Hannah Louis Group Pty Limited ACN 122 439 392 t/as Maxum Transport & Anor v Maxum Taxi Trucks Pty Limited

Judgment Introduction 1This litigation relates to a dispute about the nature of the commercial relationship between the second plaintiff, Michael Saba (the plaintiff) and the third defendant, Dominic Savo (the defendant). It is common ground that the plaintiff and the defendant reached an agreement in October 2006 in relation to the establishment and operation of a courier/transport business known as "Maxum Transport" (the Agreement). The parties are at issue as to the terms of the Agreement. 2The plaintiff and the first plaintiff, Hannah Louis Group Pty Limited ACN 122 439 392 trading as Maxum Transport (HLG), make various claims in respect of loss and damage alleged to have been caused by the defendants as a result of breaches of contract and misleading or deceptive representations in breach of section 52 of the Trade Practices Act 1974 (Cth) and sections 42 and 54 of the Fair Trading Act 1987 (NSW). There are also claims of passing off and misappropriation. 3The defendants named in the pleadings are Maxum Taxi Trucks Pty Limited ACN 118 987 143 (the 1 st defendant); CDM Transport Pty Limited ACN 118 987 134 (the 2 nd defendant), subsequently CDM Transport Pty Limited (In Liq), in respect of which an order under section 471 of the Corporations Act 2001 (Cth) was made granting leave to proceed against it; Dominic Savo (the 3 rd defendant), to whom I will refer as "the defendant"; Sandra Savo, the estranged wife of the defendant (the 4 th defendant); Christina Savo, the daughter of the 3 rd and 4 th defendants (the 5 th defendant); Savo Holdings Pty Limited ACN 118 963 312 (the 6 th defendant), subsequently Savo Holdings Pty Limited (In Liq) in respect of which an order under section 471 of the Corporations Act was made granting leave to proceed against it; Total Transport Services (NSW) Pty Limited ACN 129 753 671 (the 7 th defendant); Lindsay LeRau (the 8 th defendant); and Michael Walker (the 9 th defendant). 4There were numerous interlocutory orders made prior to trial restraining the defendant and companies owned or controlled by him from certain conduct and freezing the defendant's assets and those of some of the other corporate defendants. These orders, with some adjustments, were continued during the trial and are still in force. 5The trial (limited to the determination of liability) proceeded on 11 to 15, 18, 19, 21, 22, 25, 26 and 27 October 2010 and 3, 11, 22 and 24 November 2010. On 24 November 2010 the defendant was granted leave to file further written submissions by 10 December 2010 from which date judgment was reserved. Mr P Bruckner, of counsel, leading Mr E Walker, of counsel, appeared for the plaintiffs; Mr B Goldsmith, solicitor, appeared for the defendant; and Mr P Cook, of counsel, appeared for the 4 th and 5 th defendants and subsequently on 12 October 2010 appeared also for the 7 th defendant. 6During the trial the parties advised that as between the plaintiff and the defendants, other than the defendant, the matter had been resolved in principle. There was mention of the necessity for documentation to be completed in respect of those proposed settlements, however no formal application for final orders was made. On 18 October 2010 the parties advised that the matter had settled "in principle" between the plaintiff and the defendant. However on 21 October 2010 the parties advised that final settlement had not been reached and the trial continued. During final oral submissions on 24 November 2010, the plaintiff advised that in addition to the defendant, it was only proceeding against the 1 st defendant (Maxum Taxi Trucks Pty Ltd), the 2 nd defendant (CDM Transport Pty Ltd (In Liq) and the 6 th defendant (Savo Holdings Pty Ltd (In Liq)), and that it was anticipated that consent orders would be filed in relation to all other defendants. This has not yet occurred. 7The plaintiff propounds an agreement in which, amongst other things, he was to pay $150,000 for the setting up and operation of Maxum Transport and share in the profits of the business, as operated and/or sold. The defendant propounds an agreement in which, amongst other things, the business was to be owned by him, registered in the plaintiff's name and transferred into the defendant's son's name when he turned eighteen years of age. The defendant claims that although he offered the plaintiff 10% of the profits of the business he declined such offer allegedly on the basis that the defendant had already been very good to him, in particular in looking after his children. 8In McCann v Switzerland Insurance Australia Limited [2000] HCA 65; 203 CLR 579 Gleeson CJ said that a commercial contract should be given a "businesslike interpretation" and that interpreting a commercial document (in that case a policy of insurance) "requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure": [22]. The present case does not involve the interpretation of a commercial document. It requires the determination of the terms of the commercial agreement reached between the parties. Although there is no occasion in this case to apply any "businesslike interpretation" to a written agreement, it is appropriate in determining, as a fact, what the terms of the agreement were to consider the surrounding circumstances, including that this was an agreement to govern the commercial relationship between the parties. 9The surrounding circumstances to be taken into account in the process of determining the terms (as opposed to interpreting the terms) extend to both pre-agreement and post-agreement conduct: County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193, per Spigelman CJ at [17]. It is settled law that post-agreement conduct may be considered to decide whether an agreement was formed: Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 per Heydon JA, as his Honour then was, at [25]. 10There is no real issue that the defendant diverted the business of Maxum Transport and traded an identical business under various names and corporate structures, so that the plaintiff was excluded from any share in the profits of Maxum Transport. There is no dispute that the defendant controlled the corporations to which the business of Maxum Transport was diverted, being the 1 st , 2 nd and 7 th defendants. If the plaintiff's version of the Agreement is accepted it is not in dispute that the defendant was not entitled to divert the business and it was conceded that an order would be made for an account of profits or an assessment of damages. If the defendant's version of the Agreement is accepted there is no issue that he was entitled to divert the business and the plaintiff's claim should be dismissed. 11Although the issue of determining the terms of the Agreement between the parties may present as reasonably straightforward, it belies the complexity of the history between the parties and the numerous events and attendant undercurrents upon which both parties relied to submit that their version of the Agreement should be preferred. The relevant surrounding circumstances include strong arm tactics ("bothering") against third parties by the plaintiff to protect the defendant, large cash payments without receipts and other documents, allegations of underworld connections, physical altercations between the parties and dealings with large commercial corporations under false pretences, where the defendant masqueraded as the plaintiff in correspondence with TNT Australia Pty Ltd (TNT). 12This is not the usual backdrop to the determination of the terms of a commercial agreement. However, it is important to identify what the parties appeared to regard as acceptable conduct to judge which of the competing versions is the more probable. For instance where commercial parties usually transact business with detailed records bringing to account their capital contributions to a project, a claim of payments of large amounts of cash without receipts may present as questionable and/or less probable than where commercial parties operate in a less rigorous and disciplined fashion. There is no dispute that the defendant acted furtively in his diversion of the business. However he provided a number of explanations for this conduct that he claimed are consistent with his version of the Agreement rather than that propounded by the plaintiffs. 