Joseph Taouk v Assure

Construction of contracts generally

1. 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], French CJ, Nettle and Gordon JJ reaffirmed the approach to construing commercial contracts: [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 Simic v New South Wales Land and Housing Corporation [2016] HCA 47 at [18] and [78] and applied by the New South Wales Court of Appeal in Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27 at [96].
3. Further guidance on the construction of commercial contracts was provided by Kiefel, Bell and Gordon JJ in Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12 at [16]-[17], 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). Clause 4 is to be construed by reference to the commercial purpose sought to be achieved by the terms of the lease. It follows, as was pointed out in the joint judgment in Electricity Generation Corporation v Woodside Energy Ltd ((2014) 251 CLR 640 at 656-657 [35] and the cases at fn 60), that the court is entitled to approach the task of construction of the clause on the basis that the parties intended to produce a commercial result, one which makes commercial sense. It goes without saying that this requires that the construction placed upon cl 4 be consistent with the commercial object of the agreement.
4. The UK adopts a similar, although not identical, approach to contractual interpretation. In the recent case of Wood v Capita Insurance Services [2017] UKSC 24, the Supreme Court (leading judgment by Lord Hodge) described contractual interpretation at [12] as involving: an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated…To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.

Construction of contracts to vary

1. In construing contracts to vary, the antecedent contract will always form part of the context of the later contract; Lewison and Hughes, The Interpretation of Contracts in Australia (Thomas Reuters (Professional) Australia Limited, 2012) (The Interpretation of Contracts in Australia) at [3.03]; Carter JW, The Construction of Commercial Contracts, (Hart Publishing, 2013) at [7]-[19]. In HIH Casualty & General Insurance Ltd v New Hampshire Insurance Co [2001] EWCA Civ 735 at [84], Lord Justice Rix notes: …I do not see how the relationship of the two contracts can be decided without considering both of them. In essence there are, it seems to me, three possibilities. Either the later contract is intended to supersede the earlier, in which case the above principles apply. Or, the later contract is intended to live together with the earlier contract, to the extent that that is possible, but where that is not possible it may well be proper to regard the later contract as superseding the earlier. Or the later contract is intended to be incorporated into the earlier contract, in which case it is prima facie the second contract which may have to give way to the first in the event of inconsistency….
2. The prevailing view in Australia also appears to be that the antecedent contract is not just part of the context of the later contract, but may be taken into account in construing that later contract regardless of where there is ambiguity in the later contract; The Interpretation of Contracts in Australia at [3.06]. See also B&B Constructions (Aust) Pty Ltd v Brian A Cheeseman & Associates Pty Ltd (1994) 35 NSWLR 227; South Sydney Council v Royal Botanic Gardens (1999) 10 BPR 18,961 at [43], affirmed (2002) 240 CLR 45.
3. This approach also applies to construction of amended clauses, where regard should be had to the admissible evidence of background knowledge reasonably available to the parties at the time of the amendment; The Interpretation of Contracts in Australia at [3.03]; Portsmouth City Football Club Ltd v Seller Properties (Portsmouth) Ltd [2004] EWCA Civ 760 at [47] - [48] per Lord Justice Chadwick.

Oral agreements

1. In John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [93]-[94], Hammerschlag J summarised the principles relevant to the formation of an oral agreement: [93] A binding agreement is made when a reasonable person would believe that, based on their words and behaviour, the parties intended to contract. This is an objective test, which in most cases can be administered by determining whether there has been an offer by one party to be bound on certain terms accompanied by an unqualified acceptance of that offer communicated by the other party to the offeror. See generally: Paterson, Robertson, and Duke, Principles of Contract Law, (4th ed 2011, Thomson Reuters) at [1.15] and [12.10]; J W Carter, Contract Law in Australia, (6th ed 2013, LexisNexis Butterworths) at [3.06]. [94] Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.
2. Formal language of offer and acceptance is not required for a contract to be formed; see Ashton v Pratt [2015] NSWCA 12 at [80] per Bathurst CJ, citing Vroon BV v Foster's Brewing Group Ltd [1994] VR 32 at 79.
3. The commercial context and parties' previous dealings are relevant to determining whether a binding agreement has come into existence between the parties: Pavlovic v Universal Music Australia Pty Limited (2015) 90 NSWLR 605 at [15] (per Bathurst CJ), [72], [84] (per Beazley P), [162] (per Meagher JA); Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548; Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 138. It is also appropriate to consider the object of the transaction between the parties: Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22] (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]; International Air Transport Association v Ansett Australia Holdings Ltd (2008) 82 ALJR 419 at [8] (per Gleeson CJ).
4. In cases involving alleged oral agreements that purport to supplement or supersede written agreements, the remarks of the Court of Appeal in Skyrise Consultants Pty Ltd v Metroland Funds Management Ltd [2011] NSWCA 406 per MacFarlan JA (Beazley and Meagher JJA agreeing) at [13]-[15] are instructive: [13] If a prior oral agreement is consistent with the terms of a later written agreement, the proper conclusion may be that the agreement is partly oral and partly in writing. One issue to be addressed in that context is whether the written terms were intended to be an exhaustive statement of the parties' rights (see State Rail Authority (NSW) v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170 at 191 - 2). If they were, the parol evidence rule will preclude the conclusion that the contract is partly oral and partly in writing. [14] Moreover where, as here, the terms of the prior oral arrangement contradict the terms of the written arrangement the conclusion that the contract is partly oral and partly in writing will not be available. As was said in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; 218 CLR 471 at 484 in relation to the facts there under consideration: In another case it may leave open the possibility that the contract is partly oral and partly in writing. But that cannot be so here. The oral limited recourse terms alleged by the respondents contradict the terms of the written loan agreement. If there was an earlier, oral, consensus, it was discharged and the parties' agreement recorded in the writing they executed. It is the written loan agreement which governed the relationship between Rural Finance and each respondent." (citations omitted) [15] The appellants did not contend that the oral agreement constituted a collateral contract. Such a contention would plainly not have been successful as a collateral contract may not contradict the terms of the main contract (see Hoyt's Pty Ltd v Spencer [1919] HCA 64; 27 CLR 133 and Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; 160 CLR 1).

Promissory estoppel

1. Promissory estoppel operates when the defendant has induced or acquiesced in the adoption by the plaintiff of an assumption that the defendant will not assert its strict legal rights, so to prevent unconscionable (or unconscientious) insistence by the defendant on its strict legal rights; Moratic Pty Ltd v Gordon [2007] NSWSC 5 (Moratic) at [33] per Brereton J.
2. The current leading authority on promissory estoppel in Australia is Brennan J's formulation in Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 (Waltons Stores) at 428: … it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.
3. Waltons Stores was most recently cited with approval by the New South Wales Supreme Court of Appeal in Caringbah Investments Pty Ltd v Caringbah Business and Sports Club Ltd (in liq) [2016] NSWCA 165 at [72] per Bathurst CJ.

Estoppel by convention

1. Estoppel by convention operates alongside promissory estoppel, but as a creature of common law. The principles determining whether a conventional estoppel arises have been stated on numerous occasions. An estoppel by convention arises where the relevant parties make an assumption about the conventional basis of their relationship: Dabbs v Seaman (1925) 36 CLR 538 at 549; Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226 at 244-5. This usually arises where parties act on the basis of agreed or assumed facts and are 'estopped' from denying those agreed or assumed facts because such a denial will cause detriment to one of them: Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300 at 322-323; Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at [200] (Ryledar); Thompson v Palmer (1933) 49 CLR 507 at 547.
2. As Mason and Deane JJ in Legione v Hateley (1983) 152 CLR 406 (Legione) at 430 said, it is: …the common law estoppel which precludes a person from denying an assumption which formed the conventional basis of a relationship between himself and another or which he has adopted against another by the assertion of a right based on it.
3. The "classic statement of [the underlying] principle" (Legione at 430) is said to be that of Dixon J in Thompson v Palmer (1933) 49 CLR 507 at 547: The object of estoppel in pais is to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other's detriment. Whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party. He may be required to abide by the assumption because it formed the conventional basis upon which the parties entered into contractual or other mutual relations, such as bailment; or because he has exercised against the other party rights which would exist only if the assumption were correct … ; or because knowing the mistake the other laboured under, he refrained from correcting him when it was his duty to do so; or because his imprudence, where care was required of him, was a proximate cause of the other party's adopting and acting upon the faith of the assumption; or because he directly made representations upon which the other party founded the assumption. But, in each case, he is not bound to adhere to the assumption unless, as a result of adopting it as the basis of action or inaction, the other party will have placed himself in a position of material disadvantage if departure from the assumption be permitted. (citations omitted)
4. His Honour shortly thereafter provided the following further exposition in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 675-676: The justice of an estoppel is not established by the fact in itself that a state of affairs has been assumed as the basis of action or inaction and that a departure from the assumption would turn the action or inaction into a detrimental change of position. It depends also on the manner in which the assumption has been occasioned or induced. Before anyone can be estopped, he must have played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it. But the law does not leave such a question of fairness or justice at large. It defines with more or less completeness the kinds of participation in the making or acceptance of the assumption that will suffice to preclude the party if the other requirements for an estoppel are satisfied. A brief statement of the recognized grounds of preclusion is contained in the reasons I gave in Thompson v Palmer, and it is convenient to repeat it [his Honour then quoted part of the quote extracted above].
5. It is important to note that belief in the correctness of the facts or state of affairs assumed is not always necessary. Parties may adopt as the conventional basis of a transaction between them an assumption which they know to be contrary to the actual state of affairs.
6. The requirement the assumption be as to a state of facts (as distinct from law) has been discarded; see the authorities cited in Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300 (Waterman) at [79] per Brereton J.
7. The doctrine of conventional estoppel applies to post-contractual, not just pre-contractual, assumptions: Legione at 432. Therefore, as with equitable or promissory estoppel, in conventional estoppel, "after a formal contract is made, parties may so conduct themselves as to treat provisions of the contract as no longer relevant or varied in some way or suspended in operation": Waterman at [82] per Brereton J.
8. The elements a plaintiff needs to establish for common law conventional estoppel are set out by Brereton J in Moratic at [32], approved in Ryledar at [200]: (1) that it has adopted an assumption as to the terms of its legal relationship with the defendant; (2) that the defendant 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 plaintiff.
9. 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.

Unjust enrichment

1. The plurality of the High Court (Hayne, Crennan, Kiefel, Bell and Keane JJ) in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at [78] affirmed the concept of unjust enrichment is not a definitive legal principle of direct application and thus does not form the basis of restitutionary relief in Australian law. In the context of discussing the concept of "disenrichment," the plurality noted at [78]: Such a "principle" does not govern the resolution of this case because the concept of unjust enrichment is not the basis of restitutionary relief in Australian law. The principle of disenrichment, like that of unjust enrichment, is inconsistent with the law of restitution as it has developed in Australia. Disenrichment operates as a mathematical rule whereas the enquiry undertaken in relation to restitutionary relief in Australia is directed to who should properly bear the loss and why. That enquiry is conducted by reference to equitable principles.
2. By way of example, two recent cases from the United Kingdom Supreme Court demonstrate the proper nature and application of unjust enrichment. In Lowick Rose LLP (in liquidation) v Swynson Ltd and anor [2017] UKSC 32, Lord Sumption (with whom Lord Neuberger, Lord Clarke and Lord Hodge agreed) treated equitable subrogation as the equitable remedy to reverse unjust enrichment, rather than recognising unjust enrichment on its own as a basis for restitutionary relief (see [22]-[24]). Further, Lord Reed (with whom Lord Neuberger, Lord Mance, Lord Carnwath and Lord Hodge agreed) in Commissioners for Her Majesty's Revenue and Customs v The Investment Trust Companies (In Liquidation) [2017] UKSC 29 at [40] referred to unjust enrichment not as a free standing claim, but as "a unifying principle underlying a number of different types of claim."

Credit of the witnesses

1. As will appear later in my judgment, a number of credit issues arose for determination.
2. In principle, a trial judge is not restricted in his or her assessment of a witness; he or she is not bound to accept all or any of that which the witness attests to. O'Loughlin J collected the authorities in Cubillo v Commonwealth (No 2) (2000) 103 FCR 1 at [118]-[123].
3. However, although judges are entitled to reject part or the whole of a witness's evidence, even if there has been no cross-examination it is of course incumbent upon them to provide reasons for doing so. In any case where credibility is an important issue, the judge must give sufficient reasons so as to demonstrate he or she has not failed to use or has not palpably misused his or her advantage of first hand exposure in observing the witness; Beale v Government Insurance Office of NSW [1997] 48 NSWLR 430 at 445 per Meagher JA. Judges as do juries need to act reasonably and not perversely and capriciously in relation to accepting or rejecting a witness's testimony; Christmas v Nicol Bros. Pty Ltd and Anor (1941) 41 NSWSR 317 at 322 per Jordan CJ; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) and Others (1999) 160 ALR 588 at 617 per Kirby J.
4. Further, in making assessments of credibility, trial judges should exercise restraint in drawing inferences too willingly from the demeanour of witnesses as they present in court. Primary deference should instead be given to contemporaneous documents. 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.
5. Whilst it is simplistic and arguably erroneous for a trial judge solely to be influenced in his or her findings by contemporaneous documents, they will often have an extremely potent part to play in that process, especially when they were created against interest. If they appear of course to be self-serving they may need to be viewed with some care. Effective cross-examination also will play an important part in assisting a judge to come to a view about the facts especially when inconsistencies are exposed which are not capable of rational explanation. In any fact finding exercise however a judge must always be astute in particular when drawing inferences carefully to distinguish in his or her mind between what is a reasonable inference as opposed to what may amount to no more than mere speculation; Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 222 per Mahoney JA.
6. The observations of McLelland CJ in Equity in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 should also be at the forefront of judge's assessments of witnesses recalling oral conversations: 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)
7. There are a raft of difficulties in cases based on perception and reliance on spoken words, some of which have been alluded to by the then Chief Justice Spigelman, in "Truth and the Law" (2011) 85 (11) Australian Law Journal 746 (at 756-759), and in cases such as Pennimpede v Pennimpede [2009] NSWSC 85 at [29] per Bryson AJ and Murtagh v Murtagh [2013] NSWSC 926 at [105]-[109] per Hallen J. These difficulties are only amplified by the passage of time.
8. The rule in Jones v Dunkel (1959) 101 CLR 298 (Jones v Dunkel) may also play a role in the assessment of the probability of a witness being accepted. The Jones v Dunkel rule is a particular application of the general principle in the law of evidence that "all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted"; Blatch v Archer (1774) 1 Cowp 63 at [65] per Lord Mansfield. The statement of the rule in J D Heydon, Cross on Evidence, 9th ed (2013) LexisNexis Butterworths at [1215] was approved in R v Navarolli (2009) 194 A Crim R 96 by Muir JA at [2]: [2] What is known as the Rule in Jones v Dunkel is summarised in Cross on Evidence (Aust ed) as follows: First, that unexplained failure by a party to give evidence, to call witnesses, or to tender documents or other evidence or produce particular material to an expert witness may (not must) in appropriate circumstances lead to an inference that the uncalled evidence or missing material would not have assisted that party's case.
9. The rule can operate against a party who bears the onus of proof and against a party who does not; Ho v Powell (2001) 51 NSWLR 572 at [16] per Hodgson JA (with whom Beazley JA agreed).
10. The plurality (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) in ASIC v Hellicar (2012) 247 CLR 345 (ASIC v Hellicar) at [165]-[167] discussed the application of the rule in Jones v Dunkel: 165. Disputed questions of fact must be decided by a court according to the evidence that the parties adduce, not according to some speculation about what other evidence might possibly have been led. Principles governing the onus and standard of proof must faithfully be applied. And there are cases where demonstration that other evidence could have been, but was not, called may properly be taken to account in determining whether a party has proved its case to the requisite standard. But both the circumstances in which that may be done and the way in which the absence of evidence may be taken to account are confined by known and accepted principles which do not permit the course taken by the Court of Appeal of discounting the cogency of the evidence tendered by ASIC. 166. Lord Mansfield's dictum in Blatch v Archer (1774) 1 Cowp 63 at 65 [98 ER 969 at 970 that "[i]t is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted" is not to be understood as countenancing any departure from any of these rules. Indeed, in Blatch v Archer itself, Lord Mansfield concluded (1 Cowp 63 at 65 [98 ER 969 at 970) that the maxim was not engaged for "it would have been very improper to have called" the person whose account of events was not available to the court. 167. This Court's decision in Jones v Dunkel is a particular and vivid example of the principles that govern how the demonstration that other evidence could have been called, but was not, may be used. The essential facts of the case, though well known, should be restated. The personal representative of a driver who had died in a collision with another vehicle brought an action for damages on her own behalf and on behalf of the deceased driver's dependants. The Plaintiffs' case depended upon demonstration that the other driver's negligence was a cause of the accident. The Plaintiff sought to demonstrate negligence by having the tribunal of fact (in that case a jury) infer from facts concerning the road and the two vehicles involved that the collision had occurred when the Defendant's vehicle was on the wrong side of the road. One of the Defendants, the surviving driver, did not give evidence at the trial. The Court divided about whether the inference which the Plaintiff sought to have the jury draw about where the collision occurred was an inference that was open on the evidence. But the Court held (Jones v Dunkel (1959) 101 CLR 298 at 308 per Kitto J; see also at 312 per Menzies J; at 320-321 per Windeyer J.) "that any inference favourable to the Plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the Defendant and the evidence provides no sufficient explanation of his absence."
11. Heydon J, in a separate judgment in ASIC v Hellicar at [232] made clear the rule in Jones v Dunkel does not extend to allowing inferences to be positively drawn that the absent witness's evidence would have adversely affected the party who failed to call the witness: …As the Court of Appeal said, two consequences can flow from the unexplained failure of a party to call a witness whom that party would be expected to call. One is that the trier of fact may infer that the evidence of the absent witness would not assist the case of that party. The other is that the trier of fact may draw an inference unfavourable to that party with greater confidence. But Jones v Dunkel does not enable the trier of fact to infer that the evidence of the absent witness would have been positively adverse to that party (HML v The Queen (2008) 235 CLR 334 at 437-438 [302]-[303]; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at 385 [64]).

