In the matter of MSU Management Pty Ltd - Urusoglu v MSU Management Pty Ltd & ors

Judgment 1HER HONOUR : In these proceedings, claims are made by two members of the Urusoglu family (Elif and her brother Mahir) and by a company controlled by Mahir (MSU Earthworks & Heavy Haulage Pty Ltd) against a finance broker and erstwhile family friend (Scott Brennan) in relation to matters relating to a company (the first defendant, MSU Management Pty Ltd) formerly controlled by Elif but now controlled by Mr Brennan. (Without any disrespect, I will refer to the members of the Urusoglu family, including Elif and Mahir's father Huseyin, by their first names. Both Mahir and Huseyin were also referred to on occasion in the evidence before me by Anglicised names - Mike and Sam, respectively - but for consistency I will refer to them by their given names.) 2Elif's principal claim is for the rectification of the company's share register so as to regain the legal ownership of the shares in MSU Management (to which it is said she is in equity entitled) and thus to regain control of the company. She also seeks damages in her own right for breach of contract or alternatively relief on behalf of the company (relying upon an alleged contravention by Mr Brennan of ss 181 and 182 of the Corporations Act 2001 (Cth)) in relation to the use by Mr Brennan of moneys drawn from the company funds, while he was a director, for his personal expenditure. In the alternative, Elif seeks damages (in the pleading claimed in the sum of $680,000 but in the course of closing submissions put at a lesser sum - in the order of $250,000, or lesser still, $179,000) plus interest by way of relief for the alleged oppression of her interest as a former member of the company or in lieu of specific performance of the alleged agreement on the part of Mr Brennan to transfer back to her the shares in MSU Management. 3Elif's claims broadly rest on the establishment of an alleged agreement on the part of Mr Brennan either to hold on her behalf or to transfer back to her (after obtaining the financing necessary to enable the company to purchase a property in Mt Vernon) the shares in MSU Management. 4Mahir's claim (and that of his company) is in the alternative to that brought by Elif. Counsel for the plaintiffs, Mr Jacobs, confirmed that this claim is pressed only if Elif does not obtain the relief sought by her. In that event, Mahir and his company seek restitution for the alleged unjust enrichment on the part of the defendants in retaining the benefit of subdivision works said to have been carried out at their request and/or freely accepted by them (those works having been carried out by or at the expense of Mahir or his company) or alternatively as damages for deceit. Mahir's claim is nevertheless said to hinge on the existence of the agreement on which Elif claims (T 388). 5The nub of the dispute is as to what agreement was reached in 2008 in relation to the purchase by MSU Management of land at Mt Vernon which one or more of the Urusoglu family wanted to retain for the construction of their family home (but also for use as a display home in order to promote a wall panel product - WIPS - created or developed by Mahir and apparently patented by him or by an entity associated with him). 6In essence (though there seemed to be various iterations of the alleged agreement on which the principal claim is based, to which I will refer in more detail shortly), the Urusoglu claim is that Huseyin and Mahir (acting on behalf of Elif) entered into an agreement with Mr Brennan, the intent of which was to enable the purchase and development of the Mt Vernon land with the benefit of mortgage finance to be arranged by Mr Brennan and that, following the subdivision of the land into two blocks, one block of land (the front block) was to be the Urusoglu family home. It is said that the agency relationship between Huseyin/Mahir and Elif can be inferred from the fact that Elif (somewhat inconsistently with her protestations of independence) left the conduct of the affairs of MSU Management to her father and brother. 7The land in question had been acquired by Huseyin in 2004. Following his voluntary entry into bankruptcy in late 2007, the land was put up for auction by Permanent Custodians in the exercise of its powers as mortgagee in possession. It was acquired at auction on 5 July 2008 by MSU Management and remains in the ownership of that company (the land having been subdivided into two lots in early 2009). As part (or on Elif's evidence in breach) of the arrangements between the parties for the financing of the acquisition of the land, the shares in MSU Management were transferred to Mr Brennan in 2008 pursuant to a share transfer form dated 16 June 2008 but registered on about 28 July 2008 after the auction sale. 8It is alleged that Mr Brennan's refusal to transfer the shares back to Elif is in breach of the above agreement. It is further alleged that, in breach of an implied term of the agreement on the part of Mr Brennan (to do nothing within his power to diminish or destroy the benefit to Elif of the agreement), Mr Brennan has diverted (from funds obtained through the later refinancing in 2009 of the initial loan arrangements pursuant to which the land was acquired) funds of the company to his own personal use. (Although initially pleaded as a diversion of funds in the order of $300,000, by the time of the hearing what was claimed as funds utilised for personal expenses was in the order of $179,000.) 9The alternative unjust enrichment claim arises in respect of the work carried out for the construction of a concrete access road (sometimes described, 'absurdly' in the words of one of the Urusoglu relatives, Mr Mesut Kanli, as a driveway) through the land (to satisfy one of the conditions of the development consent for subdivision) and the provision of landscaping and other services, such as water services, to the land. It is alleged that this work was carried out at the express request of Mr Brennan or, alternatively, that the benefit of the work was freely accepted by Mr Brennan (or MSU Management), and that the work was provided upon the mistaken belief that the shares in MSU Management would be transferred back to Elif (such that the Urusoglu family would obtain the benefit of this work). 10Further, it is alleged that the making of the alleged agreement constituted a representation that Mr Brennan would reconvey the shares (on which representation Mahir and his company allegedly relied in carrying on the works in question) and that Mr Brennan had no honest intention of so doing - this being relied upon for the claim for damages in deceit. 11Mr Brennan denies the agreement as pleaded but does admit that an agreement was made in relation to the land in question. That agreement, in summary, is alleged to have been that Mr Brennan would arrange the funding for the acquisition of the Mt Vernon land; that Mr Brennan would acquire the property (it being agreed that he would do so through the corporate vehicle, MSU Management); that the Urusoglu family would carry out the subdivision work at their own cost; and that on completion of the subdivision the front block would be sold to a person or entity nominated by Huseyin at a fair market price (with the logical consequence that the back block, and any profit thereon, to be retained by Mr Brennan through his ownership of the shares in MSU Management). It is said that it was never a term of this agreement that Mr Brennan would re-convey the shares to Elif. 12Mr Brennan says that after the subdivision was completed Huseyin nominated a newly incorporated company controlled and owned by his brother-in-law (Mr Kanli) to acquire the front block. A Contract for Sale of Land was entered into on 9 February 2009 in respect of the front block, with Sebat Pty Ltd (Mr Kanli's company) as purchaser (for the sum of $850,000) and MSU Management as vendor. No deposit was paid as required by the contract (according to the Urusoglu witnesses, it was agreed that Mr Kanli's contribution to the cost of the subdivision works would be treated as the deposit). That contract was in due course terminated for breach. The land in question remains occupied by Mahir and remains burdened by an equitable mortgage in favour of Trimac (as well as securing the lending by NAB/Homeside). MSU Management seeks an order for possession in respect of the land and mesne profits for the period of its occupation by Mahir. 13By way of reply, filed by leave at the close of the hearing but foreshadowed during the course of the hearing, it is contended by Elif and Mahir that (in the event that the agreement is found to be as asserted by the defendants and not as asserted by the plaintiffs) on the facts pleaded in paragraph 5(vii) of the Defence to the Amended Statement of Claim (i.e. the termination of the Sebat Contract of Sale on or about 9 March 2009) there has been a frustration of the contract Mr Brennan says he entered into with Huseyin. In those circumstances, the plaintiffs seek practical restitution as between the parties. It is said that such restitution requires the recoupment of the benefit of the works carried out on the land and that one way this benefit may be valued is by reference to the benefit of the company funds Mr Brennan used for personal expenses since becoming a director (on the basis that those funds were only made possible though a refinancing that occurred on the basis of the subdivision that had been effected). Issues 14The issues for determination are broadly as follows: (i) What was the agreement pursuant to which the Mt Vernon land was acquired in the name of MSU Management and Elif's shares in that company were transferred to Mr Brennan (it being neither party's case that there was no agreement at all in relation to the transfer of the shares)? (ii) If the agreement was as the plaintiffs contend (and Mr Brennan is in breach of that agreement by having refused to re-convey the shares in MSU Management to Elif), what relief should be granted (and is Elif entitled to damages for breach of an implied obligation by Mr Brennan not to diminish the benefit to her of the agreement to re-convey the shares)? (iii) Alternatively, has Elif established an entitlement to relief on the basis of oppression and/or is she entitled to claim damages in the name of MSU Management for funds diverted from the company to Mr Brennan's personal use? (iv) If the agreement was as Mr Brennan contends, did the termination of the Sebat Contract of Sale amount to frustration of the agreement and, if so, should practical restitution be ordered and what would it comprise? (v) Has Mahir established an entitlement to damages for deceit? (vi)Are Mahir and his company entitled to relief on the basis of their unjust enrichment claim and, if so, in what amount does their claim in quantum meruit sound? (vii) On its separate claim, is MSU Management entitled to an order for possession of the Mt Vernon land and for mesne profits? 15Pressed at the close of the hearing to articulate the damages claimed by Elif, Mr Jacobs said that, if the shares are returned to Elif, then the amount claimed by her is $179,000 plus interest (being the amount of the company funds used for personal expenses of Mr Brennan) but that, if the shares are not returned to Elif, then what is sought is the amount of $250,000 plus interest (being the value of the land, as evidenced by the purchase price stipulated in the Sebat contract - $850,000 - less the amount outstanding on the existing mortgage over the front block - $600,000 - and assuming the Trimac loan over the land had been extinguished). 16Therefore, when considering the relief claimed, I note that the amount quantified in the pleadings at $300,000 is now said to be $179,000 and the $680,000 claimed elsewhere in the pleading is now claimed as $250,000. 17Mahir's alternative quantum meruit claim is in the order of $350,000 (a sum of $347,000 being the amount appearing in an invoice rendered by his company, MSU Earthworks, in December 2008 for the subdivision works. That sum includes a component referable to an invoice for $90,000 on the letterhead of All Concrete Constructions Pty Ltd, the authenticity of which invoice is in dispute. Conceding that there might be some difficulty in establishing the figure of $350,000, it is nevertheless submitted by Mr Jacobs that at least $250,000 in value has been shown to have been conferred by reference to the works (that comprised of $130,000 from Mr Kanli, concrete supplied by Western Suburbs Concrete for approximately $30,000 and the disputed invoice of $90,000). Summary 18In summary, for the reasons set out below, my views on the above issues are as follows. (i) What was the parties' agreement? 19The plaintiffs (Elif, Mahir and his company, MSU Earthworks) have not established on the balance of probabilities that there was an agreement in the terms for which they contend. On the whole, I find Mr Brennan's version of events to be the more credible. I find that the agreement reached between Huseyin and Mahir (on behalf of Elif) in relation to the acquisition of the Mt Vernon land was for Mr Brennan to arrange finance for its purchase by MSU Management; for the shares in, and control of, MSU Management to be transferred to Mr Brennan; for the subdivision of the land at the cost of Mahir (or the extended Urusoglu family); and for the transfer of the front block, at a fair market price, to Huseyin's nominee after completion of the subdivision. 20In particular, I find that there was no promise by Mr Brennan not to register the share transfers and no obligation on the part of Mr Brennan to transfer the shares in MSU Management back to Elif. 21The consequence of this is that (subject to the obligation to transfer the front block to Huseyin's nominee) Mr Brennan is entitled through the shares in MSU Management to any profit from the sale of the respective blocks of land. (ii)Relief for Elif if agreement in relation to shares were established 22On my finding in (i) above, this issue does not arise. Had it arisen, I would have been inclined to the view that the appropriate relief depended on the content of Mr Brennan's obligation in relation to the shares. If his obligation was to hold the share transfer form and not to register it, then I would have been of the view that the appropriate remedy was to rectify the register. Had I been of the view that Mr Brennan was entitled to register the share transfer but was thereafter obliged to transfer back to Elif the shares, then I would have considered the appropriate relief to be to order the transfer by Mr Brennan back to Elif of the shares he holds in MSU Management (or damages for failure to do so). 