13It is therefore necessary to analyse the parties' relationship in some detail over the relevant period. There were various challenges by each party to what might appear to be minor matters in the other party's evidence. However having regard to the fact that the plaintiff and the defendant rely largely on oral communications for the establishment of the terms of the Agreement, it will also be necessary to deal with these challenges to the recollections and/or credibility of each of the parties. Century Couriers 14It is common ground that as at 2006 the defendant had been involved in the transport industry for over 20 years. After his first five years as an employee he commenced his own business using the contacts that he had already made in the transport industry. The defendant owned a number of courier businesses the last of which, before entering into the Agreement with the plaintiff, was Century Couriers. This was a large courier business with forty-five vehicles, sixteen of which were owned outright by the defendant's company, Century Couriers Pty Limited. The other vehicles were owned by drivers contracted to Century Couriers. The parties are introduced 15In about February 2006 Paul Baldini, who had been an acquaintance of the plaintiff for some time, introduced the plaintiff to the defendant at a chance meeting at premises in Forest Road, Hurstville (the Forest Road premises). There was discussion about a motor vehicle that the defendant's wife was selling that resulted in the plaintiff's mother-in-law purchasing that motor vehicle at the beginning of April 2006. Century Packaging 16Some months prior to August 2006 the defendant started a new business known as a Century Packaging Supplies (Century Packaging). It was owned by State Packaging Pty Ltd and Century Packaging Supplies Pty Limited and sold disposable packaging to the catering and restaurant industries. Century Packaging operated out of the Forest Road premises. The defendant's partner in that business was Paul Baldini who, the defendant claimed, advised him that it would probably cost him about $180,000 to set the business up but the defendant claimed that, as it turned out, it cost him about $550,000. The defendant then decided to sell his shares in the business and the companies. 17On 4 July 2006 the defendant entered into "Heads of Agreement" with Nicola and Saverio Russo (the Russo brothers) for the "total acquisition" of his shares in the companies, State Packaging Pty Ltd and Century Packaging Supplies Pty Ltd. There was also provision for the total acquisition of the defendant's shares in another company, Extreme Scooters Pty Ltd. The Russo brothers agreed to acquire the defendant's shares in the three companies for $450,000 by payments of $250,000 at the time the defendant transferred his shares and resigned as a director and $200,000 within 24 months of the share transfers. There were also provisions for the defendant to resign as a director of the three companies and for the Russo brothers to become directors of those companies at the time the Heads of Agreement were signed. 18The Heads of Agreement also provided that the Russo brothers would provide to the defendant "the existing space occupied by Century Couriers Pty Ltd" (although the location of the space was not specified) "free of rent for up to six months from the date of share transfer" and that the Russo brothers would "re negotiate new lease terms with the owner of occupied premises or have the existing agreement transferred away from" the defendant. Early meetings - mid 2006 19The plaintiff claimed that in mid 2006 the defendant arrived uninvited at his home. This was the first time that the plaintiff had seen the defendant since his meeting with him earlier in the year in relation to the purchase of the motor vehicle. The plaintiff did not know how the defendant obtained his address but, once there, the defendant asked the plaintiff whether he would like to purchase a boat. The plaintiff claimed that he informed the defendant that he thought it was "a bit strange" to knock on his door as he did and he said: "you're not here to sell a boat. Why did you come and see me?" The defendant said that he would like the plaintiff "as a friend". In his cross-examination the plaintiff said that what the defendant was looking for was "protection" because he was in "a lot of trouble in the past with some of his ex partners" (tr 81). 20The defendant's first affidavit sworn on 30 September 2009 made no mention of the detail of the meeting in mid 2006. However in the defendant's affidavit sworn on 6 April 2010, he denied going to the plaintiff's house at that time. That affidavit included the following (par 7): I did not know where Saba lived at that time and all of my contact with him was by phone. I did however by telephone offer to sell my boat to him and he indicated that he was interested. 21It was suggested to the plaintiff in cross-examination that the "conversation never took place" (tr 80). The plaintiff was rather adamant that it did take place as he recounted it (tr 80-81). Notwithstanding the defendant's denial in his affidavit that he attended the plaintiff's house and notwithstanding the cross-examination of the plaintiff consistently with such denial, the defendant gave the following evidence in cross-examination (tr 248): Q. And I suggest to you that you went and saw Michael Saba and you asked him if he wanted to buy a boat? A. Yes. 22I am satisfied that in mid-2006 the defendant went uninvited to the plaintiff's house and I am satisfied that that he did so initially on the pre-text of offering to sell his boat to the plaintiff. 23The plaintiff claimed that over the next few days the defendant visited his home on numerous occasions. These meetings obviously took place after the defendant had executed the Heads of Agreement because he was complaining to the plaintiff about the Russo brothers, to whom he referred as the "pizza boys" (apparently because of the pizza business they operated elsewhere). The plaintiff claimed that the defendant informed him that he needed to "kick out" the pizza boys from the Forest Road premises. 24The plaintiff claimed that the defendant asked him whether he would like to be a director of Century Packaging and suggested that he would give him whatever salary he wanted and proposed a payment of $2,500 per week "cash in the hand". After consulting his solicitor the plaintiff advised the defendant that he did not mind working at Century Packaging but he did not want to be a director. The plaintiff gave evidence in cross-examination that the reason he was at the Forest Road premises was to "bother" the defendant's ex-partners (tr 90). When he was pressed to describe what it was that he did to "bother" the ex-partners, the plaintiff said that he instructed them to "get out" (tr 91). 25In cross-examination the defendant denied that he engaged the plaintiff to protect him. However he gave the following evidence (tr 249): Q. What do you say you engaged Mr Saba to do in that period of time, in the last half of 2006? A. I engaged, I engaged Mr, I asked Mr Saba would he, would he let me, allow me to, safe passage back into the offices of Century Packaging by firstly telling the ... brothers to go away, and secondly by controlling Mr Baldini ... that is why I engaged Mr Saba, is for, for a period of time of four weeks. 