1. I direct that, subject to paragraphs 2 and 3 of this order, the money held in trust be divided into two equal parts, that there be deducted from one such part the sum of $8,632.63 and the balance of that half part then be paid to the Respondent. The other half part, together with the sum of $8,632.63 deducted as aforesaid, shall be paid to the Applicant.
2. Liberty to apply for any further orders that might be necessary or appropriate to give effect to the findings set out in the attached reasons.
3. Liberty to the person or persons presently holding the said money to apply to intervene in regard to its disposition.
4. Costs reserved.

1. By this proceeding the parties seek orders and directions as to the division of the proceeds of sale of three Units they constructed as a residential development ("the Development") on land that they purchased at 59 Kyle Road Altona North. They were equal partners in the Development.
2. At the time this proceeding was commenced, one of the Units (Unit 2) had been sold and the parties were each occupying one of the other Units; Mr Petran occupied Unit 1 and Mr Grigoriu occupied Unit 3.
3. In his Points of Claim Mr Grigoriu said that, apart from the money that the parties borrowed from the bank, he spent $211,972.25 of his own money on the Development. He sought orders that Unit 3 be transferred into his sole name, that Mr Petran pay him an amount of $105,986.12 and, following payment of such sum, that Unit 1 be transferred into the name of Mr Petran.
4. Mr Grigoriu's assertion that he provided the bulk of the funds for the Development was denied by Mr Petran. Further, in his counterclaim, Mr Petran alleged that it was agreed that he was to provide the labour and supervise the Development for which he was to be paid. He said that he provided labour to the value of $40,000 and management services to the value of $50,000. He also says that he expended $109,735 on "costs and material necessary to complete the project". He complained that the amount of a bank guarantee in the sum of $33,500 had been withdrawn by Mr Grigoriu and the proceeds had not been accounted for. He also claimed the amount of an electricity bill that he had paid. Finally he claimed an adjustment for the greater value of Unit 3, that Mr Grigoriu was to receive, compared with Unit 1, that he was to receive. That last claim has been overtaken by events.
5. In Amended Points of Claim filed on 31 July 2008 Mr Grigoriu added a claim that he had lent various sums to Mr Petran totalling $29,500 and sought recovery of that amount. In his amended defence Mr Petran denied the allegation and in his amended counterclaim he revised his claim for labour and management fees down to $80,000 and the amount he claimed to have spent on the Development down to $102,358.

1. During the interlocutory stages, an agreement ("the Mediation Agreement") was reached on 28 February 2008 that Units 1 and 3 would be sold and the proceeds would be paid into an account to abide the decision of the Tribunal as to how they should be divided. The units have now been sold and the money (said to be some $420,000 at the time of the hearing) is now held in an account in the names of the solicitors who were then acting for the parties. My task is to determine how it should be divided.
2. The final issue and another change to the counterclaim related to the sale of Unit 3. By the Mediation Agreement, Units 1 and 3 were to be sold by public auction by 30 April 2008. Mr Petran claims that Mr Grigoriu frustrated the sale of Unit 3 so that it was delayed until July 2008, by which time the value of Unit 1 had depreciated by between $25,000 and $50,000. He claims his share of the diminution in value. He also claims rental over the further period.

1. The matter came before me for hearing on 19 May 2009. Mr Cook of Counsel appeared for Mr Grigoriu and Mr Isles with Mr Cole of Counsel appeared on behalf of Mr Petran. After hearing submissions I made orders on that first day for further discovery by both sides and adjourned the hearing until 25 May to enable that to occur. When the hearing resumed I heard evidence from both parties, from Mr Ghent, a mutual friend and business associate and from a Mr Dimitriou who had lent Mr Grigoriu money.
2. Witness statements were also tendered by consent from a number of people who worked on the Development and other witnesses without any of them being cross-examined. On Mr Grigoriu's side these were Mr Trajkovski, the draftsman, Mr Sawyer, the concreter, Mr Schembri, the flooring contractor and Mr Spataru the tiler. The substance of their evidence was that they were engaged by Mr Grigoriu, who gave them instructions and paid them. Mr Spataru said that he saw Mr Grigoriu move a window in Unit 2. There was also the expert report of a Quantity Surveyor, Mr Neville Cambridge who assessed the cost of constructing the Units at $658,000.
3. On Mr Petran's side these were the excavator, Mr Matar, the carpenters, Mr Emmanuel Caruana and Mr Mark Caruana, the plasterer, Mr Aydin, the electrician, Mr Grech, the fixing carpenter Mr Newcombe and the painter, Mr Rose. The substance of the evidence was that Mr Petran was on site working there with them. There was a witness statement from the next door neighbour, Mr Bertram, to the effect that Mr Petran was on site every day. A witness statement was also provided by Mr Mario Di Pietro, an Estate Agent concerning the sale and rental values of Unit 3 and by Mr Nathan Zablocki, an estimator, as to the likely cost of construction of the Development, the cost of having a project manager construct the Units ($5,000 per unit) and an appropriate wage for a project manager ($75,000 per annum plus car and phone). He also said that labour in addition would be at the rate of $40 per hour.

1. The relevant enabling enactment is the Property Law Act 1958 and, given that the land has now been sold, the provision relevant to the present case is s.233. That provides, where relevant:

(1) In any proceeding under this Division, VCAT may order-

(a) that compensation or reimbursement be paid or made by a co-owner to another co-owner or other co-owners;

(b) that one or more co-owners account to the other co-owners in accordance with section 28A;

(c) that an adjustment be made to a co-owner's interest in the land ... to take account of amounts payable by co-owners to each other during the period of the co-ownership.

(2) In determining whether to make an order under subsection (1), VCAT must take into account the following-

(a) any amount that a co-owner has reasonably spent in improving the land.;

(b) any costs reasonably incurred by a co-owner in the maintenance or insurance of the land ...;

(c) the payment by a co-owner of more than that co-owner's proportionate share of rates ..., mortgage repayments, purchase money, instalments or other outgoings in respect of that land ... for which all the co-owners are liable;

(d) damage caused by the unreasonable use of the land ... by a co-owner;

(e ...whether or not a co-owner who has occupied the land should pay an amount equivalent to rent to a co-owner who did not occupy the land;

...............................................................................

(3) VCAT must not make an order requiring a co-owner who has occupied the land to pay an amount equivalent to rent to a co-owner who did not occupy the land unless-

(a) the co-owner who has occupied the land is seeking compensation, reimbursement or an accounting for money expended by the co-owner who has occupied the land in relation to the land; or

(b) the co-owner claiming an amount equivalent to rent has been excluded from occupation of the land; or

(c) the co-owner claiming an amount equivalent to rent has suffered a detriment because it was not practicable for that co-owner to occupy the land with the other co-owner."

1. It should be noted that the words: "amounts payable by co-owners to each other during the period of the co-ownership" are not expressly restricted by the words of the section to amounts payable with respect to the co-owned property. Further, the circumstances in which orders for compensation and accounting can be made appear to be very wide and include amounts payable by the parties to one another during the period of co-ownership as well as damages caused by the unreasonable use of the land. It was not suggested that any of the amounts sought by either side did not fall within the section and so I do not need to consider the breadth of its operation.

1. Mr Grigoriu and Mr Petran are both from Romania. They met in 1993 through a Mr John Ghent, who was a longstanding friend of Mr Grigoriu and an acquaintance of Mr Petran. Mr Grigoriu lived for a while in a house owned by Mr Petran's former father-in-law. They then lost touch for some years until Mr Grigoriu approached Mr Petran through Mr Ghent. Mr Grigoriu had recently been released from prison, having served a term of imprisonment for dealing in illicit drugs (he described the drugs as "opium"). The parties discussed the possibility of purchasing land together and building units on it for resale at a profit. Consideration of the proposal was deferred while Mr Petran went to Romania to bring his wife back. He returned in February 2005.

1. On 28 February 2005 Mr Grigoriu and Mr Petran signed a Contract of Sale to purchase the land for the Development. The land was found by Mr Grigoriu but it belonged to someone known to Mr Petran and they negotiated its purchase. It had an existing town planning permit for the construction of three units.
2. The deposit of $33,000 was paid by Mr Grigoriu, of which $25,000 was money that he borrowed and a further $8,000 that he said was from his "savings". The balance of the purchase money was by way of a home loan they obtained from the National Australia Bank. At settlement of the purchase, there was a shortfall in the amount required of $20,558.90. To meet that and allow settlement to proceed, Mr Petran provided $21,069.90. That was $511 more than the amount required and the reason for that difference is not apparent. Settlement of the purchase occurred on 4 May when the balance due of $297,367.92 was paid.