Overview of the case and considerations to follow

1. Mr Taouk's case primarily centred on two grounds. First, Mr Taouk alleged a string of conversations with Mr Harsany spanning from January 2012 to late 2016, which, in addition to the Agreements, entitled him to be reimbursed for his alleged financial contributions to the Berowra Development. These conversations amounted, according to Mr Taouk, to oral agreements and/or oral terms which either stood alone or alternatively were superimposed upon the existing Agreements. Secondly, Mr Taouk sought to prove he made, or had made on his behalf, these financial contributions to Berowra Development.
2. Assure, on the other hand, maintained the parties rights and liabilities were confined to those set out in the Agreements. Assure rejected the conversations alleged by Mr Taouk, and submitted any payments Mr Taouk did make were in accordance with his liabilities as a Guarantor of the Developer, and Indemnifier of the Development Agreement.
3. At hearing, the main issues in dispute turned on the credit of the witnesses, and whether any of the conversations Mr Taouk alleged took place not only did take place, but altered the rights and liabilities of the parties as understood under the Agreements.
4. Given the breadth of Mr Taouk's claims, the parties agreed on nine 'Preliminary Questions on Liability' to determine the liability of issues in these proceedings (Preliminary Questions on Liability). I will proceed in setting out these Questions on Liability (1), before making some preliminary comments on the parties' submissions (2) and the credit of the witnesses (3). I will then deal separately with Mr Taouk's alleged conversations given the important role these conversations played in Mr Taouk's case as a whole (4). Finally, having made these findings, I will address each of the Preliminary Questions on Liability to resolve the disputed rights and liabilities on both parties (5).

(1) Preliminary Questions on Liability - an overview

1. It is now convenient to set out the Preliminary Questions on Liability, as agreed upon between the parties.

The Plaintiff's Claim (1) Is the Defendant liable to the Plaintiff for alleged breaches of agreement pleaded at paragraphs [2]-[27] of the Amended Statement of Claim (Claim) and as traversed at paragraphs [2]-[27], [36]-[39] of the Defence to the Claim (Defence)? (Question 1 - Breaches of Agreement) (2) Is the Plaintiff entitled to the estoppels alleged at paragraphs [28]-[31] of the Claim, the estoppels pleaded at paragraphs [3(c)], [4(e)], [8(b)], [18(a)] and [24(d)] of the Defence to Cross-Claim, or paragraphs [5], [14] and [16] of the Reply to the Defence? (Question 2 - The Estoppels) (3) Is the Defendant liable to the Plaintiff for the alleged breach of section 21 of the Australian Consumer Law pleaded at paragraphs [32]-[33] of the Claim? (Question 3 - Section 21 of the ACL) (4) Is the Defendant liable to the Plaintiff for unjust enrichment as alleged at paragraph [34] of the Claim? (Question 4 - Unjust Enrichment) (5) Are the claims for payments pleaded in paragraph [8] of the Claim claims that the Plaintiff is entitled to bring against the Defendant? (Question 5 - Alleged Paragraph 8 Payments) (6) Are claims for payments particularised in the schedule at Tab 33 of the Exhibit to the Plaintiff's Affidavit dated 2 December 2016 as follows claims that the Plaintiff is entitled to bring against the Defendant: 1. Joseph Taouk made this payment through the bank account of Edifice. The working capital to make this payment was provided by Joseph Taouk as a director's loan to Edifice and is recoverable as a contribution by Joseph towards the project (see in particular items 2-4, 7-12, 20, 89, 94, 107, 149, 166-167, 169, 172-176, 179-180, 191, 250, 292-294); (Question 6(a)) 2. This is an expense incurred by Joseph Taouk for the project and Joseph Taouk directed his cousin Mikhael Tawk to make this payment on his behalf, in which Joseph Taouk reimbursed Mikhael Tawk for this payment (see in particular items 1, 6); (Question 6(b)) 3. This is an expense incurred by Joseph Taouk for the project. Mr Taouk directed Micro Formwork to make this payment on his behalf, in which Joseph Taouk reimbursed Micro Formwork for this payment (see in particular item 5); (Question 6(c)) 4. This is an expense incurred by Joseph Taouk for the project, in which Joseph Taouk directed another company Mint Development to make this payment (see in particular item 57); (Question 6(d)) 5. This is a payment incurred by Joseph Taouk from his own credit card and is an expense incurred in the construction of the townhouses at Berowra Heights (see in particular item 7); (Question 6(e)) 6. Loan was advanced by St Peter Holding on behalf of Joseph Taouk (see in particular item 121); (Question 6(f)) 7. Were paid by Micro Formwork and later Joseph Taouk refunded Micro Formwork (see in particular items 253-254); (Question 6(g)) (Question 6 - Alleged Tab 33 Schedule Payments)

The Defendant's Cross-Claim (7) Is the Plaintiff liable to the Defendant for breaching the Development Agreement as alleged at paragraphs [2]-[30] of the Cross-Claim (Cross-Claim) as traversed at paragraphs [2]-[30] of the Defence to the Cross-Claim? (Question 7 - Breaches of Agreement, Cross-Claim) (8) Is the Plaintiff liable to the Defendant pursuant to a guarantee and indemnity as alleged at paragraphs [31]-[33] of the Cross-Claim as traversed at paragraphs [31]-[33] of the Defence to Cross-Claim? (Question 8 - Liability as Guarantor and Indemnifier, Cross-Claim) (9) Is the Defendant liable to the Plaintiff for the alleged breach of section 21 of the Australian Consumer Law at paragraph [35] of the Defence to Cross-Claim? (Question 9 - Section 21 of the ACL, Cross-Claim)

(2) Parties' submissions - preliminary comments

1. I will provide some short comments on my impression of the parties' submissions, but descend into a more detailed analysis of the substance of these submissions when considering each of the Questions on Liability.
2. By way of preliminary observation, the parties approached the submissions in a somewhat contrasting manner. In written submissions Assure took the course of a very detailed analysis of each of the various milestones relied upon by Mr Taouk.
3. Mr Taouk's approach was to take what might be generously described as an economic approach in his written submissions. In a number of instances the submissions simply did not specifically join issue on many of the factual questions agitated by Assure. Mr Taouk's submissions might best be characterised as thematic rather than a detailed analysis of the facts. In my view the latter is not only the practical approach, but indeed in the circumstances of this factually dense case, crucial. It is necessary on my part to deal with the detail of the various alleged meetings, conversations, and payments, and it would have been of great assistance to the court if Mr Taouk had chosen to engage in the detail in a similar fashion.

(3) Credit of Mr Taouk and Mr Harsany - preliminary comments

1. There were two witnesses in this case - Mr Taouk and Mr Harsany. The credibility of both witnesses was, in general terms, called into question, and was central to each party's cases.

Credit of Mr Taouk

1. Mr Taouk's ability accurately to recount historical material was an important focus in the trial, given his heavy reliance on his own recollection to support the majority of his claims.
2. In short, I did not find Mr Taouk to be a credible witness. I found it difficult, if not impossible, to believe and accept his various conversations and allegations.
3. As Mr Taouk's various affidavits evolved so did his apparent recall of the details of some of his conversations especially with Mr Harsany. There were also examples of his recalling conversations which had not been referred to in earlier affidavits.
4. Not only did the allegations vary and often inflate or grow in detail over time, but most were plagued by a substantial inability on his part to corroborate them with contemporaneous records.
5. Further, I had the distinct impression by reason of the many answers Mr Taouk gave in cross-examination, that to a very large extent, Mr Taouk said whatever he thought was the most favourable answer he could give in the circumstances to advance his case, even in the face of contemporaneous documents to the contrary.
6. In summary I found Mr Taouk to be, at best, unreliable.

Credit of Mr Harsany

1. In my view, Mr Harsany's case is much more aligned with the contemporaneous documents, in particular the important email of Mr Owen following the 12 January Meeting.
2. Mr Harsany impressed me as a careful, if not overly anxious, person who was acutely concerned to ensure there was not only a cap on construction costs, but for his and Mr Taouk's obligations going forward were clearly established. This concern was partly promoted by reason of the fact he had persuaded his mother in law to lend monies for the Berowra Development.
3. Mr Harsany's concern for certainty manifested itself in both the Development Agreement and the Variation.
4. My overall impression of Mr Harsany is that he gave truthful answers supported by contemporaneous material. His answers were responsive and direct, and in stark contrast to Mr Taouk's responses.

(4) The Alleged Conversations

1. Mr Taouk's allegations of conversations, mostly between him and Mr Harsany, concerning payments by Mr Taouk, and promises of reimbursement by Mr Harsany, were central to Mr Taouk's response to most of the Preliminary Questions on Liability. I will therefore deal with the primary alleged conversations up front to avoid repetition and make clear my findings.

Alleged January 2012 conversation

1. This conversation that allegedly took place at the 12 January Meeting concerned the parties, according to Mr Taouk, allegedly agreeing to a $5.7 million cap on construction costs, and Mr Harsany allegedly telling Mr Taouk he and associated entities would finance the Berowra Development. In my view, Mr Taouk's account of this conversation was unsatisfactory.
2. Mr Taouk gave evidence of a conversation that allegedly took place between him and Mr Harsany at the 12 January Meeting (JT1 [2]-[4]). In that first affidavit, he did not make mention of Mr Owen being present. Mr Taouk first mentioned Mr Owen also being present at the 12 January Meeting in his fourth affidavit (JT4 [6]).
3. When confronted with this omission in cross-examination, Mr Taouk's response was unsatisfactory. He tried to argue there were other things said at the meeting that also had not been in his initial account. He also said there was an agreement reached at the 12 January Meeting (T51.37) and then said that Mr Owen has proposed it (T52.7). He appeared then to change his evidence and said all three persons at the meeting came up with the figure but that he did not recall who had said it (T52.18-28).
4. With Mr Taouk's various inconsistencies and changes, he nonetheless asserted he had a clear recollection of the meeting (T52.44). The cross-examination displayed in my view that he was very confused when he tried to recall the detail of what had occurred.
5. In Mr Taouk's fourth affidavit he claimed he had said at the 12 January Meeting that construction costs would be about $2 million more than $3.7 million (JT4 [6]). This was quite different to the account he gave in cross-examination but he insisted there was no contradiction in his evidence (T53.10 - T55.11). Further, Mr Taouk of course insisted he had informed Mr Harsany construction costs would be around $5.7 million. The problem with this evidence, which was really foundational to his case more generally, is that it is inconsistent with Mr Owen's contemporaneous email written at Mr Taouk's request. I have referred to this email earlier but it is clear and unequivocal in that it states "construction costs up to $3.7 million" (CB3/887).
6. Mr Taouk gave no evidence at all that upon receipt of Mr Owen's email he informed him that that was an incorrect account of what had occurred at the meeting in what can only be regarded as a crucial aspect of the arrangements. Mr Owen of course was not called to give evidence and his absence was unexplained.
7. It is likewise clear from Mr Owen's contemporaneous email that Mr Taouk undertook to arrange finance. Mr Taouk of course claimed he believed from the conversation that Mr Harsany or entities associated with him would be attending to finance. Again there was no attempt made by Mr Taouk at the time to correct Mr Owen's summary or his attribution of Mr Taouk as financier.
8. I accept Mr Harsany's evidence that Mr Taouk told him he would obtain all of the relevant finance and that it would cost approximately $3 million. I also accept Mr Harsany in his explanation of how he arrived at the figure of $3.7 million allowing for a possible blow out (DH2 [12]-[16] and CB4/1370). This was the prelude to the preparation of the written contract.

Alleged April 2012 conversation

1. This conversation concerns the parties allegedly agreeing to a $3 million Building Agreement despite Mr Taouk alleging it would cost at least $300,000 per unit to build, and Mr Harsany allegedly telling Mr Taouk he would be reimbursed for any funds he contributed to the shortfall in the Building Agreement.
2. Mr Taouk asserted during this conversation in April 2012 Mr Harsany allegedly told him not to worry if he (Mr Taouk) injected the funds to cover the shortfall as he would get it back when the townhouses were sold. Mr Taouk failed to mention this conversation in his first and second affidavits, which is a little surprising if indeed it were true and indeed had taken place as he asserted it did.
3. If Mr Harsany had, as it were, promised Mr Taouk he would be reimbursed for any shortfall from sale proceeds it is also entirely surprising that notion is not reflected in the Proposal or the Development Agreement. Indeed Mr Taouk apparently did not complain about the absence of such an arrangement in the written documents he signed.
4. I observe in passing the Proposal required the Developer and Mr Taouk to pay any shortfall for an amount required to reach completion (see clause 7). There was no suggestion in the documents, in particular the Proposal, that Mr Taouk would be reimbursed. Mr Taouk feigned ignorance of the Proposal saying that he did not know about it until October 2014 although it was clear on the evidence at all relevant times it was an attachment to the Development Agreement (CB3/859). More to the point, under the Development Agreement Mr Taouk assumed responsibility as Guarantor without any right of reimbursement from Assure. Indeed I accept Mr Harsany made it very plain to Mr Taouk from their very first meeting that he could not do the Berowra Development on his own and that he was looking for a partner who could put money in for the purchase of the land and construction costs.
5. Mr Taouk's attempt to explain both the Building Agreement and the circumstances in which the Development Agreement came into existence were particularly confusing. He tried to suggest the Building Agreement would say $3 million only to obtain finance and that the real agreement was something different. In effect the underlying documentation did not support the real arrangement because apparently ANZ and Westpac knew the true situation (T70.41-T73.24).
6. I agree with Assure's submission that such a proposition is plainly absurd. The notion Mr Harsany and Mr Taouk drafted a fixed price contract somehow to induce the banks to lend money in circumstances where everybody including the banks knew that the written agreement did not reflect the true arrangement is implausible. There is no reason in the absence of anyone being called from ANZ and/or Westpac to conclude the Building Agreement should not be accepted on its face.