26In his affidavit sworn 6 April 2010 the defendant claimed (at par 8) that he did not offer the plaintiff a directorship and he did not discuss wages or any payment to the plaintiff. He also claimed (par 11): Saba was not appointed general manager of Century Packaging Supplies Pty Ltd and was never an employee of that company and for that reason did not receive a wage. 27Notwithstanding these claims in his affidavit the defendant gave the following evidence in cross-examination (tr 256): Q. Did you believe that Mr Saba was entitled to any money out of this business when it went into administration? A. Apart from his pay, no. HER HONOUR Q. Apart from his what? A. Apart from his wage that he was paid, no. BRUCKNER Q. How much wage was he paid? A. He was paid $1,200 a week for four weeks. Q. That money was paid to him, you say? A. I believe so. 28It was suggested in final written submissions that the plaintiff's claim that he was engaged by the defendant for an agreed amount of $2,500 per week was "inconceivable". I disagree. It is quite clear that the defendant wanted to secure the plaintiff's services to protect his interests at the Forest Road premises 29The defendant agreed that he engaged the plaintiff but said that it was only for "around 4 weeks" for the purpose of providing him with a "smooth and hassle free passage" to regain the directorship and access to the offices (tr 280). He said he engaged the plaintiff to "enforce" his wishes for the business at that particular time (tr 281). It is obvious that the defendant had to discuss payment or wages with the plaintiff for the "services" he was to provide. Whether it was for $2,500 or $1,200 per week and whether it was for services as a general manager or simply to "enforce" the defendant's wishes to allow him "safe passage" back into the Forest Road premises does not matter for the purpose of the assessment of the competing claims on this aspect of the matter. The fact is that the defendant admitted that the plaintiff was to be paid his "pay" or his "wages". I am satisfied that the defendant discussed wages with the plaintiff for either $1,200 or $2,500 per week. 30The defendant gave affidavit evidence that he terminated the Heads of Agreement with the Russo brothers because they had not paid the purchase price after 3 months. I do not have to decide the legality of any termination of that Agreement in these proceedings, however the Heads of Agreement did not oblige the Russo brothers to pay the defendant any money until he transferred his shares and resigned as a director. It is apparent that the defendant did resign as a director but did not transfer his shares. His affidavit evidence claimed blandly that he "changed the directorship back". There was nothing in his first affidavit about the engagement of the plaintiff to provide him with a "safe passage" back in to Century Packaging offices. There was no mention of any request of the plaintiff to tell the Russo brothers to "go away". Nor was there any mention of any request by the defendant of the plaintiff to control Mr Baldini. It is apparent that the only way the defendant could enforce what he regarded as an appropriate termination of the Heads of Agreement was with the assistance of the plaintiff. 31Although the path to the achievement of the defendant's wishes is not detailed in the evidence, it is clear that the plaintiff provided the "safe passage" the defendant was after because the defendant was reinstated as a director of Century Packaging Supplies Pty Ltd (and probably State Packaging Pty Ltd and Extreme Scooters Pty Ltd) in late September 2006. The defendant agreed that this had cost him $15,000 and that he had paid that amount by credit card (tr 274-275). Sale of Century Couriers - August 2006 32On 12 August 2006, the defendant and his wife, their partnership, the defendant trading as Century Couriers, Century Couriers Pty Limited, Century Couriers Pty Limited as trustee for the Century Couriers Trust and the defendant trading as Recall Couriers, collectively as "Seller", entered into a Sale of Business Agreement (the Sale Agreement) with Century Couriers (NSW) Pty Ltd as "the Purchaser" to sell the "Business" defined as "the courier and taxi truck business carried on by the Seller" for $250,000. The Purchaser was referred to in the evidence as "Civic Transport" (Civic), apparently a Melbourne based business that incorporated the Purchaser company to operate the Century Courier business. The purchase price was to be paid by instalments of $50,000 on the Completion Date, 14 August 2006, and $200,000 on 2 October 2006. 33The defendant agreed to assist the Purchaser to retain the goodwill and business of the Customers of the business and to provide ongoing assistance as directed until 2 October 2006 in return for payment of $1,500 per week: (Clauses 7.1 and 7.2). The Sale Agreement also included the following: 14. RESTRAINT OF TRADE 14.1 Restraint of Trade The Seller agrees with the Purchaser that in order to protect the Goodwill, the Seller will not for three (3) years after the Completion Date within New South Wales or the Australian Capital Territory either directly or indirectly: (a) undertake, carry on or be engaged in or concerned with (whether as director, employee, agent, principal, partner, representative, shareholder, debenture holder, trustee, the holder of any security or in any other capacity) any business which competes with the Business or is similar in nature to the Business. (b) counsel, procure or otherwise assist or encourage any person to do anything referred to in clause 14.1 (a); (c) canvass or solicit any employee of the Business to leave his employment with the Purchaser; or (d) canvass or solicit any person who has been a client or customer of the Business at any time during the year prior to the Completion Date. Notwithstanding the above, it is agreed that after the expiration of one (1) year from the Completion Date the Seller may be an employee or subcontract (sic) owner/driver of a business that competes with the Business or is similar in nature to the Business. 34The defendant agreed in cross-examination that the purchase price was paid in accordance with the Sale Agreement. Thus, he received $50,000 in August 2006 and the balance of $200,000 on about 2 October 2006. He was cross examined about clause 14 of the Sale Agreement and said that the clause was not the subject of any negotiation between himself and Civic. He claimed that his manager at the time, Rob Hyham, had informed him that there was a restraint of trade clause in the Sale Agreement and he agreed that he was aware there was a period of three years with some restraints. He denied being aware of a one year period in relation to other restraints. He was cross-examined further as follows (tr 240-241): Q. This would have been an important clause to you at the time, wouldn't it? A. I was not aware of this clause. ... Q. This would have been an important clause to you at the time you signed this agreement, wouldn't it? A. Yes. Q. Your conversation with Mr Hyham about the restraint of trade, was that prior to the signing of the agreement or after the signing of the agreement? A. Prior. Q. And did you ask Mr Hyham what you were restrained from doing? A. Yes I did. Q. What did he tell you, to the best of your recollection, that you were restrained from doing? A. Not starting a transport company within a 3-year period. There was one other, I just need to remember it. Q. Take your time sir? A. I was able to be a driver only and a manager of any transport companies I might have worked for in the future. That is the extent of it. 35The defendant said that once he sold Century Couriers to Civic he was "technically unemployed for the first time in twenty odd years". He said that this was a "concern" and that he had lost a lot of money, about $600,000, in Century Packaging, although the sale of Century Couriers made up for some of that loss. He said that he had "technically" lost his family's company and gambled on his family's wealth (tr 273). Within days of the receipt of the balance of the purchase price for Century Couriers, the defendant approached the plaintiff to discuss his plan to establish another courier/transport business, which he accepted was in breach of the restraint of trade provision of the Sale Agreement (tr 242). 