Cobanov v Josifovski [2021] ACTSC 111 | Case summary | Zoe

ACTACTSC

Cobanov v Josifovski

[2021] ACTSC 111

Supreme Court of the ACT|2021-06-03|Before: Loukas-Karlsson J

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At a glance

Source facts

Court

Supreme Court of the ACT

Decision date

2021-06-03

Before

Loukas-Karlsson J

Catchwords

PARTNERSHIP – whether common intention of parties to
form partnership – whether property ‘partnership
property’ – whether express term illegal or unenforceable as against
public

Source

Original judgment source is linked above.

Catchwords

PARTNERSHIP – whether common intention of parties toform partnership – whether property ‘partnershipproperty’ – whether express term illegal or unenforceable as againstpublicpolicy – where express term is for avoidance of paying capitalgains tax – whether owed fiduciary obligations –remedies forbreach of fiduciary duties – account of profits – equitablecompensation – restitution – resultingtrustCONTRACT – standard form building contract –whether inclusions list incorporated – whether rectification damageswarranted –where owner sold the propertyTORTS – NEGLIGENCE – standard of care

Judgment

Source: the ACT Courts (www.courts.act.gov.au). Converted to plain text by ZoeLaw. Not the official version.

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title: Cobanov v Josifovski (No 2)

Citation: [2021] ACTSC 111

Hearing Dates: 21 October 2019 – 24 October 2019, 16 June 2020

Cases Cited: Bellgrove v Eldridge (1954) 90 CLR 613 Birtchnell v Equity Trustees Executors and Agency Co Ltd [1929] HCA 24; 42 CLR 384 Black Uhlans Inc v NSW Crime Commission [2002] NSWSC 1060 Bloch v Bloch (1981) 189 CLR 390 Blundell v Leighton [2013] ACTCA 1 Brenner v First Artists Management Pty Limited [1993] 2 VR 221 Brooks v Burns Philip Trustee Co Ltd [1969] HCA 4; 121 CLR 432 Bryant Bros v Thiele [1923] SASR 393 Calverley v Green (1984) 155 CLR 242 Central Coast Leagues Club Limited v Gosford City Council (Unreported, Supreme Court of New South Wales, Giles CJ, 9 June 1998) Cesare v Deluxe Motors Pty Ltd (1996) 13 BCL 136 Chan v Zacharia [1984] HCA 36; 154 CLR 178 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 Cobanov & Anor v Josifovski [2019] ACTSC 269 Colburn v Simms (1843) 2 Hare 543 Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd [2018] NSWSC 761 Commissioner of Taxation v Hart [2004] HCA 26; 217 CLR 216 Cordon Investments Pty Ltd v Ledesor Properties Pty Ltd [2012] NSWCA 184 Craig v Silverbrook [2013] NSWSC 1687 Dart Industries Inc v Decor Corporation Pty Ltd (1993) 179 CLR 101 David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; 175 CLR 353 Director of Public Prosecutions (NSW) v Elskaf [2012] NSWSC 21 Director of War Services Home v Harris (1986) QdR 275 Dr Martens Australia Pty Ltd v Bata Shoe Co of Australia Pty Ltd [1997] FCA 505; 75 FCR 230 Duke of Westminster’s Case [1936] AC 1 Federal Commissioner of Taxation v Spotless Services Ltd (1996) 141 ALR 92 Ferrie v Whitehead (1879) 5 VLR(L) 132 Fire and All Risks Insurance Co Limited v Powell [1966] VR 513 Ford v Comber (1890) 16 VLR 540 Fox v Percy [2003] HCA 22; 214 CLR 118 GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers [2005] VSCA 113 Gollan v Nugent (1988) 166 CLR 18 Haines v Bendall (1991) 172 CLR 60 Hill v Rose [1990] VR 129 Hill v Stewart (1887) 13 VLR 76 Hollier v Rambler Motors (A.M.C) Ltd [1972] 2 QB 71 Holman v Johnson (1775) 98 ER 1120 Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; 156 CLR 41 Hyder Consulting (Australia) Pty Ltd v Wilhelmsen Agency Pty Ltd & Anor [2001] NSWCA 313 Jones v Dunkel (1959) 101 CLR 298 Kelenik v Apostolidis & Ors [2009] VSC 208 Maples Winterview Pty Ltd v Liu & Anor [2015] ACTSC 58 March v Stramare (E and M H) Pty Ltd (1991) 171 CLR 506 Maric v The Nominal Defendant [2012] NSWDC 69 McFarlane v Daniell (1938) S.R (NSW) 337 McKenzie v McDonald [1927] VLR 134 Melbourne Orthopaedic Group Pty Ltd v Stamford Aus-Trade & Press Pty Ltd [2015] VSCA 150 Minter v Minter [2000] NSWSC 100 Montefiore v Smith (1876) 14 SCR (NSW) 245 Noble v Maddison (1912) 12 SR (NSW) 45 Nocton v Lord Ashburton [1914] AC 932 Photo Production Limited v Secucor Transport Limited [1980] AC 827 Pooley v Driver (1876) 5 Ch D Port of Melbourne Authority v Anshun [1981] HCA 45; 147 CLR 589 Potter v Potter [2003] NZLR 145 Queensland Mines v Hudson (1978) 18 ALR 1 R v Meares (1997) 37 ATR 321 Re Ruddock (1879) 5 VLR (IP & M) 51 Reg. Glass Pty Ltd v Rivers Locking Systems Pty Ltd (1968) 120 CLR 516 Ross v Gordon [2021] ACTSC 41 at [171] Ruxley Electronics and Construction Ltd v Forsyth (1996) 1 AC 344 Ryan v Bunnings Group Limited [2020] ACTSC 353 Smith v Jenkins (1970) 119 CLR 397 Stone v Chappel [2017] SASCFC 72 Sze Tu v Lowe [2014] NSWCA 462; 89 NSWLR 317 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; 236 CLR 272 Thomas Brown & Sons Limited v Fazal Deen [1962] HCA 59; 108 CLR 391 Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; 219 CLR 165 Toyota Finance Australia Limited v AJI Enterprise Group Pty Ltd [2019] NSWSC 33 Tuggeranong Town Centre Pty Limited v Brenda Hungerford Pty Limited (No 2) [2017] ACTSC 88 UI International Pty Ltd v Interworks Architects Pty Ltd [2007] QCA 402 United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd [2013] FCAFC 16; 296 ALR 148 Visnic v Sywak [2009] NSWCA 173; 257 ALR 517 Warman International Limited v Dwyer (1995) 182 CLR 544 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 Wilkinson v Osborne [1915] HCA 92; 21 CLR 89 Parties: John Ivo Cobanov (First Plaintiff) A-Shell Homes Pty Ltd (Second Plaintiff) Kiki Josifovski (Defendant)

File Number: SC 241 of 2018 CONTENTS Introduction 5 Issues for Determination 6 Evidence 7 Credit and Reliability 7 Plaintiffs’ Claim 8 Does the evidence support the conclusion that the first plaintiff and the defendant 8 formed a partnership to develop and sell the property? What were the terms of the partnership agreement? 28 Is the alleged partnership agreement illegal (in part or in whole) or unenforceable for 29 public policy reasons? If any term of the alleged partnership is illegal, is that term severable? 35 If the whole of the partnership is illegal, are the plaintiffs entitled to restitution for 36 monies spent and payments not claimed? Are the plaintiffs entitled to equitable compensation or an account of profits? 36 Did the defendant pay the second plaintiff $76,850 in cash on 1 July 2013 as part of 39 payment towards the amount due under the HIA Contract? Did the first plaintiff pay the $25,000? What was the purpose and legal effect of that 57 payment? Does the evidence support a conclusion that the defendant sought, and/or directed 69 the alleged Additional Works? Did the plaintiffs pay for the alleged Additional Works? Were they performed? Were 69 they additional to requirements in the HIA Contract? Are the plaintiffs entitled to restitution for the alleged Additional Works? 89 If the alleged partnership was not formed, are the plaintiffs, or either of them, entitled 90 to restitution? If so, how much? Conclusion on the Plaintiffs’ Claim 90 Defendant’s Counterclaim 91 Which version of the HIA Contract did the second plaintiff and the defendant enter? 91 Did the parties intend to incorporate the inclusions list and building plans in the HIA 91 Contract? Did the first plaintiff fail to adequately supervise the works undertaken by the second 108 plaintiff? Did the second plaintiff fail to complete the works? 110 Did the second plaintiff breach the HIA Contract, and his duty of care (breaches) by 119 failing to build the house in a proper and skilful way, with proper material and with reasonable promptness? If the second plaintiff committed part or all of the breaches, did those breaches cause 121 the defendant to suffer the loss claimed? Was the second plaintiff entitled to be paid for each of the progress payments? Does 127 the defendant’s authorisation of payment of each of the progress payments affect the defendant’s right to claim those payments back? Is the defendant entitled to compensation for losses caused by the breaches, in 130 circumstances where he sold the property on or about 24 July 2019? Conclusion on the Defendant’s Counterclaim 138 Application for Interim Injunction 139 Orders 142 LOUKAS-KARLSSON J:

A partnership may be created through an express agreement or it may be an inference to be drawn from the dealings between the parties: Ferrie v Whitehead (1879) 5 VLR(L) 132. The partnership relationship is itself a contractual arrangement: Pooley v Driver (1876) 5 Ch D at 472.
The conduct and actions of the parties throughout their dealings will form the basis of any inference to be drawn as to whether there was a partnership agreement. Whether a partnership exists does not depend on the private intention of a party, instead their intentions will be ascertained from their actions: Montefiore v Smith (1876) 14 SCR (NSW) 245. Determination of the intention of the parties is a question of fact: Bryant Bros v Thiele [1923] SASR 393 at 401 and all facts and relevant circumstances of the interactions between the parties must be considered: Re Ruddock (1879) 5 VLR (IP & M) 51.
A single purpose joint venture is still capable of being a partnership if it is able to satisfy the indicia for a partnership, in that the enterprise has the object of gain or profit: Minter v Minter [2000] NSWSC 100 at [81]; United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 at 15. The key factor is not ongoing continuity of carrying on a business but instead whether it is a commercial venture with a view to profit.
Although the ACT modern successor of the Statute of Frauds (1677) (29 Car 2), s 201(1) of the Civil Law (Property) Act 2006 (ACT) (Civil Law (Property) Act) establishes that an interest in land cannot be created except by writing, this requirement does not apply to a partnership that is formed for the purpose of acquiring land as opposed an acquisition of land itself: Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd [2018] NSWSC 761 at [199] (Comlin Holdings).
In addressing whether such a partnership must be evidenced in writing, in Ford v Comber (1890) 16 VLR 540 at 552, Holroyd J stated: When a partnership, or an agreement for partnership, for the purpose of buying and selling land exists, and afterwards in pursuance of the partnership agreement one of the members purchases land in his own name, the land becomes part of the stock-in-trade of the firm, although the agreement was never reduced to writing. The Statute of Frauds (I use the old term for convenience) is not violated, inasmuch as a resulting trust is created by operation of law…But the partnership agreement must exist first, and its existence must be proved as an independent fact.
In Sze Tu v Lowe [2014] NSWCA 462; 89 NSWLR 317 at [115]-[127], the Court of Appeal held that property acquired after the partnership is formed should not be referred to as property the subject of a resulting trust but instead to be understood as partnership property within the meaning given by the relevant Partnership Act. This view was approved in Comlin Holdings at [192].
In relation to the issue of whether a partnership was for an illegal purpose, illegality should be explicitly raised in the pleadings: Hill v Stewart (1887) 13 VLR 76 at 79. However, if the court discovers during the course of the proceedings that the purpose of the partnership is illegal, the court must refuse to grant the relief sought and dismiss the claim: Noble v Maddison (1912) 12 SR (NSW) 45.

The first plaintiff said to the defendant words to the effect of “I have this block that I was due to settle on in November 2012. I need to find a buyer and Goran said you might be interested but he doesn’t think you can afford it”. The defendant replied with words to the effect of “that’s right”.
The first plaintiff broached the idea of jointly developing the block by building a display home. The first plaintiff then said words to the effect of “I’m old and used to building houses from the 80s. I need to do something to appeal to newer, younger buyers”. The defendant then said that he was undertaking a course in order to become qualified as a builder in the ACT. The first plaintiff and the defendant proceeded to discuss how the project would be ideal for the defendant to provide new and fresh design ideas, as well as offering the defendant the opportunity to develop experience under the first plaintiff’s builder’s licence.
The first plaintiff alleges that he and the defendant orally agreed that the first plaintiff would contribute the availability of the block, his licence and insurances, his resources, equipment, time, skill and experience as a builder all at cost. The defendant would contribute design ideas, time and sufficient finance to cover as much of the costs of the build that could not be covered by the first plaintiff at first instance. The first plaintiff asserted that he said to the defendant “the amount that I can cover I estimate will be about 20% of the total build cost, excluding the cost of the land”.
The first plaintiff stated that once built, the property would be sold. The first plaintiff and the defendant would be reimbursed for the expenses they had contributed and the profit would be shared.
The first plaintiff claimed that he and the defendant established that the next step was to engage an architect for the design and for the defendant to obtain finance approval. The parties orally agreed for the defendant to approach Robert Jukic from R Inventive Building Design, who was the tenant at the defendant and Goran Josifovski’s property located at Phyllis Ashton Circuit. The first plaintiff also asserted that the parties established that the defendant would approach Patrick Bouquiaux, a mortgage broker with Tiffen & Co. The first plaintiff asserted that both he and the defendant both knew 7 Patrick Bouquiaux and had both used his services previously.
The first plaintiff completed a second witness statement on 18 April 2019 (the second 8 witness statement of the first plaintiff) that also formed part of Exhibit 1. At the hearing, counsel for the defendant again objected to various parts of the second witness statement of the first plaintiff. Again, I adopted the approach of receiving the evidence subject to weight as discussed above.
Under the heading ‘Kiki’s active involvement in the build’, the second witness statement of the first plaintiff annexed a series of email correspondence between the first plaintiff 9 and the defendant. An exchange that commenced on 5 September 2013 to 11 September 2013 was as follows:

Prior to purchasing the property, the defendant also claimed he spoke to the architect 69 Robert Jukic to obtain advice about what dwelling could be built on the property. The defendant denied that he and the first plaintiff had agreed to utilise the services of Robert Jukic. Instead, the defendant stated that he chose Robert Jukic as he was a family friend of the defendant and he had previously engaged the services of Robert 70 Jukic.
After receiving sketches of what a dwelling on the property could look like, the defendant sought a costing estimate to build the house in the sketch from the first plaintiff. The defendant recalled that the first plaintiff said words to the effect of “I could 71 probably get it up for about $350,000”.
In either late April or early May 2013, the defendant and his fiancé had decided to purchase the property and engaged Aussie Conveyancing to act as solicitors on the 72 purchase. Approximately at the same time, the defendant engaged Robert Jukic to prepare proper plans. The plans dated 4 June 2013 were provided to the defendant in 73 early June 2013.
Shortly after receiving the plans, the defendant provided them to the first plaintiff for an 74 update on costing, an inclusions list and a timeframe for the build.
Around 12 June 2013, the defendant met with Patrick Bouquiaux and the first plaintiff at Tiffen & Co’s office in Kingston to execute the HIA Contract. The defendant claimed that one copy of the HIA Contract was executed and Patrick Bouquiaux made two copies, one for the defendant and one for the first plaintiff. The original was to be 75 provided to Westpac Bank to obtain finance.
Patrick Bouquiaux had verbally advised the defendant that he had unconditional loan approval and then confirmed this in a letter dated 1 July 2013. The letter stated that the defendant had approval for an interest-only (for 15 years) loan with a term of 30 years, 76 for the sum of $555,870.
On 2 July 2013, the defendant exchanged a contract to purchase the property from CRD for a sum of $277,500. The purchase was funded by the defendant entirely from 77 his own monies and monies he had personally borrowed from Westpac Bank.
On 17 July 2013, the defendant’s solicitors advised him that $7,267.50 was payable to the ACT Revenue Office for stamp duty on the property. The defendant provided a 78 bank cheque from Commonwealth Bank for that amount.
On 22 July 2013, the defendant’s conveyancer received an email from CRD that stated that the first plaintiff or the defendant needed to pay interest of $4,158.22 in addition to

On 26 July 2013, settlement of the purchase of the property occurred. The defendant 79 was not required to pay interest.
In the defendant’s first written statement, the defendant denied that he had ever entered into a partnership in relation to the property with the first plaintiff nor any of the entities controlled by the first plaintiff. The defendant claimed he was first put on notice of an alleged partnership when he received a letter from the first plaintiff’s solicitor on 14 80 November 2017.
The defendant denied that the first plaintiff or the second plaintiff ever made any 81 financial contribution to the construction of the dwelling on the property.
The defendant also denied that he was actively involved in the build. The defendant claimed he only received emails in respect of site plans due to the first plaintiff being 82 overseas and wanting to avoid any delays resulting from that travel.
In relation to elective variations to the plans, the defendant denied that he had instructed Robert Jukic to amend the plans to accommodate these variations. The defendant stated that variations were required as ‘work arounds’ due to errors in the 83 construction. The defendant insisted that the plans required amending because the 84 second plaintiff failed to construct the dwelling in accordance with the approved plans.
As to why the defendant began to pay trades directly, the defendant stated that this was due to the first plaintiff being overseas, frequently away or uncontactable. To 85 continue the progress of the build, the defendant paid the subcontractors directly.
The defendant admitted that he was regularly onsite to check the progress of the development throughout October and November 2014. The defendant stated that while onsite, various subcontractors would make complaints to him that the second plaintiff had not paid them. The defendant claimed that he paid many of the subcontractors 86 directly out of desperation and in an effort to complete the development.
The defendant admitted that he had sourced material directly from suppliers using the first plaintiff’s trade accounts, engaged directly with tradesmen regarding the sourcing and specification of materials, provided direction to tradesmen and researched options for different fittings and fixtures and placed orders using the first plaintiff’s trade accounts or credentials. The defendant claimed this was undertaken in the normal course of an owner specifying inclusions for his home. In relation to the use of the first plaintiff’s trade accounts, the defendant stated he only used said accounts when the 87 first plaintiff asked him to.

