Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd; In the matter of Combined Projects - [2021] NSWSC 1374 - NSWSC 2021 case summary — Zoe

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Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd; In the matter of Combined Projects

[2021] NSWSC 1374

Supreme Court of NSW|2021-04-16|Before: Ward CJ, Giles J, Commission J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2021-04-16

Before

Ward CJ, Giles J, Commission J

Source

Original judgment source is linked above.

Judgment (124 paragraphs)

[1]

15] NSWSC 1772 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 Form-Quip Ltd v Trafalgar Properties Ltd (Supreme Court (NSW), Giles J, 19 July 1991, unrep) Furs Ltd v Tomkies (1936) 54 CLR 583; [1936] HCA 3 Goodman Fielder Consumer Foods Pty Ltd v Graincorp Foods Australia Pty Ltd [2020] NSWSC 706 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Hadid v Lenfest Communications Inc [2000] FCA 628 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 Howard v Commissioner of Taxation (2014) 253 CLR 83; [2014] HCA 21 Hungerford v Richardson [2018] NSWSC 1543 Hurst v Vestcorp Ltd (1988) 12 NSWLR 394 Idoport Pty Ltd v National Australia Bank [2005] NSWSC 1273 In the matter of Combined Projects (Arncliffe) Pty Ltd [2018] NSWSC 649 In the matters of Earth Civil Australia Pty Ltd, RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (all in liq) [2021] NSWSC 966 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Junker v Hepburn [2010] NSWSC 88 Kocic v Deputy Commissioner of Taxation (2011) 85 ATR 489; [2011] NSWCA 322 Langman v Handover (1929) 43 CLR 334; [1929] HCA 42 Links Golf Tasmania Pty Ltd v Sattler (2012) 213 FCR 1; [2012] FCA 634 Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1; [2006] FCAFC 144 Lord Provost of Edinburgh v Lord Advocate (1879) 4 App Cas 823 Magafas v Carantinos [2008] NSWSC 691 Maguire v Makaronis (1997) 188 CLR 449; [1997] HCA 23 Mutual Shipping Corporation v Bayshore Shipping Co Ltd [1985] 1 WLR 625 National Bank of Greece SA v Pinios Shipping Co (No 1) [1990] 1 AC 637 Neptune (Vehicle Washing Equipment) Ltd v Fitzgerald [1996] Ch 274 New Cap Reinsurance Corporation Ltd v Grant [2009] NSWSC 950 Newmont Yandal Operations Pty Ltd v J Aron Corporation and Goldman Sachs Group, Inc (2007) 70 NSWLR 411; [2007] NSWCA 195 Nominal Defendant v Clancy [2007] NSWCA 349 Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146; [1990] HCA 32 Orr v Ford (1989) 167 CLR 316; [1989] HCA 4 Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd (2006) V ConvR 54-713; [2006] VSCA 6 Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 711 Paul's Retail Pty Ltd v Morgan [2009] NSWSC 1343 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5 Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187 Princess Ann of Hesse v Field [1963] NSWR 998 Re Duomatic Ltd [1969] 2 Ch 365 Re Earth Civil Australia Pty Ltd, RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (All in Liq) (No 2) [2021] NSWSC 1161 Re HIH Insurance Ltd; Australian Securities & Investments Commission v Adler (2002) 168 FLR 253; [2002] NSWSC 171 Robinson v Campbell (No 2) (1992) 30 NSWLR 503 Ryan Wealth Holdings Pty Ltd v L&V Tomkins Pty Ltd [2016] NSWSC 136 Sanderson v Blyth Theatre Co [1903] 2 KB 533 Smith v NSW Bar Association (No 2) (1992) 176 CLR 256; [1992] HCA 36 Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 Streeter v Western Areas Exploration Pty Ltd (No 2) (2011) 278 ALR 291; [2011] WASCA 17 Twenty-First Australia Inc v Shade (Supreme Court (NSW), Young J, 31 July 1998, unrep) Vadori v AAV Plumbing (2010) 77 ACSR 616; [2010] NSWSC 274 Vanguard Financial Planners Pty Ltd v Ale (2018) 354 ALR 711; [2018] NSWSC 314 V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd (2013) 296 ALR 418; [2013] FCAFC 16 Wang v Cai (No 2) [2021] NSWSC 1268 Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 Wentworth v Rogers [2002] NSWSC 921 Wentworth v Wentworth [1999] NSWSC 638 Wentworth v Woollahra Municipal Council (1982) 149 CLR 672; [1982] HCA 41 Texts Cited: C Mitchell, P Mitchell and S Watterson, Goff & Jones The Law of Unjust Enrichment (9th ed, 2016, Sweet & Maxwell) JD Heydon, MJ Leeming, PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) Mason, Carter, Tolhurst, Mason and Carter's Restitution Law in Australia (3rd ed, 2016, Lexis Nexis Australia) P Taylor, M Meek and Bellew J, Ritchie's Uniform Civil Procedure NSW (Looseleaf, LexisNexis) R I'Anson Banks Lindley & Banks on Partnership (20th ed, 2017, Thomson Reuters) RP Austin and IM Ramsay, Ford, Austin & Ramsay's Principles of Corporations Law (LexisNexis Australia) Category: Consequential orders Parties: Broadway Proceedings 2016/00282940

[2]

Broadway Plaza Investments Pty Ltd (Plaintiff/First Cross-Defendant to First Cross-Claim/Cross-Defendant to Second Cross-claim/First Cross-Defendant to Fifth Cross-Claim/First Cross-Defendant to Sixth Cross-Claim/Second Cross-Defendant to Seventh Cross-Claim/First Cross-Claimant to Eighth Cross-Claim) Broadway Plaza Pty Ltd (Defendant/Cross-Claimant to First, Second and Fifth Cross-claims/Cross-Defendant to Third Cross-Claim/Second Cross-Defendant to Sixth Cross-Claim/First Cross-Defendant to Eighth and Ninth Cross-Claims) Fouad Deiri (Third Cross-Defendant to Fifth Cross-Claim/First Cross-Defendant to Seventh Cross-Claim/Second Cross-Claimant to Eighth Cross-Claim) Deiri Nominees Pty Ltd (Fourth Cross-Defendant to Fifth Cross-Claim/Fourth Cross-Defendant to Seventh Cross-Claim/Cross-Claimant to Ninth Cross-Claim) Commonwealth Bank of Australia (Second Cross-Defendant to First Cross-Claim/Second Cross-Defendant to First Cross-Claim/Second Cross-Defendant to Fifth Cross-Claim/Cross-Claimant to Seventh Cross-Claim/Third Cross-Defendant to Eighth Cross-Claim) Combined Projects (Gibbons) Pty Ltd (Fifth Cross-Defendant to Fifth Cross-Claim; Fifth Cross-Defendant to Seventh Cross-Claim) Combined Property Investments Pty Ltd (Sixth Cross-Defendant to Fifth Cross-Claim; Sixth Cross-Defendant to Seventh Cross-Claim) Combined Projects (Redfern) Pty Ltd (Seventh Cross-Defendant to Fifth Cross-Claim; Seventh Cross-Defendant to Seventh Cross-Claim) Combined Projects Holdings Pty Ltd (Eighth Cross-Defendant to Fifth Cross-Claim/Eighth Cross-Defendant to Seventh Cross-Claim) Deicorp Pty Ltd (Tenth Cross-Defendant to Fifth Cross-Claim; Cross-Claimant to Sixth Cross-Claim; Third Cross-Defendant to Seventh Cross-Claim) Combined Projects (Arncliffe) Pty Ltd (Eleventh Cross-Defendant to Fifth Cross-Claim; Ninth Cross-Defendant to Seventh Cross-Claim) HWL Ebsworth (First Cross-Defendant to Fourth Cross-Claim) Moustafa Sayour (Second Cross-Defendant to Eighth Cross-Claim) Matthews Street Pty Ltd (Ninth Cross-Defendant to Fifth Cross-Claim/Second Cross-Defendant to Ninth Cross-Claim

[7]

Judgment

HER HONOUR: On 14 December 2020, I published my reasons for judgment in two sets of proceedings (the Broadway Proceedings and the Arncliffe Proceedings) involving a variety of parties and numerous disputes arising out of dealings between Mr Moustafa Sayour (Moustafa, also known as Michael) and his late son, Jamil Sayour (Jamil), along with entities associated with them (the Sayour interests), on the one hand; and, on the other hand, Mr Fouad Deiri (Mr Deiri) and entities associated with Mr Deiri (the Deiri interests) (Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd; In the matter of Combined Projects (Arncliffe) Pty Ltd [2020] NSWSC 1778) (the principal judgment). The disputes between the Sayour and Deiri interests (in which ultimately a variety of other parties became embroiled) were long-running and the two sets of proceedings were hard-fought. The disputes continue even as to the formulation of the orders to give effect to the reasons in the principal judgment.
As noted in the principal judgment, the combined hearing of the two sets of proceedings occupied over 28 sitting days in late 2019, including a day of submissions heard during the Court vacation and a further day of submissions during the first week of the law term last year. The final reply submissions for the Sayour interests, and supplementary reply submissions by various other parties, were dealt with in written submissions. The final tranche of written submissions was not received until April 2020.
When I published the principal judgment in December 2020, I did not make final orders. Rather, I directed the parties, by 28 February 2021, to bring in short minutes of order to give effect to my reasons (including as to costs - an issue in respect of which various parties had indicated that they wished to make submissions following judgment) and any brief written submissions dealing with those orders, with a view to those orders being made in chambers, if possible. As I contemplated (as proved to be the case) that the parties might consider it necessary for there to be oral submissions, I directed the parties that, if they considered this necessary, to address that in the submissions to be filed by 29 February 2021. I considered that this time frame allowed ample time for such submissions even given the then impending Court vacation ([4466] of the principal judgment). (That proved not to be the case.)
I considered (see [4465] of the principal judgment) that directing the parties to turn their minds to the appropriate orders to be made to give effect to the reasons in the principal judgment was, given the complexity of the issues raised across the two proceedings, in the interests of the just, quick and cheap resolution of the real issues in dispute (see s 56 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act)). Regrettably, that objective was not achieved (and my optimism that the parties would be able to work together efficiently to dispose of the dispute at least at first instance has proved sadly misplaced).
Further, as I indicated (at [4466] of the principal judgment) I considered that the time thus allowed before the entry of final orders would give the parties an opportunity to identify any issues with which I might have omitted to deal in the myriad of issues considered in the principal judgment. That observation seems to have been perceived (by at least some of the parties) as an invitation to embark upon further rounds of applications and submissions upon submissions (including the provision of different schedules of errata -descending to the minutiae of the description of parties and legal representatives on the coversheet of the judgment, which on no view of things forms part of the reasons for judgment), culminating in two days of oral submissions (on 13 and 16 April 2021), further written submissions, an application on 20 May 2021 for re-listing at short notice (due to perceived urgency lest a judgment might be in the offing), a short directions hearing on 21 May 2021, further rounds of submissions, a directions hearing in June 2021 and yet more written submissions. Moreover, various of the parties have foreshadowed the making of applications for special costs orders and/or gross sums costs orders after the present applications are determined.
Ironically, a process intended to give effect to the statutory mandate for the just, quick and cheap resolution of the real issues in dispute has proved anything but that. Indeed, it is difficult not to be sceptical of the suggestion (in some of the parties' submissions) to the effect that now putting in place a regime where parties might consult as to steps to be taken (such as in relation to the sale of the Matthews Street Property), or for the quantification of costs by way of gross sum costs orders (rather than by invocation of the usual costs assessment process), would achieve the statutory objective mandate to which I have referred.
Nevertheless, as I explain in due course, my attention has been drawn to some matters that were not addressed in the principal judgment and to that extent (despite my concern as to the delay in the process of seemingly never-ending requests to make further submissions) the process has been instructive and I record my gratitude at the assistance of Counsel in that respect.
These reasons address the issues that have been raised since the publication of the principal judgment, including the notices of motion filed by Broadway Plaza Investments Pty Ltd (Investments) in the Broadway Proceedings and by Deiri Nominees Pty Ltd (Deiri Nominees) and Mr Deiri (together, the Deiri Parties) in the Arncliffe Proceedings, and the final orders in light of the outcome of the motions to vary the principal judgment. Those final orders will include costs orders, subject to any application to vary those orders to seek special costs orders (but any such application will need to be dealt with in short compass so as not unduly further to delay the final disposition of the respective proceedings at this level of the judicial hierarchy). Insofar as various of the parties have sought a stay of the final orders in order to consider their position as to any appeal, I do not consider that a stay of any length is warranted. The parties have now had many months to pore over the reasons in the principal judgment and I have no doubt that the respective battalions of legal advisers involved in these proceedings are perfectly capable of moving expeditiously if their clients are so minded to appeal. Therefore, any stay granted will be short.
As to the various typographical or proofing errors helpfully pointed out in the schedules of errata I do not propose here to address those (but have simply adopted those amendments with which I agree). The only amendment proposed in the schedule which is not of such a nature is the reference to Mr Deiri at [755] of the principal judgment. There, in the context of making rulings on Jones v Dunkel submissions, I said (of the absence of any evidence adduced from a particular potential witness) that I drew no adverse inference of the kind articulated in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (Jones v Dunkel) but noted that it was in the ability of both sides (relevantly, Zapphire and the Sayour Parties) to have called that witness to enlighten me as to relevant events, adding parenthetically in the group of parties which might have called that witness "any of the other parties with whom it appears there were dealings with [that witness], such as Mr Deiri himself" and that no one had done so.
The Deiri Parties in their schedule of errata took issue with the last sentence of that paragraph of the reasons but in fact their real complaint was with the penultimate sentence, on the basis that there was no evidence before the Court of any dealings between Mr Deiri and the potential witness there named; and said that there had been no submissions as to any association or dealings between them (and pointing out that cross-examination had been foreclosed in that regard). The Deiri Parties say that there is no evidentiary basis for that comment and that it is a matter of reputational concern. No submissions were advanced against the deletion of this comment by the Sayour Parties. As would be evident from its context, the observation contained in the second set of parentheses at [755] was no more than an aside. I accept that there is no evidentiary basis for the suggestion of any such association or dealings (it being no more than an assumption). I withdraw the comment and apologise for any offence caused thereby.
I do not propose here to summarise the background to the dispute (which is set out in detail in the principal judgment) or the factual findings there made (again set out in detail in the principal judgment). I here adopt the same definitions and abbreviations used in the principal judgment.

[8]

Notices of motion

The first thing to note is that, with some alacrity following the principal judgment (due, I was told, to the concern to ensure that the motions were filed within the 14 day time period required by the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), lest that be applicable even though final orders had not yet been made), each of Investments (on the one hand) and Mr Deiri and Deiri Nominees (on the other hand) filed a notice of motion on 23 December 2020 (one in each of the respective proceedings). Both notices of motion invoked r 36.16(3A) of the UCPR or, in the alternative, r 36.16(1) of the UCPR or the Court's inherent jurisdiction for the relief there sought. I do not here set out the relief sought in those notice of motion since that was subsequently amended in notices of motion filed on 12 March 2021 (see below).
When the matter came before me for directions on 26 February 2021, the Deiri Parties indicated their desire to amend the December 2020 notices of motion. Orders were made for any amended version of those motions to be filed and served by 12 March 2021. The relief sought in the amended notices of motion filed on 12 March 2021 was as follows.
In the Broadway Proceedings (2016/00282940), the relief sought by Investments, relevantly, was: 1. To the extent necessary, an order pursuant to r 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that any judgment of 14 December 2020 (Judgment) and the reasons for judgment of 14 December 2020 (Reasons for Judgment) be varied, set aside, withdrawn and/or supplemented as the Court thinks fit, to: (a) Reflect that, in relation to the cheque dated 25 September 2013 for the amount of $200,000 made out to "Broadway Plaza P/L" referred to the Reasons for Judgment at [1716] and [1727]: (i) that cheque was received by the defendant; (ii) further or in the alternative, the plaintiff is not liable to the defendant for the amount of $200,000 in connection with the amount agreed to be paid for the acquisition of an interest in the Broadway Site; (iii) further or in the alternative to (i) and (ii) above; (A) that cheque was deposited into the CBA Partnership Account (referred to in the Reasons for Judgment at [210]) on 25 September 2013; and/or (B) the deposit of that cheque into the CBA Partnership Account in the amount of $200,000 was a capital contribution by the defendant; and/or (C) the said amount of $200,000 paid into the CBA Partnership Account was ultimately returned to the defendant in 2014-2015, as a return of partnership capital; and/or (D) the said amount of $200,000 was therefore received by the defendant; and/or (E) the plaintiff is not liable to the defendant for the amount of $200,000 in connection with the amount agreed to be paid for the acquisition of an interest in the Broadway Site; (iv) further or in the alternative to (i) to (iii) above, such further or other facts in relation to that cheque or payment as the Court may think relevant or relevantly find. (b) Reflect that, in relation to the cheques dated 17 August 2012 and 14 August 2013 each in the amount of $150,000 and made out to "Jamil Sayour" referred to the Reasons for Judgment at [1727]: (i) those cheques were received by the defendant, as submitted by the Deiri Parties in their Reply Submissions at [20]-[22]; (ii) further or in the alternative, the plaintiff is not liable to the defendant for the amount of $300,000 in connection with the amount agreed to be paid for the acquisition of an interest in the Broadway Site; (iii) further or in the alternative to (i) to (ii) above, such further or other facts in relation to those cheques or payments as the Court may think relevant or relevantly find. (c) Remove and/or vary the finding in the Reasons for Judgment at [1728] that $650,000 is owing by the plaintiff to the defendant in respect of the amount agreed to be paid for the acquisition of land be varied, to reflect that: (i) no amount is owing (or found owing) by the plaintiff to the defendant; (ii) further or in the alternative, to the extent any of the cheques referred to above have been deposited and were received by or are traceable to the defendant or the Sayour family (other than Jamil Sayour), the amount so received or traceable is not owing by the plaintiff to the defendant; (iii) in the alternative to (i) above, and further or in the alternative to (ii) above, $300,000 is owing by the plaintiff to the defendant; or (iv) in the alternative to (i) and (iii) above, and further or in the alternative to (ii) above, $500,000 is owing by the plaintiff to the defendant. (d) Reflect that insofar as the Deed of Variation and Restatement No. 1 and Restated Cash Facility Agreement dated 20 June 2013 did not bind Broadway Plaza Pty Ltd or the partnership, or was otherwise void or of no effect, then nonetheless the establishment fees, interest fees, and line fees charged by CBA to the CBA Partnership Account after that date: (i) were entitled to be charged and retained by CBA as pleaded in CBA's Amended Defence to the Points of Cross-Claim filed on 1 October 2019 at 198; (ii) further or in the alternative, cannot be recovered by Plaza by reason of the conventional estoppel pleaded in CBA's Amended Defence to the Points of Cross-Claim filed on 1 October 2019 at 193; and (iii) further or in the alternative, were entitled to be charged and retained by CBA pursuant to the initial facility dated 20 February 2012 as submitted in the Deiri Parties Reply Submissions at [67]; (e) Vary the Reasons for Judgment in relation to the tender of documents: (i) at [1687], so as to refuse leave to the Sayour Parties to tender part of Mr Deiri's affidavit of 2 November 2016 to show a different appropriation of payments, for the reasons set out in the Deiri Parties' Reply Submissions at [222]: and (ii) at [1754], so as to grant leave to the Deiri Parties to tender the mortgage memorandum as submitted in the Deiri Parties' Reply Submissions at [57]-[61]; (f) Insofar as it is necessary, reflect that Plaza has not established that the amount of $1.75m drawn by cheque numbered 514 on the CBA Partnership Account on 21 November 2014 is recoverable by Plaza (on its own account or on behalf of the partnership), given that: (i) the payment was a partnership distribution which was authorised by Plaza, in circumstances where the Court found at [1812] that Jamil Sayour was authorised to manage or direct the receipt of payments on behalf of Plaza in respect of partnership distributions; (ii) the payment discharged Investments' entitlement to a partnership distribution of that sum, in circumstances where the Court found that an equivalent sum was paid to and received by Plaza as a partnership distribution (Reasons for Judgment at [4881-[490] and [1775]); and (iii) no loss has been established for any breach of mandate by CBA or insofar as the payment was otherwise an unauthorised transaction; (g) Vary the findings in the Reasons for Judgment at [3319] and [4451] to reflect that CBA has not established that it is entitled to relief under the Seventh Cross-Claim against Fouad Deiri and Investments in respect of any amount CBA is required to pay to Plaza or to the partnership under the First Cross-Claim in respect of establishment fees, interest charges, or line fees, in circumstances where: (i) CBA has not established any loss arising from the misleading conduct pleaded at [11]-[14] of the Seventh Cross-Claim; (ii) CBA did not plead or make any submissions to the effect that Mr Deiri or Investments made representations to CBA by signing any facility agreement that CBA had authority to and should debit the CBA Partnership Account with fees, charges. interest and repayments (as found in the Reasons for Judgment at [3319]); and (iii) the Court has made no finding (and should not now make any such finding) that through Mr Deiri and Investments agreeing and acquiescing in the debiting of fees and interest to the CBA Partnership Account, Mr Deiri and Investments thereby represented to CBA that each of the debits were duly authorised (which was the only pleaded basis for the misleading conducting [sic] claim in the Seventh Cross-Claim against Mr Deiri and Investments in respect of these debits on the CBA Partnership Account). 2. In the alternative to prayer 1 above, to the extent necessary, an order pursuant to the Court's inherent jurisdiction and/or r 36.16(1) of the UCPR that any Judgment and the Reasons for Judgment be varied, set aside, withdrawn and/or supplemented as the Court thinks fit to reflect the matters in prayers 1(a) to (g) above. 3. In the alternative to prayers 1 and 2 above, an order pursuant to the Court's inherent jurisdiction that the Reasons for Judgment be varied, set aside, withdrawn and/or supplemented as the Court thinks fit to reflect the matters in prayers 1(a) to (g) above. … [marking up omitted]
In the Arncliffe Proceedings (2017/00180712), the relief sought by Deiri Nominees and Mr Deiri, relevantly, in their amended notice of motion was: 1. To the extent necessary, an order pursuant to r 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that any judgment of 14 December 2020 (Judgment) and the reasons for judgment of 14 December 2020 (Reasons for Judgment) be varied, set aside, withdrawn and/or supplemented as the Court thinks fit, to: (a1) Address and make findings with respect to the Further Amended Defence to the First Cross-Claim filed on 3 December 2019 (FA Defence), and the Further Amended Statement of Cross-Claim in the Third Cross-Claim filed on 3 December 2019 (FA Cross-Claim), which relevantly: (i) sought. as part of the primary case (cf. Reasons for Judgment at [1374]-[1376], which ought be amended), particular relief in the event that the Court determines that Moustafa Sayour did consent to become a director or member of Sayour Holdings on (relevantly) 16 December 2013, in which case he had full authority to authorise Jamil becoming a director on 21 August 2014 (which he did), including, in particular: (A) a declaration that at all times from 21 August 2014 to 6 October 2015, Jamil Sayour was a director of Sayour Holdings (FA Cross-Claim, paragraph 14); (B) an order pursuant to s 1322(4)(b) of the Corporations Act 2001 (Cth) or the inherent jurisdiction of the Court that the register kept by the Australian Securities and Investments Commission in respect of Sayour Holdings be rectified, by recording Jamil Sayour as a director of Sayour Holdings for the period 21 August 2014 to 6 October 2015 (FA Cross-Claim, prayer 15): (ii) pleaded facts in support of that relief, which are consistent with the findings recorded in the Reasons for Judgment and which support the relief sought (FA Cross-Claim, paragraphs 6A, 15A, 37A, 37B, 40(b1), 42A, 42B, 45(b1), 48A, 51(b1): FA Defence, paragraphs 112A, 118A, 128A, 128b, 131(b1), 133A, 133B, 136(b1), 139A, 142(b1)); and (iii) was supported by Deiri Parties' Closing Submissions at C.7.9; (a2) Address and make findings in relation to Jamil's authority vis-à-vis Sayour Holdings in light of the findings made with respect to (a1) above, including that Jamil Sayour was a de facto director of Sayour Holdings and/or that Jamil Sayour was an actual director of Sayour Holdings from 21 August 2014 to 6 October 2015; and, in light of those findings, vary the following findings in the Reasons for Judgment; (i) that Jamil did not have authority to negotiate the development management fee and site identification fee with Mr Deiri (at [3757]): (ii) that there was no irrevocable shareholder's resolution such that Mr Deiri was under a binding agreement and obligated to make the payments (at [3796]-[3799]); (iii) that Moustafa's assent was required for Sayour Holdings to give shareholder consent or pass a shareholder resolution of CP Arncliffe (at [3799]); (iv) that Mr Deiri breached his fiduciary duties in causing the payment of $1.56m to be made (at [4100]-[4101]) and that this amount is recoverable by CP Arncliffe (at [4461]); (v) that a number of issues in the Third Arncliffe Cross-Claim do not arise or should be dismissed because of findings concerning Jamil's authority (at [4423]); (b) Reflect that in relation to the $1.56 million Payment referred to in the Reasons for Judgment at [4100] and [4461]: (i) that sum, or part of that sum, was received by or is traceable to Sayour Holdings Pty Ltd (Sayour Holdings), Moustafa Sayour, and/or members of the Sayour family (other than Jamil Sayour); and (ii) the third defendant is not liable to the plaintiff in respect of the amounts so received or traceable; (iii) further or in the alternative to (i) and (ii) above, such further or other facts in relation to the $1.56m Payment as the Court thinks fit or relevant [sic] finds; (c) Reflect that, in relation to any other amounts for which Fouad Deiri or Deiri Nominees Pty Ltd (Deiri Nominees) is found to have been liable to the plaintiff, those amounts do not include the sum of $5,299,704.23 charged for interest and received by Deiri Nominees pursuant to the loan agreement between Deiri Nominees and Combined Projects (Arncliffe) Pty Ltd (CP Arncliffe) dated 24 February 2015, and vary the Reasons for Judgment at [4092] and [4461] accordingly. (d) For the purposes of (c) above, grant leave to Fouad Deiri and Deiri Nominees to re-open to tender in evidence a loan agreement dated 12 June 2015 between PA General Opportunity Limited, Lord Capital Opportunity IV Limited, Deiri Nominees, CP Arncliffe, and Combined Projects (Kellyville) Pty Limited together with its annexures (PAG Loan Agreement). 2. In the alternative to prayer 1 above, to the extent necessary, an order pursuant to the Court's inherent jurisdiction and/or r 36.16(1) of the UCPR that any Judgment and the Reasons for Judgment be varied, set aside, withdrawn and/or supplemented as the Court thinks fit to reflect the matters in prayers 1(a) to (d) above. 3. In the alternative to prayers 1 and 2 above, an order pursuant to the Court's inherent jurisdiction that the Reasons for Judgment be varied, set aside, withdrawn and/or supplemented as the Court thinks fit to reflect the matters in prayers 1(a) to (d) above. … [Again, marking up omitted]
Pausing here, I note that at the commencement of the hearing of the motions on 13 April 2021, I was informed by Mr Bova SC, appearing for the Deiri Parties, that the relief sought in prayer 1(d) of the amended notice of motion in the Arncliffe Proceedings was not pressed (T 6.3; 13/4/21). I include it in the extract above only for the purpose of indicating what had been sought up to that point (and to note that the Sayour Parties addressed submissions in their written submissions on that issue, which was ultimately abandoned by the Deiri interests).
For the hearing of those applications (and submissions regarding final orders) some three volumes of Court Book were provided in advance of the hearing on 13 April 2021. As adverted to above, and as I explain in due course below, that was not by far the extent of the submissions on the applications.
I propose to deal first with the applications for variation or amendment to the reasons in the principal judgment before turning to the costs applications and final orders to be made. Before doing so, however, it is convenient here to note the relevant principles where there is an application to vary or amend a court's judgment or orders.

[9]

Relevant principles

As evident from the portions of the amended notices of motion extracted above (and the transcript at T 8; 13/4/21), the jurisdiction here invoked by the Deiri interests is variously that under rr 36.16(3A) and 36.16(1) of the UCPR, and the inherent jurisdiction to supplement the reasons of the Court. No one here suggests that there is not such a jurisdiction capable of exercise in the present case.
However, it has been said in a number of cases that the purpose of the jurisdiction to vary judgments is not to permit parties to re-agitate arguments or to have a rehearing; and that it is not to be utilised as an appellate process. Caution was sounded in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6 (Autodesk) (to which both the Deiri interests and the Sayour interests, as well as CBA, have here referred) in respect of the exercise of the discretion when the application in question would have the effect of re-opening the matter to enable a re-hearing of matters already heard and adjudicated upon. Mason CJ (there in dissent but whose observations on this issue have been taken as seminal) observed at 303 that: However, it must be emphasised that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to re-argue their cases. [my emphasis]
Similarly, Brennan J, as his Honour then was, said in Autodesk (at 309): It is one thing to reopen an appeal after judgment if the Court has reached a conclusion by adopting a proposition of fact or law which the unsuccessful party has not had an opportunity to argue. In that event, natural justice is denied and it can be said that the Court's jurisdiction to hear and determine the matter is not exhausted. But that is not the present case. Here the ground on which the appeal was determined had been argued in the Courts below and had been the subject of submissions in this Court. The appeal was determined after it was fully heard. That being so, I find no jurisdiction to set aside the judgment already pronounced merely because it is submitted by the unsuccessful party that, on further argument, the Court would be satisfied that it had reached the wrong conclusion in law. [my emphasis]
In Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 (at [394E-F]) Kirby P, as his Honour then was, said: ... the jurisdiction to set aside an order and to allow [the applicant] a hearing is not a right but an 'indulgence'. The reason for this cautious attitude is obvious. It is stated by Mason and Wilson JJ in their judgment [State Rail Authority v Codelfa Construction Pty Ltd (1982) 150 CLR 29 at 38] to be the public interest in maintaining the finality of litigation. Otherwise, a determined or wealthy litigant could postpone final judgment and exhaust the rights and funds of his opponent by continuously denying the finality of the judgment and seeking to reopen disputes which that judgment was designed to close, at least so far as the courts were concerned.
A helpful encapsulation of those principles was set out in the summary by Barrett J, as his Honour then was, in New Cap Reinsurance Corporation Ltd v Grant [2009] NSWSC 950 (New Cap) at [20] (after having referred to the decision of Santow J, as his Honour then was, in Wentworth v Wentworth [1999] NSWSC 638): It seems to me that these principles, as they apply in a case such as the present, can be summarised in one basic proposition, namely, that a single judge whose decision is susceptible to appeal through readily available channels (with or without any preliminary need for leave to appeal) should allow reopening after judgment where it is obvious to that judge that the decision has miscarried and that the miscarriage may be rectified and the situation retrieved by attention to the matter by that judge rather than by an appeal court. What is highly undesirable is that the first instance judge should be cast in the role of hearing what amounts to an appeal against his or her own decision. I adopt, in that connection, the following observation of Rix LJ in Compagnie Noga D'Importation et D'Exportation SA v Abacha [2001] 3 All ER 513: I do not wish to say anything against the usefulness of the reconsideration jurisdiction, within its proper limits. I have made use of it myself. However, it is in the nature of the legal process that, once judgment has been rendered, analysis thereafter becomes clarified and refined, and citation of authority is applied to the findings made at first instance so as to illuminate that clarification and refinement of analysis of which I speak. But that is the function of the appeal process. In my judgment, to grant this application that I reconsider my judgment would subvert the appeal process itself. In doing so, it would not answer the interests of justice, but would be the antithesis of justice according to law. There are of course cases where an error of fact or law may be too clear for argument. The best test of that is perhaps - but not necessarily - where the judge himself identifies the error which concerns him. In such a case, it is better that the error is corrected without imposing on the parties the need for an appeal. But no parallel to Noga's application has been cited to me. It is in my judgment wrong for a judge to be treated to an exposition such as would be presented to a court of appeal. If in such circumstances a judge should be tempted to open up reconsideration of his judgment, an appeal would not be avoided, it would be made inevitable. Every case would become subject to an unending process of reconsideration, followed by appeal, both on the issue of reconsideration and on the merits.
In Paul's Retail Pty Ltd v Morgan [2009] NSWSC 1343 at [5], Barrett J referred to the above principles as being well settled. Rix LJ in the Compagnie Noga Case ([2001] 3 All ER 513 at [44]-[45]), had said, in a passage preceding that which was cited by Barrett J in New Cap: In the present case Noga asks the court to reconsider its judgment because of the submission that it has got the answer wrong. In every case where an appeal is allowed, the court below has, by definition, got it wrong. The solution is to appeal. What is special, what is exceptional about this case? What are the strong reasons? It is not a case of an ex tempore oral judgment. The judgment here, whatever its defects, has been reserved and is the product of substantial reflection. It is not a case where a new binding precedent has immediately reversed the previous law so as to make a judgment simply unsustainable, as in In re Harrison's Share. It is not a case where a judge has of his own motion immediately come to the conclusion that he is wrong, as in Millensted, or Pittalis (not perhaps a good example of judicial second thoughts), or In Re Australian Direct Steam Navigation Company (1876) 3 Ch D 661, where Sir George Jessel MR realised, after giving an oral judgment, that he had not had his attention directed to the crucial article in the company's articles of incorporation. If this case is like none of those, what is it then? It is a case where it is said that the judge has got it wrong, on points which have been argued. The very issue for reconsideration is in dispute.
In New Cap at [22], his Honour distinguished between a case in which the application for leave to re-open was tantamount to an appeal and a case where it was not sought to disturb any of the court's findings or reasoning "except to the extent that they have proceeded on a misapprehension" (there about the absence of differentiation between the two groups of defendants and the need to attribute to the respective groups the debts and payments relevant to particular years). His Honour there held that the new evidence sought to be tendered should be received and taken into account so that, in making its decision, the court could proceed upon a correct basis as regards those matters "and thereby remedy the effects of the misapprehension which caused the original decision to miscarry". In Wentworth v Rogers [2002] NSWSC 921 Barrett J had noted (at [7]) three matters central to the jurisdiction to re-open: first, whether the party seeking to re-open has shown that, without accident or fault on the appellant's part, he or she has not been heard on a relevant matter; second, whether there has been shown an error in the court's reasoning because of a misapprehension of the facts; and third, whether there has been an error in the court's reasoning because of some misapprehension of the relevant law (noting also that such a review had been allowed by Young J (as his Honour then was) in Twenty-First Australia Inc v Shade (Supreme Court (NSW), Young J, 31 July 1998, unrep) where an appeal to correct an inadvertent failure to deal in the judgment with important matters raised by Counsel would involve inevitable delay).
The propositions as to the difference between the appellate process and the correction of obvious misapprehensions of fact or law are here pertinent.
I note that reference was also made in various of the parties' submissions on the present application to Aktas v Westpac Banking Corporation Ltd (No 2) (2010) 241 CLR 570; [2010] HCA 47 (Aktas v Westpac) where, at [6], French CJ, Gummow and Hayne JJ made clear that the discretion to re-open to vary a judgment should be sparingly engaged (and see Smith v NSW Bar Association (No 2) (1992) 176 CLR 256; [1992] HCA 36 at 265 per Brennan, Dawson, Toohey and Gaudron JJ). While it is not necessary that an applicant can show that he or she has, without fault on his or her part, not been heard on a particular matter, the fact that there has been a full opportunity to be heard will be a relevant consideration (so, for example, see the outcome in Aktas v Westpac).
It is also relevant to note (because at least one of the variations sought would squarely fall within the slip rule) what was said in the context of consideration of the scope of the "slip rule" in Mutual Shipping Corporation v Bayshore Shipping Co Ltd [1985] 1 WLR 625. There, at 633, Donaldson MR said that: It is the distinction between having second thoughts or intentions and correcting an award or judgment to give true effect to first thoughts or intentions, which creates the problem. Neither an arbitrator nor a judge can make any claim to infallibility. If he assesses the evidence wrongly or misconstrues or misappreciates the law, the resulting award or judgment will be erroneous, but it cannot be corrected …. The remedy is to appeal, if a right of appeal exists. The skilled arbitrator or judge may be tempted to describe this as accidental slip, but this is a natural form of self-exculpation. It is not an accidental slip. It is an intended decision which the arbitrator or judge later accepts as having been erroneous.
In Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 (Storey & Keers), McHugh JA (as his Honour then was) said (at 449) in relation to the slip rule and the inherent jurisdiction to correct accidental slips or omissions: The Courts of Common Law and the Court of Chancery had inherent power to correct any clerical mistake or error in a judgment or order if it was the result of an accidental slip or omission: Lawrie v Lees (1881) 7 App Cas 19 at 34-35. This power was an exception to the general principle that a party is bound by a judgment or order once it has been drawn up unless he can set it aside: Kinch v Walcott [1929] AC 482. But although the principle of the slip rule is clear enough in conception, its application in practice has often proved difficult. The dividing line between a mistake or error which is the result of an accidental slip or omission and a mistake or error which is the product of a deliberate decision has often been difficult to draw. The difficulty became much greater when it was decided that an error might be the result of an accidental slip or omission even though, because of the inadvertence of the party's legal representative, the point was not raised at the hearing of the action: cf L Shaddock & Associates Pty Ltd v Parramatta City Council [No 2] (1982) 151 CLR 590 at 594-595.
At 453, his Honour noted that it is only omissions or mistakes which are accidental which can be rectified and said that the rationale of the slip rule requires that an omission or mistake should not be treated as accidental if the proposed amendment requires the exercise of an independent discretion or is a matter upon which a real difference of opinion might exist. (Similarly, in Brew v Whitlock (No 3) [1968] VR 504 at 506-507 the Full Court of the Supreme Court of Victoria (Winnecke CJ, Little and Gowans JJ) said that it was impossible to apply the slip rule where, on the application to correct the judgment, it was necessary to exercise an independent discretion.) At 453F, in Storey & Keers, his Honour postulated the test of accident as being whether, had the matter been drawn to the attention of the court at the time, the correction would "at once have been made".
Finally, I note that, in the context of the slip rule, it has been accepted that, while what is sought is to ascertain the objective intention of the court, and subjective evidence of intention is not necessarily admissible (see Newmont Yandal Operations Pty Ltd v J Aron Corporation and Goldman Sachs Group, Inc (2007) 70 NSWLR 411; [2007] NSWCA 195 (Newmont Yandal) at [91] and [95] per Spigelman CJ (with whom Santow JA and Handley AJA agreed), some account may nevertheless be taken of the trial judge's ex post facto observations (see, for example, Form-Quip Ltd v Trafalgar Properties Ltd (Supreme Court (NSW), Giles J, 19 July 1991, unrep). In Newmont Yandal, Spigelman CJ said (at [182]): Satellite litigation and delay should be avoided with respect to both the inherent jurisdiction and the slip rule. I agree with Handley AJA that the judge who made the orders is overwhelmingly the preferable person to make the corrections. That s/he may be influenced by, and even express, her or his subjective intention is not a ground for disqualification.
With the above in mind, I turn to the respective applications for variation of the principal judgment.

[11]

Prayer 1 - $200,000 cheque dated 25 September 2013

Prayer 1(a) of the Broadway notice of motion relates to a $200,000 cheque dated 25 September 2013 drawn in favour of Plaza (which, it will be recalled, is an entity controlled by Moustafa and part of the Sayour interests).
Plaza pleaded in its fifth cross-claim (at [530]) that certain payments made by Investments constituted bribes. Investments pleaded that it made those payments to Plaza pursuant to genuine obligations, including an obligation to pay $2 million in addition to the $6 million purchase price for the Broadway Site (amended defence to fifth cross-claim at [18]). It is noted by the Deiri Parties that Investments further pleaded that a number of payments which were not pleaded by Plaza as constituting bribes (or as giving rise to any other liability) were paid pursuant to those obligations, including a payment made by cheque dated 25 September 2013 in the amount of $200,000 made out to "Broadway Plaza P/L" (amended defence to fifth cross-claim at 18(iii)).
The Deiri Parties note that, in the Broadway Proceedings, they had sought (as factual finding #11) a finding that Investments paid the additional $2 million to Plaza (and they refer to their closing submissions at [408]-[413]). They point out that the $2 million payment included the payment of $200,000 by the cheque dated 25 September 2013.
It is noted that the $200,000 cheque dated 25 September 2013 was first referred to in the chronology of events set out in the principal judgment under the heading "Payments in September 2013" (see from [412]). At [413] I noted that: On 25 September 2013, it appears that Mr Deiri gave Jamil a cheque for $200,000 and a letter stating that the payment was in full and final settlement in relation to the purchase price and confirming that all of the $8 million was now paid and no other moneys were owing.
I further noted that Investments' position was that this was the "final land/costs payment" (the 13th of 13 such alleged payments).
At [416]-[417], I went on to say as follows: 416. I note that, also on 25 September 2013, Mr Deiri sent an email attaching a scanned copy of a cheque drawn on the account of Combined Property Investments Pty Ltd (CPI) addressed to Plaza in the sum of $200,000. 417. It appears that this cheque was deposited to an unknown account. [My emphasis]
At [1716], dealing with the submissions made by the Deiri Parties as to the proposed factual finding #11, I noted that: 1716. It is submitted that those payments were made by the following instalments: ... and on 25 September 2013, by cheque for $200,000 made payable to "Broadway Plaza P/L" (see at [416] above) and provided it to Jamil (though it is not clear where this cheque was banked). [My emphasis]
In my determination as to proposed factual finding #11, I said (at [1727]): 1727. However, I do not accept that Jamil was expressly or impliedly authorised to direct that moneys (due to Plaza) be paid to himself. Accordingly, I consider that the sums paid on 15 August 2013 (of $150,000 payable to "Jamil") (see at [372] above) and on 17 August 2012 also made payable to Jamil ($150,000) (see at [300] above); and on 25 September 2013 ($200,000) by cheque drawn in favour of "Broadway Plaza P/L", which was provided to Jamil and which cannot be traced to any bank account in Plaza or Moustafa's name(s)) (see at [416]) were not moneys received by Plaza; and I so find. [My emphasis]
At [1728], I concluded that, of the amount agreed to be paid for the acquisition of the land, moneys totalling $650,000 could not be apportioned as payments to Plaza and there would be a balance owing by Investments. Pausing here, it is common ground (and I accept) that the amount of $650,000 was an arithmetical error (an egregious error on my part, I must accept - which I can only explain by reference to a slip in the course of the many amendments and revisions of judgment drafts that occurred in the preparation of the principal judgment). The total there set out should have been $500,000. (The principal judgment will at the very least be amended to correct this error under the slip rule.)
Insofar as there is a statement at [1727] (in the context of the finding that the $200,000 and other moneys were not moneys received by Plaza) that the cheque dated 25 September 2013 for $200,000 drawn in favour of "Broadway Plaza P/L" which was provided to Jamil cannot be traced to any bank account in Plaza or Moustafa's names and was not money received by Plaza; and the statement at [1728] that that money "cannot be apportioned as payments to Plaza and there will be a balance owing by Investments", the Deiri Parties seek (by prayer 1(a) of the Broadway notice of motion) a variation of the principal judgment, to reflect that the $200,000 paid by that cheque was in fact received by Plaza; and, further or in the alternative, that there be no finding that Investments is liable for that sum.

[12]

Deiri Parties' submissions

The Deiri Parties say that there are two reasons for making those changes to the principal judgment.
First, they say that the $200,000 cheque was in fact deposited by Jamil into the CBA Partnership Account as a partnership contribution from Plaza, and that this sum was later paid out to Plaza and deposited into the Westpac 202 Account as a partnership distribution. It is noted that I found that the partnership distributions paid into the Westpac 202 Account were received by Plaza (see at [1775] of the principal judgment). The Deiri Parties say that the $200,000 was part of a larger payment of $2.9 million back to the Sayour interests as part of the profit by way of partnership distribution (see T 14.37); and that it follows that the $200,000 was also received by Plaza.
The evidence of these events to which the Deiri Parties point, in their submissions on the Broadway notice of motion, is as follows.
On 23 September 2013, Mr Deiri drew a cheque for $200,000 and caused it to be deposited into the CBA Partnership Account (referring to Mr Deiri's affidavit sworn 26 November 2019 at [41]). It is noted that this is recorded in the bank statements for the account (the Deiri Parties here referring to Annexure D to Mr Deiri's affidavit sworn 26 November 2019). Mr Deiri's evidence is that he did so as a loan from Investments to the Partnership, and it is noted that that loan is recorded in the Partnership ledger (Mr Deiri's affidavit sworn 26 November 2019 at [41], Annexure E).
On 25 September 2013, Mr Deiri emailed Jamil (the email referred to in the chronology of events at [416] of the principal judgment), attaching a copy of a cheque dated the same day drawn on the account of Combined Property Investments Pty Ltd, also in the amount of $200,000, made out to "Broadway Plaza P/L" (Annexure F to Mr Deiri's affidavit sworn 26 November 2019). The Deiri Parties say that, in his email, Mr Deiri said that he had drawn the cheque in favour of Plaza as the balance of the moneys for the site (i.e., they say, the last portion of the $2 million owed to Plaza) and that he would be depositing the cheque into the CBA Partnership Account as a loan from Plaza; and that Mr Deiri there noted he had deposited an equal sum two days earlier as a loan from Investments.
The Deiri Parties point to Mr Deiri's recollection that he did not himself end up banking the cheque referred to in his email to Jamil; rather, Mr Deiri says that he gave the cheque to Jamil. It is noted that the bank statements for the CBA Partnership Account record that, on 25 September 2013, that cheque was deposited into the CBA Partnership Account (Annexure D to Mr Deiri's affidavit sworn 26 November 2019) (the Deiri Parties say that the cheque was evidently banked by Jamil). It is noted that the partnership ledger records the $200,000 deposit as a loan (using the narration "Biomed PL-loan from Bp") (Annexure E to Mr Deiri's 26 November 2019 affidavit), which the Deiri Parties maintain was a record of a loan from Plaza. (Biomed, it will be recalled, is a company associated with Moustafa.) The Deiri Parties submit that the initials "Bp" in this narration must be a reference to Plaza.
Mr Deiri deposed that, on 14 November 2014, the total loan contributions from Investments and Plaza were paid out (Mr Deiri's affidavit sworn 26 November 2019 at [45]). As recorded in the partnership ledger, the repayment of Plaza's loans totalled $2.19 million (Annexure G to Mr Deiri's affidavit sworn 26 November 2019). The Deiri Parties say that this amount included the $200,000 Plaza had loaned on 25 September 2013. It is said that the repayment was by way of cheque dated 13 November 2014 in the amount of $2.19 million made out to "Sayour Family Trust" which was deposited into the Westpac 202 Account. As adverted to above, I found that Plaza received that payment ([1775] of the principal judgment). The Deiri Parties note that the partnership ledger records that Investments' loans were repaid on the same date (Annexure G to Mr Deiri's affidavit sworn 26 November 2019) (though the Deiri Parties say that $100,000 more was paid to Investments because it had loaned that much more to the Partnership (referring to Mr Deiri's affidavit sworn 22 August 2019 at [232]).
Accordingly, the Deiri Parties contend that the evidence establishes that the $200,000 cheque dated 25 September 2013 made out to "Broadway Plaza P/L" was in fact received by Plaza; that it was given to Jamil in September 2013 and that the amount was then loaned to the Partnership to match Investments' loan in the same amount made two days earlier; and that it was later repaid to Plaza.
The Deiri Parties say that the principal judgment should be amended as follows in this regard.
First, that [418] ([sic], this must surely be a reference to [416]) should be amended insofar as it refers to the cheque dated 25 September 2013 for $200,000 made payable to "Broadway Plaza P/L" having been deposited to an "unknown account"; that [1716] should be amended where it is recorded that it is not clear where that cheque was banked; and that [1727] should be amended where it is recorded that the sum of $200,000 paid by that cheque cannot be traced.
Second, that [1727] should be amended where it is recorded that the sum of $200,000 paid by cheque dated 25 September 2013 was not received by Plaza.
Third, that [1728] should be amended where it is recorded that the sum of $200,000 "cannot be apportioned as payments to Plaza and there will be a balance owing by Investments" to Plaza in respect of that amount.
The Deiri Parties say that, as a matter of justice, if the evidence is clear that the sum of $200,000 was received by Plaza (a premise with which the Sayour Parties cavil) then the principal judgment should be amended.
The second reason which the Deiri Parties proffer in support of their application for amendment of the principal judgment in relation to the $200,000 cheque (which they say applies in any event) is that [1728] should be amended where it is recorded that "there will be a balance owing by Investments" in respect of the $200,000 because Plaza made no claim for that amount (which they accept is a pleading point).

[13]

Sayour Parties' submissions

The Sayour Parties note that Investments pleaded in its defence to the second cross-claim that a payment was made to Plaza of $200,000 by delivery of a cheque dated 25 September 2013; and they say that Investments bore the onus of proving its defence that the $200,000 (which Investments admits was given to Jamil) was received by or on behalf of Plaza as consideration for the $2 million agreement. The Sayour Parties say that, having failed to prove this amount was received by Plaza at trial, Investments now simply seeks to reargue something that has already failed for want of sufficient evidence.
Insofar as the Deiri Parties in their submissions on the motion (at [7]) assert that the $200,000 cheque was in fact deposited by Jamil into the CBA Partnership Account, the Sayour Parties say that there is no evidence to support this contention.
As to the contention that Plaza made no claim for specific amounts, the Sayour Parties say that this fails to take into account the pleaded defence and the matters expressly pleaded in the second cross-claim. The Sayour Parties point to the pleaded contractual promises to pay $6 million plus $2 million; and that Investments pleaded a defence of payment to the whole $8 million, upon which it has failed as to $500,000.
As to the evidence to which I was taken on the present application, the Sayour Parties point out that the ledger (at Annexure E to the affidavit of Mr Deiri sworn 26 November 2019) shows a $200,000 credit on 25 September 2013 with the narration "Biomed PL loan from BP". The Sayour Parties say that if this is in the Partnership ledger recording that payment as a payment by Biomed by way of loan from Plaza, that is different from the suggestion now made that Plaza in fact contributed that money (see at T 61.19; 13/4/2021). Pausing here, the very fact that there might be an issue on the evidence as to what that payment by Biomed comprised is a powerful reason not to revisit the matter at this stage, particularly in light of the submissions that the Deiri Parties themselves made at the trial.
The Sayour Parties say that there is no evidence that the $200,000 cheque in question was a cheque which was deposited into the Westpac 202 Account and they emphasise that the submission that it was is a submission contrary to that which was made at the trial. (In oral submissions the Deiri Parties point to the coincidence of timing in relation to the $200,000 cheque referred to in Mr Deiri's email and its deposit as evidenced in the material to which my attention was drawn on the present application.)

[14]

Conclusion on prayer 1(a)

I do not consider it appropriate to revisit the reasons in the principal judgment in relation to the destination of the $200,000 cheque.
As to the references in the principal judgment to the effect that it was unclear where the $200,000 cheque was banked (and which the Deiri Parties now want corrected), it would seem that any error on my part in that regard is one into which I was led by the Deiri Parties' own submissions (and the Sayour Parties say that, on the authorities referred to above, for that reason that matter should not be revisited). Indeed the Deiri Parties accept that their own submissions were in error in this regard.
In this regard, reference was made to the written closing submissions of the Deiri Parties (dated 5 February 2020) at the hearing in which (at [409(f)]) reference is made to the 25 September 2013 cheque in question, including in footnotes 331 and 332 details of the cheque itself, the payor statement showing deduction and Mr Deiri's affidavit of 22 August 2019 at [150]-[155] as to the provision of the cheque to Jamil. It is noted (correctly) by the Sayour Parties that the submissions include the statement (contrary to the submissions made on 13 April 2021) that "[i]t is not clear where this cheque was banked". Similarly, in the table set out at [413] of those written submissions, summarising the payments comprising the $2 million that it was contended had been paid for the additional $2 million in associate costs in relation to the purchase of the land (see at [411]) the destination on the $200,000 cheque is recorded as being "unknown" (with court book references to 13/21182 and 13/21248). (Hence, the Sayour Parties say that the submission that the destination of the $200,000 cheque was the partnership bank account is a new submission (and one which is contrary to the submission made at trial).)
It was not made clear at the course of the hearing on the present applications whether in fact I was taken at the hearing to the bank statements and partnership ledgers to which reference has been made on the present application (see above). Moreover, if the suggestion is that I should have trawled through the bank statements and ledgers in order to reach a finding inconsistent with the Deiri Parties' own submissions, that seems to me to be surprising to say the least. It was incumbent on the Deiri Parties, if they considered that there was evidence to support the conclusion that the $200,000 cheque had been banked in a Partnership bank account (and treated as a loan) to take me to the relevant material; not to make submissions that the destination of the cheque was unknown. I note in this regard that the Deiri Parties' reply submissions continued to rely on the summary of payments included in their closing submissions (see footnote 11) and implicitly suggest that the destination of all of those payments was not in evidence, insofar as they state "in so far as the destination of these payments is in evidence, they were paid into bank accounts in the names of Moustafa and Jamil (the Westpac 202 Account) or Moustafa (the Westpac 238 Account) (referring in the footnote thereto, among others, to [413] in which, as noted above, the destination of the $200,000 cheque is recorded as unknown).
The clear inference from the above is that it was only after the principal judgment that it was appreciated by the Deiri Parties that there was in fact evidence as to the destination of the $200,000 cheque (albeit evidence to which it is not clear to me that I was taken during the course of the hearing). To the extent that there was a misapprehension of the facts (and I am not persuaded that the evidence to which I have been taken on this application necessarily shows that the $200,000 was traceable to the Westpac 202 Account), that misapprehension (in the words of Mason CJ in Autodesk), appears to be solely attributable to the neglect or default of the Deiri Parties who themselves characterised the destination of the $200,000 as unknown. While that, of itself, is not determinative of an application to vary (see Aktas v Westpac), it does mean that caution should be exercised, particularly where the Sayour Parties maintain that the evidence does not support the contentions now made as to the destination of the cheque. In those circumstances it is not appropriate to revisit this issue (and in the scheme of things the amount in question is hardly material).
As to the pleading point (the second reason put forward for the requested changes), I consider that in the context of the claim for relief contained in prayer 1(c) of the Broadway notice of motion (see below).