36When asked what the "catalyst" was that made him comfortable with breaching his obligations under the Sale Agreement to set up a new courier/transport business the defendant said (tr 267): In no importance of order, firstly, there were 16 drivers that I employed between 2 and 5 years, all of a sudden unemployed as a result of my selling Century Couriers Pty Limited. That is one. There was the fact that the owners of Civic Transport [the Purchaser] dropped this contract in the laps of my wife and myself on Saturday morning-whatever date it was, they commenced trading with my company on the Monday, two days later, Friday afternoon we had all the phones computers everything ripped off. They come to my home office with this document Saturday morning. My wife and I had no time to get legal representation to read this contract on our behalf, and to be very honest that peeved me off, for want of a better word, and thirdly I had money troubles at the same time so, it was a combination of all three of those things I would say. 37It is clear from this evidence that the defendant was claiming that he had "money troubles" at the time that he approached the plaintiff with his plan to establish a new transport/courier business in October 2006. However, the defendant gave the following evidence in cross-examination (tr 283): Q. You accept that at the time of the initial agreement, in early October 2006, you were short of money? A. No. 38He said that he was looking for a way to make money (tr 283). However when he was referred to his earlier evidence in which he said that he had money troubles he said that he stood by that evidence (tr 284). The defendant's affidavit sworn 30 September 2009 included evidence that "at about the same time", meaning about October 2006, his "marriage was becoming increasingly shaky". He said he was "cautious about building up assets" in is own name and "therefore decided to try to set up another courier business, but putting it in someone else's name" (pars 16-17). The Agreement - October 2006 39It is common ground that the plaintiff and the defendant met in early October 2006 and discussed the proposal the defendant put forward for the establishment of the new transport/courier business. They did not reduce their discussions or their outcome to writing. The competing versions of the conversation in early October 2006 are contained in their respective affidavits. 40The plaintiff claimed that the following conversation took place in about October 2006 in the garage of his home: Defendant: The warehouse is giving me a headache - I am still paying the rent. I know a lot about transport and I have a lot of connections. There is big money to be made from running transport drivers. Do you want to go into business? The business will be run from the offices at the Forest Road premises, but it will operate for a short time from my home until things settle down from the packaging company liquidation, because lots of creditors are chasing me for money at the Forest Road premises, so I don't want to work from there straight away. Plaintiff: OK. Defendant: The business will be in your name or the name of one of your companies, and I will be a silent partner. I will manage the business' day to day operations, but everything will be in your name. Plaintiff: OK. Defendant: The Forest Road Lease will also need to be transferred to your name or one of your companies. The business will use the offices and pay $2,000 a week from January. The business will be making money by then. Plaintiff: OK Defendant: The company will earn about $20,000 a week profit once it is up and running. Plaintiff: OK. Defendant: The company will need about $300,000 to get up and running and for working capital during the first year. You will only need to put in $150,000 as the company requires it over the first 12 months, because I will put in the first $150,000. If I put in $150,000 cash for the company's initial capital needs, and I manage the company's day to day operations, I want 50% of the company's profit and, after we each take out our contributions upon selling the company, I want 50% of the balance. After setting up the company and getting it earning for a while, the company will be sold in 12 months time, in October/November next year. The company should then be worth at least $500-$600K." Plaintiff: OK. 41The defendant claimed that the following conversation took place when he was out fishing with the plaintiff: Defendant: I am thinking about starting a new courier business but I can't put it in my name. Can I use your name? It will be my business and I will run it. I will fund it all. I have everything ready to start including drivers and clients. Plaintiff: Yes, I'll do it. You can use my name, but don't fuck it up. The only thing is I want my accountant to do all the taxes. Defendant: Does he have transport experience? Plaintiff: He used to work for the tax department. He can do everything. Defendant: Ok. We can use your accountant to ensure that you are protected. 42The defendant claimed that when they arrived back at the plaintiff's home after the fishing trip the following conversation took place: Defendant: Do you want 10% of the profit? Plaintiff: No, I don't want anything. What you did for my kids is worth a million dollars to me. 43The defendant claimed that on a subsequent fishing trip shortly after the fishing trip referred to above, the following conversation took place: Defendant: The business will be run from my house. After three years you can transfer the business to my son's name. Plaintiff: OK. 44The defendant also claimed that around that time there was a further conversation at the defendant's house in the presence of his wife. He claimed the following was said: Defendant: Are you sure you want nothing? Plaintiff: Yes, I'm sure. 45The plaintiff was cross-examined in relation to his version of the conversation as follows (tr 104-106); Q. Mr Saba, you accept, do you not, that prior to this conversation in October 2006 Dominic had a lengthy experience in the courier business? A. That's what he said, yes. Q. In October 2006 you accepted that, you knew that? A. I knew, yeah. Q. And you had no experience in October 2006 about the courier business, did you? A. No. That was new for me, even packaging too as well. Q. To make sure I fully understand what you say the agreement is, let me summarise for you my understanding. You say Dominic approached you about the joint venture? A. Yes, he did. Q. Dominic said to you that he knew a lot about transport and he had a lot of connections? A. Yes. He explained more things than that. Q. He asked you if you wanted to go into business with him? A. Yes, he did. Q. He said to you he would be the silent partner? A. Yes, he did. Q. He said to you he would manage the business, day to day operations? A. Yes, he did. Q. He said he would put in $150,000 straight away? A. Yes, he did. Q. He said to you you only have to put $150,000 over the 12 month period? A. Yes, he did. Q. And he said in return for that he wanted 50% of the profit? A. Yes, he did. Q. Mr Saba, I put to you that as a business proposition makes no sense? A. Did for me then and he said it. Q. I'm asking you in the witness box now, I put to you that makes no sense, does it? A. What do you mean by that? It does make sense. Why not making sense? Q. He's providing all of the connections? A. Yes. Q. He is managing the business day to day? A. Hmm. Q. He's putting in $150,000 at the beginning, you're only to put in $150,000 at any time over 12 months and then he is only to get 50% of the profit. I put to you that doesn't make any sense? A. Did make a lot of sense to me happening with the packaging as well. Q. Are you telling her Honour today that it makes sense to you now? A. Did make sense all the time. Q. So it makes sense to you as a business proposition? A. As a business opportunity. Q. As a business proposition he would introduce all the contacts, he would work in the business full-time, he put the money in now, you didn't have to put it in now and he would still only get 50%? A. Yes. Q. In this conversation Mr Saba there was no discussion about any work that you would do, was there? A. Actually the concern was I'll be doing the packaging part. Q. There was no discussion in this conversation about any duties you would perform in the new business which we know is called Maxum Transport, there was no discussion was there? A. No, mainly was as a share business like packaging and transport all under one roof, the drivers for the courier company do the delivery for the packages. That's what I said. We have a lot of things in common together. Q. So 50:50, he works full-time but there is no discussion about what you do, is that your evidence? A. No. We did discuss that I was. Q. It's not in your affidavit is it? A. Like in affidavit that was the packaging part was involved in it as well. Q. And there was no discussion on that occasion about weekly drawings or weekly