The defendant addressed the statement of Juha Lehtonen in the defendant’s first witness statement. The defendant denied knowing Juha Lehtonen as well as denying the conversations that were claimed to have taken place involving the defendant in 88 Juha Lehtonen’s witness statement.
The defendant addressed the allegations contained within the statement of John Rasic. 89 The defendant denied that he was providing instructions for variations.
In relation to the statement of Scott Dickason, the defendant also denied that he 90 directed Scott Dickason to undertake variations.
The defendant again denied the allegations as set out in the statement of Andrew Desmond, specifically that he ever directed any variations.
The defendant also completed a second witness statement (the second witness 91 statement of the defendant) dated 5 June 2019 that formed part of Exhibit 1. In the second witness statement of the defendant, the defendant denied the partnership with 92 the first plaintiff as set out in the witness statement of Elle Cobanov.
The defendant gave evidence at the hearing on 23 October 2019 and 24 October 2019. Both of the defendant’s witness statements were tendered as part of Exhibit 1. Counsel for the plaintiffs raised objections in relation to the admissibility of portions of the defendant’s first and second witness statements. I allowed the statements to be 93 tendered subject to weight.
The defendant was cross examined by counsel for the plaintiffs on his intention to look 94 for a parcel on land to build a family home on in 2013. The defendant stated that he saw block 1 of 104 in Casey was for sale and that the whole estate had been advertised. The defendant claimed there had been a sales office and agents working in the sales office. When it was put to him that the block was not available for sale because it was still under contract with the first plaintiff and CRD, the defendant stated he did not know 95 whether that was the case.
The defendant gave evidence that his intention was to live with his family at the property 96 after it was built and that had been his intention when purchasing the property. It was put to the defendant that his intention was instead to build an investment property, as recorded by Patrick Bouquiaux. The defendant denied that he was going to build an 97 investment property.
The defendant was referred to his Loan Application documentation for the Westpac Bank loan that became Exhibit 13 in the proceedings. There were references in the Loan Application to whether the property was going to be rented out. Under the question “will you rent out this property?” a box was ticked next to the word “yes” and in the box asking for the rental amount per month to be specified, $3,983 was written.

The plaintiffs submitted that from this conversation, it was the common intention of the parties to develop the property for their mutual profit. The first plaintiff would contribute, or cause to be contributed through the second plaintiff: the subject property; building licence and insurances; trade and supplier contacts and accounts; equipment, time and skill and experience as a builder, while the defendant would provide finance, as well as design ideas and time in running the build. The first plaintiff would also contribute 20 per cent of the build cost and 10 per cent of the land cost, the former in kind and the latter in cash. The goal of the partnership was mutual profit. The plaintiffs alleged that 105 the evasion of tax was not the purpose of the transaction. Again, I am not persuaded that it was the common intention of the parties to develop the property for their mutual profit.
The plaintiffs emphasised that the first plaintiff arranged for the second plaintiff’s contract with CRD for the subject property to be rescinded and for a fresh contact with CRD to be issued with the defendant as the purchaser. The plaintiffs submitted that the defendant did not offer a reasonable explanation of how this arrangement took place yet maintained the assertion that the dealings between the parties were always an 106 arm’s length transaction. This aspect of the evidence does not, in my view, detract from my finding that on the balance of probabilities I am not persuaded there was a partnership. Nor am I persuaded entirely of the defendant’s version of the events. Nevertheless, the plaintiffs bear the onus on the balance of probabilities of establishing the partnership and in my view, the plaintiffs have not done so to the requisite standard.
The plaintiffs also relied on the Campa project to inform the inquiry as to whether there was a partnership. The Campa project was also another proposal on foot between the parties and Alfonso Campa and it provided context to the intention of the parties to develop the subject property as a partnership rather than a standard arm’s length owner/ builder relationship. The plaintiffs drew upon Exhibit 16 which was an email from the defendant to the first plaintiff in relation to the Campa project in which the defendant 107 writes “I have done the numbers and it looks good”. In my view, Exhibit 16 does not necessarily support the first plaintiff’s partnership contention.
The references to renting out the property in the loan application documents and the anticipated rental return were also relied upon by the plaintiffs to counteract the evidence of the defendant that the property was only ever going to be his marital home and that was the purpose of it being built. The plaintiffs submitted that the court would more readily accept what is recorded in the contemporaneous material about the 108 purpose of the loan and would reject the version proffered by the defendant. Again, in my view this is not determinative, nor does it necessarily lend support to the first plaintiff’s version of events.
The plaintiffs relied on the defendant not calling Patrick Bouquiaux as grounds for the court drawing a Jones v Dunkel (1959) 101 CLR 298 (Jones v Dunkel) inference. That is, that the unexplained failure of the defendant to call Patrick Bouquiaux may lead to an inference that the evidence of that witness would not have assisted the defendant’s 109 case: see Jones v Dunkel at [5].

The plaintiffs’ highlighted that the evidence of Patrick Bouquiaux could have provided evidence as to why he had written that the purpose of the loan was for an investment property, why a rental appraisal was obtained and why the weekly rental amount was written into the loan documentation. The defendant’s position was that these actions undertaken by Patrick Bouquiaux were apparently contrary to the defendant’s intention, that is that he was building a family home to live in with his fiancé. The plaintiffs submitted that where the defendant denies aspects of the claim by asserting a positive state of affairs, it is not for the plaintiffs to make good the defence case. The plaintiffs commended the alternative inference that the defendant did not call Patrick Bouquiaux as his evidence would have undermined the versions of events propounded by the 110 defendant. I take this into account. Nevertheless, the drawing or otherwise of the inference does not assist to any significant degree on the partnership issue.
At the further hearing for submissions on 16 June 2020, counsel for the plaintiffs again referred to the loan documentation completed by Patrick Bouquiaux and noted that it 111 was not a ‘just a tick-a-box investment property’.
The plaintiffs also drew upon the defendant’s active role in the management of the build to demonstrate the alleged partnership. The plaintiffs referred to the chains of email correspondence, where the defendant engaged directly with suppliers and subcontractors, to demonstrate that the degree and type of involvement in the building of the property of the defendant could only be explicable if the defendant was acting as 112 a partner and not as an ordinary homeowner. At the further hearing, counsel for the plaintiffs submitted that the correspondence during the course of the build showed a level of participation and care which is only consistent with the actions of a 113 partnership.
The evidence of Juha Lehtonen, John Rasic, Scott Dickason and Andrew Desmond was relied upon to demonstrate that the defendant was involved in the construction of the property more than a regular owner would be. The plaintiffs’ explanation for the defendant’s involvement was that the defendant was authorised to give instructions to the subcontractors because the parties were jointly engaged in developing the subject 114 property for mutual profit.
The plaintiffs’ submissions also addressed four additional factors that they claimed undermined the defendant’s version of events as to the existence of a partnership:
The progress payment invoices, in relation to the evidence of Elle Cobanov that she did not recognise them as invoices of the second plaintiff and that the first plaintiff was not technologically proficient to author them, to assert that the progress payment invoices were authored by the defendant.
The final progress payment was not released to the second plaintiff in error.
The defendant did not call Patrick Bouquiaux to give evidence. 115 4. The Construction Contract Settlement Agreement.

In my view, the objective evidence does not support the finding on the balance of probabilities that the parties entered into a partnership agreement. The first plaintiff had taken no steps to formally set up the alleged partnership. The first plaintiff did not contribute to payment of stamp duty, conveyancing costs nor council and water rates.
The evidence of the third-party subcontractors, namely Juha Lehtonen, John Rasic, Scott Dickason and Andrew Desmond, relied on by the plaintiffs was not in my view particularly probative. It was not of telling significance in this case.
It was submitted by counsel for the defendant and I accept that the Phyllis Ashton project involving the first plaintiff, the defendant and Goran Josifovski as well as the original arrangement with Goran Josifovski to sell the block to a group including a man named Ziad Deeb were the pre-purchase arrangements of the parties. These facts do not assist the court to determine whether or not there was a partnership in this case.
It was also submitted on behalf of the defendant that the use of the HIA Contract, 116 117 regardless of whether it was the first plaintiff’s or the defendant’s version of the HIA Contract, was another factor that highlighted that the parties were not in a 118 partnership. Counsel for the defendant submitted that the HIA Contract was entered into in the ordinary commercial sense of a builder/ client arrangement rather than a 119 partnership agreement. I accept this submission.
I do not accept the plaintiffs’ submission that the degree and nature of the defendant’s involvement in the development was inconsistent with an ordinary fixed-price construction project completed through an arms-length builder/ owner agreement.
Counsel for the plaintiffs stated that the overarching inference that the plaintiffs urged upon the court was that a partnership between the first plaintiff and the defendant was the only explanation for the entirety of the circumstances. As discerned above, I am not persuaded on the balance of probabilities of such a partnership.

In reference to the first plaintiff’s evidence at the hearing that he always intended to pay tax on his portion of the profit, the defendant claimed that assertion was inherently inconsistent with the tax avoidance term. Further, the first plaintiff’s assertion was also entirely inconsistent with the intention of the partnership. The defendant submitted that the court ought to reject the evidence of the first plaintiff that he was always going to pay tax on his portion of the profit and that such evidence would lead the court to 126 question the reliability and honesty of the first plaintiff as a witness.
The defendant referred to the legislative scheme under the Income Tax Assessment Act 1997 and the Income Tax Assessment Act 1936 to establish the illegality of the tax 127 avoidance term.
The defendant submitted that if the partnership agreement was to be upheld, it must follow from the definition of partnership in s 6 of the Partnership Act that the parties intention to carry on a business in common with a view to profit was intended to be a 128 profit that would be free of the obligation to pay capital gains tax.
The defendant submitted it was clear that the partnership agreement would meet the definition of a scheme contained within Part IVA of the Income Tax Assessment Act 1936 as the agreement was for the sole or in the alternative dominant purpose of avoiding the liability of capital gains tax in the relevant year of assessable income. The defendant urged a finding that the objective inquiry pursuant to Part IVA would reveal 129 that the tax avoidance term was solely intended as a scheme to avoid tax.
The defendant asserted that the partnership agreement ought to be voided for illegality as it could not be performed without a violation of the law and was therefore ex facie 130 illegal.
The defendant also relied upon the basic maxim in common law of ex turpi causa non oritur (ex turpi causa) espoused by Lord Mansfield in the case of Holman v Johnson 131 (1775) 98 ER 1120 at 1121:

In the second witness statement of the first plaintiff, the first plaintiff claimed that he had never received $76,850 in cash from the defendant. The first plaintiff stated that he did not author the ‘tax invoice’ for $76,850 nor did he arrange for anyone else to 146 create it.
The first plaintiff claimed that the ‘tax invoice’ was handed to him by the defendant at the meeting on 1 July 2013. The first plaintiff confirmed he signed it and then handed 147 it back to the defendant. The first plaintiff referred to invoices relating to the Phyllis 148 Ashton project and annexed them to his second witness statement.
At the hearing on 21 October 209, the first plaintiff gave evidence that he was not computer literate. The first plaintiff stated that the extent of his ability to use a computer only involved being able to log on, read emails and respond to emails. The first plaintiff gave evidence that he did not know how to use Microsoft Word, any other word processing program, Microsoft Excel, any other spreadsheet program, the accounting 149 program MYOB nor any other business management software.
The first plaintiff gave evidence that he employed his daughter, Elle Cobanov, and a 150 bookkeeper to assist with business management of the second plaintiff. The first plaintiff stated that Elle Cobanov’s role involved preparing minimal paperwork for the 151 accounts.
In cross examination, it was put to the first plaintiff that he had received the $76,850 in cash from the defendant. The first plaintiff denied that he ever had received the amount 152 in cash.
The first plaintiff was referred to the invoice dated 1 July 2013 that bore the second plaintiff’s details at the top of the document, although the invoice referred to the second 153 plaintiff as Ashellhomes Pty Ltd. That invoice formed part of Exhibit 1. The first plaintiff agreed that the invoice displayed the second plaintiff’s company ABN, the 154 address of the second plaintiff and the first plaintiff’s mobile and fax number.
The first plaintiff also agreed that the invoice had his signature in the middle of the page 155 but denied this meant he had received the money in cash. When queried about why the invoice was signed and stamped as paid when the first plaintiff denied receiving the funds, the following exchange took place:

The defendant stated that the $76,850 was paid to the first plaintiff in cash, from funds that were gifted to the defendant by his parents, Snezana Josifovski and Ratko Josifovski. The cash payment was solely derived from the cash provided by the defendant’s parents, meaning that the defendant did not need to draw funds from the 175 Westpac Bank loan.
After handing the $76,850 to the first plaintiff, the defendant asserted that the first 176 plaintiff gave him an invoice stamped “paid”. The invoice dated 1 July 2013 was signed by the first plaintiff and was annexed to the first statement of the defendant, 177 becoming part of Exhibit 1.
The defendant claimed that he proceeded to give the signed and stamped invoice to Patrick Bouquiaux. The defendant’s understanding was that Patrick Bouquiaux submitted the invoice to Westpac Bank. The invoice was submitted along with a letter under the hand of Patrick Bouquiaux confirming the nature of the invoice and including a letter under the hand of Snezana Josifovski confirming that she had gifted her son $76,850.
In the defendant’s second witness statement, the defendant denied that he did not pay the first plaintiff $76,850 and also denied preparing the 1 July 2013 tax invoice. The defendant claimed that the tax invoice was prepared, stamped and signed by the first 178 plaintiff.
The defendant could not recall whether or not the invoices in relation to the Phyllis Ashton project included in the second witness statement of the first plaintiff had been 179 issued to him directly.
The defendant also claimed that he did not know whether Elle Cobanov prepared the invoices for the property but confirmed he had received invoices from the second plaintiff, annexing them to his first witness statement. The defendant denied ever having received an invoice from the second plaintiff bearing the logo of the outline of a 180 house.
In cross examination, the defendant was taken to various invoices from the second plaintiff to the defendant in relation to the Phyllis Ashton project which were also part 181 of Exhibit 1. It was put to the defendant that the Phyllis Ashton invoices were similar to the 1 July 2013 invoice, that in amongst other things, the spelling of the second 182 plaintiff was ‘Ashellhomes Pty Ltd’.
The defendant confirmed in cross examination that the 1 July 2013 was the first invoice allegedly received from the second plaintiff in relation to the development of the