1. The National Bank was not willing to finance the construction of the Units. Mr Grigoriu said in his witness statement that the reason for that was that Mr Petran's existing financial commitments were too high. However the bank statements tendered reveal that Mr Petran had three bank accounts at the time with money flowing through them, albeit not substantial sums. Mr Grigoriu eventually admitted in cross-examination that they could not obtain finance for the construction until he had paid out some debts that he owed. I do not accept his evidence that the impediment to obtaining finance was Mr Petran's commitments although that might have been one of the factors.
2. From June until September 2005 Mr Grigoriu was in Romania and the parties were attempting to obtain the renewal of the planning permit for the Units. Upon his return they decided that, due to a change in the law, they needed a registered builder to do the construction. They agreed with Mr Ghent that he would enter into a building contract with them by which he contracted to build the Units. The purpose of that contract was to enable them to obtain the benefit of Mr Ghent's domestic building insurance. It was separately agreed between the three of them that, in reality, the construction would be done by Mr Petran and Mr Grigoriu themselves.
3. All of the money from the construction loan that they proposed to obtain would be passed on to Mr Grigoriu by Mr Ghent and that is what ultimately happened. The precise mechanism adopted by the two of them (Mr Grigoriu and Mr Ghent) is unclear but some clue is provided by an invoice ("SP7") annexed to Mr Petran's Witness Statement. Mr Petran said that Mr Grigoriu left this document in his house. It is an invoice from Mr Ghent's company for $100,000 for two stages of the construction, including the base stage. There is no GST charged on the invoice. Since it is common ground that nothing was in fact charged by Mr Ghent the only purpose of this document must have been to provide it to the bank in order to obtain the release of the money. This reflects poorly on the credit of both Mr Grigoriu and Mr Ghent but Mr Petran also knew that Mr Ghent was a builder in name only.
4. Each draw down was paid by Mr Ghent in either cheques or cash to Mr Grigoriu who, on his own admission, did not keep it separate from his own money.
5. On 11 November 2005, through a finance broker, they received an Offer of finance from the Commonwealth Bank for a loan of $760,000. This was to refinance the loan they had obtained from the National Bank to buy the land and also finance the construction. They accepted the offer of finance on 25 November 2005.
6. On 9 December 2005 $25,000 was drawn from Mr Petran's account. Of this, $10,000 was to obtain a bank cheque to pay the deposit on the trusses and he gave the bank cheque to Mr Grigoriu. (There is a receipt from the bank for the issue of a bank cheque in that sum payable to Mr Grigoriu). It seems likely that Mr Petran paid this deposit because there was no similar sum drawn from any of Mr Grigoriu's credit card accounts at that time, nor from the joint account, and it does not appear that Mr Grigoriu then had any documented source of funds.
7. According to Mr Petran, at that time he also gave Mr Grigoriu $8,000 for cars that he had sold for him while he was away and $7,000 in cash for him to pay to Sunbury wall frames and trusses, which accounted for the balance of the $25,000. His evidence is supported by the bank documents and so I accept it.
8. On 3 March 2006 the building permit was obtained. The construction of the Units then proceeded over the next 12 months. Mr Petran was on site for most of the time whereas Mr Grigoriu was not

1. One of the workmen employed on the development was a Mr Catalan Stavril. It was agreed to sell him Unit 2 "off the plan". The advantage of such an arrangement was that no agent's commission would need to be paid. A contract of sale was prepared showing a price of $389,000 including a deposit of $20,000 which is said in the contract to have been paid. Upon settlement of this sale, the sum of $350,150 was paid off the mortgage loan to the Commonwealth Bank and the balance was paid into the parties' related operating account resulting in a balance in that account of $13,438.78.

1. Occupancy permits for all three Units were obtained on 23 March 2007. In about May 2007, Mr Grigoriu moved into Unit 3 and Mr Petran moved into Unit 1. The parties then fell out over the division of the remaining mortgage liability and the payments they each claimed to have made during the course of the development.
2. Apart from the construction loan borrowed from the Commonwealth Bank, Mr Grigoriu claims to have spent $211,972.25 and Mr Petran claims to have spent $102,358.00. Where did the money that each of them claims to have paid come from? The parties attached such importance to that question at the start of the hearing that, on 19 May 2009, I ordered them both to provide full discovery of (inter alia) all tax returns, bank statements and credit card account statements for the period from 1 July 2004 to 30 June 2008, all financial documents relating to the project, including sources of income for expenditure on the project and all correspondence with Centrelink for the period from 1 July 2004 to 30 June 2008. I adjourned the case part heard until this discovery had been given.
3. Both sides produced documents in response to this order, Mr Petran producing more documents than Mr Grigoriu did, but I still do not have a full picture of the financial position of these two men at the relevant times.

1. Neither of the parties has produced all of his bank statements or credit card statements and few of those produced cover any of the critical period from late June to mid October 2005. I am therefore deprived of significant independent evidence which might have helped me to resolve much of this dispute. I can draw no inferences from the fact that there is nothing at all in those statements to show any corresponding debits to account for the various payments. All I have to go on is what has been tendered.
2. I have spent very many hours attempting to reconcile all of the financial documents produced and endeavouring to trace funds from one bank or credit card account to another and between those accounts and other documents. I had some limited success with Mr Petran's accounts and the credit card statements of both parties were useful for the periods for which I had them. However, anything even approaching a full reconciliation has proved to be an impossible task. The accounts produced were as follows.

1. Mr Petran discovered statements relating to the following accounts
   • (a) National Australia Bank, Altona North - Account No 56 830 6272

The statements tendered cover the period from 21 April 2004 to 31 December 2004 showing various credits and debits, including the proceeds of a personal loan of $25,000 from the National Bank which was credited to this account on 4 October 2004. There is a single page for the period from 21 April 2005 to 19 May 2005 which shows that he received cash deposits totalling $20,190 on 26 April 2005, namely $490.00, $9,000.00 and $ 10,700.00 and that he paid out $21,069.90 on 4 May 2005. This was the money that was paid to make up the shortfall on the refinance of the subject property with the Commonwealth Bank.

(b) National Australia Bank, Altona North - Account No 49 218 3471

The statements tendered cover three periods. The first, from 21 September 2004 to 4 February 2005, show that he had a credit balance of as much as $11,400 and as little as $3,660 during this time

The period from 16 April 2005 to 2 May 2005 is a single page showing the receipt of deposits totalling $1,400 on 18 April 2005 and $1,000 in cash on 2 May 2005. The period from 21 September 2005 to 20 March 2006 show the receipt of $18,553.78 in cheques on 14 October 2005. This seems to have been part of the proceeds of the sale of his Unit in Braybrook. There was an opening balance of over $17,000, a withdrawal of $10,000 on 17 October 2005, a deposit of $6,770 on 31 October 2005, a further withdrawal on 31 October of $3,450 and another withdrawal of $5,200 on 3 November 2005.

(c) National Australia Bank, Footscray - Personal loan Account No 57 439 6796

The statements tendered extend from 9 September 2004 to 17 October 2005 and show that he borrowed $25,000 on 4 October 2004 and paid out the balance of $21,456.28 on 14 October 2005. This pay out sum was the balance of the proceeds of sale of the Unit in Braybrook (He received $40,000 altogether).

(c) Commonwealth Bank Award Saver - Account No 06 3168 10520949

These statements cover four periods, namely, from 22 September 2004 to 21 June 2005, from 4 October 2005 to 31 October 2005, from 22 December 2005 to 21 June 2006 and from 22 September 2006 to 7 November 2007. They show the following substantial credits:

The 6 December credit represents the proceeds of a refinancing of his Unit in Sunshine. Between 5 September 2007 and 12 October 2007 he received regular payments totalling $4,816.86 from one Winslow Constructions suggesting that perhaps he was doing some work for that entity (He gave evidence that he was doing occasional jobs for other people). The following substantial payments are shown on the statements with the following annotations:

(i) $10,000 drawn out on 9 December 2005 with the annotation "Truss". Despite that annotation, it appears likely that this amount was paid into his credit card account on that same day. There is no other apparent source of that payment of $10,000 that he made into his credit card account. A bank cheque for $10,000 for the trusses formed part of the withdrawal of $25,000 that he made at the same time.

(ii) $25,000 drawn out on 9 December 2005 with the annotation "Georgias", which is a reference to Mr Grigoriu. According to Mr Petran's evidence which is corroborated to some degree by the bank records, this was used to purchase a bank cheque for $10,000 payable to Sunbury wall frames and trusses. A bank cheque for $8,000 was paid to Mr Grigoriu to pay for cars Mr Petran sold on Mr Grigoriu's behalf while he was overseas and $7,000 was given to Mr Grigoriu in cash for the purpose of buying the trusses.

(iii) $4,100 was drawn out on 12 December 2005 with no annotation.

(d) National Australia Bank Visa Gold - Account No 4557 0168 354 0958

These are from 9 December 2005 to 4 September 2006 and from 5 December 2005 to 4 July 2007. They show the purchases that he made for the project using the card, but they also show substantial credits which Mr Grigoriu claims were payments that he made to Mr Petran to reimburse him. Mr Petran was unable to identify the source of many of the credit entries. Some were said to be from sale of properties, some from "small jobs" that he did and some from "savings" and others he could only guess at. For reasons that follow I am not satisfied that these amounts were paid to him by Mr Grigoriu.

1. Where there is an entry in any of these accounts that shows a payment for an item of labour or materials I will accept that as corroboration of the evidence that the expense was incurred by Mr Petran.