[16]

Deiri Parties' submissions

The Deiri Parties submit that [1727] and [1728] of the principal judgment should be amended for two reasons.
First, the Deiri Parties submit that these cheques were received by Plaza for the reasons in the Deiri Parties' reply submissions at the trial (at [20]-[22]). The Deiri Parties say that it does not appear from the reasons in the principal judgment that those submissions were considered (albeit noting that there was a reference elsewhere in the principal judgment to the reply submissions - T 18.13), there being no express reference to those submissions. The Deiri Parties submit that those submissions should be considered. The submissions in contention are those extracted below: 20. The only cheques not deposited into these accounts [seemingly a reference to the Westpac 202 Account and the Westpac 238 Account referred to at [18] of the submissions] were those made out to Jamil on 17 August 2012 and 15 August 2013 each for $150,000. For the same reasons outlined in the Deiri Closing Submissions at [1009], Plaza has failed to show the mere receipt of those funds was to Jamil's benefit and not for Plaza. In this regard, the mere deposit of money into an account in Jamil's name would not prove Jamil was acting otherwise than for Plaza when the two cheques were directed and received. The question is not whether the agent's act benefited the principal. The principle is that an agent "must be acting 'for' the principal, since if there is authority to do the act it does not matter if the principal is benefited by it": Lysaght v Falk Bros & Co Ltd (1905) 2 CLR 421 at 429-430 (Griffiths CJ). [Emphasis as per submissions] 21. If (contrary to the Deiri Parties' primary submission [citing the closing submissions at [1132]) Moustafa did not know of the payments to the Westpac accounts, the only logical inference is that he left it to Jamil to manage where moneys were to be deposited [there referring to the Deiri Parties' closing submissions at [91], [205]-[206], [478]]. Moustafa gave no evidence that he instructed Jamil to direct payments to a specific account. Yet he knew moneys were being paid by Investments, because: Jamil told him [citing the Deiri Parties' closing submissions at [168]-[172]]; he banked two cheques himself [referring to the Deiri Parties' closing submissions at [455]-[483]]; and he never complained about missing payments. 22. In those circumstances, the direction to pay and receipt of the two cheques for $150,000 was conduct for Plaza. If Jamil later applied the funds in an unauthorised way, that would not change the fact Jamil had initial authority to direct payment and receive and hold the funds. Moustafa cannot have it both ways: he cannot leave Jamil to decide where payments were to be made and held, and then complain years later that holding the funds in the "wrong" account was unauthorised.
Second, and in any event, it is said (akin to the pleading submission in relation to prayer 1(a)) and in what is acknowledged to be a pleading point - see T 18.50; 13/4/21) that [1728] of the principal judgment should be amended insofar as it is recorded that the sum of $300,000 in respect of the two cheques "cannot be apportioned as payments to Plaza and there will be a balance owing by Investments" because Plaza made no claim in respect of those amounts.

[17]

Sayour Parties' submissions

The Sayour Parties note that [1727] and [1728] of the principal judgment, concerned the determination of proposed factual finding #11 contended for by the Deiri Parties in aid of its defence to the second cross-claim (namely, that Investments had paid the sum of $2 million to Plaza). The Sayour Parties say that the determination is predicated on the matters set out at [1705] and [1721], where I took the approach in effect that where Jamil had directed payments to be made to him (and, therefore, for his own benefit) such directions were not within any authority conferred by Moustafa or Plaza.
At [1705], I said, in the context of the determination of proposed factual finding #10: 1705. In relation to this finding, I start from the proposition (which I have accepted above) that Moustafa left it to Jamil to manage the decisions of the Broadway Development and that he impliedly, if not expressly, authorised Jamil to direct where payments were to be made (other than for Jamil's own personal benefit, which I cannot accept was within any authority conferred on Jamil by Moustafa); and to receive those payments in the sense of collecting and depositing cheques.
At [1721], I said: 1721. The Sayour Parties say that Investments' case in this regard depends on a finding that Jamil had authority to receive and direct payments. I consider that he did (other than insofar as he directed payments to his own account). I accept that the appropriations depend on alleged oral conversations and the letter of 25 September 2013 which Jamil countersigned to acknowledge payment of the full $8 million; that the conversations depend on the uncorroborated evidence of Mr Deiri; and that the 25 September 2013 letter depends on the case that Jamil had authority.
The Sayour Parties emphasise that the two $150,000 cheques were made out to Jamil (noting that the tables in the Deiri Parties' closing submissions at [407] and [413] recorded as much). As to the first of the cheques, the table records the destination of that cheque as unknown (with a reference to CB 13/19514; 13/19512) and that the destination of the second cheque was to Jamil's Westpac 490 account (referring to 13/20983; 13/20986).
The Sayour Parties say that there was a finding that Jamil's authority did not extend to receiving cheques made out to himself; and that there is no occasion to alter the outcome in the principal judgment in that respect.
Insofar as the Deiri Parties (in their reply submissions at [16]) had submitted that "Jamil was not directing payments 'to himself'", the Sayour Parties say that insofar as this is to be understood as a submission of primary fact, it was not supported by the evidence. It is noted that Jamil was paid those amounts; that the cheques were addressed to him specifically; and that he deposited the cheques into accounts in his own name (and not, relevantly, into accounts associated with Plaza or Moustafa such as the Westpac 202 Account).
The Sayour Parties say that these were considered findings and dealt with the point that the Deiri Parties wanted to agitate. It is noted that the authority submissions were extensively considered in the principal judgment.
As to the first complaint by the Deiri Parties in this regard (that their submissions in reply dated 27 April 2020 at [20]-[22]) were not specifically referred to in the principal judgment, the Sayour Parties say that it does not follow that they were not considered. In this regard the Sayour Parties point to authority for the proposition that a trial judge is not required to spell out every detail of his or her reasoning process; rather the obligation is to expose the reasons for resolving a point critical to the contest between the parties (Nominal Defendant v Clancy [2007] NSWCA 349 at [124] per McColl JA (in dissent but where the majority at [14] expressly agreed with the proposition there stated).
As to the Deiri Parties' second (pleading) complaint in this context, the Sayour Parties repeat their submission above.

[18]

Conclusion as to prayer 1(b) of the Broadway notice of motion

Insofar as it is suggested by the Deiri Parties (here and elsewhere) that I failed to consider their reply submissions, I can only say that my recollection is that I had regard to all of the submissions from all of the parties (opening, closing and reply submissions) when preparing my reasons and made copious notes in the context of the preparation of the numerous drafts of the principal judgment (albeit now shredded in accordance with my usual practice after delivery of the published reasons). However, I did not refer specifically in the reasons to every paragraph of one or more of those numerous sets of submissions (not least because I was conscious of the desirability of minimising the length of the judgment and had been deluged with submissions and other material in which there was some degree of repetition); and, relevantly, I accept that I have not referred expressly to the specific paragraphs to which the Deiri Parties have pointed. (Ironically, rather than being criticised for the length of my reasons, which is the more frequent occurrence, it seems to be suggested that in order to be comprehensive they should have been longer.)
My attention now having been drawn specifically to the paragraphs extracted above from the reply submissions, I remain of the view that Jamil was not authorised to direct and receive payments in his own name (which I consider to be the significant factor here) and I do not accept that payments made to Jamil personally and not deposited into the Partnership bank account can be said properly to have been authorised or for the benefit of Plaza. What is apparent from the extracted submissions is that there was copious reference therein to the closing submissions as to these matters (and the Deiri Parties make no complaint that I have failed to address those submissions).
As to the pleading point, again I address this below in the context of the relief sought in prayer 1(c).

[19]

Prayer 1 - $650,000 "owing by Investments"

Prayer 1(c) of the Broadway notice of motion seeks a variation of [1728] of the principal judgment, in which I said that "of the amount agreed to be paid for the acquisition of the land", $650,000 "cannot be apportioned as payments to Plaza and there will be a balance owing by Investments". The Deiri Parties note that that conclusion was based in part on the fact that the cheque for $200,000 dated 25 September 2013 made out to "Broadway Plaza P/L", and the two cheques for $150,000 made payable to "Jamil Sayour", were not received by Plaza (see the submissions as to those matters above). As noted above, it is common ground that the sum of $650,000 was an arithmetical error and (on the basis that the Deiri Parties' present contentions in relation to prayers 1(a) and (b) are not accepted) should be $500,000.
The passages of the judgment here referred to were part of the summary of my conclusions, which I set out by reference to the successive cross-claims. In relation to the second cross-claim, I noted as follows: 4440. In relation to the Second Broadway Cross-claim, I have found that Plaza has not proved the contract upon which it sues and that conclusion is fatal to the principal way in which the interest claim is put under the Second Broadway Cross-claim. 4441. On the alternative way in which the claim is put, I consider that no breach of special condition 43.3 of the contract of sale has been established. 4442. Otherwise, I have recorded above my determinations of the other issues that would arise on the Second Broadway Cross-claim, if I were in error in relation to the preceding determinations.
The variation sought to [1728] (which as noted above is part of the reasons that dealt with the factual finding #11) relates to consideration by me of the factual finding that had been sought by the Deiri Parties and it necessarily involved a determination of the issues required in order to address that factual finding. The Deiri Parties had sought that factual finding in relation to the claim brought by Plaza in its second cross-claim (for amounts allegedly payable in respect of the price for acquisition of the land in question and interest under an alleged loan agreement).

[20]

Deiri Parties' submissions

The Deiri Parties read the statement at [1728] that "there will be a balance owing by Investments" not as a determination of Investments' liability in the proceeding; but, rather, as an observation made in passing about the consequence of not making the finding sought by Investments that the whole of the money for the purchase price had been paid. The Deiri Parties say that this is consistent with the summary of the disposal of the second cross-claim (at [4440]-[4442]), where it is said that the loan arguments advanced by Plaza have not been accepted, and that determinations are recorded earlier in the principal judgment of the other issues "that would arise on the Second Cross-Claim, if I were in error in relation to the preceding determinations". (To that extent I agree with the Deiri Parties' submissions on this issue.)
The Deiri Parties say that, based on the reasons in the principal judgment as they stand, there should be no judgment against Investments in respect of these amounts. Nonetheless, the Deiri Parties say that, whether obiter or a finding of liability, this part of the principal judgment should be varied to remove those statements, for two reasons.
First, that Plaza did not plead that any such amount was owing by Investments in relation to the acquisition of the Broadway Site. The Deiri Parties point to the second cross-claim, which (at [14]) pleaded a loan by Plaza to Investments of the sum of $5.6 million (being the balance of the amount payable on completion of the sale of the land); and that the loan had not been repaid and accrued interest (the indebtedness of Investments to Plaza for the sum of $5.6 million being pleaded at [45] and the indebtedness for interest at [46]).
The Deiri Parties note that there was a claim in respect of the additional $2 million that was said to be owing (see from [19] of the second cross-claim) but say that what the Sayour Parties had done was to elect to appropriate various payments (each of $500,000 as set out from [27] of the second cross-claim) on account of the liability of Investments for that $2 million. Accordingly, it is submitted that there can be no circumstances in which any part of the $2 million remained outstanding (having regard to the pleading at [27]-[38]).
The Deiri Parties say that the relevance of the individual payments of $200,000 and the two $150,000 cheques is apparent from the fifth cross-claim in the context of the alleged bribes. (It is noted that, although the fifth cross-claim did plead that the two cheques for $150,000 were bribes, that case was unsuccessful; see the principal judgment at [2972], [4445].)
The Deiri Parties thus contend that, to the extent that what was said at [1728] was a finding that there was an amount outstanding payable by Investments to Plaza (which they say it was not), this is in error because there was no debt claimed for the $500,000. In the event that all of the Deiri Parties' submissions are not accepted, they submit that the sum owing should be $500,000 (again, noting the arithmetical error I have already addressed) or less depending on their success on this application.

[21]

Sayour Parties' submissions

In response to the pleading issue, the Sayour Parties say that this amounts to the Deiri Parties seeking leave to re-open submissions to make a pleading point (see at T 21.25; 13/4/21) (a contention with which, unsurprisingly, the Deiri Parties cavil).
The Sayour Parties point to the relief sought in the second cross‑claim, which commenced with a declaration (prayer 1) as to the contract for the sale of land and included (prayer 2) a declaration concerning the further contract for the $2 million payment. It is noted that, at prayer 5, what was sought was judgment for: principal of $6 million; accrued interest on $5.6 million and continuing interest thereon. Insofar as the Deiri Parties say that this is a claim on the contract for sale and written loan agreement; the Sayour Parties say that this wrongly assumes that prayer 5 is a claim for judgment on the contract of sale only; and that prayer 5 does not say that.
It is noted that, after claims in relation to interest, prayer 9 seeks further or in the alternative an order for an account to be taken as to the amounts paid by way of payment toward the price under the contract of sale or toward repayment of such part of the price that was loaned back on completion, pointing out that the claim was not predicated only on the loan; and that an account was also sought to be taken (see (b) of the apportionment of those payments to principal and interest). Prayer 9(c) goes on to seek an account as to the amounts paid or contributed by Investments to Plaza or, on account of Plaza, to the Partnership towards satisfaction of the said promise to contribute $2 million; and prayer 9(d) seeks an account as to the dates on which each such amount was paid and the amount that remains unpaid.
It is noted that prayer 10 then seeks an order for Plaza to pay the amount found due on the taking of the account sought in prayer 9, together with, according to the character of amounts unpaid, interest, interest on the unpaid amount of the loan at the contract rate; and on the deposit, compound interest as damages at commercial rates; or, alternatively (in either case) interest pursuant to s 100 of the Civil Procedure Act.
The Sayour Parties say that the basis of appropriation sought to be made in these parts of the second cross-claim was generally to the effect that Plaza took the approach there had not been a previous appropriation; it was now open for it to make one; and sought to appropriate the payments in the most favourable way so as to leave principal owing (on which contractual interest would run). It is noted that I rejected the case that there was a right to contractual interest, so it is said that the basis for those appropriations is contrary to the findings that have now been made. The Sayour Parties say that the appropriations for which election was made in the pleading cannot stand in the face of findings that it was not available to Plaza to appropriate in that way. Accordingly, it is said that the appropriations fall in accordance with the actual findings (that there was no contractual right to interest).
The Sayour Parties say that the result is that, whether appropriated to the $6 million or the $2 million is a matter of little import, given that on either basis the only interest that would run would be under s 100 of the Civil Procedure Act and that the defence of payment has simply not been made out to the extent of $500,000. It is submitted that there is no pleading point (and that if there was then it should have been taken long before now).
As noted above, the Sayour Parties accept that there is an arithmetical error as to the $650,000 and this should be corrected to $500,000.

[24]

Deiri Parties' submissions

The Deiri Parties, in their written submissions on the present application, refer to the following concerning the various loans.
First, that on 15 February 2012, Plaza and Investments executed the "Cash Advance Facility Agreement" to finance the first phase of the development, being the car park and shopping centre, with an accommodation limit of $45,597,000 (First Facility). The First Facility provided for two stages of borrowing: "Stage 1" which comprised Tranche A, a short-term advance of $5.5 million to be used for bulk excavation and early works, to be repaid within 8 months; and Tranche B, the balance of the $45,597,000, which was to be used for construction of car parking and retail facilities, to be repaid within a further 18 months (see cl 1.4). It is noted that the First Facility contemplated that, 26 months after the first drawdown, the Stage 1 loan arrangements would be refinanced into "Stage 2", comprising a new Tranche A with a limit of $11,297,000 to be repaid within 6 months of the first drawdown and Tranche B for $34.3 million to be repaid within 36 months from the first drawdown (in effect, ultimately reducing the original Stage 1 loan from $45,597,000 to $34.3m and requiring $11,297,000 to be repaid).
Second, that on 20 June 2013, the First Facility was varied and reinstated by the "Deed of Variation and Restatement No 1" (First Facility Amending Deed) and the annexed "Amended and Restated Cash Advance Facility Agreement" (Amended First Facility), which reduced the limit for the Stage 1 loan from $45,597,000 to $34.3 million, as contemplated by the First Facility. Additionally, a "Cash Advance Facility Agreement" was executed to fund the construction of the apartments, with a limit of $42,037,000 (Second Facility).
Third (which I do not appear to have included in the chronology of events in the principal judgment but was the subject of CBA factual finding (vii)), that on 1 October 2013, the balance owing under the Stage 1 Loan under the First Facility was reduced by $11,297,000 by drawing down on the (new) Stage 2 Loan under the Amended First Facility (the Deiri Parties here referring to the CBA Running Balance of Loan Facilities).
The Deiri Parties note that they had sought a finding that Plaza was bound by the First Facility Amending Deed, the Amended First Facility, and the Second Facility (together, 2013 Loan Documents) (referring to their closing submissions at [416]-[417]) but that the finding they sought was not made on the basis that Jamil did not have the requisite authority to bind Plaza (referring to [1754] of the principal judgment).
At [1754], determining the propounded factual finding #12, I said: 1754. I cannot make the finding sought in relation to factual finding #12. I do not accept that the level of authority impliedly given to Jamil extended to the entry by him, on Plaza's behalf, into the Stage 2 Construction Contract; and I do not accept that the Powers of Attorney authorised him to enter into such a contract.
The Deiri Parties say that there was no specific finding made that CBA is liable to Plaza in respect of bank fees and interest charged after the 2013 Loan Documents were executed. It is noted that at [2141] reference was made to interest charges, line fees, and rollover fees and that I there said that "insofar as those charges were not commensurate with the contractual entitlements of CBA under the respective facility agreements then they were not authorised and they are recoverable as moneys had and received"; but that there is no finding that any particular fees or charges were not commensurate with CBA's contractual entitlements.
The Deiri Parties submit that, for the avoidance of doubt, it should be found that Plaza is not entitled to recover any such charges, for several reasons.
First, that Plaza is precluded from claiming those charges and fees by reason of its acquiescence, or alternatively the conventional estoppel, pleaded by CBA at [193E] of its amended defence to the first cross-claim filed on 1 October 2019, namely that: a. Plaza and Moustafa Sayour acquiesced in the payment of funds from, and Plaza, Moustafa Sayour and CBA at all times acted upon the convention that payment of funds would be made from, the CBA Loan Facilities and the CBA Joint Account even where cheques and other instruments had not been signed or executed by Moustafa Sayour; b. it would be unconscionable to allow Plaza or Moustafa Sayour to resile or depart from the assumed conventional basis of their dealings; c. by reason thereof, Plaza is estopped from asserting on the Cross-Claim that transactions under the CBA Loan Facilities and the CBA Joint Account were not authorised.
The Deiri Parties point to the consideration in the principal judgment of CBA's acquiescence and conventional estoppel claims in respect of cheques and accommodation notices (at [2502]-[2512]) (and they rely on the statements of principle there summarised). However, they note that the principal judgment does not address those defences in respect of the bank fees and interest which CBA debited to the CBA Partnership Account. They submit that I should now do so; and find that those defences are established.
In this regard, the Deiri Parties submit that it is clear that Plaza acquiesced in CBA charging bank fees and interest for moneys advanced to it by CBA. It is noted that I found that Moustafa was aware that the apartments were being built and that they were being funded by CBA (see at [1255] of the principal judgment). The Deiri Parties point to Moustafa's evidence in cross-examination (at T 546.44-547.39) that he knew CBA was charging interest and bank fees: Q. And in addition to the $70 million approximately, including GST, you knew that if you borrowed that sort of money from the bank, you would have to pay interest on the money borrowed, is that right? A. WITNESS: Yes. Q. You expected, having regard to your extensive business experience, that there would also be fees and charges associated with borrowing a sum of money like $70 million or thereabouts? A. WITNESS: I don't understand. I don't know about this, I don't know about this. I, I wasn't aware about that. Q. Mr Sayour, you don't suggest to the Court, do you, that you didn't understand that when the Commonwealth Bank was going to lend you and your partner money, that it would not be charging bank fees associated with the borrowing? A. WITNESS: Bank fees, yes. Q. Yes, so you knew they would be charged on top of whatever it is you borrowed? A. WITNESS: Yes. Q. And on top of whatever interest you had to pay? A. WITNESS: Yes. Q. Right. Did you yourself calculate, take any calculation, as to how much the interest on the money that you borrowed from the Commonwealth Bank might be, either monthly or annually or over the life of the loans? A. WITNESS: No, I don't. Q. For all you knew it could be many, many hundreds of thousands of dollars, correct? A. WITNESS: I leave it to my partnership, he's, he's the one that look after this - the financial for the building. Q. But you know now, don't you-- A. WITNESS: Now? Q. --that if you borrow $70 million from a bank-- A. WITNESS: Yes. Q. --you're going to be expected to pay at least a couple of million dollars in interest? A. WITNESS: Oh yes. Q. Yes and you knew that then, didn't you? A. WITNESS: Yes. [Emphasis as per Deiri Parties' submissions]
The Deiri Parties say that the nature and extent of the bank fees and interest which Plaza acquiesced in CBA debiting to the CBA Partnership Account must extend at least to those specified in the First Facility, because Moustafa signed it; and that Moustafa must be taken to have accepted such charges.
It is noted that the First Facility relevantly contained the following provisions.
First, that pursuant to cl 3.4, the Borrower must pay CBA interest on each Advance at the Interest Rate applicable to that Advance (cl 3.4(a)), calculated on the number of days elapsed (cl 3.4(b)), and payable monthly in advance with the first such payment to be made on the first day of the interest period of each Advance or at such other times or intervals as CBA may require (cl 3.4(c)).
Second, that the Interest Rate for Stage 1 Tranches A and B, and Stage 2 Tranche A, was specified as the "Floating Base Rate - average BBSY Bid Rate, for interest periods of 1, 2, 3 or 6 months (Interest Periods) as determined on the Reuters screen page BBSY as at 10.15 am Sydney time on the rate set date"; and the Interest Rate for Stage 2 Tranche B was specified as either the aforementioned interest rate, or "Fixed Base Rate: Forward Start 3 Year Swap Rate [4.59% pal (indicative as of 19/01/2012 and commencing 19/01/2014)", leaving CBA to choose which rate applied for that tranche.
Third, that CBA is entitled to capitalise interest for Stage 1 Tranche B (which had an accommodation limit of $45,597,000), up to $2,847,000 (cl 3.7). In this regard, the Deiri Parties say that, although Plaza appeared to complain in its opening submissions at [4.47] about CBA capitalising interest, there is nothing unusual about this. It is said that, had there been no express contractual right to charge interest and capitalise it, that right would have been implied in any event as an incident of the contract of banker and customer (the Deiri Parties here referring to National Bank of Greece SA v Pinios Shipping Co (No 1) [1990] 1 AC 637 at 682-683 per Lord Goff of Chieveley).
Fourth, that, pursuant to cl 13(b), the Borrower must pay line fees monthly in advance of 1.59% per annum on the Accommodation Limit for Stage 1 Tranches A and B, and Stage 2 Tranche A, with the line fee for Stage 2 Tranche B to be confirmed on refinance; and, pursuant to cl 13(c), the Borrower must pay usage fees monthly in advance for Stage 1 Tranches A and B, and for Stage 2 Tranche A, of 1.06% on the funds drawn down against the facility.
Fifth, that pursuant to cl 13, CBA has the right to debit fees and interest payments due on the First Facility directly from the Borrower's bank accounts (and therefore the CBA Partnership Account).
The Deiri Parties note that the 2013 Loan Documents provided for almost identical bank fees and interest. They point to the following in this regard.
The Amended First Facility signed on 20 June 2013, which reduced the original First Facility Stage 1 loan limit to $34.3 million, specified an interest rate relevantly identical to that in the First Facility for the various Tranches (see cl 1.1); and permitted CBA to capitalise interest for Stage 1 Tranche B as the First Facility did to the same amount (cl 3.7), and provided for establishment fees, line fees and usage fees at the same rates (cll 13(a)-(c)).
The Second Facility to fund the construction of the apartments, which had an accommodation limit of $42,037,000, specified an interest rate in line with the First Facility Agreement (cl 1.1, although the Deiri Parties note that in the First Facility CBA had an option to charge a fixed base rate for Stage 2 Tranche B); and provided for capitalisation of interest (cl 3.7). It is noted that the Second Facility specified a lower establishment fee than under the First Facility ($107,590 compared to $171,500) (cl 13(a)); and a lower usage fee than the First Facility (being 1% per annum on the Advance compared to 1.06%) (cl 13(c)). In terms of the line fees, it is noted that the Second Facility provided for a slightly higher line fee of 1.6% per annum on the Accommodation Limit (compared to 1.59% under the First Facility) but the Deiri Parties say that this is so close to the line fees permitted under the First Facility that it is well within the bounds of reasonable bank fees in which Plaza, through Moustafa, acquiesced.
It is noted that these fees and interest rates were reflected in the Approved Terms and Conditions for the First Facility, which Moustafa signed on 23 January 2012. It is said that Moustafa was entirely content with fees and charges of this nature and extent (the Deiri Parties here emphasise that, cf the Sayour Parties' submissions at [62], they do not say that Moustafa was content for charges to be made under the Second Facility; rather, they say that he was content for charges of this kind to be made - see T 27; 13/4/21). Further, they say that it is not to the point that it was not put to Moustafa in cross-examination that he agreed to have his signature forged or to the alternative finance (cf the Sayour Parties' submissions at [66]); rather, they say that this did not affect the mutual assumption as to the entitlement of CBA to charge fees.
As such, the Deiri Parties say that, even if the 2013 Loan Documents did not bind Plaza or are otherwise ineffective, Plaza must be taken to have acquiesced to the fees CBA charged from October 2013 onwards in line with those agreements. It is said that they reflect the nature and extent of charges to which Plaza had already agreed, in circumstances where Moustafa knew the second phase of development involving the construction of the residential apartments was underway and being funded by CBA (referring to the reasons at [1255] of the Principal Judgment).
The Deiri Parties say that, in the circumstances, it would be unconscionable for Plaza now to assert that CBA is not entitled to retain charges of the nature and extent identified above. It is said that there can be no doubt that CBA incurred expenses in advancing the funds to the Partnership which it would not have incurred were it not for Plaza's acquiescence in CBA charging the bank fees and interest it charged. The Deiri Parties say in this regard that it is unnecessary to identify the actual quantum of such expenses for it to be concluded that there has been detrimental reliance by CBA. Further, the Deiri Parties say that, if CBA were held liable for those charges, then Plaza and the partnership would reap a windfall gain through interest-free loans used to finance a property development which resulted in a substantial profit to them, at CBA's expense (T 27; 13/4/21).
For the same reasons, the Deiri Parties submit that CBA should succeed on its conventional estoppel defence. It is said that CBA, Plaza and Investments adopted an assumption that CBA was entitled to charge bank and interest fees of the nature and extent that were debited to the CBA Partnership Account; and that it would be unconscionable for Plaza now to be permitted to resile from that assumption.
Second, even if the 2013 Loan Documents are not binding on Plaza or of no effect, the Deiri Parties say that CBA is entitled to retain at least the interest and line fees it charged from October 2013 insofar as those fees are authorised under the terms of the original First Facility. The Deiri Parties refer to their reply submissions at [67] in this regard, which said: 67. Further, even if the 20 June 2013 deed is invalid, the partnership would still be liable to repay the moneys advanced by CBA. There is no dispute that Plaza signed the initial 20 February 2012 cash facility. If any subsequent loan agreement is not valid, then the first facility would still govern the advance. As a result, any interest and line fees would be payable under the first cash facility and the mortgage and other securities would secure the advance.
Reference was made in footnote 43 to the above submissions, by way of example, to Ryan Wealth Holdings Pty Ltd v L&V Tomkins Pty Ltd [2016] NSWSC 136 at [92]. In that case, White J, as his Honour then was, considered, inter alia, the liability of the defendant (L&V Tomkins) to the plaintiff (Ryan Wealth Holdings) to repay with interest advances made under two alleged loan agreements and relevantly said at [92]: …if I am wrong in my conclusion that L & V Tomkins is bound by the undated 2008 agreement, it is liable for the amount that would be owing under the 2006 agreement had it not been superseded by the 2008 agreement (which would be for a higher sum because under the 2006 agreement interest was capitalised at least after the first year), or, if it were not liable under the 2006 agreement, it would be liable on an action for money had and received and be liable to pay interest at the rates prescribed for the purposes of s 100 of the Civil Procedure Act 2005 (NSW).
The Deiri Parties note that the First Facility provided, relevantly, that: the Borrower may give notice to CBA (an Accommodation Notice) that it requires an Advance to be provided under the Agreement (cl 3.2) and the Borrower directs CBA to pay the Advance in accordance with that notice (cl 3.1), subject to the terms and conditions of the Agreement; "Advance" is defined (cl 1.1) to mean "the advance drawn down under this Agreement, or where the context permits, any part thereof"; CBA is not obliged to provide Accommodation beyond the Accommodation Limit (cl 3.5(a)), being $45,597,000 for the total of Tranches A and B of Stage 1; and an estimated $34.3 million for Stage 2; CBA is entitled to capitalise interest for Stage 1 Tranche B (which had an accommodation limit of $45,597,000), up to $2,847,000 (cl 3.7); and the Borrower must pay CBA line fees monthly in advance of 1.59% per annum on the Accommodation Limit for Stage 1 Tranches A and B, and Stage 2 Tranche A, with the line fee for Stage 2 Tranche B to be confirmed on refinance (cl 13(b)).
The Deiri Parties therefore say that, if the 2013 Loan Documents were not binding on Plaza or the partnership or of no effect, then the moneys advanced by CBA from 1 October 2013 would be advances drawn down under the original First Facility. It is noted that the advances were made pursuant to accommodation notices and that those accommodation notices did not purport to be drawn down under the 2013 Loan Documents. The Deiri Parties say that, objectively construed, had there been no valid 2013 Loan Documents, those notices would be referable to the First Facility. (Pausing here, I note that CBA clarified in submissions on the present application that the First Facility did not make provision for the making of further advances as such. However, as the Deiri Parties point out the First Facility did contemplate advances for Stage 2 Tranche A.)
In relation to the amounts already advanced by CBA prior to 1 October 2013, the Deiri Parties say that, if the 2013 Loan Documents were not binding on Plaza or the Partnership, or were of no effect, then the loan under the First Facility would not have been reduced by the First Facility Amending Deed and Amended First Facility from $45,597,000 to $34.3 million, through drawing down on the amount of the difference ($11,297,000) on the Second Facility. They say that the result would be that, while interest would not be chargeable on the sum of $11,297,000 under the Second Facility, it would be charged under the First Facility. (The CBA makes a similar submission - see below.) I accept the logic of this submission.
Therefore, the Deiri Parties contend for a finding that, even if the 2013 Loan Documents are not binding on Plaza or of no effect, CBA was nonetheless entitled pursuant to the First Facility to retain any amounts for interest and line fees it charged from 1 October 2013.
Third, to the extent that CBA is liable to Plaza or the Partnership in restitution for moneys had and received, the Deiri Parties say that that liability must be offset for the benefits received from CBA's advances from October 2013 onwards (citing Mason, Carter, Tolhurst, Mason and Carter's Restitution Law in Australia (3rd ed, 2016, Lexis Nexis Australia) at [1432]; Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd (2006) V ConvR 54-713; [2006] VSCA 6 at [49] per Nettle JA). Reference is made to the statement contained in C Mitchell, P Mitchell and S Watterson, Goff & Jones The Law of Unjust Enrichment (9th ed, 2016, Sweet & Maxwell) at [31-01], that: A claimant who seeks restitution of an unjust enrichment must make counter- restitution of benefits received from the defendant in exchange. [...] It is ... a precondition for recovery that the amount recovered by a claimant should be reduced by the amount of the benefits he received from the defendant.
Reference is also made to Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7 (Equuscorp v Haxton) at [114] per Gummow and Bell JJ as to the degree of flexibility in fashioning a remedy in equity to account for counter-restitution.
Thus, the Deiri Parties say that Plaza must account for the value of the advances the Partnership received from CBA in exchange for the bank fees and interest that CBA would otherwise be ordered to repay to the Partnership; since, otherwise, the partners would be unjustly enriched at CBA's expense. It is said that this is encompassed in CBA's pleading that Plaza and Investments used the funds they received for the development and obtained profits from doing so, such that they are not entitled to judgment against CBA in respect of the debits made to the CBA Partnership Account.
The Deiri Parties say that counter-restitution requires that any liability CBA has to the Partnership, in respect of bank fees and interest, be reduced by the profits that the Partnership received as a result of the use of the funds advanced by CBA from October 2013 (noting that those funds enabled the construction of the residential apartments). The Deiri Parties note that the proceeds of sale of the apartments amounted to $67,216,097; and that, after repayment of the Second Facility to CBA in the amount of $42,031,226, payment of GST to the Australian Taxation Office of $5,787,015, and payment of Partnership expenses of $117,856, that left $19,280,000 for distribution to the partners. It is said that, of this amount, $4,480,000 of the distributions comprised repayment of partner loans (referring to Annexure G to Mr Deiri's affidavit sworn 26 November 2019, being the ledger showing loan repayments). As such, the Deiri Parties calculate the net proceeds of the Partnership from the sale of the residential apartments at $14.8 million (referring to Mr Deiri's 22 August 2019 affidavit at [211]-[212]).
The Deiri Parties say that the above financial benefit to the partners is far in excess of the amount claimed by Plaza against CBA for moneys had and received in respect of bank fees and interest from October 2013, being $2,637,194.68 (as per Plaza's proposed orders of 5 March 2021); and hence, that CBA's liability would therefore be nil.
Finally, to the extent that CBA is liable to Plaza or the Partnership in damages for breach of its mandate by debiting the CBA Partnership Account, the Deiri Parties say that Plaza has not established any loss as a result of that breach. It is said that Plaza needed to show that the Partnership would have agreed with an alternative lender that the Partnership could borrow $42,031,226 in funds for the construction of the residential apartments without any fees or interest; and that this was not established.
For these reasons, the Deiri Parties say that Plaza failed to establish that it or the Partnership can recover from CBA any bank fees or interest charges which CBA debited to the CBA Partnership Account; and that there should be a finding accordingly. (The Deiri Parties' interest in such a conclusion is that these are amounts in respect of which I concluded, under the seventh cross-claim, that CBA would be entitled to indemnity from Mr Deiri.)

[25]

CBA submissions

CBA broadly agrees with the Deiri Parties' submissions in relation to prayer 1(d) (with the qualification that it does not consider it necessary for there to be any amendment to the reasons in the principal judgment).
Insofar as Investments seeks a declaration or order to the effect that the interest and fees associated with the Second Facility are not recoverable by Plaza, CBA maintains as correct the proposition that Plaza is not entitled to recover, by way of restitution or unjust enrichment, the interest and fees (for the reasons set out at [9] and [10] of CBA's initial submissions in response to the Short Minutes of Orders proposed by Plaza on 26 March 2021) (see below). However, CBA says in any event that no order to this effect is here required. CBA submits that no orders in Plaza's favour will be made on Plaza's first cross-claim and hence the order sought by Investments is otiose.
CBA notes that the discretionary power to modify reasons prior to the entry of judgment ought to be exercised sparingly and with considerable caution (citing Wentworth v Woollahra Municipal Council (1982) 149 CLR 672; [1982] HCA 41 at 684 per Mason ACJ, as his Honour then was, Wilson and Brennan JJ; Autodesk at 302 per Mason CJ, 308 per Brennan J).
In its submissions as to Plaza's proposed orders 9(c)-9(e), seeking repayment of bank fees and interest charged by CBA on the Second Facility, CBA says that no such orders should be made for the following reasons.
First, insofar as Plaza relies for those orders on the statement at [2141] (see as extracted below) that CBA was not authorised to charge interest, line fees and rollover fees in a manner that was not "commensurate" with the relevant contractual provisions, CBA says that that reliance is misplaced. CBA says (and as I explain below I agree) that the conclusion at [2141] did not constitute a finding that the fees and interest in respect of the Stage 2 Loan were charged otherwise than in accordance with its terms (and points out that no such finding was made elsewhere in the principal judgment). It is said that that question was left open due to the primary finding that the Stage 2 Loan documents had not been signed by Moustafa; and that it need not (and should not) now be the subject of further argument and orders.
CBA points out that Plaza's claim for repayment of interest and costs under the Stage 2 Loan Facility (i.e., the Second Facility) is a claim for money had and received, the essence of which is that all amounts paid by way of interest and fees were amounts by which CBA was unjustly enriched (referring to [2552]-[2554] of the principal judgment). CBA says that the finding that Plaza was not bound by the Stage 2 Loan Facility does not have the effect that CBA, having advanced the funds contemplated by that Facility, could not recover those funds together with interest and costs.
CBA points to the acceptance in the principal reasons that Moustafa was aware that the funds that were to be advanced by CBA would be in excess of $70 million, and that "bank charges, interest and the like" would be added to this amount (see at [1117]-[1118] and [1127]). It is noted that Moustafa signed the Stage 1 Loan Facility documents which provided for the payment of interest and fees to CBA and that Moustafa gave evidence that he was aware that CBA would need to be paid interest and fees and to be repaid the principal amount advanced before the partners could be paid a profit distribution (T 643.1-9).
CBA says that judicial notice can be taken of the universal custom of bankers to charge interest and fees on amounts advanced. It is said that Plaza, as a partner, took the benefit of the money advanced for the second phase of the development, in respect of which the interest and fees were charged by CBA.
CBA points out that the fact that the Stage 2 Loan has been found to be unenforceable as against Moustafa does not prevent the Court from having recourse to its terms (more so, it says, where those terms mirror those included in the enforceable earlier agreement) as evidence of the compensation (in this case, interest and fees) that was intended to be payable to one of the parties (CBA here citing Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5 at 257 per Deane J; Hurst v Vestcorp Ltd (1988) 12 NSWLR 394 at 445-446).
In the circumstances, CBA says that it was entitled to be compensated for making the advances under the second loan facility; that Plaza has not demonstrated that it overcharged or debited the Partnership Joint Account with any amount that was untoward or "unjust"; and that Plaza has failed to demonstrate that CBA's charges were excessive or unjust.
It is submitted that if Plaza were to succeed in obtaining repayment by CBA of the amounts charged in respect of interest, establishment fees and line fees under the Stage 2 Loan, then it will have achieved that result as a consequence of the Stage 2 Loan having been found to have been unenforceable. However, CBA points out that on 1 October 2013 an amount of $11,297,000 was drawn down under the Stage 2 Loan Facility and applied by the Partnership to reduce the balance owing under the Stage 1 Loan Facility.
CBA says (and I accept that it follows) that, but for that reduction, an additional amount of interest would have been payable under the Stage 1 Loan from 1 October 2013 until the repayment of that component of the loan. CBA has calculated that amount as $327,668.22, to which would be added $67,949.42 as interest under s 100 of the Civil Procedure Act (totalling $395,617.64), plus $36.81 per day after 16 April 2021. It is said that this amount would need to be deducted from the amount for which any judgment was given to Plaza.

[26]

Sayour Parties' submissions

In oral submissions on prayer 1(d), the Sayour Parties explained that proposed order 9 was intended to bring in all of the items the subject of the proposed judgment and sought judgment for a sum which included the establishment fee, line fees and interest debited to the account (in each case together with interest under s 100 of the Civil Procedure Act) (see prayers 9(c), (d) and (e)).
The Sayour Parties' position, in summary, is that there were findings made as to the acquiescence and estoppel defences (see at [2141] of the principal judgment). The Sayour Parties say that I there determined that charges not commensurate with the contractual entitlements of CBA under the respective facility agreements were not authorised and are recoverable as money had and received. Relevantly, at [2141], I said: 2141. As to the position in respect of interest charges, line fees and rollover fees, I accept that insofar as those charges were not commensurate with the contractual entitlements of CBA under the respective facility agreements, then they were not authorised and they are recoverable as moneys had and received. However, that is a different issue to whether the amounts in respect of which interest was charged were themselves authorised under the respective construction contracts or the like.
The Sayour Parties say that that finding stands on the simple proposition that the relationship between the Partnership and CBA as banker and customer is one of debtor and creditor; and that the effect of making debits to the account for money that was not due is that the relationship was not altered and that the customer can recover the money (subject to the various defences that were raised and with which I dealt).
Insofar as criticism was made that I had not dealt with the defences expressly by reference to the line fees and establishment fees and the like, the Sayour Parties say, first, that it was not necessary for there to be the specific disposal of every expression of an argument. It is said that one can see that these issues have been dealt with by, for example, the rejection of the conventional estoppel defence.
The Sayour Parties note that (at [2584]) I directed the parties to bring in minutes to give effect to the "payment categories" identified from [2575]-[2583]. The Sayour Parties say that the effect of [2141] is to identify matters that stand outside the categories of successful defences. It is noted that the Deiri Parties accept that, at [1754], I declined to make factual finding #12 for which they had contended (namely that Plaza was bound to the Stage 2 Construction Contract and the Stage 2 Loan Facility instruments on the basis that Jamil had sufficient authority (placing reliance on the Powers of Attorney or, alternatively, on the basis of some implied actual authority reposed in him by his father)). It is said that so much is accepted with respect to the 2013 Loan Documents in the Deiri Parties' Submissions at [20].
Insofar as the Deiri Parties now submit that the defences of acquiescence and conventional estoppel should apply in favour of the CBA, the Sayour Parties say that this is another instance of the Deiri Parties seeking to reargue an issue that has been decided.
By way of comment on the Deiri Parties' submissions on the present application, the Sayour Parties say, first, that the submission by the Deiri Parties that this should apply to "at least the first facility" is unnecessary (as there is no contention that Moustafa executed the First Facility).
It is noted that the Deiri Parties then assert that, by analogy, Moustafa must have been "content" for the Partnership to be charged under the Second Facility. The Sayour Parties say that such a submission ignores the uncontested fact that a "non-genuine" signature of Moustafa was applied to the 2013 Loan Documents and the refusal to make factual finding #12 for which the Deiri Parties had contended (and hence the finding that Plaza was not bound by the Stage 2 Loan documents). It is submitted that the reasons at [2141] accord with the earlier finding (at [1111]-[1112]) that, consistent with CBA's contention, Moustafa accepted that CBA had provided the funds required to enable the Broadway Development, although he had not signed any documents after the initial documents in February 2012.
The Sayour Parties say that there is no principle of authority "by analogy". It is said that authority to debit the account depended on a valid mandate, which it has been found did not exist. The Sayour Parties emphasise that there is no finding that CBA was authorised to debit the fees and interest on the Second Facility, which they maintain is fatal to the Deiri Parties' contention on this. That said, the Sayour Parties go on to respond to the Deiri Parties' particular arguments as follows.
Reference is made to Moustafa's evidence concerning his understanding, in general, of the imposition of fees, charges and interest (referred to at [25] of the Deiri Parties' submissions on the motion). It is noted that it was expressly put to Moustafa that he expected the Partnership would be liable to pay at least a couple of million dollars in interest on a loan of $70 million (at T 547.343); and that Moustafa agreed with that proposition. However, the Sayour Parties say that in fact the interest, line fees and establishment fees charged by the CBA across the two loans was well in excess of a couple of million dollars. (It is noted that the line fees charged by CBA on the Stage 1 Facility were over $2 million and that the interest, line fees and establishment fees on the Stage 2 Facility totalled $1,947,006.10).
The Sayour Parties point out that it was never put to Moustafa that he had agreed to have his signature forged or to the concealment from him of the terms of the finance (to which he was personally made a guarantor in what they say was yet another false document allegedly witnessed by Ms Dahdal). The Sayour Parties say that the orders proposed by Plaza to give effect to the reasons will have the effect that CBA does in fact retain "at least a couple of million dollars" from fees, interest and charges on the First Facility; and that CBA has no contractual entitlement to retain any more.
It is noted that the fees, charges and interest associated with the Stage 2 Loan were debited under the ineffective mandate of the unauthorised (and said to be void) "agreements"; and hence it is said that those unauthorised debits "were not commensurate with the contractual entitlements of CBA under the respective facility agreements" (adopting the terminology of the principal judgment at [2141]).
Insofar as the Deiri Parties submit (at [33]), that the accommodation notices did not purport to draw down under the 2013 Loan Documents and that, "had there been no valid 2013 Loan Document", the notices would be referable to the First Facility, the Sayour Parties say that this is factually incorrect. Further, it is said that the accommodation notice instructing CBA to make the final drawdown on the First Facility is clearly cognisant that there purportedly existed two facilities at that date (referring to the Draw Down Notice dated 18 March 2014).
Insofar as the Deiri Parties submit, at [38] that Plaza "must account for the value of the advances the Partnership received from the CBA", the Sayour Parties say that this is a new submission and appears to rely on English textbook approaches (see as per the Deiri Parties' submissions) that have not been adopted in this country. It is noted that CBA has recovered its principal; that all funds advanced by the CBA have been repaid to it and interest, usage, line and establishment fees have been paid in accordance with the First Facility. It is said that there is nothing further that Plaza need do.
Insofar as the Deiri Parties make submissions about damages for breach of mandate, the Sayour Parties say that this does not arise. They say that a bank in breach of its mandate has paid away its own money and must restore its customer to its former position. (It is noted that CBA is further protected by the determination of the seventh cross-claim.) The Sayour Parties say that the Deiri Parties are unable to identify an error or matter which has not been adequately considered or determined on this issue.
This noted that (at [2575]) I referred to specific payment categories, concluding at [2584] that the parties could bring in short minutes in relation to the payment categories vis-à-vis the first Broadway cross‑claim. The Sayour Parties say that from [2575] onwards I expressed general conclusions as to the different kinds of defence.
In summary, the Sayour Parties say that either these arguments were raised and they were dealt with in the principal judgment or, to the extent they were not raised, they cannot be raised now because the necessary principles have not been satisfied.
As to the complaint by the Deiri Parties that some of CBA's pleadings had not been dealt with, the Sayour Parties point to CBA's defence at [197]-[198]. The Sayour Parties say that this is directed to the principal, not to the establishment fee, the line fees or interest on the Second Facility. The Sayour Parties say that there is no dispute that CBA had recovered its principal at the time of the sales of the units and then, in relation to the First Facility, at the time of the sale of the shopping centre. It is noted that the pleading of conventional estoppel and acquiescence at [193D] and [E], is also directed to the principal. The Sayour Parties submit that it would be a novel development of the law of unjust enrichment for counter-restitution to extend to the recovery of profit or the recovery of payments to which there was never agreement.

