Diransson Pty Ltd v Hassan El Dirani

Diransson Pty Ltd v Hassan El Dirani - [2019] NSWSC 617 - NSWSC 2019 case summary — Zoe

Parties

Given commonality of surnames as well as the multiple proceedings, the parties and witnesses in this case are generally referred to by their first names. The proceedings are generally dealt with in chronological order.
The Defendant common to all these proceedings is Hassan El Dirani (the 'First Defendant') and his wife Youmna El Dirani (the 'Second Defendant') who together are the directors of Fenikia (the 'Third Defendant') (together the 'Defendants'). Hassan has been buying, selling and managing grocery businesses for some years now.
In the first matter, (2018/259014) Mohammed Dirani (the 'First Plaintiff') and Yousef Dirani (the 'Second Plaintiff') (together the 'Peak Hill Plaintiffs') sues the Defendants. The matter concerns a grocery business in Peak Hill. Mohammed is Yousef's father and together they operated Hassan's grocery store in Peak Hill from August 2009 to December 2012. Yousef is generally referred to as Joe. The Peak Hill Plaintiffs primarily seek a declaration for breach of contract and a sum of $473,200 for amounts paid to the Defendants, as well as damages. They further seek a declaration that the Defendants held on constructive trust for the Plaintiffs their interest in the Peak Hill Land and Peak Hill Business (PH ASOC [1]-[3]). The Plaintiffs make further claims for certain rebates paid to the Defendants as well as relief under Australian Consumer Law (PH ASOC [5]-[6]). In the alternative the Plaintiffs seek equitable damages (PH ASOC [7]) and other consequential relief (PH ASOC [11]).
In the second matter, (2018/103105) Diransson Pty Ltd (the 'First Plaintiff') and Imad Al Dirani (the 'Second Plaintiff') and Noura Choukhair (the 'Third Plaintiff') (together the 'Hill Top Plaintiffs') sues the Defendants. The matter concerns a grocery business in Hill Top. Imad and Noura are husband and wife and together are the directors of Diransson. Imad and Noura have operated Hassan's grocery store in Hill Top since August 2011 and continue to do so. The Hill Top Plaintiffs are primarily seeking that the Defendants specifically perform the agreement to sell to the Plaintiffs the land and business related to the Hill Top Store. They further seek a declaration that the Defendants hold on constructive trust for the Plaintiffs their interest in the Peak Hill Land and Peak Hill Business (HT FASOC [1]-[5]). The Plaintiffs make further claims for certain overpayments made to the Defendants, and for the rebates paid to the Defendants, as well as relief under Australian Consumer Law (HT FASOC [4A],[6]-[13]). In the alternative, the Hill Top Plaintiffs seek a declaration that the parties hold on constructive trust for each other the other's interest in the Hill Top Land and Hill Top Business as tenants in common, and further consequential relief (HT FASOC [5]). The Defendants filed a cross-claim against the Hill Top Plaintiffs seeking damages and restitution of $192,069 for stolen stock, as well as possession of the Hill Top Land (HT ASOCC [1]-[5]).
In the third matter, Ibrahim El Dirani (the 'Oaks Plaintiff') sues the Defendants. The matter concerns a grocery business in the Oaks. Ibrahim is Imad's brother. Ibrahim has been operating Hassan's grocery store in the Oaks since May 2015 and continues to do so. The Oaks Plaintiff is primarily seeking that the Defendants specifically perform the agreement to sell to the Plaintiff the business related to the Oaks Store including the lease for the Oaks Land and a declaration that the Defendants hold on constructive trust for the Plaintiff their interest in the Oaks Land and Oaks Business (O FASOC [1]-[5]). The Plaintiff makes further claims for certain rebates paid to the Defendants as well as relief under Australian Consumer Law (O FASOC [4A], [6A]-[11]). In the alternative, the Oaks Plaintiff seeks a declaration that the parties hold on constructive trust for each other the other's interest in the Oaks Land and Oaks Business as tenants in common, as well as further consequential relief (O FASOC [5]). The Defendants filed a cross-claim against the Oaks Plaintiff seeking damages and restitution of $237,574.28 for stolen stock, as well as possession of the Oaks Land (O ASOCC [1]-[5]).

[7]

The alleged contract

The Peak Hill Plaintiffs plead that on or about June 2009, Hassan made a business proposal to Mohammed. Hassan would purchase the Peak Hill Land and Peak Hill Business as well as the stock for Mohammed and his family. Upon Mohammed paying back the amounts Hassan had paid for the Peak Hill Land and the Peak Hill Business and the stock, Hassan would transfer the Peak Hill Land and Peak Hill Business to Joe. Mohammed accepted this proposal thus forming an agreement enforceable by law (PH ASOC [21]-[22]).
Mohammed states that in about June 2009, he had the following conversation with Hassan(Mohammed 2 [27]): Hassan: Mohammed, I have purchased the shop and freehold for $300,000 plus stock. I will give you more stock. In total it will be $110,000 for the stock Mohammed: So there is already about $50,000 worth of stock and you will be giving me another $60,000 worth. Hassan: correct.
Also in June 2009, Mohammed recalls the following conversation with Hassan (Mohammed 2 [29]): Hassan: I want you to work hard and give 100 per cent to the business. I am not worried about the money now. It is your business and your property. I suggest we put the business in Joe's name and he will eventually own the business. In a few years time you won't be able to work in the business in the shop. When you pay me back I will transfer the business and the property to Joe. Mohammed: Okay. That is fair as Joe has given up his job. He has given up everything for the business. Hassan: After you take over we will need to fix up the shop. It's too old. I will pay for it and you can do the work.
Joe recalls the following conversation with Hassan (Joe 1 [25]): Hassan: This shop should make a turnover of $30,000 per week which means you can pay me $13,000 a month to repay the loan for the business and the property. Mohammed and Joe: Okay Hassan: Once the amount is paid back I will transfer and put the Property and the business in your name [addressing Joe] as it will be for you. You [addressing my father] are getting older and the kids will look after the business for you
These proposals form the terms of Mohammed's alleged contract.
Before purchasing the store, Hassan states he made an offer in the following terms, which Mohammed accepted (Hassan1 [35]): You will pay me $500 per week, and pay for all of your own expenses. Otherwise, you can keep the profits. We will do this for one year, and then either one of us can end the agreement with three months' notice. We can renegotiate the amount after a year if your turnover increases. There is some stock in the store. But I will buy some more. You will have to reimburse me for all the stock when you are making enough money. For buying stock, I can open an account with Metcash for you in my name. If I do that I will keep the rebates, because I am taking the responsibility for the account, and the rebates are paid based on the orders for a few stores that I have. You could open it in your own name, but you would have to give security over a property or provide a bank guarantee
This offer forms the terms of Hassan's alleged Peak Hill agreement.

[8]

Performance of the alleged contract

On 14 August 2009, Hassan and Youmna bought the Peak Hill Store for $330,000 plus stock of about $110,000 (Hassan 1 [37]). From about August 2009, Joe and Mohammed ran the store.
Mohammed states that in about September 2009, he and Hassan had a further conversation in the presence of Joe and Hassna (Mohammed's wife). In that conversation, Hassan advised that Mohammed needed to start paying Hassan back for the Peak Hill Store by way of cash repayments of $13,000 each month (Mohammed 2 [37]; Joe 1 [25]; Hassna 1 [26]).
Mohammed states that he made many improvements to the store although Hassan paid for many of the materials (Mohammed 2 [32]). Hassan said he made a number of improvements to the store during this time which he paid for or undertook himself (Hassan 1 [41]-[42]).
Hassan states that he and Joe signed a lease (Hassan 1 [38]) (Ex P5). Joe denies signing this (Joe 2 [7]).
Hassan applied to Metcash for an account in his name (Hassan 1 [43]). In October 2009, Hassan entered into an agreement with Metcash for the Peak Hill, Lawson and Blackheath stores (Hassan 1 [45]). Hassan states that because he had multiple accounts across different stores he was entitled to rebates (Hassan 1 [43]-[47]). When Mohammed and Joe ordered stock through the Metcash account, rebates were paid to a company called Foursquare Stores (Q'ld) Pty Ltd, and that company in turn remitted rebates to Hassan and Youmna.
Joe and Mohammed say that over the years they paid Hassan $473,200 consisting of $433,500 cash and $39,700 by way of bank transfer (PH subs [15(d)]). They state that from October 2009 until December 2012, they made cash repayments of $433,500, which they recorded in an exercise book (Ex PA) (Joe 30/10/19 [48]; Mohammed 2 [51]). From December 2011 until December 2012, Mohammed also made repayments totalling $39,700 to Hassan by way of bank transfer (Ex MD-1, 24-37).
Hassan says that during the time that Mohammed and Joe managed the Peak Hill Store they paid Hassan an amount equivalent to $500 a week (Hassan 1 [48]). Hassan reported these earnings to his account, who recorded it as 'lease' or 'business' income in an amount between $23,000 and $26,000 each year: (Hassan 1 [49]). Hassan states Mohammed and Joe never repaid Hassan for the $110,000 in stock (Hassan 1 [51]).

[13]

The alleged contract

The Hill Top Plaintiffs plead that in or about early August 2011, Hassan met with Imad and made a business proposal to Imad. Hassan would purchase Hill Top Land and Hill Top Business as well as the stock and Imad would run the business. Imad would pay Hassan $11,000 per month (which would include $2,000 per month rent), all outgoings and expenses including future stock and a one-off payment of $300,000 for the Hill Top Land. Upon making these payments Hassan would then transfer to Imad in July 2015 the Hill Top Land, the Hill Top Business and all remaining stock (HT FASOC [14]). Imad and Noura accepted this proposal thus forming an agreement enforceable by law.
Imad states that in about August 2011, prior to Hassan purchasing the Hill Top Store, Hassan told him (Imad 1 [22]): I have worked out the terms with the owner to purchase the Friendly Grocer in Hill Top and the property. I want you to run the business and then you can buy the property off me in June 2015, when you have saved some money. You pay all the daily operating costs of the business and I will charge you $11,000 per month with includes $2,000 per month for rent on the shop. You will pay all the outgoings and council feels. You will pay me $11,000 in cash per month until the end of June 2015. You will need also to pay me for the stock I will buy from the previous owner in cash. In July 2015, I will transfer the business to you and also sell the property to you for $300,000.
This proposal forms the terms of Imad's alleged contract.
Hassan states that in August 2011, he made the following proposal to Imad (Hassan1 [90]): I am going to buy that business we saw in Hill Top and the land as well. You can work there if you want to, but you and your wife would have to move from Sydney, and I know you might not be able to do that. You would have to pay me $500 a week and then, when you are making money, you would have to pay me back for the stock. You would pay for all the expenses for the shop. I would open an account with Metcash in my name for you to buy the stock for the business, because they will not give you an account without any experience. They also need a cash guarantee, a bank cheque or a property as security to open an account. But you would have to pay for the stock yourself. We will do this for one year; after that, either of us can end the deal by giving three months' notice
This offer forms the terms of Hassan's alleged Hill Top agreement.

[19]

The alleged contract

The Oaks Plaintiff pleads that in or about late March or early April 2015, Hassan met with Ibrahim and made a business proposal to him. It was proposed that Hassan would acquire the Oaks Business and that Ibrahim would work in the store and pay rent to the landlord, owner of the Oaks Land. When Hassan returned from Lebanon, they would discuss how much Ibrahim would need to pay Hassan and on what terms in order for Ibrahim to eventually take over and own the Oaks Business. Ibrahim accepted this proposal and began operating the store and paying rent to the landlord (O FASOC [14]-[15]). In or about late September 2015, when Hassan returned to Australia, Hassan proposed that Ibrahim would continue to run the Oaks Business and pay all rent owing to the landlord on the lease (at that time $3410 a month). Ibrahim would also pay to Hassan, $2,200 for the first nine days of operation of the Oaks Business and thereafter $10,000 per month from June 2015 onwards until the total amount of $290,000 had been paid. Thereafter, Ibrahim would pay $1,000 per week until he could make a one-off payment of $150,000 for the stock. Upon Ibrahim having paid all the amounts, Hassan would transfer to Ibrahim the Oaks Business and the lease (O FASOC [21]). Ibrahim accepted this proposal thus forming an agreement enforceable by law.
Ibrahim states that in March 2016 he had the following conversation with Hassan (Ibrahim 1 [19]): Hassan: I am buying the shop in the Oaks. I want you to go there and meet the owner's sons and start training tomorrow. I want you to run the business. Ibrahim: I will start tomorrow with the training. How will our business arrangement work? Hassan: The previous owner did not run the business properly. I want you to start running the business and when I come back from Lebanon at the end of 2015, I will tell you how much you will need to pay me and the terms of our arrangement for you to take over the business in the future. But for now, you will pay the $3410 per month rent for the landlord and all of the daily operating expenses for the business.
Ibrahim states that he started operating the Oaks Business and paying $3,410 monthly in rent to the landlord (who was not Hassan) in May 2015 before he had a final deal with Hassan (Ibrahim 1 [19], [31]). Ibrahim states that the terms of the agreement were finalised in late September 2015 when Hassan said to Ibrahim (Ibrahim 1 [34]): I want you to pay me $2,200 for the first nine days you operated the business and $10,000 per month from November 2015 onwards. You are to continue to pay the rent to the landlord. Once you pay me back the $290,000 I paid for the business you will then pay me $1000 a week until you have the $150,000 for the stock on hand. You need to pay me for the stock in one payment and then you need to pay me anything else and I will transfer the business and the lease to you.
Together these conversations form the terms of Ibrahim's alleged contract.
In about late March 2015, Hassan states that he made an offer to Ibrahim (Hassan 1 [144]-[145]): If you agree to work there, I will buy the business and the stock. You will pay me $500 per week, plus the rent and any outgoings. You will buy your own stock from Metcash, but I will put an account in my name for the business. That means I will get a rebate for the stock, but if you put the account in your name you will have to give a guarantee. We can do this for one year and then either one of us can terminate the agreement with three months' notice. You can pay me for the stock I buy in one or two years when you have earned enough money.
This offer forms the terms of Hassan's alleged Oaks agreement.
This alleged agreement was entered into only a week or so before Hassan apparently repudiated Imad's alleged contract.

