&O Voukidis Pty Ltd (fifth defendant; Voukidis is a director); Break Fast Investments Pty Ltd (sixth defendant); Oxley Group Finance Pty Ltd (seventh defendant; Voukidis is a director); and Stanley.

47 By counter claim the plaintiffs were Baker (first); Voukidis (second); Career Path (third); IMF Pty Ltd (fourth); C&O Voukidis (fifth); Break Fast (sixth); Oxley Group Finance Pty Ltd (seventh). Ambridge was the sole defendant by counter claim.

48 On the appeal, the appellants are Baker (first appellant); Careerpath (second appellant); IMF Pty Ltd (third appellant); Break Fast (fourth appellant); and Oxley (fifth appellant). The respondents are Ambridge (first respondent); Voukidis (second respondent); C&O Voukidis (third respondent); and Stanley (fourth respondent).

49 Mr R A Brett QC with Mr J Evans appeared for all five appellants. Mr P W Collinson SC with Mr C G Juebner appeared on behalf of Ambridge only. There was no appearance for the three other respondents.

The purchase of the property and the joint venture negotiations

50 In late 1999, Messrs Stanley, Baker and Voukidis met in a restaurant in Sydney. They discussed a proposition to the effect that Mr Stanley would look for a commercial property in Melbourne that could be purchased and leased to a company in which Mr Baker had a substantial interest, Powerlan Technologies.

51 In early to mid November 1999, Mr Stanley located the Wellington Parade property and advised Mr Voukidis of the find. The required capital contributions and the percentages of those contributions from the participating parties could not be known until after the property had been purchased and financing had been arranged. The auction of the property was fixed for 24 November 1999. It was agreed, however, that Ambridge would be credited with a capital contribution of $500,000 for finding the Wellington Parade property and managing its development.

52 On 23 November 1999, Mr Voukidis, who was Mr Baker's accountant, caused Break Fast to be incorporated. He did this through his accounting firm, Mason Voukidis. Break Fast was registered as a proprietary company limited by shares. On 24 November 1999, Mr John Esquivel of Mason Voukidis advised Mr Stanley of the incorporation of Break Fast, including its directors and shareholders. The registered office of Break Fast was at offices of Mason Voukidis. Each of Messrs Voukidis, Baker and Stanley were appointed directors of Break Fast and Mr Voukidis was appointed company secretary. The paid up capital of Break Fast has at all times since its incorporation been $4, namely $1 per share issued. Two shares were issued to Mr Baker, and one each to Messrs Voukidis and Stanley. Ambridge has never been a shareholder in Break Fast. Break Fast has never issued any further shares or raised any further share capital. From the date of its incorporation until about mid 2004, ASIC records reflected that the shareholders of Break Fast held their shares beneficially.

53 On 24 November 1999, Mr Stanley bid at the auction on behalf of Break Fast. The company was successful at the auction and agreed to purchase the Wellington Parade Property for $6 million. Mr Jacobs, Ambridge's general manager, and Mr Taylor attended the auction. Mr Garry Ganis was also present at the auction. He was a director of Powerlan Technologies. At the auction he represented Messrs Voukidis and Baker. Following the auction, he drew a cheque for $600,000 drawn on an account of a Powerlan Technologies subsidiary to pay the 10 per cent deposit for the purchase. The purchase of the property was settled on 29 February 2000.

54 Ambridge contended that it and not Mr Stanley was to be the party to the venture. In addressing that issue, the learned trial judge found that in late 1999 it was Mr Stanley's company Ambridge, not Mr Stanley, which was engaged to seek out a property for purchase by Messrs Baker and Voukidis, its possible refurbishment, and ultimate sale for a profit. Ambridge contended that it was Ambridge, and not Mr Stanley, which identified the Wellington Parade property as a potentially suitable investment. The learned trial judge accepted that it was Ambridge which identified the Wellington Parade property.

55 Prior to the auction, Ambridge engaged a firm of architects to prepare a written report in relation to the property. The report dated November 1999 was made to Ambridge. The report was made available to Messrs Baker and Voukidis. Ambridge also engaged the solicitors Meerkin & Apel to review the auction contract for the Wellington Parade Property.

56 The parties differed as to the payment of the $500,000 fee to Mr Stanley/Ambridge for finding the Wellington Parade Property and managing its development. It was contended by the defendants at trial that prior to the auction there was no such agreement. They said that it was only after the auction and before settlement on 29 February 2000 that Messrs Stanley, Voukidis and Baker reached agreement as to the amount which would be paid as a fee for finding the property and managing its redevelopment, and that fee, which was agreed at $500,000, would stand as Mr Stanley's capital contribution to the joint venture.

57 On the other hand, the plaintiff contended that agreement on the question of the fee was arrived at prior to the auction on 24 November 1999 and the agreement was that Ambridge would receive a $500,000 fee for finding the property and managing its redevelopment, and that fee would stand as Ambridge's capital contribution to the joint venture.

58 The learned trial judge found that payment of the $500,000 fee was agreed to between Messrs Baker, Voukidis and Stanley by 23 November 1999, and that this fee was to be paid to Ambridge as a management fee for the work it had done, and was about to undertake, in managing the project.[2]

59 The learned trial judge found that prior to the auction, it was also agreed between Messrs Stanley, Baker and Voukidis that if they were successful in purchasing the Wellington Parade Property, Mr Stanley's interest would be taken up by Ambridge in return for the fee that had been negotiated.

60 The appellants contend that as at 24 November 1999, the terms of the joint venture had been agreed and that under the agreement Mr Stanley was to take a 25 per cent share holding in the company and Break Fast was to be the beneficial owner or the property. That contention, however, is not consistent with the email Mr Stanley sent to Mr Taylor on 23 November 1999. In the email[3] Mr Stanley states that his interest was to be one third for his fee of $500,000.[4] That tends to indicate that at that stage an agreement may not have been made as to the proportions each joint venturer was to hold. I will return to the appellants' contentions later.

Agreement as to Joint Venture Structure in late 1999

61 The learned trial judge found that he was not satisfied that, at the time of the auction on 24 November 1999, agreement as to the ownership of the property had been finalised between the parties. He was satisfied, however, that there was consensus on the basic structure to be used in moving forward.

62 He found that at the time of the purchase of the property at auction the parties had not worked out between themselves precisely what their respective interests would be in the project. He found that they agreed that this would be worked out once the purchase price and the actual capital contributions required to be made by each of them was known.

63 He found it was not known who would be the parties to the venture. He was satisfied that Mr Stanley through his company Ambridge, Mr Baker and Mr Voukidis had agreed between them that they or their corporate nominees would each participate. He found that Mr Ganis, an employee of Mr Baker, had been offered a 10 per cent interest in the venture but had not then agreed to take part in the venture. Mr Ganis subsequently declined to take up an interest. The learned trial judge found that the corporate nominees in the project on behalf of Mr Baker and Mr Voukidis had not then been identified.

64 As to the involvement of Ambridge in the joint venture, the learned trial judge was satisfied that by 24 November 1999 it was agreed between Messrs Baker, Voukidis and Stanley that Ambridge would participate in the joint venture as Mr Stanley's corporate nominee.

65 Before progressing to examine the facts and in particular the inferences that can be drawn from them it is convenient to set out in a little more detail the competing claims.

66 The learned trial judge summarised the competing cases as follows. Ambridge claims that the property was purchased by Break Fast in its capacity as the manager of what is commonly styled an 'unincorporated joint venture'. Pursuant to this arrangement it was contended that Break Fast would purchase and hold the property on trust for the participating joint venture partners. Ambridge says further that, from the outset, it was one of those participating joint venture partners and that it held and continues to hold a 25 per cent interest in the joint venture.

67 Ambridge says that on 24 November 1999 there was an initial agreement between Messrs Baker, Voukidis and Stanley, pursuant to which:

(a) a joint venture would be formed to collectively work together to purchase the Wellington Parade Property;

(b) Break Fast would be incorporated to purchase the property as trustee for the participating joint venture partners and in its capacity as the manager of the joint venture;

(c) the participating joint venture partners were Messrs Baker and Voukidis (or their corporate nominees), and Ambridge;

(d) Directors would be appointed to Break Fast to represent Messrs Baker and Voukidis (or their nominees), and Ambridge; and

(e) Ambridge would be paid a fee of $500,000 for finding and managing the redevelopment of the property, and that the fee would be treated as Ambridge's capital contribution to the joint venture.

68 Ambridge says further that, following nominations by Messrs Baker and Voukidis of the parties that were to hold their respective interests in the joint venture, as at mid February 2001 the joint venture agreement evolved to the point where the participating joint venture partners under it were:

(ii) Mr Baker's company, the third defendant, Career Path as to 40 per cent;

(iii) Mr Voukidis' company, the fifth defendant, C&O Voukidis as to 25 per cent; and

(iv) a company nominated by a later introduced person, Tod McGrouther, being the fourth defendant IMF, as to the remaining 10 per cent.

69 Ambridge says that the terms of the joint venture agreement are to be found in conversations between the parties, correspondence passing between them, from the conduct of the parties, and in order to give business efficacy to the agreement.

70 If, contrary to its principal claim, there is no joint venture agreement as it alleges, Ambridge claims that Break Fast holds a 25 per cent interest in the Wellington Parade Property on constructive trust for Ambridge.

71 The defendants said that there was no unincorporated joint venture as claimed by Ambridge. Rather, the defendants contended that an 'incorporated joint venture' arose, that did not include Ambridge as a member. The defendants contended that between mid November 1999 and 23 November 1999, Messrs Baker, Voukidis and Stanley agreed to invest in the Wellington Parade Property pursuant to a shareholder agreement. The terms of the shareholder agreement were said to be:

(b) it would acquire the Wellington Parade Property and would hold it beneficially;

(c) each of Messrs Baker, Voukidis and Stanley would hold their interest in the property by means of their shareholding in Break Fast;

(d) Mr Baker would hold a 50 per cent interest in Break Fast by holding two shares; Mr Voukidis would hold a 25 per cent interest in Break Fast by holding one share; and Mr Stanley would hold a 25 per cent interest in Break Fast by holding one share;

(e) each member would, in proportion to their respective shareholding, contribute capital to Break Fast, including for the purposes of acquiring, renovating and maintaining the property, with the initial capital contribution payable by each shareholder being determined on the basis of the price of acquisition of the property after its purchase;

(f) each member would be entitled to any distributions paid by the company from profits earned, in proportion to their respective shareholdings; and

(g) each of Messrs Baker, Voukidis and Stanley would be appointed a director of Break Fast and as a director would be entitled to participate in the management of Break Fast to the benefit of all members.

72 The defendants contended that there was no joint venture which included Ambridge, and as Ambridge had no shareholding in Break Fast, it had no interest in the Wellington Parade Property.

73 For the reasons elaborated on below, I have drawn the following broad conclusions. After the property was agreed to be purchased by Break Fast on 24 November 1999, Mr Stanley set about resolving the nature and terms of the joint venture. A solicitor, Mr Obst, was retained to draw the joint venture agreement. In early 2000 he produced two drafts. The second of the drafts was shown to Mr Voukidis. It provided that Break Fast was to hold the property as trustee for the joint venturers. Mr Voukidis told Mr Jacobs he largely agreed to the joint venture's operative provisions. In July 2000, Mr Voukidis and Mr Jacobs agreed on the equity participations of the interested parties in the joint venture (Ambridge and Messrs Voukidis, Baker and McGrouther). By that stage a binding agreement was reached. By February 2001, the individual parties to the joint venture (Messrs Voukidis, Baker and McGrouther) had each nominated a company to hold their interest in the joint venture.

The events leading up to and relevant to the binding joint venture agreement

74 The appellants contend that the learned trial judge drew inferences that were not correctly drawn on the facts. This Court does not have the learned trial judge's advantage of hearing the oral evidence and viewing the witnesses. The learned judge found that the main witnesses, Messrs Stanley, Voukidis and Baker were not reliable witnesses. The appellants agree that essentially the matter may be resolved on the documentary evidence tendered. Accordingly, I have considered the relevant contemporaneous documents and the learned trial judge's relevant findings on those documents.

75 Settlement of the purchase of the Wellington Parade Property took place on 29 February 2000. At this stage, the learned trial judge found that a concluded binding agreement between the joint venturers had not been reached. He ultimately found, that a concluded binding joint venture agreement was reached by 14 July 2000.

76 Mr Taylor and Ambridge, who had been in property ventures previously, had agreed that they would share equally Ambridge's interest in the joint venture should the property be purchased at auction. Before the auction, on 23 November 1999, Mr Stanley, as chief executive officer of Ambridge, faxed Mr Taylor a letter advising Mr Taylor that:

• 500,000 fee for structuring and project managing the transaction

• 500,000 is then invested as a percentage of equity in the transaction

77 Mr Taylor, who the learned trial judge found to be a truthful witness, gave evidence that prior to the auction Mr Stanley told him that the structure of ownership of the property was to be a joint venture.[6] As indicated above, this evidence suggests that proportions were not agreed by the auction although it was agreed that Ambridge would be credited with $500,000 in the joint venture.

78 The learned trial judge found that this letter evidences a concluded agreement as at 23 November 1999 that Ambridge would receive a $500,000 fee that would be treated as a capital contribution to the project.[7] The learned trial judge found that the payment of the $500,000 fee was agreed between Messrs Baker, Voukidis and Stanley by 23 November 1999 and that this fee was to be paid to Ambridge as a management fee for the work it had done, and was about to undertake, in managing the project. He also found that it was agreed that if they were successful in purchasing the property, Mr Stanley's interest would be taken up by Ambridge in return for the negotiated fee.[8]

79 On 23 November 1999, Meerkin & Appel, solicitors, provided to Ambridge, attention Mr Stanley, a report on the auction contract for the property.[9] That day, a copy of the report was faxed by Mr Stanley as chief executive officer of Ambridge to Mr Voukidis.[10]

80 On Wednesday 24 November 1999, the auction was held. Prior to the auction, the learned trial judge was satisfied that Mr Voukidis knew of the involvement of Ambridge in the project.[11] He found that Mr Voukidis took no objection to this involvement, and in fact made use of the material which was produced by Ambridge as preliminary work for the enterprise.

