Doughty v Abboud

1. Order pursuant to section 175 of the Corporations Act 2001 (Cth) that the register of members of Douabb Pty Ltd ACN 112 879 964 be rectified by including Trent Doughty as a member holding one ordinary share (being the one ordinary share ostensible transferred by him to George Abboud and ostensibly held by George Abboud) and by recognising that the said share is not and has never been held by George Abboud. 2. Declare that: (a) the purported resignation of Trent Doughty on 1 July 2006 as a director and secretary of Douabb Pty Ltd ACN 112 897 964 is and has at all times been of no effect; and (b) Trent Doughty is and has at all material times since 10 February 2005 been a director and secretary of the said Douabb Pty Ltd. DECISION : 3. Order that the cross-claim of George Abboud be dismissed. 4. Order that the defendants/cross claimants pay the costs of the plaintiffs/cross defendants of the proceedings as a whole. There will also be an order for the winding up of Douabb and an order for the appointment of a liquidator. However, these cannot be made until the plaintiffs file a liquidator's consent to act. I direct that such a consent be filed by delivery to my Associate within seven days. The following orders will then be made in chambers: 5. Order pursuant to section 461(k) of the Corporations Act 2001 (Cth) that Douabb Pty Ltd ACN 112 879 964 be wound up. 6. Order that [name] of [address] be appointed liquidator of Douabb Pty Ltd ACN 112 879 964.

CATCHWORDS : CORPORATIONS - rectification of registers - whether documents transferring shares and resigning as director and secretary signed - factual inquiry - no matter of principle - CORPORATIONS - winding up - just and equitable ground - breakdown in relationship - no matter of principle - EQUITY - rectification - whether common intention proved to differ from content of instrument - no matter of principle

LEGISLATION CITED : Corporations Act 2001 (Cth), ss 175, 461(1)(k)

Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd (2008) 66 ACSR 325; [2008] VSCA 86 Australian Gypsum Ltd v Australian Plaster Co Ltd [1930] HCA 38; (1930) 45 CLR 54 Brooker v Friend & Brooker Pty Ltd [2006] NSWCA 385 Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97 CASES CITED : Fowler v Fowler (1859) 4 De G & J 250 Kingjade Holdings Pty Ltd v Pineridge Nominees Pty Ltd (1997) 15 ACLC 910 Macquarie University v Macquarie University Union Ltd (No 2) [2007] FCA 844 Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342 Pukallus v Cameron [1982] HCA 63; (1982) 150 CLR 447 Re Tivloi Freeholds Ltd [1972] VR 445 Thomas v Mackay Investments Pty Ltd (1996) 22 ACSR 294 Westland Savings Bank v Hancock [1987] NZLR 21

Trent David Doughty - First Plaint/First Cross-Defendant Rosecell Pty Limited - Second Plaintiff/Second Cross-Defendant PARTIES : George Abboud - First Defendant/First Cross-Claimant Douabb Pty Limited - Second Defendant Tepall Pty Limited - Second Cross-Claimant

COUNSEL : Mr L S Einstein/Mr G W Pulsford - Plaintiffs Mr R A Parsons - Defendant

SOLICITORS : Proctor & Associates - Plaintiffs V L Macri Lawyers - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

2009/289464 TRENT DAVID DOUGHTY & ANOR v GEORGE ABBOUD & ANOR JUDGMENT

The proceedings 1 The plaintiff ("Doughty") seeks relief under the Corporations Act 2001 (Cth) in respect of a company called Douabb Pty Ltd ("Douabb"). He applies for the following orders: "An order pursuant to section 175 of the Corporations Act 2001 (Cth) that the register of Douabb Pty Ltd be rectified to include Mr Trent Doughty as a member holding one ordinary share."

"An order that Douabb Pty Ltd be wound up pursuant to section 461(k) of the Corporations Act 2001 (Cth)." 2 Also sought are declarations as follows: "Declarations that: (a) the purported resignation of Mr Trent Doughty on 1 July 2006 as a director and secretary of Douabb Pty Ltd is and has at all times has been of no effect; (b) Mr Trent Doughty is and has at all material times since 10 February 2005 been a director and secretary of Douabb Pty Ltd." 3 Douabb is, of course, a defendant. It is the second defendant. There is another defendant, George Abboud ("Abboud"). He is the first defendant. 4 When Douabb was formed, Doughty and Abboud became its only members and directors. Each held one share. At a later time, the register of members was altered to reflect transfer of Doughty's share to Abboud and Abboud's status as the only member. The records were also changed to reflect resignation by Doughty as a director and secretary. 5 Doughty says that he did not transfer his share to Abboud and that he did not resign as a director and secretary. Doughty also says that he should be recognised as having continued to be a director, secretary and member holding one share. 6 The question whether Doughty resigned as a director and secretary and transferred his share to Abboud turns on one very narrow factual question, that is, whether, as Abboud alleges and Doughty denies, Doughty signed three documents at a meeting held on 1 July 2006. 7 The first document is as follows: "1 July 2006 DOUABB PTY LTD A.C.N: 112 879 964 115 Fermoy Road MARSDEN PARK NSW 2765 Dear Sir/Madam, RESIGNATION OF DIRECTOR I hereby resign as Director of the company effective from the date of this letter. Yours sincerely, signed TRENT DAVID DOUGHTY " 8 The second document is as follows: "1 July 2006 DOUABB PTY LTD A.C.N: 112 879 964 115 Fermoy Road MARSDEN PARK NSW 2765 Dear Sir/Madam, RESIGNATION OF SECRETARY I hereby resign as Secretary of the company effective from the date of this letter. Yours sincerely, signed TRENT DAVID DOUGHTY" 9 The third document is: "I, Trent David Doughty of 115 Fermoy Road, Marsden Park NSW 2765 hereby assign all my rights and interest in Douabb Pty Ltd ACN 112 879 964 and the property known as 9 Enterprise Drive, Glendenning NSW 2761, situated in Lot 56, Deposited Plan 873433 to George Abboud of 119 Fermoy Road, Marsden Park NSW 2765. I further acknowledge that consideration was received by me by way of monies owing and guarantees provided by George Abboud and his entities. I further declare that I have no further interest in Douabb Pty Ltd ACN 112 879 964 or the property known as 9 Enterprise Drive, Glendenning NSW 2761, situated in Lot 56, Deposited Plan 873433. Pursuant to this Agreement, George Abboud relinquishes any further rights to claim moneys owing by me. Mr George Abboud still claims moneys owing to him by my wife Annette Louise Doughty and guarantees and securities provided to him by her." 10 There is also a cross-claim to be mentioned in due course (see paragraph [229] and following below). The parties 11 Doughty and Abboud were once close friends. Doughty was the best man at Abboud's wedding. They lived in the same street and were members of the same motor cycle club. They were also business associates in the field of excavation and haulage. Doughty concentrated on the excavation business and Abboud was primarily involved in the haulage business. 12 The businesses complemented each other in that the haulage business transported soil and other construction material away from the sites where the excavation business conducted operations. The haulage business also delivered to excavation sites materials required to complete excavation and construction. The haulage business relied significantly on the excavation business for its profitability and existence; indeed the excavation business was its primary source of income. 13 From late 2005, the friendship began to deteriorate as a result of financial difficulties suffered by Doughty's excavation business. These affected Abboud's haulage business. 14 In mid 2006, the excavation business was trading under considerable financial pressure. It was consistently late in making payments to suppliers and other creditors. It is not disputed that Doughty's business was late in paying Abboud's haulage business. This meant that the haulage business had cash flow problems. The situation did not improve and the financial position of both businesses continued to decline during 2007. 15 The relationship between Doughty and Abboud also deteriorated. It is alleged by Doughty that this came to a head on or about 2 February 2008, after which, Doughty says, he was violently attacked by a group of men. 16 Doughty's evidence is that, during the assault, burns were inflicted on him by a steam iron. That Doughty was, at that time, seriously injured and admitted to hospital for skin grafts is borne out by hospital records. Doughty alleges that Abboud was present when the assault occurred. Abboud denies this.

17 Doughty says that during the attack, he was told by the men: "You had better get out of town if you want your life. Leave now. We're taking over your business. Move from your house. Leave everything." 18 Doughty's wife Annette ("Mrs Doughty") says that, on the night in question, she was told by men she believed to be (or to be associates of) her husband's attackers that she and her family were to leave town and leave the business immediately. They went initially to Doughty's parents' home and later to another State. 19 It is accepted that Doughty and Mrs Doughty did not play an active role in the management or operation of the businesses from February 2008. They say that they did not voluntarily leave the businesses but that, because of the violence and threats, it was not possible for them to continue to be involved. Doughty maintains that the decision to leave the business in the control of Abboud alone was made under duress. Doughty also says that Abboud witnessed the attack and that both Abboud and his wife Jillian ("Mrs Abboud") were actually involved in the immediate aftermath. 20 Doughty further says that he made no attempt to protect his interests in the business because he feared reprisals. Attempts to recapture his interests were begun in February 2009 when, he says, he became aware that Abboud was no longer affiliated with the group of men who had attacked him. The establishment of the companies and their operations 21 Doughty and Abboud used a number of companies in their business activities over the years. Companies associated solely with Doughty included Rosecell Pty Ltd ("Rosecell"), Perfection Australia Pty Ltd formerly Trent's Excavation Pty Ltd ("Trent's Excavations") and TCG Group Pty Ltd formerly Trents Civil Group Pty Ltd ("TCG"). Companies associated solely with Abboud included Tepall Pty Ltd ("Tepall") and Sydney Sand and Soil Pty Ltd ("SSS"). 22 There are three companies about which questions of ownership and control are unresolved. These are GT Haulage Pty Ltd ("GTH"), Civil Constructions Australia Pty Ltd ("CCA") and Douabb. The claims in the proceedings relate, as I have said, to Douabb alone. 23 The excavation business operated by Doughty was conducted through a number of companies sequentially. Trent's Excavations was registered on 23 May 2000 and adopted the name Perfection Australia on 18 April 2006. At inception, Doughty was the sole shareholder and director. The company was used by Doughty to operate the earthmoving business until appointment of an administrator on 28 April 2006. The company subsequently went into creditors voluntary winding up. 24 TCG was registered on 17 May 2005 and changed its name to TCG Group Pty Ltd in October 2006. Doughty was the sole shareholder and director of this company. TCG replaced Trent's Excavations in the excavation and construction business upon the latter's demise. TCG took over the unfinished contracts of Trent's Excavations including liabilities arising under those contracts and received the benefit of progress claims and final payments. TCG became subject to voluntary administration in October 2007 and entered creditors voluntary winding up in November 2007. 25 The excavation business was conducted from premises in Fermoy Road, Marsden Park. At the relevant time this property was also the home of the Doughtys. 26 SSS was registered on 22 October 2001. Abboud became the sole director of this company on 23 June 2003 and remained sole director until 12 June 2009 when his brother Michael became sole director. The business of SSS was that of road haulage and transportation. The company on occasions provided such services to Doughty's earthmoving business. 27 GTH was registered on 24 September 2003. It conducted a haulage and transportation business with its principal place of business at the Fermoy Road address. Abboud was sole director, secretary and shareholder for a short period in late 2007. At all other times Doughty was the sole director and shareholder. GTH provided services directly to Doughty's earthmoving business. 28 CCA was incorporated on 11 July 2007 with a view to its taking over both the haulage and excavation businesses. The original intention was that CCA should be operated by both Doughty and Abboud. It is not disputed that a nominee director acted under the instruction of Doughty and Abboud and that they were together the guiding mind of the company. After the assault in February 2008, Doughty ceased to be involved in the business and operations were controlled solely by Abboud. 29 Doughty and Abboud decided in 2004 that the businesses could not continue to operate from the Doughtys' residential address in Fermoy Road. They investigated the possibility of buying a commercial property. 30 Doughty and Abboud sought advice as to the appropriate vehicle to purchase such a property. They spoke to their accountant, Gino Cassaniti, who was then a principal of the firm CAP Accounting, based at Liverpool. He was primarily responsible for the accounting and taxation affairs of the various entities and individuals involved in the businesses. Gino Cassaniti was assisted by an employed accountant named Fred Khalil. Sam Cassaniti, a cousin of Gino Cassaniti, was also a principal of the firm. He provided some assistance before his imprisonment on 30 September 2005 following his conviction for fraud. 31 It was decided by Doughty and Abboud that the new property should be purchased through a unit trust, with two companies as the unit holders, one nominated by Doughty and the other by Abboud. Another company was to be incorporated to act as trustee of the unit trust. 32 Douabb became the trustee of the unit trust. It was incorporated on 10 February 2005. Doughty and Abboud became directors of Douabb and took one share each. The Douabb Unit Trust was established. The beneficiaries were Rosecell (the second plaintiff) and Tepall (the third defendant) representing the Doughty and Abboud interests respectively. The proportionate unit holding of Rosecell and Tepall in the Douabb Unit Trust is the subject of the dispute raised by the cross claim which will be addressed presently. 33 On 27 July 2005, Douabb, acting as trustee of the Douabb Unit Trust, purchased a property at Glendenning for $853,125. It was from this property that the respective businesses thereafter conducted their operations until January 2008 when it was leased to an unrelated party. The three contentious documents 34 Abboud alleges that the three documents set out at paragraphs [7] to [9] above were signed by Doughty in the course of a meeting that took place at the Glendenning property on 1 July 2006. Abboud says that six persons were present at the meeting: Doughty, Mrs Doughty, Abboud, Mrs Abboud, Gino Cassaniti and Fred Khalil. Abboud's account is corroborated by Mrs Abboud, Gino Cassaniti and Fred Khalil. 35 Doughty denies that such a meeting took place on 1 July 2006 or at all. He denies having signed any of the three documents. It is his case that his purported signature on each is a forgery. Mrs Doughty supports the position taken by Doughty. 36 The issues concerning the supposed meeting of 1 July 2006 and the creation of the three documents raise the main factual questions in these proceedings. Before dealing with those questions, I should refer to the background against which the supposed meeting took place. The alleged antecedent agreement 37 Abboud alleges that the three documents were executed in conformity with an agreement between Doughty and Abboud stemming from the financial difficulties suffered by Doughty and his businesses. 38 Abboud says that, because of Doughty's inability to pay debts owed to Abboud's haulage business, it was agreed between the two men that Doughty would sign over the interests that he and Rosecell had in the Glendenning property (including, it seems, his shares in Douabb) as a means of extricating himself from his debts to Abboud. Abboud also says that part of the agreement was that if the debts were paid within twelve months, then the property previously assigned would be transferred back to the Doughty interests and Doughty would be restored to his former position. Doughty denies that any such agreement was made. The debts 39 The pretext for the alleged agreement under which Doughty was to transfer to Abboud his interests in Douabb and the trust (and thus, effectively, the Glendenning property) is thus, on Abboud's case, that substantial debts were owed by Doughty's excavation business to Abboud's haulage business and Doughty was unable to cause those debts to be paid. 40 This circumstance is relied upon by Abboud as an objective rationale for what he says was done by Doughty at the meeting on 1 July 2006. 41 Abboud said in an affidavit that, by 30 June 2006, Trent's Excavations and TCG owed SSS and GTH about $600,000, with $350,000 owed by Trent's Excavations and $240,000 owed by TCG. Mrs Abboud, who was the bookkeeper for the haulage businesses and was the person primarily responsible for maintaining the accounts, supports the calculation. 42 MYOB records of GTH recording invoices from 30 March 2006 to 30 June 2006 and showing an amount of $439,000 due to GTH by TCG were relied on by Abboud in support of this proposition. 43 It is also alleged by Abboud that Doughty failed to make substantial payment on the overdue liabilities after 30 June 2006. The position was put thus by Abboud in cross-examination: "Q: And you would often say, "When will you pay?" and payment was simply not forthcoming in any real way? A: No, he just drip fed me." 44 Later cross-examination of Abboud was as follows:

