Jana Pty Ltd atf Azizi Family Trust & Anthony Azizi v Ezistripdemo Pty Ltd & Sam Sharan

Judgment Proceedings Background Facts Legal Principles Construction Rectification Estoppel Credit of witnesses Parties' submissions Credibility Construction of the Nomination Deed Surrounding circumstances - Plaintiffs Surrounding circumstances - Defendants Construction of the Nomination Deed - Plaintiffs Construction of the Nomination Deed - Defendants Rectification - the Defendants' cross-claim Mr Sharan's subjective intention Alleged 18 January Conversation 20 January Draft Deed Events of 27 January 2017 Jana and Mr Azizi's post-contractual conduct Rectification - the Plaintiffs' claim Estoppel by convention Defendants' cross-claim Plaintiffs' claim The Evidence Mr Sharan Mr Sam Ayache Mr Michael Ayache Mr Azizi Mr Raheb Mr Scobie Consideration Construction Rectification (a) Preliminary remarks on the evidence (b) Established beliefs and intentions of Mr Azizi and Mr Sharan (c) Events leading up to exchange of the Nomination Deed 1. Gateway Approval is first suggested 2. The Alleged 18 January Conversation 3. 20 January Draft Deed 4. Negotiations of 27 January 2017 Post-contractual conduct Conclusion on rectification Conventional Estoppel Conclusion

Proceedings

1. These proceedings concern the construction and effect of a deed relating to the exercise of call options over a strip of properties that are the subject of rezoning.
2. The First Plaintiff (Jana) entered into a deed with the First Defendant (Ezistrip) on 27 January 2017, where Jana was nominated to exercise Ezistrip's options over seven properties in Bexley, in return for a nomination fee payable in three tranches (Nomination Deed/Deed). Following numerous drafts of the Nomination Deed prior to its exchange, there is a dispute over whether payment of the third tranche is conditional on the Rezoning of the properties (as pleaded by Jana), or must be made 16 weeks after Gateway Approval regardless of whether Rezoning has taken place (as pleaded by Ezistrip).
3. By way of summons, Jana seeks a declaration the proper construction of the Nomination Deed is that the steps required to be taken on the Completion Date, including payment of the third tranche of the Nomination Fee, are not required to be performed until Rezoning of the properties has occurred. Jana also seeks a declaration that, on the proper construction of the Deed, if Rezoning has not occurred by the Final Exercise Time, Jana is entitled to terminate the Deed and a return of the second tranche of the Nomination Fee, and Ezistrip is obliged to repay Jana $100,000 plus GST (Summons, Prayers [11]-[15]).
4. Ezistrip contend the proper construction of the Nomination Deed is that the steps required to be taken on the Completion Date, including payment of the third tranche of the Nomination Fee, are not conditional upon Rezoning, and that only where Completion Date has not occurred by Final Exercise Time will the parties have a right to terminate under clause 10.
5. In the alternative, by way of cross-claim, Ezistrip seek a rectification of the Deed reflecting that the actual or true common intention of the parties was for the steps required to be performed on Completion Date to be conditional upon Gateway Approval of the Rezoning, not the Rezoning itself. Further, or in the alternative, Ezistrip seek an order Jana be estopped from terminating the Nomination Deed or refusing to pay the third tranche on the grounds of conventional estoppel.

Background Facts

1. In around late 2015, Mr Sam Ayache, a real estate agent, became aware of potential rezoning over seven properties located at 8, 8A, 10, 12, 14, 16 and 18 Stoney Creek Road, Bexley (Bexley Properties). Mr Sam Ayache learnt of the rezoning proposal when accompanying a Mr Angelo Elliot, owner of the Forest Inn Hotel which adjoins the Bexley Properties, to meetings with the Rockdale City Council (Council) and the Council's Planning Department. Mr Elliot was interested in a rezoning of his land to construct a car park for the Hotel, and asked Mr Sam Ayache to arrange and accompany him to the Council meeting for this purpose (SA1 [12]-[13]).
2. In December 2015, at the Council Planning Department meeting, the Council representative told Mr Elliot and Mr Sam Ayache the Council would not permit a "spot" rezoning over Mr Elliot's Hotel, but would consider supporting a planning proposal for a block in Bexley, which included the Bexley Properties, to be rezoned for commercial and residential purposes (Bexley Site) (SA1 [16]-[18]).
3. Following this meeting, Mr Sam Ayache approached Mr Sam Sharan, the sole director and shareholder of Ezistrip (and brother-in-law of Mr Sam Ayache), asking whether he was interested in acquiring options to purchase the Bexley Properties, to which Mr Sharan replied he was (SA1 [24]-[25]; SS [5]).
4. Over the course of the following 12 months, Mr Sam Ayache negotiated with the owners of the Bexley Properties to have them enter into call option deeds, where each owner granted an option to purchase their property at an agreed price in return for an "option fee."
5. Between 14 April 2016 and 8 December 2016, Ezistrip entered into seven separate call option deeds with the Bexley Properties' owners (Option Deeds) (CB B tab 3 - 9). Each of the Option Deeds provided the grantee of the option (being Ezistrip) had the right to appoint and nominate a "Nominee" to exercise the call option in accordance with the terms of the Deed. Further, the options could be exercised within the "call option period" of 18 months following the commencement date, being the 43rd day after the date of the particular Option Deed. The earliest date of expiry for the Option Deeds was 27 November 2017, being the Option Deeds for 10 and 12 Stoney Creek Road, Bexley (CB B tabs 3 and 4).
6. In about August 2016, Mr Elliot provided Mr Sam Ayache a copy of the "Planning Proposal" prepared by town planning consultants regarding the amendments to the Rockdale Local Environment Plan 2011 (CB D 546-606) relating to the Bexley Site. The Planning Proposal estimated Gateway Approval or "Gateway Determination" would be issued in approximately March 2017 (CB D 604; SA1 [74]).
7. On or about 8 September 2016, Mr Sam Ayache phoned Mr Anthony Azizi, a director of Jana, to ask if he was interested in the Option Deeds after Mr Sharan had told him he was wanting to sell them (SA1 [36]). That same day, Mr Sam Ayache followed through the phone conversation with an email providing further details about the Bexley Properties (CB C 1; SA1 [37]).
8. On or about 14 August 2016, Mr Azizi phoned Mr Sam Ayache asking whether the sale of the Option Deeds was "still on the table." According to Mr Sam Ayache, he responded saying he was finalising the Option Deeds, and that it might be possible to build 80-90 new units on the site. Mr Azizi said he "liked" the proposal and asked Mr Sam Ayache to send though a contract for the deal (SA1 [38]).
9. Mr Sharan told Mr Sam Ayache to instruct his brother and solicitor at OneGroup Legal, Mr Michael Ayache, to prepare a contract (SA1 [39]; SS [16]-[17]). After initially suggesting the contract be in the form of a put and call option agreement (SA1 [40]-[41]; CB C 19-21), Mr Sam Ayache agreed with Mr Michael Ayache's suggestion the contract be in the form of a nomination deed (MA [12]; CB C 25).
10. On 14 November 2016, Mr Sam Ayache accepted Mr Azizi's offer to work at Perennial Property (NSW) Pty Ltd (Perennial), a company Mr Azizi was a director and shareholder of and which is now known as Trinity Projects and Maintenance Pty Ltd, and commenced working as Site Acquisition and Project Marketing Manager (SA1 [42]; AA1 [7]).
11. On 14 December 2016, the Bayside Council passed a resolution supporting the proposal for the Rezoning of the Bexley Properties (CB C 28-41).
12. On 16 December 2016, Mr Michael Ayache commenced working on the first draft of the Nomination Deed, under which Ezistrip would appoint Jana as Nominee under the Option Deeds (MA [17]).
13. On 21 December 2016, Mr Sam Ayache delivered the first draft of the Nomination Deed in hard copy to Mr Christopher Raheb, solicitor at Oxford Legal acting for Jana on the Nomination Deed.
14. The salient terms in the first draft of the Nomination Deed (CB C 42) included the following.
15. Clause 1.1, setting out the defined terms, included: Completion Date means the date that is the earlier of: (a) the date that the Nominee exercises any Option Deed; or (b) the date being 9 weeks after the Rezoning of the Property takes effect; or (c) the date that the Nominee and any Vendor enter into a binding Land Contract. … Final Exercise Time means 5pm on 4 October 2017. …. Rezoning means the Rezoning of the Properties to B4 Mixed Use Zone as defined in the Rockdale Local Environmental Plan 2011.
16. Clause 9 set out the steps the parties were required to take on Completion Date: 9 Completion Date 9.1 On the Completion Date, Ezistripdemo must deliver to the Nominee: (a) the Nomination Notice referred to in clause 8.1(a), duly executed by the Ezistripdemo [sic] nominating the Nominee to exercise the Option; (b) the original Option Deed; and (c) a duly executed withdrawal of any caveat in registrable form to remove any caveat lodged under the title register of the Property. 9.2 On the Completion Date, the Nominee must deliver to the Ezistripdemo [sic]: (a) a bank cheque for the balance of the balance of the Nomination Fee specified in Item 2(c) of the Schedule payable as Ezistripdemo directs[.]
17. Clause 10 titled "Deed Conditional" provided: 10 Rezoning of Property 10.1 This deed is conditional upon the Rezoning of the Property. 10.2 If the Rezoning of the Property does not occur on or before 5 October 2017, then either party may terminate this deed, at which time: (a) The Nomination Fee paid in accordance with Items 2(a) and (b) of the Schedule will be refunded to the Nominee; and (b) Neither party shall have any Claim against the other party.
18. Item 2 of the Schedule set out the amount and timing of the payment of the Nomination Fee: ITEM 2 NOMINATION FEE Amount: $5,450,000 plus GST Payable as follows: (a) $100,000.00 plus GST upon execution of this deed; and (b) $650,000.00 plus GST on or before 26 February 2017; and (c) $4,700,000 plus GST on the Completion Date.
19. On 22 December 2016 at 11:36am, Mr Raheb sent an email to Mr Michael Ayache attaching a marked-up version of the Nomination Deed (CB C 73; MA [21]). The solicitors continued to exchange a series of marked-up versions of the Nomination Deed over emails between 22 December and 26 December 2016 (CB C 88-119). During these dates, there were no significant amendments to the Nomination Deed beyond a change to Item 2(b) of the Schedule making payment of the second tranche of the Nomination Fee due on or before 26 March 2017 following a request from Mr Raheb.
20. On 26 December 2016 at 4:48pm, Mr Ayache attached a further marked-up version of the Nomination Deed to Mr Raheb, amending clause 9 to read (CB C 120): 9 Completion Date 9.1 On the Completion Date, Ezistripdemo must deliver to the Nominee: (a) the Nomination Notice referred to in clause 8.1(a), duly executed by the Ezistripdemo [sic] nominating the Nominee to exercise the Option; (b) the original Option Deed; and (c) a duly executed withdrawal of any caveat in registrable form to remove any caveat lodged under the title register of the Property. 9.2 On the Completion Date, the Nominee must: (a) validly exercise each Option granted under each Option Deed in accordance with the terms of each Option Deed; and (b) deliver to the Ezistripdemo [sic] a bank cheque for the balance of the balance of the Nomination Fee specified in Item 2(c) of the Schedule payable as Ezistripdemo directs[.] (Changes underlined)
21. Clause 9 remained as amended on 26 December 2016 when the Nomination Deed was executed on 27 January 2017.
22. A few days after 31 December 2016, when Mr Sam Ayache had returned to Sydney from holidays, he met with Mr Sharan at a family gathering (SA1 [51]-[52]; SS [21]). At this gathering, according to the Defendants, Mr Sharan told Mr Sam Ayache he wanted the Nomination Deed "subject to Gateway Approval" instead of Rezoning, and for settlement to take place eight to nine weeks after Gateway Approval (SA1 [51]-[52]; SS [21]).
23. On 9 January 2017, Mr Raheb sent an email to Mr Michael Ayache, copying in Mr Azizi and Mr Sam Ayache which read (CB C 229): Hi Michael I am back on board now and my client is anxious to secure an exchange how do we move forward to achieve this?
24. According to Mr Sam Ayache, on 18 January 2017 when he returned to work at Perennial, he had a conversation with Mr Azizi in the office regarding the settlement date, with words to the following effect (SA1 [53]) (Alleged 18 January Conversation): Mr Sam Ayache: "I spoke to the vendor and he wants the exchange to be subject to Gateway approval, with settlement to take place after nine weeks. Michael [Ayache] will be sending through an amended agreement for Chris [Raheb] to review." Azizi: "I will accept Gateway approval, but I will need to discuss the settlement period with Chris. Get your solicitor to send the amended agreement through, and Chris will have a look at it."
25. Mr Azizi denied the Alleged 18 January Conversation took place (T138/5-7).
26. According to the Defendants, following the Alleged 18 January Conversation, Mr Sam Ayache alleged he phoned Mr Michael Ayache and informed him the parties had "now agreed" the deal was "subject to Gateway Approval" (SA1 [54]; MA [39]). Mr Sam Ayache also alleged he told Mr Michael Ayache Mr Sharan had requested settlement take place nine weeks after Gateway Approval, and asked Mr Michael Ayache to amend the version of the Deed to reflect these changes to the settlement period even though Mr Azizi was still discussing the topic with his lawyer (SA1 [54]; MA [39]).
27. Mr Michael Ayache took a file note of his phone conversation with Mr Sam Ayache "probably within about ten seconds of getting off the phone" (T100/24-26). The file note provided (CB C 243) (18 January File Note): 18/01 T/o Sam Spoke to parties + the agt is now subject to Gateway approval V wants nine weeks after gateway app Has P agreed? P agreed to Gateway approval but discussing period still but prepare based on gateway, plus nine weeks and will advise if any change.
28. Two days later, on 20 January 2017, Mr Michael Ayache made further amendments to the draft Nomination Deed (CB C 245) (20 January Draft Deed). The amendments included the following.
29. The definition of "Gateway Approval" was added under clause 1.1, providing: Gateway Approval means the date that the Minister for Planning (or delegate, or any other authority with the power to approve the Rezoning of the Property) decides whether the planning proposal for the Rezoning of the Property can proceed (with or without variation) and subject to other matters including further studies being undertaken, public consultation, public hearings, agency consultation and time frames.
30. The definition of "Completion Date" provided: Completion Date means the date that is the earlier of: (a) the date that the Nominee exercises the option to purchase the Property pursuant to rights to purchase granted under an Option Deed; or (b) the date being nine weeks after the date of Gateway Approval of the Rezoning of the Property; or (c) the date that the Nominee and a Vendor enter into a binding Land Contract. (Changes underlined)
31. Further, reference to "5pm on 4 October 2017" in the original clause 10 was replaced with "Final Exercise Time" which was defined to mean "5pm on 4 October 2017." Consequently, clause 10 provided: 10 Rezoning of Property 10.1 This Deed is conditional upon the Rezoning of the Property. 10.2 If the Rezoning of the Property does not occur on or before the Final Exercise Time 5pm on 4 October 2017, then either party may terminate this deed, at which time: (a) The Nomination Fee paid in accordance with Items 2(a) and (b) of the Schedule will be refunded to the Nominee; and (b) Neither party shall have any Claim against the other party.
32. On 20 January 2017 at 9:06am, the same day Mr Michael Ayache made the above amendments, he emailed the 20 January Draft Deed to Mr Raheb, copying in Mr Sam Ayache, with the amendments in mark-up as an attachment (CB C 244). The subject of the email was 'Stoney Creek Road Site.'
33. In cross examination, Mr Azizi agreed he had instructed Mr Raheb he was "happy with the changes" in Mr Michael Ayache's 20 January Draft Deed attached to the 20 January email (T143/28-34).
34. On 23 January 2017, Mr Azizi's sister was involved in a serious car incident and taken to hospital.
35. On 23 January 2017 at 11:04am, Mr Raheb sent an email in reply to Mr Michael Ayache's email of 20 January with the subject 'RE: Stoney Creek Road Site,' copying in Mr Sam Ayache, which read (CB C 271): Michael that is fine to proceed with. The main thing is that the provision in the agreement that it is a proviso that all of the properties transfer is still in.
36. On 23 January at 5:57pm, Mr Michael Ayache sent Mr Raheb an email attaching what was described as an "execution version" of the Deed, in reply to Mr Raheb's email from 11:04am that day (CB C 272; MA [44]). This version accepted all the changes Mr Michael Ayache had made in the 20 January Draft Deed, which relevantly included the addition of the 'Gateway Approval' definition, and amendment to the definition of Completion Date as being nine weeks after the date of Gateway Approval, rather than Rezoning.
37. On 27 January 2017, Mr Raheb sent a series of emails to Mr Michael Ayache. At 10:29am, in an email with the subject 'Amendment to the Deed,' Mr Raheb said (CB D 301): Dear Michael I have just received instructions from my client that they wish the Deed to be amended to reflect the following that it is conditional upon the properties being rezoned to B4 mixed use with a minimum FSR of 2:1 and the bonus of 0.5:1 as defined in the Rockdale Local Environmental Plan 2011. The Height is to be a minimum of 16 metres with a bonus 3 metres as defined in the Rockdale Local Environmental Plan 2011.
38. Less than an hour later, on 27 January 2017 at 11:20am, Mr Raheb sent a further email to Mr Michael Ayache (subject Re: Stoney Creek Road Site) (CB D 302), in reply to Mr Michael Ayache's email of 23 January 2017 (CB C 272). This email provided: Michael my client seems to think that the completion date will be in October 2017 not nine weeks after the date of the Gateway Approval of the rezoning of the property. Can you please check your records. My client is adamant that the deal was a completion date in October 2017.
39. Just over an hour later, on 27 January 2017 at 12:38pm, Mr Raheb sent a further additional email to Michael Ayache with the subject 'Bexley,' which opened with the following (CB D 305): Dear Michael I apologise for my late instructions but I have been asked to press for an October 2017 settlement as well. This would mean amending the completion date to allow for this.
40. On 27 January 2017 at 1:07pm, Mr Raheb sent two emails to Mr Azizi and Mr Luke Scobie, a consultant working with Mr Azizi, forwarding the email he sent to Mr Ayache at 10:29am that morning (CB D 306), and the email he sent to Mr Ayache at 12:38pm (CB D 308).
41. On 27 January 2017 at 1:12pm, Mr Michael Ayache replied to Mr Raheb's email sent to him at 11:20am that day (subject Re: Stoney Creek Road Site) (CB D 310). This email provided: Dear Chris My client will not agree to this amendment.
42. On 27 January 2017 at 1:15pm, Mr Raheb sent a further email to Mr Azizi and Mr Scobie, forwarding the chain of emails with the subject 'Re: Stoney Creek Road Site,' which included Mr Michael Ayache's response of 1:12pm (CB D 314).
43. On 27 January 2017 at 1:18pm, Mr Raheb replied to Mr Michael Ayache's email of 1:12pm asking what his client would agree to (subject Re: Stoney Creek Road Site) (CB D 318). Mr Michael Ayache replied at 1:19pm (subject Re: Stoney Creek Road Site) stating (CB D 322): As is. Gateway Approval plus 9.
44. On 27 January 2017 at 1:25pm, Mr Raheb replied to Mr Michael Ayache (subject Re: Stoney Creek Road Site) stating (CB D 326): Michael if that is your client's stance then it will be a deal braker [sic].
45. On 27 January 2017 at 1:26pm, Mr Michael Ayache replied to Mr Raheb (subject Re: Stoney Creek Road Site) stating (CB D 331): Noted. Best to take up with Sam as he negotiated the deal.
46. On 27 January 2017 at 1:27pm, Mr Raheb replied to Mr Michael Ayache (subject Re: Stoney Creek Road Site), stating "No problems" (CB D 301).
47. Also on 27 January 2017, Mr Sam Ayache and Mr Scobie had discussions about the timing of settlement. The substance of these discussions was disputed in the proceedings. Mr Sam Ayache alleged Mr Scobie told him he would need settlement to be 16 weeks after Gateway Approval (SA1 [57]-[58]) whereas Mr Scobie alleged he told Mr Sam Ayache he would need settlement to be 16 weeks after Rezoning (LS [18]-[20]).
48. At around 1:00pm on 27 January 2017, Mr Sam Ayache alleged he spoke to Mr Sharan, and after negotiating back and forth on various occasions with both Mr Sharan and Mr Scobie about the time period, Mr Sam Ayache and Mr Scobie agreed to dating settlement at 16 weeks after Gateway Approval (SA1 [58]-[62]; SS [23]-[24]).
49. In the afternoon of 27 January 2017, Mr Azizi paid the first tranche of $110,000 by way of bank cheque (CB D 344). The timing and location of this payment and recipient of the bank cheque was disputed in proceedings (see SA1 [63]; AA1 [37]; MA [58]).
50. Later in the afternoon of 27 January 2017, Mr Raheb and Mr Sam Ayache attended the offices of Mr Michael Ayache's law firm, OneGroup Legal, to exchange the Nomination Deed (MA [55]-[56]; SA1 [64). Mr Raheb and Mr Michael Ayache made the following handwritten amendments to the definitions in clause 1 of the Nomination Deed: Completion Date means the date that is the earlier of: (a) the date that the Nominee exercises the option to purchase the Property pursuant to rights to purchase granted under an Option Deed; or (b) the date being 916 weeks after the date of Gateway Approval of the Rezoning of the Property; or (c) the date that the Nominee and a Vendor enter into a binding Land Contract; or (d) the Final Exercise Time. Rezoning means the Rezoning of the Properties to B4 Mixed Use Zone as defined in the Rockdale Local Environmental Plan 2011 with a minimum height of 16 metres, with the ability to increase height by a further 3 metres, and a minimum floor space ratio of 2:1, with the ability to increase to 2.5:1. (Changes underlined)
51. The parties formally exchanged counterparts of the Nomination Deed.
52. On 8 March 2017, the NSW Department of Planning & Environment (DPE) granted gateway approval over the Bexley Site, in a document titled "Gateway Determination" (CB D 361) (Gateway Approval).
53. On 9 March 2017 at 2:25pm, Mr Sam Ayache forwarded an email to Mr Michael Ayache from Mr Josh Ford of Bayside Council, attaching a cover letter from the DPE to Bayside Council, informing the parties the DPE had issued the Gateway Approval for the Bexley Site, and a copy of the Gateway Approval itself (CB D 358).
54. On 13 March 2017, Mr Azizi and Mr Scobie attended their first minuted meeting with Mr Sam Ayache to discuss the Bexley Properties. Whether Mr Azizi had seen a copy of the Gateway Approval prior to or at this meeting was disputed in these proceedings (see SA 3 [7]; LS [24]).
55. The substance of discussions at the 13 March meeting was also disputed in these proceedings, but both parties agreed Mr Sam Ayache raised settlement taking place in 16 weeks since Gateway Approval had occurred (see SA1 [67]; LS [24]-[27]; AA1 [38]).
56. Minutes dated 13 March 2017 at 4:39pm were made for this meeting (CB D 364). These minutes included the following: Discussion Topics 1. Land Acquisitions Money for Deposit EOM $650k Settlement 16 Weeks - approx. 9th July 2. Planning Status a. Gateway Approval - Sam to send approval and Document Approved …
57. On 13 March 2017 at 10:57pm, Mr Sam Ayache sent soft copies of the Gateway Approval and DPE covering letter to Mr Azizi and Mr Scobie (CB D 365).
58. On 17 March 2017, Mr Michael Ayache caused his secretary Ms Maggie Elkington to send a letter by email to Mr Raheb of Oxford Legal, informing him Jana was due to pay Ezistrip the third payment of $4.7 million on 28 June 2017, based on Completion Date falling on that day, being 16 weeks after Gateway Approval on 8 March 2017. The letter read (CB D 396-403): We confirm that Gateway Approval was issued on 8 March 2017 and we attach a copy of the Gateway Determination. Based on the definition [of "Completion Date" in the Nomination Deed], presently the Completion Date would [sic] fall on 28 June 2017. We confirm that on 28 June 2017 our client will be in a position to provide the documents referred to in clause 9.1 and we ask that you ensure you will be in a position to comply with clause 9.2 and exercise the Options as well as providing [sic] our office with a bank cheque for $4.7 million plus GST.
59. The Gateway Approval was attached to the letter.
60. On 21 March 2017, Mr Azizi, Mr Scobie, and Mr Sam Ayache had their second meeting to discuss the Bexley Properties. The substance of discussions regarding settlement were disputed in these proceedings (SA1 [70]; LS [30]).
61. Minutes were made at the 21 March meeting (CB D 405), and it is accepted Mr Scobie was the author of these minutes (T219/26). These minutes again note "Settlement 16 Weeks - approx. 9th July." The minutes also include the following: 3. Planning Status a. Gateway Approval - b. 12 month LEP Council - 18 month Risk.
62. According to Mr Scobie, the 21 March meeting was the first time he was told Rezoning might take place between 12 and 18 months after Gateway Approval (LS [31]).
63. On 23 March 2017 at 2:25pm, Mr Raheb sent an email to Mr Michael Ayache (with Mr Sam Ayache copied in), referring to an earlier call and requesting an extension for the payment of the second tranche of the Nomination Fee, being the $650,000, to be paid on 30 March 2017 (as opposed to 26 March 2016) without penalty (CB D 409).
64. On 23 March at 5:38pm, Mr Michael Ayache replied to Mr Raheb's email, noting Ezistrip consented to payment of the second tranche on 30 March 2017, with time being of the essence (CB D 417).
65. On 30 March 2017, Jana paid $715,000 (being $650,000 plus GST) into OneGroup Legal's trust account as payment of the second tranche of the Nomination Fee (MA [64]; CB D 445).
66. On 14 June 2017, Colin Biggers & Paisley Lawyers, on behalf of Jana, sent a letter by email to Mr Michael Ayache in response to his letter to Mr Raheb dated 17 March 2017 (CB D 483). This letter informed Mr Michael Ayache Colin Biggers & Paisley Lawyers now acted for Jana, and unless Rezoning of the Bexley Properties occurred by 28 June 2017, Jana was not required to pay the third tranche of the Nomination Fee, pursuant to clause 10 of the Nomination Deed.
67. On 21 June 2017, Mr James Neal of Colin Biggers & Paisley Lawyers sent a follow through email to Mr Ayache requesting a response to his letter of 14 June 2017 (CB D 486).
68. On 21 June 2017, Mr Michael Ayache replied to Mr Neal's email saying it was a mistake clause 10 had not been amended to read "Gateway Approval of the Rezoning of the Property" as opposed to only referring to the "Rezoning of the Property" (CB D 488). Mr Michael Ayache further noted it was the parties' intentions to have Completion Date take place 16 weeks after Gateway Approval, as reflected in the amended definitions, and thus Jana was obliged to pay Ezistrip the $4.7 million on 28 June 2017.