It was put to the defendant that the remaining invoices received from the second plaintiff for the development of the property were all in the format of the 2 December 2013 186 invoice as opposed to the 1 July 2013 invoice. The defendant conceded this point.
The defendant was also taken to an email he had sent from his ACT government email 187 address back in 2011 in relation to the Phyllis Ashton project. The email had been sent to two email addresses in the name of the second plaintiff and attached an invoice in the form of a Microsoft Excel spreadsheet named ‘Yerrabi Invoice 17 June 2011’. When referred to the 2 December 2013 invoice and the invoices in the same format thereafter, the defendant conceded that those invoices were in a similar template as 188 invoice attached to the email in relation to the Phyllis Ashton project.
It was put to the defendant that he had drafted all of the invoices that were in the similar template to the 2 December 2013 and that they had originated from a template the defendant had from 2011 in relation to the Phyllis Ashton project. The defendant denied 189 these claims.
In relation to this point, the defendant was taken to the Loan Application documentation for the Westpac loan that became Exhibit 13 in the proceedings. On the first page of the document was a heading ‘customer contribution’, underneath it read ‘where is the customer’s contribution coming from?’. On the document, the boxes savings/bank account and other were ticked. The word gift was written alongside other. When asked who had written the word ‘gift’ the defendant responded that he was not sure but that 190 it may have been the broker, Patrick Bouquiaux.
The defendant agreed that there was no other reference in the Loan Application documentation to the gift. The defendant however noted that attached to the back of the documentation was a letter under the hand of his mother Snezana Josifovski dated 7 June 2013 which stated she had provided the defendant with a gift of $76,850 to 191 assist with the deposit.
The defendant gave evidence that he had received the gift of $76,850 from his mother at the time he had signed the Loan Application on 7 June 2013, which is also the date 192 of his birthday.
In cross examination the defendant could not recall the exact date that his mother had given him the $76,850 but stated that it was in the days leading up to his birthday on 7 193 June 2013.

When queried about what denominations the $76,850 was given to the defendant in, the defendant gave evidence that the money was a mix of $50 and $100 notes, arranged in $10,000 stacks with the remaining stack of $6,850. The defendant agreed 194 that it was broken up into approximately six or seven stacks of cash.
It was the defendant’s evidence that his mother had given him the $76,850 at his parents’ family home located in Harrison. The defendant stated that the exchange took place in the living room of the family home, which was open plan and included a dining room setting. The defendant gave evidence that after they had eaten dinner his parents had said “we’re here to help you like we helped your brother” and then his mother 195 proceeded to hand him the money.
The money was in an envelope and the defendant stated that he did not open the 196 envelope when he first received it from his mother. The defendant stated that it was 197 a white envelope and could not recall whether there was any writing on the envelope. When asked when he first discovered the amount of stacks, the defendant claimed that he later took the envelope to his bedroom in the family home in Harrison and opened the envelope. He proceeded to count the money and then put it away in his wardrobe for safekeeping. The defendant stated that he had taken the money out of his wardrobe 198 and placed it onto his bed on at one least occasion to recount the amount.
The defendant gave evidence that he had taken the $76,850 with him when he met with the first plaintiff on 1 July 2013. The defendant stated that the money was no longer in the same white envelope but had instead been transferred to a grey Country Road 199 tote bag.
When queried why he knew he needed to take the money to the meeting with the first plaintiff, the defendant again affirmed they had previously discussed the first plaintiff 200 requiring the funds. The defendant gave evidence that the meeting occurred at the 201 first plaintiff’s workplace address.
The defendant stated that he took the cash from the Country Road tote bag and handed it to the first plaintiff. The first plaintiff then allegedly counted the funds in the 202 defendant’s presence before putting the cash to one side on the table. The defendant stated that the stacks of cash remained on the side of the table when he left and 203 confirmed that he believed 1 July 2013 was the last time he had seen the $76,850.
It was put to the defendant that the contract to purchase the land was not going to exchange until 2 July 2013 and that there was no certainty exchange would proceed. The defendant claimed that he was quite certain exchange would proceed given he had his finances secured at the time and exchange had been booked to take place on 204 2 July 2013.

The defendant conceded that there was perhaps a risk that there would be a delay in 205 settlement and that the defendant may not actually have the land at all. The defendant also acknowledged that the first plaintiff would not actually be able to 206 commence work until the defendant had possession of the land. It was agreed by the defendant that he gave the first plaintiff $76,850 on an allegedly urgent basis when 207 there was no land for the second plaintiff to commence work on.
It was the defendant’s evidence that the first plaintiff gave him the 1 July 2013 invoice but that he was not sure whether it had been produced by the first plaintiff, Elle Cobanov 208 or the first plaintiff’s bookkeeper. The defendant denied stamping it as paid with the stamp that read “Paid” “Date” “CHQ No” and that he did not think he wrote the date into 209 the stamped area of the invoice but he could not recall.
It was put to the defendant that he had drafted the 1 July 2013 invoice for the first plaintiff to sign and then had stamped it as paid and entered the date after the first plaintiff signed it, before the defendant submitted it to Westpac Bank. The defendant 210 denied this.
The defendant was unsure whether he took the original tax invoice or whether he took 211 a copy, but thought it was most likely to be the original. The defendant stated he believed the first plaintiff made a copy of the invoice but conceded that he could not 212 remember if he saw the first plaintiff make a copy.
When asked why he did not simply retain the $76,850 until after settlement, the defendant claimed that the first plaintiff had assured him the trades and materials could be prearranged which would ensure the property would be built in the indicated 213 timeframe.
The defendant was further asked why he was content to give the first plaintiff $76,850 at a time when there was no security that the project would proceed, when the first 214 plaintiff allegedly owed the defendant’s father $31,000. The defendant confirmed he was content to pay the first plaintiff the $76,850 notwithstanding the first plaintiff 215 allegedly had not paid his own father back the $31,000.
The defendant was queried as to whether he had drafted the letter under the hand of Snezana Josifovski dated 7 June 2013. The defendant denied that he had drafted the letter and indicated that he did not know whether his mother had drafted the letter herself. The defendant admitted that his mother had not given him the letter at the same 216 time she had given him the $76,850 in cash.
The defendant was also referred to a document that was a loan enquiry with Tiffen & Co and had the name of Patrick Bouquiaux as the loan writer. This document was

In her witness statement, Snezana Josifovski recalls that she handed the defendant $76,850 in cash at the family home in Harrison just prior to his birthday on 7 June 2013. 226 At the time, Ratko Josifovski was also present.
Snezana Josifovski also details a series of letters she signed in June and July 2013: one being dated 7 June 2013 and two others being dated 22 July 2013. The letters were signed at the request of Patrick Bouquiaux, who Snezana Josifovski knew as the mortgage broker of the defendant. The series of letters were annexed to Snezana 227 Josifovski’s witness statement.
The 7 June 2013 letter is addressed to Patrick Bouquiaux and states that Snezana Josifovski had provided her son, the defendant, with a gift of $76,850 to assist with the deposit to build the home. The letter confirmed there was no requirement for the defendant to repay the amount. This letter also formed the final page of Exhibit 13, being the Westpac Bank Introducer Application Pack.
The first 22 July 2013 letter is also addressed to Patrick Bouquiaux and clarified that the money gifted by Snezana Josifovski to the defendant was contributed to the construction of the home itself. The letter refers to a receipt of the contribution being attached.
The second 22 July 2013 letter is also addressed to Patrick Bouquiaux and further clarified that the money gifted to the defendant was contributed to the construction of the home itself pursuant to cultural practice. The letter details that the contribution is to the amount of $76,850 worth of building works at 1/104 Casey, ACT. This letter also refers to a receipt of the contribution being attached.
In relation to the references to a receipt of the contribution being attached to the 22 July 2013 letters, Snezana Josifovski claimed that the receipt was the 1 July 2013 invoice stamped as $76,850 being paid to the second plaintiff. Snezana Josifovski 228 recalled seeing the invoice in or around July 2013.
Snezana Josifovski stated that she could not recall whether she drafted the letters, whether Patrick Bouquiaux drafted them solely or whether it was a combined effort. The letters were to confirm with Westpac Bank that the gifted money was to go towards 229 the actual construction of the property.
Snezana Josifovski gave evidence at the hearing on 24 October 2019. It was noted by 230 counsel for the defendant that English was Snezana Josifovski’s second language.

In cross examination, Snezana Josifovski stated that she gave the defendant $76,850 in cash a few days before his birthday. Snezana Josifovski gave evidence that she gave the defendant the money during dinner in the living area of the family home in 232 Harrison.
Snezana Josifovski gave evidence that she had arranged the cash into bundles of $10,000 but that she could not recall how many bundles there were. The $10,000 bundles were made up of $50 and $100 denominations. Snezana Josifovski stated she had given the defendant the bundles of money in a white envelope. After giving the envelope to the defendant, Snezana Josifovski said that she believed the defendant 233 took it to his bedroom in the family home.
When asked whether that amount of money had come from, Snezana Josifovski gave evidence she had not withdrawn it from the bank but there was cash stored in the home 234 from saving. Snezana Josifovski stated that there had been more than $76,850 stored in the home but that she could not recall whether it was more or less than 235 $100,000 in total.
When referred to the 7 June 2013 letter, Snezana Josifovski gave evidence that she 236 did not type the letter but it did bear her signature. Snezana Josifovski stated that she believed she had first handwritten out the letter then provided it to Patrick Bouquiaux, she was unsure whether it may have been Patrick Bouquiaux who typed 237 the letter.
Shortly thereafter, Snezana Josifovski stated she could not recall if she had handwritten 238 the letter or whether she typed it or Patrick Bouquiaux typed it. Snezana Josifovski gave evidence that she did not have a printer at home and that she did not think she had a computer at home at the time. She rejected that she could not have typed it if she did not have a computer at home, instead stating she may have used a work 239 computer but she could not recall.
Snezana Josifovski gave evidence that the letter was the result of Patrick Bouquiaux calling her saying he required something in writing to confirm to Westpac that she had given the defendant the money. Snezana Josifovski was then provided with a copy of 240 the letter to sign by Patrick Bouquiaux.
In relation to the first 22 July 2013 letter, Snezana Josifovski gave evidence that she could not recall handwriting or typing the letter but confirmed it bore her signature. She

Ratko Josifovski could recall discussing the defendant’s request with Snezana 250 Josifovski where he told his wife to give the money to the defendant.
Ratko Josifovski stated that he recalled that he and his wife gave the defendant $76,850 just before the defendant’s birthday, although he could not recall the exact 251 date of the exchange.
Ratko Josifovski gave evidence at the hearing on 24 October 2019. As was the case for Snezana Josifovski, counsel for the defendant also indicated to the court that 252 English was Ratko Josifovski’s second language.
The evidence in chief of Ratko Josifovski consisted of confirmation that the witness was telling the truth about the information contained in his first and second witness statements, which were then formally tendered as part of Exhibit 1.
In cross examination, Ratko Josifovski confirmed he was present in the room when his wife gave the defendant the $76,850 in cash. He gave evidence that Snezana 253 Josifovski had handed the defendant a white envelope which contained the money.
When queried where the large sum of cash had come from, Ratko Josifovski stated 254 that the money was kept in the house as a result of saving from his hard work. Upon being asked whether that amount was all of the cash within the home, Ratko Josifovski gave evidence that there was perhaps a little bit more money in the house, but he was 255 unsure of the quantum.
Ratko Josifovski also gave evidence that he had previously given his other son, Goran Josifovski money. Although, Ratko Josifovski was unable to recall how much money 256 he had given to Goran Josifovski or when this had taken place.
Ratko Josifovski was referred to Exhibit 19 in cross examination. Exhibit 19 had been tendered through the defendant and on the third page of the bundle was a document dated 24 April 2017 under the hand of Ratko Josifovski written in Macedonian. The document specified that Ratko Josifovski would lend the defendant $100,000 and it was agreed that the defendant would return that amount upon the sale of the property.
Ratko Josifovski confirmed that he had written the document dated 24 April 2017 and 257 that it was in Macedonian. Ratko Josifovski confirmed that it recorded a loan of $100,000 which he had made to the defendant. When queried why a written record was made of the $100,000 loan to the defendant but not the bequeathing of $76,850, Ratko Josifovski stated that the amounts were for different purposes. The $76,850 was to help build the house whereas the $100,000 was to be returned to him when the 258 defendant was able to.
During the course of cross-examination on the issue of the $76,850, Ratko Josifovski was also referred to the alleged $31,000 owed to him by the first plaintiff. Ratko Josifovski was questioned as to whether he was concerned that the defendant was

The plaintiffs submitted that the first plaintiff was earnest and forthright when giving his evidence. Reference was made to the limited computer literacy of the first plaintiff, including his lack of knowledge of how to use templates to create word processing 261 documents.
The plaintiffs stated that the defendant was inexplicably unable to recall key events or circumstances, including the date he had received the $76,850 in cash from his parents. It was submitted that key documents and witnesses which would otherwise be available to support the defendant’s version of events were not adduced into evidence 262 leaving the defendant’s evidence uncorroborated.
The plaintiffs submitted that the court should not accept that the defendant was given $76,850 by his parents shortly before his birthday and that the whole of that amount was then given to the first plaintiff on 1 July 2013.
Without the gift of $76,850, the plaintiffs asserted that the defendant would have had to seek 100 per cent finance of the build cost in his Westpac Loan Application. The plaintiffs also referred to the misinformation as to the loan purpose, being the various references to it being an investment property and the anticipated rental returns. The available inference was that without the $76,850 gift, the finance would not have been 263 available.
The building cost had to be known prior to know how much money was required. The preparation of plans were a prerequisite to determining the building costings. The plans prepared by Robert Jukic were dated 4 June 2013 but bear a house energy rating stamp of 6 June 2013. The plaintiffs submitted that even if the plans were given to the first plaintiff on the day the defendant received them, the earliest date the defendant could have had the plans was 4 June 2013 but it was more likely 6 June 2013.
The plaintiffs submitted that the evidence of Snezana Josifovski was lacking outside of scripted details in that she could not recall details that would otherwise be memorable. It was submitted that Snezana Josifovski was unable to commit to any meaningful circumstances regarding the preparation of the letter dated 7 June 2013 that she 264 signed.
There was no evidence of a discussion between the defendant and his parents as to how the specific amount of $76,850 was arrived at. The plaintiffs noted that $76,850 amount to exactly 20 per cent of the $384,250 build cost as set out in the HIA contract.