[27]

Conclusion

Much emphasis was placed on what was said at [2141] of the principal judgment (which I have extracted above). It is relevant at the outset to note that that paragraph appeared in a section of the reasons where I was setting out the various categories of amounts which Plaza contended had been debited to the CBA Partnership Account without a valid mandate (and for which it sought judgment in prayer 2 of the first cross-claim in the Broadway Proceedings). One of those categories was comprised of the balance of debits and credits to the CBA Partnership Account associated with the construction facilities (for interest and line fees on those facilities, "rollovers" and amounts taken as repayments when the residential units were sold, as listed in Schedule F to the first cross-claim). From [2135]-[2141], I outlined the position in relation to the Schedule F items. I expressly did so before turning to the parties' respective submissions. Therefore, the reference at [2141] as to the recoverability of claimed amounts not commensurate with the contractual entitlements as moneys had and received was a general observation not a concluded finding in advance of consideration of the parties' submissions. Indeed, this is how I read the prefatory words "insofar as", which contemplated that findings would need to be made in that regard.
I noted (at [2135]) that Schedule F listed items that were debited to the CBA Partnership Account in connection with transactions on the construction facilities and which the Sayour Parties contended were unauthorised; and that Plaza claimed the net balance of the various debits and credits there listed.
At [2136], I noted that the Sayour Parties categorised the debits as falling into three groups, by reference to the descriptions in the CBA bank statements and its running balance of loan facilities: first, interest and usage fees; second, line fees; and, third, "drawdown rollovers". I went on to say: 2137. As to the amounts for interest, the Sayour Parties say that the debiting of interest can only be referable to principal drawings on the facilities and, therefore, depends on the validity of those drawings (which are themselves the subject of dispute in respect of unauthorised payments to the builder, referring to Schedule G - as to which, see below). 2138. As to the line fees, the Sayour Parties say, by reference to cl 13(b) of the First Facility Agreement, that the monthly fee payable should have been $7,287.50 (and it notes that on no occasion was such an amount debited to the account). 2139. The Sayour Parties say that, from September 2012, line fees, usage fees and interest began to be debited to the CBA Partnership Account through aggregation into rollover debits that "lumped" into one amount on each occasion items which the Sayour Parties say can now be seen to be the aggregation of principal, interest and fees (but which are not itemised as such in the bank statements). It is noted that the rollovers are described in CBA's running balance statement as maturity repayments, and rollover drawdowns, but that the terms of the First Facility Agreement defined the "Repayment Date" as four different periods in respect of four tranches, and cl 5.1 provided for repayment on the "Repayment Date". Accordingly, the Sayour Parties say that there was no basis for rollovers at the different times indicated in the running balance statement; and that what seems here to have occurred is a capitalisation (not provided for in the First Facility Agreement) of interest and fees relative to advances made (noting that those advances are in turn disputed by it as unauthorised transactions).
I also noted (at [2140]) the reference by the Sayour Parties to the fact that CBA did not plead (in response to [105]-[118] of the first cross-claim) that the deduction of any of the payments listed in Schedule F was authorised by the partners under cl 13 of the First Facility Agreement; rather, the Sayour Parties said that CBA's defence was confined to the general pleas of authorisation made later in the defence in respect of all of the unauthorised payment claims (with the addition in [115] of a specific plea based on the Cheque Authorisation Alteration Instruction). (Pausing here, there was no reference at this point to the conventional estoppel defence as such.)
It was at that point that I made the observation at [2141] which has been set out above. I accept the force of the criticism that the addition of the words "and they are recoverable as moneys had and received" was premature, since the issues raised in submissions as to why, even if not authorised under the contractual mandate they should not now be recovered, had not at that stage been considered. At the very least, those words should have been qualified, for example, by adding "subject to consideration of the matters raised by CBA" before "they are recoverable" (and I will make that change).
More problematic is the fact that I did not later expressly address these charges (including when considering the unjust enrichment principles and the conventional estoppel defence raised by CBA). It will be recalled that, after summarising the categories of alleged unauthorised claims, I proceeded to consider (at, regrettably, some length) the parties' submissions in relation to Jamil's authority and my determination as to his authority (after reference, among other things, to the question whether he was authorised under various Powers of Attorney to sign the various unauthorised cheques) and then proceeded to deal with issues as to acquiescence, conventional estoppel and the so-called "Liggett" defence. I do not propose here to revisit those passages of the principal judgment but it may be noted that the discussion was largely centred on the cheques (and accommodation notices). As CBA points out, I did not in that analysis make reference to the bank fees or interest charges.
I did note (see at [2180]; [2459]) CBA's pleaded defence: (at [183]-[193]) that the partners used the funds provided by CBA to develop a car park, shopping centre and residential apartments, which were then sold to produce moneys; (at [193D]) that CBA, Plaza and Investments "knew and assumed" various matters there set out; and (at [193E]) that Moustafa and Plaza acquiesced in the payment of funds, and that each of Plaza, Investments and CBA acted upon the convention that payment of funds would be made from the facility agreements and the CBA Partnership Account, even where cheques and other instruments had not been signed or executed by Moustafa. In so doing, I noted (at [2459]) CBA's submission (in essence) that, whatever the contractual terms, throughout their dealings Plaza and CBA acted upon the common assumption that Moustafa's signature was not required to authorise partnership transactions (from which it is clear that my focus was there on the dispute as to the cheques and accommodation notices; they being the relevant documents on which Moustafa's signature - or genuine signature - did not appear).
My conclusion (at [2561]) was that the so-called "Liggett defence" succeeded in relation to particular amounts (whether the doctrine was conceived as predicated on mistake, agency, authority, unjust enrichment or some other basis). In the ensuing summary of the amounts in respect of which I considered that defence had (or had not) been made good, there is a conspicuous absence of any reference to the bank establishment fee, line fees or interest charges.
At [2552]ff, I made reference to the principle of unjust enrichment and authorities in that context; but, again, the focus was on the alleged unauthorised cheques and whether there had been a discharge of Partnership liabilities, not on the Schedule F amounts.
Therefore, I accept that I have failed in the principal reasons to address the issues now the subject of the prayer 1(d) relief. The question then raised is whether it is appropriate for me now to do so, consistent with the principles referred to above as to revisiting or re-opening argument before entry of final orders (but after judgment has been delivered). There is obvious attraction to the submission by CBA that it is not necessary here to do so because there is not any dispositive finding in the principal judgment that these amounts are recoverable from it. However, it seems to me that to accede to that proposition would be to shirk the fact that these issues should have been determined in the principal judgment (and unfortunately were not). I consider that this falls within the scope of the opportunity I afforded to the parties to raise, prior to final orders, any issue with which I had failed to deal; and (unlike some of the issues that were then raised), I consider that this is one which could potentially affect the final outcome and hence, it is necessary to be considered.
Turning then to the question of the bank fee, line fees and interest charges under the Second Facility (which loan facility I found was not authorised by Moustafa), it is not necessary here to repeat the factual findings relevant to the claim; nor the authorities relevant to the legal issues raised by CBA and the Deiri Parties in their submissions (which have been set out in the principal judgment). I have summarised above the parties' submissions in this regard on the present application to the extent that they are not summarised in the principal judgment.
As set out above, the Deiri Parties seek a variation of the reasons in essence to reflect that (insofar as the 20 June 2013 Loan Documents did not bind Plaza or the Partnership, or were otherwise void or of no effect) then nonetheless the establishment fees, interest fees, and line fees charged by CBA to the CBA Partnership Account after that date: were entitled to be charged and retained by CBA as pleaded in CBA's amended defence at [198(a)]; further or in the alternative, cannot be recovered by Plaza by reason of the conventional estoppel pleaded in CBA's amended defence at [193(c)]; and, further or in the alternative, were entitled to be charged and retained by CBA pursuant to the initial facility dated 20 February 2012 as submitted in the Deiri Parties' reply submissions (at [67]).
As to the last of the bases on which the Deiri Parties submit that the requested variation to the reasons is warranted, I do not accept that there is evidence that permits me now to conclude (nor do I recall that I was taken to such evidence for the purpose of such a conclusion at the trial) that CBA was or would have been entitled (on the assumption that the Second Facility was unauthorised) to charge fees under the First Facility of the kind in question by reference to the further amount advanced under the Second Facility. What I do accept, however, is that, had some $11 million of the amount drawn under the Second Facility not been used to reduce the amount owing on the First Facility, then there would have been a contractual entitlement at least to interest charges on the (on that hypothesis) outstanding component of the debt.
As to the proposition that the Second Facility did not bind Plaza, that finding was made in the principal judgment and it seems to me not necessary for the purposes of the present argument to delve into the dispute as to whether that had the effect that the facility was void and of no effect. It is sufficient to say that CBA was not authorised by its customer, Plaza, by reference to the Second Facility to debit those particular amounts. What would clearly be necessary, however, as CBA's calculations on the present application have done, is to consider how much of those fees and charges would have properly been incurred under the First Facility had the approximately $11 million not been applied to that facility. Therefore, on any view of things, I consider that the amount sought by Plaza in its proposed orders in relation to these fees and charges would need to be reduced to take that into account.
As to the defence of acquiescence, at [2504] of the principal judgment I said: 2504. As to acquiescence, the difficulty I see is that I am not persuaded that Moustafa had actual knowledge that Jamil was signing cheques (whether in his own name or in Moustafa's name) (although he was obviously aware that money was coming from somewhere insofar as he did not suggest the construction works was not at cost). Therefore, but for (and only to the extent of) the finding of authority, I would have concluded that estoppel by acquiescence was not made good up until it became apparent to Moustafa that there were cheques that had been drawn on the CBA Partnership Account and not signed by him (which was, relevantly, at the time of the two cheques in 2014). At that stage, Moustafa was clearly on notice of the fact that cheques were being drawn without his signature and (apart from his evidence of a telephone conversation with Mr Deiri) he did not take any action to alert CBA to a problem or to complain about the cheques having been issued without his signature. From that time, in 2014, I consider that an estoppel by acquiescence defence is made good.
That determination of the estoppel by acquiescence defence, as already noted, clearly focussed on the signing of cheques, and the determination at [2505] related only to the accommodation notices. Those paragraphs did not refer to other conduct such as the charging of bank fees or interest or the like to which the acquiescence defence might apply.
I accept that the evidence supports the conclusion that Moustafa was aware that the project was continuing to be funded by CBA (though not aware of the Second Facility) and that he accepted in effect that interest charges and the like would have been payable on such funding. While the precise details of the interest charges and bank fees associated with the funding from CBA were unknown to Moustafa, his acceptance that such charges would have been payable indicates the level of informed inaction necessary to satisfy the defence of acquiescence (Orr v Ford (1989) 167 CLR 316; [1989] HCA 4 at 344 per Deane J). I also accept that (although complaint was made as to the capitalisation of interest or rolling over of draw down notices - to which I referred in the principal judgment) the charges rendered by CBA for interest and line fees were in accord with those under the First Facility and have not been established to be excessive or unreasonable. I note that, on the present application, the Deiri Parties handed up as an aide memoire a document comprising a comparison of the fees and interest provisions under the First Facility, the Amended First Facility and the Second Facility, noting that all of those facilities: allowed for interest; had materially the same interest rate; allowed interest capitalisation; allowed for establishment fees (and, indeed, these were lower in the case of the Second Facility); allowed for usage fees; allowed for virtually the same line fees; and permitted CBA to debit fees and interest payments directly from the CBA Partnership Account.
In the circumstances, I am of the view that the acquiescence defence is made good in relation to the line fees and interest charges; and hence, at least in relation to those amounts, it is not strictly necessary to explore the unjust enrichment arguments here raised (nor to enter into the counter-restitution debate).
The establishment fee is more problematic (though in the scheme of things it was a relatively small amount) as it seems to assume an acquiescence in something that would not logically have arisen but for the Second Facility of which Moustafa was not aware. Thus, I do not consider the acquiescence defence is made good in relation to the establishment fee for the Second Facility.
As to the conventional estoppel defence, insofar as that is necessary to consider in relation to the establishment fee, it would need to be shown that CBA adopted an assumption as to the terms of its legal relationship with the Partnership such that it could charge an establishment fee for a loan facility based on the knowledge and authority of one partner which is inconsistent with the agreement between the parties (and my findings in the principal judgment). I also cannot find that there was an assumption by Moustafa that CBA could charge an establishment fee for a loan facility to which he was not privy.
That leaves, at least in relation to the establishment fee, the submissions made in relation to the unjust enrichment claim. Relevantly, is it unjust in all the circumstances for CBA to retain the amounts charged in respect of the establishment fee (or, if I am wrong as to the defence of acquiescence, also in respect of the interest charges and line fees) under the Second Facility? Leaving aside for the present the complaint as to the status of principles of counter-restitution under Australian law, it is recognised that what is required to be established for an unjust enrichment claim (so-called) is that the enrichment (i.e., the retention of the relevant benefit) be "unjust" (Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [150] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ). There, it will be recalled that their Honours said: 150. First, whether enrichment is unjust is not determined by reference to a subjective evaluation of what is unfair or unconscionable: recovery rather depends on the existence of a qualifying or vitiating factor falling into some particular category. In David Securities Pty Ltd v Commonwealth Bank of Australia, Mason CJ, Deane, Toohey, Gaudron and McHugh JJ gave as instances of a qualifying or vitiating factor mistake, duress or illegality. No such factor was identified in the present case by the Court of Appeal beyond what was identified as the breach of fiduciary duty by Mr Elias and by Farah. But Mrs Elias and her daughters owed no fiduciary duty to Say-Dee. Further, principles respecting fiduciary duty have been said to be foreign to unjust enrichment notions because the unjust factors are commonly concerned with vitiation or qualification of the intention of a claimant. [Footnotes omitted]
The vitiating factor here relied upon by Plaza was the fact that the Second Facility was unauthorised. The taking of payments without authority by CBA in relation to the establishment fees, interest charges and line fees gives rise to a prima facie obligation to make restitution. However, that prima facie liability can be displaced in circumstances where the law recognises that it would be unjust to make an order for restitution (David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR; [1992] HCA 48 at 379 per Mason CJ, Deane, Toohey, Gaudron and McHugh JJ; Equuscorp v Haxton at [30]). Does the fact that the fees and charges were not extortionate or unreasonable mean that the retention of those amounts (to the extent that they would not otherwise have been recoverable under the First Facility in any event) was unjust? So to argue in my view risks venturing impermissibly into a subjective enquiry as to what is unfair or unconscionable. However, what is unarguable is that the Partnership has taken the benefit of the funds advanced under the Second Facility (including the reduction of interest or fees that would otherwise have been payable under the authorised First Facility). It is not apparent to me that stripping CBA of its (not unreasonable) fees relating to the provision of funds for the benefit of the Partnership (being fees and charges of the kind that Moustafa accepted would be incurred in connection with such a borrowing) takes into account the benefit that the Partnership has received.
Having regard to the recognition in Equuscorp v Haxton (at [114] per Gummow and Bell JJ) as to the "degree of flexibility in fashioning the just measure of recovery on an action such as that for money had and received"; and to the need for it to be shown that the enrichment be "unjust", I have concluded that the relief claimed in prayer 1(d) is appropriate.
For completeness, I have also concluded that, if approached as a claim for damages for breach of the client's mandate, Plaza has not shown that it suffered loss as a result of the breach. In the absence of the Second Loan Facility (of which it has taken the benefit), the Partnership would otherwise have required funding to complete the development and there is nothing to show that it would have been in a position to achieve this at a lesser cost. It is not irrelevant here to note that this is not a case where the impugned funding arrangements were entered into with an associate of the erstwhile partner (here, say, an associate of the Deiri interests) at some extortionate cost. The Second Facility was entered into with a reputable financier and on terms that largely mirrored the terms that Moustafa had himself accepted for the First Facility (having signed that document).
For those reasons, I have concluded that the acquiescence defence is largely made good in relation to these amounts; and that, to the extent that it is not (particularly in respect of the establishment fee), it is not unconscionable for CBA to retain the establishment fee, line fees and interest fees, charged by CBA to the CBA Partnership Account pursuant to the Second Facility documents albeit that they were not authorised under that agreement. No order is required to reflect the finding on this issue, for the reasons submitted by CBA.

[28]

Prayer 1(e)(i)

Prayer 1(e)(i) of the Broadway notice of motion seeks a variation of the principal judgment at [1687] where leave was granted to the Sayour Parties to tender part of Mr Deiri's affidavit of 2 November 2016 to show a different appropriation of payments. The Deiri Parties opposed leave being granted to do so in their reply submissions (at [222]) and complain that those submissions were not addressed in the principal judgment. It is contended that the tender should be refused.
What was said at [222] of the reply submissions was as follows: 222. At [728] of the Sayour Reply Submissions, leave is sought to reopen Plaza's case to tender part of Mr Deiri's affidavit of 2 November 2016. The relevance is said to be that Mr Deiri asserted a different appropriation of payments towards the $2 million. Leave should obviously be refused. It is too late. Mr Deiri has not been given an opportunity to deal with his earlier evidence by way of clarification or explanation. There is no reason why it could not have been tendered at the start of the trial so that evidence could be led by Mr Deiri. Moreover, Mr Deiri's evidence on this topic was not challenged. Plaza should not be permitted to re-open its case in its 300 page written submissions "in reply" in order to tender material to impugn Mr Deiri in closing submissions on a matter which was never put to him and which he cannot now address.
The Sayour Parties sought to tender [50] of Mr Deiri's affidavit of 2 November 2016 to show a different appropriation of payments on the liabilities that were the subject of the second cross-claim (see the Sayour Parties' submissions in reply dated 12 March 2020 at [713], [728]-[729], [736]).
The Sayour Parties point to the reasons in the principal judgment at [1687] where I noted that the grant of leave to tender that material was "as evidence of the making of an assertion at that stage as to the manner in which payments were to be treated".
The Sayour Parties say that this paragraph of Mr Deiri's 2 November 2016 affidavit was relevant to Investments' defence that it had paid the $5.6 million which was the subject of the alleged interest-bearing loan of $5.6 million on which Plaza sued not only for principal but also for contractual interest (see [713] of Plaza's 12 March 2020 reply submissions). The Sayour Parties say that the relevance to this was that the additional agreed payment of $2 million was not expressed to be interest bearing; and therefore, if payments were appropriated to principal under the $5.6 million interest-bearing loan, that would prevent contractual interest accruing, leaving s 100 interest to accrue at a much lower rate on the correspondingly unpaid amount of the promised additional $2 million.
It is noted by the Sayour Parties that, while (at [1687]) this paragraph of Mr Deiri's affidavit was admitted into evidence, ultimately (at [1714]) I made factual finding #10 for which the Deiri Parties had contended (i.e., that the $5.6 million had been paid (albeit as money owed under the contract of sale, rather than under the alleged loan)), thereby accepting the Deiri Parties' case as to appropriation of payments. It is also noted that I rejected Plaza's case that there was an interest-bearing loan. The Sayour Parties say that it follows that whether the payments were appropriated to the $5.6 million due on completion under the contract of sale or the $2 million additional payment has no bearing on the rate of interest, because in either case it arises under s 100 of the Civil Procedure Act.
The Sayour Parties say that it is obvious that the admission of this piece of evidence cannot be of any relevance (except in case there is an appeal against the series of findings referred to above); and that that is not a matter of sufficient present importance to warrant reconsideration of the decision on the tender of evidence on these issues.
It is submitted that the reasons for rejecting the tender (given at [222] of the Deiri Parties' reply submissions) are not sufficient to warrant reconsideration. The Sayour Parties point out that the Deiri Parties have not identified how the tender of [50] (which was predicated upon the fact that Mr Deiri's affidavit of 22 August 2019, which was read by the Deiri Parties in the case in chief, expressly dealt with the same payments and yet made no reference to his earlier explanation which provided a different understanding of the intended allocation of those payments) might be clarified or explained further.
Insofar as the Deiri Parties complain that the principal judgment does not refer to the Deiri Parties' reply submissions on the matter, the Sayour Parties say that there was no requirement for this (referring again to Nominal Defendant v Clancy). The Sayour Parties say that the fact that the reasons at [1687] directly determined the grant of leave and made comment on the weight to be applied to the differing accounts now in evidence was adequate in the context of the myriad of findings and matters to be determined and suggests that there was cognisance of the opposition to the application for leave to tender [50].

[29]

Prayer 1(e)(ii)

Prayer 1(e)(ii) of the Broadway notice of motion seeks a variation of the principal judgment so as to grant leave to the Deiri Parties to tender the mortgage memorandum which was enclosed with the Deiri Parties' reply submissions for the reasons set out in those submissions at [57]-[61]. It is noted that the principal judgment does not refer to and determine that request. The Deiri Parties say that this determination would fall under the topic of the determination of factual finding #12 at [1754] of the principal judgment (see as extracted above).
Albeit at the risk of being accused of not having specifically addressed them, I do not propose here to set out in detail the reply submissions to which the Deiri Parties here refer. I note that the reply submissions in question respond to the question of Jamil's authority (dealt with in what some might say was excruciating detail in the principal judgment) in relation to the entry into the Second Facility with CBA and the drawing of payment under the Second Facility (noting that the issue did not arise in relation to the First Facility, which Moustafa had himself signed); and the effect of the limitation in the powers of attorney on selling or encumbering real estate assets.
At [61] of the reply submissions, the Deiri Parties sought leave to re-open and tender the registered mortgage memorandum incorporated by reference into the registered mortgage over the Broadway Site (which I was told in the reply submissions had been included as an annexure in a 2016 affidavit of the Receiver (Mr Brett Stephen Lord) earlier in the proceedings but which I do not apprehend was read in the final hearing). Reliance was sought to be placed on the registered memorandum seemingly only for the proposition that the security was an all-moneys mortgage. It was said that the particular relevance of this arose only because of the "new" submission by the Sayour Parties in their submissions that the 20 June 2013 deed was not authorised because of the limitation in the power of attorney on encumbering assets.
As to the relief sought by the Deiri parties in prayer 1(e)(ii), the Sayour Parties refer to their reply submissions at [94] in this context.
The Sayour Parties note that the principles governing leave to re-open were summarised by Henry J in Goodman Fielder Consumer Foods Pty Ltd v Graincorp Foods Australia Pty Ltd [2020] NSWSC 706 at [45]-[48]. Her Honour there noted the recognised circumstances where a court may grant leave to re-open, namely: where the evidence is fresh evidence or it was previously unavailable or not reasonably discoverable; where there has been inadvertent error; where there has been a mistaken apprehension of the facts; and where there has been a mistaken apprehension of the law.
It is submitted that the power to permit re-opening is to be exercised having regard to all the circumstances of the proceedings and the resolution of the real issues in dispute. The Sayour Parties say that, given the determinations referred to below and the principles summarised above, there is no utility in granting leave to the Deiri Parties to tender the mortgage memorandum.
It is noted that, at issue was whether Jamil's power extended to the execution of loan facility documents in circumstances where the express powers of attorney were limited to exclude the encumbering of land. The Sayour Parties say that the application for leave to tender the memorandum of mortgage was made in reply to bolster the Deiri Parties' argument that the 2013 Loan Documents did not involve a further encumbrance of real estate owned by Plaza and hence, that Jamil was entitled to rely on the Power of Attorney to sign on behalf of Plaza.
The Sayour Parties say that this was not a point for reply but, in any event, that the same point was made with respect to the Charge granted by Plaza to CBA at the time of the first construction facility. It is noted that that point did not succeed and the Sayour Parties say that nothing is to be gained by adding to it. Insofar as the Deiri Parties seek to contend that the prohibition in the Powers to seeking finance is confined to finance in conjunction with encumbrances, the Sayour Parties say that the construction of the Powers is not to be determined by recourse to different instruments. In any event, it is said that where there is an all-moneys security, additional borrowing does encumber the security asset with an additional burden.
It is noted that, in support of their application to re-open their case, the Deiri Parties contend (at [43] of their submissions on the present application) that the admission of the memorandum of mortgage "would fall under the topic of the determination of factual finding 12 at [1754] of the Reasons". The Sayour Parties point out that this is the finding which I declined to make with respect to the Stage 2 Construction Contract and Loan Documents. It is submitted that, given that I declined to make factual finding #12, the tender of the mortgage memorandum gives no assistance to the determination of this issue. It is said that the principal judgment makes clear that there was a determination that the implied actual authority granted to Jamil was for day-to-day running and administration of the venture (which covered most of the field of Jamil's activities), and that the grant of authority to Jamil under the various Powers of Attorney was limited.
The Sayour Parties point out that, upon considering the various sources of his authority contended for, it was held that the authority given to Jamil did not extend to committing Plaza to substantial construction and loan contracts. Reference is made to the summary of the findings concerning the extent of Jamil's authority at [2454]-[2455]: 2454. In short, in relation to the various Powers of Attorney, I have found that these did not confer actual authority on Jamil to draw cheques or to receive funds in relation to trust property, or sign or otherwise acquiesce in the execution of accommodation notices and other such matters. 2455. As to implied actual authority by reason of Jamil's role, I have found that there was implied actual authority for the day-to-day tasks involving, inter alia, the direction of payments and the like (noting again however, for example, not for payments into Jamil's personal account) and as to the issue of accommodation notices. However, this did not extend to the drawing of cheques and did not extend to making decisions to commit Plaza to substantial construction contracts (though, it did extend to approving, to the extent necessary, various of the variations and escalation costs).

[32]

Deiri Parties' submissions

The Deiri Parties say that Plaza's contention appears to be that the cheque was debited in breach of CBA's mandate, because CBA's acquiescence defences did not succeed for cheques prior to 24 November 2014 (it is noted that Plaza here refers to [2504] of the principal judgment), and CBA's "Liggett defence" did not succeed for partnership distributions (Plaza here refers to [2565] of the principal judgment).
The Deiri Parties say that, insofar as Plaza appears to claim that the partnership distribution to Investments of $1.75 million paid by cheque #514 was made in breach of mandate, and must be returned to the Partnership, this contention is misconceived for at least two reasons.
First, the Deiri Parties point to the conclusion (at [1812] of the principal judgment) that Jamil was authorised to manage and direct the receipt of payments on behalf of Plaza in respect of partnership distributions. It is noted that Jamil's authority extended to authorising partnership distributions to be made to Investments concurrently with equal distributions to Plaza.
At [1812] of the principal judgment, I said: 1812. However, whether or not Moustafa actually knew about the precise amounts that were paid by way of partnership distributions or appreciated the particular account into which they were being paid, I accept that the evidence leads very comfortably to the conclusion that Moustafa left it to Jamil to manage or direct the receipt of payments on behalf of Plaza in respect of partnership distributions from the Broadway Development (just as he clearly appears to have done in relation to other payments due to Plaza - in particular, the amounts that Moustafa left it to Jamil to organise for payment to his account in Lebanon).
The Deiri Parties say that distributions were always made to both partners in equal amounts. It is said that, Jamil having authorised the distribution of Plaza's share of $1.75 million to Plaza, he also caused Plaza to authorise the payment of cheque #514 to Investments; and that neither Investments nor CBA is liable in respect of it.
Second, it is noted that at [488]-[490] and [1775] of the principal judgment it was held that Plaza received its share of the partnership distributions.
Those paragraphs are as follows (bearing in mind that at [488]-[490] I was setting out part of the chronology of events, not findings as such): 488. On 19 November 2014, cheque #513 was drawn on the CBA Partnership Account for $1.75 million in favour of the "Sayour Family Trust", signed by Mr Deiri. 489. Again, Investments says that this is partnership distribution (i.e., two out of 7). 490. The cheque was deposited into the Westpac #202 Account and subsequently that amount was transferred to an account in the name of Moulikyah. … 1775. Insofar as moneys were paid into the Westpac #202 Account, I have concluded that the partnership distributions were received by Plaza (albeit that it appears that Jamil may then have misappropriated a substantial proportion of those amounts). That is consistent with Moustafa's stance in the Estate Proceedings - namely, that moneys paid into the Westpac #202 Account were (on receipt into that account) impressed with a trust and that the cheques paid in respect of those moneys were the property of Plaza. It is also consistent with my finding as to Jamil's authority to manage the day-to-day activities of Plaza and the family's affairs, which included directions as to the accounts to which moneys were to be paid.
The Deiri Parties say that Investments was thus entitled to an equivalent sum and that cheque #514 discharged the liability of the Partnership to Investments. It is said that, having received its $1.75 million, Plaza cannot now claim that the other $1.75 million paid to Investments must be returned to the Partnership. It is submitted that, if that contention be correct, Plaza would need to return its $1.75 million as well and that this would be pointless because each partner would then be entitled to be paid out those same contributions. In other words, it is submitted that there is no loss demonstrated by Plaza for any breach by CBA of the mandate by debiting $1.75 million in payment of cheque #514, because Investments would be entitled to be paid that amount in any event.
Insofar as it is necessary, prayer 1(f)(i) of the Broadway notice of motion seeks a variation of the principal judgment to reflect that Plaza has not shown that the amount of $1.75 million drawn by cheque #514 is recoverable by it. The Deiri Parties in oral submissions then took the position that it was not necessary for a variation to the reasons in this respect (but that if the point was pressed on the first cross-claim it might be necessary) (see T 29; 13/4/21).
The Deiri Parties say that prayer 1(f) arose out of the Sayour Parties' proposed orders where recovery is sought from CBA in the amount of $1.75 million, for cheque #514. The Deiri Parties say that, in essence, there were two cheques that were paid prior to what I held to be Moustafa's acquiescence (the two distributions in the amount of $1.75 million). One was paid to Investments and one was paid to Plaza. The Deiri Parties complain that the effect of Plaza's proposed orders is that it keeps the $1.75 million that it received but seeks judgment against CBA for the $1.75 million which the Deiri Parties received. It is submitted that this is misconceived in light of the fact that I was required only to deal with whether or not Jamil was authorised to direct payments on behalf of Plaza for partnership distributions (which I did at [1812]) and therefore all of the distributions paid to Plaza were authorised.
It is said that there was no need to make a finding that any payment made to Investments was received, or partial distribution was received, because it was not in dispute; the cheques were paid and Investments received the money and there was an equitable distribution between the two partners. Complaint is made that Plaza is seeking to take advantage of a payment made to Investments before Moustafa's acquiescence and to recover from CBA $1.75 million
It is said that the Partnership cannot recover, as against CBA, an amount of money that was properly paid. It is said that the alternative would be that both Plaza and Investments would have to pay back their $1.75 million into the Partnership.
Finally, the Deiri Parties say that this issue only arises in relation to their position in the event that CBA is liable to the Partnership in respect of bank fees and/or the $1.75 million, because CBA seeks to pass those amounts on to Investments under the seventh cross-claim (in respect of which I made the findings at [3319] and [4451] of the principal judgment - see below).

[33]

CBA submissions

CBA makes effectively the same submission in this context as it did in relation to prayer 1(d). Insofar as Investments seeks a declaration or order to the effect that Plaza has failed to establish that the proceeds ($1.75 million) of cheque #514 are recoverable by Plaza, CBA says that no such order is necessary. CBA says that Plaza is not entitled to an order that CBA pay $1.75 million (at least without itself regurgitating the $1.75 million that it received) for the following reasons.
First, noting that it was found that Plaza received its distribution of $1.75 million when it was paid into the Westpac #202 Account, CBA says that there is no difference in the character of this distribution and of other distributions received by the partners. It is said that Plaza recognised that it had no claim against CBA for profit distributions made to Investments in respect of which Plaza had recovered its corresponding distribution in the Estate Proceedings; and that, similarly, it has no claim against CBA for Investments' counterpart to the $1.75 million received by it.
Second, that this is consistent with the "finding" at [2544] of the principal judgment that, where the partners were to receive distributions of profits in equal shares and Plaza had received its share, "a balancing distribution to Investments did not represent a loss". (Although reference is here made to this being a finding, this excerpt from the reasons was not a finding as such but, rather, the recording of a submission by the Sayour Parties - see at [2544].)
Third, that the claim for repayment of the amounts paid by CBA is restitutionary in nature; and that the law will not permit a restitutionary claim where it would be inequitable to do so (here referring to Robinson v Campbell (No 2) (1992) 30 NSWLR 503) (see principal judgment at [2548]). It is submitted that there is no reason in principle or logic why Investments should be obliged to disgorge its share of the profits while Plaza (through its share of the profits) takes for itself the benefit of the Broadway Development with a resulting windfall gain to Plaza.
In that context, it is noted that although Plaza has received its distribution of $1.75 million, it has not offered to repay it. Accordingly, CBA says that should it be ordered to pay $1.75 million (the subject of cheque #514) as sought in Plaza's proposed order 9(a), then any judgment against CBA for this sum should be made conditional upon prior repayment by Plaza of the $1.75 million it received and retained. It is submitted that this is the only equitable manner in which a double-recovery by Plaza may be avoided. CBA argues that Plaza has suffered no loss from the payment to Investments by reason of its own receipt of an equivalent amount, which it has retained.
CBA says that while such a loss may not fall within the Liggett principles as a payment to a third-party creditor (see at [2565]), that does not have the consequence (and it is noted that I did not here conclude) that the amount could be recovered by Plaza from CBA notwithstanding that Plaza suffered no loss through its receipt of that amount.
CBA says that what Investments here seeks is to have the conclusions as to liability under the seventh cross-claim reversed and that this should not be permitted.
It is noted that the relevant findings are at [3319], it there being held, first, that "Investments and Mr Deiri represented to CBA (by signing the First Facility Agreement, by signing the Second Facility Agreement, and in all the circumstances) that CBA had authority to, and should debit, the account with fees, charges, interest and repayments, in respect of Stage 1 Loan and Stage 2 Loan"; and it being accepted that, to the extent that Plaza had succeeded in establishing that these debits were not authorised, CBA had suffered loss in reliance upon and by reason of these representations.

[34]

Sayour Parties

The Sayour Parties note that prayer 1(f) is concerned with the $1.75 million. It is submitted that the arguments raised by the Deiri Parties raise new submissions not the subject of any of the defences that have been found.
The Sayour Parties say that cheque #514 was a profit cheque paid before the date on which CBA's defence of acquiescence is made good; that the relief sought is against CBA; and they point, as to the accounting between the partners, to the process outlined at [37] of Plaza's Proposed Orders dated 5 March 2021.
The Sayour Parties say that the approach raised against them amounts to taking part only of the account between the partners. The Sayour Parties say that they are giving credit for what they have received. In that regard, they point to their proposed orders and in particular to the declarations to give effect to the final position on the account. Handed up at the hearing of this application was a schedule that set out the final partnership distribution calculations. What is there set out starts with the funds held by the Receiver ($5,249,428.05) to which is added the recovery anticipated against CBA, including $8,050.80 in relation to Matthews Street, the recovery for cheque #514, the establishment, line fees, interest (and interest on all of those components). From that, the Sayour Parties subtract any unpaid remuneration of the Receiver and agreed costs up to the making of the winding up order. What next follows are the surcharges that it is submitted should be added (i.e., amounts of the Stage 2 payments to Investments totalling $29,615,608 - less an offered just allowance of $23.5 million). The Sayour Parties say that they there allow a credit for the $1.75 million profit share received by them.
The $23.5 million "just allowance" comes, it is said, from the finding as to what was discussed and agreed by Mr Deiri and Moustafa about the costs of the tender price for the second construction contract. What I said in that regard (at [145]) was perhaps more nuanced, in that I there said "[i]t would seem that agreement was later reached on a Deicorp Constructions' tender to design and construct the residential development for $23.5 million". However, I recorded elsewhere in the principal judgment the communications between Jamil and Mr Deiri that make clear that Jamil understood his father had agreed to the sum of $23.5 million and Plaza did not dispute that there was an agreed tender for Stage 2 in the sum of $23.5 million; so the lack of a more express finding of this is of no moment.
The Sayour Parties say that the place to give credit for what Plaza has received is in the accounting as between Investments and Plaza (and that this does not concern CBA). Particularly where there are other matters in contention between the parties in the accounting, it is said that it ill-behoves one of the partners to deprive the Partnership of an asset (which is what the Deiri Parties' submission is said to be - and it is submitted that this is not only misconceived but a new submission that should not be entertained).
It is said that the credit given by Plaza in its calculations for $1.75 million increases the amount of assets on the partnership accounting. On Plaza's calculations (dependent on various assumptions as to recoveries) Plaza would be entitled to $7.287 million but there is only about $5.249 million in the hands of the Receiver. It is submitted that if money does not come in from CBA, and there is a shortfall in Plaza obtaining judgment against Investments for the short fall, it will be disadvantaged if Investments turns out to be insolvent. It is submitted that the suggestion that an asset of the Partnership should be taken away and not given its effect in a remedy would be wrong.

[35]

Conclusion

The relief here sought is to amend the reasons (insofar as it is necessary) to reflect that Plaza has not established that the amount of $1.75 million drawn by cheque #514 on the CBA Partnership Account on 21 November 2014 is recoverable by Plaza (on its own account or on behalf of the Partnership). This is put on the basis that: the payment was a Partnership distribution which was authorised by Plaza, in circumstances where it was found at [1812] that Jamil was authorised to manage or direct the receipt of payments on behalf of Plaza in respect of Partnership distributions; the payment discharged Investments' entitlement to a Partnership distribution of that sum, in circumstances where an equivalent sum was paid to and received by Plaza as a Partnership distribution (see at [488]-[490] and [1775]); and no loss has been established for any breach of mandate by CBA or insofar as the payment was otherwise an unauthorised transaction.
I consider that, so far as the submissions on the present application invite the revisiting of the principal judgment in relation to this sum, that is not appropriate, in circumstances where I gave detailed consideration to the issues in respect of this payment in the principal judgment and, if I be wrong, there is an appellate process by which I will be corrected. Moreover, I do not consider that it is necessary to amend the reasons in order for the Deiri Parties to achieve the result they seek (which is that there be no order that CBA repay this amount - such that no liability for it could then be passed on to them). That is because I consider that the issue arises (where CBA dealt with it in its submissions) in relation to the framing of the orders for relief; and, for the reasons submitted by CBA at the hearing in April this year, I am not persuaded that the orders sought by Plaza in this respect should be made - the position is that both partners received an equal distribution by way of the $1.75 million payment. Plaza received its share. Although Plaza offers to account for it in the ultimate calculation of partnership distributions (which calculations I have no intention of seeking to verify, particularly given my earlier (admittedly egregious) arithmetical error in the principal judgment to which I have referred above). It seems to me that, vis-à-vis CBA and Plaza, there is no injustice in CBA not being required to pay a second time the amount that has already been paid (albeit by an unauthorised cheque) and received by Investments as an equal share of partnership profit at the time.
Accordingly, I do not grant the relief sought in prayer 1(f) but deal with the substance of that application when it comes to fashioning the final relief and, in essence, I accept Investments' position on this issue.

[37]

Deiri Parties' submissions

The Deiri Parties say that such a variation is sought to reflect that CBA has not established that it is entitled to relief under the seventh cross-claim for any amount it is required to pay Plaza or the Partnership under the first cross-claim in respect of establishment fees, line fees, or interest charges. The Deiri Parties say that there are three reasons why that variation should be made.
First, that CBA did not plead that Mr Deiri or Investments made representations to CBA "by signing any facility agreements" to the effect that CBA had authority to and should debit the CBA Partnership Account with fees and interest charges (see seventh cross-claim at [13(a)-(c)]); nor did CBA advance any such submission in its closing submissions (see CBA's closing submissions at [61]). Rather, it is noted that CBA pleaded the representation and the basis for it as follows: a. in and between February 2012 and March 2017, Mr Deiri and Investments knew that the Partnership Joint Account was debited with fees and interest incurred in respect of the Facilities; b. Mr Deiri and Investments agreed and acquiesced in the debiting of such fees and interest to the Partnership Joint Account; c. through their said conduct Mr Deiri and Investments thereby represented to CBA that each of the debits were duly authorised; [Emphasis as per Deiri Parties' submissions]
Second, as for the basis of the relevant representation that CBA pleaded, it is said that there has been no finding that the representation was made by Mr Deiri and Investments "agreeing and acquiescing in the debiting of fees and interest" to the CBA Partnership Account; and that no such finding should now be made in circumstances where there have been no submissions directed to it by CBA and no evidence cited in support for it.
Third, and in any event, that CBA has not established its loss arising from the misleading conduct pleaded at [11]-[14] of the seventh cross-claim. It is said that if CBA is liable to refund to Plaza or the Partnership the fees and interest it debited to the CBA Partnership Account, that only means that CBA would not have received those moneys; and that it does not follow that those amounts necessarily reflect CBA's loss. The Deiri Parties say that the relevant counterfactual (but for the representation that CBA could debit the CBA Partnership Account for fees and interest), is that CBA would not have lent the money at all. It is said that in that scenario, CBA still would not have obtained fees and interest. It is noted that CBA may not have incurred expenses associated with lending the money (such as borrowing costs or administration expenses), but it is said that CBA has adduced no evidence about the extent of those expenses and, as such, CBA has failed to establish the quantum of loss it suffered by reason of the contravention, and is not entitled to any relief in respect of it.
The Deiri Parties say that the representation that I found was made was something that was not pleaded and that Plaza should not be able to pass on any liability in respect of fees and interest arising from any representation in relation to the Second Facility Agreement. Complaint is made that the misrepresentation was a misrepresentation of fact; and that there was no finding that Investments (or Mr Deiri), made such representation by agreeing and in acquiescing in debiting interest and fees. It is said that that is an allegation that has not been dealt with and that, in the absence of an application by CBA to have that considered, I should not now deal with it. The Deiri Parties accept that this is a straight pleading point; but say that it would be necessary here to re-argue the submissions if it were now to be entertained (and, contrary to the stance seemingly taken in relation to prayer 1(d), they say that this should not be done).
Further, it is submitted that if there was a representation it must have been made on behalf of the Partnership, through the execution of the Facility on behalf of both partners (and that it differs to the position in relation to the cheques because that relies on the unilateral act of Mr Deiri in signing a facility agreement and says nothing about what the other partner did). The Deiri Parties here note the conventional estoppel point; and say that, if there was acquiescence and agreement to the debiting of fees and interest, it was the Partnership doing that; and therefore, there is no liability at all. (As noted above, it is accepted by the Deiri Parties that this issue does not arise if the Deiri Parties succeed on the point raised by prayer 1(d); since, if there is no liability in respect of the bank fees and interest on the part of CBA then there will be no liability arising to be passed on under the seventh cross-claim.)

[38]

CBA submissions

CBA says that all of the relief it sought in the seventh cross-claim was contingent on a finding that CBA was liable to Plaza (or the Partnership) for any of the categories of payments which were the subject of Plaza's claims against CBA under the first cross-claim. CBA notes that if it is not liable to Plaza for the interest and bank fees the subject of prayer 1(d), then it will suffer no loss. However, CBA contends that if CBA is held to be liable for these debits, it will clearly have suffered loss.
As to the pleading issue raised by the Deiri Parties, CBA points out that it alleged (at [13] of the seventh cross-claim): first, that Mr Deiri and Investment knew that these charges in respect of interest and fees were being debited by CBA; and, second, that they agreed to and acquiesced in the debiting of these charges. CBA emphasises that Investments admitted both of these allegations (at [13(a)] of the defence to the seventh cross-claim).
CBA maintains that the reference in its pleading to the agreement and acquiescence of Investments and Mr Deiri in the debiting of fees and interest is apt to encompass both their initial agreement (through signing of the Loan Agreement) and their subsequent conduct (through ongoing acceptance of the periodic debits made by CBA). It is said that the encapsulation of this conduct in the finding that "by signing the First Facility Agreement, by signing the Second Facility Agreement, and in all the circumstances" (emphasis added) is consistent with CBA's pleaded allegation and Investments' admission.
CBA says that it alleged that this conduct of Investments and Mr Deiri constituted a representation of due authority (seventh cross-claim at [13(c)]); that Investments denied this allegation (defence at [13(b)]); and (at [3319]) CBA's contention was upheld. At [3319] I said that: 3319. As to the misleading and deceptive conduct claim, in respect of debits made to the CBA Partnership Account and which Plaza has claimed were unauthorised, I accept that Investments and Mr Deiri represented to CBA (by signing the First Facility Agreement, by signing the Second Facility Agreement and all the circumstances) that CBA had authority to, and should debit, the account with fees, charges, interest and repayments, in respect of Stage 1 Loan and Stage 2 Loan. Again, I also accept that, to the extent Plaza has established that those debits were not authorised, CBA has suffered loss in reliance upon and by reason of each such representation.
CBA says that the finding there made is an unambiguous rejection of Investments' defence to this aspect of CBA's contingent claim, and is supported by the pleadings and evidence. It says that Investments' disquiet or disappointment concerning this finding is not a basis for a request that the finding be revisited and varied to produce a result that it prefers. In that regard, CBA submits that the Deiri Parties here (in relation to the relief that affects CBA) primarily seek to have the Court impermissibly reverse or amend outcomes with which they do not agree; and that any such inaccuracies or errors that may exist ought to be corrected by the Court of Appeal.

[39]

Conclusion as to prayer 1(g)

It is clear from [3319] that the conclusion I formed as to the alleged representation by the Deiri Parties to CBA was not based on the signing of the First and Second Facility documents alone. Had that been the case there would have been no call to add the words "and [in] all the circumstances". I accept that the pleaded representation did not make specific reference to the signing of, relevantly, the Second Facility Agreement. However, the signing of the agreement was to my mind part of the conduct comprised in the pleaded (knowing) agreement and acquiescence by the relevant parties to the debiting of interest and fees; and the fact that Mr Deiri signed the document purportedly on behalf of both partners conveyed a representation to CBA in my opinion that both were agreeing to that for which it provided. Thereafter, the lack of complaint as to the debits from the account would also have conveyed to CBA that the parties acquiesced in that conduct. On one view the words in parentheses referring to the signing of the Second Facility (and, for that matter, the First Facility) might be regarded as mere surplusage and it would sufficiently have expressed my reasons by saying that in all the circumstances I considered the alleged representation to have been made.
In any event, this seems to me to be an instance where, if there be an error, it should be corrected elsewhere. The issue was raised on the pleadings; it was the subject of submissions; and I formed a view that will either be proven correct or otherwise, as the case may be.
As to the complaint by the Deiri Parties that CBA has not suffered loss in reliance upon the alleged representation on the basis that the relevant counterfactual is that, but for the representation that CBA could debit the CBA Partnership Account for fees and interest, CBA would not have lent the money at all (and hence, in that event, CBA still would not have obtained fees and interest; it being noted that CBA has adduced no evidence about the extent of expenses such as borrowing costs or administrative expenses), it nevertheless must at the very least be the case that CBA is now exposed to a claim for repayment of interest and other charges in circumstances where it has lost the opportunity to obtain such charges and fees on other potential financing transactions, having advanced the moneys to the Partnership that it did, and is faced with a claim to disgorge the amounts charged for the very provision of the finance of which the Partnership has taken the benefit. Again, however, those were issues dealt with (rightly or wrongly) in the principal judgment.
Thus, had the claim for relief under prayer 1(g) otherwise arisen, I would have determined that it was not appropriate to revisit the principal judgment on this issue.

[41]

Prayer 1 - Pleadings and arguments regarding Jamil's authority as a director not addressed in the Reasons

The first issue raised relates to the fact that, pursuant to leave granted on 29 November 2019, in the course of the final hearing, the Deiri Parties were granted leave to file, in the Arncliffe Proceedings, a further amended defence to the first cross-claim (further amended defence) and a further amended statement of third cross-claim (further amended cross-claim). Those pleadings (the Further Amended Pleadings) were filed in Court on 3 December 2019.
The Deiri Parties say that the effect of the Further Amended Pleadings was, among other things, to plead as Deiri Nominees' and Mr Deiri's primary (as opposed to hitherto alternative) case that Moustafa consented to becoming a director and member of Sayour Holdings on 16 December 2013 and, as a consequence, he had full authority to appoint Jamil as a director on 21 August 2014. The Deiri Parties sought relief declaring that Jamil was a validly appointed director from that time until his death, and rectifying the ASIC register accordingly.
The Deiri Parties say that this had important consequences for the Arncliffe Proceedings because, if those allegations were made good, it meant that (apart from any de facto authority Jamil had prior to 21 August 2014), from that time Jamil had actual authority, in his capacity as director, to bind Sayour Holdings. It is said that such authority therefore included giving the assent of Sayour Holdings to the Site Identification Fee and the DMA fee in September 2015, and authorising the payment of $1.56 million on 21 November 2014.
It is said that, while the Further Amended Pleadings are referred to at [3430] of the principal judgment, otherwise the reasons appear to proceed on the basis that the relevant pleadings were those that had in fact been superseded by the Further Amended Pleadings (the Superseded Pleadings), referring by way of example to [83]-[89] of the principal judgment in which, in a passage summarising the amended statement of third cross-claim, the relief sought in prayers 14 and 15 is there described as "an alternative case" (and I note that the reference is there made to an allegation that Jamil was the "sole" director and secretary which, as detailed below, is deleted from the Further Amended Pleadings). The Deiri Parties place emphasis on the fact that, in the further amended cross-claim, that relief was no longer sought "in the alternative" but, rather, was simply sought prefaced as follows: If the Court determines that Moustafa Sayour did consent to become a director or member of Sayour Holdings Pty Ltd on 16 December 2013 or 21 August 2014, or is otherwise a director or member of Sayour Holdings Pty Ltd, the cross-claimants seek: …
The Deiri Parties say that Moustafa Sayour's directorship (the subject of the above claim) was the amalgam of two of the key findings of fact sought by the Deiri Parties in the Arncliffe Proceedings - factual finding #1 and factual finding #2. Prayer 14 sought a declaration that at all times during the period from 21 August 2014 to 6 October 2015 Jamil was a director of Sayour Holdings (cf the previous declaration which was to the effect that he was the sole director and secretary of the company for that period). Prayer 15, as noted above, sought rectification of the ASIC register in that regard.
Similarly, it is said that the apparent inconsistency perceived at [1374]-[1376] and [3574] of the principal judgment (in the Deiri Parties' position in the Arncliffe Proceedings on the question of Moustafa's position as director and shareholder of Sayour Holdings), was based upon the Superseded Pleadings. It is submitted that those paragraphs should accordingly be amended to reflect the position of the Deiri Parties as ultimately advanced in the Further Amended Pleadings. Those paragraphs are as follows.
At [1374]-[1376], I said: 1374. The Deiri Parties' submission in this regard appears to be premised on Moustafa knowing of the incorporation of Sayour Holdings and the purpose of that company. In this regard, there is an inconsistency with the position taken by the Deiri Parties (although, as I understand it, this is in the alternative) in relation to the Arncliffe Proceedings. 1375. The inconsistency I see is that, in relation to the Arncliffe Proceedings, the first key finding of fact for which the Deiri Parties contend is that Moustafa was aware of and agreed to be the sole director and shareholder of Sayour Holdings in December 2013 (cf the submissions that Moustafa did not consent to be a member of [sic; or] director of that company prior to, or at the time of, its registration). 1376. Suffice it here to say that even if Moustafa knowingly allowed Jamil to run Sayour Holdings that would not (as I also considered in relation to Biomed) lead me to conclude that he did so in relation to Plaza.
Those paragraphs were in the section of the principal judgment dealing with the key factual findings for which the Deiri Parties had contended in Arncliffe Proceedings (they following a series of preliminary factual findings for which they also contended) and, in particular, factual finding #1, that being that Moustafa was aware of, and agreed to be the sole director and shareholder of, Sayour Holdings in December 2013. Pausing here, there remains such an inconsistency even on the Further Amended Pleadings insofar as they retain the allegation (albeit now expressed in the alternative) that Moustafa did not consent to be a director of Sayour Holdings and was never a director or secretary of Sayour Holdings. Therefore, the complaint seems to be that the suggestion of inconsistency only arose on the alternative version (still then remaining) in the Further Amended Pleadings and not on what is here described as the primary case. In any event, I have difficulty seeing what turns on it being an alternative case rather than a primary case, since at this point of the principal judgment I was addressing the first of the key factual findings for which the Deiri Parties had contended. Certainly, the conclusion expressed at [1376] - predicated as it was on Moustafa allowing Jamil to "run" Sayour Holdings, as opposed to consenting to his appointment as a director, say - would not change; though for completeness a cross-reference might be added to the circumstance surrounding the fact of Moustafa's consent to Jamil's appointment as director.
When commencing the section relating to factual finding #1, I noted that: 3492. I interpose here, however, to note that there is a pleading to the contrary (seemingly, put in the alternative to the proposition for which the Deiri Parties have here contended as a key finding of fact) in the Deiri Parties' defence (at [114]-[115]; [123]) and in the Third Arncliffe Cross-claim (at [8], [10], [20]), where it is contended that Moustafa: did not consent in writing or at all to be a member or director of Sayour Holdings prior to or at the time of its registration; was never issued with shares in Sayour Holdings and was never a member or director of Sayour Holdings; and hence that Sayour Holdings has had no directors and has at all times been unable to act - and thus all of the pleadings in the Arncliffe Proceedings were filed without authority (see at [124] of the defence and [21] of the Third Arncliffe Cross-claim).
Pausing here, there was indeed a pleading in the Further Amended Pleadings to the effect stated in the passage at [3492] extracted above (see, for example, at [114]-[115] of the defence). The only relevant difference is that it was now pleaded at [114]-[115] of the defence as an alternative to the allegations at the new [112A] and amended [113], where it was alleged that Moustafa had consented to being a member, director or secretary of Sayour Holdings on either 16 December 2013 or 21 August 2014 (particularised by reference to the signed consent documents referred to in Moustafa's 8 November 2019 affidavit at [26]-[28]). As noted above, the initial allegation was inconsistent with factual finding #1 for which the Deiri Parties contended.
The second passage of the principal judgment to which reference was made in this context was at [3574], in a paragraph which followed the conclusion (at [3572]) that Moustafa had signed the consent forms: 3572. With those observations, I find that the evidence comfortably establishes that Moustafa signed the relevant consent forms in relation to Sayour Holdings on or about the date they bear (16 December 2013). 3573. I consider that the documents establish that Moustafa signed the consents in question and on the balance of probabilities (and having regard to the analysis of the documents referred to above) I find that he did so on 16 December 2013. I have concluded that Moustafa should be taken to have consented to becoming a shareholder and director of Sayour Holdings at that time.
I then said at [3574]: 3574. Pausing here, I note that this finding is relevant in relation to (and inconsistent with the submissions made by the Deiri Parties in respect of) the Third Arncliffe Cross-claim (see below) insofar as there it is contended (as I understand it in the alternative) that Moustafa did not consent to be a member or director of Sayour Holdings prior to, or at the time of, its registration and was never issued with shares in the company and was never a member or director of the company (see particularly the defence at [114] and [115]).
I concluded that to that extent the alternative factual finding #2 (that Moustafa agreed to become director and member of Sayour Holdings in August 2014 with full knowledge of the company's purpose) did not arise. The determination of factual findings #1 and #2 also followed the preceding observations at [3569]-[3571]: 3569. As an initial matter, I note that, by way of reply, the Deiri Parties emphasise that the Sayour Parties accept that Moustafa became a director and member of Sayour Holdings by August 2014; and the Deiri Parties say that this is sufficient for their purposes. 3570. More significantly to my mind, is the Deiri Parties' reply submission to the contention that whether Moustafa signed the relevant consents in August 2014, or in December 2013, is of little import because the Sayour Parties do not accept that Moustafa had any knowledge of the company's purpose or dealings. The Deiri Parties say that the Sayour Parties, in this respect, seek to "walk a tightrope", by on the one hand accepting that Moustafa had sufficient awareness of what he was doing to sign the forms that made him a director and member of the company while; on the other, arguing that, at the same time, he was oblivious as to the company's purpose. The Deiri Parties say that this is untenable and I here record that I see some force to that submission. 3571. Likewise, and in any event, the Deiri Parties say by way of reply that, even if Moustafa was oblivious as to the company's purpose, it is now clear that he was not oblivious as to the fact of his directorship and shareholding; and yet (it is said despite knowing that he was the sole director and shareholder) he nonetheless seemed content to leave the management of the company to Jamil. Again, the Deiri Parties say that this is itself sufficient for their case. Again, I here record that I see some force to this submission.
In their submissions, in this regard, the Sayour Parties say that the Further Amended Pleadings filed on behalf of the Deiri Parties on 3 December 2019 did not indicate the amendments made to the Superseded Pleadings and thus did not comply with the mandatory requirements of r 19.5 of the UCPR. It is said that, because of this non-compliance with r 19.5 of the UCPR, there was nothing to bring the amendments contained in the Further Amended Pleadings to the proper attention of the Court. The Sayour Parties submit that, to the extent any of these amendments have been overlooked, that is due to the fault of the Deiri Parties and not a reason to prolong these proceedings; and that the points lack sufficient merit to warrant reconsideration (as to which see below).
I take no point as to non-compliance with r 19.5 of the UCPR. The Further Amended Pleadings were filed by leave in Court. They were not included in the (voluminous) Court Books and it is clear that in some parts of the reasons I was referring to the Superseded Pleadings. However, unless anything turns on this, I see no utility in amending the principal judgment in order to add references to the Further Amended Pleadings; nor do I consider that the time taken to do so would warrant such an exercise, having regard to the statutory mandate for the conduct of litigation in this Court. I turn then to the aspects of the decision that the Deiri Parties say (and the Sayour Parties contest) are affected by the fact that an alternative case had by 3 December 2019 become the "primary case" on this issue.

[42]

Prayer 1(a1)

Prayer 1(a1) of the Arncliffe notice of motion seeks a variation of the Reasons to address and make findings based on the Further Amended Pleadings, including matters relating to Jamil's authority as outlined below.
First, it is noted that, under the further amended cross-claim, certain relief was sought if either factual finding #1 or factual finding #2 was made. The Deiri Parties note that factual finding #1 was made at [3573] of the principal judgment (see as extracted above). Namely, I concluded that Moustafa should be taken to have consented to becoming a shareholder and director of Sayour Holdings at the time that he signed the relevant consents (which I found occurred on the balance of probabilities on 16 December 2013).
The Deiri Parties say that the relief they sought upon the making of that finding should have been addressed. Relevantly, that relief (as indicated above) is set out at prayers 14 and 15 of the further amended cross-claim, as follows: 14. A declaration that at all times during the period from 21 August 2014 to 6 October 2015 Jamil Sayour was a director of Sayour Holdings Pty Ltd. 15. An order pursuant to s 1322(4)(b) of the Corporations Act 2001 (Cth) or the inherent jurisdiction of the Court that the register kept by the Australian Securities and Investment Commission in respect of Sayour Holdings Pty Ltd (ACN 167 249 363) be rectified, by recording Jamil Sayour as a director of Sayour Holdings Pty Ltd for the period 21 August 2014 to 6 October 2015.
It is noted that, in the Further Amended Pleadings, the Deiri Parties pleaded a number of facts in support of that relief (the Deiri Parties here referring to the matters pleaded at [6A], [15A], [37A], [37B], [40(b1)], [42A], [42B], [45(b1)], [48A], and [51(b1)] of the further amended cross-claim, and at [112A], [118A], [128A], [128(b)], [131(b1)], [133A], [133B], [136(b1)], [139A], and [142(b1)] of the further amended defence). It is said that those facts are consistent with the findings made in the principal judgment and support the relief sought in prayers 14 and 15 of the further amended cross-claim.
The Deiri Parties say that most critical finding in this regard is the allegation at [15A(a)] of the further amended cross-claim (which is identical to [118A(a)] of the further amended defence), which pleads in effect that, if it is accepted that Moustafa consented to becoming a member, director and secretary of Sayour Holdings on 16 December 2013 (which is what I found on the balance of probabilities), or on 21 August 2014, or it is otherwise accepted that Moustafa is a director or member of Sayour Holdings, then: (a) on 21 August 2014, Jamil Sayour was appointed as a director of Sayour Holdings. Particulars ASIC form 484 notifying of appointment of Jamil Sayour as a director of Sayour Holdings on 21 August 2014, signed by Moustafa Sayour. …
The Deiri Parties note that they made arguments in support of this finding at C.7.9 of their closing submissions (see from [586]-[592] of those submissions). It is said that, in view of the findings made in the principal judgment, this finding now follows as a matter of course (and that it does not depend upon any particular answer to the question of Moustafa's knowledge at the time that he signed the relevant forms). In this regard, as evident from the extract above, I indicated that there was force in the Deiri Parties' submissions at [3571] of the principal judgment.
The Deiri Parties say that this is a finding of objective fact that flows directly from the following two established facts: first, that, as at 21 August 2014, Moustafa was a shareholder and director of Sayour Holdings (as was found at [3573]); and, second, that on 21 August 2014, Moustafa signed an ASIC form 484 appointing Jamil as a director of Sayour Holdings (which the Deiri Parties say was uncontroversial).
Thus, it is submitted that the principal judgment should be amended to include a finding that Jamil became a director of Sayour Holdings on 21 August 2014, and that the relief sought in prayers 14 and 15 of the further amended cross-claim should be granted.
Pausing here, I do not see the utility of the relief sought in prayers 14 and 15 (noting that declarations will ordinarily be made only if there is utility in so doing and it was not made clear what purpose would now be achieved by rectification of the ASIC register - some six years after Jamil's death). Lest there remain any doubt, I here make clear that I find that the evidence establishes on the balance of probabilities that Jamil became a director of Sayour Holdings on 21 August 2014.