Construction

1. The proper approach in construing commercial contracts was set out by the High Court (French CJ, Nettle and Gordon JJ) in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (S99/2015; S102/2015) (2015) 256 CLR 104 (Mount Bruce Mining) at [46] - [52]: [46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. [47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. [48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning. [49] However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals. [50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations. [51] Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption "that the parties ... intended to produce a commercial result". Put another way, a commercial contract should be construed so as to avoid it "making commercial nonsense or working commercial inconvenience". [52] These observations are not intended to state any departure from the law as set out in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales and Electricity Generation Corporation v Woodside Energy Ltd. We agree with the observations of Kiefel and Keane JJ with respect to Western Export Services Inc v Jireh International Pty Ltd. (citations omitted) (See the judgments of Bell and Gageler JJ at [119] - [121] and Kiefel and Keane JJ at [107] - [113] which are of similar effect).
2. Mount Bruce Mining was most recently approved by the High Court in Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12 (Ecosse) at [73] and cited by the New South Wales Court of Appeal in CSR Limited v Adecco (Australia) Pty Limited [2017] NSWCA 121 at [154].
3. In Ecosse, the High Court (Kiefel, Bell and Gordon JJ) provided further guidance on the construction of commercial contracts at [16], citing Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640: It is well established that the terms of a commercial contract are to be understood objectively, by what a reasonable businessperson would have understood them to mean, rather than by reference to the subjectively stated intentions of the parties to the contract (Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656 [35] and the cases at fn 58; [2014] HCA 7). In a practical sense, this requires that the reasonable businessperson be placed in the position of the parties. It is from that perspective that the court considers the circumstances surrounding the contract and the commercial purpose and objects to be achieved by it (Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656-657 [35] and the cases at fn 60).
4. In construing the objective meaning of the words of the contract, the Court may resort to surrounding circumstances where there is an ambiguity or in circumstances where the words are susceptible of more than one meaning; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352 per Mason J.
5. However, there are strict limitations on the sort of materials going to surrounding circumstances that can be used for the purposes of detecting the objective intention of the parties. Objective evidence of the surrounding circumstances known to the parties includes their "knowledge of the genesis of the transaction, the background, the context [and] the market in which the parties are operating"; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ. Allsop P expressed the following view in Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 (Franklins) at [24]: [24] The High Court authorities to which I have referred and in particular Pacific Carriers v BNP Paribas and Toll (FGCT) v Alphapharm, and the recognition of the significance of the objective theory assist in appreciating the scope of the evidence that is admissible. The evidence, to be admissible, must be relevant to a fact in issue, probative of the surrounding circumstances known to the parties or of the purpose or object of the transaction, including its genesis, background, context and market in which the parties are operating. What is impermissible is evidence, whether of negotiations, drafts or otherwise, which is probative of, or led so as to understand, the actual intentions of the parties. Such evidence might be legitimate, however, if directed to one of the legitimate aspects of surrounding circumstances. The distinction can be subtle in any particular case. As Macfarlan JA and I said in Kimberley Securities Ltd v Esber [2008] NSWCA 301 at [5]; (2008) 14 BPR 26,121: [5] The possible subtlety of the distinction can be seen in Lord Wilberforce's reasons in Prenn v Simmonds at 1384-1485, and the recognition that the objective commercial aim may, possibly, be ascertained from some aspect of what has passed between the parties. The distinction can also be seen in what Mason J said in Codelfa at 352 about prior negotiations and their legitimate use "to establish objective background facts which were known to both parties and the subject matter of the contract", and their inadmissibility "in so far as they consist of statements and actions of the parties which are reflective of their actual intentions or expectations".
6. As noted by the Defendants, various drafts of a deed have been considered by the High Court to fall within such objective evidence in construing the executed deed; Royal Botanical Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 at [26] and [30] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.
7. Further, in construing written contracts, it is common ground the Court is to have regard to all the words used "so as to render them all harmonious with one another"; Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99 at 109 per Gibbs J. As the plurality (Gleeson CJ, McHugh, Gummow and Kirby JJ) remarked in Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 at [16], in construing instruments such as commercial contracts "preference is given to a construction supplying a congruent operation to the various components of the whole."

Rectification

1. French CJ made observations about the distinction between rectification and construction in Simic v New South Wales Land and Housing Corporation [2016] HCA 47; (2016) 91 ALJR 108 (Simic) at [20]: [20] There is a conceptual distinction between construction and rectification but that does not mean that there is not a close connection in their practical operation. Professor Carter has pointed to the close relationship between construction and rectification and the pragmatic view that the fundamental difference between them lies in the ability to use the prior negotiations of the parties. However, he has properly acknowledged the difference of principle between mistakes which can be corrected by construction and those for which a formal order is required, commenting that: "The fact that rectification is a remedy informed by matters such as the prevention of unconscionable conduct must still have some relevance." (footnote omitted) As to that, it may be added that the relevance is considerable given the historical and doctrinal bases upon which rectification is granted. (footnotes omitted)
2. The joint judgment (Gageler, Nettle and Gordon JJ) in Simic went on to set out the key principles of rectification at [103] - [104]: [103] Rectification is an equitable remedy, the purpose of which is to make a written instrument 'conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately'. For relief by rectification, it must be demonstrated that, at the time of the execution of the written instrument sought to be rectified, there was an 'agreement' between the parties in the sense that the parties had a 'common intention', and that the written instrument was to conform to that agreement. Critically, it must also be demonstrated that the written instrument does not reflect the 'agreement' because of a common mistake. Unless those elements are established, the 'hypothesis arising from execution of the written instrument, namely, that it is the true agreement of the parties' cannot be displaced. [104] The issue may be approached by asking - what was the actual or true common intention of the parties? There is no requirement for communication of that common intention by express statement, but it must at least be the parties' actual intentions, viewed objectively from their words or actions, and must be correspondingly held by each party. (footnotes omitted)
3. Further, Kiefel J observed rectification will "overcome common mistake by making an instrument conform either to a concluded antecedent agreement or to the continuing concurrent intention of the parties to the instrument"; Simic at [32]. Her Honour went on to explain at [41]-[43]: [41] It has for some time been settled law that the existence of an antecedent agreement is not essential to the grant of relief by way of rectification and that rectification may be granted in cases where the instrument sought to be rectified is the only agreement between the parties.57 The focus of the courts turned to the common intention of the parties up to the time the relevant instrument was made. That intention must be proved by admissible evidence and proved to a high standard. In a passage from Fowler, which has been cited with approval by this Court, Lord Chelmsford said that: "a person who seeks to rectify a deed upon the ground of mistake must be required to establish, in the clearest and most satisfactory manner, that the alleged intention to which he desires it to be made conformable continued concurrently in the minds of all parties down to the time of its execution." [42] What is necessary to be shown is the actual intention of each of the parties. This has often been referred to by intermediate appellate courts as the subjective intention of the parties. A court, in determining whether the burden of proof is discharged, may be said to view the evidence of intention objectively, in the sense that it does not merely accept what a party says was in his or her mind, but instead considers and weighs admissible evidence probative of intention. It is in this sense that statements such as that of Hodgson J in Bush v National Australia Bank Ltd, that common continuing intention "must be objectively apparent from the words or actions" of each party, may be understood. [43] It is not to be expected that parties to contractual negotiations will express themselves in terms of their intentions. It is therefore to be expected that proof to the necessary standard will usually require some manifestation of the intention of each party by their words or conduct and that the requisite common intention will be a matter of inference for the court from that evidence. As Yeldham J pointed out in Bishopsgate Insurance Australia Ltd v Commonwealth Engineering (NSW) Pty Ltd, it would not be sufficient for proof of intention to refer to a party's state of mind which remained undisclosed in the course of negotiations. (footnotes omitted)
4. Her Honour added at [46]: [46] Regardless of these issues it may be said that the traditional approach of the courts, following cases such as Fowler, is to grant rectification only if the instrument in question did not reflect the actual common intention of the parties. That intention is proved in the usual way, by admissible evidence to the requisite standard. The assessment undertaken by the court may, in the sense referred to above, be described as an objective one. But the term "objective" is apt to be misunderstood because it can be applied with respect to a quite different process, as the decision in Chartbrook shows. (footnotes omitted)
5. The Court of Appeal recently cited Simic and collected further authorities on the principles of rectification in Samm Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2017] NSWCA 132 at [107]-[119] per McColl JA (with whom Gleeson JA and Sackville AJA agreed).
6. Rectification will only be granted upon "convincing proof" of the parties holding a common intention inconsistent with what is provided for in the written agreement; Franklins at [451] and [458] per Campbell JA (with whom Allsop P and Giles JA agreed); Pukallus v Cameron (1982) 180 CLR 447 at 452 per Wilson J (with whom Gibbs CJ agreed). As Brightman LJ observed in Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 WLR 505 at 521: The standard of proof required in an action of rectification to establish the common intention of the parties is, in my view, the civil standard of balance of probability. But as the alleged common intention ex hypothesi contradicts the written instrument, convincing proof is required in order to counteract the cogent evidence of the parties' intention displayed by the instrument itself. It is not, I think, the standard of proof which is high, so differing from the normal civil standard, but the evidential requirement needed to counteract the inherent probability that the written instrument truly represents the parties' intention because it is a document signed by the parties.
7. Further, while it is the subject of some debate (see Hodge, Rectification at [3-48]), subsequent conduct may be admissible in assessing the parties' common intention at the date of entering into the contract for the purposes of rectification. Cross on Evidence at [39290] reads: The post-contract conduct of the parties may, of course, be relevant to matters other than the construction of the document. It may show that the parties varied the terms of the contract, or that one of them waived a right under it; it may be relied on to raise an estoppel or to expose illegality; it may be relevant to show the true intention of the party in so far as that is relevant to a claim for rectification. And where there is a dispute as to the existence of a contract, or the contract is oral or there is a question as to how the contract is to be characterised or there is a question of whether a term was incorporated into a contract, or where there is a question of an implied term, the parties' subsequent conduct may be relied upon to establish the existence of that contract, and what the terms of the contract were, but these are not, properly speaking, cases concerning the interpretation of a document. (my emphasis)