Alleged May 2012 conversation

1. This conversation concerns the timing of the agreement for the Berowra JV, and cannot be corroborated by any contemporaneous documents.
2. When initially asked about the conversation Mr Taouk insisted that it had taken place in May 2012 yet when pressed he said it took place in the March of that year. I am simply unable to accept his evidence in that regard.

Alleged 27 June 2012 conversation

1. This conversation concerns Mr Taouk allegedly agreeing to and carrying out Mr Harsany's request that he advance $200,000 for Lot 8.
2. Mr Harsany said he asked Mr Taouk for the money but it was not forthcoming. He then said Assure borrowed it from Mr El Khoury. I will deal with this matter in some greater detail later when I come to the specific transaction. However I accept Mr Harsany's account. Mr El Khoury undoubtedly signed the Loan Agreement and provided the funds. Further, Mr El Khoury was not called to deny or qualify the relationship between himself and Assure which is to be gleaned from the face of the relevant documentation.

Alleged March and May 2013 conversations

1. The March 2013 conversation concerns Mr Harsany allegedly requesting Mr Taouk to add to the Westpac Facility as Guarantor, and Mr Taouk agreeing, saying he would work on Westpac to get finance. The May 2013 conversation concerns Mr Harsany allegedly telling Mr Taouk the Berowra JV was only between Assure and Mr Taouk, and he would inform Westpac and the Quantity Surveyor that the Developer was no longer the Special Purpose Vehicle (SPV).
2. These conversations were first introduced in Mr Taouk's third affidavit, with no explanation as to why, if they were important, they only emerged belatedly. Again, based on the timing and uncorroborated nature of Mr Taouk's account of these conversations, I am unable to accept his versions of both conversations.

Alleged 22 June 2013 conversation

1. These conversations concern the circumstances in which Mr Harsany became a site manager at the Berowra Development.
2. Again, Mr Taouk's account of Mr Harsany apparently pleading with him to be the site manager of the Berowra Development did not emerge until his third affidavit, and are not corroborated by any evidence besides Mr Taouk's own recollection. I am not persuaded Mr Taouk's version of these events is accurate. On the other hand I do accept Mr Harsany's evidence that upon Mr Taouk requesting him to do so, he took over as site manager for a short period (DH2 at [69]).

Alleged August 2014 conversation

1. These conversations concern Mr Harsany allegedly requesting Mr Taouk to pay $200,000 to CEG.
2. Mr Harsany was alleged to have said he would pay the moneys back but that Mr Taouk was protected in any event by the "Joint Venture Deed". No such clause was identified in the Development Agreement. It was said Mr Taouk would have known the fact. Again I do not accept this conversation occurred.

Alleged February and March 2015 conversations

1. These conversations concern Mr Harsany allegedly telling Mr Taouk he would be reimbursed for any contributions he made at the end of the Berowra Development.
2. Mr Taouk's evidence of these conversations is confused and, in my mind, contrived. First, it is nonsensical in my mind for the two men to be discussing how Assure would reimburse Mr Taouk, if, on Mr Taouk's own evidence, this arrangement had been part of the deal for almost three years since April 2012.
3. Secondly, Mr Taouk was unable to provide a consistent account of such conversations which apparently led to the Variation. In his first affidavit, he deposed to a March 2015 conversation where Mr Harsany allegedly told him "You will get any contributions you have made at the end of the project" (JT1 [52]). In his second affidavit, Mr Taouk instead deposed to a February 2016 conversation where Mr Harsany told Mr Taouk he would amend the Development Agreement to ensure Mr Taouk would be repaid his contributions in priority (JT2 [26]). In his fourth affidavit, Mr Taouk deposed to two more February 2015 conversations which again were different to his earlier deposed conversations which occurred as a prelude to the Variation.
4. In one aspect of his evidence Mr Taouk sought to call in aid an email which he asserted recorded this conversation precisely in the same terms as his affidavit (T134.1-17). Such an email was never identified and I am satisfied it simply does not exist. I am unable to accept any of these conversations occurred.

Alleged November 2015 and January 2016 conversations

1. These conversations concern Mr Harsany allegedly telling Mr Taouk they would "split" a GST refund between them both. Again I am unable to accept that those conversations took place.
2. The recollections were omitted from Mr Taouk's first affidavit, with no explanation as to why they were belatedly recalled, especially given the magnitude of such an agreement, if it existed.
3. Mr Taouk provided no context in his evidence as to how it emerged or indeed why it emerged that Mr Harsany was offering to split a GST refund.
4. More to the point by late 2015 early 2016 Assure had replaced the Developer with Devlan because of the lack of progress on the site. The emails passing between the parties betray a significant degree of frustration on the part of Mr Harsany. To say the parties were in confrontation at this point may be taking it a little too far but without any contextual explanation it seems to me implausible that Mr Harsany would be offering to split a GST refund with Mr Taouk. Such contemporaneous materials as do exist do not support any promise of the sort asserted in the conversations. Again I am not satisfied such conversations took place as Mr Taouk asserted.

Alleged February, March and May 2016 conversations

1. These conversations concern Mr Harsany allegedly promising Mr Taouk he would be paid his contributions from the sale proceedings. Again they were belatedly referred to which in and of itself, given their apparent importance, raises a very considerable question as to the plausibility of them having occurred.
2. For reasons already advanced I am not satisfied these conversations took place. At this point in time the Developer had been deregistered and Assure had retained Devlan to complete the work. This was also a context in which Mr Harsany had already complained about Mr Taouk's failure to contribute to the project. Given the time at which these alleged conversations apparently took place and the context which I think is uncontroversial in a number of respects to which I have referred, I regard these conversations as a contrivance.

Alleged early/May 2016 conversation

1. This conversation concerns Mr Harsany allegedly requesting an audit in early 2016 from Mr Taouk, but was again hampered by Mr Taouk's failure to provide a consistent and corroborated account of the conversation.
2. In his first affidavit, Mr Taouk asserted Mr Harsany wanted a reconciliation of all costs incurred (JT1 [47]). Mr Taouk added detail to this request in his second affidavit, alleging he told Mr Harsany construction costs were at $5.2 million and that he had covered the $2 million shortfall from his own pocket. Mr Taouk also alleged Mr Harsany suggested an audit be prepared to obtain a verification of the amount expended so that Mr Taouk could be paid out of the sale proceeds (JT2 [23]). The disparity between these accounts, compounded by the complete absence of contemporaneous records supporting these accounts, leaves me unable to accept either of Mr Taouk's versions of events.

(5) Preliminary Questions on Liability - consideration

Preliminary Question 1 - Breaches of Agreement

1. Mr Taouk alleged Assure breached a number of express and implied terms in written and oral agreements by failing to reimburse monies contributed by Mr Taouk to the Berowra Development, failing to pay the Mr Taouk a share of the GST refunds, and withdrawing funds from the construction facility on account of construction costs but not forwarding these payments to Mr Taouk or Edifice (Plaintiff's opening submissions [7]). The relevant terms were allegedly expressed and/or implied in the Agreements, and in a number of oral agreements in June 2012, February 2014 and February 2015. I will first address the alleged express terms under the Agreements (1), followed by the alleged implied terms under the Agreements (2), and finish with the alleged terms (both express and implied) in the alleged oral agreements (3).

1. Express terms under the Agreements
2. Mr Taouk alleged the Agreements contained express and implied terms entitling Mr Taouk to recover his alleged contributions.
3. Mr Taouk relied largely on clause 2 of the Variation to support his claim of entitlement to the reimbursement of the monies he allegedly contributed to the Berowra Development. This submission was based on the words of the clause, read together with the Variation as a whole and history of correspondence between the parties which contemplated Mr Taouk being reimbursed for his contributions (Plaintiff's opening submissions [7]-[21]).
4. Assure maintained it had no obligation to pay Mr Taouk any contributions he allegedly made to the Berowra Development under the Agreements.
5. Assure submitted the only payment obligation Assure had under the Development Agreement was to pay the Developer (and not Mr Taouk) the Consideration Amount. Apart from this obligation, the Developer bore the commercial risk and costs of the project as made clear in various clauses of the Development Agreement. Further, pursuant to the Proposal, Mr Taouk was liable as Guarantor and Indemnifier to provide any shortfall in finance or further amount required for reaching completion (Defendant's closing submissions [22]-[31]).
6. I accept Assure's submissions on this point. I am satisfied, based on an analysis of the payment obligations of (1) Assure, (2) the Developer, and (3) Mr Taouk under the Agreements, coupled with an interrogation of (4) Assure's payment obligations as alleged by Mr Taouk, that Assure was not contractually obliged to reimburse Mr Taouk for any of his alleged "contributions." (1) Assure's payment obligations
7. First, the only obligation upon Assure under the Development Agreement was to make any payment pursuant to clause 4.1. This obliged Assure to pay the Developer the Consideration Amount in the manner specified in schedule 6. Schedule 6 in turn set out a formula as to the calculation of the Consideration Amount. It was to be equal to half of the Gross Value of the Project minus the agreed land value, development costs as defined and the owner's equity. Schedule 6 also provided the Consideration Amount would be payable "upon completion of the sale of the last lot" excluding any lots Assure chose to retain.
8. I am satisfied the parties, in my view, objectively agreed Assure was only liable to make payment to the Developer and that payment was only due and owing upon the Developer completing the Berowra Development, as obliged. (2) Developer's payment obligations
9. Secondly, I am satisfied the parties also agreed the Developer bore the commercial risk and the costs of the project, apart from payment of the Consideration Amount. Under clause 11.1 the Developer bore responsibility to prepare the design documentation. The Developer had further obligations under clause 13.1 to construct and develop the project in accordance with the plan. Further under clauses 13.5, 13.9 and 13.11 the Developer was responsible for the quality of and defects relating to the work.
10. Under clause 15.1 the Developer was obliged to ensure Practical Completion occurred on or before the Date for the Project Practical Completion (a term defined in the Building Contract). Under clause 15.5 the Developer was liable for liquidated damages for each month thereafter if the project was not completed by this date. Clause 18.1(a) provided the Developer bore the risk of loss or damage to the site from the Risk Assumption Date (meaning the date of the Development Agreement) and the Developer's Project from the date also of this agreement. Further clauses 18.2 to 18.5 required the Developer to affect various insurance to cover the works. Clause 22 provided that the Developer was to be responsible for all costs in relation to the Developer's Project except or otherwise expressly provided for in the Agreement.
11. The Proposal from the Developer to Assure (Schedule 8) expressly provided for the Developer to arrange finance of approximately $5,455,000 and pay the costs of obtaining finance excluding interest on borrowings and ongoing bank fees. Further the Developer also undertook to procure an amount of $2,200,000 plus short term lending costs and interest to be available from the Development loan for paying out the bank and the private funding facility arranged to purchase 8 Kita Road and in cash to Assure as part of its equity.
12. The Developer pursuant to item 7 of the Proposal was also to engage a Builder to complete the works with "$3.7 million including GST to be the maximum amount chargeable under the Contract" and that "any shortfall in finance or any further amount required to reach completion was to be contributed by the Developer or the Guarantor" (defined as Mr Taouk in the Agreement).
13. On the basis of the limited number of clauses I have so far adverted to, the Developer was the party responsible for carrying out the work and was liable for all the costs associated with the work subject to its rights to claim the Consideration Amount. (3) Mr Taouk's payment obligations
14. Thirdly, I am satisfied any amount the Developer was responsible for, or which Assure had to pay by virtue of the Developer's failure to perform its obligations, were amounts for which Mr Taouk himself was liable as Indemnifier and Guarantor.
15. Pursuant to clause 24.1, both Mr Taouk and the Developer gave Assure an indemnity in respect of the "actual amount of all losses, liabilities, costs and expenses (including without limitation legal expenses on a full indemnity basis) in connection with: (a) the occurrence, cure and attempted cure of any Default Event" and "(b) where the Developer is in default… the administration enforcement or attempted enforcement… of rights under this Agreement". Pursuant to clause 24.2 Mr Taouk guaranteed to Assure the due and punctual performance by the Developer of its obligations.
16. It follows in my view that on proper construction of this clause 24 in particular, not only was Assure not obliged to pay Mr Taouk any amount for construction or finance under the Development Agreement, but it was indeed Mr Taouk who was positively obliged to pay these amounts himself. (4) Assure's payment obligations as alleged by Mr Taouk
17. Mr Taouk contended the Variation affected an alteration of the Development Agreement such that he was entitled to make a claim against Assure for alleged "contribution" by him. Assure maintained no amendments to the Development Agreement in the Variation (such as clauses 3-5 and the additional item to the definition of Development Costs) altered Assure or Mr Taouk's payment obligations (Defendant's closing submissions [32]-[42]).
18. Again, I am satisfied Assure's submissions accurately reflected the proper construction of the Development Agreement as varied by the Variation.
19. First, the Recital to the Variation affirmed the Development Agreement governed the parties' relationship. The Recitals in my view made it abundantly plain that apart from the specific matters set out in the Variation all other terms of the Development Agreement were to apply and continue to bind the parties. If that was not clear from the Recitals alone, clause 7 was explicit in that it provided, except to the extent as varied, amended, or confirmed by the Variation, all rights and obligations arising from and as set out in the existing Development Agreement were to remain in full force and effect. Clause 8 made it abundantly plain that the Variation was not to be taken as a waiver "of any kind" in respect to the Development Agreement, and that there was no waiver of any right under the Development Agreement unless such waiver was expressly set out in writing.
20. Clause 12 for more abundance of caution required each party to indicate they had received independent legal advice, they had a reasonable opportunity to understand the terms of the Variation and they had executed the Variation before their solicitor or legal representative.
21. Notwithstanding the Variation's clear terms in respect of the Development Agreement, Mr Taouk relied on clause 2 to submit it imposed an obligation on Assure to pay Mr Taouk his alleged "contributions". He submitted it gave rise to, in effect, a contractual entitlement that he was to be paid or reimbursed all sums he had paid or caused to be paid on account of Development Costs.
22. Clause 2 of the Variation read: 2. Notwithstanding any other terms within the Development Agreement, the balance of the Development Costs are to be paid or reimbursed to the relevant parties prior to payment of the Consideration Amount.
23. Mr Taouk alleged he was a "relevant party" entitled to be "paid or reimbursed" all of the sums he paid, or caused to be paid, on account of "Development Costs" prior to the payment of the "Consideration Amount." This submission was based on the words of the clause, read together with the rest of the Variation and history of written and oral correspondence between the parties which contemplated Mr Taouk being reimbursed for his contributions (Plaintiff's opening submissions [7]-[21]).
24. Assure submitted a proper construction of clause 2 was that payment of the Consideration Amount was prohibited unless the Development Costs were already paid. Further, the Developer and Mr Taouk, and not Assure, were liable for payment of the Development Costs pursuant to the Development Agreement.
25. I do not accept Mr Taouk's argument that clause 2 granted him a contractual entitlement to be paid or reimbursed any sums he paid or caused to be paid on account of the Development Costs. As submitted by Assure, the provision merely prohibits payment of the Consideration Amount without prior reimbursement of the Development Costs (Defendant's closing submissions [32]-[42]). Assure did not pay the Consideration Amount and accordingly is not in breach of that provision in any event.
26. Further, the reimbursement of costs was limited to Development Costs. The definition of Development Costs was amended by Schedule 1 to the Variation and states relevantly "payment to the Guarantor of any contribution made by the Guarantor to the acquisition of the land and project". This means payments to the Guarantor must be reimbursed in priority, not payments by the Guarantor. Therefore any payments made for example by Assure to the Guarantor are to be deducted from the Consideration Amount payable. The meaning of "contribution" was also qualified as payments limited to "the acquisition of the land and project". This would, on the clear terminology of the provision, exclude construction costs.
27. In this sense, clause 2 read in conjunction with the varied definition of Development Costs in Schedule 1 of the Variation, would not attract payments made by Mr Taouk. It is plain the mechanism contemplated that any payments made by Assure to Mr Taouk came out of the Consideration Amount payable to the Developer. This was a mechanism which would clearly prevent double payments to Mr Taouk. Schedule 1 of the Variation in any event simply added a further item to the definition of Development Costs in the Consideration Amount formula in Schedule 6, and modified the formula by which the Consideration Amount was to be calculated. It did not, in my view, impose an obligation of Assure to pay the items in the definition of Development Costs. Liability of any party, in my view, remained governed by the Development Agreement.
28. In my view, properly construed, the Development Agreement in conjunction with the Variation does not give rise to any cause of action of the kind pleaded by Mr Taouk. In particular the Variation does not give him the contractual entitlement he asserted. The Agreements are obviously intended to be read together and dovetail in a way that does not detract from their intelligibility.
29. Debate took place before me as to when surrounding circumstance may be adverted to for the purposes of contractual construction. As stated, Mr Taouk sought to rely on the history of written and oral correspondence between the parties as support for his construction of the Agreements entitling him to be reimbursed for his contributions (Plaintiff's opening submissions [7]-[21]).
30. In my view, ambiguity must be present before such an endeavour can be undertaken: Mount Bruce Mining at [46]-[52]; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352. I am satisfied no ambiguity exists here. It is therefore untenable in my opinion, as Mr Taouk suggested, surrounding circumstances and/or extrinsic material can be called in aid.
31. However even if such material was adverted to, it does not assist Mr Taouk as was pointed out in the Defendant's closing submissions at [34]. A fair reading of the emails therein referred to and others make it plain Mr Harsany was entirely dissatisfied with Mr Taouk's performance at various points. Indeed the contemporaneous materials showed Mr Harsany was complaining having borne more than what he saw as his fair share of the financial burden. Indeed he did a calculation which Mr Taouk did not, it seems, seriously contest in an email of 26 February 2015 (CB1/392) suggesting that if contributions were taken into account it would not be a reflection of 50/50 but rather Mr Taouk had contributed to at that point only 16% of what had been agreed. There was not the slightest suggestion in any of the materials carefully considered that Mr Harsany was agreeing or intimating he would recognise Mr Taouk's alleged contribution to the project so as to relieve him from his liability under the terms and conditions of the arrangement, in particular the guarantee and the shortfall.