salary, monthly salary, was there? A. It wasn't, no. We haven't discussed that briefly that much, no. Q. Mr Saba, at the time of this conversation Dominic had told you that he'd sold the previous business and that he was subject to a 3 year restraint of trade? A. He told me he sold the business but I have no knowledge about him having restraint against him. Q. I put to you Mr Saba he told you. A. No, he didn't Sir. Q. And I put to you Mr Saba that that is the reason and that is the explanation that he gave to you as to why he wanted to put the business in your name? A. That wasn't explanation for me at that time. At that time we had - the packaging was heavily involved with the transport which is we talking about a warehouse money, a lot of money to be collected, two businesses run under the same roof. He did not mention anything about restraint order against him. Q. I put to you Mr Saba that on or just before 5 October 2006 you had a conversation to this effect with Dominic and tell me if you agree or don't agree and I'll do it in each part. I put to you that Dominic said to you that he was thinking about starting a new courier business but he couldn't put it in his name, he asked you if he could use your name, he said to you it would be his business and he would run it, he said to you he would fund it all, he said he had everything ready to start including drivers and clients? A. That's not correct. Q. I put to you that you then said in response "I'll do it, you can use my name but don't fuck it up, the only thing is I want my accountant to do all the taxes". Did you say that? A. I say the last part. That was one of the main concern to be safe and secure like I want my accounting to do my paperwork, yes. Q. And in fact Mr Amine, the accountant, is your accountant isn't he? A. He is actually our accountant. ... Q. And he was your accountant before any dealings with Dominic? A. Yeah, before then and he was accounting for our packaging company actually Century Packaging Supplies. 46The plaintiff could not recall the defendant asking him if the accountant had transport experience but denied that he said that Mr Amine had worked for the Australian Tax Office. He also denied that the defendant said that they could use Mr Amine to ensure that the plaintiff was "protected". The plaintiff also denied that the defendant asked him whether he wanted 10% of the profit. He was cross-examined further as follows (tr 108): Q The conversation you had with Dominic about this new business, I put to you it didn't happen in your house at all? A. It did happen in my house in my garage. Q I put to you it happened on Dominic's fishing boat? A. Couldn't be, couldn't be, no way fishing trip I went with Dominic it's way over Christmas which is the company was a couple of months old. Q. And I put to you that the conversation that you had with him was on the fishing boat in the presence of Daniel, Dominic's son, your daughter and two of your sons? A. First of all I would never discuss business in front of my kids and I never heard somebody discussing a business deal on a fishing boat while you're fishing putting baits for your children, you have children, you've got children and what you want to get that fishing trip. That was way over Christmas. I mean if you're talking about October, that fishing trip was I'll say two or three months after the company started. Q. Mr Saba, I'm not putting to you that you discussed business in the presence of your children. What I am putting to you is that the conversation you had with Dominic about this new business took place on the fishing boat and your daughter and two of your sons were also on the fishing boat? A. Exactly what I repeat again what I said. That fishing trip you talking about I only been once or twice fishing trip with him, couldn't be more than once or twice and definitely that happened way over Christmas which is if you're saying that happened in October it definitely wasn't in Christmas time. After Christmas that fishing trip took place. 47There was cross-examination of the plaintiff to suggest that on his version of the conversation there appeared to be little discussion with his only response to all of the defendant's propositions being "okay". It was suggested that such a conversation was most unlikely. However it is interesting that even the defendant's version of the conversation suggests that the plaintiff responded in this fashion to some of the propositions put by the defendant. The plaintiff explained in cross-examination that the conversation about which he gave evidence took place over a number of days (tr 102-103). In any event, the determination of which version of the Agreement is to be preferred requires consideration of all the surrounding circumstances and not merely challenges to the content of the conversations. 48The parties have adopted an "all or nothing" approach to the issue as to which version of the Agreement is to be preferred. I prefer one party's version then the other party does not suggest that some of the terms of the Agreement propounded by that party have not been established. Nor has it been suggested that there are any legal impediments to the Agreement if either version is preferred. Accordingly it is necessary to deal with the various aspects of the evidence that have been relied upon by the respective parties to suggest that their version of events is to be preferred. Set up costs 49One of the matters upon which the defendant relied to suggest that his version of the Agreement was more probable than the plaintiff's version was his contention that the plaintiff did not make any payments or contributions to Maxum Transport including the set up costs. The defendant claimed in his affidavit sworn on 30 September 2009 that he did not ask the plaintiff to pay any money for the set up of the business and he also claimed that the plaintiff did not pay any money at any stage. He said: "I did everything to set the business up". His affidavit evidence was that the "only thing" that the plaintiff did was to go with him to open a bank account at the Commonwealth Bank and to the Post Office to sign up for a Post Office box. The defendant claimed in his affidavit that he received and retained all of the relevant tokens, passwords, keys, cheque books and documents relating to the bank account and the post office box. He claimed that he thought up the business name "Maxum Transport" and that he designed the logo and arranged business stationary. His affidavit dated 30 September 2009 included the following (par 23): I registered the business name, for which I paid the registration fee of $132.00. 50The defendant reiterated this evidence as follows (par 75): Apart from agreeing to the use of his name (and later his company's name) as the business owner ... Saba had absolutely no involvement in the business whatsoever. He paid no money whatsoever into the business. Until about March 2007, he showed and had no interest in the business whatsoever. 51In his affidavit sworn on 6 April 2010 the defendant returned to the topic and gave the following evidence (par 30): I reiterate that I paid for the registration of the business name in cash and I received the receipt. 52The defendant was cross examined on these claims as follows (tr 307-308): Q. As at the date of the original agreement, the initial agreement, you regarded that there was no reason for Michael Saba to pay anything in relation to this transport business? A. Correct Q. It is your evidence, is it, that he did not pay for anything? A. Never. Q. You say you paid the fee for the PO Box? HER HONOUR: Q. Is that right? A. I'm just thinking, your Honour. I can't recall the transaction about the PO Box. BRUCKNER: Q. You say that he did not contribute any money to the business? A. No. Q. You say that he was not involved in the registration of the business name. Is that your evidence? A. No. No. He was involved in the registration, yes, of the business name. Q. So, he attended, did he? A. Yes. Q. And he paid the fees? A. No. I paid that one. $123. Q. You paid that one? A. The Department of Fair Trading. I paid the registration. $123. Q. Are you sure about that? A. As sure as my mind can allow me to remember from those times. He may have lent me $60 for the post office box, which I returned. That's why I can't remember, but the registration at the Department of Fair Trading, I'm certain that I paid it, because I remember the amount. $123. Q. Did you pay it with a credit card? A. No. Cash. Q. Are you sure about that? A. Pretty certain. 