Estoppel

1. The elements of common law conventional estoppel are set out by Brereton J in Moratic Pty Ltd v Gordon [2007] NSWSC 5; (2007) NSW ConvR 56-172 (Moratic) at [32], approved by the Court of Appeal (Tobias JA, with whom Campbell JA and Mason P agreed) in Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at [200]: (1) that it has adopted an assumption as to the terms of its legal relationship with the Defendants; (2) that the Defendants has adopted the same assumption; (3) that both parties have conducted their relationship on the basis of that mutual assumption; (4) that each party knew or intended that the other act on that basis; and (5) that departure from the assumption will occasion detriment to the Plaintiffs.
2. As further noted by Brereton J in Moratic at [37], there is no requirement either party has induced, or acquiesced in, the adoption of the assumption by the other, and in particular there is no requirement that either know that the other may incur detriment by reliance on the assumption. Rather, since the assumption must be common to both parties, and may involve a mistaken interpretation of the contract, the possibility that either party might incur detriment by reliance on it will usually not occur to the other.
3. Further, in determining whether there is a mutual assumption, the Court must only have regard to objective conduct, as opposed to the parties' subjective state of mind; Blockbuster Australia Pty Ltd v Karior Pty Ltd [2009] NSWSC 1089 at [87]-[88] per Price J.

Credit of witnesses

1. For good reason, judges are not necessarily bound to accept a witness's sworn testimony, even if the witness is not cross examined. O'Loughlin J collected the authorities in Cubillo v Commonwealth (No 2) (2000) 103 FCR 1 at [118]-[123].
2. Further, in making assessments of credibility, trial judges should refrain from drawing inferences too willingly from the demeanour of witnesses as they present in court. Contemporaneous documents will almost always be a far more reliable guide than observations of a witness's demeanour, especially when they are created against interest. As noted by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy (2003) 214 CLR 118 at [30]-[31]: 30. It is true, as McHugh J has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in as appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana"): "... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour." 31. Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility.
3. In respect of evidence of oral conversations, it is always salutary to refer to the observations of McLelland CJ in Equity in Watson v Foxman (1995) 49 NSWLR 315 at 318-319: Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. … Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration. … What I have said above as to the cause of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act) is equally applicable, mutatis mutandis, to the causes of action based on contract and on equitable estoppel (with the added requirements, in the case of contract that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding, and in the case of equitable estoppel that any representation alleged was clear and unequivocal and was relied on to the substantial detriment of the representee). (my emphasis)
4. The rule in Browne v Dunn (1893) 6 R 67 (Browne v Dunn) may also be relevant to a judge's assessment of a witness's credibility. In this jurisdiction Hunt J subjected the rule in Browne v Dunn to his typically lucid analysis in Allied Pastoral Holdings Pty Ltd v Cmr of Taxation (Cth) [1983] 1 NSWLR 1 (Allied Pastoral) and concluded at 26: I remain of the opinion that, unless notice has already clearly been given of the cross examiner's intention to rely upon such matters, it is necessary to put to an opponent's witness in cross examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings.

Parties' submissions

1. The essential difference between the parties, whichever case is propounded, is the Plaintiffs submit first that the third tranche ($4.7 million) is not payable upon Gateway Approval and is only payable immediately after 5pm on 4 October 2017. Secondly, if Rezoning is not obtained by 5pm on 4 October 2017 the moneys which comprise the first and second tranches under the Deed are to be refunded. The Defendants on the other hand assert, upon Gateway Approval plus 16 weeks, the third tranche is payable and non-refundable, if it occurs before 5pm on 4 October 2017.
2. Both parties submit the evidence they have called, even if rectification is entertained, would lead to the same result they contend for on a proper construction of the Deed. A more detailed overview of their submissions follows.

Credibility

1. Issues of credibility are limited in these proceeding largely to the Alleged 18 January Conversation and thus the credit of Mr Azizi and Mr Sam Ayache.
2. The Plaintiffs submit the court should accept Mr Azizi as a reliable witness given his direct, careful and consistent evidence (Plaintiffs' closing submissions [58]). In contrast, the Plaintiffs submit Mr Sam Ayache gave inconsistent evidence, pointing to his changing evidence on who he was acting for in negotiating the Option Deeds, and his negotiation of the purchase prices being well above market (Plaintiffs' closing submission [57]-[61]).
3. The Plaintiffs also point to Mr Sam Ayache's alleged inconsistent evidence about his responsibilities at Perennial, and his failure to disclose to Mr Azizi when Rezoning was likely to take place, instead telling Mr Azizi and Mr Scobie that it was likely to take place "a month or so" or "approximately 3 months" after Gateway Approval.
4. Further, the Plaintiffs submit Mr Sam Ayache had a perceived conflict of interest arising from his entitlement to receive commission from all parties, and thus it was in Mr Sam Ayache's interest to tell all parties what they wanted to hear (Plaintiffs' closing submission [62]-[65]).
5. The Defendants submit the attack on Mr Sam Ayache's perceived conflict of interest is misguided as Perennial was in an agency agreement with Ezistrip pursuant to which Mr Sam Ayache was entitled to receive commission (Defendants' closing submissions [13]). Further, the Defendants submit Mr Azizi and Mr Scobie's claim they were unaware of Mr Sam Ayache's position is seriously undermined by Mr Sam Ayache's email of 14 November 2016 which expressly refers to "our commission" (Exhibit D4) (Defendants' closing submissions [14]).
6. Further, the Defendants submit Mr Sam Ayache denied ever telling Mr Azizi or Mr Scobie Rezoning would take place around three months after Gateway Approval (SA3 [16]), and it was never put to him that he had done so (T221/14-18).
7. In relation to Mr Azizi, the Defendants submit he was an unsatisfactory witness, giving confusing, internally inconsistent and self-serving evidence (Defendants' closing submissions [18]-[21]).
8. The Defendants draw particular attention to Mr Azizi's understanding of the operative effect of the Completion Date. Mr Azizi initially thought payment of the final tranche was due on Completion Date which included nine weeks after Rezoning (T130/3-29), then recalled Completion Date was to occur nine weeks after payment of the second tranche of the Nomination Fee (T130/45-50), then said only payment of the third tranche, rather than Completion Date, was to take place nine weeks after payment of the second tranche of the Nomination Fee (T131/23-30). The Defendants also point to further transcript references where Mr Azizi gave different views as to the timing of Completion Date and payment of the final tranche of the Nomination Fee (eg T140/35-43; T153/1-2; T139/20-37; T139/10-11) and Mr Azizi's concession he was "a little bit confused" about the Completion Date (T139/10-11) as evidence his current understanding of the Nomination Deed should not be relied upon (Defendants' closing submissions [18]-[19]).
9. In relation to the remainder of the Plaintiffs' witnesses, in summary the Defendants submit Mr Raheb is not an independent witness, Mr Scobie's evidence on overlooking the reference to Completion Date being 16 weeks after Gateway Approval "strained credulity" and Mr Neal's evidence is irrelevant as he did not communicate to either party his understanding of planning law (Defendants' closing submissions [24]-[29]).

Construction of the Nomination Deed

1. Both parties accept the Nomination Deed in its final form is sufficiently ambiguous for the Court to take into account surrounding circumstances (Plaintiffs' closing submissions [7]; Defendants' closing submissions [94]). The first point of distinction in submissions is the ambit of those surrounding circumstances.

Surrounding circumstances - Plaintiffs

1. The Plaintiffs submit the surrounding circumstances the Court should take into account in construing the Nomination Deed are limited to the following: 1. The parties were aware of Gateway Approval being a step on the path to Rezoning, but not Rezoning; 2. Certain Option Deeds would expire in November 2017; 3. The Nomination Fee amount was agreed to by reference to the development potential of the Bexley Properties, and at a time where the risk of Rezoning was being discussed as being borne by Ezistrip; and 4. The Nomination Fee ($5.45 million plus GST) was to be paid in addition to the payment of the "Land Fee" of $9.55 million, being the sum of the purchase prices for the Properties under the land contracts. 5. (Plaintiffs' closing submissions [14]).
2. The Plaintiffs maintain evidence of negotiations, whilst sometimes admissible, does not assist in this case since Mr Azizi and Mr Sharan were not involved in, and hence have no actual knowledge of, the negotiations regarding the wording of the Deed (Plaintiffs' closing submissions [11]).

Surrounding circumstances - Defendants

1. The Defendants submit the Court may take into account a broader range of materials going to surrounding circumstances in construing the Nomination Deed. In addition to the circumstances set out by the Plaintiffs, the Defendants point to the negotiations between the parties and various drafts of the Nomination Deed as relevant and admissible material going to construction (Defendants' closing submissions [94]-[95]; T209/4-6).
2. In particular, the Defendants include the fact the initial proposal for Completion Date was nine weeks after Rezoning, and that this changed from 18 January 2017, as a surrounding circumstance the Court should have regard to (Defendants' closing submissions 95 - (d)). The Defendants submit this evidence is admissible because Mr Azizi had knowledge of those matters, being copied in on emails and in communication with Mr Raheb. Similarly, Mr Sharan had knowledge of those matters, albeit at a higher level, as reflected in his sworn evidence he knew the initial form of the Deed had the Completion Date at nine weeks after Rezoning (SS [17]) and his participation in the conversations about changing the Completion Date to 16 weeks after Gateway Approval (SS [21], [22], [24]). Further, the Defendants submit Mr Michael Ayache, as Mr Sharan's lawyer and agent, had full authority to act on Mr Sharan's behalf and thus his knowledge should be imputed to Mr Sharan (T209/9-20).

Construction of the Nomination Deed - Plaintiffs

1. Having regard to the limited surrounding circumstances, the Plaintiffs submit clause 10 of the Nomination Deed should be construed as imposing the Rezoning of the Bexley Properties as a condition precedent to the steps required to be taken on Completion Date (Plaintiffs' opening submissions [13]).
2. The Plaintiffs submit this construction provides a sensible commercial operation to the Deed as a whole. In support of this, the Plaintiffs submit their construction gives practical content to the right to terminate in clause 10.2 as the termination will operate to relieve each party of existing executor obligations. Further, the Plaintiffs' construction preserves the separation between payments not tied to the Completion Date (being the first and second payments) and the provision for their refund if Rezoning has not occurred (Plaintiffs' opening submissions 14-(b)).
3. In addition, the Plaintiffs submit their construction gives content to the consequences of Rezoning not occurring prior to the Final Exercise Time. Clause 10.2 only provides for the unwinding of the first and second payments, and does not provide for the unwinding steps required on Completion Date because where there is no Rezoning, per clause 10.1, there have been no Completion Date steps (Plaintiffs' opening submissions 14).
4. Finally, the Plaintiffs submit their construction sits consistently with clause 4. Clause 4.2 does not, according to the Plaintiffs, contemplate both 'completion' and the operation of clause 10. Thus the combination of clause 4.1 (and, in particular, the reference to "Completion Date"), and clause 10.2 have the operative effect of meaning Ezistrip has use of the first payment until Completion, at which point there is no further contractual entitlement attached to that payment unless there is no Rezoning and Completion prior to the Final Exercise Time in which case the first payment is to be refunded (Plaintiffs' opening submissions 14).

Construction of the Nomination Deed - Defendants

1. The Defendants submit the proper construction of clause 10 is that it operates as a sunset clause so the parties have a mutual right to terminate the Nomination Deed in circumstances where the Completion Date has not been triggered before 4 October 2017, being the Final Exercise Time. If Completion Date is triggered prior to Final Exercise Time, then clause 10 would have no effect (Defendants' closing submissions [4]). Thus, clause 10.1 only makes obligations conditional upon Rezoning to the extent provided for in clause 10.2 (Defendants' closing submissions [96]-[118]).
2. The Defendants base this construction on the following submissions.
3. First, the Defendants submit their construction is consistent with other clauses of the Deed. Clause 10, on the Defendants' construction, reads in a similar way to clause 11, which provides the Deed is conditional upon the Nominee entering into binding land contracts with Ezistrip (clause 11.1) and then defines the content of that condition in clause 11.2 and following. Further, the Defendants submit clause 4.3 operates on the presumption money is paid on the Completion Date - a presumption which must necessarily be false if the Plaintiffs' construction of clause 10, founded on the possibility of no money being paid on Completion Date, is to be accepted (T211/4-17).
4. The Defendants' construction of the limited operation of clause 10, they submit, is also consistent with other clauses of the Deed which make no reference to the Deed or steps required on Completion Date being conditional on Rezoning. The Defendants point to clause 3 which states payment of the Nomination Fee (including payment of the third tranche) is an essential term, and makes no reference to being subject to clause 10.1. Similarly an act of default (clause 13) does not in any way refer to clause 10.1, nor does the carefully considered definition of Completion Date. On these grounds, the Defendants submit the Plaintiffs' construction of clause 10.1 as a condition prevailing over all other terms does not sit consistently with the Nomination Deed as a whole. Rather, the absence of any reference to clause 10.1 in key clauses and definitions in the Deed supports the Defendants' construction of the clause's limited operation for when Completion Date does not occur before the Final Exercise Time (T211/18-47).
5. The Defendants also submit their construction is consistent with the objective purpose of clause 10, which was - and still is - to provide a sunset clause so either party can terminate with Ezistrip still having sufficient time to arrange finance and exercise the option before November 2017 when the first option expired. The Defendants maintain clause 10 was never intended to ensure steps on Completion Date had to take place after Rezoning. The initial drafting of the definition of Completion Date which included '9 weeks after Rezoning' was intended to achieve this purpose (Defendants' closing submissions [100]).
6. Further, the Defendants submit the Plaintiffs' interpretation of clause 10 as making the Completion Date conditional on Rezoning does not make sense when one looks at (a) and (c) of the definition of Completion Date. On the Plaintiffs' interpretation, if Rezoning had not yet occurred then Jana could act in bad faith in securing the benefit of the Options, or enter into contracts directly with the Vendors without triggering Completion (Defendants' closing submissions [102]-[103]). The Defendants submit the Plaintiffs' interpretation is also contrary to part (d) of the definition of Completion Date, being 4 October 2017, as if Rezoning had not occurred by this date then on the Plaintiffs' case, the parties could not complete even if neither had opted to terminate (Defendants' closing submissions [104]).
7. In addition the Defendants look to the original definition of Completion Date, when clause 10 was already in its final form, and submit none of the elements of that definition contained in the first draft Nomination Deed work consistently with the Plaintiffs' construction that such elements were conditional upon Rezoning first occurring. This is particularly the case with the original (b), namely that Completion Date was "the date being nine weeks after the Rezoning of the Property takes place" (emphasis added). The Defendants note clause 10.1 serves no purposes on the Plaintiffs' construction if, by definition, Completion Date only arises nine weeks after Rezoning (Defendants' closing submissions [105]-[106]).
8. The Defendants also submit the Plaintiffs' construction of clause 10 creates a commercial inconvenience as it introduces an unacceptable degree of uncertainty into the Deed, whereas the Defendants' construction means the parties can reasonably determine their contractual obligations (Defendants' closing submissions [107]-[108]).
9. Further, the Defendants note the Plaintiffs' construction of clause 10 imposing a condition on obligations taken on Completion Date ignores the fact clause 10.1 does not distinguish between those obligations, and obligations that arise at other times under the Deed such as payment of the first two tranches, Jana's delivery of the signed Nomination Notice, and Ezistrip's provision of the Council letter to Jana 14 days after the Deed. The fact nothing in the Deed suggests these obligations are also conditional on Rezoning supports the Defendants' construction that the only obligations conditional upon Rezoning are those provided for in clause 10.2 (Defendants' closing submissions [109]).
10. In addition, the Defendants submit their construction of clause 10.2 only being enlivened where Completion Date has not yet passed is supported by numerous considerations. First, a right to terminate the Deed after the Completion Date would have little utility since the Nomination Fee has already been paid and the Option Deeds have been exercised. Further, if termination was permitted, it would alter the bargain and work an injustice to Ezistrip as Jana would receive the full benefit of exercising the Options, while Ezistrip would still have to refund Jana the first two tranches of the Nomination Fee. Further, clause 10.2 does not provide for the refund of the third tranche of the Nomination Fee, which the Defendants submit shows clause 10.2 assumes Completion Date has not yet passed (Defendants' closing submissions [116]-[117]).
11. Finally, the Defendants submit clause 10.2 is enlivened and does have a purpose where Completion Date has not occurred before the Final Exercise Time (Defendants' closing submissions [117]). In such a scenario where one or both of the parties choose to terminate the Deed, then, consistent with clause 4.2, Jana will be refunded its first and second tranches of the Nomination Fee (Defendants' closing submissions [123]).