[43]

Prayer 1(i) - Jamil's authority to negotiate Development Management Fee and site identification fees

By prayer 1(a2) of the Arncliffe amended notice of motion, the Deiri Parties seek a variation of the principal judgment to address and make certain findings in relation to Jamil's authority vis-à-vis Sayour Holdings.
In this regard, the Deiri Parties say that the starting point is that Jamil controlled, and had authority to control, Sayour Holdings, for two distinct reasons: first, he was an actual director of Sayour Holdings from 21 August 2014 to 6 October 2015; and, second, he was in any event a de facto director, who controlled Sayour Holdings with Moustafa's consent or acquiescence (saying that factual finding #3 sought by the Deiri Parties was made at [3578] and [3601]-[3602] of the principal judgment).
In fact, at [3578], I simply stated the factual finding #3 for which the Deiri Parties contended (but there made no such finding): 3578. The third key finding of fact that the Deiri Parties submit should be made in the Arncliffe Proceedings is that Jamil controlled Sayour Holdings with Moustafa's consent or acquiescence. Related to this factual finding is the finding sought by Konstructions (and, as I understand it, Zapphire) as to Jamil's authority.
The relevant finding was made at [3601]-[3602] where I concluded that: 3601. Generally for the reasons advanced by the Deiri Parties and Konstructions (and, as outlined above), I find that Jamil was acting as a de facto director of Sayour Holdings and that Moustafa, who must be taken to have been aware of the company's incorporation since he signed the consent forms for the registration of the company, permitted that state of affairs to continue. 3602. As to the findings sought by Konstructions, I do not accept that the evidence permits any finding as to Jamil's unreliability or dishonesty or otherwise, nor do I draw any inference from Moustafa's, perhaps inconsistent, conduct in expressing views as to Jamil's unreliability in the past but at the same time having been prepared to appoint him as his attorney when he travelled overseas and having been prepared to allow Jamil to manage certain of the family business affairs (including Biomed). Nor do I draw an inference from whatever cultural practices might suggest in this context (having again the absence of any expert sociological or anthropological evidence as to applicable cultures or customs). Suffice it to note that, whatever in fact be the extent of Moustafa's understanding at the relevant time as to the purpose of Sayour Holdings and whatever his understanding as to the Arncliffe Development, he certainly left to Jamil the day-to-day running of the Arncliffe Development and, to that extent, he either impliedly authorised Jamil to act on behalf of Sayour Holdings in that project or he acquiesced in him so acting.
The Deiri Parties submit that, once these premises are accepted, those parts of the reasons in the Arncliffe Proceedings where findings have been made that Jamil did not have authority in connection with particular transactions and events (or where doubt was expressed about that authority) should be revisited. It is said that, while in the Broadway Proceedings, findings were made that Jamil had only limited authority to act on behalf of Plaza (see at [2453]-[2457]), there is no corresponding finding or reasoning to support any limit upon Jamil's authority to act on behalf of Sayour Holdings.
In this regard, the Deiri Parties say that the first finding that falls to be revisited in light of the above matters is the finding contained in the final words of [3757] of the principal judgment, where several reasons were given for declining to find that the conversation between Jamil and Mr Deiri at the Meriton Apartments on 30 September 2015 occurred in the terms set out in Mr Deiri's affidavit. Relevantly, I there said: 3757. Furthermore, while I can readily accept that Mr Deiri would have demanded some form of fee to offset a loss of profits caused by such an identification fee being payable, I cannot be satisfied that there was an agreement in the terms ultimately drafted by Mr Vamvakaris; nor am I persuaded that Jamil had authority to negotiate those terms (the particular significance of which I deal with in due course below). [Underlining added per Deiri Parties' submissions]
The Deiri Parties submit that the underlined words should be deleted having regard to the fact that Jamil was both an actual director of Sayour Holdings, and a de facto director with Moustafa's consent and acquiescence, as at the date of this conversation. (Pausing here, even if those words were deleted nothing would turn on this unless I revisited the conclusion that I was not satisfied that there was an agreement in the terms ultimately drafted by Mr Vamvakaris and came to a different conclusion based on Jamil's position as an actual director at the time; which I do not - as explained below.)

[44]

Prayer 1(ii) and (iii) - No unanimous assent of shareholders

The next findings that the Deiri Parties submit should be revisited in light of the above matters are at [3796]-[3799] of the principal judgment. It is noted that (at [3796]), in relation to factual finding #7, which I declined to make, I said: 3796. Furthermore, I agree that it is not the case that the "deathbed conversation", even if (which I do not accept - see below) this constituted unanimous assent of shareholders, would have amounted to an irrevocable resolution such that Mr Deiri was thereafter under some binding agreement between shareholders to pay site identification fees to unidentified people. As the Sayour Parties point out, it would have been open to Mr Deiri simply to put forward another resolution to amend the "deathbed resolution. Mr Deiri did not even make these matters known to Moustafa, nor is there any explanation as to why he chose not to approach Moustafa to discuss revocation or amendment of the purported resolution. [Underlining added per Deiri Parties' submissions]
For ease of reference, the other paragraphs to which the Deiri Parties here refer are: 3797. I consider it inconsistent with Mr Deiri's duties as a director to the company not to have sought at the very least to consider whether there was a binding obligation, or whether the company could properly have avoided the purported obligation before paying out these not unsubstantial amounts, (particularly when they were raised at a time after the concerns as to disruption to the development had passed). 3798. In any event, I do not accept that this was a shareholder meeting as such and I do not accept that it was incumbent on Mr Deiri to give effect to "the shareholder resolution" as best he could. I do not accept that there was a binding arrangement of any kind and I consider that it beggars belief that it could have been thought to be in the company's best interest to agree to such an amorphous arrangement. Having said that, it was clear in cross-examination that Mr Deiri was genuinely affected by emotion when he gave evidence of this meeting and I accept that he may well have felt a moral obligation to honour Jamil's deathbed wishes. Nevertheless, what I do not accept is that he (or the company) was legally bound to do so. 3799. Again, I accept the Sayour Parties' submission that a bare shareholders' resolution to pay a sum of money to an unidentified person could be withdrawn at any time by a further resolution of shareholders; that there is no contractual obligation to make the payment, and that there is no basis on which the unidentified person could claim an enforceable interest in the performance of the resolution. I accept that it is no more than, at best, a gratuitous understanding as between Jamil and Mr Deiri and that it could have been unwound at any time. Further, while I accept that Jamil was left with ostensible authority to manage the Arncliffe project, (which must follow from Moustafa's apparent lack of knowledge of its day-to-day activities and his seeming understanding at the outset that it was Jamil's project) at least from the time that Moustafa signed the consent forms for Sayour Holdings I consider that his assent was required for a binding commitment of this kind to have been concluded.
The Deiri Parties says that once it is accepted that Jamil was both an actual director of Sayour Holdings, and a de facto director in any event with Moustafa's consent and acquiescence, it follows that any consensus reached between Jamil and Mr Deiri at this meeting was indeed a unanimous assent of shareholders. (That assumes Jamil's authority as a director to bind the company to such an assent.)
Relatedly, reference is made to the findings that the meeting could not properly be characterised as a "shareholder resolution" to which it was incumbent that Mr Deiri give effect ([3798]) unless it was "irrevocable" ([3796]) and that the resolution could be "withdrawn at any time by a further resolution of shareholders" ([3799]) or "could have been unwound at any time" ([3799]). The Deiri Parties advanced submissions in reply on this point (which they complain do not appear to have been considered in the principal judgment) (referring to [292] of their reply submissions).
The reply submissions (C.12), responding to [1064]-[1081] of the Sayour Parties' closing submissions, argued at [291] that the proposition by the Sayour Parties to the effect that there was no consideration that "bound Sayour Holdings forever" should be rejected and maintained that it was sufficient that shareholders unanimously assented to a proposed course of action, stating that "[t]he company is then bound to give effect to that decision". The Deiri Parties then submitted that: 292. In any event, the submission above fails to grapple with the fact that, apart from imposing an obligation, the unanimous assent of shareholders permitted the conduct in question, even if the company was not required to do it. To speak of Sayour Holdings possibly having been able to take steps to "withdraw" from the agreement is to fail to recognise that, until and unless it did so (which it never did) sufficient authority existed for CP Arncliffe to take exactly the actions that it did take. There therefore cannot have been a breach of duty, given that affirmative authority so to act in fact existed.
The Deiri Parties say that they there made the point that there was no need for a shareholder resolution to be irrevocable in order for the resolution to authorise conduct by a director of the company which would otherwise be unauthorised. It was said that the unanimous assent of the shareholders authorised that conduct and that it does not matter whether Mr Deiri was bound to give effect to the resolution or that he could have taken steps to withdraw the resolution, because he was acting with the authority of Combined Projects Arncliffe. The Deiri Parties here reiterate their reply submission to the effect that it is not to the point (contrary to the Sayour Parties' submissions), that the resolution can be withdrawn. The Deiri Parties say that the fact that a shareholder resolution could be withdrawn might be said of any shareholder resolution, noting that a shareholder resolution is always liable to be reversed or altered by a subsequent one. It is submitted that, unless and until that occurs, the shareholder resolution binds and authorises the directors of the company to act in accordance with it. It is said that if a shareholder resolution ceased to have that effect simply because of the possibility that it might later be retracted, then no shareholders' resolution would ever be binding on the company's directors.
In this respect, the Deiri Parties says that the finding at [3798] of the principal judgment (that the arrangement could not have been thought to be in the company's best interest) is not material because the shareholders had authorised that very conduct. It is submitted that, even if a director has an affirmative view that a unanimous resolution of shareholders is contrary to the best interests of the company, the director would be required (and certainly authorised) to give effect to it. To the extent that doing so would amount to breach of duty, it is said that that breach is negated and ratified by the resolution itself, as held in Re Duomatic Ltd [1969] 2 Ch 365 (Duomatic). Thus, it is said that whether Mr Deiri thought it was consistent with his duties to agree to such an arrangement is not relevant because, qua shareholder, Mr Deiri owed no duty to the company (i.e., Combined Projects Arncliffe) when exercising his shareholder vote (nor was it pleaded that he owed any such duty) and, qua director, Mr Deiri could not breach his duty if he was simply giving effect to a shareholder resolution. (Pausing here, I have considerable difficulty in this attempt at justification for the decision Mr Deiri took to pay substantial sums of the company's money based seemingly on no more than the deathbed conversation - that I do not accept amounted to any form of binding agreement or shareholders' resolution; and in any event it is simply inviting re-argument of submissions already made and rejected.)
Finally, as to the acceptance at [3799] (see above) of the Sayour Parties' submissions as to why any consensus reached between Jamil and Mr Deiri on 30 September 2015 did not amount to a shareholders' resolution binding on Mr Deiri, the Deiri Parties submit that the final sentence should be deleted: Further, while I accept that Jamil was left with ostensible authority to manage the Arncliffe project, (which must follow from Moustafa's apparent lack of knowledge of its day-to-day activities and his seeming understanding at the outset that it was Jamil's project) at least from the time that Moustafa signed the consent forms for Sayour Holdings I consider that his assent was required for a binding commitment of this kind to have been concluded. [Underlining added per Deiri Parties' submissions]
The Deiri Parties say that the finding that Jamil's authority was so limited is foreclosed by the fact that he was an actual director of Sayour Holdings at this date; and that it is further foreclosed by the findings at [3601] and [3602] concerning Jamil's de facto authority (set out above). Pausing here, this raises issues as to the extent of Jamil's authority as a director of Sayour Holdings from 21 August 2014 (a matter that the Sayour Parties contest).
The Deiri Parties say that, even if Jamil were not an actual director of Sayour Holdings, these findings would have foreclosed the finding at [3799] that Moustafa's "assent was required for a binding commitment of this kind to have been concluded". It is said that while that might have been true if Plaza had been the entity in question, it was not true for Sayour Holdings. The Deiri Parties say that Jamil was clothed with plenary authority to act as and for Sayour Holdings; and that this authority was both actual and implied. (The Sayour Parties cavil with this contention, even assuming (as I have found) that Jamil became an actual director on 21 August 2014 - see below.)
As such, the Deiri Parties submit that this part of the reasons in the principal judgment should be amended to reflect the fact that the meeting between Jamil and Mr Deiri on 30 September 2015 was a meeting of persons having full authority to represent the two shareholders of Combined Projects Arncliffe.

[45]

Sayour Parties' submissions

The position of the Sayour Parties in relation to the above is that the findings now sought by the Deiri Parties would not affect the outcome of the case.
Insofar as the Deiri Parties argue that Jamil was an actual or de facto director of Sayour Holdings and seek subsequent findings as to the consensus reached at the alleged meeting of 30 September 2015, the Sayour Parties say that the Deiri Parties cannot point to any resolution of Sayour Holdings appointing Jamil as a director of the company. (While I accept that is the case, the filing of the ASIC form to which I have referred above is prima facie evidence of such an appointment.)
As to the submission by the Deiri Parties that Jamil had unlimited authority (actual and/or implied) to act as and for Sayour Holdings, the Sayour Parties note that no authority is cited in support of the proposition that a director of a company, qua director, has plenary authority. The Sayour Parties refer in general terms to the fact that there are limits on directors' authority; and they say that references to the Duomatic principle are beside the point (for the reasons put by the Sayour Parties in their closing submissions as reflected at [2319]-[2321] of the principal judgment). The Sayour Parties maintain that a director of a company does not have unfettered authority to bind the company to extraordinary transactions that have not been notified to the company's shareholders or to his fellow directors, particularly if the proposed extraordinary transaction would be materially financially adverse to the company and contrary to the interests of the trust of which the company is trustee.
The Sayour Parties thus contend that, even if (as I have found) Jamil had been an actual director of Sayour Holdings and Moustafa had in fact left to Jamil the day-to-day management of Sayour Holdings' investment in Combined Projects Arncliffe, that would not confer upon Jamil the authority to enter into the supposed arrangements with Mr Deiri regarding payment out of the "Development Management Fee" and the "Site Identification Fees".
The Sayour Parties point to their submission at trial (noted at [3789] of the principal judgment) that a resolution to enter into such a transaction could be withdrawn unilaterally as having "been entered into by an unauthorised person without full information and consent, sacrificing the interests of Sayour Holdings". The Sayour Parties argue that, so far as an "acting director" is concerned, the position is even more difficult; in that it would be necessary to allege and prove reliance on ostensible authority (a task of some difficulty, it is suggested, given the knowledge of Mr Deiri that Jamil was "recycling" Plaza's money, his knowledge of Jamil's behaviour in deceiving his father, and the instances of self-dealing by Jamil that have been established).
The Sayour Parties say that another obstacle for the Deiri Parties is the purported minute of 30 September 2014 bearing a false "Moustafa" signature and bearing a date when Jamil was overseas receiving treatment for cancer. The Sayour Parties maintain that Mr Deiri's evidence does not establish any clear view that he believed Jamil was a director. It is said that Mr Deiri's own evidence suggested that, far from relying on the consent of Sayour Holdings to his actions, Mr Deiri tended to act unilaterally (inconsistent with an ostensible authority case).
The Sayour Parties thus say that the matters said to have been overlooked in the principal judgment are irrelevant to the outcome of the dispute. It is further noted that the question of Jamil's authority to bind Sayour Holdings to the supposed agreement of 30 September 2015 was the subject of extensive submissions by the parties and considered in the principal judgment at (in particular) [3762]-[3799].
The Sayour Parties say that a finding that Jamil was an actual or de facto director of Sayour Holdings would not impugn the findings regarding: Jamil's alleged authority to negotiate the supposed development management and site identification fees (at [3757]); whether the supposed "deathbed conversation" gave rise to a binding agreement (at [3796] to [3799]); and whether Jamil had authority to commit Sayour Holdings to the supposed deathbed arrangements without the knowledge or assent of Moustafa (at [3799]).
Further, the Sayour Parties say that the Deiri Parties' submissions do not remove the objections that the "consensus" is not established in fact, that it would not have been binding, nor irrevocable, nor reasonable to act upon after Jamil's death, especially when Moustafa was in conflict (or moving into conflict) with Mr Deiri and certainly not in 2018 when the parties were embroiled in litigation with an interlocutory regime in place.

[46]

Conclusion as to prayer 1(a1)

I accept that the combined effect of the finding that Moustafa signed the consent to become a director of Sayour Holdings on 16 August 2013 and the lodgement of the ASIC form recording Jamil's appointment as a director on 21 August 2014 leads to the conclusion that Jamil was appointed as a director of Sayour Holdings as at 21 August 2014 (and I note in this context the prima facie conclusive effect of ASIC records).
However, there remains inconsistency in the Deiri Parties' submissions on the vexed question of the directorship of the company (Sayour Holdings) at or around that time. In the closing reply submissions, for example, at [267] the Deiri Parties ask for a finding that Moustafa became the sole director and member of Sayour Holdings in December 2013 (referring to the reasons advanced in the Deiri Parties' closing submissions at [551]-[651]). At [276] of the closing reply submissions it is said that it was common ground that Moustafa became "the sole director and shareholder of Sayour Holdings no later than August 2014 (more likely December 2013), and then saw fit to do nothing more with the company for years". There was nothing there to the effect that, having become sole director and shareholder in December 2013 or August 2014, Moustafa then appointed Jamil as a co-director (as the ASIC form on which the Deiri Parties here place emphasis records). The finding that it is said I have failed to make is thus difficult to square with the closing reply submissions that it is said I have overlooked.
In any event, I accept the Sayour Parties' submissions that the finding that Jamil was appointed a co-director does not establish that he had actual or implied authority to enter into contracts of the kind here in question. Where a company has more than one director, a director acting individually has no usual authority to bind a company (see RP Austin and IM Ramsay, Ford, Austin & Ramsay's Principles of Corporations Law (LexisNexis Australia) (Ford) at [13.080] and the cases there cited - Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146; [1990] HCA 32 at 205 per Dawson J (Northside); Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd (1990) 3 ACSR 649 at 672; on appeal Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd (1991) 6 ACSR 464; [1992] 2 VR 279 a 361). (For completeness it may be noted that a company secretary has the implied actual authority to sign contracts connected with the administrative side of a company's affairs (see Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 711 at 717), but does not have implied authority to participate in the management of the company (Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 (Grimaldi) at [76] per Finn, Stone and Perram JJ.)
To bind a company of multiple directors, a single director must join with other directors in a collective resolution of the board (Northside at 205 per Dawson J). A single director with the power unilaterally to bind the company must have gained that power from either being an agent, delegated by the appropriate organ, or (in a small enterprise) having predominant power under the company's constitution as a governing director (see Ford at [13.080]).
True it is that there are instances where an individual may be held to have both implied actual and apparent authority (see Junker v Hepburn [2010] NSWSC 88 at [43] per Hammerschlag J). However, in the present case, acquiescence in leaving aspects of the management of the project to Jamil hardly approaches acquiescence to entry into contracts or arrangements of the kind in question. Thus, even if the alleged meeting on 30 September 2015 was a shareholders' meeting (contrary to my finding at [3798]) as only one of the directors of Sayour Holdings, I do not consider that Jamil had authority to represent Sayour Holdings as a shareholder of Combined Projects Arncliffe for the purposes of a shareholders' resolution.
In any event, I do not accept that it is appropriate here to revisit the issue as to Jamil's authority given the matters raised by the Sayour Parties (such as the extent of Jamil's authority even if he was validly appointed as an actual director), which would require further consideration. (Nor, as noted above, do I see any utility in the rectification of the ASIC register at this point.)

[47]

Prayer 1(iv) - Jamil authorised the $1.56 million payment

The next matter that the Deiri Parties submit should be revisited in light of the above matters concerning Jamil's authority as a director of Sayour Holdings is the conclusion reached in respect of the $1.56 million payment (at [4100]-[4101] of the principal judgment), namely that Mr Deiri breached his fiduciary duties in causing the payment of $1.56 million to be made as directed by Jamil.
In those paragraphs, I said: 4100. In relation to the $1.56 million Payment, on the evidence, I accept the proposition that this payment was not made in satisfaction of any genuine debt or contractual obligation to Jamil; and, following, that Mr Deiri breached his fiduciary duties in causing this payment to be made, which payment has resulted in Combined Projects Arncliffe suffering loss. 4101. Otherwise, to a very large extent, the Deiri Parties' defence to this aspect of the claim turns principally on Jamil's authority (particularly in relation to the operation of the bank accounts and the extent of his authority in this regard), which matters I have relevantly determined adverse to the Deiri Parties' interests.
The Deiri Parties say that it appears from [4101] that the findings made concerning Jamil's authority vis-à-vis Plaza have been unintentionally imported into the Arncliffe Proceedings and treated as findings that Jamil had only limited authority vis-à-vis Sayour Holdings because of the reference to the findings of limited authority being "particularly in relation to the operation of the bank accounts". The Deiri Parties say that the extent of Jamil's authority to operate bank accounts was an issue that arose only in the Broadway Proceedings. It is said that there was no issue about Jamil's authority to operate bank accounts in the Arncliffe Proceedings; and that the findings in one could not be imported to the other since the accounts were different and were held in the names of the entities that are parties to the two respective proceedings. The Deiri Parties apprehend that the various references in the Arncliffe Proceedings to Jamil having only limited authority to act on behalf of Sayour Holdings are therefore a slip that has resulted from the treatment of a similar (but different) issue in the Broadway Proceedings.
Pausing here, there was indeed extensive treatment of the issue of authority in the Broadway Proceedings and it is certainly possible that consideration of that issue has unintentionally been imported in some way into the consideration of authority in the Arncliffe Proceedings. However, the Sayour Parties submit that it is not clear that there was any such "slip" or other error in that respect and that, in any event, there is no reason to revisit the finding regarding Jamil's lack of authority to approve the $1.56 million payment.
The Sayour Parties say that (contrary to the Deiri Parties' submissions on the present application at [82]) it is not accurate (or at least not to the point), to say that the question of Jamil's authority to operate bank accounts was an issue that arose only in the Broadway Proceedings. In that regard the Sayour Parties point to the fact that (at [3519]-[3522]) I noted the Deiri Parties' submission that Jamil's request for $1.56 million from Combined Projects Arncliffe was one part of a larger transaction involving other entities (including Moulikyah Pty Ltd) and that Combined Projects Arncliffe was entitled to rely on Jamil's instructions in directing the account into which the payment of that amount should be made. It is said that this was clearly a contentious submission reflecting a clear difference and issue between the parties and that, although it did not concern bank accounts, that is not to the point since the $1.56 million payment was authorised and made by Mr Deiri.
Ultimately, what I was referring to at [4101] was what I understood to be fundamentally the basis of the Deiri Parties' defence - if that understanding was incorrect, then so be it. However, the finding at [4100] is not dependent on any view as to the operation by Jamil of bank accounts (and, because it is not dispositive, I have no difficulty in deleting the parenthetical comment at [4101]).
Nevertheless, in the case of the $1.56 million payment, the Deiri Parties say that this slip is of central importance. The Deiri Parties accept that their defence to this aspect of the claim turned principally on Jamil's authority; and the Deiri Parties emphasise their contention that Jamil had that authority. For this reason, it is submitted that [4100] and [4101] of the principal judgment should be revisited completely, taking into account what was submitted at C.7.12 of the Deiri Parties' closing submissions (see at [600]-[606]). The Deiri Parties say that, for the reasons outlined in those submissions, this part of the Sayour Parties' claim should be rejected for the simple reason that the payment to Jamil was a refund of the difference between the $1.75 million amount originally proposed to be contributed by Sayour Holdings on 19 or 20 November 2014, and the $190,000 ultimately confirmed as Sayour Holdings' contribution on 24 November 2014.
It is said that, whether or not Moustafa was aware of the payment, Jamil had full authority to advance contributions to Combined Projects Arncliffe on behalf of Sayour Holdings because he was an actual director of that entity.
For this reason, the Deiri Parties submit that [4100]-[4101] should be varied to reflect that the $1.56 million was not paid out in breach of any fiduciary duties owed by Mr Deiri, and the conclusion recorded in [4461] should be varied to reflect that the $1.56 million is not recoverable by Combined Projects Arncliffe. In any event, the Deiri Parties say that a substantial part of the $1.56 million payment can be traced to the Sayour interests (as explained below).
The Sayour Parties say that a fundamental point overlooked by the Deiri Parties in their submissions in relation to the variations sought in respect of the issue of Jamil's authority is that the $1.56 million payment was made to Jamil himself, and not to Sayour Holdings. They point to the fact that it was noted (at [4098] of the principal judgment) that Mr Deiri originally accounted for this amount in the books of Combined Projects Arncliffe as a repayment to Sayour Holdings but, in 2017, when the company was under Mr Deiri's control, the accounting for that payment was changed to reallocate it to the account of Jamil personally. The Sayour Parties say that Mr Deiri admitted that the payment was a loan to Jamil.
Again, the Sayour Parties say that the question of Jamil's authority to receive $1.56 million in payments from Combined Projects Arncliffe for his own account and benefit were extensively canvassed by the parties during the hearing, and in their written submissions, and in the principal judgment. It is noted that the parties' submissions regarding Jamil's authority to demand that Combined Projects Arncliffe pay him $1.56 million were addressed at [493], [1194], [3518]-[3522], [3568], [3577], and [4093]-[4101] of the principal judgment.

[48]

Prayer 1(v) - The compendious finding concerning Jamil's authority

Finally on the issue of Jamil's authority, the Deiri Parties note that the principal judgment contains a summary of the determination of the third Arncliffe cross-claim (at [4423]-[4433]).
In those paragraphs, I said: 4423. As I have noted, to a large extent, the issues raised by the Third Arncliffe Cross-claim do not arise, and the claim must be dismissed, in light of my factual findings concerning Moustafa's consents in relation to Jamil's authority, Sayour Holdings and Combined Projects Arncliffe (again, see above). In particular, and for completeness, I record the following. 4424. In relation to the prayers for rectification of the registers of Sayour Holdings and Combined Projects Arncliffe, to my mind, this must fail in light of my factual determinations. This includes in relation to Yesmine. 4425. Furthermore, I see force to the Sayour Parties' submissions in relation to the asserted abandonment or relinquishment of Sayour Holdings' interest in Combined Projects Arncliffe. As to the pleaded telephone conversation in about December 2015 (again, for example, see at [104] of Mr Deiri's affidavit sworn on 16 October 2019 cf [64]-[67] of Moustafa's affidavit sworn on 8 November 2019 and the apparent refusal to sign proposed draft deeds of settlement), there simply is insufficient evidence, on the totality of the evidence and in the events that have happened, here to make any factual findings that could justify the conclusion that Moustafa abandoned his claims. 4426. In this connection, I also accept the Sayour Parties submissions as to the need to show sufficient full knowledge of the material facts, and the circumstance in which Moustafa found himself at the time of the purported release. 4427. As to s 175, I have some difficulty here seeing that the Deiri Parties are relevantly persons aggrieved for the purposes of seeking orders (though, I here reach no concluded view on that matter). However, I have less difficulty accepting the submission, and noting the residual discretion in this regard (see, for example, Indoor Climate Technologies at [3]), that any such order should here be made having in mind the circumstances and justice of the case and that such an order, or orders, would have the ultimate practical effect of entailing the dismissal of proceedings that are otherwise meritorious. 4428. As to s 1322, even putting aside questions as to whether the Deiri Parties are relevantly interested persons and whether ASIC ought to have been joined, again, I see that the making of any such order would, or likely could, cause substantial injustice to Sayour Holdings and, thereby, such an order could not here be made (see s 1322(6)(c) of the Corporations Act). 4429. Finally, I here record that I see some force, though it is again not necessary to reach a concluded view, to the Sayour Parties' submission in relation to an estoppel by convention, noting particularly that the Arncliffe Proceedings have gone on for well over two years on the (it would seem) mutually understood basis that Sayour Holdings was a 50% shareholder (or at least a shareholder) in Combined Projects Arncliffe (and noting also those other matters referred to in the Sayour Parties' submissions - see above). 4430. The preceding disposes of prayers for relief 1 through 13. 4431. As to the submissions here made, and relief sought, in relation to the alleged Arncliffe Agreement, my findings in relation to the alleged Arncliffe Agreement (see particularly preliminary factual finding F) substantially disposes of this issue and the relief here sought by prayers 14 through 18. 4432. As to the submissions here made in relation to payments of the Site Identification Fee(s) and Development Management Fees, my disposition of those issues has been recorded, and those findings apply equally here, in relation to the First Arncliffe Cross-claim. 4433. This leaves prayers for relief 19 through 21 (along with prayer for relief 22, which concerns costs, and prayer 23, which is an incidental prayer for any other order that the Court thinks fit - as to which, see below). Prayers 19 and 20 relate to the appointment of Ms Howe as Managing Director of Combined Projects Arncliffe. Prayer 21 relates to the appointment of Mr Deiri as a director and secretary of Combined Projects Arncliffe. Insofar as this relief is pressed, I will hear the parties as to the appropriate relief.
By the third cross-claim, Mr Deiri and Deiri Nominees sought declarations and orders in relation to the ownership and direction of Sayour Holdings and Combined Projects Arncliffe, including for the rectification of the registers of those companies. The Deiri Parties submit that the summary should be revised having regard to the matters outlined above, as follows.
First, it is submitted that [4423] should be amended to revise the underlined sentence to reflect that Jamil had both actual and de facto authority to act on behalf of Sayour Holdings from 21 August 2014 onwards): 4423. As I have noted, to a large extent, the issues raised by the Third Arncliffe Cross-claim do not arise, and the claim must be dismissed, in light of my factual findings concerning Moustafa's consents in relation to Jamil's authority, Sayour Holdings and Combined Projects Arncliffe (again, see above). In particular, and for completeness, I record the following. [Underlining added per Deiri Parties' submissions]
I see no need to make the requested amendment - this is largely an introductory paragraph and refers to findings elsewhere in the principal judgment.
Second, it is submitted that [4424] should be revised to reflect that prayer 15 of the further amended cross-claim sought a rectification of the register that did align with the findings in fact made, namely, that Jamil was an actual director of Sayour Holdings from 21 August 2014 onwards. (I have already concluded that the order for rectification of the register would have little utility; and I have referred to the lodgement of the ASIC form recording that appointment.)
Third, it is submitted that the final words of [4431] (i.e., "substantially disposes of this issue and the relief here sought by prayers 14 through 18") should be amended to read "prayers 16 through 18", as those were the prayers that related to the Arncliffe Agreement. I have no difficulty with that suggested amendment.

[50]

Prayer 1 - Part of the $1.56 million is traceable to the Sayour Parties

The Deiri Parties note that Sayour Holdings (through its derivative suit in the name of Combined Projects Arncliffe) alleged that Mr Deiri caused the sum of $1.56 million to be drawn on Combined Projects Arncliffe's bank account by a cheque made out to "Jamil Sayour" (first cross-claim at [22], [211]-[212]); and that I concluded (at [4100]) that the payment was not made in satisfaction of any genuine debt or contractual obligation to Jamil, and therefore that Mr Deiri breached his fiduciary duties in causing the payment to be made, finding (at [4461]) that this amount is recoverable by Combined Projects Arncliffe.
The Deiri Parties say that the fact of Jamil's authority to authorise this payment provides a complete defence to this claim but, putting that to one side, they say that most of the $1.56 million paid out of Combined Projects Arncliffe is, in any event, traceable to the Sayour Parties. As such, by prayer 1(b) of the Arncliffe notice of motion, the Deiri Parties seek a variation of the principal judgment to reflect that, of the $1.56 million payment, part of that sum is traceable to and was received by Sayour Holdings, Moustafa, and/or members of the Sayour family (other than Jamil), and that Mr Deiri is not liable for that amount. The Deiri Parties calculate the traceable amount as $744,220.89.
The Deiri Parties point to the following matters which they say support the finding they seek.
On 24 November 2014, the cheque for $1.56 million was deposited into a Bank of Sydney term deposit account in Jamil's name numbered 1105048 (BOS 048 Account) (Ex 33 at 118); at which time the balance in the account was nil. A further $476,720.22 was deposited into the BOS 048 Account comprising funds from "unknown sources" plus interest, but no further transactions took place on the account until it was redeemed. The Deiri Parties say that, because this sum was mixed with the original $1.56 million, an amount of $476,720.22 needs to be deducted from the traceable amount.
On 25 May 2015, the whole of the balance in the BOS 048 Account, being $2,036,720.22, was transferred out of that account via two transfers.
The first transfer from the BOS 048 Account on 25 May 2015 was $1 million which was deposited into another term deposit account at the Bank of Sydney in Jamil's name (BOS 895 Account) (Ex 33 at 107). Of this $1 million, the Deiri Parties say that the amount of $523,279.78 is traceable to the Sayour Parties, because: immediately prior to that transfer, the balance of the BOS 895 Account was nil but (because the BOS 048 Account from which the funds were transferred was a mixed fund comprising the original $1.56 million and another $476,720.22 from other sources, the sum of $476,720.22 must be deducted from the running traceable amount which leaves a traceable amount in the BOS 895 Account of $523,279.78 on 25 May 2015); on 25 September 2015, there was a withdrawal of $9,604.11 from the BOS 895 Account, but otherwise the only further transactions on that account until it was redeemed were credits for interest; and on 1 March 2018, the whole of the balance of the BOS 895 Account was transferred to the trust account of Adams & Partners, the solicitors for the Sayour Parties (being a recovery by the Sayour Parties in the Estate Proceedings) (Ex 33 at 107). Accordingly, it is said that at least $523,279.78 of the $1.56 million can be traced to the Sayour Parties.
The second transfer from the BOS 048 Account on 25 May 2015 was an amount of $1,036,720.22 which was deposited into another Bank of Sydney Account in Jamil's name (BOS 003 Account) (Ex 33 at 2). Of this sum, the Deiri Parties say that the amount of $220,941.11 is traceable to the Sayour Parties, because of the following.
First, on 25 May 2015, $240,000 was transferred to another Bank of Sydney Account in Jamil's name (BOS 903 Account) (Ex 2 at 2; 97) at which time the balance in that account immediately prior to the transfer was nil (Ex 33 at 97); there were then credit entries totalling $9,853.89 and a transfer out of the account of $50,000 (which it is said may be deducted from the traceable amount for present purposes); and on 6 August 2015, there is a transfer of $190,000 with the narration "Transfer To Fatima Sayour", Jamil's mother. The Deiri Parties say that the transaction amounts which took place between the time of the traceable funds being deposited into the BOS 903 Account on 25 May 2015 and the time of the transfer to Fatima Sayour must be deducted from this transfer to Fatima Sayour (totalling $59,853.89), which leaves an amount of $130,146.11 traceable to the Sayour Parties.
Second, there was a series of transfers from the BOS 003 Account from 25 May to 3 June 2015 to various accounts which cannot readily be traced and a deposit into the BOS 003 Account of $9,205, which brought the balance of the account to $239,048.43 by 31 July 2015. On 5 August 2015, there was a debit with the narration "Fatima Sayour" in the amount of $100,000. Thus, the Deiri Parties say that the whole of this amount, less the $9,205 from other funds, can be traced to the Sayour Parties, because the source of the funds was the original transfer into the BOS 003 Account of the $1,036,720.22 on 25 May 2015, which leaves a traceable amount of $90,795.
The Deiri Parties say that, adding the traceable amounts of $523,279.78 in respect of the deposit into the BOS 895 Account and subsequent transactions, and $220,941.11 from the deposit into the BOS 003 Account and subsequent transactions, the total traceable amount is $744,220.89.
Thus, it is said that even if (which they say he is not) Mr Deiri was liable in respect of the $1.56 million, the sum of $744,220.89 is not recoverable by Combined Projects Arncliffe because that sum has already been received by the Sayour Parties. It is said that the maximum extent of Mr Deiri's liability (if any) in respect of the $1.56 million payment would be $815,779.11 and that there should be a finding to that effect. The Deiri Parties say that, otherwise, Sayour Holdings (as a shareholder seeking a distribution from Combined Projects Arncliffe upon the conclusion of its derivative suit) would be over-compensated.

[51]

Sayour Parties' submissions

The Sayour Parties say that the Deiri Parties' submissions regarding the tracing of the $1.56 million payment should have been raised by way of a pleaded defence. It is said that, at the very least, they are fact sensitive submissions that could and should have been raised as issues and made before or at latest during the course of the hearing. The Sayour Parties say that, the issue not being raised at trial, these matters did not receive precise attention; and that, at the trial, it was common ground that the destination of the payment could not now be identified. Accordingly, the Sayour Parties say that these are not submissions that should be heard now. (I agree.)
In any event, the Sayour Parties say that, even if the sums are traceable as the Deiri Parties allege, that would have no bearing on any of the substantive findings.
It is noted that the submission is now that the $1.56 million was paid by Combined Projects Arncliffe to a personal account of Jamil. The Sayour Parties say that, even if one accepts the analysis of the flow of funds set out at [95]-[97] of the Deiri Parties' submissions, that analysis does not prove anything other than that Jamil, upon receipt of the $1.56 million from Combined Projects Arncliffe, comingled those funds with other funds in a bank account in his own name. It is said that subsequent payments that Jamil made do not, without more, establish any basis for tracing.
The Sayour Parties point out that there is no allegation of knowledge in the pleading. The Sayour Parties say that, without precise pleading, no occasion arose for any defence of consideration (which might be established by an antecedent debt). It is said that such defences are likely to be available given the success of the Deiri Parties in suggesting in the Broadway Proceedings that various actions of Jamil were in fraud of the Sayour family and that their remedies lay against him or his estate. Nor, the Sayour Parties say, is there any allegation in the defence or otherwise that Sayour Holdings received any part of this money.
The Sayour Parties say that there is no explanation why the transfer of those comingled funds should affect Sayour Holdings' rights in relation to the maintenance of its loan account with Combined Projects Arncliffe; and that the Deiri Parties should not now be permitted to raise this new issue. (I agree.)

[53]

Prayers 1 - Interest charged by Deiri Nominees

Combined Projects Arncliffe paid Deiri Nominees $5,299,704.23 in interest for loans made to Combined Projects Arncliffe to fund the Arncliffe Development. The Sayour Parties sought a declaration that that sum is held on trust by Deiri Nominees for Combined Projects Arncliffe or alternatively a judgment in that amount plus interest. Deiri Nominees submitted that the interest was charged pursuant to a loan agreement dated 24 February 2015 between Deiri Nominees and Combined Projects Arncliffe (Deiri Nominees Loan Agreement). At [4092], I stated that I was not satisfied that there was "such an agreement (properly authorised by Sayour Parties)" and that Deiri Nominees should repay the interest. At [4461], I confirmed that the interest was recoverable by Combined Projects Arncliffe.
Prayer 1(c) of the Arncliffe amended notice of motion seeks a variation of the principal judgment to reflect that, of any amounts for which Mr Deiri or Deiri Nominees is liable to Combined Projects Arncliffe, those amounts do not include the $5,299,704.23 interest charged by Deiri Nominees; and the Deiri Parties submit that [4092] and [4461] of the principal judgment should be varied accordingly. Those paragraphs of the principal judgment, summarising my conclusions in relation to the relevant matters, stated that: 4092. As I am not satisfied that there was such an agreement [i.e., for repayment of interest on loans to Deiri Nominees] (properly authorised by Sayour Parties), this amount should be repaid. … 4461. As to repayment of interest on loans, this amount is recoverable; and, as to recovery of the $1.56 million payment to Jamil, this too is recoverable.
The Deiri Parties note that in their closing submissions (at [1257]-[1278]), they made a number of points in response to the Sayour Parties, including, first, that the Sayour Parties' pleaded case did not challenge the validity of the Deiri Nominees Loan Agreement (rather the Sayour Parties merely disputed that the payments were made in repayment of loans to Deiri Nominees). The Deiri Parties say that because of this it was not open to the Sayour Parties to dispute, in closing submissions, that the Deiri Nominees Loan Agreement was not valid, and that there is no basis to find that the interest was not paid pursuant to a genuine liability of Combined Projects Arncliffe. Second, it is said that the Deiri Nominees Loan Agreement was an agreement by a shareholder to lend money to Combined Projects Arncliffe so that Combined Projects Arncliffe could undertake the venture (in circumstances where Sayour Holdings was no longer contributing to the Arncliffe Development) on terms that Combined Projects Arncliffe pay interest. It is said that there is nothing unusual about such an agreement and entry into it was not (nor could it be) alleged to be a breach of duty. Third, in any event, it is said that it was unnecessary for Sayour Holdings to authorise the Deiri Nominees Loan Agreement given Combined Projects Arncliffe's constitution.
The Deiri Parties say that they pointed out in their submissions in reply at [302] that the Sayour Parties did not engage with these points and they again complain that these submissions do not appear to have been considered and are not referred to in the reasons. It is noted that there is a finding at [4092] that the Deiri Nominees Loan Agreement was not properly authorised by the Sayour Parties, but the Deiri Parties say that the pleading point raised by the Deiri Parties is not there addressed. Complaint is made that there is no consideration of why such authorisation is necessary, particularly given the character of the Deiri Nominees Loan Agreement as a shareholder loan and in light of the Deiri Parties' submissions concerning Combined Projects Arncliffe's constitution. As such, the Deiri Parties submit that those submissions should be considered and that the judgment varied to remove any findings of liability in respect of the interest charged by Deiri Nominees.
The relevant paragraph of the reply submissions to which the Deiri Parties here refer stated, (with commendable brevity) that: 302. The "additional points" at [1084]-[[1085] of the Sayour Reply Submissions do not grapple with the fundamental problem with the Sayour Parties' case in relation to the $5.29 million payment. They do not attack the signed loan agreement dated 24 Febrary 2015 pursuant to which the payments were made.
Footnote 164 to the above submission was a reference back to the Deiri Parties' closing submissions at [1257]-[1264]. Those submissions were recorded in some detail in the principal judgment at [4074]-[4087]. Give that the reply submissions effectively reprise the closing submissions that were taken into consideration in the principal judgment, the complaint can only fairly be a complaint that I did not engage with the substance of those submissions in the principal judgment (since I clearly had them in consideration at the time).
The Deiri Parties further emphasise that the loan agreement between Deiri Nominees and Combined Projects Arncliffe was a "back-to-back" loan which simply permitted Deiri Nominees to cover some of the costs of its own borrowings to fund the Arncliffe Development. The Dieri Parties say that the theory "apparently advanced" by the Sayour Parties (that Deiri Nominees was somehow profiteering or diverting funds from Combined Projects Arncliffe through the loan to Deiri Nominees) is misconceived and ignores the commercial reality that funding for the Arncliffe Development needed to be secured; particularly in circumstances where Sayour Holdings was not providing funding, and that funding had a cost.
Pausing here, I note (lest it later be suggested that I have not considered the entirety of the submissions on this application) that the Deiri Parties' written submissions go on to refer to a loan note subscription agreement said to have been entered into on 12 June 2015, a few months after the Deiri Nominees Loan Agreement was executed. However, on 13 April 2021, I was informed that the prayer for relief at 1(d) (for leave to re-open to tender that document) was not pressed. Therefore, I have proceeded on the assumption that the submissions at [105]-[106] are also not pressed. (It was not made clear whether the same applies to the submission at [104] but, given its generality, I have noted it above. Nor is it clear if the submission at [107] is pressed but since it refers to documents in relation to or referring to the PAG Loan, I have assumed that it is not.)

[57]

Sayour Parties' submissions

By prayer 24 of the first cross-claim, Combined Projects Arncliffe sought an order for equitable compensation, or compensation under s 1317H of the Corporations Act 2001 (Cth) (Corporations Act), against Mr Deiri in relation to the breach of his duties to Combined Projects Arncliffe in causing the payment of $753,709.62 to Deicorp Properties.
In support of prayer 24, the Sayour Parties pleaded (at [251]-[254] of the first cross-claim) that Mr Deiri acted in breach of his various fiduciary and equitable duties to Combined Projects Arncliffe in causing that payment to be made to Deicorp Properties.
The Sayour Parties submitted (at [824] of the Sayour Parties' closing submissions) that Mr Deiri's conduct in causing those payments to be made to Deicorp Properties was a breach of the profit rule, the conflict rule and the pleaded statutory officers' duties. The Sayour Parties said that Mr Deiri: kept the whole transaction secret from Sayour Holdings until the payment was made; did not turn his mind to his obligations or the interest of the company; and acted to benefit Deicorp Properties, in which he was interested, at the expense of Combined Projects Arncliffe.
It is noted that (at [4462] of the principal judgment) it was held that Deicorp Properties had an entitlement to retain the sums paid to it by Combined Projects Arncliffe. The Sayour Parties submit that, while this finding disposes of the primary claim, it does not address the alternative prayer 24 of the first cross-claim, or the submissions made in support of that prayer for relief.
It is submitted that it is open to find (and it should be found) that: Mr Deiri acted in breach of his duties in causing the payment to be made to Deicorp Properties; and that Mr Deiri ought to compensate Combined Projects Arncliffe for the loss suffered as a consequence of that breach. It is said that this is entirely consistent with the finding that Deicorp Properties is entitled to retain those moneys.
Similarly, it is noted that, by prayer 28 of the first cross-claim, Combined Projects Arncliffe sought an order for equitable compensation, or compensation under s 1317H of the Corporations Act, against Mr Deiri in relation to the breach of his duties to Combined Projects Arncliffe in causing the payment of $3,617,298.76 to Deicorp Constructions. In support of prayer 28, the Sayour Parties pleaded (at [296]-[303] of the first cross-claim) that Mr Deiri acted in breach of his various fiduciary and equitable duties to Combined Projects Arncliffe in causing that payment to be made to Deicorp Constructions.
The Sayour Parties submitted (at [908]-[909] of the Sayour Parties' Closing Submissions) that Mr Deiri's evidence did not suggest that he gave any reasonable consideration to the basis for the payment of millions of dollars of Combined Projects Arncliffe's funds under PC 24 to the benefit of Mr Deiri's company, Deicorp Constructions, and that Mr Deiri failed to comply with the profit rule, the conflict rule and the statutory duties of which complaint was made.
The Sayour Parties again say that, while the finding at [4462] of the principal judgment disposes of the claim against Deicorp Constructions, it does not address or resolve the alternative prayer 28 of the first cross-claim or the submissions made in support of that prayer, and that it is open to the Court to find (and it should be found) that: Mr Deiri acted in breach of his duties in causing the payment to be made to Deicorp Constructions; and Mr Deiri ought to compensate Combined Projects Arncliffe for the loss suffered as a consequence of that breach.