[24]

Mohammed Dirani

Mohammed swore three affidavits for the proceedings on 17 August 2018, 26 October 2018 and 31 January 2019.
Mohamed migrated to Australia in 1987 (Mohammed 2 [9]). Mohammed previously owned a business, which was a fruit shop, he was forced to close this business in January 2009 and lost a lot of money (Mohammed 2 [10]).
Mohammed met Hassan about 30 years ago in the village in Lebanon (Mohammed 2 [11]). After Mohammed closed his business he had discussions with Hassan about whether there was any work available for him. He states that in February 2009, Hassan indicated that he would buy a business for Mohammed who could then slowly pay Hassan back (Mohammed 2 [12]-[13]).
Mohammed worked in Hassan's Lawson store for a few months in 2009 (Mohammed 2 [15]). He states that during this time he discovered the Peak Hill Business for sale (Mohammed 2 [16]). Mohammed inspected the business and the land with his family; he stated he believed it was a new opportunity for him (Mohammed 2 [22]). He told Hassan that he and his family would be happy to move to Peak Hill. Mohammed states Hassan made an offer in accordance with Mohammed's alleged agreement at [20]-[24] above (Mohammed 2 [23]-[24]).
Mohammed states that he was aware from the internet advertisement that the Peak Hill Land was for sale for $230,000 and the Peak Hill Business was available for $100,000 plus about $50,000 of stock (Mohammed 2 [26]). Mohammed later stated that Hassan purchased the land and the business for $300,000 plus additional stock of $110,000 (Mohammed 2 [27]). Mohammed stated that he visited the Peak Hill Store with Hassan many times while finalising the purchase (Mohammed 2 [29]).
Mohamed states that he never signed a lease in relation to the Peak Hill Store (Mohammed 3 [7]).
Mohammed states that from August 2009, himself and Joe carried out significant work to the Peak Hill Store, including painting and replacing the flooring, as well as purchasing a chicken rotisserie (Mohammed 2 [32], [34]). He notes that Hassan bought most of the materials needed for the improvements (Mohammed 2 [33]).
Mohammed recalls that Hassan visited Peak Hill Store in September 2009 and asked that Mohammed start paying him the $13,000 monthly (Mohammed 2 [37]).
Mohammed states that he and Joe made the following payments for the Peak Hill expenses (Mohammed 2 [46]); 1. Council Rates, 2. Restocking, 3. Building and business insurance, and 4. Utilities, water, electricity, telephone, internet.
Mohammed states the following about his payments to Hassan: 1. From October 2009 he and Joe paid Hassan $13,000 in cash payments. They would gather the money together and then deliver it at Hassan's home. Mohammed recalls Hassan recording the payments in a black book (Mohammed 2 [48]-[50]). 2. Mohammed states that Joe kept an exercise book to record the date of the payments made (Mohammed 2 [51]).
Mohammed recalls that trading was very difficult (Mohammed 2 [57]-[58]). Joe had to borrow money from the bank (Mohammed 1 [33]) and later Mohammed took a loan from Mary Wright (Mohammed 1 [41]). Joe left Peak Hill in November 2011 (Mohammed 2 [60]). Shortly after this, in December, Mohammed states Hassan agreed to monthly payments of $9,000 a month (Mohammed 2 [62]). Mohammed states that the business encountered further difficulties in February 2012 when road works started outside the Peak Hill Store, he struggled to make the repayments and became depressed (Mohammed 2 [63]-[64]).
Mohammed states that in July 2012, Hassan returned from Lebanon and visited the Peak Hill Store. He requested that Hassan transfer the business but Hassan refused and demanded continuing payments of $6,000 per month (Mohammed 2 [67]-[69]).
Mohammed states that from 14 October 2009 to December 2012 he paid Hassan $433,500 in cash and $44,700 in bank transfers, totalling $478,200 (Mohammed 2 [53]). He states that this included an overpayment of $78,200 (Mohamed 2 [75]).
Mohammed states that in December 2012, he became aware that Hassan intended to sell the Peak Hill Store. He states that Hassan told him that they would go halves in any profit from the sale (Mohammed 2 [81]-[82]). Mohammed stated that the shop should now be his, but Hassan denied this was the case (Mohammed 2 [83]).
Mohammed left the shop in December 2012, he states that he left behind $56,700 worth of stock that he had paid for (Mohammed 2 [87]).
Mohammed recalls a conversation with Hassan where he asked for his money back, Hassan refused stating that Mohammed still owed him money. Mohammed states that in early 2013 he went to see a lawyer and drew up a witness statement (Mohammed 2 [91]).
Mohammed states that in early 2018, Joe told him that Imad and Ibrahim were taking Hassan to court. He states that he got their phone numbers from a family friend who was Imad and Ibrahim's aunt (Mohammed 3 [34]).
Mohammed stated that he would never have moved to Peak Hill to run the business unless he considered that the store would be transferred to him or Joe (Mohammed 2 [47]).
During the hearing, Mohammed was questioned extensively about the terms of his alleged contract. He maintained that he was to pay Hassan back the purchase price in instalments and confirmed that no rent was payable to Hassan (T437/8-17). Mohammed insisted that they paid Hassan every month (T458/49-459/10). Although he maintained that he and Hassan had this particular agreement in place, he made several concessions: 1. Mohammed admitted that he had purchased his home as well as several other businesses in the past, he stated that he had engaged a solicitor and signed a written agreement when doing so (T438/28-439/23). 2. Mohammed confirmed that it was Hassan who purchased the Peak Hill Store and was involved in the negotiations (T432/13-20). He admitted that he did not ask the previous owners about the price of the business or the land (T431/41-50). 3. Mohammed accepted that Hassan had in fact paid for many of the improvements to the store (T447/50-448/25; 448/49-449/30). 4. Mohammed confirmed that he was struggling financially and with his health in 2012 (T483/29-50). He admitted that he had applied for an ABN for a new business and paid a bond for the purchase of a supermarket by 3 December 2012 (T485/28-50; T487/1-3). A week or so prior he had asked Sahar to secure a personal loan to fund this purchase (T487/22-48). 5. Mohammed admits that he did not see a lawyer in December 2012, despite the alleged repudiation of the agreement by Hassan (T492/49-50). He admits that when Hassan and others visited Peak Hill in 2012 he was friendly and invited the party to stay at his house (T494/24-495/07). 6. Mohammed admitted that Joe told him that Hassan had said there would be no profits from the sale of Peak Hill and they would get no money from the sale (T500/45-501/17). After this conversation Mohammed saw a lawyer (T498/18-23). 7. Mohammed admitted that he spoke with Imad and Ibrahim about their dealings with Hassan (T535/30-37).

[25]

Yousef (Joe) Dirani

Joe swore two affidavits for the proceedings on 30 October 2018 and 31 January 2019.
Joe states that he was born in Sydney, and married Nouha Dirani in February 2012 (Joe 1 [1]-[2]). Joe recalls that his family experienced financial hardship in 2008 and lost of a lot of money (Joe 1 [11]-[12]).
Joe recalls that his father told him Hassan, an old friend, would help them buy a business. He recalls that Mohammed found a business in Peak Hill and that Hassan would buy it for them (Joe 1 [14]-[16]). He recalls that he visited Peak Hill Store with Mohammed (Joe 1 [20]).
Joe denies signing any lease with Hassan. He states he has never met Ajaj Slaibi, the witness on the alleged lease. Joe further notes that the address on the lease was not his address at the time that the lease was allegedly signed (Joe 2 [7]) (Ex P5).
Joe recalls that Mohammed told him about Mohammed's alleged contract and how much Hassan purchased the Peak Hill Store for (Joe 1 [21]-[22]). Joe recalls attending a meeting with Hassan and Mohammed were Hassan told them to pay him monthly repayments of $13,000 until they had repaid him for the business and the property (Joe 1 [25]).
Joe states that the Peak Hill Business name was registered and put into his name for taxation purposes (Joe 1 [27]).
Joe recalls that he and Mohammed made renovations to the store, including fixing the floors, shelving and painting (Joe 1 [30]). Joe recalls that Hassan asked to be paid in cash (Joe 1 [30]).
Joe recalls the following about the payments made to Hassan: 1. Payments started in September 2009 of monthly instalments of $13,000 (Joe 1 [41]-[42]). 2. Each week he would put aside money for Hassan and count it (Joe 1 [43]). 3. He or Mohammed would drive to Hassan's home every month to pay him in cash (Joe 1 [44]). If Hassan was not in the country, they would wait until he returned. Joe recalls one instance where Hassan had been away for three months, they paid him $39,000 in cash (Joe 1 [44]). 4. Joe recalls that Hassan recorded the payment in a small black diary (Joe 1 [46]). 5. Joe recorded the payments in an exercise book, Mohammed recorded some of these payments (Joe 1 [48]-[50]).
Joe recalls that the Peak Hill Store struggled financially (Joe 1 [58]). He left the store in December 2011 (Joe 1 [66]). He was told later by Mohammed that the monthly instalments had decreased to $9,000 (Joe 1 [68]). Joe recalls that in July 2012, Mohammed told him that Hassan had refused to transfer the Peak Hill Store and demanded $6,000 monthly instalments (Joe 1 [73]). Joe states that he occasionally inquired about receiving receipts or invoices but that Hassan deemed this unnecessary (Joe 1 [46]).
Joe bought a café in Hazelbrook in July 2012. Hassan and Michael Saba owned the shops in which the café was situated and Joe signed a lease with them for a particular shop. Joe states that he felt more comfortable dealing with Hassan in circumstances where there was an agent involved (Joe 2 [22]).
Joe states that in October 2012, Mohammed told him that Hassan had informed him he wished to sell the shop (Joe 1 [89]). Joe said that he and Mohammed asked for the money back which they had paid, Hassan refused stating that Mohammed and Joe still owed him money (Joe 1 [95]). He states that they explored legal options however did not pursue these (Joe 1 [96]).
In May 2017, Joe sent Hassan a text message in which among other things, he forgives Hassan for the trouble he caused his family (the text message is discussed below). Joe states he sent this message after attending a Tony Robbins 'Date with Destiny' event and was encouraged to forgive and let go of the past (Joe 2 [25]).
Joe was cross-examined extensively about Mohammed's alleged contract with Hassan. Although he maintained that Hassan had told him that the Peak Hill Property would be his, there were several concessions that were made throughout the course of the trial: 1. Joe confirmed that Hassan did not consult with him about the terms of the purchase or the price of the business and property (T334/14-46). 2. Joe accepted that Hassan had paid for much of the improvements made to the shop including purchasing new equipment (T335/04-335/36). 3. Joe admitted that when he left Peak Hill in December 2011, he left to pursue another business opportunity and that he never intended to work in Peak Hill again (T373/49-374/13). 4. He admitted that in July 2012, he believed he could have a good business relationship with Hassan and had no complaints about Hassan (T377/17-19; T380/41-43). Joe then signed a lease for a property that was part owned by Hassan. He admitted that he was happy to enter into another business relationship because it was through an agent and there were real documents (T380/29-33) 5. Joe admitted that Hassan had told him that there had been no profits upon the sale of the Peak Hill Store, so there was no money to share. Joe stated he was not happy with this conversation (T386/36-387/06). 6. Joe stated he had seen Mohammed's 2013 statement before giving evidence in these proceedings (T388/15-389/1). 7. Joe admitted that he spoke with Imad and Ibrahim about their dealings with Hassan (T415/31-36).
Further there were several inconsistencies and uncertainties evident in Joe's testimony: 1. When asked about why the Peak Hill Business was in his name, and what 'taxation purposes' meant, Joe was vague and didn't directly answer the question (T332/09-333/21). 2. He admitted he had met Ajaj Slaibi earlier, despite denying it in his affidavit (T344/05-345/20). 3. When questioned about the significant financial investment that Hassan had made to improve the business, Joe for the first time stated that the alleged purchase price agreed to (that is 300,000 plus 100,000 of stock), included this 'equipment' as part of the stock amount (T335/38-336/14; T340/32-342/20).

[26]

Hassna Dirani

Hassna, Mohammed's wife, swore two affidavits for the proceedings on 26 October 2018 and 1 February 2019.
Hassna states that she emigrated to Australia when she was a young child and married Mohammed in 1988 (Hassna 1 [2]-[4]).
She recalls that her family suffered significant financial hardship in 2008 and 2009 (Hassna 1 [6]-[7]).
Hassna recalls Mohammed telling her about a business in Peak Hill and that Hassan would buy it for them. She recalls visiting the shop and inspecting the property in April 2009 (Hassna [12]-[15]). She states that later Mohammed told her that Hassan had bought the shop for them, and that it would be transferred to Joe after they had paid him back (Hassna 1 [16]-[23]).
She states that on a few occasions she went with Mohammed to make the cash payments to Hassan (Hassna 1 [28]). Hassna recalls that business was tough (Hassna [29]).She recalls that Hassan visited the shop in July 2012,she states Mohammed asked whether they now owned the shop, Hassan said no and demanded further payments of $6,000 a month (Hassna [44]).
Hassna recalls that in December 2012, Hassan visited and stated he wished to sell the shop and informed Hassna and Mohammed that they could go halves on the profit (Hassna [51]). She moved back to Sydney in December 2012.
She recalls that Mohammed told her in January 2013 that Hassan stated that they still owed him money (Hassna [55]).
Hassna was cross-examined about her recollection of Mohammed's alleged contract. She confirmed that she knew how much money was being paid to Hassan because she used to count it (T556/47-49) She maintained that she recalled particular conversations where Hassan promised to transfer the property, but admitted that she had not taken any notes of the conversation at the time (T553/07-23;T55/15-28).
She made several concessions throughout her testimony: 1. She had seen and read a copy of Mohammed's 2013 statement before she prepared her own affidavit (T533/41-534/03; T552/05-17). 2. She admitted that Mohammed had been depressed at Peak Hill (T559/06-29).

[41]

Imad Al Dirani

Imad swore three substantive affidavits for the proceedings, on 2 April 2018, 19 August 2018 and 31 January 2019.
Imad states that he first came to Australia in October 2010 (Imad 1 [7]). He was employed at a variety of businesses including at an aluminium factory, a clothing store, a taxi company and at a service station (Imad 1 [8]). He married Noura Choukair in October 2011 and they now have three children (Imad 1 [7]).
Imad first met Hassan in late 2010, Hassan is Imad's father's cousin (Imad 1 [9]). Imad states that approximately the third time he met Hassan in June 2011, Hassan raised with him a possible business venture in the future (Imad 1 [12]). Imad recalls becoming aware of a service station for sale in Colo Vale, he and Hassan then travelled to look at the business, Hassan decided that the service station was not a good investment (Imad 1 [13]-[14]). Imad recalls that he visited the Hill Top Store with Hassan but wasn't involved in discussions with the owner (Imad 1 [15]-[17]).
Imad recalls that in August 2011 he had a discussion with Hassan in which Hassan made an offer in the terms of Imad's alleged contract (as at [51]-[53] above). Imad also recalls at this time that Hassan requested that he be paid in cash and that Imad not talk to Marwan or Mouhamed Haidar about the deal because Hassan was offering Imad a better arrangement than them (Imad 1 [22]).
Imad states that after talking to Noura and his parents he decided to accept Hassan's offer (Imad 1 [25]). Imad states that Hassan told him they didn't need any written agreement because they trusted each other (Imad 1 [26]). Imad states that shortly after accepting the offer he met with Hassan who gave him some documents to sign. Imad states he did not read these nor did he get a copy (Imad 1 [28]). He states that Hassan told him the documents were for 'tax purposes' (Imad 3 [11]).
With regards to the leases, Imad states that to his knowledge, him and Noura never signed the leases. Nor did he recall Mr Nader Slaibi or Mouhamed Haidar ever witnessing their signatures (Imad 3 [12]).
Imad states that he went into possession of the Hill Top Store in October 2011 (Imad 1 [36]).
Imad states that he spoke to the previous owner of the Hill Top Business, who had told him that the price of the business was $280,000 plus $66,200 for the stock (Imad 1 [39]). Imad states, by reference to a title search, he believes Hassan purchased the Hill Top Land for $220,000 (Imad 1 [40]).
Imad states that he has paid the following expenses for the Hill Top Store, both as a partnership with his wife and later through his company Diransson (Imad 1 [43]-[50]); 1. $2,000 monthly rent to Hassan, 2. $9,000 monthly instalment amount to Hassan, 3. The costs of restocking and buying goods for the store, 4. Electricity, telephone, accountancy, internet, 5. Council rates, and 6. Business insurance and security.
Imad recalls the following about the payments to Hassan: 1. He recalls that he saved cash of $4,000 a month to repay Hassan for the initial $66,000 worth of stock (Imad 1 [52]). 2. He recalls that he saved cash to pay the monthly instalment amounts. This was not paid monthly but saved up then paid to Hassan or Mr Saba (at Hassan's direction) when directed to be paid (Imad 1 [53]).
According to Imad the payments to Hassan can be summarised as follows: Date Amount paid Circumstances January 2012 $27,500 Imad delivered the money with Noura to Hassan's house. They had dinner with Hassan Late February/early March 2012 22,000 Paid before Hassan left to Lebanon, Hassan visited the store to collect the money May 2012 33,000 Delivered to Hassan's brother in law, Mr Haidar at the Blackheath store December 2012 77,000 Hassan visited Imad's home to collect the money December 2012 50,000 For the initial stock January 2013 11,000. Hassan visited Imad's home to collect the money April 2013 33,000 Delivered to Mr Saba at the Rooty Hill July 2013 33,000 plus $16,200 for the stock Cannot recall where this payment was made or to whom it was made January 2014 $55,000 Hassan visited the store to collect the money February 2014 $22,000 Hassan visited the store to collect the money May 2014 $33,000 Delivered to Mr Saba at his home July 2014 $22,000 Hassan visited Imad's home to collect the money March 2015 $88,000 Hassan visited the store to collect the money May 2015 $22,000 Hassan visited the store to collect the money 5 June 2015 $11,000 Imad paid Hassan after he, Hassan and Ibrahim had been to dinner at Greenacre October 2015 $44,000 plus $52,200 on behalf of Ibrahim Hassan visited Imad's home to collect the money December 2015 $22,000 plus $20,000 on behalf of Ibrahim Hassan visited Imad's home to collect the money May 2016 $55,000 plus $50,000 on behalf of Ibrahim Hassan visited Imad's home to collect the money August 2016 $33,000 plus $30,000 on behalf of Ibrahim Imad visited Hassan's home to pay the money November 2016 $33,000 plus $30,000 on behalf of Ibrahim Delivered to Mr Saba at his home February 2017 $33,000 plus $30,000 on behalf of Ibrahim Hassan visited Imad's home to collect the money 4 July 2017 $44,000 plus $40,000 on behalf of Ibrahim Delivered to Mr Saba at his home August 2017 $22,000 plus $20,000 on behalf of Ibrahim Paid to Hassan 21 October 2017. $22,000 plus $20,000 on behalf of Ibrahim Hassan visited Imad's home to collect the money before he visited Lebanon. On this occasion Imad and Hassan visited another store in Unaderra 3 January 2018 $22,000 plus $20,000 on behalf of Ibrahim Paid to Mr Saba at Mr Saba's home with Ibrahim