Rectification - the Defendants' cross-claim

1. The Defendants submit that should the Court find in favour of the Plaintiffs' construction of the Nomination Deed, then the Deed should nonetheless be rectified to show the steps required on the Completion Date are conditional only upon Gateway Approval of Rezoning, and, as a corollary, the right to terminate the Deed only arises if Gateway Approval, rather than Rezoning, has not occurred by the Final Exercise Time.
2. In summary, the Defendants submit as an alternative to its pleaded construction of clause 10, the Deed should be rectified to read: 10 Rezoning of Property 10.1 This Deed is conditional upon the Gateway Approval of the Rezoning of the Property. 10.2 If the Gateway Approval of the Rezoning of the Property does not occur on or before the Final Exercise Time, then either party may terminate this deed, at which time: (a) The Nomination Fee paid in accordance with Items 2(a) and (b) of the Schedule will be refunded to the Nominee; and (b) Neither party shall have any Claim against the other party. (Changes underlined)
3. The Defendants base their submissions on Mr Sharan's subjective intention, the Alleged 18 January Conversation, the 20 January Draft Deed, the events of 27 January 2017 and Jana and Mr Azizi's post-contractual conduct to support that their changes reflect the actual or true common intention of the parties to the Nomination Deed (Defendants' closing submissions [140]-[183]).

Mr Sharan's subjective intention

1. In respect of Mr Sharan, the Defendants submit he, as the controlling mind of Ezistrip, was unequivocal in his evidence that from late December after instructing Mr Sam Ayache to change Completion Date to be conditional upon Gateway Approval, to the date of signing the Nomination Deed and thereafter, he intended settlement to be subject to Gateway Approval, not Rezoning itself. The Defendants rely on both his sworn (SS [21], [26]) and oral testimony (T40.31-33; T42/12-17; T41/24-30) to support this claim.
2. The Defendants submit Mr Sharan's desire to push the deal forward was consistent with his decision to make the Deed conditional upon Gateway Approval rather than Rezoning, since the former was a precursor to the latter (Defendants' closing submissions [140]-[143]). Further, the Defendants submit Mr Sharan's interchange between using the words "the deal" and "settlement" should not be the basis of an attack on his credibility since he is a layperson who did not intend by his language to distinguish between legal concepts (Defendants' closing submissions [144]).

Alleged 18 January Conversation

1. In respect of the Alleged 18 January Conversation, the Defendants submit Mr Sam Ayache's evidence should be accepted, and, if so, form a further basis for the Defendants' rectification claim. The Defendants maintain the 18 January File Note "carries significant weight" as a near contemporaneous record corroborating Mr Sam Ayache's recollection of the Alleged 18 January Conversation. The Defendants also note it was never put to Mr Michael Ayache that his 18 January File Note was inaccurate (Defendants' closing submissions [147]). The Defendants submit there is no commercial reason why Mr Sam Ayache would make up the Alleged 18 January Conversation, as it was clear enough the contents of that conversation would soon be reflected in the amended Nomination Deed (T216/31-35).
2. Further, the Defendants submit the Alleged 18 January Conversation and agreement to shift Completion Date forward by tying it to Gateway Approval is consistent with Mr Azizi's professed anxiety about securing the exchange of the Deed, as seen in Mr Raheb's 9 January email (CB C 229) and Mr Azizi's own oral testimony regarding the attractiveness of the transaction (T136/38-T137/12, T138/13-14, T123/15-19, T123/47-T124/1). The Defendants also point to Mr Azizi's awareness the proposal for Rezoning had been passed by 18 January 2017, his belief Rezoning would "be likely" to occur if Gateway Approval was issued, and his evidence Mr Sam Ayache told him Rezoning would happen within three months of Gateway Approval, as factors making it more likely Mr Azizi did agree to make the Deed subject to Gateway Approval rather than Rezoning (Defendants' closing submissions [148]-[151]).

20 January Draft Deed

1. In respect of the 20 January Draft Deed, the Defendants submit the Court should take Mr Raheb's response to the Draft Deed in his email of 23 January 2017 (CB C 271) as evidence of Mr Raheb and Mr Azizi's acceptance of the changes to the definition of Completion Date. In support of this, the Defendants point to Mr Azizi's evidence Mr Raheb "may well have" told him about the changes in the 20 January Draft Deed (T143/9-12), Mr Raheb's "usual practice" of telling him about "material changes to the Deed" (T136/14-17), his evidence he was in "constant discussion" with Mr Raheb about the terms of the Deed (T135/27-29), and his assertion he had instructed Mr Raheb he was "happy with" the 20 January Draft Deed. The Defendants submit Mr Azizi's position was consistent with his desire to exchange the Deed expediently, and his belief Rezoning would likely occur within around three months of Gateway Approval (Defendants' closing submissions [152]-[154]).
2. The Defendants also submit Mr Raheb's evidence he "quickly flicked through" the 20 January Draft Deed and did not notice the changes to Completion Date and amendment of Gateway Approval should be rejected in light of Mr Azizi's evidence he specifically instructed Mr Raheb to agree to those changes (Defendants' closing submissions [155]).

Events of 27 January 2017

1. In respect of the events of 27 January 2017, the Defendants submit both the negotiations surrounding the change to the definition of Rezoning, and negotiations surrounding the change to the definition of Completion Date support the parties having a common intention at the time they entered the Deed that steps required on Completion Date were conditional upon Gateway Approval, and not Rezoning.
2. First, in respect of the negotiations surrounding the change to the definition of Rezoning, the Defendants submit nothing in the correspondence and evidence given on these negotiations suggested the parties intended to also change the definition of Completion Date to make it subject to Rezoning. If one were to accept Mr Azizi's evidence the Deed "was always subject to Rezoning" (T147/9-11) then Mr Raheb's email of 10:29am on 27 January requesting the Deed "be amended" to make the Deed conditional on Rezoning would not have been necessary. Further, the Defendants note neither Mr Raheb nor Mr Azizi made any request for the definition of Completion Date to be amended (Defendants' closing submissions [158]-[161]).
3. Secondly, in respect of negotiations surrounding the change to the definition of Completion Date, the Defendants submit such negotiations confirm Mr Azizi intended at the time of entering the Deed that steps required to be taken on Completion Date were conditional upon Gateway Approval, not Rezoning. The Defendants give three reasons for this. First, nothing that occurred on 27 January 2017 changed Mr Azizi's intention on 18 January 2017 to amend the Deed to be conditional upon Gateway Approval. Secondly, Mr Azizi accepted he knew by 27 January 2017 he had to pay the third tranche of the Nomination Fee regardless of whether the Properties had been Rezoned (T150/41-42).
4. Thirdly, neither Mr Azizi nor Mr Raheb ever raised any objection to the amendment of the Completion Date definition, nor could Mr Azizi provide an explanation for why he remained silent on the issue and signed the Deed stating Completion Date was nine weeks after Gateway Approval (Defendants' closing submissions [162]-[166]).
5. The Defendants submit Mr Azizi's alleged belief, disclosed in cross examination, that final payment of the third tranche was distinct to Completion Date, and that the third tranche, once paid, would be held on trust and only released to Ezistrip upon Rezoning are not relevant in determining his actual intention at the time of entering into the Deed (Defendants' closing submissions [167]-[168]). The Defendants also note that while Mr Azizi's apparently unfounded belief the third tranche would be held on trust shows he presently has a confused understanding of the Deed, as at the date of execution, the Defendants maintain Mr Azizi had a good understanding of the Deed, with the evidence showing Mr Raheb explained to him key terms, including the requirement the third tranche was to be paid on Completion Date (T170/42-44) and Jana's obligation to complete under the Deed was determined by Completion Date (T151/15-17). On these grounds, the Defendants submit Mr Azizi understood at the date of signing the Deed that Jana's obligation to complete arose upon the happening of Completion Date.

Jana and Mr Azizi's post-contractual conduct

1. The Defendants submit Jana and Mr Azizi's post-contractual conduct is also consistent with the actual common intention of making the steps required at the Completion Date conditional upon Gateway Approval, not Rezoning. The Defendants point to Mr Azizi's lack of timely response to the letter of 17 March 2017 from OneGroup Legal informing him Completion Date was 28 June 2017 as strong evidence Mr Azizi understood the Deed was conditional upon Gateway Approval and not Rezoning (Defendants' closing submissions [175]-[177]).
2. The Defendants also point to the minutes from the 13 March and 21 March meetings which Mr Azizi participated in, referring to "settlement" taking place in 16 weeks. The Defendants submit the Court should reject Mr Azizi's fresh evidence in cross examination that "settlement" was a mistake, and accept the inference to be drawn from the minutes that Mr Azizi understood, at the time of entering the Deed, it was conditional upon Gateway Approval, not Rezoning (Defendants' closing submissions [180]).
3. Further, the Defendants rely on the evidence showing Mr Azizi was taking steps to progress the Bexley Properties project without waiting for Rezoning to occur (T155/11-23) as further support for Mr Azizi holding the understanding Jana was obliged to complete the Deed even if Rezoning did not occur (Defendants' closing submissions [181]).
4. Finally, the Defendants note Mr Azizi confirmed that upon receiving the Gateway Approval on or about 13 March 2016, he believed Rezoning would take up to 12 months, showing, according to the Defendants, the only relevant date as far as Mr Azizi was concerned was settlement being 16 weeks after Gateway Approval (Defendants' closing submissions [182]).

Rectification - the Plaintiffs' claim

1. The Plaintiffs submit the evidence falls well short of the requisite "clear and convincing proof" to support the Defendants' claim Mr Sharan and Mr Azizi held a mutual intention to make the steps required upon Completion Date conditional upon Gateway Approval, rather than Rezoning as initially agreed upon.
2. By way of summary, first the Plaintiffs submit Mr Sharan's motivation in the lead up to and at the execution of the Deed was to speed up the transaction to ensure early payment, and he was not concerned about the shifting of risk from one party to another. The Plaintiffs point to Mr Sharan's confused understanding of the Deed, interchanging terms such as "deal" and "settlement," and his evidence Mr Michael Ayache never explained to him the mechanics of the transaction (T47/25), as evidence of his lack of engagement with the actual terms of the Deed which "cannot be reconciled with a rectification claim" (Plaintiffs' closing submission [43]-[55]).
3. Secondly, the Plaintiffs submit the Alleged 18 January Conversation did not occur, or if it did, the evidence surrounding the Conversation does not support the Defendants' claim the parties shifted the risk of the transaction without discussing and amending the price. The Plaintiffs frame the Alleged 18 January Conversation as a factual contest between Mr Sam Ayache and Mr Azizi, and claim Mr Azizi's evidence should be preferred for the following reasons (Plaintiffs' closing submission [56]).
4. The Plaintiffs submit Mr Azizi should be considered reliable and Mr Sam Ayache unreliable, on the grounds summarised in the Plaintiffs' submissions on credibility.
5. The Plaintiffs also cite a number of events following the Alleged 18 January Conversation which are inconsistent with the Defendants' version of the Conversation. These include the Defendants' desire to proceed to exchange despite Gateway Approval not being in sight, the fact there was no subsequent discussion of a change in the negotiating fee, the email from Mr Raheb on 27 January maintaining the conditionality by reference to Rezoning (CB D 301), and the continued relevance of Rezoning in Mr Michael Ayache's discussions with his brother on 27 January which is inconsistent with the Defendants' case that the actual form of the Rezoning was an irrelevancy (Plaintiffs' closing submission [82]).
6. The Plaintiffs also note the evidentiary worth of the 18 January File Note is undermined by the fact it is not a verbatim note, that the words used have been interpreted to some extent by Mr Michael Ayache's own recollection, and his claim "gateway approval of the Rezoning" is recorded in the File Note (MA [39]), when it is clear the File Note only refers to "of the Rezoning" (Plaintiffs' closing submissions [97]-[100]).
7. For these reasons, the Plaintiffs submit Mr Sam Ayache's evidence of the Alleged 18 January Conversation should be rejected, and the Court should find the Conversation never occurred.
8. Thirdly, the Plaintiffs submit the correspondence of the 27 January does not support any mutual agreement to change the conditionality of the transaction. The Plaintiffs in particular rely on the email sent by Mr Raheb on 27 January 2017 at 11:20am which, they say, (in terms) expressly proceeds on the footing that the conditioning event was Rezoning, and maintain that this email is inconsistent with any Alleged 18 January Conversation (Plaintiffs' closing submissions [107]).
9. The Plaintiffs also submit the Defendants' reliance on post-exchange events is of no assistance in determining the subjective intention at the time of exchange. In any case, the Plaintiffs submit progress on the development before Rezoning is prudent business practice and has financial benefits, and thus should not be relied on as evidence of the parties accepting the Nomination Deed was no longer conditional upon Rezoning. Further, the Plaintiffs reject the Defendants' claim there was inactivity following the 17 March letter based on Mr Scobie's evidence lawyers were first instructed about a month after that letter (Plaintiffs' closing submissions [132]-[134]).

Defendants' cross-claim

1. The Defendants submit the objective evidence demonstrates both parties adopted the following assumptions as the conventional basis of their relationship: 1. Performance of the steps required to be taken on Completion Date was not conditional upon Rezoning; and 2. If Rezoning did not take place on or before 5pm on 4 October 2015, no right to terminate the Nomination Deed would arise.
2. The Defendants rely on the 18 January File Note corroborating the Alleged 18 January Conversation, the 20 January Draft Deed, Mr Raheb's response that the 20 January Draft Deed was "fine to proceed with," Mr Raheb's silence in response to the 17 March Letter from OneGroup Legal, and Jana and Mr Azizi's post-contractual conduct in progressing with the development (Defendants' closing submissions [192]).
3. The Defendants submit the parties conducted their relationship on the basis of the aforementioned mutual assumptions, by entering the Deed, by Jana paying the first two tranches of the Nomination Fee, and by Jana and Mr Azizi progressing with the development despite Rezoning not yet taking place (Defendants' closing submissions [193]).
4. Further, the Defendants submit each party knew or intended the others would act on the basis of the common assumptions, based on both the evidence going to these common assumptions and Mr Scobie's remarks at the 13 and 21 March meetings in the presence of Mr Sam Ayache (Defendants' closing submissions [194]).
5. Finally, the Defendants submit Ezistrip and Mr Sharan will suffer detriment if Jana is permitted to depart from the assumptions adopted by the parties, as they will be required to refund the first two payments of the Nomination Fee and find another buyer or locate finance in a short period of time (Defendants' closing submissions [195]).

Plaintiffs' claim

1. The Plaintiffs submit the Defendants' pleaded case of estoppel by convention is "hopeless" for several reasons (Plaintiffs' opening submissions [24]). First, the Plaintiffs note evidence of negotiations such as the Alleged 18 January Conversation and the correspondence of 27 January 2017 cannot, by themselves, support the Defendants' claim for estoppel as there needs to be an 'agreement' outside the negotiations which the parties say the negotiations proceeded. The Plaintiffs also submit a written agreement (such as the Nomination Deed) would supersede any oral agreement the parties may have reached at an earlier stage, and that there is no proof of the parties conducting themselves in accordance with the so called common assumption since Completion Date had not arisen. Further, the Plaintiffs point to the lack of evidence the parties' have conducted themselves in accordance with the pleaded "convention", and the lack of detriment the Defendants would suffer, as all that would flow would be performance consistent with the terms of the Nomination Deed (Plaintiffs' opening submissions [23]-[30]).
2. In addition, the Plaintiffs note there cannot be conventional assumptions when the parties have not communicated with each other, and that the Defendants did not lead any evidence on reliance or detriment occurring after 27 January 2017 (Plaintiffs' closing submissions [39]-[40]).

The Evidence

1. Numerous witnesses were called on both sides. This included several lay witnesses, as well as the parties' respective solicitors who were acting for them in the negotiation and exchange of the Deed. It is necessary to canvas both sides' relevant witnesses in some detail to establish the competing narratives and, for the purposes of rectification, detect both parties' actual intentions.