81 Mr Ganis attended the auction, at the request of Mr Voukidis. Mr Ganis was a Melbourne based director of Powerlan Technologies at the time.

82 The learned trial judge found that prior to the day of the auction Mr Ganis was given instructions to attend the auction by Mr Voukidis and if successful in the bidding, he was to sign a cheque for the deposit. Mr Ganis was instructed to report back to Messrs Voukidis and Baker at the conclusion of the auction. The learned trial judge found that Mr Baker was informed of these arrangements by Mr Voukidis. The learned trial judge found that Mr Voukidis gave his instructions to Mr Ganis on behalf of himself and Mr Baker.

83 Messrs Baker and Voukidis arranged for monies to be deposited into an account in the name of Networking Solutions Pty Ltd, a subsidiary of Powerlan Technologies for payment of the deposit if the purchase was to proceed, as they hoped it would. Mr Ganis was also offered a percentage of the investment in his own right by Mr Voukidis, which was up to 10 per cent if he could come up with the money.[12]

84 On 24 November 1999, Mr Ganis met up with Messrs Stanley and Taylor, who also attended at the auction. Upon the bidding being successful for his parties, Mr Ganis paid the deposit of $600,000, being 10 per cent of the purchase price from the account of Networking Solutions Pty Ltd and then reported back to Messrs Voukidis and Baker.

85 The learned trial judge was satisfied that Mr Ganis attended the auction in his capacity as an agent for Messrs Baker and Voukidis and acted on the instructions of Mr Voukidis. The learned trial judge was satisfied that Mr Ganis had been instructed by Mr Voukidis that the joint venture partners for the Wellington Street Joint Venture were to be Mr Voukidis, Mr Baker, Ambridge on behalf of Mr Stanley, and possibly Mr Ganis if he was able to take up the offer which had been extended to him.

86 Further, the learned trial judge was satisfied that Mr Ganis was told by Mr Voukidis that his share of up to 10 per cent was to be allocated from the shares of Messrs Baker and Voukidis, if he could come up with the required capital. Mr Ganis subsequently had difficulty raising the $300,000 required for the investment offered to him and did not proceed with the investment.[13]

87 The learned trial judge accepted the evidence given by Mr Ganis that Ambridge was to be a party to the joint venture and that this had been agreed prior to the auction conducted on 24 November 1999.[14]

88 On Thursday 25 November 1999, Mr Jacobs emailed Mr Stanley, who was to arrange the funding for Wellington Parade, and asked 'what JV documentation is required to record our interest in the property? Is this interest to be shared with Greg Taylor?'[15]

89 On 9 December 1999, Mr Stanley faxed Mr Voukidis, under Ambridge's name, attaching an application to Suncorp Metway by Ambridge for finance for the purchase of the property. The executive summary identified Break Fast as the purchaser and specifies the purchaser's contribution as $2 million.[16]

90 On 3 February 2000, Howard Obst of Tress Cocks & Maddox sent to Mr Jacobs of Ambridge a copy of a draft joint venture agreement for his consideration for 'Ambridge Investments Pty Ltd & Headland Properties Pty Ltd, Break Fast - Joint Venture.' Mr Jacobs says that this was the draft for the Break Fast joint venture involving Mr Voukidis and Mr Baker relating to the purchase of the property.[17]

91 The proposed parties to the agreement are named as X Pty Ltd (meant to represent the interest of Messrs Voukidis and Baker); Stanley/Taylor Pty Ltd and Break Fast as the Venture Manager. The draft provides that the 'Venture Manager [Break Fast] shall manage the Joint Venture and shall hold the Property on behalf of the Joint Venture as nominee.'[18] The draft provides that Stanley/Taylor are to contribute $500,000 by waiver of its entitlement to the 'Acquisition Fee.' No sum is specified for 'X'. The share of Stanley/Taylor is not specified.[19]

92 Later on 3 February 2000, Mr Obst sent to Mr Taylor of Headland Properties and Mr Jacobs of Ambridge a 'draft shell joint venture agreement' and asked for their comments.[20] This joint venture agreement is the one between Headland Properties and Ambridge and related to Headland Properties' and Ambridge's interest in the joint venture in the Wellington Parade property.

93 Ambridge contends that the joint venture between Ambridge and Headland Properties would only work if Ambridge was the beneficial holder of an interest in the property.[21] The draft has inserted by hand a clause beginning 'if the joint venture includes the ownership of real estate.'[22] I do not think too much can be drawn from this draft.

94 On 4 February 2000, Mr Obst sent to Mr Stanley another draft of the Break Fast proposed joint venture agreement between 'X Pty Ltd', Ambridge and Break Fast (the second draft).[23] The second draft provides, as previously, that Break Fast as the Venture Manager would hold the property as nominee for the joint venturers.[24] This second draft identifies 'X' as contributing $1,500,000 and Ambridge's share as 25 per cent.[25] The learned trial judge found that the second draft was sent to Mr Voukidis.[26]

95 Finance was sought for the purchase of the property from the NAB. On 10 February 2000, Darryl Nelson of the NAB asked Mr Jacobs for information about the proposed borrower.[27] The appellants rely on this facsimile to support their contention that Break Fast owned the property beneficially.[28] In particular, the appellants rely on the reference in the letter to Mr Stanley's equity contribution to Break Fast. The appellants contend that this establishes the NAB were proceeding on the basis that Break Fast was the beneficial owner of the property as equity was being injected by shareholders to finance the purchase.[29]

96 In response, on 15 February 2000, Mr Jacobs faxed Mr Nelson to inform him that Mr Voukidis would attend to the provision of the formation balance sheet [of Break Fast] and provide details of the joint venture structure.[30] Ambridge contends that the reference to joint venture structure does not support the suggestion that Mr Jacobs was representing that Break Fast owned the property beneficially.[31] Ambridge also referred to a fax from Mr Jacobs to Mr Nelson on 18 August 2000, where Mr Jacobs describes Break Fast as the manager of the Wellington Parade Joint Venture.[32]

97 On 21 February 2000, Mr Stanley faxed Mr Voukidis and asked Mr Voukidis if he had any comments on the proposed 'JV Agreement'.[33] The learned trial judge found that this was a reference to the second draft that had been sent to Mr Voukidis.[34]

98 On 29 February 2000, the purchase of the Wellington Parade property settled.

99 On 16 March 2000, Mr Jacobs faxed Mr Taylor about the draft joint venture agreement for the property dated 4 February 2000 prepared by Mr Obst, with a copy to Mr Obst. Mr Jacobs said that 'we have discussed the contents of the draft with ...Voukidis.' Mr Jacobs said that 'Chris [Voukidis] is largely in agreement with the operative provisions of the deed but requires Recital A to be fleshed out to more fully document the role and responsibilities of Ambridge in the selection, development and management of the property. I will consult with [Obst] early next week in this regard and produce a final draft for Chris' consideration by the end of the week.'[35]

100 Ambridge says it is important to note that Ambridge is referred to, not Mr Stanley, reflecting Ambridge's participation in the transaction. Secondly, it records that Mr Voukidis told Mr Jacobs that he is largely in agreement with the operative provisions of the deed.

101 The learned trial judge addressed both the evidence of Mr Jacobs and Mr Voukidis on the discussion referred to by Mr Jacobs in the fax. The learned trial judge rejected the evidence of Mr Voukidis to the effect that he told Mr Jacobs that he and Mr Baker did not agree to restructuring the joint venture to a trust from a shareholding structure.[36] He accepted Mr Jacobs evidence that:

[Jacobs] said that on or shortly prior to 16 March 2000 he had a telephone conversation with Voukidis. He said they discussed the contents of the draft joint venture agreement. He said that Voukidis told him that he was largely in agreement with the operative provisions of the draft agreement, but that recital 'A' needed to be fleshed out more fully to document the role of Ambridge in the selection, development and management of the Wellington Parade Property.[37]

102 The learned trial judge preferred the version of the conversation given by Mr Jacobs as to his conversation with Mr Voukidis about the second draft joint venture agreement, because it was consistent the facsimile sent to Mr Taylor on 16 March 2000.[38] The learned trial judge concluded that as a matter of likelihood, he accepted the fax of 16 March 2000 sent by Mr Jacobs to Mr Taylor as a reasonably contemporaneous and accurate record of the conversation that in fact took place between Mr Jacobs and Mr Voukidis after 21 February 2000.[39]

103 The learned trial judge found that by the telephone conversation between Mr Jacobs and Mr Voukidis on or about 16 March 2000, 'subject to one matter, being a more specific definition of the role of Ambridge in the preamble, the structure of the joint venture reflected in the operating sections of the second draft was agreed to by Mr Voukidis on behalf of himself and Mr Baker, and by Mr Jacobs on behalf of Ambridge.'[40]

104 On 21 March 2000, Mr Jacobs met with Mr Obst in the offices of Ambridge to discuss with Mr Obst the proposed amendments to the second draft joint venture agreement. Mr Jacobs took notes of his discussion with Mr Obst during that meeting. The note refers to the matters that Mr Voukidis had raised with Mr Jacobs in his conversation on or about 16 March 2000.[41] Mr Obst proceeded to prepare a third draft joint venture agreement.

105 On the next day, 22 March 2000, Mr Obst emailed Mr Jacobs attaching a marked up copy of the joint venture agreement 'incorporating amendments following our conference yesterday'[42] (the third draft). Mr Jacobs said in his witness statement that he faxed a copy of the revised joint venture agreement to Mr Voukidis.[43] The learned trial judge made no reference to this evidence. Mr Jacobs did not produce a copy of the fax.

106 The marked up joint venture agreement made amendments to the background recitals as to the role of Ambridge, consistently with the request of Mr Voukidis, as related in the version of events given by Mr Jacobs.[44] The third draft made only one amendment to the operative part that had appeared in the second draft, to amend the description of the fee Ambridge was to waive as its capital contribution from 'Acquisition Fee' to 'Acquisition and Management Fee.'[45]

107 The learned trial judge found that after his meeting with Mr Obst on 21 March 2000, Mr Jacobs telephoned Mr Voukidis and asked him who Ambridge should bill for the $500,000 fee for finding the property. Mr Voukidis advised Mr Jacobs that the bill should be addressed to Break Fast as manager of the Break Fast joint venture. Mr Jacobs also asked who would be the entities to the joint venture agreement that would represent Messrs Baker and Voukidis. Mr Voukidis responded by saying that he would advise Mr Jacobs of this in due course. Mr Jacobs made a note of the conversation at the time that included the notation: [46]

2 Parties to JV Agreement - Voukidis & Baker entities

3 Capital - Contributions

- Gannis Involvement

4 BFI as 'manager'.[47]

108 The learned trial judge found that Mr Voukidis never told Mr Jacobs that he objected to any operative term of the second draft joint venture agreement; Mr Voukidis' only suggestion was to include some further information in the non-operative part of the agreement, described as 'BACKGOUND'.

109 The learned trial judge found that Mr Voukidis did not take issue with the central planks of the structure for the joint venture which provided for Break Fast to act as the 'Venture Manager' which could hold the assets of the defined 'Joint Venture' in its name as 'nominee for the joint venturers as beneficial owners to the extent of their respective participating interests.' The learned trial judge found that Mr Voukidis did not take issue with the inclusion of Ambridge as one of the 'Joint Venturers' holding a 'Participating Interest' of 25 per cent.[48]

110 The third draft provided under part A of 'Background' as follows:

At the request of Voukidis Baker, Ambridge:

(a) undertook a search of the Melbourne property market for a suitable investment for Voukidis Baker;

(b) identified a potentially suitable investment the land and buildings at 176 Wellington Parade, East Melbourne described in certificate of title volume 9262 folio 922 (the property);

(c) caused to be produced for the benefit of Voukidis Baker a building assessment and development analysis in respect of the Property including;

(i) a project construction and strategy and cost estimate;

(ii) an existing technical appraisal;

(iii) a financial analysis;

(iv) a proposal for potential extension of the Property.

111 The learned trial judge found that this work had been undertaken by Ambridge with the knowledge of Messrs Baker and Voukidis.[49]

112 The third draft provided under Part B of 'Background' as follows:

Further, Ambridge has agreed at the request of Voukidis Baker to manage the upgrading and adding of value to the Property for so long as Voukidis Baker and Ambridge continue to have an interest in the Property. Such management to include but not limited to:

(a) management of the internal base building refurbishment and external construction including direction to the project supervisor whether through project meetings or otherwise;

(b) management of all tenancy issues including instructions to and reviewing reports from the real estate managers appointed for the time being; and

(c) management of all legal issues including instructions to and reviewing reports from the solicitors appointed for the time being.