2. Implied terms under the Agreements
3. Mr Taouk also submitted the Development Agreement contained nine implied terms supporting Mr Taouk's entitlement to repayment of contributions by Assure (ASOC [14]-[15]).
4. Assure rejected the alleged nine implied terms of the Development Agreement on the grounds the comprehensiveness of the Development Agreement itself made it unlikely the parties also intended to be bound by implied terms, and that certain implied terms were not supported by particulars and were inconsistent with the Development Agreement (Defendant's closing submissions [68]-[71]).
5. I am again satisfied that, in my view, Assure's submissions on this point were consistent with a proper construction of the terms of the Agreements. I am satisfied the parties set out to record the terms of their agreement in a detailed written document following negotiations and with the assistance of lawyers, and did not intend to be bound by any implied obligations.
6. The first implied term was that Assure would pay Mr Taouk all contributions made by him to the acquisition of the land and to the project (ASOC [14]). I am unable to see how the terms should be implied. As noted by Assure, the particulars in relation to this implication are non-existent (Defendant's closing submissions [68]-[71]).
7. Further, as I construe the written contractual documents, the term was contrary to the express contractual agreement between the respective parties. Pursuant to that contract Mr Taouk provided Assure with a guarantee and indemnity in relation to the Developers performance. Mr Taouk had a responsibility to compensate Assure in the event that the Developer failed to carry out the work and complete the work in accordance with the terms of the arrangement. An implication in this context makes no sense at all as it has the effect of turning what I regard to be an express contractual obligation on its head.
8. In any event, as I have stated, pursuant to the terms of the Agreements between the parties, Assure was responsible for one payment which was the Consideration Amount to the Developer. The Developer on the other hand was obliged to carry out and pay for the costs associated with the work and was the party responsible for contracting the Builder. In my view, in light of these obligations, the implied term cannot arise.
9. The balance of the implied terms are a repetition of the same alleged implications said to emerge from the 27 June 2012 oral agreement as to contributions, which I will deal with in further detail below. However, in short, I am of the view the implied terms cannot arise because of the comprehensiveness of the Agreements, and in particular the express and detailed contractual arrangements regarding payment obligations (especially those of Mr Taouk and the Developer) agreed to by the parties.

3. Express and implied terms under the alleged oral agreements
4. Mr Taouk also alleged there were a string of oral agreements containing express and implied terms for Assure to repay Mr Taouk for any contributions to the Berowra Development. The nature and number of these alleged agreements and breaches vary throughout submissions, but include: 1. 27 June 2012 oral agreement obliging Assure to repay Mr Taouk for contributions he made to the acquisition of the Berowra Property. Mr Taouk alleged that pursuant to this agreement, he advanced $200,000 to Assure which he had not been repaid. Mr Taouk also alleged Assure breached further obligations implied under this oral agreement, namely not taking steps to market for sale three of the townhouses, not paying Mr Taouk any of the proceeds for the sale of townhouses in the Berowra Development, disbursing monies referable to the development for costs outside of the Development Agreement, and refusing to provide Mr Taouk with information about the sale of the townhouses in the Berowra Development. 2. February 2014 oral agreement varying the 27 June 2012 oral agreement and obliging Assure to pay 50% of GST refunds to Mr Taouk. Mr Taouk alleged Assure received a GST refund of approximately $336,000 and did not pay Mr Taouk 50% of this. 3. February 2015 oral agreement obliging Assure to repay Mr Taouk for any payments he made, or caused to be made by the Builder, towards the development and construction costs of the Berowra Development when funds from the sale of the townhouses in the Berowra Development became available.
5. I should add that both in opening and closing written material each of the various factual and legal issues sought to be advanced by Mr Taouk were somewhat scantily dealt with. The oral submissions I regret to say did not enlighten me much further.
6. Assure submitted there was no intent for any oral conversations to alter the written Agreements. Firstly, both the Development Agreement and Variation would have reflected purported obligations arising from oral conversations had the parties intended for these obligations to be legally binding (Defendant's opening submissions [22]). Further, and this applies in response to most of the Plaintiff's responses to the Questions on Liability, Mr Taouk was not a credible witness and Mr Harsany's evidence should be favoured over his (Defendant's closing submissions [3]-[8]).
7. With regard to specific express or implied terms and breaches of these terms in these alleged oral agreements, Assure submitted: 1. 27 June 2012 oral agreement: no agreement was reached and in any case, it was Mr El Khoury and not Mr Taouk who advanced the $200,000 to Assure. Further, Assure did not breach any of the alleged implied terms from this alleged agreement (Defendant's closing submissions [50]-[61]). 2. February 2014 oral agreement: there was no evidence of a conversation in February 2014 regarding a GST split. Even if there was a conversation, this was not promissory in nature and therefore created no legally binding obligations (Defendant's closing submissions [62]-[64]). 3. February 2015 oral agreement: no conversation took place, and even if it did, it was in the context or pre-contractual negotiations, with no intention to enter into legal relations and illusory or uncertain consideration (Defendant's closing submissions [65]-[67]).
8. I have already rejected Mr Taouk's version of the above conversations, so strictly speaking any analysis of terms incorporated by implication is unnecessary. However I propose to make some comments about the implied terms asserted.
9. Mr Taouk alleged there was an oral agreement arising from his conversation with Mr Harsany of 27 June 2012 which contained at least 8 implied terms (ASOC [5]-[6]). Some of the implications alleged by Mr Taouk went perilously close to those which might be implied in many commercial arrangements (for example, an obligation to do all things reasonably necessary and/or to act in good faith). Some were quite explicit, for example the obligation to pay Mr Taouk all contributions.
10. Even had I found an oral contract formed on 27 June 2012 I would have rejected the alleged existence of these implied terms. I have difficulty understanding how the implications concerning good faith would arise in this context. The so called oral contract dealt with the repayment of a particular sum and an alleged promise Mr Taouk would be repaid those amounts. I cannot see how these specific promises would as a matter of necessity or otherwise give rise to high level and generalised implications of the sort asserted. As a matter of law I consider the argument untenable.
11. In relation to the more specific implied terms referrable to contributions made in relation to the specific project, the GST split and Mr Taouk's reimbursement following sale of the Berowra Development townhouses, again I do not understand why in accordance with the usual tests these terms would be implied. At the risk of unnecessary repetition the underlying assumption of course is that they necessarily and/or as a matter of fact ought to be implied notwithstanding the fact that the alleged conversation dealt with quite specific items. In the light of what was otherwise alleged to be said on 27 June 2012, February 2014 or February 2015, I see no room for there to be any implication as a matter of necessity obviousness or fact.
12. In the light of my findings as to the conversations and my analysis of the non-existence of implied terms it is unnecessary to deal with whether any of them was breached.

Preliminary Question 2 - The Estoppels

1. Mr Taouk submitted a series of conversations between Assure and Mr Taouk gave rise to estoppel by convention or representation precluding Assure from departing from the terms of the Variation (in particular Mr Taouk's construction of clause 2) and denying Mr Taouk was entitled to recover his contributions. Mr Taouk pleaded three estoppels, but relied on seven estoppels in closing submissions (ASOC [29], Plaintiff's closing submissions [33]-[38]). Specifically, Mr Taouk relied on representations in alleged conversations on the following dates: 1. April 2012 where Mr Harsany allegedly told Mr Taouk he would pay him the shortfall between the construction costs of $3 million and what construction would be once the townhouses are sold (JT4 [9]); 2. June 2012 where Mr Harsany allegedly asked Mr Taouk to tip in $200,000 for the purchase of Lot 8, and Mr Taouk agreed to do so (JT4 [19]); 3. About May 2013 where Mr Harsany allegedly asked Mr Taouk to contribute a further $80,000 for the Westpac Facility Loan and Mr Taouk agreed to do so (JT1 [13]); 4. About August 2014 where Mr Harsany allegedly asked Mr Taouk to contribute $200,000 to the CEG Funding Facility which Mr Harsany would eventually reimburse him for (JT1 [25]); 5. About February 2015 where Mr Harsany allegedly reassured Mr Taouk he would be reimbursed for the money he was contributing to the Berowra Development (JT4 [59]); 6. About February 2015 where Mr Harsany allegedly reassured Mr Taouk the Variation would give Mr Taouk security for his contributions and ensure he was paid in priority to everyone once the mortgagee and outgoings were paid (JT4 [26]); 7. About March 2015 where Mr Harsany allegedly told Mr Taouk he would get "any contributions you have made at the end of the project" (JT1 [52]). (Plaintiff's closing submission [35]).
2. The June 2012 conversation and second February 2015 conversation were pleaded, along with an estoppel based on an alleged conversation in February 2014 regarding splitting the GST refund not included in the Plaintiff's closing submissions. As pointed out by Assure, the remaining estoppels were only introduced in submissions.
3. Mr Taouk submitted he made payments, or otherwise arranged for payments to be made, in reliance on the representations allegedly made in these conversations.
4. Assure objected to the estoppels not included in the Mr Taouk's pleaded case, submitting Mr Taouk should be confined to his pleadings.
5. In any case, Assure submitted first, Mr Taouk's account of conversations should not be accepted. Secondly, reliance was not made out as Mr Taouk conceded in cross-examination that his payments as Guarantor had nothing to do with any oral conversations made. Thirdly, there was no detriment or unconscionability as any alleged contribution paid by Mr Taouk was something which he was financially responsible for. Further, in the case of the $200,000 towards Lot 8, the Defendant submitted there was no detriment suffered by Mr Taouk because it was never Mr Taouk who made the loan (Defendant's opening submission [73]-[81], Defendant's closing submissions [48]-[59]).
6. Mr Taouk also appeared to allege estoppel by convention arising from the pleaded conversations (ASOC [29]). In response, Assure submitted even if Mr Taouk's account of the conversations were accepted, the elements of conventional estoppel had not been made out.
7. In relation to the alleged June 2012 conversation, Assure claimed Mr Taouk could not have assumed from the conversation Assure had contractually undertaken to repay Mr Taouk his contributions and that Assure knew or intended Mr Taouk to act on this basis. Further, there was no evidence to support Assure adopted any assumption that both parties conducted their relationship on the basis of the mutual assumption. Finally, a departure from the purported assumption would not cause Mr Taouk detriment as he bore contractual responsibility for financing the Berowra Project and indemnifying Assure against its loss (Defendant's opening submission [77]).
8. In relation to the alleged February 2014 conversation regarding the GST split, Assure submitted Mr Taouk did not adopt an assumption he was entitled to a split of any GST rebate, and Assure certainly did not share that assumption. Further, the parties did not conduct their relationship on the basis of that assumption, especially given how late the conversation took place in the course of their dealings. Further, Mr Taouk suffered no detriment as he was never entitled to a GST refund and was in any case responsible for contributions under the Agreements and did nothing in reliance of any assumed entitlement (Defendant's opening submission [79]).
9. In relation to the alleged February 2015 conversation concerning the Variation, Assure submitted the parties plainly conducted their relationship on the basis of the Variation, rather than anything said in preceding negotiations. Further, Mr Taouk suffered no detriment in making contribution payments as he was responsible for indemnifying Assure for those costs.
10. I am satisfied Mr Taouk's case must be confined to the estoppels he pleaded, and not expanded to include the multiple other estoppels raised in closing submissions. This is not a case where the parties have chosen to disregard pleadings and the case on issues chosen at the trial, so relief for estoppel, if any, must be founded on the pleadings alone: Dare v Pulham (1982) 148 CLR 658 at 664. It has long been accepted parties must have a proper opportunity to answer the case against them, and crucial to this principle is supporting all claims for relief with sufficiently clear pleadings. As observed by Isaacs and Rich JJ in Gould v Mount Oxide Mines Ltd (In liq) (1916) 22 CLR 490 at 517 "pleadings should state with sufficient clearness the case of the party whose averments they are." For this reason, my analysis is limited to the three estoppels pleaded by Mr Taouk in the ASOC.

