F6086 No. 6749 of 2005 Plaintiff v Defendant

Supreme Court of Victoria|2008-05-22|Before: HARGRAVE J

CONTRACT - Joint venture for property development - Dispute amongst joint venturers - Settlement agreement - Whether procured by duress - Duress not established - Affirmation of settlement agreement in any event.

CONTRACT - Contract not executed by all named parties - Whether concluded agreement reached - Part performance - Subsequent conduct - Enforceable agreement established.

CORPORATIONS LAW - Non-compliance with company constitution - Procedural irregularities - Whether irregular share transfer, resignation of director and appointment of director should be declared not invalid - Declarations made - Corporations Act 2001 (Cth), s 1322(4)(a).

TRADE PRACTICES - Misrepresentation as to a future matter - Whether misleading - Whether failure of another person, knowing of the misrepresentation, to correct it constituted false or misleading conduct - False or misleading conduct established - Fair Trading Act 1999 (Vic), ss 4(1), 9(1).

For the First and Second Defendants (until 29 January 2008)

The Second Defendant appeared in person from 30 January 2008

1 The principal matter to be resolved in the proceedings before the Court concerns a fight for the ownership and control of the lands known as 61 Buckley Street, Footscray and 63-67 Buckley Street, Footscray ("the Buckley Street properties").

2 There are two proceedings before the Court. In the principal proceeding, the plaintiffs are Antonio Gangemi and his company Bloomingdale Holdings Pty Ltd. Mr Gangemi is a builder and a property developer. He utilised Bloomingdale as the vehicle for his relevant investments and ventures. Unless it is necessary to specify that Mr Gangemi's conduct was through Bloomingdale, I will refer only to the conduct of Mr Gangemi.

3 The third defendant Pasquale (Percy) Lanciana is a property developer and businessman. He has known Mr Gangemi since he was at school with Mr Gangemi's brother. They were once close friends, with Mr Lanciana acting as best man at Mr Gangemi's wedding in early 2001. They are now enemies.

4 Mr Gangemi alleges that in early 1997 he and Mr Lanciana agreed to go into business together as joint developers of properties, sharing all of the profits and losses. Mr Gangemi alleges that, in furtherance of this joint endeavour, he was given a 50 per cent shareholding in two of the corporate vehicles utilised for these ventures, Pre Need Services Pty Ltd and Clapana Pty Ltd. Mr Gangemi was also appointed as the sole director of these companies.

5 Mr Lanciana accepts that he engaged in some joint developments with Mr Gangemi. However, Mr Lanciana contends that other developments which Mr Gangemi alleges were joint developments between them were in fact undertaken by him on his own account, and that the only involvement of Mr Gangemi in those developments was as a builder. Mr Lanciana denies that Mr Gangemi ever held any shares in Pre Need or Clapana. Mr Lanciana contends that, at all relevant times, he owned or controlled all of the issued shares in Pre Need and Clapana, and that the only reason Mr Gangemi was appointed as a director of Pre Need and Clapana was because he (Mr Lanciana) was prohibited from being a director by reason of criminal convictions.

6 The first defendant 63 Buckley Street Pty Ltd ("63 Buckley") is the owner of the Buckley Street properties. 63 Buckley was incorporated at the request of Mr Gangemi and Mr Lanciana as the vehicle for an investment by them in the Buckley Street properties and the project to develop them ("the Buckley Street project"). Upon its incorporation, Mr Gangemi became the sole shareholder in, and the sole director and secretary of, 63 Buckley. Mr Gangemi contends that this position remains to this day. The central dispute in the proceeding is whether this is so. Mr Lanciana contends that Mr Gangemi transferred ownership and control of 63 Buckley to him in September 2003 and that subsequently, in 2005, he transferred ownership and control of 63 Buckley to the second defendant Kourosh Jafari.

7 The second defendant Kourosh Jafari is also a property developer. Prior to the disputes giving rise to the principal proceeding, he was a friend of Mr Gangemi. Mr Jafari invested either $300,000 or $350,000[1] for a 25% interest in the Buckley Street project. Following his dealings with Mr Lanciana in 2005, he contends that he is entitled to sole ownership and control of 63 Buckley and, accordingly, is entitled to develop the Buckley Street properties for his sole benefit.

8 The fourth defendant Richard Osborne was a very close friend of Mr Gangemi. Mr Osborne acted as the master of ceremonies at Mr Gangemi's wedding in early 2001. Mr Osborne alleges that he agreed with Mr Gangemi to invest $200,000 for a 12.5% interest in the Buckley Street project, upon certain conditions. In broad summary, Mr Osborne contends that he invested $200,000 in the Buckley Street project on condition that this amount, together with interest of $50,000, would be repaid to him by Mr Gangemi if the necessary planning permit to develop the Buckley Street properties was not obtained within 18 months of him investing. Mr Osborne alleges that no permit was obtained within this time and that Mr Gangemi is accordingly indebted to him in the sum of $250,000 plus interest. Mr Osborne's claims are made in a separate proceeding which was tried together with the principal proceeding. Mr Gangemi denies Mr Osborne's allegations and contends that the $200,000 invested by him was paid unconditionally to purchase a 12.5% interest in the Buckley Street project.

9 As I have said, the central issue to be determined is the identification of the person or persons entitled to ownership and control of 63 Buckley. Mr Gangemi contends that the Buckley Street properties are held by 63 Buckley upon a trust for him (Bloomingdale), Lanciana, Jafari and Osborne. Mr Jafari, with the support of Mr Lanciana, contends that he is the sole beneficial owner of 63 Buckley and the Buckley Street properties. Mr Lanciana makes no claim to any interest in 63 Buckley or the Buckley Street properties. Mr Osborne's principal claim is his debt claim against Mr Gangemi. As an alternative, Mr Osborne seeks a declaration that he is entitled to a 12.5% interest in the Buckley Street properties as beneficiary of any trust found by the Court.

10 Following discussions between Mr Lanciana and Mr Gangemi, the land situate at 63-67 Buckley Street was purchased by Mr Gangemi "or nominee" in mid 2001 with settlement due in July 2002. The land situate at 61 Buckley Street was purchased by Mr Gangemi "or nominee" in April 2002, with settlement due in September 2002. Prior to settlement, 63 Buckley was nominated as the purchaser of each of the Buckley Street properties. The deposits for the purchase of these properties were paid from Pre Need funds.

11 In the first half 2002, Mr Osborne advanced the sum of $200,000, and Mr Jafari advanced the sum of either $300,000 or $350,000, to Mr Gangemi, Mr Lanciana or persons or entities associated with them or one of them. It was agreed at some stage that the funds advanced by Mr Osborne and Mr Jafari would be applied by Mr Gangemi and Mr Lanciana towards the Buckley Street project. In return, Mr Jafari would obtain a 25% interest in the Buckley Street project and Mr Osborne would obtain a 12.5% interest. There is a dispute as to whether Mr Osborne's investment was subject to conditions.

12 The Buckley Street properties remain undeveloped.

13 As I have said, upon its incorporation Mr Gangemi was the sole director and secretary of, and shareholder in, 63 Buckley. Mr Gangemi contends that this position has never altered. He disputes the validity of all changes to the shareholding in, and officeholders of, 63 Buckley which have been notified to the Australian Securities and Investments Commission ("ASIC"). The end result of these changes is that Mr Jafari is recorded in ASIC's records as the sole director and secretary of, and shareholder in, 63 Buckley.

14 Mr Gangemi's principal contention is that the parties agreed that their respective interests in the Buckley Street project would be held through unit holdings in the "Buckley Street Unit Trust", which he alleges was created by a trust deed dated 1 February 2003. Mr Gangemi contends that this position remains and seeks declarations to give effect to his contentions. Consequent upon those declarations, Mr Gangemi seeks orders that the Buckley Street Unit Trust be wound up, for the sale of the Buckley Street properties and for the distribution of any net proceeds of sale to the unit holders in proportion to their unit holdings. Alternatively, Mr Gangemi seeks a declaration that 63 Buckley holds the Buckley Street properties on a constructive trust for him (Bloomingdale), Lanciana, Jafari and Osborne; and seeks consequential orders winding up that constructive trust.

15 Following notices served on Bloomingdale under s 89A(3) of the Transfer of Land Act 1958 (Vic), Mr Gangemi and Bloomingdale commenced their proceeding in order to substantiate caveats lodged on behalf of Bloomingdale prohibiting dealings by 63 Buckley in the Buckley Street properties. These caveats have had the effect of delaying Mr Jafari in his endeavours to develop the Buckley Street properties. In the meantime, Mr Jafari has been funding the obligations of 63 Buckley to the mortgagee of the Buckley Street properties.

16 Mr Lanciana denies Mr Gangemi's claims. He contends that, although it was intended that the Buckley Street Unit Trust would come into existence, the trust deed was never executed. Further, he contends that Mr Gangemi did not contribute any money to the acquisition of the Buckley Street properties. Although he denies that the Buckley Street Unit Trust ever existed, Mr Lanciana's final position, in evidence although not in his pleadings, is that the parties were interested in the Buckley Street project in the proportions of their intended unit holdings. However, Mr Lanciana contends that this position changed when Mr Jafari and Mr Osborne indicated that they wanted their investments to be repaid, and Mr Gangemi agreed to transfer all of his (Bloomingdale's) interest in the Buckley Street project to Mr Lanciana.