1. Mr Grigoriu discovered no bank accounts but produced statements relating to four Visa credit card accounts. One of these (National Australia Bank Visa Gold Account No 4557 0130 0017 6208) shows the payment of the deposit for the land upon which the Units were built and numerous charges for materials used on the project. As with Mr Petran's account I accept them as evidence that the money was spent on the project by Mr Grigoriu.
2. Mr Grigoriu had no bank account at all at the time and seems to have operated solely using cash and through the credit card accounts into which he deposited substantial sums of cash from time to time. Where those sums came from was never satisfactorily explained. Many of them appeared before there was any access to the construction loan money. The most significant of these was an amount of $32,500 deposited on 2 December 2005, just before the first drawdown of the loan money. In the fortnight before that, payments into the account amounted to almost $27,000. Although there is no apparent source of these funds, the fact that they appear in his statements indicates that he had access to large sums of money that might have permitted him to fund at least part of the development.
3. As stated, the statements do confirm that Mr Grigoriu paid the deposit for the subject land. That appears from the statement for the period 1 March 2005 to 9 March 2005 which shows a payment of $16,000 to National Australia Bank at Bentleigh on 2 March 2005 and a separate payment to the same bank of $2,500 on the same day plus a further $6,500 from his ANZ Visa account No 4509 4931 6135 0769 on the same day. The sources of the funds paid into these Visa accounts shortly before these payments do not appear on the evidence.

1. Apart from these individual accounts there were the following three accounts in the joint names of Mr Grigoriou and Mr Petran:
   • (a) National Australia Bank Footscray Account No 58 226 9148

This operated from 13 April to 25 November 2005 and a full set of statements was tendered. This was the "home loan" which funded the original purchase of the subject land. The statements show the following payments to the bank:

Date Amount Handwriting on the pay in slip appears to be:

Mr Grigoriu admits that Mr Petran paid the first three payments but says that he gave him the money to do so before leaving for overseas. Mr Petran denies that and says that he used his own money. There is a further dispute about the last two payments which both men claim to have made. The figures on the pay in slip for the 8 September 2005 deposit appear to be in Mr Grigoriu's handwriting but I am not a handwriting expert. Mr Petran said that Mr Grigoriu had completed one pay in entry but he thought it was the last one. For the last payment, the entry is in Mr Grigoriu's handwriting. Mr Petran appears to have had access to money at the time whereas it does not appear whether Mr Grigoriu did. It is impossible to be confident about the matter but upon the only hard evidence I have, which is the deposit record, I think it is more likely than not that Mr Petran paid the first three payments and Mr Grigoriu paid the last two, and I so find.

This is the refinance and construction loan and the full set of statements have been tendered for the life of the account, extending from 23 November 2005 to 24 September 2008. There is a credit of $1,360 received into the account on 21 September 2007 which I find Mr Petran paid. All of the other credits came from the next account, with some defaults, until the sale of Unit 2. Thereafter payments that fell due were not honoured. The reason for these defaults was that there were insufficient funds in the operating account to make the payments. Significant credits to this account were the receipt of most of the proceeds of the Sale of Unit 2 ($350,150) on 13 July 2007, the receipt of the proceeds of the sale of Unit 1 on 2 June 2008, which was $434,138.03 and the payout of the balance of the account ($23,672.22) on 19 September2008 following settlement of the sale of Unit 3.

(c) Commonwealth Bank Account No 06 3109 10603437

This was the operating account. The loan repayments were made from this account and a full set of statements has been tendered for the life of the account, extending from 7 December 2005 to 31 July 2007 when the loan was finally paid off. Small credits from the term deposit appear to be the interest on the money deposited as security. There is also part of the proceeds of the sale of Unit 2 ($13,438.78) which the two of them drew out on the day of settlement. Otherwise a total of $39,500.30 has been paid into the account. Mr Grigoriu claims to have paid in these amounts and there is some documentary evidence that he did pay in some of them. It does not appear that Mr Petran paid any of them. I will treat them all as having been paid in by Mr Grigoriu, except for the proceeds of the term deposit and the proceeds of sale of Unit 2. The term deposit, in an amount of $33,000 was paid in by Mr Grigoriu as security for Mr Ghent and is credited to him below. This sum was later credited back to the account together with some accrued interest, and shortly afterwards, Mr Grigoriu drew out $23,005.40. I deal with that below.

What is not clear to me from this or any of the other accounts, is what has become of the balances of the deposits for Units 1 and 3. They may be incorporated in some of these figures but I have not been able to identify them.

Mr Grigoriu's income and other sources of funds

1. Mr Grigoriu said that when he was released from prison in September 2003 there was $20,000 to $30,000 left in his solicitor's trust account but he was unable to say how much it was and he did not produce any corroborative evidence of it. That is despite me having ordered further discovery of documents relating to the parties' finances. When pressed for some evidence he said that on his release from prison he burned all his papers. He provided no income tax returns for the 2003-2004 or the 2004-2005 tax years and it does not appear that he submitted any. He sought to explain the absence of the latter return by asserting that it had been burnt in the fire but since the fire was in 2004 this explanation is not credible. His tax return for the 2005-6 financial year showed a taxable income of $27,570 as "Residential Property Operators". His income tax return for the 2006-7 tax year shows an income of $33,932, the whole of which he said was capital gains. Even with money left over in his solicitor's trust account, if there really was any, it would seem that he had very little to live on. At that time he was living alone and would have needed to pay rent and purchase food. In the absence of any source of income it is likely that, if there were any money in his solicitor's trust account, it would have been exhausted. Indeed, he said that when he divorced his wife there was no property to divide between them.
2. When pressed as to how he would have been able to have funded this development to the extent of $200,000, as he claimed, and lend to Mr Petran all of the money that he says he lent, he said that he made money from doing up cars and selling them. When asked whether he was a licensed motor car trader he said that he was not and then said that he did it as a hobby and made no significant profit from selling them. Yet he sold one car to Mr Ghent for $8,000, and he had Mr Petran sell two other cars for him when he was overseas. He said that he sold a "special" car on 20 May 2006 for "$24,000 to $25,000". There was not, in regard to any of these cars, any evidence as to what he purchased it for, what expenses he incurred in regard to it or what proportion of the sale price was profit.
3. There were three other sources of funds that Mr Grigoriu suggested. The first was his "savings" which he said he kept at home in the form of cash. On the basis of the evidence given and the material tendered it does not seem to me that he had any source of funds since his release from prison from which he could have accumulated any savings.
4. The second was his wedding to his present wife. He said that it is a Romanian custom to give the groom substantial sums of money at such events. He said he had received "about $70,000" on that occasion, including $500 from Mr Petran. However the wedding was in February 2007 and the bulk of the expenses for the Development had been incurred by then.
5. The other source of funds was loans. He said that it was the custom within the Romanian community for people to lend large sums of money to one another. Mr Ghent agreed that that was the case as did another witness, Constantine Demetriou. Both said that they had lent Mr Grigoriu large sums, most of them after the Units had been built. Mr Ghent said that Mr Grigoriu owed him $100,000 during 2004-2005 but that it had been repaid, in stages, by 2007. There is no apparent source from which such repayments could have been made.
6. When Mr Grigoriu was asked who he had borrowed money from for the purpose of funding this project he said at first that he could not remember. Either that evidence is false or he has a very poor memory. Later in his evidence he suggested that he had borrowed $100,000 from Mr Ghent and said that he started doing that in late 2005. He said that up to the end of 2005 he had borrowed $20,000 and by 2006 or 2007 he owed Mr Ghent $100,000. He then said that he could not remember. Although his evidence is confused it accords roughly with Mr Ghent's evidence. He also said that he had borrowed $5,000 from a Mr Gonzales but it seems that this was in 2006 on two dates that he said he could not recall. He said that he repaid Mr Gonzales from the money he received at his wedding. According to Mr Gonzales' witness statement he lent Mr Grigoriu two amounts totalling $50,000 during the course of construction. He agreed that he was repaid after Mr Grigoriu's wedding.
7. One would expect there to have been some record made or some paper trail of a loan or loans of the magnitude that would have been required to finance this project and nothing has been produced. Further, it seems to me that this is such a significant issue that he would have remembered the details of the loans and there would have been something about them in his witness statement. All I have is his uncorroborated evidence given during cross-examination.
8. He claims that he now owes Mr Ghent $500,000 and Mr Demetriou $400,000, all of which was borrowed after the construction. Mr Ghent says he is owed $88,000 which was advanced over the preceding 6 to 8 months and that anything advanced before that had been paid back by Mr Grigoriu. He said that Mr Grigoriu owed him $100,000 in 2004 to 2005 which he paid back over 18 months. That was the period in which much of the money for the Units was said to have been outlaid. Mr Demetriou said he lent Mr Grigoriu $200,000 on 25 May 2008. Even if it is $88,000 to Mr Ghent and $400,000 to Mr Demetriou, how and why Mr Grigoriu accumulated debts of this magnitude is not explained but it leads me to wonder how he could have survived on the very modest sums that he declared as income in the preceding years.
9. If he has outlaid the money on this project that he claims to have outlaid then he has a very substantial source of funds that he would not tell me about which reflects upon his credit. If he has not outlaid the money that he claims then his evidence is false.
10. His evidence in regard to his assets is unreliable. He said in cross-examination that he had other assets apart from the money in trust that is the subject of this dispute but he refused to specify what those assets were. When I ruled that he had to answer the question he then admitted that he had no other assets.