1. Estoppel based on alleged June conversation
2. With respect to the alleged estoppel arising from the 27 June 2012 conversation, I have already found against Mr Taouk as to that conversation. Strictly speaking therefore the estoppel case on that conversation fails.
3. However I should comment that even on Mr Taouk's account of that conversation it would be difficult to construe it as giving rise reasonably to a promise by Mr Harsany that all contribution would forever be repaid from the proceeds of sale.
4. In any event, evidence establishes Mr Taouk in my view did not pay the $200,000 requested by Mr Harsany to Assure. As I have already determined, on the face of the Loan Agreement, and consistent with Mr Harsany's evidence, the $200,000 was lent on a standalone commercial and arm's length arrangement, subject to a 2% per month interest rate, between Assure and Mr El Khoury. Mr Taouk was a Guarantor, but there was nothing in the Loan Agreement to suggest Mr Taouk was primarily responsible to lend the $200,000, nor any evidence to show he in fact made such a contribution.
5. In the circumstances I could not accept any reasonable reliance on Mr Taouk's part. Further, not having paid the $200,000 in my view, on the facts he suffered no detriment by reason of that payment. He called no evidence from Mr El Khoury to suggest any collateral or other arrangement which he relied upon.
6. Insofar as he relied upon conventional estoppel, in my view, based on the express contractual obligations between the parties, Mr Taouk could not have made an assumption that Assure had contractually undertaken to repay him for any contributions made. More to the point, as noted by Assure, there was simply no evidence Mr Harsany on behalf of Assure made any such assumption or conducted himself on its behalf consistent with it.

2. Estoppel based on alleged February 2014 conversation
3. Secondly, Mr Taouk also claimed an estoppel based on the alleged February 2014 conversation concerning the "splitting" of the GST refund. I have similarly come to a view about the non-existence of that conversation but nonetheless will make some comment about the estoppel case.
4. Again, even on Mr Taouk's account, I do not accept Mr Harsany's words would simply give rise to a representation of the sort asserted in the pleading. In addition, reliance was a problem for Mr Taouk. Mr Taouk allegedly asked for the GST refund to be shared and allegedly Mr Harsany said he would organise it. I see no logical connection between that conversation and the alleged payments of contribution to the project. I am of the view that, on the evidence, it could not be said that Mr Taouk made contribution payments in reliance upon the conversation. In any event by November 2015 Assure had engaged Devlan to complete the work. Further, simply to make contributions consistent with his contractual obligations and financial responsibilities certainly cannot amount to a detriment.
5. The problem with the conventional estoppel aspect of this claim again was the complete lack of evidence Assure made the same assumption as Mr Taouk alleged he did. There was no evidence in my view which could support an assertion Assure assumed Mr Taouk was entitled to a split of any GST rebate, nor was there any evidence the parties conducted themselves on that basis.

3. Estoppel based on alleged February 2015 conversation
4. Thirdly, Mr Taouk claimed estoppel based on the alleged 20 February 2015 conversation preceding the Variation Agreement. Again, I have come to a view that such a conversation as asserted did not occur.
5. In any event, even on Mr Taouk's account, again the conversation ended by Mr Harsany saying he had to ask his lawyers to put a document together. No reasonable view of the evidence in my view would give rise to a construction of what Mr Harsany said as amounting to a representation that his words were to trump the content of any deed prepared by the lawyers.
6. In the circumstances where a document containing express terms was to be prepared with the knowledge of both parties, I fail to see how any reliance arises on the basis of the representation. Nor do I see detriment arising in the relevant sense.
7. As far as conventional estoppel is concerned, I do not see it has any operation in the light of the existence of the Variation. The parties plainly conducted their relationship on the basis of the Variation rather than on any conversation preceding it.

Preliminary Question 3 - Section 21 of the Australian Consumer Law

1. Mr Taouk alleged in the ASOC (and also in the Defence to the Cross-Claim) Assure contravened section 21 of the ACL. First, Mr Taouk pleaded Assure engaged in "unconscionable conduct" by promising he would be reimbursed for his contributions only to retreat from this assurance. Mr Taouk also pleaded Assure engaged in unconscionable conduct by not taking steps to repay Mr Taouk in a timely manner for any or all of his contributions to the acquisition of the Berowra Property and the Berowra Development and not actively marketing for the sale of three of the townhouses in the Berowra Development (ASOC [32]).
2. Notwithstanding his pleading, Mr Taouk alleged in written submissions only the first ground of pleaded unconscionable conduct, namely that it was unconscionable for Assure to promise him he would be reimbursed for his contributions and then retreat from this assurance. The further allegations contained in the ASOC were not addressed in written submissions, nor orally.
3. Assure submitted Mr Taouk's allegations regarding the ACL contraventions were unfounded. Firstly, Assure submitted Mr Taouk had not suffered, nor had he pleaded that he suffered, loss or damage because of the alleged contravention, depriving Mr Taouk of applying for relief under section 236, 237 and 243 of the ACL.
4. Further, Assure claimed the requirement under section 21 of the ACL that the impugned conduct was in connection with the supply or possible supply of goods or services to or from a person had not been satisfied. Mr Taouk failed to provide particulars on this point, and Mr Taouk's supply of a guarantee and indemnity allegedly amounted to a "financial product" under section 12BAA(1) and (5) of the Australian Securities and Investments Commission Act 2001 (Cth) and therefore fell outside of section 21.
5. Furthermore, Assure claimed there was no unconscionable conduct within the meaning of section 21 in that Mr Taouk was at no special disadvantage in negotiating the Development Agreement, and the Development Agreement provided for no entitlement on the part of Mr Taouk to be repaid any contributions.
6. In my view, there are several shortcomings in Mr Taouk's pleading. First, relief was sought under sections 36, 237 and 243 of ACL. No material facts appear to be pleaded in support of the alleged infringement of these provisions.
7. Secondly, in relation to section 236, Mr Taouk did not plead (as he should have, and as Assure noted) that he was the person who suffered loss or damage because of the alleged contravention. In any event, on my construction of the contract it was Mr Taouk who was liable to pay as Indemnifier in respect of the costs of the project and therefore logically could not have suffered any loss or damage because payment by him would be in respect of something he was already contractually obliged to undertake.
8. Thirdly, in relation to the alleged infringements of sections 237 and 243, it was not pleaded Mr Taouk was the person who suffered loss or damage as the result of the conduct and it is entirely opaque as to what orders precisely he sought.
9. Fourthly, for any alleged infringement of section 21 the conduct sought to be impugned must be in connection with the supply or possible supply of goods or services to or from a person. The pleading made that assertion at a high level but it provided no particulars. On the facts, as I understand them, Assure, for example, did not supply any goods or services to Mr Taouk. Under the Development Agreement Mr Taouk was to supply a guarantee and indemnity to Assure. Frankly I do not understand this aspect of Mr Taouk's case.
10. Further, on the facts, Mr Taouk could not sensibly point to any special disability he suffered from. He clearly and obviously had the opportunity to review and negotiate the Variation as he saw it with the benefit of legal advice. I fail to understand how it could be rationally suggested there was some unconscionable advantage, let alone a "high level of moral obloquy" exercised by Assure in having Mr Taouk agree to the Variation.
11. There was no contractual right obliging Assure to inform Mr Taouk about the sale process. Further the time and manner adopted by Assure in marketing the remaining three townhouses, it seems, was a matter entirely for it. If Mr Taouk was concerned about this issue, the parties could have negotiated a term that marketing be undertaken in a particular way or on a particular time frame.
12. It is by no means clear precisely what Mr Taouk did in reliance upon the various conversations which he said took place between 2013 and 2015. Reliance was asserted in general terms but it lacked in content. Mr Taouk accepted it seemed to me that he made contribution payments as Guarantor or pursuant to the Development Agreement and he accepted as much in cross-examination.
13. Further it is difficult to see what if any further detriment Mr Taouk suffered. Mr Taouk had contractual obligations in relation to any shortfall in construction costs or amounts required up to completion or as Guarantor. In other words he was contractually bound to make payments and it is difficult if not impossible to dissect what in fact he did additionally to his contractual obligations.
14. Mr Taouk's case under the ACL on this aspect must be rejected.

Preliminary Question 4 - Unjust Enrichment

1. Mr Taouk pleaded that if he did not have the contractual rights alleged then his contributions were to be claimed on the basis of an allegation of unjust enrichment (ASOC [34]).
2. Assure submitted unjust enrichment was not a cause of action. It called inter alia the decision of the High Court in Australian Financial Services and Leasing Ltd v Hills Industries Ltd (2014) 253 CLR 560 at [78]. Further, Assure submitted that authority and others support the proposition that any claim in restitution must not alter the contractual bargain struck. Assure contended holding Assure liable to Mr Taouk for his alleged contributions would amount to a "radical alteration of the parties' negotiated contractual rights" (Defendant's opening submissions [116]).
3. Further and in the alternative, Assure submitted it provided "good consideration" for Mr Taouk agreeing to arrange finance of the Berowra Development and provide the guarantee and indemnity through its commitments to its obligations under the Development Agreement. As "good consideration" was a defence to a restitution claim, Assure submitted Mr Taouk's claim under section 21 should fail.
4. Furthermore, Assure submitted it did not receive a "benefit" from Mr Taouk's alleged payments as they were not payments which Assure was liable for, and any payments were not at the expense of Mr Taouk. Finally, Assure disputed any allegations that "contributions" were at Assure's request and rejected Mr Taouk's claim that a payment pursuant to a common understanding between the parties established a restitution based cause of action.
5. Mr Taouk in closing submissions simply asserted (in one paragraph) Assure continued to enjoy the benefits of Mr Taouk's contributions by controlling the sale and proceeds of sale of the townhouses and further received rental income for three townhouses without payment to Mr Taouk for his contributions and was thereby unjustly enriched (Plaintiff's closing submissions [45].
6. There was no attempt in written submissions, nor did I detect in oral submissions, to articulate, elaborate or even explain the basis for such a claim.
7. It is clear from the authorities that a close examination of the contractual relationship between the parties is to be undertaken. The importance of such an analysis is to ensure the underlying bargain struck and the rights assumed by the parties is not the subject of alteration.
8. In the present case, Assure engaged the Developer to carry out necessary work for the Consideration Amount and Mr Taouk gave the relevant indemnity in respect of the Developer's performance. The Developer then retained Edifice to carry out the work.
9. The contractual bargain struck did not require Assure to pay Mr Taouk anything. Assure was liable only to pay the Consideration Amount and that was to be paid to the Developer. The Developer had the contractual responsibility to carry out the work in exchange for the Consideration Amount and Edifice in turn was contractually obliged to the Developer to carry out the work in exchange for the agreed fixed price.
10. Further Mr Taouk had no responsibility to carry out the work or pay Edifice or its sub-contractors any amount although it was liable in respect of the Developer's non-performance pursuant to the guarantee and indemnity. In that light, Assure submitted, correctly in my view, that Mr Taouk's alleged contributions were either voluntary or discharged his liability to Assure under the Development Agreement. It would follow that to hold Assure liable to Mr Taouk for his alleged contributions would involve a substantial revision of the contractual rights negotiated by the parties.
11. Assure committed to its side of the Development Agreement by reason of Mr Taouk agreeing to arrange for finance of the project and his guarantee and indemnity in relation to the Developer's performance. The obligation to pay Edifice for its work was owed by the Developer, not Assure. The obligation further to pay Edifice's sub-contractors was the Developer's obligation and not that of Assure. Mr Taouk's payments therefore did not extinguish any debt to which Assure was contractually obliged to pay.
12. Assure of course disputed the allegation all of the alleged contributions were at its request. Mr Taouk of course bore the onus to prove that each payment was pursuant to such a request - a matter to which I shall return. Any request for payment must be coupled with a promise of repayment. Mr Taouk did not plead a promise of repayment as an element of this cause of action. In any event for reasons already advanced, this promise (which I do not believe exists as a fact), was inconsistent with the contractual rights and obligations in the Agreements.
13. In short, apart from there being no response of substance to Assure's submissions, in my view, the so called case of unjust enrichment should fail.

Preliminary Question 5 - Alleged Paragraph 8 Payments

1. Mr Taouk claimed to be entitled to reimbursement of certain amounts he asserted he paid (ASOC [8]).
2. From June 2012 to January 2015 Mr Taouk alleged he paid, or caused to be paid on his behalf, the following amounts at Assure's request pursuant to the Development Agreement, in addition to the $200,000 contribution he alleged he made to the purchase of Lot 8: 1. $80,000 in or about 1 September 2013 to Westpac on behalf of Assure to purchase the Berowra Property; 2. $27,000 in or about 1 October 2014 to Westpac on behalf of Assure as interest free payments to the Westpac Loan Facility; 3. $5,300 in or about 15 October 2014 to CEG on behalf of Assure on account of refinance loan fees; 4. $220,000 in or about 23 December 2014 to CEG on behalf of Assure for discharging the CEG mortgage over the Berowra Property; 5. $15,000 in or about 23 December 2014 to CEG on behalf of Assure as interest free payments on the CEG Loan Facility; 6. $20,000 in or about 15 January 2015 to CEG on behalf of Assure for discharging the CEG mortgage over the Berowra Property; and 7. $12,000 and a further $10,000 in or about 15 January 2015 to CEG on behalf of Assure as interest free payments on the CEG Loan Facility. (ASOC [8])
3. Mr Taouk submitted he was entitled to bring these claims by virtue of clause 2 of the Variation, as Development Costs included payments for the acquisition of the land and the project (Plaintiff's opening submissions [46]).
4. Assure submitted Mr Taouk did not discharge his onus with regard to proof of these payments. First, Assure stated none of the affidavits sworn by Mr Taouk contained proper documentary evidence of the alleged transactions. The evidence comprised assertions on Mr Taouk's part that he or an associate paid the money or secondary emails comprising hearsay that referred to a payment without properly proving the payee.
5. Assure also pointed to a lack of what might be described as conventional records such as bank statements, copies of cheques and matter of that sort. Further, Assure submitted that Mr Taouk's failure to produce documents in answer to notices to produce seeking underlying records was telling. I agree.
6. Assure also submitted Mr Taouk failed to distinguish between "his payments" and "third party" payments. Assure pointed to the fact Mr Taouk both in pleadings and evidence asserted he was claiming payments made by him "or caused to be paid on his behalf". Mr Taouk submitted his evidence on the source of funds and the arrangement he had with third parties who provided the funds could be "confused or confusing". I regard that to be an understatement.
7. Assure raises the obvious point as to why Mr Taouk would have a cause of action to recover an amount paid by a third party. Further it was submitted there was no basis properly disclosed upon which he provided any basis he could do so.
8. Assure further submitted that properly characterised, any payments Mr Taouk made were those he was obliged to pay anyway. It was further submitted any responsibility to repay would be owed by the Developer. In any event, Assure submitted Mr Taouk needed to establish a cause of action to reclaim the contribution payments and he disclosed none.
9. I have already expressed my view on Mr Taouk's construction of clause 2 of the Variation. However it is important I deal with each of the alleged payments in any event because of the difficulties I consider Mr Taouk has even if he had been otherwise successful on his construction of clause 2.