It was submitted that in order for the court to accept the defendant’s version as to the $76,850, the court would have to accept that the specific and idiosyncratic amount of $76,850 was arrived at by pure chance and that it was given to the defendant at some point between 4 and 6 June 2013.
The plaintiffs highlighted that no documents were produced to show the source of that amount of money but instead Snezana Josifovski and Ratko Josifovski gave evidence it had come from an unspecified and unknown amount of cash which they had on hand in their family home. The plaintiffs submitted that the only documentation in relation to the $76,850 was the 1 July 2013 invoice, a highly disputed document in the proceedings.
The plaintiffs also referred to the evidence of the defendant that he had counted the money in his bedroom yet Patrick Bouquiaux had recorded the incorrect amount of $69,000 twice on the loan application. The plaintiffs submitted that as Patrick Bouquiaux was the defendant’s mortgage broker acting on the defendant’s instructions, the court ought to infer that Patrick Bouquiaux was told by the defendant the amount was $69,000. It would be logically implausible for the defendant have been given and to have personally counted the amount as $76,850, yet tell Patrick Bouquiaux he only 265 received $69,000 as a gift.
The plaintiffs reiterated the absence of Patrick Bouquiaux in relation to the $76,850 issue, noting that he could have given evidence as to:
Why he inexplicably twice wrote the wrong gift amount of $69,000 on the loan paperwork.
The circumstances surrounding the creation and timing of the letter dated 7 June 2013 signed by Snezana Josifovski.
The extent of the assurances provided by him as to the defendant’s approval for finance that provided the defendant with the willingness to sign a building contract and pay the first plaintiff $76,850 in cash prior to 266 exchanging on the land.
The plaintiffs invited the court to make a Jones v Dunkel inference to these aspects of the $76,850 that the evidence of Patrick Bouquiaux would have undermined the version 267 of events propounded by the defendant, Snezana Josifovski and Ratko Josifovski. The drawing of this inference does not assist to any significant degree in the resolution of this question of the $76,850.
The plaintiffs referred to the evidence of the defendant in the first statement of the defendant that the first plaintiff asked for a large upfront payment on 1 July 2013 and that the defendant happened to have received that exact amount from his parents as a gift, happened to have the full amount on his person at the meeting and decided to pay it to the first plaintiff, all at the same time.

It was submitted that the cash gift of $76,850 preceded the first plaintiff’s request for that sum by a matter of weeks and that payment of that cash to the first plaintiff occurred before the defendant had even secured land to build the house upon.
In reference to the 1 July 2013 tax invoice, the plaintiffs submitted it was not referable to the format of invoice utilised by the second plaintiff at that point in time. It was instead referable to a form of invoices that the second plaintiff had used previously, including at the time of the Phyllis Ashton project with the defendant and Goran Josifovski.
The plaintiffs emphasised the evidence of Elle Cobanov that she did not recognise the template of the 1 July 2013 invoice, nor did she ever see or use a stamp at the workplace of the second plaintiff that produced a red square with the words “Paid” “Date” and “CHQ No”.
The plaintiffs submitted that the court should draw an inference that the 1 July 2013 tax invoice was authored by the defendant as he had a similar template in his records from the Phyllis Ashton project. The plaintiffs further invited the court to draw an inference that the purpose of the defendant generating the 1 July 2013 tax invoice was for the purposes of obtaining finance, a responsibility of the defendant pursuant to the 268 partnership agreement.
It was submitted that the defendant’s evidence as to the $76,850 failed to add up. The defendant’s evidence was inconsistent with the loan documentation and the defendant’s own witness statements. The plaintiffs claimed the defendant’s version 269 was implausible in isolation and in the context of the remaining evidence.
The plaintiffs submitted that the court would more readily accept the evidence of the first plaintiff that he had never received the $76,850. The better explanation of the 1 July 2013 invoice was that it was created by the defendant and signed by the first plaintiff to represent the 20 per cent contribution of the first plaintiff to the cost of the build and to ensure consistency with the defendant’s loan application. Such a conclusion was consistent with the evidence of the first plaintiff and Elle Cobanov as to 270 the records of the second plaintiff.
In oral submissions on 16 June 2020, counsel for the plaintiffs submitted that the court would have to accept that the amount of $76,850 was arrived at by pure chance by the defendant and his parents. Such was the case in circumstances where there was no evidence to show the source of the amount, instead it was evidence from Snezana Josifovski and Ratko Josifovski that they had an unknown and unspecified amount of 271 cash stored in their home.
Counsel for the plaintiffs also submitted that in circumstances where the defendant was alleging an arm’s length builder/ client relationship, providing the first plaintiff with $76,850 in cash prior to the defendant having a legally enforceable right to build on the 272 land did not stand up to scrutiny.
Counsel for the plaintiffs reiterated its call for an inference to be drawn that the defendant authored the 1 July 2013 invoice from a template he had in records from the

I accept the evidence of both Snezana Josifovski and Ratko Josifovski that the $76,850 was the product of life savings which they stored in their home.
I accept the 7 June 2013 letter and the two 22 July 2013 letters signed by Snezana Josifovski, were prepared before any dispute between the parties had arisen and well before the proceedings had commenced. The 7 June 2013 letter stated the gift was an amount of $76,850 and it was to assist with the deposit of the defendant’s home.
The defendant also submitted that a Jones v Dunkel inference was not open to be drawn in relation to Patrick Bouquiaux. It was submitted that as the defendant was not on notice to the content of his cross examination, it could not be foreseen by the defendant that Patrick Bouquiaux would be raised in the manner that he was nor that the loan application form would be used in the manner that it was. The defendant 275 maintained he had no obligation to call Patrick Bouquiaux. Again, the drawing of the inference does not assist to any significant degree in the resolution of this question.
The evidence of the first plaintiff that he was going to pay capital gains tax on his portion of the profit notwithstanding the tax avoidance term is in my view unreliable. I similarly reject first plaintiff’s evidence that he signed the 1 July 2013 invoice as paid although he did not receive the funds.
Counsel for the defendant was queried as to his response to the defendant and his parents arriving at the particular amount of $76,850 and the lack of evidence setting 276 out this process. The apparent coincidence was not explored in the evidence.
The 1 July 2013 invoice was stamped as paid and signed by the first plaintiff.
I am satisfied on the balance of the probabilities of the defendant’s version of the $76,850 on the basis the 1 July 2013 invoice is signed by the first plaintiff and I accept the corroborating evidence of Snezana Josifovski and Ratko Josifovski.
The plaintiffs referred to the issue of the defendant’s parents arriving at the idiosyncratic amount of 20 per cent of the contract sum prior to the contract being drafted and the questionably identical recollections of the defendant, Snezana Josifovski and Ratko 277 Josifovski.
The plaintiffs reiterated the concerns about the stamp on the invoice itself, in circumstances where the first plaintiff and Elle Cobanov gave unchallenged evidence that no such stamp was used by them in the course of the second plaintiff’s business, as well as referring back to the consistency of the 1 July 2013 invoice with the Phyllis Ashton project invoice that had been sent by the defendant to the second plaintiff in 2011.
The plaintiffs submitted that in the circumstances, the court would more readily find that the $76,850 was not paid by the defendant. Further, the 1 July 2013 invoice was generated by the defendant and signed by the first plaintiff for the purposes of obtaining 278 finance.
In oral submissions in reply, the plaintiffs submitted that it was not a mere coincidence as to the idiosyncratic amount of $76,850 nor the 1 July 2013 invoice sharing similarities

The first plaintiff denied that Ratko Josifovski was capable of undertaking painting work worth $31,000 in circumstances where he did not have employees or subcontractors, 286 nor did he provide the materials or any equipment.
The first plaintiff confirmed that he had never received any invoices, letters, reminders, statements or demands from or on behalf of Ratko Josifovski for payment of any 287 monies owed to Ratko Josifovski.
The first plaintiff also denied ever having conversations with the defendant in relation to the defendant receiving money on behalf of Ratko Josifovski or being Ratko Josifovski’s enduring power of attorney.
At the hearing, the first plaintiff was taken to part of Exhibit 1 which was a photocopy of three cheques. The bottom cheque was dated 8 July with the year obscured and was addressed to the defendant for the sum of $25,000. It was drawn by Slavica Pty 288 Ltd as trustee for Cobanov Family Trust. The first plaintiff gave evidence that he 289 believed the cheque was written on 8 July 2013 but he was unsure.
The first plaintiff was then referred to a document which contained a copy of a cheque butt which contained the words ‘8/7/13, land block 1/104 $25,000’. The security paper of the cheque read ‘land sale’. The first plaintiff gave evidence that he wrote the words 290 on the cheque butt and the words ‘land sale’. The document also contained a Bendigo Bank Transaction History for an account in the name of the second plaintiff which showed a cheque withdrawal on 10 July 2013 for $25,000. The document 291 became Exhibit 2.
When referred to Exhibit 2 in cross examination, the first plaintiff denied that he inserted 292 the writing ‘land sale’ after he wrote the cheque. When queried what the phrase ‘land sale’ meant and its purpose, the first plaintiff stated that it was for the bookkeeper’s records so that he could confirm if it was for 1/104 Casey and that it meant the particular 293 amount of money was a deposit for the land.
During cross examination, Exhibit 4 was tendered through the first plaintiff. It was a th document signed by the first plaintiff addressed to the defendant stating ‘On the 8 of July 2013, a loan of $25,000 was lent to Mr. Josifovski to settle land of 1/104 Casey. This is owed back to John Cobanov. ** interest to be calculated daily’. The first plaintiff stated he was unsure who had in fact produced the document but conceded he had 294 signed it.

The defendant stated that the first plaintiff never paid the remaining monies owed to 310 Ratko Josifovski.
The first witness statement of the defendant referred to the document that had been produced and later became Exhibit 4 in the proceedings: the undated letter saying a loan of $25,000 had been lent to the defendant to settle land of 1/104 Casey. The defendant stated that he never seen the document prior to its production in the 311 proceedings.
The defendant also referred to the payment of stamp duty for the property. On 17 July 2013, the defendant was notified by his solicitors that $7,267.50 had to be paid to the ACT Revenue Office for stamp duty by 24 July 2013. The defendant provided a bank cheque from Commonwealth Bank to satisfy this payment and exhibited a copy of the bank cheque, ACT Revenue Office record and email from his solicitor regarding the 312 stamp duty.
In cross examination the defendant admitted he had received a cheque for $25,000 from the first plaintiff on 8 July 2013. The defendant accepted that Ratko Josifovski had 313 never given him any quotes nor documents to support the claim for $31,000.
The defendant confirmed that he had emailed the first plaintiff a demand for the monies owed but conceded no documentary evidence of the work undertaken by Ratko 314 Josifovski had been attached.
It was put to the defendant that there were no records in existence for the work Ratko Josifovski had performed on the first plaintiff’s Forrest home but the defendant responded that he did not know if that was the case. The defendant denied that there were no records due to the fact that Ratko Josifovski never undertook works to the value of $31,000. The defendant further denied that he never claimed the $31,000 from the first plaintiff, instead he asserted that he requested the money several times over a 315 long period.
When queried about paying the second plaintiff $76,850 in alleged circumstances where Ratko Josifovski was owed $31,000, the defendant gave evidence he was 316 content to pay the money to the second plaintiff.

The plaintiffs also highlighted that Ratko Josifovski’s evidence indicated that he was not concerned about the defendant retaining the second plaintiff to build the home, notwithstanding the alleged circumstances that the first plaintiff supposedly owed him 337 the significant sum of $31,000 for at least one year.
It was submitted that in circumstances where Ratko Josifovski was aware that the defendant also was to pay the second plaintiff $76,850 notwithstanding the $31,000 owed, it was illogical that he would not have objected to the defendant providing that 338 sum of money to the second plaintiff.
Such concern ought to have also been shared by the defendant himself if he had actually been making demands for payment for monies owed to Ratko Josifovski. The plaintiffs submitted that if the defendant had been making demands to the first plaintiff, he would have formed his own concerns as to the trustworthiness of the first plaintiff 339 and not provided him the $76,850 payment.
In oral submissions, counsel for the plaintiffs again urged the court not to accept the defendant’s version that the $25,000 was received against monies owed to Ratko 340 Josifovski. The plaintiffs submitted that there was a disconnect between the evidence given by the defendant and Ratko Josifovski, in that the defendant said $31,000 was owed for the painting work undertaken at the first plaintiff’s Forrest home. Whereas Ratko Josifovski gave evidence at the hearing that the monies were owed for a number 341 of different jobs in different suburbs.
Counsel for the plaintiffs emphasised the lack of quotes, invoices and formal written demands for payment from the first plaintiff. Reference was also made to the alleged outstanding balance of $6,000 which was also not the subject of any written demands, nor was there any evidence from the defendant or Ratko Josifovski requesting that the 342 remaining $6,000 be obtained.
It was submitted that if the court accepted the defendant’s version of events as to the monies owed to his father for over a year, the defendant would have been concerned 343 and troubled as to engage the first plaintiff to act as builder.
The plaintiffs also noted that the first plaintiff had not been cross examined as to the purpose of the $25,000 payment. It had not been put to the first plaintiff that the cheque 344 was instead for monies owed to Ratko Josifovski.
The plaintiffs ultimately submitted that the court should prefer the inference proffered by the plaintiffs as to the purpose of the $25,000 in that it was to support the first plaintiff’s contribution to the partnership. The alternative inference advanced by the

The defendant further referred to s 204(1) of the Civil Law (Property) Act which provides that a proceeding does not lie against a person on a contract for the sale or other disposition of land unless the agreement on which the proceeding is brought, or a memorandum or note of the agreement, is in writing signed by the person or by the person’s agent properly authorised in writing.
The defendant submitted that the court would not be satisfied that the $25,000 cheque had the effect of creating a resulting trust that would satisfy the exception in s 201(1)(a) 354 of the Civil Law (Property) Act.
It was submitted that if the court was to conclude that the defendant was liable to the plaintiffs for the $25,000, Slavica would still be able to bring a separate claim for the $25,000 if it was minded to. Such a result would be possible as Slavica was not a party to the current proceedings and would not be estopped or barred from making the claim pursuant to the doctrine in Port of Melbourne Authority v Anshun [1981] HCA 45; 147 CLR 589. This could have the ultimate result of the defendant being ordered to pay the 355 $25,000 twice.
In oral submissions, counsel for the defendant submitted that as the cheque was drawn by Slavica it would not be open for the court to conclude that the $25,000 was money paid by the plaintiffs. As a result, even if the court rejected the defendant and Ratko Josifovski’s version of the $25,000, the plaintiffs were not the proper plaintiffs for the 356 $25,000.
The defendant asserted that even if the court was to conclude that the plaintiffs had made the payment on the Slavica cheque, the payment of $25,000 would not create any rights in the land for the plaintiffs as the property was purchased on 2 July 2013 with the deposit paid by the defendant. The balance was paid with the funds borrowed 357 from Westpac at settlement on 26 July 2013.
As Calverley v Green at 252 establishes that the extent of any beneficial interest must be determined at the time the property was purchased, the plaintiffs would have no beneficial interest in the land as a result of the $25,000 in circumstances where Slavica 358 made the funds available after the deposit had already been paid by the defendant.
The defendant referred to the use of the word ‘loan’ in Exhibit 4 to further assert that a mere unsecured loan would not have created a right in the land. Further reference was made to Calverley v Green at 246 where Gibbs CJ affirmed that for the resulting trust presumption to apply to contributed funds, the money must have been provided by the 359 purchaser in the capacity as such, not for a loan.