113 The learned trial judge found that in general terms Part B provided for the future obligations to be assumed by Ambridge. The learned trial judge found that this work was also undertaken by Ambridge with the knowledge of Baker and Voukidis. The learned trial judge found that Ambridge engaged in management of the refurbishment, management of tenancy issues that arose in relation to the building, and management of legal issues that arose from time to time.[50]

By the conduct of Voukidis and Baker in permitting Ambridge to undertake this work, terms of the agreement to the effect contained in the 'BACKGROUND' part 'B' are to be implied, even if the final text of the redraft comprised in the third draft joint venture agreement was never sighted by them until the provision of a later partly signed draft on 8 January 2002 [sic 8 October 2002[51]].[52]

115 On 5 April 2000, Mr Jacobs emailed Mr Voukidis enclosing an operating cash flow. He advised Mr Voukidis that 'the partners' need to contribute $100,000 to cover expenses. Mr Jacobs asked Mr Voukidis to advise Mr Jacobs of the 'Joint Venture parties to enable completion of the JV Agreement.'[53]

116 Ambridge contends that this email discloses that it was Mr Jacobs view of the discussions that he had had with Mr Voukidis that there was nothing further to resolve commercially with Mr Voukidis about the terms of the joint venture agreement. Ambridge says that Mr Jacobs indicated that all Mr Jacobs needed was information about the identity of the corporate participants who would hold the interest for each of Messrs Baker and Voukidis.[54]

117 Headland Properties and Ambridge executed a joint venture agreement. The joint venture is described as 176 Wellington Parade East Melbourne. The object of the joint venture is to acquire 25 per cent of the property. The document is not dated. The print date on the document is 6 April 2000.[55]

118 On the evening of 11 April 2000, Mr Jacobs and Mr Voukidis had a telephone conversation. Mr Voukidis asked Mr Jacobs to send him the file that Mr Jacobs had prepared of the Break Fast accounts.[56] The computerised accounting file was initially set up by Mr Jacobs.[57]

119 On 12 April 2000, Mr Jacobs faxed Mr Voukidis.[58] He confirmed that he had emailed Mr Voukidis the file as Mr Voukidis had requested. The accounts that Mr Jacobs sent to Mr Voukidis included the balance sheet for Break Fast that described it 'as Manager for the Wellington Parade Joint Venture.' The balance sheet does not refer to shareholders funds but equity including Ambridge's as $500,000.[59]

120 The appellants point out the Mr Jacobs said in his evidence that he did not include the description 'as manager' in the original establishment of the file for Break Fast. Mr Jacobs says the accounts he sent to Mr Voukidis would not have had in the heading 'as manager for the Wellington Parade Joint Venture.'[60] The appellants say that is unexplained mystery in the case.

121 The appellants say that in contrast to Mr Jacobs omission of the words 'as manager' on the Break Fast accounts, if that be the case, Mr Jacobs included the description 'as manager' in other joint venture accounts that involved Mr Stanley, Mr Voukidis and Mr Baker; Clarence Street and St Leonard's.

122 In the fax, Mr Jacobs asked Mr Voukidis to '[p]lease contact me to discuss the treatment of the $500k fee in the accounts of the Joint Venture (as per the data file) and the contributions required as between the joint venture parties to equalise the respective equity account balances.'[61]

123 On 12 April 2000, Mr Jacobs faxed Mr Taylor about the Wellington Parade joint venture. Mr Jacobs enclosed draft financial statements as at 29 February 2000. Mr Jacobs said that he was waiting for confirmation from Mr Voukidis as to his treatment of the $500,000 fee in the books of the joint venture. Mr Jacobs said that he had deducted the fee from the capital account of Mr Baker and credited Ambridge in order to recognise the respective equity interests. Mr Jacobs said that he was awaiting details of the 'JV partners' from Mr Voukidis plus the final details for completing the JV Agreement. Mr Taylor was sent the same accounts that Mr Voukidis had been sent after Mr Voukidis telephone conversation with Mr Jacobs on the evening of 11 April 2000.

124 Ambridge says that the treatment of Ambridge in those accounts as 'owner's equity' is inconsistent with Break Fast being the beneficial owner of the property. Ambridge says that under the corporate model [that is Break Fast as beneficial owner] one would expect to see Ambridge as a creditor under liabilities, not part of the owners at equity.[62]

125 On 12 April 2000, Mr Jacobs faxed Ms Checcucci of Headland Properties and advised her that Mr Voukidis agreed that Ambridge should pay a certain invoice due by Break Fast to AXIA architects and that those payments would represent the sum of $25,000 otherwise to be contributed to the bank account of Break Fast [as part of the capitalisation adjustments between the joint venturers].[63]

126 On 13 July 2000, the balance sheet and profit and loss accounts for Break Fast dated May 2000 were printed out [from the computerised accounts]. The balance sheet refers to the equity holders as partners not shareholders. Ambridge is recorded as a partner, rather than Mr Stanley.[64] On that day, pursuant to the arrangements between them, Mr Jacobs sent Mr Voukidis these accounts.[65] Mr Jacobs informed Mr Voukidis that he would like to resolve certain outstanding matters including the 'Joint Venture details - parties, equity participation etc'.[66] The fax makes it clear that Mr Jacobs is proceeding on the basis that Break Fast holds the property as trustee and did not hold the property beneficially.

127 The next day, 14 July 2000, Mr Jacobs and Mr Voukidis had a conversation. Mr Jacobs made a note of the conversation. His note records the 'J V Parties' as 'Todd McGrouther 10% $300k, Ambridge 25% 500k, Chris 25%, Theo Baker 40%.' The note records the increased capital of $300,000.[67] During the conversation, Mr Voukidis makes similar notes, on the fax sent to him by Mr Jacobs on the day before (13 July), as to the holdings of the various parties.[68] Ambridge contends that the notations by Mr Voukidis that include Ambridge, which is not a shareholder, are inconsistent with the beneficial ownership case.[69]

128 The learned trial judge treated Mr Voukidis' conduct in relation to the 31 May accounts and his notes on the fax sent to Mr Voukidis of 13 July, as an admission against the beneficial ownership case. The learned trial judge said:

There is no doubt that Voukidis received the fax which included the 30 June 2000 [31 May 2000] balance sheet for Break Fast.[70] On or about 14 July 2000, a telephone discussion took place between Jacobs and Voukidis about the contents of the fax. Beside the reference in Jacobs' faxed letter to a request for information as to 'Joint Venture details - parties, equity participation etc' Voukidis noted in his handwriting, referring to the joint venture partners: 'Tod 10, Ambridge 25%, CV 25% and TB 40%' This accords with Jacobs' contemporaneous note of the same conversation which recorded: 'V Parties: Tod McGrouther 10% 300 K; Ambridge 25% 500K; Chris V 25%; Theo Baker 40%'.

Voukidis attempted to explain away this note by saying that they were notes he took which recorded what Jacobs was asking for in the event that 'we went down the path of a joint venture' however at that time, he continued 'we had pretty much knocked that on the head'. I do not accept this explanation of Voukidis. For some time Jacobs had been requesting Voukidis to provide him with the corporate nominees proposed by Baker and Voukidis to represent their interests in the Wellington Parade Joint Venture so that the joint venture agreement could be completed. For example, on 5 April 2000, Jacobs wrote to Voukidis by email asking him to 'advise of the joint venture parties to enable completion of the JV agreement'. This was repeated by Jacobs in a facsimile to Voukidis dated 13 July 2000. It was in response to this request from Jacobs that Voukidis supplied the information to Jacobs that McGrouther would be the fourth joint venture partner with a 10% interest; McGrouther's 10% interest would come from the interests in the joint venture held by Voukidis and Baker; resulting in the interests of the four parties to the joint venture being: McGrouther 10%; Ambridge 25%; Voukidis 25%; and Baker 14%.

When cross-examined on the fax of 13 July 2000 and its contents Voukidis admitted that he did not write back to Jacobs pointing to any error in the balance sheet. He said that there was 'no need because I spoke to him about it'. I do not accept that Voukidis had any such discussion with Jacobs.

I am satisfied that Voukidis did not challenge Jacobs on the basis on which the May 2000 balance sheet had been prepared. Indeed he accepted that treatment of the Break Fast accounts. This provided a signal to Jacobs to continue to have the Break Fast accounts prepared on the same basis, which he did. Further, in his conversation with Jacobs of 14 July 2000, Voukidis accepted without question that Ambridge held a 25% interest in the Wellington Parade Joint Venture.

This conduct amounts to an admission made by Voukidis, against the case which he now seeks to present, that Ambridge was in fact a joint venture partner with a 25% interest in the venture. Voukidis not only had the opportunity to correct the Break Fast accounts had he chosen to do so, given his professional qualifications as an accountant he had the knowledge to do so, and given his statutory obligations as a director of Break Fast he had the duty to do so, if in fact the accounts were incorrect.

Further, I am satisfied that in confirming the structure of the joint venture on 14 July 2000, Jacobs was representing the position of Ambridge and Voukidis was representing the position of himself, Baker and McGrouther. As such, the statement made by Voukidis to Jacobs amounted to an admission on the part of himself, Baker and McGrouther, that Ambridge held a 25% interest in the joint venture.[71]

129 The learned trial judge treated the telephone conversation on 14 July 2000 between Mr Jacobs and Mr Voukidis as completing further terms of the joint venture agreement. The parties and the percentage interests that each party was to hold was defined.

130 Critically, the learned trial judge found that at this point a binding joint venture agreement was concluded.[72]

131 On 9 August 2000, Mr Jacobs sent to Mr Taylor the draft financials for Wellington Parade as at 30 June 2000. Consistently with the accounts as at 31 May 2000, the equity accounts refer to partners' equity rather than share holders' funds.[73] The balance sheet also included a reference to Mr McGrouther for his $300,000 investment in the joint venture.

132 On 15 August 2000, Mr Jacobs sent to Mr Baker the draft financials for Break Fast for the year ended 30 June 2000.[74] These accounts are in the same form as sent to Mr Taylor six days earlier. The attached accounts refer to 'partners' equity' and include reference to non shareholders Ambridge and Mr McGrouther.[75]

133 Ambridge contends these accounts are inconsistent with the corporate model where the value is in the shares.[76] No objection is received from Mr Baker to the accounts even though those accounts identified Break Fast as the manager of the joint venture.

134 On 18 August 2000, Mr Jacobs sent to Mr Nelson of NAB the accounts for Break Fast 'as manager of the 176 Wellington Parade East Melbourne joint venture for the year ended June 30 2000.'[77] These accounts are the same as those emailed to Mr Taylor and Mr Baker.

135 Ambridge contends that to describe Break Fast in its capacity as manager would not be necessary if it were the beneficial owner of the property.[78] On the other hand, the appellants contend that the description 'manager of' the joint venture is consistent with either beneficial ownership or trustee ownership.[79]

136 On 23 August 2000, Mr Jacobs emailed Mr Taylor referring to the 'recent joint venturers' meeting wherein ...Voukidis requested ...'. I infer this meeting was held shortly after Mr Baker received the year end accounts of Break Fast.

137 On 12 September 2000, Mr Jacobs sent to Mr Nelson of NAB the financial statements as at 30 June 2000 for 'the above named joint venture', referring to 'Break Fast Investments Pty Ltd - 176 Wellington Parade.'[80] The attached balance sheet does not refer to shareholders' funds but to 'partners' equity.'[81]

138 On 5 December 2000, Mr Stanley met with Rohan Davis of Ashe Morgan Winthrop to procure a loan of 70 per cent of the Wellington Parade property's value. Mr Davis sought financial information from Mr Stanley.[82] In January 2001, Break Fast sought to refinance its mortgage loan. Papers supporting the application were tendered.[83] The mortgage proposal identifies Messrs Baker, Voukidis, Stanley and McGrouther as the shareholders. The proposal says the 'applicants acquired the subject property.' The papers included the usual accounts produced for Break Fast showing under 'Equity' and 'Partners Equity.'

139 On 18 January 2001, Mr Jacobs sent to Mr Davis copies of management accounts for Break Fast for the periods 29 February 2000, 30 June 2000 and the six months ended 31 December 2000.[84] The balance sheet for December 2000 is in the same format as previously produced by Mr Jacobs and sent to Mr Taylor and Mr Baker that identifies Break Fast as manager and describes the investors as partners.[85]

140 On 23 January 2001, Mr Davis wrote to the directors of Break Fast informing them that Colonial First State Investment Managers (Australia) Ltd had agreed to lend the lesser of $9,345,000 or 70 per cent of valuation of the property.[86]

141 The appellants rely on this request to support their contention that Break Fast was represented as the beneficial owner of the property. Ambridge responds by referring to Mr Davis' evidence that he understood that Break Fast held the property as manager of a joint venture.[87]

142 On 31 January 2001, Mr Baker signed a directors' declaration to Career Path financial accounts for year ended 30 June 2000.[88] Although dated 31 January 2000, I infer that it was signed in January 2001 as it dealt with accounts as at 30 June 2000. The accounts treat the loss from the Wellington Parade property joint venture as a loss to Career Path. It is accepted that the relevant tax return for year ended 30 June 2000 signed by Mr Baker also took the joint venture loss as a deduction for Career Path. Such treatment accepts that Break Fast was not the beneficial owner of the property.

143 On 8 February 2001, Mr Voukidis emailed Mr Baker and Mr McGrouther informing them that information and guarantees were required for the loan. Mr Voukidis asked Mr Baker and Mr McGrouther to provide 'firm details of which entity or individual you would like to hold your interest in the Wellington Pde joint venture.'[89] On 12 February 2001, Mr McGrouther replied that his interest in the joint venture was held by IMF.[90]

144 The learned trial judge found that by 12 February 2001, Career Path was nominated by Mr Baker to hold his 40 per cent interest. C&O Voukidis was nominated by Mr Voukidis to hold his 25 per cent interest. As noted, Mr McGrouther had nominated IMF to hold his 10 per cent interest.[91]

145 The learned trial judge found that these nominations did not give rise to any new or substitute agreement or any variation of the binding joint venture agreement. He found that the nomination of these corporate representatives was undertaken pursuant to a contractual mechanism which existed by implication under the binding joint venture agreement, (as he had found the existing relationship to be).

146 At this point, the learned trial judge had concluded a binding joint venture agreement with the substituted parties had been agreed and settled. Hereafter, the learned trial judge found that the evidence was relevant to whether or not the parties admitted to the existence of the agreement.