17 Mr Lanciana's principal contention is that, following a settlement conference in September 2003 between him and Mr Gangemi, Mr Gangemi executed a document titled "Heads of Agreement" in which Mr Gangemi agreed (amongst other things) to resign as a director and secretary of 63 Buckley, to transfer his shares in 63 Buckley to Mr Lanciana, to transfer any units held by him in the Buckley Street Unit Trust (if in existence) to Mr Lanciana and to withdraw his caveats over the Buckley Street properties. Mr Lanciana alleges that, pursuant to the Heads of Agreement, Mr Gangemi signed documents resigning as a director and secretary of 63 Buckley, transferring his shares in 63 Buckley to him and withdrawing his caveat over the property at 63-67 Buckley Street.[2] Mr Lanciana alleges that he then became the sole shareholder in, and director and secretary of, 63 Buckley and caused further shares in 63 Buckley to be issued to him. Thereafter, in the belief that these transactions were efficacious, he agreed with Mr Jafari to transfer his shares in 63 Buckley to Mr Jafari, to resign as a director and secretary of 63 Buckley and appoint Mr Jafari in his place.

18 Mr Gangemi admits that he signed the Heads of Agreement, a handwritten resignation of his position as director and secretary of 63 Buckley and an incomplete share transfer form. He denies that he signed the withdrawal of Bloomingdale's caveat over 63-67 Buckley Street and alleges that the withdrawal of caveat lodged by Mr Lanciana is a forgery. Mr Gangemi alleges that his signature to all of these documents, including the withdrawal of caveat if in fact he did sign it, was procured by duress. Further and alternatively, Mr Gangemi contends that the Heads of Agreement are void and unenforceable because they have not been signed by all intended parties and are incomplete in essential respects.

19 Mr Gangemi also alleges that if the Heads of Agreement were ever binding they ceased to have effect before Mr Lanciana purported to transfer ownership and control of 63 Buckley to Mr Jafari. In this respect, Mr Gangemi contends that Mr Lanciana is either estopped from relying upon the Heads of Agreement or any transactions pursuant to them, or that the Heads of Agreement were terminated or abandoned by the parties.

20 On these grounds, Mr Gangemi pleads that the transactions whereby Mr Lanciana transferred ownership and control of 63 Buckley to Mr Jafari are invalid and of no effect, and that Mr Jafari is wrongly claiming to be in control of 63 Buckley, wrongly denying the existence of the Buckley Street Unit Trust and has wrongly dealt with the Buckley Street properties by further encumbering them with the payment of Mr Jafari's personal debts.

21 Mr Lanciana disputes the claims of duress, forgery, estoppel, termination and abandonment. As to the duress claims, he contends that if (which is denied) Mr Gangemi's signature was obtained by duress he has, with full knowledge of the duress and with the benefit of legal advice, elected to affirm the Heads of Agreement and the transactions by him pursuant to them in resigning as a director and secretary of 63 Buckley, transferring his shares in 63 Buckley to Mr Lanciana and withdrawing Bloomingdale's caveat over 63-67 Buckley Street; and by other conduct subsequent to this in which Mr Gangemi and his lawyers have acknowledged the efficacy of, and relied upon, the Heads of Agreement.

22 Mr Jafari denies Mr Gangemi's allegations and relies upon his dealings with Mr Lanciana as giving him full ownership and control of 63 Buckley, in the absence of any trust obligation. Alternatively, Mr Jafari contends that Mr Gangemi is estopped from denying that he is entitled to full ownership and control of 63 Buckley. In this regard, Mr Jafari alleges that Mr Gangemi told him in or about September 2003 that he was "out of the [Buckley Street] project" and that Mr Jafari was free to deal with Mr Lanciana. In this context, Mr Jafari alleges that he told Mr Gangemi that he intended to acquire full ownership and control of 63 Buckley from Mr Lanciana and that Mr Gangemi raised no objection to the proposed purchase by Mr Jafari.

23 Further, Mr Jafari claims damages from Mr Gangemi on a number of grounds, including alleged false and misleading conduct inducing him to invest in the Buckley Street project, damages resulting from the actions of Mr Gangemi in causing Bloomingdale to lodge caveats over the Buckley Street properties and damages for breach by Mr Gangemi of his duties as a director of 63 Buckley.

24 As I have said, Mr Osborne is both a defendant in the principal proceeding and a plaintiff against Mr Gangemi in his own proceeding seeking to recover of a debt of $250,000 and interest. In the event that Mr Osborne is successful in his debt claim, Mr Gangemi claims contribution or indemnity from Mr Lanciana in respect of any judgment sum. It is only if Mr Osborne fails in his debt claim that he makes an alternative claim for a declaration that the has a 12.5% interest in the Buckley Street properties.

III. DEMEANOUR AND GENERAL CREDIBILITY OF THE PARTIES

25 The evidence is in many respects confused and incomplete. This is to be expected. There are four parties, each with a different story to tell. The critical events occurred between four and ten years ago. The parties were in frequent oral contact on many issues, both business and personal. At many relevant times, the parties dealt with each other as close friends. The parties did not adhere to formalities such as holding company meetings and passing resolutions. There are virtually no contemporaneous file notes. In these circumstances, it is unlikely that the parties would have a clear and specific recollection of particular conversations.

26 The solicitors for the parties were involved at relevant times in respect of significant issues. None of the solicitors gave evidence. Nor were any file notes made by solicitors as to relevant events available or placed in evidence. Evidence from the solicitors would have been of great assistance in resolving a number of the factual disputes which arise on the evidence.

27 As a result of these matters, it is necessary to treat the evidence of oral recollection with caution, and, wherever possible, to determine factual disputes by reference to the probabilities arising from the whole of the evidence, in particular from contemporaneous documents and non-contentious established facts. However, there are some issues where the demeanour and general credibility of the parties assumes a greater significance.

28 Mr Gangemi gave evidence over many hours. At times, he endeavoured to portray himself as an unsophisticated businessman who did not pay any attention to details. At other times, he sought to rely upon his business acumen and experience. Although his recollection of critical conversations was poor, he was nevertheless prepared to forcefully deny the evidence of others which was unhelpful to his case. He was consistently evasive on important matters and often dissembled. For example, he said that he was confused or did not understand unambiguous questions on issues which I am satisfied he well understood. He gave many inconsistent responses to the same or similar questions, often within seconds or minutes of the issue first being raised with him in cross-examination. He hid in generalities, conclusions and non-committal responses. I am satisfied that he gave false evidence on a number of important issues. The reasons for this will become apparent when the facts are considered below.

29 In contrast, Mr Lanciana was generally an impressive witness. He gave direct answers. He made numerous concessions against his interest. His evidence was consistent in nearly every respect. He presented as a hard-nosed businessman who was aggressively entrepreneurial. On the other hand, he was careless when it came to recording financial transactions and corporate dealings.

30 It was submitted on behalf of Mr Gangemi that Mr Lanciana was nevertheless a witness who lacked any credibility because he "is a thoroughly disreputable and dishonest person". In this regard, reliance was placed upon a number of matters, most of which were candidly admitted by Mr Lanciana and some of which were the subject of his own evidence-in-chief.

31 I accept that there are a number of collateral matters involving misleading, unethical or dishonest conduct by Mr Lanciana.

32 Mr Lanciana's has a history of criminal convictions, including a conviction for theft of a person's wallet in order to use his identity to set up a false electricity account for the purposes of stealing electricity in order to grow marijuana.

33 The evidence establishes that, on a number of occasions, Mr Lanciana has engaged in misleading conduct in order to minimize or avoid taxation or stamp duty on relevant transactions.

34 Mr Lanciana acted as a de facto director of a number of companies, in particular Pre Need, at times when he was, by reason of his criminal convictions, disqualified by s 206B(2) of the Corporations Act 2001 (Cth) from managing corporations. In this respect, he was assisted by Mr Gangemi, who knowingly acted as a "puppet" director of companies under the effective control and management of Mr Lanciana, when he knew that Mr Lanciana was disqualified from managing those companies by reason of his criminal convictions. This conduct reflects poorly on Mr Gangemi, as well as Mr Lanciana.

35 Mr Lanciana admitted forging Mr Gangemi's signature on a number of credit applications relating to the supply of materials or services to Pre Need or Clapana. Mr Lanciana gave evidence that he signed Mr Gangemi's signature with Mr Gangemi's consent, because Mr Gangemi was unavailable to sign the necessary credit applications. Taking the evidence as a whole, I think that it is extremely unlikely that Mr Gangemi gave his consent to Mr Lanciana signing his name to the credit applications. I find that he did not do so. The evidence establishes that, although he was the sole director at relevant times, Mr Gangemi left control of all of the financial dealings of Pre Need and Clapana to Mr Lanciana, and did not seek to involve himself in their financial affairs until he became concerned about their tax liabilities and the use by Mr Lanciana of company funds for personal purposes, in about April 2003. I find that Mr Lanciana did forge Mr Gangemi's signature when suppliers requested director's guarantees. Whilst there is no evidence that any of these guarantees were ever called upon, these are serious matters which reflect poorly on Mr Lanciana as a person and a witness.

36 The Court will refer these matters to the Attorney-General to take any necessary action or make any necessary referrals to the appropriate statutory authorities.

37 In my view, the credibility of Mr Gangemi and Mr Lanciana should, wherever possible, be determined on an issue by issue basis having regard to the probabilities affecting that issue. Where an issue cannot be determined on the probabilities, I will consider the demeanour and the credibility of Mr Gangemi and Mr Lanciana respectively on that issue. If there is no reason to prefer the evidence of one against the other on this ground, I will determine the issue by reference to the general demeanour and credibility of Mr Gangemi and Mr Lanciana. In doing so, I will prefer the evidence of Mr Lanciana to that of Mr Gangemi. Although there are a number of established collateral matters indicating that Mr Lanciana is prepared to engage in dishonest or misleading conduct, his evidence as a whole accords more with the probabilities. With minor exceptions, it was consistent throughout. As I have said, the same cannot be said of Mr Gangemi. He gave evasive evidence, dissembled when it suited him and gave inconsistent evidence on important matters. I am satisfied that he told deliberate untruths in respect of a number of matters, in particular concerning signatures which he has falsely denied are his and in connection with the settlement of his disputes with Mr Lanciana by the document titled "Heads of Agreement" dated 9 September 2003. These matters are considered in detail below.