The first plaintiff alleged that additional expenses were incurred as a result of carrying out the Additional Works, including debts on established accounts that the first plaintiff and second plaintiff had with trade suppliers. The second plaintiff did not seek a variation of the HIA Contract, put in a progress claim nor otherwise seek payment for 361 any of the Additional Works.
In November 2013, the first plaintiff asserted that the defendant had the architect Robert Jukic amend the plans for the dwelling in order to accommodate variations that 362 the defendant had sought.
The first plaintiff stated that he raised his concerns with the defendant regarding the increased costs the defendant was incurring with variations and choices of specifications, including the significant debts with trade suppliers. The defendant responded with words to the effect that the increased costs would be recovered upon the sale of the property.
In or around July 2014, the first plaintiff contacted Robert Jukic and requested an updated site plan for the property that included all of the extra or additional areas that 363 had not been calculated in the total square metres on the original plans.
On 7 July 2014, the first plaintiff received an updated site plan from Robert Jukic. In addition to the original plan of 269.8 square metres, the updated site plan listed an additional 60.97 square metres of floor area for:
Alfresco area 26.47 square metres;
Portico area 4.3 square metres;
External stairs and landing to laundry 5 square metres;
Sub floor area 12 square metres; 364 5. External timber deck 12.2 square metres.
On 5 December 2014, there was a dispute between the first plaintiff and the defendant as to unpaid invoices and accounts. The was a further heated phone call that took place between the first plaintiff and the defendant on 24 December 2014 about the sewerage 365 system at the property.
After the disagreement on 24 December 2014, the first plaintiff asked Elle Cobanov to gather all the receipts, supplier invoices and total paperwork that she could find in relation to the development of the property. Elle Cobanov then complied them all into 366 a hardcopy, ring binder style folder.
In January 2015, the first plaintiff and the defendant had agreed to meet at the office address of the second plaintiff to go through a reconciliation of all of the expenses and

The first plaintiff was also taken to a collection of documents that read in typed font‘ Extras for Section 1 Block 104 Casey’. Underneath the title, it read’ ‘Client: Kiki Josifovski’. The word client had been struck out with a pen and the word ‘Partner’ was handwritten underneath. It contained an index of invoices as well as the invoices themselves. Included in the collection of invoices were invoices payable to the second plaintiff bearing the logo of the second plaintiff.
The first plaintiff stated the invoices were invoices for the defendant’s job and that Elle 376 Cobanov had prepared the summary. In relation to the invoices payable to the second plaintiff, the first plaintiff gave evidence that Elle Cobanov knew what information to populate the invoices with based on the instructions given to her by the 377 first plaintiff. The documents were marked for identification, included in a bundle with the ‘1/104 – Expenditure Lists’. The bundle was paginated and was 73 pages long.
Although the tender of both ‘1/104 – Expenditure Lists’ and ‘Extras for Section 1 Block 104 Casey’ were to be deferred to the evidence of Elle Cobanov, counsel for the defendant wished for his objections to the material to be dealt with prior to the cross 378 examination of the first plaintiff.
In making the objection, counsel for the defendant understood ‘1/104 – Expenditure Lists’ and ‘Extras for Section 1 Block 104 Casey’ to be advanced as the Additional 379 Works. Counsel for the defendant noted that the first 16 pages of the bundle were summaries, and pages 17 to 73 were individual invoices. The document ‘1/104 – Expenditure Lists’ had a total of 184 entries for monetary amounts owed to suppliers, 380 some with invoice reference numbers.
Counsel for the defendant asserted that ‘1/104 – Expenditure Lists’ was an inaccurate summary of the resulting invoices by virtue of there being 184 entries on the summary 381 yet only 57 invoices succeeding it. Further, the invoices included in the bundle were ambiguous in that there was nothing on the face of discrete invoices that recorded it 382 was for an Additional Work. It was also unclear from the invoices whether there had been a record of payment made as there had been no authentication of business 383 records by the relevant third parties.
Counsel for the defendant maintained the objection on the basis of s 135 of the Evidence Act as the bundle presented as a burden to the defendant as an unquantified 384 claim for money.
In responding to the objection raised referred to the bundle, counsel for the plaintiffs referred to the evidence of the first plaintiff that Elle Cobanov collated all of the original documents chronologically along with proof of payment and that material in the ring binder folder was given to the defendant with no copy made. Counsel for the plaintiffs

I determined that the bundle could later be tendered through Elle Cobanov and the court would then receive it, subject to weight. If counsel for the plaintiffs failed to the link the material contained in the bundle to the HIA Contract to demonstrate the works 386 were in fact additional, the material itself would have zero weight.
Further evidence in chief was then taken of the first plaintiff. When referred to the document titled ‘Extras for Section 1 Block 104 Casey’, the first plaintiff gave evidence that the index included in the document contained dates with invoice numbers and 387 amounts paid. The invoices were from subcontractors for services and materials for 388 the development of the property, which had been sent to the second plaintiff.
The first plaintiff gave evidence that he paid for all of the amounts set out in the invoices and that there would be a paper trail from cheque books and bank statements. The first 389 plaintiff confirmed that he was not repaid for any of the amounts.
When asked what was meant by the word ‘extra’ in the title ‘Extras for Section 1 Block 104 Casey’, the first plaintiff said extra referred to works that were outside the scope of the build where changes were made, work was performed but no payment was 390 received.
The first plaintiff gave an example of a work that was outside of the scope of the build as being the change to the front door and back door. The first plaintiff stated that the doors were already in place and then the defendant wanted them changed from being 391 a timber door to a glass door with an aluminium frame.
Reference was made to an invoice for changing of doors included in the bundle that was payable to the second plaintiff. The first plaintiff confirmed that the invoice was dated 13 July 2015 because the original invoice had been given to the defendant and a new invoice had to be generated. The first plaintiff gave evidence that the invoice 392 date did not reflect the date on which the works were performed.
The invoice overleaf was from the company that the doors were obtained from, Trend Windows. The first plaintiff gave evidence that he received the invoice from Trend 393 Windows, that he paid the invoice and that he was not reimbursed for doing so.
During cross examination, the first plaintiff was taken to the version of the HIA Contract he said he entered into on behalf of the second plaintiff with the defendant. The first plaintiff was referred to clause 21, which sets out the proceeding for variations to the building works.
Clause 21 provides:

The first plaintiff was referred to an invoice of the second plaintiff for ‘plumbing for 1/104 Casey: plumbing for alfresco and butlers (sic) kitchen sinks’ for $3,000. Counsel for the defendant claimed that the $3,000 was for correcting faulty workmanship. The first 399 plaintiff denied this and stated that it was due to the plans being updated.
Reference was also made to an invoice of the second plaintiff for a ‘retaining wall for 1/104 Casey’ for $6,670. Although it was put to the first plaintiff that the defendant had 400 paid for $5,300 for the retaining wall to be built, the first plaintiff denied this.
Counsel for the defendant also referred the first plaintiff to an invoice of the second plaintiff for ‘bookeeping (sic) for 1/104 Casey’ for $2,000. The first plaintiff conceded that he had not approached the defendant and asked him for approval to incur bookkeeping costs. However, the $2,000 was on account of the material having to be 401 reconstructed after the ring binder folder went missing.
An invoice of the second plaintiff for ‘base work to below floor level of 1/104 Casey’ was also referred to, it included a line reading ‘Piers by drilling and pouring of concrete’ for $3,000. When asked how this was an additional work, the first plaintiff stated that it was additional because the height of the base had been exceeded and piers had to be 402 inserted.
The first plaintiff was referred to two further invoices of the second plaintiff. When queried why the corresponding invoices from suppliers were addressed to G & M Cobanov and who that entity was, the first plaintiff gave evidence that it was his father’s account that he had taken over. The first plaintiff claimed that it did not matter that the invoices were addressed to G & M Cobanov in circumstances where he had paid the 403 accounts.
In re-examination, the first plaintiff gave evidence that he did not confirm any variations in writing pursuant to clause 21 of the HIA Contract because he and the defendant were 404 operating as partners.

Approximately a couple of days after providing the ring style binder file to the first plaintiff, Elle Cobanov recalled being in the office of the second plaintiff and overhearing yelling from the carpark. She recognised the voices to be that of the first plaintiff and 408 the defendant.
Elle Cobanov walked outside and saw the first plaintiff and the defendant having an argument. She asked them to keep it down and to work out the dispute without 409 screaming. Elle Cobanov then proceeded to go back inside of the office.
During examination in chief, Elle Cobanov was shown the bundle of material that had been marked for identification during the evidence of the first plaintiff. Elle Cobanov was first shown the document titled ‘1/104 Casey – Expenditure Lists’, which became Exhibit 5. Elle Cobanov was also shown a document included in the bundle that was titled ‘Expenses Summary’, which became Exhibit 6.
In relation to Exhibit 5 and Exhibit 6, Elle Cobanov gave evidence that:
The document ‘1/104 Casey – Expenditure Lists’ was a list of company payments.
The document ‘Expenses Summary’ was a summary.
She had prepared both ‘1/104 Casey – Expenditure Lists’ and ‘Expenses Summary’.
The first plaintiff had asked her to prepare both documents.
The first plaintiff had provided her with the information to populate 410 both documents.
Elle Cobanov was also shown the document in the bundle that was titled ‘Extras for Section 1 Block 104 Casey’, which became Exhibit 7. In relation to Exhibit 7, Elle Cobanov gave evidence that:
She had prepared the index of invoices contained within that bundle. 411 2. The invoices had come from the software program MYOB.
During cross examination, Elle Cobanov was again referred to the document ‘1/104 Casey – Expenditure Lists’, Exhibit 5. Elle Cobanov stated that she had looked at invoices in order to prepare the tables. She further claimed that the invoices she had 412 looked at to prepare the tables were the same invoices that formed part of Exhibit 7.
When referred to the documents ‘Expenses Summary’, Exhibit 6, Elle Cobanov was asked whether a table with a header above it ‘Breakdown of Expenses from expenditure list supplied to Kiki’ had been populated using the invoices in Exhibit 7 or

The Construction Contract Settlement Agreement was originally exhibited to the first witness statement of the defendant. However, at the hearing counsel for the defendant did not read the line in the statement that said the Construction Contract Settlement 427 Agreement was exhibited and the document itself was removed from Exhibit 1. Proof of the $4,227.15 remained exhibited to the statement and part of Exhibit 1.
During cross examination, the defendant was taken to letters sent in the course of these proceedings from the plaintiffs’ solicitor to the defendant’s solicitor and vice versa. This included a letter from the defendant’s solicitor which enclosed a copy of the Construction Contract Settlement Agreement as part of an answer to the plaintiffs’ claim. This letter enclosing the Construction Contract Settlement Agreement became 428 Exhibit 10 in the proceedings.
The defendant gave evidence that the Construction Contract Settlement Agreement bore his signature. He stated that the first plaintiff had not signed the document in his 429 presence, nor had he seen the first plaintiff sign it.
The defendant was then shown an affidavit he had deposed on 23 May 2019 in response to a request for interrogatories. The affidavit became Exhibit 11 in the proceedings. In paragraph 2 of the affidavit, the defendant states that he drafted the Construction Contract Settlement Agreement.
In paragraph 5 of the affidavit, the defendant states that in relation to the Construction Contract Settlement Agreement, he recalled that both he and the first plaintiff were present at the execution. In paragraph 6 of the affidavit, the defendant stated that he recalled the first plaintiff executed the Construction Contract Settlement Agreement above where his name had been typed out.
The defendant denied that his evidence in paragraph 6 of the affidavit recalling the first plaintiff executing the Construction Contract Settlement Agreement was inconsistent with his evidence at the hearing that he had not seen the first plaintiff sign the document.
When asked how this was reconcilable with his evidence in paragraph 5 of the affidavit that they were both present upon execution, the defendant claimed it had been signed 430 above the first plaintiff’s name when it was presented back to the defendant.
The defendant gave evidence that on or around 18 February 2015, he provided the first plaintiff with the Construction Contract Settlement Agreement and the first plaintiff took 431 it away to check it. The defendant asserted that he then got the signed version back

The defendant conceded that his first witness statement did not make mention of a second meeting between the first plaintiff and himself in relation to the Construction Contract Settlement Agreement. It was put to the defendant that the second meeting 433 never happened but the defendant denied this.
The defendant admitted that that there was no reference to $4,227.15 in the 434 Construction Contract Settlement Agreement itself. The defendant was referred to the part of his witness statement where he said $4,227.15 was paid pursuant to the Construction Contract Settlement Agreement and payment records of that amount.
When referred to the payment records of that amount, being a snapshot of the defendant's bank account, it was pointed out to the defendant that the amount for $4,227.15 had been paid to the second plaintiff on 17 February 2014. The defendant maintained that this was the amount paid pursuant to the Construction Contract 435 Settlement Agreement.
The defendant agreed that he had instructed his solicitors to include the Construction Contract Settlement Agreement in the defence and counterclaim. The defendant agreed that between 20 November 2017 and 30 September 2019, the defendant had relied on the Construction Contract Settlement Agreement as presenting an answer to the plaintiffs’ claim and confirmed that such reliance was abandoned on 30 September 436 2019.
It was put to the defendant that the Construction Contract Settlement Agreement was abandoned in response to the plaintiffs seeking to file an application to adduce expert 437 handwriting evidence about the veracity of the first plaintiff’s signature. The defendant denied this. When asked whether the Construction Contract Settlement Agreement had been abandoned because the expert evidence would have called into question his credibility, the defendant claimed that he did not know if that would be the 438 case.
Counsel for the plaintiffs sought for the defendant to compare the signature of the first plaintiff on the Construction Contract Settlement Agreement with the signature of the first plaintiff on the 1 July 2013 invoice for $76,850. Counsel for the defendant objected to the exercise of comparing the signatures as it fringed into the territory of expert 439 evidence to be given by a handwriting expert.
Prior to the hearing, the plaintiffs filed an application to seek leave to serve a late expert report of a handwriting expert that concluded the signature on the Construction Contract Settlement Agreement. Pursuant to r 1241(4)(a) of the Court Procedure Rules 2006 (ACT), the court must not give leave unless there are exceptional circumstances that justify the granting of leave. The application came before Elkaim J on 27

The plaintiffs emphasised that the defendant had accepted he drafted the Construction Contract Settlement Agreement but submitted that the defendant gave conflicting evidence as to who was present and when it was actually executed. The difference between the defendant’s answers to interrogatories in the affidavit that became Exhibit 11 and the evidence given under cross examination was stark. In the former, the defendant claimed he was present when it was executed by the first plaintiff and under cross examination the defendant had claimed there had been another meeting between the parties as to when the unsigned document was present to the first plaintiff which 455 had previously been unmentioned in the proceedings.
It was submitted that the defendant’s evidence that he paid $4,227.15 pursuant to the Construction Contract Settlement Agreement could not be accepted when evidence of that payment demonstrated it was made in February 2014. That is, a year prior to the 456 Construction Contract Settlement Agreement allegedly coming into existence.
Emphasis was placed on the defendant’s reliance on the Construction Contract Settlement Agreement from November 2017 until September 2019, upon which the defence was amended. The plaintiffs noted that the defendant denied this change was protect his credibility, yet the defendant did not offer any alternative explanation as to 457 why the reliance was abandoned right before the hearing. No plausible explanation was proffered as to why what would have otherwise been a complete defence to the 458 claim was abandoned inexplicably.
The plaintiffs submitted that the signature of the first plaintiff on the Construction Contract Settlement Agreement was identical to his signature on the 1 July 2013 invoice for $76,850, which the defendant had admitted was in his possession. The plaintiffs urged a conclusion that the Construction Contract Settlement Agreement was not a genuine document and that it was created by the defendant to attempt to defeat 459 the plaintiffs’ claim.
The plaintiffs submitted that the works detailed in the ‘Expenses Summary’ (Exhibit 6) were works that were required to be performed at the request of the defendant. It was claimed that Exhibit 6 provided a basis for the court to conclude that the defendant 460 requested the Additional Works.
In claiming that the court could be satisfied that the plaintiffs’ paid for the Additional Works and that they were additional to the HIA Contract requirements, the plaintiffs referred to the evidence given by the first plaintiff that he paid or caused to be paid each of the items set out in the summary table in Exhibit 5 and the invoices in Exhibit 7. Further reliance was placed on the corroborative evidence given by Elle Cobanov and submitted that the defendant only identified one instance when the evidence was mistaken. The plaintiffs submitted that the court could conclude the Additional Works 461 were performed and paid for.