"Q: You say that his companies remained in debt? A: TCG, SSS, yes, Sydney Sand.

Q: Very little was paid? A: Yes, he just drip fed. Sometimes he gave me some money but he was always behind.

Q: Not often? A: No. I just got drip fed mostly.

Q: And what money, on your evidence, did come from Trent's company was pretty insubstantial? A: It was nothing." 45 Similarly, Mrs Abboud said that the situation in relation to debts did not improve and the debts remained outstanding. The position was put thus in her cross-examination: "Q: And after mid-2006 to your understanding things did not improve debt-wise, is that correct? A: Yes.

Q: And TCG remained very much in debt to GT Haulage? A: Yes. Q: And that remained the case forever, is that correct? A: Yes.

Q: So one has a situation in which, as at the end of the financial year 30 June 2006 there was, to your understanding, $439,000 odd owing? A: Yes.

Q: And that did not improve? A: Yes." 46 Acounting records for the financial year to 30 June 2007, which might have supported the assertion that the debt of $439,400 remained unpaid after 30 June 2006, were not put into evidence. 47 Counsel for Doughty submitted that the figure of $439,000 referred to at paragraph [42] above was inaccurate. Abboud and Mrs Abboud were taken through a number of financial records including the MYOB sales register detailing GTH invoices to TCG up to the end of August 2006; the bank statements of TCG from 1 April 2006 to 1 May 2007; the bank statements of GTH from 1 April 2006 to 30 March 2007 and a bundle of documents which contained an assortment of payment receipts and invoices in regard to payments made by TCG to GTH. 48 The receipts and invoices evidencing payments by TCG to GTH referred to specific invoice numbers and the corresponding amounts attributable to those invoice numbers as recorded in the MYOB sales register. 49 The receipts indicate that payments were made to GTH on 14 July 2006 ($49,112.72), 18 July 2006 ($20,000), 27 July 2006 ($70,000), 6 September 2006 ($100,000), 11 September 2006 ($31,535.73) and 15 September 2006 ($80,000), an aggregate of $350,648.45. Each receipt refers to a number of different invoices, which appear in the MYOB sales register relied upon by Abboud as amounts currently owing. In relation to the second, third, fourth and sixth payments just mentioned, there is supporting evidence in that the bank statements of the companies show corresponding debit and credit entries on the relevant dates. 50 It is the contention of Doughty that these receipts show that the MYOB records relied upon by Abboud to prove the state of the account are inaccurate. It was eventually accepted by both Abboud and Mrs Abboud in cross-examination that, to the extent the MYOB sales record indicates that invoiced amounts for March, April, May and June 2006 totalling $439,400 are still owing to GTH by TCG, the MYOB sales record is inaccurate. 51 In addition to the payments outlined at paragraph [49] above referring to specific invoiced amounts designated as currently due in the sales register, the bank statements show that further payments were made by TCG on 10 April 2006 ($57,949.16), 9 May 2006 ($20,000), 24 May 2006 ($20,000), 2 June 2006 ($40,119.50), 10 October 2006 ($50,000), 7 November 2006 ($55,000), 7 December 2006 ($80,000) and 1 February 2007 ($1532), an aggregate of $324,600.66. In relation to each of these payments there is a debit entry in TCG's bank statement on the relevant date and a corresponding credit entry in GTH's bank statement. 52 There is no evidence of the purpose of the eight payments just mentioned. Abboud says that the court should infer ongoing invoicing for the periods of time not covered by the MYOB report (January, February, July, August and October 2006) and that the payments are referrable to that invoicing. This is speculation. No evidence was put forward by Abboud in relation to specific invoicing during these periods. 53 The documentary evidence shows that payments totalling $675,249.11, were made to GTH by TCG during the period 1 April 2006 to 30 March 2007 ($350,648.45 at paragraph [49] above and $324,600.66 at paragraph [51] above). A number of these payments related directly to invoices detailed in the MYOB sales register as at end of June 2006 for which it is said by Abboud that the debts remained unpaid. It is apparent therefore that the MYOB accounts cannot be relied upon as an accurate depiction of the current state of affairs as between the respective companies. 54 The accounts can, however, be relied upon in relation to the position as at June 2006. The payments made as outlined at paragraph [49], which are specifically referable to the outstanding invoices of March, April, May and June commence in July 2006. The position therefore is that at 30 June 2006 an amount of $439,000 was owing to GTH. 55 There is additional evidence from which to assess the state of inter-company indebtedness at June 2006 and thereafter. Doughty accepted in cross-examination that his business owed money to GTH throughout the financial year 2006; indeed he accepted that it was possible that the indebtedness would have amounted to hundreds of thousand of dollars. Doughty did however say that the debts were continually being paid throughout that period: "I understand the question, but the excavation business always looked after the haulage business, like, a big brother, so it was always taken care of." 56 It was conceded by Doughty that his companies were having trouble paying trade creditors on time and that the excavation business was trading under considerable pressure. 57 In April 2006, administrators were appointed to Trent's Excavations as a result of a severe and sustained cash deficiency. The company was subsequently put into liquidation because of inadequate working capital and lack of accurate financial information. GTH lodged a proof of debt in the administration for the amount of $350,000. 58 The aged payable accounts of TCG as at 31 May 2006 contained an amount owing to GTH of $289,451.29. TCG, like Trent's Excavations before it, was trading under severe financial difficulty. Advice was sought from the firm de Vries Tayeh which, on 25 July 2006, advised that TCG was "clearly facing a cash crisis", was unable to pay its debts as and when they fell due and was insolvent. The firm further advised that, for the business to continue to trade, it required an immediate cash injection of funds approximating $1.1 million. An extract of the advice is as follows: "The company is clearly in need of immediate injection of funds and we do not believe that it is able to generate sufficient funds from trading with the time required, at least without the support of creditors and/or the company's lenders." 59 It is clear that TCG was facing severe financial difficulties as a result of poor cash flow. It is therefore inherently unlikely that the position as at May 2006 (a debt of $289,451.29 owing by TCG to GTH) materially improved thereafter. Indeed, it is probable that the situation became worse. True it is that payments were made as outlined at paragraph [51] above. But it is also apparent that the excavation business would have continued to incur further debts over this period. 60 On 5 September 2006, a deed was entered into under which Roger Hill lent $940,000 to TCG, at the request of Doughty and Mrs Doughty. The guarantors of the loan were TCG, Douabb, Rosecell and GTH and their directors and shareholders. For this reason, Doughty required the consent and co-operation of Abboud. It was accepted by Doughty that it was intended that, in consideration of Abboud's committing his interest in Glendenning as part security for the loan, some of the benefit of the loan derived from the loan would go to Abboud's companies by way of part payment of TCG's debt owing at that time. 61 Part of the borrowing from Hill, to the extent of $300,000, was used by Doughty to pay a debt owed by TCG to the Australian Taxation Office. There is no evidence to suggest that any of the remainder of monies lent by Hill was used in making payments to GTH. Abboud expressly denies that he or his companies received any benefit from the loan. 62 The monies borrowed from Hill provided only temporary relief from the financial problems suffered by the excavation business. GTH did not materially benefit from the loan and the debt to it remained. 63 It was accepted by Doughty on a number of occasions that there was a significant debt owed by his entities to GTH at June 2006. The proof of debt lodged by GTH in the winding up of Trent's Excavations, the MYOB accounts of GTH as at June 2006, which evidence an amount owing at the time of $439,400 and the accounts of TCG all support the conclusion that a significant debt was owed to GTH. 64 The statements by Abboud and Mrs Abboud that only insubstantial payments were made thereafter and that the debt continued to increase are inconsistent with the documentary evidence that shows payments totalling $675,249.11 were made during the period 1 April 2006 to 30 March 2007. 65 In addition, it was acknowledged by Abboud in his affidavit evidence that on occasions Doughty made payments directly to suppliers of GTH, in lieu of direct repayments to GTH. 66 Any attempt to quantify the debt owed after 30 June 2006 would however involve speculation as there is a lack of accurate and comprehensive financial documentation. It is enough to record that there was a significant debt owed to GTH as at 30 June 2006, which is likely to have continued thereafter. Ownership of GTH 67 It is important to note at this stage that there is a disagreement as to ownership of GTH. This disagreement is relevant in assessing the likelihood of Doughty having signed the contentious documents referred to at paragraphs [7] to [9] above. Despite the structure of the company as outlined at paragraph [27], both parties acknowledge that it was originally intended to be a joint venture on the basis of equal interests. 68 Doughty gave evidence in cross-examination that, despite the fact he was for most of the time the sole director and sole shareholder of GTH, he never regarded the company as solely his. He considered Abboud his partner in that business. Indeed, the initials GTH stand for "George and Trent Haulage". 69 Doughty gave evidence of a conversation between himself and Abboud before the incorporation of GTH in September 2003 in which Abbout said: "Trent I've got a bad credit rating. I'd prefer it if my name was left out of GTH and you were named as its only shareholder and director. As long as it's understood that we each own half of GTH." 70 Abboud maintains that the original intention of equal shareholdings in GTH was overtaken by subsequent events, although he is not able to point to an express agreement. The assertion is based mainly on the fact, uncontested by Doughty, that Abboud made a contribution of $170,000 at the start of the business, while Doughty did not make any initial cash contribution. 71 It is also clear that Abboud was responsible for the day to day operation of GTH from December 2003 to June 2008. Jillian Abboud was the bookkeeper for the company and was responsible for the office administration. Abboud says that it should be inferred from these circumstances and the fact of the initial financial contribution that Doughty has no beneficial interest in the company. Doughty on the other hand says that Abboud's initial cash contribution was repaid over the course of the business and that consequently Doughty retained his half interest. 72 It is unnecessary to decide the true state of affairs regarding the ownership of GTH in these proceedings, as it is Doughty's state of mind which is important. Doughty believed, rightly or wrongly, that he retained a half interest in the GTH business. For this reason, he must have believed in June 2006 when the alleged agreement was made that any debt owed by his excavation business to GTH was at least to the extent of 50% a debt owed effectively to himself. 73 It is necessary to keep this in mind when assessing the probability that Doughty entered into the alleged agreement of mid-2006 as a way of extricating himself from his debts. The situation at that time was that a debt, which cannot be precisely quantified, was owed by Doughty's interests to GTH. Doughty assumed, however, that only half of that debt was owed to Abboud. This makes it less probable that Doughty would have entered into the agreement. 74 In addition, it is difficult to understand why Doughty, who was operating under severe financial pressure, would have given up his interest in one of his few realisable assets to satisfy the debt to GTH in circumstances where he had many other obligations and liabilities. Counsel for the defendants submitted that Doughty preferred to appease Abboud because of their close personal friendship. The more significant likelihood, in my view, is that the personal friendship between them would have caused Doughty to seek to delay payments to Abboud in the expectation that Abboud would be willing to carry him. The contentious documents - physical features and whereabouts 75 Doughty maintains that the signatures on the contentious documents appearing to be his are forgeries. In his affidavits and in cross-examination, he repeatedly denied signing the documents. 76 A report dated 4 September 2009 by a handwriting expert, Ms Novotny, was tendered by the plaintiffs. The relevant conclusions of the expert are outlined as follows: "[4] The examination of the signatures is limited by the reproduction nature of the questioned documents. Documents Q1 to Q3 [the relevant documents] are at least second generation facsimile reproductions. The poor quality reproduction nature of these documents precludes any proper consideration of the dynamic qualities associated with the execution of the questioned signatures … [17] The combination of observed similarities and differences in conjunction with the limitations discussed previously, preclude me from expressing a conclusion in probability terms … [18] On the basis of the available material, my observations are more supportive of a proposition that the questioned signatures were each written by a person other than the writer of the Doughty specimens rather than a proposition that they were each written by the writer of the Doughty specimens." 77 This evidence is of limited value in deciding the question of forgery. The report of itself is insufficient to ground a finding that the purported signatures are forgeries. It is, however, supportive of an inference of forgery. 78 The reliability of the report is limited by the fact that the original documents were not produced to the expert. Nor have they been produced to the court. In opening it was noted by Mr Einstein, counsel for the plaintiffs, and agreed by Mr Parsons, counsel for the defendants, that the parties did not know where the originals were. 79 In cross-examination of Fred Khalil and Gino Cassaniti, however, the possible whereabouts of the documents were revealed. When asked what happened to the documents after signing, Fred Khalil said that Gino Cassaniti had taken them back at the end of the meeting. Gino Cassaniti said unequivocally in cross-examination that the originals were at CAP Accounting. 80 Sam Cassaniti gave evidence that he conducted a search for the originals of the documents at the office of CAP Accounting but had been unable to locate them. The contentious documents - an unrecorded element? 81 I turn now to a significant feature of the documents, that is, that they do not record part of the alleged agreement under which Doughty relinquished his interest in Douabb in favour of Abboud. It is the contention of Abboud that the transferred interest was to be re-assigned to Doughty upon payment of the outstanding debt. This aspect is not stated. 82 Why would Doughty have signed documents that omitted this very significant element? Re-assignment upon payment of the alleged debt would have been of fundamental importance to Doughty at the time. 83 Gino Cassaniti prepared the documents. He was cross-examined about the reason why the second part of the alleged agreement, the re-assignment, was not included. The cross-examination of Gino Cassaniti on this issue was as follows: "Q. The document though doesn't contain an ingredient B in the arrangement; ingredient B being: Trent, if you repay the money within 6 and 12 months I will sign [sic; scil "assign"]things back again? A. No, it doesn't.