23In either case, I consider that any relief involving the reinstatement of Elif as a member of the company would have needed to be conditional on the reimbursement to Mr Brennan of any interest or other payments made by him or on his behalf in relation to the land over the period from July 2008 and to the procuring of a release in respect of any liability he or his wife have or may continue to have under guarantees given in connection with the financing of the acquisition or development of the Mt Vernon land. 24As to the re-financing of the initial loan facilities obtained in that regard, and the use by Mr Brennan of funds derived from that refinancing for his personal use, had I found that the agreement was as contended for by Elif, then any claim for damages suffered for breach of an implied obligation not to diminish the benefit to Elif of the reconveyance of the shares would be referable to the loss of value in the shares which was not established. I would have therefore been inclined to think that the appropriate remedy would be to order Mr Brennan to reimburse to the company the sum of $179,000 (plus interest) being the amount drawn from the company funds to his personal use (in the absence of evidence from Mr Brennan that he was entitled to do so). (iii) Oppression/derivative claim 25I am not satisfied that Elif, as a former member of the company, has established any oppression in relation to the circumstances in which she was removed as a member and director of the company and hence has not established any entitlement to relief under s 234 of the Corporations Act . 26As to the question of any breach by Mr Brennan of his duties as a director of MSU Management by reason either of his conduct (after Elif ceased to be a shareholder) in not paying down the so-called Trimac loan at an earlier time or in drawing down company funds for his personal use, those issues do not arise on the suit of Elif (since I am not satisfied that she has any entitlement to the shares of the company). Had the issue arisen, then it would have been necessary to consider Elif's application for leave to bring a derivative suit in the name of the company (problematic in that it could be assumed that if Elif were the sole director and shareholder then there would be no basis for thinking that the company would not itself prosecute the claim and because it was not explained how the overlap between Elif's personal claim for damages and the cause of action asserted on behalf of the company would be addressed in the context of what whether it would be in the best interests of the company to bring the claim). I am inclined to think that the requirements for leave to bring a derivative suit in those circumstances were not satisfied. 27In passing I note that I would not have been satisfied that the evidence before me enabled me to form a conclusion (had it been necessary) that the delayed repayment of the Trimac loan was a breach of director's duties since I was not privy to all of the circumstances in which that loan was not paid down (there having been, I was told, litigation last year in relation to that loan) and the commercial prudence or otherwise of deferring repayment in the anticipation of a sale of one or both of the blocks is something that seems to me to fall within the realms of a business judgment that I am simply not in a position on the evidence to assess. However, I accept that the evidence would have allowed the conclusion that there was a serious question to be tried on that issue. 28As to the payment by Mr Brennan from company funds of personal expenses, it was suggested that this could legitimately have been effected by way of a loan account with the company or as a payment at the direction of Mr Brennan of directors' fees. However, in the absence of evidence as to those issues, a payment out by Mr Brennan of company funds for personal expenses would prima facie seem to be in breach of his duties as a director and there would have been a serious question to be tried also on that issue. 29In light of the finding in (i) above, I can usefully take the matter no further (other than to note that had Elif succeeded on her principal claim in relation to rectification of the shares, and been reappointed as sole director it would then have been open to her in the name of the company to pursue claims for breach of director's duties against Mr Brennan, if so advised, and hence there would not seem to be a need for leave to bring a derivative suit). (iv) Frustration 30I am not satisfied that the termination of the Sebat Contract of Sale operated to frustrate the agreement that I have found was reached in relation to the transaction (namely that the front block would be subdivided at Mahir or the Urusoglu family's expense and sold at a fair market price to Huseyin's nominee). 31The front block remains in the ownership of MSU Management. I am not satisfied that the agreement has become impossible of performance. (It seems to me that there is a reasonable argument that, the sale to Sebat having fallen through, it remained open at least for a reasonable time after termination of the Sebat contract for Huseyin to nominate another purchaser of the land for fair market value.) Nor am I satisfied that performance of the contract has become a radically different thing, so as to give rise as a matter of law to frustration of the contract. The performance by Mahir of his obligations to carry out the subdivision works may not have had the outcome Mahir desired but his performance of the subdivision works was always to be in circumstances where the benefit hoped to be achieved was dependent on Huseyin's nominee being able and willing to complete the contract. 32In any event, I have concluded that the failure of Sebat to complete the 2009 contract was due to a decision by Huseyin (or in which he acquiesced) for his nominee not to proceed with that sale or an inability on the part of Huseyin to arrange the necessary finance for that to occur. I am satisfied that Sebat, in entering into the contract for sale, was doing so on behalf of Huseyin. Any frustration of the agreement by reason of the failure by Sebat to complete the contract in those circumstances seems to me to be self induced. (v) Damages for deceit? 33I am not satisfied that it has been established that Mr Brennan has any liability in tort for deceit. (vi) Mahir's alternative quantum meruit claim 34I am not satisfied that Mahir (or his company) has established a claim based on the unjust enrichment of Mr Brennan or MSU Management (and, even if there had been such a claim I could not be satisfied that the quantum of the benefit to be restored to Mahir or his company had been adequately established). (vii) Claim for possession 35In light of the above findings, MSU Management is entitled to an order for possession of the Mt Vernon land. I consider that it is also entitled to an order for mesne profits. I think it appropriate that the quantification of those profits be referred to a referee or to an Associate Justice but will hear submissions in relation to the most expeditious way of carrying out such an assessment. Facts 36Prior to his entry into bankruptcy, Huseyin had carried on business as a property developer. (According to Huseyin's evidence in the witness box, in explanation for his assertion that he did not care what happened to the Mt Vernon property after his bankruptcy, Huseyin said that he had been involved in millions of dollars worth of property development.) He was described by Counsel for the plaintiffs, Mr Jacobs, as an entrepreneur (and there was no suggestion to the contrary). 37Mr Brennan is a finance broker and had, over the years, arranged to procure finance for Huseyin for various property developments. Mr Brennan conceded that there had been a commercial relationship with Huseyin over the years and did not deny that he had derived commission or brokerage fees from his dealings with Huseyin. Though the precise quantum was not admitted, Mr Brennan accepts that he had received at least $120,000 in that regard. Nevertheless, the receipt of commissions seems to be only one side of the equation. Mr Brennan claims to have suffered considerable (and far more extensive) losses in at least one project in which he says he (and his colleagues) had invested funds (referred to as the Granville development), something not acknowledged either by Huseyin or by Mahir (other than that Huseyin said that "everybody" had lost in that project and appeared to acknowledge that Mr Brennan had been pressing him for repayment of money in respect of the project). 38It does not appear to be disputed that the two men and their families had had a social relationship for some time (though the extent of it may be in dispute). Both Elif and Mahir said that they had called Mr Brennan "Uncle". (Their trust in Mr Brennan, which I consider likely to have been overstated by both, was given as the explanation for Elif's preparedness to sign documents that she now says she knew were incorrect at the time and which she says her father's accountant had advised her at the time not to sign.) 39In around 2004/2005, Huseyin bought the land at Mr Vernon which is the subject of the claims in the present proceedings. At that time, the land had the benefit of a Development Consent for subdivision into two lots. One of the conditions of the subdivision consent was the creation of a 3.5m sealed driveway or access road along the boundary of the land. Mahir's evidence is that he carried out substantial work to clear the Mt Vernon land in 2006 (and he estimated that work to be worth around $300,000). Mahir's evidence in the witness box was that much of the work done prior to the events in question in 2008 (or at least the works in relation to the access road) was rendered worthless (and later had to be re-done) due to the delay occasioned by the mortgagee taking possession of the property (that arising by reference to the impact of the weather on the incomplete roadworks). 40Huseyin says that he wanted to build a family home on the Mt Vernon land and to do so by using an insulated wall panel system ("WIPS"). Mahir said that he had created or invented the idea of WIPS. He was enthusiastic and expansive in his description of it in the witness box, (as compared with his evidence in relation to other matters in which he displayed an attitude of distinct disinterest). Huseyin's plan was to live in the home but also to use it as a display home in order to demonstrate the features of the WIPS product. In the witness box, Huseyin emphasised that the only way that "they could all get back trading" was for the WIPS project to "get off the ground" (T 74) and that for that to happen it was necessary to have a display home to demonstrate the benefits of WIPS.

• WIPS 41It is not clear to me when the WIPS product was first developed or what, if any, arrangements were made as between the parties for the development or commercialisation of WIPS. However, Mr Brennan seems to have been approached to become involved in the WIPS project, at least in relation to the financial side of that project, at some time in 2007. Huseyin said that there were discussions as to Mr Brennan obtaining a commercial interest in the product. (Huseyin said that he had promised both Mr Brennan and another person, who he described as a friend, Mr Ashish Patel, a percentage of the company to be set up to commercialise WIPS although no such shareholding was ever transferred and it seems clear that WIPS did not ever 'get off the ground' at least in the Urusoglu family's hands). Huseyin says that he set up WIPS Management (T 74), although this is not clear from the ASIC search. Mahir said in the witness box that WIPS had been patented and that the patent was owned by a company but that it had been sold - though he claimed to have an entitlement to some management and royalty fee. He accepted that to date WIPS has not made money (T 30) and there is nothing to suggest that there was any mechanism in place by which, if it did, Mr Brennan would benefit therefrom. 42The relevance of WIPS to the dispute at hand is that Mr Jacobs submits that the prospect of a profit being made out of the WIPS product (together with the commission to be generated from the raising of finance for the acquisition of the Mr Vernon land) was the commercial incentive for Mr Brennan to enter into the agreement that Huseyin and Mahir say was reached in mid 2008. (For Mr Brennan it is said that there was no commercial purpose served in him entering an agreement in the terms contended for by the Urusoglu family and hence it is objectively unlikely that there was an agreement in such terms). 43In any event, in August 2007, a company was incorporated (WIPS Management Pty Ltd) by Mr Brennan, which suggests that at that time he anticipated in some fashion becoming involved in the promotion and sale of WIPS in the future (since otherwise the use of WIPS in the company name seems hard to explain - it might be thought likely that Mahir or his father would take objection to the use of the WIPS name by a party not involved in some way with the project). This company did not, however, ever trade. In June 2010, Mr Brennan resigned as a director and secretary of the WIPS Management company and transferred his shares in that company to his wife. Mr Brennan, in cross examination, said that WIPS Management was just "lying around unused" and had been put into his wife's name so some good use could be made of it, though it is not clear what use that might be.
• Huseyin's bankruptcy - late 2007 44In late 2007, Huseyin declared himself bankrupt. Chronologically, this followed (and Huseyin says it was caused by) the failure of the Granville project. In cross-examination, Huseyin became visibly upset when talking about his current financial position (saying that he had lost everything) and at one stage seemed to attribute his bankruptcy to following Mr Brennan's advice, though there was no evidence as to this and nothing turns on it for the purposes of this proceeding. For his part, Mr Brennan says that he (and his colleagues, collectively) lost about $2.8m in the Granville project. He deposed to having made a number of attempts to procure repayment of moneys lent for the project from Huseyin (and Huseyin does not seem to dispute that Mr Brennan was upset and demanding moneys around this time). Huseyin's attitude in the witness box seemed to be that he, Huseyin, had lost his 'life' over the project and thus he had little room for sympathy for Mr Brennan's position; further, he maintained that he was not aware whether there had in fact even been any losses sustained by Mr Brennan (apparently solely on the basis that he had not been shown all the financial documents he had requested in relation to this issue.) 45The first registered mortgagee (Permanent Custodians) in due course exercised its power of sale and put the property up for auction on 5 July 2008 as mortgagee in possession.