[58]

Deiri Parties' submissions on first cross-claim prayers [24] and [28]

On 16 April 2021, at the Deiri Parties' request, I granted leave to the Deiri Parties to file short written submissions concerning the claims in relation to the relief claimed by prayers 24 and 28. (The Sayour Parties say, and I accept, that the submissions ultimately filed went beyond this.)
The Deiri Parties first argue that the principal judgment should not be varied to consider these claims. In any event, it is said that the claims cannot succeed given that: (i) they are unsustainable in light of the findings concerning the entitlement of Deicorp Constructions and Deicorp Properties, respectively, entitlement to the payments; (ii) the constitution of Combined Projects Arncliffe; (iii) the confined scope of any duties owed; (iv) the fully informed consent of Combined Projects Arncliffe; (v) the absence of causal connection between any profit and fiduciary office; and, which the Deiri Parties emphasise in particular, (vi) the failure to prove loss.
First, the Deiri Parties say that the power to vary is not enlivened, and in any case should not be exercised. The Deiri Parties say that while there was no express finding on the claims against Mr Deiri, there is no basis to revisit the reasons to determine those claims because the Sayour Parties did not substantiate them in submissions. It is said that the claims were only addressed fleetingly by way of bald assertion, and without identification of the relevant principles, the factual premises underpinning the claims, or the evidence supporting them.
In this regard, the Deiri Parties have calculated that the Sayour Parties spent some 84 paragraphs addressing the claims against Deicorp Constructions, and only two (they say cryptic) paragraphs (at [908]-[909]) directed to the claim against Mr Deiri (see above). Similarly, it is noted that 29 paragraphs addressed the claim against Deicorp Properties, and a single (said to be "throwaway") submission was made at [824] in respect of Mr Deiri.
The Deiri Parties refer to the principles set out earlier in these reasons, in particular that, for the jurisdiction to vary the reasons to be enlivened, the Court must be satisfied it misapprehended the facts or the law (citing Autodesk at 303 per Mason CJ). Here, it is said that, by failing to substantiate the claims against Mr Deiri, the Sayour Parties in substance and effect abandoned those claims. It is said that, if a party has abandoned a claim, no misapprehension of fact or law can infect the reasons by a failure to consider it; and hence the jurisdiction is therefore not enlivened at all.
In any event, the Deiri Parties say that even if the jurisdiction is enlivened, the power to vary remains discretionary and that it is to be exercised with great caution (citing Aktas v Westpac at [6]). The Deiri Parties say that the power should not be exercised to consider a case that is not the subject of proper submissions, particularly in a matter of this complexity. It is said that it is neither incumbent upon, nor appropriate for, the Court to develop a party's ipse dixit into a substantiated case. Nor, it is said, is there any basis to permit the Sayour Parties to make new and further submissions on these matters. It is said that the Sayour Parties had every opportunity in over 500 pages of closing submissions to express their arguments concerning the alleged breaches of duty; and it is submitted that they chose not to do so. The Deiri Parties say that there is no compelling reason why the Court should now consider the claims.
Second, the Deiri Parties say that, if the claims against Mr Deiri were now to be entertained, it would be necessary also to determine Deicorp Constructions' argument that the payments pursuant to PC 24 were authorised under the construction contract. The Deiri Parties say that there appears to have been an acceptance that Deicorp Constructions is entitled to retain the sums on a quantum meruit basis (advanced by the second cross-claim) ([4297], [4293]) but that there appears not to have been a determination of Deicorp Constructions' submissions on the contractual basis (set out in the Kreisson Parties' opening submissions at [34] and outlined in the principal judgment at [4243]); namely that the adjustments were assessed pursuant to cl 11 of the contract which, when combined with Item 25 of Part A, allow an amount of 15% for profit and overheads.
Third, it is said that if the claims against Mr Deiri were now to be determined, the scope of those claims is limited by what was submitted and pleaded. In respect of payments to Deicorp Constructions, it is said that the Sayour Parties' only submission was that Mr Deiri failed to comply with the profit and conflict rules and his statutory duties because he failed to give reasonable consideration to the basis of the payments, where his company was benefiting from them (referring to the Sayour Parties' closing written submissions at [909]).
It is said that, in respect of the payments to Deicorp Properties, there was no pleading of a breach of the conflict or profit rules; rather, the pleading was Mr Deiri breached his duties because the commissions were not liable to be paid by reason of the Property, Stock and Business Agents Act 2002 (NSW) (now the Property and Stock Agents Act 2002 (NSW) (Property and Stock Agents Act)) and the payments were "uncommercial" (see first cross-claim at [239]-[256]). It is said that, had a breach of the conflict or profit rules been pleaded, evidence might have been led about any discussions with Jamil about the topic (knowledge of which is attributable to Sayour Holdings); and that Moustafa may also have been cross-examined about his knowledge of the commissions. (I interpose to note that this submission does not appear to engage with the pleading at [252]-[254], which I set out in due course below.)
The Deiri Parties further say that the claimed breaches fail at the outset by reason of the findings that were made (which are identified below in respect of the payments first to Deicorp Constructions and then to Deicorp Properties).
As to the findings in respect of the Deicorp Constructions payments, the Deiri Parties note the following.
First, that it was not alleged that the entry into the construction contract was in breach of duty; rather, it is said that the claim by Sayour Holdings impliedly accepted that the contract was authorised and proper, and no breach of duty arises from it. As such, it is said that it should be accepted that the payments were due under that contract and that it cannot have been a breach of duty to make the payments to Deicorp Constructions.
Second, that the suggestion that Mr Deiri failed to give reasonable consideration to the basis of the construction payments cannot succeed, because the payments were certified as being due by the contract superintendent, Momentum, and independently assessed by the bank's quantity surveyor, Napier & Blakeley. It is said that a process had been undertaken in accordance with the contract to determine the amount due to the builder; and that, itself, provided a reasonable basis to cause the payments to be made.
Third, it is said that the amount would have been owed on a quantum meruit basis in any event (noting my conclusion that the amounts paid were fair and reasonable). The Deiri Parties say that, in circumstances where there is no attack on the involvement of Deicorp Constructions as the builder per se, it cannot have been a breach of duty to cause payments to be made to it that were due.
In light of the above findings, the Deiri Parties contend that the payments were clearly reasonable and made in good faith and for proper purposes; and that no issue of conflict or profit arises. It is emphasised that, on the case submitted by the Sayour Parties, those rules were only said to have been breached by failing to give reasonable consideration to the basis of the payment.
As to the payments to Deicorp Properties, it is noted that the claim is that Mr Deiri breached his duties to exercise reasonable care and act for proper purposes by causing the payments to be made to Deicorp Properties. It is said that this fails at the outset by reason of the findings that were made: (at [4185]) that the payments were fair and reasonable and Deicorp Properties was entitled to retain them; and (at [4186]) that agreement was reached in relation to the provision of services and that the ultimate payments made to Deicorp Properties were intended to fulfill an antecedent obligation in relation to that agreement.
The Deiri Parties say that there was thereby a rejection of the arguments that the commissions were not required to be paid and were uncommercial; and hence, a rejection of the pleaded basis on which Mr Deiri was alleged to have contravened his statutory and fiduciary duties. It is said that the payments were clearly for a proper purpose (being to enable the sale of the units, so that Combined Projects Arncliffe could obtain a profit from the venture); and that any suggestion that Mr Deiri acted unreasonably or for improper purposes cannot be sustained. It is noted that no breach of the conflict or profit rules was pleaded in respect of these payments.
Reliance is also placed on the constitution of Combined Projects Arncliffe, which it is said permitted the impugned conduct. It is noted that a company's articles may authorise conduct which would otherwise be a breach of the conflict and profit rules (the Deiri Parties here citing Furs Ltd v Tomkies (1936) 54 CLR 583; [1936] HCA 3 (Furs v Tomkies) at 592 per Rich, Dixon and Evatt JJ).
In the present case, the Deiri Parties say that cl 15.1 of Combined Projects Arncliffe's constitution permitted Mr Deiri to vote on matters involving a contract in which he had an interest where he disclosed the nature and extent of it at a meeting of directors. It is said that Mr Deiri could simply disclose the nature and extent of the contracts to himself, because he was the sole director; that the disclosure need not be "out loud" where the maker and recipient are the same (citing Neptune (Vehicle Washing Equipment) Ltd v Fitzgerald [1996] Ch 274 at 284 per Lightman J (Neptune v Fitzgerald)); and that Mr Deiri must be taken to have done so by signing the contract with Combined Projects Arncliffe on its behalf.
The Deiri Parties say that, where a company's constitution permits a director who is interested in the proposed transaction to vote, the required quorum for a board to deal with the transaction will not be interpreted as excluding the interested director (citing AM Spicer & Son Pty Ltd (in liq) v Spicer (1931) 47 CLR 151; [1931] HCA 30 at 186-187 per Dixon J); nor, by its terms, is cl 15.1 confined to cases where there is more than one director. It is said that such a construction would read down the plain wording and ignore the words in the chapeau. The Deiri Parties say that those words expressly and specifically define the circumstance in which cl 15.1 will not apply, namely, "if the company is a proprietary company with one director and that person is also the only shareholder of the company" (emphasising the italicised words). It is said that an interpretation to the effect that the clause cannot apply where there is only one director would render the italicised words otiose.
The Deiri Parties submit that, in confirmation of the construction for which they contend, regard may be had to certain circumstances known to both parties when the constitution was adopted (noting that the constitution is a contract). It is further submitted that (although one must be more cautious in using extrinsic evidence to construe corporate constitutions than contracts - partly because they may be relied upon by third parties) circumstances which "are likely to be well-known, not just to members of the company, but also to relevant third parties" are appropriate matters which may be used (citing Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1; [2006] FCAFC 144 at [59] per Weinberg J; [123]-[125] per Kenny J; [258]-[259] per Lander J). Further, it is said (citing the above) that a corporate constitution should be interpreted to give reasonable business efficacy if such a construction is available, in preference to one which might prove unworkable and that a company's constitution should not be construed narrowly or pedantically; it should be considered an enduring and flexible document.
In this case, the Deiri Parties say that it was known to Mr Deiri and Jamil, when Combined Projects Arncliffe was incorporated, that Mr Deiri would be the sole director of Combined Projects Arncliffe and that a company of Mr Deiri's would be the builder. It is said that this was the only basis on which Mr Deiri agreed to participate. It is said that it is very likely that any third-party transacting with Combined Projects Arncliffe would know this too, because the whole venture of the company was to build and sell units. As such, it is said that cl 15.1 should be read to facilitate the purpose of the project known to Deiri Nominees and Sayour Holdings (through Jamil) and to give the constitution business efficacy. It is said that the clause should be construed as permitting Mr Deiri to transact with Deicorp Constructions and to make payments due to it for construction work; and that a contrary interpretation is not workable.
The Deiri Parties further submit that, properly analysed, the scope of the duties owed permitted the payments. The Deiri Parties note that it is not controversial that the no profit rule is that "a fiduciary cannot obtain a profit from his or her position without the principal's consent"; and the no conflict rule "requires that a fiduciary cannot have a personal interest or duty to a third party which gives rise to a real and sensible possibility of a conflict"; and it is said that, in determining whether a breach has occurred, it does not matter if no loss is caused to the company (though this is relevant to relief), or that a profit was made for the company (citing Vadori v AAV Plumbing (2010) 77 ACSR 616; [2010] NSWSC 274 at [199]-[200]).
However, the Deiri Parties say that it is contrived to suggest that Mr Deiri breached the conflict and profit rules by causing Combined Projects Arncliffe to make fair and reasonable payments due to Deicorp Constructions when that is precisely the position in which the parties put him. They say that the fallacy in the Sayour Parties' approach is to assume the content of the duties posited without regard to the circumstances which mould their scope. It is noted that in Howard v Commissioner of Taxation (2014) 253 CLR 83; [2014] HCA 21 (Howard) at [34], French CJ and Keane J said: The scope of the fiduciary duty generally in relation to conflicts of interest must accommodate itself to the particulars of the underlying relationship which give rise to the duty so that it is consistent with and conforms to the scope and limits of that relationship. It is to be "moulded according to the nature of the relationship and the facts of the case".
Reference is also made in this context to Grimaldi at [179]. It is noted that their Honours in Howard warned at [35] of "[o]verbroad assertions of fiduciary duties, uninformed by a close consideration of the facts and circumstances". The Deiri Parties say that that warning is apposite here. It is said that the Sayour Parties invite error when they simply assert that Mr Deiri was in a position of conflict by causing payments to be made to another entity of which he was a director, without any regard to the fact that this was a fundamental element of the Arncliffe project from the outset.
The Deiri Parties say that it is not, and could not be, in dispute that Jamil was aware that Mr Deiri would be the sole director of Combined Projects Arncliffe, and that one of Mr Deiri's construction companies was to be the builder. It is noted that in September or October 2013, Jamil told Mr Deiri about the Arncliffe Site, proposing a 50/50 venture "just like we did at Punchbowl" (i.e., with Mr Deiri's company as the builder) (see [392] of the principal judgment); in December 2013 and January 2014, Mr Deiri spoke with Jamil, and agreed that Mr Deiri (through his company) would carry out the construction ([408], [427]). It is said that this was the basis on which Mr Deiri agreed to participate in the project, including that Mr Deiri would be the controller of Combined Projects Arncliffe; and that Jamil acknowledged this and the relationship proceeded that way.
It is said that Jamil's knowledge from late 2013, that a Deicorp entity was to be the builder for the project, is attributable to Sayour Holdings. The Deiri Parties say that the law generally imputes to a principal knowledge relating to the subject matter of the agency which the agent acquires while acting within the scope of authority. Similarly, they note that the state of mind of a director acting within the scope of authority ordinarily will be attributed to the company where there is a duty on that director to communicate his or her knowledge to the company.
Here, it is said that Jamil was a de facto director of Sayour Holdings from December 2013 (see at [3601]). It is noted that Jamil was formally appointed a director on 21 November 2014 (see ASIC form referred to above), and remained so until his death in October 2015; the ASIC register being presumed correct unless proven otherwise (citing Kocic v Deputy Commissioner of Taxation (2011) 85 ATR 489; [2011] NSWCA 322 at [41]-[43] per Gzell J (with whom Beazley JA, as Her Excellency then was, and Handley AJA agreed)). On that basis, it is said that Jamil's knowledge that a Deicorp entity was to be the builder is attributable to Sayour Holdings.
Additionally, it is said that Moustafa must have known that a Deicorp entity was the builder for the project. It is noted that Mr Deiri's dealings with Sayour Holdings until Jamil's death were through Jamil but Moustafa's evidence was that Jamil had told him the Arncliffe Development involved a venture with Mr Deiri to build units at Arncliffe (see at [327]-[328]). It is said that, whatever Moustafa's knowledge was of the development, he must have known that one of Mr Deiri's construction companies was to be the builder, as was the case in the Broadway Development. In any event, it is said that he must have become aware Deicorp Constructions was the builder (once the affidavit of Ms Caitlin Murray of 23 June 2017 was served in these proceedings, which deposed that Deicorp Constructions was engaged as the builder and it was a company owned and operated by Mr Deiri - see [682] of the principal judgment).
As such, it is said that, at least by the end of June 2017, Moustafa was aware Deicorp Constructions was in the process of building the units, and that Mr Deiri was both director of Combined Projects Arncliffe and Deicorp Constructions and that he had an interest in the builder. It is noted that Construction was then still in progress; practical completion occurred only on 8 February 2018. Yet Moustafa made no objection to Deicorp Constructions being the builder and took no issue with any perceived conflict or any profit being made. It is said that, as a director of Sayour Holdings from its incorporation on 16 December 2013, Moustafa's knowledge, too, is attributable to Sayour Holdings.
As a consequence, the Deiri Parties say that the director and both shareholders of Combined Projects Arncliffe knew that a Deicorp entity was to be the builder. It is said that these facts moulded the scope of the duties owed by Mr Deiri; and that Mr Deiri was clearly permitted to cause Combined Projects Arncliffe to engage a Deicorp entity to construct the development. The Deiri Parties say that it is telling that the Sayour Parties make no complaint that causing Combined Projects Arncliffe to enter into the construction contract was a breach of the conflict and profit rules. It is said that they cannot do so, because such a contract was contemplated from the outset, despite Mr Deiri having an interest in the builder.
Similarly, it is said that Mr Deiri's duties must not have precluded him from causing Combined Projects Arncliffe to make payments due to that building entity under the contract or quantum meruit. It is said that the impugned conflict in Mr Deiri causing payments to be made from Combined Projects Arncliffe to one of his building companies, and the impugned profit his company is claimed to have made, is the very situation contemplated by all parties from the inception of the project.
The Deiri Parties point out that the scope of the duty may be influenced by "arrangements, understandings or practices" and these may demonstrate a "clear understanding of the putative principal, the putative fiduciary has his or her own interests parallel to, and separate from, those of the principal, and is allowed to pursue them" (Links Golf Tasmania Pty Ltd v Sattler (2012) 213 FCR 1; [2012] FCA 634 at [481] per Jessup J). The Deiri Parties further note that the parties may put the fiduciary in a position of conflict in full knowledge of that fact (referring to Princess Ann of Hesse v Field [1963] NSWR 998 by way of example).
Here, the Deiri Parties say that the parties knowingly put Mr Deiri in a position of conflict in which he was entitled to deal with Deicorp Constructions and, it follows, make payments properly due to it. Once it is accepted that the scope of Mr Deiri's duties accommodate the circumstances in which everyone understood a Deicorp building entity was to receive fair and reasonable payments for construction work, the Deiri Parties say that the claims about the conflict and profit rules must fail. It is noted again that there was a finding that the payments were fair and reasonable ([4293]-[4297]).
Next, it is noted that it is a defence to a breach of the no conflict rule and the no profit rule that the person to whom the duties were owed gave their fully informed consent to the conduct in question; and that what is required for fully informed consent is a question of fact in all the circumstances and that there must be disclosure of the "nature and extent" of the interest.
In this case, the Deiri Parties say that Combined Projects Arncliffe gave informed consent to the making of fair and reasonable payments properly due to a Deicorp entity to build the Arncliffe Development via both of its members, Deiri Nominees (through Mr Deiri) and Sayour Holdings. It is said that Sayour Holdings knew a Deicorp entity owned by Mr Deiri would be the builder from the outset; it knew payments would be made to that entity for construction work; it knew payments which were at least fair and reasonable and properly due would be paid. Thus, the Deiri Parties say that Sayour Holdings was fully aware of the nature and extent of Mr Deiri's interest in the construction contract and that payments of the kind that were made would be made to Mr Deiri's company. As such, it is said that Sayour Holdings must be taken to have consented to that course. It is noted that that was the entire basis of the Arncliffe project. The Deiri Parties point out that consent need not be given expressly; it may be implied in the circumstances.
Further, it is noted that, from 2015 onwards, Sayour Holdings acquiesced in Mr Deiri causing Combined Projects Arncliffe to enter a contract with his company as the builder and progressing the development in accordance with it. It is noted that, after the meeting between Jamil and Mr Deiri in Tripoli in January 2015, no further funds were contributed by Sayour Holdings to the project and Jamil as director of Sayour Holdings took no further role in the project; and that, after Jamil's death, Moustafa (as the remaining director of Sayour Holdings) took no steps concerning Combined Projects Arncliffe until proceedings were commenced in 2017. The Deiri Parties point out that Mr Deiri contributed almost all of the shareholder funding, and maintain that Sayour Holdings effectively left Mr Deiri to progress the project pursuant to whatever construction contract he put in place with his company, at least so far as the price was fair and reasonable, and it follows also to make payments pursuant to those arrangements.
The case of acquiescence is said to be even stronger considering what Mr Deiri alone did after the Tripoli meeting, namely that he arranged $98 million in finance; gave personal and corporate guarantees for the loans and took the risk; made the necessary shareholder loans of $21.7 million; arranged the sales; and carried the project to completion.
Further, it is noted that, for the profit rule to be engaged, there must be a causal connection between the fiduciary office and the receipt of the benefit. It is noted that the rule does not apply to an opportunity or benefit a director obtained in a personal capacity or a separate corporate role (citing Streeter v Western Areas Exploration Pty Ltd (No 2) (2011) 278 ALR 291; [2011] WASCA 17 at [77] per McLure P). Here, the Deiri Parties say that the opportunity Mr Deiri obtained for Deicorp Constructions was obtained not by his position as a director of Combined Projects Arncliffe, but by his position as a director of Deicorp Constructions. It is said that the opportunity for Deicorp Constructions to charge fees for construction work was presented to Mr Deiri by Jamil in 2013, prior to the incorporation of Combined Projects Arncliffe. It is said that any "profit" Deicorp Constructions obtained therefore had no causal connection with Mr Deiri's fiduciary office.
Finally, the Deiri Parties say that no loss has been suffered. It is noted that, where there has been a breach of the profit or conflict rules, the company may obtain an account of profits or, alternatively, may elect for a compensatory remedy. The Deiri Parties say that, in this case, Combined Projects Arncliffe has elected to claim compensatory relief. It is noted that prayer [28] of the first cross-claim is confined to "equitable compensation, or an order for compensation pursuant to s 1317H of the Corporations Act in the sum of $3,617,298.76".
The Deiri Parties point out that a claim for equitable compensation requires a causal link between the breach and the loss; and that it remains the case that "the only losses that are made good are those that, on a common sense view of causation, are caused by the breach of duty" (V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd (2013) 296 ALR 418; [2013] FCAFC 16 at [56] per Emmett, Edmonds and Rares JJ). The object is to restore persons who have suffered loss to the position in which they would have been if there had been no breach of the obligation. Where equitable compensation is sought for breaches of fiduciary duty, it is necessary to identify criteria which supply an adequate or sufficient connection between the compensation claimed and the breach.
In this case, the Deiri Parties say that there is no causal connection between the compensation claimed and the alleged breach of duty. It is said that, without the payments being made to Deicorp Constructions, the units would not have been built and Combined Projects Arncliffe would not have sold any units and obtained proceeds. Equitable compensation will not be awarded if it would put a party in a better position than if the breach had not occurred. It is said that the Sayour Parties would need to show that another builder would have constructed the units for a lower cost.
The Deiri Parties say that the matters the subject of prayers [24] and [28] are dealt with in the Sayour Parties' written closing submissions in considerable length at [795]-[909]; yet there is nothing in those submissions directed to establishing, or even identifying the quantum of any loss suffered, the extent of any loss which was caused by Mr Deiri's alleged breaches, or the relevant counterfactual had the breaches not occurred. It is noted that there are no submissions and no evidence directed to whether Combined Projects Arncliffe would have engaged another party to do the work, and the cost at which that work would have been done. If another party would not have done the work, there is no identification or evidence of the effect that this would have had on Combined Projects Arncliffe to sell the remaining lots and the price at which they would have been sold, and on the bringing of claims by existing purchasers of the already sold lots on the basis that their lots were incomplete.
The Deiri Parties say that the Sayour Parties made no attempt to discharge their onus of establishing these indispensable matters. It is said that, had they sought to do so, they would have been faced with the task of showing that Combined Projects Arncliffe's loss is anything greater than zero, in circumstances where all the payments complained of have been found as fair, proper and reasonable sums in exchange for services rendered. Having not undertaken any of these steps, it is said to be far too late to do so now and that the claim therefore fails on that basis.
As for the causation requirement for compensation under s 1317H of the Corporations Act, it is noted that this is "more demanding than that which is applicable in equity" (Vanguard Financial Planners Pty Ltd v Ale (2018) 354 ALR 711; [2018] NSWSC 314 at [164] per Black J). Accordingly, the Deiri Parties say that the Sayour Parties' failure to establish causation and the quantum of their loss in seeking equitable compensation necessarily means that they cannot succeed on the more demanding standard imposed by s 1317H. Whatever standard applies, it is said that no relief is available where the plaintiff fails to establish its loss, as is the case here.
For the above reasons, it is said that the claims against Mr Deiri are unsustainable; and that the same arguments above apply equally to the interest payments of $5.299 million to Deiri Nominees.

[59]

Sayour Parties' submissions in reply on first cross-claim prayers [24]; [28]

The Sayour Parties' first complain that the Deiri Parties' submissions on prayers 24 and 28 go beyond the scope of the leave that was granted on 16 April 2021 to Mr Deiri "to put in short written submissions in relation to the quantum meruit point" (T 58; 16/4/21).
Apart from the (not unreasonable) complaint about the length of the submissions, the Sayour Parties say that they were not limited to the specific point adverted to by Counsel and, instead, raise numerous arguments that the Sayour Parties say had not previously been foreshadowed.
The Sayour Parties reiterate their submission (at T 53; 16/4/21), to which they say no authority has been produced to the contrary, that: Conflict rule and profit rule claims proceed all the time on the basis that the obligations are legally binding on the relevant entity and that the fiduciary who caused them to be entered into has acted in a situation of conflict or thereby obtained a profit and it doesn't involve any question of proving loss or detriment. It is a different area of discourse, just as a claim for moneys had and received doesn't involve proving a loss.
The Sayour Parties say that the additional submissions made on 23 April 2021 by the Deiri Parties instead descend into the merits of the claim. That said, they respond to those submissions as follows.
First, the Sayour Parties say that the power to vary is not in question because Combined Projects Arncliffe has not asked for variation or retraction of the reasons. Rather, the Sayour Parties say that what is contended is that further findings ought be made on a subject that was not dealt with namely, to the effect that Mr Deiri acted in breach of duty in authorising the relevant payments, and that those payments ought therefore be recoverable from him.
It is said that such further findings are consistent with the principal judgment, including in particular the findings regarding the manner in which Mr Deiri discharged his fiduciary obligations to Combined Projects Arncliffe, and the consistent pattern of Mr Deiri entering into undisclosed transactions that were to his benefit and to the detriment of Combined Projects Arncliffe and Sayour Holdings. The Sayour Parties say that Mr Deiri's references to Autodesk and Aktas v Westpac are not to the point, since, in each of those cases, the court was asked to exercise its jurisdiction to reopen a judgment and to vary orders that had already been made.
Here, it is noted that no orders have yet been made; rather, the parties were invited (at [4466]) to identify any issues that had not been dealt with in the principal judgment. The Sayour Parties say that prayers 24 and 28 have not been dealt with; and that dealing with them does not require retraction or variation of any other part of the reasons.
The Sayour Parties point to the reference, in the course of the determination as to the "extra over amounts" under PC 24, at [4298] to Jamil's authority and the determination concerning ratification of actions. It is noted that Jamil died on 5 October 2015, and the decision to undertake the work that was the subject of PC 24 was made some time between 17 May 2017 and February 2018 ([4217]). It is said that clearly, whatever the extent of Jamil's authority to ratify during his lifetime, he died well before the decision to undertake the PC 24 work was made.
Second, it is said that the findings made do not foreclose the making of orders in the form of prayers 24 and 28. The Sayour Parties rely on their earlier written submissions as to the pleading of Mr Deiri's breach of duty in relation to the relevant payments was pleaded.
As to the complaint that prayers 24 and 28 "were only addressed fleetingly", the Sayour Parties say that the analysis of the evidence, in the course of submissions, laid the necessary foundation for the findings and orders that are presently sought. In this regard, the Sayour Parties point to a number of their submissions on this point that were noted in the principal judgment.
The Sayour Parties point to the reference in the reasons to the following submissions that were made by them at the hearing in relation to the "extra over" amount under PC 24. At [4206]-[4207], I noted the Sayour Parties submissions that there was no justification or explanation for the "extra over" amount to be found anywhere in Mr Deiri's affidavits, and no documentary evidence to support the decision to contract Deicorp Constructions to do the "extra over" work, and no material in evidence by which the reasonableness or desirability of undertaking the work that was the subject of the claim could be evaluated.
At [4210] of the principal judgment I noted the Sayour Parties' submission that Mr Kyrikos, the Contract Superintendent, had not explained why, as of early 2017, he (or any other person) considered upgrades to the units to be necessary or desirable; and at [4212], that an "offhand observation" by Mr Kyrikos in May 2017 was as close as it came to any evidence from any of the witnesses for the Deiri Parties, or Deicorp Constructions, as to the basis for and justification of the extra over amounts in PC 24.
At [4215], I noted the submission that the payment of the extra over amounts under PC 24 "blew past" the balance of provisional sum contingencies for the Arncliffe project by at least $3 million. At [4216], that there was nothing in evidence from any of the Deiri Parties to explain the decision-making process that led to a greater than $500,000 contingency for the Arncliffe Development being "wiped out" and replaced with a greater than $3 million shortfall.
At [4217]-[4219], I noted the submission that this decision-making process was made "even more mysterious" by the fact that, as of 17 May 2017, at least around 176 of the 234 units in the Arncliffe Development had already been sold, and the improved finishes that were the subject of PC 24 were applied to all of the Arncliffe units (not only to ones unsold at that time), and the Sayour Parties' complaint as to the lack of explanation for a decision to exceed the contract contingency for provisional sums to upgrade already sold apartments, and at a time when only a relatively small minority of lots then remained unsold.
At [4265]-[4268], I noted the submission that there was no evidence that the services provided to Combined Projects Arncliffe by Deicorp Constructions in relation to the "extra over" amounts were bargained for, or that those services added any value to the Arncliffe project; and that, even if the amount paid by Combined Projects Arncliffe to Deicorp Constructions represented a fair price for the goods and services provided if they were needed and contracted for, there is no evidence in Deicorp Constructions' defence, or in its second cross-claim, that justifies (or "even tries to justify") the desirability or necessity of the provision of those services.
At [4269]-[4272], I noted the submission that Deicorp Constructions, a sophisticated developer, provided unnecessary and unjustified "gold plated" services to Combined Projects Arncliffe, and that Mr Deiri, wearing his Combined Projects Arncliffe "hat" as well as his Deicorp Constructions "hat", authorised those payments without satisfying himself that the payments were authorised or required to be made under the contract between his two entities, and without there being any evidence to justify the reasonableness or necessity of the services, and that he knew when he did this that he was facing a shareholder claim, contesting his right to control the company, and that his conduct in the face of that action must be regarded as deliberately self-serving.
At [4291]-[4292], I noted the submission that the PC 24 payment occurred at approximately the same time as other large payments that are complained of, and that the payment left Combined Projects Arncliffe without any, or any substantial, funds for its shareholders; that Mr Deiri's evidence did not suggest that he gave any reasonable consideration to the basis for the payment of millions of dollars of Combined Projects Arncliffe's funds under PC 24, in circumstances where his company (Deicorp Constructions) benefited therefrom; and that the Sayour Parties say that he failed to comply with the profit rule, the conflict rule and the statutory duties complained of in failing to do that which, in the circumstances, he ought to have been assiduous to do, particularly as there was an ongoing shareholder dispute at this time and that he must have appreciated that the claim would come under scrutiny.
The Sayour Parties note that (as the Deiri Parties accept in their submissions of 23 April 2021 at [9]) it was submitted for Combined Projects Arncliffe in the Sayour Parties' closing written submissions at [909] that Mr Deiri failed to give reasonable consideration to the basis of the payments. However, the Sayour Parties say that (as per the above) that was far from the only basis for the submission that Mr Deiri breached his duties.
Further, it is noted that the following submissions by the Sayour Parties in respect of the impugned payment to Deicorp Properties were recorded in the principal judgment.
At [4128], that obtaining the consent of Combined Projects Arncliffe to a dealing between Deicorp Properties (in which Mr Deiri was interested) and Combined Projects Arncliffe (in which Sayour Holdings was interested) required Mr Deiri to obtain the informed consent of shareholders because of the profit rule, the conflict rule and cognate statutory duties; and that fundamental to any process of informed consent must have been the presentation of a properly prepared and informative proposed agency agreement.
At [4129], that fully informed consent was not obtained and that the rights of Sayour Holdings as a 50% shareholder in Combined Projects Arncliffe were disregarded, and that Mr Deiri acted in contempt for the rights of a shareholder which was even then making enquiries as to the management of Combined Projects Arncliffe's affairs.
At [4134]-[4135], that the conduct of Mr Deiri in causing the payment to be made to Deicorp Properties was a plain breach of the profit rule, the conflict rule and the pleaded statutory officers' duties; that he kept the whole transaction secret from Sayour Holdings until the payment was made; and that he did not turn his mind to any appropriate consideration of his obligations or the interest of the company; and that he acted to benefit Deicorp Properties, in which he was interested, at the expense of Combined Projects Arncliffe; and that Mr Deiri ought give equitable compensation on account of his breach of duty.
The Sayour Parties note that (at [10] of their 23 April 2021 submissions), the Deiri Parties submit that in respect of the payments to Deicorp Properties, there was no pleading of breach of the conflict or profit rules, and that consequently evidence "might have been led" of "any discussions with Jamil about the topic" (which the Sayour Parties say is an implicit concession that no such evidence was led). The Sayour Parties say that, to the contrary, breach of a number of Mr Deiri's duties was expressly pleaded in relation to the Deicorp Properties payments: the business prudence duty(first cross-claim at [251]); the good faith, best interests and proper purpose obligations (at [252]; Corporations Act, s 181); improper use of his position to gain advantage for Deicorp Properties or to cause detriment to Combined Projects Arncliffe (at [253]; Corporations Act, s 182); and fiduciary and equitable duties owed to the company (at [254]). It is noted that these fiduciary and equitable duties were expressly pleaded at [32] of the first cross-claim, comprising: (a) the profit rule; (b) the conflict rule; (c) the equitable duty of ordinary business prudence; and (d) the equitable obligation to act honestly and impartially in discharging functions as an officer.
The Sayour Parties note that in Mr Deiri's affidavit of 16 October 2019 (at [180]-[181]), as noted in the reasons at [4174], Mr Deiri deposes that the missing signed Agency Agreement was entered into in around April 2017. The Sayour Parties point out (as is obviously the case) that this was long after Jamil's death. It is said that it is difficult to explain how Sayour Holdings consented to the alleged Agreement in circumstances where Sayour Holdings was not consulted about it at the time it was entered into; the relations between Sayour Holdings and Mr Deiri were not good (it having commenced demanding information from Mr Deiri), and any supposed "authority" of Jamil must have lapsed with his death.
It is said that (contrary to the Deiri Parties' present submissions) Combined Projects Arncliffe and the Sayour Parties both pleaded and made submissions during the normal course of the trial that, if accepted, would provide a clear basis for a finding that Mr Deiri acted in breach of his duties in authorising the "extra over" payments to Deicorp Constructions and the agency commissions to Deicorp Properties; and that he ought compensate Combined Projects Arncliffe for the loss.
Third, as to the submission made by the Deiri Parties to the effect that it is a defence that the company's constitution authorised or permitted him to cause Combined Projects Arncliffe to make the payments complained of to the Deicorp entities in which he was interested, the Sayour Parties point out that defences based on exemption clauses can involve complex questions of construction, and the interaction of the contractual provision with the irreducible core of fiduciary obligation, as well as its interaction with the reach and effect of statutory obligation. It is noted that Mr Deiri did not plead a defence arising under the constitution of Combined Projects Arncliffe in answer to the claims in prayers 24 and 28. Accordingly, the Sayour Parties say that that constitutional defence did not arise; that the legal and factual answers to an exemption clause defence did not need to be explored; and that this defence is not now available and should not be considered.
Further, it is said that, even at the level of pure construction, the defence suffers from a number of difficulties. In this regard, it is said that (contrary to the Deiri Parties' submission at [17]), cl 15.1 of Combined Projects Arncliffe's constitution, properly read, supports (rather than undermines) a finding that Mr Deiri acted in breach of the conflict and profit rules in authorising the impugned payments to Deicorp Constructions and Deicorp Properties.
It is noted that cl 15.1 of the constitution says nothing more than that a director is not disqualified from office because the director contracts with the company (cl. 15.1(b)), and that a director may vote at a meeting of directors on a resolution as to whether the company enters into a contract in which the director has an interest provided the director "discloses the nature and extent of the interest at a meeting of the directors or as otherwise allowed by the Corporation Act" (cl. 15.1(c)). The Sayour Parties say that none of the conduct complained of was authorised at a meeting of directors. They contend that cl 15.1(c), in effect, permits a director who is interested in a contract but makes full disclosure of his or her interest at a meeting of directors at which a vote is held on entry into the contract to escape the operation of the profit and conflict rules. However, it is said that it assumes that there will be another director or other directors (and that the question will not be left to the sole decision of the interested director, but will be considered by a board meeting, with the benefit of the conflict having been drawn to the directors' attention).
Insofar as Mr Deiri relies on this clause as applicable in the case of an interest that Mr Deiri, as sole director, discloses to himself, and has submitted that Mr Deiri must be taken to have made this disclosure to himself "by signing the contract with CP Arncliffe on its behalf" (see above), the Sayour Parties say that on this analysis, cl 15.1 would give Mr Deiri carte blanche to cause Combined Projects Arncliffe to enter into contracts in which he was interested with no minute, record or disclosure of the interest or the decision to enter into the contract or interested transaction (simply by affixing his signature on a contract in which he has an interest).
The Sayour Parties cavil with the Deiri Parties' submission that such an interpretation of cl 15.1 is required to give the constitution "reasonable business efficacy"; and say that the suggestion that this is reasonable, necessary, or so obvious that it goes without saying, is insupportable.
Further, it is said that the interpretation ignores the plain language of cl 15.1(c), which, by its terms, applies to interests in contracts that are put to a meeting of directors following full disclosure of the interest at the meeting, and in anticipation of a formal vote by directors on entry into the contract. It is noted that it is there expressly contemplated that the disclosure and board approval will occur before entry into the relevant the contract.
The Sayour Parties maintain that an interpretation of Combined Projects Arncliffe's constitution so as to impose a requirement on interested directors to document their interest by prior disclosure is consistent with not only the plain language of the constitution but also with minimum standards of good governance, and that such an interpretation does not impede business efficacy but is perfectly reasonable.
It is noted that in the present case, there has been no such disclosure and no such vote. It is submitted that Mr Deiri's failure to document his interests, or to disclose them or notify them to his co-shareholder, and his failure even now to provide a sensible ex post facto justification for his interested transactions, support a finding that he acted in derogation of his constitutional and fiduciary obligations. The Sayour Parties say that cl 15.1 should not be read as giving Mr Deiri carte blanche to enter into self-interested dealings without any disclosure or record of his doing so. Further, it is said that, even assuming for the sake of argument that there was fully informed consent of Combined Projects Arncliffe's shareholders to the initial engagement of Deicorp Constructions as the prime contractor for the development, the giving of that initial consent does not authorise Mr Deiri to use his position as the controller of both the principal and the contractor throughout the life of the contract to cause payments to be made to the detriment of the principal and the benefit of the contractor, that were not mandated by the contract (as these, the Sayour Parties say, were not).
Fourth, insofar as the Deiri Parties say that Combined Projects Arncliffe's consent to "the making of fair and reasonable payments properly due to a Deicorp entity to build the Arncliffe development" was given by both Deicorp Nominees and Sayour Holdings, the Sayour Parties say that even were this "rather vaguely developed and unpleaded form" of consent to be assumed to be true, it does not rise to an assertion of informed consent to the payments complained of, and it is no answer (for example) to the charge that PC 24 was unnecessary and wasteful and did not deliver any benefit to Combined Projects Arncliffe, or that Deicorp Properties was paid at the same rate as Home 789 (the fee of which was justified as warranted by the employment of a specialist to procure quick sales in time to get construction finance). It is said that it was not suggested that Deicorp Properties was in this class of agent, and the evidence was that it sold the unit stock that was not sold in the early phase of the project.
The Sayour Parties say that the Deicorp Parties have had abundant opportunity to demonstrate that the PC 24 payments were fair and reasonable, but they have not presented evidence of any benefit to Combined Projects Arncliffe from the payments and complain that they have not even tried to explain why upgrades were made, at Combined Projects Arncliffe's expense, to apartments that had already been sold. As to the commission payments, it is noted that there is no claim that Sayour Holdings ever consented to or knew of the contract with Deicorp Properties or the payments made thereunder.
Fifth insofar as the Deiri Parties argue (at [38] of their submissions) that Mr Deiri did not obtain any benefit for himself as a director of Combined Projects Arncliffe but only as a director of Deicorp Constructions, the Sayour Parties say that the profit rule is not so confined. It is noted that the pleadings expressly allege that Mr Deiri obtained a benefit for these entities in which he was interested. It is said that Mr Deiri was only in a position to benefit them because he was the sole director of Combined Projects Arncliffe.
Finally, as to the Deiri Parties' submission as to the measure of damage, the Sayour Parties say that Mr Deiri's liability must be for the higher of the impermissible gain or the company's loss. It is said that Mr Deiri's liability might be conceived as a requirement to disgorge a benefit obtained by his alter ego companies, or to compensate for a benefit given at the expense of the company.
As to prayer 28, which seeks equitable compensation on account of the extra over amounts under PC 24, the Sayour Parties say that it is not an ambit claim (noting that recovery of the full amount of PC 24 has not been sought; simply the amount for which it is said no rational justification has been provided - namely, the extra over amount as described at [4195]).
As to prayer 24 and the payments to Deicorp Properties, the Sayour Parties say that the pleadings, the evidence and the submissions of the parties support a finding that Mr Deiri acted in breach of duty when causing Combined Projects Arncliffe to enter into the contract without any disclosure or notice to his fellow shareholder, and thus the full amount paid under the contract should be recoverable from him. Alternatively, it is said that it should be for the difference between the rate charged of 4.4% and the standard rate of 2.2% (this having been the subject of evidence at trial).

[60]

Conclusion as to claim re prayers 24 and 28

I accept that I did not expressly address in the principal judgment the claims for relief in prayers 24 and 28.
In that regard, I should say at the outset that I see (and saw at the time) a fundamental difference between, for example, the payments made by way of the fees under the alleged Development Management Agreement and alleged Deiri Nominees loan agreement (let alone the payments made to Zapphire and Konstructions) and the payments made to Deicorp Constructions and Deicorp Properties (which I considered to be fair and reasonable in the circumstances).
I accept that, not having expressly addressed those issues in the principal reasons, it is incumbent on me now to do so (just as I accepted the Deiri Parties' submission in relation to prayer 1(d) of the Broadway amended notice of motion). This is not a question of re-opening or re-visiting the reasons in the principal judgment; it is addressing an issue overlooked in that principal judgment.
That said, I propose to address these issues here with (perhaps uncustomary) brevity, since much of the argument on which it was based has already been considered in the context of the claims that were determined in no little detail in the principal judgment.
As a first proposition, I should note that I do not accept that it can be said (as the Deiri Parties have suggested) that the Sayour Parties abandoned at the trial any claim for relief under prayers 24 and 28 (irrespective of the number of paragraphs that dealt directly with these issue in their submissions or how extensive or comprehensive those submissions may have been on these issues). I certainly did not understand that the Sayour Parties were not pressing any of their claims for relief. Had they done so, I would have expected (consistent with the parties' concern to identify what was or was not being pressed) there to be a formal indication that this was the case.
Nor do I accept that the claims here being considered are unsustainable in light of the findings in the principal judgment concerning the entitlement of Deicorp Constructions and Deicorp Properties, respectively, to the payments (there being different issues in play in the context of the claims against Mr Deiri).
As a further matter, I accept that the claims by the Sayour Parties for the relief sought in prayers 24 and 28 must be confined to the pleaded case (not expanded, insofar as it may be said the pleaded case was, by the submissions that were made in relation to those claims). As recorded above, the Deiri Parties say that, had a breach of the conflict or profit rules been pleaded in relation to these payments, then evidence might have been led about any discussions with Jamil about that topic and that Moustafa may also have been cross-examined about his knowledge of the commissions. As it is disputed whether these claims were pleaded, it is necessary to set out the relevant sections of the amended first cross-claim.
Under the heading "Duties of Fouad Deiri", it is pleaded that Mr Deiri owed several duties to Combined Projects Arncliffe, expressly including the relevant duties as to profit and conflict, as follows ([32]-[33]): 32. By reason that he has on, and at all times after, 29 January 2014 acted as sole director and sole secretary of CP Arncliffe, or, alternatively, by reason that he was at all times after 29 January 2014 the sole director and the sole secretary of CP Arncliffe, Fouad Deiri owed to CP Arncliffe as an officer of that company: a) A fiduciary duty not to obtain for himself or another person from the use of his position or the exercise of his powers as an officer of CP Arncliffe a profit or benefit otherwise than (through his interest in Deiri Nominees) one accruing to the generally and equally to the shareholders of CP Arncliffe; and b) A fiduciary duty not to use his position or exercise his powers in any transaction whereby his interest or the interest of Deiri Nominees (whether in its own right or as trustee of the F Deiri Family Trust) or the duties that he owed to Deiri Nominees, conflicted with the interest of CP Arncliffe or with his duties to CP Arncliffe; and c) An equitable duty to in exercising his powers and discharging his functions to use for CP Arncliffe that prudence that an ordinary person of business would use in discharging his or her own affairs; d) Equitable duties to act honestly and impartially in exercising his powers and discharging his functions as an officer of CP Arncliffe. 33. By reason that he has on, and at all times after, 29 January 2014 acted as sole director and sole secretary of CP Arncliffe, or, alternatively, by reason that he was at all times after 29 January 2014 the sole director and the sole secretary of CP Arncliffe, Fouad Deiri owed to CP Arncliffe as an officer of that company the duties prescribed by each of sections 180 to 183 of the Corporations Act, 2001.
After the primary pleadings concerning Deicorp Properties that, generally, the commissions were not liable to be paid by reason of the Property and Stock Agents Act and the payments were "uncommercial" (see first cross-claim at [239]-[256]), from [251] it was pleaded that: 251. In the premises, in causing CP Arncliffe to pay the Deicorp Properties Payments to Deicorp Properties, Fouad Deiri failed to exercise his powers and discharge his duties as an officer of CP Arncliffe with that degree of care and diligence that a reasonable director of CP Arncliffe would exercise. 252. Further or in the alternative, in the premises in causing the said payments of $753,709.62 to Deicorp Properties, Fouad Deiri as an officer of CP Arncliffe acted against good faith and against the best interests of CP Arncliffe and not for any proper purpose. 253. Further or in the alternative, in the premises in causing the said payments of $753,709.62 to Deicorp Properties, Fouad Deiri improperly used his position as an officer of CP Arncliffe to gain an advantage for Deicorp Properties or to cause detriment to CP Arncliffe. 254. Further, or in the alternative, in the premises Fouad Deiri caused the said payments of $753,709.62 to be made in breach of his aforesaid fiduciary and equitable duties to CP Arncliffe.
I consider that the reference to the "aforesaid fiduciary and equitable duties" in [254] must have been a reference to those detailed at [32]-[33]. Whatever complaint there may be about the manner in which this was pleaded, I do not accept that allegations of breach of equitable and statutory duties (including of the no profit and no conflict rules) were not pleaded in relation to the payments to Deicorp Properties. I consider that the case to be met was stated with sufficient clarity (and I note that the Deiri Parties' submission here was not as to the clarity of the pleading; rather, as noted above, the Deiri Parties' submissions about the pleading does not appear to have engaged with the substance of [251]-[254]).
As to the claims against Mr Deiri in relation to the payments to Deicorp Constructions, the amended first cross-claim stated as follows: Breach of officer's duties 294. At all material times, Deiri Nominees was the sole shareholder of Deicorp. 295. At all material times, Fouad Deiri was the sole director of Deicorp. 296. By reason of his position as sole director of and sole shareholder in Deiri Nominees and his position of control and personal interest in the F Deiri Family Trust, and by reason of his position as sole director of Deicorp, there was a conflict between the personal interest of Fouad Deiri and his duties to Deicorp and Deiri Nominees on the one hand, and the interest of and his duties to CP Arncliffe on the other hand, in respect of the making of the 16 February 2018 Payments made to Deicorp Nominees on or about 16 February, 2018. 297. Further, by the making of those payments, Deicorp obtained a benefit of $3,617,298.76 otherwise than as a benefit conferred equally upon the shareholders of CP Arncliffe. 298. In causing the said payments to be made Fouad Deiri acted for the benefit of Deicorp and Deiri Nominees and used his position to gain an advantage for Deicorp and Deiri Nominees and to the detriment of CP Arncliffe. Liability for those breaches 299. In causing the Extra Over Amount to be paid to Deicorp, Fouad Deiri: a) did not exercise his powers and discharge his duties as a director of CP Arncliffe for a proper purpose; b) did not exercise his powers and discharge his duties as a director of CP Arncliffe in good faith and in the best interests of CP Arncliffe; c) did not exercise his powers and discharge his duties as a director of CP Arncliffe with reasonable care and diligence; d) improperly used his position as a director of CP Arncliffe to gain an advantage for Deicorp; e) improperly used his position as a director of CP Arncliffe to gain an advantage for Deicorp; and f) improperly used his position as a director of CP Arncliffe to cause detriment to CP Arncliffe. 300. In the premises, Fouad Deiri breached his aforesaid fiduciary and equitable duties to CP Arncliffe. 301. In the premises, in causing the Extra Over Amount to be paid to Deicorp, Fouad Deiri contravened section 180 of the Corporations Act. 302. In the premises, in causing the Extra Over Amount to be paid to Deicorp, Fouad Deiri contravened section 181(1) of the Corporations Act. 303. In the premises, in causing the Extra Over Amount to be paid to Deicorp, Fouad Deiri contravened section 182(1) of the Corporations Act. 304. By reason of those breaches and contraventions CP Arncliffe lost $3,617,298.76.
Therefore, I do not consider that the Sayour Parties' claim for the relief in prayers 24 and 28 fails on the pleading point. Relevantly, what must here be addressed is whether Mr Deiri's conduct in causing the relevant payments (to Deicorp Constructions and to Deicorp Properties, respectively) amounted to the breaches pleaded (variously, and with relevant differences in relation to the respective impugned payments, a breach of the profit rule, the conflict rule and/or Mr Deiri's equitable and statutory duties as an officer of Combined Projects Arncliffe).
I consider the respective claims below. As a general matter, insofar as the Deiri Parties rely upon the constitution of Combined Projects Arncliffe as permitting what might otherwise have been a breach of the no profit or no conflict rules, I have difficulty with the proposition that notional disclosure by Mr Deiri to himself (or disclosure to himself by signing the relevant agreements) can sensibly be compliance with cl 15.1. At the very least I would have concluded that such disclosure should be recorded in a proper company resolution or minute (and perhaps in the circumstances of a sole director company would require consent of a relevant shareholder). In this regard, I also note the further reasoning of Lightman J in Neptune v Fitzgerald (as referred to by the Deiri Parties for the proposition that the disclosure need not be "out loud"). In that case, Lightman J stated, when considering the requirement for a sole director to disclose an interest at a meeting under the legislation there in question (at 284): In the context of legislation which specifically authorises sole directorships and where Table A provides for a committee of one, the legislature cannot have intended by use of the word "meeting" in section 317 to exclude from its ambit and the achievement of the statutory object sole directors, and I so hold. This conclusion is reinforced by the consideration that the concept of the holding of a directors meeting in case of a sole directorship is familiar to company lawyers. Two different situations may arise. The sole director may hold a meeting attended by himself alone or he may hold a meeting attended by someone else, normally the company secretary. When holding the meeting on his own, he must still make the declaration to himself and have the statutory pause for thought, though it may be that the declaration does not have to be out loud, and he must record that he made the declaration in the minutes. The court may well find it difficult to accept that the declaration has been made if it is not so recorded. If the meeting is attended by anyone else, the declaration must be made out loud and in the hearing of those attending, and again should be recorded. In this case, if it is proved that the declaration was made, the fact that the minutes do not record the making of the declaration will not preclude proof of its making. In either situation the language of the section must be given full effect: there must be a declaration of the interest. [emphasis added]
In light of Lightman J's reasoning and what I have said above, I do not consider the conduct of Mr Deiri, in signing the contract making provision for such payments or in authorising the payments themselves, as evidence in any form that he has called a meeting, made the declaration to himself and had "statutory pause for thought" as to his obligations to Combined Projects Arncliffe.

[61]

Deicorp Properties payments

In the principal judgment, I dealt first (from [4102]) with the claims in relation to the payment to Deicorp Properties, namely, the payment of $753,709 to Deicorp Properties in 2018 as commissions on sales of lots in the Arncliffe Development, and of $5,967,271.69 in commissions on sales of lots to Aust Sunshine Marketing Pty Ltd trading as Home789 (Home789) (to which I referred as the Commission Payments). I noted that there were claims made that Mr Deiri acted contrary to his fiduciary duties and also his statutory duties under the Corporations Act as an officer of Combined Projects Arncliffe in causing those payments to be made, and that Combined Projects Arncliffe was thus entitled to a taking of accounts, or equitable compensation or compensation under s 1317H of the Corporations Act from Mr Deiri in respect of the losses suffered by Combined Projects Arncliffe as a result of the alleged breaches of duties.
I further noted that the amount of $753,709.62 comprised three different components: amounts received by Deicorp Properties as reimbursement of marketing and advertising costs ($168,382.02); costs claimed by Deicorp Properties for managing other real estate agents in the sales process ($92,955.00); and commissions charged by Deicorp Properties for sales achieved ($492,372.10).
It was contended against Mr Deiri, in essence, that a prudent developer in the position of Combined Projects Arncliffe would not (as he caused it do) have entered into an exclusive agency agreement that provided for commissions of 4.4%; that Deicorp Properties had no contractual entitlement to the payment (never having entered into an agency agreement that complied with the requirements of the Property and Stock Agents Act); and that a 4.4% commission was uncommercial in the circumstances. It was submitted that Mr Deiri breached his fiduciary duties to Combined Projects Arncliffe in causing it to pay those commissions and breached the equitable obligation of business prudence and the corresponding obligation under s 180 of the Corporations Act in so doing.
From [4109], I set out my determination in relation to the re-payment of $753,709 as agency commissions to Deicorp Properties (albeit confined to the claims against Deicorp Properties). I do not here need to repeat those reasons. Relevantly, I accepted the expert evidence assessing the value of the real estate works and services provided as being proper, fair and reasonable. I accepted Mr Deiri's evidence as to the engagement of Deicorp Properties and its provision of services in relation to the Arncliffe Development (and concluded that this evidence established the fact that agreement was reached in relation to the provision of services albeit noting the absence of a properly executed written agency agreement). I also made clear that I accepted that good consideration was supplied for the payments (noting that the payments had not been shown to be unjust or unreasonable).
Relevantly, although I had concluded that the provisions of the Property and Stock Agents Act were not engaged (as Deicorp Properties was not seeking payment for the amounts in question - those already having been paid to it), I went on to express the view that there was not a basis for the restitution that had been sought from Deicorp Properties.
I accept that the above, however, does not address the position of Mr Deiri insofar as the payments he caused to be made were payments to which Deicorp Properties did not have a contractual entitlement (by reference to the unenforceability of the agency agreement); though it is by no means clear on the evidence that Mr Deiri was aware of the unenforceability of the agency agreement, which may be a factor to take into account in assessing whether the business prudence obligations were breached for example.
As to the claims made against Mr Deiri, I am not persuaded that there was a breach of his duties as a director (or his equitable obligation of prudence) in agreeing to an arrangement whereby commissions were paid at the rate of 4.4% (since the expert evidence to which I referred in the principal judgment did not place this as being an unreasonable fee) even though a standard agent's fee (or for that matter any other agent's fee) might have been slightly less; nor am I persuaded that such a fee was "uncommercial". There was an explanation as to why such a fee might be considered reasonable in seeking to effect sales of the units and minds might well differ as to whether and how such services should be procured.
As to whether there was a breach of those obligations to make the payment in circumstances where (as it transpired) there was no enforceable contractual entitlement on the part of Deicorp Properties to agency commission, I am again not persuaded of this. It is clear that the services were provided and it is equally plausible that a prudent director would take into account that good consideration for the services had been rendered and that to refuse to pay the amounts charged - on what might well be seen as a technicality - could expose the company to a quantum meruit claim or, although this seems unlikely with a related company, reputational damage in the industry.
As to whether there was a breach of the no profit and no conflict rules, there was no dispute as to the content of the respective rules: the profit rule precludes a fiduciary generally (absent fully informed consent) from retaining a profit or benefit acquired from trust property during and by virtue of his or her trusteeship; the conflict rule, strictly formulated, is that a fiduciary must not place himself or herself in a position where a personal interest conflicts with a fiduciary duty (see Bray v Ford [1896] AC 44 at 51 per Lord Herschell). I note that in Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36, Deane J (at 198) considered that the latter approach might be too strict in a commercial context, noting that "[t]he equitable principle governing the liability to account is concerned not so much with the mere existence of a conflict between personal interest and fiduciary duty as with the pursuit of personal interest" (and see the further articulation of the operation of these rules at 199).
Modern courts have similarly narrowed the scope of the conflict rule by requiring a "real or substantial possibility of conflict" (see Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 at 103 per Mason J, as his Honour then was; Australian Careers Institute Pty Ltd v Australian Institute of Fitness Pty Ltd (2016) 340 ALR 580; [2016] NSWCA 347 (Australian Careers Institute) at [130] per Sackville AJA (with whom Meagher JA agreed)). Lord Upjohn in Boardman v Phipps [1967] 2 AC 46 noted (at 124) that determining what constitutes a "real sensible possibility of conflict" requires an objective test, which involves taking into account the activities of the company and the functions and responsibilities of the director (see Canberra Residential Developments Pty Ltd v Brendas (2010) 188 FCR 140; [2010] FCAFC 125 at [36] per Finkelstein, Siopis and Katzmann JJ; Australian Careers Institute at [136]).
With regard to the profit rule, I also note the comments of Rich, Dixon and Evatt JJ in Furs v Tomkies (at 592), where their Honours stated that no director can obtain a profit from a transaction he is involved with on behalf of the company "unless all the material facts are disclosed to the shareholders and by resolution a general meeting approves of his doing so, or all the shareholders acquiesce"; and the observations of Santow J, as his Honour then was, in Re HIH Insurance Ltd; Australian Securities & Investments Commission v Adler (2002) 168 FLR 253; [2002] NSWSC 171 at [735]).
I consider that there was a breach of the strict profit/conflict rules in relation to the entry by Mr Deiri in the name of Combined Projects Arncliffe into the Deicorp Properties' arrangements, without the fully informed consent of Sayour Holdings. Deicorp Properties was an entity associated with Mr Deiri obtaining the benefit of a contract with a company of which Mr Deiri was a director. As above, I do not consider that Mr Deiri met the disclosure requirements in cl 15.1 of Combined Projects Arncliffe's constitution and I note that the inclusion of such a requirement in the constitution is indicative of how shareholders would expect the company to be run. The question is what relief should flow therefrom in circumstances where the contract is now complete, the residential apartments have been sold, and Deicorp Properties has been permitted to retain the amounts paid under that contract. I consider in due course the principles relating to causation in respect of claims for equitable compensation. Suffice it here to say that I consider that the appropriate relief would most likely have been for Mr Deiri to account, perhaps in the course of the statutory accounting process between the partners, for the unauthorised sums paid out of Combined Projects Arncliffe to Deicorp Properties. However, that would not take into account that the Partnership has obtained the benefit of the services provided for those moneys and I am not in a position to quantify that benefit.
In those circumstances, while I consider that a breach of the profit/no conflict rules has been established on the part of Mr Deiri in relation to the Deicorp Properties' payments, I would dismiss the claim for relief in prayer 24 of the Arncliffe Proceedings.