Q. Why not? A. Because these documents weren't going to be lodged.

Q. Where would you lodge them? A. You lodged them with ASIC. The agreement, no. The ASIC forms were not going to be lodged. They were to be put aside for now.

EINSTEIN Q. You know very well I'm not talking about the ASIC documents. I'm talking about the agreement … That was not going to be lodged any where? A. No, that doesn't get lodged.

Q. Can you please explain to his Honour why a document which you were instructed to prepare reflecting the arrangement did not reflect the arrangement as it was? A. It was just an oversight." 84 This evidence is entirely unsatisfactory. Having attempted some explanation based on "lodgment" and been forced to accept that that made no sense; Gino Cassaniti fell back on "just an oversight" as the reason why the documents did not reflect a centrally important aspect of the proposed agreement.

The alleged meeting - the evidence 85 Central to the proposition that the contentious documents were signed by Doughty at a meeting at the Glendenning property on 1 July 2006 is, of course, the proposition that such a meeting actually took place. It is to the evidence relevant to that question that I now turn. 86 In maintaining that a meeting took place at Glendenning on 1 July 2006, the defendants rely on the evidence of Abboud, Mrs Abboud, Fred Khalil and Gino Cassaniti. Each gave evidence that he or she saw Doughty sign the contentious documents at a meeting on that day. Both Doughty and Mrs Doughty deny that the documents were signed and further deny that any such meeting occurred. 87 Abboud's affidavit evidence was as follows: "Gino produced a document headed "Agreement". During the meeting Trent and I signed that document … I recall that Trent signed first and I signed after him. Gino then signed the document as witness in my presence and in the presence of Trent, Annette, Jill and Fred. During the meeting Trent also signed, in the presence of the same people the following documents … Resignation of Director of Douabb Pty Ltd … Resignation of Secretary of Douabb Pty Ltd." 88 Mrs Abboud's account on affidavit was as follows: "I attended a meeting in the boardroom at our place of business at 9 Enterprise Drive Glendenning. Trent Doughty, his wife Annette Doughty, my husband George, Gino Cassaniti and Fred Khalil were also present. We were all seated at the boardroom table. When I walked into the room, the others were all seated and talking. I sat down last … I am certain that Trent signed these documents during that meeting. We were all seated at the table and I saw Trent sign his name." 89 Fred Khalil deposed: "When we arrived at the Glendenning property Gino and I met with Trent, George, Trent's wife Annette Doughty and George's wife Jill Abboud. We all sat in the meeting room located in the office. We all sat at the boardroom table. Gino produced three documents. He spoke to everyone present but directed his conversation mainly to Trent and George and said words to the effect: "You both told me that Trent is going to give George his share of the property because Trent is having trouble paying for George's accounts. I've prepared some documents. One is an agreement for Trent to sign over Douabb and the land to George. The others are for Trent to resign as Director and Secretary of Douabb". Gino gave the three documents to George and Trent … George and Trent signed the documents. Trent signed all three documents." 90 Gino Cassaniti said in his affidavit: "Within the next few days I prepared three documents, an Agreement and two resignations … On or about 1 July 2006 I took these documents to the Glendenning Property. Fred Khalil who was another employed accountant at CAP Accounting accompanied me. We met with Trent, George, Trent's wife Annette Doughty and George's wife Jill Abboud. We met in the boardroom of the office at the premises. The meeting took about 1 hour. We were all seated at the boardroom table. I said to George and Trent: "I have prepared some documents for you to sign. Trent is going to resign as Director and Secretary of Douabb Pty Ltd. Both of you will sign an agreement that says that Trent is transferring his share of Douabb and his share of the yard to George." I handed the three documents to George and Trent. They looked at the documents. I then saw them sign the documents. Trent signed all three documents. George signed one of the documents." 91 All four witnesses were extensively cross-examined by counsel for the plaintiffs in relation to their recollections of the alleged meeting. 92 I quote first from the cross-examination of Abboud: "Q. Is your recollection of that meeting a fairly vague one or is it pretty crisp and accurate? A. I'll do my best.

Q. That is taken as a given, I'm sure you will do your best, but I ask the question again, is your recollection of that meeting a crisp and accurate one or is it otherwise? A. Yeah I remember most of it.

Q. When you arrived at the meeting did you arrive with anyone else? A. I've come by myself or with my wife, sometimes we drove in together, sometimes we've--

Q. So it would be you and your wife drove in together? A. Or I would have drove in myself.

… Q. And you tell his Honour that you've got a fairly accurate recollection of the meeting, yes? A. Yes.

Q. And therefore the signing of that document, is that correct? A. Yes."

… "Q. Is your recollection of the meeting on 1 July 2006 an accurate recollection? A. Yes I don't know if it is - I couldn't tell you exactly what date it was.

Q. Can you tell me what time of day it took place? A. I don't know, it could have been lunch, after lunch.

Q. After lunch? A. It could have been.

Q. And did you arrive alone? A. Arrive where?

Q. At the meeting? A. I can't remember that. I was in the office. I would have walked myself from my desk to the board room.

Q. Mr Aboud, may I hand up a copy of a plan. Just take your time; would you agree that that is more or less a rough plan of the board room at 10 Enterprise Drive, Glendenning? A. Yes.

Q. And the rectangle in the middle of the page is the board table, correct? A. Yes.

Q. On your evidence the people there were yourself and your wife Jill? A. Yes.

Q. Trent and Trent's wife Annette, that is seven people? A. Yes.

Q. Please inform his Honour to the best of your ability where everyone was sitting? A. I couldn't tell you that. We were everywhere.

Q. How does that happen? Where were you sitting, Mr Aboud? A. We were sitting around the table.

Q. You don't know where you were? A. No. I got up.

Q. Could you have been sitting - I will just hold this up - could you have been sitting on one side and Trent on the other side? A. We were sitting around the table.

Q. And yet on your evidence on oath you have deposed to your observation as to Trent signing a particular document? A. Yes I did.

Q. Were you standing over him as he signed? A. No.

Q. How do you know what he was doing? A. What do you mean how did I know what he was doing?

Q. How could you see from your vantage point what document he was signing? A. They were the two documents that Gino produced.

Q. How far away from you was he? A. I don't know, half a table, a couple of chairs down.

Q. Mr Aboud, you know, don't you, that one of the central issue in these proceedings is whether this particular alleged meeting actually took place? A. It did take place.

Q. And you have a very very clear recollection of that? A. What, that this meeting took place?

Q. And yet you are able to sit there and tell his Honour that you have no idea where you were seated? A. Well, we were sitting around the table, all of us were sitting around the table. Do you want me to tell you what I drank that day too? I can't remember." 93 The cross-examination of Mrs Abboud about the meeting was as follows: "Q. Do you have an accurate or a vague recollection of that meeting? A. A vague.

Q. A vague one. You can recall that when you walked in to the room everyone else was seated? A. Yes.

Q. And can you recall the time of day of the meeting? A. No.

Q. Can you recall the time you arrived at the meeting? A. No.

Q. And when you say they were all seated when you arrived, can you actually see the picture in your mind's eye as to where everyone was seated at the time? A. No.

Q. Can I assist you please by handing you this document, with a copy to his Honour and a copy to my learned friend. I would like you just have a look at that please. It is my understanding that is not to scale, but in general terms the layout of this board room, just have a look at where everything is and identify for his Honour whether this is a fair reflection of how things stand or stood in that room I should say as at July 2006? A. I don't recall.

Q. You don't? A. As at July 2006.

Q. When this meeting occurred? A. Exactly.

Q. Yes? A. Whether there was that particular desk in that corner or, I don't recall if that's right.

Q. All right. There was certainly a board table in the middle of the room, wasn't there? A. Yes.

Q. And can you see on the bottom right hand corner someone has very neatly written in red "door"? A. Yes.

Q. Was that where everyone came into the room? A. Yes.

Q. Is that where they entered? A. Yes.

Q. Let me ask you this. There were, on your evidence, seven people present at the meeting. Let me just remind you of who they were. There was yourself and your husband? A. (Witness nods).

Q. There was Mr and Mrs Doughty. That makes four. Then there was Mr Gino Cassiniti, Mr Fred Khalil. Six, actually, I am sorry? A. Six.

Q. Yes. Are you able to help his Honour by indicating where everyone was seated at the time? A. No.

Q. You have said in your evidence that you can remember Trent Doughty signing a document? A. Yes.

Q. I don't know on the basis of my understanding how big this table was, but was it longer, for example, than the distance from me to you? A. No. It was probably that long.

Q. Probably about that long? A. Yes.

Q. Mrs Abboud, you would accept from me, would you not, that unless you were very very close to Mr Doughty at the time he signed the document and unless you were actually looking at the document he was signing at that time you wouldn't really know what document it was, would you? A. Yep.

Q. You would? A. No, no, that's right.

Q. Of course. And so when you say on your oath that you saw Mr Doughty sign a document, are you saying in effect that you were sufficiently close to him to be able to give that evidence? A. Yes.

Q. You were sufficiently close to him? A. Well, if I had seen him sign the document, yes.

Q. Yes. So you were then sitting next to him or just opposite him; is that correct? A. I was near him.

Q. Near him, I see. But sufficiently near him to see him actually sign the document? A. Yes.

Q. Could you read what was typed on the document when he was signing it? A. I could read Douabb at the top of the letter. I couldn't read everything else. I could read that.

Q. You could read that at the top of the letter? A. Yes.

Q. Douabb at the top of the letter? A. Yes.

… Q. Could you open up the big fat white book please and could you turn please to page 167? A. Yes.

Q. Now, I can see the word "Douabb" appearing towards the top left hand corner of that page. You are telling his Honour that you could see that word? A. Yes.

Q. How did you know then what the other words said? A. I didn't know what the other words said.

Q. But you see, my problem, Mrs Abboud, is that you have actually given evidence on oath that, "I saw George and Trent sign the documents. Gino witnessed one of them. I did not read them carefully", you say? A. Mmm.

Q. But then you annex them? A. Sorry, then I?

Q. Then you attach them to your affidavit? A. Right.

Q. And I just want to be absolutely fair to you so that you know where I am coming from. I am just asking you to identify, Mrs Abboud, how with great confidence you can actually inform his Honour that you saw Trent sign this document or the original of it when all you saw on your own evidence is the name Douabb? A. I can't explain it.

Q. Turn please to page 169. That is a document entitled Agreement, isn't it? A. Mmm.

Q. Now, unlike the previous document, the word Douabb is not very prominent on that document, is it? A. Yes.

Q. It's sort of buried in it somewhere I think. Is it the case then that when we are talking about this document you didn't actually see the word Douabb at the top of the page? A. I don't understand what you are asking.

Q. Your evidence, as I understand it, is to this effect, and please correct me if I am wrong, you think that you saw Trent Doughty sign these documents? A. (Witness nods).

Q. He was sitting nearby you. You have told his Honour a little while ago that you can recall seeing the word Douabb on the documents? A. Mmm.