Mesut Kanli 228Mr Cox submits that, insofar as Mesut Kanli accepted that he was not involved in these transactions as a free agent for his own benefit, he was Huseyin's stooge. While I do not accept that Mr Kanli made such a concession, his actions (and in particular his inaction in early 2009) seem inconsistent with someone seeking to purchase the front block in his or his company's own right. It seems inconceivable that if Huseyin (or Mahir) was not the real person behind the Sebat transaction that Mr Kanli had not shown any interest in the progress of the transaction and that there had been no complaint when the contract had been terminated. I accept that Mr Kanli was genuinely trying to help the family. I think it likely that he was doing so at the request and in accordance with the directions of Huseyin and/or Mahir. 229As to the evidence on the cash cheques and cash given to Mahir, on its face it seems unlikely that an experienced businessman would part with substantial sums without any more particular information as to the request than that there was a development being undertaken by Mahir at the Mt Vernon land and without keeping or obtaining records of what was spent. It seems more likely from this that Mr Kanli was providing funds as a gift and as a family matter. Mr Kanli did not suggest that these payments were loans to Mahir. Mr Cox submits that the reference to these payments as contributions to the ultimate purchase price is improbable. (In that regard, it seems to me more likely that any reference to these amounts being treated as the deposit was raised after the subdivision and as part of an attempt by Huseyin or Mahir to reduce the amount of cash that would be necessary for the purchase of the front block, but this is speculation on my part.) 230It was pointed out that a large amount of cash was deposited into Mr Kanli's account on 20 January 2008 and yet a cash cheque was drawn the following day (which surely would not have been necessary since the amount to be withdrawn could have been retained before the deposit was made) and hence it is submitted the evidence on cash payments should not be accepted as reliable. 231There is no dispute that Mr Kanli paid $9,800 by cheque to the council and that he had a concrete account with Western Suburbs concrete (which he says he paid) but he has not advanced any claim in relation to those funds. 232As to the (very vague) evidence from Mr Kanli in respect of the circumstances in which the sale contract was signed in the name of Sebat on 6 February 2009 at Strathfield, the only logical explanation for his denial of knowledge in relation to the contract was that he did not have a real interest in it (and was acting at the direction of his relatives). 233Mr Cox submits that, as a witness, Mr Kanli was guarded and sceptical of any questioning. He certainly appeared to be wary in the witness box (and went so far as to suggest that he thought it was as if he were on trial, perhaps since there had been a need to caution him in relation to the evidence he might give in relation to disclosure in relation to taxation matters). However, in general I formed the view that Mr Kanli was endeavouring to answer the questions put to him truthfully and to the best of his ability. Dennis Castino 234Mr Jacobs submits that Mr Castino presented as someone who was embarrassed to have been party to a back-dating of the relevant company form. I accept that Mr Castino was quick in the witness box to shoulder the blame for the fact that he had acted otherwise than in accordance with what he regarded as proper practice in that regard. Other than his long term client relationship with Huseyin, there seems no reason for Mr Castino not to have given truthful evidence. That said, I would place more reliance on his contemporaneous notes than his memory particularly when some of the evidence of what occurred at the meeting emerged for the first time in the witness box. Defendant's witness Mr Brennan 235Mr Jacobs points to a number of matters that he says reflect adversely on Mr Brennan's credit and/or on his attitude in this litigation. 236First, it is said that it was difficult to obtain from Mr Brennan on discovery the documents relating to expenditure of funds from the NAB refinancing (said to be reflective of a consciousness of guilt on Mr Brennan's part) and it is said that the cross-examination of Mr Pelle as to the basis for his assertion that moneys had been applied to Mr Brennan's personal use was a waste of court resources when Mr Brennan then conceded that those expenses were for his personal benefit. A Notice to Produce issued on 1 April 2010 was relied upon in this regard, (Mr Cox, however, pointed to the response which had been made on 12 April 2010 inviting the plaintiffs to identify particular transactions in respect of which documents were sought, an invitation that the Urusoglus' solicitor (Mr Marando) concedes was not taken up.) As to this issue, I do not consider that the resistance by a party to production of documents of itself indicates a consciousness of guilt. It is unfortunately a common experience of litigation that opposing sides will take different views as to the relevance of documents sought by way of discovery or as to the ambit of discovery sought. I think it more likely that Mr Brennan's initial stance (rightly or wrongly) was that these were documents personal to him and not relevant to the dispute and he should not be required to produce them. The invitation later put forward by his solicitors seems to me to have been a sensible means to resolve the issue and not redolent any intentional concealment of documents. 237Secondly, it was suggested that Mr Brennan had misstated or misrepresented the basis on which he had made certain accusations in relation to the represented value of the Granville project by suggesting that an expression of interest document (by Australian Unity) in relation to the Granville Project had been a signed contract (this also being said to be inconsistent with Mr Brennan's practice only to lend on written third party valuations). The difficulty with this submission is that this material was rejected, on Mr Jacobs' application, when Mr Brennan's affidavit was read at the hearing. 238Mr Jacobs then made much of two matters in particular: first the fact that Mr Brennan had made a statutory declaration on 28 August 2008 (apparently in the context of an application to the Office of State Revenue in relation to stamp duty on the share transfers) to the effect that MSU Management had no liabilities or contingent liabilities or assets or contingent assets as at that date and as to his evidence in the witness box in relation to his awareness of discovery obligations. 239As to the OSR declaration, Mr Jacobs submitted that this was a false declaration in that, as at that date, MSU Management had incurred a liability under the Contract for Sale of Land and had an asset being the chose in action represented by the contract. Mr Jacobs pointed to paragraph 29 of Mr Brennan's affidavit, in which he had used the phrase "unknown contingent liability". It was submitted that as a mortgage broker of long standing, Mr Brennan would know the meaning of that phrase. Cross-examined as to the declaration, however, it seemed to me that, while the declaration was factually incomplete, it was consistent with Mr Brennan's incorrect understanding of the effect of entry into the sale contract. 240As to the evidence relating to his discovery obligations, my observation of Mr Brennan in the witness box was that he was at times unable to follow the thrust of Mr Jacob's somewhat rapid fire style of questioning. The gist of Mr Brennan's evidence, however, was not consistent with a disregard for his discovery obligations but, rather, with a feeling that he had been let down by his former solicitor (on whom he had relied for advice and answers in this regard). 241Mr Jacobs also points to inconsistencies in Mr Brennan's evidence such as the statement in Mr Brennan's affidavit that he was "not aware of the reason why those documents [the ASIC forms] were not .......available for me to sign until 21 August 2008", faced with his acknowledgement in cross-examination that he had received the ASIC forms on 7 July 2008 and was in a position to sign the forms on that date. It is not clear to me what the reason for the discrepancy in the dates was or whether it did anything more than cast doubt on Mr Brennan's recordkeeping. 242It was further submitted that the fact that Mr Brennan could not recall a number of matters in respect of the documentation of the Mt Vernon deal and in relation to the proceedings indicated either that his memory was dull or that his tactics in the witness box were sharp. In this regard, Mr Jacobs pointed to the answers given by Mr Brennan as to his understanding of "discovery" (notwithstanding the swearing of various affidavits in relation to discovery) and the evidence he subsequently gave in that regard (evidence that I consider explicable by reference to the evident difficulty Mr Brennan had in following the questions put to him). 243Mr Jacobs also pointed out that Mr Brennan had conceded in cross-examination that some of the items listed as personal expenditures in his affidavit had not been paid by him (such as Capital Gains Tax and Goods & Services tax amounting to somewhere in the order of $80,000.00). However, on a fair reading of the relevant pages, it seems to me that Mr Brennan was doing no more than deposing to those amounts being payable. 244It was submitted by Mr Jacobs that Mr Brennan was a reticent and overly cautious witness, guarded in his evidence and as someone who was doing less than his best to assist with the truth. My impression of Mr Brennan in the witness box was that he was frequently confused by the questions put to him and that he was not seeking to avoid answering them but attempting to do so to the best of his ability. 245On balance, I accept Mr Brennan's evidence as being his genuine attempt to recall the relevant events. The matters to which Mr Jacobs adverted did not persuade me otherwise. 246I note that Mr Cox submitted that Mr Brennan's recollection of events in 2008 was not tested so it could not be submitted that funds could have been better utilised by way of repayment of the Trimac loan - matter going to the breach of director's duty allegation. Mr Ishwar Shrestha 247Mr Jacobs submits that a Jones v Dunkel inference ( 1959) 101 CLR 298) can be drawn from the fact that no evidence was called from Mr Brennan's accountant, Mr Ishwar Shrestha, to whom documents were supposedly given on the 16 June 2008. 248A Jones v Dunkel inference is open to be drawn in relation to an unexplained failure to call evidence as to a matter that calls for explanation. The rule in such a case permits evidence in relation to that matter to be given greater weight, and an inference or inferences to be more readily drawn, when the party who might have called evidence to the contrary has chosen not to do so. In Commonwealth of Australia v McLean (NSWCA, 31 December 1996, unreported), Handley JA and Beazley JA said: "... The rule typically applies to strengthen or weaken an inference otherwise available on the evidence for the benefit of the party not in default." 249If such an inference does arise, it would do no more than permit the court to infer that the uncalled evidence or missing material would not have assisted the case of the party against whom the inference is drawn; it would not permit the court to infer that that the uncalled evidence was in fact damaging to that case. 250What the principle allows is the more ready acceptance of evidence which might have been contradicted (but which was not). Thus, w here an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the party disputing it might have proved the contrary, had it chosen to give evidence, is properly to be taken into account as a circumstance in favour of drawing the inference (per Davies AJA in Ho v Powell (2001) 51 NSWLR 572, at [76]; HML v R (2008) 235 CLR 334; 245 ALR 204 at [302] [303; [2008] HCA 16; Brandi v Mingot (1976) 12 ALR 551 at 559-60; Cf Jones v Dunkel (1959) 101 CLR 298 at 320-321; [1959] HCA 8; Katsilis v Broken Hill Pty Co Ltd (1977) 18 ALR 181 at 197; 52 ALJR 189 at 197; and Menzies J in Jones v Dunkel (at 312)). 251It nevertheless remains the case that (as per Dixon CJ (at 305)): The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied. 252In Ho v Powell , Davies AJA said at [15]: ... it is important to have regard to the ability of parties, particularly parties bearing the onus of proof, to lead evidence on a particular matter, and the extent to which they have in fact done so: cf 69 ALJ at 732-733, 736, 740. As stated by Lord Mansfield in Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969 at 970: "... [A]ll evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted". See also Azzopardi v The Queen (2000) 75 ALJR 931 at 935 [10]; 179 ALR 349 at 353 [10]. noting that Jones v Dunkel was a particular application of this principle. 253Mr Jacobs pointed out that Mr Brennan had described Mr Shrestha as the in house accountant of NLG ([para 29]) and that, as there was no suggestion that he had been unavailable to give evidence, his evidence can thus be inferred not to have been of assistance to Mr Brennan on the key issue as to when the ASIC documents were prepared (and perhaps as to when the meeting was held), such that this should lead the court to prefer the plaintiffs' version of events. 254Mr Cox submits that there was no reason to call Mr Shrestha since he did no more than prepare documents for lodging with ASIC and for the incorporation of Sebat and that all he could have been expected to give evidence about would be the date of lodgement of the ASIC forms - not the date of the meeting. (It was said from the bar table that he no longer works for Mr Brennan.) In circumstances where it is not ultimately disputed that the ASIC forms were prepared by Mr Castino on 7 July 2008 and signed by Mr Brennan on that day (lodged thereafter) I accept that there is no issue on which Mr Shrestha might be assumed could have assisted and I draw no adverse inference from the fact that he was not called. 255Mr Jacobs also submitted a Jones v Dunkel inference would arise from the failure of the defendants to tender a file note of Mahir's solicitor that had been the subject of a notice to produce (as to the instructions received by him in relation to the initial draft of the Statement of Claim). Mr Cox submitted that I could not infer that this assisted the plaintiffs when they had not themselves sought to tender the documents. I do not consider anything arises from this. In the absence of evidence to the contrary, I can only assume that a solicitor acting properly would have drafted the pleadings consistently with his or her instructions. Issues (i) What was the relevant agreement in relation to the Mt Vernon land? 256The content of the agreements for which the respective parties contend is markedly different.