53The defendant was then shown documents produced by the Department of Fair Trading under subpoena (Ex E) that included a copy of the Application for Registration of a Business Name that recorded the plaintiff as the applicant for the proposed business names of "Maxum Transport", "Maxum Couriers" and "Maxum". The certification at the conclusion of the form was dated 4 October 2006 and was signed "M Saba". That exhibit also included the Business Name Extract showing that the business name "Maxum Transport" was registered on 5 October 2006 and that the proprietors were HLG and the plaintiff. It also included a receipt dated 5 October 2006 for "EFTPOS Michael Saba" in the amount of $137. 54When the defendant was first confronted with these documents he gave evidence that he signed the signature "M Saba". However, when he was shown the EFTPOS receipt in the plaintiff's name he gave the following evidence (tr 310): Q. Do you stand by your evidence that the payment for registration of these business names was done by cash? A. Obviously not. ... Q. Do you stand by your evidence that you paid for the registration of these business names? A. No. I paid for the post office box, so I've got it wrong. Q. The reason why Michael Saba paid for the registration of these business names was because he was contributing money to the businesses, wasn't he? A. Yes. Q. It was part of his agreed contribution, wasn't it? A. $137? Q. Yes. A. No. It was not part of the agreed contribution. 55I am satisfied that the plaintiff paid for the registration of the business name. I am also satisfied that the defendant's original claims that the plaintiff did not make any payments towards the set up costs of the business and his reiteration of those claims were made to suggest that the plaintiff had no entitlement or interest in the business other than allowing the use of his name and that of HLG. Irrespective of whether the defendant's affidavit evidence in relation to the payment of the registration fee was merely mistaken or intentionally deceptive, the fact that the plaintiff paid for the registration of the business name tends to support his greater involvement in the business than that claimed by the defendant. Meeting with Accountant - late 2006 56It is common ground that after the business name was registered the plaintiff and the defendant met with the plaintiff's accountant, Sayed Amine. The defendant claimed that at this meeting he informed Mr Amine that: (1) he had started up a transport company; (2) it was in the plaintiff's name; (3) he was "funding it all" and he would be "running it all from home"; and (4) he would own the business but the plaintiff wanted him, Mr Amine, to be the accountant. The defendant also claimed that he informed Mr Amine that he had a restraint on him in relation to the courier company that he had sold that prevented him from owning a business but that it did not prevent him from managing a business. He claimed that he informed Mr Amine that the business was to be transferred into his son's name when he turned eighteen years of age. The defendant also claimed that he informed Mr Amine that his bookkeeper did all the documents for the Business Activity Statements (BAS) and that he would personally deliver them to Mr Amine each quarter when they were ready. 57Mr Amine has been in practice as an accountant for seventeen years. He met the plaintiff fifteen years ago when he completed one tax return for him and did not see him again until 2006 when the plaintiff's brother (a client of Mr Amine) referred the plaintiff to him. Mr Amine said that he went to the Forest Road premises and met with the plaintiff and the defendant and that this was the first time that he discussed the transport business with the plaintiff. Prior to that he had a number of meetings with the plaintiff in relation to Century Packaging. 58Mr Amine's affidavit evidence of his conversation with the plaintiff and the defendant at the meeting in October 2006 was that the defendant informed him that: he and the plaintiff wanted to start a transport business together; he would be managing the transport business because of his experience in the industry; and his bookkeeper would prepare everything and he would give him a print out for the business activity for every quarter. 59Mr Amine made no notes of this conversation. He was cross-examined as follows (tr 166): Q. And you don't think it is appropriate to make any notes of these new instructions that you had? A. I didn't take any notes. Q. Mr Amine you didn't ask any questions, did you, about this new business, did you? You didn't ask who was putting in money for the new business, did you? A. Really, I didn't ask, so I thought in the first BAS when I do the BAS for them they should provide me with all like, there's any capital contribution, who contribute, I take it from them. It is not my job to like, go deeply in this discussion. I didn't ask question, no, really. Q. You are being asked to be the accountant, you are being told that there is a new business venture but you don't think it is your job to ask questions about who is putting in money or who is allowed to take profit or drawings or anything? A. Yeah, look, this meeting well, was not intended to like, go into further discussion but only we set up the like, the headline, you know, for this business but it didn't go through with it. Q. I put to you Dominic Savo never said those words, "Michael Saba and I want to start a transport business together under Hannah Louis", I put to you he never said those words, do you agree or you don't agree? A. This, what I heard in the meeting. 60When the defendant's version of the meeting was put to him in cross-examination, Mr Amine said he "never heard this words, never" (tr 166). 61When Mr Amine was being cross-examined to suggest that he had not produced any timesheets or invoices to the Court in response to a subpoena he gave the following evidence (tr 160): Q. In fact Mr Amine the documents that you have produced to the Court, there are no invoices from your practice to Maxum Transport or Hannah Louis Group, did you not render invoices to them? A. Really I invoice in the past for Hannah Louis, look because Maxum Transport is a part of Hannah Louis, so. What I invoice, I invoice to Hannah Louis, I think I invoice one and after that it didn't pay me, to tell you the truth, more than two years I didn't get any cents from them. Q. So, you haven't been paid? A. Only once, they gave once, I think, yeah. Because I know it was in hard financial situation, you know, the business was struggling and really I wait and wait. But I have to issue invoice for Maxum Transport, I have to issue invoice for them. 62Although it was suggested that Mr Amine's memory of the transaction relating to the Maxum Transport business was not assisted by notes, I am satisfied that the defendant did not inform Mr Amine that the business was to be owned by him and that the plaintiff was merely providing his name for the business. I accept Mr Amine's evidence. Maxum Transport set up - October 2006 63The business name Maxum Transport was registered on 5 October 2006. The defendant claimed in his affidavit that after he had done the preliminary work to set up Maxum Transport, there was a period of about six to eight weeks where he had little to do because he was waiting on a commitment from TNT to use his new business. Century Packaging - administration and liquidation 64An administrator was appointed to Century Packaging on 27 November 2006 and a liquidator was appointed on 22 December 2006. HLG purchases Century Packaging - January 2007 65On 22 January 2007 HLG, as purchaser, and the plaintiff, as guarantor, entered into a Sale Agreement with Century Packaging Supplies Pty Ltd (In Liq) to purchase the business. That agreement included a covenant by HLG "to assume all the Liabilities in respect of the leases and other tenancy arrangements in respect of the Premises": (Clause 9(a)). The completion of the Sale