147 The tendered documents included a notice of beneficial ownership given by Mr Baker that IMF had a 20 per cent interest in his two shares in Break Fast.[92] Ambridge contends that notice, and related documents, were back-dated. Ambridge says this is established by the fact that Mr McGrouther did not nominate IMF as the company to hold his joint venture interest until 8 February 2001.[93]

148 On 20 March 2001, Mr Fink of Ashe Morgan Winthrop asked Mr Jacobs for information on 176 Wellington Parade including the certification of shareholding of Break Fast.[94] On 9 April 2001, the refinancing settled. Loan funds of $9,345,000 were obtained.[95]

149 The appellants rely on the undated refinancing application made by Mr Stanley to establish that he held out to Ashe Morgan Winthrop, and admitted, that Break Fast was the beneficial owner of the property.[96] Ambridge rejects the appellants' submission. In response Ambridge says that the application states that it is made by 'applicants' rather than an applicant. Ambridge contends that the reference to applicants is inconsistent with Break Fast acquiring beneficial ownership.[97] Ambridge also relies on the balance sheet of Break Fast that was provided to Ashe Morgan Winthrop that refers to partnership equity rather than shareholders funds. Ambridge concedes the document is equivocal. Ambridge also relies on the evidence of Mr Davis of Ashe Morgan & Winthrop that he understood that Break Fast held the property as manager of a joint venture.

150 Mason Carter, accountants, were initially engaged by Break Fast to prepare accounts and tax returns for the year ended 30 June 2000, the first year of operation of the joint venture. On 10 July 2001, Rachel Lamport, who worked for Mason Carter accountants, informed Mr Jacobs and Mr Voukidis that Mason Carter had still not prepared Break Fast's accounts for the year ended 30 June 2000. [98] Ultimately Mason Carter did not prepare the tax return for Break Fast.[99]

151 Mr Voukidis responded to Mason Carter asking them to '[p]lease confirm that the accounts have been prepared on the basis that Break Fast... acts as manager of a joint venture and does not prepare accounts as an operating company.' Mr Voukidis sent a copy of his email to Messrs Jacobs and Stanley. By this communication Mr Voukidis unequivocally admitted that Break Fast held the property as trustee and not beneficially.

152 Mr Jacobs responded to Mr Voukidis' email about 30 minutes later informing him that 'the accounts have/are being prepared on the basis of an unincorporated JV with BFI as manager.'[100] Mr Jacobs sent a copy of this email to Miss Lamport and Mr Stanley.

153 In evidence, Mr Voukidis sought to explain away this damaging email in which he conceded, in effect, that Break Fast held the property as trustee. The learned trial judge dealt with Mr Voukidis' attempt to explain away his email. The learned trial judge said:

1. Voukidis sought to explain away his email, which was the second in the chain to which I have referred, and he did so in a remarkable fashion. He denied that he wanted the accounts prepared on a basis that Break Fast acted as manager of a joint venture. He said:

I wanted confirmation that Graeme Jacobs was providing accounts in that form, which would have been against my instructions to Graeme Jacobs.

1. I do not accept this explanation provided by Voukidis. Jacobs was copied into the email. Jacobs responded to Voukidis by saying that the accounts 'have/are being prepared' on the basis of an unincorporated joint venture with Break Fast as the manager. Jacobs also copied Rachel Lamport into his email. In this way, Voukidis was informed directly as to the basis on which the accounts of Break Fast had been and were then being prepared. Voukidis was also informed that this email from Jacobs had been copied to Rachel Lamport, and was likely to have been construed by her as an instruction as to the basis on which the Break Fast accounts were to be prepared by her firm.
2. However, Voukidis did not provide any counter instruction to Rachel Lamport that the accounts of Break Fast had been prepared and were to be prepared on the basis which is now maintained by the Defendants, namely that Break Fast was the operating company.
3. As events unfolded, as will be seen, neither Rachel Lamport nor any member of the firm Mason Carter prepared the taxation return for Break Fast for the year ended 30 June 2000.
4. Nevertheless, and in spite of the evidence of the email exchange which took place on 10 July 2001 between Rachel Lamport, Voukidis, Jacobs and Stanley being significant, neither Rachel Lamport nor anybody from her firm was called to give evidence on this matter in support of the explanation proffered by Voukidis. There was no explanation for this failure. I draw the inference that if she had been called by the Defendants, she would not have offered any evidence which could have assisted the case which the Defendants now advance.
5. I find that Voukidis left the instruction to Rachel Lamport as it had been provided to her by Jacobs on behalf of Ambridge in the third of the emails in the chain, that is that the Break Fast accounts had been prepared and were to be prepared on the basis of an unincorporated joint venture with Break Fast as the manager.
6. Voukidis was a practising accountant and a director of Break Fast. I am satisfied that he never took issue with Jacobs, Stanley or Ambridge as to the manner in which the Break Fast accounts and taxation returns were prepared for the company. These accounting records consistently showed Ambridge as having a direct interest in the Wellington Parade Joint Venture and were prepared consistently with the structure of an unincorporated joint venture, with Break Fast as the registered proprietor of the land and manager of the enterprise on behalf of the joint venture.
7. I do not believe the evidence given by Voukidis which was to the effect that the Wellington Parade Property was held by Break Fast on behalf of its shareholders, and each shareholder, namely Baker, Voukidis and Stanley, held their interests in those shares on behalf of the companies nominated by them, and that Ambridge, not being a shareholder, had no interest in the joint venture.[101]

154 Ambridge contends that this exchange of emails confirms that Mr Voukidis use of the expressions 'manager of a joint venture' and 'not... as an operating company' in his email meant that he understood that Break Fast acted as trustee of the property in distinction to as a beneficial owner of the property.[102]

155 As mentioned above, Mason Carter did not prepare the taxation return for Break Fast for the year ended 30 June 2000. Rather [subsequently I infer] Mr Stanley instructed Stannards, accountants and advisors, to prepare financial statements and tax returns for the year ended 30 June 2000.[103] In their compilation report, dated 24 August 2001, accompanying the unaudited financial statements for the year ended 30 June 2000,[104] Break Fast is described as the manager. On the balance sheet, where shareholders funds would normally appear in a company's accounts, the accounts instead record 'partnership funds' that included entries for C&O Voukidis Pty Ltd, Ambridge, IMF Pty Ltd and Career Path.[105] Under the note to the accounts headed 'statement of accounting policy,' the accounts record that the accounts 'are a special report prepared by the partners of the business. The senior partner has determined that the partnership is not a reporting entity.'[106] I understand that normally company accounts would not refer to partners nor give details of partnership funds where the company is the beneficial owner of the property it holds.

156 The accounts concluded with a partners' declaration and provision for each of the partners to sign. Ambridge was referred to as 'Ambridge Investments Pty Ltd Joint Venture.'[107] The balance sheet of Break Fast had not altered from the balance sheet[108] sent to Mr Nelson on 18 August 2000 that described Break Fast as the 'manager' of the joint venture.

157 The net loss of $178,099 of the 'partnership' for the financial year ended 30 June 2000 was distributed to the partners as follows: C&O Voukidis Pty Ltd - $44,525; Ambridge Investments Joint Venture - $44,525; IMF Pty Ltd - $17,810; and Career Path (Aust) Pty Ltd $71, 239.[109]

158 The distribution of the net loss to the partners is not consistent with the company being the beneficial owner of the company's assets but rather is consistent with Break Fast acting as trustee.

159 On 4 September 2001, Ashe Morgan Winthrop wrote to the 'directors' of Break Fast about the recent mortgage application lodged with Colonial First State on 'your behalf.'[110] This document is relied on by the appellants.

160 On 13 September 2001, Mr Jacobs sent to Mr Anthony Fink of Ashe Morgan Winthrop draft management accounts for the 'above named joint venture' for the year ended 30 June 2001.[111] The balance sheet was in the usual form referring to the partners' equity.[112] The copy of the email sending the accounts was discovered by Ambridge. Ashe Morgan Winthrop produced the same email on a subpoena.[113]

161 On the other hand, Break Fast had produced on discovery a falsified version of the email and accounts that said 'attached are draft management accounts for the above named company for the year ended 30 June 2001' ('my emphasis').[114] At that stage, Break Fast was firmly under the control of Messrs Baker and Voukidis. The balance sheet had also been altered to remove the reference to partners and replaced that reference with 'shareholders' equity.'[115]

162 The learned trial judge found this version of the email and the attachment were 'artful concoctions.'[116] He concluded that the version produced by Ambridge was authentic.[117] These findings were not challenged on the appeal. The concocted email and attachment were discovered by Break Fast in the same bundle of documents as NAB bank statements, that had been forged by Mr Voukidis. Nevertheless, the learned trial judge made no finding on the author of the false email and attachment.

163 On 4 October 2001, Mr Jacobs emailed Mr McGrouther asking him to confirm that his 10 per cent interest in the '176 Wellington Parade Joint Venture' was held by him personally. Mr McGrouther replied that it was held by IMF. Mr Jacobs forwarded the emails to Mr Nello Traficante at Stannards on 8 October 2001 who were preparing the income return for Break Fast for the year ended 30 June 2000.[118] Using this information, Stannards prepared the income tax return for the 2000 tax year for Break Fast.

164 On 24 October 2001, Mr Stanley signed the income tax return for Break Fast as the trustee or public officer.[119] On 25 October 2001, Mr Jacobs returned to Stannards the electronic return signed by Mr Stanley and requested Stannards to lodge the return.[120] The return was a partnership return. Break Fast was identified as the name of the partnership. The return identified the partners and the distributed the loss among the partners as indicated above.[121]

165 On 13 November 2001, Mr Stanley wrote to Mr Voukidis advising him that Ambridge held 25 per cent of 'this property' [referring to 176 Wellington Parade, East Melbourne] on behalf of Headland Properties and Ambridge in equal shares.[122] There was no objection by Mr Voukidis to this claim of Mr Stanley. Mr Voukidis did not assert that the property was in fact owned by Break Fast or that Ambridge had no interest in the property.

166 After this date, I shall limit my reference to documents and events relied on by the appellants and Ambridge in the appeal.

167 On 24 May 2002, Herbert Geer Rundle lawyers tendered advice sought by Gerard Bongiorno, the accountant acting for Break Fast at Stannards, on a proposed syndication of the property.[123] The memorandum states that Break Fast has owned the property in its own right since 1999. The appellants rely on this document as an admission by the joint venturers that Break Fast was the beneficial owner of the property.

168 Ambridge refers to an undated statement of assets and liabilities of the Voukidis Family Trust prepared by Mr Voukidis.[124] The learned trial judge found that it was made about July 2002.[125] The learned trial judge found that the accounting records of the Voukidis Family trust recorded an interest in the Wellington Parade property, rather than recording an interest in the share capital of Break Fast. The learned trial judge found that the accounting record constituted an admission against Mr Voukidis and C&O Voukidis that the Wellington Parade property was held directly by C&O Voukidis and not by any shareholding in Break Fast.[126]

169 Ambridge refers to draft financial statements for the year ended 30 June 2002, sent by Mr Jacobs to Mr Voukidis on 23 August 2002.[127] Those statements refer to 'partners' equity' and also make provision for 'drawings' which is consistent with Break Fast being a trustee than beneficial owner of the property.[128]

170 On 8 October 2002, Mr Stanley emailed to A. Carthlew at Powerlan Technologies a joint venture agreement for the Wellington Parade property.[129] The joint venture agreement emailed to A Carthlew was the third version prepared by Mr Obst. Mr Stanley had signed it on behalf of himself and Break Fast. Mr Stanley claimed in evidence that Mr Baker asked him to provide Mr Baker with the joint venture agreement for Mr Baker's banking arrangements. Mr Baker said in evidence that he refused to sign the joint venture agreement and threw it in the bin.

171 The learned trial judge found that this joint venture document contains the terms of the joint venture agreement between the parties named therein.[130]

172 Ambridge refers to series of documents executed by Messrs Baker, Voukidis and Stanley in December 2002 that established by admission that Break Fast was acting as trustee rather than beneficial owner of the Wellington Parade property. The learned trial judge found that to meet this evidence that contradicted the case put forward by Messrs Baker and Voukidis, Messrs Baker and Voukidis relied in their evidence on fabricated emails that were known by both Messrs Baker and Voukidis to have been so fabricated when they gave their evidence.

173 As previously discussed, Mr Stanley through his company Ambridge was appointed by Messrs Baker and Voukidis to administer the Wellington Parade Joint Venture. The learned trial judge found that Break Fast was dishonestly managed by Mr Stanley. He found that Mr Stanley had misappropriated funds from Break Fast. As a result, in December 2002, Mr Voukidis collected the Break Fast records from the Melbourne office of Ambridge. Mr Stanley resigned as a director of Break Fast. Mr Taylor took a more active part in the administration of the Wellington Parade property. Mr Taylor claims he was appointed a director of Break Fast. Mr Voukidis denies that Mr Taylor was appointed a director of Break Fast. The learned trial judge found that it was not necessary to resolve that issue.[131]

174 The learned trial judge found that as a result of Mr Stanley's misappropriation, Mr Stanley owed Mr Baker over $1 million. Accordingly, by late 2002 Mr Baker felt that the only way Mr Stanley would be able to repay him would be if they could realise his share in Break Fast. A draft minute was prepared by Mr Voukidis and forwarded by email to Mr Baker and Mr Stanley on 3 December 2002.[132] The second resolution was intended to prevent Mr Stanley from misappropriating to himself any of the proceeds from the sale of the property. The minute recorded a meeting between Messrs Baker, Voukidis and Stanley of 6 December 2002. The minute read in part:

IT WAS RESOLVED THAT the company [Break Fast] in its capacity as Manager of the Break Fast Joint Venture proceed with the sale of the property at 176 Wellington Parade.

IT WAS RESOLVED THAT Mr Mark Stanley continued [sic] to give instructions to the solicitor acting on behalf of the company, Mr Rodney Saw of Meerkin & Apel, only in relation to matters that relate to the preparation of contracts of sale.

IT WAS RESOLVED THAT Mr Mark Stanley provide updates on the progress of the transaction at least every second day to all Directors simultaneously.