Mr Sharan

1. Mr Sharan affirmed his affidavit on 12 July 2017 (SS). He described himself as sole director and shareholder of Ezistrip. He is the brother in law of Mr Sam Ayache (SS [1]-[2]).
2. He said he had a conversation with Mr Ayache in November 2015 who told him about an investment opportunity in the Bexley area that he may be interested in. He told Mr Ayache to keep him informed and he would be happy to invest (SS [3]-[5]).
3. In about April 2016, Mr Sam Ayache called him again and told him that he had some people who were interested in giving options over their Properties on Stoney Creek Road. Between April and October 2016 Mr Ayache brought Mr Sharan from time to time various Option Deeds for the Bexley Properties. In due course he entered a total of seven Option Deeds over the period April to December 2016 (SS [6]-[7]).
4. In October 2016, he and Mr Ayache had a further conversation about the possibility of selling sites together as one big package. He thought about the transaction and came to the view that the whole site might be worth about $15 million and the purchase price under the Option Deeds was around $9.5 million. He then came to the view that he would sell the Bexley Options for about $5.5 million. He told Mr Ayache of his decision and Mr Ayache said he would get back to him. In about mid October 2016 Mr Ayache told Mr Sharan there was a construction company called Trinity Constructions which was interested in acquiring the site (SS [10]-[15]).
5. In late October 2016, Mr Sharan called Mr Ayache and told him a contract needed to be prepared. As a result, Mr Sharan told Mr Sam Ayache to contact Michael (meaning Michael Ayache, solicitor). Mr Sharan said that he wanted an eight to nine week settlement after Rezoning. Mr Sharan also spoke with Mr Michael Ayache directly and told him to prepare a contract along those lines (SS [16]-[17]).
6. In November - December 2016, Mr Sharan looked at Planning New South Wales website to find out more about the Rezoning process. He remembered reading a page on the website which had information about Gateway Approval. In November 2016 at a meeting with Mr Sam Ayache, he expressed the view that Rezoning may take until at least November. Mr Sharan said he became frustrated with the deal in relation to the Bexley site and he wanted the contract signed before the end of 2016 (SS [18]-[20]).
7. In late December 2016, Mr Sam Ayache went on holiday. After he returned still in late 2016 he asked Mr Ayache what he could do to speed up the process. Mr Sharan said that it was his idea to make the deal subject to Gateway Approval instead of Rezoning, in which case he wanted settlement to occur nine weeks after Gateway Approval which would push the whole thing forward. Mr Ayache said he would talk to Trinity Constructions about it (SS [21]).
8. In about mid-January 2017, Mr Ayache rang Mr Sharan to tell him that Gateway Approval was agreed however at some time later in January 2017 Mr Ayache rang again indicating that "Trinity" wanted to change the date for settlement to 16 weeks after Gateway Approval. Mr Sharan said he was prepared to give Trinity 12 weeks. Mr Ayache rang back to say that they would not budge on a 16 weeks settlement and Mr Sharan told Mr Ayache he would agree to that (SS [22]-[24]).
9. He stated that at all times after the middle of January 2017 and at the time he signed the Nomination Deed it was his intention under the terms of the Nomination Deed that settlement was only subject to the receipt of Gateway Approval and that he did not intend settlement would be subject to Rezoning of the Bexley site which he understood would happen much later (SS [25]).
10. He also stated that when he signed the Nomination Deed on 27 January 2017 it was also his intention under the terms of that Deed that settlement would take place no later than 5pm on 4 October 2017. Mr Sharan also stated that if Jana was permitted to terminate the Deed he did not personally have enough capital to purchase the Bexley Properties and he would need to borrow from other sources. Currently there was no other party interested in the Bexley Properties (SS [27]-[30]).
11. Mr Sharan agreed in cross examination that he saw Mr Sam Ayache as his agent (T36/5-10).
12. He also agreed to pay him $120,000 to drive the project (T36/11-12).
13. Mr Sharan agreed that Mr Ayache negotiated the purchase prices and the Option Prices (T37/15-20). At the time he signed the Option Deeds he had been told that the prices negotiated were market prices (T38/1-5).
14. The price of $15 million which he came up with was what he thought the site would be worth to a developer and the highest price that would be obtained when the land was rezoned (T38/23-40).
15. Mr Sharan said that he became frustrated at not having a deal done and he told Mr Sam Ayache to get on with it (T39/30-50).
16. Mr Sharan agreed that the contract he had signed was conditional upon Rezoning but that was the contract in December (T40/30-35).
17. Mr Sharan agreed that he wanted to get his money earlier (T41/45-50).
18. Mr Sharan agreed that the original negotiation was based on a Rezoning (T42/15-25).
19. It was put to Mr Sharan that when he first agreed to transfer the Option he was taking the risk of getting the property rezoned but then "we" shifted the risk over to the Gateway Approval (T42/35-45).
20. Mr Sharan agreed that a date for completion X weeks after Gateway Approval was always going to be a date prior to the date X weeks after Rezoning (T43/30-35).
21. Mr Sharan also agreed that Gateway Approval was a step before Rezoning and he was asking for Gateway Approval as the starting point instead of Rezoning (T44/5-20).
22. Mr Sharan believed that settlement was agreed subject to Gateway Approval (T45/1-2).
23. Mr Sharan said whenever he used the word "settlement" he meant to use the word "deal" as meaning the same thing (T45/45-50).
24. Mr Sharan agreed he signed the Nomination Deed on 27 January 2017 (T46/40-45).
25. Mr Sharan also agreed that on 27 January there was some debate about the definition of Completion Date. He did not have the document explained to him prior to him signing it and he was content to sign whatever was put in front of him as he trusted Sam and Michael (T47/10-42).

Mr Sam Ayache

1. Mr Sam Ayache affirmed three affidavits dated 12 July (SA1), 20 July (SA2) and 26 July 2017 (SA3).
2. Mr Ayache said that he was a real estate agent and that he was the brother in law of the Second Defendant Mr Sharan. He obtained his Certificate of Registration as a registered real estate agent in 2000. He had numerous jobs but returned to real estate in August 2015 (SA1 [1]-[8]).
3. In late 2015, he said he was approached by his friend Mr Angelo Elliott who was the owner of the Forest Inn Hotel in Bexley. Mr Elliot told him there were a number of properties near the hotel and he would like to build a car park for his patrons (SA1 [12]-[13]).
4. He thereafter had some meetings with representatives of the Planning Department for Rockdale Council. After discussions with the Council he became interested in seeking to secure a number of properties adjoining the hotel with a view to a property development. In or about December 2015 he began knocking on the doors of the Bexley Properties enquiring whether people were interested in selling. He then discussed the matter with Mr Sharan. At various points between December 2015 and December 2016 Mr Sharan entered into various Options Deeds with owners of the Bexley Properties (SA1 [14]-[27]).
5. In about late August 2016, Mr Elliott provided Mr Sam Ayache a copy of the "Planning Proposal" which sought amendments to the Rockdale Local Environment Plan 2011 (Rockdale LEP) in relation to the land use zoning, building height and floor space ratio of a possible development (SA1 [28]-[19]).
6. He had further discussions with Mr Sharan in October 2016. However earlier in September 2016 he had spoken to Mr Azizi and told him he had a site in Stoney Creek Road that may be of interest. He told Mr Azizi that the site was going through a rezoning process which could take about 12 months. On 8 September 2016, he sent an email to Mr Azizi providing certain details in relation to the site (SA1 [34]-[37]).
7. On 14 November 2016, he had a further conversation with Mr Azizi. He told Mr Azizi that the total area when all the Options were exercised would be 3,115 square metres. Mr Azizi said he liked the idea and he would like to have a contract for the whole site (SA1 [38]).
8. On 29 November 2016, he sent an email to Mr Michael Ayache, solicitor, seeking him to draw up a put and call Option. He sent further emails to Mr Michael Ayache on 30 November 2016 (SA1 [40]-[41]).
9. In October or early November 2016, Mr Azizi invited him to join Perennial Property (a property controlled by Mr Azizi) (SA1 [42]-[43]).
10. Based on the information he received, Mr Ayache formed the view that it would likely take until November 2017 before proposed rezoning would occur. He met with Mr Sharan shortly after that and explained the situation to him. In late November or early December 2016 he received a draft contract called the Nomination Deed for the sale of the Options. This was sent to Mr Azizi and his lawyer, Mr Christopher Raheb (SA1 [44]-[48]).
11. He had a conversation with Mr Sharan who told him he would like to try and have the contracts exchanged before Christmas. However in late December he travelled to Melbourne for a holiday with his wife. Soon after returning he met Mr Sharan at a family gathering. He said he thought the contracts should have been exchanged in late November or December and he would like to "do it" subject to Gateway Approval and not Rezoning. Mr Ayache suggested that he and/or Mr Sharan speak to Michael Ayache about it (SA1 [49]-[52]).
12. He asserted that on 18 January 2017 he went to Mr Azizi and had a conversation. He told Mr Azizi that the vendor wanted to exchange subject to Gateway Approval with settlement to take place nine weeks thereafter. He said Michael Ayache would be sending an amended agreement to his solicitor Mr Raheb. Mr Ayache said that Mr Azizi told him that he would accept Gateway Approval but he needed to discuss the settlement period with his solicitor. He reported this to Mr Michael Ayache. Mr Ayache said that he told Mr Sharan a few days later that Mr Azizi had agreed to settlement being subject to Gateway Approval (SA1 [53]-[56]).
13. On the morning of 27 January 2017, he had a conversation with Mr Scobie in the office. He went through the document with Mr Scobie and Mr Scobie indicated that Mr Azizi would need 16 weeks from Gateway Approval for finance reasons. Mr Ayache said to Mr Scobie that nine weeks had been agreed, however Mr Scobie insisted that 16 weeks would be needed (SA1 [57]).
14. Later that afternoon he spoke to Mr Sharan and told him about what Mr Scobie had said. Mr Sharan said that Mr Ayache should go back with 12 weeks (SA1 [58]).
15. He had further conversations with Mr Scobie who insisted that 16 weeks or "we won't proceed". Mr Ayache called Mr Sharan who agreed to 16 weeks. Mr Ayache passed this information on to Mr Scobie (SA1 [59]-[62]).
16. On 27 January 2017, he met Mr Azizi who gave him a cheque for $110,000 for the first tranche under the Nomination Deed (SA1 [63]).
17. He was also present in Mr Ayache's offices with Mr Raheb and Mr Michael Ayache when they made various handwritten amendments to their respective copies of the Nomination Deed (SA1 [64]).
18. Mr Ayache said that in mid December 2016 he had numerous meetings with possible tenants and architecture and town planning firms (SA1 [65]).
19. At one of his weekly meetings with Mr Azizi and Mr Scobie on 13 March 2017 he told them that Gateway Approval had occurred on 8 March and that settlement had to take place 16 weeks later (SA1 [67]).
20. On 21 March he again met with Mr Azizi and Mr Scobie at which point Mr Scobie indicated that settlement would have to take place 16 weeks after Gateway Approval which meant around 9 July. Mr Scobie said that if Gateway Approval occurred in 12 months that would be okay from a finance perspective but 18 months would become a bit of a risk. Mr Scobie and Mr Azizi asked Mr Ayache to prepare an excel spread sheet setting out the Option Periods and Settlement Dates (SA1 [69]-[73]).
21. On 28 June 2017, Mr Azizi told Mr Ayache he did not want him working on the Bexley site anymore. Later that day Mr Ayache resigned from Perennial (SA1 [74]).
22. Mr Ayache affirmed a further affidavit on 20 July. That affidavit responds briefly to the affidavits of Mr Raheb, disputing a number of events.
23. Mr Ayache affirmed a final affidavit of 26 July, responding to numerous paragraphs of the affidavits of Mr Azizi and Mr Scobie, both dated 19 July. Mr Ayache also gave some additional evidence of a number of emails.
24. He stated that he attended a meeting on 28 March 2017 with Mr Azizi and Mr Scobie to discuss the Bexley project. Mr Azizi said to him that on the current numbers the site did not stack up. He responded by saying that the size of the retail component would have an effect on the total amount of residential lots. Mr Scobie said that if the right rental return on the retail component was there, then the site could stack up. Mr Ayache said that Mr Azizi said that he had just spent $15.5 million on a site that did not stack up (SA3 [19]-[20]).
25. Further on 30 May 2017, when he spoke with Mr Azizi, Mr Azizi said that he thought that there were too many one bedroom units in the proposed developments and the numbers did not stack up (SA3 [26]).
26. Mr Ayache agreed in cross examination the object was to acquire all of the blocks (T51/21-30).
27. Mr Ayache said that he had negotiated the Option fees and the purchase price in consultation with Mr Sharan.
28. He thought the Properties were somewhere between 10% and 25% over market value (T53/30-50).
29. He was going to receive some commission from the vendors, but not all of them (T54/45-50).
30. He did not tell Mr Sharan that at least on some of the Properties he was going to receive a commission on the purchase price because he was working for the vendor (T55/25-35).
31. Mr Ayache agreed that in the beginning he represented to Mr Azizi that the deal was subject to Rezoning (T57/10-15). He also agreed that he told Mr Azizi that he expected Rezoning would take 12 months. (T57/15-20). His belief in November 2016 was that he thought the Rezoning would take about 12 months and he appreciated that the timing of Rezoning was commercially significant to Mr Sharan (T58/25-45).
32. He told Mr Sharan about the timing for Rezoning but he did not recall speaking to Mr Azizi about that (T60/25-45).
33. Mr Ayache understood from discussions that both parties wanted to make their contracts before Christmas (T64/5-15).
34. Mr Ayache appreciated that the way forward to exchange was for the two solicitors respectively to agree on the form of the document (T67/1-10).
35. Mr Ayache agreed that at one point of the deal he did believe there was no risk and he said so to Mr Raheb but that was at a time when Mr Azizi did not have to complete if Rezoning had not occurred (T68/20-50).
36. Mr Ayache agreed that Mr Sharan complained to him late in 2016 that there had not been an exchange of contract (T69/40-50).
37. Mr Sharan insisted on Gateway Approval not Rezoning (T70/30-50).
38. It was put to Mr Ayache that Mr Azizi did not make any agreement in the terms he suggests. Mr Ayache disagreed (T73/10-15).
39. Mr Ayache said he spoke to his brother and he had a fairly clear recollection of doing so. He told his brother that "Anthony had agreed to the period" (T73/1-20) and that he had spoken to "Anthony and Sam" and they had agreed that the settlement would be nine weeks after Gateway Approval (T74/1-12).
40. Mr Ayache did go through the Deed, but not page by page (T77/1-5).
41. He did not take Mr Sharan through the Deed as it was not his job to do that (T77/25-40).
42. Mr Ayache agreed he was not keeping tabs on Mr Sharan or Mr Azizi or the two solicitors, but he was involved in the negotiations (T79/1-20).
43. Mr Ayache denied telling Mr Azizi that Rezoning would not be a problem. Further he denied abusing Mr Azizi's trust by not keeping Mr Azizi up to date about Mr Ayache's knowledge about Rezoning (T80/30-50).
44. Mr Ayache agreed he was getting commission from some of the vendors on the sale. When working for Mr Azizi however he was on a full time wage and being paid weekly. He also agreed he got a percentage of any business he brought in but he did not get any bonuses (T82/5-25).