38 Further, I find that Mr Gangemi gave false evidence in making allegations of forgery against Mr Lanciana. In my view, Mr Gangemi deliberately seized upon admissions made by Mr Lanciana, that he forged Mr Gangemi's signatures on some credit applications, as a springboard for making a number of allegations of forgery against Mr Lanciana in connection with other documents which do not suit Mr Gangemi's case.

39 In considering any contention by Mr Gangemi that a document purportedly bearing his signature was not in fact signed by him, but contains a forgery of his signature, it is necessary to take account of the following matters.

40 First, there are many examples of Mr Gangemi's genuine signature in evidence - both in photocopy and original form. Further, there are many examples of Mr Gangemi's genuine signature on affidavits sworn by him and filed in the proceeding. I informed the parties that I would examine Mr Gangemi's signature on these affidavits and would take them into account in deciding any issue as to whether a purported signature of Mr Gangemi is in fact his genuine signature or is a forgery. The parties consented to this course.

41 Further, I asked Mr Gangemi to put forward a selection of original documents containing his genuine signature, signatures purporting to be his but where he was uncertain as to whether they were in fact his genuine signature and signatures that he contends are forgeries. As a result, an original documents folder containing 27 documents bearing signatures in these categories was prepared and marked as an exhibit.[3] I have examined all of the signatures in evidence, both original and photocopy, in an endeavour to ascertain whether Mr Gangemi's genuine signature is consistent and therefore able to be recognised by a non-expert such as myself. Having done so, I have reached the firm conclusion that Mr Gangemi's genuine signatures contain many variants and inconsistencies. There are full versions, short versions and versions in between. There is much inconsistency within each of these versions. There are even material differences between Mr Gangemi's signatures when affixed at the same time and on the same page of documents.

42 Second, there are a number of documents in evidence which Mr Lanciana admits contain his forgery of Mr Gangemi's signature. I have examined these and compared them to the documents in the original documents folder and to copy documents in evidence where no dispute arises as to the authenticity of Mr Gangemi's signature. To my eye, there is a very material difference between the admitted forgeries and the alleged forgeries. The admitted forgeries are obviously amateurish and bear no resemblance to any version of Mr Gangemi's signature. The alleged forgeries have many similarities to Mr Gangemi's genuine signature.

43 Third, I raised in the course of openings in the case whether any expert handwriting evidence would be called to assist the Court to determine allegations by Mr Gangemi that his signature had been forged on particular documents. I was told by counsel for Mr Gangemi that no expert evidence would be called. The matter rested there until Mr Gangemi was cross-examined. In cross-examination, counsel for Mr Lanciana asked Mr Gangemi if he knew Mr Neil Holland, a handwriting expert. Mr Gangemi said that he knew of Mr Holland and that he was a handwriting expert. Counsel for Mr Lanciana asked Mr Gangemi if any documents relevant to this case had been given to Mr Holland for his examination. Mr Gangemi replied that they had been.

44 Following this evidence, an application to re-open Mr Gangemi's case to call expert handwriting evidence was foreshadowed, but ultimately not proceeded with. In the first instance, Mr Gangemi's counsel sought leave to show original exhibits containing Mr Gangemi's signature or purported signature to a handwriting expert for the purpose of further examination, with a view to expert evidence being prepared and an application made to call that evidence. Orders were made permitting the original exhibits to be shown to the handwriting expert. Further, other documents were shown to the handwriting expert. However, following this further examination, no application was made to call any expert evidence.

45 In these circumstances, I infer that the expert document examiner engaged on behalf of Mr Gangemi could not give evidence which would have assisted him to establish his allegations of forgery. In this regard, I note that it was at one stage proposed to make application to re-open Mr Gangemi's case to call his solicitor to explain why the handwriting expert was not called to give evidence. However, no such application was made.

46 Mr Osborne presented as an honest witness. With a few exceptions, he gave direct answers to all questions put to him and willingly made concessions against his interest. His evidence was consistent throughout. There are some aspects of Mr Osborne's evidence which are mistaken. However, in general, I prefer his evidence to that of Mr Gangemi where there is direct conflict. The reasons for this will become apparent.

47 Mr Jafari gave evidence in difficult circumstances. By the time he entered the witness box, his legal representatives had withdrawn due to lack of funding. Further, his difficulties were increased because English is obviously not his first language. As a result, Mr Jafari gave a number of confused or non-responsive answers to questions. I am satisfied that this was not due to any deliberate evasion, but was caused by a lack of understanding of the questions. This was particularly so when cross-examined by junior counsel for Mr Gangemi who spoke in a rapid fashion with varying degrees of audibility. At times, this caused me difficulties in comprehending the question asked.

48 Once Mr Jafari understood the question, he gave consistent evidence. He impressed me as a witness who was doing his best to recall relevant events.

49 It must be said that there were a number of occasions where Mr Jafari made emotional speeches and sought to argue his case, often venting his frustration at what he perceived as the failure of his counsel (when still acting for him) to bring out in cross-examining Mr Gangemi, matters he believes were important. In my view, these occasional lapses by Mr Jafari do not affect his credibility as a witness. He was an unrepresented witness giving evidence in a language foreign to him in circumstances where he had some dissatisfaction with his previous representation and was intimidated by the fact that the two parties with opposite interests to him, Mr Gangemi and to a lesser extent Mr Lanciana, were both represented by senior and junior counsel. In my view, Mr Jafari's dissatisfaction with his legal representatives, as expressed, was without any real substance. However, I am satisfied that his dissatisfaction was subjectively genuine.

50 As appears below, I have in general preferred the evidence of Mr Jafari to that of Mr Gangemi where there is direct conflict. Mr Jafari's evidence was specific and generally consistent. Mr Gangemi's evidence was often inconsistent and unspecific, often amounting to no more than conclusions or denials. I am not prepared to find that Mr Jafari lied to me on any matter, let alone on a consistent basis as contended for by Mr Gangemi. Of course, I accept that Mr Jafari is or may have been mistaken as to some matters. However, on critical matters, I accept his evidence.

51 As will become apparent, there are a substantial number of important factual issues in dispute. As I have said, the evidence is in many respects confused and incomplete, and at times points to polar outcomes. In resolving the factual disputes, there are some incongruities in the evidence that I will identify. It is not possible to make all of the facts fit together with complete consistency. Where this is so, I have made findings on the evidence when considered as a whole.

(1) Prior dealings between Mr Lanciana and Mr Gangemi

52 As I have said, Mr Gangemi alleges that in early 1997 he and Mr Lanciana agreed to go into business together as joint developers of properties, sharing all of the profits and losses. Mr Gangemi alleges that, in furtherance of this joint endeavour, he was given a 50 per cent shareholding in two of the corporate vehicles utilised for these ventures, Pre Need Services Pty Ltd and Clapana Pty Ltd. Mr Gangemi was also appointed as the sole director of these companies. Mr Lanciana accepts that he engaged in some joint developments with Mr Gangemi. However, Mr Lanciana contends that other developments which Mr Gangemi alleges were joint developments between them were in fact undertaken by him on his own account, and that the only involvement of Mr Gangemi in those developments was as a builder.

53 Mr Lanciana denies that Mr Gangemi ever held any shares in Pre Need or Clapana. Mr Lanciana contends that, at all relevant times, he owned or controlled all of the issued shares in Pre Need and Clapana, and that the only reason Mr Gangemi was appointed as a director of Pre Need and Clapana was because he (Mr Lanciana) was prohibited from being a director by reason of criminal convictions.

54 Prior to the acquisition of the Hoddle Street properties, there were a number of other properties acquired by Pre Need, Clapana or other companies controlled by Mr Lanciana for the purposes of development or investment. These included properties at Kororoit Creek Road, Williamstown (a townhouse development); a property in Walter Street, Williamstown (which was sold for a capital gain); a property in Anchor Place, Prahran (which was the subject of an apartment development by Clapana); a property in Mitchell Street, Maidstone (a factory site which is rented on a negatively geared basis); a property in Stevedore Street, Williamstown (an investment property comprising vacant land); a property in Bute Street, Footscray (upon which a townhouse development was completed) and a property in Hoddle Street, Richmond (which was developed as residential apartments).

55 Insofar as these properties involved building works, those works were performed under the supervision of Mr Gangemi.

56 Mr Lanciana contends that Mr Gangemi's only involvement in the Kororoit Creek Road project and the Anchor Place project was as a builder, and that he was paid $1,000 per week for this. Mr Lanciana contends that Mr Gangemi had no interest whatsoever in the Walter Street property. Mr Gangemi denies this and says he was an equal partner with Mr Lanciana in the Kororoit Creek Road, Walter Street and Anchor Place properties. Mr Gangemi alleges that this flowed from his equal shareholding in Pre Need and Clapana.

57 Mr Lanciana acknowledges that the Mitchell Street property, the Stevedore Street property, the Bute Street properties and the Hoddle Street property were all acquired as joint undertakings by him and Mr Gangemi, with each of them being equally entitled to share in the profits and equally obliged to share in the losses. Their interests were held, or were intended to be held, through unit holdings in separate unit trusts established or intended to be established for each of those properties.

58 The Bute Street properties were developed in conjunction with Mr Brendan Blott, the solicitor acting for Mr Lanciana and Mr Gangemi at that time. Mr Blott has been paid some money towards his share of the profit on that development. However, no other profit entitlements have been distributed, and the final accounts for the Bute Street properties have not been finalised. The undistributed profits are held by Pre Need.