• Urusoglu contentions as to the agreement 257Mr Jacobs submits that the agreement reached between Huseyin, Mahir and Mr Brennan was an evolving or springing contract, by which I understand him to mean that it was reached during the course of a series of conversations and not necessarily able to be identified by reference to a previous point at which there was an offer and acceptance. 258When pressed as to precisely what the agreement was (there having been I thought, some conflicting evidence from the Urusoglu witnesses in that regard particularly as to the non-lodgement of the paper work versus the re-transfer of the shares), Mr Jacobs confirmed that on the plaintiffs' case the only contract was one that arose after the auction and was one pursuant to which Mr Brennan was to seek finance for the purchase of the land (and to be responsible for arranging the payment of interest for the first 3 months - a term said to be implied into the contract, though it is hard to see why such a term should be implied since on the Urusoglu version of events the company was at all times to be in equity in the ownership of Elif). 259Mr Jacobs emphasised that one of the terms of that agreement was that there was to be no actual transfer of the shares in MSU Management (through which the purchase was to be effected) - the purpose of signing the share transfer form (and related documents) being so that Mr Brennan could lend his good credit rating to enable the funds to be borrowed by MSU Management and to show the financier that Mr Brennan was in control of the company for the relevant period. In response to my query as to whether or not that was tantamount to unclean hands (and seemingly inconsistently with the above submission and with the pleaded term to that effect), Mr Jacobs submitted that the plaintiffs' case was not that there was only a 'paper transfer' (which is what one might have thought was an apt description if there was a signed share transfer form transferring the shares on paper but it was never to be lodged) but rather that the shares were to be transferred and later re-transferred. 260(Elif's evidence that the shares were never actually to be transferred seems to be inconsistent with Mr Castino's stated unhappiness with what he referred to as the 'actual transfers' - T 203. More relevantly, it is inconsistent with the allegation that the shares were to be re-transferred to Elif (which necessarily is predicated on there being a transfer in the first place). It is also inconsistent with the arrangement being one pursuant to which the front block was to be sold to Mr Kanli (since if MSU Management remained in control, through Elif's ownership of the shares, of the Urusoglu family, there would be no need for that to happen in order to realise the so-called family dream or, in Mahir's words, "family plan").) 261Mr Jacobs says that the agreement that Mr Brennan was to arrange finance was reached in discussions between Mr Brennan and Huseyin on 6 or 7 (and probably 7) July; and that MSU Management was to be used for that purpose. Mr Brennan was to become a director of the company in order to arrange the borrowing. The land was, according to Mr Jacobs, to be held as an asset of "trust" (MSU Holdings Trust), which did not feature in any version of the relevant conversations (though Mahir says he raised the position of the trustee when he was at the auction). 262The consideration for Mr Brennan's involvement was said to be the earning of commissions and the possibility of obtaining some profit out of WIPS (though the mechanism as to how the latter was to be achieved was by no means clear - Mr Brennan's ownership of WIPS Management Pty Ltd, later transferred to his wife, achieves nothing if that company has no interest in WIPS). 263Such an arrangement does not explain why Mr Brennan would have been willing to assume any personal liability in relation to the financing (even if that personal exposure might be limited to a 3 month window, as Huseyin says Mr Brennan insisted it was to be). Perhaps that might have been explained by reference to the social relationship between the parties but by 2008 that relationship seems already to have been sorely tested by the events leading up to Huseyin's bankruptcy. Further, it seems unlikely that an experienced finance broker would have committed to such an arrangement without any written document making clear the limit to his obligations in relation to the transaction and without some form of security for the obligations he was undertaking. 264Huseyin says that there was sufficient equity in the land to cover any exposure (and that may have been the case) but even if that makes any exposure on the Trimac loan unlikely, the exposure remains (as the present events have clearly shown) and it is not clear that it would remove concern by Mr Brennan as to personal exposure on the ANZ loan in any event. 265It is the plaintiffs' case, confirmed by Mr Jacobs, that the arrangement in relation to the works to be carried out (namely that they were to be undertaken by Mahir,) forms part of the so-called springing contract and that this arrangement was reached in discussions with Mahir in November - at which time the term pleaded in paragraph 6(ii) of the Amended Statement of Claim became part of the contract. However, it is submitted by Mr Jacobs that discussions with Huseyin in relation to the land being subdivided necessarily involved the subdivision works being done - so it seems to be the plaintiffs' case that the November discussions simply crystallised the manner in which the Urusoglu family's interest in the land was to be effected. 266It is also contended by Mr Jacobs, that in September/October 2008, a further term of the contract was agreed namely that there would be a second mortgage (by which I understand him, and Huseyin as well, to be referring to the Trimac loan); that the subdivision would be completed and that all the funds (presumably from the refinancing) would be used to pay the second mortgage with the balance to reduce the first mortgage (ANZ loan) on the front block. On this, the evidence of Huseyin seems to be that initially the funds for the 20% portion of the acquisition that could not be borrowed from ANZ because of its 80% loan to value ratio were to be provided by Mr Kanli but that Huseyin then decided to use those funds for the subdivision works which meant there was a need for a second facility (the Trimac loan). The need to pay it out quickly was due to the high interest rate (hence the force of Huseyin's complaint in the witness box seemed to be as to Mr Brennan's failure to pay down the Trimac loan, thus exposing the company to higher default interest, and that he had used those loan funds for his personal interest). 267The final piece of the agreement asserted by the Urusoglu family (T 371) seems to be that in December 2008 it is said that Mr Brennan and Mahir agreed that Mr Kanli's contribution to the subdivision works would form the deposit for a contract for the sale of the front block to Mr Kanli and that Mr Kanli would take the front block encumbered with a mortgage of $600,000 approximately. 268Apart from the fact that no sale to Mr Kanli would be necessary if the arrangement at all times was that MSU Management would remain in the ownership of the Urusoglu family, the contract signed by Mr Kanli's company in early 2009 is inconsistent with that arrangement. Significantly, also, Huseyin seems to have been involved in that sale process (having, according to Mr Kanli, accompanied Mr Kanli to Mr Brennan's office in January 2009 for the incorporation of Sebat and when arrangements were put in place for the raising of finance - and, according to Mr Kanli, when the contract for sale was signed) and seems to have raised no objection to that process. I would infer from Mr Kanli's evidence that Huseyin nominated Mr Kanli or his company as his nominee for the purpose of the agreement to sell the front block after subdivision (as contended for by Mr Brennan). 269Raising of the refinance from Homeside/NAB is said to be consistent with the agreement to pay out the Trimac loan when it fell due in February 2001 and to support the agreement as contended for by the Urusoglu family. Of course, if there was no agreement to transfer back the shares in MSU Management to Elif, then the fact that the Trimac loan has not been repaid (even if that be in breach of director's duties) would occasion no loss to the Urusoglu family because Mr Brennan (both through MSU Management and through his personal security in respect of that loan) ultimately will be liable for the increased arrears (except perhaps to the extent that this might prejudice the ability to sell the front block to Huseyin's nominee). (If, however, Elif is entitled to the shares then I accept that if they were transferred back to her (or the register rectified to that effect) then she would regain ownership of the company now encumbered by a much larger liability to Trimac due to the defaults since February 2009. Whether (and how) that is compensable is something I deal with later in the context of the relief claimed for breach of contract.)

(ii) Relief, had agreement been established? 292The primary relief sought by Elif is an order nunc pro tunc pursuant to s 175 of the Corporations Act for the rectification of the register of MSU Management to remove Mr Brennan's name as shareholder and to reinstate that of Elif. That order is sought on the basis of the contract pleaded, whereby Elif's shares were to be re-transferred to her, and Mr Brennan's refusal to do so. Given the finding in (i) above, this does not arise but nevertheless I consider the position had it in fact arisen. 293It is submitted by Mr Jacobs that Elif is an "aggrieved person" within the meaning of s 175 because she is the equitable owner of the issued shares in MSU Management (presumably on the basis of the contention that there was an enforceable agreement for the shares to be transferred back to her, since no trust over the shares was alleged). Reference was made to what was said as to the court's discretion by Fullagar J in Grant v John Grant & Sons ( 1950) 82 CLR 1 at 51 as follows: The power to order rectification of the register must clearly, I think, be in all cases discretionary. The person claiming rectification must show that he has some equity which the court will protect. If he is a shareholder, then prima facie he shows such an equity if he establishes that a name is wrongly included in or omitted from the register of his company . Some definite reason must be shown, I would think, for refusing rectification before rectification will be refused. But there may be circumstances which justify, or even compel, refusal." (my emphasis). 294The power of the court to order rectification of the register is part of its general jurisdiction to "act in personam" in aid of a legal right which is subject to the same principles which apply generally to equitable remedies (G rant , per Fullagar J, at 51). 295Where it is established that someone who is a shareholder has ceased to be noted on the register as a shareholder, and asserts that this was without authority, then the company must establish that the shares were cancelled with authority and/or that it acted reasonably to remove the name of the shareholder from the register. In McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) [1904] HCA 51; (1904) 1 CLR 243 (at 266) Griffiths CJ, on an application for rectification of the share register, said: The plaintiff is entitled to say to the company - to adopt the words of Shadwell VC ... - 'you are bound by law to be my bookkeeper in respect of my stock, and to show me the true account of it, and if I can show that on a given day stock stood in my name, and now show that it does not stand in my name, and I have not authorised the transfer of it, you are responsible to me - that is say, you must make the account stand as it ought to have stood'. ... The plaintiff, then, having established that he was, before the transfers to be directly mentioned, registered in defendants' register as the holder of the ... shares in question, the onus is cast on the defendants to show that the change in the register has been made by plaintiff's authority. 296That said, Grant would suggest that the ultimate onus of establishing wrongful omission or removal from the register remains on the party asserting it. This was the approach adopted in Actwane Pty Ltd (Receiver and Manager Appointed) (In Liquidation) and William James Moss v Hotel Redfern Pty Ltd, Actwane Holdings Pty Ltd and Stephen Michael Larkin [2002] NSWSC 265 by Bergin J (as her Honour then was) and in Rafeletos v Great Wall Resources Pty Ltd [2009] FCA 1396 by Emmett J, In other words, an evidentiary onus will lie on the defence in respect of particular factual issues asserted by the defendant (by way of the defences raised) failing the satisfaction of which the plaintiff's evidence in favour of rectification may be sufficient to support the relief sought but this does not change the ultimate onus on the person claiming an entitlement to rectification of the register. 297Here, there is no dispute that Elif signed the share transfer form pursuant to which Mr Brennan became registered as shareholder and on which he relied to procure the removal of Elif's name from the register. Thus, the onus lies on Elif to establish that there was an agreement that the share transfer form would not be lodged and that Mr Brennan would not become registered as shareholder. Had that agreement been established then the registration of Mr Brennan as shareholder and the removal of her name from the register would have been without Elif's authorisation and prima facie an order for rectification of the register would lie. However, I am not satisfied that Elif has established that this was a term of the agreement reached on her behalf by her father and brother in 2008. 298Once it is established that the registration of the transfer was authorised (as logically it must have been for there to be any agreement at the outset of the transaction for there to be a later transfer of the shares back to Mr Brennan, as also contended by Elif on the pleadings), then the question becomes whether there was an agreement for the transfer of the shares and, if breached, what remedy lies for breach of that agreement. Elif bears the onus in that regard also. 299As it is, I have found that there was no agreement for the re-transfer of the shares to Elif (and no antecedent promise by Mr Brennan not to register the share transfer form). Therefore, I am not satisfied that Elif's name was wrongly removed from the register in the first place. Had there been an agreement for the shares to be re-transferred to Elif, then I would have considered the appropriate remedy to be to order Mr Brennan to re-transfer the shares in accordance with that agreement (or, in the alternative, to order damages for breach of that obligation). The case, it seems to me, is one of wrongful omission in the register but one which it is said to be a breach of contract for Mr Brennan not to reconvey the shares. 300Insofar as there is a discretionary element in relation to relief of the kind sought on this aspect of the claim, Mr Cox submits that Mr Brennan should not be ordered to re-transfer the shares (and the register should not be rectified) without account being taken for interest paid by Mr Brennan on behalf of MSU Management in respect of the loans made to it. It is submitted that Mr Brennan changed his position in so doing. (In that regard, there is some dispute as to the evidence in relation to what amounts were personally paid by Mr Brennan and what came out of the finances obtained by the company - or what remain payable. It is not necessary for me to determine that issue. Suffice it to note that I do not accept Mr Jacobs' submission that Mr Brennan has misrepresented the position in the schedule to his affidavit.) 301(I also note that Mr Cox submits that the loss on any claim for damages for the refusal to transfer the shares would be the value of the shares and that this has not separately been proved and cannot be assumed to be the cost of the works or the moneys personally expended by Mr Brennan out of company funds. By way of illustration, Mr Cox says that the land was acquired for $960,000 and that if the work on it (as Mahir says) cost $350,000 then there was an expenditure of $1.31 plus interest (say $1.5m) whereas the asking price for the respective blocks in 2009 totalled $1.48m; thus leaving little by way of profit in the company at that stage.) 302I accept the force of the submission that any rectification of the register would need to take into account amounts personally expended by Mr Brennan on account of the company and would have been inclined to make any order for relief of this kind conditional on account being made of such interest repayments (though not the default interest occasioned by the decision to spend part of the finance obtained from Homeside Lending on personal expenses rather than repayment of the loan). 