The plaintiffs have failed to address the deficiencies in relation to the Additional Works bundle. No further evidence was led. In my view, the Additional Works bundle cannot be ascribed significant weight. The evidence is insufficient to establish that the alleged works were additional to those specified in the building contract.
In oral submissions, counsel for the defendant addressed the issue of the Construction Contract Settlement Agreement. Counsel for the defendant asserted that the cross-examination of the defendant merely explored but did not resolve that the reason the defendant had abandoned reliance on the Construction Contract Settlement Agreement was because it was in his best interests to do so in circumstances where 465 the document was not authentic.
Counsel for the defendant stated that the plaintiffs had invited the court to perform a quasi-expert role by comparing the signature of the first plaintiff on the Construction Contract Settlement Agreement with the signature on the 1 July 2013 invoice for 466 $76,850. It was submitted that the plaintiffs were attempting to use the Construction Contract Settlement Agreement for the court to conclude that there was a nefarious 467 reason that the defendant had abandoned reliance on it as part of his defence.
Counsel for the defendant then submitted that the Construction Contract Settlement Agreement was of no benefit to either of the parties other than the point advanced by the plaintiffs as to the defendant’s credit. It was submitted that the Construction Contract Settlement Agreement itself was a nonsensical statement and contained many defects that prevented the document from actually amounting to the agreement 468 it purported to be.
It was submitted that the reliance on the Construction Contract Settlement Agreement had been withdrawn after the plaintiffs had suggested that the parties ought to incur 469 significant costs for expert evidence on authenticity of the signature. Counsel for the defendant asserted that the aspersion of the defendant’s credit could not be made in relation to the Construction Contract Settlement Agreement in light of the submission that reliance was withdrawn due to the fact that it did not amount to an agreement at 470 law that could be pleaded as a defence.
In oral submissions, counsel for the plaintiffs addressed the submissions advanced by the defendant in respect of the Construction Contract Settlement Agreement. It was submitted that the defendant continuously urged weight to be placed on the face of documents throughout the proceeding, such as the signed 1 July 2013 invoice for $76,850, yet then asked the court to place no weight on a document that formed a key 471 plank of the defence for almost two years. Counsel for the plaintiffs submitted that there was no evidence to support the conclusion that the defendant had advanced in 472 oral submissions as to why reliance was abandoned.

The amended statement of claim sought damages by reason of the defendant’s breach of the partnership agreement for the contributions to the development of the property and 50 per cent of the profit realised on the sale of the property. The plaintiffs’ sought:
A declaration that the defendant held the property, and any sale proceeds, on trust for the partnership;
A declaration that the defendant owed the first plaintiff fiduciary and statutory obligations as a partner and was obliged to account to the plaintiffs’ for their contributions to the development of the property and 50 per cent of the net proceeds of sale of the property.
In the alternative to the court finding a partnership between the first plaintiff and the defendant, the plaintiffs’ claimed that the second plaintiff was entitled to be paid the full sum set out in the HIA Contract and entitled to recoup the extra expenses incurred for the development of the property. The plaintiffs’ sought:
A declaration that the defendant held the property and any proceeds from the sale thereof on resulting trust for the first plaintiff, second plaintiff, and defendant in such shares as the court deemed just and equitable as a result of the $25,000 and the second plaintiffs’ contribution to construction costs.
Further in the alternative, the plaintiffs’ sought an order that the defendant pay equitable compensation for the losses caused by breaches of fiduciary and statutory duties. The plaintiffs’ also sought in the alternative judgment for the second plaintiff against the defendant on the HIA Contract and restitutionary claims
For the preceding reasons on the plaintiffs’ claim, the partnership agreement is not made out. There is therefore no remedy available for any breach of a partnership agreement, be it a breach of the Partnership Act or a breach of any fiduciary duty. There is also no resulting trust as a result of the $25,000. Further, as the Additional Works claim is also not made out on the balance of probabilities, the plaintiffs’ are not entitled

The first plaintiff claimed that on or around 12 June 2013, he signed the contract. In the second witness statement of the first plaintiff, the first plaintiff asserted that after he signed the contract on 12 June 2013, he did not discuss any amendments to it with the defendant nor with Patrick Bouquiaux. Further, the first plaintiff claimed that he did not 480 agree to any amendments to the HIA Contract.
The version of the HIA Contract that the first plaintiff relies upon was included in Exhibit 481 1 and was derived from the plaintiff’s list of discoverable documents. Of note, Item 9 of the HIA Contract, which refers to the completion time for when the building works are to reach the stage of practical completion, was left blank and no timeframe had been written in for how many days the build was to take. There is also no inclusions list annexed to the first plaintiff’s version of the HIA Contract.
In examination in chief, the first plaintiff was taken to the version of the HIA Contract that was derived from the plaintiffs’ list of discoverable documents in Exhibit 1. The first plaintiff gave evidence that he had signed this document on behalf of the second plaintiff on 12 June 2013 and confirmed that this was the version of the HIA Contract 482 he had signed on that date.
In cross examination, the first plaintiff was asked to compare the version of the HIA Contract he relied upon with the version of the HIA Contract that had been advanced by the defendant. The first plaintiff was given time to compare the difference between 483 the two versions of the HIA Contract.
The first plaintiff maintained that the version of the HIA Contract that had come from the plaintiffs’ list of discoverable documents was the contract he had entered into on 484 behalf of the second plaintiff with the defendant.
When asked what the purpose of the HIA Contract was, the first plaintiff stated that it 485 was required by the defendant to obtain finance. The first plaintiff gave evidence that he had written information into the HIA Contract, such as the quantum for each progress payment, to work out a sum for the property that was to be built. The first 486 plaintiff confirmed that his version of the HIA Contract was accurate in all respects.
Counsel for the defendant took the first plaintiff to explanatory note 1 of the HIA Contract which read:

When asked what his understanding of the phrase ‘plans and specifications’ was, the first plaintiff stated that it meant the actual plans that were approved by the government 487 and the specifications referred to specifications rendered with the HIA Contract.
The first plaintiff was then referred to the inclusions list that the defendant asserted formed part of the HIA Contract entered into by the parties. The first plaintiff agreed that the document was entitled an 'inclusions list’ but asserted that it was not an inclusions list that he had been annexed to the HIA Contract when he executed it on 12 June 2013 in the presence of the defendant and Patrick Bouquiaux. The first plaintiff noted that the inclusions list did not bear his own initials nor the initials of the 488 defendant.
Counsel for the defendant requested that the first plaintiff refer back to his version of the HIA Contract and the same time as having access to the inclusions list advanced by the defendant as forming part of the HIA Contract. When asked where the specifications were in the first plaintiff’s version of the HIA Contract and whether there was another attachment with specifications, the first plaintiff stated that there were no 489 specifications and no other attachments addressing specifications.
When asked where in his version the HIA Contract the specifications were as to the kitchen, Colourbond fencing, and showers, the first plaintiff stated that there were 490 none.
The first plaintiff was then referred back to the inclusions list. It was put to the first plaintiff that the inclusions list was on the stationery of the second plaintiff and that it also had the name of the second plaintiff on it. The first plaintiff confirmed that the inclusions list had the second plaintiff’s name on it but denied that it was on the 491 stationery of the second plaintiff.
Counsel for the defendant put it to the first plaintiff that it had been the first plaintiff who had inserted the details on the cover page of the inclusions list, which had the name and address of the second plaintiff, ‘June 2013’ and ‘Block 1 Section 104 Casey, ACT 2913 Client: Kiki Josifovski’ typed on it. The first plaintiff denied that he had inserted 492 this information onto the cover page of the inclusions list.
The first plaintiff was queried whether he honestly was to tell he court that the document bearing the details of the second plaintiff was prepared by someone other than himself. The first plaintiff maintained that the inclusions list had been prepared by someone else. When it was put to the first plaintiff that he prepared the inclusions list, the first 493 plaintiff again stated that he did not prepare it.

General Connection to services (not including final owner connection fees) Construction Site cut (+/- 300mm deviation) and fill. Excludes rock Engineered concrete stiffened raft or waffle slab (as per engineers report). Footings and slabs to AS2870 Termite resistant timber wall frames and roof trusses Bristille Concrete tiles roof, colorbond fascia, and 100x50mm downpipes Aluminium powder-coated windows, sliding doors, security screen doors and fire rated flyscreens as per plan Selected face brickwork $600 (inc. GST) p/1000 2700mm ceiling height lower floor as per plans 2400mm ceiling height upper floor as per plans Insulation to specifications (as per energy report) Insulation R2.0 Batts to external walls and R4.0 Batts to ceiling of living areas Internal Doors Oakfield or equivalent (including plastic door stops) -height as per plans Gainsborough or equivalent door contemporary furniture throughout- Standard height Skirting & Architraves 67x8mm MDF pre primed craftwood Garage Door Automatic dual sectional door Garage front , includes x2 remotes Upgrade to timber dual sectional Garage door Single roller door at rear (non-automatic) Plastering 10mm plasterboard to walls and ceilings, 6mm villaboard to wet areas Square set cornice (Downstairs living, kitchen and theatre) 75mm scotia cornice Plumbing Instantaneous gas unit Laundry – Single 45 litre flushline tub in laminated benchtop unit External garden taps (x4) on building Stormwater lines and pit lids Water point for fridge Electrical Metering connected to street, up to 10 metres allowed 40 x power points allowed (34 double, 6 single) 4 x TV points connected to one roof antenna 10 x Phone/data point 3 x External light points 2 x Smoke detectors (hardwired with battery back-up) Exhaust fans in bathrooms Cabinetry Full Height Robes– fixed shelf with hanging rail including open divided shelving and drawer. Dual sliding mirrored doors WIR–fixed shelf with hanging rail and open divided shelving and drawer Linen - open divided shelving with dual vinyl sliding doors Bathrooms and Ensuite Modern vanity basins with mixer tapware to all basins and sinks Mirror over vanity units (to length of unit) Builders range chrome double towel rails and toilet roll holders Floor to ceiling tiling (as per tiling allowance) in main bathroom and ensuite Four bulb tastic in main bathroom and ensuite/two bulb in additional bathrooms Obscure glass windows to WC’s, Bath and Ensuite as per plan requirements Finishes Glass Splashback to Kitchen Tiled splashbacks to Laundry and Vanity Basins Tiled skirting to Bathroom, En-suite, WC and Laundry Painting Internal 3 coats low sheen paint on walls throughout. 2 coats paint to ceiling throughout. Enamel acrylic paint to woodwork. Choice of one wall colour including woodwork and one ceiling colour. External 3 coats solarguard external paint to rendered areas External Cladding/surfacing as per plans Concrete driveway to street. Concrete to Entry and Alfresco Wall mounted clothesline Engineered stiffened raft or waffle slab design H2 termite resistant timber wall frames and roof trusses. Colorbond roofing, colorbond fascia, and 100x50mm downpipes.

General Connection to services (not including final owner connection fees) Construction Site cut (+/- 300mm deviation) and fill. Excludes rock Engineered concrete stiffened raft or waffle slab (as per engineers report). Footings and slabs to AS2870 Termite resistant timber wall frames and roof trusses Bristille Concrete tiles roof, colorbond fascia, and 100x50mm downpipes Aluminium powder-coated windows, sliding doors, security screen doors and fire rated flyscreens as per plan Selected face brickwork $600 (inc. GST) p/1000 2700mm ceiling height lower floor as per plans 2400mm ceiling height upper floor as per plans Insulation to specifications (as per energy report) Insulation R2.0 Batts to external walls and R4.0 Batts to ceiling of living areas Internal Doors Oakfield or equivalent (including plastic door stops) – Standard height Gainsborough or equivalent door contemporary furniture throughout- Standard height Skirting & Architraves 67x8mm MDF pre primed craftwood Garage Door Automatic dual sectional door Garage front , includes x2 remotes Upgrade to timber dual sectional Garage door Single roller door at rear (non-automatic) Plastering 10mm plasterboard to walls and ceilings, 6mm villaboard to wet areas Square set cornice (Downstairs living, kitchen and theatre) 75mm scotia cornice Plumbing Instantaneous gas unit Laundry – Single 45 litre flushline tub in laminated benchtop unit External garden taps (x4) on building Stormwater lines and pit lids Water point for fridge Electrical Metering connected to street, up to 10 metres allowed 40 x power points allowed (34 double, 6 single) 4 x TV points connected to one roof antenna 10 x Phone/data point 3 x External light points 2 x Smoke detectors (hardwired with battery back-up) Exhaust fans in bathrooms Cabinetry Full Height Robes– fixed shelf with hanging rail including open divided shelving and drawer. Dual sliding mirrored doors WIR–fixed shelf with hanging rail and open divided shelving and drawer Linen - open divided shelving with dual vinyl sliding doors Bathrooms and Ensuite Modern vanity basins with mixer tapware to all basins and sinks Mirror over vanity units (to length of unit) Builders range chrome double towel rails and toilet roll holders Floor to ceiling tiling (as per tiling allowance) in main bathroom and ensuite Four bulb tastic in main bathroom and ensuite/two bulb in additional bathrooms Obscure glass windows to WC’s, Bath and Ensuite as per plan requirements Finishes Tiled splashbacks to Laundry and Vanity Basins Tiled skirting to Bathroom, En-suite, WC and Laundry Painting Internal 3 coats low sheen paint on walls throughout. 2 coats paint to ceiling throughout. Enamel acrylic paint to woodwork. Choice of one wall colour including woodwork and one ceiling colour. External 3 coats solarguard external paint to rendered areas External Concrete driveway to street. Concrete to Entry and Alfresco Wall mounted clothesline Engineered stiffened raft or waffle slab design H2 termite resistant timber wall frames and roof trusses. Builders selection Concrete tiles roof, colorbond fascia, and 100x50mm downpipes Lintels with brickwork above

In cross examination, counsel for the plaintiffs’ questioned the defendant on the basis that Elle Cobanov had given evidence that she did not recognise the inclusions list. It was put to the defendant that the Building Costing Schedule for the Campa project was the only document similar to the inclusions list, both of which projects involved the 528 defendant. The defendant responded that he did not know if that was the case.
The Build Costing Schedule became Exhibit 17 in the proceedings. Counsel for the defendant submitted that the Build Costing Schedule ought to be admitted only for the limited purpose of the assertion that it was prepared by the defendant. Counsel for the 529 plaintiffs confirmed that was the purpose it was sought to be tendered.
It was put to the defendant that he had prepared the inclusions list. The defendant denied doing so. The defendant further denied that he had added to the inclusions list 530 to the HIA Contract after it had been executed.
The defendant also confirmed that he had handwritten ‘180’ days into Item 9 of the HIA 531 Contract. When asked whether he still maintained that Westpac Bank required the completion time to have an allocated timeframe, the defendant gave evidence that it was both the requirement of the bank and a requirement of his agreement with the first plaintiff to build the property within the time period that he had promised he would do it 532 in.
Counsel for the plaintiffs noted that in the first witness statement of the defendant, the defendant refers to the insertion of 180 days solely being a requirement of the bank. The defendant said that the reference to the conversation whereby the first plaintiff provided the defendant with the blank HIA Contract to consider and said words to the effect of “it will cost about $380,000 to $385,000 to build the house according to Robert’s plans. I will take about 180 days to build” was a reference to the 180 days 533 being a requirement of the agreement with the first plaintiff.
When referred to the conversation the defendant had with Patrick Bouquiaux where Patrick Bouquiaux informed him that Wesptac Bank required a completion timeframe, the defendant gave evidence that he had spoken to the first plaintiff before he wrote in 534 180 days and that the first plaintiff had agreed to this timeframe. The defendant was queried as to whether he had asked the first plaintiff if the first plaintiff thought 180 days