[42]

Imad states that in about April 2015 he spoke to Ibrahim about Ibrahim going into business with Hassan. Imad stated that he encouraged Ibrahim and that he trusted Hassan (Imad 1 [62]-[63]).
Imad stated that by June 2015 he had paid Hassan all of the $11,000 monthly instalment amounts totalling $489,500 plus $66,200 for the stock (Imad 1 [66]).
Imad states that in late September 2015, he spoke to Ibrahim. Ibrahim told him he could not afford to pay the $10,000 per month to Hassan and Imad offered to help him make the payments (Imad 1 [68]). Imad states that in October 2015, he met with Hassan and requested that Hassan transfer the business. Hassan refused to transfer and stated that Imad was to keep paying the $11,000 a month until he wanted to leave the business (Imad 1 [69]).
Imad states that he decided to keep paying the $11,000 a month so that Hassan would not kick him out of the business (Imad 1 [70]).
Imad recalls that in 2017 he received a phone call from Hassan who complained about Ibrahim's laziness in running the Oaks Store (Imad 1 [75]). Imad states that Hassan said he would 'fuck him [Ibrahim] up' if he was ever rude to Hassan again (Imad 1 [75]). Imad could not recall when in 2017 the conversation happened (Imad 3 [19]). He states that following this incident, he and Ibrahim went to extra effort to keep Hassan on side (Imad 3 [21]).
In March 2018, Imad sent a text message to Hassan stating that he needed more time to gather the money for the monthly instalment.
Since proceedings have commenced, Imad has opened his own account with Metcash (Imad 3 [32]), however he can no longer order stock on credit and must pay on delivery of the stock (Imad 3 [33]).
Imad states that in about mid 2018 he discovered his insurance premiums had increased (Imad 3 [36]). Imad believes Hassan increased these premiums (Imad 3 [37]).
Imad was questioned extensively about his agreement with Hassan.
He did make several concessions: 1. Imad conceded that he had signed tax returns on behalf of his wife and his brother, but insisted that his accountant had told him to do this (T34/34-35/09;36/08-36/15; T37/08). 2. Imad admitted that he didn't know what the Hill Top Business or Hill Top Land would cost despite agreeing to purchase it (T23/10-26;T26/31-44). He admitted that he had never worked in a grocery business before (T22/30). 3. Imad denied that he signed the lease (Ex P6) despite acknowledging that the signature looked like his and accepting that he had signed some documents with Hassan at the relevant time (T38/1-24). 4. Imad accepted that Hassan had made improvements to the store and that he did not pay for them (T47/10-27). 5. Imad confirmed that he had made no contemporaneous record of the payments he made to Hassan (T47/43-48/10). 6. Imad admitted that upon Hassan's alleged repudiation in 2015, he had not seen a lawyer, had not written to Hassan, and hadn't complained to anyone else about Hassan's conduct (T96/35-97/24). 7. Imad admitted that he had ordered the extra stock to protect the business, although he denied that it was deliberately done to fund the litigation (T142/15-23; T141/6-7). 8. Imad admitted that he spoke regularly with Ibrahim about their dealings with Hassan (T174/35-48) 9. Imad could not explain why, in his affidavit, he had recalled in almost precisely the same words as Ibrahim, a conversation the two had over three years ago (T175/08-176/41). 10. Imad admitted that he is very close friends with Mohammed and Joe (T150/14-16), and that they speak regularly about the proceedings (T152/09-32) and their dealings with Hassan (T155/41-44).
There were further several inconsistencies in Imad's evidence: 1. He could not remember fundamental facts such as the price of the land and the business and refused to concede he was wrong when shown documents that contradicted him (T42/30-45; T43/11-31; T44/13-18; T44/43-45/4). 2. In his affidavit evidence he stated that Hassan agreed to transfer Hill Top Land to him for $300,000 in July 2015 (Imad 1 [22]), in cross-examination Imad stated that the transfer would take place when he had enough money and there was no time limit in place (T23/49-24/39). Imad could not say what would happen after July 2015 if he did not buy Hill Top Land (T26/01-23). 3. In his affidavit, Imad recalled specific details about the payments he had made to Hassan. In cross-examination, Imad could not recall the same details (T53/01-55/49; T72/3-46; T101/43-104/21; T114/44-115/2; T119/30-120/6).

[43]

Ibrahim El Dirani

Ibrahim swore three affidavits for the proceedings, on 2 April 2018, 19 August 2018 and 31 January 2019.
Ibrahim states he arrived in Australia in December 2014. He was initially employed by Imad on a casual basis to work in the Hill Top Store. In May 2015 he married his wife Sassee (Ibrahim 1 [13]-[17])
Ibrahim states that he first met Hassan in 2013 at a wedding in Lebanon. He states that at this time, Hassan offered to help him out when he moved to Australia (Ibrahim 1 [8]-[13]). In March 2015, Ibrahim states he met with Hassan who stated he was considering buying a business in the Oaks for Ibrahim to run (Ibrahim 1 [18]). A few days later Ibrahim said Hassan made an initial offer to him to run the store and pay the landlord rent on business expenses, Ibrahim states that Hassan told him the agreement would be finalised upon his return from Lebanon (Ibrahim 1 [19]). Ibrahim states that the final agreement was in the terms of Ibrahim's alleged contract as at [78]-[81] above.
Ibrahim states that he went into possession of the Oaks Store in May 2015. He began paying expenses as well as $3,410 a month to the Landlord (Ibrahim 1 [34]). When Hassan returned in September 2015, it was agreed that Ibrahim would also pay Hassan $10,000 a month starting in September.
Ibrahim states that the existing stock in the store was for $150,000. Ibrahim states that he spoke to the previous owner of the Oaks Business, who informed him that Hassan had bought the business for $290,000 (Ibrahim 1 [27]-[29]).
Ibrahim states that although he became aware in late 2015 that Hassan had not honoured Imad's alleged contract, he kept paying him because he was scared (Ibrahim 1 [39]).
Ibrahim states that he has paid the following expenses for the Oaks Business, (Ibrahim 1 [41]); 1. $3,410 monthly rent for the shop, paid by bank transfer, 2. $10,000 monthly instalment amount to Hassan, paid to Imad who would then give the cash to Hassan, 3. The costs of restocking and buying goods for the store, 4. Electricity, telephone, accountancy, internet, and 5. Business insurance and security.
Ibrahim states that between September 2015 and January 2018, he would give Imad $10,000 a month to pay Hassan. Ibrahim states that once in 2018 he visited Mr Saba with Imad to pay the monthly instalment, he states that at this time he paid $20,000 (Ibrahim 1 [47]-[48]).
Ibrahim states that he personally bought equipment to use in the store including a slushy machine and an air-conditioner (Ibrahim 3 [14]).
Ibrahim recalls that on one occasion in 2017 Hassan yelled at him in front of his customers. He states that he heard from Imad that Hassan was going to fuck him up and he felt scared and intimidated (Ibrahim 1 [53]-[54]).
Ibrahim states that the $290,000 owing under Ibrahim's alleged contract was paid on about 31 October 2017. He states that according to the agreement he only had to pay Hassan $1,000 a week until the final lump payment, however he was too scared to raise this with Hassan so continued paying the $10,000 a month (Ibrahim 1 [56]).
Ibrahim states that by January 2018 he had paid Hassan approximately $312,000 in cash (Ibrahim 1 [49]).
Ibrahim states that he ordered extra stock prior to commencing litigation so that the store could continue to trade while proceedings were on foot (Ibrahim 3 [28]).
Ibrahim was questioned extensively about his agreement with Hassan, he confirmed that under the agreement he would run the Oaks Store between March and September 2015 while paying no money to Hassan (T203/32-48). He confirmed that he made no enquiries about the purchase price of the business (T189/45-190/21) and did not know the particulars of the lease arrangement (T198/31-42).
He did make several concessions: 1. Ibrahim could not explain why, in his affidavit, he had recalled in almost precisely the same words as Imad, a conversation the two had over three years ago (T205/16-206/47). 2. Ibrahim agreed that Hassan would not be making any money on his investment under Ibrahim's alleged contract (T196/3-6). 3. Ibrahim admitted that he ordered the extra stock to keep the business running and because they needed money to help them come to court (T232/30-35).
Further, Ibrahim made mistakes about critical aspects of his evidence: 1. He maintained that the purchase price for the Oaks Store was $290,000 however the contract for sale discloses a price of $230,000 (T191/44-192/8). 2. Ibrahim was unable to recall his apparent obligation to pay Hassan $2200 for the first nine days he occupied the business (T200/18-201/22).

[45]

Noura Choukhair

Noura, Imad's wife, swore two affidavits for the proceedings, on 19 August 2018 and 31 January 2019.
Noura states that she was born in Sydney and that she met Imad in December 2010. Prior to marrying, she was employed as a childcare teacher (Noura 1 [3]-[6]).
Noura states she first met Hassan in 2011 when he attended her engagement party (Noura 1 [8]).
Noura recalls that in August 2011, Imad met with Hassan to discuss the Hill Top Store, she recalls that Imad was excited over the opportunity to purchase the business from Hassan (Noura 1 [12]).
She states that Imad told her that Hassan had bought the Hill Top Business for $280,000 and Hill Top Land for $220,000 (Noura 1 [24]).
Noura recalls that she was present at the stocktake and that the stock was worth $66,230. She recalls that Mr Slaibi and Mr Saba paid this amount to the previous owners (Noura 1 [21]).
Noura states that she and Imad took possession of the shop in October 2011 (Noura 1 [23]). She denies ever signing a lease (Noura 2 [3]).
Noura recalls Hassan visiting her home in 2013 and telling her not to worry about the hard work because soon the business would be hers and Imad's (Noura 1 [40]).
Noura recalls the following about the payments made to Hassan: 1. She states that on the first payment to Hassan, she and Imad visited Hassan's home for dinner. She and Imad counted out $27,500 to pay Hassan. 2. She states that she and Imad used to count the money together and that she was often present when Hassan visited their home to collect the cash (Noura 1 [29]). 3. She further recalls that Imad paid Hassan for the stock amount of $66,230, she states she remembers counting the money (Noura 1 [32]) and witnessing the payments (Noura 1 [48]).
Noura recalls that by June 2015 she and Imad had paid Hassan $489,500 plus $66,230 for the stock (Noura 1 [33]). She states that when Hassan returned from Lebanon in October 2015 he refused to transfer the Hill Top Store.
Noura was cross-examined about her understanding of Imad's alleged contract with Hassan. She maintained that Hassan had promised to transfer the business and she was not challenged on the fact that she used to count the money being paid to Hassan. There were several concessions made that suggested her memory may be unreliable: 1. Noura was mistaken about the price of the Hill Top Land and the Hill Top Business (T243/32-244/2). 2. Noura accepted that she was not a party to Imad's conversations with Hassan and accepted that she had spoken about the agreement with Imad many times since then (T244/12-31). 3. She was unable to explain why she and Sassee apparently recalled having almost the same conversation with Hassan in separate incidents (T250/44-253/8).

[54]

Imad's text messages

The Hill Top and Oaks Plaintiffs point to the text messages between Imad and Hassan (Ex P13) as evidence of an obligation on Imad to make regular payments of $11,000 per month plus $10,000 on behalf of Ibrahim. The Plaintiffs state that given the absence of complaint by Hassan, the text messages establish that at least some of the payments described occurred. The fact that many of these text messages refer to amounts far greater than $500 a week, the Plaintiffs submit proves that they were in fact paying a purchase price, not a weekly rent.
For example, one text message sent on 4 July 2017 sent from Hassan to Imad states (CB8/1539): Hassan: you paid until the end of the month of February. Imad: I will give 44 Thousand Dollars from me and 40 thousand from Ibrahim for the end of the sixth month.
Hassan states that these text messages related to payments that Imad and Ibrahim had agreed to make for the stock in the Oaks store (Hassan 1 [111]-[115]). One text message from Hassan however reads, "Just a reminder, you paid until the month of February" (P13, 104), Further Hassan states he never received any payment for the stock in relation to the Oaks (Hassan 1 [159]). He further states that he didn't receive the payments referred to in those messages (Hassan 1 [115]). The text messages refer to money being given to Mr Saba and Mr Haidar, both witnesses deny receiving the money as described (Saba1 [20]-[21]); Saba 2 [4]; T847/8-11;T84830-32; Haidar [21]).
The Hill Top and Oaks Plaintiffs particularly point to two text messages sent in November 2016 and August 2017 between Imad and Ibrahim, prior to the commencement of litigation. These text messages read in part, on the 19 November 2016 (attached to Affidavit of Stephen Tully): Imad: And the dick Hassan sent me a message telling me to take 3 months worth of rent to Michael Saba. Imad: You have given me 20 thousand dollars. I still need 10 thousand dollars from you. Get them ready for me if you have them and I will tell you when I will be going to him. Ibrahim: OK brother just tell me when you will be coming so that I can get them ready.
And on the 5 August 2017 (attached to affidavit of Stephen Tully): Ibrahim: Ok brother. I will try to figure out how to get him the money, have you got the 22 thousand ready for him. Imad: yes they are with me. Ibrahim: OK good I need about a week to get the money read is that ok? Imad: Should be good. Ibrahim: I still need 10 thousand $ out of the 20 thousand. Imad: Ok.
Imad admitted that he had sent a series of intentionally misleading messages to Hassan (CB9/1853; T136/15-144/24).
There is no reference in any of the text messages about the purchase of the Hill Top Store (T29/37-48).The payments when described are referred to as rent (CB9, 1785-86, 1787-88).

[55]

Hill Top Plaintiffs' Tax returns and financial statements

The Hill Top Plaintiffs produced numerous financial statements and tax returns for the proceedings, including original and amended.
Imad's original tax returns and financial statements disclose a profit insufficient to pay the alleged amounts to Hassan. In FY2013, Imad states that he paid Hassan $171,000 (Imad 1, 40), his partnership financial statements only discloses a profit of $59,996 (Ex D1, 26). This profit is reflected in his 2013 partnership tax return (Ex D1, 32). In FY2014, Imad states he paid Hassan $159,200 (Imad 1, 40), but his FY2014 partnership financial statement discloses a profit of only $63,999 (Ex D1, 42). This profit is reflected in his FY2014 partnership tax return (Ex D1, 48). In FY2015, Imad states he paid Hassan $143,000 (Imad 1, 41) but the original financial statements and tax returns disclose no profit and only the payment of $60,000 in wages (Ex D1, 74). In FY2016, Imad states that he paid Hassan $121,000 (Imad 1, 42) however the original financial statements and tax returns disclose profit of $460 and wages of $39,000 (Ex D1, 114, 124). In FY2017 Imad states he paid Hassan $99,000 but the original financial statements and tax returns disclose a profit of $168 and wages of $39,000 (Ex D1, 154, 166).
The Hill Top Plaintiffs submit however that (at CB4, 102B, 102C, 103A) there were sufficient funds to pay the amounts that they alleged (T92/44-50). Further, the Z readings produced disclose a higher turnover.
Imad stated that the financial statements were incorrect (T59/22-36) but could not explain these mistakes when Mr Faeeh stated that Imad checked the financial statements (T279/1-16) and denied understating Imad's income (T279/18-37).
None of the documents record the Plaintiffs having made any payment towards the purchase of the Hill Top Store. Both the original and amended financial statements describe the payments to Hassan as rent.
The Plaintiffs prepared amended financial statements in February 2018, these recorded $28,818 paid for 'rent-premises' and $98,182 paid for 'rent-business' (Ex D1, 13, 16, 20). These show the same profit as the previous tax returns but the expense and revenue figures have changed (T93/3-95/2; T111/27-112/5; T123/29-124/12). Imad stated he was only mistaken about the rental figure and could not explain why many other figures had been changed (T113/09-23).These amended tax returns have not been filed.