1. Mr Petran produced no income tax return for 2003-4. His return for 2004-5 showed a $2,145 loss. His sole source of income appears to have been Centrelink payments because he received no payment while working on the Development. His return for 2005-6 shows a taxable income of $4,919, his 2006-7 shows a $35,663 loss and his 2007-8 return shows a very modest taxable income of $6,805
2. Apart from unemployment benefits during 2004-2005 the bank statements show that he was receiving $448.56 per month rent from an estate agent, John Kontek, from at least 7 October 2004 until May 2005. There does not appear to have been any other source of income.
3. When questioned about what he lived on, he said that he used to do odd jobs during the construction of the Units and he produced what he said were quotations and Invoices for these. He said that one of these jobs involved the replacement of a roof and that he made a profit of $30,000 from it. In view of his tax returns it is quite unclear what he earned overall. Apart from his tax returns, one would have expected his earnings to be reflected in the bank statements tendered, yet the more substantial entries in those appear to be related to property transactions.
4. From September until 12 October 2007 he was receiving weekly payments from one Winslow Constructions of $800 or $900 dollars. He is now a registered builder and carries on business as such.
5. It looks as though he had no income of any consequence while he was working on the Development which is not surprising because he appears to have spent most of his time working on it and it is common ground that he received no regular wage for doing so.
6. Mr Petran said that he had two other sources of funds. The first was his savings which he said he kept in large amounts at home. He said that he had $40,000 in cash and that over $160,000 came in gradually. When asked why he did not put this money into one of his bank accounts he said that he did not want Mr Grigoriu to know how much money he had. That is not a rational explanation. Why could he not have banked it in an account that he did not show to Mr Grigoriu? If he did have any savings of the magnitude that he suggests then he had some other reason for not banking the money.
7. His main source of money appears to have been the sale of properties and the receipt of these sums is documented. They were as follows:
   • (a) On 30 January 2004 he settled the sale of a house in McLaughlin Street, Ardeer for $217,000. All the money received at settlement, which was almost $185,000, was received by the National Australia Bank although it appears from the settlement statement as though $81,080.99 might have gone into an account that he could have drawn upon.
   • (b) On 19 January 2005 he and his wife received $27,500 from the sale of a property in Romania;
   • (c) On 12 October 2005 he and his wife settled the sale of a Unit in Howden Crescent, Braybrook and received as the net proceeds $40,010.06. He said that he lived in this property. An amount of $41,070.35 was deposited into one of his accounts on 6 December 2005. He said that this was from the sale of one of his properties and so it probably includes the proceeds of sale of the Unit in Braybrook because he said that he sold only three properties.
   • (d) On 10 February 2006 he and his wife settled the sale of a Unit in Alexandra Avenue, Sunshine. It appears from the settlement documentation that he received less than $1,000 from that sale.
8. In addition, on 9 September 2004, Mr Petran borrowed $25,000 from the National Australia Bank at Footscray. Repayments appear to have been $550 per month. The balance of $21,456.28 was repaid to the bank on 14 October 2005 from the proceeds of the sale of the Braybrook property.

1. Neither party appears to have had any regular source of substantial funds during the period in question, that is, during the period of construction. Each says that the other had no money apart from the construction loan. Mr Petran received the substantial sums referred to but, considering that he also had to support himself and his wife, that does not seem to have been enough to account for what he claims to have spent. Like Mr Grigoriu he claims to have had "savings" but the source from which these could have been accumulated does not appear.
2. It would seem that both of these men have other sources of money but there is no evidence as to what they are and I cannot speculate. Perhaps they operate in what is commonly called "the black economy", perhaps they borrowed it from people whose identities they did not wish to reveal, but whatever the sources, they have not told me what they are. I think that the true significance of this is that I cannot assume that either of them had or did not have the money that he claims to have spent, so I must look to the other evidence.
3. For example, Mr Grigoriu said that he paid the deposit because Mr Petran had no money. He also said that he gave Mr Petran $19,700 to pay into his bank account to pay for the stamp duty. Mr Petran denies this and says that the $19,700 he contributed was his own. His bank statement (from 21 April 2005 to 19 May 2005 - one page only) shows that he received cash deposits totalling $20,190 on 26 April 2005, namely $490.00, $9,000.00 and $10,700.00 and that he paid out $21,069.90 on 4 May 2005. The National Bank loan (approved on 18 April) was for $297,000. Fees and charges were $20,190.98 so the balance provided by the bank was $276,809.02. The $21,069.90 was the shortfall. The deposit slip says "Stellian Land Contribution". I accept that Mr Petran made this payment and I do not accept the uncorroborated account of Mr Grigoriu that he gave the money to Mr Petran to pay into his account. It is an unlikely story and is inconsistent with the words on the deposit slip which is a contemporaneous document.
4. That is the sort of approach I must adopt with all of the claims of payment. Start with the objective evidence as to who made the payment and treat any contrary oral evidence very carefully.
5. Before proceeding further I need to consider questions of credit of the two principal witnesses.

1. Mr Grigoriu immigrated to Australia from Romania in 1986. He said that he was an aircraft mechanic in Romania. Since arriving he has worked in various labouring jobs, many of these in the building industry. He has also conducted a night club. He carried out some small residential developments but most of his work in the building industry appears to have been in labouring positions.
2. Mr Grigoriu admitted to having served a term of imprisonment for dealing in drugs, which he described as "opium". He has also been convicted of other drug related offences over 10 to12 years. Although that does not necessarily mean that he will give false evidence it must raise questions as to his honesty and so it goes to his credit.
3. He was an unimpressive witness. He was argumentative with counsel and often his answers were unresponsive. He refused to answer some questions and had to be directed to do so. He would offer gratuitous comments from the witness box without having been asked a question. He provided no credible explanation of either his employment or sources of income or money, yet he claimed to have financed the development to the extent of over two hundred thousand dollars. The sources of money that he suggested would not have been sufficient to generate the funds that would have been required, nor would they explain the large credit entries that appear in his credit card statements.
4. When asked whether his signature appeared on a statement acknowledging the receipt of a supposed $20,000 deposit on Unit 2, he said that he did not know whether the signature was his and suggested that he would need to see other samples of his own signature. An extraordinary suggestion.
5. The significance of that document lies in Mr Grigoriu's claim that, at the settlement of the sale of Unit 2, Mr Petran retained the whole of the deposit. I am satisfied that no deposit was ever paid on Unit 2 and that his evidence in this regard is false. It was Mr Petran's evidence, which I accept, that there was no such deposit paid at all and that the price for Unit 2 was falsely overstated in the contract by twenty thousand dollars with a fictitious deposit of the same sum in order to enable the purchaser to obtain a loan from the bank. Mr Petran's signature does not appear on the document but it is clear that he was also a willing participant in this scheme to deceive the purchaser's bank.
6. Mr Grigoriu also said on a number of occasions that he had to drive Mr Petran around while the Units were being constructed because Mr Petran had no driver's licence. It was put to Mr Grigoriu during his cross-examination that he had no driver's licence himself at that time, to which he replied that he could not remember whether he had one or not. That is unlikely to be true. When he was asked whether, if Mr Petran gave evidence that he, Mr Grigoriu, did not have a driver's licence at that time he would dispute that evidence, he said that he was not making any comment. I do not believe that he has no memory of anything as basic as to whether or not he had a driver's licence at the time. He raised the drivers licence issue himself and he declined the opportunity to deny the allegation that he had no licence himself during the period of time in which, according to his evidence, he was driving Mr Petran around.
7. Mr Grigoriu said in his witness statement that Mr Petran rarely attended the development alone before he moved into Unit 1. He denied that Mr Petran had laboured on the site except after lock up on Unit 1 and "to a very minor extent" on Unit 2. He resiled somewhat from this position in the witness box but, in any case, his claim is contradicted by the witness statements of a number of tradesmen namely, Mr Matar, Mr Emmanuel Caruana, Mr Mark Caruana, Mr Aydin, Mr Grech, Mr Newcombe, Mr Rose and the next door neighbour Mr Bertram. I am satisfied that Mr Petran was there more often than not, although he could not have been there every day because he claimed to be doing other jobs at the time. I am satisfied that Mr Grigoriu's contrary evidence is false.
8. Mr Grigoriu also said that Mr Petran also received $10,000 from the balance of the purchase money for Unit 2 whereas he, Mr Grigoriu, received only $3,438. He never explained why he allowed that to occur. What happened was that most of the balance of purchase money was used to reduce the construction loan as above. The balance of $18,187.10 was paid into the operating account which then had a debit balance of $4,748.32. The deposit of this money meant there was then a credit balance of $13,438.78 in the account. Both men went to two different branches of the Commonwealth Bank on 18 July and drew it out, save for 78 cents. An amount of $10,000 was drawn out at the Altona North Branch and then, a few minutes later, they went to the Altona Gate Branch where they drew out $3,438.00. As stated below, on balance, I accept Mr Petran's evidence in regard to this money that is, that it was given back to the purchaser, Mr Stavril. I cannot see that Mr Grigoriu's evidence about this could be ascribed to faulty recollection. His evidence is false.
9. Mr Grigoriu claimed that he reimbursed Mr Petran for the various sums of money that he had spent on the Development but his claim about that varied substantially. He said originally in his witness statement that he had paid $35,367 to Mr Petran but amended it before trial to $76,875. There was no satisfactory explanation given why he first thought it was the lesser figure and then thought that it was a figure more than twice that sum. A schedule (Schedule "M") setting out all the alleged payments was produced at the hearing but credible substantiating evidence to support the allegations in that statement was not produced.
10. I have less concerns about Mr Petran's credit but I do have some. Like Mr Grigoriu he also has sources of money that he will not tell me about. He was a willing participant in inflating the purchase price in the contract for the sale of Unit 2 in order to deceive the purchaser's bank as to how much the property was sold for. I also do not accept his assertion that the amounts written on the note that he put under Mr Grigoriu's door were not moneys that he owed Mr Grigoriu. Although he was a more responsive witness he was somewhat vague about a number of matters and some of his answers to questions put in cross-examination concerning some of the entries in his diary were difficult to believe. His evidence as to how he came to have a copy of a supposedly sham loan agreement between Mr Grigoriu and Mr Demetriou is denied by Mr Demetriou and I do not know which of them to believe.
11. Overall, I think Mr Petran is a less unreliable witness than Mr Grigoriu and in a choice between the uncorroborated evidence of the two of them I would be more inclined to accept his evidence.