59 At all relevant times until Mr Lanciana and Mr Gangemi fell out and commenced their dispute in or about April 2003, Mr Brendan Blott of the legal firm Wilckens and Roche represented Mr Lanciana, Mr Gangemi, Pre Need, Clapana and related interests. After Mr Gangemi and Mr Lanciana fell out, Peter Johnson, who operated from the same offices as Wilckens and Roche and in association with that firm, acted for Mr Lanciana. Mr Gangemi then engaged Alderuccios, solicitors, to act on his behalf.

60 Mr Lanciana and Mr Gangemi conducted their relations on a very informal basis. Mr Gangemi attended to all building and development matters, including applications for permits and the like. Mr Lanciana attended to all administrative, accounting and financial matters. The central company in the business arrangements between Mr Lanciana and Mr Gangemi was Pre Need. Mr Lanciana "pooled" all of the income from the various projects, including those which he acknowledges were joint projects with Mr Gangemi, in Pre Need.

61 Putting to one side the assertion by Mr Gangemi that he was entitled to share equally with Mr Lanciana in the profits (and losses) of all of the projects, it is apparent that Mr Gangemi made no demand for a formal accounting or distribution of profits in respect of projects as they were completed. Whether or not Mr Gangemi was interested in all of the developments, or only those of them which are acknowledged by Mr Lanciana as being joint developments, it is clear that they were content to "roll" the profits from one joint project to the next, with a view to extracting those profits at some time in the future.

62 At the time the Buckley Street properties were acquired, there had been no formal profit distribution in respect of any prior projects. On Mr Lanciana's case, the only potentially distributable profit was in respect of the Bute Street properties, which had been completed and sold. The Mitchell Street and Stevedore Street properties were investments only, and had not realised any profit.[4] Mr Lanciana and Mr Gangemi were no doubt hoping for large profits from the Hoddle Street development, which was the largest development yet undertaken by them. This is how things stood when the Buckley Street properties were acquired.

63 The prior dealings between Mr Lanciana and Mr Gangemi in respect of projects other than the Buckley Street project, and concerning Mr Gangemi's claim that he was entitled to one half of the issued shares in Pre Need and Clapana, give rise to a whole host of collateral issues. It is unnecessary to decide those collateral issues in this proceeding. This is because it must be kept firmly in mind that this proceeding concerns only claims made by the parties in connection with the Buckley Street project. The case presented at trial on behalf of Mr Gangemi focussed heavily on these collateral issues. There were two reasons for this.

64 First and foremost, evidence and cross-examination on behalf of Mr Gangemi was directed to these collateral issues because Mr Lanciana pleaded in his defence that Mr Gangemi had made no financial contribution towards the acquisition of the Buckley Street properties, or to development costs (such as consultants and permit fees) paid by Pre Need for the benefit of the Buckley Street project. The case was pleaded and opened on behalf of Mr Lanciana on the basis that Mr Gangemi could not establish the existence of the Buckley Street unit trust and that, accordingly, Mr Gangemi having contributed nothing towards the Buckley Street project, he was entitled to no interest in it.

65 However, in his oral evidence, Mr Lanciana abandoned that position. He conceded that Mr Gangemi had in fact made substantial contributions to the acquisition of the Buckley Street properties and the development costs of the Buckley Street project. This concession was properly, although belatedly, made. Mr Gangemi made his contribution in a number of ways:

(1) Mr Gangemi was a joint guarantor with Mr Lanciana for the finance facility which was utilised to complete the acquisition of the Buckley Street properties.

(2) All of the development costs expended in connection with the Buckley Street project were paid from Pre Need funds. Any profits which had been realised from prior projects in which Mr Gangemi was interested (for example, the Bute Street development) were contained within Pre Need. In that sense, Mr Gangemi contributed to the development costs which were paid by Pre Need.

(3) Each of Mr Gangemi and Mr Lanciana undertook obligations towards Mr Osborne and Mr Jafari in respect of their advances towards the Buckley Street project.

(4) Mr Gangemi invested a considerable amount of his time in connection with the acquisition of the Buckley Street properties and the proposed development of them, including in connection with engaging consultants and prosecuting the application for a planning permit.

66 As appears hereafter, I am satisfied that it was agreed between Mr Gangemi and Mr Lanciana that they would take an equal share in the Buckley Street project, through whatever structure (trust, company or partnership) was ultimately agreed between them and any other participants in the project.

67 In these circumstances, it is unnecessary to determine the extent of Mr Gangemi's interest as a shareholder in, or in the assets of, Pre Need or Clapana at any time. Those issues are to be determined in other proceedings between Mr Gangemi and Mr Lanciana.

68 The second reason why evidence and cross-examination on behalf of Mr Gangemi was directed at collateral issues arising out of the dealings between him and Mr Lanciana otherwise than in respect of the Buckley Street project was to raise a plethora of credit issues directed at undermining the credibility of Mr Lanciana as a witness. It is unnecessary to resolve all of these issues, and the evidence is in any event incomplete in respect of many of them. They have been taken into account by me in assessing Mr Lanciana's general credibility as a witness.

69 Mr Lanciana and Mr Gangemi pursued an aggressive property investment and development strategy. The profits of projects were "rolled into" one another and projects overlapped. There was a constant need for funds, with Mr Lanciana juggling funds between different projects and entities and mixing the funds from his own projects, or those of his wife, with projects jointly undertaken by Mr Gangemi. No attention was given to the proper separation of funds and the keeping of separate accounts for different projects. Until they fell out in early 2003, Mr Gangemi showed no interest in the way in which Mr Lanciana managed the finances. I infer that he believed that all was going well, and that profits would eventually begin to flow from the various projects. Further, during this time, Mr Gangemi was acquiring assets from the projects, for example, an apartment in the Anchor Place project on terms that Pre Need paid Mr Gangemi's interest payments for some time. In addition, Pre Need paid for some renovations to one of Mr Gangemi's properties.

70 At some time in late 2001, Gangemi and Lanciana discussed the need to obtain funds to progress the Hoddle Street project. Mr Lanciana told Mr Gangemi that he too should be trying to obtain funds for Hoddle Street and other joint projects, and that he "should not always leave everything to me". In this context, Mr Gangemi approached Mr Osborne, and later Mr Jafari, and sought funds from them.

71 Mr Osborne met Mr Gangemi in about 2000 when they were both holidaying in Malaysia. Mr Gangemi told Mr Osborne that he was a property developer in Melbourne and that he owned a pre-cast concrete yard. A close friendship developed between the two men, and they commenced socialising together often. They met for coffee most days and, when Mr Gangemi married in early 2001, Mr Osborne acted as the master of ceremonies at his wedding.

72 During the course of their conversations, Mr Gangemi kept Mr Osborne informed about his property development activities. I infer that this was, initially, just part of normal conversation between friends.

73 At some stage in 2001, Mr Gangemi told Mr Osborne that he had a plan to develop the site of an old car yard in Footscray into a residential unit development. This is the property at 63-67 Buckley Street. Mr Gangemi told Mr Osborne that he intended to do this in conjunction with Mr Lanciana.

74 Later in 2001, I infer after Mr Lanciana had asked Mr Gangemi to assist with obtaining funding, Mr Gangemi asked Mr Osborne if he wanted to "put money in" to the project to develop "the old car yard". Following this approach by Mr Gangemi, there were many conversations between the two men about Mr Osborne investing in the Buckley Street project.

75 As a result of these conversations, Mr Osborne alleges that an agreement was reached between him and Mr Gangemi for Mr Osborne to make a conditional investment in the Buckley Street project. In his evidence of this agreement, Mr Osborne did not give evidence of specific words said in particular conversations. He said there were many conversations concerning the proposal that he invest, and that he and Mr Gangemi spoke almost daily at this time concerning the proposal and other matters. They were close friends and he trusted Mr Gangemi. The best that Mr Osborne could do was give evidence of his recollection of the terms of the agreement reached during the many discussions. As appears below, Mr Osborne's recollection is generally consistent with, and is no doubt assisted by, some handwritten notes made by Mr Gangemi, and supplemented by Mr Osborne, in May 2003 on the back of a truck rental invoice. Of course, in May 2003, the recollections of Mr Osborne and Mr Gangemi of their discussions in late 2001 and early 2002 are likely to have been more reliable than their present recollections.

76 Mr Osborne's evidence concerning the result of these discussions is contained in the following evidence given by him in chief:

Could you please tell His Honour, as carefully and with as much detail as you recall, the content of the discussions which occurred between you on the one part and Mr Gangemi on the other in that period?---Yes. I said that I would contribute the amount of $200,000, which ended up being $199,000 because there was a $1,000 first month's interest that was taken out, on certain provisos, that being that I would be given a charge over Mitchell Street, that I would be paid my monthly interest that was being accrued from the bank for the $200,000 that if a permit was obtained within 18 months of me giving the money to Mr Gangemi, I would obtain a 12.5 per cent interest in the development and if the permit was not obtained within 18 months, I would be given my $200,000 back, and interest sum of $50,000 and also interest paid of about $1,000, between rate at the time, and also legal into fees and any other fees associated with putting the charge on Mitchell Street, and also the property at Buckley Street would be purchased unencumbered.

Mr Osborne, that's exhausted your memory on the discussions as best you are able?---Yes.

HIS HONOUR: Am I correct in this, Mr Osborne, that the evidence you've just given as to your recollection of the result which was reached after discussions over a period of a number of months?---That was the main crux of the reason why I would hand over the $200,000.