[64]

Hassan El Dirani

Hassan swore two affidavits in the proceedings on 30 November 2018 and 20 February 2019.
Hassan confirms that he used to own the Peak Hill Business and the Peak Hill Land (Hassan 1 [11]-[12]). Hassan states that he and Mohammed were childhood friends from Lebanon (Hassan 1 [13]). He states that he was aware that Mohammed needed help in 2008 and offered him a job in the Lawson store. He states that he told Mohammed about the arrangement he had at the Blackheath store, where Carolyn and Abdou ran the store and kept the profits and paid Hassan an amount each week. Hassan recalls that Mohammed asked if they could enter a similar arrangement (Hassan 1 [29]-[31]).
Hassan states that he later became aware about a shop for sale in Peak Hill. He states that he visited the shop on his own, spoke with the owners and made inquiries about the business. Hassan states that he was the only one involved in the negotiations to purchase the property (Hassan 1 [32]-[33]).
Hassan states that he entered into an agreement with Mohammed in the same terms as alleged Peak Hill agreement as at para [25]-[26] above. Hassan states that he bought Peak Hill Land for $230,000 and the Peak Hill Business for $100,000 plus stock of $110,000 (Hassan 1 [37]). Hassan states that on about 14 August 2009, he and Youmna, entered into a retail lease with Joe for the Peak Hill Business (Hassan 1 [14]). He states that the lease was in Joe's name so that Mohammed could keep receiving Centrelink payments (Hassan 1 [38]).
Hassan states that he paid for many improvements and additional equipment for the store (Hassan 1 [41]-[42]).
Hassan recalled that he opened an account with Metcash for Joe and Mohammed to make orders for the Peak Hill Store. He recalls one time in February 2012, when Mohammed and Joe failed to pay for $60,000 worth of stock Hassan was then forced to pay (Hassan 1 [51]).
Hassan states that Mohammed and Joe paid the equivalent of $500 a week to run the Peak Hill Store. He states that the payments were not regular, they were paid when Mohammed and Joe would visit Sydney, and paid in cash. Hassan states that when he received a payment he would write it down in a notebook which he threw away a few years ago. He states that he told his accountant that he was receiving rent for the Peak Hill Store and this is recorded in his financial records (Hassan 1 [48]-[50). Hassan states that Mohammed and Joe did not pay him the amount they owed for the stock. When they placed orders with Metcash for the stock, often Hassan would pay for them and Mohammed would pay him back by way of bank transfer (Hassan 1 [51]).
Hassan states that in late 2012, Mohammed told him that he wanted to move back to Sydney. Hassan then says he offered to sell Mohammed the business but Mohammed refused, he found out a few weeks later that Mohammed had purchased another business in Oakdale (Hassan 1 [60]-[62]).
Hassan states that in July 2012, Joe leased a shop from him in Hazelbrook. He states that he told Joe if he sold Peak Hill and made a profit he would give Joe some of the proceeds. He states that when he did sell the Peak Hill Business to Abdou, he lost money and there were no profits to share (Hassan 1 [69]-[72]).
Hassan confirms that his company Fenikia owns the Hill Top Business and the Hill Top Land (Hassan 1 [17]). He states that he first met Imad in late 2010, soon after he arrived in Australia (Hassan 1 [79]). Hassan stated that he told Imad about his business arrangements in Lawson and Blackheath and that Imad expressed interest in a similar deal (Hassan 1 [82]).
Hassan states that he and Imad visited Hill Top, but that he was the only one who made inquiries about the business and negotiated the purchase (Hassan 1 [86]-[89]). Hassan states that he entered into an agreement with Imad in the same terms as the alleged Hill Top agreement as at [54]-[55] above (Hassan 1 [90]-[93]). Hassan states that in August 2011, he, Imad and Noura signed a retail lease for the Hill Top Land. He later recalls that Imad asked for Noura to be removed from the lease so he and Imad alone signed a second retail lease for the Hill Top Land (Hassan 1 [96]). Hassan states that he bought the Hill Top Business for $250,000 plus $66,000 of stock [Hassan 1 [99]).Hassan states that he made improvements to the shop and bought new equipment for it (Hassan 1 [100]).
Hassan states that he received the equivalent of $500 a week from Imad, although the payments were not regular. Some payments were made to Michael Saba (Hassan 1 [101]-[104]). Hassan said he recorded these payments in a notebook. He states he no longer has the original notebook, but transferred the original notes across to a new notebook in late 2017 (Hassan 1 [105]). He states Fenikia's ledgers, tax returns and financial statements record this money as rental income (Hassan 1 [106]).
Hassan states that in 2017 he became angry with Ibrahim for not running the shop properly, he stated that Ibrahim had not paid him back for $155,000 worth of stock and he did not trust him. He threatened to sell the shop if Ibrahim did not pay him back. He states that Imad then offered to help his brother pay this stock back quickly (Hassan 1 [111]-[115]).
Hassan states that in April 2018, Imad owed $192,069 for stock, which Hassan was forced to pay (Hassan 1 [130]-[131]). Imad continues to run the Hill Top Business but has not paid Hassan the weekly fee from January-May 2018. Hassan states that he terminated the agreement with Imad (Hassan 1 [137]).
Hassan confirms Fenikia owns the Oaks Business and leases the Oaks Land (Hassan 1 [18]). Hassan states that he first met Ibrahim at a wedding in 2013 (Hassan 1 [139]). Hassan states that he saw Ibrahim a few times in early 2015, he told Ibrahim that if he purchased a new business Ibrahim could work in it (Hassan 1 [141]). Hassan states that he later became aware that the Oaks Business was for sale, he told Ibrahim that he could work there and keep the profits and pay Hassan a fee (Hassan 1 [142]-[144]).He states that he entered into an agreement with Ibrahim in the same terms as alleged the Oaks agreement in about April 2015 as at para [82]-[83] above (Hassan 1 [144]-[145]).
Hassan states that he purchased the Oaks Business for $230,000 plus $154,600 in stock (Hassan 1 [151]-[152]). Hassan states that he paid for some of the repairs made to the Oaks (Hassan 1 [153]).
Hassan states that he received payments from Ibrahim through Imad of a weekly fee equivalent to $500. The payments were made irregularly (Hassan 1 [155]-[157]). This money was recorded in Fenikia's records as rental income (Hassan 1 [157]).Hassan states that he has not received any money from Ibrahim for the Oaks stock (Hassan 1 [159]). Hassan states that in April 2018, Ibrahim owed $237,574 to Metcash for stock, which Hassan was forced to pay (Hassan 1 [170]-[171]). ]). Ibrahim continues to run the Oaks Business but has not paid Hassan the weekly fee from January-May 2018. Hassan states that he terminated the agreement with Ibrahim (Hassan 1 [173]-[175]).
Hassan states the following about his other properties and businesses: 1. He confirms that in about 2000, he and Youmna bought a supermarket in Lawson (Hassan 1 [21]). He operated the business from 2001 until about 2010. He then entered into an arrangement with his nephew Marwan from about 2010 to 2016 where Marwan would pay Hassan a fee and then was allowed to keep the rest of the profits. In September 2010, Fenikia bought the land the Lawson Store operated on, the Lawson Store was sold in October 2017 (Hassan 1 [21]-[23]). 2. He confirms that he and Youmna bought a grocery store in Blackheath in 2005, he states his niece Carolyn and brother in law Abdou operated the shop for him, they kept the profits and paid him a monthly fee (Hassan 1 [24]). Since about October 2010, Hassan's brother in law Mouhamed Haidar has operated the store, he pays a fee to Hassan and then keeps the profits (Hassan 1 [25]).
Hassan states that his business model is to buy an underdeveloped business, improve its value over time and then sell it for a profit (Hassan 1 [188]).
During cross examination, Hassan made several concessions: 1. He admitted that he had made changes to his notebook between the time copies were put into evidence and the time it was produced in court (T674/18-25). 2. Hassan admitted that he had lied to his solicitor and directed someone else to lie to their solicitor (T806/16-807/14). He lied to his solicitor about the stocktake figures for Hill Top and the Oaks (Ex P13, 77A, 77D). 3. Hassan conceded that it was his idea that the various payments be made in cash (T684/3).
Hassan also gave inconsistent evidence about some aspects of the agreements 1. Hassan recalls his argument with Ibrahim in 2017 and the subsequent demand that he be paid back for all the stock quickly, as well as the text messages allegedly discussing this transaction. He states Imad offered to pay about $10,000 a month each. This is inconsistent with his original affidavit in which he states that Ibrahim could pay him back for the stock in one or two years. In cross-examination, Hassan changed this to only one year (T569/6). Hassan then changes, stating that Ibrahim paying $10,000 a month and Imad paying $11,000 for the stock (T599/31;T696/13). The text messages further refer to 'rent' as oppose to 'stock' (T712/28-729/12). 2. In relation to calculating the amount owed under his various agreements, Hassan gave inconsistent evidence. He stated that it was clear that the more important criterion was turnover (T605/35-606/7). He further agreed that he wouldn't have offered a better deal to Imad or Ibrahim then Mouhamed Haidar or Marwan (T609/29-32). Hassan then changed his evidence to fit with these propositions. In relation to Peak Hill, the $500 a week rent seems to be based on a turnover of $25,000 (based on the Dunbar report (CB5/66, 68) and the solicitor file note of 2 July 2009 (Ex P13)), not, as Hassan stated in cross-examination, a lower figure of $13-15,000(T606/25). Hassan further stated that the rent of $500 on Hill Top was enough to cover the interest on the property (T605/22), however according to Fenikia's accounts, it lost money on Hill Top every year except 2017. 3. Hassan was mistaken about some of the occasions on which he states he received money from Imad, as established by his travel records (P13). Hassan states that he had realised these mistakes and instructed his lawyer to fix them (T687/4). A call was made for these instructions (T687/29) but nothing was produced (T709/3)

[79]

Joe's 2017 text message to Hassan

In 2017 Joe sent Hassan a text message thanking him for the experience in Peak Hill (CB8/1394; D6), the text message was as follows: I was going to send you an email, but I felt this message would get you a lot quicker. I hope all is well with you. Thought to take this opportunity to share a few words with you, as this isn't easy for me to share. Honesty is the best, and I believe truth is always most powerful. So I want to start off by saying Thank You  Truth is, I blamed you for all the extra financial struggle my family and I went through even after Peak Hill. :( However, after many years that have passed and looking back in the past, replaying life events - it was clear to me that when my dad lost everything in 2008, with all the family that we have around us and YOU, ONLY YOU were the one who put your hand up to Help my family. Only You had some belief that my dad and I wouldn't do wrong by you and was worthy of the help. For that I am forever grateful. Even though Peak Hill wasn't fruitful and financially successful that we had anticipated. The whole situation and opportunity taught me a lot. Even though we walked away with no Money and it felt that it was a waste of time. It taught me to be an even smarter and better business man! When promised to give some funds to myself and dad, when you sold it - again it taught me a lot. Which I am thankful for :) So my realization is that even though the deal didn't work, YOU were the only one who wanted Help my dad in a time of true need. All of this has helped me become the successfully Business man, Husband, Brother and father that I am today!!! Thanks to this experience I now have a purpose and mission bigger than me, So, for me to be completely clear and to stop the blame, I want to say thank You and I am Forever Grateful
Joe stated that he took particular care to be truthful in the message and that it was an opportunity to be honest and tell Hassan his real complaints (T412/9-413/13).

[98]

Hassan's credit

The Hill Top and Oaks Plaintiffs note that a particular conversation as recalled in Marwan and Hassan's affidavits are virtually identical. The Plaintiffs submit that the court should not accept the denials of collusion. They further note that the call for the lease, which Marwan asserted he had with Hassan went unanswered (HT sub [70]-[73]).
The Hill Top and Oaks Plaintiffs submit that Hassan was an unsatisfactory witness, known to lie (HT sub [74]) and engaged in a scheme to avoid paying his tax liabilities (HT sub [75]). Hassan lied about the insurance call to Allianz (HT sub [76]) and altered the notebook (EX P8) used apparently to record the amounts he received for stocktake shortly before trial (HT sub [77]).
It appears clear that the leases concerning Hill Top (EX P5 and P6) are both forged and Hassan gave unsatisfactory explanation for the mistakes in the signatures (HT sub [79]-[80]). The signatures appear to be in Hassan's handwriting and the witnesses on the leases deny signing them (HT sub [81]-[83]). The inconsistencies in signatures, for example the fact that Noura's signature initially appears on P6 and then is absent and the fact Joe's signature appears on the later P7, suggest that the P6 lease was created for tax purposes (HT sub [87]) and then P7 was forged by Hassan for the purposes of this litigation and he was made a mistake about which signature to use (HT sub [88]-[89]).
Hassan recorded only seven occasions when he received money from Imad, two of these must be wrong given Hassan's travel dates (HT sub [92]). Hassan stated that this was the result of a mistake from his lawyer, but no evidence was produced about the initial instructions or any actions taken by Hassan to fix this mistake (HT sub [93]-[94]).
Hassan's accounts of the payments indicate that Imad was able to pay him $92,200 between 10 January 2013 and 10 July 2013. Hassan also states that Imad and Ibrahim jointly paid him $104,000 across the space of 11 weeks. Hassan's accounts do not reflect the apparent rents paid across all of his businesses and show that Hassan was undervaluing his income to avoid tax (HT subs [99]-[112]).

[102]

Contract claim

The Defendant submits that there are several problems with the Plaintiffs' contract claim.
Firstly that even though the claim is brought by Joe and Mohammed, Joe was not a party to any agreement with Hassan. Further, the alleged agreement was to transfer Joe the Peak Hill Store, therefore Mohammed has suffered no loss (Def sub [103]-[106]).
Further the parties conduct is inconsistent with the terms of Mohammed's alleged contract (Def sub [109]): 1. It was Hassan who purchased the Peak Hill Store and negotiated the price. Mohammed did not conduct his own inquiries. Hassan did not consult with either Mohammed or Joe about the purchase. 2. Hassan continued to make financial contributions to the shop after the alleged agreement to sell the shop to Mohammed. These contributions cost well over $100,000. 3. Joe left Peak Hill in December 2011, to pursue his own business opportunities. He signed a lease with Hassan on 31 July 2012, this was at the time the alleged breach occurred, 4. After he had left the Peak Hill and Hazelbrook café, Joe sent a message of thanks to Hassan.
The terms advanced by the Plaintiffs do not make commercial sense (Def sub [112]-[115]): 1. The effect of the alleged contract is that it was impossible for the Defendants to make a profit from their investment in the Peak Hill Store. The alleged contract would have the Defendants purchasing the Peak Hill Store, and then reselling it at the original purchase price, but allowing the purchaser to pay the price in instalments over several years. 2. Hassan and Mohammed were not close friends or family; there was no reason to enter into an uncommercial agreement.
There are no contemporaneous documents that support the Plaintiffs case. Both parties rely on evidence of oral conversations that occurred almost ten years ago, the Defendants however do not bear the onus of proof to establish the truth of their conversations. Further there was inconsistent evidence given by the Plaintiffs (Def sub [118]-[120]).
The Plaintiffs rely on three post-contractual documents, which the Defendants submit are not probative of their case: 1. The Peak Hill Notebook, which purports to record the payments that Mohammed and Joe made to Hassan, cannot be said to be probative given that pages had clearly been torn and cut from it. Further given that Hassan was overseas for periods of time, it is impossible that some of the payments were made on the dates recorded. The notebook contains the words "rent $2,166" within its front cover (Def sub [122(a)]), 2. The Bank records of payments to Hassan, although no doubt record the actual payments, are described as "rent" or "goods" (for the repayment of the stock) which is consistent with Hassan's version of events. Mohammed gave inconsistent evidence about when and what payments were made via bank transfer or cash; he stated he started paying $6,000 per month from July 2012 via bank transfer but there is no record of this. In none of the bank records is there withdrawals of $13,000 to pay the alleged monthly rate to Hassan (Def sub [122(b)]), 3. Mohamed's 2013 statement was made 4 years after the alleged oral contract was made and is replete with errors demonstrating that even then Mohammed was not able to remember the basic facts. This statement is not proof of any underlying facts, but was created by Mohammed in 2013 for the purpose of bringing litigation at that time (Def sub [122(c)]). Further Mohammed's 2018 affidavit includes further specific particulars adding to his case that were absent from the 2013 statement (Def sub [122(d)]).
There are, on the other hand, contemporaneous documents that support the Defendants case. Firstly the Peak Hill Lease (Ex P5) and the Defendants' contemporaneous tax and financial records, which document the receipt of rental income from the Peak Hill Store (Def sub [123]).
The Peak Hill Plaintiffs' financial documents do not support their case. Their tax returns do not disclose income sufficient to meet the payments they say were made to Hassan (Def sub [125]). The tax returns describe payments as 'rent expenses' (Def sub [126]).
The Peak Hill Plaintiffs rely on the tendency evidence from the Hill Top and Oaks proceedings. The Defendants submit that that this tendency evidence is not credible or reliable given that the Plaintiffs in all of the proceedings are not independent witnesses but firm friends who have spoken together at length about their arrangements with Hassan (Def sub [129]-[130]). The Plaintiffs' affidavits do not reflect their independent recollections but are rather the product of collusion (Def sub [131]).
Hassan's account is corroborated by witnesses of two kinds. Firstly there are witnesses who spoke to the Defendants or Peak Hill Plaintiffs prior to the commencement of the litigation about the terms of the arrangement. Marwan, who was Joe's close friend, and Sergio, who had no relationship with the parties, gave evidence that the arrangement was consistent with it being a lease and not a purchase. The Defendants also note that Ramsay Zreikat, Michael Saba and Fouad Slaibi also gave evidence consistent with Hassan's alleged contract. The Plaintiffs' evidence about the arrangement all came from close family members (Def sub [133]). Further there was tendency evidence given by Paul Kabashi, Marwan Dirani and Mouhamed Haidar, about the analogous arrangements Hassan had entered into at the Lawson and Blackheath stores. The Defendants submit that Hassan has a tendency to engage others to operate his grocery business and retain any profits, in consideration for the payment of a weekly sum and the coverage of operating expenses (Def sub [135]).
In response to the Plaintiffs' claim that Hassan's purported arrangements at Lawson and Blackheath were far less favourable than the purported arrangements at Peak Hill, and are therefore implausible, the Defendants make several submissions. Firstly that measuring rent as a percentage of turnover does not demonstrate one deal was better than another, it is more multifactorial than that. Further on the Plaintiffs' own case they should have been paying less rent (in some cases no rent) to Hassan than the arrangements in Lawson or Blackheath.
The Defendants submit that for all the reasons above, the Court ought not to accept that the parties made an agreement in the terms of Mohammed's alleged contract, but rather in the terms of Hassan's alleged Peak Hill agreement.