$200,000 Contribution

1. Mr Taouk submitted he arranged for the $200,000 to be paid to Assure to allow for a settlement of 8 Kita Road following a request from Mr Harsany. It was submitted further that the moneys formed a loan between Mr El Khoury and Assure, with each of Mr Harsany and Mr Taouk being guarantors of the loan. Further it was submitted Mr Harsany in his testimony confirmed the moneys were arranged by Mr Taouk and further that he conceded that the money may have been repaid by Mr Taouk. It was then submitted that notwithstanding the legal relations concerning the payment of the $200,000, Mr Harsany looked to Mr Taouk to both arrange for the loan and to acquit the debt himself.
2. Assure noted Mr Harsany accepted he asked Mr Taouk to advance $200,000 pursuant to his obligations under the Development Agreement, however Mr Taouk did not make the advance. Assure submitted Mr El Khoury made the contributions in the $200,000 Loan Agreement, Mr Taouk showed no evidence of him advancing $200,000 contribution, and the evidence he did provide by way of his affidavits and oral testimony was "contradictory and unbelievable" (Defendant's closing submissions [66]). Further, Assure submitted Mr Taouk did not plead the arrangement between Mr Taouk, Mr Harsany and Mr El Khoury, and rather stated Mr Taouk was the lender. Assure submitted on these grounds Mr Taouk's case that Mr Harsany looked to Mr Taouk to arrange for a loan could not be put (Defendant's closing submissions [66]-[69]).
3. In my view, Assure's submissions on the evidentiary deficiencies of Mr Taouk's claim for this payment were well founded. The Loan Agreement plainly shows Assure borrowed the $200,000 from Mr El Khoury. There was also a contemporaneous email from Lane & Lane (Assure's solicitor at the time) corroborating the execution of the agreement and confirming receipt of the advance from Mr El Khoury (CB4/1402).
4. Of course Mr Taouk in his affidavit said he had a conversation with Mr Harsany who asked him for the $200,000 (JT1 [10]-[11]). Mr Taouk then said that later in the day he made arrangements to obtain a short term loan of $200,000 which he caused to be paid and contributed towards the purchase price of the property. He relied upon a deposit slip dated 27 June 2012 which he said proved he paid the money into the account of Lane & Lane. The difficulty with this evidence is that it is inconsistent with Loan Agreement. It is also inconsistent with the contemporaneous email from Lane & Lane. Mr Taouk produced no documentation whatsoever which corroborated any loan arrangement between himself and Mr El Khoury (if that was the person he borrowed the moneys from). The deposit slip does not prove that he made the payment because it does not identify the payor of the $200,000.
5. Further, Mr Taouk produced no bank statement of any account in his own name showing the corresponding debit of $200,000.
6. In his fourth affidavit, Mr Taouk said he proceeded to source the sum of $200,000 from family and friends. He further asserted he "managed" to secure a loan for the sum $200,000 from Mr El Khoury to himself. He also asserted Mr Harsany thanked him and told him that he would be repaid from sale proceeds. This alleged promise of Mr Harsany to repay Mr Taouk appeared for the first time in Mr Taouk's fourth affidavit (JT4 [20]-[23]).
7. On the morning of the second day of the trial Mr Taouk served a further affidavit. In that affidavit he said Mr Harsany asked him for the $200,000 which caused Mr Taouk to ask Mr El Khoury for the money to obtain funds from a Mr Ali Behmad who insisted that Mr El Khoury be the lender on the Loan Agreement. In this version however, Mr Taouk omitted to say Mr Harsany would have repaid him from sale proceeds. On the face of this affidavit Mr Taouk appeared to accept that Mr El Khoury was in fact the lender. The emergence of Mr Behmad for the first time is also telling.
8. During the course of the second day of the trial Assure suggested Mr Taouk's case was that an amount of $200,000 which was lent had been discharged by payment (T87.1-6). The substance of this allegation was to the effect that Mr Taouk had repaid the loan from Mr El Khoury. This of course was quite a significant change in the way in which the case had previously been put.
9. Mr Taouk made a suggestion in closing submissions that Mr Harsany looked to Mr Taouk to both arrange for the loan and acquit the debt himself was again something which had not previously been alluded to. I addressed these matters in the transcript at T86.31-T87.6.
10. The sum total of this analysis is merely to highlight the inconsistent and confused versions of events given by Mr Taouk over a relatively short period commencing in September 2016 and during the running of the trial. It seems odd if the true position was that Mr Taouk was repaying a loan as opposed to being the lender that he would not remember with some precision which role he in fact played. But this is not a case of mere confusion. I am simply not satisfied on the evidence Mr Taouk proved the payment of the $200,000 made by him or at his direction and I reject the claim.

$80,000 on 1 September 2013

1. Mr Taouk submitted the $80,000 was paid to Assure on the direction of Mr Taouk to his cousin, a Mrs Mary Succar, and that Mr Harsany acknowledged the contribution in his email dated 22 April 2016 (CB1/305) (Plaintiff's closing submissions [57]-[59]; JT6 at [3] - [10]).
2. Mr Taouk submitted the moneys were urgently required for a refinance of the Berowra Property mortgages.
3. Assure submitted the evidence surrounding the $80,000 was unsatisfactory. First, Assure pointed to Mr Taouk's changing and conflicting accounts of the transaction, and questioned why Mrs Succar was not called as a witness, and no contemporaneous documents were produced to support this transaction.
4. In any case, Assure submitted the $80,000 was repaid to Edifice as reflected in the payment of $50,000 and $30,000 to Edifice recorded in the distribution schedule sent to Mr Taouk on 3 December 2013 containing spread sheets entitled 'Project Cost and Distribution Schedule' (DH3, page 80) (Distribution Schedule) (Defendant's closing submissions [70]-[72]).
5. In taking a similar view to Assure, I am satisfied Mr Taouk failed to prove payment of the $80,000 by or on behalf of Mr Taouk, and that Assure did not repay the loan as reflected in the Distribution Schedule.
6. First, Mr Taouk's changing accounts of how the $80,000 payment was made and by whom casts strong doubt on the veracity of his claim.
7. Mr Taouk initially said he caused the bank cheque to be drawn and handed to Mr Harsany (JT1 [14]). No attempt, it seems, was made to obtain a copy of the records from the relevant financial institutions.
8. On the second day of the trial Mr Taouk deposed to an arrangement he had with Mrs Succar whereby Mrs Succar and her husband apparently owed Mr Taouk money for building work. Mrs Succar was said to have obtained a bank cheque of $80,000 from Westpac which Mr Taouk asserted he gave to Mr Harsany (JT6 [6]-[8]). Mrs Succar was of course also not called.
9. Later in cross-examination on the second day of the trial Mr Taouk appeared to give yet a third account. Mr Taouk's evidence during his testimony (T109.43-T120.50) was that he had borrowed $68,000 from Mrs Succar and that the amount of $80,000 included interest.
10. Mr Taouk however also accepted that he had pressed Assure to repay the Builder $80,000 because the person he was borrowing the money from was charging interest (T110.27-30). However he had second thoughts and later in his evidence claimed that the loan was interest free (T118.11-12). He further then said Mrs Succar was repaid by his company Micro Formwork (T118.45-49).
11. These versions are not only inconsistent but again confused to the point of implausible.
12. It seems Mr Taouk could not comfortably settle on which account he preferred. Either Mrs Succar was lending him the money or repaying a loan. Further, the absence of any documentary record in relation to the advanced of $68,000, with or without interest, is proof the evidence is not only unsatisfactory but, in my view, non-existent.
13. Such contemporaneous records that do exist include the Distribution Schedule showing the Builder was paid the sum of $80,000 (DH3 page 82). Mr Taouk updated the Distribution Schedule and sent it to Mr Harsany on 3 December 2013, referring to a short term loan plus other interests in the sum of $80,000 being repaid in two lots of $50,000 and $30,000 (DH3 page 82).
14. These events appear to be corroborated by contemporaneous emails showing Mr Harsany informed Mr Taouk of his $50,000 payment (DH3 page 84) and Mr Taouk requested Mr Harsany to then pay $30,000 to pay off the loan completely (DH3 page 85). Mr Harsany also produced banking records showing the $30,000 payment (DH3 page 86).
15. The evidence on one view could equally support the payment by the Developer, the Builder, Ms Succar, or indeed Mr Taouk. In any event I think on the evidence it is reasonably clear Assure repaid it. Further, on the state of the evidence, again in my view Mr Taouk failed to discharge his onus.

$27,000 on 1 October 2014

1. Mr Taouk in closing written submissions asserted the $27,000 payment was made by Mr Taouk on 1 October 2014 towards interest that was then overdue to Westpac. Mr Taouk submitted that Mr Harsany asked Mr Taouk to make the payment. Further it was submitted Mr Harsany in an email indicated these funds were due and he had no money to pay them. Reference was then made to what was said to be Mr Taouk's proof of payment at CB1/348. It was further submitted that this evidence was simply not contested at the trial.
2. Assure submitted the only purported evidence of this payment was Mr Taouk's illegible record (CB1/348), which did not prove anything at all. This was due to the fact that the critical text was obscured. The cursory glance at the document indicates that it is not capable of being deciphered. It purports to be a customer receipt. The date and the amounts are unclear, but it appears to deal with both a withdrawal and a deposit. This type of evidence is wholly unacceptable and should have been plainly obvious to those purporting to assist Mr Taouk. If this is the best evidence in my view it is simply not good enough. I am not prepared to draw inferences or make findings where clearly little, if any, attempt was made to procure appropriate records to substantiate such a claim. In my view the evidence is such that I am simply unable to find in Mr Taouk's favour.

$5,300 on 15 October 2014

1. Mr Taouk's submissions on this alleged payment are contained in one sentence by way of an assertion that the payment was made by Mr Taouk towards interest expenses on the loan from CEG (Plaintiff's closing submissions [64]). Apart from mere assertion, no documentary evidence was pointed to or relied upon. In those circumstances I am unable to accept that as satisfactory proof that the payment was made as alleged. I reject the claim.

$220,000 on 23 December 2014

1. Mr Taouk submitted he arranged for a payment of $220,000 be paid from a refinance of a real property held in Saint Peter's Holding Trust (which he was a 25% beneficiary of) to Assure toward discharging part of principle and interest or expenses on the CEG Funding Facility, relying on Mr Taouk's recollection of an oral request by Harsany in or about December 2013 (Plaintiff's closing submissions [65]-[68]); the CEG Loan Statement (CB1/343); email dated 19 December 2014 (CB1/350-351)).
2. As Assure pointed out, Mr Taouk's evidence on this matter was served on the second day of the trial. Further, as Assure submitted, the evidence showed a payment by the St Peter Trust which had a corporate trustee St Peter's Holding Pty Ltd. Assure was clearly correct in observing this proves unequivocally that the payment was not made by Mr Taouk.
3. The difficulty, as was further pointed out by Assure, is that there is no legal principle such as to deem a payment by a trust to be an act of any particular beneficiary of that trust. It is plain and obvious that a trustee is a relevant legal entity and it does things for and on behalf of the trust from time to time including making payments.
4. Assure further pointed out the trustee (or perhaps the person who prepared it) attributed various percentages to beneficiaries which exceeded 100%, which, it was submitted, was nonsensical. Further the trust appeared to be a discretionary trust where the trustee was empowered to deal with the income and assets of the trust as it saw fit as between beneficiaries, leading to the fact that there was no significance to the 25% designation, and of course it was not or did not appear to be a unit trust. In my view these propositions are clearly correct.
5. It was also submitted, correctly in my view, that it was not clear the trust actually made the payment. The so called evidence of the payment was contained first in an email from a Ms Lauren Morris to a Mr Grant Marshall, copied to the elusive Mr El Khoury (CB1/350-351). The subject matter was said to be an advance from St Peter Holdings Pty Ltd and Latrobe Financial Services. There are numerous amounts referred to in the email totalling $500,000 of which $220,000 purports to be directed to CEG direct to Securities Pty Ltd.
6. A number of things may be said about this email. First it does not prove the fact of any payment by the trust. Neither of the individuals along with Mr El Khoury were called and there were no banking records proving that payment by the trust as alleged.
7. However an even greater difficulty arises because the email is dated 9 December 2014. Mr Taouk's account which I regard as implausible was that in December 2013 Mr Harsany asked Mr Taouk to pay $220,000 to Westpac and then a year later without any further communication between the two, the trust made the payment (Taouk affidavit 7 February 2017 [19] - [20].
8. Mr Taouk relied upon an email dated 22 April 2016 from Mr Harsany to him (CB1/305). It is a little difficult to fathom precisely what the email is meant to indicate but a number of things are clear. Mr Harsany did make reference to what he described as significant contributions made by "you". However it is not clear in my mind whether he was making an admission or alternatively merely asserting these were claims made by Mr Taouk. The reason I say that is that in the fourth last paragraph Mr Harsany asserted Mr Taouk was confused about items 1 and 2 and goes on to indicate that the $200,000 was not obtained from Mr Taouk for the settlement of 8 Kita Road. This indicates that what Mr Harsany was recording was an assertion rather than making any concessions.
9. It is true in item 3 he made a reference to "around 200K to pay off the CEG loan". This email was not put to Mr Harsany in cross-examination. I accept that the words "around 200K" could be a reference to the amount referred to in Ms Morris' email of 19 December 2014, but as pointed out, rounded down. However Mr Taouk is ultimately faced with the proposition which I think is insurmountable, namely that at best this might be seen as a payment by the Trust as opposed to any particular beneficiary. That is the ultimate hurdle which in my view Mr Taouk fails to jump. In this case the evidence in relation to this matter is again unsatisfactory to the point that I cannot make a finding in his favour on that amount.

$15,000 on 23 December 2014

1. Mr Taouk submitted he made a further payment of $15,000 toward discharging interest or expenses on the CEG Funding Facility. While it was pleaded this payment was made on 23 December 2014 (ASOC 8), Mr Taouk submitted it in fact accorded with a payment made on 28 November 2014 (Plaintiff's closing submissions [70]; ATJ6 [16]), in response to a request by Mr Harsany on 25 November 2014. Mr Taouk relied on his recollection of receiving request (JT6 [15]-[16]) as well as a CEG loan statement purporting to reflect the payment (CB1/343).
2. Assure submitted, correctly so in my view, the evidence did not support Mr Taouk making such a payment, as the receipt relied on by Mr Taouk showed HGH Condell Park as the payor (Defendant's closing submissions [76]). The receipt he relied identified the payor as HGH Condor Park. This may be the Builder formerly known as HGH. In my view this proves unequivocally that Mr Taouk did not make the payments. That being the case, Mr Taouk failed to discharge his onus and establish that he in fact made the $15,000 payment.

$20,000 on 15 January 2015

1. Mr Taouk abandoned this claim (Plaintiff's closing submissions [73]).

$12,000 and $10,000 on 15 January 2015

1. As with most of Mr Taouk's submissions, the submissions on these two payments are somewhat cryptic.
2. Mr Taouk submitted he made the $12,000 and $10,000 payments towards interest or expenses on the CEG Funding Facility, relying on his recollection (JT6 [24]-[29]) and the CEG loan statement (CB1/343). Further, in his affidavit (JT6, Annexure D) Mr Taouk asserted he made two credit card payments on 15 January 2015 to CEG. His credit card statement (assuming it to be such) does show these two payments.
3. Assure pointed out that before Mr Taouk made the two payments from his credit card, he received credit of $10,000 from the Builder on 12 January 2015 and $12,000 from Mint Development on 13 January 2015 (Defendant's closing submissions [78]-[79]). On the basis of that evidence it does appear to me that the funds used by him were therefore given to him by the Builder and Mint Development.
4. Mr Taouk gave evidence at the trial that he used his credit card for expenses of his companies to accumulate frequent flyer points for which he would be reimbursed. He accepted that he was using company funds to pay his credit card (T153.21-27). It is therefore simply inaccurate as was pointed out by Assure to suggest these payments were contributions by Mr Taouk to the project. Again I am unable to accept his assertion in this regard and I reject the claims.