303The other claim for relief based on the existence of an agreement for the re-transfer of the shares is Elif's claim for damages for the alleged breach of an implied term of the agreement with Mr Brennan (namely, that he would not act so as to subvert the contractual benefit of that contract), whether that term be found as a matter of construction of the agreement or by way of an implication of the term at law (Mr Jacobs noting the discussion in this regard in Jackson Nominees P/L v Hanson Building Products P/L [2006] QCA 126.) It is said that Mr Brennan breached this term by diverting $179,000 of MSU Management's money to his personal use. 304As to the allegation of damages for breach, in Jackson Nominees , Williams JA referred to the position where one party, by its conduct, removes the sub-stratum of the contract so that the other party is denied the benefit of the contract, referring to the principle stated by Lord Blackburn in Mackay v Dick and Anor (1880-81) 6 App Cas 251 at 263 (that where both parties have in a written contract agreed that something be done that could not effectually be done unless both concurred in doing it, then the construction of the contract was that each agreed to do all that is necessary to be done on his or her part for the carrying out of that thing) and other authorities as to the implication of a mutual obligation to do all things necessary to enable the other party to have the benefit of the contract or not to do anything calculated to hamper the other in the performance of the contract. Jerrard JA noted that this was referred to as a rule of construction in Mackay v Dick and Secured Income Real Estate (Australia) Limited v St Martins Investments Proprietary Limited [1979] HCA 51; (1979) 144 CLR 596 but described in Byrne v Australian Airlines Limited as not so much as a rule of law as a term implied in the sense of being attributed to the contractual intent of the parties unless contrary to the proper construction of their bargain. Mr Jacobs seemingly contends for a term in effect of the kind referred to in Ansett Transport Operations Pty Limited v The Commonwealth of Australia and Ors [ 1977] HCA 71; (1977-78) 139 CLR 54 at 61, that "a party to a contract made on the footing of a continuance of a state of things may not by any act within its power or control do anything to destroy or diminish that situation" 305On this basis, Elif seeks damages for breach of the agreement to transfer back to her the shares, those damages it is said to reflect the value of the shares as at the date of breach calculated on the basis of the value of the work done (said in the submissions to be $347,463.60) plus the diverted sum of $179,000.00. Mr Jacobs says that this calculation assumes that the mortgages otherwise balanced out the value of the Mr Vernon land. 306In that regard I think that a distinction would have to be made between conduct such as mismanagement of the company's affairs due to inefficiency or incompetence, for example, or due to a belief that there would be funds derived from other sources to pay down the Trimac loan in the short term, which surely must be a risk assumed by someone transferring shares under an arrangement of the kind contended for by Elif, and conduct whereby company moneys were deliberately diverted for personal benefit of the director). 307The damages recoverable as a result of any such breach would be such as to put Elif in the position that she would have been in had there not been such a breach. Logically, given that the conduct complained of is that Mr Brennan chose not to apply all of the funds from the Homeside refinancing to the repayment of the Trimac facility and instead diverted moneys to his own use, the question would be how the value of those shares in Elif's hands would be diminished by the fact that the company remained liable for the interest on the Trimac loan - I am by no means satisfied that this would be measured by the additional interest payable to Trimac or the quantum of the moneys so applied for personal expenses (the former being the cost to the company but not to Elif directly of the conduct; the latter being to require Mr Brennan to disgorge the benefit he obtained personally). 308In the event, nothing turns on this as I have not found there to be any agreement for the transfer of the shares back to Elif. Had I so found, then it would have been impossible for me on the evidence to ascertain what damage had been caused to Elif (as opposed to the company) in terms of the diminution of the value of her shares by reference to the conduct in question (and I would not have considered it appropriate to order the payment of the $179,000 direct to Elif, but would have been inclined to consider that the appropriate relief would be to order Mr Brennan to repay those moneys to the company with interest). 309Had I found that the agreement with Mr Brennan was that he would do no more than hold the share transfer forms or that he would retransfer the shares to Elif after holding them for a short time solely to facilitate the financing, then I would have been inclined to the view that Mr Brennan had an implied obligation not to diminish the company's assets in the interim or, put in positive terms, to do no more than would be consistent with a "caretaking" role or as required to effect the financing. A withdrawal of funds for private purposes seems to me clearly to be inconsistent with this. However, the damage Elif personally suffers as a result of that conduct must be the amount by which value of shares diminished by that conduct and I am not satisfied that this has been established (and it could not be pursued at the same time).

(iii) Oppression/Breach of Directors' Duties 310There are two further bases on which Elif seeks the repayment (to herself or to the company) of the moneys used by Mr Brennan for personal expenses ($179,000) (and said to have been wrongly diverted from MSU Management). 311The first is oppression and the second is via a claim for breach of directors' duties. It is submitted that if the register is rectified nunc pro tunc , such that Elif is back in control of MSU Management, then she has standing to seek a remedy in its name (Mr Jacobs referring to Winspear v Mackinnon [2007] FCA 2077 para [54], where Marshall J noted Counsel's concession that if the rectification order was made nunc pro tunc , (finding the plaintiff to be entitled retrospectively to be a member of the company at the time the application was filed) then the standing issue - there, in relation to an oppression suit - disappeared. No similar concession was made by Mr Cox.)

• Oppression 312As to the oppression claim, s 234(c) of the Corporations Act provides a remedy for oppression to those who have ceased to be members, if the application relates to the circumstances in which they ceased to be a member. 313Mr Jacobs drew my attention to two articles referred to by Elizabeth Boros in Minority Shareholders' Remedies at p 123, addressing the question as to whether the corresponding English statutory provision should be expanded to give standing to former members of a company to complain of oppression (Ms Boros being of the view that it should "since unfairly prejudicial conduct may arise out of circumstances in which a person ceases to be a member, or have occurred while the former members were still members but have come to light only after they ceased to be so"). 314Given that Elif was the sole member and director up until the time of transfer of her shares to Mr Brennan, any complaint of her treatment or of the conduct of the affairs of the company while she was still a member could only be a complaint directed against herself. I did not understand Mr Jacobs to be invoking the second of the scenarios identified by Ms Boros (of circumstances where a former member might legitimately have a complaint as to unfairly prejudicial conduct of the affairs of the company). 315As to the first of those scenarios, Ms Boros referred to the fact situation described by Andrew Marsden in 'Prejudicial relief?' (1994) 15 Company Lawyer 178, where one of three director/members of a company resigned as director in accordance with his contractual terms and the remaining directors were entitled to acquire his shareholding at a price representing a proportionate part of the net asset value of the company as certified at the date of exercise of the option. It was suggested that (where it was alleged that the remaining directors had, after his resignation, set about to reduce the value of the company's net assets so as to produce a lower price payable on exercise of the option), this was conduct that would appropriately be dealt with by permitting the former member to sue under the oppression provision of the relevant legislation. 316As I understand it, what Mr Jacobs argues is that, here, there is a not dissimilar scenario, in that Mr Brennan (having, on Elif's case, reached an agreement that he would take a transfer of the shares for a particular purpose and for a short time only, then retransfer them to Elif) has conducted the affairs of the company in the meantime in a manner unfairly prejudicial to her interests (in that he has diverted funds from the company to his personal use instead of using them to pay down the Trimac loan - hence reducing the value of the shares she says he is obliged to transfer back to her). 317Mr Jacobs contends that the present application relates to the circumstances in which Elif ceased to be a member of MSU Management, on the basis that the nub of the present dispute is what was the agreement then reached in relation to the shares. It is submitted in that regard that a large proportion of the hearing time was spent exploring the circumstances in which Elif ceased being a member (whether it was on 16 June 2008 or 7 July 2008; whether there was a face to face meeting, or rather a meeting in Mr Castino's office on 7 July 2008 (after the auction) attended only by Elif, Mahir and Mr Castino, after which the forms were faxed to Mr Brennan; how long was the meeting in Mr Castino's office; what happened in the course of that meeting; whether Mr Brennan was contacted by telephone and, if so, what was said; and what was the arrangement as to the shares namely whether they were to remain with Mr Brennan or be transferred back to Elif). While I accept that time was devoted at the hearing to those issues, this was because they were relevant to the existence or otherwise of the agreement alleged. There was nothing there raised as to the circumstances referable to Elif as a member of the company in which (whatever version of the agreement was reached) that agreement was reached. 318In particular, it is noted that there is no claim of undue influence or duress. Mr Cox contends that if the shares were agreed to be transferred on 16 June 2008 and a valid transfer giving effect to that intention was signed on 7 July 2008 (later registered on 28 July 2008), then Elif voluntarily gave away any beneficial interest in the company. Mr Cox submits that Elif was not excluded by Mr Brennan from the management of a company in which she had an interest and that the shares were not held on any trust for her benefit. Thus it is submitted that Elif's claim should fail because she has no standing to complain about how Mr Brennan managed his own company and no other oppressive conduct is identified in the pleading. 319I do not consider that this has been shown to be a case in which, under s 234(c), a former member would have a claim for oppression. The agreement pursuant to which Elif transferred her shares was not one procured by oppression of any member of the company at that time. She was the only member of the company. Even accepting, for present purposes, and taking a broad view (which I think would be incorrect), that the application did relate to the circumstance in which Elif ceased to be a member (insofar as it relates to whether there was an agreement that the share transfers would not be lodged with ASIC or, alternatively, that if lodged the shares would be transferred back to her), I am not satisfied that Elif has established that there has been oppression in that regard, namely that the affairs of the company at the relevant time were being conducted in a manner oppressive to Elif. 320Mr Jacobs submits that this is established by the fact that (as it is asserted) it is unfairly prejudicial to Elif, who "embodies her family's interests", to have the substantial work done by her family, in contemplation of a family home and display home for WIPS, "gifted" to Mr Brennan. It is submitted by Mr Jacobs that it is unconscionable for Mr Brennan to retain the benefit of the works "after plundering the company accounts", while being aware that the Urusoglu family does not have the money to purchase the front block and without offering to pay the "fair value of the works." 321It is submitted that Mr Brennan has used his legal rights as owner of the shares in MSU Management as an "instrument of oppression" in order to deny the Urusoglu family (though surely the only relevant person who could bring a claim of oppression would be Elif, as she was the only member of the company) their fair share of the rewards constituted by the development of the Mt Vernon land. In this regard, Mr Jacobs invokes what was said in Re M Dalley & Co Pty Ltd (1968) 1 ACLR 489 per Lush J: In my opinion want of probity is only one of the ways in which oppression can manifest itself, ... One person may `subject another to continual injustice' by insisting, however honestly, on a proposition that is wrong or by using his strength to maintain, however honestly, a position unjustified in law. ... Section 186 [the predecessor in the Companies Act 1961 of s.260] is, upon the authorities, a wide remedial section not to be narrowed in the manner contended for by an interpretation of the first judicial observations made upon it. It is to be observed that it speaks of oppression in terms of its impact on the oppressed, not in terms of the intention of the oppressor, except to the extent that the word itself has some moral or emotional content. 322However, it is of relevance to note that in the above extract, his Honour was addressing the position where (however honestly) there was insistence upon or maintenance of a position unjustified in law. If (as I have found) there was no agreement on the part of Mr Brennan to re-transfer the shares to Elif, then it seems to me that he is justified in maintaining his refusal to do so and the present enjoyment of benefits arising from his ownership of the shares cannot amount to oppression of Elif's interests in relation to the circumstances in which the shares were transferred to him in the first place(which is the focus of the statutory provision). 323Mr Cox submits in this regard that the use of the $179,000 is irrelevant to this proceeding. Even if substantially for Mr Brennan's personal use, it is submitted that he would be entitled to director's fees and to have a company loan account and that ultimately he was the only person affected by running the company in that way.) 324Therefore, even had I been satisfied that Elif had signed the share transfers pursuant to an agreement that the shares would be held for her or transferred back to her, I would still have had difficulty with the proposition that conduct of Mr Brennan in his capacity as a director (which on this hypothesis had led to the company shares being worth less to her on their transfer back to her or the company being in a less favourable financial position at that time,) amounted to oppression of Elif's interests as a former member of the company in relation to the circumstances in which she ceased to be a member. (Such conduct would more likely, in my view, amount to breach of an implied term of the kind pleaded, at least if the conduct can be said inevitably have had the result of diminishing the benefit of the agreement to re-convey the shares to her, as considered earlier.) 325Accordingly, I do not consider that the oppression claim has been established. Strictly speaking, I therefore do not need to consider what remedy would be appropriate had the claim in oppression been sustained. However, for completeness I note that Mr Jacobs submitted that compensation could be awarded by reference to the uplift in the value of the Mt Vernon land by virtue of the work (even though the (said to be oppressed) shareholder, Elif, had not contributed to that work). Mr Jacobs noted that fairness under s 232 must not be assessed in a vacuum ( Thomas v HW Thomas Ltd [1984] 1 NZLR 686, at 694; (1984) 2 ACLC 610; (1984) 2 NZCLC 99,148). Young J (as his Honour then was) in ES Gordon Pty Ltd v Idameneo (No 123) Pty Ltd (1995) 15 ACSR 536, at 540 said that: The flavour of the judgments in the company oppression cases is that in looking to the fair value one must look at all the circumstances of the case and seek to put the oppressed in the same position as nearly as can be as if there had been no oppression, erring, if there is to be any erring, on the side of the oppressed. 326The aim is to fashion relief which removes the adverse effects of the oppression ( Shelton v NRMA (2004) 51 ACSR 278 at [26], cited by Bergin J (as her Honour then was) in Backoffice Investments v Campbell [2007] NSWSC 161; (2007) 61 ACSR 144 (2007) 25 ACLC 302, at [93], and reaffirmed in Campbell v BackOffice Investments Pty Ltd [2008] NSWCA 95 ; (2008) 66 ACSR 359, which was not questioned in the High Court's decision in this matter, Campbell v Backoffice Investments Pty Ltd [2009] HCA 36, at [178]; ( 2009) 259 ALR 402 ; (2009) 83 ALJR 110.) Furthermore, it has been said that the remedy chosen should be the least intrusive: Martin v Australian Squash Club Pty Ltd (1996) 14 ACLC 452, at 475; Fexuto v Bosnjak Holdings Pty Ltd (1998) 30 ACSR 688, Young J (as his Honour then was), at 742. 327Had I been satisfied that there was oppression in the present case (because the value of the shares to be transferred back to Elif had been diminished) then I would have considered the appropriate relief to be an order for the payment by Mr Brennan of a sum to reflect the diminished value of the shares (but I am unable on the evidence before me to quantify that amount).