1. Mr Petran says that it was agreed that he would supervise the construction and the performance of the work and that he would be paid for that at the end of the project "whatever the normal cost is". He said that it was agreed that in the meantime he would be paid $16,000 from the construction loan for the project but that was never paid. Mr Grigoriu said that it was agreed that neither of them was to be paid and that the profits were to be shared equally. Indeed, Mr Grigoriu said that he was an experienced developer, that he sourced the land, supervised the project, funded it and provided all the expertise. He said that Mr Petran was anxious to learn from him about property development.
2. Notwithstanding Mr Grigoriu's insistence I do not accept that he was an experienced developer and that Mr Petran wanted to learn from him. Mr Grigoriu was an aircraft mechanic in Romania and has no formal building qualification. His main building experience on arriving in Australia appears to have been in labouring positions. In his witness statement he referred to some small developments, two in Ballarat in 1988-1989 and another one in Caulfield 1996. One of them was with Mr Ghent and one was with Mr Dimetriou. Otherwise the evidence that he gave of his building experience was largely of working with or for other people or jobs done with or by Mr Ghent, who is a registered builder. Precisely what role Mr Grigoriu played in these projects is unclear. At the time of his agreement with Mr Petran he was not long out of prison and was looking to rebuild his life. In contrast, evidence was given of developments that Mr Petran had undertaken himself and he was constructing a development at the time of their first discussions. It is more likely that the person with the "hands on" building experience was Mr Petran, not Mr Grigoriu.
3. On the Development, whereas Mr Petran was on site on most days supervising and assisting the tradesmen, Mr Grigoriu was rarely there. I accept that Mr Grigoriu negotiated the supply of some of the trades, purchased and delivered some of the materials, did some of the fixing stage work on Unit 3 that he intended to live in, moved a window and laid floor battens in Units 2 and 3. However it was Mr Petran who was engaged full time on site and he did it for a year. I think that it is unlikely that he would have suffered such a very large imbalance of input if there had been no agreement that he would be paid something for it.
4. Further, in his witness statement Mr Grigoriu says that it was agreed that no interest was to be charged upon the money that he claimed to have lent Mr Petran because: "Instead Petran stated to me that he would labour wherever he can on the development for no charge". This seems inconsistent with Mr Grigoriu's earlier statement that neither of them was to be paid for labour. If that had been the arrangement Mr Petran would not have been able to charge in any event.
5. I therefore prefer the evidence of Mr Petran. He was to be paid for his work at the end of the project and, although no amount was agreed, I interpret the phrase "normal cost" to be equivalent to "a reasonable sum in the circumstances". The difficulty is in establishing what that would be.
6. I accept that Mr Petran was to be paid $16,000 on account of this "reasonable sum" and that that amount was never paid. However Mr Grigoriu claims to have given him $20,000 on 24 June 2006, the day after he withdrew $100,000 from the Construction account. Mr Petran denies having received the money. Such a payment is described in Exhibit "2" as being "Stellian's wage" with another $20,000 being described as "George's wage". The two amounts are described in Exhibit 5 as "Drawings" for each of them and someone has handwritten the word "WAGES" next to them. In later statements Mr Grigoriu has deleted the reference to his own $20,000 and changed Mr Petran's to a loan of $20,000.
7. In cross-examination Mr Ghent said that he gave them $40,000 on that day, half in a cheque and half in cash. This, coupled with the earlier characterisation of these sums as "wages" suggests that it represented a payment to each of them for living expenses from the construction money. Were it simply a choice between the evidence of Mr Grigoriu and Mr Petran I would not be satisfied that this amount of $20,000 was paid to Mr Petran. However, Mr Grigoriu's evidence is corroborated by Mr Ghent which tips the scale. There is also this limited documentary evidence. I am satisfied that Mr Grigoriu did pay this amount to Mr Petran and that, despite his denials, he retained the same amount for himself.
8. So I find that Mr Petran has been paid $20,000 on account of the "reasonable amount" he was to be paid for his work.
9. Despite the evidence of Mr Zablocki, it is impossible to assess with any confidence just what the value of Mr Petran's work on site was so I must look to their agreement. Both men did work but Mr Petran did a great deal more than Mr Grigoriu did. The parties agreed that Mr Petran was to be paid $16,000 on account of his work. There was no such agreement with respect to Mr Grigoriu. I find therefore that the $20,000 each that was drawn from the construction loan was the wages to which they considered they were both entitled and that the $16,000 was to be paid to Mr Petran over and above anything that they were both to receive, on account of what Mr Petran should reasonably have been entitled to. I will therefore allow $16,000 in favour of Mr Petran for his work in addition to the $20,000 that he has already received. There is insufficient evidence to make any finding that any more than this agreed amount is owed.

1. Mr Petran said that from the start he asked that they appoint an accountant to handle the money but that Mr Grigoriu said to him that it was unnecessary, saying: "Can't you add up?" Because of the arrangement with Mr Ghent all of the money had to pass through his hands and it was given to Mr Grigoriu, mainly in cash. Having received the money Mr Grigoriu has an obligation to account for what he did with it. On his own evidence he admits that he did not keep it separate from his own money.
2. Mr Grigoriu acknowledged that after the first drawdown Mr Petran asked him about the money and he said that he told Mr Petran that he had already spent a large amount of money.

1. Mr Grigoriu seeks to account for the money that he received and prove his claims from a variety of documents. Many receipts and quotations have been produced which I accept as evidence of their contents but it is apparent that there are no documents for many of the amounts he claims to have spent. He claimed that when he moved from a house that he shared with Mr Petran in Marigold Avenue he left a number of receipts behind. He said that Mr Petran put these in a box and then gave only some of them back to him. Mr Petran denies this and I prefer his evidence.
2. It is common ground that some of the work and materials were obtained for cash in order to secure a better price. The difficulty then is to know whether the absence of a receipt means a cash job or whether it means that the expense was not incurred. I have concerns about the credit of both men, more so Mr Grigoriu, and I am not prepared to find that a claimed expense has been incurred by one if it is denied by the other unless there is some corroboration to support the claim.
3. Mr Grigoriu said that he recorded the money that he spent in his diary and suggested that this had been kept as a continuous record of his spending. The status of this document is of considerable importance because in many cases it is the only corroboration relied upon to support Mr Grigoriu's evidence that a disputed payment was made.