Q. At the top, I am sorry. But you can't recall seeing anything else on the documents. Is that right so far? A. On that document I thought you were referring to. The Douabb document. I couldn't read anything further in that Douabb document.

Q. I see. Thank you. So that string of questions and answers applies to the documents on pages 167 and 178; is that right? A. Yes.

Q. What about 169, the agreement? A. Mmm.

Q. Now, can you recall Mr Doughty signing that document? A. I know that he signed three documents.

Q. How do you know this was one of them? A. They were all signed together at one time.

Q. When is the first time you saw this document, that is the page 169 document? A. Well, I am assuming I would have seen it after he signed it, after we walked out of the room originally and then I know my husband had copies of it in a folder.

Q. I see. What folder was that? A. Just an envelope.

Q. And where are the originals because no-one has been able to find the originals? A. I don't know if they were originals or not. I don't know.

Q. So the basis upon your belief that you saw Mr Doughty sign the documents is that you saw him sign three documents together? A. (Witness nods).

Q. You believe that this is one of them? A. (Witness nods).

Q. And that belief is based upon your observation as to what happened after the meeting? A. Well, I'd heard discussions prior to the meeting that that's what we were going in for, yes." 94 Cross-examination of Fred Khalil on the topic went as follows: "Q. You were told about the meeting by Gino? A. Correct.

Q. And you went with Gino to the meeting room, is that correct? A. Sorry?

Q. The place at which the meeting took place, you arrived there with Gino? A. Correct.

Q. And when you arrived who was there in the board room at which the documents are said to have been signed? A. Trent, Annette, George, Jill, myself and Gino.

Q. When you arrived you and Gino weren't there, if you went together; there were only some other people already there. Who was already there? A. Annette, Trent, George and Jill.

Q. Do you have a fairly accurate recollection of that meeting? A. I don't really.

Q. Mr Khalil, irrespective of where the bookshelves were, are you able, relative to others sitting at the table to indicate to his Honour on this diagram where you were sitting? A. I don't remember.

Q. Do you remember who was sitting next to you? A. No.

Q. Do you remember who was sitting opposite you? A. No I don't.

Q. It was a rectangular table, was it? A. Yes it was, I think.

Q. For all you know you might have been sitting at one head of the rectangular table and Mr Doughty might have been sitting on the other side? A. I don't remember.

Q. But that is possible, isn't it? A. I don't remember.

Q. You don't remember, but it is possible, isn't it? A. Possible.

Q. You have given evidence in these proceedings that on 1 July 2006 you were present in the room when Trent and George put their names, in other words signed, certain documents? A. Correct.

Q. Could you please have a look at this folder, (Exhibit A shown) and you can see Mr Khalil that is divided into various tabs. Go to tab B and turn the pages over until to get to 167; are you there? A. Yes.

Q. These are copies of the documents which are annexed to your affidavit, aren't they? A. Correct.

Q. You would agree with me, wouldn't you, that unless you were sitting next to or very very close to Mr Doughty you would have had no way of knowing what documents he was signing? A. Could you repeat that question?

Q. Yes, you would agree with me, wouldn't you, that unless you were sitting right next to Trent, or very close to him, you would not have known what he was signing at the time? A. No I don't agree with that.

Q. What was it about the occasion on 1 July which convinces you that you saw Trent Doughty sign those documents? A. It was in front of me, I was in the meeting.

Q. You are saying that Mr Doughty was in front of you when the signed the documents? A. Yes, it was in the room.

Q. He was in the same room? A. He was in the same room.

Q. You saw him sign some pieces of paper? A. Mm.

Q. How do you know what pieces of paper he signed? A. Because usually the table - from memory usually the table had no pieces of paper on it.

Q. Is the evidence you have just given the basis upon which you have sworn on oath that you saw Mr Doughty sign those documents? A. Sorry?

Q. Is the evidence that you have just given to his Honour the basis upon which you swore on your oath that you saw Mr Doughty sign the documents? A. Yes I did." 95 Cross-examination of Gino Cassaniti on the subject was as follows: "Q. You have a fairly accurate recollection of the meeting, on your evidence? A. Yes.

Q. What time of day was it? A. I don't know, mid-morning, afternoon, I don't know. I would have to check my diary.

Q. When you arrived at the Glendenning property on 1 July, who was there? A. They were all there, all the time they were there, every day.

Q. When you walked into the room in which the documents were signed, were there people there already seated? A. Yes. It was a board room where they had their estimators, like a meeting room, who had desks in there as well, and I think they told them to leave and we all sat there.

Q. And in the middle of the room there is a rectangular table? A. Yes.

Q. And that is where you were all seated? A. Yes.

Q. Are you able to write down on the document you are holding, where around the table you were seated? A. I wouldn't remember where I was seated.

Q. Are you able to inform his Honour of any recollection at all as to who was sitting next to you at the time? A. No. We are talking about almost four years ago?

Q. But you know, don't you, that the holding of the meeting is a most important issue in these proceedings? A. Right.

Q. And you swore an affidavit, didn't you, in which you described the meeting as lasting for about an hour? A. Yes.

Q. And you stated in your affidavit that you said to the people around the table, "I prepared some documents for you to sign. Trent is going to resign as director and secretary of Douabb. Both of you will sign an agreement that says Trent is transferring his share of Douabb and his share of the yard to George." That evidence is to the best of your recollection, isn't it? A. Yes.

Q. But you are telling his Honour that in your mind's eye you have no idea relative to the other participants in the meeting where they were or where you were seated? A. It is not something that I would pay attention to normally, to stay in my memory.

Q. You can recall that you were actually seated? A. Yes, yes of course.

Q. When you set out the explanation that you gave them in your affidavit - I am referring to para 14, I have just read out part of it to you - you were really telling them something that they already knew, as I understand it. There was no need for you to say to them "Trent is going to resign as director, both of you will sign the agreement." A. I think it was more to explain to Annette the meeting.

Q. You didn't know that Annette had any idea of this before the meeting, is that right? A. No, she had an idea.

Q. What happened in the rest of the hour? A. It was more about a restructure of their business affairs and trying to get out of this hole that they were in. Trent was in - the company was trading insolvent. We had to sort it out, to sort out his problems." 96 It is relevant to quote also a later part of Gino Cassaniti's cross-examination: "HIS HONOUR

Q. Let me understand this; you say that you and Fred arrived together at the meeting? A. Yes.

Q. And that the other four people, all four of them were already in the room? A. No, not until - when you would walk in there was reception, and then Annette, Trent, Jill and George's office and the board room was right here. If you look here, there is a hallway.

Q. Who was in the meeting room when you first walked in? A. They had two or three guys, estimators, working in there.

Q. Were any of the other people involved in the meeting, Jill, George, Trent or Annette, in the meeting room when you went into it first? A. No, no, we all went in together. They got rid of the people."

Abboud, Mrs Abboud, Fred Khalil, Gino Cassaniti - associations 97 Findings of credit are central to this case. It is to that matter that I now turn. 98 Counsel for the plaintiffs submitted that the evidence of Abboud, Mrs Abboud, Fred Khalil and Gino Cassaniti about the supposed meeting of 1 July 2006 is false and concocted and the result of collaboration between the witnesses. 99 It is said against the four witnesses that they lack objectivity and as a result of this their evidence is brought into question. This submission pays attention to the fact that Abboud has a close personal relationship with all the witnesses. One, of course, is his wife, although at the time of the hearing they were not living together. The relationship between Abboud and each of Fred Khalil and Gino Cassaniti requires closer examination. It is said by Doughty that those witnesses should be found to have a propensity to give evidence favourable to Abboud because of this relationship and their evidence therefore cannot be relied upon. 100 Fred Khalil is the brother-in-law of Abboud, having married Abboud's sister, Catherine, on 7 November 2009 during the course of the trial. Fred Khalil gave evidence that he had known Catherine for about three years and that Abboud had introduced her to him. He acknowledged that he had both a professional and personal relationship with Abboud before the start of his personal relationship with Catherine. 101 Abboud and Gino Cassaniti were among several men who spent about two weeks in Las Vegas with Fred Khalil before his marriage to Catherine. Abboud said in evidence that the time in Las Vegas was spent "flat out and having fun". Several photographs of members of the party in Las Vegas were admitted into evidence. When shown one of the photographs and asked if he remembered who had taken it, Abboud answered: "I would not remember. I was too intoxicated." 102 The photographs show the group of men - including Abboud, Fred Khalil and Gino Cassaniti - in jovial mood enjoying themselves. A photograph of a similar group of men in like circumstances at Abboud's home on an occasion he could not identify was also put into evidence. 103 It is clear that Abboud, Fred Khalil and Gino Cassaniti were friends who mixed socially. Abboud's relationship with Gino Cassaniti was one of friendship transcending a mere professional connection of accountant and client. They socialised together. They drank together. They spent two weeks together at an extended buck's party in Las Vegas for part of which, at least, Abboud was "too intoxicated" to remember who was photographing him. 104 Fred Khalil was, of course, part of the Las Vegas group. It was his forthcoming marriage that was the reason for the visit. He was on intimate personal terms with Abboud. By the time Fred Khalil gave evidence, the affinity had been further strengthened by his marriage to Abboud's sister. 105 Gino Cassaniti gave evidence that Abboud had been a client of the Cap Accounting firm for about 10 years and was also a personal friend. In cross-examination, Gino Cassaniti attempted to distance himself from Abboud: "Q. You were the person responsible for the management of George's affairs within CAP Accounting? A. I was responsible for his accountancy work only.

Q. As well though he was a social acquaintance of yours? A. Yes, we did see each other socially.

Q. And was that frequent? A. No, not very frequent, no.

Q. You were drinking mates; weren't you? A. When you socialise with someone, you do drink."

106 Abboud himself painted a quite different picture. After reference to a recent episode of conflict between himself and Gino Cassaniti, Abboud's cross-examination continued: "Q. Before that personal conflict arose how would you describe your relationship with Gino Cassaniti? A. Gino became very close because he did a lot of things for me and I don't forget things like that so it was professional plus a, plus a - how would you say it - like as well as a friend?

Q. That would explain why in the fourth photograph he has his, in the third and fourth photographs he has his arm around your shoulders, that's right? A. That's right because I have not got a short memory. I remember the stuff people do for me.

Q. So before your falling out, as you have described it, you were extremely close friends? A. All good friends.

Q. Very very good friends? A. Good friends.

Q. You drank together? A. Good friends.

Q. You socialised together? A. Good friends.

Q. You have not answered the question. Did you drink together? A. Yes, of course.

Q. Did you socialise together? A. Yep.

Q. And in addition to all that he was your accountant? A. Yes.

Q. And was he your financial adviser also? A. You could say so.

Q. He helped you in terms of advice for the purposes of your business? A. Yes, time to time." 107 The evidence of Abboud, Mrs Abboud, Fred Khalil and Gino Cassaniti must be approached on the footing that the last three have such a close relationship with the first as to give rise to a well-based possibility that they might tailor their evidence to suit his case. Credit - Doughty 108 Counsel for the plaintiffs submitted that Doughty was a reliable and truthful witness who freely made appropriate concessions which were adverse to his interests. The defendants submit that any admissions made were reluctant and that Doughty was an unreliable witness who told untruths and sought to manipulate the evidence in order to support his own version of events. 109 For the reasons that follow, I am satisfied that Doughty was a generally reliable witness, albeit a witness who had difficulty recalling specific details. Also, his evidence generally accords with commercial probabilities and objective evidence. 110 Counsel for the defendants submitted that Doughty gave untrue evidence in relation to three fundamental matters namely; whether money was owed by him to Abboud as at mid-2006, the respective contributions made by himself and Abboud to the purchase price of the Glendenning property and whether he had, as at October 2007, $1,000,000 available to him for investment in a motor cycle shop or other business. 111 In relation to the state of the indebtedness at mid-2006, the defendants' assertion that Doughty gave untrue evidence is founded on two statements made in affidavits. The first was in an affidavit of 2 November 2009: "To my recollection George was never owed any money by me." 112 The second statement was made in an affidavit of 22 July 2009, which was not read in the proceedings, but states: "I have no recollection of TCG or Trent's Excavations owing moneys to Sydney Sand and Soil and GT Haulage as described in paragraph 4 of the Jillian Abboud Affidavit." 113 In order to appreciate the significance of these statements it is necessary to set out the extract in Mrs Abboud's affidavit referred to by Doughty. The relevant paragraph reads: "By mid 2006 TCG and Trents Excavations owed GT Haulage and Sydney Sand & Soil over $600,000. I do not know the exact amounts. The total amount owing by these 2 companies and by Civil Construction today is about $680,000." 114 Counsel for the defendants submitted that Doughty's denials in the face of the proven debt adversely impact upon his credit. It is therefore necessary to have regard to his cross-examination on the subject which was as follows: "Q. And you also put your case on the basis that neither the company Trents Excavations nor Trents Civil Group or TCG Group, as it became, owed moneys to GT Haulage or Sydney Sand & Soil in the middle of 2006. That's also part of your case, isn't it?? A. I would not have owed money to Sydney Sand and Soil. Probably would have owed money to GT Haulage.

Q. You think that is so? A. I think so, without any paperwork in front of me.

Q. Well, put it another way. How much do you accept was owing, if anything, by TCG or Trents Excavations to Sydney Sand & Soil and/or GT Haulage? A. To Sydney Sand & Soil in 2006 would have been zero if not very little and to GT Haulage I could not tell you off the top of my head.