Agreement was not conditional upon the grant of a new lease or on granting any possession rights in respect of "the Premises". "Premises" was not defined in the agreement, however it is common ground that Century Packaging Supplies Pty Ltd was operating from the Forest Road premises. HLG also agreed that from the date of execution of this Sale Agreement it would pay "all monies to the landlord" with respect to any liability in respect of the lease of the Premises. Maxum Transport Invoice 66The business and financial documents of Maxum Transport were provided to Mr Amine between January and mid 2007. The cash journal for 28 February 2007 recorded a capital acquisition of $88,000. The defendant was cross examined about this entry as follows (tr 531): Q. Sir, can you explain why at page CB71 the document provided to Mr Sayed Amine referred to capital acquisition of $88,000? A. Would you like me to explain this to you? Q. Yes. A. I was ordered to do this by Mr Saba so he could collect $8,000 of unwarranted GST, and I specifically told his accountant that, and to deal with it between them two. 67The defendant was then shown an invoice purporting to be from him directed to Maxum Transport and dated 20 October 2006. It listed various computers, printers, filing cabinets and other equipment with various amounts totalling $88,429. The defendant was cross examined in relation to this invoice (it appeared at CB70) as follows: Q. If you could turn to page CB70. Did you prepare that invoice? A. Not that one, but one very, very similar that only totalled $88,000. Q. You provided this invoice to Mr Sayed Amine personally, didn't you? A. This one here? Q. Yes? A. It was amongst the second lot I think of BAS statements or the first, I'm not sure. But, yes, I did personally give it to him. I pointed out to him that it had nothing to do with me. It is not a legitimate invoice. What I have produced is not a legitimate invoice. This has been turned into a replica. $400 has been added, and a tax invoice number. My one does exist somewhere in all this paperwork and is a lot cruder in format than this one. Q. Mr Saba didn't tell you to lie in the accounts as to $88,000, did he? A. Yes, he did. Q. Sir, you wanted to convince Mr Saba that you were contributing your fair share to the business? A. I contributed everything to the business. Not my fair share, everything. ... Q. So is it your evidence that you were requested by Michael Saba to prepare a false invoice? A. I didn't prepare a false invoice. I was asked to provide a list of all the equipment used for Maxum Transport, which I did. It was never an invoice. 68The claim that the plaintiff ordered the defendant to do certain things in relation to the invoices, whether it be true or not, is a claim made by the defendant which seems to me to be inconsistent with the plaintiff only letting the defendant use his name for the business. Rather, it suggests that the defendant was involved with the plaintiff in the way in which the business would be structured and invoices rendered and moneys brought to account. Maxum Transport flourishes 69The defendant claimed that after TNT started providing work he "arranged" for Rob Hyham to join Maxum Transport as the General Manager. At that time Mr Hyham was working with Civic and the restraint of trade clause prevented the defendant from canvassing or soliciting any employees of the business. The defendant was cross examined about this as follows (tr 352): Q. Did you understand when you asked Mr Hyham to come and work for you that you were subject to a restraint not to canvass or solicit any employee of the business to leave his employment with the purchaser? A. No. Q. You gave evidence when I first cross-examined you that you did understand that to be your obligation, do you now change that evidence, do you? A. Yes. Q. I suggest to you that you were aware of that obligation but you didn't care as to whether or not your breached it when you spoke to Mr Hyham in late 2006, you agree or disagree with that proposition? A. I agree in part with that summation. Q. I suggest that you were aware when you spoke to Mr Hyham in late 2006 that you were subject to a restraint prohibiting you from canvassing or soliciting any employee of the business to leave his employee with the purchaser? A. No. Q. I suggest to you that when you spoke to Mr Hyham you didn't care as to whether or you breached any restraint with the purchaser of that business? A. Any restraint or just that restraint? You said any restraint. Q. Any restraint? A. Yes. Q. I suggest to you that you did not care whether or not you breached that restraint in paragraph (c) on CB17? A. I wasn't aware of that restraint, so, I don't know the answer. Q. I suggest to you that any time from when you first asked Mr Hyham to come and work for you that you didn't care whether or not Civic Transport or the purchaser found out as to whether you were breaching your restraint? A. I didn't care about, no, I didn't. 70The defendant said that after Mr Hyham commenced working for him and TNT provided him with further work the business was growing well so in February 2007 he decided to employ Chris Moustakas as a manager and Kerrie Hollands as an office manager. The Maxum Transport business showed steady growth with an increase in drivers from nine in February 2007 to thirty one by March 2007. The diversion of the business 71It was in March 2007 that the defendant and his wife separated. The defendant claimed that at this time he became concerned that Mr Moustakas was spending more and more time at the Forest Road premises. He said that he noticed that there were many calls between the plaintiff's mobile telephone and Mr Moustakas' number. He claimed that the growth in the business "just stopped" in around late March or April 2007. He said that he "therefore" formed the view that Mr Moustakas was not doing his job and that he and the plaintiff had taken steps to try to take over the Maxum Transport business. It was in April 2007 that he decided that the current situation was "dangerous" and that he had to take steps to protect his business. 72The defendant was cross-examined about his claim that he regarded the situation as dangerous and there was a need to protect his business (tr 376). He said that he did not ask the plaintiff why Mr Moustakas was spending time at the Forest Road premises nor did he ask Mr LeRau, a person he had known for some fifteen years, who was working for the plaintiff at the Forest Road premises. He was cross-examined as follows (tr 377): Q. And you didn't ask Mr Lerau whether he knew anything about why Mr Moustakas was spending time at the Forest Road premises in March or April of 2007, did you? A. He wouldn't have known. He was a delivery guy. He would be on the road. No, never entered my mind, no. Q. I suggest to you that in March or April of 2007 you weren't concerned at all about Mr Moustakas spending time at the Forest Road premises in March or April of 2007, were you? A. There was a point when I was not concerned, then there became a point when I was concerned. As to the exact months, I can't say. 73On 24 April 2007 the defendant's daughter, Christina Savo, was appointed as a director of Extreme Scooters Pty Limited. The defendant gave evidence that he did not provide Ms Savo with any information about her duties as a director. On 26 April 2007 Extreme Scooters Pty Limited's name was changed to Maxum Taxi Trucks Pty Limited. 