1. A complete diary has not been produced. All that has been tendered is a stapled bundle of pages torn from a "one day to a page" diary for the 2006 Calendar year. The first page in the bundle has the printed heading "Staff Leave Chart 2006". This has columns printed from left to right for the months January to May. It is reasonable to assume that the next page in the original diary, as printed, would have had columns for the other seven months but that page is missing. So also are the pages for the first three days of January.
2. The "Staff Leave" page contains a list of expenses. They all have the appearance of having been written out at the same time. It does not have the appearance of a continuous record and so, since the amounts in question were incurred at different times it is more likely than not that the list was prepared at a time by which all of the payments listed had been incurred. The expenses are totalled at the foot of the page at $272,047. It is impossible to know whether this was intended to be a final total or a running total to be carried on to the next page because the next page in the original diary is not there.
3. The next page in the bundle is that for 4 January. Some notes at the top have been crossed out. Half way down the page are four payments side by side below the heading, written in a foreign language which I assume is Romanian. Mr Grigoriu claims that these were amounts that he gave to Mr Petran. I note that each of these coincides with a credit in Mr Petran's Credit card statement on that date for an identical amount. Below those payments is another list of payments said to have been made by Mr Petran which are totalled at $18,882.34.
4. The pages for 5,6 and 7 January are there but contain nothing of apparent interest and no evidence was given in regard to them. The pages for the rest of January and the first 8 days of February are missing. The 9 February page contains notes apparently concerning the project but which are of no apparent relevance. Four lines at the foot of this page have been crossed out in such a way as to make it impossible to see what was written there so I cannot know whether there was once something there of relevance or not. The previous writing has been obliterated.
5. The next 9 pages contain lists of payments which Mr Grigoriu claims were a continuous record of the expenses that he incurred on the project. They were not consecutive pages in the original diary but are written on the pages for the following dates: 10, 19, 20, 23, 24, 25 and 26 of February and 3 and 4 of March. The first two of these pages and two thirds of the third page have the appearance of having been written at the same time, in that not all of the entries were in chronological order, the ink and style of writing are identical and the columns are symmetrical.
6. When I expressed these concerns to Mr Grigoriu he acknowledged that the entries on two thirds of the first page were written at the same time but he maintained that the rest was a continuous record.
7. I do not accept that evidence. Apart from the appearance of the document, no explanation was offered as to why, in preparing a continuous record, Mr Grigoriu would get to the bottom of the page for 10 February and then continue it on the page for 19 February. One possible explanation might be that the pages for the intervening days had something written in them. In fairness to Mr Grigoriu that question was not put to him but the authenticity of this document as a "continuous record" has been challenged and I have to decide whether I should accept it as such.
8. The rest of the third page does not have the same uniform appearance and the entries look to have been written at different times. The entries in the first half of the fourth page have the appearance of having been written at the same time but those on the rest of the page and the first four lines of the fifth page look to have been written at different times. The rest of the fifth page, save for the last line, appears to have been written at the same time. On the sixth page, the first fifteen lines appear to have been written at the same time and two of those lines have been obliterated, that is, crossed out in such a way as to prevent anyone from seeing what was written there.
9. The next 5 lines on page six appear to have been written at the same time but they all purport to be for the same date (16 November) so that is to be expected. The following line contains a deleted entry for 14 November and again, the details have been obliterated. The rest of page six, containing entries from 15 November to 1 December, appear to be contemporaneous except for the insertion of an item for fly screens and one alteration. The first eight lines on page seven look to have been written at the same time. The rest of page seven, including one obliteration, is in a slightly darker ink and those entries look to have been written contemporaneously at a different time.
10. Page eight was the 3 March page from the original diary and contains what appears to be about seven multiple entries. The final page appears to contain three multiple entries. Each of these pages contains obliterations. The last page contains 12 entries, one of which has been obliterated. No dates are given for any of the items on this page except for the last one. The first six items have the appearance of having been written at the same time, the seventh item is in a different colour ink and the remaining five items look similar to one another.
11. The rest of the "diary" comprises 22 sheets, one day to a page, of various dates. Some of the entries are written in English but most are in Romanian, and no evidence was given about any of them. There are many deletions on these pages only some of which are obliterations.
12. Although crossings out are to be expected in a document, to cross out in such a way as to prevent anyone from seeing what had been written there suggests that the person responsible wanted to conceal what had been written there. To do this in what is claimed to have be a contemporaneous record is a serious matter because it means that the document is no longer a contemporaneous record of what was originally written in it but only of some of those things.
13. Quite obviously, this is not a diary but a bundle of pages torn from a diary. It occurred to me that perhaps these were the only pages in the original diary that had anything written on them but that was not suggested in evidence and, if that were the case, why tear these pages out from the book? The fact that the list which is said to have been a continuous record has been written on pages that were not consecutive in the original diary raises the likelihood that it was written after the pages were torn from the diary and stapled together. I do not accept that it is a contemporaneous record. It later emerged from Mr Grigoriu's evidence that it is a list that he prepared over an unknown period from other sources.

1. The amounts that Mr Petran claims he spent are borne out by his Visa Statements. Apart from those, two bound books have been produced. The first is a 2006 printed diary that appears to be intact. On the opening page the Respondent has written his name and the address of the job, followed by the words: "Stelian Petran - Labour Supervision Management". On the next few pages there are rough notes and figures and the daily entries begin on 9 January. The entries for each day describe work done, presumably on the day in question, and in some cases are quite detailed.
2. At the end of each daily entry is the notation that 8 hours were worked for "Management, Supervision and Labour." There is a sameness about many of those entries, explained by Mr Petran's witness statement where he said that he went back later and wrote in the hours that he thought he had worked.
3. There is considerable whiting out and overwriting and also the obliteration of some entries which would indicate that the dairy has been altered. Mr Cook drew my attention to the fact that the entries claim that Mr Petran worked 8 hours virtually every day of the year including some public holidays. That seems unlikely but it is not impossible. It appears from the witness statements of the various tradesmen that the Respondent was on site virtually every day. The neighbour, Mr Betram, said that he was on site every single day from early in the morning until late at night and many times on Saturdays and Sundays. At first he lived in the next street and then he lived on site. He did not have a driver's licence for much of the time.
4. The relevance of his attendance on site is his claim for wages and a management fee. In view of the number of other jobs he claimed to have carried out during that period it seems unlikely that he would have been there for 8 hours every day. I think the later annotations in the diary to that effect are a reconstruction that is not justified. However, in the absence of any contemporaneous record of the hours that he worked I am able to find on the evidence of the tradesmen and the neighbour that he was there for most of the time.
5. The other book is not a diary but an account book containing various calculations and notes. The Respondent was cross-examined extensively on the meaning of some of the entries, in particular, where these were said to echo what Mr Grigoriu had put in his "diary". Mr Petran's explanation was that he copied entries from that "diary" but no reason is suggested why he would have done that and I find it difficult to believe.
6. There does seem to be a similarity between some of the figures appearing in Mr Petran's diary and some of the amounts that Mr Grigoriu claims to have lent him but, in most cases, not sufficient to base any finding on. The figures are confused and many of the annotations, where there are any, are written in Romanian and do not clearly identify what most of the figures are. His explanation of some figures that he said were a list of moneys received from various people for whom he had done jobs did not make any sense when it appeared that he was adding debts to assets but I not sure that I understood his evidence.

1. I am concerned about the alterations that have been made to both diaries and in the case of the Mr Grigoriu's diary I do not believe that it is a diary at all in the sense that entries were made in it as the alleged events occurred. Because of the concerns I have about the document as detailed above and Mr Grigoriu's credibility I cannot regard it as being a contemporaneous record. As to Mr Petran's diary, I accept that it is genuine in the sense that it was kept as a diary and I will have regard to the entries in it that do not appear to have been altered. However I do not accept it as being a contemporaneous record of the hours that he worked.

1. Of the greatest significance, on page 681 of the Tribunal Book there is a list of figures in his handwriting under the heading: "Stellian personal debts to George." Mr Petran said that he put this under Mr Grigoriu's door after this proceeding had commenced, offering to accept responsibility for these in order to avoid the Tribunal hearing. There is nothing qualified about the heading, nor does the document purport to be an offer. Insofar as what is on this list supports Mr Grigoriu's evidence I will treat it as being corroborative of his evidence that Mr Petran owed him this money.
2. Mr Grigoriu said that during construction he took notes and, at the end of the project, he transcribed the spending from all of his notes into a separate list. The notes were then discarded. He said that these included a list of the money that Mr Ghent had given him. When asked why he discarded such significant documents at a time when he knew that Mr Petran was querying the claims that he was making he said that it was his "procedure" and that no one advised him to keep them. Later he said that he discarded the list of Mr Ghent's payments because he did not want to keep a lot of papers. These assertions undermine his evidence that the diary was a contemporaneous record because, if it were, this later exercise would have been unnecessary.
3. In the absence of a contemporaneous record from either side I must look to the lists they have provided and see what can be substantiated by objective evidence.

1. On page 78 of the binder of Mr Petran's further discovered documents is a list that he has prepared of what he says was spent on the project by both parties. He acknowledges that this is no more than an estimate.
2. Mr Grigoriu has a number of lists, namely:
   • (a) The "diary" (Exhibit "1"), which after first suggesting that it was a contemporaneous record he then seemed to acknowledge (sensibly) that it was not.
   • (b) Exhibit 2, which is a list that he prepared in 2007 before Exhibit "B".
   • (c) Exhibit B, which he said he prepared to take to the accountant. He claimed that he prepared it from the "diary" and other notes in March or April 2007 and that after he prepared this document he threw some of his notes away.
   • (d) Exhibit 4, which he said he prepared from all the other documents.
3. Mr Grigoriu said that the ultimate statement is more reliable. This is inconsistent with the allegation that any continuous record was kept because if it was, it would not have required any alteration. The various lists appear to be reconstructions from other material that is not before me. Indeed, late in his cross-examination he acknowledged that the "diary" was not a running sheet of all the expenses incurred. He said that to produce the list of the amounts he was claiming he also used receipts, notes, bank statements and his memory.
4. The first attempt at an accounting in any formal sense appears to have been the account ("Exhibit "5") prepared by Mr Grigoriu's accountant, Mr Hillary, which is "Annexure "H" to his witness statement. Mr Grigoriu had this prepared on the advice of his solicitors when litigation was pending. It contains a number of obliterations. One of these was a credit amount of $4,700 on 12 March 2006 with the barely discernible annotation: "Stellian cont. to construction costs" which I interpret to mean that it was a contribution by Mr Petran of that sum towards the construction costs. Other deleted credits except for one appear to relate to draw downs from the bank. At the end of the document the author notes that it was prepared on information supplied by Mr Grigoriu but that no receipts were sighted.
5. Exhibit "5" formed the basis of Mr Grigoriu's case until the filing of his witness statement. It was then replaced by "Schedule "L" which reduced the amount claimed by about $100,000, removing, inter alia, the amounts Mr Petran could prove from his Visa statements that he, not Mr Grigoriu, had paid.