Q. It was hundreds of thousands of dollars, wasn't it? A. I could not tell you off the top of my head.

Q. Sir, would you accept that TCG and/or Trents Excavations owed to GT Haulage in the middle of 2006 sums measured in hundreds of thousands of dollars for work performed in relation to the excavation jobs which you had undertaken? A. It's quite possible.

Q. And how those debts came about was basically that the excavation business and the companies through which you conducted it were not paying the accounts of GT Haulage for the haulage work being performed, correct? A. No, that is not correct. Obviously they were getting paid.

Q. Do you understand the question? A. I understand the question, but the excavation business always looked after the haulage business as, like, a big brother, so it was always taken care of …"

115 Doughty readily conceded that money was owed to GTH. He was unsure as to the amount and he questioned the assertion that he did not make regular payments to discharge the debt. 116 Counsel for the defendants noted in submissions that the denials made in Doughty's affidavits were not qualified by suggesting that it was limited to the amount of the debt and as such the denials must stand in relation to the entire debt. 117 It must be remembered however that the statement noted at paragraph [112] above was not relied on by the plaintiffs in these proceedings. In addition, Doughty's evidence that he did not owe money to Abboud, as opposed to SSS and GTH, is not untrue. 118 Doughty's statement in cross-examination that there was a debt but that substantial payments were made is supported by the findings outlined at paragraph [53] above. 119 The second circumstance said by counsel for the defendants to adversely impact upon Doughty's reliability as a witness is his evidence of the respective proportionate amounts provided by the parties to the purchase of Glendenning. 120 Doughty disputes the claim by Abboud that he provided 50% of the cash consideration on acquisition of the Glendenning property. Doughty's position is that Abboud contributed some 25% - 33%. He says in his affidavit of 22 July 2009: "[15] I do recall a meeting with Abboud and a solicitor (Phillip Beasley) said words to Abboud to the effect: "Tepall Pty Limited's interest as beneficiary in the Douabb Trust is 25% in contrast to Rosecell Pty Limited's interest of 75%" This accorded with my understanding of an agreement between Abboud and I based upon the proportionate contributions by Tepall Pty Limited and Rosecell Pty Limited to the purchase price paid by Douabb Pty Limited for the Glendenning property." 121 Doughty explained in an affidavit his recollection of the source and application of funds for the Glendenning purchase. This was, of necessity, a reconstruction from sources available to him when he was preparing his evidence. He referred to a deposit of $42,656.23 provided by him, leaving a balance of $811,109.56 payable on settlement. He then referred to $645,920 provided by a mortgagee bank and $250,502.11 from Trents Excavations, of which $90,583 was provided by Abboud and $136,104 was provided by Doughty (obtained by him as a loan from his parents). This left an unexplained deficiency - called by Doughty the "missing link" - of $23,815.11. 122 In fact, Doughty's figures left out of account stamp duty and legal costs of $35,941.70, so that the unexplained deficiency in funding was $59,756.81. He accepted that he could not say where this balance had come from. 123 I do not accept that this evidence reflects adversely on Doughty's credibility. He candidly accepted that he was merely doing his best to piece things together from sources available to him (including recollections of his wife), had overlooked the stamp duty and legal costs and had no explanation for the "missing link". The evidence was straightforward. Equally straightforward was his acceptance of the proposition that not all of the money from his parents had been received at the time of settlement and that there was an element of ex post facto adjustment in his presentation. 124 The third basis on which Doughty's credibility was attacked centred on his statement in an affidavit that, as at October 2007, he had available to him some $1 million for investment in a motor cycle business as a means of leaving the excavation industry. 125 In the course of cross-examination, Doughty was taken through aspects of his financial situation at that time. Various debts and obligations were identified. It was obvious that he had failed to take account of a number of matters in coming to his estimate of $1 million and that the net amount available was much less - perhaps even zero. 126 I do not regard this as reflecting adversely on Doughty's credibility. It showed, rather, that he had a poor grasp of financial realities and tended to accentuate at the positives and wish away the negatives. This is consistent with several of his companies having failed financially. 127 As a separate matter, I refer to the following passage in Doughty's cross-examination: "Q. You did discuss from time to time with Mr Abboud an idea of opening a motor cycle shop? A. For myself?

Q. That was something that you talked about from time to time over the years as something that you would like to do in the future, correct? A. Not over the years, it was at that sort of time, a change." 128 It is clear from this interchange that Doughty actually operated under the belief at the time, albeit an incorrect belief, that if he rationalised his assets and discharged his debts he would have sufficient funds to explore the possibility of opening a motor cycle shop. 129 Contrary to the submissions of the defendants' counsel, this was not artificially constructed for the purpose of making it less likely that Doughty would leave the business to Abboud but rather was an actual misapprehension on the part of Doughty as to the true state of his financial affairs. The reliability of Doughty's evidence is not adversely affected by this aspect. It merely demonstrates that Doughty's understanding of his business finances was limited. Credit - Mrs Doughty 130 As Doughty's wife, Mrs Doughty may be expected to wish to further his cause. Quite separately, the defendants say that the reliability of her evidence is affected by her denial of the existence of the debt owed by Doughty's businesses. 131 In an affidavit of 22 July 2009, Mrs Doughty, in response to the paragraph set out at paragraph [113] above, stated: "As the book keeper and office administrator of Trents Excavations and TCG Group I was well acquainted with the debts of those companies. I deny that they were in debt to GT Haulage and Sydney Sand & Soil as alleged". 132 Her cross-examination on this issue was as follows: "Q. In July 2006 you understood, didn't you, that the excavation business was in financial trouble? A. Yes.

Q. That Trent himself was in financial trouble with personal obligations arising from the business? A. No.

Q. You knew, didn't you, that Trents Civil Group was behind in paying the accounts of GT Haulage as at that time? [June 2006] A. No.

Q. Well, I suggest to you that as at May of 2006 Trents Civil Group owed about $240,000 to GT Haulage. That would be right, wouldn't it? A. I'm not sure.

Q. Did you know that Mr Abboud was asking Trent, your husband, from time to time, to fix up the GT Haulage account? A. They often spoke about that.

Q. That was … A. That's normal business.

Q. But that was the case, wasn't it, as at June and on 1 July 2006? Trent's company did owe several hundreds of thousands of dollars to GT Haulage and could not pay it? A. No.

Q. You say that's just not true? A. Eventually it could have paid it.

Q. No, but at the time Trent could not pay it? A. On time.

Q. Well, he could not pay it in June of 2006, could he? A. The whole amount?

Q. He was behind on that account by hundreds of thousands of dollars, wasn't he? A. I'm not sure of the amount." 133 This cross-examination shows that the denials of Mrs Doughty are substantially concerned with the quantum and the assertion that Doughty could never have repaid the debt. Accordingly, the reliability of her evidence is not adversely affected. Credit - Gino Cassaniti 134 The evidence of Gino Cassaniti was inconsistent and at times unresponsive and nonsensical: see, in particular, paragraph [83] above. His answers in cross-examination raise serious questions about his professional competence, honesty and integrity. His evidence must be approached with the greatest caution. 135 The first matter prompting this assessment relates to the allegation by counsel for Doughty that, at various times Abboud used the alias "Anthony Matter". Abboud was shown a document which contained purported photocopies of a driver's licence in the name of "Anthony Matter". The photograph on the licence was obviously a photograph of Abboud. Copies of a Medicare card in the name of "Anthony Matter" and a National Australia Bank ATM card in the name of "Anthony Matter" were also shown to Abboud. The following exchange took place thereafter: "Q. You've never seen that before? A. Never in my life.

Q. You can see that the name on it is Anthony Matter, can you see that? A. I can see it.

Q. You have no explanation for his Honour as to how that came about? A. I wouldn't have a clue.

Q. Do you have any other forms of identification on you as we speak? A. No.

Q. Just your driver's licence. I suggest to you Mr Abboud that the truth is that you have at times called yourself Anthony Matter haven't you? A. Never.

Q. And you used that false identification in order to prove that you were a person by the name of Anthony Matter? A. Never." 136 In cross-examination Gino Cassaniti was asked questions about "Anthony Matter". He denied any knowledge of the person: "Q. … Now, does the name Anthony Matter on the very front of the folder mean anything to you? A. No.

Q. You actually began to shake your head in answer to my question before I had finished it. Have you heard of the name Anthony Matter before? A. No.

Q. You are telling his Honour, on your oath that, prior to giving this evidence that name hasn't been mentioned to you? A. No." 137 Gino Cassaniti was then taken by counsel through a number of documents which make it impossible to accept this denial. 138 The first document was a trading history search, in relation to Anthony Matter, undertaken by a credit agency on 9 July 2007, on the instructions of CAP Accounting. Gino Cassiniti's explanation for this was that the search must have been authorised by his brother David, the only other principal of the firm at that time, and that this had occurred without his knowledge. 139 The second document was a lease between Blue Mountains Helicopters Pty Ltd, of which Gino Cassaniti was a director, as landlord and Anthony Matter and Brett Jones as tenants. This document was executed on behalf of the landlord by Gino Cassaniti. When asked whether this document assisted him in his recollection of the identity of Anthony Matter, Gino Cassaniti said that it did not but then claimed that he often signed blank leases to be filled in at later dates by staff of CAP Accounting because he was constantly out of the office because his work took him elsewhere. 140 Gino Cassaniti was cross-examined in relation to his knowledge of the companies "AU Trades Services NSW Pty Ltd" and "NG Investments Aust. Pty Ltd". The registered office of each was at CAP Accounting. Anthony Matter was shown by his ASIC records to be a former director of both companies. Gino Cassiniti said that he was not familiar with these companies and that he had no knowledge of them. 141 I do not accept that, in a firm with only two principals, Gino Cassaniti could be unaware of the "Anthony Matter" thus referred to in several documents held by the firm; the more so because he was himself a signatory to one of the documents. 142 I next refer to a purported loan agreement of 2 February 2007 between SSS, as lender, and Chobe Pty Ltd, Volwave Pty Ltd and Blue Mountains Helicopters Pty Ltd, as borrowers. The document was drafted by Gino Cassaniti and executed by him on behalf of the borrowing companies and by Abboud for the lender, SSS. The recitals to the loan agreement state: "A. The Lender has agreed to lend and the Borrower has agreed to borrow the Principal Sum referred to in the Reference Schedule at the end.

B. The Borrower acknowledges receipt of the Principal Sum." 143 The loan agreement defines the principal sum as $1.5 million. It is clear, however, that no such transaction ever took place. Again, I quote from the cross-examination of Gino Cassaniti: "Q. Can you please explain to his Honour the circumstances in which this came about? A. There was no physical loan as in money given by Sydney Sand to these companies. They were doing construction works on the property and it was an agreement where if they build the factories to a value of 1.5 million, they got some form security for it.

Q. And this document was stamped as a deed of loan; wasn't it? A. Yes.

Q. As you have just said in evidence, it wasn't what it purports to be, was it? It wasn't a loan at all; was it? A. It was an agreement. Look, I'm not a lawyer and I am not saying I am a lawyer but it was an agreement to put in place to protect them because merely putting - fixing up a property does not give you a caveatable interest so the people that were working on the property had to protect their interests." 144 Gino Cassaniti admitted that he understood what a loan was. He was under no misapprehension as to the true state of affairs in relation to the agreement. Yet he was apparently prepared to execute an agreement evidencing payment of $1.5 million by way of a loan when such a transaction never occurred. 145 Gino Cassaniti is thus shown to have been party to the concoction of a fictitious transaction. 146 Reference is next made to the circumstances surrounding a caveat lodged by Nazard Group Ltd ("Nazard") on the title to the Glendenning property on 17 October 2010. Gino Cassaniti as an "authorised representative" of Nazard made the statutory declaration that accompanied the application. The declaration stated that the basis for the caveatable interest claimed was that Nazard contributed moneys towards the "purchase, mortgage and improvements of the property". 147 In cross-examination, Gino Cassaniti gave the following evidence: "Q. It has been a contest between two possible sources, one being the George Abboud corner, and one being the Trent Doughty corner. Is there anyone else that you are aware of from whom the purchase price might have come from? A. No.

Q. What is the basis of your understanding as to where the purchase price might have come from? A. George Abboud and Trent.

Q. On your understanding, Nazard Group contributed nothing towards the purchase; isn't that correct? A. That's correct. The interest was assigned to Nazard Group.

Q. Now your evidence just a little while ago was that you were aware that the two possible sources of purchase moneys for the acquisition of the Glendenning yard was, on the one hand, the George Abboud corner, as I described it and, on the other hand, the Trent Doughty corner? A. Correct.

Q. What has Nazard Group Ltd got to do with that? A. Well, George, to protect the money I had lent him, had given that interest to me and I had assigned it over to Nazard Group.

Q. But is says here and you have verified the truth of it by making the Statutory Declaration, that Nazard Group contributed moneys towards the purchase of the property? A. Yes, it was.

Q. Is that true or false? A. Well, I will tell you how it works, your Honour. I lent George 90,000 when he bought his first truck. Now, instead of repaying me back, he bought this property. He asked me could he keep the money and buy this property. I said, "No problem". So, in actual fact, instead of being repaid, he used partly my funds. So I wanted to protect those funds.

