Mr Lennon replied: "I'm not stupid, Paul." Mr McGarry was cross examined about this conversation. I have no hesitation in accepting Mr McGarry's evidence that the conversation occurred as he said.
137 Second, I must bear in mind that Mr Lennon has not been able to give evidence or to defend himself in any way. The serious accusations of misconduct against him depend solely on the uncorroborated evidence of Drs Iannuzzi and Tsironis, both of whom have, of course, a strong motivation for accusing BankWest and Mr Lennon of wrongdoing and thus escaping their liabilities.
138 Third, I take into account that in the only document which Dr Iannuzzi brought into existence to record his analysis of the proposed transaction, i.e. the Deal Summary, there is no reference whatsoever to any assurances by Mr Lennon that the transaction was "safe" or that it had no risk or little risk, or that Dr Iannuzzi was relying on something said by Mr Lennon. There is no reference at all in the document to the meetings with Mr Lennon which occurred on 22 December and 29 December. This is surprising if, as Dr Tsironis and Dr Iannuzzi would have it, they made up their minds to enter into the transaction on the basis of what Mr Lennon had said at the meeting of 29 December.
139 Fourth, I take into account that I am unable to accept Dr Iannuzzi as a witness of any credit.
140 Fifth, I regard it as improbable in the highest degree that Dr Iannuzzi would have accepted trustingly and at face value anything that Mr Lennon had said at the meetings of 22 and 29 December. The content of Dr Iannuzzi's communications with NAB, with their valuers, and with St George immediately after his execution of the Transaction Documents, taken in conjunction with his demeanour in the witness box, convince me that he is the sort of person who takes nothing and nobody on trust in his business dealings, who regards himself as knowledgeable and experienced in business matters, who always makes his own enquiries to the fullest extent possible, who makes his own judgments and who is not backward in criticising in blunt terms those who do not agree with him.
141 Sixth, I take into account that Dr Tsironis' credit generally is adversely affected by the fact that, if her evidence in cross examination is to be believed, she falsely swore a statutory declaration as to the independent advice which she had received from Mr Belos prior to executing the Transaction Documents, knowing that the statutory declaration was to be relied upon by St George Bank.
142 Seventh, it is clear that at the time of the meeting on 29 December and thereafter Dr Tsironis was wholly and understandably preoccupied with the serious medical condition of her new-born baby. I think it highly unlikely that at the meeting on 29 December she was in a state of mind in which she could focus on what was being said between Mr Lennon and her husband or could afterwards retain an accurate recollection of it.
143 Eighth, it is clear that Dr Tsironis left implementation of the transaction entirely to Dr Iannuzzi. Her evidence generally and her demeanour, coupled with the very assertive manner of Dr Iannuzzi, leaves me with the strong impression that in matters of business Dr Tsironis is prepared to acquiesce in decisions made by Dr Iannuzzi and that she is very much directed by him in that regard. I am of the view that in business matters Dr Tsironis would be prepared to support Dr Iannuzzi to whatever extent he felt necessary, if he required it of her.
144 Ninth, I take into account generally as to the Plaintiffs' case that they have not been willing to call as witnesses those from whom they had received advice in connection with the transaction and who could have given direct evidence on the issue of reliance, namely, the NAB officers, Mr Coupe and Mr Leeson, their accountant, Mr Belos, and their solicitor, Mr Cheung. In my view, their evidence was required to explain what advice they gave to Dr Iannuzzi, if any, as to the subject matter of the Representations and as to what response Dr Iannuzzi made, if any, to that advice. Without their evidence, the inference is clearly open that Dr Iannuzzi discussed with them, or some of them, what he had been told both by Mr Blom and by Mr Lennon and sought their assessment. I conclude that the evidence of those witnesses would not have assisted the Plaintiffs' case.
145 Tenth, as against the foregoing, I take into account that BankWest has not called Mrs Lennon, who was present at the meeting of 29 December. Mrs Lennon could possibly have given evidence contradicting the evidence of Dr Iannuzzi and Dr Tsironis as to what Mr Lennon said at the meeting. However, I am not satisfied that the failure to call her has the same significance as the Plaintiffs' failure to call the four witnesses to whom I have referred above. The Plaintiffs' absent witnesses were all professional people directly involved in the transaction and must have had an intelligent understanding of what had been discussed between Dr Iannuzzi and themselves respectively. On the other hand, there is nothing to suggest that Mrs Lennon was knowledgeable in business affairs generally or about this transaction in particular so that she could be expected to have paid any particular attention to what was being said between Mr Lennon and Dr Iannuzzi. She was present at the meeting only because Mr Lennon was using the opportunity of taking her on a brief holiday. In view of what I regard as the overwhelming evidence as to the credit of Dr Iannuzzi and Dr Tsironis, and in view of the inherent improbability of their accounts of the 29 December meeting, I do not find that BankWest's failure to call Mrs Lennon has any great significance.
146 Eleventh, in addition to all of the foregoing reasons, I find it inherently improbable that Mr Lennon would have made the Balance Sheet Representation in light of the fact that the balance sheet being discussed was out of date and BankWest was then in the process of obtaining an urgent, up-to-date review of Barrington's financial position.
147 In summary, I must be satisfied on the balance of probabilities that Mr Lennon made one or more of the Representations, bearing in mind that a finding that he did so requires a finding of serious dishonesty on his part. I bear in mind also that before making a finding of fact that Mr Lennon made any of the Representations, I must feel "an actual persuasion" that he did so: Briginshaw v Briginshaw (1930) 60 CLR 336, at 361.
148 In Rhesa Shipping Co SA v Edmunds [1985] 2 All ER 712 at 718, Lord Brandon of Oakbrook said:
"The judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so. There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course for him to take." Quoted with approval in Moukhayber v Camden Timber & Hardware Co Pty Ltd [2002] NSWCA 58 per Heydon JA, and in Timms v Commonwealth Bank of Australia [2004] NSWSC 76 per Barrett J.
149 In the present case I may well have been able confidently to make a finding of fact as to whether any of the Representations were made had Mr Lennon's evidence been available. In the absence of Mr Lennon, the state of the evidence generally is not nearly as satisfactory as it could have been. In those circumstances, I prefer to make a decision on the basis of whether or not the Plaintiffs have discharged the burden of proof which lies upon them.
150 For the reasons which I have given, I am very far from feeling any actual persuasion that Mr Lennon made any of the Representations. Accordingly, I hold that the Plaintiffs have failed to prove that any of the Representations were made.