Mr Michael Ayache

1. Mr Michael Ayache affirmed one affidavit of 12 July 2017 (MA).
2. Mr Michael Ayache is a solicitor. He is the principal of the law firm known as OneGroup Legal. He was retained by Ezistrip and Mr Sharan to draft and settle the Nomination Deed dated 27 January 2017. Mr Sam Ayache is his brother and Mr Sharan is his brother in law, being married to his sister (MA [1]-[5]).
3. Mr Ayache said that his brother, Sam, in early 2016 asked him whether he might be interested in the Bexley site. He said he was not (MA [7]).
4. In early 2016 Mr Sam Ayache rang him to say that Mr Sharan was interested. In due course he prepared seven Option Deeds (MA [8]).
5. On 30 November 2016 he received an email from Mr Sam Ayache to prepare a put and call option agreement. He told his brother that a put and call option would not work, it would have to be an agreement whereby Ezistrip agreed to assign or nominate another party to take over the options (MA [10]).
6. In early December 2016 Mr Michael Ayache had a conversation with his brother Sam who told him that the last Option Deed had been exchanged. Michael wanted to confirm that the "deal" was subject to the Rezoning. Sam agreed that it was. Discussion then took place about an appropriate "sunset date" and 4 October 2017 was inserted (MA [16]).
7. Mr Ayache had a conversation with Mr Chris Raheb on 22 December 2016 about the Deed to ensure Mr Raheb had received a copy (MA [19]).
8. Over the next few days the Deed was revised (MA [20]-[38]).
9. On 18 January 2017, Mr Michael Ayache received a telephone call from his brother Sam. His brother told him that he had spoken to the parties and they agreed that the sale was going to be subject to Gateway Approval and that settlement would take place nine weeks after that. Mr Ayache prepared a file note of his conversation with his brother Sam. He thereafter made amendments on 20 January in line with the instructions but said he forgot to make the corresponding amendments to clause 10 of the Nomination Deed so that the Deed would be conditional upon Gateway Approval instead of Rezoning of the Properties (MA [39]-[41]).
10. He then circulated on 20 January an email to Mr Raheb attaching a further revised draft of the Nomination Deed. He received an acknowledgment back from Mr Raheb on 23 January saying that the Deed was "fine to proceed with" (MA [42]-[43]).
11. Further emails were exchanged between himself and Mr Raheb. On 27 January at about 4:30pm he received a phone call from Mr Sam Ayache indicating that parties had agreed to settle 16 weeks after Gateway Approval. Mr Ayache said the parties were ready to exchange and could he and Mr Raheb come and exchange the contracts (MA [54]).
12. Somewhere between 5 and 5:30pm, Mr Raheb and Mr Sam Ayache attended at his office. A number of handwritten alterations were made to the respective copies of the Deed. Due to an oversight, he said he did not raise the need to amend clause 10 to make the Deed conditional upon Gateway Approval instead of Rezoning (MA [55]-[58]).
13. On 9 March 2017, he received an email from Mr Sam Ayache indicating that Gateway Approval had occurred. On 17 March, he sent an email to Mr Raheb advising him accordingly (MA [59]).
14. Mr Ayache said in cross examination he thought his brother was acting for the vendors, that is, the land owners (T86/5-10).
15. As far as Mr Ayache was concerned he was acting for Mr Sharan (T86/35-40).
16. Mr Ayache was not concerned about his brother's role. He did not perceive any conflict of interest on his part (T88/5-15).
17. Mr Ayache did not agree that the condition "subject to Rezoning" bore the same relationship to the price to be paid under the Deed. He did agree however that he recommended a sunset date be put in (T90/4-20).
18. Mr Ayache agreed that the Deed as originally drafted was conditional upon Rezoning which was consistent with his instructions (T94/40-50 - T95/1-15).
19. Mr Ayache agreed that his state of mind as to the conditionality of the Deed by reference to Rezoning stayed the same until at least 18 January 2017 (T98/10-20).
20. Mr Ayache said that he had had an independent recollection of the call and that he also refreshed his recollection from the file note (T98/40-50). He made the note probably within ten seconds of getting off the phone to his brother (T100/20-25).
21. When he emailed the documents as amended to Mr Raheb he thought he had satisfied himself that the amendments reflected the instructions (T100/40-50).
22. Mr Ayache agreed that his brother told him that the instructions were based on his/his brother's understanding of both parties and within a few days thereafter he sent the document to the solicitor on the other side and to his brother (T101/40-50).
23. It was put to Mr Ayache that his new draft had the effect of speeding up completion by calculating time running from Gateway Approval but that the commercial deal would otherwise be subject to Rezoning occurring and that is what the new draft achieved. Mr Ayache did not accept that proposition. He asserted that you could not settle a transaction but keep it conditional on an event that had to occur after settlement (T103/15-30). Mr Ayache also said that Rezoning was unlikely to occur 16 weeks after Gateway Approval because of the public exhibition which is a mandatory 28 days (T103/35-50).
24. Mr Ayache agreed that he actually turned his mind to the amendments in clause 10.1 and 10.2 (T105/15-25). It was put to Mr Ayache that if he forgot to make the commercial change as suggested, his conduct would have been grossly negligent. He agreed with that proposition (T105/27-35).
25. In making the various amendments Mr Ayache was concentrating on getting the Completion Date right and he appreciated the deal that was being settled quicker or sooner so effectively Jana was accepting the potential of any holding costs or holding expenses between Gateway Approval and actual Rezoning (T106/5-25).
26. Mr Ayache agreed that the change to Gateway Approval was a major shift in the arrangement (T107/35-45).
27. Mr Ayache did indicate however that the changes were tracked (T108/5-15).
28. Mr Ayache agreed that Mr Sharan had signed the document before exchange and before handwritten amendments were made (T109/25-45).
29. Mr Ayache agreed that he did not take Mr Sharan through the document before exchange. He believed he did speak to Mr Sharan telling him that Mr Ayache his brother would be arranging to see him to sign the Deed but he did not go through the document again to ensure that it reflected his instructions (T110/15-30).
30. At the exchange with Mr Raheb, they went through the Completion Date which was Gateway Approval plus 16 weeks. As he was making that amendment it actually entered his head that if Gateway Approval was issued on 3 October and then you had a 16 weeks period commencing then that would take it beyond the first date to exercise the first option. He put that scenario to Mr Raheb and as a result they added the words "or final exercise date" as part of the definition of Completion Date (T110/25-45).
31. In relation to the 16 weeks, Mr Ayache received a telephone call from Mr Sam Ayache before he and Mr Raheb came to his office, telling him the parties had agreed to 16 weeks. Those alterations were made in hand at the exchange (T111/1-7).

Mr Azizi

1. Mr Azizi affirmed three affidavits, 19 July (AA1), 25 July (AA2) and 28 July 2017 (AA3).
2. He is a director of the First Plaintiff and is also the Second Plaintiff in the proceedings. He is the shareholder and director of Trinity Projects and Maintenance Pty Ltd (formerly known as Perennial Property NSW Pty Ltd). Trinity Projects is a maintenance company, however prior to 2017 it was a real estate company (AA1 [1]-[9]).
3. Mr Azizi stated that he became aware of a potential development opportunity sometime in or around September 2016 at which time he had a conversation with Mr Sam Ayache. Mr Ayache told him about a site at Bexley which involved about 5 houses and was likely to be $8 - $9 million. Mr Azizi asked Mr Ayache to send him some information. Mr Ayache said that he was interested in purchasing the property as the land was rezoned to mixed use (AA1 [10]-[13]).
4. In or about 14 November 2016 Mr Sam Ayache commenced working for Trinity Projects. His role was to identify potential development sites and/or development opportunities. Mr Azizi believed that at all relevant times Mr Ayache was working for Trinity Projects and nobody else. He did not know Mr Ayache was acting for Ezistrip nor was he informed Mr Ayache was related to Mr Sharan (AA1 [15]-[19]).
5. He recalled seeing the Nomination Deed in late 2016 and he understood the Plaintiffs' obligation to pay for the Properties were subject to Rezoning of the Properties. He was not interested in paying for the Properties if they were not Rezoned (AA1 [20]-[22]).
6. Mr Azizi said he would not have agreed to make the Deed conditional upon Gateway Approval and that would have completely changed the Agreement in an unacceptable way. In his mind there was no certainty that the Properties with Gateway Approval would be Rezoned. For that reason it would not be worth the same to him if they were not Rezoned (AA1 [25]).
7. On the morning of 27 January 2017, he had a number of conversations with Mr Scobie and Mr Raheb in connection with the terms of the Deed. One conversation with Mr Scobie involved a discussion about the definition of Rezoning. Mr Azizi made it clear to Mr Raheb that he would not exchange the Deed without the definition of Rezoning being amended (AA1 [26]-[30]).
8. Following the conversations Mr Azizi said his understanding remained that the Deed was conditional on Rezoning and would not be exchanged if it was not conditional on Rezoning (AA1 [31]).
9. In his second affidavit of 25 July 2017, he referred to two emails sent by Mr Raheb at 1:07pm on 27 January 2017 dealing with Gateway Approval and a further email sent by Mr Raheb on the same day at 1:15pm, all of which included emails Mr Raheb had sent earlier that day. Mr Azizi said he had gone to St George Hospital to visit his sister and he did not recall reading the emails on that day (AA2 [4]-[11]).
10. In his affidavit of 28 July 2017, he referred amongst other things to a meeting on 27 January 2017 with Mr Scobie and Mr Sam Ayache. He recalled discussing the Gateway Approval. He did not recall Mr Ayache providing him with a copy of the Gateway Approval. Further he did not recall saying to Mr Ayache that he had paid $15.5 million for a site and that it did not stack up (AA3 [7]-[9]).
11. Mr Azizi agreed in cross examination he had been in the property development and construction business for about 18 years. In the course of his business he had been involved in dozens of property transactions and he has recently built 100 units in Bankstown and was currently building more than 100 units in Pennant Hills (T114/25-40).
12. Mr Azizi agreed that although he relied upon advisors there were key features in any agreement which he would be interested in, such as the price and the completion date (T115/20-35). Mr Raheb worked for him as a solicitor in his company and was paid $2,500 per week. Mr Raheb is married to his sister (T116/5-20).
13. He also agreed he had known Mr Sam Ayache for a number of years. It was Mr Ayache who introduced him to the Bexley site (T117/5-15).
14. Mr Azizi agreed he had grown up on Stoney Creek Road and knew the Bexley area well (T118/10-25). Mr Azizi agreed that Mr Sam Ayache told him that Ezistrip was his client (T120/1-7).
15. Mr Azizi knew that Mr Sam Ayache continued to work on the deal in terms of liaising with Council but he did not know that Mr Sam Ayache was still acting for Ezistrip (T121/25-35).
16. Mr Azizi agreed that the only real estate agent that he was aware of acting on behalf of Ezistrip at any time was Mr Sam Ayache (T122/24-27).
17. Mr Azizi agreed that Mr Ayache told him that he thought he could get 80 to 90 units on the site and he told Mr Ayache to send him a contract for the whole site and thereafter proceeded on the assumption that he could get 80 to 90 units built on the site (T123/1-15). Mr Azizi was aware that on 14 December 2016 Bayside Council resolved to support the Rezoning of the planning proposal. He agreed that he looked at the Council website and saw the Council resolution to that effect (T124/1-11).
18. Further Mr Azizi agreed that a Council resolution in favour was one important step in the eventual Rezoning (T124/25-30).
19. As at December 2016, Mr Azizi knew that there was going to have to be community consultation about the development (T125/30-31).
20. At the time and after talking to Mr Sam Ayache, Mr Azizi believed that Rezoning should happen within about three months of Gateway Approval (T26/1-15). Mr Azizi agreed he was relying on Mr Sam Ayache in this regard (T126/24-25).
21. Even at $15 million, Mr Azizi decided he could make money on the deal (T126/44-46).
22. In late December 2016, he instructed Mr Raheb to act on the Bexley deal and he saw the first draft of the Deed on about 20 December 2016 (T127/10-20).
23. Mr Azizi agreed when he first saw the draft of the Deed he asked for further time to pay the second tranche from 26 February to 26 March (T129/34-50).
24. He was also told that the $4.7 million plus GST would have to be paid on the Completion Date. Further he understood what the Completion Date was (T130/5-15).
25. Mr Azizi had the understanding that the third payment was to be made nine weeks are the second payment. This was negotiated to 16 weeks. He did not appear to have an understanding that it was nine weeks after Rezoning (T131/20-35).
26. Mr Azizi agreed that he did not read the document at the time. He also agreed that he did not read any draft agreement or even the executed documents prior to signature (T131/40-50).
27. Mr Azizi confirmed that his understanding at the time was that payment for the third tranche was nine weeks after the second tranche independently of any Rezoning (T132/40-45).
28. Mr Azizi agreed that around 22 December 2016, Mr Raheb again explained the terms of the Deed to him (T133/20-25).
29. Mr Azizi was concerned that all the Options lined up so that they could be exercised at the same time (T134/35-45).
30. Mr Azizi was asked to assume that clause 11.1 was added to a fresh draft of the Deed so as to give the Plaintiffs the right to terminate and ask for a refund of the Nomination Fee if one of the underlying land contracts was not valid (T135/6-15).
31. Mr Azizi did not click on any attachment he received to have a look at any changes to the proposed Deed (T136/1-10). Mr Azizi had wanted the Deed to be exchanged in 2016. He agreed he was anxious to secure the exchange because he did not want to lose the property. It had been sitting there for a while and he did not want it to sit there for too much longer and for someone else to get it before he did (T136/35-50).
32. Mr Azizi denied on or about 18 January being told by Mr Sam Ayache that the vendor wanted the contract to be subject to Gateway Approval plus nine weeks (T138/1-10). Mr Azizi however did think that it was a good deal, he knew that the Council was supporting it, and he thought that if the Council supported the proposal and a Minister gave Gateway Approval it would likely be Rezoned but he definitely would not have agreed Gateway Approval instead of Rezoning (T138/5-30).
33. Mr Azizi said there was no conversation with Mr Sam Ayache about changing the Deed from Rezoning to Gateway Approval, but noted he did not have a problem with the third tranche payment being due after Gateway Approval (T139/1-19).
34. Again Mr Azizi denied he agreed to the Deed being subject to Gateway Approval, and maintained it was always intended to be subject to Rezoning. However he was happy to pay the third tranche to be held in trust until Rezoning had occurred (T139/20-35).
35. Mr Azizi agreed that by the middle of January he did appreciate Completion Date was a fixed point in time, and his understanding was that it was the October date (T140/35-45).
36. He appreciated that in exchange for paying the $4.7 million, he received in signed nomination forms which entitled him to exercise the option and that all that was to occur nine weeks after the second payment (T141/40-50).
37. Mr Azizi agreed that on or about 23 January Mr Raheb may have told him about the proposed changes to the Deed, including the addition of the definition of Gateway Approval and completion nine weeks after the date of Gateway Approval (T143/1-20).
38. Mr Azizi agreed that he instructed Mr Raheb to inform Mr Ayache that he was happy with the changes (T143/20-35).
39. Mr Azizi agreed that after a discussion with Mr Scobie there was to be an amendment to the definition of Rezoning (T143/35-50).
40. Mr Azizi agreed that he instructed Mr Raheb to send an email to Mr Michael Ayache to ensure that the Completion Date was October 2017 (T144/35-50).
41. Mr Azizi was shown an email. It was suggested that the email presupposed a conversation between himself and Mr Raheb in which Mr Raheb had told Mr Azizi that Completion Date was nine weeks after the date of Gateway Approval. Mr Azizi said it was always Completion Date in October, not after Gateway Approval (T145/15-25).
42. Mr Azizi agreed that he must have had a conversation with Mr Raheb about the terms of the Deed showing Completion Date nine weeks after Gateway Approval. From this point he accepted he must have understood that there was an issue about the Completion Date (T145/35-45).
43. Mr Azizi understood that if the property was not Rezoned by October all moneys would be returned to him (T145/45-48).
44. Mr Azizi agreed that he instructed Mr Raheb that he wanted to press for an October 2017 settlement date. He also agreed he signed the Deed before he left to go to St George Hospital. He agreed that when he signed the Deed it would appear the definition of Completion Date was nine weeks after Gateway Approval but he did not remember at the time (T146/30-35).
45. He stated that he gave instructions to Mr Raheb not to exchange contracts unless the definition of Rezoning was changed and the Completion Date be changed to October (T146/40-50).
46. Mr Azizi indicated that he asked to "extend from the second tranche payment from nine weeks to 16 weeks." He asked for the extension because he wanted more time to get his finance. He also agreed that he had said that he thought Rezoning would have happened within the 16 weeks and he asked for the extension from nine to 16 weeks after Gateway Approval because he thought Rezoning would have been done by then (T147/15-44).
47. Mr Azizi did not accept that he was confused about events and that he did not tell Mr Raheb that the Rezoning issue was a deal breaker but that Gateway Approval plus nine weeks was (T149/20-45).
48. He had an understanding that he had to make the third tranche payment regardless of whether the property had been Rezoned (T150/40-45).
49. Mr Azizi agreed that Mr Scobie had his approval to ask for 16 weeks after Gateway Approval as he understood it for the next payment (T151/35-45). He also agreed that he shifted from October Completion Date to 16 weeks after Gateway Approval (T151/42-44).
50. Mr Azizi thought that Rezoning would happen within about three months or so after Gateway Approval but he still insisted the contract had to be subject to Rezoning however he was proceeding upon the basis that Rezoning would happen within a couple of months of Gateway Approval. He also accepted that he extracted a concession by the end of the afternoon that Completion Date would be 16 weeks after Gateway Approval (T152/5-35). Again he would not accept he was confused about matters (T153/1-15).
51. He agreed that on or about 10 March, Mr Sam Ayache informed him that Gateway Approval had occurred and he also agreed that he had a meeting on 13 March 2017. He further agreed that the minute of the meeting indicated that settlement was to be in 16 weeks - about 9 July (T153/20-45). He agreed that the minutes talked about a settlement but he did not write the minutes and he did not pick out the use of the term "settlement" in the minutes after he saw them (T154/5-20).
52. Mr Azizi agreed that he wanted Mr Scobie to organise a valuer to start looking for Anchor tenants and to take steps to progress the project (T155/20-45). He agreed that the minutes talk about a settlement but he did not write the minutes and he did not pick up the use of the term "settlement" in the minutes after he saw them (T154/5-20).
53. Mr Azizi agreed that by 17 March he was aware that Rezoning was expected to take a further 12 months (T156/5-40).
54. Mr Azizi indicated that although payment might have to be made by 28 June (that is $4.7 million) he might not get it back until October, however there was no agreement on interest and that was his risk (T157/40-50 - T158/1-8).
55. It was put to Mr Azizi that he never instructed Mr Raheb to respond to the letter of 17 March. He said that he could not remember (T158/15-25).
56. Mr Azizi agreed that there was a further meeting on 21 March with further discussions about retaining a town planner (T159/5-20).
57. Mr Azizi agreed that by 21 March the October 2017 date was academic because he was clearly projecting dates for Rezoning way beyond October (T160/40-45).
58. Mr Azizi agreed that he was also discussing the use of Nordon Jago Architects and was considering the costings for a concept design fee and development application fee (T162/30-45).
59. Mr Azizi agreed he received an email from Nordon Jago dated 26 May which raised questions about the number of units that could be accommodated and that he considered that it seriously compromised the financial return of the project. He rejected this (T165/1-20).