Q. But the entity seeking to protect an asserted interest in this document isn't you, it is Nazard. A. That's correct." 148 The effect of this evidence is that Gino Cassaniti was aware that Nazard did not contribute any money towards the purchase of the Glendenning property yet made a statutory declaration that it had done so. Gino Cassaniti is thus seen to have become party to a false instrument. 149 It is necessary to consider the Nazard matter further. The NAB loan facility which provided a large part of the funds used by the parties to purchase the Glendenning property was secured by a mortgage over that property and a fixed and floating charge over the assets of Douabb. Gino Cassaniti, as Douabb's accountant, was aware of this and told Nazard of it. Nazard obtained an assignment of the charge from the NAB upon payment of approximately $530,000. Gino Cassaniti did not inform his client Douabb that an assignment had occurred. Nor did he inform his client that he had played a part in arranging the acquisition by Nazard. 150 Gino Cassaniti thus used to the advantage of Nazard knowledge acquired from his position as Douabb's accountant. Nazard was enabled to acquire the charge because of the facilitation of Gino Cassaniti. Cross-examination about this flagrant breach of professional duty proceeded as follows: "Q. Mr Cassaniti, you had a grave conflict of interest between, on the one hand, the interests of your client, Douabb and, on the other hand, the interests of your clients, to whom you referred as lenders to Trent and George? A. Um-hmm.

Q. You preferred one set over the other? A. Yes, I did.

Q. That was wrong; wasn't it? A. I don't think so." 151 I turn next to Gino Cassaniti's evidence about certain "declarations of non-repayable gift". In cross-examination he was taken to two documents so entitled. Each purported to be a declaration, signed by Gino Cassaniti that he had made a gift. One was a gift of $40,000 to Abboud; the other a gift of $175,000 to Mrs Abboud. 152 Gino Cassaniti denied that he had signed those documents and that he even knew of their existence. He also denied that he had given money to the Abbouds. It is submitted by the plaintiffs that Gino Cassaniti did in fact sign the two documents for the purpose of deceiving a financier that the Abbouds had certain funds so that the financier would lend them money to purchase certain properties. 153 Counsel for the plaintiffs showed Gino Cassaniti a facsimile transmission sent from CAP Accounting to Angelo Grasso of Simplicity Finance. The facsimile was dated 2 March 2006 and had as its subject the "Abboud's". Under the heading "comments" was a typed notation, which read in part "please find attached … confirmation of non-repayable gifts to George Abboud, Jill Abboud and Monica Perez". The "declarations of non-repayable gift" were included in the attachments to the fax. The facsimile was purportedly sent by Fred Khalil and approved by Gino Cassaniti. 154 Fred Khalil stated in cross-examination that he had no recollection of the fax but conceded that he must have generated it and that Gino Cassaniti must have authorised it. It was accepted by Gino Cassaniti, as a general proposition, that he was responsible for the supervision of Fred Khalil and that Fred Khalil reported to him. For these reasons, Gino Cassaniti's statement that he had no knowledge of the "declarations of non-repayable gift" cannot be accepted. I find that he signed them and that he did so knowing that the statements in them were false. 155 For the several reasons stated at paragraphs [134] to [154] above, Gino Cassaniti is not a witness of truth and I do not accept his evidence except to the extent that it is against interest, is corroborated by other acceptable evidence or accords with the probabilities objectively ascertained. Credit - Abboud 156 The evidence of Abboud about the debt owed by the excavation business to the haulage business, as outlined at paragraphs [43] to [44] above, is indicative of his general tendency to say on oath whatever was consistent with his commercial interests irrespective of the truth. 157 In cross-examination, he was adamant that the indebtedness remained and that any payments made by the Doughty businesses were negligible and inconsequential. It was only upon being shown documentary evidence, which showed the contrary that Abboud was willing to recant. 158 It is also relevant to recount the following evidence given by Abboud in cross-examination in respect of the purported loan agreement referred to at paragraph 142 above: "Q. Now are you telling his Honour that no loan such as that described in this document ever took place? A. No, it was an agreed sum for work that was going to be done.

Q. Sydney Sand & Soil never lent these companies $1.5 million, is that correct? A. No. It does owe us a bit of money because we did do some work.

Q. Are you able to explain to his Honour how you came to sign a document which indicates in fact such a loan was made by Sydney Sand & Soil? A. It was agreed myself because we were going to do work, there was an agreed sum. It was like an agreement. I took this as more than an agreement, than just an agreement. This is an agreement we came up with to do the works and how we are going to do it.

Q. You were prepared to sign a document which was quite misleading, isn't that correct? A. Mate, I am just a knock-around western suburbs bloke. I don't go into this formal stuff." 159 Abboud must therefore be taken to have executed the loan agreement on behalf of SSS knowing that it reflected a fictitious transaction. 160 On the basis of the foregoing paragraphs [156] to [159], I have very strong reservations indeed about the truthfulness of Abboud and regard his evidence as unreliable unless either uncontentious or corroborated. Credit - Fred Khalil 161 In cross-examination of Fred Khalil the following interchange took place : "Q. Does the name Anthony Matter mean anything to you? A. Anthony Matter?

Q. Doesn't? A. No, it doesn't." 162 Fred Khalil was then taken to an ASIC search of NG Investments Aust. Pty Ltd, a deregistered company, which had its registered office at CAP Accounting from 19 March 2007 to 21 June 2009. The search recorded that Anthony Matter was a director of the company from 19 December 2007 to 21 June 2009. 163 Counsel for the plaintiff also took Fred Khalil to an email sent from Khalil's personal email account on 24 June 2008 to a client of the firm in response to a request by that client for Khalil to forward the details of the director of NG Investments Pty Ltd. Khalil sent a reply stating: "his name is Anthony Matter do you need his personal details" 164 There is also the lease as outlined at paragraph [139] above between Blue Mountains Helicopters Pty Ltd, as landlord, and Anthony Matter, as one of two tenants. Gino Cassaniti's signature, which appears on the document, was witnessed by Fred Khalil. When questioned about this Fred asserted that he could not recall the document in question. 165 On the basis of the matters in paragraphs [161] to [164] above, I have strong reservations about the truthfulness of Fred Khalil. Credit - Mrs Abboud 166 Mrs Abboud was the bookkeeper for GTH and gave evidence as outlined at paragraph [45] above to the effect that the debt was due and owing and that the situation did not improve to any material extent. As the person responsible for the accounts, she was in the best position to be able to give accurate information to the court however her evidence when compared with the financial records was shown to be completely inaccurate and unreliable. 167 It was only in cross-examination after she had been taken through the records Mrs Abboud accepted that payments had in fact been made in contradiction to her assertion that the debt had remained unpaid. She thus either deliberately told an untruth or had faulty recollections of events at that time. 168 It is relevant to refer also to Mrs Abboud's evidence about the production of GTH's accounts for the financial year 2006/2007. As noted at paragraph [46] above, these accounts were material to the question whether the debt remained owing after mid-2006. 169 An order made on 23 October 2009 required the defendants to advise the plaintiffs of the physical location of all computer systems containing, amongst other information, the MYOB files pertaining to GTH for the financial years ended 30 June 2006 and 30 June 2007. It also ordered the defendants to do all things reasonably necessary to enable Ms K Faros, an expert witness, to have access to the systems. 170 Mrs Abboud gave evidence that attempts by her to access the electronic file in question were unsuccessful because the information had been stored on a central network database at the Marsden Park premises to which her current office computer was no longer connected. 171 This evidence was supported by Ms Faros who in her report of 30 October 2009 stated: "[5] Upon attempting to log on to the computer system to access the GTH and SSS file, the login on screen indicated that the computer system was part of a network as the Windows log on screen had the default user name and server displayed. [6] This indicated to me that the computer files provided to me had previously been stored on a file server forming part of a larger network to which I did not have access." 172 Mrs Abboud gave evidence that upon the Doughtys moving to another State, the administrative office of the businesses was relocated from its previous address at Marsden Park to Mrs Abboud's house at Plumpton. She went on to note that the central server/database, on which the information was stored, remained at the Marsden Park address. This information was never communicated to the plaintiffs. 173 The position then is that Mrs Abboud, being aware of the difficulties associated with accessing the information which was of importance to the proceedings and with knowledge of a possible solution to these difficulties, remained silent. The location of the server was not disclosed to the plaintiffs. The explanation for this failure, despite the specific orders of 23 October 2009, was that Mrs Abboud believed a computer expert would be able to succeed where she had failed. 174 Counsel for the defendants in written submissions argued that these circumstances ought not to compromise Mrs Abboud's credit; indeed, it was submitted that knowledge and control of the server had passed from the Abbouds to the Doughtys. 175 I do not accept this submission. Because of their sudden departure from New South Wales, the Doughtys were forced to leave the business in the control of Abboud. Doughty ceased to play an active role in the business. Abboud delegated responsibility for the administrative and office function of the company to Mrs Abboud. The whereabouts of the server was a matter solely within her knowledge. 176 Mrs Abboud's silence in these circumstances was unsatisfactory and reflects adversely on her credibility.

Indications that there was no meeting - continuing payments 177 I proceed now to an examination of matters tending to confirm the proposition that no meeting took place on 1 July 2006 and that the three contentious documents were not signed by Doughty at any such meeting. 178 First, there is the fact that companies associated solely with Doughty, being Trents Excavations and TCG, continued to make payments to the NAB in relation to the mortgage on the Glendenning property up until 2 August 2007 and that, thereafter, payments were made by CCA, a company jointly owned by Doughty and Abboud, until February 2008. The property was leased to Superior Formworks Pty Ltd in January 2008 and rent receipts went towards the mortgage payments thereafter. 179 In the period 1 July 2006 to 2 August 2007, payments totalling $132,400 were made to NAB. The bank statements show that GTH made payments totalling $18,000 whereas companies associated solely with Doughty made payments totalling $98,300. There is an amount of $16,100, consisting of two separate payments of $8000 on 25 April 2007 and $8100 on 22 April 2007, which cannot be attributed with certainty to either party, although it is alleged by the plaintiff that these repayments were also made by TCG. 180 The fact of the mortgage payments being made in this period, coupled with the inequality in contributions, is inconsistent with the notion that Doughty had transferred his interest in the property to Abboud. Although the assignment to him would, on Abboud's version of the arrangement, have taken effect irretrievably on 1 July 2007, payments were made by Doughty alone in July and August 2007 and later, payments were made by CCA, owned half-and-half by Doughty and Abboud, up to February 2008. 181 The defendants submit that these payments are not inconsistent with their stated case, in that Doughty and Abboud proceeded on the basis of a hoped-for financial recovery. Additionally, it was suggested that the payments may be an example of Doughty paying Abboud's obligations direct to creditors in lieu of payments to discharge the debt. 182 Alternatively, it was said by Gino Cassaniti in cross-examination that these payments constituted rental payments for use of the land. There is however no evidence of any agreement that Doughty would pay rent for the property. 183 The explanations put forward by the defendants do not show any reason for the disparity between contributions to the mortgage payments, as outlined at paragraph [179] above; nor do they accord with the objective probabilities of the situation. It is impossible to understand why Doughty would continue to make payments related to a property in which his interest had been extinguished by operation of the alleged agreement. Indications that there was no meeting - ASIC lodgment 184 Another factor consistent with the non-existence of the contentious documents is the fact that it was not until 8 February 2008, six days after the assault upon Doughty and more than two years after the alleged meeting, that a change to company details was lodged with ASIC in respect of Doughty's cessation as a director and secretary of Douabb. 185 The ASIC form records the date of cessation and the date of the change to the share register as 1 July 2006. According to the alleged antecedent agreement (see paragraph [38] above) the resignations were to be permanent only as at 1 July 2007. 186 Abboud was cross-examined about this. His explanation for the delay was as follows: "Well, I was hoping I got my money off Trent, but when him and his wife, I can't say disappeared, but when they left, I lost any hope of getting my money back, so I had no choice but to ask get these lodged". 187 This explanation cannot be reconciled with Abboud's earlier evidence in which he said that Doughty's financial position continued to deteriorate throughout 2006 and 2007; that Abboud constantly harassed Doughty for payments, which were not forthcoming; and that GTH suffered as a result of these difficulties. 188 Counsel for the defendants submitted that the court should find that, at least from October 2007 (and probably from a much earlier time), Doughty had no prospects of salvaging his excavation business and that his financial position did not improve thereafter. Abboud's assertion that he delayed submitting the documents because of a hope that the situation would improve does not accord with that proposition. Indications that there was no meeting - the unit trust 189 The third circumstance which tends to suggest that the meeting did not occur and the contentious documents were not signed by Doughty concerns Abboud's becoming aware of the proportionate holdings of units of the Douabb Unit Trust. 190 Abboud says that it was only at a meeting at a solicitor's office in mid 2007 that he learned that the beneficial interests in the Douabb Unit Trust were 75% on the part of Rosecell (Doughty) and 25% on the part of Tepall (Abboud). Abboud says that he had always operated under an assumption that there were equal interests in the Douabb Unit Trust and that he was angry when he found out that that was not so. 191 It was submitted on behalf of Abboud that he immediately instructed Gino Cassaniti, with the alleged consent of Doughty, to rectify matters so as to reflect a 50/50 split of the trust units. Doughty admits that Abboud at this time was angry about the 75/25 split but he denies that he accepted that the position should be changed. 192 These events occurred in mid-2007, some twelve months after the alleged meeting of 1 July 2006 and at a time when, according to Abboud, the debt owed by Doughty's companies remained unpaid. Accordingly, under the alleged antecedent agreement, the whole of Doughty's interest in the Glendenning property had passed irretrievably to Abboud and the proportions as set out in the trust deed had become irrelevant. 193 If this were so, Abboud's anger in mid-2007 and his desire at that time to see the trust deed rectified are quite inconsistent with the existence, for a period of about a year, of the alleged agreement made on 1 July 2006. In cross-examination, Abboud gave the following explanation of his state of mind at that time: "Q. So if the property was totally yours that means, didn't it, that whatever proportion was set out in the trust deed was irrelevant? A. But I was going to give him his share back if he paid the money, so it was relevant. Just so he paid me the money. How am I going to give him - to pay him the money? I am still going to come back with 75/25 if I never looked at the trust deed.