[107]

Contract claim - terms and alleged breach by Defendants

The Defendants submit that there are several reasons why the Court should not accept that the parties made an agreement in the terms of Imad's alleged contract (Def sub [194]).
Firstly, Imad's failure to complain about Hassan's alleged breach of the contract impugns his evidence that there was in fact such a contract (Def sub [195]). Imad in fact kept paying monthly instalments to Hassan (Def sub [197]).
The terms of Imad's alleged contract do not make commercial sense. Imad was not involved in the negotiations to purchase Hill Top Store and apparently agreed to Hassan's proposed purchase price without knowing what the business or the land would cost. Imad had never worked in a grocery store before and had no idea about whether the store would generate sufficient profits to pay Hassan. Hassan continued to make improvements to and purchase equipment for the Hill Top Store (Def sub [198]).
The Hill Top Plaintiffs rely on oral evidence and adduce no contemporaneous documents to support a finding that Hassan agreed to the terms of Imad's alleged contract (Def sub [199]). Imad's evidence was both internally inconsistent and uncertain (Def sub [201]). He could not recall during cross-examination, the details of his payments to Hassan (Def sub [205]). There is no document that references the alleged purchase of the Hill Top Store, and Mr Faeeh's file note at its highest only refers to the purchase of the business and not the land (Def sub [202]), and in any case Mr Faeeh cannot be regarded as a credible witness (Def sub [208(d)]). The Hill Top Plaintiffs refer to text messages as evidence that Imad paid certain amounts to Hassan. The Defendants submit that these text messages were referring to the stock that Ibrahim owed Hassan, and that in any case, Hassan didn't receive the money referred to in these messages. No text messages refer to any payment of a purchase price, rather the payments, when described, are referred to as 'rent' (Def sub [206]-[207]).
The Hill Top Plaintiffs' post-contractual tax returns and financial statements (both original and amended) are inconsistent with the terms of Imad's alleged contract [208]. The original tax returns disclose a profit significantly below that which would be required to pay Hassan the amounts alleged. Although Imad contended that this had been a mistake, this evidence should not be accepted given that he could not explain how a mistake had been made. Further, the apparent mistaken profit is reflected in Imad and Noura's partnership tax returns as well. None of these documents record the Hill Top Plaintiffs making payments towards the purchase of the Hill Top Store and further specifically describe the payment of 'rent'. The amended financial statements should not be accepted, they are not contemporaneous documents but were created for the purpose of the litigation, further these amended tax returns haven't been filed. These amended financial statements still record the payments to Hassan as 'rent'. With regard to the 2012 file note from Mr Faeeh, the Defendants submit that is in not a contemporaneous record in circumstances where Mr Faeeh has a history of dishonesty, where the file note did not actually become part of the tax returns, and there were several infelicities in the 2012 tax return which suggest it was not prepared in 2012 (Def sub [208]).
The Defendants' contemporaneous documents support their account of the Hill Top Agreement, particularly Fenikia's accounts as well as the lease that Imad signed [209].
The Defendants submit that the tendency evidence of Mohammed and Joe is of limited utility given that the Defendants contest Mohammed and Joe's evidence.
Further the Defendants' evidence as to the terms of the alleged agreement is corroborated by witnesses of two kinds, the Defendants make the same claim in relation to the Peak Hill proceedings at para [411] above (Def sub [211]).

[108]

Cross claim - Breach of contract by Imad and termination

The Defendants submit that Hassan terminated his contract with Imad on 9 August 2018. There were three bases for that termination.
Firstly that Imad allegedly stole around $192,000 worth of stock from Hassan contrary to their agreement. Imad admitted that he bought the stock to 'protect the business' shortly before commencing proceedings, he subsequently lied to Hassan about why he had bought this stock. Hassan was forced to pay for this stock. Imad has only repaid Hassan about $15,000. The Defendants submit that this breach was a sufficiently serious breach of an intermediate term under either of the alleged Hill Top agreements (Def sub [214]-[219]).
Secondly, Imad failed to pay Hassan the $500 weekly fee that was due under the alleged Hill Top agreement between January and May 2018 (Hassan 1 [134]) (Def sub [220]).
Thirdly, Imad contends that he is not obliged to pay the weekly rent. The Defendants say that Imad's alleged contract is untenable, and his conduct in refusing to perform in accordance with Hill Top Agreement is therefore repudiatory (Def sub [221]).
The Defendants submit that therefore, they have validly terminated the contract, are entitled to damages and Fenikia as the registered proprietor of Hill Top Land is entitled to an order for possession of it in circumstances where the basis upon which the Plaintiffs occupied it has been removed (Def sub [222]).
In reply to this claim, the Hill Top Plaintiffs claim that Hassan was precluded from terminating the agreement owing to his own anterior 'fundamental breach' of the alleged contract by failing to transfer the property to Imad. This will only be true if the Court finds that Imad's version of the contract was correct. Further, the Defendants state that in any case the Hill Top Plaintiffs should not be granted relief against forfeiture. They note relief will only be granted if Hassan's termination of the contract was unconscientious. The Defendants submit that this is not the case because Hassan did not contribute to Imad's breach in taking the stock, the breach was not trivial and the Defendants have suffered significant financial loss (Def sub [225]-[228]). Further the Defendants note that Imad has 'unclean hands' (as discussed in para 156; Def sub [229]).

[115]

Contract claim- terms and alleged breach by Defendants

The Oaks Plaintiff seeks specific performance of Hassan's obligation to sell the Oaks Business and Lease and alternatively equitable damages. The Defendants submit that there are several reasons why the Court should not accept that the parties made an agreement in the terms of Ibrahim's alleged contract (Def sub [276]).
The terms of Ibrahim's alleged contract do not make commercial sense. Under the agreement Hassan invests capital upfront to purchase the store only to resell it immediately for the same price which was payable in instalment. Hassan and Ibrahim were not close and there is no reason to make such an agreement. Further under the alleged contract, Ibrahim was to run the store between March and September 2015 while paying Hassan no money at all and in circumstances where there was no agreement on foot between them. Ibrahim did not enquire about the viability of the Business or what the business was worth, or the specific terms of the lease, and committed himself to allegedly paying Hassan $10,000 a month without knowing these key facts. Further Ibrahim admits that shortly after he entered Ibrahim's alleged contract, he discovered that Hassan had repudiated his agreement with Imad, yet still agreed to pay $10,000 to Hassan each month. Hassan continued to make improvements to the store (Def sub [277]).
The Oaks Plaintiff relies on oral evidence and adduces no contemporaneous documents to support a finding that Hassan agreed to the terms of Ibrahim's alleged contract. There is no reference in any text message to the purchase of the Oaks Business (Def sub [278]). Further Ibrahim's oral evidence was unreliable, he was mistaken about the purchase price of the business and was unable to recall the details of the alleged agreement as set out in his affidavit during cross-examination (Def sub [279]).
The Oaks Plaintiff's case is undermined by Ibrahim's own contemporaneous financial documents. Ibrahim's tax returns and financial statements record payments for the Oaks Business as 'rent', and disclose a profit insufficient to meet the payments under Ibrahim's alleged contract (Def sub [281]-[282]). Ibrahim's amended tax returns prepared for the litigation should be treated with scepticism, the expenses and income were increased but the profit was kept the same and the payments to Hassan were still described as 'rent' (Def sub [282]).
The Defendants contemporaneous documents support Hassan's alleged agreement, Fenikia's tax returns record 'income' from Ibrahim.
The Oaks Plaintiff relies on tendency evidence of Mohammed and Joe, this is of limited utility given that the Defendants contest the Peak Hill Plaintiffs' evidence (Def sub [282]).
Further the Defendants' evidence as to the terms of the alleged agreement is corroborated by witnesses of two kinds. The Defendants make the same claim in relation to the Peak Hill proceedings at para [411] above (Def sub [284]).

[125]

Consideration

Although I will deal with each of the Plaintiffs cases in turn they share a number of similar characteristics.
In each case the conduct which is said to amount to contractual relations or some estoppel is based upon conversations which occurred many years before the trial was conducted in this court.
In such cases the discharge of the relevant onus often provides considerable difficulties for a Plaintiff. Absent some objective and contemporaneous support, the alleged reiteration many years after the event of verbal exchanges which importantly are said to consummate contractual relations and/or alternatively induced a particular form of conduct, are often difficult to prove.
The reasons for that are to some extent obvious but were discussed by McClelland J with his customary precision and insightfulness in Watson v Foxman (1995) NSWLR 49 as follows (at 319) : Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
In similar vein Hammerschlag J captured the difficulties associated with such an exercise in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 (at [94]): Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences:
Whilst many judges still advert to what might be described as findings on demeanour, such a process should be viewed with some caution or indeed scepticism as a reliable method for determining which factual version of events to accept. A Judge's capacity to view, evaluate and purport to make findings of a witness he or she may see for the very first time in the witness box and then only fleetingly, might be best described as limited. However witness statements filed in advance do or should give the Judge a more precise idea of what the witness will say and it is nonetheless unsurprising that the manner and mode of delivery of the testimony especially during cross examination may understandably have some influence on the Judge's view of the witness' credibility, especially when carefully viewed in the context of objectively corroborative materials.
However as the High Court in Fox v Percy (2003) 214 CLR 118 stated (at [31]): Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, but at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical.
The more reliable guide especially in cases where the cause of action is based solely or substantially on oral testimony is to seek and identify if possible relevant corroboration, which of course may take many forms.
Obviously any contemporaneous documents such as memoranda, letters, emails or perhaps diary entries may provide a context in which, unless themselves capable of being discredited as contrived, the plausibility and credibility of the asserted oral communication can be evaluated.
In addition with oral contracts, unlike written contracts, post contractual conduct if objectively sustainable may be relied upon not only to prove the existence of a contract but in addition its terms (see e.g. Australian Estates v Palmer [1989] NSWCA 11, 50; Re Centura Global Holdings Pty Ltd (2016) 111 ACSR 185; [2016] NSWSC 62 [64]-[67]; Gestion Pty Ltd v Kit Digital Aus Pty Ltd (in liq) [2014] NSWSC 1547 [11]).
However post contractual conduct can be a two edged sword. Whilst it may be that post contractual conduct points either to the existence of a contract or one of its terms, a failure to complain for example may have the inverse consequence. In other words, if a person asserts a cause of action based on reliance upon certain contractual relations, but then failed in circumstances where it might have been thought appropriate to complain about the way in which they were being treated, the absence of the complaint may well amount to an admission that no contract or no promise of the sort alleged was made in the first place (see e.g. Textralian Enterprises Pty Ltd v Perpetual Trustees Victoria Ltd [2000] NSWCA 176 [85]; Raphel Shin Enterprises Pty Ltd v Waterpoint Shepherds Bay Pty Ltd [2014] NSWSC 743 [104]).
It is entirely unsurprising therefore, in this case given the nature of the Plaintiffs' causes of action that significant attention was given to the detail of anything which even remotely suggested corroboration.
Both sides attacked each other somewhat vigorously on matters of credit and with some justification. There was more than a healthy suggestion on both sides that certain documents were contrived for the purposes of the litigation. It is also fair to say that on both sides, very likely the parties from time to time did not take their tax liabilities all that seriously or consider them at all.
There was no assertion made by any of the Plaintiffs that they were given any tutorial by Hassan about the financial benefit of understating their respective incomes. They appeared to adopt this course of action almost instinctively.
In my view the contemporaneous material relied upon by the various Plaintiffs in these proceedings is, in my view, unreliable and/or contrary to the Plaintiffs' version of events. I am simply unable, in each case, to reach the requisite level of persuasion that binding contractual relations came into being as the result of these various conversations.
Regarding the credit of Hassan and the reliability of the documents produced by the Defendants, I am not at all satisfied, for example that the leases (or some of them) relied upon are genuine, nor am I persuaded that Hassan was entirely forthright in the production of his financial records. It appears that he was the one who requested the payments be made in cash, although given the absence of any contemporaneous documents, I am not entirely convinced that any of the Plaintiffs took issue with this or requested otherwise. The explanation that he gave for transferring some but not all records from one notebook to another (that is Ex D5) is totally inexplicable and I am not convinced that this document represents a contemporaneous record of the payments.
It seems, fairly clear to me that he exaggerated his evidence and gave unsatisfactory explanations for the various inconsistencies in his testimony. The telephone conversation with Allianz, in which he lies about his relationship with Imad and unilaterally raises the insurance premiums, was clearly not his finest hour. However, true it may be in discharging the onus, it is not inappropriate for the Plaintiffs to draw my attention to the unsatisfactory evidence of Hassan, I do not believe in the end that his conduct and testimony amounts to a significant admission. Importantly Hassan, although he may be unreliable, does not bear the onus of discharging an onus of proof on the existence of a contract or the conduct supporting an estoppel.
In broad terms the forensic context was not so much an argument of contract or no contract, rather as to the terms. The Plaintiffs asserted contracts of quite a specific nature, as opposed to what might be said to be a proposal or a business opportunity to make some money in a short period. By that I mean the Plaintiffs in each case although with some differences, asserted specific promises which would either lead in the end to a transfer of land and/or the business operated at the various stores in the respective locations.
The Defendants' general response was consistent with there being contractual relationships in place but of a very different kind to that asserted by the Plaintiffs. The Defendants' case was that in each instance, the Plaintiffs were being given an opportunity to operate businesses, effectively on behalf of the Defendant, whereby they had an opportunity to pocket whatever profits they managed to achieve after paying monies to the Defendant and other overheads. Although each case needs to be looked at quite separately again, the main thrust of the Defendants' case was that each of the Plaintiffs had very little if any other employment options and they were not close members of his family. Rather the arrangement in each case was that of a commercial relationship whereby on the one hand the Plaintiffs had an opportunity to make money by way of profits and the Defendant had someone in effect to look after the store.
It is worth briefly mentioning the various pieces of tendency evidence that were relied upon in this case. Early on in proceedings, Counsel for all parties agreed that there was going to be no objection to any tendency evidence adduced throughout the trial (T8/21-49). In effect, the Plaintiffs in the various proceedings sought to rely on evidence from each other of the proceedings respectively, amounting to a conclusion that Hassan had a tendency to make promises to transfer land and business in exchange for certain monthly payments and then proceed to renege on those promises.
In response the Defendant calls in aid, what is in effect evidence of Hassan's business model. That is, that in September 2010 Hassan entered into an agreement with his nephew Marwan to operate Hassan's Lawson store. The agreement required Marwan to pay Hassan $1,100 per week rent and to cover all expenses after which he could keep the profits. However Hassan did not agree to sell the Lawson store to Marwan. Further in October 2010, Hassan entered into an agreement with is brother in law, Mouhamed Haidar, to operate Hassans' Blackheath store. That agreement required Mohammed to pay Hassan $2,166.66 per month plus cover all expenses after which Mohammed could keep the profits. Again Hassan did not agree to sell the Blackheath store to Mr Haidar.
The Plaintiffs further submitted that when considering all of Hassan's various business arrangements it was entirely implausible for Hassan to offer much better business deals to Mohammed, Imad or Ibrahim than his own family being Marwan or Mr Haidar.
As I have clearly said, in any event in the circumstances as is clear from the discussion below, I am not satisfied that any contracts are of the kind alleged by the Plaintiffs in the various proceedings. The tendency evidence that they seek to rely on, therefore, fails to be of any weight. Further there is insufficient evidence before the court for me to make a precise comparison between the arrangements offered to either Marwan or Mr Haidar and the respective Plaintiffs. It is difficult to make any meaningful findings about the differences between each business opportunity.
On the other hand, the tendency evidence adduced by the Defendants seems to me, to suggest that Hassan indeed had a habit of buying businesses and letting others run them and keep the profits before then selling them at a profit some years later or keeping them for him and his family.
It appears to me in any case, that the arrangement contended for by the Plaintiffs was altogether more improbable than the arrangement as asserted by Hassan. On the Plaintiffs case, Hassan was to be their keeper, creator of an opportunity, banker, and philanthropist where no one else was available, and yet not one objectively provable conversation or contemporaneous document showing not even a simple thank you. This seems to me highly unlikely, particularly given the absence of any apparent motive for Hassan to enter into an arrangement like this. It was not pleaded for example, that he had duped the Plaintiffs into running the business for him by making false promises to convey the business and or land, in order to assist him cost effectively increase the size of his business and/or property empire, although counsel for the Plaintiffs (at PH subs [31]; T890/13) did indeed raise this issue in the final submissions. Rather on their case he was simply to make no money from the endeavour.
Each of the Plaintiffs' cases necessarily must be dealt with separately and in turn.