How many conversations were there between you and Mr Gangemi which gave rise to those matters being agreed between you?---That would be hard to answer because we used to meet every night for a coffee, but I would say in quite a few occasions we would discuss the business.

Yes?---But again it's hard to know because we met socially most nights.

Was there an element of negotiation involved, that is, as to the terms upon which you would advance moneys?---No.

Who proposed the terms that you say were agreed?---I proposed the terms and Mr Gangemi agreed to them. I wasn't interested in a piece of dirt that didn't have a permit. It was only worth something if it had a permit. That's why the clause was put in, 18 months.

How did you come to specify a charge over the Mitchell Street property? How did you know about the Mitchell Street property?---At the point that I gave my money over to Mr Gangemi, Buckley Street wasn't settled, so a charge couldn't be put on that property. So he suggested as an alternative to put in on the Mitchell Street property.

77 Mr Osborne maintained this position throughout his evidence.

78 Subsequently, Mr Osborne paid two cheques totalling $199,000 in order to make his investment. There is much dispute about the circumstances surrounding the drawing and banking of these cheques. The reason only $199,000 was advanced was because Mr Osborne deducted $1,000 as the approximate amount of the first month's interest payable by him on his loan of $200,000 on the security of his house. Thereafter, until in or about September 2003, Pre Need paid Mr Osborne each month an amount equal to Mr Osborne's interest payment due on his loan of $200,000. The payments were usually made by cheque handed to Mr Osborne by Mr Gangemi.

79 Mr Osborne said that he gave a cheque for $86,040 payable to Mr Gangemi on or around the date of the cheque (6 February 2002). Mr Gangemi denies this, and says that he knew nothing of the first Osborne cheque until after Mr Osborne had provided it to Mr Lanciana and Mr Lanciana had organised for that cheque to be banked.

80 In his witness statement, Mr Gangemi denied any involvement in, or knowledge of, the circumstances in which the first Osborne cheque was requested or delivered. The denial was very particular, and includes denials of events which Gangemi says have only recently come to his attention. It is necessary to set out the full content of Gangemi's denial in respect of the first Osborne cheque:

In early 2002 Lanciana obtained two cheques from Osborne for $86,040.00 and $112,960.00 respectively. I was not present when Lanciana obtained the cheques from Osborne. I have learned recently that Lanciana paid the cheque for $86,040.00 into an account that I believe was styled as follows 'Mahmood, Mehmood & Gangemi'. I did not pay the cheque into that account. I do not know who paid the cheque into that account but the cheque was deposited into that account without my knowledge. I had agreed to open an account with Mahmood and Mehmood who were mortgage brokers whom Lanciana and I had engaged to raise $6.8 million required to construct the 16 apartment development at 129 Hoddle Street, Richmond Victoria and for the proposed development at Buckley Street. $4.8 million was to be applied for the Hoddle Street development and the balance was for the commencement of the Buckley Street development. I did not know until recently that a cheque for $86,040.00 had been processed through that joint account. I only learned this after I inspected documents discovered by Osborne ... It appears that this cheque was processed through the said joint account and the proceeds thereof were transferred from that account to the said mortgage brokers.[5]

81 In cross-examination, Mr Gangemi held to his denial.

82 Mr Lanciana's evidence was as follows. In early February 2002, there was an urgent need for funds, in particular for the Hoddle Street project. At this time, he was trying to arrange funding for the Hoddle Street project from a group of Asian investors. One of the brokers trying to arrange a loan was Sam Trantino. Another was Luan Tranh Phan. Through Mr Trantino, he and Mr Gangemi became aware that the Asian investors required a fee equal to 1 per cent of the proposed loan to accompany the loan application for approximately $8.6 million. The amount required was $86,040, which was to be banked into a joint bank account in the name of the Asian investors and Mr Gangemi. Mr Gangemi was involved in dealings with Mr Trantino in connection with opening a joint account with HSBC Bank Australia in the name "Mahmood, Mehmood & Gangemi".

83 Mr Lanciana said that he raised the urgent need for funds with Mr Gangemi in early February 2002 and asked Mr Gangemi whether he could assist with obtaining an advance from Mr Osborne or Mr Jafari. As a result of this discussion, Mr Lanciana said that Mr Gangemi gave him Mr Osborne's telephone number. Mr Lanciana then telephoned Mr Osborne and asked him whether he could provide any of the funds he had agreed with Mr Gangemi to lend. Mr Lanciana said that Mr Osborne responded favourably to this request and that he then asked Mr Osborne for an advance of $86,040 by a cheque payable to Mr Gangemi.

84 In cross-examination, Mr Osborne agreed that it was Mr Lanciana who telephoned him and asked for the initial advance in respect of his agreement with Mr Gangemi. However, Mr Osborne denied that Mr Lanciana asked him for a specific sum of money.

85 As I have said, the first Osborne cheque is dated 6 February 2002. On that day, Mr Gangemi attended at an office of HSBC Bank together with one of the proposed investors (Ms Mahmood), Mr Trantino and Mr Phan. They attended in order to open the joint account in the name of "Mahmood, Mehmood & Gangemi". They met with a female bank officer.

86 Mr Gangemi's initial position was that the joint account was opened prior to 6 February 2002 with a sum of $1,000 deposited by the finance brokers. Further, his initial position was that Mr Trantino did not attend at the HSBC Bank with him when he attended to open the account. This evidence was inconsistent with the contemporaneous documents dated 6 February 2002, and Mr Gangemi's counsel later cross-examined Mr Trantino on the basis that the account was opened on 6 February 2002 and that Mr Trantino was present at the time. When it was put to Mr Gangemi that Mr Trantino was present, and recalls Mr Gangemi handing across a cheque of about $80,000, Mr Gangemi said that Mr Trantino would be lying if he gave that evidence. Earlier, Mr Gangemi had said "I've never seen Mr Trantino at the HSBC Bank". This is one of many examples of Mr Gangemi giving definite evidence where he either has no recollection or a vague recollection, and he perceived that a definite recollection would suit his case. By the time Mr Trantino gave evidence, it was accepted by Mr Gangemi and his legal advisers that he and Mr Trantino were present together at the HSBC Bank on 6 February 2002 when the joint account was opened.

87 Mr Trantino gave evidence. He said that he met Mr Gangemi and Mr Phan at the HSBC Bank at about 1.30 pm on 6 February 2002. The time is recorded in his diary and there was no cross-examination to the effect that this was a false time. Mr Trantino gave evidence that he recalls that Mr Gangemi "pulled a cheque out of his pocket and handed a cheque over". He said that he did not actually see the cheque "but it would have had to have been for 1 per cent of the total amount of the loan".

88 In cross-examination, Mr Trantino maintained his evidence. He said that "a cheque was definitely handed over". Mr Trantino was cross-examined as to the circumstances in which his statement was taken. The purpose of the cross-examination was to question whether words had been put in his mouth by the person taking the statement. Mr Trantino said that he was asked what transpired at the HSBC Bank on 6 February 2002 and that, in response, he mentioned that a cheque had been handed over. He stated firmly that this was "something I recalled myself".

89 Mr Phan gave evidence. He recalled the meeting on 6 February 2002 at the HSBC Bank. In his witness statement, he gave evidence that all of those in attendance were taken into a small room and met with a representative of the HSBC. He said:

There was signing in order to open a bank account. No cheque was handed over when the bank account was being opened and Gangemi did not produce a cheque at that meeting.

90 When Mr Phan was cross-examined, it became apparent that his evidence is simply that he has no recollection of a cheque being handed over. Nor could he recall other events which obviously happened, such as Mr Gangemi producing his passport in order to give sufficient proof of his identification. His recollection was that the meeting lasted about half an hour, that there were forms to sign and that he recalled both Ms Mahmood and Mr Gangemi signing documents. When it was put to him that it was possible that Mr Gangemi handed over a cheque during the course of the discussions and events and that that he did not see Mr Gangemi do so, he responded "if he did, I did not see that".

91 Mr Phan was cross-examined about the circumstances in which he came to give evidence. He said that he received a telephone call from Mr Gangemi and that Mr Gangemi asked him "did I remember him depositing a cheque that day". Mr Phan agreed with the proposition that Mr Gangemi put this question to him in a leading fashion and suggested to him that "I didn't deposit a cheque that day".

92 In these circumstances, Mr Phan's evidence is of little weight. It amounts to no more than his recollection of attending when the joint account was opened, that there were discussions on that day, documents handed over, documents signed over the course of about half an hour and that he does not recall Mr Gangemi handing over a cheque during that process. This is to be contrasted with the positive recollection of Mr Trantino that a cheque was handed over by Mr Gangemi.

93 The documents produced by the HSBC Bank support the conclusion that Mr Gangemi attended at the HSBC Bank and handed over the first Osborne cheque. The application form signed by Ms Mahmood and Mr Mahmood stated that they were applying to open a "call deposit account" with an initial deposit of $86,040 by cheque numbered 012 drawn on the Commonwealth Bank. This is the number of the first Osborne cheque. However, these details are absent from the application form signed by Mr Gangemi and it is possible that these details were filled out later.

94 The most significant document produced by the HSBC Bank is the original deposit slip recording the payment of the first Osborne cheque into the joint account. Most of the handwriting on the deposit slip is the same as the handwriting on the forms signed by Mr Gangemi when he attended to open the joint account. Further, the deposit slip contains a signature in the box titled "Paid in by". That signature appears to be Mr Gangemi's.

95 Mr Gangemi denies that his signature appears on the deposit slip. Of course, if it is his signature, it would establish that he had possession of the cheque at some stage and that it was he who paid it into the joint account. I have examined the original deposit slip and compared it with a number of original signatures which Mr Gangemi admits are his. Further, I have compared the signature on the deposit slip with signatures which Mr Gangemi alleges are forgeries. Based on my review of the signatures, I find that the signature on the deposit slip is that of Mr Gangemi. This finding is supported by the following matters.