[62]

Deicorp Constructions

Turning then to the Deicorp Constructions payment, this was in the sum of about $3.6 million to Deicorp Constructions on account of purported "extra over" amounts (plus a 15% uplift and GST) claimed by Deicorp Constructions under the final progress claim (PC 24) issued under the Arncliffe Construction Contract. In this regard, the Deiri Parties say that, if the claims against Mr Deiri are now to be entertained, it will be necessary also to determine Deicorp Constructions' argument that the payments pursuant to PC 24 were authorised under the Arncliffe Construction Contract.
The payments under that construction contract and the "extra over" amounts (PC 24) were considered in the principal judgment from [4189] (albeit again only with a determination made as to the claims against Deicorp Constructions not Mr Deiri). These related to payments made under PC 24 in circumstances where Sayour Holdings had pleaded non-compliance with certain terms and conditions of the Arncliffe Construction Contract set out which were a pre-condition to Combined Projects Arncliffe's payment obligation to Deicorp Constructions. The amount sought to be recovered was comprised of amounts claimed in respect of provisional sums ($2,859,821.19); plus a builder's profit margin of 15% (bringing the sum to $3,288,794.37).
It was alleged (see at [280]-[281] of the first cross-claim) that there was no contractual basis for a 15% margin to be applied to these provisional sums. The Deicorp Entities contested this, pointing to cl 11(b) of the Arncliffe Construction Contract, which included the words "plus an amount for profit and attendance calculated by using the percentage thereon stated in Annexure Part A", and Item 25 in Annexure Part A, which specified a rate of 15%. (It is this construction issue that the Deiri Parties say must now be determined.) Relevantly, cl 11 provided: A provisional sum included in the Contract shall not itself be payable by the Principal but where at the direction of the Superintendent the work or item to which the provisional sum relates is performed or supplied by - (a) the Contractor, the work or item shall be valued under Clause 40.5; and (b) a sub-contractor to the Contractor, the Principal shall pay the Contractor the amount payable by the Contractor to the subcontractor for the work or item, disregarding any damages payable by the Contractor to the subcontractor or vice versa, plus an amount for profit and attendance calculated by using the percentage thereon stated in Annexure Part A or, where not so stated, as stated elsewhere in the Contract. The amount payable to a subcontractor for materials or goods is to be taken to be the nett cost to the Contractor (disregarding any deduction of cash discount for prompt payment).
As stated at [649] of the principal judgment, the relevant amount for profit and attendance under "Part A" of the Arncliffe Construction Contract is 15%. As to the issue relating to the proper construction of the contract, I considered at the hearing that the submissions made for the Deicorp Entities had force. I consider that, when combined with Item 25 of Part A of the contract, those contract terms allow an amount of 15% for profit and overheads; and I accept Mr Kyrikos' evidence as to those amounts.
The position of Sayour Holdings at trial was that, because of non-compliance with the terms of the Arncliffe Construction Contract in relation to the preparation, submission and evaluation of PC 24, Deicorp Constructions had no contractual or other entitlement to payment of that sum; that Mr Deiri caused Combined Projects Arncliffe to pay that sum to Deicorp Constructions; and that, in so doing, breached his fiduciary and statutory duties owed as an officer of Combined Projects Arncliffe.
Sayour Holdings relied on the expert opinion of a quantity surveyor (Mr Michael Sanig) to the effect that the requisite procedures under the Arncliffe Construction Contract were not followed by Deicorp Constructions or the Contract Superintendent (Mr Kyrikos) with respect, inter alia, to: record keeping and documentation; the submission and approval of progress claims; and the treatment of "Variations" and "Provisional Sums" under the contract. Mr Sanig also expressed the opinion that any such work claimed under PC 23 was not properly to be treated as a variation under the contract; that there was no evidence that Mr Kyrikos gave directions as to the variations that were supposedly the subject of PC 24; and that Mr Kyrikos did not appear to have made any enquiries as to the reasonableness of the sums claimed under PC 24 but, rather, appeared to have relied upon, and assumed without verification the correctness of, figures provided to him by Deicorp Constructions.
The Sayour Parties complained that Mr Deiri did not explain or justify the "extra over" amount in PC 24 (and did not explain why the expenditures on work comprised by that amount were considered reasonable or necessary); that there was no documentary evidence to support Mr Deiri's evidence in cross-examination (at T 1081.21) that there "would have been backup and discussions around these claims" (and no evidence as to the scope or substance of those discussions, or any material by which the reasonableness or desirability of undertaking the work that was the subject of the claim could be evaluated).
Insofar as the allegation at [281] was that a margin of 15% was not authorised by the contract to be included in the progress claim, I do not accept that to be correct. I consider that the contract provisions referred to above did authorise such an amount and I accepted that the work was done pursuant to a direction from Mr Kyrikos.
The Deiri Parties, at trial, emphasised the evidence of Mr Kyrikos to the effect that he had given verbal directions for the work the subject of PC 24 to be undertaken (see T 1231.23-24); and submitted that this was sufficient for the purposes of the "General conditions of contract for design and construct" (being standard contract AS 4300-1995). It was noted that cl 11 of the contract (which referred to work being performed or items supplied "at the direction of the Superintendent") did not specify that any such direction must be in writing and that cl 23 expressly provided that "[e]xcept where the Contract otherwise provides, a direction may be given orally but the Superintendent shall as soon as practicable confirm it in writing".
It was submitted by the Deicorp Entities that the evidence of Mr Kyrikos as to the steps taken by him following receipt of PC 24 supported the conclusion that there was a proper, bona fide and honest assessment of PC 24, together with the issuing in good faith of the progress certificate. The Deicorp Entities also relied on expert evidence (of Mr Portelli) which they said demonstrated that the payment made in respect of PC 24 was justified and reasonable. To the contrary, Sayour Holdings had submitted that Deicorp Constructions had provided unnecessary and unjustified "gold plated" services to Combined Projects Arncliffe (and had demanded full payment for those services even though it had no contractual entitlement to payment). Complaint was made that Mr Deiri had authorised those payments without satisfying himself that the payments were authorised or required to be made under the contract between the two Deiri entities, and without there being any evidence to justify the reasonableness or necessity of the services; and it was pointed out that he knew when he did this that he was facing a shareholder claim, contesting his right to control the company.
The Sayour Parties noted that, under the construction contract between Combined Projects Arncliffe and Deicorp Constructions, the formal instrument of agreement to the contract dated 27 April 2015 provided that the contract sum was $71.6 million plus GST; and it was noted that Item 11 of Part A of the contract provided that the project requirements were set out in the tender submission dated 20 April 2015 affixed to the contract.
The Sayour Parties submitted that a payment made by Combined Projects Arncliffe, as principal, to Deicorp Constructions, as contractor, following the issue of the payment certificate that it said was not supported by evidence and information (and that was not the product of the Contract Superintendent's reasonable measure or value of the relevant work), was not a payment authorised by, or due under, the Arncliffe Construction Contract (and therefore, not a payment of an amount due under the contract).
As against Mr Deiri, it was submitted that his evidence did not suggest that he gave any reasonable consideration to the basis for the payment made under PC 24, in circumstances where his company was benefiting therefrom; and therefore, that he failed to comply with the profit rule, the conflict rule and his statutory duties.
For the reasons set out in the principal judgment (and generally for the same reasons as the Deicorp Properties payments of agency commissions), I accepted that there was an entitlement on the part of Deicorp Constructions to retain those amounts (but regrettably, I failed to address the claim for relief against Mr Deiri himself).
Relevantly, I considered that there was a distinction to be drawn between what might be classified as a substantive complaint (that a sum paid pursuant to a progress certificate, was not an amount for which Combined Projects Arncliffe could ever have been liable to pay Deicorp Constructions) and a procedural complaint (that some procedures followed in relation to a progress claim were not in accordance with the terms of the Arncliffe Construction Contract). I accepted the expert evidence to the effect that the complaints that Sayour Holdings had made were essentially procedural (noting that, to a large extent, Mr Sanig was asked only to review the methodologies used to process variations, provisional sums and PC 24) and I did not accept that it would be unjust or inequitable for Deicorp Constructions to retain the impugned sum (noting, inter alia, the expert evidence of Mr Portelli as to the justification for, and reasonableness of, the sums claimed in PC 24).
The difficulty, as I see it, in the claim against Mr Deiri based on payment of particular amounts said not to have been justified under the construction contract (or the complaint as to the works being "gold plated") is that Mr Kyrikos was involved in the directions for the undertaking of the works and those works were assessed as being at reasonable cost by Mr Portelli. Whether or not Mr Kyrikos performed a satisfactory task in assessing the costs is not the issue. The complaint by the Sayour Parties effectively requires that I second guess the reasonableness of construction works and I am not in a position here to gainsay the expert evidence in this regard. Nor do I consider that a director in Mr Deiri's position can be said to be in breach of obligations of the business prudence kind when the payments were certified as being due by the contract superintendent (Mr Kyrikos) and independently assessed by the bank's quantity surveyor, Napier & Blakeley. I accept that a process was undertaken (whether wholly in accordance with the contract or not) to determine the amount due to the builder; and that to my mind establishes a reasonable basis to cause the payments to be made.
As to whether there was a breach of the no profit and no conflict rules, the arrangement at the outset (according to Mr Deiri as proposed by Jamil) was that the project would be carried out on the same basis as the Broadway Development; and that must have contemplated the use of a Deiri company as builder. Insofar as Moustafa left the Arncliffe Development to Jamil at the outset (and leaving aside the vexed issues of Jamil's authority), Jamil's knowledge that a Deiri company was to be involved in the construction works for the development should in my opinion be attributed to Sayour Holdings such that it is not now open to Moustafa (or Sayour Holdings) now to complain (nor does Moustafa in fact complain) that there was entry into the construction agreement per se. A profit element must have been understood as being likely to be involved in any such construction contract. I note that the Sayour Parties have raised the fact that the contract was entered into after Jamil's death. However, in the absence of complaint by Moustafa as to the construction contract itself (and the lack of anything to alert Mr Deiri to a change in the position whereby he had been led by Jamil to understand that the Arncliffe project was to be developed the same way as the Broadway project), I have difficulty with the proposition that anything flows from this. The real complaint (as already noted) was not with entry into the contract itself but with the charging of the "extra over" amounts.
In the circumstances, I am not persuaded that there has been a breach of the no profit and no conflict rules but, even if I had been so persuaded I would nevertheless have necessarily limited any relief to equitable compensation for any loss causally connected to those breaches (and I am not persuaded that the evidence establishes such a loss).
In In the matters of Earth Civil Australia Pty Ltd, RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (all in liq) [2021] NSWSC 966 (Earth Civil) at [2235], I had cause to consider the principle of causation in relation to a claim for equitable compensation; and noted at [2235] that: 2235. The purpose of equitable compensation is to make good losses which, on a common sense view of causation, were caused by the breach of an equitable obligation (Canson Enterprises; Target Holdings at 432). It is clear that "[c]ausation in equity is not, however, susceptible to the formulation of a single test. It is necessary to identify the purposes of the particular rule to determine the appropriate approach to issues of causation" (see O'Halloran at 274-275). Ultimately, there must be an adequate or sufficient connection between the equitable compensation claimed and the breach of fiduciary duty, which requires consideration of both the nature of the obligations and the nature of the breach (see Maguire v Makaronis at 473; O' Halloran at 277; Ancient Order of Foresters at [9]). The appropriate test to be applied in circumstances of the breaches of fiduciary duty in issue here is the "but for" test (Agricultural Land Management at [395]-[396]).
In Agricultural Land Management Ltd v Jackson (No 2) (2014) 48 WAR 1; [2014] WASC 102 (Agricultural Land Management), to which I referred in Earth Civil, Edelman J, then sitting in the Supreme Court of Western Australia, addressed an equitable claim for compensation for financial loss suffered as a result of alleged breach of fiduciary duty, which his Honour categorised as involving two different claims for reparative compensation (see at [386]). The first of those claims for reparative compensation failed for three separate reasons ([388]), the first two, relevantly being that (i) no loss was proved and (ii) any loss was not proved to have been caused by the breaches. His Honour there adopted the "but for" test, as I noted in Earth Civil, for the reasons explained from [391].
At [395], Edelman J said: [395] The same negative "but for" criterion does not apply to all cases where compensation is sought in equity for breach of a fiduciary duty. As I have explained, equitable claims for substitutive compensation are not concerned with financial loss. It would be nonsense to apply a criterion concerned with whether financial loss would have been suffered but for the breach. Further, in claims for breach of fiduciary duty which are said to be based on a breach of a "duty" of disclosure a different, and contentious, approach to causation is sometimes applied. But where the claim is not one for substitutive compensation and where there is no plea of failure to disclose some material fact the "but for" criterion becomes more relevant. Where a claim is brought to recover loss caused by the act of the defendant fiduciary putting himself in a position of conflict then it is very difficult to see why the negative "but for" criterion should not apply. Why should the defendant fiduciary be required to pay compensation for losses which would have been suffered even if the conflict had not occurred? [Footnotes omitted]
At [396], his Honour referred to the approach taken by Ipp J, as his Honour then was, in Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187 at 247, in the context of a claim for equitable compensation for loss caused by a lack of skill and care (namely, that "a court of equity … should not require an honest but careless trustee to compensate a beneficiary for losses without proof that but for the breach of duty those losses would not have occurred") and went on to consider High Court authority as to claims for equitable compensation for loss suffered from breach of fiduciary duty requiring a sufficient connection (or "causation") between breach of duty and the loss sustained (Maguire v Makaronis (1997) 188 CLR 449; [1997] HCA 23 at 468 per Brennan CJ, Gaudron, McHugh and Gummow JJ) before turning to the passage in McLachlin J's minority judgment in Canson Enterprises Ltd v Boughton & Co (1991) 85 DLR (4th) 129, to the effect that it is essential that the losses (from breach of fiduciary duty) made good are only those which, on a common sense view of causation, were caused by the breach.
Relevantly, his Honour observed (at [397]) that had it been established that no reasonable director would have caused the company to enter into the relevant contract then the negative "but for" criterion would have been satisfied; but his Honour was not persuaded in the case at hand that it had been established that a reasonable director would not have committed a company to the transaction; nor that, at the time of the transaction, it was not in the best interests of the company to enter it.
In the present case, entry into the construction contract per se is not the subject of complaint, as noted above. The complaint lies in the implementation of the contract (in particular that additional amounts - the PC 24 claims - were incurred). Even if there were to have been a breach of the profit and no conflict rules in the implementation of the construction contract, I am not persuaded that, on a common sense view of the connection between the alleged breach of fiduciary duties and the loss, the test as explained in Agricultural Land Management has been satisfied. It has not been shown that the works were unnecessary for the completion of the project; nor has it been shown that those works could have been performed at a lower cost but for the breach of duty alleged.
For those reasons, I do not propose to grant the relief claimed in prayers 24 and 28.

[65]

Plaza's proposed declarations and orders re unauthorised facility agreements

The orders proposed by Plaza commence with various declarations and orders (1 to 8 of its proposed orders as set out below) that it submitted would give effect to the findings in relation to the various instruments purporting to be between the Partnership and CBA that did not bear genuine signatures of Moustafa and were thus unauthorised. Those proposed orders were as follows: 1. DECLARE that the purported Amended and Re-Stated Cash Advance Facility Agreement dated 20 June, 2013 between Broadway Plaza Pty Ltd, the first cross- claimant, Broadway Plaza Investments Pty Ltd, the first cross-defendant, and the Commonwealth Bank of Australia, the second cross-defendant is and always was void and of no effect. 2. ORDER that the said purported Amended and Re-stated Cash Advance Facility Agreement be delivered up to the Court for cancellation. 3. DECLARE that the purported "Deed of Variation and Re-statement No 1" and dated 20 June, 2013 between Broadway Plaza Pty Ltd, the first cross-claimant, Broadway Plaza Investments Pty Ltd, the first cross-defendant, and the Commonwealth Bank of Australia, the second cross-defendant is and always was void and of no effect. 4. ORDER that the said purported "Deed of Variation and Re-statement No 1" and dated 20 June, 2013 be delivered up to the Court for cancellation. 5. DECLARE that the purported Amended and Re-Stated Cash Advance Facility Agreement Originally dated 20 June, 2013 and amended and restated on 3 September, 2013 between Broadway Plaza Pty Ltd, the first cross-claimant, Broadway Plaza Investments Pty Ltd, the first cross-defendant, and the Commonwealth Bank of Australia, the second cross-defendant is and always was void and of no effect. 6. ORDER that the said purported Amended and Re-stated Cash Advance Facility Agreement Originally dated 20 June, 2013 and amended and restated on 3 September, 2013 be delivered up to the Court for cancellation. 7. DECLARE that the purported "Deed of Variation and Re-statement No 1" and dated 3 September 2013 between Broadway Plaza Pty Ltd, the first cross-claimant, Broadway Plaza Investments Pty Ltd, the first cross-defendant, and the Commonwealth Bank of Australia, the second cross-defendant is and always was void and of no effect. 8. ORDER that the said purported "Deed of Variation and Re-statement No 1" and dated 3 September 2013 be delivered up to the Court for cancellation.
The Sayour Parties point in this regard to the finding at [362] and [1085] of the principal judgment that the purported signatures of Moustafa appearing on the Amended and Restated Cash Advance Facility Agreement and the Second Facility Agreement were not genuine signatures of Moustafa; noting that (at [1731]) the submission made by the Deiri Parties that Jamil was authorised to sign these documents on behalf of Plaza was rejected.
It is further noted that I declined to make factual finding #12 as contended for by the Deiri Parties (that Plaza accepted the Stage 2 Construction Contract and Stage 2 Construction Loan) (at 1754]) and found that the Stage 2 Construction Loan documents were not signed by Moustafa (at [362], 1085]).
Plaza says that the proposed declarations and orders for cancellation of those purported instruments should follow; that it is the ordinary right of a party to such an instrument; and that this is important not only as between the partners and CBA but also as between Plaza and Investments in respect of the accounting (as well as any appeals, noting that this has been foreshadowed).
The Deiri Parties oppose the making of the proposed declarations and orders requiring the 2013 Loan Documents to be delivered up for cancellation, on the basis that there is no practical utility in such orders. It is noted that the transactions which those documents purported to govern are completed and the affairs between the parties have been determined; and it is said that this is not a case where there is an uncertainty about the parties' legal rights and obligations which would necessitate such declaratory relief.
Similarly, CBA also argues against such declarations and orders, which it submits are inappropriate for the following reasons.
First, CBA says that the finding that Plaza did not authorise the signing of the Stage 2 Construction Loan documents (at [19], [3631]) does not have the result that the loan contracts were void and of no effect. It is said that, while Plaza may not have been bound by the contracts, the same does not necessarily apply to Investments. CBA points out that the Stage 2 Loan arrangements were fully performed (noting, for example, that approximately $11 million was immediately repaid to CBA to reduce the Stage 1 Loan; and that Moustafa acknowledged the Partnership's obligation to repay the whole of the Stage 2 Loan even though the Stage 2 Loan documents had not been signed by him - see T 644.5-14).
Second, it is said that declaratory relief will not be granted in respect of "past acts long since completed" (citing Church of Scientology Inc v Woodward (1982) 154 CLR 25 at 62 per Mason J, as his Honour then was). CBA points out that the obligations of the parties to the Stage 2 Loan have been fully performed, including all advances, payments and repayments. (Pausing here, I note that Mason J there said that it was inconceivable that the Court would exercise its discretion to grant declaratory relief in respect of past acts long since completed under a statute which had since been repealed; stating that the manifest inutility of making such a declaration makes the claim for relief academic.)
Third, CBA notes that declarations will not be made which lack utility and will produce no foreseeable consequence for the parties (citing Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10 at 582 per Mason CJ, Dawson, Toohey and Gaudron JJ). Here, CBA says that no declaration as to invalidity is required to determine the further judgments sounding in money which are sought by Plaza.
Finally, CBA says that, although delivery up of documents may be appropriate in order to prevent the documents from being used or enforced (for example, as security, citing Langman v Handover (1929) 43 CLR 334; [1929] HCA 42 at 352 per Rich and Dixon JJ), the remedy serves no purpose in the present circumstances. Their Honours there said: The jurisdiction of Courts of equity to direct delivery up and cancellation of instruments which, although good on their face, are, in fact, void, is thoroughly established by decisions. "And these decisions are founded on the true principles of equity jurisprudence, which is not merely remedial, but is also preventive of injustice. If an instrument ought not to be used or enforced, it is against conscience for the party holding it to retain it; since he can only retain it for some sinister purpose" (Stot'y, Equity Jurisprudence, sec. 7(0). But the equity to have the document recalled does not necessarily arise from the mere fact that the document is void and is outstanding considered without regard to the reason for its invalidity, and irrespective of the position occupied by the parties.
The Sayour Parties' response to this is to maintain that the declarations are useful for accounting between the partners and giving effect to the position of the parties as a result of the judgment.
I do not see the utility in the declarations and orders here sought. The findings contained in the principal judgment seem to me to be sufficient for any relevant purposes.

[66]

Money claims

The next category of Plaza's proposed orders deals with the money claims. What is sought by the Sayour Parties in this regard commences with: 9. JUDGMENT for the Cross-claimant (Broadway Plaza Pty Ltd) and the First Cross-defendant (Broadway Plaza Investments Pty Ltd) against the Second Cross-defendant (Commonwealth Bank of Australia), for $5,009,184.36.
That amount is calculated as the sum of: (a) $1,750,000.00 being the sum drawn on 21 November 2014 under cheque #514 (see [2504]; [2565] of the principal judgment) plus s 100 interest (calculated from 22 November 2014 to 16 April 2021 at $610,967.62) totalling $2,360,967.62 (plus interest at $196.40 per day from 16 April 2021); and (b) $8,050.80 [as per CBA's memorandum], being the total of sums drawn on the CBA Partnership Account and applied to expenses arising for the Matthews Street Property and drawn before 30 July 2014 [see [2564]) plus s 100 interest (calculated from 1 August 2014 to 16 April 2021 at $2,971.26) totalling $11,022.06 (plus interest at $0.90 per day from 16 April 2021; and (c) $107,590.00 being establishment fee charged by the CBA on 1 October, 2013 for the Stage 2 Construction Loan (see [2141]) plus s 100 interest (calculated as $45,588.57 from 2 October 2013 to 16 April 2021); plus interest at $12.05 per day from 16 April, 2021; and (d) $784,997.75 being line fees charged for the Stage 2 Construction Loan (see [2141]) plus s 100 interest at $275,092.23 calculated from 14 November 2014 to 16 April 2021 plus interest at $ 87.94 per day from 16 April 2021 (noting that the line fees and interest were capitalised and then paid in one amount on 13 Nov 2014 - see CBA Running Balance); and (e) $1,054,418.78 being interest charged for the Stage 2 Construction Loan (see [2141]) plus $369,507.35 being s 100 interest calculated from 13 November 2014 until 16 April 2021; plus $118.12 per day from 16 April 2021.
Proposed order 10 contemplates the making of directions to be given as to how the judgment sum was to be paid. Plaza, in its proposed orders, contended that in the accounting it is to receive, on any view, at least 50%, and so, to avoid circuity, this should be paid directly to Plaza, with the balance paid to the Receiver in the first instance.
By contrast, the Deiri Parties in their proposed orders seek: 3. Judgment for Plaza against Commonwealth Bank of Australia (CBA) in the amount of $8,050.80, on terms that Plaza pay 50% of the amount paid by CBA in respect of this order to Investments. 4. The First Cross-Claim be otherwise dismissed.
CBA seeks a similar order to that sought by the Deiri Parties.
In submissions as to the proposed orders the Sayour Parties pointed to the determination of CBA's Liggett defence, namely that: the defence was made good in relation to payments that are accepted as having discharged incontrovertible expenses and liabilities of the Partnership, including payments which comprise the return of capital (at [2577]; see [2563], [2565]) and in relation to claims predicated on ratification, including the increase in construction costs ([2566]) but not made good in relation to payments relating to the acquisition and maintenance of the Matthews Street Property ([2564]).
As to the defence of acquiescence, it was noted that this was held to operate in favour of CBA with respect to all accommodation notices (at [2505]) and with respect to cheques drawn on the partnership account from 25 November 2014 (being the date on which Moustafa was given and banked a cheque for $3,350,000 bearing only Mr Deiri's signature) ([2504]). Reference was made again to the statement at [2141] that "…insofar as those charges were not commensurate with the contractual entitlements of CBA under the respective facility agreements, then they were not authorised and they are recoverable as moneys had and received".
Plaza contended that this resulted in a total of $5,009,184.36 of transactions being unauthorised (including s 100 interest up to 16 April 2021), being the sum of: (i) $1,750,000 in partnership distributions of profit paid for the benefit of the Deiri Parties on about 14 November 2014 (this being a profit cheque paid before the date on which the CBA's defence of acquiescence is made good); (ii) fees, charges and interest associated with the Stage 2 Construction Loan facility under the unauthorised and void agreements (namely, the $107,590.00 establishment fee; $784,997.75 line fees; and $1,054,418.35 interest charges); (iii) $8,050.05 for payments relating to the acquisition and maintenance of the Matthews Street Property (noting that this last sum is not controversial as between CBA, Investments and Plaza). It was submitted that there would be a consequential order (see proposed order 21 of Plaza's proposed orders) falsifying the principal amount of these items in the list of Partnership transactions. (I have ruled above as to the claim by the Sayour Parties for recovery of the amounts paid for the establishment fee, line fees and interest charges on the Second Facility; and to the $1.75 million payment.)
The Sayour Parties note that there was no dispute as to their interest calculations.
Insofar as CBA has posed an alternative proposition that the amount recoverable should be computed on a principal sum with a deduction for some $11,297,000 less than the amount upon which the line fees and interest were in fact computed and debited to the partnership bank account by CBA (which I have also considered above), I note that the Sayour Parties submitted that this was a new argument, which ought not now be entertained and, in any event, that it was contrary to the finding that there was no authority to debit to the account the amounts that were debited to it.
In terms of directions as to how the sums should be paid, the Sayour Parties contend (as foreshadowed in the proposed orders) that, in the accounting between Plaza and Investments, Plaza is entitled to at least half the judgment sum obtained from CBA; and it is submitted that, to avoid circuity, 50% of the sum payable by the CBA on judgment should be paid to Plaza directly and the remaining sum should be paid to the Receiver (or into Court) before the accounting is finally determined (as to which, [37] of Plaza's note of proposed orders set out a proposed mechanism). Plaza submits in this regard that, after the passage of six years since the sale of the residential units in the partnership development, it is not reasonable for the Deiri Parties to insist that Plaza's share be kept wholly under the control of the Court.
As to the substantive orders on the first cross-claim, as evident from their proposed orders, the Deiri Parties submit that there should be judgment against CBA only in the amount of $8,050.80, on terms that Plaza pay 50% of the amount paid by CBA in respect of that order to Investments (because, as a partner, Investments would be entitled to half of the Partnership's assets). It is said that this amount reflects the total amount debited from the CBA Partnership Account by cheques drawn upon the account prior to 24 November 2014 which were not signed by Moustafa and which were used for the purposes of the Matthews Street Property.
The Deiri Parties say that the basis for this order is that it was held that: subject to any applicable defences, the cheques drawn on the CBA Partnership Account which were not signed by Moustafa were caused to be paid by CBA in breach of mandate ([1672]) because Jamil did not have authority to sign such cheques ([2454]-[2455]); CBA was not liable for cheques which were not signed by Moustafa from the time Moustafa deposited such a cheque, because Moustafa then acquiesced in such cheques being paid ([2504]) and Moustafa first deposited such a cheque on 24 November 2014 ([1778]); and CBA's Liggett defence did not succeed in respect of the Matthews Street Property expenses (on the basis that those expenses were not expenses of the Partnership) ([2564] and [2576]).
The Deiri Parties say that the first cross-claim should otherwise be dismissed. As for Plaza's proposed orders for judgment against CBA in the amount of $1.75 million in respect of cheque #514 drawn on 21 November 2014, and for bank fees and interest, the Deiri Parties say that CBA is not liable for those for the reasons I have considered above. The Deiri Parties point out that they had an interest in defending the first cross-claim insofar as Plaza was seeking to unwind a very substantial transaction to which Investments was a party and CBA was seeking to pass on any liability to Investments under the seventh cross-claim.
CBA, as noted already, also contends that the judgment against it on the first cross-claim should only be in the sum of $8,050.80 plus interest.
In light of the findings in the principal judgment and the determination of the motions above, the outcome is that CBA is obliged to account for the sum of $8,050.80. It is accepted by the Sayour Parties that this is money that represents a recovery for the benefit of the Partnership; and hence, it seems sensible that the order sought by the Deiri Parties should be made (which will have effect that each of Plaza and Investments obtains 50% of that judgment amount). The alternative would be for payment of the whole amount to the Receiver and distribution out to the Partners of their proportionate share (after expenses and the like). It seems to me that given the small amount involved that circuity should be avoided.

[70]

Fifth Cross-Claim

As to the fifth cross-claim, it is accepted by the relevant parties that the prayers for relief 1-28, 40-48 and 57-74 on the fifth cross-claim would be dismissed. The Deiri Parties, however, say that the entirety of the fifth cross-claim should be dismissed (rather than, as the Sayour Parties propose, addressing particular claims for relief in the fifth cross-claim).
The orders proposed by Plaza in respect of the fifth cross-claim are as follows: 16. ORDER that the claims made under prayers for relief 1 to 28, 40 to 48 and 57 to 74 be dismissed. 17. DECLARE that the claims for payment made by Deicorp Constructions (NSW) Pty Ltd (as it was then known) in respect of the Stage 2 (residential units) project at 1 The Broadway, Punchbowl, being the Claims listed in Part 2 of Schedule A to the Fifth Cross Claim: (a) were not made pursuant to any building contract; or (b) were not authorised and paid by the Cross-Claimant; and (c) were not liabilities of the Cross-Claimant and the First Cross-Defendant. [the Sayour Parties here referring to prayers 49 a, c, d of the fifth cross-claim] 18. DECLARE that the building contract between the Cross-Claimant and the First Cross-Defendant on the one hand and Deicorp Constructions (NSW) Pty Ltd (as it was then known) purportedly executed on 15 May 2013 is not and never was executed by the Cross-Claimant and is void. [the Sayour Parties referring to prayer 50 a of the fifth cross-claim] 19. ORDER that that instrument be delivered up to the Court and cancelled. [the Sayour Parties referring to prayer 51 of the fifth cross-claim] 20. DECLARE and DIRECT that on taking of accounts of the partnership between the Cross-Claimant and the First Cross-Defendant, all items claimed by the First Cross-Defendant in respect of the Payments listed in Part 2 of Schedule A to the Fifth Cross Claim be surcharged to the First Cross Defendant as withdrawals by it from the funds of the partnership. [the Sayour Parties referring to prayer 53(b) of the fifth cross-claim in relation to construction drawings under unauthorised contract; and, pursuant to the finding at [145], Plaza offers to allow a just allowance against these surcharges for $23.5 million] 21. DECLARE and DIRECT that on taking of accounts of the partnership between the Cross-Claimant and the First Cross-Defendant, the sum of $3,705,057.33 be subtracted from the sum of amounts paid that are listed in the First Cross-Defendant's Lists of transactions of the partnership. [it is said that this deducts from the list of payments the items (principal only) recovered from CBA] 22. DECLARE that the Matthews Street Unit Trust purportedly constituted under a purported deed dated 3 November, 2011 is void and of no effect. 23. ORDER that the purported Matthews Street Unit Trust deed be delivered up to the Court for cancellation. 24. DECLARE that the land comprised in Lot B, Deposited Plan 319465 known 14 Matthews Street, Punchbowl, in the State of New South Wales, is held by Matthews Street Pty Ltd upon trust for the Plaintiff and the Defendant as tenants in common in equal shares. 25. GRANT to each of the Plaintiff and the Defendant liberty to apply on 7 days' notice for the appointment of trustees for sale of that land, in the event that they are not able to agree within 28 days of these Orders on a consensual orderly separation or disposal of their interests in that land.
By contrast, the Deiri Parties contend simply for an order that the fifth cross-claim be dismissed.

[71]

Sayour Parties' submissions as to proposed orders 17-21

In support of their proposed orders 17-21, the Sayour Parties make the following submissions. Broadly, these orders relate to the unauthorised Stage 2 Construction Contract (and surcharges to the accounting between the partners for amounts paid under that contract and otherwise).
The Sayour Parties submit that proposed orders 17 to 19 (see above) would give effect to the conclusion that the Stage 2 Construction Contract was not authorised. It is noted that I declined to make factual finding #12 contended for by the Deiri Parties (see at [1741] and [1754]), and I found that Jamil was not authorised to enter into the Stage 2 Construction Contract (see at [362], [1085]). Further, it is noted that I determined that the basis for the builder's entitlement to the Stage 2 construction payments was not contractual but, rather, was a quantum meruit or quantum valebat claim ([3082]) and that I concluded that the unauthorised contract could not be used to measure the value of the work because it was never an agreement ([3280]). The Sayour Parties note that these findings enabled CBA's Liggett defence to succeed on the Stage 2 construction payments.
The Sayour Parties say that it follows that, as between the partners, the Partnership was exposed (by the making of the payments and inability to recover them from third parties) to large unrecoverable expense by the unauthorised conduct of Investments and Mr Deiri.
The Sayour Parties says that leaves still to be determined Plaza's alternative claims to surcharge its partner, Investments, upon the partnership accounting for the difference between what was paid and what was authorised. The Sayour Parties say that the Deiri Parties' submission on this issue (that Investments would have not proceeded without further clarification or agreement had it known there would be insistence on the contract procedure) has never been an answer to the profit rule.
It is noted that (at [145]) I concluded that there had been agreement reached on a tender to design and construct the residential development for $23.5 million. It is submitted that, beyond this finding, and the findings negating both authority and the availability of the putative contact as a measure for evaluating the builder's quantum meruit, this alternative claim has not been determined in the reasons. The Sayour Parties say that it is reflected in Plaza's proposed order 20.
In this context it was submitted that there was nothing in the reasons to indicate that the omission to deal with this alternative claim was other than an oversight (noting that at [3228] there is a recitation of Plaza's submissions that this was Plaza's alternative case, but the reasons do not bring this issue to findings, except to the extent submitted above).
The Sayour Parties point to the nature of the relationship between partners as a fiduciary relationship; and say that a partner directing or causing payments to a related third party, without authority and contrary to the agreement actually reached with its partner, has no consent (and still less the informed consent needed for a dealing otherwise within the profit and conflict rules). Hence, it is contended that Investments ought to be surcharged with the difference. Plaza says that it would otherwise be a striking anomaly that the defaulting partner (whether directly or by benefiting related entities) can be better off for instigating payments without any authority than would have been the case if the putative contract had been the measure for the quantum meruit.
The Sayour Parties say that proposed order 21 is consequential on the outcome of the first cross-claim.

[72]

Deiri Parties' submissions as to proposed orders 17-22

As to the orders proposed by the Sayour Parties, the Deiri Parties say that the declaration sought in their proposed order 17 (regarding the claims for payment made by Deicorp Constructions (NSW) Pty Ltd in respect of the residential units) or the declaration in order 18 (that the Stage 2 building contract is void) should not be made; nor should proposed order 19 for delivery up and cancellation of that agreement be made. It is said that those orders would serve no practical utility.
Insofar as the Sayour Parties further propose in order 20 that, on the taking of accounts, all items listed by Investments as a Partnership expense in respect of the Stage 2 Construction Contract be surcharged to Investments "as withdrawals by it from the funds of the partnership"; and Plaza then "offers to allow a just allowance against these surcharges for $23.5 million", the Deiri Parties say that the effect that Plaza proposes to achieve is to surcharge Investments with the difference between the price Plaza claims it originally agreed to pay for Stage 2 of the development of $23.5 million, and the price paid under the Stage 2 Construction Contract of $24.85 million (i.e., it is said that Plaza claims that Investments is liable to account as a partner for $1.35 million). The Deiri Parties say that that proposal is misconceived and finds no support in the reasons in the principal judgment.
The Deiri Parties say that Deicorp Constructions was successful on its quantum meruit claim advanced by the sixth cross-claim for the full amount invoiced to the Partnership, such that all of the moneys paid by the Partnership to the builder for Stage 2 of the development were legitimate partnership expenses. The Deiri Parties therefore say that those payments were paid for a genuine partnership liability and that there is no basis to surcharge Investments for any of those amounts.
Insofar as the Sayour Parties assert a breach of fiduciary duty or the profit rule, the Deiri Parties complain that this is a new case which was neither issued or argued and that, in any event, the quantum meruit claim in the sixth cross-claim serves the same effect as a claim for just allowances.

[73]

Conclusion as to above orders

I do not see the utility of the declarations and orders sought in proposed orders 17-19 and, for similar reasons in relation to the earlier declaratory relief that was sought, do not propose to make those declarations and orders.
The issue as to the declarations and directions sought on the taking of the partnership accounts is a different issue. To some extent the conduct of the Broadway Proceedings has been bedevilled by the fact that the proceeding started out life as a claim for the winding up of the Partnership and the taking of partnership accounts and it was then overtaken by the numerous cross-claims that were filed. I made passing reference to this in the principal judgment. The alternative claims that the Sayour Parties complain have still not been determined relate to the claims to surcharge Investments on a partnership accounting for the difference between what was paid out of the Partnership and what was authorised.
The taking of accounts is a procedure by which the financial dealings between parties are reviewed to determine their rights in relation to disputed funds. Such an account often occurs on the dissolution of a partnership. In Cheng v Lam (No 3) [2020] WASC 45 at [84], Whitbread R summarised the three types of account, by reference to Edelman J's judgment in Agricultural Land Management, as follows: 84. In Agricultural Land Management Ltd v Jackson (No 2) [2014] WASC 102 [334] to [349], Edelman J identified, from old authority, those same three types of account as referenced in Glazier Holdings Pty Ltd, namely: (i) common account; (ii) account on the basis of wilful default; and (iii) account of profit. Simplistically explaining his Honour's approach, each provides a form of equitable compensation for different types of breach of duty by the accounting party and each applies to different situations as to misapplication of the fund, loss to beneficiaries, or gains to the accounting party. Firstly, on a common account, it is open to the party challenging the account to falsify an accounting item by showing that the expenditure was not authorised by the terms of the fiduciary relationship; ie that the accounting party made an unauthorised payment to a third party. In that case, the accounting party is obliged to make restitution to the fund regardless of loss to the beneficiary. Secondly, on an account on the basis of wilful default, the accounting party is required to compensate the fund for loss caused to the fund by reason of the accounting party's failure to protect or marshal the fund. So, for instance, a failure to make a claim on an insurance policy would be a potential instance of wilful default. The obligation of the accounting party to pay equitable compensation in this case depends on proof of loss. Thirdly, an account of profit applies where the accounting party has acted in breach of duty to derive a personal benefit. In that case the accounting party is required to compensate the fund by disgorging the profit derived.
As I noted in Hungerford v Richardson [2018] NSWSC 1543 (Hungerford v Richardson) at [16], the method of taking a partnership account, which falls under the first category as a common account, was summarised by Roderick I'Anson Banks in Lindley & Banks on Partnership (20th ed, 2017, Thomson Reuters) (Lindley & Banks) at [23-125] as follows: (1) Ascertain how the firm stands as regards non-partners. (2) Ascertain what each partner is entitled to charge in account with his co-partners; remembering, in the words of Lord Hardwicke, that 'each is entitled to be allowed as against the other, everything he has advanced or brought in as a partnership transaction, and to charge the other in the account with what that other has not brought in, or has taken out more than he ought.' (3) Apportion between the partners all profits to be divided or losses to be made good; and ascertain what, if anything, each partner must pay to the others in order that all cross-claims may be settled. [Footnotes omitted.]
Where detailed accounts have been prepared by competent accountants, they would normally form the basis for any further accounts and enquiries (see Hungerford v Richardson at [18] and the authorities there cited). As to the ability of a party, when presented with accounts to either surcharge or falsify those accounts, r 46.7 of the UCPR provides that: (1) If a party seeks to charge an accounting party with an amount beyond that in respect of which the accounting party by his or her account admits receipt, he or she must give to the accounting party notice of the charge, stating, so far as he or she is able, the amount that he or she seeks to charge, with brief particulars. (2) If a party alleges that any item in the account of an accounting party is erroneous in amount or otherwise, he or she must give to the accounting party notice of the allegation, stating the grounds for alleging the error.
As noted at [46.7.5] of Ritchie's Uniform Civil Procedure NSW, the term "surcharge" is commonly applied to the charge referred to in r 46.7(1) and the term "falsification" applied to the errors referred to in r 46.7(2) (see P Taylor, M Meek and Bellew J, Ritchie's Uniform Civil Procedure NSW (Looseleaf, LexisNexis) (Ritchie's)). Young AJA clearly defined the terms in Eastlake v Eastlake [2015] NSWSC 1772 at [49] as follows: A surcharge is a statement that there is an omission in the accounts for which credit ought to be given. A falsification alleges that a matter has been wrongly inserted, such as an allegation that a sum said to have been paid was either not paid, or improperly paid.
Thus, fact or law may form the basis of alleged surcharges and falsifications (Cavasinni v Cavasinni [2007] NSWSC 619 (Cavasinni) at [24] per Young CJ in Eq; Ritchie's at [46.7.5]). The onus is on the party claiming a surcharge to establish it; however, the onus is on the accounting party to establish the correctness of an alleged falsification (Cavasinni at [24]).
All "just allowances" must be made when taking an account (see r 46.8 of the UCPR). A just allowance "includes everything which the Court might think just and proper" (Lord Provost of Edinburgh v Lord Advocate (1879) 4 App Cas 823 at 839 per Hatherley LJ). The learned authors in Meagher, Gummow & Lehane's Equity: Doctrines and Remedies compiled some of the circumstances where just allowances have been made (see JD Heydon, MJ Leeming, PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) at [5-280]): …the matters to be taken into account in assessing 'everything which the Court might think just and proper' have been expressed in various partly overlapping ways. Their common factor is the generation of the profit, not by the plaintiff's property or some opportunity created by the fiduciary relationship, but by something peculiar to the defendant. One factor is work done by the defendant. Another is time and energy expended by the defendant, skill employed by the defendant, and experience relied on by the defendant. Another is the employment by the defendant of a particular kind of professional or expert skill for which, if it had not been supplied by the defendant, payment to a third party would have been necessary. Another is the use of the defendant's assets, property or resources in contributing to the profit. Another is the use of capital introduced by the defendant or obtained on mortgage backed by the defendant's personal covenant. Another is the taking of risks by the defendant to achieve the profit (other than risks with the plaintiff's property). Another is whether the defendant can be said to have employed 'entrepreneurial efforts' in matters such as the expert spotting of an opportunity. Another is whether the defendant has had overheads. [Footnotes omitted]
The tension between the adversarial claims and the partnership accounting process was evident during the course of the hearing insofar as the claim against CBA was concerned (as Plaza had sought in effect to falsify all of the debits from the CBA Partnership Account and called on Investments and/or CBA to verify that they were genuine partnership expenses or payments that discharged a partnership liability).
Perhaps unsurprisingly, this issue has reared its head again in the context of the costs orders claimed, in that the Sayour Parties here seek to surcharge Investments for drawings under the Stage 2 Construction Contract (which Moustafa did not sign and which was not authorised by him) (less the $23.5 million sum that Moustafa agreed to in relation to the Stage 2 development) and for some $3,705,057.33 of the amounts listed in Investments' list of partnership transactions. As I understand it, the position of the Sayour Parties is that, simply because the recipient of the construction payments was held to be entitled to retain those payments (or was not required to repay them) on the basis that it was not thereby unjustly enriched (the payments being of a kind that would justify a quantum meruit claim), this does not mean that, as between the partners themselves, such payments were authorised. Thereby, on an accounting as between the partners, it is said that Plaza is entitled to have those payments taken into account.
I accept that I did not make any determination on the partnership accounts as such. That was because I considered (and remain of the view) that in essence the partnership accounting had in effect been overtaken by the adversarial claims that had been made in relation to those amounts (so, for example, the need to verify each of the many debits from the CBA Partnership Account had, I thought, been addressed by the tacit or implicit acceptance that certain categories of payment could be treated as partnership expenses) (see at [1110])).
In relation to the construction payments under the unauthorised Stage 2 Construction Contract, in effect the submission made by the Sayour Parties is that there was a breach of fiduciary duty on the part of one partner (Investments) "directing or causing payments to be made to a related third party, without authority and contrary to the agreement actually reached with its partner". The Deiri Parties' response to this, as I understand it, is to say that those payments were legitimate partnership expenses because they were amounts for which a quantum meruit claim was made. It seems to me that this exposes the chasm between the parties' respective positions - the Sayour Parties place weight on the fact that there was no authorisation from Moustafa for expenditure beyond the agreed amount (of $23.5 million) and therefore, as I understand it, the argument is to the effect that it matters not that Deicorp Constructions was ultimately able to retain the payments (or that they went to discharge a liability that the Partnership had or would be found to have had, albeit not a contractual liability, to Deicorp Constructions); rather, they were payments that were not authorised in the first place (and the making of which was a breach of fiduciary duty). Whereas the Deiri Parties in effect say that it is sufficient to show that the payments were for a genuine partnership liability and hence there is no basis to surcharge Investments (thus saying that the quantum meruit claim serves the same effect as a claim for just allowances).
Approaching the question purely on the basis as to whether the payments discharged a genuine partnership liability (albeit one that was not contractual because the contract was unauthorised) the answer would clearly be yes, based on the findings made in the principal judgment. If the question now raised is as to whether it was a breach of fiduciary duty to cause the liability to be incurred in the first place, then this gives rise to the pleading complaint by the Deiri Parties. As I understand the Deiri Parties' pleading complaint, they accepted in oral submissions that a surcharge was claimed as part of the fifth cross-claim, but maintained that the surcharge was not sought due to a breach of the profit rule (T 21). In response to this pleading point, Counsel for the Sayour Parties referred to footnote four of [35] of Plaza's submissions as to the orders sought, (which, somewhat unhelpfully, refers, inter alia, to the fifth cross-claim in its entirety).
Prayer 53 of the 5th cross-claim, under the section headed "The Stage 2 (Residential Apartments) Building Contract", sought: 53. A Declaration and Direction that on taking of accounts of the partnership between the Cross-Claimant and the First Cross-Defendant, all items claimed by the First Cross Defendant in respect of the Payments listed in Part 2 of Schedule A hereto and consequential payments of finance balance rollover debits and credits, and interest and finance charges claimed by the First Cross-Defendant as partnership transactions being the balance of the transactions listed in Schedule F hereto ought be: a. Disallowed, or, b. in the alternative, surcharged to the First Cross-Defendant as withdrawals by it from the funds of the partnership.
Under the heading "The Stage 2 (Residential Apartments) Building Contract" in the pleadings, while the lack of knowledge of Plaza and Moustafa of the Stage 2 Construction Contract and Jamil's lack of authority to sign the Stage 2 Construction Contract was pleaded, no breach of fiduciary duty or breach of the profit and conflict rules as such was claimed in terms ([418]-[437]). There were pleadings, for example at [461]-[462], for Investments to be surcharged for payments as it was in wilful default of its obligations as partner. However, that pleading of wilful default was on the basis that the Partnership was not liable for the amounts paid to Deicorp (listed in Pt 2 of Sch A of the cross-claim) under the Stage 2 Construction Contract (i.e., on the basis that the contract was properly entered into) as the payment claims were not submitted in accordance with the terms of the contract and were not claims that the superintendent was authorised to certify.
Footnote four also referred to the description that the Sayour Parties gave of their alternative position in oral opening submissions that "the direction sought is that if they're not disallowed as transactions of the partnership, that they then be surcharged to the first cross defendant as the person who caused them to be paid without authority" (T 16; 11/11/19). In closing submissions, the Sayour Parties put the position as follows (at [412]): The primary case of Plaza is that the construction payments were not payments by the partnership at all. The alternative case is that they ought be surcharged to Investments and can be recovered from the Deicorp group as benefits which it is not entitled to retain because of the bribes. The alternative relief claims the difference between the amounts paid for construction and the price referred to in 19 September, 2011 email from Jamil to Mr Deiri or, alternatively, relief in respect of other, lesser differences.
In reply submissions (also referred to in footnote four) at [399], it was stated that "if the defendant cannot falsify the unauthorised debits because the partners are bound to the bank by actions that, as between partners, were not authorised then it must be entitled to surcharge Investments for them". In the Sayour Parties' submissions as to these orders, they submit that (at [38]): It is trite to state that the relationship between partners is fiduciary. A partner directing or causing payments to a related third party, without authority and contrary to the agreement actually reached with its partner, had no consent and still less the informed consent needed for a dealing otherwise within the profit and conflicts rules. It is submitted that it is clear that Investments ought be surcharged with the difference.
To the extent to which the Sayour Parties' submissions as to these orders raise the profit and conflict rules as a basis for surcharging Investments with the difference between the costs of the Stage 2 Construction Contract and the cost that Moustafa agreed to pay for stage 2 (see at [145] and [356] of the principal judgment), I consider that this is inconsistent with the pleadings and earlier submissions on this point.
In any event, if breach of fiduciary duty is the conceptual prism through which this issue is to be tested, then the observations I have made as to the basis on which equitable compensation is assessed on a claim for breach of fiduciary duty would suggest that unless loss could be shown to be causally connected to the conduct alleged to be in breach, then relief in the nature of equitable compensation would not lie (although that perhaps begs the question of whether there might nevertheless be a liability to account). In that regard, the complaint about the construction payments was answered by the expert evidence, which I accepted, as to the process by which the payments were assessed and approved; and as to the reasonableness of the payments.
My conclusion on this issue is that, so far as the relief in Plaza's proposed orders 20-21 proceeds on the basis that these amounts were caused to be paid in breach of fiduciary duty on the part of Investments (as Plaza's partner) or Mr Deiri (as the controlling mind of Investments), then I am not satisfied that loss of a kind which should be compensated in equity has been suffered. If the relief sought is purely on an alternative claim for falsification and surcharges on a partnership accounting, then I am satisfied that these payments were made for a genuine partnership liability (albeit that it may have been one incurred in breach of duty) and, in any event, I consider that the manner in which the trial proceeded is such that a traditional partnership accounting process became subsumed in the adversarial cross-claims and that it is not appropriate here to revisit that issue. (I say that not least because I would have referred out to a referee any issues referable to the taking of partnership accounts in the first instance.) And if I be wrong in these conclusions, then that is a matter for appellate review.
As to proposed order 21 in particular, that "the sum of $3,705,057.33 be subtracted from the sum of amounts paid that are listed in the First Cross Defendant's Lists of transactions of the partnership", that order was consequential on the outcome of the first cross-claim. The sum of $3,705,057.33 comprises $1,750,000 (in partnership distributions of profit said to be paid for the benefit of Mr Deiri), $107,590 (establishment fee for Stage 2 Loan), $784,997.75 (line fees for Stage 2 Loan), $1,054,418.35 (interest charges for Stage 2 Loan), $8,050.05 (payments in relation to Matthews Street Property). Given my earlier conclusions as to the first cross-claim, it therefore follows that if I were to have granted the relief sought in order 21, it would have been limited to $8,050.05.

[74]

Sayour Parties' submissions re proposed orders 22-25 re Matthews Street

Plaza's proposed orders in relation to the Matthews Street Property (orders 22 to 25) are opposed by the Deiri Parties. The Sayour Parties note that the Deiri Parties propose instead (see below) a regime on the ninth cross-claim (which the Sayour Parties point out had merely sought a winding up and a direction to the liquidator to sell and distribute the proceeds of sale of the property equally after expenses). The Sayour Parties say that the regime proposed by the Deiri Parties would seem to involve further steps that may possibly raise new controversies. (I would think that new controversies between the parties would be almost a certainty.)
The Sayour Parties point out that, on the unchallenged evidence of Mr Dubedat (see at [1817]), it was held that Moustafa did not sign the Matthews Street Unit Trust deed; and that it was found that Matthews Street Pty Ltd did not hold the title beneficially but that I was not satisfied that the alleged resulting trust was established (concluding instead that Plaza and Investments are equal owners based on failure to discharge an onus of proof to the contrary).
The Sayour Parties point to the proposed regime contemplated in the principal judgment to the effect that the parties ought to work to a consensual determination of that trust (i.e., not the trust the subject of the unauthorised Unit Trust Deed but the trust that I found was established) and a buyout, failing which the company would be put into liquidation ([3199] and [3366]).
The Sayour Parties say that Plaza's proposed orders 22, 23 and 24 will "put to rest" the purported unit trust and state the basis on which the land is held. They contend that this is important, particularly if a liquidator or trustees for sale are to be involved. (I agree.) As to proposed order 25 it is said that this would, in lieu of a liquidation, provide liberty to apply for appointment of trustees for sale, which it is submitted would be a simpler way of resolving deadlock without the additional work and complexity of a liquidation. (Pausing here, the parties have had ample time to see if accommodation can be achieved in relation to the Matthews Street Property, which suggests to me that the appropriate course is now simply for the company owning the property to be wound up, in the course of which the asset will be realised. However, I deal with this, and the Deiri Parties' submissions in relation to Matthews Street in relation to the ninth cross-claim.)