[126]

Peak Hill

The Defendants analysed each of the cases by reference to three principal factors. The first being onus, the second what was said to be the implausibility of the proposed arrangement, and the third the consideration and assessment of contemporaneous materials.
It must be recalled, that what the Plaintiffs set out to prove was an oral agreement to transfer the Peak Hill Business and Land to Mohammed's son Joe. That promise was said to have taken place some decade before the proceedings were heard.
It is uncontroversial that there are no contemporaneous documents recording the promise. It is also uncontroversial that there are no documents, created at any time, in which terminology is used suggesting that an arrangement had been made whereby there would be a transfer of land or business. The term "transfer" is not used nor is "purchase" or "sale" or any other terminology suggestive of the fact that the ownership in both the business and the land moved from the Defendant to Joe at some point indeed at any point.
It is uncontroversial again that Mohammed was not a close friend or a family friend of the Defendant. Further, although there is some debate about who actually found and identified the property and the business, it is clear that the Defendant was the one who made inquiries of the business and negotiated the purchase price. There is no doubt that he used his funds to obtain the business.
Leaving aside the precise amount spent, it is clear on the evidence that the Defendant spent money on items for the business. The Plaintiffs made no choice or selection of those items nor were they consulted or participated in a decision of how much each item costs. There is clearly a dispute as to precisely what was installed and how much each cost. However the Defendant asserts that he bought two fridges for the shop at the cost of $53,000, a computer and scanning system at a cost of $22,000. He replaced shelving at $31,600 and he bought new dairy produce cases at a cost of $33,000. (CB5,139 and 143)
Joe certainly accepted that he did not pay any money towards those costs. He further accepted that new equipment was needed to improve the business, and that the Defendant paid for much of it. Mohammed gave similar evidence. (T335.04 - 335.36, T447.50 - 448.25, 448.49 - 449.30).
The Defendant with some force points to the implausibility or rather improbability of the arrangement as suggested by the Plaintiffs. For example, the Plaintiffs do not assert that as part of their arrangements, Mohammed and Joe would ever pay for, at cost or on some depreciated basis, any improvements made to the property. Rather they assert, implicitly at least, whatever improvements were made simply be transferred as part of the transfer of land and business at no additional cost.
With both Mohammed and Joe accepting, or so it seems, that neither was a close friend or family member of the Defendant, and although it could pass as an act of philanthropy, it does seem to me highly improbable. The Plaintiffs' asserted arrangement is quite uncommercial in its nature, particularly without there being a good reason for entering the contract, or alternatively some considerable discussion of the detail of the various items, which on no view appears to have occurred.
The Plaintiffs counter this, arguing that the Defendants' alleged demand for only $500 a week on a business that had an expected turnover of $25,000 a month is likewise implausible. Although this may be the case, I am not persuaded that the contract as alleged by the Plaintiffs is at all more likely, in fact it seems to me the version as proposed by the Defendant is altogether more probable.
The relevant period here is from mid 2009 to late 2012. It appears that there is not one contemporaneous document created during this time referring to a sale of business or transfer of land from the Defendant to Joe. There is no text message between father and son, or email making any reference to such a transaction or even hinting at it. There is certainly no text messages or emails between the Defendant and anybody else referring to an agreement of the sort pleaded and asserted by the Plaintiffs.
Although the Plaintiffs deny such an arrangement, it seems to me upon considering such contemporaneous documents that do exist; there was clearly an agreement to rent the premises from the Defendant. The Plaintiffs assert that any moneys paid to the Defendant were part of a purchase price for the property and the business. I am not satisfied this is so.
There are clear inconsistencies between the evidence given by Mohammed and Joe. Mohammed continued to assert that he had paid Hassan every month, while Joe denied this was the case. Rather he asserted that they would save up the monthly amounts, and then from time to time, when convenient, would give large lump sums to Hassan. In the absence of any credible contemporaneous document, this inconsistency in their affidavit evidence is significant.
There are indeed documents which are quite contrary to this notion of a purchase. At CB10, page 120 (the bank records of the business) for 10 September there is an item for $2,500 described as "hassan's rent". Again at CB10, 121 on 16 September described as "hassan's bill". In the same volume at p, 138 the two items are described as being for "rent". (This is in the bank statements of the Defendant). Another such item is to be found in a further copy of the Defendant's bank statement for 9 October. Again an amount of $5,000 this time described as "rent". (CB10, p 142).
It is clear that the Plaintiffs and the Defendant retained separate accountants to prepare their tax returns. The Defendants' case was that the Plaintiffs and he agreed that the Plaintiffs would pay Hassan $500 a week for rent for the Peak Hill premises. In their tax returns for the years ended 30 June 2010, 30 June 2011 and 30 June 2012 there is disclosed as "lease income for Peak Hill the amount of $23,636.36 (CB5, 161, 205 and 377).
The Defendants' accountant, Mr Ramsay Reikat, filed a statement in the proceedings but was not cross examined, which suggests that the entries were not erroneous or false, or that he had no basis for believing that such rental had not been received in relation to those premises. These tax returns which were filed for the relevant years provide very strong support for the Defendants' case that the arrangement Hassan had with the Plaintiffs was that of landlord and tenant. Mr Reikat said that conventionally he received information from the Defendant prior to preparing the tax returns. He also asserted that the Defendant never told him that he had agreed to sell shops to the tenants and had he done so he would have recorded the sale in the financial records.
Importantly as I have already noted the accountant was not subjected to cross examination.
However most importantly in my mind in the tax return for Joe for 30 June 2010 there is an item (Ex PC, Tab 1, page 5) which shows rent expenses of $22,697 (close enough to $500 a week). Likewise in Tab 2, his return for the year ended 30 June 2011, page 17 an amount shown for rent expenses of $24,000.
These returns were prepared by Joe's own accountant Mr Maatouk. Both sides of the record, so to speak, therefore recorded a rental arrangement. Joe clearly told his accountant he was paying approximately $500 a week rent for those two relevant financial years, and the Defendant recorded receipt of income of not quite identical but of virtually similar scale.
These documents provide ample evidence in my view that the parties relevantly agreed that rental of approximately $500 a week would be paid by Joe to the Defendant. The other alternative is that one or both parties lied to their accountants.
The Plaintiffs of course rely upon a draft statement prepared by a solicitor in mid-2013. As is obvious from the face of the document it is not a contemporaneous statement made at the time the alleged agreement was supposedly consummated. The statement (at CB6,698) runs to 37 paragraphs and certainly does purport to set out conversations between Mohammed and Hassan which first occur allegedly in February 2009 (paragraph 4), and then somewhat imprecisely to conversations which occur allegedly between February and April 2009 (paragraphs 5 - 8).
There is little doubt that the statement was made with the intention of commencing litigation. Clearly it was prepared for that purpose. The Defendant points out (Closing submission, para 122(c), p 30-31) that there are numerous errors in the statement. More accurately inconsistencies. There are no less than 10 errors, which are not insignificant, pointed out by the Defendants in their submissions. They are not mere matters of detail but are in my view significant. Moreover as is pointed out in para 122(d) of the Defendants' closing submissions, a comparison between Mohammed's evidence in the proceedings before this Court and that statement in some critical respect indicate that Mohammed has sought to improve his evidence since that statement.
Most importantly words added in Mohammed's 2018 affidavit go very much to the question of purchase and sale or transfer of the property and business. At the very least, the passage of time from the instance of the alleged initial agreement and the preparation of the 2013 statement together with the over embellishments as I see them in Mohammed's 2018 statement, give me serious reservations about being able to accept his version of events. Particularly given the absence of any documents in the years immediately following the alleged oral agreement, in which there is no reference whatsoever to the kind of arrangement asserted in these proceedings.
Further and not unimportantly the draft statement (para 29) makes reference to the Plaintiffs making six monthly payments of $6,000 per month up to December 2012. In my view there does not appear to be any evidentiary support for this proposition. Such bank records as do exist reveal that Mohammed transferred a maximum of $5,000 in any one month to the Defendant during this period (T472.32-482.49).
The Plaintiffs of course rely upon what is an exercise book, which has otherwise been described as the Peak Hill notebook (Ex PA: CB5, 156). The Plaintiffs submit that this is a contemporaneous record of cash payments that they made to the Defendant between October 2009 and December 2012. I have my reservations again about the so called contemporaneous nature of the document. First of all there have been pages torn or cut out from it. Why this was done remains a mystery, but it should not be ruled out that there was material taken out of the book which did not help the Plaintiffs' case (T394.26-395.05).
The entries from November 2009 until 30 December 2011 record payments of precisely $13,000 at monthly intervals. However Joe's evidence is that the Plaintiffs did not pay Hassan each month, that they did not pay the same amount on each occasion, and that they did not record in the notebook the specific dates on which payments were allegedly made (T404.45-405.30).
It is entirely possible given the form and format of the exercise book that the entire list from 14 October 2009 to 30 December 2011 was written on one occasion and that the word "paid" was also written at the same time for each entry.
There is very little support objectively for precisely when any of these entries was made. The entries could have been recorded literally at any time before or after the Plaintiffs left Peak Hill. Further the note book purports only to be payments of cash. There is no detail of any payments made by way of bank transfer. The document is almost certainly the "exercise book" referred to in paragraph 17 of Mohammed's draft 2013 statement, but it is not exhibited nor are any of the pages. Further, the amount actually recorded in the notebook itself varies from the amount which Mohammed alleges he paid in cash in the draft 2013 statement.
There is in fact no way of knowing when the exercise book was created. I am certainly not satisfied it was created contemporaneously when payments were made in the year 2009 and following. The appearance of the notebook suggests a contrivance in the sense that it was created much later in point of time. The various dates, use of the same pen in almost every case, except some blue biro whenever added, rather suggests later creation. The somewhat uniform entries in my view are redolent of being done in one sitting as it were.
However on the inside of the notebook appears the words 'rent $2166". Joe recognises this as the writing of his father (T405.48-407.02) although Mahommed denied this (T529.22-40). The entry of course is consistent with the payment of approximately $500 a week in rent in accordance with the Defendants' version of the agreement. It runs entirely contrary to the Plaintiffs' case. No explanation other than the fact that it was reflective what one or other of the Plaintiffs was doing can explain its presence in the notebook.
Further there is simply a paucity of evidence to support the payment of $13,000 per month. Mohammed asserted that he paid those amounts in cash until January 2012 (T461.50-462.01). However there is no record in Mohammed's personal or business bank accounts showing withdrawals of $13,000. Likewise from January to June 2012 Mohammed alleges he made payments of $9,000 per month sometimes in cash and sometimes by bank transfer. However none of the bank records support any transfer of $9,000 to the Defendant (CB10, 33037, 47-54, 69-83, 107). I find myself entirely unable to accept Mohammed's version of these payments.
Mohammed further gave evidence that in about July 2012 he agreed to start paying the Defendants $6,000 a month and did so by bank transfer. He put his bank statements into evidence to support the claim but they do not. They reveal a maximum of $5,000 in any one month to the Defendant during that period.
The Defendants also rely upon a signed retail lease (Ex P5). Joe denies signing the lease. If the lease is not genuine it would not be the first document which was brought into existence perhaps for the purpose of this litigation nor would his denial about signing it being the first false denial in the proceedings. However pursuant to s 183 of the Evidence Act I am entitled to compare signatures. There are clear differences between his signature as shown on Exhibit P3 and those on either of his two affidavits. However they are not that dissimilar.
Joe however did deny signing it, and at least in his affidavit he purported to deny ever having met Ajaj Slaibi (the named witness on the lease) at any point. However in cross examination it appeared at the very least he knew who he was and more to the point knew that he was the Defendant's brother (T344.05-3.5.20).
In the end whether or not the lease is a fabrication or in fact the truth in my view is not determinative of itself of any particular issue in the case. This is so because of the liberal use by the Plaintiffs of the term "rent", particularly in the materials Joe supplied to his accountant. Although he did not expressly accept the proposition when asked whether he told his accountant honestly what his income and expenses were, there is little doubt that the tax returns were prepared on the basis of information supplied by him to his accountant. The description for items would be sourced in information or explanations given by him.
It is submitted that the Plaintiffs' tax returns do not disclose income sufficient to meet the payments they assert they made to the Defendant. Joe was responsible for the finances of the Peak Hill Business whilst he was working there and his personal tax returns include details of the business. Merely examining Joe's tax return for a period ended 30 June 2010 discloses income of $36,197.00 (Ex P3, Tab 1, page 12). The return also discloses the payment of $37,850 in salaries (Ex P3, Tab 1, page 12). Joe accepted those figures were correct (T347.40-347.42). It is clear that those salaries were paid to Joe's father Mohammed and the family. Joe's tax return for 30 June ended 2011 discloses income of $38,810, and wages of $37,848 totalling about $77,000. In the previous year the total profits available totalled only $70,000.
The Plaintiffs' contract here, if it is truthful, provides for the payment of $13,000 a month over a 24 month period and would total approximately $321,000. But the income of the business over that period as disclosed was only approximately $147,000. Joe gave a number of what I regard to be both unsatisfactory and somewhat inconsistent answers when called upon to explain the discrepancies. Joe has not filed any amended tax returns and gave evidence that he had only asked his accountant to prepare amended returns the day before he was cross examined (T356.10-356.32).
So far as revenue and expenses are concerned given the totally unsatisfactory nature of Joe's evidence for the years ended 2010 and 2011, I am simply left in the position where I am unable to accept his explanation that he could have had sufficient money in any event to pay $13,000 a month to the Defendants.
In addition to the reasons I have already stated, I do not regard the exercise book given its inadequacies and its apparent contrived nature as corroborating the assertion that $13,000 a month was paid, given the inability on the part of the Plaintiffs to actually prove that they had those monies available to make the payments.
There is however a contemporaneous document which I regard as very significant in this matter. It is a text message dated 22 May 2017 unsolicited from Joe to the Defendant (CB81395-41003). Thought to take this opportunity to share a few words with you and hoping you take in what I say with respect and love. As this is not easy for me to share. Honesty is the best and I believe truth is always the most powerful. Truth is, I blamed you for all the extra financial struggle my family and I went through even after Peak Hill. However after many years that have passed and looking back in the past replaying life events - it was clear to me that when my dad lost everything in 2008 with all the family that we have around us and YOU ONLY YOU were the one who put your hand up to Help my family.
The text goes on to state unequivocally that Peak Hill was not as fruitful and financially successful "as we had anticipated".
A little further in the text there is an assertion that the Defendant had promised to give some funds to Joe and his father when the Defendant sold the business. It concludes with the following words: Thank you and I am forever grateful.
This text is poignant for any number of obvious reasons. First and foremost it was unsolicited. Secondly it makes no assertion whatsoever consistent with the contract case the Plaintiffs bring in these proceedings. Thirdly the only promise, implicit though it might be, that the Defendant is guilty of reneging upon, was sharing some proceeds of the sale when the business was sold. The latter is simply not a key case the Plaintiffs seek to make in this Court.
Further, as is obvious, not only is there no hint of any complaint about any breach of contract which occurred years earlier (if it ever did), but there is no complaint about a failure to transfer the business of the land but rather an allegation of a failure to share in the proceeds of sale. This is a case so fundamentally different from that which the Plaintiffs now seek to make that it is a little hard to accept Joe could ever have believed the case pleaded in this Court was indeed the fact.
The Plaintiffs further seek to rely on the evidence of, in particular, Sahar and Hassna to corroborate their asserted arrangement with Hassan. Without making any final findings on the credibility of these witnesses, it seems to me that much of their evidence was based not on their own conversations with Hassan but rather what either Mohammed or Joe had conveyed to them. They both accepted that they had not made any contemporaneous note of any conversations. I do not grant their evidence any significant weight.
The Defendants submitted that it is highly probable that the Plaintiffs version of events, in this case, had somehow or other been contaminated, or that they had colluded with the two Plaintiffs in the other proceedings such that all of the evidence should be discredited for that reason. I am prepared to accept that each of these persons would have spoken to the other from time to time. They had clearly a number of common interests including unsurprisingly the respective pieces of litigation they were bringing. I am not however satisfied that apart from giving each other emotional and/or psychological support the allegation of collusion or concoction goes very far at all. There is no clear evidence which in my view would support such a finding and I would not make it.
More importantly I am not satisfied that the relevant conversations alleged by the Plaintiffs took place with the Defendant in 2009. There is not adequate support in my mind for such allegations. The whole essence of the arrangement it seems to me, particularly given the respective tax returns filed by the parties, was that they regarded the arrangement as one essentially of a lease. The frequent use in the Plaintiffs' tax returns of the notion of rent or lease payments, together with my substantive scepticism about whether or not they could ever have afforded to pay $13,000 a month, highlight but two matters of substance that detracts from there being an oral agreement of the sort alleged in the first place. The text message in May 2017 is somewhat crucial in this regard. Unsolicited, Joe went to the trouble to expand upon his views of life and more importantly, the only breach of any arrangement that he adverted to was a failure on the part of the Defendant to share in and/or contribute to Joe and his father from the sale proceeds. This is so antithetical from the arrangement that was alleged that I am not satisfied that in addition that such a contract as pleaded and asserted ever existed.
The Defendants of course also rely upon tendency evidence to the effect that the Defendant showed a propensity to engage others to operate his grocery businesses permitting him to retain profits in return for the payment by them of a weekly sum and the covering of all operating expenses. In my view, given my findings on the Plaintiffs' alleged contract, it is unnecessary for me to make any express findings in that regard. However I will say this, the Defendant struck me as a businessman used to dealing with this type of business and, if I may say so, striking what might on one view be regarded as particularly tough bargains. I do think the evidence called by the Defendants does support in broad terms the structure of his business activities which are quite contrary to the way in which the Plaintiffs put their case, because it would be rather exceptional for him to do so. One thing which is relatively clear is that he hardly knew Joe and Mohammed. They certainly were not family and he did not strike me as being altogether philanthropic in his business dealings.
In addition to contract the Plaintiffs in this case plead remedial and constructive trust, proprietary estoppel, misleading conduct and make a claim for restitution. I will deal with these causes of action in turn.
For a constructive trust to arise, in broad terms at least, the parties seeking relief, have to point to some joint relationship or endeavour where expenditure is shared for the common benefit, where the joint endeavour has ended without attributable blame, and that it would in essence be unconscionable for any party to obtain the benefit of any moneys attributed by a particular party. To a very large extent the claim is contingent unsurprisingly upon the very nature of the relationship forged between the parties. Here in my view the relationship was purely each party pursuing its own interests so as to permit each to make a return out of the business. The Plaintiffs were in difficult financial circumstances, Mohammed having failed in his earlier endeavours. The Plaintiffs agreed to pay rent to the Defendants as I find there was no agreement to transfer any property or any business, and the financial opportunity afforded the Plaintiffs was to retain such profits as they could by reason of their own industry. In my view therefore the principles governing constructive trust has no application.
For the proprietary estoppel claim to be made out the Plaintiff requires proof of the relevant representation, reliance upon that, and then conduct to the detriment of the Plaintiffs. In my view having found that there was no contractual promise of the kind asserted, and there being no difference in substance between that and the representation which it is alleged induced or cajoled the Plaintiffs, accordingly then the Plaintiffs case would fail at the first hurdle. In any event the Plaintiffs rely upon representations made to Mohammed, yet any apparent loss was actually suffered by Joe. In the circumstances it is impossible to comprehend how Joe has a case of proprietary estoppel at all.
Even however had the representations been made as alleged, there does not appear to me to be any evidence that Joe would have acted differently had he known the alleged assumption would not have been fulfilled, although Mohammed does purport to give evidence to that effect in his first affidavit at [47]. However that goes nowhere because I am not satisfied that such a representation that the transfer of business and sale was ever made. In any event Mohammed was quite frankly desperate, and in my view did take up the opportunity to pocket the profits which was a good deal better, as nothing else was on offer for him. It follows that I do not regard the Plaintiffs as having satisfied me that they acted therefore accordingly to their detriment.
For similar reasons, in my view the misleading conduct having not arisen, that cause of action then fails. As far as restitution is concerned in my view the Plaintiffs have not really elaborated upon their claim in any relevant sense at all and it does not fall to be considered in the light of the absence of that argument.
Lastly the Defendants rely upon Limitations defence. Proceedings were commenced on 23 August 2018. The events in question occurred in or about June 2009 which is about 9 years prior to the commencement of the proceedings. The Plaintiffs submit that the cause of action accrued upon Hassan's refusal to transfer the business and the land in December 2012 after Mohammed requested that he do so. The Defendants, on the other hand, submit that, on the Plaintiffs' case, the cause of action should accrue at the point in which Mohammed and Joe said that they had paid the total amount liable and the property would be transferred. On the Plaintiffs' case, they had paid the total amount owing to Hassan by June 2012, more than 6 years prior to them commencing proceedings, and it is at this point, when transfer did not occur upon payment that the damage properly arose. The Defendants therefore rely upon Limitation defences pursuant to Section 141(a) of the Limitation Act. Alternatively laches in relation to the Plaintiffs' equitable claims.
Although not necessary, given that I have already found no such contract as alleged by the Plaintiffs, in my view, the Plaintiffs would be time barred. The cause of action, would have relevantly arisen upon payment of the alleged amount owing. Indeed it is true that Hassan was in fact out of the country, but this would not have prevented some sort of communication to him about the failure to transfer. Even if it were the case that the Plaintiffs had not physically paid the money owing to Hassan by June 2015 and instead were waiting till his return to make a lump sum payment of the remaining money owing, this would then suggest that both their exercise book (Ex PA) as well as Mohammed's contention that they paid Hassan 'every month' as contrived.
I finally note that the Peak Hill Plaintiffs are not entitled to any money from the rebates. There was no evidence adduced that the Hassan had, at any point, made a representation to them that they would be entitled to such rebates as were available and I am not convinced that the Plaintiffs have articulated any other basis for their claim to them.