96 First, Mr Trantino gave evidence that he recalled Mr Gangemi hand over a cheque at the time the account was opened. Mr Trantino gave his evidence directly and forcefully. I accept this evidence.

97 Second, Mr Osborne gave evidence that he recalls handing the first cheque to Mr Gangemi. In circumstances where there was admittedly a close friendship between Mr Osborne and Mr Gangemi, it is much more likely that Mr Osborne would hand a cheque for a significant sum of money to Mr Gangemi, with whom he had dealt, and not Mr Lanciana.

98 Third, the fact that the deposit slip is, in large part, completed in the handwriting of the bank officer who wrote the handwritten portions of the documents signed by Mr Gangemi at the time he opened the joint account is significant.

99 Fourth, Mr Gangemi's evidence concerning the HSBC deposit slip was most unsatisfactory. It was infected with advocacy and his own conclusions, which are wrong, as to the identify of the person whose handwriting appears on the deposit slip. In his evidence-in-chief, Mr Gangemi said that, "Some of the numerals I believe are Brendan Blott's, our former solicitor, and some of the handwriting is actually Richard Osborne's handwriting". In cross-examination, Mr Gangemi said that he could "absolutely" identify Mr Blott's handwriting on the deposit slip. He said that Mr Blott had written the BSB number and the account number and that he could absolutely "identify that these account details had been written in Mr Blott's handwriting". Mr Gangemi's evidence in this regard was contained in the following exchange:

Where is Mr Blott's?---Mr Blott's, it's actually the numbers. If you look at the BSB number and the account number, very distinctive the number 2. I've been doing a lot of research on Blott's handwriting, and the actual numbers are---

This is just your opinion based on some research, not from a long period of dealing with Mr Blott?---It was a long period of dealing with Mr Blott. I have a lot of original documents from Mr Blott and that's how I ascertained - when I finally got a copy of this pay-in slip I knew that it's not my signature - sorry, it's not my handwriting whatsoever.

And you say it's not your signature either?---No, sir, no.

100 Further, Mr Gangemi said that he believed Mr Osborne had written the names "Richard & Natalie Osborne" under the description of "Drawer" on the deposit slip and was "more positive" that Richard Osborne had written the names "M Mahmood & A Mehmood & A Gangemi" in the "Name of Account" box on the deposit slip. He did not say how he was able to express this opinion.

101 I reject Mr Gangemi's evidence in this regard. It demonstrates Mr Gangemi's unreliability as a witness, and his preparedness to give whatever evidence he thought was necessary to advance his case. In my view, he was simply trying to confuse the issues with respect to the deposit slip in an endeavour to support his denial that he had anything to do with the deposit slip and, in particular, that he signed it.

102 My reasons for rejecting Mr Gangemi's evidence on this issue are as follows. At the time Mr Gangemi first gave his evidence on this issue, there was only a photocopy of the deposit slip in evidence. Later, the original deposit slip and legible photocopies of the application forms and other documents completed in handwriting by the HSBC Bank officer were produced to the Court. It is obvious from an examination of the documents that the bank officer who completed the account opening documents has written most of the handwriting on the deposit slip which Mr Gangemi attributes to either Mr Osborne or Mr Blott. In particular, the figure "2" is consistent throughout the bank forms and the deposit slip, with the exception of the account number which is in different handwriting and colour ink. I infer that the different handwriting is that of another bank officer and was made when the first Osborne cheque was processed later in the afternoon. There is no reason to suppose Mr Blott had anything to do with the deposit slip or that he wrote anything on it.

103 Fifth, in finding that Mr Gangemi signed the deposit slip, I take into account his general lack of credibility as a witness. The reasons for this appear throughout these reasons. Given the probabilities, I am not prepared to prefer Mr Gangemi's evidence to the sworn evidence of Mr Osborne and Mr Trantino. In all the circumstances, I find that Mr Osborne gave the first cheque to Mr Gangemi and that Mr Gangemi gave the cheque to the HSBC Bank officer at the time he opened the joint account.

104 By a deed of charge dated 21 February 2002, Clapana (in its capacity as trustee of the Mitchell Street Unit Trust) and Mr Gangemi and Mr Lanciana (in their capacities as unit holders in the Mitchell Street Unit Trust) granted a charge to Osborne over the Mitchell Street property. The charge was executed by Mr Gangemi as sole director and secretary of Clapana and on his own behalf. Mr Lanciana and Mr Osborne also signed the deed of charge. The deed of charge is a most unsatisfactory document. Although it was prepared by a solicitor, Mr Blott, it makes no reference to the moneys secured by the charge. It states simply that "the parties have by an agreement of even date arranged to create a charge over the property".

105 In his witness statement, Mr Gangemi said that he was responsible for instigating the charge to Mr Osborne. Mr Gangemi said that he instigated the charge because he was "surprised and embarrassed" to learn that Mr Osborne had paid the first Osborne cheque to Mr Lanciana at a time when "the purchase of the property at 63-67 Buckley Street had not been settled and the Buckley Street Unit Trust, in respect of which Osborne was to subscribe for units, had not been established". Mr Gangemi said in his witness statement that he discussed this with Mr Lanciana and "asked him why he had taken Osborne's money at that time". According to Mr Gangemi, Mr Lanciana replied that Pre Need would credit the amount of the first Osborne cheque to Mr Osborne's subscription for units in the Buckley Street Unit Trust once it was established. In these circumstances, Mr Gangemi said that he persuaded Mr Lanciana to agree to provide a charge in favour of Osborne over the Mitchell Street property.

106 The difficulty with this evidence of Mr Gangemi is that it depends upon acceptance of his evidence that he had no involvement in the procurement and payment of the first Osborne cheque. For the reasons given above, I do not accept his evidence in this regard.

107 Mr Osborne was cross-examined about the charge. He said that it was part of the original arrangement which he reached with Mr Gangemi that he would be given a charge over 63-67 Buckley Street. At the time of the first Osborne cheque, Mr Osborne knew that the purchase of 63-67 Buckley Street had not then been settled. Accordingly, he asked Mr Gangemi for security. He knew that security was not provided before he paid the cheque. He said that he paid the cheque in the absence of security being first obtained because he was giving his money to his best friend and he "trusted him wholeheartedly". Subsequently, in circumstances which Mr Osborne cannot recall, the executed charge was provided to him for signature. At this time, Mr Osborne learnt from Mr Gangemi that the Mitchell Street property was owned by Clapana on behalf of Mr Gangemi and Mr Lanciana.

108 Mr Lanciana was cross-examined about the charge. At the time the charge was created, Mr Lanciana says that he believed that Mr Osborne was a mere lender to him and Mr Gangemi, on the basis that they would pay the interest incurred by Mr Osborne on the moneys advanced by him. Mr Lanciana explained his recollection of the circumstances giving rise to the charge in the following way.

... because it was a loan, the concern was that if something happened to Gangemi and myself, where would Mr Osborne be in respect to his money, and it was agreed, although there are varying accounts of who came up with the idea and everyone seems to be taking credit for it, but the end result was it was agreed there would be a charge over Mitchell Street to protect Mr Osborne's funds that he had contributed and was about to contribute. Otherwise the case - if we died in a car accident, where would he be?

So you are accepting that you were equally liable with Mr Gangemi for the $86,000?---At that time that point in time it was a loan and I felt responsible for it too, yes.

It was a loan to the two of you?---It was a loan for us to use at Hoddle Street, yes. That's how I interpreted it all the way until I heard different.

109 The circumstances in which the charge was arranged raises a credit issue. It is strictly unnecessary to decide it. However, I prefer the evidence of Mr Lanciana and Mr Osborne to that of Mr Gangemi. This is principally because Mr Gangemi's evidence is inconsistent with my findings concerning Mr Gangemi's involvement in procuring and depositing the first cheque into the joint account with HSBC Bank.

110 Later in February 2002, Mr Osborne wrote a further cheque for $112,960 payable to Mr Gangemi ("the second cheque"). Someone, probably Mr Lanciana, banked this cheque to the credit of an account maintained by Pre Need in the name of "Victorian Precast Panels". This cheque was dishonoured. The bank brought this to the attention of Mr Lanciana. Mr Lanciana says that he spoke with Mr Gangemi about this and then rang Mr Osborne and told him the cheque had been dishonoured. Mr Osborne was concerned. Both Mr Osborne and Mr Lanciana said that Mr Lanciana did not ask Mr Osborne for a replacement cheque during this conversation. Mr Osborne says that it was Mr Gangemi who thereafter asked him to provide a replacement cheque, in the same amount, but payable to "Victoria Pre Cast Panels". I find this evidence difficult to accept. For the following reasons, it is much more likely that both Mr Osborne and Mr Lanciana are mistaken about the replacement cheque.

111 First, the bank informed Mr Lanciana that the second Osborne cheque had been dishonoured. Mr Lanciana says that he then spoke with Mr Gangemi about this. This is more probable than not. It was important to Mr Lanciana that the funds were obtained, and the dishonour would have concerned him. It is natural that he would have discussed this with Mr Gangemi. Following his conversation with Mr Gangemi, Mr Lanciana spoke with Mr Osborne and informed him that the cheque had been dishonoured. Mr Osborne was concerned about this. Given that Mr Lanciana had spoken with Mr Gangemi, it is more probable than not that it was Mr Lanciana who asked Mr Osborne for the replacement cheque. There would otherwise be no purpose for Mr Lanciana to have telephoned Mr Osborne.