[81]

Ninth Cross-Claim

The Sayour Parties propose (see Plaza's proposed order 30) that the ninth cross-claim be dismissed but they do so only on the basis that their proposal concerning the alternative of trustees for sale in case of deadlock is accepted. It is said that, if that proposal is not adopted, then Matthews Street Pty Ltd should be wound up (but the order stayed for a period to give effect to the reasons at [3367]-[3368] of the principal judgment).
The Deiri Parties proposed instead the following orders: 27. Within 35 days of these orders, the parties to the Ninth Cross-Claim are to confer with a view to agreeing and jointly appointing an appropriately qualified real estate agent for the sale by public auction of the property at 14 Matthews Street, Punchbowl, NSW (Matthews Street Property). 28. The costs and expenses of the sale of the Matthews Street Property are to be split equally between Deiri Nominees Pty Ltd (Deiri Nominees) and Plaza. 29. Any proceeds of sale in respect of the Matthews Street Property are to be distributed in the following sequence: (a) first, any outstanding expenses of Matthews Street Pty Ltd or the Matthews Street Property are to be paid (such as Council rates); (b) secondly, Deiri Nominees is to be paid $8,050.80 in partial reimbursement of its contribution to the expenses of Matthews Street Pty Ltd and the Matthews Street Property; (c) thirdly, any other expenses or contributions that the shareholders or directors of Matthews Street Pty Ltd have made to Matthews Street Pty Ltd or to the Matthews Street Property are to be accounted for, by reimbursement of those relevant parties for any such expenses and contributions they have made; (d) fourthly, any remaining proceeds of sale are to be distributed equally between Deiri Nominees and Plaza. 30. The Ninth Cross-Claim is stood over for further directions on a date convenient to the Court six weeks from the date of these orders. 31. The costs of the Ninth Cross-Claim are reserved. 32. The parties have liberty to apply on 5 days' notice.
The Deiri Parties say that the ninth cross-claim (which sought a winding-up of Matthews Street Pty Ltd, the registered proprietor of the Matthews Street Property) has not yet been determined, although noting that (at [3199] under the heading "Determination re Matthews Street Property") I observed that "in circumstances where there appears to be an intractable dispute between the shareholders, I see force to the argument that the appropriate order is for the winding up of the company".
It is noted that at [4455] of the principal judgment, the result of the ninth cross-claim is summarised as follows: 4455. In relation to the Ninth Broadway Cross-claim, in accordance with these reasons and the below orders, the parties are to bring in short minutes in relation to an orderly separation of their affairs, along with any other extant issues to be determined.
The Deiri Parties say (and I accept) that this does not determine the ninth cross-claim (that was, however, intentional in that I had sought to indicate the outcome if the parties could not agree to a separation of their affairs - namely, winding up - and was intending that there be a final opportunity for the disputing parties to reach a consensus as to how the winding up of the company's affairs would proceed). The Deiri Parties now appear to embrace the course suggested that the parties confer to bring about an orderly separation of their affairs, and hence their proposal as set out above in their proposed orders. (As noted above, I consider that the parties have had ample time by now to sort this issue out - it was not necessary for them to await final orders to do so - and I see no point in further delaying what seems to be the inevitable.)
In relation to the Matthews Street Property, the Deiri Parties submit that orders should be made for the parties to confer with a view to agreeing and jointly appointing an appropriately qualified real estate agent to sell the Matthews Street Property at public auction, with the costs to be shared between the shareholders of Matthews Street Pty Ltd. (Again, I see no reason why that could not have been done well before now.)
The Deiri Parties say that the proceeds of sale should be distributed as provided for in their proposed orders.
It is submitted that the ninth cross-claim should be stood over for directions six weeks from the time the orders are made, with liberty to apply, to allow for the parties to approach the Court if need be and for Deiri Nominees to press the relief sought to appoint a liquidator and wind up Matthews Street Pty Ltd if that is appropriate.

[83]

Receiver and final distribution

Plaza's proposed orders include the following in relation to the receiver of the Partnership. 36. ORDER that the Receiver be discharged. 37. DECLARATIONS re entitlements to final division of partnership funds.
As to the declarations that are contemplated by Plaza, it contends for the following final distribution: (a) Add to Receiver's funds the recovery from CBA. (b) Subtract any unpaid remuneration of the Receiver. (c) Subtract costs ordered by Order 31 [see below - this being the suggested costs order as between Plaza and Investments for the costs of the proceedings up to and including 29 September 2016] and direct payment from the partnership funds to the plaintiff and defendant respectively of their respective assessed costs under that order. (d) Add surcharges directed by Order 20, less credit for $1.75 million and credit for $23.5 million. (e) Direct payment to Plaza of one half of the balance. (f) Direct payment to Plaza of the costs ordered by orders 32 and 33 [see below - those being the costs proposed by Plaza as against the Deiri Parties from 30 September 2016 to 28 November 2019; and thereafter, respectively] from the other half of the balance, with the remainder, if any, to Investments, with judgment for Plaza against Investments for any shortfall.
The Deiri Parties instead, in their 26 March 2021 proposed orders, sought: 34. After the quantum of any costs payable by Plaza and Investments to each other is determined (or otherwise agreed between them), and after the reasonable remuneration of the receiver, Brett Stephen Lord (Receiver), is paid from the fund of the former partnership held by him as receiver, the Receiver is to distribute that fund as follows: (a) first, half of the remaining fund is to be distributed to Investments; (b) next, the costs payable by Plaza to Investments, Deiri Nominees and Fouad Deiri in these proceedings (no 2016/282940) are to be paid from the remaining fund; (c) after the distributions in (a) and (b) above have been made, the remaining fund (if any) is to be distributed to Plaza. 35. [In the alternative to 34 above, the funds held by the Receiver be paid into Court pending further order.] 36. Upon distribution of the fund in accordance with the above orders, the Receiver is discharged.
The Sayour Parties say that the orders proposed by Plaza allow for the retirement of the Receiver and making of declarations concerning the entitlement of Investments and Plaza to the fund. The Sayour Parties say (and I agree) that this ought not be an ongoing process bedevilled with complexity; rather, it should be a simple process of taking into account the decisions on the financial claims in order to produce an outcome on the partnership accounting.
The Sayour Parties say that there are funds in hand with the Receiver (pointing to confirmation from the Receiver that, as at 12 April 2021, there were funds held of $5,249,428.05; with unbilled WIP of $16,000 plus GST and unbilled legal fees estimated at $17,000 plus GST). The Sayour Parties point out that there will be recoveries to be added thereto and potential surcharges to be brought to account against Investments (if the submissions made on behalf of Plaza be accepted - which they were not); and there will need to be the division of proceeds and the impact of costs. The Sayour Parties say that there may need to be a reservation for the Receiver's remuneration. The proposed structure to achieve this is outlined above in Plaza's proposed orders.
The Sayour Parties say that the effect of the Deiri Parties' proposal (see below) is to burden Plaza with all the costs (or, if not, to have the whole fund paid into Court until further order, and complaint is made that Plaza will be indefinitely deprived of any share in the remaining fruits of the venture).
The Deiri Parties submit that the receiver should distribute the fund as set out in their proposed order 28 (above), after the quantum of each of Investments and Plaza's costs has been determined.
In particular, the Deiri Parties say that any costs liability that Plaza has to Investments should be paid out of the fund before any distribution is made to Plaza of its share (if any). It is said that the fund held by the receiver has always served as de facto security for Investments' costs in the Broadway Proceedings, and that that proposition formed a basis for the refusal to permit Plaza to charge that fund as Sayour Holdings' security for the derivative suit in the name of Combined Projects Arncliffe in the Arncliffe Proceedings (see Broadway Plaza Investments v Broadway Plaza Pty Ltd; In the matter of Combined Projects (Arncliffe) Pty Ltd [2019] NSWSC 1082 at [169], [176]). It is said that, after all of the distributions are made, the Receiver should be discharged (and that does not seem to be in dispute).

[85]

Orders in Arncliffe Proceedings

Turning then to the Arncliffe Proceedings, I propose to deal first with the substantive orders before turning at the end of these reasons to the issue of costs.
In summary, as to the differences between the proposed orders put forward by the Sayour and Deiri Parties, the Sayour Parties say that what they have proposed are overlapping orders for disposal of the statutory derivative claim (first cross-claim), and the oppression claim (in the Originating Process), followed by orders disposing of the second and third cross-claims. The Deiri Parties submit, instead, as I understand it, that the Originating Process should be dealt with separately and dismissed, on the basis that it has been superseded with none of the relief there sought being granted - in that regard it is said that the s 247A relief was not "granted" but was dealt with by consent orders. The Sayour Parties cavil with this, asserting that s 247A relief was given (I would interpose to add, by consent) and noting the subsisting Undertakings that were given by the Deiri Parties (which it is noted the Deiri Parties have not suggested should be replaced with any other undertaking or injunction).
The Sayour Parties dispute that Mr Deiri should remain in sole control of the company, with no regime to ensure that Sayour Holdings receives any money, nor any means of supervision or control of the company's affairs.
The Sayour Parties note that during the hearing the Deiri Parties contended that an efficient means of curing the oppression would be for a proportion of the amounts recovered to be paid directly to Sayour Holdings - reflecting what the Deiri Parties then contended to be the proportionate interest of Sayour Holdings in Combined Projects Arncliffe. That contention was rejected. The Sayour Parties say that the Deiri Parties' change of position, in now seeking the Originating Process to be dismissed, would require the parties now to have a further debate as to the claims for oppression relief; and they submit that this is contrary to the principles laid down in ss 56-60 of the Civil Procedure Act and ought not be permitted.
The Sayour Parties' proposed orders provide for judgments inclusive of s 100 interest up to 16 April 2021 and they seek that the judgments be pronounced in a form that is inclusive of interest up to judgment. (Insofar as Konstructions provided a note providing for s 100 interest to run from the date of the orders, the Sayour Parties assume that was a mistake; and I note that Konstructions did not suggest otherwise.)
The Sayour Parties note that the Deiri Parties in broad terms accept that there should be judgment for Combined Projects Arncliffe against Deiri Nominees for the amounts of the purported Development Management Fee, and the amounts paid to Konstructions and Zapphire, plus s 100 interest; and that they also propose orders that Mr Deiri pay equitable compensation to Combined Projects Arncliffe in the same amounts; but that the Deiri Parties cavil with the making of any orders against Deiri Nominees or Mr Deiri in respect of the purported interest payments of nearly $5.3 million or the $1.56 million payment (the subject of the Arncliffe amended notice of motions that I have dealt with above).
Both the Sayour Parties and Deiri Parties provided a comparison of the orders sought by them.

[86]

Fourth Further Amended Originating Process filed 10 December 2018

As adverted to above, the Deiri Parties (in their proposed orders 1 and 2) seek orders dismissing the Originating Process with each party to bear its own costs. The Deiri Parties say that the Sayour Parties' proposed orders conflate the claim made in the Originating Process and the first cross-claim; and they maintain that the two pleadings are distinct and that orders should be made in respect of each of them.
In respect of the Originating Process, it is said that the claim thereunder has been entirely superseded; that none of the relief sought in that Claim is now the subject of the Sayour Parties' proposed orders and that it follows that the Originating Process should now be dismissed. In those circumstances, the Deiri Parties say that there is no event for costs to follow; and that each party should bear their own costs.
The Kreisson Parties (perhaps unsurprisingly) support the Deiri Parties' proposed orders in this regard. They say that the original claims brought by Sayour Holdings in the Arncliffe Proceedings (by the various iterations of the originating process, including the Fourth Further Amended Originating Process) had been entirely abandoned or otherwise fell away long prior to the commencement of the final hearing in November and December 2019. Further, they submit that there were a number of elements in those proceedings, in respect of which the issue of costs had been reserved, but where it was apparent that Sayour Holdings had substantively failed.
In this regard, reference is made by way of example to an interlocutory application brought by Sayour Holdings on 10 May 2018 that it is said almost entirely failed (on which costs were reserved) (see In the matter of Combined Projects (Arncliffe) Pty Ltd [2018] NSWSC 649 per Leeming JA). The Kreisson Parties refer to this as indicating that a number of events throughout the litigation resulted in determinations against Sayour Holdings and that the proposed order (that each party bear their own costs) is one that is reasonable (and one which they submit, on balance, is slightly more favourable to the Sayour Parties).
The Sayour Parties submit that the most efficient means of quelling the controversy as to oppression relief is to adopt the method earlier proposed by the Deiri Parties themselves, of paying Sayour Holdings directly amounts according with its proportionate interest as a shareholder (namely, 50% of the various judgment items). However, Sayour Holdings contends for an exception in relation to the $1.56 million payment, which it says should be 100% recoverable because in respect of that sum it says that Sayour Holdings was a creditor.
The Sayour Parties argue that, if that course is not taken, then to cure the oppression it would be necessary either to remove Mr Deiri from the board and appoint a representative of Sayour Holdings (as to which Jesmine is nominated), or to leave Mr Deiri in place but to appoint both Ms Sayour and the independent director whose consent to appointment was tendered at the hearing.
The Sayour Parties say that there should also be final injunctions to replace the existing Undertakings; and that it would also be necessary to give some formal expression to the rejection in the principal judgment of the various contentions in the third cross-claim to the effect that Sayour Holdings is not a 50% equity shareholder in accordance with the constitution of Combined Projects Arncliffe.
The Sayour Parties submit that the form of orders they have proposed will give appropriate formal expression to the rights of Combined Projects Arncliffe on its claims, and superimpose orders pursuant to ss 233 and 241 of the Corporations Act to put an end to the oppression of Sayour Holdings.
For example, in relation to the Development Management Fee, the Sayour Parties propose (by their orders 4, 5 and 6) that: there ought to be judgment jointly and severally against Deiri Nominees and Mr Deiri in favour of Combined Projects Arncliffe for the amount of the purported Fee plus applicable statutory interest; with a judgment in favour of Sayour Holdings for 50% of that quantum; and an order that payments made directly to Sayour Holdings in satisfaction of that judgment be credited against the judgment debt owed to Combined Projects Arncliffe.
The Sayour Parties propose similar orders in respect of the Konstructions Fee, Zapphire Fee, Deiri Nominees interest payments and the $1.56 million payment, subject to the following distinctions: (a) that Konstructions ought also be liable to Combined Projects Arncliffe for the Konstructions Fee; (b) that Zapphire Investments ought also be liable to Combined Projects Arncliffe for the Zapphire Fee; and (c) that, because the $1.56 million payment should have been recorded in the books of Combined Projects Arncliffe as a debt owed to Sayour Holdings, Sayour Holdings ought to be able to recover 100% of this amount as a creditor of Combined Projects Arncliffe rather than the 50% share to which it would be entitled as a mere shareholder.
It is noted that the Deiri Parties made submissions in the Deiri Parties' closing submissions (at [1290]-[1295]) to the effect that: if it were found that there were any unlawful payments by Combined Projects Arncliffe, then (rather than ordering Deiri Nominees to pay those funds to Combined Projects Arncliffe so that it can pay those funds to shareholders in accordance with their profit entitlements) "the Court should simply order Deiri Nominees to make payment of that share of the judgment proceeds to Sayour Holdings directly" (see [1290]-[1292]); "the Court has power to craft the relief to resolve the dispute finally" and the Court "should simply direct the payment of funds in accordance with where they are ultimately destined to go" (see at [1293]); and that there is no need for any relief in the nature of an oppression remedy appointing Yesmine and/or an independent person to the board of directors of Combined Projects Arncliffe insofar as the distribution of company proceeds is concerned because "the Court would simply order that the proceeds be paid directly to members" (at [1294). It is noted that, at [4313] and [4314] of the principal judgment, there was an acknowledgement of the making of those submissions by the Deiri Parties.
The Sayour Parties say that the concession as to remedial power that was made at [1293] of the Deiri Parties' closing submissions was correctly made. In this regard, the Sayour Parties refer to Magafas v Carantinos [2008] NSWSC 691 at [22]-[23] per Einstein J as to the power to make orders under s 241 in relation to derivative proceedings brought under s 237 of the Corporations Act, including that the power in s 241 is available "as an aid to the proper application and enforcement of the declarations and orders of the Court, particularly when their effect may become frustrated or rendered nugatory by obfuscation".
The Sayour Parties say that it is clear that a comprehensive and effective governance regime for Combined Projects Arncliffe would need to be adopted and approved if Combined Projects Arncliffe were to be responsible for enforcing, collecting and disbursing the judgment debts; and that this would require a need for the grant of s 237 leave to continue for enforcement purposes unless there is a judgment directly in favour of Sayour Holdings, as is proposed.
The Sayour Parties emphasise that it has been found that Mr Deiri contravened his fiduciary duties to Combined Projects Arncliffe, resulting in the depletion of Combined Projects Arncliffe's assets to the detriment of the company itself and Sayour Holdings as a shareholder (see principal judgment at [3861]).
The Sayour Parties say that continued litigation is likely if effective steps are not taken to end the oppression now. It is noted that the Deiri Parties themselves made this point in the Deiri Parties' closing submissions (at [1291]), where they said that judgment in favour of Combined Projects Arncliffe (as opposed to Sayour Holdings) for the amount of the unlawful payments is "only likely to prolong the dispute between the parties".
The Sayour Parties say that it is common ground that Combined Projects Arncliffe is no longer engaged in any commercial or operational activity; and that Combined Projects Arncliffe's purpose is now the collection and distribution of the judgment debts.
As to the Deiri Parties' proposed orders, the Sayour Parties complain that, contrary to the position in their closing submissions, the Deiri Parties do not propose any mechanism to provide for Sayour Holdings to be paid its share of the quantum of the recoverable amounts. Further it is noted that the Deiri Parties do not propose any governance mechanism for Combined Projects Arncliffe, or any means of protecting Sayour Holdings against the prospect of further oppressive conduct by Mr Deiri.
The Deiri Parties, in their submissions (and contrary to the proposal they put in their closing submissions) now say that there is no juridical basis for a regime whereby the Deiri Parties pay sums directly to Sayour Holdings rather than to Combined Projects Arncliffe (see at [67] of their submissions on the present applications). They complain that such a regime was not sought in the proceedings. Pausing there, it may not have been sought by the Sayour Parties but it was certainly the subject of submissions put forward by the Deiri Parties, as follows: 1292. To the extent that there are any funds that the Court considers to have been paid out to Deiri Nominees in breach of duty, rather than ordering Deiri Nominees to pay those funds to CP Arncliffe so that it can in turn pay those funds in accordance with the shareholders' profit entitlements, the Court should simply order Deiri Nominees to make payment of that share of the judgment proceeds to Sayour Holdings directly. That is, the amount of the unlawful payment, multiplied by 2.99%.
The position of the Deiri Parties, on the present application, was that such a regime might prejudice the Deiri Parties to the extent that they have been taxed on income now found not properly to have been earned, for which (on the Sayour Parties' approach) they will be unable to claim a refund as they will be unable to point in the orders to a liability for the full amount of that income.
Pausing here, the stance adopted by the Deiri Parties (of first making submissions in their closing submissions that invited the approach of Sayour Holdings' proportionate share of any sums found payable to Combined Projects Arncliffe being paid directly to Sayour Holdings, in lieu of the oppression relief that Sayour Holdings had sought; and then, in the context of submissions for final orders, suggesting that there is no juridical basis for such a regime and that it should not be adopted) seems to me to be a complete volte-face. Moreover, it led to the ongoing delay in finalising these proceedings as I explain below.

[87]

Tax Issues

On 21 May 2021, the Deiri Parties foreshadowed the need to seek advice concerning the tax implications of any monetary award to Combined Projects Arncliffe (albeit that this had already seemingly been raised in their proposed orders in the context of the suggestion that there be a stay of the orders for 42 days to consider such issues). The Deiri Parties say that that need arose because the Sayour Parties pressed the above submission that, if Deiri Nominees and Mr Deiri were found liable to Combined Projects Arncliffe, there should be an order under s 241 of the Corporations Act that half of the judgment sum be paid directly to Sayour Holdings (as 50%shareholder of Combined Projects Arncliffe).
The Deiri Parties point to advice provided on 15 June 2021 by PwC Australia (PwC), annexing a separate letter of 8 June 2021 from Combined Projects Arncliffe's auditors, Allworths, a copy of which was annexed to the Deiri Parties' submissions. The Deiri Parties say that the following two issues flow from that advice which affect the final orders that should be made.
First, it is noted that the PwC Advice is that Combined Projects Arncliffe will be liable to pay tax of 30% on any judgment award. The Deiri Parties say that it follows that 30% of any judgment amount received by Combined Projects Arncliffe must be reserved for tax payable to the ATO, and the balance split between Sayour Holdings and Deiri Nominees as 50% shareholders.
Second, it is said that if there is to be an order under s 241 for direct payment to shareholders, it would also need to take into account the GST that was paid by Combined Projects Arncliffe on the Development Management Fee of $7,239,425 paid to Deiri Nominees (GST of $723,942), the site identification fee of $7.2 million paid to Konstructions (GST of $720,000), and the site identification fee of $7.18 million paid to Zapphire (GST of $718,000). In any event, it is said that any judgment award against Deiri Nominees and Mr Deiri in favour of Combined Projects Arncliffe (whether accompanied by an order for direct payment to shareholders or not) must be framed to take into account GST, because otherwise Combined Projects Arncliffe will be overcompensated.
It is said that this is because Combined Projects Arncliffe claimed GST credits on the GST paid on the Development Management Fee and site identification fees totalling $2,161,943, which offset GST liabilities that the company had to the ATO for GST collected from the sale of units in the amount of $1,692,995. The Deiri Parties say that the net result was a credit refund from the ATO of $503,966 (referring to Combined Projects Arncliffe's Business Activity Statement for March 2018 (Ex E at 10/14111)) and confirmed by the Allworths' letter annexed to the PwC Advice. It is noted that the receipt of the credit of $503,966 from the ATO on 7 May 2018 is recorded in Combined Projects Arncliffe's bank statements (Ex E at 11/15361).
The Deiri Parties say that if Combined Projects Arncliffe had not paid $2,161,943 in GST to Deiri Nominees, Konstructions and Zapphire, then it would not have been able to claim GST credits of $503,966 and it would have been liable to pay the ATO an additional $1,692,995 for the March 2018 period. As such, it is said that the payments of GST on the development management fee and site identification fees caused no loss to Combined Projects Arncliffe.
The Deiri Parties say that, insofar as the Sayour Parties suggest that there were no services rendered in return for the Development Management Fee and site identification fees and therefore no GST should have been paid, this misses the point that Combined Projects Arncliffe suffered no loss, and there is therefore no basis for compensation in respect of the GST components of those fees. It is said that this is not a defence or a matter for pleading, but rather a simple quantification of the loss.
Annexed to the tax submissions are further Short Minutes of Order proposed by the Deiri Parties, which it is said encompass each of the possible judgment awards that might be made, depending on the determination of the present issues. It is said that those orders are based on the PwC Advice and include interest calculations up to 30 June 2021. By way of explanation, the Deiri Parties note as follows.
First, they say that orders 1 and 2 give effect to the finding that Deiri Nominees and Mr Deiri are liable to Combined Projects Arncliffe in respect of the Development Management Fee - that order 1 provides for judgment in favour of Combined Projects Arncliffe, plus interest; and order 2 directs how that judgment liability is to be paid: first 30% of the judgment liability is deducted to account for company tax payable on the judgment award. Next the balance is split between Deiri Nominees and Sayour Holdings because each are equal 50% shareholders and there is to be a direct payment to those entities. Finally, they say that the amount of $1 million has been deducted from Sayour Holdings' share to be placed in a reserve to cover Sayour Holdings' contribution to any tax liability shortfall for the orders generally (Shortfall Reserve) (and they propose a mechanism to deal with any tax shortfall - see below).
Second, that orders 3-5 give effect to the finding that Konstructions and Mr Deiri are liable to Combined Projects Arncliffe in respect of the site identification fee payments to Konstructions: order 3 provides for judgment against Konstructions plus interest, and order 4 provides that Mr Deiri is jointly and severally liable to pay equitable compensation for that amount. The proposed order 5 provides for how the judgment liability is to be discharged, whereby 30% is first deducted for company tax which order 5(c) requires to be paid to the ATO, and the remainder is split equally between Sayour Holdings and Deiri Nominees.
Third, that orders 6-8 give effect to the finding that Zapphire and Mr Deiri are liable to Combined Projects Arncliffe in respect of the site identification fee payments to Zapphire. It is noted that the orders are structured in the same form as orders 3-5 in respect of Konstructions.
Fourth, as to proposed orders 9-11, it is said that these would only be made if there is a finding that Deiri Nominees and Mr Deiri are liable to Combined Projects Arncliffe in respect of the interest received by Deiri Nominees on the loan it advanced to Combined Projects Arncliffe. In that event the same regime outlined above is proposed.
Fifth, as to proposed orders 12-13, it is said that these only arise if Mr Deiri is liable to Combined Projects Arncliffe in respect of the $1.56 million paid to Jamil on 24 November 2014. The orders provide for the same regime as the orders above, whereby 30% is first deducted for company tax and the balance split between the shareholders. The Deiri Parties say that while the Sayour Parties appear to claim that Sayour Holdings is a creditor of Combined Projects Arncliffe in respect of this sum, no such case or pleading was brought by Sayour Holdings in respect of it. It is submitted that the amount must therefore be paid equally to the shareholders, or alternatively simply be paid back into Combined Projects Arncliffe. It is noted that there is a dispute about whether some of the $1.56 million is traceable to the Sayour Parties (see my conclusion at prayer (1)(b) of the Arncliffe notice of motion that it is inappropriate to review the destination of the $1.56 million).
Sixth, that orders 14-16 provide a mechanism to deal with any surplus or shortfall in respect of the tax liabilities assumed by the other orders. It is said that order 14(a) deals with a scenario where the tax payable is less than anticipated such that Deiri Nominees and Mr Deiri are to pay the difference to Sayour Holdings and Deiri Nominees in equal shares.
It is noted that proposed order 14(b) deals with the scenario where the tax payable by Combined Projects Arncliffe on the judgment awards is greater than anticipated. Where there is a shortfall, the Deiri Parties propose that half is to be paid by Deiri Nominees and Mr Deiri, and the other half is to be paid by Sayour Holdings by taking it from the Shortfall Reserve of $1 million that it proposes to allocate from Sayour Holdings' share of the judgment award in order 1. Proposed order 14(c) provides for distribution of the balance of the Shortfall Reserve to Sayour Holdings once Combined Projects Arncliffe has paid its relevant tax liabilities on the judgment awards. Proposed order 15 provides that no money is to be paid from the Shortfall Reserve without giving Sayour Holdings 7 days' notice; and proposed order 16 grants liberty to apply.
The Deiri Parties say that these orders provide a practical way to make orders under s 241 of the Corporations Act which accommodate the tax issues identified by PwC, while providing for any judgment in Combined Projects Arncliffe's favour to be paid directly to shareholders.
By submissions dated 9 July 2021, the Sayour Parties responded to the Deiri Parties' submissions of 24 June 2021 in relation to the tax treatment of judgment amounts (following leave granted on 24 June 2021).
Issue was taken at the outset with the fact that the submissions extended beyond the issue of GST. The Sayour Parties point out that shortly before 21 May 2021, the Deiri Parties requested that the matter be relisted to deal with a question of company income tax. On 21 May 2021 at 11.55am, Mr Ti, the solicitor for the Sayour Parties, forwarded draft orders now including proposed orders 6A, 10A, 14A, 17A and 21A to address that question. It is noted that the matter was listed on 21 May 2021 for directions but that no directions were made in circumstances where the Sayour Parties had already proposed a form of revised orders to deal with the problem, and the Deiri Parties were proposing to seek tax advice and did not seek a specific order or direction at that time.
The matter was next before the Court on 24 June 2021, when the subject raised by the Deiri Parties was GST. Order 1 made on that day was for the Deiri parties to "file and serve forthwith any written submissions in support of the revised form of orders they propose of no more than 3 pages". The Sayour Parties say that they had anticipated this would be concerned with GST; instead they received submissions that annexed a letter of advice from PwC, a one page auditor's opinion, and two additional 1 page documents. The Sayour Parties submit that documents provided with submissions are provided by way of submission (not having been tendered as evidence) and that their use is accordingly limited.
Insofar as the Deiri Parties have submitted that there ought to be a reserve established for the payment of 30% income tax, and that any orders under s 241 of the Corporations Act, should take this into account, the Sayour Parties point out that they had already accepted, on 21 May 2021, that there should be such a reserve. The Sayour Parties say that the orders proposed by them on 21 May 2021 would fully address the concerns raised by the Deiri Parties regarding assessment and withholding of company tax on compensation amounts.
The Sayour Parties complain that the Deiri Parties have not identified any problem with the Sayour Parties' proposed orders so far as company income tax is concerned; instead, they propose a different mechanism; namely that: (a) 30% would be taken off the top before the s 241 payments, but not put into a reserve or even paid to Combined Projects Arncliffe in the meantime (rather, it would remain under the personal control of Deiri Nominees and Mr Deiri until the assessment of tax - referring to their proposed order 14(a)); (b) in case the tax is higher than the 30% maximum advised by PwC, a reserve is to be established not for the 30% tax (which the Sayour Parties say would remain "uncontrolled" in the hands of the Deiri Parties) but for tax above 30% (as to which it is noted that there is no evidence or advice that it can arise); that that reserve is to be $1 million and is to be contributed not equally, but wholly from the otherwise s 241 payment to Sayour Holdings, and is to be held in a bank account in the name of Combined Projects Arncliffe (proposed order 2) (which the Sayour Parties say would inevitably be under the control of Mr Deiri, with no more restraint than is proposed in order 15; namely 7 days' notice).
The Sayour Parties in this context allude to the evidence at the hearing as to how that kind of regime has worked in the past (a reference, I assume, to the failure of the Deiri Parties to disclose, when the matter was part-heard before Robb J, in the exchanges of correspondence between solicitors any intention to pay substantial sums of money that were ultimately the subject of dispute in the Arncliffe Proceedings in circumstances where the Sayour Parties were clearly raising an apprehension of dissipation of funds - see, for example, the correspondence referred to from [683] of the principal judgment). Suffice it here to say that I regarded that correspondence as misleading at best and I accept that it would give rise to understandable concerns as to any regime that now left the disposition of disputed funds solely under the control of the Deiri Parties.
The Sayour Parties say that this proposed regime would prolong Mr Deiri's personal control of funds; that it would be unnecessary so far as a reserve above 30% is concerned; and that it unfairly discriminatory against Sayour Holdings. The Sayour Parties press for adoption of the regime proposed by them on 22 May 2021.
As to the Deiri Parties' now proposed order 13, the Sayour Parties characterise this as a "brand new attempt by Mr Deiri to take Sayour family money" and say that this is another point that should have been raised in the April 2021 hearing.
It is said that the Deiri Parties' proposed order 13 is contrary to the findings in the principal judgment in that it is proposed that Deiri Nominees take half of the sum of $1.56 million (which the Sayour Parties say is owed to Sayour Holdings by Combined Projects Arncliffe as a debt).
The Sayour Parties emphasise that, from the outset, Combined Projects Arncliffe's records reported Sayour Holdings as contributing $1.75 million. It is noted that this money came from a distribution from the Broadway Partnership to Plaza (see the principal judgment at [488]-[493]) and the Sayour Parties say that this was misdirected (or "recycled") by Jamil into Combined Projects Arncliffe as a loan by Sayour Holdings (see the submission recorded in the principal judgment at [1994] and the refusal by me at [3577] to find that Moustafa was content for money to be "recycled").
The Sayour Parties note that this amount was recorded in the accounts as a shareholder loan; and that Mr Deiri originally recorded in the accounts the payment of $1.56 million to Jamil as a part repayment of Sayour Holdings' earlier shareholder loan. They complain that, after the proceedings commenced, Mr Deiri "retroactively" altered Combined Projects Arncliffe's accounts, to divide the loan accounts between Sayour Holdings and Jamil personally (referring to the cross-examination at T 945; and T 943 dealing with the payment to Jamil). The Sayour Parties point out that the changes to the accounts after the commencement of the proceedings passed without comment from the company's auditor appointed by Mr Deiri (Ms Colleen Hosking of Allworths).
It is noted that (at [3521] of the principal judgment) I recorded the Deiri Parties' submission (in another part of the case), that the repayment of $1.56 million discharged a liability of Combined Projects Arncliffe to Sayour Holdings, being part of the $1.75 million loan; and that, at [4100] I accepted the proposition (advanced in the submission noted at [4904]-[4099]) that the $1.56 million payment to Jamil was not made in satisfaction of any genuine debt or contractual obligation to Jamil. The Sayour Parties say that the issue was whether the debt was owed to Jamil or to Sayour Holdings; and that the finding was that the payment to Jamil did not discharge a debt owed to him.
The Sayour Parties say that their proposal for a direct payment to Sayour Holdings (under ss 233 or 241) was to avoid the need for other oppression remedies (noting that the Deiri Parties now in their minutes of 22 June 2021 have "returned to acceptance" that a s 241 order is appropriate). Complaint is, however, made that the Deiri Parties now (it is said for the first time in this case) say the $1.56 million should be treated as profit divisible between the shareholders. The Sayour Parties complain in effect that the Deiri Parties now "want to take half of this $1.56 million portion of the money that Jamil stole from Plaza and recycled into Arncliffe".
The Sayour Parties insist that the Deiri Parties should not be permitted to reagitate this issue; that their submissions in chief on this topic should not be considered (and that they should not be permitted to reply to this part of the Sayour Parties' submissions). The Sayour Parties further say that the Deiri Parties should pay the costs of the revisitation of this issue on the indemnity basis and that those costs should be assessable forthwith.
Insofar as the Deiri Parties have raised the issue of taxation of profit, the Sayour Parties say that the proposed order 21A in their 21 May 2021 short minutes "mechanically copied" their approach from the other claims which do or may involve the distribution of profit. The Sayour Parties say that the repayment of a debt is not a distribution of profit and that Combined Projects Arncliffe could not be liable to company tax on revenue applied to pay debts that have to be paid before profit can be ascertained. The Sayour Parties say that there should be no reserve for income tax in respect of the orders on the $1.56 million claim (which explains their deletion of order 21A from those proposed orders).
As to GST, as noted above, the Sayour Parties say that the documents annexed to the Deiri Parties' submissions (such as the PwC Advice and the Allworths opinion letter signed by Ms Colleen Hosking) should be treated no higher than submissions. It is noted that the PwC Advice and the Allworths letter have not been tendered; and the Sayour Parties say that their provenance is not supported by any affidavit evidence (and no such opportunity to do so should be given).
It is noted that, insofar as the PwC Advice relates to GST, it proceeds on the basis of an assurance given to PwC by Ms Hosking of Allworths that "[v]alid tax invoices were made on the correct date as per the date on the invoices". The Sayour Parties say that it is therefore of no value as a submission.
The Sayour Parties say that Ms Hosking's statement that the tax invoices were valid is a bare assertion, not founded on any apparent evidence or reasoning. It is said that even if Ms Hosking's letter had been tendered as evidence in the proper manner, the statement of her mere opinion that the tax invoices are valid would be inadmissible to prove the validity of the invoices. It is said that this is a partisan statement of opinion made for the benefit, and at the instruction, of Mr Deiri.
The Sayour Parties maintain that the assertion that there were valid tax invoices contradicts specific findings in the principal judgment, where it was held: in respect of the Development Management Fee, that I could not accept that the impugned payments were made in satisfaction of any genuine obligation or debt (at [3857]); in respect of the payment to Konstructions, that "that there is simply no evidence or insufficient evidence, in the totality of the evidence, to satisfy me that this payment was made for any proper purpose or for any proper basis" (at [3919]); in respect of the payment to Zapphire, that "there was no binding agreement giving rise to a relevant or proper basis for making the payment" (at [3991]); and in respect of the payment of $5.299 million in interest to Deiri Nominees, that I was "not satisfied that there was such an agreement" (at [4092]).
The Sayour Parties say that, on these findings, there was no liability for any service and, therefore, there can be no GST. It is noted that Ms Hosking does not explain her opinion; nor what consideration, if any, she gave to the findings that the payments were made without any proper purpose or basis.
The Sayour Parties say that they, and Combined Projects Arncliffe, are prejudiced by the material now apparently sought to be relied on. It is said that, had Ms Hosking's opinion been tendered at trial, the Sayour Parties would have objected to it (and, if tendered in admissible form, would have cross-examined Ms Hosking and would have challenged her independence from Mr Deiri and her diligence in scrutinising Combined Projects Arncliffe's transactions with related parties). The Sayour Parties say that during 2018 their solicitors wrote to Ms Hosking several times regarding Allworths' conduct of the audits of Combined Projects Arncliffe, expressing the Sayour Parties' concern that related party transactions passed without comment or enquiry from Allworths. It is said that this correspondence with Ms Hosking was not put into evidence by the Sayour Parties because the Deiri Parties chose not to call her.
The Sayour Parties say that the defence that GST credits were claimed on the basis of valid tax invoices ought to have been pleaded in the defence to the first cross-claim years ago; that this opens up a train of enquiry as to where that money went, which would have required further disclosure, investigation and evidence. The Sayour Parties say that the submission by the Deiri Parties that Combined Projects Arncliffe suffered no loss as a result of the GST payments on the impugned transactions depends on an allegation that was not raised at trial. Reference is made to what was said in Daniels v Anderson (1995) 37 NSWLR 438 (Daniels v Anderson) at 585E-F, namely that: If a comparison between taxable receipts for which damages are recoverable and the taxability of the compensatory verdict are so uncertain and depend upon such imponderables as the degree to which the plaintiff can for example carry forward losses from previous years the appropriate course is to ignore taxation considerations.
The Sayour Parties say that the present case is analogous to this; that the assumption of no loss would depend upon a further train of fact finding that has not been litigated because the primary allegation was not put in defence. It is noted that in Daniels v Anderson at 585G-586A observations were made (that the Sayour Parties say now apply here in relation to the GST issue) that: the principle of remoteness means that not all the consequences of the loss complained of are to be taken into account in assessing damages. The need after judgment for inquiry about the consequences of the changed rate of company tax is a telling indicator that they are too remote to be taken into account.
The Sayour Parties emphasise that the orders sought against the payment recipients are restitutionary; that the recipients received money without any entitlement to it; and that they have no "defence" that Combined Projects Arncliffe suffered no "loss". It is said that it is none of their business to assert such a thing; that the company lost money that it had; and that, on the compensatory orders against Mr Deiri and Deiri Nominees, it is incongruous to say that that is not a loss.
Thus, the Sayour Parties submit that no action ought to be taken on account of the most recent submissions by the Deiri Parties, other than an order that Sayour Holdings' costs of dealing with these submissions be paid forthwith.
The Deiri Parties (unsurprisingly given the manner in which this issue has arisen) exercised the leave to file reply submissions (thus having the final word on the submissions as to the tax issues identified by them). In their reply submissions (served late on 19 July 2021), the Deiri Parties commenced with a statement as to the two matters on which it is said there is now common ground. First, that orders under s 241 of the Corporations Act are appropriate in the circumstances of this case; second, that an allowance of 30% of the judgment sum should be made for tax.
The Deiri Parties say that, in those circumstances, they are content for the PwC Advice (and the annexed letter from Allworths) to be treated as submissions (and say that there is no need to tender them on the appropriateness of an order under s 241, which was previously not sought by the Sayour Parties). (Insofar as the Sayour Parties have asserted prejudice by reference to the Allworths letter, the Deiri Parties nevertheless seemingly could not resist entering into the fray insofar as they assert that the Allworths letter is not an "opinion"; rather that it "simply confirms the position" of Combined Projects Arncliffe; and, in any event, they say that the source documents are in evidence and so the Allworths letter does no more than state or summarise the matters before the Court (referring to the Activity Statement for March 2018 and bank statement identified in their earlier submissions - see above).)
As to the issue of GST, the Deiri Parties say that the fundamental purpose of an award of damages is to compensate for loss; and that there is no power to award damages where, as is asserted to be the case here for the GST amounts, there was no loss.
Pausing here, I note that Mason CJ in Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd (1994) 182 CLR 51; [1994] HCA 61 said: Restitutionary relief, as it has developed to this point in our law, does not seek to provide compensation for loss. Instead, it operates to restore to the plaintiff what has been transferred from the plaintiff to the defendant whereby the defendant has been unjustly enriched. … The subtraction from the plaintiff's wealth enables one to say that the defendant's unjust enrichment has been 'at the expense of the plaintiff', notwithstanding that the plaintiff may recoup the outgoing by means of transactions with third parties.
The Deiri Parties say that it is not to the point to say that GST should not have been paid as there was no liability for any service (cf the Sayour Parties' submissions at [31]); rather, that the fact is that it was paid, and then offset by corresponding GST credits. It is said that Combined Projects Arncliffe's loss accordingly does not extend to include the GST it paid. The Deiri Parties say that Combined Projects Arncliffe cannot claim compensation for a tax payment that was subsequently reimbursed by the ATO.
Insofar as the Sayour Parties argue that the orders against the payment recipients are restitutionary (see the Sayour Parties' submissions at [38]), the Deiri Parties say that, while a claim for moneys had and received was pleaded in the first cross-claim, it was only pleaded against Deiri Nominees, and only in respect of the Development Management Fee (first cross-claim at [55]-[57]). It is said that such a claim could not have been made in respect of the site identification fees, because those sums were not received by Deiri Nominees or Mr Deiri. Moreover, the Deiri Parties note that the claim in restitution was not upheld. Rather, they say that the claims that did succeed were those against Mr Deiri for breach of fiduciary duty ([3861]), for which the remedy is equitable compensation. It is stated that the conclusion was expressly predicated on the notion that Combined Projects Arncliffe suffered loss and it is said that the loss suffered by the company is the very measure of that award (and does not here extend to the GST payments).
In any event, the Deiri Parties say that, even if GST should not have been paid, it would not follow that any part of the amounts paid in GST would be payable to the Sayour Parties. Rather, it is said that the amount payable by Combined Projects Arncliffe to the ATO would increase, because the GST of $2,161,943 paid would not be offset against the GST of $1,692,995 collected from the sale of the units. It is said that, whether or not GST should have been paid, there is no scenario in which the Sayour Parties would obtain any part of the GST payments made.
Finally, it is said that the submission that the GST credits should have been pleaded and that there is some prejudice as a result (submissions at [34]) is without merit and should be rejected (referring to the submission above as to the incidence and payment of GST). It is noted that the Sayour Parties had the burden of proving Combined Projects Arncliffe suffered loss (which was denied on the pleadings). The Deiri Parties say that the fact that the GST payments out did not result in a loss is not a "defence" to be pleaded; rather, that it is the simple quantification of the loss to the company having regard to the company's accounts and bank statements in evidence. It is said that, insofar as there is uncertainty as to the GST position, that does not assist the Sayour Parties; rather, it means that Combined Projects Arncliffe has failed to satisfy the Court that the GST payments resulted in loss.
As to the issue of company tax, in circumstances where it is common ground that 30% of each judgment liability should be set aside for tax, the Deiri Parties say that the question now is the most appropriate and efficient way to deal with this liability in light of the proposed orders under s 241.
The Deiri Parties say that the proposed orders put forward by the Sayour Parties to address company tax are a recipe for further problems down the track insofar as their orders provide for 30% of each judgment liability be paid into an account "under the joint control of the solicitors" for the two shareholders and require the shareholders to "consult with one another as to the preparation and submissions of any taxation returns of amended taxation returns". The Deiri Parties say that aspirational orders of this kind, requiring extensive co-operation between the parties over what may be a period of months or years, are plainly unsuitable; that they will inevitably lead to stalemates, and to further applications to the Court; and that they are contrary to the basis on which Combined Projects Arncliffe was established (that Mr Deiri would be the sole director).
It is submitted that the advantage of the Deiri Parties' proposed orders is that they are effected through payment obligations alone; that they do not depend on the parties' ability to comply with "vague and general obligations of co-operation in jointly controlled accounts and consulting on tax returns"; that they are self-effecting; and that, to the extent that less than 30% tax is payable then order 14 makes specific provision for the payment of the residual judgment sum to the parties in equal shares.
The "Tax Shortfall Reserve" proposed by the Deiri Parties' order 2(c) is said to be a practical part of that scheme. It is said that the PwC Advice does not say that 30% is the "maximum" tax payable by the company; rather, that it says that this is an "estimate". The Deiri Parties assert that the tax payable may well exceed 30% and submit that a buffer needs to be set aside in case there is a shortfall.
The Deiri Parties say that, contrary to the Sayour Parties' suggestions of discrimination, proposed order 14(b) expressly makes that shortfall payable equally by the parties. They say that the only difference is where the money should be kept until that obligation crystallises. It is said that, in the case of Mr Deiri, no reason has been advanced to doubt that he will have the assets to pay his share when the time comes; whereas by contrast, Sayour Holdings is a shell company. In this context it is said that there has already been a ruling as to risk of dissipation (referring to the derivative suit judgment at [35], [46], [176], [182]-[184]) and they say that this is why the Deiri Parties' proposed order 2(c) provides for Sayour Holdings' potential contribution to the shortfall to be placed in a safe account in the interim).
In any event, the Deiri Parties say that it is the Sayour Parties' proposed orders that are truly "discriminatory", noting that their proposed orders 6A, 10A, 14A and 17A would have the surplus (if any) after the tax liability is ascertained to be paid to Sayour Holdings alone, rather than to both shareholders. The Deiri Parties say that there is no basis for that suggestion and that any part of the judgment sum retained by the company after tax must go to the shareholders equally (as the Deiri Parties' proposed order 14(a) provides).

[88]

Determination - tax issues

The whole issue of tax implications of any orders made (insofar as this relates to the proposal made initially by the Deiri Parties) that a proportionate share of any amounts found to have been unlawfully made should be paid directly to Sayour Holdings is an issue that leads me to conclude that the appropriate relief is for the moneys to be paid to Combined Projects Arncliffe and for that company (having regard to the oppressive conduct that has occurred) now simply to be wound up. As to the submissions to the effect that orders for payment of those amounts would be inappropriate or incorrect because they do not reflect the company's loss (due to the incidence of GST payments or the like) those are matters that could and should have been raised at the hearing (and probably should have been pleaded). The Sayour Parties established, on the balance of probabilities, loss as a result of the unauthorised payment of those funds. It was not before the Court that there were potential consequences of GST payments that could impact on the quantification of loss. It is too late now to dispute the loss caused by the unauthorised payment out of those funds with an argument that was not raised at the hearing. Moreover, the fact that the documents forming the evidentiary basis of the Deiri Parties' submission on this point formed part of the volumes of evidence tendered as part of this matter indicates that the Deiri Parties had the ability to have properly raised this submission, at the latest, throughout the hearing and in submissions. The fact is that amounts have been paid out of Combined Projects Arncliffe that should not have been paid out (for the reasons set out in the principal judgment). The company has lost the benefit of that money. I am not in a position to determine what arrangements would or might have been put in place to deal with GST or tax issues had that not occurred. It is inappropriate now to deal with those issues in the context of the making of final orders.
Further, insofar as the belated exercise of raising tax and GST issues after the principal judgment has no doubt been at a cost to the parties, I consider that the Deiri Parties should bear any such costs.

[89]

Undertaking

Finally, before turning to the orders in relation to the proceedings, I note that an undertaking was proffered by Deiri Parties and Mr Deiri (forwarded to the Court and the parties on 30 April 2021) in the Arncliffe Proceedings (for the stated purpose of seeking to avoid the need for determination as to whether to make the orders sought by the Sayour Parties for half of any judgment liability determined in favour of Combined Projects Arncliffe against Mr Deiri or Deiri Nominees to be paid directly to Sayour Holdings). That undertaking was in the following terms. UNDERTAKING 1. Following the request of Sayour Holdings Pty Ltd (Sayour Holdings), a shareholder of Combined Projects (Arncliffe) Pty Ltd (CP Arncliffe), that the Court make orders under s 241 of the Corporations Act 2001 (Cth) that any liability in the Arncliffe Proceedings of Fouad Deiri and Deiri Nominees Pty Ltd (Deiri Nominees) to CP Arncliffe be paid to Sayour Holdings directly, in order to avoid the Court needing to determine that issue and without admissions Fouad Deiri and Deiri Nominees hereby undertake to the Court to pay to Sayour Holdings half of any judgment sum (including interest) that the Court orders in favour of CP Arncliffe against Fouad Deiri and Deiri Nominees in the Arncliffe Proceedings. 2. This undertaking is given on the following conditions: (a) any payments by Fouad Deiri and Deiri Nominees to Sayour Holdings are to be credited against and pro tanto discharge any judgment liability (including interest) that Fouad Deiri and Deiri Nominees have or will have to CP Arncliffe in the Arncliffe Proceedings; (b) the receipt by Sayour Holdings of any such payments will be taken into account in any winding up of CP Arncliffe and any payment of final dividends to shareholders; (c) nothing in this undertaking prejudices any rights of Fouad Deiri and Deiri Nominees to claim an indemnity or contribution from the third and fourth cross-defendants to the First Cross-Claim in the Arncliffe Proceedings; (d) nothing in this undertaking prejudices any rights of CP Arncliffe to enforce any judgment against the third and fourth cross-defendants to the First Cross-Claim in the Arncliffe Proceedings; (e) Fouad Deiri and Deiri Nominees will not be required to pay to CP Arncliffe the other half of any judgment liability that the Court finds they have to CP Arncliffe in the Arncliffe Proceedings (given that Deiri Nominees is a 50% shareholder of CP Arncliffe); (f) if any stay is granted of any orders for judgment against Fouad Deiri and Deiri Nominees in the Arncliffe Proceedings, this undertaking will similarly be stayed and suspended in parallel with those orders and for the same duration; and (g) this undertaking is subject to and without prejudice to any appeal. For the avoidance of doubt, if and to the extent that any judgment liability the subject of this undertaking is successfully appealed by Mr Deiri and/or Deiri Nominees, this undertaking will be discharged in respect of that amount and will not require payment to Sayour Holdings of that amount, and any such amount already paid to Sayour Holdings must be repaid to Mr Deiri and Deiri Nominees.
As to the proposed undertaking, the Sayour Parties' position remains that orders should be made as previously proposed by them.
Complaint is made that the proffered undertaking does not accommodate the interest of Sayour Holdings in respect of its shareholder loan of $1.56 million, as it is limited to 50%.
The Sayour Parties say that a concern about the Undertaking's application generally, is that it would be conditional and the conditions are complex. It is submitted that the duty of the Court to bring the oppression suit controversy to an end would not be discharged by accepting conditional undertakings of some complexity (citing s 63 of the Supreme Court Act 1970 (NSW)).
The Sayour Parties further say that a significant concern is whether it is possible that the result intended can be achieved by a mere undertaking. It is said that proposed conditions 2(a) and (b) would seem to deny, rather than achieve, the intended effect of the undertaking. Whether or not unintended, it is said that those conditions would seem to need the very orders that Sayour Holdings has proposed, in order to bind Combined Projects Arncliffe. Another concern raised by the Sayour Parties is the difficulty that occurred in respect of the previous undertakings given by Mr Deiri (to which reference was made in the principal judgment - see as noted above the references in the principal judgment as to what was said when the matter was before Robb J in 2018 see at [683]; [689]-[692]ff).
As to the Undertaking that has been proffered, it seems to me that this has been overtaken by the controversy raised as to tax implications and GST issues, insofar as those were raised in response to the prospect of a payment directly to Sayour Holdings of 50% of any amount receivable by Combined Projects. Since I do not propose to make such an order, there is no need to consider the efficacy of the Undertaking or the concerns expressed by the Sayour Parties as to reliance on such undertaking having regard to the history of the matter.
I turn then to the particular claims in the proceedings.

[91]

Development Management Fee

Turning then to the substantive relief in relation to the Development Management Fee, the Deiri Parties note that both sets of proposed orders (the Deiri proposed orders at 3 and 4 and the Sayour Parties' proposed order 4 - see below) seek to give effect to the liabilities arising in respect of the Development Management Fee.
The Deiri Parties say that the only material difference between them is that the Deiri Parties' orders are more precise in making explicit the particular basis on which Mr Deiri is liable (namely that his liability to pay the debt jointly and severally owed by him and Deiri Nominees is set out in a stand-alone order that specifies the particular basis on which he has been held to be liable to pay that amount). It is noted that the Sayour Parties do not cavil with the Deiri Parties' formulation and it is submitted that it is to be preferred for its greater precision.
The orders sought by the Sayour Parties are as follows: 4. ORDER that there be JUDGMENT for Combined Projects (Arncliffe) Pty Limited against Deiri Nominees Pty Ltd and Fouad Deiri jointly and severally for $9,169,240.37.
The Sayour Parties note that this sum is calculated as follows: (a) $7,239,425.44 plus interest pursuant to s 100 from 4 April 2018 to and including 16 April 2021 ($1,097,636.01), thus totalling $8,337,061.45 (plus interest to be added from 16 April 2021 at $813.20 per day); (b) $723,942.54 plus interest pursuant to s 100 from 18 April 2018 to and including 16 April 2021 ($108,236.38), thus totalling $832,178.92 (plus interest from 16 April 2021 at $81.32 per day); hence $9,169,240.37 up to 16 April 2021.
The orders then continue as follows: 5. ORDER pursuant to ss 233 and 241 of the Corporations Act, 2001, that there be JUDGMENT against Deiri Nominees Pty Ltd and Fouad Deiri jointly and severally in favour of Sayour Holdings Pty Ltd for the sum of $4,585,620.19.
It is noted that Sayour Holdings accepts the suggestion of the Deiri Parties (recorded in the principal judgment at [4313] and [4314]) and says that, on the basis that this approach is followed generally in respect of the money claims, Sayour Holdings does not need to press the other relief claimed in the Originating Process, beyond that already given. It is on this basis that judgment is sought in the sum of a $4,584,620.19 (being 50%) (with interest from 16 April 2021 at $447.26 per day). 6. ORDER that payments pursuant to the liability under Order 5 be credited against the liability under Order 4.
As to the proposed orders 5 and 6, which seek the imposition of a payment regime in which a half share of the liabilities owed by the Deiri Parties to Combined Projects Arncliffe are paid directly to Sayour Holdings in lieu of payment of the full amount to Combined Projects Arncliffe, see the discussion above.