• Derivative suit/claim against company 328Elif also asserts a claim on behalf of the company itself to damages (and seeks leave under s 237 of the Corporations Act, if that be necessary), to seek relief in effect on a derivative suit against Mr Brennan as director of MSU Management for alleged breach of his duties as officers of the company to exercise his powers in good faith in the best interests of the company for proper purposes (s 181 Corporations Act ) and not improperly to use his position to gain an advantage for himself to the detriment of the company (s 182 Corporations Act ). 329It is contended that Mr Brennan has breached his duties as a director of MSU Management by reference to the use by him of funds from the company for his personal or family expenses. 330Although Mr Pelle, when cross-examined as to the basis on which he had expressed the opinion that company funds had been so used (and which, at the hearing, he qualified and expressed in more temperate terms), was not able to do more than comment on the likelihood of a particular description of expense being a company expense (something on which he was rightly, in my view, criticised for not having any particular expertise and not having suitably qualified his opinions), nevertheless Mr Brennan did ultimately admit that he had used funds obtained from the company for personal expenses such as school fees for one or both of his children and that those funds were in the order of $179,000. 331It is submitted by Mr Cox, in effect, that the drawing of cheques on the company's account for personal expenses does not necessarily constitute a breach of director's duties, since those drawings might properly be reflected in internal loan accounts in the company's books or the money might have represented a payment in lieu of director's fees. Mr Pelle conceded that he had not seen the company's financial statements over the relevant period (and had not qualified his report in that regard). Accordingly, he could not comment on whether the company's records evidenced the existence of internal loan accounts or the like. That said, the company remains in Mr Brennan's control. It was open to him to have adduced evidence of such matters and he did not. 332Mr Cox further submits that, as the sole member of the company, any question as to the use of company funds is a matter for Mr Brennan. Of course, this submission assumes that there was no agreement for the re-transfer of the shares such that Elif would have no standing (as someone entitled to the shares) to complain of Mr Brennan's conduct while a director of the company. 333Given the finding in (i) above, this issue does not arise. However, had I been satisfied that there was an agreement for the re-transfer of the shares to Elif, then in the absence of evidence as to the entitlement of Mr Brennan to draw down company funds for his personal benefit, it would seem that once the shares were transferred to Elif she would have a basis on which (acting as the sole director of the company) to bring proceedings on the company's behalf against Mr Brennan for breach of director's duties by reference to the transfer of company funds. (In those circumstances it would not be necessary for her, as shareholder, to pursue a derivative suit in the name of the company; the proceeding could be commenced in the company's name with her authority as sole director.) Until then, however, she could not do so. Therefore, it would have been necessary to consider whether the criteria to be considered on an application for such leave had been satisfied ( Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534 at 541; 20 ACLC 1502) and had they been then I would have been bound to grant the application ( Fiduciary Morningstar Research Pty Ltd [2005] NSWSC 442; (2005) 53 ACSR 732 at 735; 23 ACLC 1100). 334Of those five criteria, I am satisfied that while Mr Brennan is the sole shareholder and director the probability is that the company will not itself bring the proceedings but that poses the interesting question as to whether if I had ordered that the register be rectified nunc pro tunc, that I could then form such a view (as clearly Elif would be in a position to bring the claim). I accept that Elif has been acting in good faith (albeit probably on the assumption that what her father and brother have told her about the alleged agreement was correct). I am satisfied that there would have been a serious question to be tried as to Mr Brennan's conduct as a director in relation to the matters of which complaint is made. As to whether it is in the interests of the company to commence the proceedings, if the allegation of breach of duties were to be sustained then the company would recoup moneys paid out to Mr Brennan and on that basis this criterion would seemingly be satisfied but there is an obvious overlap with the claims brought by Elif personally and it was not clear to me how it was that the plaintiffs sought to overcome that overlap. It might well have been that it was not in the best interests of the company to pursue a claim for relief that ultimately would benefit its sole shareholder if that shareholder was maintaining at the same time a claim in relation to the same matters). It may well have been that in those circusmtances Elif would not have pressed the derivative suit if she had succeeded on her personal claim. Finally, there is no evidence as to whether the requirement for notice was satisfied but it might have been a matter in which there could have been a dispensation at that stage. 335I do not need to decide whether the breach of director's duties claim would have succeeded. I am inclined to the view that, Mr Brennan having adduced no evidence as to any entitlement he had to the funds in question, he was relying on no more than the fact that he was the sole shareholder of the company when drawing those funds for his personal use and would have been inclined to the view that the appropriate order (had Elif established that she was entitled to the shares of the company) would be to fashion relief such that these amounts should be refunded to the company with interest. As to the position of the Trimac loan, however, I would not have been satisfied that the decision not to pay it out in full in February 2009 amounted to a breach of director's duties, as it seems to me that involves an assessment of the exercise of business judgment (a matter in which the court should not be involved). Mr Brennan, during cross-examination, indicated that there may have been other factors relevant to the decision not to repay the Trimac loan (including the anticipation of funds from the sale of the back block and the reference to an amount of money held in a trust fund to which it was suggested the plaintiffs had impeded access - matters that I am not in a position to assess on the state of the evidence). 336In any event, given my findings in (i), this claim for relief fails. (vi) Frustration 337As to the alternative claim in frustration, Mr Jacobs submits that if the agreement is as Mr Brennan contends, then the inability of the Urusoglu family to have the fruits of their labour, which was in the contemplation of both contracting parties in the lead up to the agreement, is said to constitute a failure of something which was "at the root" of the contract (using the terminology in Scanlan's New Neon Limited v Tooheys Limited (1943) 67 CLR 169) and the frustration of the commercial object of the contract. The subject matter of the agreement is said to be the acquisition of the Mt Vernon land front block, as improved by the road access works. It is submitted by Mr Jacobs that to the extent that one must focus on the performance of the obligation, the performance by the Urusoglu family, (in contemplation of receiving the benefit of their work), has become a radically more onerous burden (in that their work has in effect stood as a gift to Mr Brennan's interests). 338Reliance was placed on what was said by Lord Denning MR in The Eugenia [1964] 2 QB 227. There, in well-known passages (at p 238 and 239 respectively), his Lordship said: ... if it should happen, in the course of carrying out a contract , that a fundamentally different situation arises for which the parties made no provision - so much so that it would not be just in the new situation to hold them bound to its terms - then the contract is at an end. (my emphasis) and We are thus left with the simple test that a situation must arise which renders performance of the contract "a thing radically different from that which was undertaken by the contract," see Davis Contactors Ltd. V. Fareham Urban District Council by Lord Radcliffe. To see if the doctrine applies, you have first to construe the contract and see whether the parties have themselves provided for the situation that has arisen. If they have provided for it, the contract must govern. There is no frustration. If they have not provided for it, they you have to compare the new situation with the situation for which they did provide. Then you must see how different it is. The fact that it has become more onerous or more expensive for one party than he thought is not sufficient to bring about a frustration. It must be more than merely more onerous or more expensive. It must be positively unjust to hold the parties bound. ( my emphasis) 339Has there been frustration of the contract as a matter of law? 340At the outset, I note that it is by no means clear to me that Huseyin's nomination of Sebat constitutes an election once and for all, such that Mr Brennan's obligation (which he concedes, under the agreement for which he contends), to transfer the front block for a fair market price to a nominee of Huseyin could be said to have been discharged. The agreement itself was informally made. There was no mechanism stipulated for the nomination of the purchaser. It would surely be a matter of construction of the agreement as to whether once an election was made there was an ability to nominate a different purchaser. At first blush this would not seem to be same as the situation where exercise of an option must be strictly in accordance with its terms, there being no manner of exercise of the right of nomination having been referred to in the terms of the alleged agreement in the present case. No doubt there would be a requirement that the right to nominate a purchaser be exercised within a reasonable time. 341Therefore it is not immediately apparent that Huseyin could not simply have nominated a new purchaser as nominee or to have sought to have the Sebat contract novated when Huseyin realised (as he must have done at some stage in February or March 2009) that Sebat was not in a position to complete the contract. (I note that Mr Brennan has not asserted in the present proceedings that he has been discharged from that obligation.) 342Tellingly, Huseyin does not appear to have taken any steps to nominate a replacement purchaser once the contract with Sebat was terminated; nor have Elif and Mahir sought an order in the nature of specific performance of an obligation to convey the front block to a nominee of Huseyin (as they could have done as an alternative to the claims made under the agreement for which they contend), which raises the question of self-induced frustration that I consider in due course. 343Before doing so, I note that it has been recognised that hardship and expense in the performance of a contract does not, in itself, constitute frustration ( British Movietonews Ltd v London & District Cinemas Ltd (1952) AC 166 [at 185] per Viscount Simon). In the case of financial hardship, the Privy Council in Hangkam Kwintong Woo v Liu Lan Fong (1951) AC 707 stated [at 721-722] "...the question is whether this change in fortune is to be regarded as so fundamental as to strike at the root of the agreement and render its performance, in the manner contemplated by the parties, impossible ." (my emphasis). 344Here, the point at which it is asserted that the contract has been frustrated is the time at which the performance of Mahir's obligations is already complete - the subdivision works have been finished. Mahir has no further obligations to perform. In effect, what is being said is that, in retrospect, the performance of Mahir's obligations in relation to the subdivision works has been more onerous for him than he had expected because the Urusoglu family now may be unable to enjoy the benefit of the works (due to Sebat's failure to complete the contract to purchase the front block). 345The threshold for establishing frustration is higher than mere hardship or burden. What is required, as was recognised by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 is that the change in circumstances that led to performance becoming more onerous must render the contract "radically different" or "fundamentally different" from anything contemplated by the parties. 346True it is that in Brisbane City Council v Group Projects (1979) 145 CLR 143, Stephen J (with whom Murphy J agreed, the majority deciding the case on a different ground) considered that an agreement was frustrated where the purpose of undertaking any obligation under the contract at all had been "wholly destroyed" although it could not be said that the performance of its obligations had been rendered impossible or more onerous in nature. There, however, the obligations remained to be performed - it was not a case (as is here the case) where the relevant party claiming frustration had already performed its obligations and was simply faced with the position that in hindsight it had not obtained the benefit it had sought to achieve from the contract (the risk of which it might be taken to have assumed when entering into the agreement pursuant to the work was performed). (Moreover, his Honour there had noted that the Council was not in the position of a party to a commercial venture concerned exclusively with is own financial interests and would not be deprived of some commercial advantage if the contract were to be declared to be frustrated. His Honour considered that the Council's own particular concern with the performance of the work in question had also come to an end. The position is quite different in the present case.) 347I do not consider that the failure of Sebat to complete the contract is something that operates to frustrate the contract - it does not change the fundamental nature of the contractual obligations or render the contract radically different; it does not change the mutual purpose of the contract insofar as that was to develop the land for subdivision - it simply changes the outcome of that performance. Mahir has no obligation left to perform and so the contractual performance required from him has not changed in any fundamentally different or radical way. It is simply that the bargain he struck (based on the expectation that Huseyin's nominee would acquire the front block) has proven not to be a prudent one, assuming the benefit of the front block has now been lost. (That assumption has not been tested. Therefore, even if a failure to obtain the front block would have constituted sufficient hardship to render the contract such that it would be positively unjust to hold the parties still bound thereby, I am not satisfied that the acquisition of the front block by the Urusoglu family became impossible by the non-completion of the Sebat contract.) 