74The defendant was crossed examined in relation to Ms Savo's appointment to Extreme Scooters Pty Limited and subsequently Maxum Taxi Trucks Pty Limited. He gave the following evidence (tr 361-362): Q. Sir, three things happened on or about 24 April 2007. You ceased to be a director, you ceased to be a secretary and Christina Savo became a director of the company now known as Maxum TaxiTrucks Pty Ltd; do you accept that? A. Yeah, I've agreed to that, yes. Q. And can you think of any reason why any of those steps occurred? A. As I said, I used her as she was available and it was a trusting member of the family. That's why I did it. Q. You say you used her? A. Yeah, I did use her. Yeah, I used her. I used her name. Q. What were you trying to achieve by ceasing to be an office holder of that company and making your daughter an office holder of that company? A. A quick and smooth transaction of the transport business of Maxum into Maxim. Q. Do you mean Maxum Transport into Maxum Taxi-Trucks? A. Yes. Q. Any other reason? A. Not that I can remember. Q. And why was it necessary for you to cease to be an office holder of that company in order to have a smooth transition? A. Of what company, sir? Q. Of the company now known as Maxum TaxiTrucks Pty Ltd? A. From your Honour's documents, I ceased to be a director of Extreme Scooters. I don't think I was ever a director of -- Q. I will ask another question. Why was it necessary for you to cease to be an office holder of Extreme Scooters in order to ensure a smooth transition, as you describe it? A. I don't know. Just what I outlined before; I just needed someone I could trust in that position. Q. Couldn't trust yourself to remain in the position of office holder? A. No, no, I had the restraint on me still. I had the Civic Transport restraint on me. Q. I suggest to you at that time you didn't care about whether or not you breached the restraint? A. No, I've never cared. Q. And I suggest to you, at the time, that you didn't care whether or not the purchaser of the business formerly known as Century Couriers found out as to whether you were breaching the restraint? A. They were aware of they were aware almost from the beginning, yes, they were. Q. So there would be no reason for you to be concerned about remaining a director of Extreme Scooters, would there? A. There's 60 million reasons. They were a big powerful company and could squash me at an instant. It's the biggest transport company in Melbourne brought me out, so -- HER HONOUR Q. Which one? A. Civic Transport is the biggest transport company in Melbourne. I didn't want to mess with them in court. Guarantee/Security Bond 75Michael Ayache, solicitor, recalled a meeting with the plaintiff and the defendant on 6 June 2007 in which the plaintiff advised that he was taking over a lease of the Forest Road premises. The plaintiff advised Mr Ayache that he had spoken to the landlord and that the defendant had agreed that he would transfer his bond to the plaintiff. The plaintiff advised Mr Ayache that he needed him to talk to the agent who was somehow related to the landlord or involved as an owner to get the lease "moving". At that stage Mr Ayache had received an email from George Zogheb, the agent, that he showed to the plaintiff. Mr Ayache recalled that the plaintiff instructed him that the defendant had informed the landlord that he was going to sign his bond over to the plaintiff. 76Mr Ayache said he asked the defendant whether the bond was a bank guarantee or a cash bond and was informed that it was a bank guarantee. Mr Ayache advised the plaintiff and the defendant that they could not just "simply" transfer the bond. He advised them that it would have to be assigned in a specific way. He recalled being shown a letter, which he advised the plaintiff and defendant was "insufficient" and that they would need to go and see the bank. His recollection was that the defendant had the letter in his possession. 77There is a letter in evidence on the letterhead of Century Packaging Supplies Pty Ltd dated 31 May 2007 directed to the Manager of Blakehurst Prestige Properties Pty Ltd, the agent for the landlord, Sentumar Pty Ltd. That letter is in the following terms: I, Dominic Savo of Century Packaging Supplies Pty Ltd wish to surrender my lease to my Managing Director Mr Michael Saba at Unit 1 & 2/61-65 Forrest Road, Hurstville NSW 2220. I would like my security deposit of $21,500 to be transferred to the new company-Hannah Louise (sic) Group Pty Ltd, ABN 95122439392. 78The defendant gave the following evidence in relation to that letter (tr 418 -419): Q. Is that your signature? A. Yes. Q. Did you sign this document? A. No. Q. Are you sure about that? A. Yes. I read that document this morning in my files, I did not sign it. Q. What makes you sure that you didn't sign it. A. Because I don't put Mr Dominic Savo, Century Packaging Supplies Pty Ltd. And I have never seen this document before. Q. I didn't ask you whether you had drafted the text, I am asking you whether you signed the document? A. No, I did not sign this document. ... Q. As at 31 May 2007 you agree that you wished to surrender your lease? A. No. Q. To Michael Saba? A. No, at no stage. Q. Do you agree that as at 31 May 2007 you wanted your security deposit transferred to Hannah Louis Group? A. No. Q. You disagree? A. I didn't wish for my security deposit to be given to Hannah Louis Group. Q. At any time in 2007? A. Never, never, at any time, any year. 79The defendant denied attending the offices of Mr Ayache in relation to the lease or the security deposit. He claimed that the only times that he attended upon Mr Ayache were in relation to the administration of Century Packaging (when he attended with the plaintiff) and in respect of a speeding fine matter (tr 419). 80On 14 June 2007 Mr Zogheb, on behalf of Blakehurst Prestige Properties, wrote a letter addressed to the defendant as a director of Century Packaging Supplies Pty Limited at the Forest Road premises with the additional words "Att. Mr Michael Saba Managing Director". That letter included the following: Thank you for your letter and your instructions that you wish to surrender your lease to your Managing director Mr. Michael Saba of Hannah Louise ( sic ) Group Pty Ltd. This letter has been sent to the Landlords solicitors for completion of the transfer of the security Bank Guarantee to Hannah Louise (sic) Group Pty Ltd. 81On 22 June 2007 the landlord's solicitors wrote to the plaintiff's solicitors on matters relating to the proposed lease including the following: 3. A security deposit or bank guarantee of $44,000 will be required. The current bank guarantee from Century packaging will be released to the former tenant when the new bond is in place. 82The defendant's affidavit sworn 30 September 2009 included the following: 102. Saba's lease of the Forest Road warehouses was not finalised until June or July 2007. Around that time he came to me and said words to the effect: "The lease requires me to pay $22,000 bond for each unit, which is a total of $44,000. Can you leave your bond in place so that I only have to pay $22,000?" 103. The bond that I had put up was by way of a bank guarantee. I agreed to leave my bank guarantee in place, but the lessor did not agree to that. 104. Without my knowledge or permission, the bank guarantee was called upon and the cash was paid out. Documents authorising the bank to pay out under the guarantee were not signed by me and were forged. 83There are two letters dated 18 July 2007 that contain the defendant's signature. One letter is directed to the Westpac Banking Corporation in the following terms: I, Dominic Savo ("the Customer"), agree to Sentumar Pty Limited calling on the Bank Guarantee (a copy of which is attached to this letter) in the sum of $21,450.00. 84The second letter of the same date was addressed to Mr George Zogheib (sic) at Sentumar Pty Limited and was in the following terms: I, Dominic Savo, agree to Sentumar Pty Limited calling on the Bank Guarantee in the sum of $21,450.00 and holding the money paid pursuant to the Bank Guarantee on behalf of Hannah Louis Group Pty Ltd as security bond payable under the Lease to Hannah Louis Group Pty Ltd. 85The defendant agreed that his signature is on these letters but claimed that he did not sign the letters. He said, "it's my signature on this page, yes, I agree with that but not in relation to what the document says" (tr 421). 86On 19 July 2007 Mr Zogheb wrote to the plaintiff's solicitors as follows: We have received authority letter handed by Mr. Michael Saba this morning to transfer the security bond $21,450.00 from Mr. Dominic Savo to Hannah Louise (sic) Group Pty Ltd and Westpac told us that this couldn't be completed in this manner. Mr. Dominic Savo has to go personally to Westpac and do this transaction. 87There is also a letter in evidence from Mr Zogheb to the Westpac Banking Corporation dated 23 July 2007 advising that Blakehurst Prestige Properties were the managing agents for the landlords. That letter included the following: Please find Copies as follows: -