1. The following amounts were drawn from the account and, except for one retention, passed on to Mr Grigoriu:

Less held back by Mr Ghent on account of his exposure

in regard to the domestic building insurance 28,000.00

1. Evidence was led as to what the three Units should have cost to construct. Various figures were suggested, ranging from the parties' own estimates of less than $500,000, Mr Ghent's estimate of $560,000 and the evidence of Mr Grigoriu's Quantity Surveyor of over $650,000. However those last two figures contemplated that a builder would be engaged. The parties did not have to pay a builder's profit, they obtained materials and labour cheaply by paying cash. Some materials were purchased at auction and much of the site labour was carried out by Mr Petran. It also appears that in many cases GST would not have been paid. This evidence as to what the job should have cost is of limited use because my task is not to determine that but to ascertain what the parties have outlaid.

1. Apart from the parties' own oral evidence, the evidence that I have of the various payments made is the bank records that have been tendered and the receipts that have been produced. Where it appears from these documents that a particular party has made a payment I will treat the payment as having been made by that party in the absence of any evidence to the contrary. Mr Grigoriu says that on many occasions he gave money to Mr Petran, but this is denied.

Payments Claimed to have been made by Mr Grigoriu

1. On balance, I make the following findings concerning the amounts claimed by Mr Grigoriu. In each case I have checked the claim against the other evidence and based my finding upon the relevant receipt, invoice or credit card statement or an admission made by the opposite party. The credit is in the column of the party that I find made the payment. Where there is no figure in either column it means that the figure has been accounted for elsewhere or I am not satisfied that there is sufficient evidence to prove that the alleged payment was made by either party. In some case, I have found that a lesser sum than that claimed was paid, in which case a smaller figure is in the findings column. With others, such as the plumber, I have lumped the proven figures together into a single figure
2. In the original lists, rounded figures appear to have been used. Where I was able to correct these from the documents in evidence I have done so. (The numbering from 1 up to 349A has been taken from Mr Grigoriu's latest list of claims):

1. The above amounts include a building guarantee of $33,000 which was held on fixed deposit by the Commonwealth Bank until 29 March 2007 when it was paid back into the operating account. On 4 April 2007 an amount of $23,005.40 was then drawn out of that account by Mr Grigoriu. He said that the $33,000 had been given back to him by Mr Ghent but the bank statement would suggest that it was an account entry by the bank. He said that he used $10,000 of this money to pay interest on the loan, $15,750 to pay the landscape bond, he lent $1,000 to Mr Petran and he paid the rest off credit cards. He did pay the landscape bond on 11 April 2007 and that is credited to him above. Mr Petran says that he does not know what Mr Grigoriu did with the $23,005.40. He denies having received any money from Mr Grigoriu and says that the withdrawal occurred without his knowledge.
2. Since I have credited Mr Grigoriu with the initial $33,000, this $23,005.40 is another amount for which he must account. I therefore add this back into the bank loan and credit him with any proved expenditure, which includes the landscape bond.
3. The apparent reason the deposit could be released back to the parties was that, according to Mr Ghent's evidence, he held back $28,000 as security for his exposure in regard to the domestic building insurance. I have therefore deducted this sum (above) from the amounts for which Mr Grigoriu has to account. Mr Ghent continues to hold this money and it would seem that, if there are no claims on the builder's warranty insurance during the period of six and a half years after the occupancy permits were issued, the parties should get it back, subject to any contrary arrangement they might have with Mr Ghent. However, since Mr Ghent is not a party to this proceeding I cannot make any order concerning him.

1. In addition to those referred to above, I make the following findings as to the amounts claimed by Mr Petran. The basis of these findings is that the amounts in question appear as charges in Mr Petran's credit card statements and I am satisfied that they relate to the Development.

The alleged repayments to Mr Petran for purchases made on his credit cards

1. Mr Grigoriu claims to have given Mr Petran the following sums on account of the money he spent on his credit card statements; namely, $8,000 on 4 May 2006, $3,000 on 10 May 2006, $5,000 on 29 May 2006, $9,000 on 15 June 2006, $6,000 on 19 June 2006 and $4,000 on 3 July 2006. In paragraph 91 of his witness statement he said:

"The practice was that Petran would show me the items he had purchased on his credit card in his credit card statement and then he would show me the receipts. I would reimburse him shortly thereafter or on some occasions I would give him the money beforehand."

Mr Petran denies that any of these payments were made to him.

1. By 4 May 2006 when Mr Grigoriu claimed that he made the first payment of $8,000, Mr Petran had spent only $4,116.00 on his credit card so why give him as much as $8,000? Then, on 10 May, when he has bought nothing further, why give him another $3,000? Mr Grigoriu claims to have paid him a further $5,000 at a time when Mr Petran had spent only a further $1,038 on his credit card. He then claims to have given him a further $9,000 at a time when Mr Petran had spent only a further $193 on his credit card. Then, when he must have been many thousands of dollars in front, Mr Grigoriu claims to have made two further payments totalling $10,000 for the further expenditure of almost $5,800. I do not believe Mr Grigoriu's evidence about this. The coincidence between the amounts and dates and Mr Petran's credit card statements is explicable on the basis that Mr Grigoriu made up his story to suit what he knew to be in the statements.

1. Mr Grigoriu claims that he lent various sums to Mr Petran. Some of these are acknowledged and some are denied. It does not seem to me that personal debts unrelated to the land are things that the Parliament contemplated should be taken into account in deciding upon the disposal of money under the section but the words used are very wide. Further, the problem is that the money in trust arises from the sale of the land that was developed at the expense of the parties. The finances for the development have been mixed with the parties' own funds. Mr Grigoriu appears to have obtained much of the money that he lent to Mr Petran from the development loan from the bank which he did not keep separate from his own money. Mr Grigoriu says that part of the debt owed to him was repaid by Mr Petran giving a cheque for $10,000 to pay the deposit on the trusses. The parties are content for me to deal with all of these claims and take them into account in determining the apportionment of the money and since it is impossible to disentangle the loans from the other money I will do so.
2. None of these alleged loans were included in the letter of demand sent by Fetter Gdanski to Mr Petran but that is by no means conclusive. Corroboration of much of the claim is to be found in the list in Mr Petran's handwriting that he pushed under Mr Grigoriu's door after they had their falling out. That list, on page 681 of the Tribunal Book, is headed "Stellian Personal Debts to George", suggesting that Mr Petran considered that he owed him this money. In his oral evidence Mr Petran suggested that this was simply an offer to appease Mr Grigoriu but the list is not in those terms. It does not tally exactly with the claims Mr Grigoriu makes but, insofar as it does I accept that document as an admission.
3. Mr Grigoriu claims to have paid $3,0000 into Mr Petran's Visa account in January 2005. This allegation was not made in his witness statement and I do not have any statements from Mr Petran's Visa account for that time. It is not on the list that was put under the door. It is denied by Mr Petran and in the absence of some independent evidence corroborating the claim I cannot find that the payment was made.
4. Mr Grigoriu claims to have lent Mr Petran $4,240.00 in "small amounts" between January to June 2005. There is no evidence as to what these amounts were or when each of them was advanced. The allegation first seems to have surfaced after the hearing started in a list (Schedule "K") annexed to Mr Grigoriu's witness statement. It is not in any of the earlier claims and appears to have been derived from a page of Mr Petran's diary that had by then been discovered. The cross-examination did produce an admission by Mr Petran that he had owed Mr Grigoriu $4,340.00 but had paid that back. The onus of proving payment of an admitted debt is on the debtor but I prefer Mr Petran's evidence over that of Mr Grigoriu. It occurred to me that if Mr Petran had really owed Mr Grigoriu this money since 2005 then he would have made a claim for it well before this claim was made. However Mr Grigoriu says that the money was largely repaid by the payments of $920 and $8,000 and that Mr Petran gave him and the cheque for $10,000 he paid to Sunbury Wall Frames and Trusses which both of them claim a credit for. In claiming that credit, Mr Petran is denying that the $10,000 cheque was a repayment of anything that he owed Mr Grigoriu. This amount of $2,240 is not on the list that was put under the door but there is an amount of $1,200. I will allow that lesser sum as an admitted debt but since do not know who to believe I cannot make a finding that the balance is owed.
5. Mr Grigoriu claims that he left $7,000 with Mr Petran when he went to Romania for the purpose of making the payments to the National Bank. Mr Petran admitted that Mr Grigoriu left the money in a wardrobe in his room together with another $4,000 but said that it was for no particular purpose. They were both living in the same house but Mr Petran denies having used this money. Notwithstanding that, an amount of $7,000 appears as the second item in the list that was put under the door. There is also the same amount on page 227G of the Tribunal Book in Mr Petran's handwriting under the heading: "Received on departure" and two figures, $3,000 and $4,000 are referred to. I therefore accept Mr Grigoriu's evidence that he did indeed leave $7,000 when he left and that Mr Petran used it. It may be that it was used to pay the first three payments of $2,000 to the National Bank but although I am satisfied that he made those payments there is insufficient evidence of what money he used.
6. Many of the remaining amounts in Schedule "K" are admitted. As to repayment, Mr Grigoriu admits that he received $920 while he was overseas and $8,000 when he returned home. He also admits that the cheque for $10,000 for the trusses came from Mr Petran's cheque account but he applied that in reduction of the amounts that he was owed. Mr Petran admits that he received $12,990 for cars that he sold for Mr Grigoriu. He also admits that Mr Grigoriu paid him the following amounts: $$7,000, $330, $800; $8,000, $2,500 and $150. The rest of the claim is denied and, not knowing who to believe, I cannot find that the money is owed.
7. The result (largely derived from Mr Petran's admission) is therefore as follows:

Given to Mr Petran on 3 June on my way to the airport

Paid to Mr Ghent on behalf of Mr Petran on 18 March 2006

Lent to Mr Petran on 21 March 06 for deposit of house

Lent to Mr Petran on July 2006 to buy car from Fowles Auction

Lent to Mr Petran on 5 August 2006 for air tickets for his wife

Lent to Mr Petran on 16 August 06 for his visa account

Lent to Mr Petran on 19 Sept 2006 to pay for a windscreen

Lent to Mr Petran on 19 October 2006 for his visa account

Lent to Mr Petran on 16 November 2006 for his visa account

Lent to Mr Petran on 9 October for his visa account

1. The parties shared this rented house while the Units were being built. Both claim to have paid the security deposit to the Landlord and Mr Grigoriu claims that he paid more than his share of the rent and other expenses. Mr Petran claims that they shared the expenses equally. He also claims that Mr Grigoriu negligently damaged the front fence of the property and that he, Mr Petran, had to pay $1,500 to the landlord to have it repaired. He makes no claim for that in this proceeding.
2. There is a page in Mr Petran's diary (Tribunal Book p.227Y) suggesting that Mr Grigoriu paid the bond and two months rent, each of $1,000, and that the parties paid the next two months rent equally. What other payments were made and by whom does not appear. However this page is headed (in Romanian) "George Personal Debts" and has the word "PAID" on it. This document predates the list pushed under the door and the parties had financial dealings afterwards. I think the list under the door is more likely to reflect the present situation since the parties had no further dealings afterwards.
3. Since I have neither reliable evidence nor complete documentation as to these matters I am not able to sort out the domestic finances between these two men. Further, this is too remote from the task that I have under the Act.

The claims for "the deposit" and the balance of purchase money for Unit 2

1. Mr Grigoriu claims, and Mr Petran denies, that that there was a deposit paid by the purchaser, Catalin Stavril that was retained by Mr Petran. As to whether or not there was a deposit paid, the statement dated 14 September 2006 acknowledging receipt of the deposit bears what looks very much like the signature of Mr Grigoriu. It does not appear to have been signed by anyone else. He denied that he had signed it. Since the Unit was still under construction at that time any deposit would have had to have been paid into a trust account in accordance with the requirements of s.9AA(1)(a) of the Sale of Land Act 1962. There was no such account opened. I accept Mr Petran's evidence that there was no deposit paid.
2. Mr Grigoriu also claims that the net proceeds of the sale, after satisfying the bank, were not divided equally. The settlement statement certainly shows that a cheque for the balance of funds, which was $13,438, was made payable to Mr and Mrs Petran but the bank statement shows that it was paid into the operating account in the names of both parties. Mr Grigoriu claims that Mr Petran received $10,000.00 of this money and that he received only $3,438.00. The bank record shows two such amounts as having been withdrawn on the date of settlement from the operating account as detailed above. Mr Petran said that the extra received at settlement went back to the purchaser Mr Stavril by agreement between the three of them. Mr Petran said that Mr Stavril attended at settlement and received the money. Mr Grigoriu denied that but was unable to say whether or not Mr Stavril attended the bank with them when the money was drawn out. If Mr Grigoriu is right, there would have been no reason for him to be there. If Mr Petran is right then he would have had to have been there.
3. The bank records relating to the banking and drawing out of this money show that they were both at the bank when this money was deposited and the funds were withdrawn from the two branches, so whatever happened occurred with the cooperation of both parties. Why Mr Grigoriu would have allowed Mr Petran to retain an unequal division of the proceeds was never satisfactorily explained by Mr Grigoriu but neither party's story makes any commercial sense. On balance I accept Mr Petran's evidence.

1. Mr Grigoriu said that a broker's fee of "around $8,000" was paid for the construction loan but he did not say precisely how much it was. There is no documentary evidence of that. One would expect that if a mortgage broker was used (and Mr Petran did not deny that) he would have been paid something and that there would have been some documentary evidence of it. Mr Grigoriu has produced no such evidence. There is nothing in the refinance figures that specifically refers to a broker's fee but the amount paid out by the Commonwealth Bank was $6,988.72 more than the amount received by the National Bank and so the balance might well have been the broker's fee. That is the best I can do on this highly unsatisfactory evidence.

1. It was originally agreed that each of the parties would take one of the two smaller Units, being Units 1 and 2, and they would sell Unit 3, which was larger and more valuable. The evidence is clear that it was more valuable and I do not accept Mr Grigoriu's evidence to the contrary. However at some stage before lock up Mr Grigoriu told Mr Petran that he would take Unit 3. This was a unilateral decision by Mr Grigoriu rather than any agreement between the parties. Indeed, Mr Petran claimed and continued to claim that there ought to be an adjustment to take into account the difference in value between Units 1 and 3. That dispute was overtaken when it was agreed that both Units would be sold.
2. The terms of settlement provided that they could both bid at the auction. The auction was scheduled for 19 April but, about 1 week beforehand, Unit 1 was sold for $450,000. The auction was held for Unit 3 with a reserve of $460,000. The only bidder was Mr Grigoriu who offered $440,000 so the property was passed in. Thereafter, according to Mr Petran's evidence which is supported by letters from the Estate Agent that were tendered, Mr Grigoriu would not allow inspections of the property that were open to the public after the auction. Any inspection had to be by appointment and he insisted upon being present with his wife and child. Mr Grigoriu admitted that he took down the sale board and told the agent that the property was off the market. This occurred after he was told that there was a prospective purchaser for $475,000, I am satisfied that he acted in this way in order to reduce the chance of someone else buying the property so that he could purchase it himself at a cheap price. The Unit was eventually sold for $450,000 on 15 July 2008.
3. I find that the sale of Unit 3 was impeded by Mr Grigoriu's behaviour and that what he did was in breach of the Terms of Settlement. It is impossible to state with any precision what loss was caused by this conduct because it does not appear that there was a signed offer by anyone to purchase Unit 3 for $475,000 or any other price. Perhaps the property would have sold earlier, perhaps it would not. One would expect that it would have fetched a higher price than it did because it was a more valuable unit than Unit 1, which sold for the same price. There is insufficient evidence of that. What was lost was a chance that it would have been sold earlier and I must assess the value of that chance. I will allow interest at the penalty interest rate on the purchase money of Unit 3 for two thirds of the period between the sale of Unit 2 and the sale of Unit 3, which is $7,865.00. I will also allow damages for the loss of a chance of the property fetching a higher price, which I fix at $12,500. The total of those sums is $20,365 and one half of that is a loss suffered by Mr Petran for which he must be compensated. Conclusion
4. The contributions of the parties are therefore as follows:

Interest paid to National Australia Bank $ 4,000.00

Less wages drawn by the parties $ 40.000.00 $385,000.00

Contribution in excess of construction loan $126,234.80

1. To balance out the uneven contributions, Mr Grigoriu needs to pay to Mr Petran half the difference, which is $1,229.87.
2. In addition, Mr Petran needs to pay Mr Grigoriu the balance owed to him with respect to the loans, which is $20,045.00
3. To be set off against those sums are one half of the losses caused by Mr Grigoriu when he frustrated and delayed the sale of Unit 3. I have assessed the total of these at $20,365.00 so Mr Petran's share is $10,182.50. Deducting that from $20,045.00, Mr Petran has to pay to Mr Grigoriu $8,632.63.
4. The order will therefore be that the money held in trust is to be divided into two equal parts, from Mr Petran's one half share there is to be deducted the sum of $8,632.63, which is to be added on to Mr Grigoriu's share. There will be liberty to apply reserved for any further orders that might be necessary or appropriate to give effect to these findings. The persons holding the funds will have liberty to apply to intervene in regard to the disposition of the money.