348There has been no claim for damages for failure on the part of Mr Brennan to convey the land to Huseyin's nominee (which is the context in which one would expect to see a frustration claim based on impossibility of performance). Nor has Huseyin or Mahir requested or sought to compel Mr Brennan to sell the land to a third party in place of Sebat. 349This brings me to the question of self induced frustration. Lord Radcliffe in Davis Contractors v Fareham UDC [1956] AC 696 at 729 notes that frustration can only occur where there is no 'default' by either party. Latham CJ in Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169 at [186] affirmed that a "state of facts brought about by the act of a party" cannot be the basis of a claim of frustration by that party (see also Joseph Constantine Steamship Line Ltd v Imperial Smelting Corp Ltd , "The Kingswood" [1942] AC 154). 350Even if I am wrong and the contract was frustrated by reason of the inability of Sebat to complete, in my view that amounts to a self-induced frustration - since it was open to Huseyin to nominate whomever he chose to purchase the front block and since I have concluded that Sebat entered into the contract at his instigation and on behalf of Huseyin and its failure to complete seems most likely to lie at the feet of Huseyin and/or Mahir, who between them appeared to be responsible for arranging the balance of the financing for the acquisition. 351There is no suggestion in the proceedings that the termination by MSU Management of the Sebat contract for sale was wrongful - nor was there apparently any suggestion by Huseyin at the time the Sebat contract was entered into that its terms did not reflect the agreement that had been struck with Mr Brennan in relation to the Mt Vernon land (a telling point in that the Sebat contract requires payment of a fair market price for the land, whereas on the version of the agreement for which Elif and Mahir now seem to contend, the land was to be transferred for the consideration that Sebat would assume the obligations under the ANZ mortgage with Mr Kanli's monetary contributions would be treated as the deposit - a markedly different scenario to that provided for under the Sebat contract). (An interesting point might well have arisen had Mr Brennan been sued for damages for breach of the agreement he alleges, for damages for failure to transfer the front block to Huseyin's nominee. Mr Brennan would surely then have a claim for indemnification for those damages against Sebat.) 352It could not have been open to Huseyin, for example, to frustrate the agreement he made with Mr Brennan by nominating a purchaser he knew was unable or unwilling to complete the contract (and, in my opinion, that must also be the case where the nominated purchaser is relying, for its ability to complete, on Huseyin procuring part or all of the necessary finance). By way of illustration I note that The Super Servant Two [1990] 1 Lloyd's Rep 1, a contract for carriage by either of two vessels at the carriers' option was not frustrated by the loss of the vessel that the defendants had intended to use for that purpose, where the unavailability of the remaining vessel was due to the existence of commitments to other persons. It was said that the contract did not oblige the carriers to use the vessel that had been lost and that the inability to use the other vessel was, for the purposes of self-induced frustration, the carriers' own fault. 353I accept that the onus lies on the party (here Mr Brennan) alleging that the frustrating event was due to the other's fault to establish that this is the case. Here, however, I am satisfied that the apparent failure of Huseyin to take any steps to procure completion by its nominee of the contract or to nominate any other nominee for that purpose means that the contract cannot be said to be frustrated (even had that conclusion otherwise been open). 354It is submitted by Mr Cox that the fact that Mr Kanli (or the Urusoglu family) could not procure the money to meet the conditions of the loan Mr Brennan obtained for Mr Kanli (which was at 80% loan to value ratio) and could not pay the deposit or effect the loan, is not an external frustration of the contract (but simply the failure of Huseyin as the person who was really doing this deal). I agree. 355Mr Kanli (the director of Sebat) knew almost nothing as to the performance of the contract and was not concerned about what was required to perform the contract or as to its subsequent termination. This is consistent with his approach to the handling of the contract from the time of entry into it, leading to the inference that Mr Kanli had left the sale transaction to his relatives: Huseyin and Mahir. Huseyin was aware of the Sebat contract, and must have been aware of the need for financing to be procured. 356The failure by Sebat to complete the contract seems to be due to a decision by Huseyin not to do so or an inability of Huseyin to arrange finance for that to occur. 357I find that the alternative claim in frustration fails.

(v) Deceit 358The tort of deceit provides a legal remedy for harm suffered "in consequence of dishonesty" ( Magill v Magill [2006] HCA 51; (2006) 226 CLR 551 per Gleeson CJ at [17]). The tort of deceit is based on fraud; it arises in relation to a misrepresentation where the defendant lacks an honest belief in its truth, and that misrepresentation is relied upon to the detriment of the plaintiff. Fraud must therefore be proved on the balance of probabilities. In Nocton v Lord Ashburton [1914] AC 932; [1914] All ER Rep 45, Viscount Haldane explains the concept of 'fraud' in the commercial context in which the tort of deceit emerged. He states at [954]: If a man intervenes in the affairs of another he must do so honestly, whatever be the character of that intervention. If he does so fraudulently and through that fraud damage arises, he is liable to make good the damage. A common form of dishonesty is a false representation fraudulently made, and it was laid down that it was fraudulently made if the defendant made it knowing it to be false, or recklessly, neither knowing nor caring whether it was false or true. That is fraud in the strict sense. 359The tort of deceit does not require an intention to injure; it requires intention to deceive. Such intent may be established by proof of an intention to induce a representee to rely and act upon a belief in the truth of the representation. 360Gummow, Kirby and Crennan JJ set out the five elements required to establish the modern tort of deceit in Magill at [114] as being the making of a false representation; with the knowledge that it was false, (or being reckless or careless as to the falsity of the representation); with the intention that the representative would rely on it; that the representative acted in reliance on the false representation; and suffered damage which was caused by reliance on the false representation. Deceit is not actionable without proof of injury, but the misrepresentation need not be the sole cause of the damage suffered. 361Mr Jacobs submits that the dishonest state of Mr Brenann's mind is to be inferred from his conduct (reference being made to para [9146] o f The Bell Group Ltd (in liq) v Westpac Banking Corp [No 9] [2008] WASC 239 ) . There, Owen J summarised the law in relation to an intention to defraud creditors under the relevant legislation and observed that a dishonest intention could be established by inference. His Honour said "if the natural and probable consequences of the disposition are such that its effect will be to defeat or delay creditors, the necessary inference can be drawn and a court might more readily do so. But a finding to that effect is a finding of an actual or real intention not one that is implied to the disponor by virtue of a legal principle." 362Here, I see no basis on which to conclude (or to draw any inference to this effect) that when Mr Brennan entered into the agreement (as I have found it) he had no genuine intention to perform the obligations under the agreement. 363I am not satisfied that any representation was made by Mr Brennan other than such representation as was comprised by the making of the agreement in the terms for which Mr Brennan contends. There is nothing to suggest that Mr Brennan did not have an honest intention to comply with that agreement and his conduct supports the conclusion that he did have an honest intention to do so - he took the steps for the raising of the finance to acquire the land, he gave personal guarantees in that context, he entered into the contract for the sale of the land to Sebat and assisted in the procurement of finance for such an acquisition. The claim for damages for the tort of deceit fails. (vi) Quantum Meruit 364As an alternative remedy,(though said to be "hinged" on the alleged agreement) Mahir, through his company MSU Earthworks, claims the value of the subdivision works by way of a quantum meruit, in circumstances where it is said that the work was requested to be done by Mr Brennan and/or freely accepted by him. Reliance was placed generally on what was said by the High Court in Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 and the principle identified by Beech J in R J Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2009] WASC 206 at paras [156] to [157]. 365In this regard, it was submitted by Mr Jacobs, (but not conceded by Mr Cox) that it is common ground that the purpose of the purchase and development of the Mt. Vernon land was to provide a family home for Mahir and Elif (referring to para 7 of the Amended Statement of Claim and para 7 to the Defence thereto) and thus that the driveway work was not intended to be a gift to Mr Brennan. (In fact, the Defence in terms concedes that this was the Urusoglu family's "wish" at a particular time.) 366Profit margin is said to be claimable upon a quantum meruit by reference to; Hayward v Timilty [2009] NSWDC 54 at [128 ff] (though I note that there the Court also explained that there must be some external standard by which a court assesses a reasonable price for work and materials ( Flett v Deniliquin Publishing Co Ltd (1964-1965) NSWR 383). 367The initial difficulty for Mahir's quantum meruit claim is that, as Williams DCJ made clear, "indebitatus", "quantum merit" or "restitution" actions, so called, can only occur in the absence of an enforceable agreement and cannot be used where there is an enforceable agreement. However, where there is an unenforceable agreement, reference may be made to the agreement in order for the court to determine the appropriate amount of compensation (citing Deane J at 257 per Jordan CJ in Horton v Jones (1934) 34 SR (NSW) at 368). 368Mr Cox submits that it is not open to Mahir and his company to claim for the benefit of the work they were required to do under the contract with Mr Brennan, since that was part of the bargain in return for which Mr Brennan had agreed to sell the front block to Huseyin's nominee. It is submitted that Mr Brennan honoured his part of the bargain and entered into the contract for sale of the front block to Mr Kanli as agreed. 369Where the contract provides the means of remuneration for particular work, no claim may be made in restitution ( Horton v Jones [No 2] (1939) 39 SR NSW 305 at 319 referred to with approval in Pavey at 237-8, 240-1). In RJ Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2009] WASC 206, in an analysis of the principles applicable on quantum meruit claim (strictly obiter in light of his Honour's findings on the principal contractual claim), Beech J noted (at [154]) that a well-established exception to the general rule stated in Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635; (2008) 247 ALR 412 was that if the request (to provide services) is made in the context of an enforceable contract, then the claim must be founded in contract not restitution (citing Lumbers at 111 and Pavey at 256). Restitution is not available in a contractual situation where the contract is still on foot as this would subvert the parties' contractual allocation of risk ( Lumbers v Cook ). 370Even assuming that the claim in restitution could be pursued in face of an enforceable contract, Mr Cox submits that here the situation is simply that the Urusoglu family could not complete the purchase. It is said that there is no total failure of consideration of the kind considered in cases such as Roxborough v Rothmans of Pall Mall Aust Ltd [2001] HCA 68; (2001) 208 CLR 516. It is conceded that Mr Brennan (through MSU Management) has received a benefit from the works, but it is said not to be unjust for him to retain that benefit where it was never in contemplation that he would be required to pay for the works. 371Wilcox J in State Bank of New South Wales Ltd v FCT (1995) 62 FCR 371; 132 ALR 653 said : The principle underlying the modern law of restitution is unjust enrichment, the purpose being, in the words of Halsbury at para 630, "to prevent a man from retaining the money of, or some benefit derived from, another which it is against conscience that he should keep". The emphasis is on the position of the beneficiary, not the loss sustained by the claimant. 