Preliminary Question 6 - Alleged Tab 33 Schedule Payments

1. As suggested by Assure, the payments set out in Question 6 can be categorised as either payments a) payments made by Edifice (question 6(a)), b) payments made by third parties (question 6(b)-(d), (f)-(g)), or c) payments from Mr Taouk's credit card. As Mr Taouk adopted the same categorisation, I will structure my consideration of the payments in that same manner.

a) Payments made by Edifice

1. Mr Taouk submitted the parties adopted an "informal and pragmatic approach to their contractual relations and the completion of the development" (Plaintiff's closing submissions [23]) with Assure seeking and accepting payment by Mr Taouk or entities related to him, such as Edifice, which was controlled by Mr Taouk (Plaintiff's closing submissions [22]). Thus the payments by Edifice (such as items 2-4, 7-12, 20, 89, 94, 107, 149, 166-167, 169, 172-176, 179-180, 191, 250, 292-294) must be properly construed as payments ultimately by Mr Taouk.
2. Further, Mr Taouk submitted a loan agreement (provided in answer to the notice to produce at page NTP1-6) showed the arrangement between Mr Taouk and Edifice, and also relied on his own evidence that he provided Edifice with funds to meet its obligations (JT5 [16], [18], [20]; Plaintiff's Question 6 submissions [2]-[3]).
3. In respect of claims Edifice was reimbursed for its contributions, Mr Taouk submitted the Distribution Schedule cannot be properly viewed as records of payments made and received, but rather a statement of matters to be paid, in the nature of an aide memoire (Plaintiff's Further Question 6 Submissions [2]-[44]). Any funds paid to Edifice were on the basis of work already done by the company, resulting in a shortfall in payments to Edifice (Plaintiff's Question 6 submissions [5]).
4. Assure submitted, correctly in my view, payments by Edifice could not be characterised in anyway as payments by Mr Taouk. As Assure noted, common to all the itemised transactions was the absence of any evidence showing funds allegedly used by Edifice were a loan granted by Mr Taouk (Defendant's closing submissions [96] rows 1-28). Assure also noted Mr Taouk relied on inadmissible evidence, citing paragraphs of Mr Taouk's affidavit of 1 February 2017 that were either struck out (such as JT5 [16], [18], [20]), or restricted by section 136 of the Evidence Act 1995 (NSW) to use as a submission, not evidence (such as JT5 [23]).
5. Even if Edifice borrowed money from Mr Taouk, I am satisfied with Assure's submissions that the correct analysis was Mr Taouk and Edifice were in a relationship of borrower and lender, where Edifice was liable to repay Mr Taouk, not Assure. Further Mr Taouk, as Guarantor for the Developer was simply making payments he was obliged to make in light of the Developer failing to contribute.
6. I am also satisfied Assure was correct, in my view, in submitting Edifice was in any case reimbursed by Assure for its contributions to the Berowra Development. Assure submitted the Distribution Schedules, evidence of Mr Harsany, and banking records showed Edifice was in fact repaid for its contributions by Assure, and in certain cases was paid more than it was entitled to (Defendant's closing submissions [87], [96] rows 1-28). Assure maintained, correctly in my view, Mr Taouk's assertion of a shortfall was unproven and contrary to Mr Harsany's evidence supported by bank statements, and based on the erroneous assumption Edifice had an entitlement to $3.7 million (when this was in fact the cap) and that it finished the work it was engaged for, and that Assure was liable to pay Edifice (Defendant's reply to Question 6 submissions [17]).

b) Payments made by third parties

1. Mr Taouk submitted the payments made by third parties ought to be credited to Mr Taouk for the purposes of clause 2 of the Variation. Mr Taouk relied on his evidence that the payments made by him using Mr Mikhael Tawk's (Mr Taouk's cousin) credit card and Mr Taouk's subsequent repayment to Mr Tawk were part of the usual course of borrowing and repaying with his cousin (Plaintiff's closing submissions [83] - [85]; Plaintiff's Question 6 submissions [45]-[47]; JT5 [29]-[32]).
2. Further, Mr Taouk asserted payments by Mirco Formwork, Mint Development, and Saint Peter Holdings were similarly made on Mr Taouk's behalf and should be properly construed as payments by Mr Taouk himself (Plaintiff's closing submissions [86]-[91], [95]-[100]).
3. Assure submitted payments by third parties did not give rise to a claim against Assure. There was no evidence of Mr Taouk directing the third parties make payments, and then reimbursing those parties for such payments. Further, what the evidence did show, Assure submitted, was Assure paid Edifice funds exceeding what it was entitled to under the Building Agreement, meaning Edifice either applied money it received or was given the money to do so (Defendant's closing submissions [88]-[90]).
4. In my view, in respect to payments by Mr Tawk, it is plainly correct, as submitted by Assure, that those payments do not disclose any cause of action on the part of Mr Taouk against anyone, let alone Assure. Mr Tawk, did not give any evidence and therefore does not corroborate Mr Taouk's account of the alleged arrangement. More to the point there is simply no evidence of any alleged payments being reimbursed by Mr Taouk.
5. There are, however, two items which need to be dealt with expressly - Items 1 and 6. Item 1 is evidenced apparently by a photocopy of a payment options sheet with Mr Taouk's credit card details on it (CB5/2006). I am not sure what this document is meant to in fact prove. It is entirely unsatisfactory. There is simply no evidence of Mr Taouk reimbursing Mr Tawk.
6. Item 6 is again a matter in respect of which no evidence was led that Mr Taouk reimbursed Tawk. In any event the Distribution Schedule forwarded by Mr Taouk identifies that the amount was paid from progress claim 2 (PC2) (DH3 page 82). Mr Harsany's evidence, which I accept, demonstrates with reference to the banking records that PC2 was paid therefore the Builder received money and likely applied it the specific invoice, but was certainly paid the moneys that would cover it.
7. Similarly, in relation to alleged payments by Micro Formwork on Mr Taouk's behalf (Question 6(c)), again the evidence is entirely unsatisfactory. There is no evidence Micro Formwork paid the quote said to be at CB5/2011-2012 or that Mr Taouk reimbursed it. Mr Taouk said the payment was actually from Mr Tawk's credit card and he told Micro Formwork's director (another cousin Mr Jabbour) to refund Mr Tawk's credit card from Micro Formwork's funds and to deduct the same from future profits due to him (JT5 [34]-[39]). Mr Jabbour did not give evidence and I am simply unable to accept such evidence as there is. Again, whatever arrangement Mr Taouk in fact had with either member of his family, it is difficult to see how there would be a cause of action against Assure.
8. In respect of payments by Micro Formwork (items 253 and 254) (Question 6(g)), again I am satisfied that even if Micro Formwork made a payment at the direction of Mr Taouk and Miro Formwork was reimbursed, this does not give rise to any claim by him against Assure. In relation to Item 253 the evidence is wholly inadequate. There is no evidence of any invoice providing that Hornsby Council levied the alleged fee. There is a cheque stub and a bank statement (CB5/2014-5). This purports to show a payment by cheque to the Council. There is no evidence however connecting the payment to the Berowra Development. Further, there is no evidence in respect of either item of Mr Taouk reimbursing Micro Formwork.
9. In respect of alleged expenses incurred by Mr Taouk for the Berowra Development in which he directed another company Mint Development to make the payment (Question 6(d)), there is simply no evidence of Mr Taouk reimbursing Mint Development. The claim fails on that basis alone.
10. Similarly, with loans allegedly advanced by St Peters Holding on behalf of Mr Taouk (eg item 121) (Question 6(f)), there is no evidence whatsoever proving anything in relation to this item. For reasons previously given, even if money had been paid it did not give rise to a cause of action for Mr Taouk against Assure.

c) Payments from Mr Taouk's credit card

1. Mr Taouk relied on his own evidence (JT5 [43]-[44]) and the fact Assure did not allegedly challenge Mr Taouk on this evidence to assert the payment from Mr Taouk's credit card should be credited as a contribution by Mr Taouk for the purpose of clause 2 of the Variation (Plaintiff's closing submissions [92]-[94]).
2. Assure submitted that even if Mr Taouk did make payments off his credit card, these payments must be examined in light of the parties' contractual relationship. Assure maintained any payment Mr Taouk made because he was contractually responsible for doing so did not give any right of recovery. Further, any payment Mr Taouk made which Assure was not responsible for under the Development Agreement could also not give rise to a claim by Mr Taouk against Assure, and, at best would be against Edifice or the Developer who carried the contractual risk. Further, Assure alleged Mr Taouk's credit card appeared to be paid by Edifice and Mr Taouk was reimbursed (Defendant's closing submissions [91]-[93]).
3. In my view, Assure's submissions are correct. The payments via Mr Taouk's credit card did not give rise to a claim against Assure on any view and Mr Taouk as Guarantor was in fact liable for various amounts under the Agreements. In respect of item 7 which is a claim made under this category, Mr Taouk had an invoice with a corresponding payment (CB5/1927-9). The invoice at CB5/1927 is directed to Edifice from a company Prestige Building Products. The balance is $6,732. The date of the invoice is 2 December 2013. His credit card statement (CB5/1929) on the same day is for $6,732 but an internet payment from Edifice Australia is for $7,900. It appears Mr Taouk used his credit card to accumulate frequent flyer points. It also appears he was reimbursed in full (plus) on the same day. Further the Distribution Schedule forwarded by Mr Taouk identifies that this amount would be paid from progress claim 5 (PC5) (Exhibit DH3 page 82). The evidence of Mr Harsany which I accept demonstrates PC5 was paid for this amount. The claim therefore cannot succeed.

Preliminary Question 7 - Breaches of Agreement, Cross-Claim

1. This question is directed to determining Mr Taouk's liability, if any, for breaching the Development Agreement as alleged in paragraph [2]-[30] of the Cross-Claim.
2. Assure submitted Mr Taouk breached the Development Agreement in that he did not pay for the entirety of the shortfall in finance and further amounts required to reach completion, as obliged by clause 7 of Schedule 8, and did not pay Assure for its equity in the land, as obliged by clauses 4 and 5 of Schedule 8 (Defendant's submissions on the Cross-Claim [9]).
3. Assure relied on the Development Agreement, as well as Mr Taouk's concession in his first affidavit (JT1 [20]) that any shortfall of the construction and development amounts were paid by Mr Taouk "in accordance with the JV agreement, and more specifically clause 7 of Schedule 8 of the JV Agreement" (Defendant's submissions on the Cross-Claim [15]).
4. In regards to the shortfall, Assure noted it made payments totalling $3,266, 518.14 to Edifice, subcontractors and Devlan, and none of these funds came from finance or funds arranged by Mr Taouk (Defendant's submissions on the Cross-Claim [18]). In regards to the equity in land, Assure noted Mr Taouk did not mount a case in respect of this claim, and that Mr Harsany put Mr Taouk on notice of a failure to pay for Assure's equity in the land, being $200,000 (Defendant's submissions on the Cross-Claim [20]-[21]).
5. In closing submissions Mr Taouk yet again provided cryptic responses to the allegations in the Cross-Claim. He submitted the claims in Preliminary Question 7 (as well as Preliminary Question 8) turned upon the existence of a binding contractual guarantee given by Mr Taouk. Mr Taouk submitted he did not breach any contractual guarantee because the proper construction of clause 2 of the Variation was that the contractual guarantee was intended to be displaced by the parties. Further, he submitted the parties abandoned a strict application of the terms of the Development Agreement, including the guarantee provisions, and this was known at the time of the Variation. Further, there was no transfer of the Berowra Property to the SPV which removed any ability for the Developer to meets its obligations and was a condition precedent to Mr Taouk's guarantee, or, alternatively, a variation of the parties discharging Mr Taouk's liability.
6. Mr Taouk also noted Assure did not make any contribution to the costs of construction beyond the Westpac Loan Facility, did not pass $3.7 million as contemplated as the maximum amount payable pursuant to the Proposal, and acknowledged (through Mr Harsany) that any forthcoming variation and adjustment of the profit share would replace the need to review competing claims and expenses on the project (Plaintiff's submissions on Cross-Claim [2]-[3]). Other arguments along similar lines were advanced (Plaintiff's closing submissions [3(e)(f) and (g)]).
7. In my view, Assure was correct in submitting Mr Taouk (and the Developer) was expressly obliged to pay any shortfall in finance and/or any smaller amount required for reaching completion. Under clause 7 of Schedule 8, the Developer was to engage a builder to complete works using a design and construct contract. An amount of $3.7 million including GST was to be the maximum amount chargeable under the contract. Any shortfall in finance or further amount required to reach completion was to be contributed by the Developer.
8. Further, clause 4 of Schedule 8 also required the Developer "to arrange finance of approximately $5,455,000 and pay costs of obtaining the finance excluding interest on borrowings and ongoing bank fees". Clause 5 then required $2.2 million of the funding arranged by the Developer to be paid for certain purposes.
9. Pursuant to the contractual arrangements the Developer was obliged to arrange finance and that finance was to include a payment to Assure as partial payment for its equity in the land. The extent that the Developer did not arrange this, Mr Taouk, pursuant to clause 7 of Schedule 8, and being the party who had guaranteed the Developers performance under clause 24.2, was liable to pay it.
10. As noted by Assure, Mr Taouk conceded in his first affidavit (JT1 [20]), that he was liable to make payments of the sort identified in Schedule 8.
11. I am satisfied on this aspect of the matter that the evidence clearly demonstrates Assure raised funds to pay the Builder and subcontractors by borrowing money in its own name from lenders, including CBA, Mr El Khoury, Westpac, CEG Direct Securities, Balanced Securities, Bacchus and Mr Harsany's family members (DH1 [11(a)], DH2 [36], [51], [55], [58]-[60] and [63]-[64] respectively).
12. Mr Taouk of course asserted he made substantial payments for financing and construction costs. I dealt with these already in preliminary questions 5 and 6.
13. Although I have already made this clear, in my view the evidence supports Assure's claim that it made payments totalling at least $2,164,740.37 to the Builder, $866,861.05 to subcontractors, $216,259.37 to Devlan and $18,657.35 in further payments to subcontractors (DH3 [7]-[18]). The total of those payments is $3,266,518.14. There is no evidence that these moneys came from finance of funds arranged or provided by the Developer or Mr Taouk for that matter. There does not appear to be any issue in the trial and indeed Mr Taouk accepted that Assure had paid at least $3,113,126 (JT2 [23]).
14. As is plain from my reasoning above, I reject Mr Taouk's assertion that he made numerous of the payments he asserted. I will not repeat that analysis. More particularly, I rejected above that Mr Taouk made any payment to Assure for equity in the land. Again I will not repeat my findings.
15. On these grounds, I am satisfied Mr Taouk was obliged under the Development Agreement to pay for the entirety of the shortfall in finance and further amounts required to reach completion, and pay Assure for its equity in the land. Further, in my view, the evidence shows Mr Taouk did not meet these obligations and is therefore liable for breaches of the Development Agreement.