...[133]

175 Provision was made for each of Messrs Baker, Voukidis and Stanley to sign the resolution. They did.[134] The signed copy was emailed by Mr Voukidis to Mr Saw, solicitor, of Meerkin & Appel. A copy of the email to Mr Saw was sent to Mr Baker.[135]

176 Ambridge submits that in Mr Voukidis' evidence about the preparation of the accounts for the year ended 30 June 2002, the expression 'in its capacity as manager' was conceded by Mr Voukidis to mean that Break Fast was not acting as an operating company and as such was not the beneficial owner of the property.[136] The resolution proceeds on the basis that Break Fast is the manager of the Break Fast Joint Venture. This resolution, signed by both Messrs Baker and Voukidis, is inconsistent with the case they put in this Court that Break Fast is the beneficial owner of the property.

177 The learned trial judge found that to undo the adverse and damning evidence contained in the resolution, Messrs Baker and Voukidis relied on a forged email of 10 December 2002 purportedly from Mr Baker to Mr Stanley, copied to Mr Voukidis.[137] The forged email relevantly said:

As requested, I have forwarded the minute for Break Fast Investments. I assume that the reference to 'Joint Venture' in the first paragraph relates to your new structure for the acquisition of the Wellington Parade Property. If not, please delete the words '... in its capacity as Manager of the Break Fast Joint Venture ...' because as you are aware, we have not yet resolved to implement any such structure.

178 In a responding email, Mr Stanley purportedly replied to Mr Baker's email of 10 December 2002 on the same day with: 'I will make the amendment before forwarding.'[138]

179 The learned trial judge explored, in great depth, why he found this a forgery. His finding is not challenged so there is no need to cover those grounds here. Nevertheless, he did find:

1. Bearing in mind the principles of Briginshaw to which I have already referred, I am satisfied that the email purportedly sent by Baker to Stanley dated 10 December 2002, and Stanley's reply email of the same date, were not authentic. They were fabricated after the event to support the case now advanced by the Defendants and were known by both Baker and Voukidis to have been so fabricated when they gave their evidence.
2. I am further satisfied that each of Baker, Stanley and Voukidis signed the resolution in its original draft form, confirming that it was signed 'as a true and correct record'. Voukidis then sent the signed resolution to Saw at the office of Meerkin & Apel, the solicitor acting on behalf of Break Fast who was also instructed by the resolution to disburse the proceeds of any sale only upon the written direction of at least two of the directors of Break Fast.
3. By this document, both Baker and Voukidis admitted, against the case which they now seek to put, that Break Fast in fact acted as the manager of the Wellington Parade Joint Venture, as contended for by Ambridge.
4. Further, their reliance on Baker's email of 10 December 2002, which I have found to be a fabricated document and known by them to be such, allows me to draw the inference that when they gave their evidence, they were conscious of the weakness of their case, and to draw the further inference that their cause lacks truth and merit.[139]

180 The appellants challenged the trial judge's finding that Mr Baker knew that the email was false at the time he gave his evidence.[140] The appellants accept that Mr Baker did give evidence he sent the email They say it looked genuine to him as it corresponded with his views.

181 Ambridge relies on the fact that on 9 January 2003, Mr Traficante of Stannards sent to Mr Voukidis the financial statements and income tax return for Break Fast for the year ended 30 June 2000.[141] He confirmed the tax return had been lodged. These were prepared on the basis that Break Fast was not the beneficial owner of the property but the trustee.

182 Ambridge also rely on the draft accounts for Break Fast sent by Mr Voukidis to Mr Taylor on 1 May 2003.[142] These accounts describe Break Fast as the manager of the Wellington Parade Joint Venture. They include the joint venture capital accounts listing Ambridge, Career Path Pty Ltd, C&O Voukidis and IMF. For each of those there are drawings and entries that normally would not be found in partnership accounts and not in the accounts of Break Fast if Break Fast was the beneficial owner of the property.

183 The learned trial judge found and declared that Ambridge holds a 25 per cent interest in the Wellington Parade Joint Venture under the terms of an enforceable contract of joint venture between Ambridge, Career Path, IMF, C&O Voukidis and Break Fast in the terms of the written joint venture agreement executed by Break Fast and Ambridge and provided to Mr Baker on 8 October 2002.

184 The learned trial judge further found and declared that Ambridge holds a 25 per cent beneficial interest in the Wellington Parade property pursuant to an express trust of which Break Fast is the trustee.

185 The terms of the written joint venture agreement executed by Ambridge and Break Fast and provided to Mr Baker on 8 October 2002 provides, in effect, that Break Fast holds Wellington Parade property on trust for the Joint Venturers.

186 The learned trial judge reached his conclusion by the following steps. He found that the Joint Venture Agreement evolved over time until it was completed in July 2000. He called the first stage the 'Preliminary Joint Venture Negotiation Phase.' This stage commenced in November 1999. The learned trial judge found that Messrs Baker and Mr Voukidis and Ambridge agreed that:

[489] During this nascent period of the commercial relationship between Baker, Voukidis and Ambridge it was agreed between them that:

(a) The parties would attempt to purchase the Wellington Parade Property at auction;

(b) The company Break Fast would be incorporated with four shares, two of which would be issued to Baker, with one each to Voukidis and Stanley. The total paid up capital for the company would be $4.00. Each of Baker, Voukidis and Stanley would be directors of the company. If the parties were successful at the auction, Break Fast would be the purchasing entity, would become the registered proprietor of the property and would thereafter be the manager of the joint venture;

(c) The initial partners to the joint venture would be Baker, Voukidis and Ambridge. However, at some stage another partner would be nominated by Baker and Voukidis to join the joint venture and take up a 10% interest derived from the initial holdings of Baker and Voukidis or one of them. On this basis initially Ganis would be invited to join the joint venture;

(d) Ambridge would hold a 25% interest in return for its fee of $500,000 which it would earn for its part in finding the Wellington Parade Property and thereafter undertaking a management role in Melbourne for the Wellington Parade Project, including managing legal matters, tenancy matters and the refurbishment works for the property;

(e) Voukidis and Baker between them would initially take a 75% interest in the venture and in due course they would nominate the persons or entities who would hold their respective interests and the precise percentages of the interests the new persons or entities would take up.

187 Nevertheless, the learned trial judge found that these negotiations had not achieved a binding agreement. He said:

[495] However, the preliminary joint venture negotiations could not be legally binding and enforceable as a contract because terms which were essential for the formation of a binding joint venture agreement, namely the parties to the venture and the proportions which each of them were to hold, had not been agreed. The composition of the joint venture partners and the precise allocation of their interests, other than the membership and interest of Ambridge, was left for further development and agreement.

188 The learned trial judge found that by 16 March 2000 the joint venture entered a new phase with the detailed operative terms of the joint venture being settled. The learned trial judge called this phase the 'Informal Joint Venture Phase.'

[497] The agreement as it had been negotiated to this point was reflected in the second draft joint venture agreement which had been prepared by Break Fast's solicitor, Obst, on 4 February 2000. A copy of this document was initially provided to Jacobs of Ambridge. Jacobs in turn supplied a copy to Voukidis. Subject to one matter, being a more specific definition of the role of Ambridge in the preamble, the structure of the joint venture reflected in the operating sections of the document was agreed to by Voukidis on behalf of himself and Baker, and by Jacobs on behalf of Ambridge. This occurred in the telephone conversation between them which occurred on or about 16 March 2000 which I have earlier described.

[498] The detailed terms of the binding joint venture agreement were contained in what was described as the 'Operative Part' of the draft prepared by Obst of 4 February 2000. The reference in the draft agreement to the party described as 'X Pty Ltd', was a fictional entity which described the combined interests of Baker and Voukidis, and any party invited by them to join the joint venture, who together would hold a 'Participating Interest' in the joint venture of 75%. Ambridge was to hold the other 25%. The use of the fictional entity 'X Pty Ltd' in the draft agreement at this time was designed to facilitate negotiation of a more precise definition as to which parties were to hold the 75% interest, and in what proportions.

190 Following the discussions that occurred on 16 March 2000, the learned trial judge found that there still remained the question as to who would be the parties to the joint venture and what would be the proportions that each was to hold. The learned trial judge found that this remained the missing element for the creation of a binding agreement of joint venture and was the subject of further evolution. The learned trial judge found that until agreement on this issue had been achieved, there existed merely an agreement to agree.

191 The third stage the learned trial judge called the 'Binding Joint Venture Agreement Phase.' The learned trial judge found that it was not until mid July 2000 that the parties and the percentage interests that each was to hold was defined. The learned trial judge found that at this point a binding joint venture agreement was concluded.[143]

[505] The binding joint venture agreement was evidenced by the conversation held on 14 July 2000 between Jacobs on behalf of Ambridge, and Voukidis on behalf of Baker and McGrouther, which has been described earlier. In the course of this conversation it was confirmed that the joint venture parties were McGrouther who would hold a 10% interest, Ambridge who would hold a 25% interest, Voukidis who would hold a 25% interest and Baker who would hold a 40% interest.

Notes taken at the time of the conversation by both Jacobs and Voukidis listed these parties and the percentage interest which each was to hold. Agreement on the parties to the joint venture is also evidenced by the balance sheets drawn up for Break Fast for June 2000 and December 2000 which shows the same parties noted as the persons holding 'Partners' Equity' in the enterprise.

[506] In terms of the express trust, upon the nomination of McGrouther by Baker to take up 10% of his interest, Break Fast appointed McGrouther to hold a 10% beneficial interest in the Wellington Parade Property.

193 The fourth phase the learned trial judge called the 'Corporate Representative Joint Venture Agreement Phase.' The learned trial judge found:

[507] In what may be called the 'Nomination of Corporate Representatives Phase', Mr Baker and Mr Voukidis nominated their corporate entities, Career Path and C&O Voukidis to take up their respective shares, and Mr McGrouther nominated IMF for this purpose.

[508] Pursuant to the binding joint venture agreement which operated from mid July 2000, there existed an implied mechanism for the appointment of substitute parties by a process of nomination on the part of Baker, Voukidis and McGrouther in respect of their respective interests. The mechanism is to be implied from the conduct of the parties in undertaking this very process under the management of both Voukidis and Jacobs.

[509] Pursuant to this nomination mechanism, between December 2000 and mid February 2001 the parties to the joint venture, other than Ambridge, proceeded to nominate the corporate entities which were to hold the respective interests of Baker, Voukidis and McGrouther in the Wellington Parade Joint Venture. Careerpath was nominated by Baker to hold his 40% interest and C & O Voukidis was nominated by Voukidis to hold his 25% interest. This was done in communications with Jacobs prior to mid February 2001. Then in an exchange of emails between 8 and 12 February 2001. McGrouther nominated IMF to hold his 10% interest, and Voukidis advised Jacobs of the nomination.

[510] This did not give rise to any new or substitute agreement, or any variation of the binding joint venture agreement. The nomination of these corporate representatives was undertaken pursuant to a contractual mechanism which existed by implication under the binding joint venture agreement, as I have found it to be.

....

[515] In this case no agreement was brought about by the process of offer and acceptance. Nevertheless, by conducting the Wellington Parade Joint Venture consistently with the terms of the binding joint venture agreement which coalesced in mid July 2000, and following the nominations of Careerpath, C & O Voukidis and IMF by mid February 2001, consistently with the terms of that structure as it had been settled at that point, a contract of joint venture came into being....

[516] I find that the terms of the draft joint venture agreement provided by Stanley to Baker on 8 October 2002, which was executed by Ambridge and Break Fast, happens to record all of the terms of the binding joint venture agreement, the parties and their designated partnership interests, upon which the parties conducted their joint venture since mid July 2000, as it was developed by adding the corporate representatives for Baker, Voukidis and McGrouther in mid February 2001 pursuant to the contractual mechanism in place. The contract of joint venture continues in this form to this day.

[517] In terms of the express trust, upon the nominations of Baker and Voukidis, Break Fast appointed Careerpath, C & O Voukidis and IMF to hold the interests of Baker, Voukidis and McGrouther, alongside that of Ambridge, in the Wellington Parade Property.

194 Ambridge relies on two principles of law that were not contested by the appellants. First, that post contractual conduct is admissible to determine whether contracting parties made a contract or not as against construing a contract that is admitted.[144] Secondly, that parties may make a contract in the absence of a formal offer and acceptance, simply by a course of dealing between them.[145]

195 In this case, being an appeal from the trial division of this Court, the appeal is in the nature of a rehearing.[146] In Allesch v Maunz[147] the High Court of Australia held that on an appeal by way of rehearing the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order the subject of the appeal is the result of some legal, factual or discretionary error and the court can substitute its own decision based on the facts and the law as they then stand.

196 This Court is obliged to proceed on the basis of the record and any fresh evidence that it admits on the appeal. No further evidence was admitted on this appeal. This Court is obliged to give the judgment that in its opinion ought to have been given in the first instance, where error has been demonstrated on the part of the learned trial judge. On the other hand, the Court must observe the 'natural limitations' that exist in the case of any appellate court proceeding on the record, particularly dealing with questions of credit.[148]

197 In CSR Ltd v Della Maddalena[149] Kirby J (with whom Gleeson CJ agreed) restated the obligations on the appellate court in cases where the trial judge drew inferences from established facts. In those cases, Kirby J said that to give a judgment that in its' opinion ought to have been given in the first instance, the appeal court is required to conduct a thorough examination of the record and a real rehearing. Kirby J said that this involves weighing conflicting evidence and drawing inferences and conclusions.

198 In this case, the Court has not been asked to reverse the learned trial judge's decisions on credibility save for one exception dealing with the evidence of Mr Baker. It is asked, however, to weigh conflicting evidence and draw inferences and conclusions contrary to those drawn by the learned trial judge.