112 Second, the probabilities favour Mr Lanciana specifying that the replacement cheque should be made payable to Victoria Pre Cast Panels. This is because Mr Lanciana had control of the finances and it was he who made decisions as to which account should be credited with funds as the need arose.

113 I find that Mr Lanciana requested the replacement cheque from Mr Osborne and that Mr Osborne provided that cheque directly to him, and not to Mr Gangemi.

114 However, I accept Mr Osborne's evidence that the second Osborne cheque, which was made payable to Mr Gangemi personally, was handed by him to Mr Gangemi. There is no reason to disbelieve Mr Osborne when he says that he recalls giving the second Osborne cheque to Mr Gangemi. Mr Osborne and Mr Gangemi were very close friends at the time. It was Mr Gangemi who had persuaded Mr Osborne to invest in the Buckley Street project. At this time, it is unlikely that Mr Osborne would have dealt directly with Mr Lanciana, to the exclusion of Mr Gangemi, in respect of such a large sum of money.

115 In about September 2002, Mr Jafari discovered that the Buckley Street properties had been purchased subject to a mortgage. This was contrary to his understanding and he was annoyed. He spoke with Mr Osborne and told him about the mortgage. Mr Osborne said he did not know the properties were mortgaged and was unhappy that they were. A meeting was arranged between Mr Lanciana, Mr Gangemi, Mr Jafari and Mr Osborne that night. Mr Jafari said that he wanted the mortgage paid out or he wanted his money back. Mr Lanciana and Mr Gangemi said that they could not pay the mortgage out.

116 Mr Jafari said that he repeated his wish to withdraw from the project in a later meeting between him and Mr Osborne, and Mr Osborne replied to the effect "I feel the same. As far as I'm concerned my money is a loan and I want it back".[6] Mr Osborne cannot recall saying this to Mr Jafari, but does not deny he may have done so.

117 In his witness statement, Mr Osborne said that shortly after he was informed by Mr Jafari about the mortgage, he told Mr Gangemi that he wanted out of the project and that he wanted his money back. Mr Osborne said that Mr Gangemi did not pay his money back but:

He instead told me that he would write out the details of what our agreement was. He also told me that the project would still go ahead and that he could still get the permit within the 18 month period.

In May 2003, Gangemi did write out those details. The document written by Gangemi was created one day in Richmond after I had been with Gangemi to return a truck which he had rented from Thrifty.[7]

118 There are some difficulties with this evidence of Mr Osborne. First, Mr Osborne said in his witness statement that he asked for his money back when he learnt that the properties were mortgaged. In contrast, in his oral evidence, Mr Osborne said that he "went to Mr Gangemi and expressed my concern that there was a mortgage over the property ... He assured me that everything was fine and I was happy with that". In re-examination, Mr Osborne said that he did not seek to remove his money from the Buckley Street project when he learned that the property was mortgaged because:

I had a discussion with Mr Gangemi about the mortgage which from memory he denied that there was one on it at the time. Then he assured me that the mortgage was not my responsibility at all and that things will progress as we hoped they would. So at that time I had no reason to distrust him at all and I believed what he was saying.

119 Second, the clear indication given in Mr Osborne's witness statement is that Mr Gangemi's promise to "write out the details of what our agreement was" was given shortly after Mr Osborne discovered that the Buckley Street properties were mortgaged. This was in or about September 2002. There is no explanation in Mr Osborne's witness statement as to the delay between this time and May 2003, when Mr Gangemi finally wrote out the details as promised.

120 In my view, Mr Osborne's oral evidence accords with the probabilities.

121 As will appear, by May 2003 Mr Gangemi and Mr Lanciana had commenced a serious falling out. There was a heated meeting at the Pre Need offices, attended by Mr Gangemi, Mr Lanciana, Mr Jafari and Mr Osborne.[8] It was clear to all present that Mr Gangemi and Mr Lanciana could no longer work together. By this time, Mr Osborne was most concerned about his investment. It is in my view more probable that it was at this time that Mr Osborne asked Mr Gangemi for his money back and, in response, Mr Gangemi either offered to write down the terms upon which Mr Osborne had invested or Mr Osborne asked him to do so. Mr Gangemi said that, at this time, "Mr Osborne was very concerned and I sympathised with him". I accept this statement by Mr Gangemi. He and Mr Osborne were still good friends at this time.

122 Mr Osborne says that, on or about 12 May 2003, he assisted Mr Gangemi when he returned a rental truck to the Thrifty Car Rental office in Richmond. Mr Osborne said that he followed Mr Gangemi in his car whilst Mr Gangemi drove the rental truck to the Thrifty office. According to the invoice issued by Thrifty to Mr Gangemi, the truck was returned on 12 May. Once Mr Gangemi had returned to the truck, and obtained his copy of the invoice, Mr Osborne said that Mr Gangemi sat in the passenger seat of Mr Osborne's car and, at that time, Mr Osborne asked him to write out the terms upon which Mr Osborne had invested. According to Mr Osborne, Mr Gangemi then wrote out the terms of Mr Osborne's investment on the back of the Thrifty invoice ("the Thrifty note").

DEED IS MADE THE _________ DATE 4/3/02

BY ANTONIO GANGEMI OF UNIT 6-3 ANCHOR PLACE PRAHRAN 3181

AT THE REQUEST OF ________ RICHARD OSBORNE OF ADDRESS 95 Richardson Street Albert Park

61 BUCKLEY ST. FOOTSCRAY 3011, CERT OF TITLE VOL,. 8224 FOL 243

63-67 BUCKLEY ST. FOOTSCRAY 3011, CERT OF TITLE VOL. 2805 FOLIO 988

VOL. 8592 FOLIO 907. VOL. 8195 FOLIO 152. VOL. 8355 FOLIO 746.

THE PROPERTY WILL BE DEVELOPED BY THE REGISTERED PROPRIETOR 63 BUCKLEY STREET PTY LTD ACN 099 836 361

* PLAN-PERMIT FOR MIN 26 UNITS WITHIN 18 MONTHS OF MONEY PAYED (sic)

* INTEREST PAYED (sic) BY PRE NEED SERVICES AUSTRALIA

* YOU WOULD RETAIN 12½% IF PERMIT WITHIN 18 MONTHS

MONEY REPAYED (sic) BACK WITH 25% NET RETURN $250,000

* COST OF ESTABLISHMENT FEES & CHARGES. + LEGAL FEES ASSOCIATED WITH CHARGE ETC.

124 Mr Osborne said that Mr Gangemi hand wrote all of the Thrifty note except for the date, Mr Osborne's address, the symbol and words "+ LEGAL FEES ASSOCIATED WITH CHARGE ETC." and the words, symbol and figures in the box at the end of the Thrifty note. For convenience, these are in bold type in the above quote. Mr Osborne said that he wrote these things, appearing in bold above, on the Thrifty note in the presence of Mr Gangemi immediately following the preparation of the document by Mr Gangemi.[9]

125 Mr Osborne dated the Thrifty note 4 March 2002, because that is the date he paid the replacement cheque for the second Osborne cheque.

126 Mr Gangemi accepts that the bulk of the Thrifty note is in his handwriting but says that, in addition to the portions which Mr Osborne admits he wrote, Mr Osborne also wrote "18 MONTHS" on three occasions on the Thrifty note. These are italicised in the quote above. Mr Gangemi does not say that he remembers Mr Osborne writing "18 MONTHS" on three occasions on the Thrifty note. He says that the handwriting of "18 MONTHS" is not his. I do not accept this evidence. I have examined the original of the Thrifty note. There is nothing to indicate that the handwriting of "18 MONTHS" is materially different from the other handwriting which is admittedly that of Mr Gangemi. I find that Mr Gangemi wrote "18 MONTHS" on the Thrifty note.

127 Mr Gangemi also said that he does not believe the percentage symbol "%", which is adjacent to the figure "12" on the Thrifty note, was written by him; because he uses "dots" and not "circles" when writing the symbol for percentage. Nothing turns on this.

128 Mr Gangemi also said that he was not sure if the figure "26" in the first condition stated on the Thrifty note was written by him. Again, nothing turns on this.

129 There are more important factual issues concerning the Thrifty note. First, Mr Gangemi denies that the Thrifty note was written in Mr Osborne's car, or that Mr Osborne ever assisted him in the return of a rental truck by following him to the Thrifty office and then driving him to his onward destination. However, although he was prepared to deny Mr Osborne's account of the place where the Thrifty note was written, Mr Gangemi himself had no recollection of where the document was written. Further, although Mr Gangemi cannot recall where the Thrifty note was written, he gave evidence of a positive recollection that Mr Osborne wrote nothing on the Thrifty note in his presence: "I can recall there was nothing written (by Osborne), no. The only notes on that note were mine".

130 Second, and of greatest importance, Mr Gangemi denies that the Thrifty note was written to record the terms of Mr Osborne's investment in the Buckley Street properties. In his evidence-in-chief, Mr Gangemi said that Mr Osborne became very concerned after the heated arguments in May 2003 at the Pre Need offices between him and Mr Lanciana and "everybody in that room". Mr Gangemi described those arguments as "very heated arguments, very, very - got out of control". As I have said, in this context, Mr Gangemi said that Mr Osborne was very concerned and he sympathised with him. As a result, Mr Gangemi said that Mr Osborne approached him "at some time", which I infer was shortly after these heated arguments.