The plaintiffs’ also pointed to the fact that both the first plaintiff and the defendant denied preparing the inclusions list. Further reference was made to the evidence of Elle Cobanov not recognising the document, as well as the unchallenged evidence that the first plaintiff did not have the computer skills to use word processing software. The plaintiffs submitted that if the defendant’s version of the HIA Contract was to be accepted, the court would have to infer the creation of a contractual document out of 543 nowhere.
It was submitted that the better explanation of the discrepancies between the versions of the HIA Contract was that the defendant had prepared the inclusions list and added it to his copy of the HIA Contract unilaterally. The plaintiffs asserted that this was not a valid incorporation on the terms of the building contract and furthermore, that it did not represent a meeting of the minds for the purposes of forming an enforceable contract. The plaintiffs ultimately urged the determination that the plans and inclusions list did 544 not form part of the HIA Contract. I note at this juncture that the state of the evidence concerning the inclusions list is unsatisfactory.
In oral submissions at the further hearing, counsel for the plaintiffs reiterated that if the defendant’s version of the inclusions list was to be accepted, the court would have to conclude that it was unclear where the inclusions list had originated from. Counsel for the plaintiffs submitted that the court ought to prefer the version proffered by the first 545 plaintiff that the inclusions list was not part of the HIA Contract. In view of the unsatisfactory state of the evidence concerning the inclusions list, I am not satisfied on the balance of probabilities that this inclusions list was part of the HIA Contract.
In oral submissions in reply, counsel for the plaintiffs claimed that the inclusions list tritely ought to be referred to as the “immaculate inclusions list” in circumstances where 546 both the first plaintiff and the defendant denied preparing the document. It was submitted that as the inclusions list remained of unknown and unknowable origin, the court ought to have serious pause as to whether it was capable of representing a meeting of the minds of the parties. As indicated above, I am not satisfied on this matter on the balance of probabilities on all of the evidence.
The plaintiffs conceded that there may have been valid incorporation of the inclusions list if the defendant had admitted to preparing it, as the first plaintiff had given evidence that he expected the defendant was going to prepare an inclusions list. The plaintiffs submitted that in circumstances where the defendant repeatedly denied preparing the inclusions list, the first plaintiff’s mere expectation bore no relevance to the 547 determination of incorporation. Again as stated above, the evidence in relation to the inclusions list is entirely unsatisfactory.
The defendant submitted that determining which version of the HIA Contract was agreed is a question of fact: Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004]

The defendant referred to the standard HIA Contract providing in explanatory note 2 that plans and specifications are part of the contract. It was submitted that explanatory 548 note 2 not being contractual in nature was of no moment.
The evidence of the first plaintiff that he understood the defendant would prepare an inclusions list was relied upon by the defendant to assert that the inclusions list formed part of the HIA Contract. It was submitted that if the court accepted the evidence of the first plaintiff that the inclusions list was not part of the HIA Contract when it was executed, it must still follow the first plaintiff agreed an inclusion list would be part of 549 the terms. In my view, it does appear on the balance of probabilities on the evidence that the inclusions list was not part of the HIA Contract when it was executed.
The defendant submitted that the evidence of the first plaintiff that specifications were determined by consultation with the defendant on an ad hoc basis ought to be rejected. The defendant submitted that this evidence was implausible for the following reasons:
The defendant was a first homeowner in his mid-twenties who worked a s a public servant. There had not been evidence that he had experience in building and construction.
It would have been either highly impractical or impossible for the first plaintiff to continually liaise with the defendant as to specifications and inclusions when the defendant was offsite due to his fulltime employment.
It would have been a strange commercial arrangement if the defendant was required to pay the contract price and then participate in the works.
There was no adequate evidence of the defendant giving instructions of the kind to be expected in lieu of an inclusions list. Although there was email correspondence as to some specifications, they were sparce and not sufficient to canvass the extent of the development.
While the original plans dated 4 June 2013 contain some specifications, they do not contain the information that would be borne out by an inclusions list.
As the first plaintiff had calculated the contract price on 12 June 2013, it must follow that the quantum was based on something more than the original plans. It must be that the quantum was informed by the inclusions list.
I agree that an arrangement that entailed the specifications on an ad hoc basis does not on the evidence appear realistic. That of itself is not enough to conclude that this particular inclusions list formed part of the HIA Contract.
The defendant submitted that the cross examination in relation to the similarities between the Build Costing Schedule for the Campa project and the inclusions list did not yield any relevant evidence. It was asserted that even if the evidence supported a conclusion that the defendant had prepared the Build Costing Schedule, it would not

In oral submissions, counsel for the defendant again referred to the evidence of the first plaintiff that he understood the defendant would prepare an inclusions list and it would be added to the contract in due course.
Counsel for the defendant submitted that the court would be alarmed at the prospect that the parties would have been able to proceed to develop the property in the absence of an inclusions list in the HIA Contract. It was submitted that the contract was 552 meaningless without an inclusions list. I agree that an inclusions list must have been contemplated.
When queried about the plaintiffs’ submission that the inclusion list relied upon by the defendant was not on the stationery of the second plaintiff, counsel for the defendant submitted that it was said that it was the plaintiffs’ who created the inclusions list and referred to the evidence of the defendant that he did not prepare the inclusions list. Counsel for the defendant submitted that it of no moment that the first plaintiff denied 553 the inclusions list was not on the stationery used by the second plaintiff. As stated earlier, the state of the evidence is unsatisfactory and consequently the submissions concerning the evidence are self-evidently based on unsatisfactory evidence.
Counsel for the defendant submitted that there was nothing to be achieved in determination of this issue by querying who in fact prepared the inclusions list, in light of the first plaintiff’s evidence that he understood the defendant was going to prepare 554 the inclusions list. This is difficult to reconcile with the defendant’s submission that the first plaintiff authored the inclusions list.
It was submitted that there was no evidence that the defendant had the skillset to author the inclusions list. Notwithstanding this, even if the defendant did author the inclusions 555 list this was what the first plaintiff expected.
In relation to the query of whether the parties intended to incorporate the inclusions list and building plans, the defendant submitted that the objective evidence established 556 that the parties did intend to incorporate those documents. The defendant submitted that if the court was to conclude that the inclusions list did not eventuate until after the HIA Contract was executed rather than concluding that it formed part of the HIA Contract when it was executed on 12 June 2013, such a determination would not bar 557 incorporation of the documents.
The defendant submitted that as the first plaintiff’s evidence was that he expected an inclusions list to be prepared by the defendant, the inclusions list was intended to be incorporated: Hollier v Rambler Motors (A.M.C) Ltd [1972] 2 QB 71 at 77-78 (Salmon

The defendant admitted that he contacted the first plaintiff to indicate the sewerage was 594 blocked but denied that he had any conversation about being in the house. The defendant received the certificate of occupancy on 12 January 2015. The defendant 595 submitted that he did not move into the house with his wife until early February 2015.
The defendant stated that shortly after moving into the house, he had called the first plaintiff regarding defects in the construction. The first plaintiff retorted with words to 596 the effect of “if you want me to fix them, I’ll need more money”.
In the first witness statement of the defendant, the defendant claimed he had a number of concerns over the second plaintiff’s workmanship and as a result, the George Pudja 597 report was obtained in the course of the litigation.
In the evidence in chief of the defendant, a document titled ‘Defendant’s/Counter Claimant’s Summary of Expert Defect Evidence – George Pudja’ was tendered through the defendant and became Exhibit 9 in the proceedings. Exhibit 9 was prepared on behalf of the defendant as a shorthand reference document to the George Pudja report.
The defendant was cross examined on his compliance with the HIA Contract. The defendant admitted he could not recall where he had followed the defects liability 598 regime as stipulated in Clause 23 of the HIA Contract.
The defendant was also cross examined on the release of the final progress payment by Westpac Bank. The defendant maintained that the money was released to the 599 second plaintiff in error. The defendant was taken to a document that was on the letter header of Tiffen & Co dated 28 November 2014 and signed on behalf of Patrick Bouquiaux.
This letter dated 28 November 2014 became Exhibit 12 in the proceedings. It was addressed to Westpac Bank and the contents of the letter said, “please find attached progress payment invoice for $28,434 for the practical completion stage authorised by the client for payment to the builder ASAP”. Attached to the letter was the invoice dated 28 November 2014 for the final progress payment and it was signed by the defendant.
The defendant gave evidence that he was advised by Patrick Bouquiaux that the funds had been released in error. The defendant stated that the final progress payment was 600 to be released to himself directly in order to facilitate the payment for subcontractors.
The defendant confirmed that he had signed the invoice as approved and provided it to Patrick Bouquiaux so that Westpac Bank would release the funds. The defendant 601 denied that the error was his own.

The plaintiffs conceded that the second plaintiff failed to complete the works. This failure was a result of the defendant preventing the second plaintiff from performing any further work from 24 December 2014, as a result of the defendant taking early possession of the site on this date without the knowledge or consent of the second 602 plaintiff.
The plaintiffs submitted that the defendant took possession prior to the second plaintiff issuing a notice of practical completion and that the defendant did not follow the defects rectification procedure that is established in Clause 23 of the HIA Contract. Pursuant to Clause 14 of the HIA Contract, the defendant was not entitled to take exclusive possession of the property until completion of the contract. The plaintiffs submitted that as the defendant had breached the HIA Contract in this way, the second plaintiff had 603 been denied the opportunity and ability to complete the construction works.
In relation to the HIA Contract itself, the plaintiffs submitted that neither party insisted upon compliance with the HIA Contract and that the court should find that it was not 604 intended to strictly govern the relationship between the parties.
The plaintiffs submitted that if the HIA Contract had truly governed the relationship between the parties, then the defendant would have refused to authorise the release of progress payments prior to the relevant work being completed. The actions of the defendant in causing progress payments to be released prior to the relevant stage being reached is evidence that neither party gave any real regard to their rights under 605 the HIA Contract. This does in my view regrettably appear to be the case.
It was submitted that despite there being no issuing of a notice of practical completion by the second plaintiff nor any orderly ending to the works, the defendant prematurely caused the final progress claim for practical completion to be paid. The plaintiffs noted that the invoice, which was submitted by the plaintiffs to have been prepared by the defendant, bore the defendant’s signature authorising payment.
The plaintiffs also noted that Patrick Bouquiaux could have been called by the defendant to give evidence as to how the final progress payment was to be released 606 by Westpac Bank to the second plaintiff in error. I note that Patrick Bouquiaux was not called to give evidence. In my view, the drawing or otherwise of this inference does not assist to any significant degree in the resolution of this matter.
The defendant referred to portions of the HIA Contract (which is not controversial in 607 that the terms are the same on both parties versions of the HIA Contract). The defendant made reference to Clause 3 of the HIA Contract which relevantly reads:

The defendant relied upon the evidence contained within the George Pudja report and noted that this evidence was unchallenged by the plaintiffs. The qualifications, experience or ability of George Pudja to give the expert opinion was not scrutinised by 608 the plaintiffs.
The George Pudja report listed 24 items of works which the second plaintiff was required to complete pursuant to the HIA Contract which were defective. It was submitted that defective works are deemed incomplete works: Maples Winterview Pty Ltd v Liu & Anor [2015] ACTSC 58 at [80]-[84] (Maples Winterview).
The defendant referred to the evidence that the first plaintiff gave under cross examination where he confirmed he performed the works which the George Pudja report said were defective. The defendant also referred to the first plaintiff’s evidence that he had received a copy of the George Pudja report but did not respond to it.
The defendant also referred to Exhibit 9, which was the summary table of the George Pudja report prepared on behalf of the defendant. The centre column of the summary table was titled ‘source of obligation’ and specified where in the HIA Contract the obligation was drawn from, as well as the consequential provisions in ss 42 and 88 Building Act 2004 (ACT) (Building Act).
Item 23 of the George Pudja report noted that the second plaintiff failed to install hydronic heating in the slab. The defendant submitted that if the court was to accept that the inclusions list was duly incorporated in the HIA Contract, it must follow that the second plaintiff failed to complete this particular work. I am not satisfied that this inclusions list that contemplated hydronic heating was duly incorporated into the HIA Contract.
The defendant also referred to Item 24 in the George Pudja Report which highlighted that the stone feature wall at the front of the residence was not built, despite being shown in original plans dated 4 June 2013. The defendant submitted that as Clause 3 of the HIA Contract provided that the builder must completed the works in, amongst other things, the signed approved plans, the second plaintiff was obliged to complete 609 this item. The defendant noted that the second plaintiff failed to complete this item. I note that this was not completed.
In submissions in reply, the defendant noted that not even in the face of the litigation nor of the George Pudja report had the plaintiffs offered to fix the defects with the property. The defendant submitted that if the defendant had not taken possession of the property, on the balance of probabilities the defendant would still be waiting for practical completion, a certificate of occupation, and for the defects to be fixed.
Again the evidence is in an unsatisfactory state in this regard and I am not satisfied on the balance of probabilities of the defendant’s claim.

The defendant again relied upon the evidence of the first plaintiff in cross examination that he performed the works that the George Pudja report stated were defective. The defendant submitted that the second plaintiff was obliged to perform those works pursuant to the HIA Contract and the logical conclusion from that was that the second 610 plaintiff breached the contract as he did not complete the works.
The defendant referred to Clause 12 of the HIA Contract which provides that the builder must give the owner a written claim for each progress payment on completion of each stage set out in Item 12 of Attachment A, which is the various progress payment stages 611 and corresponding percentages of the total build price extrapolated above.
Further reference was made to the decision of Mossop J in Maples Winterview at [84] where it was stated that in interpreting the HIA Contract in that matter, the meaning of completion of each stage is a condition precedent to a builder’s entitlement to make progress payment claims.
The defendant claimed that following this observation made by Mossop J in Maples Winterview, the second plaintiff was not entitled to make a claim for a progress payment until all the matters for that stage were completed, save for minor defects. The defendant submitted that if the court was to conclude the second plaintiff failed to attend to complete a stage, it must follow that the second plaintiff was not entitled to make the claim or any subsequent claims. Further, any payments ought to be refunded or an adjustment be made to take into account the cost of rectifying the defect relevant to the 612 completion of each progress stage.
It was noted that the defendant’s version of the HIA Contract encompassed the 180 days completion time. If the court was to accept this version of the HIA Contract, it would follow that the second plaintiff was required to achieve practical completion by approximately January or February 2014 – to March or April 2014, depending on when 613 the court determined construction commenced.
The defendant submitted that as the George Pudja report highlighted that the second plaintiff had not completed the construction works in accordance with the HIA Contract, including the inclusions list. Therefore, the second plaintiff was well and truly outside of the 180 day obligation.

The plaintiffs submitted that the second plaintiff did not breach the HIA Contract nor his duty of care owed to the defendant. The defendant denied the second plaintiff the opportunity to complete the works by effectively ending the contract prior to the date of practical completion. It is not established that the second plaintiff breached the HIA Contract or his duty of care with respect to the construction when the defendant unilaterally ended the contract.
The defendant did not issue the second plaintiff with a dispute notice nor present a defect list to the second plaintiff, both of which are contemplated by the HIA Contract. By denying the second plaintiff the opportunity to finish the works, the defendant denied the second plaintiff the opportunity to fulfil the terms of the HIA Contract and his duty of care.
In relation to s 88(2)(d) of the Building Act as to reasonable promptness, I am not satisfied that the 180 day clause formed part of the HIA Contract. This is in light of the defendant’s concession that he had added 180 days after execution. There was not in my view sufficient evidence for the court to determine reasonableness or otherwise as to the time taken to carry out the building works.
The defendant urged the court to reject the suggestion that the defendant was not entitled to damages because he took possession of the property before practical 618 completion. I am not persuaded that an entitlement to damages has been established. I am not persuaded s 42 has been breached.
It was submitted that there was no evidence that the plaintiffs attempted to rectify the defects from late November 2014, not even after receipt of the George Pudja report 619 which explicitly identified defects.
The defendant submitted that it was of no moment that the defendant did not follow the regimes laid out in the HIA Contract as to disputes and the rectification of defects. It was asserted that the counterclaim and the George Pudja report amounted to such 620 notices. I am not persuaded on the evidence to this view.