199 Applying these principles, I now turn to the grounds of appeal and the alleged errors of the learned trial judge.

200 In the appellants' written and oral submissions, the appellants divide their grounds of appeal into Parts A to N. On the hearing of the appeal several parts were not pressed by the appellants.[150]

201 The appellants make an overall contention. They say that in summary their case is that the learned trial judge wrongly drew and relied upon fundamentally a series of inferences from facts which were simply not open to be drawn and that is the error that he made.[151]

Part A: The learned trial judge erred in finding that there was an unincorporated joint venture 'close to or shortly after' 24 November 1999. (Grounds 1, 2, 3, 4, and 5)[152]

202 The appellants' contention that the learned trial judge erred in finding that an unincorporated joint venture agreement was reached after 24 November 1999 is built around three propositions.

203 Firstly, that the learned trial judge erred in not finding that by 24 November 1999, Messrs Stanley, Voukidis and Baker had agreed on an incorporated joint venture structure for their acquisition of the Wellington Parade property.

204 Secondly, that the learned trial judge erred in not finding that the objective evidence disclosed admissions by Mr Stanley that Break Fast was the beneficial owner of the property and that such admissions established or assisted in establishing the original agreement formed on or about 24 November 1999 of an incorporated joint venture structure whereby Break Fast would be the beneficial owner of the property. The appellants rely on the evidence of Mr Ganis to support this proposition.

205 Thirdly, that the learned trial judge erred in finding that the original agreement on an incorporated joint venture structure was thereafter varied by a subsequent agreement that Break Fast would hold the property as trustee. In particular, the appellants contend that the learned trial judge erred in finding that a joint venture agreement thereafter evolved into a binding joint venture agreement by July 2000.[153]

206 For the following reasons I reject each of these contentions.

Did Messrs Stanley, Voukidis and Baker reach a binding agreement on 24 November 1999 ?

207 According to the appellants the learned trial judge ought to have found that on or about 24 November 1999, Messrs Stanley, Voukidis and Baker agreed that the joint venture would be affected by a corporate structure whereby Break Fast would buy the property beneficially and the three joint venturers would take their interest in the property through their shareholding in Break Fast and their control over the venture through their directorship of Break Fast.

208 The appellants concede that before the auction there was no discussion between the parties as to the nature of the joint venture or whether Break Fast would hold the property beneficially or as trustee.[154] On the other hand, the appellants contend that Messrs Stanley, Voukidis and Baker had agreed on several matters and that by doing so they had agreed on all the necessary terms of the joint venture between them. The appellants contend that Messrs Stanley, Voukidis and Baker had agreed:

(c) that two shares would be issued to Mr Baker and one each to Messrs Stanley and Voukidis;

(d) that the shareholding of 50 per cent, 25 per cent and 25 per cent, would represent their interest in the venture;

(e) that Break Fast would purchase the property if successful at the auction.

209 The appellants contend that based on what Messrs Stanley, Voukidis and Baker had agreed and their subsequent conduct in causing Break Fast to agree to buy the property in Break Fast's name, the learned trial judge erred in not inferring that Messrs Stanley, Voukidis and Baker had reached a binding agreement on an incorporated joint venture and that as a result Break Fast would hold the property beneficially.[155]

210 The appellants and Ambridge agreed that in Break Fast agreeing to buy the property, the choice facing the parties was between Break Fast holding the property beneficially and Break Fast holding the property as trustee. Neither of these arrangements was unusual for a property syndicate. There were advantages and disadvantages in each form of holding the property. If the property was held beneficially by Break Fast, ownership may be easier to deal with by transferring shares in Break Fast. If Break Fast held the property on trust, then the profits and losses would be those of the beneficial owners. This is not intended to be an exhaustive list of the benefits and disadvantages of each form of holding the property.

211 As the appellants contend, the parties had agreed on some matters. The parties had agreed that Break Fast should be incorporated and should hold the legal title. The parties had also agreed that four shares should be issued with Mr Baker holding two shares and Messrs Stanley and Voukidis one each. The parties had agreed that each of Messrs Baker, Voukidis and Mr Stanley would be a director. The parties had agreed that the deposit moneys would be provided by a company associated with Mr Baker, Networking Solutions. Break Fast was not able to subscribe any money to the property's purchase and was in no position to do so. The evidence did not disclose that it had any money.

212 On the other hand, no loan agreement between Break Fast and Networking Solutions, which was providing the deposit, was contemplated or agreed on by the joint venturers. There was no evidence that Networking Solutions intended Break Fast to be the beneficiary of its bounty.

213 Before the auction, the capital contributions to be made by each of the parties to the venture were yet to be agreed on. The parties did not know the price they would need to pay to buy the property. Even when the parties did know the price of the property, there was no agreement as to how much capital each party would invest. It was understood that Messrs Baker and Voukidis would have the lion's share. The parties had agreed that Ambridge would be credited with $500,000 in the venture for finding the property and supervising its renovation and administration. There is doubt that the parties had finally agreed on the proportion of the property that Ambridge would be entitled to. On 23 November 1999, Mr Stanley told Mr Taylor that Ambridge's share would be 33 per cent.

214 If those be the facts, as I so find, then there is no reasonable basis for finding that the parties had agreed that Break Fast would hold the property beneficially. The parties might agree to Break Fast doing so in due course, but at that stage no such agreement had been made. In those circumstances, Break Fast would have held and continue to hold the property as trustee until the venturers had agreed on how Break Fast would hold the property.

215 It may have held the property on a resulting trust in favour of those who provided the purchase moneys. On the other hand, it may have held the property on a constructive trust. It is not necessary for me to decide the form of the trust other than Break Fast held the property on trust.

216 I reject the appellants' submission that there was a binding agreement in existence between the parties as at 24 November 1999 and that under that agreement Break Fast was the beneficial owner of the property. If the appellants wish to contend that Break Fast holds the property beneficially and not as trustee then the appellants must establish that subsequently to 24 November 2009 an agreement was reached between the venturers that Break Fast would hold the property beneficially and no longer as trustee, or that events occurred that would otherwise lead to that result.

217 During the appeal, however, the appellants adopted a limited approach. The appellants case was that as at 24 November 2009, Break Fast held the property beneficially and not as trustee. The appellants contend that no agreement was subsequently reached between the parties that altered that status of beneficial ownership to one of trustee. The appellants do not seek to argue that if, contrary to their primary position, at 24 November 2009 Break Fast did not hold the property beneficially and was in fact a trustee of the property, that subsequently to 24 November 2009, Break Fast by its directors or shareholders agreed that Break Fast would change its holding from one of trustee to holding the property beneficially, or such a change came about by some other reason.

218 The consequences for Ambridge of my finding are significant. If, as I find, that as at 24 November 2009 Break Fast did not hold the property beneficially but did hold the property as trustee, then the onus on Ambridge is to satisfy this Court that subsequently the terms of the trust were agreed to by the relevant parties. Importantly, it is not necessary for Ambridge to establish that subsequently to 24 November 1999 the venturers agreed that no longer would Break Fast hold the property beneficially and that henceforth it would hold the property as a trustee.

219 The appellants contend that the matters relied on by the learned trial judge that occurred after the auction are equivocal in that they are as consistent with Break Fast being the beneficial owner of the property as they are consistent with Break Fast holding the property as trustee. They say that the matters relied on by the learned trial judge do not establish a binding agreement that the property was to be held either beneficially or as trustee.

220 Based on my review of the contemporaneous documents referred to above, I make the following findings.

221 Soon after Break Fast agreed to buy the property, Mr Stanley and Mr Voukidis set about considering the terms of the joint venture. I have discussed the relevant evidence in detail above.

222 In early February 2000, Mr Obst the solicitor engaged by Ambridge to prepare the joint venture agreement prepared a first, then a second, draft of a joint venture agreement. On or about 4 February 2000, the second draft was sent to Mr Voukidis for his comment.

223 On 21 February 2000, Mr Stanley faxed Mr Voukidis asking him if he had any comments on the proposed joint venture agreement.

224 On or about 13 March 2000, Mr Voukidis told Mr Jacobs that he was largely in agreement with the operative provisions of the second draft but required that Recital A be fleshed out to more fully document the role and responsibilities of Ambridge in the selection, development and management of the property. Mr Voukidis did not specify any disagreement with any of the operative provisions in the second draft.

225 On about 22 March 2000, after Mr Jacobs had met with Mr Obst to discuss amendments to the recitals in the draft joint venture agreement, Mr Jacobs had a further conversation with Mr Voukidis in which Mr Jacobs asked Mr Voukidis who would be the entities to the joint venture agreement that would represent Mr Baker and Mr Voukidis. Mr Voukidis responded by saying that he would advise Jacobs of this in due course.

226 In my opinion, the learned trial judge was entitled to draw the inferences that he did from Mr Voukidis' responses to the second draft of the joint venture agreement.

227 By his response, Mr Voukidis agreed to the central element of the joint venture: that is, that Break Fast would hold the property as trustee and not beneficially. It was not possible to be generally in agreement with the operative provisions of the second draft and not agree to the essential nature of the joint venture.

228 Once Mr Voukidis is taken to have agreed to that central element he must also be taken to have agreed that there would be beneficial owners of the property. The beneficial owners were not finally identified in the second draft but what was clear was that Ambridge was to hold 25 per cent. Viewed objectively, Mr Voukidis' response to the draft joint venture must carry with it his agreement to Ambridge being a beneficiary as to 25 per cent.

229 In fact, Mr Voukidis went further than this essential point. He said that his only issue with the second draft was with the recitals as to the role and responsibilities of Ambridge in the selection, development and management of the property. In my view, in the context of the later discussions on about 22 March 2000 and 14 July 2000, the learned trial judge was correct to infer that Mr Voukidis had agreed to the operative provisions of draft two.

230 On 13 July 2000, Mr Jacobs sent to Mr Voukidis Break Fast draft accounts as at 31 May 2000 and told Mr Voukidis that

he would like to resolve the following outstanding matters with you tomorrow:-

1. Joint Venture details - parties, equity participation, etc.

2. Ambridge capital adjustment contribution.

...[156]

231 As Mr Jacobs requested, on 14 July 2000, Mr Jacobs and Mr Voukidis resolved the 'outstanding matters' in a telephone conversation which is recorded in separate notes made by Mr Voukidis and Mr Jacobs (my emphasis). They expressly agreed on the parties to the joint venture agreement and the equity participations of each party to that agreement.

232 It is implicit in the conversation between Mr Jacobs and Mr Voukidis that there was no outstanding issue over the nature of the joint venture or the operative terms of the joint venture.

233 I therefore find no error in the learned trial judge's conclusion that by 14 July 2000 the parties had agreed on a binding joint venture agreement under which Break Fast held the property as trustee and Ambridge held a 25 per cent beneficial interest in the property.

234 The finding of the binding contract on 14 July 2000 was supported by admissions by Mr Voukidis and Mr Baker after that date. These included Mr Voukidis' acceptance of the accounts prepared on the basis that Break Fast was a trustee of the property, Mr Voukidis' instructions that the accounts be drawn on that basis and the resolution that Messrs Baker and Voukidis signed in December 2002 that acknowledged that Break Fast was a trustee of the property. These have all been discussed above.

235 The appellants contend that the learned trial judge's findings on the authority of Mr Voukidis to bind Mr Baker and Mr McGrouther were in error. I reject this contention for the reasons given in Part J below.

Additional evidence relied on by the appellants

236 In coming to these findings, I have taken into account the appellants' contentions that the learned trial judge failed to give sufficient weight to the alleged admissions by Mr Stanley that Break Fast was the beneficial owner of the property, and the evidence of Mr Gannis. I turn to this evidence.

237 The appellants refer to six pieces of evidence that they contend constitute admissions by Mr Stanley that Break Fast held the property beneficially.

(a) the application by Mr Stanley to NAB for the original loan for Break Fast to purchase the property in February 2000;[157]

(b) the application by Mr Stanley to Colonial First State to refinance the loan and obtain a larger loan in about December 2001;

(c) the instructions given by Mr Bongiorno to Herbert Geer & Rundle in May 2002 for advice on the structure of Break Fast;

(d) the George Tauber Management Pty Ltd (Tauber) loan;

(e) the statutory declaration by Mr Stanley of 7 February 2005;[158]

(f) the deed of acknowledgement of Mr Stanley of 8 July 2004.[159]

239 The appellants submit that the above constitute a large amount of clear and unequivocal evidence, mostly in the form of admissions against interest by Mr Stanley, that establishes the property was owned by Break Fast beneficially.[160] The appellants contend that in the circumstances where the learned trial judge was not prepared to act on the oral evidence unless there was independent corroboration from objective facts, the case is basically a documentary one. The appellants say that in those circumstances the learned trial judge ought to have inferred from these objective facts that Break Fast held the property beneficially and not on trust.

240 The appellants refer to Mr Stanley's application for finance in early 2000. The appellants contend that Mr Jacobs represented to NAB that Break Fast was acquiring the property beneficially and that this is an admission against interest. They point to Mr Nelson's request for the balance sheet of the borrowing entity. The appellants say that Mr Nelson is 'clearly proceeding on the basis that it's a company that owns the property in its own right.'[161]

241 As discussed above, Ambridge refers to Mr Jacobs' response of 15 February 2000 where he informs Mr Nelson that Mr Voukidis will attend to the provision of the formation balance sheet and provide details of the joint venture structure.[162]

242 In my view, the relevant matters are the conduct of the parties inter se. I consider representations by Mr Stanley or Mr Voukidis to the NAB or other financiers to be of little relevance to the issue that was before the learned trial judge. Assuming that Mr Stanley did represent to the NAB that Break Fast was the beneficial owner of the property, that would not determine the agreement as between the joint venturers.