372Deane J in Pavey said that the concept of unjust enrichment: constitutes a unifying legal concept which explains why the law recognises, in a variety of distinct categories of case, an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognise such an obligation in a new or developing category of case. 373In Lumbers , Gummow, Hayne, Crennan and Kiefel JJ, in their joint judgment, stated (at [85]): The second point to be noted is that unjust enrichment was identified as a legal concept unifying "a variety of distinct categories of case". It was not identified as a principle which can be taken as a sufficient premise for direct application in particular cases. Rather, as Deane J emphasised in Pavey & Matthews , it is necessary to proceed by "the ordinary processes of legal reasoning" and by reference to existing categories of cases in which an obligation to pay compensation has been imposed. " To identify the basis of such actions as restitution and not genuine agreement is not to assert a judicial discretion to do whatever idiosyncratic notions of what is fair and just might dictate ". (my emphasis) On the contrary, what the recognition of the unifying concept does is to assist "in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognise such an obligation in a new or developing category of case " (emphasis in original) 374More is required than proof of a retention of a benefit, that is there must be some additional factor rendering retention of the benefit 'unjust' in the relevant sense, (see Deane J in Pavey and in Lactos Fresh Pty Ltd v Finishing Services Pty Ltd (No 2) [2006] FCA 748, and what was said in David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353, at 378-379, (by Mason CJ, Deane, Toohey, Gaudron and McHugh JJ) that: ... it is not legitimate to determine whether an enrichment is unjust by reference to some subjective evaluation of what is fair or unconscionable. Instead, recovery depends upon the existence of a qualifying or vitiating factor such as mistake, duress or illegality. (my emphasis) 375Similarly, more is required than simply that a request was made for the provision of the goods or services in question (see Christiani and Nielsen Pty Ltd v Goliath Portland Cement Company Limited; Goliath Portland Cement Company Limited v Christiani and Nielsen Pty Ltd [1993] TASSC 156 16 December 1993) per Zeeman J, his Honour there observing that the mere request for work to be done (for the benefit of a third party) and the mere non-payment (by that third party under a contract the first had entered into for the performance of the work, did not give rise to a conclusion that such enrichment as there was unjust.) 376The mistake here asserted is a mistake that Mahir (through his family) would have the benefit of the interests. Huseyin (and Mahir to the extent that he was involved in the arrangements reached with Mr Brennan) seems to have been operating under an assumption or belief that the outcome of the subdivision would be for the sale of the front block to Huseyin's nominee (an assumption that Mr Brennan must have shared, since he asserts that this was the agreement he reached with Huseyin and Mahir). A mere misprediction will not give rise to a basis for unjust enrichment ( Cadorange Pty Ltd (in liq) v Tanga Holdings Pty Ltd (1990) 20 NSWLR 26, at 32; Dextra Bank & Trust Company Limited v Bank of Jamaica [2002] 1 All ER (Comm) 193). Nor, it seems to me, will the fact that the parties were operating on simply a common assumption that was not ultimately fulfilled (at least where it does not appear that the fact that it was not fulfilled was due to the fault of Mr Brennan). 377Here, for example, there might be various scenarios in which the benefit of the front block was not ultimately reaped by the Urusoglu family notwithstanding the expenditure on the sub-division works - say, if the market rose and the fair market value of the front block was such as to make the acquisition of the block such that they did not wish to (or could not) proceed with the purchase. 378The need to establish an 'unjust' factor was again affirmed by the High Court in Farah Constructions v Say-Dee , [2007] HCA 22; (2007) 230 CLR 89, Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ stated at [150]-[151]; First, whether enrichment is unjust is not determined by reference to a subjective evaluation of what is unfair or unconscionable: recovery rather depends on the existence of a qualifying or vitiating factor falling into some particular category; Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation [1988] HCA 17; (1988) 164 CLR 662 at 673 per Mason CJ, Wilson, Deane, Toohey and Gaudron JJ; David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 at 379 per Mason CJ, Deane, Toohey, Gaudron and McHugh JJ. In David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 at 379, Mason CJ, Deane, Toohey, Gaudron and McHugh JJ gave as instances of a qualifying or vitiating factor mistake, duress or illegality. ... Further, principles respecting fiduciary duty have been said to be foreign to unjust enrichment notions because the unjust factors are commonly concerned with vitiation or qualification of the intention of a claimant Edelman, "A Principled Approach to Unauthorised Receipt of Trust Property", (2006) 122 Law Quarterly Review 174 at 177-178. 379In Lumbers v Cook , Gummow, Hayne, Crennan and Kiefel JJ, at [80] said that; ... where one party ... seeks recompense from another ... for some service done or benefit conferred by the first party for or on the other, the bare fact of conferral of the benefit or provision of the service does not suffice to establish an entitlement to recovery ... (my emphasis) 380Their Honours had earlier noted [at 53] that the concept of "free acceptance" was commonly related to a defendant who "did not take a reasonable opportunity open to him to reject the proffered services" (citing Goff & Jones, The Law of Restitution , 7 th edn (2007) [1-019]). No such opportunity was given here. 381In Christiani , Zeeman J observed that the claim there made was one seeking to be protected from the consequences of entering into a contract that, with the benefit of hindsight, might be seen as having been unwise on the basis that there had been unjust enrichment at its expense - and noted that unjust enrichment was not a separate cause of action - at [28].) 382It seems to me that it can be said that Mahir (and, for that matter, Huseyin) chose to carry out the subdivision works at his own expense (or, more accurately, at the expense of his uncle Mr Kanli) on the basis of an expectation that the benefit of those works would be enjoyed when the front block was acquired by Huseyin's nominee (Mr Kanli) but did so in circumstances where they must have realised that if completion of the sale could not take place then they would have lost the benefit of the works. There was no provision in the agreements asserted (on either version) for Mr Brennan to bear the cost of the subdivision works. 383In Christiani it was noted that a commercial decision had been made to perform the work the subject of the subcontract and to look to another party for payment (a decision that might have been wise or foolish) but that, regardless of the wisdom of the commercial decision, there was no occasion to relieve the consequences of that decision by imposing a liability on that other party that, had Christiani wished to protect itself against the risk that had eventuated, Christiani could have sought to include in the initial contractual arrangements. Here, similarly, had Mahir wished to ensure that, if sale of the subdivided block to Huseyin's nominee did not proceed, he would be reimbursed for the works carried out by his company to effect the subdivision, then he could have sought Mr Brennan's agreement to such an arrangement. He did not. Therefore, it seems to me that Mahir assumed the risk that he or his family might not ultimately enjoy the fruits of his labour. 384Reference was made to the statement by the Court of Appeal (at para [123]) in Ford by his Tutor Beatrice Ann Watkinson v Perpetual Trustees Victoria Limited [2009] NSWCA 186; (2009) 75 NSWLR 42 to the effect that the question of request, payment, receipt and benefit should be viewed as matters of substance and not form or legal technicality, in the context of restitutionary actions. 385Insofar as Mr Jacobs invokes the terminology of "free acceptance" of the benefit conferred by the works, Beech J in Baker Nominees (at [174]) noted the test as to when services have been accepted, applied in Brenner v First Artists Management Pty Ltd [1993] 2 VR 221 (at 257-261) and ABB Power Generation Ltd v Chapple [2001] WASCA 412; (2001) 25 WAR 158 (at [15],[20]-[21]), is that stated in Goff & Jones, The Law of Restitution (7th edn, 2007) [1-019] as being where a reasonable person "should have known that the claimant who rendered the services expected to be paid for them, and yet he did not take a reasonable opportunity open to him to reject the proffered services". (His Honour also noted (at [177]), but did not need to address, the doubt as to whether acceptance of a benefit, without a request, would be sufficient to found an action for quantum meruit for work done (as opposed to services provided) referring to paras [82] and [86] of Lumbers .) 386Here, there was no suggestion that Mr Brennan had any expectation that he or MSU Management would be required to pay the cost of the works to complete the subdivision. Those were to be provided by Mahir or his company in order to enable the Urusoglu family to obtain the front portion of the land. 387In conclusion, a claim in restitution does not lie where there is an enforceable contract and the parties' rights can be determined in accordance with that contract. Here, to grant relief on a restitutionary basis would subvert the contractual arrangements as I have found them to be. Mr Brennan did not undertake to pay the cost of the work, nor did Mahir expect him to do so. That is clear from Mahir's own evidence. Mahir must be taken to have accepted that any remuneration for those works/services was to come through the acquisition of the front block by or on behalf of the Urusoglu family and to have (knowingly or otherwise) accepted the risk that if that did not come to fruition, the works would have been carried out at his expense. There is not a question of any free acceptance as that concept is referred to in the authorities, as there was no opportunity to refuse the benefits knowing that otherwise they would have to be paid for by Mr Brennan. 388Therefore I am not satisfied that Mahir has established his quantum meruit claim. Had I been so satisfied, I would nevertheless not have been satisfied that Mahir had established the quantum of that claim at anywhere near the $347,000 asserted by him. While I accept that the payments made by Mr Kanli to third parties (such as the contract supplier and the Council) can be relied upon in establishing the value to Mr Brennan of the works, I am not satisfied that the concrete supply invoice of $90,000 is genuine nor do I consider that the evidence of "cash" payments or cash cheques (unsupported by independent evidence) is sufficiently reliable to accept. Therefore, any quantum meruit claim in my view would have been restricted to the Council fees, cost of the Western Suburbs concrete supply and the total of the invoices that were ultimately produced and marked as Exhibits in the proceedings, those being amounts that I am satisfied were directly referable to the subdivision works. (I do not regard Mahir's assertions as to the cost of such works to be reliable.) 389In my view it cannot be said that there is anything that warrants the conclusion that it is inequitable or unconscionable for Mr Brennan now to retain the benefit of the subdivision works in circumstances where there was no expectation at the time the works were carried out that that he would be required to make payment for those works and he had honoured his side of the bargain by entering into a contract to sell the front block to Huseyin's nominee. (vi) Possession 390Mr Cox submits that if Mr Brennan remains the beneficial owner of MSU Management then he is entitled to an order for possession and mesne profits and that the assessment of the quantum of reasonable rent should be referred for assessment. He points out that no defence was raised to this claim. 391Mesne profits are payable where the defendant occupies the premises as a trespasser. They represent in substance damages for trespass ( Wilson v Kelly [1957] VR 147). They are recoverable until such time as possession is delivered up ( Southport Tramways v Gandy [1897] 2 QB 66). 392While mesne profits may be assessed by reference to the rent that would be payable for the premises, it seems that this is where it represents the fair value of the premises and that there may be a different basis for assessment in appropriate cases. Where the occupant fails to keep the premises in repair then this may also be taken into account. 393I have given some consideration to whether an order for mesne profits should take into account (perhaps be way of offset) reimbursement of those sums that I can be satisfied were expended by Mahir on the subdivision works. However, I have not done so because that would then not take into account the interest payable by MSU Management on the mortgages securing the land during such time as MSU Management has not been able to sell the land to reduce the mortgage because of Mahir's unauthorised possession of the land. 394In the event, I consider that the appropriate order is to order that Mahir pay mesne profits for the period of his occupation until possession is delivered up in accordance with my orders and to refer the assessment of those profits to a referee or associate justice for determination.

Orders 395For the reasons set out above, in proceedings in the Equity Division I dismiss the plaintiffs' claims with costs and in the Common Law Division proceedings I will make a declaration that MSU Management Pty Limited is entitled to possession of the premises and order vacant possession to be provided within a time to be determined following any submissions by Counsel. 396I order Mahir Urusoglu pay to MSU Management Pty Ltd reasonable rent for his occupation of the premises by way of mesne profits and will refer the matter for assessment of such rent. I will hear submissions as to the form of orders and costs.

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