Mr Raheb

1. Mr Raheb affirmed three affidavits, 12 July 2017 (CR1), 19 July 2017 (CR2) and 25 July 2017 (CR3).
2. Mr Raheb said he received instructions from Mr Azizi to act on the matter in late 2016. He spoke with Mr Sam Ayache from time to time in relation to negotiations and the exchange of the Nomination Deed. He knew Mr Ayache as an employee of Trinity Projects. Mr Raheb said that he was involved in the negotiation of the terms of the Nomination Deed between about 19 December 2016 and 27 January 2017 (CR1 [6]-[12]).
3. On 23 January 2017, his sister in law (and Mr Azizi's sister) was involved in a serious traffic accident. She was admitted to St George Public Hospital. As a result he did not substantially review or consider the Nomination Deed (CR1 [13]-[15]).
4. He agreed he met with Mr Azizi on the morning of 27 January 2017 and received instructions from Mr Azizi (CR1 [16]).
5. On 27 January when he arrived at the hospital Mr Azizi instructed him to go to Michael Ayache's office for an exchange of contracts (CR1 [18]).
6. Mr Raheb remembers obtaining a cheque for $110,000 to be paid to Ezistrip after execution of the Deed (CR1 [22]).
7. He observed Michael Ayache making a number of handwritten amendments to the copy of the Nomination Deed and then reading out the amendments so he could make the same amendments on his counterpart Deed (CR1 [28]). The balance of Mr Raheb's affidavit simply annexed numerous documents and exchanges of emails (CR1 [29]-[38]).
8. His affidavit of 19 July indicated he had practised as a solicitor for some 24 years and is the Principal of Oxford Legal solicitors (CR2 [1]-[3]). Again numerous documents were attached to his affidavit.
9. He said that by or about 26 December 2016 he had understood that the terms of the Deed had been largely agreed. When he received Mr Ayache's email of 20 January 2017 he indicated that some changes had been made to the Deed but did not identify them. He had a look at the Special Condition and confirmed he was happy with it. He also said he "flicked" through the Deed. He did not notice the definition of Completion Date had been amended to include Gateway Approval. Mr Ayache did not draw this to his attention. He did not conduct a further review of the Deed before he communicated with Mr Ayache by email on 23 January 2017 (CR2 [10]-[15]).
10. On 27 January 2017, he had a number of conversations with Mr Azizi in his office. He said that Mr Azizi said to him that he should make sure that the Deed was conditional upon the Rezoning of the Properties and that Rezoning needed to be in effect defined in a particular way. He then sent an email to Mr Ayache. He then set out further email exchanges on 27 January 2017 (CR2 [17]-[19]).
11. Mr Raheb said he did not speak to Mr Azizi about the Nomination Deed being subject to Gateway Approval. It was always his understanding that the Nomination Deed was subject to Rezoning and that the Plaintiffs would get their money back if the Properties at any time prior to exchange were not Rezoned (CR2 [20]).
12. In his affidavit of 25 July 2017 he referred to his email of 27 January 2017 at 11:20am which drew attention to the Completion Date in October 2017 not nine weeks after Gateway Approval. He said he wrote that email because Mr Azizi asked him to send it. Mr Azizi said to him before he sent his email of 27 January 2017 that the deal was to complete in October (CR3 [4]-[13].
13. Mr Raheb said he raised the definition of Completion Date being nine weeks after Gateway Approval with Mr Azizi and Mr Azizi said it was supposed to be October. Mr Raheb further said that he did not believe that the discussions about the Completion Date affected the requirement in the Deed that it was subject to the Properties being Rezoned (CR3 [11]-[12]).
14. Mr Raheb agreed in cross examination that after he was initially instructed in December 2016, Mr Sam Ayache came to his office and gave him a hard copy of the then proposed Deed (T169/25-35).
15. Mr Raheb agreed he had a conference with Mr Azizi shortly thereafter but did not keep a file note of the conference. He agreed however that he did talk about the terms of the Deed with Mr Azizi (T170/5-25). Mr Raheb agreed that he was concerned to explain to Mr Azizi when the Completion Date was to occur (T170/45-50).
16. Mr Raheb further agreed he explained the definition of Completion Date to Mr Azizi (T171/1-6). Mr Raheb agreed that he updated Mr Azizi about changes in the terms of the Deed from time to time (T171/20-25).
17. Mr Raheb agreed when he received the updated Deed on 26 December 2017, although the changes were not marked-up, he went through the Deed carefully and attached comments in relation to the changes (T171/30-45). Mr Raheb agreed that he would have explained a number of provisions of the Deed in particular about the exercise of options to Mr Azizi (T173/1-20).
18. Mr Raheb agreed speaking with Mr Azizi on 27 January concerning the terms of the Deed (T73/25-40).
19. Mr Raheb also agreed he sent an email to Mr Michael Ayache indicating the Deed would not be exchanged unless the definition of Rezoning was changed (T173/35-45).
20. Mr Raheb agreed he sent an email to Mr Michael Ayache indicating his client was adamant the deal had a Completion Date in October 2017 not nine weeks after Gateway Approval. He agreed that he sent that email after a conversation with Mr Azizi (T174/1-10). Mr Raheb agreed, however, he explained to Mr Azizi that the Completion Date was to be nine weeks after Gateway Approval (T174/15-20).
21. Mr Raheb understood Mr Azizi was only obliged to make the third payment nine weeks after Gateway Approval if the Property was Rezoned (T174/38-43).
22. Mr Raheb agreed Mr Azizi must have had a conversation with him in which he told him that he thought the Completion Date was October 2017 but that in response Mr Raheb said the Deed made the Completion Date nine weeks after Gateway Approval (T175/15-25). Mr Raheb agreed that he was likely told by Mr Azizi that Gateway Approval plus nine weeks would be a "deal breaker" (T175/25-50).
23. Mr Raheb agreed Mr Azizi told him that he would not exchange if the Completion Date was Gateway Approval plus nine weeks (T177/5-10).
24. He agreed he considered the letter which was received on 17 March 2017. He said however that he did not really read the letter even though it appeared to be important. He also agreed that Completion Date was an important matter (T178/1-30).
25. He did not advise Mr Azizi to instruct him to write back denying the money was due as alleged in that letter. He did not give Mr Azizi any legal advice about the letter (T179/1-10).
26. Mr Raheb agreed he did read the letter and the assertion that payment was due on 28 June "would have surprised me" (T179/45-50).

Mr Scobie

1. Mr Scobie affirmed one affidavit of 19 July 2017 (LS).
2. Mr Scobie described himself as a self-employed consultant. He reports to Mr Azizi. He has worked in the property development and construction industry in various roles as a Commercial Manager and then as a General Manager since about 2002. He has worked as a consultant to companies in the Trinity Group since about 2015 (LS [1]-[7]).
3. He became involved in the commercial negotiations on behalf of the Plaintiffs in relation to acquisition of the Bexley Properties in or about October or November 2016 (LS [8]).
4. He was overseas between 16 December 2016 through January 2017, including 9 January and 23 January 2017 (LS [11]).
5. On 27 January he "skim-read" a draft Nomination Deed. He read the Deed from a "commercial perspective" only (LS [12]).
6. He recalled raising the definition of Rezoning with Mr Azizi or Mr Raheb indicating there was a problem with it (LS [15]).
7. He also recalled having a conversation on the same day with Mr Sam Ayache indicating nine weeks to arrange refinancing was insufficient. Although he received a number of emails he always understood that the Deed had to be subject to Rezoning in accordance with the definition (LS [16]).
8. He agreed he attended meetings on 13 and 21 March (LS [24]).
9. He was surprised to learn that it was said that settlement was due to take place 16 weeks after Gateway Approval rather than Rezoning (LS [27]).
10. He agreed he attended a meeting on 21 March 2017 with Mr Azizi and Mr Sam Ayache and further said that this was the first time that he had learned that it might take between 12 to 18 months after Gateway Approval to get the Properties Rezoned (LS [29]-[31]).
11. In cross examination, Mr Scobie said although he had not personally engaged in property development he had worked for property developers assisting them to buy and sell properties including assistance in relation to negotiating the terms of the deal (T181/20-40).
12. Mr Scobie agreed that he commenced dealing with Mr Sam Ayache and the Bexley Properties sometime in November (T182/20-40).
13. Mr Scobie was shown a signed Agency Agreement which he had not seen before giving evidence (T183/20-35).
14. Mr Scobie was not aware that in December 2016 Bayside Council was supporting the Rezoning. He did not give it any thought (T185/1-15).
15. He agreed on 27 January 2017 he had a number of conversations with Mr Azizi and Mr Raheb about the Deed. He went through the Deed but in a "very quick manner" (T185/25-35).
16. Mr Scobie agreed one important commercial feature of the contract was the Completion Date (T185/45-48).
17. Mr Scobie had his attention drawn to the definition of Completion Date in the Deed he had on 27 January 2017. He interpreted the definition as being nine weeks after Rezoning. He agreed he also would have read the definition of Rezoning, and accepted he recommended there be changes made to Mr Azizi (T186/10-35).
18. Mr Scobie could not remember what he was thinking at the time but he would have considered, as he still did, that the clause should be read as being nine weeks after the Rezoning. His eyes kept turning to the "Rezoning" because that is how he interpreted it (T187/1-10).
19. Mr Scobie agreed he told Mr Azizi that the definition of Rezoning should be changed (T187/10-15).
20. As at 27 January 2017, Mr Scobie appreciated that Gateway Approval was different to Rezoning and that Gateway Approval was a precursor to Rezoning (T187/20-35).
21. Mr Scobie agreed that he told Mr Azizi that Completion Date was to be nine weeks after Rezoning and that he would then be required to make the final payment. Mr Scobie was not happy with nine weeks after Rezoning and he spoke to Mr Azizi. He wanted a longer period so that he would be able to get finance. At the time he would have required about 16 weeks to arrange finance and to arrange valuers so as to be able to settle the loan (T188/20-25).
22. Mr Scobie did not ignore the reference to Gateway Approval - "It did not register" (T189/5-15). In fact he read the clause or the definition as meaning nine weeks or 16 weeks after Rezoning (T189/15-20).
23. It was not until 21 March that Mr Scobie learned that Rezoning might take 12 - 18 months after Gateway Approval (T191/30-45).
24. The letter requesting payment of $4.7 million took him by surprise and he suggested Mr Azizi get some legal advice (T192/15-25).
25. Mr Scobie believed that although final deposit was to be paid on or around 28 June that was always subject to Rezoning (T193/20-25).
26. Mr Scobie had a problem with what was written in the letter and he had a different understanding (T194/10-15).

Consideration

1. The issues in these proceedings are first, what is the proper construction of the Nomination Deed exchanged by the relevant parties on 27 January 2017. Secondly, whether the construction and/or the circumstances of this case require there to be rectification to the Deed. Thirdly, whether Ezistrip have a claim for estoppel based on a common assumption adopted by the parties. As the estoppel claim did not feature heavily in proceedings, considerations will centre mostly on the first two issues, namely construction and rectification.
2. It seems to me the better view, either by way of construction or upon an evaluation of the evidence in the context of the claim for rectification, is that objectively or otherwise the parties intended the final and third payment be made 16 weeks after Gateway Approval and that at that point any risks associated with the ultimate Rezoning would be borne by the Plaintiffs. My reasons follow.

Construction

1. In my view, a reasonable businessperson would construe the terms of the Deed to mean the steps required to be undertaken on Completion Date may be triggered by Gateway Approval, and that the parties will only have a right to terminate the Deed under the conditions set out in clause 10 where Completion Date has not taken place before Final Exercise Time.
2. First, it is necessary to understand the role of Completion Date in the Deed. The definition of Completion Date plainly includes 16 weeks after Gateway Approval of Rezoning, as well as (in the alternative) Final Exercise Time, being 5pm on 4 October 2017. At Completion Date, the Schedule to the Deed states the third payment (Item 2(c) $4.7 million plus GST) is to be paid. Payment of the Nomination Fee is an essential term of the Deed (Clause 3). Further, clause 4.3 provides the third payment should be held on trust for 14 days after Completion Date, and then released provided there is no dispute about the validity of the Option Exercise Notice. Both parties are required to undertake other steps on Completion Date (clause 9.1 and 9.2), which importantly includes Jana being required to deliver a bank cheque to Ezistrip for the third payment of the Nomination Fee.
3. It is plain from these terms of the Deed, read both in isolation and collectively, the objective intention of the parties was to make/receive payment of the third tranche of the Nomination Fee on Completion Date, and that this date could be 16 weeks after Gateway Approval, as has been the case.
4. This construction is, some might say, unsettled by clause 10. Clause 10.1 says the Deed is conditional upon the Rezoning of the Property. Clause 10.2 speaks of a right to terminate and a refund of Items 2(a) and 2(b) of the Nomination Fee, but not 2(c) being the third payment, if Rezoning has not taken place by the Final Exercise Time.
5. In my view, clause 10, properly construed, does not detract from the obligation to pay the third tranche on Completion Date, which may be, and in this case was, 16 weeks after Gateway Approval. Clause 10.1 makes no reference to Completion Date, being the event governing payment. Further, clause 10.2 only concerns the repayment of the first and second tranche, and thus by implication does not contemplate the repayment of the third tranche. In my view, the clear and logical reason for this is because clause 10 only has work to do where Completion Date does not occur before the Final Exercise Time, and thus no payment of the third tranche has been made.
6. In other words, clause 10 operates where 5pm on 4 October 2017 passes without Rezoning taking place, and Completion Date has not occurred in the sense that either Jana has not exercised the options nor entered into a binding Land Contract with a Vendor, or Gateway Approval has not taken place or it is not yet 16 weeks after Gateway Approval. In my view this is the only way to make sense of the various provisions.
7. The following points further support the above construction. First, as submitted by the Defendants, clause 10 read in this way is consistent with the operation of clause 11. Clause 11.1 provides the general condition and clause 11.2 gives content to that condition. Clause 10 operates in a similar way, with clause 10.1 only operating to the extent provided for in clause 10.2.
8. Secondly, no other term of the Deed, including terms detailing steps to be taken on Completion Date, make reference to being subject to Rezoning taking place. Clause 4.3 does not provide the third tranche should continue to be held on trust until Rezoning occurs, clause 3 does not provide payment of the third tranche on Completion Date is conditional upon Rezoning, and clause 13 does not provide an act of default is overridden by the requirement Rezoning take place. In my view, the disconnect between clause 10 and other terms of the Deed, including essential terms, speaks to its limited operation in circumstances where Completion Date has not occurred before Final Exercise Time.
9. This construction is further supported by the drafts of the Deed. Prior to the 20 January Draft Deed, Completion Date was tied to Rezoning, with the definition of Completion Date including at (b) "the date being nine weeks after the Rezoning of the Property takes effect." However, in the 20 January Draft Deed and thereafter, "Rezoning of the Property" was changed to read "Gateway Approval of the Rezoning of the Property" leaving a reasonable businessperson to understand Completion Date was no longer tied to Rezoning, and instead tied to Gateway Approval.
10. I accept caution must be exercised in having regard to drafts of an agreement in construing the agreement in its ultimate form, even in cases such as this where there is accepted ambiguity and thus consideration given to the surrounding circumstances (see Franklins at [24] per Allsop P).
11. However, I am satisfied in this case the various drafts of the Deed, formulated by and exchanged between both parties, go directly to knowledge of the genesis and background of the transaction. I do not accept the Plaintiffs' submissions the relevant parties had no actual knowledge of these drafts. Both Mr Azizi and Mr Sharan were in regular communication with their solicitors, and displayed knowledge of the earlier drafting of the Deed (eg SS [17], [21], [22], [24]; AA1 [20]-[22]; T127/10-20; T130/5-15). In any case, even without reference to the earlier versions of the Deed, I am satisfied the terms of the Deed alone support the Defendant's construction of clause 10.
12. For these reasons, I am satisfied the Deed objectively intended to make the Completion Date the date upon which settlement was to occur, and a possible option (and the relevant one here) for when Completion Date would arise was 16 weeks after the date of Gateway Approval of the Rezoning of the Property. Further, I am satisfied the Deed was only to become conditional upon Rezoning where none of the Completion Date events took place by the Final Exercise Time, in which case the parties would be entitled to a right to terminate. Such a construction, in the words of Gibbs J, renders the terms harmonious with each other, and is, in my view, how a reasonable business person would understand the Deed to operate.

Rectification

1. On the question of rectification, the focus, unsurprisingly, is upon the state of minds of Mr Sharan and Mr Azizi. Their subjective intention is crucial. That may be proved by direct evidence as to their state of mind, but equally in what they said or did, and potentially the conduct of others, especially their solicitors in so far as it can be reasonably inferred they were implementing their respective instructions.
2. In my view, if my findings are wrong on construction, I am nonetheless satisfied the words and conduct of the parties in the events leading up to the exchange of the Nomination Deed show clear and convincing proof of Mr Azizi and Mr Sharan sharing a common intention to have the steps required to be performed on Completion Date conditional upon Gateway Approval, with the right to terminate the Deed under clause 10 only arising if Gateway Approval did not occur by the Final Exercise Time.
3. I will first (a) provide preliminary remarks on the evidence, then (b) set out the established beliefs and intentions of Mr Azizi and Mr Sharan which, in my view, formed the basis of them reaching this common intention regarding the Deed, before (c) descending into a chronological overview of the events which, I am satisfied, show clear proof of such an intention.