243 The appellants refer to the application for finance by Mr Stanley to Colonial First State in about December 2000.[163] They contend that Mr Stanley in those documents concedes that Break Fast is the beneficial owner of the property. They refer to the representation that Break Fast would be earning the rent on the property to pay the interest.[164]

244 The appellants argue that the reference to 'equity' and 'partners' in the accounts that accompanied the application[165] is not inconsistent with Break Fast being the beneficial owner. The appellants say that, rather, the references to 'equity' and 'partners' are a recognition that there was a joint venture between the individuals and recognises the contributions by the various individuals to the company one way or the other.[166]

245 As discussed above, Ambridge refers to the evidence of Mr Davis that he subsequently knew the nature of the joint venture. In any event, I repeat the observation about the information provided to the NAB. I find this evidence does not meet the evidence relied on that establishes that Break Fast was not the beneficial owner of the property as found by the learned trial judge.

246 The appellants rely on the letter of 24 May 2002, from Herbert Geer & Rundle to Ambridge.[167] The appellants argue that it is evident from this letter that the solicitors were instructed by Mr Stanley, or the accountant (Mr Bongiorno) on behalf of Mr Stanley, that Break Fast was the beneficial owner of the property. The advice canvasses the conversion of Break Fast to a trustee. The letter says that 'the company has owned the property in its own right since 1999. The unencumbered value is in the vicinity of $17m.' The appellants contend this evidence is as clear as it gets.[168]

247 Ambridge refers to the evidence of Mr Stanley that he did not instruct Mr Bongiorno that Break Fast was the beneficial owner of the property, and the failure of the appellants to call Mr Bongiorno to rebut the evidence of Mr Stanley. Ambridge also contends there is some ambiguity in the letter from Herbert Geer and Rundle. For my part, I do not consider that any of this evidence undermines the conclusions drawn by the learned trail judge as to the agreement reached.

248 The appellant contends that in what is called the Tauber transaction Mr Stanley represented that he held the shares in Break Fast beneficially and that Break Fast beneficially held the property.

249 In the Tauber transaction, Mr Stanley borrowed the $840,000 from George Tauber Management Pty Ltd to fund his equity contribution to another joint venture, the St Leonards' joint venture that owned a property at 28-34 Clarke Street, St Leonards, NSW.[169] The parties to the joint venture were Mr Baker, Mr Stanley, Mr Voukidis and a Mr Nick Anastopoulos. St Leonards Property Pty Ltd held the St Leonards property on behalf of the St Leonards joint venturers. Mr Stanley mortgaged the St Leonards joint venture property to fund his required capital contribution to that property without the knowledge or agreement of the other participants in that joint venture.[170]

250 The St Leonards joint venture was terminated in 2003 by Mr Voukidis and Mr Baker when they became aware of the unauthorised mortgage of the St Leonards property to Tauber. Mr Stanley signed a deed of termination of that joint venture.[171]

251 The learned trial judge found that on 23 November 2001 Mr Stanley represented to Tauber that his half interest in his share in Break Fast was worth about $650,000 and that Mr Stanley himself held the interest in the Wellington Parade property by means of his shareholding in Break Fast.[172] The appellants contend that this is a clear admission against interest by Mr Stanley.[173] The appellants further contend that Ambridge gave a guarantee of Mr Stanley's obligation secured by charge over any freehold property that it held within Victoria or New South Wales. The appellants contend that there was no reason for Mr Stanley to make the representation he did to protect Ambridge, as Ambridge itself guaranteed his obligation with a charge.[174] They say that Mr Stanley's admission is the best sort of admission. Tauber sought to realise his securities over Mr Stanley's share in Break Fast. The fourth appellant, Oxley, paid out the liability to Tauber.[175]

252 The appellants rely on a statutory declaration by Mr Stanley of 7 February 2005.[176] In that statutory declaration Mr Stanley declares that the shares that he, Mr Baker and Mr Voukidis held were held on behalf of their respective companies. I am not sure how the statutory declaration assists the appellants as Mr Stanley also declares that the joint venture was to be conducted with Break Fast as manager.[177]

253 In the deed of acknowledgement of 8 July 2004, Mr Stanley acknowledges that Break Fast is the legal and beneficial owner of the property. The appellants rely on the fact that in the statutory declaration Mr Stanley only retracts the statement that he beneficially owned the share. He says that the statement that he owns the share in Break Fast beneficially is not true and that the share was always owned by Ambridge.[178]

254 I can deal with the last two points together. The learned trial judge found that Mr Stanley cheated on his partners misappropriating large sums of money. I find that little reliance can be placed on what Mr Stanley represented to others when he was seeking to obtain some sort of financial advantage.

255 The appellants contend that Mr Ganis' evidence supports their contention that it was through shareholding in Break Fast that their interests would be allotted rather than by way of an interest in the property itself. The appellants submit that Mr Ganis was one of the few witnesses who escaped unscathed in terms of credit.

256 The relevant part of his evidence was set out in the learned trial judge's judgment as follows:[179]

[217] In examination-in-chief, Ganis said:

Do you know who the venturers were to be from your discussion with Mr Voukidis? --- At the point - at that point in time, I understood it to be Mr Voukidis or - or a nominated entity, Mr Baker or a nominated entity, Ambridge being through Mark Stanley I assume, (indistinct) and myself.

I'm sorry, I beg your pardon. Did you know of Ambridge? --- Yes, I did.

[218] In examination-in-chief, Ganis said further:

MR PETERS: After the auction, did you speak at all with Mr Voukidis or Mr Baker about the property? --- I did.

Can you take it in steps and tell His Honour the substance of those discussions? ---

Leading up to and immediately after the auction, my understanding was that Mr Baker was adamant that he retain 50 per cent share in - in the investment, and that Mr Voukidis would participate at least 25 per cent, and that there was 25 per cent left over which was going to be Ambridge's participation. I asked where my share was, as that was committed to me, and Mr Voukidis suggested to me that he had convinced Mr Baker to allocate part of their respective shareholdings and it was said to me that potentially 10 per cent would be available to me if I could come up with the money. (my emphasis)

257 The appellants contend that Mr Voukidis reference to 'respective shareholdings' confirms the appellants' case that the interest in the property was to be taken through shares in Break Fast.

258 In my view, the passing reference by Mr Voukidis to 'respective shareholdings' was not determinative of the nature of the joint venture structure. The observation would be just as consistent with a reference to a share in the property. The evidence of Mr Ganis does not undermine Mr Voukidis' acceptance in March and July 2000 of Break Fast holding the property on trust for the joint venturers.

259 In summary, I find that the evidence relied on by the appellants does not disclose error on the trial judge's part in inferring as he did on the evidence that by 14 July 2000 the parties had reached a concluded joint venture agreement under which Break Fast was to hold the property as trustee.

260 I find that the grounds of appeal put forward under Part A fail.

Part D: The idea of an unincorporated joint venture was not discussed by the parties until after the company had been incorporated and the building had been purchased in the name of Break Fast Investments Pty Ltd which occurred on 24 November 1999. (Ground 3)

261 The appellants rely on the evidence of Mr Jacobs to the effect that it was not until December 1999 that Mr Jacobs had a telephone conversation with Mr Voukidis in which an unincorporated joint venture with Break Fast as manager was discussed as the appropriate structure for holding property.[180] They argue that by this time the property had been purchased by Break Fast.

262 This argument does not advance the appellants case beyond that argued under Part A.

Part E: Contract and other specific errors (Grounds 3, 4, 5, 6, 9 and 10)

263 The appellants contend that it did not follow from the facts that by mid March an agreement had been reached, as the learned trial judge found, that:

(a) Ambridge was a party to the joint venture in its own right;

(b) Break Fast was to be manager and hold the property on behalf of the participating joint venturers as their trustee;

(c) Baker and Voukidis between them held a 75 per cent interest which would be apportioned on them nominating any additional joint venturer;

(d) Otherwise the terms of the joint venture were those contained in the second draft agreement of 21 February 2000.[181]

264 This ground does not advance the appellants' case beyond that argued under Part A.

Part F: The Express Trust found by the Learned Trial Judge was inconsistent with both the single evolving contract and the evidence (Ground 8)

265 The appellants contend that the learned trial judge should not have found there was an express trust where he found that there wasn't sufficient agreement to constitute an agreement.[182] In my view the learned trial judge did not err in finding that the property was held by Break Fast as trustee. In my view, nothing relevant turns on whether it was an express, implied, resulting or constructive trust. The issue is whether or not by the beginning of 2001, Break Fast held the property on trust according to the terms of the joint venture agreement that was sent to Mr Baker on 8 October 2000. I find that in so finding, the trial judge did not err.

266 The appellants say that this is consequential on other grounds, and did not wish to add to previous submissions.

Part I: The 8 October 2002 draft joint venture agreement is binding to this day (Grounds 1 and 2)

267 The appellants contend that the learned trial judge failed to properly consider the whole of the evidence about the 8 October 2002 draft joint venture agreement. They point out that the draft contains factual errors in the recital and other alleged errors.[183]

268 The errors referred to, if that be the case, do not alter the draft's operative parts and the essential terms of the binding agreement.

Part J: Errors as to admissions and authority to bind (Grounds 9 and 10)

269 The appellants contend that the learned trial judge erred in finding that Mr Voukidis had authority to bind the other defendants.

270 The appellants argue that the learned trial judge found Mr Voukidis acted in a professional capacity on behalf of Mr Baker as his accountant and investment adviser in relation to the investment in the property[184] and had implied authority to represent Mr Baker as his agent in the course of Mr Voukidis' dealings with Mr Stanley and to engage in conduct not authorised or approved by Mr Baker from which admissions are to be implied and inferred.

271 The appellants contend that the learned trial judge should have found admissions could not be inferred from the conduct of Mr Voukidis, and that, in any event, it was all inadmissible post-contractual conduct.

272 The appellants concede that Mr Voukidis had authority to represent Mr Baker up to a point when Mr Voukidis talked to Mr Jacobs and Mr Stanley. They concede that Mr Voukidis was known to be a close associate and the accountant for Mr Baker. They concede it was also known that Mr Baker was a passive investor and that if anything was to be said it would probably be said by Mr Voukidis on Mr Baker's behalf.[185]

273 Nevertheless, the appellants contend that Mr Voukidis' statement and conduct leading to the agreement that had been reached by 14 July 2000 did not carry with it committing Mr Baker to the agreement.

274 Mr Voukidis was well aware that after the property was purchased it was necessary for the parties to agree on the terms of the joint venture. He was well aware that when the draft was sent to him for comment that its purpose was to settle the terms as between the three joint venturers Ambridge, himself and Mr Baker. His observation that he was generally in agreement with the draft and his subsequent behaviour in agreeing on the parties and their equity contributions, insisting the accounts of Break Fast be prepared on the basis that Break Fast was the trustee was only consistent with him agreeing on behalf of Mr Baker as well.

275 The negotiations held on 14 July 2000 as to the parties and their equity contributions by its very nature was a negotiation carried out on behalf of Mr Baker.

276 It is also relevant that Mr Baker by his own conduct in accepting that Break Fast was only the manager of the joint venture establishes his approval of his agent's prior agreement to the joint venture structure. Mr Baker agreed that he signed the resolution that acknowledged that Break Fast acted as the manager of the joint venture.

277 In their written submissions the appellants contend that the learned trial judge erred in finding that Mr McGrouther and his company IMF conferred authority on Mr Baker and Mr Voukidis to make admissions on his behalf and on behalf of IMF as to the formation of the Wellington Parade joint venture as it proceeded to be structured by them, and in relation to the accounts of the joint venture.[186] The appellant argued that the learned trial judge should have found that Mr Baker had some authority to represent Mr McGrouther and IMF in relation to the joint venture but Mr Voukidis did not.

278 The appellants pointed to no particular error in the learned trial judge's reasoning in reaching the conclusion that he did.

280 The relevant ground of appeal provides as follows:[187]

1. The learned Trial Judge erred in finding that the evidence of Baker was in some respects unsatisfactory (J125, J462) and he should have found that Baker was a witness of good credit and gave true and reliable evidence and further:

(a) a fair minded lay observer having viewed the hearing of the proceeding prior to the appellants having given evidence might reasonably have apprehended that his Honour had prejudged the credibility of the appellants, including Baker, on the basis of conduct engaged in by Voukidis during the pre-trial stages of the proceeding: Tr1039, 25 - Tr1040, 14;

(b) having correctly identified the Briginshaw standard as the standard or proof for such a finding his Honour erred in applying that standard in that:

(i) there was no direct evidence before the Court that the documents in question had been fabricated either by the appellants or at all;

(ii) there was insufficient indirect evidence before the Court to support such a finding having regard to the seriousness and the gravity and consequences that his Honour found (J365-366) would flow from such a finding;

(iii) in reaching the conclusion his Honour relied on a finding, made in error, that the email in question was the first reference in writing to the structure in the terms which were contended for by the Appellants (J443) and in doing so failed to take into account other evidence to the same effect including:

(a) a letter of advice from Herbert Geer & Rundle Lawyers dated May 2002 received and paid for by Stanley: Exhibit D8

(b) the financial accounts of Break Fast (prepared by Jacobs and Stanley) which were consistent with Break Fast being an operating company and not a trustee:

(c) correspondence and documents provided to financiers (by Jacobs and Break Fast) on the basis of which Break Fast borrowed money which were consistent with Break Fast being an operating company and not a trustee:

(d) each of the tax returns of Break Fast, save one, which were all consistent with Break Fast being an operating company and not the trustee of an unincorporated joint venture.