[100]

Costs - relevant principles

As I deal with the costs orders of the respective proceedings and cross-claims separately, it is appropriate first to set out the relevant legal principles.
The relevant principles in relation to costs are well known and have been summarised in numerous of my recent judgments (see, for example, Bassett v Cameron (No 2) [2021] NSWSC 419 (Bassett v Cameron (No 2)); Wang v Cai (No 2) [2021] NSWSC 1268 (Wang v Cai (No 2)); Re Earth Civil Australia Pty Ltd, RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (All in Liq) (No 2) [2021] NSWSC 1161). It is useful here to extract those principles that arise on the present application. As to costs generally, I noted in Bassett v Cameron at [17]-[18]: 17. There is a broad discretion as to costs (see s 98 of the Civil Procedure Act; Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 (Oshlack)) but it must be exercised judicially and having regard to the overriding statutory purpose mandated by s 56 of the Civil Procedure Act. 18. The usual order is that costs follow the event (r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR)); unless the Court considers that some other order ought to be made (see Purnell v Tindale (No 2) [2020] NSWSC 1047 at [12] per Henry J; Commonwealth of Australia v Gretton [2008] NSWCA 117 (Gretton) at [38] per Beazley JA, as Her Excellency then was (with whom Mason P agreed)). Ordinarily, where there are multiple issues in proceedings, the Court does not seek to differentiate between the issues on which a party succeeded and those in which the party did not succeed, unless the two are clearly severable (see Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328; [1994] NSWCA 338 at 330 -331 per Mahoney JA; and Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 at [24] per Beazley, Ipp and Tobias JJA).
I considered the circumstances where costs may be apportioned in Wang v Cai (No 2) as follows (at [83]-[85]): 83. …Costs may be apportioned where there has been a mixed outcome in the issues in proceedings (see Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1423 at [30], where Hammerschlag J referred to the authorities collated by White J, as his Honour then was, in Short v Crawley (No 40) [2008] NSWSC 1302 at [25]-[32]). 84. Relevantly, the circumstances in which apportionment of costs as between different issues may be appropriate include: where, in respect of one or more issues, the successful party has "unfairly, improperly, or unnecessarily increased the costs" (Waddell J, as his Honour then was, in Windsurfing International Inc v Petit (1987) AIPC 90-441 ); where the bulk of the time has been taken on an issue on which the unsuccessful party had succeeded (see, for example, Waters v PC Henderson at 5 per Mahoney JA; Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748 per Toohey J); or where a particular issue or group of issues is clearly dominant or separable (see, for example, Waters v PC Henderson at 5 per Mahoney JA; Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [6] per Beazley JA, as Her Excellency then was, McColl and Basten JJA). 85. Where the apportionment of the costs attributable to such issues is considered appropriate, the question of apportionment is recognised to be a matter of discretion, the exercise of which "will often depend upon matters of impression and evaluation" (Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272 per Gummow, French and Hill JJ).
Relevantly, for present purposes (and noting that CBA has foreshadowed a special costs order with which I cannot presently deal as I understand it relates to either an Offer of Compromise or Calderbank offer to which I am not privy), I note the following principles set out in Bassett v Cameron (No 2) in respect of special costs orders where the conduct by a party has been unreasonable (at [26]): 26. As to special costs orders referable to the unreasonable conduct of litigation, the discretion to award indemnity costs may be exercised where there is some special or unusual feature or circumstances in the case (concerning the conduct of the party against whom the order is made and relating to the proceedings in question) to justify such an order (ie, some "relevant delinquency" by the party as a litigant - see Oshlack at [44] per Gaudron and Gummow JJ). In that regard, "relevant delinquency" does not mean moral delinquency or some ethical shortcoming but delinquency bearing a relevant relation to the conduct of the case (see, for example, White Constructions ACT Pty Ltd (in liq) v White [2004] NSWSC 303 at [11] per McDougall J). Conduct in relation to the matter may be discreditable to an extent warranting a party being deprived of costs (see, for example, Jamal v Dept of Health (1988) 14 NSWLR 252 at 271 per Mahoney JA).
I went on to summarise in Bassett v Cameron (No 2), the circumstances where it is appropriate to exercise the power to make a gross sum costs order (at [28]): 28. …the power to make such an order "should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available" (Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 (Harrison v Schipp) at [22] per Giles JA). A gross sum costs order is appropriate where it is desirable to avoid the expense, delay and aggravation likely to be involved in a costs assessment or where a party's conduct has unnecessarily contributed to the costs of the proceedings and "especially where the costs incurred have been disproportionate to the result of the proceedings" (Hamod v New South Wales [2011] NSWCA 375 at [817] -[818] per Beazley JA with whom Giles and Whealy JJA agreed).
Where there are multiple parties to a proceeding and a combination of successful and unsuccessful defendants, it may be appropriate to make a Sanderson or Bullock order. A Sanderson order, so-called after the decision in Sanderson v Blyth Theatre Co [1903] 2 KB 533, is an order requiring an unsuccessful defendant to pay the costs of other successful defendants. A Bullock order requires an unsuccessful defendant to reimburse the plaintiff for the costs of a successful defendant (see the orders in Bullock v London General Omnibus Co [1907] 1 KB 264). The exercise of the discretion to make either order involves similar considerations. In Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176 at [16], Beazley JA (as Her Excellency then was), together with Hodgson and McColl JJA, considered when a Sanderson order is appropriate as follows: 16. In Stevedoring Industry Finance Committee v Gibson Mason P (Stein JA and Heydon JA agreeing) (at [128]), adopted the considerations stated by Asche CJ in Lackersteen v Jones to be relevant to the exercise of the court's discretion in making such an order. Those considerations were: 1. It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant. 2. The causes of action against two or more defendants need not be the same but they must be substantially connected or dependent the one on the other. 3. While it is essential to find that the plaintiff has acted reasonably and properly that alone is not sufficient. The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion. 4. Finally, in considering whether to make such an order, the court should, in the exercise of its discretion balance overall two considerations of policy: the first, that an unnecessary multiplicity of actions should not be forced on litigants, so that a plaintiff who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have to pay more than one set of costs merely because he is unsuccessful.
With those principles in mind, I turn to consider the parties' costs submissions for the respective proceedings.

[104]

Sayour Parties' general position

As between themselves and Investments, Plaza says that, so far as the Partnership winding up is concerned, the partners have been engaged in a controversy that arises from the decision of one partner (Investments) to engage without authority with the son of the other (i.e., with Jamil). It is said that it was that which caused the problem and that, to the extent that the Deiri Parties have avoided liability, that is not because they dealt fairly with Plaza but rather because Moustafa (who it is said was burdened with grief, and who was deceived) did not adequately protect himself; as for example with the findings of acquiescence. (It is said that this is also true of the extent to which CBA avoided liability.) (Pausing here, the underlying factors that may have led to the ultimate outcome do not change the outcome itself and it is difficult to see why Moustafa's understandable grief should determine the cost issues in the proceedings.)
The Sayour Parties nevertheless maintain that the Deiri Parties can fairly be seen as the "instigators of the trouble" and they say that the nature and extent of this behaviour "spilled out" through a partnership winding up by the Court (pointing to the need for them to prove matters denied by the Deiri Parties - for example, through the evidence of the forensic expert (Mr Dubedat)'s evidence and the process of the production of partnership records and the accounting). (The Sayour Parties suggest that this somewhat resembles the conduct complained of by CBA in the seventh cross-claim.) The upshot of this submission by the Sayour Parties seems to be that it is contended that Plaza has had a measure of success (though much less than desired); and that a party that has had to go to these lengths to recover anything ought not to be deprived of all of its costs.
As to the question of costs from the date of the making of the winding-up order and prior to the filing of the first cross-claim, as noted in the principal judgment Plaza emphasised throughout its submissions that the constitution of the Broadway Proceedings (as commenced by Investments), was that of a partnership winding up proceeding, in which the taking of partnership accounts was indeed ordered). Plaza's position (and I accept that this was the case) was that this affected much of what was subsequently agitated in the various cross-claims in the proceedings.
Nevertheless, the Broadway Proceedings ultimately proceeded by way of (and I considered that the issues for determination were framed by reference to) the various cross-claims that were filed (Plaza being the moving party on a number of those cross-claims). In those circumstances, I consider that the appropriate order is for the order for costs prior to the making of the winding up order to extend to the filing of the first cross-claim on 12 October 2017, since up to this point the conduct of the proceedings was referable to the process of the winding up of the Partnership.

[106]

First Cross-Claim

The first cross-claim was filed on 12 October 2017 by Plaza against Investments and CBA. Plaza sought a substantial amount of money from CBA (alleging that CBA breached its mandate, and was liable, in respect of payments made pursuant to forged signatures on facility agreements which funded the Broadway Development and cheques drawn on the CBA Partnership Account). As against Investments, the claim related to the falsification and surcharge of the partnership accounts (Investments being joined, as a necessary party in its capacity as a partner, as cross-defendant to the cross-claim made against CBA). Hence, Plaza treated the first cross-claim as seeking remedies in respect of the recovery of partnership assets.
As to the first cross-claim, the Deiri Parties invoke the general rule that costs follow the event unless there is reason otherwise to order (see r 42.1 of the UCPR); and they say that there is no reason here to depart from that rule.
It is said that Plaza has been overwhelmingly unsuccessful on the substance of the first cross-claim; that the first cross-claim sought, in effect, an unwinding of the entirety of the transactions made on the CBA Partnership Account and judgment against CBA for a total of $108,252,788.39; and that Plaza recovered some $8,050.80, half of which must be provided to Investments. The Deiri Parties contend that Investments and CBA have been put to enormous expense in having to defend a claim which resulted in a trivial sum being recovered.
Further, the Deiri Parties submit that Plaza should be ordered to pay the costs of the first cross-claim on an indemnity basis pursuant to s 98(1)(c) of the Civil Procedure Act, for three reasons.
First, that the first cross-claim was hopeless and Plaza should have known that it had no chance of success of recovering $108 million from CBA, in circumstances where CBA had advanced funds to the Partnership which would have had to be repaid in any event; and despite Plaza having accepted and retained profits from the development which CBA funded.
Second (and seemingly related to or an expansion of the first submission), that the first cross-claim was a pointless yet expensive exercise, causing a very significant time and cost burden. It is noted that the construction had been funded, the Broadway Development had been completed, profits had been made, and Plaza accepted and sought to retain such profits. It is said that there could never be any utility in seeking to unwind the financing arrangements with CBA.
Third, that Plaza unduly prolonged the case by groundless contentions. In this regard the Deiri Parties note that Plaza alleged that all of the expenses of the Broadway Development were not genuine partnership expenses even though Investments had provided Plaza with vouchers (showing mundane transactions related to the construction and operation of the shopping centre or residential units) supporting its list of partnership transactions prior to Plaza commencing the first cross-claim. It is noted that Plaza only conceded many of the Partnership expenses that it had put in issue during the final hearing.
The Deiri Parties say that all of this behaviour by Plaza was unreasonable and that an indemnity costs order is appropriate to compensate the other parties for the costs and expenses incurred because of that unreasonable conduct.
CBA, similarly, emphasises that Plaza sued it for $108,312,859.18 and that, overwhelmingly, Plaza's claim against CBA has failed. CBA submits that Plaza should be ordered to pay CBA's costs (and CBA has foreshadowed that a special costs order will in due course be sought).
It is submitted that even if, contrary to CBA's submissions, Plaza were to recover a judgment with respect to cheque #514, this particular payment formed a miniscule part of the overall litigation. It is said that the hearing time spent with regard to this transaction constituted barely a fraction of the hearing time; and that if any deduction is to be made at all from the costs payable by Plaza, this would be in the order of 1-2% only.

[108]

Third Cross-Claim

The third cross-claim was brought by Investments against Plaza, seeking rectification of the contract of sale (and loan agreement) the subject of the second cross-claim. However, it also included other causes of action (including a claim for relief based on the assertion that the contract of sale and loan agreement were incidents of the fiduciary relation of partners - a claim that Plaza noted at the time was one that did not arise in the partnership winding up).
The Deiri Parties point out that, although the issues on the third cross-claim (rectification of the interest rate in the alleged loan agreement the subject of the second cross-claim, as well as a declaration that the interest rate clause was void as a penalty) did not ultimately arise following the findings made on the second cross-claim, I concluded in the principal judgment (in obiter) that, had the issues in the third cross-claim arisen, I would have upheld the rectification suit brought by Investments and would further have found that the clause providing for an interest rate of 9% per month was void as a penalty (see [2780] and [4443] of the principal judgment).
Accordingly, the Deiri Parties submit that Investments was substantively successful on the third cross-claim. They say that the only reason Investments brought the third cross-claim was because of Plaza's (unsuccessful) second cross-claim. Hence, they submit that Plaza should therefore pay Investments' costs of the third cross-claim on the same basis as the order in relation to the second cross-claim.
I accept that the need to seek rectification of the alleged loan agreement and the claim for relief based on the penalty aspects of the interest rate provided for under the alleged loan agreement were matters that arose only consequent upon the claims brought by Plaza in its (to that extent) unsuccessful second cross-claim. Therefore, I consider that the appropriate order is that Plaza pay Investments costs of the third cross-claim.

[109]

Fourth Cross-Claim

The fourth cross-claim was brought by Investments against HWLE, in effect being a claim for professional negligence in the event that Investments was liable to Plaza under the alleged loan agreement (the subject of the second cross-claim). Again, Plaza pointed out at the hearing that this claim did not strictly arise in the partnership winding up.
The issues on the fourth cross-claim did not arise (because they were predicated on the second cross-claim being successful). However, the Deiri Parties point out that I concluded (again in obiter) that, had the fourth cross-claim arisen for determination, I would have found that HWLE was negligent in preparing the pro forma loan agreement but that the claim was barred by the Limitation Act 1969 (NSW) (see at [2927]). As such, Plaza failed against Investments; and Investments (having joined HWLE) failed against HWLE.
The Deiri Parties say that in all the circumstances the prima facie position (that Investments pay HWLE's costs of the fourth cross-claim) should not apply; rather, that the costs of the successful third party (HWLE) ought fairly to be borne by Plaza, not the Deiri Parties. They say this for the following three reasons.
First, that Plaza's claim was the catalyst for Investments bringing the fourth cross-claim (in order for Investments to protect itself from a claim for interest of approximately $47,904,000, in the event that Plaza's second cross-claim succeeded). It is said that Plaza must have known that there was a real likelihood of such a claim being made, given the obvious error in the pro forma loan agreement.
Second, that it was reasonable for Investments to bring the fourth cross-claim against HWLE. It is noted that the facts arising under the second cross-claim and the third cross-claim overlapped with the fourth cross-claim.
Third, that almost all of HWLE's participation in the proceedings (including almost all of its written submissions) was directed to resisting Plaza's claim against Investments on the second cross-claim and supporting Investments' rectification and penalty case against Plaza on the third cross-claim. It is said that it would be incoherent and unjust for Investments to pay HWLE's costs of supporting the very case which Investments advanced and on which it succeeded against Plaza. Rather, it is submitted that Plaza should pay those costs, because Plaza was the unsuccessful party in relation to those cross-claims.
Alternatively, insofar as any costs orders are made in HWLE's favour against Investments, it is submitted that the terms of those orders should make clear that Investments is not liable for any of HWLE's costs associated with contesting Plaza's second cross-claim or in supporting Investments' third cross-claim.
In the circumstances, the Deiri Parties say that there should be an order akin to a Sanderson order to the effect that Plaza, as unsuccessful cross-claimant, pay the costs of HWLE as successful cross-defendant, as proposed by the Deiri Parties' proposed order 12. Alternatively, they say that there should be an order akin to a Bullock order requiring Plaza to reimburse Investments any amount of costs that Investments is ordered to pay HWLE, such reimbursement to be made from Plaza's share of the partnership funds currently held by the Receiver.
Further in the alternative, the Deiri Parties say that each party should pay its own costs of the fourth cross-claim because, while HWLE succeeded on its limitation point, it would have lost on the negligence case brought against it ([2927]). It is said that each party has had a measure of substantive success on the merits of the claims advanced; and that HWLE chose to put in issue not only the limitation point, on which it succeeded, but also the claim against it in negligence. (Pausing here, I do not consider it appropriate to make costs orders on the basis of an obiter finding as to what would have been the case but for a successful limitation defence. While there are cases where a mixed outcome on issues in the proceeding may give rise to an apportionment of costs as between those issues, I do not consider that this is the appropriate course here.)
As for the basis of assessment, the Deiri Parties say that there is no reason to depart from the usual rule that costs be payable on the ordinary basis (r 42.2 of the UCPR).
As to the contention by HLWE (see below) that Investments should pay its costs on an indemnity basis because Investments conducted itself unreasonably (by not agreeing to stay the fourth cross-claim pending resolution of the issues to be determined on the second cross-claim; and not seeking to have the issues to be determined on the second cross-claim dealt with as a separate question and/or prior to the hearing), the Deiri Parties say that there is no substance to this submission, for three reasons.
First, that while the Deiri Parties consulted extensively with HWLE's solicitors and genuinely considered the various options proposed by HWLE, ultimately these options were considered to be unfeasible, because it was not possible to separate the evidence on the second, third and fourth cross-claims from the other evidence in the proceedings.
Second, that it was inappropriate for there to be a separate question of the second and third cross-claims in advance of the other proceedings because: the overlap in evidence would be inefficient and wasteful of costs, contrary to s 56(1) of the Civil Procedure Act; the credibility of Mr Deiri and Moustafa were likely to be in issue in the separate questions, necessitating a new judge hearing the balance of the proceedings and thereby requiring two judges to review voluminous documentary material, wasting court time and resources and likely delaying the determination of the proceedings; and Plaza would have the opportunity to cross-examine Mr Deiri twice, in relation to overlapping subject matter, giving it an illegitimate forensic advantage.
Third, and in any event, that on 6 August 2019 HWLE agreed to the course which was ultimately adopted of having the fourth cross-claim heard on particular days during the hearing. The Deiri Parties say that the suggestion by HWLE's solicitors in written submissions that by that stage HWLE had "little choice but to agree to proceed with the hearing" is unsustainable. It is noted that, after it was joined on 28 June 2018, HWLE could have brought a motion, over Investments' opposition, for a separate question; and it could have brought a motion at any time to defer the hearing of the fourth cross-claim until after the other claims were determined; but it did not. It is said that HWLE agreed to the course about which it now complains (and had in fact proposed that course as an option as early as 3 April 2019). It is submitted that HWLE's recent volte-face affords no basis for an award of indemnity costs.
The Sayour Parties oppose the making of either a Sanderson or Bullock order against Plaza in relation to the fourth cross-claim.
The Sayour Parties say that (see at [2927]-[2929]) the primary reason for failure of the fourth cross-claim was a limitations defence. They point out that the limitations defence was pleaded by HWLE at the outset and say that it was for the Deiri Parties to take notice of that defence before putting HWLE to the cost of defending a claim which was to fail in any event. It is noted that no reply to the defence to the fourth cross-claim was filed.
Furthermore, the Sayour Parties say that the role of HWLE in the proceedings, to the extent that it supported the defence of Investments, should not expose Plaza to two sets of costs, for the conduct of the same defence, upon which the fourth cross-claim should have been unnecessary; nor would it be appropriate to expose Plaza to the costs of a claim over which it had no control.
HWLE, as adverted to above, seeks an order that Investments pay its costs of the Proceedings on the ordinary basis until 13 July 2018 and on the indemnity basis from 14 July 2018 (or in the alternative simply that Investments pay its costs of the fourth cross-claim). The basis on which the special costs order is sought (as detailed above) pertains to the asserted unreasonableness of the Deiri Parties in refusing a regime for the separate determination of the fourth cross-claim (on the basis that those issues may not arise).
As discussed below, I have concluded that the ordinary rule that costs follow the event should here apply and that Investments should pay HWLE's costs (but on an ordinary, not indemnity, basis). I do not consider that Plaza should bear the costs of the fourth cross-claim, which was instituted for Investments' protection and in respect of which the limitation issues were apparent from the outset.

[110]

Fifth Cross-Claim

The fifth cross-claim (which I note expanded considerably the scope of the proceedings as a whole) was brought by Plaza against a variety of cross-defendants (including Investments, the Deiri Parties and the Deicorp Entities). In this cross-claim, Plaza alleged that payments to the builder for the Broadway Development (Deicorp for Stage 1 and Deicorp Constructions for Stage 2) were not liable to be paid for various reasons, including a failure to issue payment certificates and invalid variations under the construction contracts; and alleged that certain payments by Investments or by various of the Deicorp Entities to Jamil (the making of which it is alleged was not disclosed to Plaza) constituted bribes. It was alleged that various of the cross-defendants had received a benefit as a result of the alleged bribes and alleged breaches of fiduciary duty. Plaza sought declaratory and other relief, including equitable compensation.
This led to extensive debate as to the bribery allegations. Further, the Deicorp Entities complained that Plaza was seeking reimbursement from Deicorp of the entirety of the moneys paid for the construction of the Broadway Development, notwithstanding that the Broadway Partnership (comprising Plaza and Investments) received more than $70 million worth of construction work from Deicorp (and noting the expert opinion of their expert witness, Mr Johnny Portelli, that it would have been reasonable for Deicorp (or another builder) to have charged anywhere in the vicinity of $3 million to $8 million more for the very same outcome).
The Deiri Parties say (and the Kreisson Parties agree) that there is no reason why costs should not follow the event and therefore, Plaza should pay the costs of the cross-defendants to the fifth cross-claim.
So far as Deicorp is concerned, the Sayour Parties say that, although Deicorp was brought into the fifth cross-claim on the bribery issue, that part of the case was defended by the Deiri Parties and that Deicorp's separate involvement was confined more or less to the construction case. The Sayour Parties emphasise (as they did at the hearing) that no claim for moneys had and received was made by Plaza against Deicorp; rather, the moneys had and received claim was made against CBA (and it is noted that CBA did not seek to pass this claim on to Deicorp).
The Sayour Parties maintain that Deicorp's conduct was really a defence in aid of CBA's Liggett defence (it being pointed out that Mr Deiri is Deicorp's sole director). It is said that this was with a view to defeating the claim made on behalf of the Partnership against CBA, as well as the alternative claim against Investments for the entry of surcharges in case (or to the extent that) the claim against CBA failed. The Sayour Parties say that this was really the Deiri Parties' defence to conduct, and that a second set of costs ought not to be involved. On that basis, it is said that the Kreisson Parties ought to bear their own costs.
I agree that costs should follow the event. As I made clear at the hearing, I considered that there had been a reasonable basis on which there was separate representation for the respective entities associated with the Deiri interests and I consider that any issues as to duplication of costs (for which I agree that the Sayour Parties should not be responsible) should be addressed in the context of the costs assessment process.

[111]

Sixth Cross-Claim

The sixth cross-claim was brought by the builder, Deicorp, against Investments and Plaza, pleading a quantum meruit claim in the event that Plaza were to succeed on the allegations in the fifth cross-claim (i.e., that Deicorp was not entitled to payment under the construction contracts). (As noted in the principal judgment, although the construction work was carried out by different Deiri entities for the two stages of the Broadway Development (i.e., Deicorp and Deicorp Constructions respectively), the parties proceeded as if the relevant entity for both was Deicorp.)
Accordingly, the sixth cross-claim was predicated upon Plaza's success against Deicorp in the fifth cross-claim, which did not occur (see at [3207], [3210], [3289]). The Deiri Parties point out that I concluded that Deicorp would have been successful on its quantum meruit claim (which Investments supported) had it arisen ([3289]). (Again, although relevant in the context of certain of the findings I was called upon to make - including in relation to some of the matters the subject of the Broadway amended notice of motion considered above - this means that there was no determination as such of the issues in the sixth cross-claim.)
The Deiri Parties (as also do the Kreisson Parties) say that the bringing of the sixth cross-claim was an entirely foreseeable and reasonable defence to Plaza's claims under the fifth cross-claim. As such, the Deiri Parties say that Plaza should pay Deicorp's and Investments' costs of the sixth cross-claim.
The Kreisson Parties emphasise (as they did at the hearing - see [2941]), though the Sayour Parties cavil with this proposition, that the sixth cross-claim (brought by Deicorp) was essentially a defensive cross-claim. The Kreisson Parties say that, in broad terms, in the fifth cross-claim Plaza was contending that payments made for construction costs and expenses were not authorised or were the by-product of arrangements reached as a consequence of bribes; and that the sixth cross-claim enabled Deicorp positively to assert its entitlement to retain moneys for those construction costs because it had delivered a valuable benefit to Plaza and Investments.
It is again noted that I concluded (at [3289]) that, had it been necessary to determine the claims made by Deicorp on the sixth cross-claim, those claims would have succeeded. It is said that there is no reason why Plaza ought not pay Deicorp's costs of the sixth cross-claim, in circumstances where the sixth cross-claim was a reasonable and appropriate defensive measure adopted in response to the fifth cross-claim and in circumstances where the fifth cross-claim has failed in its entirety insofar as it relates to the parties represented by Kreisson.
As to the sixth cross-claim, the Sayour Parties say that this was only to be necessary if the claim against CBA succeeded and CBA made a claim against Deicorp. It is said that, had the claim against CBA succeeded and had CBA succeeded against Deicorp, the sixth cross-claim could not have succeeded and it follows that the sixth cross-claim was bound to fail. The Sayour Parties thus contend that the sixth cross-claim was unnecessary (whether the merits were with or against Plaza), reiterating Plaza's closing written submissions in chief in this regard at [408] where it was emphasised that the sixth cross-claim "miss[ed] the point" of the fifth cross-claim; and noted that the first cross-claim alleged that the payments were not authorised (and the relevant defences alleged that the benefits of those payments were received).
In my opinion, the costs of the sixth cross-claim are bound up in the defence of the fifth cross-claim for practical purposes and should be dealt with on the same basis. Any unnecessary duplication or overlap will be dealt with in the ultimate costs assessment process.

[112]

Seventh Cross-Claim

The seventh cross-claim was brought by CBA against Investments and Mr Deiri, on the one hand, and the Deiri Entities, on the other, raising claims which are premised on Plaza's success on its claims against CBA. It was accepted that if Plaza did not succeed against CBA on the first and fifth cross-claims, CBA sought no relief on the seventh cross-claim.
By its seventh cross-claim, CBA raised: claims for moneys had and received; a claim for civil conspiracy; and a claim for misleading or deceptive conduct (alleging, inter alia, that representations were made that the cheques and payments signed by Mr Deiri were duly authorised, which representations are alleged to be false and misleading if Plaza's claims were to succeed). Because of the lateness of the time (by reference to the then listed commencement date for the hearing) at which the seventh cross-claim was advanced, the hearing proceeded on the basis that the change of position defence that the Deiri Entities foreshadowed to the seventh cross-claim as against them would be deferred (i.e., so that, if Plaza failed to make out its case against CBA, and hence there would be no need for CBA to press the seventh cross-claim, there would be no need for the Deiri Entities to agitate the change of position issues that the Deiri Entities would otherwise have wished to raise). Thus, there was a deferral of much of the issues arising under the seventh cross-claim pending the outcome of the claims made by Plaza against CBA.
As to costs, CBA seeks an order for Mr Deiri to pay its costs of the seventh cross-claim (on which CBA seeks judgment against Mr Deiri for $8,050.80).
The Deiri Parties submit that Plaza should pay Investments' and CBA's costs of the seventh cross-claim. They say that the seventh cross-claim was only brought by CBA in response to Plaza's first cross-claim, which substantially failed. It is said that, had Plaza not brought the first cross-claim, there would have been no cause for CBA to seek to protect itself by the seventh cross-claim, and there would have been no need for Investments to incur expense defending that claim. Further, the Deiri Parties submit that, based on their submission that indemnity costs should be awarded on the first cross-claim, so too should Plaza pay CBA's costs of the seventh cross-claim on an indemnity basis.
Alternatively, given the minimal sum awarded on the seventh cross-claim, the Deiri Parties submit that each party to the seventh cross-claim should bear its own costs. It is said (and this proposition seems to me to be unarguable) that the costs associated with the seventh cross-claim would far exceed the amount awarded to CBA of $8,050.80. The judgment sum is said to be disproportionate to the cost that was involved in bringing the claim and it is said that it would be unjust for the cross-defendants to the seventh cross-claim to bear CBA's costs in those circumstances.
The Deiri Parties apprehend that CBA also contends that, if it is liable for bank fees and interest to Plaza under the first cross-claim, then Mr Deiri is liable to CBA under the seventh cross-claim for that amount. This is addressed in the Deiri Parties' separate submissions in support of their amended notices of motion.
Insofar as the Kreisson Parties are concerned, they submit that each party should pay its own costs of the seventh cross-claim. It is noted that the claims brought by CBA under the seventh cross-claim against the Kreisson Parties were deferred and ultimately did not require determination. It is said that there was, consequently, minimal expenditure upon this portion of the proceedings and the costs order ought to reflect the fact that all parties to this cross-claim conducted themselves reasonably.
As far as the Kreisson Parties are concerned, I consider that an order that each party pay its own costs of the seventh cross-claim is appropriate given the deferral of the issues relating to their defence of that cross-claim.
As between CBA, on the one hand, and Investments and Mr Deiri, on the other hand, I consider that costs should follow the event and CBA should have its costs payable by those cross-defendants. As to the Deiri Parties' submission that Plaza should be responsible for those costs in effect because the seventh cross-claim would not have been necessary had it not been for the bringing of Plaza's first cross-claim, I disagree. True it is that, in the absence of the first cross-claim, it would not have been necessary for CBA to seek relief against Investments and Mr Deiri in the seventh cross-claim. However, the Deiri Parties chose to defend that cross-claim (and were unsuccessful in so doing). I do not consider that Plaza should be responsible for costs referable to the making of representations by Mr Deiri.
Accordingly, I will order that Investments and Mr Deiri pay CBA's costs of the seventh cross-claim and that, as between CBA and the Kreisson Parties, those parties bear its or their own costs.

[115]

Quantum of costs generally

The Deiri Parties submit that, after final orders have been made including as to the parties' respective cost liabilities, the matter should be listed for directions to set a timetable for any affidavits and brief written submissions on the quantum of costs, with a view to costs being fixed in a gross sum or sums, pursuant to s 98(4)(c) of the Civil Procedure Act. It is said that the assessment of costs in these proceedings would likely be protracted and expensive (Idoport Pty Ltd v National Australia Bank [2005] NSWSC 1273 (Idoport) at [9] per Einstein J). Pausing here, the suggestion of there being any prospect of "brief" written submissions on any disputed issue in this case is risible; and the spectre of ongoing submissions upon submissions is not only unattractive but hardly consistent with the just, quick and cheap resolution of the real issues in dispute. It calls to mind the adage "once bitten twice shy". However, I cannot gainsay that there are a number of factors in this case which would point to the adoption of a gross sum costs regime.
The Kreisson Parties and Deicorp Properties support the proposal by the Deiri Parties costs orders ought ultimately to be made in the form of gross sum costs orders. They submit that the time and expense associated with a costs assessment process, including the burden that such applications would place upon a costs assessor, would warrant the quantum of those costs being fixed by the Court.
The Sayour Parties say that, in a case where there are many cross-claims, and various results between the different claims, it will be difficult on assessment to apportion costs between the different claims; and that it is a case where the appropriate approach, to avoid delay and complication, is to make a broad evaluation of the overall costs to be recovered. Insofar as the Deiri Parties have proposed a lump sum order be formulated (after directions for preparation for the hearings in April had already been made), the Sayour Parties complain that they have not adduced the necessary evidence, nor otherwise explained how the conditions for such an order described in the authorities are established.
The Sayour Parties say that the Deiri Parties' proposals would involve continuing the proceedings in this Court for an unspecified further period. The Sayour Parties say that this is not an appropriate approach to the litigation (and it is noted that it is not supported by any party outside the Deiri and Deicorp Parties).
Recognising that Plaza's cross-claims have had much less than the desired result, but nonetheless some substantial success, the Sayour Parties submit that the appropriate order is that the Deiri Parties should pay 25% of Plaza's costs incurred after 30 September 2016 (the date of the winding up order) up to 28 November 2019. (In respect of CBA, the Sayour Parties submit that the same approach be taken; but limited to 25% of Plaza's costs of the first cross-claim.)

[116]

Determination as to costs of Broadway Proceedings

There is no dispute as to the costs of the Broadway Proceedings up to and including the date of the Partnership winding up order on 29 September 2016. I consider that, for the reasons put forward by the Sayour Parties the same order should be made in relation to costs to the date of filing of the first cross-claim.
As to the first cross-claim, Plaza should pay CBA its costs of the first cross-claim on the basis that CBA has substantially succeeded in the defence of that cross-claim (and, to the extent that Plaza was successful against CBA, the costs of that exercise were disproportionate to the relief claimed and do not warrant a deduction from the overall costs order). However, and subject to CBA's foreshadowed special costs application, I would not order those costs on an indemnity basis. That is because I am not persuaded that, despite the very limited success, it was unreasonable for Plaza to seek an account of the sums that had been expended, particularly in the context of the partnership winding up in which the issue of an accounting for those costs arose.
As to the position vis-à-vis Investments, I do not accept that the first cross-claim was hopeless or raised groundless contentions (as the Deiri Parties contend). It arose in the context of a partnership accounting and there was a reasonable basis for Plaza to have had suspicion as to the amounts expended out of the CBA Partnership Account (and seems to have had little co-operation from Investments in determining the appropriate partnership accounting as far as I can see). Nor do I accept that the behaviour of Plaza was such as to warrant an indemnity costs order (as has been submitted).
To reflect the fact that there was substantial success on Investments' part in relation to the claim, but noting also that Investments was necessarily required to be involved in the partnership accounting process, and taking a broad brush view of the matter, I consider that the appropriate order is that Plaza pay 50% of Investments' costs of the first cross-claim.
As to the second cross-claim, as noted above, I consider that the appropriate order is that Plaza pay 80% of Investments' costs of the second cross-claim on the ordinary basis.
As to the costs of the third cross-claim, I consider that these should follow the outcome of the second cross-claim since the third cross-claim only arose because of the second cross-claim.
As to the fourth cross-claim, I consider that, vis-à-vis HWLE, the general rule should follow, i.e., that Investments should pay HWLE's costs of the fourth cross-claim.
However, I do not consider that Investments should pay HWLE's costs on an indemnity basis. The submission by HWLE is that a special costs order is warranted because of the unreasonableness of the conduct of the parties in not acceding to the requests for separate determination of the issues relating to HWLE. I do not accept that it was unreasonable for the parties not to accede to such a regime. Indeed, it was debated in the context of various directions hearings before me and I did not consider it appropriate at the time for there to be a separate determination of the issues relating to HWLE. Even if the parties had agreed to this suggestion I would have been most unlikely to have acceded thereto. Further, accommodation was made in order to minimise the amount of time required for attendance in Court by HWLE's representatives at the hearing. There was certainly no "relevant delinquency" that would give rise to a special costs order of the kind here sought in HWLE's favour.
I do not accept that it is appropriate for there to be an order such that Plaza should be required effectively to bear, or to reimburse Investments for, those costs irrespective of the fact that Investments' claim against HWLE was responsive in a practical sense to the second cross-claim.
The principles relevant to the making of a Bullock or Sanderson order need here to be considered in the context that Plaza was not itself a party to the fourth cross-claim. In effect what is sought, in circumstances where Plaza had no control over the bringing or conduct of the fourth cross-claim, is that it should be ordered (as the unsuccessful cross-claimant to the second cross-claim) to be responsible for the costs incurred by another party (HWLE) in defending a claim (which was not ultimately required to be determined but which I considered would have succeeded) that was brought against that other party by a cross-claimant seeking protection against claims made in that second cross-claim.
In that regard, I accept that Plaza's claim no doubt precipitated both the rectification and penalty case in the third cross-claim and the bringing by Investments of the fourth cross-claim and that there was an inevitable overlap in those claims. However, that can be dealt with as part of the ultimate costs assessment process. I do not accept that it was unreasonable for Plaza to have brought the second cross-claim (albeit that it ultimately failed) and I do not consider that the fate of that claim was unarguable. Similarly, I accept that it was not unreasonable for Investments to bring the fourth cross-claim against HWLE. To the extent that HWLE's participation in the proceedings was directed to resisting Plaza's claim against Investments on the second cross-claim and supporting Investments' rectification and penalty case against Plaza on the third cross-claim, again that is a matter that can be reflected in the overall costs assessment.
However, I do not consider that it is appropriate for Plaza to be exposed to two sets of costs for the conduct of the same defence; nor that it is appropriate to expose Plaza to the costs of a claim over which it had no control.
I have concluded that the ordinary rule that costs follow the event should here apply and that Investments should pay HWLE's costs (but on an ordinary, not indemnity, basis). I do not consider that Plaza should bear the costs of the fourth cross-claim, which was instituted for Investments' protection and in respect of which the limitation issues were apparent from the outset.
As to the fifth cross-claim and sixth cross-claim as noted above, costs should follow the event.
As to the seventh cross-claim, I consider that the Deiri Parties should pay CBA's costs in accordance with the general rule. I do not accept that it is appropriate for the Deiri Parties and CBA respectively to bear their or its own costs; nor do I consider that Plaza should bear these costs. This was an independent cause of action and costs should simply follow the event. I accept the Sayour Parties' submissions that they should not bear the costs flowing from misrepresentations by Mr Deiri.
As between CBA and the Kreisson Parties, each should bear its or their own costs, as suggested by the latter.
Finally, as noted above, I consider that Deiri Nominees should pay Plaza's costs of the ninth cross-claim.
I consider below, in the context of both proceedings, the submissions in relation to a stay of the orders pending commencement of foreshadowed appeals and in relation to any applications for special costs orders or gross sum costs orders.

[117]

Costs in relation to Arncliffe Proceedings

The Deiri Parties say that it is common ground that Konstructions and Zapphire should pay Combined Projects Arncliffe's costs of the claims against them (Deiri Parties' proposed orders 12 and 13 and Sayour Parties' proposed orders 27 and 28).
The Sayour Parties' proposed costs orders are as follows. 27. ORDER that Konstructions Pty Limited pay the costs of Combined Projects (Arncliffe) Pty Limited, including the costs of Sayour Holdings Pty Limited in suing on behalf Combined Projects (Arncliffe) Pty Limited, of the case against Konstructions Pty Limited. 28. ORDER that Zapphire Investments Pty Limited pay the costs of Combined Projects (Arncliffe) Pty Limited, including the costs of Sayour Holdings Pty Limited in suing on behalf Combined Projects (Arncliffe) Pty Limited, of the case against Zapphire Investments Pty Limited. 29. ORDER that Deiri Nominees Pty Limited and Fouad Deiri pay the costs of Combined Projects (Arncliffe) Pty Limited, Sayour Holdings Pty Limited, Moustafa Sayour and Jasmine Sayour of the proceedings. 30. ORDER that the costs payable by Deiri Nominees Pty Limited and Fouad Deiri under Order 29 be assessable on the ordinary basis up to 28 November, 2019 and thereafter on the indemnity basis. 31. ORDER that the requirement for security for the undertaking directed on 22 August, 2019 be now discharged. 32. ORDER that the bank guarantee given by Westpac Banking Corporation and lodged with the Court on behalf of the Plaintiff be now returned to the Plaintiff. [Note this last order is unnecessary as the guarantee has already been returned.]
In the Arncliffe Proceedings, the Sayour Parties say that they (and Combined Projects Arncliffe) have had very substantial success and ought to have their costs paid by Mr Deiri and Deiri Nominees.
The Sayour Parties say that they have also demonstrated oppressive conduct and that they ought to have their costs of the Originating Process. They note that they have previously obtained had the relief they sought under s 247A of the Corporations Act. It is said that this provides further support for a costs order in their favour, as well as in favour of Combined Projects Arncliffe in respect of its costs. The Sayour Parties further suggest that it is discriminatory for the Deiri Parties want to confine any favourable costs order to the name of Combined Projects Arncliffe but to visit adverse costs orders on Sayour Holdings directly.
The Deiri Parties resist the proposition that they should pay the whole of the Sayour Parties' costs of the proceedings (cf the Sayour Parties' proposed order 29) in circumstances where there Sayour Parties have succeeded only in some but not all claims. Rather, the Deiri Parties say that they should pay only the costs of Combined Projects Arncliffe's costs of the claims against them which have succeeded (i.e., Combined Projects Arncliffe's costs of the claims against them in the first and third cross-claims - see the Deiri Parties' proposed orders 11 and 19). (In my view, since the claims were maintained by Sayour Holdings in the name of Combined Projects Arncliffe, the costs orders should include Sayour Holdings' costs.)
The Deiri Parties say that the Sayour Parties have been wholly unsuccessful against the Deicorp Parties and, for that reason, the Sayour Parties should pay the whole of their costs of the first cross-claim and second cross-claim (Deiri Parties' proposed orders 14, 15, 17). The Kreisson Parties and Deicorp Properties support the Deiri Parties proposed orders 14 and 15 (namely that Sayour Holdings pay Deicorp Properties' and Deicorp Constructions' costs of the first cross-claim). They say that the claim against Deicorp Properties (see [4102]-[4188]) entirely failed and that there is no reason why Sayour Holdings ought not pay the costs incurred by Deicorp Properties (which was separately represented) in defending that claim. As to the claims against Deicorp Constructions, again it is said that those claims failed in their entirety (see [4189]-[4299]) and that there is no reason why costs would not follow the event.
The Deiri Parties propose (similarly to the order proposed in the Broadway Proceedings) an order (at order 20) that the matter be listed for directions with a view to setting a timetable for any affidavits and brief written submissions on the quantum of costs, with a view to costs payable being fixed in a lump sum or sums. It is submitted that this approach will be considerably more efficient and less costly than a protracted costs assessment process. The Kreisson Parties and Deicorp Properties support this submission.
As to the second cross-claim (see at [4319]-[4335]), the Kreisson Parties maintain that this was a defensive cross-claim, which was brought in order to protect against a circumstance in which Sayour Holdings (in its derivative claim in the name of Combined Projects Arncliffe enjoyed some success on the first cross-claim). It is said that the essence of this defensive second cross-claim was that Deicorp Constructions (or Deicorp) had delivered a valuable benefit to Combined Projects Arncliffe by having completed construction works (and complain that the Sayour Parties never really grappled with the difficulty as to the retention of the benefit of the construction work in circumstances where they wished to have the costs of that construction work reimbursed). It is submitted that Sayour Holdings ought to pay Deicorp Constructions' costs of the second cross-claim.
As to the remaining parties, Zapphire did not dispute the interest calculation incorporated into the Sayour Parties' proposed order 11 and did not oppose the final order in respect of Zapphire being in the form, or to the effect, of that proposed at order 7 of the Deiri Parties' proposed orders or 11 of the Sayour Parties' proposed orders. Zapphire did not oppose a costs order in the form of the Deiri Parties' proposed order 13 or the Sayour Parties' proposed order 28. Zapphire seeks a stay (as the Deiri Parties propose) of the orders to be made against Zapphire and adopts the Deiri Parties' submission in support of the stay.
Konstructions did not contest the proposed orders.

[121]

Broadway Proceedings 1. As to the costs, as between Broadway Plaza Pty Ltd (Plaza) and Broadway Plaza Investments Pty Ltd (Investments), of the Broadway Proceedings up to and including 29 September 2016 (the making of the Partnership winding up order), direct payment by the Receiver from the Partnership funds to each of Investments (the plaintiff) and Plaza (the defendant), respectively, for its costs assessed on the indemnity basis. 2. As to the costs of the Broadway Proceedings, from 30 September 2016 to the filing of the first cross-claim on 12 October 2017, again direct payment by the Receiver from the Partnership funds to each of Investments (the plaintiff) and Plaza (the defendant), respectively, for its costs assessed on the indemnity basis. 3. As to the first cross-claim, judgment for Broadway Plaza Pty Ltd (Plaza) against Commonwealth Bank of Australia (CBA) in the amount of $8,050.80, plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from the date of the debiting of the amounts comprising that sum to the date of judgment, on terms that Plaza pay 50% of that amount to Broadway Plaza Investments Pty Ltd (Investments) within 7 days of receipt of the said sum. 4. Order Plaza to pay the costs of CBA of the first cross-claim and to pay 50% of the costs of Investments of the first cross-claim on the ordinary basis. 5. Otherwise dismiss the first cross-claim. 6. As to the second cross-claim, judgment for Plaza against Investments in the sum of $774,892.04 (being $500,000 plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) up to and including 16 April 2021), plus interest of $56.01 per day from 16 April 2021 to the date of payment of the judgment sum. 7. Otherwise dismiss the second cross-claim. 8. As to the costs of the second cross-claim, order Plaza to pay 80% of Investments' costs of the second cross-claim on the ordinary basis. 9. Dismiss the third cross-claim. 10. Order Plaza to pay 80% of Investments' costs of the third cross-claim on the ordinary basis. 11. Dismiss the fourth cross-claim. 12. Order Investments to pay HWLE's costs of the fourth cross-claim assessed on the ordinary basis and fixed in a gross sum at $200,000. 13. As to the fifth cross-claim: 1. declare that the Matthews Street Unit Trust purportedly constituted under a purported deed dated 3 November, 2011 is void and of no effect and order that the purported Matthews Street Unit Trust Deed be delivered up to the Court for cancellation; 2. declare that the land comprised in Lot B, Deposited Plan 319465 known 14 Matthews Street, Punchbowl, in the State of New South Wales, is held by Matthews Street Pty Ltd upon trust for Plaza and Investments as tenants in common in equal shares; 3. otherwise dismiss the fifth cross-claim. 1. Order Plaza to pay the cross-defendants' costs of fifth cross-claim on the ordinary basis. 2. Dismiss the sixth cross-claim. 3. Order Plaza to pay the costs of the cross-claimant on the sixth cross-claim on the ordinary basis. 4. As to the seventh cross-claim, judgment for (CBA) jointly and severally against the first cross-defendant (Mr Fouad Deiri) and the second cross-defendant (Investments) in the sum of $8,050.80. 5. Order Investments and Mr Deiri to pay CBA's costs of the seventh cross-claim on the ordinary basis. As between CBA and the Kreisson Parties, those parties should bear its or their own costs. 6. Dismiss the eighth cross-claim. 7. Order that Investments and Mr Deiri pay the costs of the cross-defendants of the eighth cross-claim. 8. As to the ninth cross-claim, order that Matthews Street Pty Ltd be wound up and a liquidator be appointed (Mr Brett Stephen Lord) but stay this order for 28 days in order to give Plaza and Investments a final opportunity to reach agreement on an orderly process for the sale of the Matthews Street Property and the winding up of the company, failing which the order for winding up will automatically take effect 28 days from the date of these orders. 9. Order that Deiri Nominees pay Plaza's costs of the ninth cross-claim on the ordinary basis. 10. Order that the appointment of the Receiver to the Broadway Partnership be discharged, following the application of the Partnership funds in accordance with these orders. 11. Direct the Receiver to the Broadway Partnership to apply the funds held in his capacity as Receiver as follows: 1. in discharge of any unpaid remuneration of the Receiver and any outstanding legal fees or disbursements in respect of the Receivership; 2. to each of Plaza and Investments its costs, assessed on an indemnity basis, of the Broadway Proceedings up to and including the date of filing of the first cross-claim; 3. as to one-half of the remaining funds (including any recoveries pursuant to the orders made in this proceeding) to each of Plaza and Investments. 1. Other than as reflected in these orders, dismiss the amended notice of motion filed on 12 March 2021 in the Broadway Proceedings.

[122]

Arncliffe Proceedings 1. Order that there be judgment for Combined Projects (Arncliffe) Pty Limited against Deiri Nominees Pty Limited and Mr Fouad Deiri jointly and severally for $9,169,240.37 (being $7,239,425.44 plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from 4 April 2018 to and including 16 April 2021 of $1,097,636.01), plus additional interest from 16 April 2021 to the date of payment at the rate of $894.52 per day. 2. Order that there be judgment for Combined Projects (Arncliffe) Pty Limited against Konstructions Pty Limited in the sum of $9,126,791.31 (being $7,920,000 plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from 30 March 2018 to 16 April 2021 ($1,206.791.31), plus additional interest from 16 April 2021 to the date of payment at the rate of $889.64 per day. (2A) Order that there be judgment for Combined Projects (Arncliffe) Pty Limited against Mr Fouad Deiri in the sum of $9,126,791.31 (calculated as per order 2) plus additional interest from 16 April 2021 to the date of payment at the rate of $889.64 per day, and that such liability be joint and several with the liability of Konstructions Pty Limited in order 2. 1. Order that there be judgment for Combined Projects (Arncliffe) Pty Limited against Zapphire Investments Pty Limited in the sum of $9,101,439.11 (being $7,898,000 plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from 30 March 2018 to 16 April 2021 ($1,203,439.11), plus additional interest from 16 April 2021 to the date of payment at the rate of $887.17 per day. 2. Order that there be judgment for Combined Projects (Arncliffe) Pty Limited against Mr Fouad Deiri in the sum of $9,101,439.11 (calculated as per order 3) plus additional interest from 16 April 2021 to the date of payment at the rate of $887.17 per day, and that such liability be joint and several with the liability of Zapphire Investments Pty Limited in order 3. 3. Order that there be judgment for Combined Projects (Arncliffe) Pty Limited against Deiri Nominees Pty Limited and Mr Fouad Deiri jointly and severally for $6,130,393.14, plus additional interest from 16 April 2021 to the date of payment at the rate of $595.31 per day. 4. Order that there be judgment for Combined Projects (Arncliffe) Pty Limited against Mr Fouad Deiri for $2,103,573.54 (calculated as $1,560,000.00 plus interest pursuant to s 100 from 25 November 2014 to and including 16 April 2021 ($543,573.54), plus additional interest from 16 April 2021 at the rate of $175.23 per day. (Note that the amount of $1,560,000.00 is to be treated as a loan by Sayour Holdings Pty Limited to Combined Projects (Arncliffe) Pty Limited, such that its receipt by Combined Projects (Arncliffe) is to be dealt with in that way.) 5. Order that Combined Projects (Arncliffe) Pty Limited be wound up and appoint Brett Lord as liquidator. 6. Otherwise dismiss the fourth amended originating process and first cross-claim in the Arncliffe Proceedings. 7. Order that Deiri Nominees Pty Limited and Mr Fouad Deiri pay the costs of Sayour Holdings Pty Limited of the Originating Process (having regard to the finding of oppressive conduct and noting the relief granted in relation to the s 247A application by consent) on the ordinary basis. 8. As to the costs of the first cross-claim: 1. order that Konstructions Pty Limited pay the costs of Combined Projects (Arncliffe) Pty Limited, including the costs of Sayour Holdings Pty Limited in suing on behalf of Combined Projects (Arncliffe) Pty Limited, of the case against Konstructions Pty Limited; 2. order that Zapphire Investments Pty Limited pay the costs of Combined Projects (Arncliffe) Pty Limited, including the costs of Sayour Holdings Pty Limited in suing on behalf of Combined Projects (Arncliffe) Pty Limited, of the case against Zapphire Investments Pty Limited; 3. order that Deiri Nominees Pty Limited and Mr Fouad Deiri pay 80% of the costs of Combined Projects (Arncliffe) Pty Limited, including the costs of Sayour Holdings Pty Limited in suing on behalf of Combined Projects (Arncliffe) Pty Limited, of the first cross-claim (other than the costs referred to in (vi) below which should be borne in full); 4. order that Sayour Holdings Pty Limited pay the costs of the Deicorp Parties but only to the extent that those costs are separate from and specifically referable to the Deicorp Parties' defence of the first cross-claim and their conduct of the second cross-claim; 5. order that Sayour Holdings Pty Limited pay Deicorp Properties' and Deicorp Constructions' costs of the first cross-claim; 6. order that Deiri Nominees Pty Limited and Mr Fouad Deiri pay the costs of Sayour Holdings Pty Limited of the post-hearing submissions in relation to the tax and GST issues raised and bear their own costs of those issues; such costs to be on the ordinary basis. 1. Order that the second cross-claim be dismissed. 2. Order that Sayour Holdings Pty Limited pay Deicorp Constructions' costs of second cross-claim on the ordinary basis. 3. Order that the third cross-claim be dismissed. 4. Order that Deiri Nominees Pty Limited and Mr Fouad Deiri pay the costs of Combined Projects (Arncliffe) Pty Ltd, including the costs of Sayour Holdings Pty Limited, of the third cross-claim on the ordinary basis. 5. Other than as reflected in these orders, dismiss the amended notice of motion filed on 12 March 2021 in the Arncliffe Proceedings.

Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd; In the matter of Combined Projects

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Judgment (124 paragraphs)

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Legislation Cited (9)

Cases Cited (113)

Cited By (5)