[127]

Hill Top Proceedings

In this case again the Plaintiff alleges an oral agreement made in 2011. The Defendants' company, Fenikia, owns the grocery store in Hill Top and the land on which it operates. The Plaintiff, Imad, says the Defendant agreed to sell him the Hill Top store, and as a result he has an equitable or legal duty to do so. The Defendants maintain that there was only a rental agreement in place and there was no promise to transfer any property. Again counsel for the Defendants emphasised three key issues with the Plaintiffs' case, being the onus, the implausibility and the lack of any contemporaneous documents.
The Defendants have brought a cross claim, the substance of which is to assert that Imad breached his agreement with Hassan by failing to pay for around $200,000 worth of stock which he ordered in Hassan's name and by refusing to pay a weekly amount to occupy the store. The Defendants say those breaches entitled Hassan to terminate the agreement, which he has done, and to recover the money Hassan paid on behalf of Imad.
Although there was much sought to be made by analogy with the earlier agreements formed with Marwan and Mouhamed Haidar, the principal focus of course in any proceedings are on the particular facts of the case. Here again the Defendants submit that although there were multiple text messages sent dating back to 2015 and passing between Imad and Hassan, none referred to the sale of the business or the property in any way, and they don't use any terminology suggestive of any agreement to that effect.
The Defendants of course submit that this is unsurprising. Imad was not involved in the negotiations for the purchase price requested by the owners. It was Hassan who made all relevant enquiries and negotiated the price for the business and the land. This is really not controversial.
The two versions of what occurred in relation to Imad working in the business are of course diametrically opposed in content. Hassan's version is that in August 2011 he put a fairly broad proposition to Imad that he would pay rent, pay for the stock, pay all the expenses and that initially the arrangement was only to be for one year. Imad's version has some similarity but he expressly asserts that Hassan said he would charge Imad $11,000 a month until June 2015, which included $2,000 for rent for the shop, and that he would pay all outgoings. Imad then alleged that Hassan promised to sell him the business and the property for a one off payment of $300,000.
In my view, such contemporaneous documents that exist and which go to the terms of the arrangement, on balance favour the Defendants.
Again, in this case there are alleged lease documents. On the first lease dated 25 August 2011, Imad and the named witness Nader Slaibi deny signing the lease. However there was an earlier lease in the name of Imad's wife Nora (CB265). Nora denies signing the lease but the signature seems to me to be that of Imad's on the lease. He had signed a number of documents on his wife's behalf including her tax returns. The lease was also signed by Mouhamed Haidar. Mr Haidar explained that he signed the lease in English but that he sometimes signed in Arabic. Whether or not these leases are authentic in the end it seems to me is not determinative of the issue, although it does reflect adversely on Hassan and for that matter, on Imad.
The Plaintiffs rely on the evidence of Noura, who recalled a particular conversation with Hassan, to corroborate Imad's evidence of the alleged agreement with Hassan. Noura recalls that Hassan made certain representations to her, while she was pregnant, that she was not to worry, the business would soon be hers. This conversation occurred in remarkably similar terms to another alleged exchange between Sassee and Hassan. I am altogether satisfied that these representations were made.
The problem in my view for the Plaintiffs, is not only the absence of contemporaneous materials, particularly the absence of any mention of a transaction of the sort alleged in any of the multiple text messages, but also in a number of witnesses, who I accept, who gave evidence consistent with Hassan's version of events. In the latter category Ramsey Zreikat, Hassan's accountant, who was told by Hassan that Hassan bought businesses and leased them to other people. Also Joseph Bechara a sales representative who sold chocolates to some of Hassan's stores and gave evidence that Hassan told him in about 2011 that he had bought the Hill Top store and that Imad was there "on a sub-lease".
Marwan asserted that Imad told him in about 2014 that he asked Hassan if he could buy the shop but was told Hassan did not want to sell. Marwan also said that Imad never told him that he was paying some $10,000 per month to Hassan.
Michael Saba said that around the time that Hassan bought the Hill Top store he told Mr Saba that he bought it for his children, it was run down and that he was going to improve it but that he was sub-leasing it to his cousin Imad.
Fouad Slaibi said that Hassan told him in 2011 that Imad was going to work in the store "under a sub-lease". Much was made in cross examination by Counsel for the Plaintiffs about the respective witnesses understanding of sub-lease. It is true that most of the witnesses who used that terminology had some difficulty in giving a precise and/or accurate description of the term. None the less, I am not satisfied that, although the term may well have been suggested by the solicitor assisting in the preparation of the statement, these witnesses merely adopted it either without thinking not falsely, or dishonestly to support Hassan's case. I am satisfied that leaving Hassan to one side each of those persons who used that terminology meant to infer that Imad was in fact (on their understanding) renting the premises and the business from Hassan.
Again Imad accepts that Hassan purchased equipment for him to use in the store and that Hassan did not ask Imad to reimburse him, nor did Imad offer to do so (CB5355, T47.10-47.27). It is clear to me that Hassan was the one who paid for many improvements to the store, actions that are entirely consistent with his belief that the property and business was entirely his.
The Defendants financial records including Fenikia's ledgers, financial statements and tax returns all refer to the rent received on Hill Top (CB6/410, 625, 715, CB7975, 118 and CB8/1435). Fenikia's financial statements record Hill Top and the goodwill as "non-current assets" (CB6/412, 628, 730; CB7/993, 1178; CB8/1458) and further Fenikia's tax returns record detail of the Hill Top store in the rental property schedule including rental income received (CB6/422, 638, 718; CB7/978, 1161; CB8/1439).
The Plaintiffs initially pointed to a certain file note on Imad's 2012 tax returns made by Mr Faeeh. The file note records that Imad had apparently told his accountant that he was making payments towards the purchase of a business. Notwithstanding that this note only refers to a business and not land, it is of limited utility given that it is clear that it did not in fact become more than a file note and translate into any tax returns. Presumably this is because there was no evidence upon which Imad could substantiate this assertion. I would also note, that Mr Faeeh did not impress me as a reliable or honest witness, this is probably why the file note was strikingly absent from the Plaintiffs' final submissions.
Imad asserts that he has paid Hassan $9,000 a month in instalments and $2,000 in rent. There are no contemporaneous bank documents or any receipts to support this assertion. All of the payments were allegedly made in cash. The Defendant submits that an analysis of the financial and taxation records for the Hill Top store from 2012 to 2017 reveal insufficient profits to pay the amounts as alleged. The Plaintiff responded to these assertions by providing certain proposed amended tax returns as well as Z-reports namely print outs from the cash register, that were produced quite late in the case (CB6/606; CB7/969) Although, as was conceded by the Defendants (T967/16-27), these reports seem to suggest that the Plaintiffs did have sufficient moneys to pay the amounts they allege, they are totally inconsistent with the Plaintiffs' tax returns.
I am not at all satisfied that these reports are sufficient to establish the Plaintiffs' case. Leaving to one side, the reliability of these reports given they were produced so late, it is further clear that these readings were not translated into tax returns. There is no doubt that Imad along with others in this case have in some cases grossly understated on any view of it monies actually received from the various business ventures. Leaving aside the dishonesty associated with such activity it makes it in my view near to impossible actually to assess the reliability liability of allegations made by Imad in this case. I cannot therefore, reasonably rely upon the readings as an accurate indication of the money paid. In any case, what's more all payments are still described as 'rent'.
Nobody, including those assisting him in which I include his wife Noura, apart from their say so have any independent and/or objective basis for substantiating the large dollops of cash it is alleged they paid Hassan. It must be said however that there is some support for amounts of this order being paid to Hassan being mentioned in numerous of the text messages passing between Imad and Hassan. But the payments are described as rent and they do not in my view determine whether or not an oral contract of the sort pleaded in fact existed. They are at best equivocal. The mere mention of a sale or purchase of transfer of something would be of relevance, but no such references exist.
The Defendants in this case as with Peak Hill raises the implausibility of such an arrangement. As to the implausibility it is clear that Imad had to concede in cross examination (T22/30) that he had never worked in a grocery store and that he knew nothing about such a business. Further (T23/14) Imad accepted that he did not know how much Hassan was proposing to pay for the land and that he had not looked into how much the land was worth. There is much force in my view in the Defendants' proposition that it would be entirely implausible for someone to simply agree to commit to such a transaction.
But there is a further complication and that is that Imad appeared to embellish the transaction even further when he gave his evidence (T24/13). He appeared to indicate that the transaction as he understood it was that he was promised the land and the business only when he had enough money, and that in effect Hassan had given him an indefinite period of time in which to put his arrangements in order. Unsurprisingly having boxed himself into a corner Imad had to concede (T25/18) that come June 2015, if he did not have enough money that contingency was simply not discussed. A little later in the transcript as is pointed out by the Defendant (T26/9-10), Imad recalled apparently that if 2015 were to arrive and he did not have enough money he would simply pay rent.
The Plaintiffs' case in effect is that he was entirely trusting of Hassan and so it seems was prepared to accept any deal at all which Hassan put on the table. The Defendants' case is that given Imad had very little by way of other options, simply moving in and running the business, paying overheads, rent and pocketing the profits is much more plausible commercially both for Hassan and indeed for Imad. I agree. I regard it as implausible that Imad and/or his wife both of whom impressed me as intelligent people have accepted unequivocally years in advance to make a purchase in circumstances such as these when no investigation had been undertaken by either of them in relation to the prices paid for the business or the land. I am simply not satisfied that the Plaintiffs would have accepted such an arrangement.
Diransson of course was only incorporated in 2014, which leads to another problem for the Plaintiffs in the way in which they have pleaded their case. It could not have been relevantly subjected to the promises at the time they were made.
When people have a grievance or believe that they have been robbed, as is the case here, of a serious and important business opportunity, it is common indeed in many instances expected that someone will complain to either the person to whom they allege the arrangement existed or to others. Relevantly speaking during many of the years when it would be understandable if he did, Imad failed to complain to Hassan or for that matter to anybody else. Although not determinative, neither Imad nor his wife Noura gave me the impression that they would hold back from complaining if they felt they had been wronged. The mere commencement of the litigation years after the event to some extent addresses that issue as a matter of practical reality, but it is the failure most relevantly in 2015 to complain when it must have been apparent to Imad and/or his wife that Hassan was not going to abide by the arrangement, assuming such an arrangement had been promised.
It is worth briefly noting, as I have said above, I do not find sufficient evidence that there was collusion between the various Plaintiffs with regards to their evidence.
As far as the text messages are concerned the Defendants' rightly point to the fact that there is no reference to any purchase by Imad of the land or business. He makes no assertion to that effect at all. Further the description in numerous of the text messages to the $11,000 etc the Defendants submit does not help the Plaintiffs either because of the liberal use again of the term "rent". Forcefully they submit that the payment of "rent" is completely inconsistent with Imad and Ibrahim's case. Ibrahim says he paid no rent at all to Hassan. The only rent he says he paid was to the landlord. Imad's case on the other hand is that he only paid $2,000 worth of rent a month, certainly not $10,000 or $11,000. The text messages therefore insofar as they refer to any payments at all only refer to the payment of rent and do not refer to either instalments or payments towards a purchase.
The Defendants concede that the amounts being discussed are larger than what Hassan accepts was paid. But the real question the Defendants pose perfectly legitimately is that the payments are in respect of what? It does seem entirely inconsistent with the Plaintiffs case to describe the payments in the text messages as rent. Imad nor his wife gave evidence that the term "rent" in their own minds was interchangeable with the purchase price or payment on behalf of the purchaser. I am satisfied that Imad understood precisely what the term "rent" meant and that he was in no way confused as to what the term conveyed.
I relevantly note, that the Plaintiffs drew attention to the various inconsistencies in the Defendants' financial evidence. In particular, the Plaintiffs note that contrary to Hassan's emphatic assertion that the $500 a week rent was sufficient to cover any amount owing on the Hill Top Land and that in fact he was making a profit on Hill Top. However his records actually disclose a loss. It seems not unlikely, as the Plaintiffs' submit, that Hassan was understating the income he was receiving in order to minimise certain tax liabilities. However, it is not necessary to reach a final conclusion on this matter. It is not the Defendants that bear any onus, and I am not satisfied, despite certain inconsistencies in the Defendants' case, that the Plaintiffs have established their case on the balance of probabilities.
I find myself with great respect in agreement with Ward CJ in Eq in Ardestani v Doss [2018] NSWSC 1084, when her Honour observed in the absence of any written record or any record establishing money being paid, cases such as these ultimately turn upon the evaluation of which of the competing accounts is more probable and hence credibility and inherent implausibility is critical.
Here in this case the total failure on the part of the Plaintiffs to use any terminology reminiscent of a purchase or an acquisition of either the business or the land together in their contemporaneous communications with the use of terminology such as rent in circumstances where it would be entirely antithetical to use such terminology, are very potent factors in my mind. This as I have discussed leads me to reject the Plaintiffs claim for breach of contract. I am simply not satisfied that the contract as pleaded by the Plaintiffs can be made out on the evidence. It follows no remedy would be available for breach of contract.
Likewise in my view a remedial constructive trust is not available. I am not satisfied that the relationship can properly be described as a joint endeavour or exercise, it certainly was not a partnership. It was simply a case of an arrangement whereby rent was paid, overheads were paid and profits were pocketed. I do not see that arrangement, although cryptically described here more elaborately, otherwise amounts to the sort of situation anticipated in Baumgartner.
So far as proprietary estoppel is concerned, I am not satisfied that the oral contract as I have said as pleaded was made, nor am I therefore satisfied that any assurance was given to the Plaintiffs that they would acquire the Hill Top store or the business associated with it. It follows that no reliance nor detriment could arise therefore in these circumstances.
In any event Imad gave no evidence that he would have acted differently had he known that the assumption which he says he made would not be fulfilled.
Here in addition the Defendants rely upon Imad's behaviour in taking almost $200,000 stock from the Defendants on the eve of the litigation as amounting to unclean hands. I think it does, but it does not strictly arise here because I am not otherwise satisfied he, his company or his wife have a cause of action.
So far as misleading conduct is concerned there are a number of difficulties associated with that cause of action. First of all I am not satisfied that any representations were made in accordance with the oral contract as pleaded. Second in so far as Diransson seeks relief, there is no evidence any representation was made to it by reason of the fact it was only incorporated in 2014.
Further in my view the Plaintiffs are not entitled to restitution. They paid for a business opportunity and indeed as a result of the bargain struck they may have overpaid. But that was the opportunity they took up, they made profits and they failed in any event to disclose the full extent of the profits received and so to that extent it is very difficult to determine with any precision the benefits they achieved. But they did indeed achieve benefits. In my view their claim for restitution likewise fails.
In my view in any event Imad has effectively taken stock from Hassan in the amount of nearly $200,000. He admits that, under any contract, he is required to pay for the stock, and has thus far failed to do so. Counsel for the Plaintiffs accepted that if they failed to establish the facts as they alleged, they would indeed be liable under Hassan's cross-claim (T895/15-20). In my view Hassan is entitled to repayment for this amount.
In so far as the Hill Top Plaintiffs have pleaded relief against forfeiture, I don't think it is appropriate to grant such relief.
I finally note that the Hill Top Plaintiffs are not entitled to any money from the rebates. There was no evidence adduced that Hassan had, at any point, made a representation to them that they would be entitled to such rebates as were available and I am not convinced that the Plaintiffs have articulated any other basis for their claim to them.