(iv) In finding that the email was the first piece of correspondence in writing that referred to the structure contended for by the Appellants his Honour also failed to take into account that, on the appellant's case, the incorporated joint venture was oral and was settled on or before 24 November 1999 (D&C[7.1) as a reasonable alternative explanation for the absence of correspondence;

(v) his Honour gave too much weight to the fact (J444) that despite having produced hard copies of the email the applicants were unable to produce electronic copies of the email nearly seven years after the event, despite reasonable explanations from the appellants as to why;

(vi) erred in finding that Baker, Voukidis and Stanley signed a resolution which described Break Fast as manager of the joint venture (J463) without taking into account the evidence of Voukidis that he had personally applied Baker's electronic signature to the resolution prior to receiving Baker's email, in circumstances where there was no direct evidence to the contrary;

(vii) his Honour erred in finding that after 10 December 2002 the accounts of Break Fast continued to be prepared on the basis of an unincorporated joint venture as alleged by Ambridge (J453) in that:

(A) he placed too much weight on the fact that some of the accounts were headed 'As manager for the Wellington Parade Joint Venture': (J453) when others were not;

(B) he failed to take into account that all of the financial accounts of Break Fast, in substance, indicated that Break Fast was not a trustee of an unincorporated joint venture as alleged by Ambridge but was an operating company as alleged by the Appellants with assets and liabilities income and expenditure;

(C) failed to take into account the evidence of Jacobs that:

1. the accounts prepared for Break Fast that were distributed to third parties such as financiers did not describe Break Fast as manager of a joint venture;
2. the accounts prepared for Break Fast and distributed to third parties such as financiers included assets and liabilities and recorded income which was not consistent with Break Fast being the manager of a joint venture;

1. none of the accounts prepared by Jacobs described Break Fast as the manager of a joint venture.

281 Although this ground of appeal alleges several errors by the learned trial judge, on the hearing of the appeal the only error alleged, under this ground, was that Mr Baker's evidence was treated with more scepticism than it deserved.[188] I assume the alleged error relates to the learned judge's finding as follows:

[462] Bearing in mind the principles of Briginshaw to which I have already referred, I am satisfied that the email purportedly sent by Baker to Stanley dated 10 December 2002, and Stanley's reply email of the same date, were not authentic. They were fabricated after the event to support the case now advanced by the Defendants and were known by both Baker and Voukidis to have been so fabricated when they gave their evidence.

282 This finding is referred to in the ground of objection as being in error. In essence, the appellants contend that the learned trial judge erred in finding that Mr Baker knew that the email purportedly sent by Mr Baker to Mr Stanley dated 10 December 2002 and Mr Stanley's reply email were fabricated, when Mr Baker gave his evidence.

283 The written outline of submissions does not identify what Mr Baker said when he gave his evidence, nor whether the evidence was read to the court. The court book contains part of the cross examination of Mr Baker by Mr Peters SC who appeared for Ambridge below. That cross examination does touch on the minute of meeting. Mr Baker agreed that he signed it. He was also cross-examined on the email purportedly sent by him to Mr Stanley. He was challenged that it made no sense to send the email to Mr Stanley when it was Mr Voukidis that was organising the minute to give to Meerkin & Apel to prevent Mr Stanley from misappropriating the sale moneys from the sale of the property. It will be recalled that the resolution limited Mr Stanley's authority to merely giving instructions about the contract.

284 The duty of this Court upon a rehearing where a finding on credibility is challenged was examined by the High Court of Australia in Warren v Combes[189] and Fox v Percy.[190] In Warren v Combes Gibbs ACJ, Jacobs and Murphy JJ confirmed the duty of the appellate court to draw its own inferences from the facts as they find them. They said:

Shortly expressed, the established principles are, we think, that in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it. These principles, we venture to think, are not only sound in law, but beneficial in their operation.

....

The duty of the appellate court is to decide the case - the facts as well as the law - for itself. In so doing it must recognize the advantages enjoyed by the judge who conducted the trial. But if the judges of appeal consider that in the circumstances the trial judge was in no better position to decide the particular question than they are themselves, or if, after giving full weight to his decision, they consider that it was wrong, they must discharge their duty and give effect to their own judgment. [191]

285 In Fox v Percy, the High Court elaborated on the disadvantage the appellate court has when compared to the trial judge in respect of the evaluation of witnesses' credibility and the duty of the appellate court in those circumstances. The High Court observed that the appellate court does not typically get taken to, or read, all of the evidence given at the trial that the trial judge has the advantage of, in deciding on a witness' credibility. Nevertheless, despite those limitations the High Court confirmed the obligation of the appellate court to conduct a real review of the trial and that such a review may demonstrate that the trial judge's conclusions are erroneous, even when the appear to be, or are stated to be, based on credibility findings.[192]

286 The particular finding in this case deals with the knowledge of Mr Baker at the time he gave evidence.

287 In Mr Baker's witness statement he says as follows:

1. On 3 December 2002, I was concerned to ensure that the proceeds of any sale of the property would not be available for misappropriation by Stanley. I discussed this with Voukidis. He told me that he had a similar concern. Voukidis told me that he would prepare a minute which would overcome this concern.
2. On 3 December 2002, I received an email from Voukidis attaching the draft minute in relation to the sale of the property. I did not want to sell the property but by this time it was obvious that Stanley was unable to meet his obligations or to pay me back the moneys he had taken. The only way it appeared that Stanley would be able to repay any money was if we were able to realise his share in Break Fast. By this time I was very keen to be repaid and have nothing further to do with Stanley.
3. I do not specifically recall having any discussion with Voukidis in relation to the draft minute he sent me. I looked at the minute on or before 10 December 2002. I was aware that Voukidis had gone to Melbourne. He told me that he was going to meet with Stanley. I recall reading the minute and thinking that there had been no agreement for an unincorporated joint venture for the property. I sent an email to Stanley on 10 December 2002 in which I asked Stanley to change the wording of the minute and informed him that I assumed that the reference to 'joint venture' was in the context of his proposed new structure, the acquisition of the property. I specifically said 'If not, please delete the words "in its capacity as manager of the Break Fast joint venture" because as you're aware we have not yet resolved to implement any such structure.
4. I received a response to my email from Stanley the same day advising that he would make the amendment before forwarding the minute to me.
5. I refer to [NSCB 234][193] which is the final minute of the meeting. I note that it appears to have been signed by me.'

288 In his witness statement Mr Baker maintains the authenticity of the emails that the learned trial judge found were fabricated after the event.

289 The full cross-examination of Mr Baker is not in the court book. The portion in the court book discloses that he was questioned on why he emailed Mr Stanley to ask him to change the resolution, when Mr Voukidis prepared the resolution and its purpose was to ensure the proceeds of any sale of the property were not available for misappropriation by Mr Stanley. Mr Baker's answers appear to have been evasive and non-responsive.

290 Bearing in mind the advantages that the learned trial judge had in assessing Mr Baker's credit, I am not satisfied that the learned trial judge erred in his findings on Mr Baker's credit. I find myself in a similar position to that in which Nettle JA referred in Simonovski v Bendigo Bank Limited[194] where he said:

This appeal is in the nature of a rehearing and not a hearing de novo. Relative to the judge, therefore, I consider that we are at a distinct disadvantage in attempting to evaluate the evidence, particularly Panebianco's and the Janevskis' evidence, and quite unable to achieve the sort of perception of the case that his Honour was able to derive from hearing the evidence as a whole. Faced with the limitations which that entails, I am not prepared to say that the judge was in error in the conclusion which he reached. (citations omitted)

291 The appellants argued that the most significant thing that related to Mr Baker was the fact that his company filed a tax returning claiming a loss of $75,000 for its share of the loss of the joint venture.[195] The appellants say that Mr Baker says that he just signed what his accountants gave him. They further said the loss has to be compared to the total income of Career Path of $16.785 million.[196] Even if this be the case, in my view the appellants have not established the learned trial judge erred in finding that at the time Mr Baker gave evidence he was aware that the relevant emails that he relied on in his case were forged.

293 The appellants challenge the finding of the learned trial judge that Break Fast by implication was conferred with a special power of appointment to appoint beneficiaries in place of Messrs Baker and Voukidis as to the whole or part of the interest upon nominations being provided by one or other of those persons.[197] They say this was a clear error on the trial judge's part. The appellants agree that there was a power to nominate but that it was a power of the individuals rather than Break Fast.[198] No issue is made of the nomination by Mr McGrouther of his company IMF.

294 In my opinion, in view of the concession by the appellants, the central issue in the case is not affected. Break Fast holds the property on trust for the joint venture parties or their nominees. Further, this concession coupled with the other findings I have made, confirms that the first and second declarations made by the learned trial judge were not in error.

[1] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59 at 126-146.

[2] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 230.

[7] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 228.

[11] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 212.

[13] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 221.

[17] Witness statement of Mr Jacobs, 17-20, handed up at appeal on 20 July 2011 by Ambridge: see Appeal transcript 94.

[26] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59 265.

[32] Appeal Book D 310; Appeal transcript 121.

[34] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59 267.

[36] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59 267.

[39] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 270.

[41] Appeal Book D 171; witness statement of Mr Jacobs, 33.

[43] Witness statement of Mr Jacobs, 36.

[46] Appeal Book D 172; witness statement of Mr Jacobs, 35.

[48] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 274.

[49] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 276.

[51] Appeal Book D 532-541; Witness statement of Mr Baker, 62.

[52] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 278.

[56] Witness statement of Mr Jacobs, 45.

[65] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 250.

[68] Appeal Book D 271 (the learned trial judge found that the hand written notations were those of Mr Voukidis).

[71] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 251-256.

[75] Appeal Book D 283; a better copy of Appeal Book D 311.

[91] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 509.

[99] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59 at 373.

[101] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 377-384.

[110] Exhibit D7, Appeal Book C 36.1-42.

[116] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 359.

[117] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 370: the learned trial judge refers to the letter and attached documents which were discovered by Break Fast first in time being authentic. It is clear he was referring to the documents at Appeal Book D 388-391.

[123] Exhibit D8, Appeal Book C 43-50.

[125] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 415.

[126] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 418.

[130] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 624.

[133] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 450.

[139] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 462-465.

[143] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 504.

[144] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 199-201; see in particular summary of principles by Heydon JA in Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2991) [2001] NSWCA 61; 53 NSWLR 153, 163-165.

[145] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 182-204.

[146] Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531, 551-552; Fox v Percy [2003] HCA 22; (2002) 214 CLR 118, 27-30; Financial Wisdom Ltd v Newman [2005] VSCA 110; (2005) 12 VR 79, 81 (Eames and Nettle JJA and Williams AJA); Simonovski Bendigo Bank Ltd [2005] VSCA 125, 66 (Warren CJ, Charles and Nettle JJA); Sahin v NAB [2011] VSCA 64.

[147] [2000] HCA 40; (2003) 203 CLR 172, 23 (Gaudron, McHugh, Gummow and Hayne JJ); followed and applied by the Court of Appeal in Financial Wisdom Ltd v Newman [2005] VSCA 110; (2005) 12 VR 79, 81 (Eames and Nettle JJA and Williams AJA).

[148] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118, 23 (Gleeson DJ, Gummow and Kirby JJ).

[149] [2006] HCA 1; (2006) 224 ALR 1.

[152] Appellants written submissions of 3 February 2011.

[155] Appeal transcript 16-17; and 22 line 24-29.

[163] Exhibits D5 and D7 of Appeal Book C.

[169] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 569.

[170] Voukidis witness statement, exhibit D36, 88; Baker witness statement, exhibit D 38, 71; Stanley cross examination, transcript 525 lines 12-16; transcript 593 lines 17-24. The Mortgage is at NSCB 304-327.

[171] Voukidis witness statement, exhibit D36, 88; Baker witness statement, exhibit D 38, 71; Stanley witness statement, exhibit P2, 143-144 (although Stanley does not give the reason for its termination).

[172] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 574.

[179] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 217-218.

[180] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 237.

[183] (i) The 8 October 2002 draft joint venture agreement was executed by Stanley alone on behalf of both Ambridge and Break Fast without the knowledge, authority or approval of Baker, Voukidis, McGrouther or their respective corporate entities.

(ii) The 8 October 2002 draft joint venture agreement was forwarded by Stanley by email to Baker for execution by Baker as a the second director on behalf of Break Fast but was rejected by Baker and not signed by him. This was not followed up by Stanley.

(iii) The 8 October 2002 draft joint venture agreement contained material errors including:

• Recital A(a) incorrectly states Ambridge at the request of C & O Voukidis, Career Path and IMF undertook a search for a Melbourne property. None of those corporations were parties to the joint venture at such time.

• Stanley and Taylor, not Ambridge, bid for the property on behalf of Break Fast and Break Fast acquired the property.

• Recital B described Ambridge as the manager of the property after acquisition but the property was managed by Break Fast.

• Recitals C and D refer to the equity contribution of Ambridge being $500,000 but Ambridge's equity contribution was in fact the $500,000 and a further $250,000.

• Clause 2 contained incorrect amounts for the capital contributions of Ambridge and the other corporate joint venturers and suggested such contributions were yet to be paid, which was incorrect.

• The joint venture agreement referred to Voukidis, Baker and McGrouther as if they were one joint venturer throughout with an undivided 75% share and with Ambridge as the other joint venturer with a 25% share. See the Recitals and clauses 3 and 6. Clause 11 referred to 'each of the joint venturers'. Clauses 14 and 16 referred to 'either joint venturer'. Clauses 14, 18 and 19 referred the 'other joint venturer'.

• Clause 6 provided that Ambridge on the one hand and the other joint venturer corporations on the other hand could each appoint up to two representatives as directors whereas the corporations representing Voukidis, Baker and McGrouther should have been entitled to appoint 75% of the directors and Ambridge 25%.

(iv) The 8 October 2002 draft joint venture agreement contained provisions which according to the evidence had never been discussed or agreed, for example, clauses 6, 7, 8, 10, 13, 14-16, 18, 19, 22-24, none of which would be implied in accordance with the rules governing the implication of contractual terms.

[184] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 170.

[186] Ambridge Investments Pty Ltd (in liq) v Baker [2010] VSC 59, 171.

[189] [1979] HCA 9; (1979) 142 CLR 531.

[190] [2003] HCA 22; (2003) 214 CLR 118.

[191] [1979] HCA 9; (1979) 142 CLR 531, 551-552.

[192] [2003] HCA 22; (2003) 214 CLR 118 at 23-28.

[193] I assume this is the document at Appeal Book C 557.

[194] [2005] VSCA 125, 66.