(a) Preliminary remarks on the evidence

1. In general terms, I am satisfied each witness did their best accurately to set out what they believe was said and done during the negotiations. Further, both Mr Sharan and Mr Azizi are seemingly highly successful businessmen, with an astute ability to understand the core components of a transaction such as the one at hand, while delegating the mechanics of the transaction to their respective solicitors.
2. However, despite the events in question transpiring only a short time ago, parts of Mr Sharan and Mr Azizi's narratives were considerably at odds with each other, with neither having any contemporaneous records of their own to support their recollection. Without intending any disrespect to any witness, self-interest is often a potent factor in commercial litigation and, wittingly or unwittingly, will likely interfere in a witness's ability to give an entirely accurate account. Contemporaneous materials are therefore almost always the primary and most reliable point of reference for detecting the subjective intentions of the relevant participants. This case is no exception.

(b) Established beliefs and intentions of Mr Azizi and Mr Sharan

1. First, it is accepted both parties were keen to secure exchange of the Deed once the drafting had begun. Mr Azizi believed it was "a good deal" (T138/13-14), and was "anxious" to secure an exchange to ensure he did not "lose the property" (T136/38-T137/12). This sentiment was also reflected in the email sent by Mr Raheb to Mr Michael Ayache on 9 January 2017 (CB C 229) noting "my client is anxious to secure an exchange." Mr Sharan was similarly keen to progress the transaction or "push the whole thing forward", with his incentive being to secure earlier payment (T41/45-49; T43/43-45; T44/7-10).
2. Secondly, both parties understood Gateway Approval and Rezoning were distinct concepts, with Gateway Approval being a precursor to Rezoning. This is not only reflected in the testimony of the witnesses (T43/47-T44/5; T138/20-23), but in the terms of the Deed itself, with the definition of Gateway Approval making plain the parties clearly had in mind the notion of Gateway Approval as contained in section 56 of the Environmental and Planning Assessment Act 1979 (NSW), with various steps required to be undertaken following Gateway Approval before Rezoning could be granted.
3. Both parties also believed that despite the process that still had to be undertaken after Gateway Approval before Rezoning could take place, obtaining Gateway Approval would likely lead to Rezoning. Mr Sharan believed once Gateway Approval took place, the proposal would be "pretty much on the way" to formal approval and Rezoning (T41/26-27). Similarly, Mr Azizi believed Rezoning "would be likely" once Gateway Approval was granted (T138/20-22). Critically, in terms of timing, Mr Azizi also believed Rezoning would take place approximately three months after Gateway Approval based on what he believed Mr Sam Ayache told him (T126/3-13; T152/9-12).
4. In my view, these accepted positions regarding the parties' desire to accelerate exchange of the Deed and their respective understandings of the relationship between Gateway Approval and Rezoning are important considerations in making sense of the events leading up to the exchange of the Deed, and ultimately determining the intentions of both parties' at the date of execution.

(c) Events leading up to exchange of the Nomination Deed

1. Gateway Approval is first suggested
2. Both parties accepted the Nomination Deed as it was initially conceived in late 2016 intended to be tied to Rezoning (T40/31-33; T42/12-17; T130/27-29). The initial draft of the Nomination Deed reflects this, with the Deed being subject to Rezoning, and an option for Completion Date being nine weeks after Rezoning (CB C 42).
3. This remained the position, I am satisfied, until early 2017 when Mr Sharan told Mr Sam Ayache at a family gathering that, having made his own inquiries about the Gateway Approval process, he wanted the Deed to be subject to Gateway Approval, and for settlement to take place eight to nine weeks after Gateway Approval (SA1 [51]-[52]; SS [21]). This conversation sits consistently with Mr Sharan's understanding of the Gateway Approval process (T43/47-T44/5), and his desire to secure earlier payment under the Deed (T44/5-10). I am satisfied by this stage Mr Sharan had become both agitated and anxious about Ezistrip being exposed under the various Option Deeds. He wanted to maximise his return for a minimum outlay, for which there can be no criticism objectively. In this context I am satisfied he revised his strategy and asked Mr Sam Ayache in early 2017 to change the definition of Completion Date from nine weeks after Rezoning to nine weeks after Gateway Approval.
4. In my view, the fact Mr Sharan may have used the word "settlement" in his affidavit (SS [26]-[28]) and "deal" in cross examination (T45/42-45) in recalling this conversation with Mr Ayache is, in dealing with a layperson, largely immaterial - Mr Sharan was intending as at early 2017 to secure earlier payment under the Deed, and he believed tying payment and making the Deed conditional upon Gateway Approval was the way to make that happen.

2. The Alleged 18 January Conversation
3. There is, as the Plaintiffs frames it, a "factual contest" as to whether the Alleged 18 January Conversation between Mr Azizi and Mr Sam Ayache took place. Mr Sam Ayache claims it did (SA1 [53]; T71/40-46), while Mr Azizi claims it did not (AA1 [24]; T138/5-7; T139/2-4). In my view, the likelihood is the Alleged 18 January Conversation did take place and Mr Azizi was mistaken as to his recollection of the day. There are numerous reasons for this.
4. First, Mr Michael Ayache's 18 January File Note (CB C 243) closely corroborates Mr Sam Ayache's recollection of the Alleged 18 January Conversation. Most importantly, it corroborates Mr Sam Ayache's recollection that Mr Azizi agreed to make the Deed subject to Gateway Approval, and he was considering Mr Sam Ayache's request to make settlement nine weeks after Gateway Approval.
5. Secondly, the Plaintiffs did not put to Mr Michael Ayache his File Note made some ten seconds after talking to Mr Sam Ayache was inaccurate, nor that his conversation with Mr Sam Ayache never took place. Further, the Plaintiffs did not put to Mr Sam Ayache why he would lie about the occurrence and substance of this conversation to his brother. In my view, the reason for the Plaintiffs not doing so is because there is no feasible explanation for either Mr Michael or Mr Sam Ayache fabricating such a conversation.
6. The Plaintiffs cannot point to, and I cannot contemplate, any commercial or personal motivation Mr Sam Ayache may have had for telling Mr Michael Ayache about the Alleged 18 January Conversation, were it not true. The perplexity of such a claim that Mr Sam Ayache made up the Alleged 18 January Conversation further lies in the fact Mr Sam Ayache would have known any instructions he gave to his brother would have been reflected in the amendment of the Nomination Deed which the other side would not only soon receive but have to approve of, as indeed happened with Mr Raheb's receipt of the 20 January Draft Deed.

3. 20 January Draft Deed
4. In my view, the 20 January Draft Deed (CB C 244) and Mr Raheb's approval of that Draft are important indicators of the parties' common intention to tie settlement to Gateway Approval, rather than Rezoning.
5. As reflected in the Background Facts, the 20 January Draft Deed contained two important changes, reflected in mark-up, for the purposes of these proceedings. First, paragraph (b) of the definition of Completion Date now read "the date being nine weeks after the date of Gateway Approval of the Rezoning of the Property" (changes underlined), and secondly, a definition of Gateway Approval was introduced.
6. In accepting the Alleged 18 January Conversation, I accept Mr Michael Ayache's evidence these changes he made were in accordance with what he believed were the instructions provided to him by Mr Sam Ayache following the Alleged 18 January Conversation (T100/14-20). Further, I accept his evidence that for whatever reason, he forgot to amend clause 10 so as to make the clause consistent with the definition of Completion Date (MA [41]; T106/4-11). Finally, I accept the 20 January Draft was meant to be a reflection of what Mr Michael Ayache understood the current agreement to be (T198/14-20).
7. It can be inferred from Mr Raheb's response to Mr Michael Ayache on 23 January telling him the 20 January Draft Deed "is fine to proceed with" (CB C 271) that the Draft also accorded with what the Plaintiffs believed the current agreement to be. Mr Azizi accepted in cross examination Mr Raheb "may well have" told him about the changes in the 20 January Draft Deed (T143/9-12). In my view, the likelihood is that a discussion did in fact take place. Not only were the two men "in constant discussion" with each other about the Deed (T135/27-29) and Mr Raheb's "usual practice" was to tell Mr Azizi of "material changes" to the Deed (T136/14-17), but Mr Azizi accepted in cross examination he had told Mr Raheb he was "happy with" the changes in the 20 January Draft Deed (T143/20-34).
8. Mr Azizi's position on the 20 January Draft Deed, and his decision to never query the introduction of Gateway Approval as a defined term and importantly a new feature of the definition of Completion Date speaks to the likelihood he had already agreed on such changes with Mr Sam Ayache during the Alleged 18 January Conversation. Further, his approval of the Draft Deed and decision to shoulder the risk about when Rezoning precisely occurred is consistent with his desire to secure a swift exchange of the Deed, and his belief Gateway Approval would likely, in any case, lead to Rezoning, and Rezoning would likely take place around three months following Gateway Approval. The change to Gateway Approval did not "change the whole scope of the…deal" (T138/30), as in Mr Azizi's mind, Rezoning would likely follow Gateway Approval, and would do so in a matter of months.
9. In my view, the words and conduct surrounding the 20 January Draft Deed infer by this stage, and indeed by 18 January 2017, both Mr Azizi and Mr Sharan shared the common intention the steps required on Completion Date were now conditional upon Gateway Approval, not Rezoning.

4. Negotiations of 27 January 2017
5. The negotiations that transpired on 27 January 2017 did not alter, and in my view only go to confirm, the parties' common intention to make the steps required on Completion Date conditional upon Gateway Approval, not Rezoning.
6. First, on 27 January both parties clearly directed their attention to both Rezoning and Completion Date in the Deed, and yet neither Mr Raheb nor Mr Azizi ever inquired about or requested Completion Date be reverted to link to Rezoning, rather than Gateway Approval. Instead, the definition of Rezoning was added without any discussion of removing Gateway Approval from the definition of Completion Date.
7. I do not accept the Plaintiffs' claim Mr Raheb's email requesting the change in the definition of Rezoning (CB D 301) "destroys the rectification case" as it shows the Plaintiffs intended on 27 January 2017 for the Deed to be conditional on Rezoning (T200/20-40). It is plain the email requests "the Deed to be amended to reflect…that it is conditional upon the properties being rezoned," however the sentence goes on to read "to B4 mixed use with a minimum FSR of 2:1 and the bound of 0.5:1 as defined in the Rockdale Local Environment Plan 2011." Thus, in its entirety, in my view it is clear the request is solely focused on Rezoning in a particular form. Further, as the Defendants submit, if Mr Azizi always believed the Deed was subject to Rezoning (T147/9-11) then there would be no need for Mr Raheb to request the Deed "be amended" to reflect this position (Defendants' closing submissions [159]). Thus, rather than impeding the case for rectification, in my view the lack of any reference to a change of Completion Date in the email further supports the finding Mr Azizi accepted Completion Date was no longer conditional upon Rezoning and instead intended it to be conditional upon Gateway Approval.
8. Further, the definition of Completion Date itself was the subject of negotiations, with the parties finally agreeing to make paragraph (b) read 16 weeks after Gateway Approval, rather than nine weeks. Indeed, I am satisfied the very reason Mr Azizi requested via Mr Raheb that he be given 16 weeks after Gateway Approval instead of the nine put forward is because, taking into account what he understood Mr Sam Ayache had said to him about timing, he believed Rezoning would likely occur in that time in any case and was therefore prepared to shoulder the risk given it would lead to an acceleration of the deal as a whole. On these grounds, I am satisfied Mr Azizi clearly appreciated the role of Gateway Approval in the Deed, and that Completion Date was no longer conditional upon Rezoning.
9. Mr Azizi's acknowledgement he knew payment of the third tranche had to take place on Completion Date, regardless of whether Rezoning had occurred (T150/41-42), is further evidence of this common intention. Mr Azizi's claim - raised for the first time in cross examination - that he understood the third tranche would be held on trust and only paid to Ezistrip once Rezoning took place (T139/20-20), is, in my view, difficult to believe. There is no basis for such a claim in the Deed, with clause 4.3 making plain the third tranche would be held on trust for 14 days pending any Vendor challenging an Option Exercise Notice served by Jana. Beyond this clause, there is no other reference to the third tranche being held on trust, let alone on trust for a period of months until Rezoning occurred. Further, Mr Azizi's claim no interest would be paid on the $4.7 million while it was being held on trust for several months (T157/50-10) speaks to the unlikelihood of such an arrangement.
10. In any case, it is plain Mr Azizi understood at the time of exchanging the Deed on 27 January 2017 that, contrary to Counsel for Plaintiff's claim (T12/31-37) he was obliged to pay the third tranche on or by Completion Date, regardless of whether Rezoning had occurred. Mr Azizi also understood Jana was required to provide the nomination forms on Completion Date, pursuant to clause 9.1(a) of the Deed (T141/42-45), and thus by implication this was also to take place irrespective of Rezoning occurring. Mr Azizi's decision to not raise any objection with clause 9.1(a) and the definition of Completion Date before signing the Nomination Deed (T146/33-38) fortifies, in my view, the finding that his intention at the time of executing the Deed was that the steps required to be undertaken upon the Completion Date were conditional upon Gateway Approval, and not Rezoning.

Post-contractual conduct

1. In theory, post-contractual conduct is admissible to the question of rectification (see [87] above). However, in my view the post-contractual conduct raised by the Defendants, even if admissible, is not sufficiently cogent to form part of what I have found to be the already clear and convincing proof the parties shared a common intention the step required upon Completion Date be conditional upon Gateway Approval, not Rezoning.
2. I accept the failure of Jana to provide a timely response to the Defendants' letter of 17 March 2017 requesting payment of the third tranche by 28 June 2017 since Gateway Approval had taken place (CB D 396) is consistent with the Plaintiffs not believing the Deed to be conditional upon Rezoning. The same goes for Mr Scobie's minutes of the meetings of 13 March (CB D 364) and 21 March (CB D 405), both of which Mr Azizi attended, recording "settlement" as taking place in 16 weeks. However, neither pieces of evidence, in my view, carry much more evidentiary weight than simply fitting in with the Defendants' claim. Mere silence and delay is not, in and of itself, determinative nor necessarily supportive of a belief the Deed was conditional upon Rezoning. There is evidence lawyers were first instructed about a month after receipt of the 17 March Letter (T192/18-47), and in my view Mr Azizi's delay in raising an issue with the Deed appearing to not be conditional upon Rezoning after exchange was not properly explored in evidence.
3. Further, I am not satisfied the post-contractual activity the Plaintiffs undertook in progressing the development before Rezoning is necessarily indicative of any intention for the Deed to not be conditional upon Rezoning. There is no evidence of actual expenditure by the Plaintiffs. Further, as submitted by the Plaintiffs, such activity would be in line with prudent business practice given the scope of the development. For these reasons the Plaintiffs' post-contractual conduct does not, in my view, strengthen the Defendants' already well formed case on rectification.

Conclusion on rectification

1. In my view, I am satisfied the words and conduct of the parties up to and including the date of the Deed provide clear and convincing proof of an intention to make the Deed conditional upon Gateway Approval. Specifically, I am satisfied Mr Azizi and Mr Sharan shared a common intention at the date of executing the Deed that the performance of the steps required to be taken on the Completion Date was conditional only on the issuance of Gateway Approval, and not Rezoning, and as a corollary, the right to terminate the Deed arose only where Gateway Approval had not occurred by the Final Exercise Time.
2. Thus, even if I had not construed the Deed in such a way as to make the steps required to be taken on the Completion Date conditional only upon the issuance of Gateway Approval, I would be satisfied in ordering the Deed be rectified to read as follows: 10 Rezoning of Property 10.1 This Deed is conditional upon the Gateway Approval of the Rezoning of the Property. 10.2 If the Gateway Approval of the Rezoning of the Property does not occur on or before the Final Exercise Time, then either party may terminate this deed, at which time: (a) The Nomination Fee paid in accordance with Items 2(a) and (b) of the Schedule will be refunded to the Nominee; and (b) Neither party shall have any Claim against the other party. (Changes underlined)

Conventional Estoppel

1. I am not satisfied the Defendants would otherwise succeed in a claim for conventional estoppel. While the claim played, at best, a peripheral role in the proceedings, the Defendants did not lead evidence of any reliance or detriment they suffered as a result of any common intention they may have shared with the Plaintiffs. For these reasons in my view there are insufficient grounds to find that in the alternative, the Plaintiffs are estopped from terminating the Deed or refusing to perform the steps required under clause 9 should Rezoning not take effect before the Final Exercise Time.

Conclusion

1. For the above reasons, in my view the Deed, objectively construed, is not conditional upon Rezoning. Rather, the terms and surrounding circumstances of the Deed make plain that should 16 weeks after Gateway Approval be the earliest of the events set out under the definition of Completion Date, then the parties are required to undertake their obligations required on Completion Date once those 16 weeks expired. These obligations only become conditional upon Rezoning in the sense described in clause 10.2, that is, when Completion Date has not occurred by Final Exercise Time.
2. In the alternative, I am satisfied the parties subjectively intended the steps required to be undertaken on Completion Date to be conditional upon Gateway Approval, not Rezoning, and thus an order for rectification of the kind set out in [418] would have been granted had the Defendants not succeeded on construction. I am not, however, satisfied there are sufficient grounds to establish a claim for conventional estoppel.
3. In light of my reasons, I invite the parties to prepare short minutes and, if the need arises, to be heard on the question of costs.

Amendments 29 August 2017 - Correction in case name DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 August 2017