[128]

Oaks

The property in question here is owned by Fenikia which owns the business but leases the land from which the business is run.
The Defendants have brought a cross claim, the substance of which is similar to that case advanced against Imad, namely that Ibrahim breached his agreement with Hassan by failing to pay for $200,000 worth of stock which he ordered in Hassan's name and by refusing to pay a weekly amount to occupy the store. The Defendants say those breaches entitle Hassan to terminate the agreement which has been done and they seek to recover moneys paid by Hassan on Ibrahim's behalf.
Again the agreement here is said to be an oral agreement. The genesis of the agreement is Ibrahim's father requesting Hassan to help Ibrahim out when Ibrahim moved to Australia from Lebanon in late 2014. However, it was Hassan who discovered the Oaks business was for sale. He visited the premises a few times and obtained information about earnings and decided to buy it. It is uncontroversial that Ibrahim did not visit the Oaks store at least in company with Hassan, nor did he make inquiries into the price of the leasehold or the business.
The Plaintiff alleges that in March or April 2015 Hassan met with Ibrahim at Imad's home, at which Hassan proposed that he would acquire a business that was trading as the Oaks Friendly Grocer. They further allege Ibrahim would work in the business and pay rent to the landlord and upon Hassan returning from Lebanon they would discuss how Ibrahim would pay for the business which he would in due course own.
Ibrahim says that he accepted that proposal and in due course entered into possession of the business. The Plaintiff of course further alleges that in September 2015 an arrangement was consummated for the purposes of acquiring the business.
Hassan's version of course is very different. He asserts that in March 2015 he asked Ibrahim whether he would be prepared to run the business for him and pay him rent plus any outgoings, and Hassan would buy the business and the stock. Hassan told Ibrahim he could undertake such an arrangement for about a year with each side being able to terminate on three months notice. I consider that a more likely version of events.
The Defendant adopted a similar submission with relation to Ibrahim's case. The Defendant points out that the agreement said to have been consummated here, similar to the other proceedings, is that Hassan having spent his own time and money to locate a business and negotiate its acquisition and then buy it with his own money, only to immediately sell it for the same price some little time later to a person he barely knew, is improbable. The Defendant with some justification points to the uncommercial nature of such a transaction whereby Hassan would in effect be agreeing in advance to receive no return on his money in circumstances where, relatively speaking, Ibrahim was a stranger. It further seems highly improbable that Hassan would allow Ibrahim to run the shop for several months and demand no payment at all between the months of May and September 2015.
Again there are a number of witnesses who have given evidence supporting the Defendants' version of events. First Ramsay Zreikat, Hassan's accountant gave evidence that Hassan told him in effect about his business model including the Oaks Store. Ramsay says that Hassan told him that he bought businesses to lease them out to people to run them for him. When he prepared the Defendants' tax returns he included two years worth of rental income for the Oaks Store for the financial year 2017.
Fouad Slaibi said that Hassan told him that in about 2015 he had bought a shop in the Oaks and he was going to get Imad's brother to work there on a similar deal to that which he had arrived at with Imad namely the payment of $500 a week. In addition Michael Saba gave evidence that Hassan told him he bought the Oaks store and that he was going to sub lease it to Imad's brother.
The Defendant points to the implausibility of certain evidence given by Ibrahim to the effect that he had no understanding as to how long he could stay in the property (T198/32 and T199/5).
The Defendant again makes the point that there is not one document referring to the so called sale of the business, and that there are no bank transfers or receipts establishing the amount paid, and the tax returns and financial statements are it is submitted inconsistent with Ibrahim's case.
Ibrahim's case in summary is that he was obliged to pay Hassan $290,000 and then obliged to pay $1,000 per week until he paid $150,000 worth of stock to Hassan. Ibrahim accepts that he has not paid $150,000 stock and that he simply stopped paying $1,000 a week to Hassan. The Defendant submits with some considerable force that Ibrahim on his case and on his own admission is in breach of the agreement and that the time for Hassan to perform, even if the contract is found to have existed, has not yet arisen. Further Ibrahim like his brother bought $200,000 of goods on Hassan's credit and has refused to pay. Hence Hassan has terminated legitimately, it is submitted, Ibrahim's contract.
Of course it is submitted that by September 2015 Hassan had told Imad that he was not transferring the business and land across to him. Therefore by October 2015 both brothers knew that Hassan had allegedly broken a fundamental part of the agreement with Imad. The Defendants submit this adds to the implausibility that nonetheless Ibrahim had reached some arrangement with Hassan based apparently on some element of trust.
The Defendants submit that from any number of vantage points the arrangement asserted by Ibrahim is entirely uncommercial. I agree. It really makes no sense for Hassan to permit Ibrahim over an indefinite period to occupy premises on the promise that at some point in the distant future there would be a transfer of the business to Ibrahim. The arrangement was entirely uncertain as to time. Further the evidence rather supports the fact that Ibrahim did not enquire about the viability of the Oaks store before purchase and had no role in negotiating the purchase price. It seems to me he did not know what the purchase price of the business was, and did not ask to see the contract under which Hassan bought the business. It seems improbable in my view for someone not to show any interest whatsoever in these matters and yet commit to purchasing such a business.
Further Ibrahim clearly appreciated that Hassan did not own the land upon which the Oaks business was being conducted and could not have known how long he could stay on the land. In addition Hassan asserts credibly in my view that in 2017 he bought new flooring for the Oaks store and helped Ibrahim to install it. Ibrahim did not repay Hassan for the associated costs.
It is true as the Defendant forcefully points out that the absence of contemporaneous materials concerning the arrangement and/or the terms of it is quite significant. It is not that Ibrahim lacked opportunity to confirm the arrangement. The absence of a single text message or an email in relation to that exchange is rather odd.
I am satisfied that there was no such arrangement as alleged by Ibrahim. I am satisfied that there was an arrangement by which Ibrahim would pay rent and that is entirely consistent in my view with such contemporaneous documents that do exist.
In giving his evidence as the Defendants correctly point out, Ibrahim's oral evidence exposed a degree of unreliability on his part. He conceded for example that he was mistaken in both his affidavit and oral evidence about the purchase price (T191.44-192.08). Equally he had difficulty in cross examination in recalling his apparent obligation to pay Hassan $2,200 for the first nine days that he occupied the business (T200.18-201.22). Ibrahim further sought to rely on the corroborating evidence of his wife, Sassee, who alleged that Hassan made certain representations to her, while she was pregnant, that the business would eventually be hers. Again, as I have already noted, this conversation occurred in remarkably the same terms as the alleged exchange between Noura and Hassan. I am reluctant to award this evidence any significant weight.
The assertion that Ibrahim made payments to Hassan pursuant to the alleged agreement runs contrary to his own financial documents. All of Ibrahim's tax returns and financial statements for the period 2015 to 2017 describe payments for the Oaks Business as "Rent" not instalments payments or a purchase price.
In Exhibit D3, page 1 he records $60,386 "in rent expenses". The Defendant points out that the rent payable for the land was $3,410 per month or $37,200 per year. The remainder, namely $23,636 reflects additional payments of more than $450 per week. It is submitted with some force that that is consistent with Ibrahim having told his accountant that his liability to Hassan was to pay about $5,000 in "rent" per week. That was for the financial year 2016. For the financial year 2017 (Ex D3, page 8) Ibrahim records $61,363 in "rent expenses". Again deducting rent payable to the landlord that reflects payments of about $500 per week to Hassan.
The Defendant also submits that the tax returns disclose a profit insufficient to meet Ibrahim's alleged payments to Hassan under the alleged contract of $120,000 per annum. The Plaintiff responded to these assertions by providing certain proposed amended tax returns as well as Z-reports namely print outs from the cash register, that were produced quite late in the case CB6/606/CB7/969). Again, as described above, even accepting that indeed the Z reports show an income sufficient to pay the amounts alleged, this is insufficient in and of itself to establish the contracts as alleged.
I am also satisfied that Ibrahim had manipulated his financial records. Ibrahim accepted as much in evidence when he acknowledged that he and his brother Imad had visited their accountant, Mr Mattouk so as to "fix up our documents". (T219.11-219.24) The effect of the proposed changes to the financial year 2016 was to increase Ibrahim's expenses by about $90,000 from his previous 2016 return to keep profits at the same namely, $32,403. The same exercise was undertaken in relation to the 2017 financial year by increasing the rent, increasing the income but keeping the profits the same. No amended tax returns have yet been filed. I am satisfied that these documents have been created to bolster Ibrahim's evidence in these proceedings whilst avoiding any additional taxation liabilities. I cannot accept they are legitimate.
A fundamental problem even with the proposed amended financial records is that there is no reference in there to the payment of instalments or the acquisition of a business but rather simply the payment of rent. So again these documents recently created are entirely antithetical to the Plaintiff's case.
It seems to me that the contract claim must be rejected, most importantly because I am simply not satisfied there was an agreement made as alleged by the Plaintiff. In any event he has terminated the contract by his own conduct and it seems to me specific performance could not be granted even if it satisfied such a contract existed. No question therefore of any damages arises.
For similar reasons as previously discussed I do not think a remedial constructive trust arises here. Further proprietary estoppel does not arise largely because I do not accept that Hassan made the representations or gave any relevant assurance to Ibrahim that he would acquire the business. In addition a claim for misleading conduct in my view cannot arise. Further I do not think this is a claim for restitution.
However in my view Ibrahim has effectively taken stock from Hassan contrary to their agreement. Ibrahim admits that in March 2018 he ordered $237,574.28 worth of stock on Oaks account which was in Hassan and Youmna's name, and strongly suggested that he had done so in order to fund this litigation (T232/30-35). He admits under the contract he was required to pay for it and has failed to do so (CB1,Tab 7 at [8(f)], [10(g)] and [11]). Counsel for the Plaintiff accepted that if they failed to establish the facts as they alleged, they would indeed be liable under Hassan's cross-claim (T895/15-20). In addition Ibrahim has failed to pay Hassan the $500 weekly fee. In my view, Hassan is entitled to repayment for this amount.
In so far as the Oaks Plaintiff has pleaded relief against forfeiture, I don't think it is appropriate to grant such relief.
I finally note that the Oaks Plaintiff is not entitled to any money from the rebates. There was no evidence adduced that Hassan had, at any point, made a representation to Ibrahim that they would be entitled to such rebates as were available and I am not convinced that the plaintiff has articulated any other basis for his claim to them.

At a glance

Court

Decision date

Before

Source

Judgment (130 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (8)

Cited By (4)