Preliminary Question 8 - Liability as Guarantor and Indemnifier, Cross-Claim

1. This raises the question of whether Mr Taouk is liable to Assure pursuant to a guarantee and indemnity as alleged at paragraph [31]-[33] of the Cross-Claim. Mr Taouk relied on the same submissions for Preliminary Question 7 as it did for Preliminary Question 8 since both turn on the existence of a binding contractual guarantee given by Mr Taouk (Plaintiff's submissions on Cross-Claim [2]).
2. The thrust of Mr Taouk's response to the Cross-Claim was to allege Assure and Mr Harsany were the cause of any delay in the project and that by reason of the various conversations he called in aid they are precluded through either variation or estoppel from relying on the guarantee. However, in addition to general denials, Mr Taouk also made a number of positive assertions (namely, four estoppels) which I propose to deal with after addressing the positive claims submitted by Assure.

Assure's claims

1. Assure submitted that as per clause 24 of the Development Agreement, Mr Taouk provided an indemnity and a guarantee. Assure submitted both the indemnity and the guarantee were engaged by the Developer's failure to fulfil its contractual obligations.
2. Specifically, Assure maintained the Developer failed to complete the project as required under clause 13.1 and 15.1, failed to pay liquidated damages as required under clause 15.5 when the Developer failed to complete the Berowra Development by the date of Practical Completion, failed to make good defects as required under clause 13, and failed to refinance the existing mortgage over Lot 8, arrange and guarantee the construction finance for the building work, pay Assure for its equity in land, provide any shortfall in finance or other amount required to reach completion, and generally bear the cost and risk of the project. All these failings relevantly engaged the indemnity and guarantee, leaving Mr Taouk liable to Assure (Defendant's closing submissions [24] - [48]).
3. Importantly the indemnity extended to the "actual amount of all losses, liabilities, costs and expenses" incurred by Assure in connection with the "occurrence, cure and attempted cure of any Default Event". The guarantee extended to the "due and punctual performance by the Developer" of its obligations. The guarantee was also said to be "continuing", "absolute and unconditional in any and all circumstances" and "irrevocable".
4. I am satisfied the Developer engaged in a "Default Event" so as to engage the indemnity, and/or the Developer failed in the due and punctual performance of its obligations so as to engage the guarantee.
5. Under the Development Agreement the Developer had numerous responsibilities in respect of the Berowra Development catalogued to a large extent in clauses 13 and 14. The date of Practical Completion would have meant the project should have been completed by approximately 20 August 2013. That clearly did not occur. Indeed the evidence discloses that as late as 22 June 2015 Devlan was engaged to continue the work.
6. Pursuant to clause 15.5 the Developer of course was also obliged to pay liquidated damages if the project was not completed by the date for Practical Completion. There is little doubt here that the Developer did not pay any liquidated damages.
7. It follows that Mr Taouk was liable for his breach under the indemnity and guarantee. The guarantee is engaged in my view because the non-completion by the date for Practical Completion goes to the "due and punctual performance" by the Developer of its obligations (clause 15.1).
8. Unsurprisingly the Development Agreement also imposed upon the Developer an obligation to rectify defects (see clause 13.3(a)). There was no dispute the Developer was deregistered on 23 August 2015, before the work was complete and it was thereby incapable of complying with its obligations to make good any defects. That indemnity and guarantee provided by Mr Taouk also underwrites any failure on the part of the Developer to rectify the defects.
9. Although the question of quantum in connection with the costs of rectification is alleged to be determined at a later point, Mr Harsany gave ample evidence in support of the existence and ongoing nature of rectification process (DH1 [23], [26]).
10. The Developer had numerous funding obligations (clause 18.1(a), clause 22, clause 4 Schedule 8, clause 5 Schedule 9 and clause 7 Schedule 8). Under those provisions the Developer was obliged to refinance the existing mortgage over Lot 8, arrange and guarantee the construction finance for the building work and make payment to Assure for its equity in the land, provide any shortfall in finance and other amounts required to reach completion and generally bear the costs and risk of the project. It is plain from the evidence the Developer did not do this. On the evidence as I have analysed it, the only payments ever made by Mr Taouk were reimbursed by the Builder who in turn was paid by Assure. I have already dealt with these matters under Preliminary Questions 5 and 6.
11. So far as Preliminary Question 8 is concerned I am satisfied the Developer did not fulfil most, if not all, of its obligations, thereby engaging Mr Taouk's liability as both an Indemnifier and Guarantor.

Mr Taouk's estoppels

1. Mr Taouk also pleaded four estoppels in his Defence to the Cross-Claim, notwithstanding the express terms of the guarantee, and all of which Assure claimed should not be accepted (Defendant's opening submissions [82]-[93]). First Cross-Claim estoppel
2. Mr Taouk pleaded Assure was estopped from asserting the Building Agreement was for a maximum lump sum of $2.85 million and to be completed in 15 months based on the alleged April 2012 conversation (see para [17], [131]-[136] above) (Defence to Cross-Claim [3(c)]).
3. In response, Assure claimed, correctly in my view, the alleged April 2012 conversation was implausible, not promissory in nature, could not reasonably be relied on and entailed no unconscionable conduct on Assure's part since it was not reflected in the Development Agreement.
4. There was no corroboration of the alleged April 2012 conversation, and more to the point it is implausible that Mr Harsany told Mr Taouk that he would be repaid money that he injected into the Development Agreement in April 2012 and yet this was not reflected in the Development Agreement signed in June 2012. In any event I have already dealt with this conversation and various other aspects of the estoppel claim earlier in this judgment. Second Cross-Claim estoppel
5. Mr Taouk pleaded Assure was estopped from relying upon the 15 month completion period for the Development Agreement based on a "variation" of the Development Agreement arising first, from representations in a conversation between Mr Taouk and Mr Harsany, Assure would obtain planning approval and finance, and buildings works should have only commenced after obtaining approvals, and secondly, from an alleged convention adopted by both parties to this effect (Defence to Cross-Claim [4(e), 8(b)]).
6. As noted by Assure, the pleading gave no particulars as to alleged representations and did not pinpoint when the conversation occurred, despite Mr Taouk asserting he entered into the Development Agreement in June 2012 in reliance upon the conversation. The notion that such a conversation could amount to a "variation" before the June 2012 Development Agreement came into place makes no sense. The problem again is that the terms and conditions of the Development Agreement are entirely antithetical to such a conversation, particularly one which Mr Taouk alleged to have contractual force, having taken place beforehand. More to the point, Mr Taouk must have appreciated the Development Agreement was entirely different to the alleged understanding Mr Taouk apparently gained as a result of this conversation whenever it took place. The pleading is both confused and ambiguous.
7. I am also not satisfied there is any evidential basis whatsoever to support Mr Taouk's allegations Assure delayed the project until July 2013 and failed to obtain finance until May 2013, and Mr Harsany, as project manager, caused extensive delays in additional costs being incurred. The evidence would tend to suggest Mr Harsany's role in connection with the management of the construction was for a short period from early August 2013 to, at best, early September 2013. There is no evidence Mr Harsany caused delay by his conduct during this short period, or at any other time, in particular by changing designs issuing variations or requiring subcontractors to do work.
8. Further, I do not accept there was any conversation in which Assure, in particular Mr Harsany, agreed to accept contractual responsibility for the work in question or the obtaining of finance. This is contrary to the express terms of the agreement and precisely the task not only Mr Harsany but Mr Taouk assumed responsibility to achieve.
9. It follows that I am also satisfied, as submitted by Assure, the evidence does not establish mutual adoption by both parties of the alleged "convention" in departure of their written agreed contract. Third Cross-Claim estoppel
10. Mr Taouk pleaded Assure should not be allowed to argue the Developer abandoned or failed to complete the project or that Mr Taouk was liable as a consequence because of conversations which allegedly took place in June and August 2015 in which Mr Harsany allegedly said the parties did not need the Developer any more (Defence to Cross-Claim [18(a)]).
11. Assure submitted Mr Taouk provided no evidence of any conversations in June or August 2015, the alleged representations were vague and not statements of fact or a promise, and the alleged 2015 representations did not have causative connection with the Developer's failure to complete the work in 2012.
12. I do not accept the conversations took place. Again the difficulties with any conversations that occur in or near the vicinity of the Variation in and of themselves, by reason of that context, lack substantial credibility. Having consummated for the second time their rights and liabilities in a written agreement, it is in my view, stretching credibility to suggest a month or two later the parties were objectively agreeing to waive substantial objections. Fourth Cross-Claim estoppel
13. Mr Taouk pleaded Assure was estopped from claiming liquidated damages under clause 15.5 of the Development Agreement based on Assure failing to appoint an Independent Assessor pursuant to clause 14 (Defence to Cross-Claim [24(d)]). Mr Taouk therefore submitted the Developer was not liable to pay liquidated damages or alternatively under the applicable formula the quantum should be nil. The quantum will be dealt with in due course.
14. Assure claimed clause 15.5 was not contingent on the appointment of the Independent Assessor. Assure submitted a proper construction of clause 15 was that the Developer (and not Assure) bore the responsibility for obtaining certification of on-time completion, or an extension of time, from the Independent Assessor.
15. Pursuant to clause 15.1(c) the Developer had to "procure the Independent Assessor to deliver to the Developer and the Project Administrator a statement under which the Independent Assessor certifies to the Developer and the Council that Practical Completion occurred within 7 business days of Practical Completion occurring". The Developer therefore had a responsibility to procure a certification from the Assessor. There was no obligation on the part of Assure. In any event there was simply, as a matter of fact, no practical completion.
16. Clause 15.2 set out a regime whereby the Developer could obtain an extension of time to the Date for Practical Completion. The Developer was obliged to give written notice to the Independent Assessor and satisfy the Independent Assessor of certain matters. In other words the Developer was only entitled to an extension of time if the requisite certification was obtained. There was no obligation of Assure in this regard.
17. In addition, pursuant to clause 15.5, liability was imposed on the Developer to pay liquidated damages which was not contingent upon the appointment of the Independent Assessor doing anything. The relevant damages were to be paid if Practical Completion did not occur as agreed.
18. Further, clause 14.1 provided Assure would select the Independent Assessor from three consultants proposed by the Developer. The Developer had to initiate that process. In addition there is nothing that the Independent Assessor would indeed do when one considers the roles of such a person (clause 14.2) which relates to a claim for liquidated damages. I therefore do not see any basis, construction or otherwise that would, in the absence of an Independent Assessor being appointed, preclude Assure from otherwise claiming liquidated damages for the requisite breach on the part of the Developer and/or Mr Taouk. Nor do I see any point which conceivably arises by reason of the failure to serve any of the notices (assuming there was such an obligation) under the various provisions called in aid.
19. It seems to me therefore by reason of my analysis above that Mr Taouk was liable for liquidated damages pursuant to the indemnity and guarantee. None of the estoppels and/or other defences he raised are successful. Therefore there will need to be a quantification of the claim for liquidated damages in due course.

Preliminary Question 9 - Section 21 of the ACL, Cross-Claim

1. Mr Taouk in addition pleaded in defence to the Cross-Claim as a whole that Assure's behaviour was unconscionable within the meaning of section 21 of the ACL having regard to the asserted oral conversations, and sought relief which would modify the Development Agreement to prevent Assure from advancing its arguments in the Cross-Claim (Amended Defence to Cross-Claim [35]).
2. Mr Taouk relied on alleged representations by Mr Harsany regarding the structure of the parties relationship, Assure's agreement to obtain planning approval and finance and delaying the start of work, the Developer not being needed by the parties, and that Mr Taouk would be paid (Amended Defence to Cross-Claim 3, 4, [35]).
3. Assure submitted the representations relied on by Mr Taouk must be rejected on the same grounds Mr Taouk's further estoppels pleaded in the Defence to the Cross-Claim should not be accepted (Defendant's opening submissions [82]-[93], [109]). Furthermore, as noted in response to the Preliminary Question 3, Assure submitted Mr Taouk had no standing as there was no pleading of loss or damage, Mr Harsany was not supply goods or service and Mr Taouk only supplied a financial product, and Mr Taouk did not take into account or plead any of the factors set out in section 21(4) or section 22 of the ACL (Defendant's opening submissions [107]-[110]).
4. Further, Assure submitted Mr Taouk did not make clear what element of reliance there was, how the allegations made against Assure amounted to "moral obloquy," and what disadvantage Mr Taouk was at. On these grounds, Assure submitted the requisite level of unconscionability was not made out (Defendant's opening submissions [11]). In closing, Assure noted there was nothing emerging from the trial which required further elaboration, except Mr Taouk was an unreliable witness and his evidence as to alleged conversations he relied on to claim unconscionable conduct could not be believed (Defendant's closing submissions [81]-[82]).
5. For reasons I have already developed here in the context of consideration of this sort of claim, in my view there is no substance in the allegation, leaving aside my rejection of the alleged conversations. The absence of special disadvantage and importantly his opportunity to review the written terms and obtain legal advice makes any suggestion of unconscionability untenable.

Summary of findings

1. In summary, my findings in response to each Preliminary Question on Liability are as follows: 1. Question 1 - Breaches of Agreement: the Defendant is not liable to the Plaintiff for alleged breaches of agreement pleaded at paragraphs [2]-[27] of the Amended Statement of Claim (Claim) and as traversed at paragraphs [2]-[27], [36]-[39] of the Defence to the Claim (Defence); 2. Question 2 - The Estoppels: the Plaintiff is not entitled to the estoppels alleged at paragraphs [28]-[31] of the Claim, the estoppels pleaded at paragraphs [3(c)], [4(e)], [8(b)], [18(a)] and [24(d)] of the Defence to Cross-Claim, or paragraphs [5], [14] and [16] of the Reply to the Defence; 3. Question 3 - Section 21 of the ACL: the Defendant is not liable to the Plaintiff for the alleged breach of section 21 of the Australian Consumer Law pleaded at paragraphs [32]-[33] of the Claim; 4. Question 4 - Unjust Enrichment: the Defendant is not liable to the Plaintiff for unjust enrichment as alleged at paragraph [34] of the Claim; 5. Question 5 - Alleged Paragraph 8 Payments: the claims for payments pleaded in paragraph [8] of the Claim are not claims that the Plaintiff is entitled to bring against the Defendant; 6. Question 6 - Alleged Tab 33 Schedule Payments: none of the claims for payments particularised in the schedule at Tab 33 of the Exhibit to the Plaintiff's Affidavit dated 2 December 2016 claims that the Plaintiff is entitled to bring against the Defendant; 7. Question 7 - Breaches of Agreement, Cross-Claim: the Plaintiff is liable to the Defendant for breaching the Development Agreement as alleged at paragraphs [2]-[30] of the Cross-Claim (Cross-Claim) as traversed at paragraphs [2]-[30] of the Defence to the Cross-Claim; 8. Question 8 - Liability as Guarantor and Indemnifier, Cross-Claim: the Plaintiff is liable to the Defendant pursuant to a guarantee and indemnity as alleged at paragraphs [31]-[33] of the Cross-Claim as traversed at paragraphs [31]-[33] of the Defence to Cross-Claim; and 9. Question 9 - Section 21 of the ACL, Cross-Claim: the Defendant is not liable to the Plaintiff for the alleged breach of section 21 of the Australian Consumer Law at paragraph [35] of the Defence to Cross-Claim.
2. 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.
3. Further directions may need to be given in light of my answers to Preliminary Question 7 and 8.

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: 04 May 2017