Q. Is that the best explanation you can offer his Honour? A. That is the best." 194 In re-examination counsel for the defendant sought to clarify this explanation. The position was put thus:

"Q. It was suggested to you in those questions at that point, that is the middle of 2007 or thereabouts, you would have said that Glendenning was totally yours, because Trent had not repaid money, he still owed you money. You recall those questions? A. Yes.

Q. When you said in those answers, speaking about the middle of 2007, "I was going to give him his share back", what were you referring to? A. To the Glendenning yard, when he paid back the money.

Q. In the middle of 2007 did you hold any hope that he was going to get his accounts or his debts square with you? A. Yes, of course." 195 The clarification does not accord with earlier evidence of Abboud as to the state of accounts as between the companies (see paragraph [187] above). On Abboud's evidence, he was constantly seeking payment from Doughty and was almost entirely frustrated in these efforts. The likelihood of Doughty paying the debts was minimal. 196 Additionally, according to his evidence, Abboud had just discovered that Doughty had procured for himself a benefit greater than he was entitled to; and this was to Abboud's detriment. Abboud's assertion that he continued to hope that Doughty would pay the debt does not accord with the objective probabilities and does not accord with the submission made by counsel for the defendants that Doughty had no prospects of salvaging his excavation business and his financial position did not improve but rather continued to deteriorate. ­­­­­­­­ Indications that there was no meeting - alleged formalities 197 Another circumstance tending strongly against any finding that the alleged meeting of 1 July 2006 took place and the three documents were signed at it is the formality of the signing ceremony as described by the defendants' witnesses. 198 The evidence makes it clear that formalities were virtually never observed in the business dealings among Doughty, Abboud and Gino Cassaniti. Indeed as has been noted already, Abboud said in cross-examination: "Mate, I am just a knock-around western suburbs bloke. I don't go into this formal stuff." 199 The contentious documents required nothing more than the simple signature of Doughty on all three plus Abboud's signature on the agreement. Gino Cassaniti could have simply obtained the relevant signatures without any recourse to a meeting. 200 The presence of Mrs Abboud, Mrs Doughty and Fred Khalil was not required. Gino Cassaniti gave evidence that the parties fully understood the nature of the documents in advance of the alleged meeting and that they had no concerns about them. There was therefore no reason why a meeting of six people should be convened, although there are obvious forensic advantages to Abboud's case in asserting that there were a number of witnesses to the supposed signing by Doughty. 201 The defendants say that, because of the importance of the transaction to the parties and the significant effect it would have on their rights, it is entirely plausible and reasonable that Mrs Abboud and Mrs Doughty would be involved. But the consistent business practice of Doughty and Abboud in their dealings is inconsistent with this. There is no evidence of any other occasion on which Doughty and Abboud, together with their wives, formally met with the two accountants. Doughty and Abboud were the guiding minds of their respective businesses. True it is they delegated certain responsibilities to their wives. But control and responsibility for management of the businesses rested with them. Dealings among the various entities were conducted on the basis of discussions and oral agreements between the two men and on a basis of great informality.

Indications that there was no meeting - a 2008 file note 202 Another aspect of the evidence lending support to the plaintiffs' version of events is a CAP Accounting file note of 7 February 2008. The violent assault Doughty says he suffered occurred on 2 February 2008. 203 The file note was located at CAP Accounting by Sam Cassaniti. It may be accepted that it was written by Karina Wilson, who was at the time an employee of the firm. Both Sam Cassaniti and Gino Cassaniti gave evidence that the writing on the document appeared to be that of Ms Wilson. 204 The file note records instructions given to Ms Wilson, allegedly by Gino Cassaniti and Fred Khalil. Fred Khalil, in cross-examination, stated that he had no recollection of the file note. 205 The file note of 7 February 2008 reads as follows: "Gino/Fred asked me to prepare forms to take George Abboud off Sydney Sand & Soil P/L and appoint Michael Abboud. Also to take Trent Doughty off Douabb P/L and leave George as director and secretary. Forms were hand written then given to Fred for clients to sign." 206 Abboud submits that the contentious documents were created and executed on 1 July 2006. It is therefore odd that the file note of 7 February 2008 refers to "preparing forms". In cross-examination Gino Cassaniti provided the following explanation: "Q. So without looking at the next page for now, I am just seeking your assistance and asking if you can explain how it is that, at least according to this file note, reference is made in February 2008 to the taking off of Trent Doughty as a director of Douabb Pty Ltd, whereas on your evidence it is an event that actually occurred quite some time beforehand? A. The event occurred beforehand, that's right, but at the same time, we didn't handwrite forms, they are computerised. They are computer generated. So it would have been a matter of lodge these old forms. Maybe the girl misunderstood, I don't know.

Q. So your explanation of the discrepancy in dates is this, as I understand it, the forms were actually brought into existence in mid 2006? A. Correct.

Q. But they were sat on in effect, and your explanation to his Honour is that perhaps Karina misunderstood her instructions, that she was actually asked to do what with the documents after so much time had gone by? A. To lodge the documents.

Q. So when she actually writes "Gino/Fred asked me to prepare forms" that was just a mistake on her part, she meant to lodge forms? A. That's right." 207 The file note strongly supports the conclusion that the "forms" to "take Trent Doughty off Douabb Pty Ltd and leave George as director and secretary" were not created until February 2008. Indications that there was no meeting - inconsistent evidence about the event 208 I return at this point to the evidence surveyed at paragraphs [87] to [96] above. Several aspects of it warrant particular comment. 209 First, none of Abboud, Mrs Abboud, Gino Cassaniti and Fred Khalil could say who sat where at the meeting. None could say who sat next to them or opposite them. 210 Second, there were significant inconsistencies about arrivals at the meeting. Fred Khalil said that Abboud, Mrs Abboud, Doughty and Mrs Doughty were all present in the meeting room when he and Gino Cassaniti arrived. Gino Cassaniti first gave like evidence but later said that other persons (he called them "estimators") were in the room when he and Fred Khalil arrived and that the six people involved in the meeting went into the room together when the estimators left. 211 On Mrs Abboud's account, "everyone else" was seated in the meeting room when she entered. This must have included Gino Cassaniti and Fred Khalil. 212 It is also relevant to note Gino Cassaniti's evidence that the meeting lasted for an hour. Given that, on his testimony, Doughty and Abboud were aware of and agreeable to the meeting's purpose and that the transaction was, in concept, a simple one of complete transfer and relinquishment by Doughty in favour of Abboud, there could have been no occasion for extensive explanation or discussion in advance of signing. Indeed, Gino Cassaniti's evidence of what he said by way of preliminary or introductory words makes it clear that he could not have spoken for more than a few minutes. Gino Cassaniti further said that the rest of the hour was spent discussing "a restructure of their business affairs and trying to get out of this hole they were in. Trent was in …". No other witness spoke of anything other than the signing of the documents having happened at the meeting. No one but Gino Cassaniti referred to the occasion as having had any purpose or significance beyond the signing of the documents and whatever led up to it. Conclusions about the alleged meeting 213 I find, on the balance of probabilities, that the alleged meeting of 1 July 2006 did not take place and that Doughty did not sign the contentious documents. Several factors combine to produce this result. They are discussed in detail above and are, in summary, the positive credit findings in relation to Doughty and Mrs Doughty, the negative credit findings in relation to the six persons supposedly at the meeting, the evidence of the handwriting examiner tending towards lack of genuineness of the purported signatures of Doughty and the several contrary indications established by the evidence about the continuing mortgage payments, the ASIC lodgment a matter of days after the date of the assault alleged by Doughty, Abboud's continuing desire to see the trust deed rectified at a time when, according to him, Doughty's interests had been assigned to him, the unaccustomed formality and ceremony associated with the supposed meeting, the inconsistent file note of February 2008 and the inconsistencies and general vagueness in the witnesses' respective accounts of the supposed meeting. 214 Against that background, I approach the plaintiff's claims in the proceedings. Principal relief 215 The plaintiffs have made out their claim for declaratory relief. There will be utility in the making of declarations recognising that Doughty has remained throughout a director and secretary of Douabb. 216 The plaintiffs (or, more precisely, Doughty alone) have also made out the claim under s 175 of the Corporations Act for an order rectifying the register of members of Douabb to include him as the holder of one share. It has been shown that his name has been wrongly omitted from the register. 217 Both these conclusions flow directly from the findings that the alleged meeting of 1 July 2006 did not occur and that Doughty did not sign the three contentious documents.

Consequential Relief - winding up 218 An application for winding up is advanced by the plaintiffs on the ground stated in s 461(1)(k) that the court is of the opinion that it is just and equitable that Douabb be wound up. Counsel for the plaintiffs submitted that such an order is justified on the basis that the circumstances of the case require investigation by a court appointed liquidator or alternatively because there has been a breakdown in any mutual trust and confidence between the parties. 219 In Thomas v Mackay Investments Pty Ltd (1996) 22 ACSR 294 at 300 Owen J said: "The classes of conduct which will justify a winding up order on the just and equitable ground are not closed. Much will depend on the circumstances of each case. … Where there is a breakdown in a relationship of mutual trust and confidence which was the foundation of an understanding by which the operations of the company were to be governed the court can order that the company be wound up. These have become known as the quasi-partnership cases. The reference to partnership can be misleading. The company is just that, a corporate structure. It is not necessary to show that any partnership agreement or deed was entered into before the principle can be invoked." 220 This echoes what was said in Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 by Lord Wilberforce (at 379): "[While] the "just and equitable" provision does not … entitle one party to disregard the obligation he assumes by entering a company, it … enable[d] the court to subject the exercise of legal rights to equitable considerations … of a personal character arising between one individual and another, which may make it … inequitable to insist on legal rights or to exercise them in a particular way." 221 His Lordship also said (at 378): "Elements which give rise to the superimposition of equitable considerations may include one, or probably more of the following: (a) An association formed or continued on the basis of a personal relationship involving mutual confidence; (b) An agreement, or understanding, that all, or some, of the shareholders, shall participate in the conduct of the business; (c) Restriction on the transfer of the members' interest in the company (d) The fact that the company is a small one, or a private company, is not enough." 222 The question whether equitable considerations should be superimposed is a question of fact to be determined with regard to all the particular circumstances of the case: Re Tivloi Freeholds Ltd [1972] VR 445. 223 Doughty and Abboud decided to incorporate Douabb on the basis of mutual trust and co-operation stemming from a long-standing social and business relationship. There was a "quasi-partnership" as discussed in Brooker v Friend & Brooker Pty Ltd [2006] NSWCA 385. These proceedings and the events discussed in this judgment leave no doubt that there is no prospect whatsoever that Doughty and Abboud can ever again work together through Douabb (or at all). The break between them is complete and irreparable. There is deep-seated animosity. Doughty has what has been found to be a well-placed distrust of Abboud and his honesty. Abboud, for his part, has made it clear that he wants nothing more to do with Doughty. 224 The relationship founded on trust and co-operation has ended - and ended in bitterly acrimonious circumstances. 225 The court's jurisdiction to make a winding up order on the ground that there has been an irretrievable breakdown of the relationship between the parties is obviously enlivened, which makes winding up just and equitable. 226 The decision of Dodds-Streeton JA in Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd (2008) 66 ACSR 325; [2008] VSCA 86 at [119] supports this: "Winding up is the characteristic remedy in circumstances where a working relationship predicated on mutual cooperation, trust and confidence has broken down. Equity would not ordinarily order the continuation of such an association where it would be a futility, would require continuing supervision or would be tantamount to specific enforcement of a contract of personal services." 227 It is not necessary for the plaintiff to demonstrate oppression, unfair prejudice or unfair discrimination: Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342 applying Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97. 228 There are other grounds on which the winding up application under s 461 is advanced. But, in light of the findings that I have made, it is unnecessary to consider those grounds beyond saying that there is merit in the submission that there are a number of circumstances in relation to the operation and conduct of Douabb since Doughty's exclusion which would warrant making the order: see Kingjade Holdings Pty Ltd v Pineridge Nominees Pty Ltd (1997) 15 ACLC 910; Macquarie University v Macquarie University Union Ltd (No 2) [2007] FCA 844. The Cross-Claim 229 I turn now to the defendants' cross-claim, which seeks the following relief: "1. A declaration that the true agreement between Doughty and Rosecell, on one hand, and Abboud and Tepall, on the other, was to the effect that the beneficial interest in the Douabb Unit Trust would be as to one half by Rosecell and as to one half by Tepall and that the companies were entitled to be the Registered Holder within the definition of those words in the Trust Deed of one half of the issued units representing the beneficial interest in the Fund.