131 Mr Gangemi said that Mr Osborne said that his solicitor had told him that the charge over Mitchell Street "means nothing unless an agreement goes with it". Mr Gangemi said that he replied "I can't give you an agreement, all I can do is give you a few notes, go to Lanciana and see if he will write you up something". Mr Gangemi said that the Thrifty note was written for this purpose only: "That's basically all it was. Just to make some points and tell him (Lanciana)". Mr Gangemi says that it was in this context, that "for some unknown reason I wrote something on the back of the Thrifty note". By "some unknown reason" I took Mr Gangemi to be referring to the fact that the notes were written on the back of the Thrifty invoice. In that regard, Mr Gangemi said that the Thrifty note would have been placed by him in his diary and, in the usual course, given by him to his accountant. Mr Gangemi said that he usually carried his diary with him, inside an attaché case. Although it was not put, I infer that Mr Gangemi carried documents of current relevance to him in his attaché case.

132 In cross-examination, Mr Gangemi sought to further downplay the significance of the Thrifty note. He described the Thrifty note as "just taking down some notes about his (Mr Osborne's) concerns" following the heated argument at the Pre Need offices. Mr Gangemi "absolutely" denied that the Thrifty note was intended to reflect his earlier discussions and the terms of the agreement reached between him and Mr Osborne in those discussions.

133 I accept Mr Gangemi's evidence that Mr Osborne told him that his solicitor had said that the charge over Mitchell Street "means nothing unless an agreement goes with it". I have previously referred to the deficiency of the charge in this regard. Any solicitor consulted about the charge is likely to have given that advice. Further, the fact that the Thrifty note refers to Clapana is a strong indication that Mr Gangemi wrote the note with the purpose of linking it to the charge granted by Clapana to Mr Osborne over the Mitchell Street property. However, I do not accept Mr Gangemi's evidence that the Thrifty note was not, and was not intended to be, a record of the agreement previously reached between him and Mr Osborne prior to the second Osborne cheque being paid. My reasons are as follows.

134 First, the Thrifty note was always likely to be a critical document in the case between Mr Osborne and Mr Gangemi. In his further amended statement of claim, Mr Osborne alleged that the agreement between him and Mr Gangemi was made on or about 6 February 2002, which is the date of the first Osborne cheque. The particulars of this allegation made it clear that the Thrifty note was a document written on the back of the Thrifty invoice dated 12 May 2003 and that it was "prepared by Gangemi and delivered to Osborne as recording the terms and conditions of the Agreement".[10] Further, the particulars state that the date on the Thrifty note "is recorded as 4 March 2002". This is the date of the replacement cheque for the second Osborne cheque.

135 In these circumstances, the failure of Mr Gangemi to include in his witness statement any evidence concerning the purpose of the Thrifty note, or the circumstances in which it was prepared, is significant. The only evidence of Mr Gangemi about the Thrifty note in his witness statement is as follows:

Not all of the handwriting on the document is mine and I did not sign or date the document. I believe that the document contains some notes taken by me during a conversation held between myself and Osborne. The document was amended at some later stage and dated by someone else. I do not know who made the amendments or who dated the document.[11]

136 The above evidence is silent as to the purpose for which Mr Gangemi now says that he wrote the Thrifty note. There is no mention of the "notes" being made so that Mr Osborne could "go to Lanciana and see if he will write you up something". Further, the witness statement is silent as to which parts of the Thrifty note were written by Mr Gangemi and which parts he alleges were someone else. It was put to Mr Gangemi in cross-examination that he was deliberately vague and brief in his witness statement concerning the Thrifty note, so that he could wait and see what Mr Osborne said in his witness statement before committing himself to a position in respect of these matters. Mr Gangemi did not accept that this was so. I reject his evidence in this regard. I find that the statements in Mr Gangemi's witness statement concerning the Thrifty note were deliberately brief and lacking in detail, in order to give Mr Gangemi an opportunity to see what Mr Osborne said in his witness statement, or in opening, before committing himself to a position.

137 Second, if accepted, the purpose which Mr Gangemi gave in evidence for the preparation of the Thrifty note is in any event not inconsistent with Mr Osborne's evidence that the purpose of the Thrifty note was to record the terms upon which he had invested in the Buckley Street project. It matters not whether it was intended that Mr Osborne would take the Thrifty note to Mr Lanciana for the purpose of Mr Lanciana preparing, or arranging for the preparation of, a more formal agreement to link with the charge given by Clapana. The critical issue is whether the Thrifty note records the terms of that which had previously been agreed but not documented.

138 Third, Mr Gangemi could offer no rational alternative explanation as to the purpose of the six conditions listed on the Thrifty note. The only explanation that he gave was that "Richard (Osborne) could have gone to Lanciana and requested that he accept some of these notes and write up an agreement if he needed to. I can't give you a specific reason for it".

139 Fourth, the language used in the Thrifty note is consistent with the note written as a record of terms previously agreed between Mr Gangemi and Mr Osborne. In particular:

(1) The note records that Mr Osborne had previously "advanced the amount of $200,000 to be applied towards purchase of the properties". (emphasis added)

(2) The first condition is that a permit be obtained "within 18 months of money payed (sic)".

(3) The second condition, records "interest payed (sic) by Pre Need Services Australia". This had already happened. From the time Mr Osborne made his investment, Pre Need had paid interest to Mr Osborne.

(4) The third and fourth conditions should be read together. They obviously record an agreement which had previously been reached between Mr Gangemi and Mr Osborne:

* YOU WOULD RETAIN 12½% IF PERMIT WITHIN 18 MONTHS

* IF PERMIT NOT ISSUE WITHIN 18 MONTHS MONEY REPAYED

(sic) BACK WITH 25% NET RETURN $250,000" (emphasis added)

(5) The sixth condition refers to a charge being given to Mr Osborne over the Mitchell Street property and over 63-67 Buckley Street. As appears above, a charge had already been given to Mr Osborne over the Mitchell Street property, in substitution for a charge over 63-67 Buckley Street, because the purchase of 63-67 Buckley Street had not been settled at the time Mr Osborne made his second payment.

140 Fifth, Mr Gangemi said that he had no intention of deceiving Mr Lanciana when he wrote the Thrifty note. In the absence of any rational explanation being given by Mr Gangemi as to why the note contains the conditions written by him, I infer that those conditions were a record of what Mr Gangemi had previously agreed with Mr Osborne. Mr Gangemi gave no evidence that the conditions were some new agreement reached between him and Mr Osborne once Mr Osborne expressed his concerns following the falling out between Mr Gangemi and Mr Lanciana and the resulting heated meetings.

141 Sixth, Mr Osborne did not approach Mr Lanciana with the document and have him prepare a formal agreement. The Thrifty note was not shown to Mr Lanciana until a year or so later, when Mr Osborne obtained legal representation and made formal demands for payment.

142 Finally, Mr Gangemi does not remember writing the Thrifty note:

I remember having the chat with Richard regarding making some notes. I do not recall, I don't remember the actual day, evening, whatever time it was, that we sat down, I just don't recall.

Is this the case, that apart from remembering that you sat down and had a general chat with Richard Osborne in response to his concerns and made some notes, that you have no recollection of the preparation of these notes?---I'm just - Your Honour---

Is that the position, or not?---Sorry, I don't have that much recollection about the document itself, that's correct.

143 It was submitted on behalf of Mr Gangemi that I should accept Mr Gangemi's evidence and reject Mr Osborne's concerning the purpose of the Thrifty note. Reliance was placed upon the following matters:

144 It was submitted that Mr Osborne originally sought to pretend that the Thrifty note had been created in 2002. It was submitted that Mr Osborne did this by dating the document 4 March 2002, because Osborne's original pleading did not refer to the fact that the Thrifty note was created in 2003 and because Mr Osborne's affidavit of documents described the Thrifty note as dated 4 March 2002 and discovered the Thrifty tax invoice as a separate document. I reject these submissions. Mr Osborne has adequately explained why he dated the document 4 March 2002 (the date of his final payment) and Mr Osborne's amended pleading, filed in September 2007 well in advance of the trial, made it plain that the Thrifty note was not created in 2002. It was never part of Mr Osborne's case that the Thrifty note was a contemporaneous record of an agreement between him, Mr Gangemi and Clapana.

145 It was submitted that the Thrifty note could not have been intended to record the terms of the agreement reached between Mr Osborne and Mr Gangemi prior to Mr Osborne making his investment, because the Thrifty note refers to the property at 61 Buckley Street. 61 Buckley Street was not purchased until after Mr Osborne had made the whole of his investment. There is no merit in this submission. By the time the Thrifty note was prepared, 61 Buckley Street had been included in the Buckley Street project. Mr Osborne's interest in that project, conditional or otherwise, had been agreed at 12.5%. There is no dispute about that. In these circumstances, it is natural that, in seeking to record the terms of Mr Osborne's investment, 61 Buckley Street would be included in the description of the property to be developed. The Thrifty note is an informal document written by two businessmen. They are likely to have included a reference to the proposed development, in which Mr Osborne admittedly had an interest, as that development stood at the time.

146 It was submitted that Mr Osborne's evidence that the Thrifty note was written in his car is unlikely to be true, because the Thrifty note contains the ACN numbers of Clapana and 63 Buckley, and gives the full title particulars of the Buckley Street properties. I accept that it is unlikely that Mr Gangemi would have been able to recall the ACN numbers of Clapana and 63 Buckley or the title particulars of the Buckley Street properties. However, this is not fatal to Mr Osborne's account of the Thrifty note being written in his car. Mr Gangemi had his attaché case with him and I infer that he had the relevant particulars at hand in one or more documents in that case, for example a planning application in respect of the Buckley Street properties and documents concerning Clapana's development of the Hoddle Street project. Both of the projects were current at the time. In any event, if Mr Osborne is mistaken as to the Thrifty note being written in his car, that is not fatal to his case. For the reasons given above, the probabilities favour the Thrifty note being prepared to record the arrangements reached between Mr Gangemi and Mr Osborne in late 2001 and early 2002.

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