The second plaintiff also failed to complete the sub-floor cellar area. The defendant claimed that the area was left without a door, with a bare dirt floor and with exposed brickwork footings as the walls. This had been contrary to what the defendant had 635 discussed with the first plaintiff about the sub-floor area.
To rectify and complete the sub-floor cellar area, the defendant engaged subcontractors to pour a concrete floor, render and seal the walls, install a vent to 636 attempt to reduce moisture, and install a door.
The defendant claimed that the second plaintiff failed to make adjustments or deductions to the HIA Contract sum for the items that the second plaintiff did not deliver. 637 The defendant stated that he had paid the HIA Contract in full.
The defendant stated that the second plaintiff failed to make a deduction to the HIA Contract sum for works that were the subject of allowances in the inclusions list where the items cost less than the allowances. This was dependent on the inclusions list being 638 found to have formed part of the HIA Contract.
Schedule B was exhibited to the first witness statement of the defendant set out various payments to subcontractors and suppliers. It detailed the date an amount was paid, the quantum and the type of work/ goods that were supplied. In total, it set out that the 639 defendant had paid various subcontractors and suppliers $88,661.20.
In examination in chief, the defendant was directed to Exhibit 9 and asked to confirm what items identified in the George Pudja report he had caused to be rectified prior to 640 selling the property.
The defendant gave the following evidence in respect of items in the George Pudja report and by reference to Exhibit 9:
The defendant had caused Item 4– the roof screws that had been incorrectly fitted in some areas of the home – to be rectified before he sold the 641 property.
The defendant had caused Item 5– the installation of the Foxtel cables that had resulted in gaps to the roof flashing – to be rectified before he sold the property.
The defendant had caused Item 8 – the excessive gaps and a lack of head flashing of the entry door to be partially rectified before he sold the property.
The defendant had caused Item 13 – the excessive cracking in the exterior rendered wall and the lack of articulation joints in the brickwork to be rectified before he sold the property.
The defendant had caused Item 14 – the location of the subfloor storage 642 area – to be rectified ‘in a way’ before he sold the property.

Relying on Maples Winterview, defendant submitted that the second plaintiff was not entitled to be paid for any stage it did not complete nor any later stages thereafter 653 pursuant to the HIA Contract. The defendant referred back to Exhibit 9 as containing the ‘source of obligation’ that corresponded with the George Pudja report conclusion that the second plaintiff did not properly complete any stage after the first stage associated with the first progress payment.
The defendant referred to the stages as specified in Item 13 of the HIA Contract, which is set out previously in the judgment at paragraph [698]. On the assumption that the inclusions list formed part of the HIA Contract, the George Pudja report opined that the second plaintiff failed to complete the second stage ‘floor slab complete’ by failing to install hydronic heating into the slab. The defendant submitted that on this basis, the second plaintiff was not entitled to issue a payment claim for the second progress 654 payment for the second stage, being an amount of $38,425.
The defendant also referred to the George Pudja report that concluded the installation of the windows was defective. The second plaintiff was required to install the windows in a proper and skilful way. It was submitted that the second plaintiff failed to complete the third stage of the HIA Contract being the ‘roof frame complete’ and was therefore 655 not entitled to be paid the $57,638 as the third progress payment.
It was submitted that the second plaintiff was not entitled to the final progress payment for practical completion. Reference was made to the George Pudja report to assert that the second plaintiff was not entitled to be paid any of the progress payments as the defects together and separately revealed that the second plaintiff had not completed 656 the final stage which disavowed the second plaintiff the entitlement to be paid for it.
The defendant asserted that the second plaintiff was not entitled to claim any progress payment beyond the payment made for completion of the first stage due to Maples Winterview. It was submitted that the second plaintiff ought to be ordered to repay all 657 progress payments it received save for the first progress payment.
As to whether the defendant’s authorisation of payment affected the right to claim the payments back, it was submitted that the plaintiffs had not expressly pleaded this nor had they conducted the case on the basis of such a defence. It was submitted that the plaintiffs were bound by the HIA Contract in that the second plaintiff was only

The second plaintiff was paid the progress payments as set out in the HIA Contract. The defendant authorised the payments. As stated previously, I am not satisfied that the inclusions list was part of the HIA Contract. Further, consistent with Maples Winterview, the second plaintiff was entitled to the progress payments.
Even if the inclusions list was part of the HIA Contract, the evidence is that the defendant signed the progress payment invoices. The defendant controlled the release of payments from one stage to the next.
The plaintiffs submitted that the progress payment invoices were referrable to a 2011 invoice that the defendant had sent to the plaintiffs in relation to the Phyllis Ashton Circuit project. The invoice was dated 17 June 2011 and the plaintiffs submitted that invoice bore a number of key similarities to the invoices purportedly issued by the 660 second plaintiff for progress payments.
The plaintiffs referred to the evidence of the first plaintiff that he did not have the technical nous to generate an invoice in a word processing program and the evidence of Elle Cobanov that she did not recognise the template that was used for the progress payment invoices. It was submitted that the available inference from this evidence was that the defendant had prepared the progress payment invoices himself, using a template he had from 2011. After drafting the invoice, printing it and signing it, the defendant would provide the invoice to Patrick Bouquiaux who would forward it to 661 Westpac Bank to facilitate the release of funds to the second plaintiff. Again the evidence in this regard is unsatisfactory.
As to the final eighth progress payment of the HIA Contract for $28,434, the plaintiffs submitted that the court ought not to accept that the funds were released by Westpac 662 Bank in error. The plaintiffs referred to Exhibit 12 which showed the defendant signed the invoice and that it was provided to Tiffen & Co to be forwarded to Westpac Bank.
The plaintiffs highlighted that the defendant had admitted he had signed the invoice for the final progress payment and the handwritten date immediately below the defendant’s signature was 28 November 2014. It was submitted that the court ought to infer that the final progress payment invoice was signed by the defendant and submitted for payment on 28 November 2014. This inference was supported by Exhibit 12 which showed that the invoice was then promptly sent to Westpac Bank with a cover letter saying the client had authorised payment. I am not satisfied on the evidence on the

In reference to the hydronic heating system, the plaintiffs submitted that this alleged inclusion had not been raised as integer of the counterclaim until the defendant amended his pleadings in 2019. It was submitted that the evidence did not establish that the defendant had raised the absence of the hydronic heating with the second 663 plaintiff. I accept this submission on the evidence.
The plaintiffs submitted that the defendant was obliged under the HIA Contract to pay the contract sum subject to an adjustment to take into account the costs of rectification of any unremedied defects. It was submitted that a failure to complete a stage may have disentitled the second plaintiff from making a progress claim but the defendant was not relieved from his obligation to pay the contract sum. The plaintiffs reiterated that the defendant did not suffer a diminution in the sale price of the property and the defendant was not eligible to claim the cost of unrectified defects against the contract 664 sum nor the individual progress payments. On the evidence before me, I accept the submission of the plaintiffs on this issue in this regard.
The defendant asserted that even if the inclusions list was not incorporated, the plaintiffs could not then say the second plaintiff was entitled to the progress payments for the following reasons:
The George Pudja report concluded the works were defective;
The first plaintiff gave evidence that the second plaintiff performed the works that were the subject of the George Pudja report;
It was possible to determine which progress claim the defective items were attributable to by reference to the George Pudja report and the summary in Exhibit 9, even if the inclusions list was not part of the HIA 665 Contract;
The defendant submitted that the plaintiffs were incorrect in the characterisation of Maples Winterview in suggesting that the defendant must still pay the contract price, subject to an adjustment to take into account the costs of rectification of any 666 unremedied defects. In my view on the basis of Maples Winterview, the defendant must pay the contract price subject to adjustment, if called for.
Mossop J stated in Maples Winterview at [81]:

In my view the defendant is not entitled to damages for the losses caused by the second plaintiff’s breaches as the defendant has sold the property. If the defects outlined in the George Pudja report were not disclosed to potential purchasers, then the defendant did not suffer a diminution of the sale price due to the defects. This is clear in my view from the Marcus Hon report.
There was no evidence to suggest that the George Pudja report was disclosed to the purchaser, notwithstanding the defendant had been granted leave to reply to the Marcus Hon report.
I am satisfied on the evidence that the value realised by the defendant on the sale of the property is the same as if the defects had been rectified. Consequently, the defendant failed to prove loss and the negligence claim fails. I note the plaintiffs conceded that the defendant would be entitled to nominal damages only for breach of 680 the HIA Contract.
The plaintiffs made reference to the judgment of Keane JA (as his Honour then was) in UI International Pty Ltd v Interworks Architects Pty Ltd [2007] QCA 402 at [55]-[75] (UI International). It was asserted that this matter was akin to UI International where the purpose of the building contract was to produce a marketable product. The measure of damages is the difference in value between what the property would have been worth had the contract been performed and what it was in fact worth. In UI International, 681 Keane JA had held that the damages were nil. I have formed the same view with respect to this case.
By reference to the decision of Kourakis CJ in Stone v Chappel [2017] SASCFC 72 at [55]-[75] (Stone v Chappel), the plaintiffs submitted that if it is not practically feasible for rectification work to be carried out, damages cannot be awarded in relation to that work. In Stone v Chappel, an award of rectification costs had to be weighed against the likelihood that such rectifications would take place, and the effect of those works on third parties. It was held by Kourakis CJ that rectification was unlikely and thus an 682 award of rectification costs was a not a reasonable course for the court to adopt. On the evidence in this case, I am persuaded to a similar course.
In the current matter, the defendant first entered into the contract to sell the property on 24 July 2019. The plaintiffs submitted that as such it was not practically feasible to rectify the 24 defects outlined in the George Pudja report in circumstances where the defendant now has no right to access the property. It was asserted that the defendant is not entitled to damages for rectification for the following reasons:

I accept these submissions as they accord with my view of the evidence.
The incoming owners of the property succeeded the defendant’s rights to bring an action for breach of statutory warranty, pursuant to s 88(3) of the Building Act. That subsection explicitly establishes that each of the owner’s successors in title succeeds to the rights of the owner in relation to the statutory warranties. The plaintiffs claimed that as a result, from the date of transfer the defendant no longer had any rights to claim for breach of s 88 of the Building Act. The plaintiffs stated that any claim for breaches of s 88 relied upon by the defendant for unrectified defects had to fail for want 684 of standing. In my view there is force in this submission.
The rectification works carried out by the defendant prior to the sale of the property were undertaken and paid for by the defendant after he took possession of the property 685 and excluded the second plaintiff in breach of the HIA Contract.
The defendant submitted that the decision of UI International was not applicable in this matter for the following reasons from that case at [45]-[87]:
UI International was a decision in respect of an application to strike out certain parts of an unusually pleaded statement of claim. There had been three attempts at amending the statement of claim.
The case centred on a building dispute brought by a developer (who developed the land for residential, retail and office purposes) against, amongst others, the builder with whom it contracted to design and construct the building on the land;
After completion of the construction, the developer subdivided the land and sold some of the lots. The developer was then not able to unilaterally carry out any rectification works on the building as that course required the consent of persons who were not parties to the matter;
In the third proposed amended statement of claim, the developer alleged it was entitled to damages for the demolition and rebuilding of the development for $31,099,490. This claim for damages were based on the following three bases:

At the commencement of the hearing on 21 October 2019, counsel for the plaintiffs moved on an application in proceeding dated 17 October 2019. That application sought to restrain the defendant from disposing of, dealing with, or diminishing the proceeds from the sale of the property and was supported by an affidavit of the plaintiffs’ solicitor Gavin Mansfield affirmed on 17 October 2019 (the Gavin Mansfield affidavit).
The Gavin Mansfield affidavit detailed that he had received instructions from the first plaintiff on 10 October 2019 that the defendant had been observed moving out of the property. The plaintiffs’ solicitor proceeded to conduct Google searches to ascertain information as to the status of title of the property which indicated that the property had been sold on 11 July 2019 for $1,125,000.
Email correspondence between the plaintiffs’ solicitor and the defendant’s solicitor was annexed to the Gavin Mansfield affidavit. In the first email dated 11 October 2019 sent by the plaintiffs’ solicitor to the defendant’s solicitor, the plaintiffs’ solicitor attached links to websites that indicated that the property had been sold. An urgent request was made for confirmation that the property had been sold, for disclosure of all discoverable documents in relation to the sale and for advice as to what the defendant had done or intended to do with the proceeds of sale.
On 15 October 2019, the plaintiffs’ solicitor wrote to the defendant’s solicitor requesting a substantive and full response to their first letter, noting that no response had been received. The plaintiff’s solicitor put the defendant’s solicitor on notice that if they were not provided with a substantive and full response including the provision of all discoverable documents by 16 October 2019, it was anticipated an urgent interlocutory application would be made pursuant to Parts 2.8 and 2.9 of the Court Procedure Rules 2006 (ACT).
On 16 October 2019, the defendant’s solicitor responded to the plaintiffs’ solicitor and attached a letter to their email in response. In the letter, the defendant’s solicitor denied that there was any basis for the plaintiffs’ request for information and documents. The letter confirmed that exchange of contracts for the sale of the property occurred on 24 July 2019 and that settlement occurred on 10 October 2019. A copy of the front page for sale was enclosed with the letter.
The Gavin Mansfield affidavit also annexed a copy of the defendant’s most recent balance Westpac Bank Investment Loan account, which was dated 23 January 2015. The loan was secured by a mortgage over the property and as at 23 January 2015, the balance was $563,674.
At the commencement of the hearing, counsel for the defendant opposed the granting of an interim injunction. Counsel for the defendant stated that “quite a bit of the money 695 has been dissipated to satisfy debts that the defendant owed”. Counsel for the plaintiffs noted that this was the first instance that he had been notified that monies had been dissipated and put the defendant on notice that the statement of claim may need 696 to be amended.
After a short adjournment, counsel for the plaintiffs’ notified that court that he had been informed by counsel for the defendant that only $126.11 remained from the sale of 697 $1,125,000. Counsel for the defendant confirmed that $126.11 was the amount 698 remaining. Counsel for the plaintiffs indicated that had this information been forthcoming prior to the hearing when it was requested, the application for an interim injunction would not have been prepared nor would have it been formally moved upon 699 at the outset of the hearing.
After hearing from the parties, I reserved the question of costs in relation to the 700 application for an interim injunction. As the true amount of the remaining funds was late breaking, it is appropriate to also set out the relevant evidence of the parties and witnesses as to how $126.11 came to be the remaining quantum.

As to the approximate remaining $205,000 after $920,000 is deducted from the sale amount of $1,125,000, the defendant gave evidence that the remaining funds from the sale were paid out to individuals that had loaned him money, being his father Ratko 708 Josifovski and his brother Goran Josifovski.
The defendant stated that it was his understanding that he gave both Ratko Josifovski and his father a mortgage over the property and that he had formally signed a document 709 confirming this arrangement.
It was put to the defendant that the mortgage arrangements with Ratko Josifovski and Goran Josifovski were made so that there would be no funds left over from the sale of the property and so the first plaintiff would not have to be paid anything from the 710 proceeds of the sale. The defendant denied this assertion.
Later in the cross examination, documents had been produced on behalf of the defendant that provided information about the sale of the property. The first page of the bundle was the first page of the contract for sale of the property. Also included in the bundle of documents on the second page was the settlement adjustment sheet for the sale of the property dated 10 October 2019. Under the heading ‘Bank Cheque Details’, a cheque for $913,681.30 was payable to Westpac Bank. The defendant confirmed that the $913,681.30 was owed to Westpac Bank solely for the loan for the property and that the amount owed to Westpac Bank had increased between 2015 and 2019 711 from $563,000 to $913,681.30.
Contained within the third page of the bundle was a handwritten document dated 24 April 2017. The defendant confirmed that the document was not written in English and 712 that it was written in Macedonian. The defendant confirmed that the document said that his father Ratko Josifovski would lend him $100,000 and that it was agreed that the defendant would return that amount upon the sale of his home, being the property 713 that is the subject of these proceedings. The defendant gave evidence that he received the $100,000 loan from Ratko Josifovski by a deposit in his bank account on 714 approximately 24 April 2017.
The defendant was referred to the final page of the bundle which was a handwritten letter dated 20 September 2018. It read as follows:

Cobanov v Josifovski

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