2. A declaration that the Glendenning property is comprised in the Fund as defined in the Douabb Unit Trust Deed.

3. A declaration that Doughty has assigned to Abboud all of his interest in the Douabb Unit Trust, including the interest of Rosecell as a Unit Holder under the Douabb Unit Trust Deed." 230 Items 2 and 3 can be dealt with briefly. Declaration 3 will not be made, given the finding that the alleged agreement of 1 July 2006 was not made. The cross-claimants put forward no other basis for that relief. 231 As to declaration 2, the cross-defendants do not raise any opposition. Both sides accept that the Glendenning property is held upon the trusts of the Douabb trust deed. Declaration 2 will therefore be made. Rectification of the trust deed 232 That leaves for consideration the claim for declaration 1 in the cross claim. 233 The cross-claimants' primary approach on this aspect seems to be that the trust deed which originally reflected a 75/25 split of trust units was later varied. The contention appears to be that a variation of the deed occurred when Gino Cassaniti simply removed from the document the page recording the 75/25 split and inserted in its place a page reflecting a 50/50 split. The contention is, of course, absurd. 234 The secondary contention of the Abboud interests is that the trust deed should be rectified because it does not reflect the mutual intention of the relevant parties. Both sides approached the matter on the footing that the relevant intentions are those of Doughty and Abboud. In the circumstances, I do not need to decide whether that is correct. The Doughty interests made submissions on the footing that the claim for declaration 1 is, in substance, a rectification claim. I approach the matter accordingly. 235 In Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 at 345, McLelland AJA said that in order for a claim of rectification to be upheld: "… it is [to be] established by clear and convincing proof that at the time of execution of the instrument the relevant party or parties as the case may be had actual intention (if more than one party, a common intention) as to the effect which the instrument would have which was inconsistent with the effect which the instrument as executed did have in some clearly identified way." 236 This statement of principle recognises the heavy burden placed upon the party seeking rectification. A court will not speculate or make assumptions. It must find that the alleged mutual intention is established "in the clearest and most satisfactory manner": per Lord Chelmsford in Fowler v Fowler (1859) 4 De G & J 250 at p.265 approved in Australian Gypsum Ltd v Australian Plaster Co Ltd [1930] HCA 38; (1930) 45 CLR 54. 237 In approaching the question of mutual intention, I begin by setting out the part of the Douabb Unit Trust Deed sought to be rectified. Clause 5 is as follows: "(d) The beneficial interest in the Fund as originally constituted by the payment to the Trustee of the sum of One Hundred Dollars as referred to in the Recital C hereof shall be divided into One Hundred Units having an initial value of one dollar each. The said Units shall be held subject to this Deed by the following person as the Registered Holder of those Units: Rosecell Pty Ltd 75 Tepall Pty Ltd 25." 238 Abboud says that the common intention of Doughty and himself and their respective companies was that the proportionate holdings in the trust were to be equal. He says that this common intention was reached in discussions between himself and Doughty. He also relies on an inference which he says should be drawn from the respective contributions to the purchase of the property. 239 Doughty gave evidence of a conversation between himself and Abboud to the following effect: "Doughty: Once a loan is obtained from the financier, GTH and Trents Excavations will each have to pay half of the balance of the purchase price. As I own all of Trents Excavations and half of GTH, it stands to reason that I'll have a 75% interest in the property and you will have a 25% interest. Is that OK? Abboud: Sure. No problem." 240 Abboud referred to this conversation in an affidavit and denied the words attributed to him. According to him, the conversation continued as follows: "Abboud: I funded all of GT. You contributed nothing. I've never asked you for your half and now you want to do this 75/25 s..t. Realistically I'm the owner of GT until you pay your half. Doughty: OK then it's 50/50 on Glendenning." 241 Gino Cassaniti who was responsible for the preparation of the deed stated that subsequent to this conversation he received the following instructions from Doughty: "George and I have agreed that I'll have 75% of the land and George will have 25%. Make sure that's the way you do it." 242 Doughty agrees that he did in fact give Gino Cassaniti these instructions. The situation therefore is that either there was no common intention at this point and the rectification case fails or that there was a common intention but that Doughty acted unconscionably in securing for himself a benefit to which he was not entitled. 243 There is a fundamental discrepancy between the two versions of the conversations as set out above. For reasons stated earlier, I find the evidence of Doughty more credible than that of Abboud. But even if this were not the case, the discrepancy between the two versions is sufficient of itself to cause rectification to be refused. 244 Abboud contends that the respective contributions made by the parties to the purchase of the Glendenning property are indicative of their true common intention. He says that the contributions were approximately 50/50, while Doughty claims that his interests contributed two-thirds to three-quarters of the purchase moneys. 245 The property was purchased for a price of $853,125. It is not disputed that the Doughty interests paid the initial deposit of $42,656.25 leaving a balance payable on settlement on 27 April 2005, after adjustments, of $811,109.56. 246 There is a letter in evidence from the solicitor instructed in relation to the purchase noting that at settlement Trent's Excavations provided a bank cheque for an amount of $250,502.11. A further amount of $645,920 was provided through a joint NAB loan facility. It is apparent, upon the addition of the two sums, that there was an overpayment of $85,312.55. This was refunded to Trent's Excavations. This overpayment was caused by a late concession by the vendor that the transaction was not subject to GST. 247 In addition to the moneys paid at settlement and the deposit, the parties had previously paid $35,941.70, made up of legal fees, disbursements and stamp duty. This was satisfied by a bank cheque received on 27 April 2005 totalling $37,734.50 and thus including an overpayment of $1,792.80 which was refunded to Trents Excavations Pty Ltd. The source of the $37,734.50 is in issue between the parties. 248 Excluding the monies obtained on mortgage, the parties made payments totalling $330,892.86 towards the purchase of the Glendenning property, being the deposit (paragraph [245] above) the bank cheque provided by Trent's Excavations at settlement (paragraph [246] above), and the stamp duty and legal fees (paragraph [247] above). This total is inclusive of the overpayments which were subsequently refunded. 249 Doughty gave evidence that, in addition to the deposit payment of $42,656.25, he contributed two further sums, borrowed from his parents, of $101,104 and $35,000, thus bringing his total contribution to $178,760.25. 250 Abboud submitted (and it was accepted by Doughty) that he made an initial contribution of $90,583 which was deposited into the Trent's Excavations account from which the bank cheque was drawn. Abboud says that he provided a further $45,000 in part borrowed from his brother Michael Abboud. In support of this two letters from Homeside Lending to Michael Abboud were produced. The letters evidence approval of loan redraw requests in amounts of $16,311.09 and $26,961.15, both dated 5 April 2005. Cross-examination of Abboud on this matter was as follows: "Q. What is the basis upon which you say that the sum of $16,311 formed part of your contribution? A. Yes, it is around those dates anyway. It would have been for that if it was the date of purchase.

Q. Are you able to point to any other evidence that discloses a deposit of that sum in an account for which the purchase moneys were used on settlement? A. Is there bank statements or anything? Could have been - was it for..? Could have been for the stamp duty, could have been for anything like that. What could it be?

Q. Is this the evidence upon which you rely for your proposition Mr Abboud that you contributed $16,311? A. Yes.

Q. And you also say, don't you, that you contributed a further sum of $26,900? A. That's correct.

Q. And if you just turn over the pages a little bit you will see a similar sheet? A. Yes.

Q. Identifying a re-draw request for $26,961? A. Yes.

Q. That is the evidence upon which you rely for the proposition to his Honour that $26,961 was contributed by you towards the purchase of the Glendenning property? A. It looks around those dates. That's what it would have been for". 251 Abboud says that he supplemented these loan amounts with additional personal funds to reach the amount of $45,000. 252 Assuming that Abboud did in fact contribute the further $45,000 (thus bringing his contribution to a total of $135,583) there remains an amount of $16,549.61 upon which neither party provided satisfactory evidence of source. 253 There is insufficient evidence for the court to make a determination as to the source of the additional amount of $16,549.61. It may be that the moneys are attributable to Abboud, it may be that the monies were provided by Doughty. This is mere speculation. 254 The situation therefore is that, of the $330,892.86 paid in relation to the purchase, $178,760.25 is attributable to Doughty (54%), $135,583 is attributable to Abboud (41%) and $16,549.61 (5%) cannot be attributed to either party. 255 Counsel for Abboud submitted however that the total sum provided by the parties should be discounted by the refunded amount of $87,105.35 and that this amount should be subtracted from Doughty's contribution because the refunded amount was provided to Trent's Excavations. If this were the case, the position would be that, of the $243,787.51 actually paid by the parties, Doughty contributed $91,654.90 (37.6%), Abboud contributed $135,583 (55.6%) and the untraceable amount of $16,549.61 (6.8%) remains. 256 I do not accept the submission. It is necessary to set out an extract of the letter of 2 May 2005 from the solicitor acting for the purchasers which read: "I confirm that Trents Excavations Pty Ltd provided a cheque for $250,502.11 on settlement. Due to the late decision by the Vendor that the transaction was not subject to GST, this cheque provided an overpayment of $85,312.55 to the Vendor and I confirm that this overpayment has now been refunded. … After payment of all fees and reimbursement of the stamp duty paid by me on behalf of your Company, the final balance remaining in my trust account was $1,792.80. As discussed with

Trent, a cheque in favour of Trents Excavations Pty Ltd for this final balance is enclosed." 257 I return, however, to a fundamental point. The important issue in rectification proceedings is the common intention of the parties at the time of the creation of the particular instrument. The inquiry is as to discrepancy between what is recorded in the instrument and what was intended to be recorded in it. It is the intention at the time of the creation of the instrument that is alone relevant: see Pukallus v Cameron [1982] HCA 63; (1982) 150 CLR 447 at 452. The trust deed constituting the Douabb Unit Trust was executed on 10 February 2005. It is therefore the intention at that date that is relevant. 258 The extract from the solicitor's letter of 2 May 2005 notes that the overpayment was brought about by a late change in circumstances concerning GST of which the purchasers were unaware. It could not have been in the contemplation of anyone on 10 February 2005 that it was not necessary to raise the amount that was refunded in May 2005. 259 It is true that the late decision of the vendor affected the financial contributions as between the parties. But that altered state of affairs is in no way reflective of intentions at the time of the execution of the trust deed. The original intentions - that is, the intentions on 10 February 2005 - must be ascertained from the figures outlined at paragraph [254] above, which are inclusive of the overpayments. 260 I pause at this point to note that counsel for Doughty also asserts that the refunded amount should not be discounted because the money was used to pay for later renovations to make the property suitable for the businesses. Abboud says that this was not the case. It is, however, not necessary to decide this point. I do note that it is clear that the parties accessed whatever funds were available to them at the time to complete the renovations and it is highly likely that the refunded amounts were such a source. 261 Counsel for Abboud submitted that the parties' intention is properly to be ascertained by their conduct, including post-contractual conduct. To this effect counsel drew the court's attention to Westland Savings Bank v Hancock [1987] NZLR 21 at 31.7 where it was held: "Intention can only be inferred from words and conduct. It seems both on principle, and on authority, that the fact that a party has acted as if the document stood in the form into which it is sought to be rectified is strong evidence of the existence of an intention on the part of that party to contract in those terms … subsequent conduct is both relevant and often highly persuasive as to what a party's intention was at and leading up to the execution of the instrument in question." 262 The argument put forward by Abboud is that the mutual intention of the parties, that the proportional holdings would be 50/50, can be inferred from the cash contributions as outlined at paragraph [255] above. Assuming for the moment that I am wrong in relation to whether the refunded amounts should be discounted and the figures at [255] are the relevant figures, the cross-claimants nonetheless fail to satisfy the onerous burden required in a rectification case. 263 Wilson J in Pukallus v Cameron (above) said (at p 452): "The second principle governing rectification of a contract which is material to this case is that which requires the plaintiff to advance 'convincing proof' that the written contract does not embody the final intention of the parties. The omitted ingredient must be capable of such proof in clear and precise terms. The Court must not assume for itself the task of making the contract for the parties." 264 The Abboud parties have, however, failed to establish on the balance of probabilities by way of "convincing proof" that the common intention of the parties as at 10 February 2005 was anything other than that recorded in the Trust Deed executed on that date. 265 The final cash contributions of the parties emerged after the execution of the deed. The actual contributions as ultimately made were not a product of any mutual intention as to respective participating interests. They were a product of ad hoc decisions subsequently made on the basis of the availability of finance at the time. 266 The application for declaratory relief sought in paragraph 1 of the cross-claim - whether taken literally or as a claim for a decree of rectification - must be dismissed. Disposition 267 I make the following orders and declarations:

Order pursuant to section 175 of the Corporations Act 2001 (Cth) that the register of members of Douabb Pty Ltd ACN 112 879 964 be rectified by including Trent Doughty as a member holding one ordinary share (being the one ordinary share ostensible transferred by him to George Abboud and ostensibly held by George Abboud) and by recognising that the said share is not and has never been held by George Abboud.

Declare that: (a) the purported resignation of Trent Doughty on 1 July 2006 as a director and secretary of Douabb Pty Ltd ACN 112 897 964 is and has at all times been of no effect; and (b) Trent Doughty is and has at all material times since 10 February 2005 been a director and secretary of the said Douabb Pty Ltd.

Order that the cross-claim of George Abboud be dismissed.

Order that the defendants/cross claimants pay the costs of the plaintiffs/cross defendants of the proceedings as a whole. 268 There will also be an order for the winding up of Douabb and an order for the appointment of a liquidator. However, these cannot be made until the plaintiffs file a liquidator's consent to act. I direct that such a consent be filed by delivery to my Associate within seven days. The following orders will then be made in chambers:

Order pursuant to section 461(k) of the Corporations Act 2001 (Cth) that Douabb Pty Ltd ACN 112 879 964 be wound up.

Order that [name] of [address] be appointed liquidator of Douabb Pty Ltd ACN 112 879 964.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.