Penhall (as executor of the estate of the late Paul Sukkar) v Abu. Tony Pty Ltd atf Abu. Tony Discretionary Trust

Supreme Court of NSW|2022-07-28|Before: Robb J, Foster J

Judgment

This is a suit for specific performance of two separate contracts for the sale of home units that I will call Lots 15 and 16, as the location of the properties is not material.

The plaintiff

The plaintiff in these proceedings was originally Paul Sukkar, who was the purchaser under the contracts. Without meaning any disrespect, I will sometimes refer to Mr Sukkar as Paul, to distinguish him from his brother, Steven, who was a witness and who represented his brother at a significant meeting.
For much of the period in which relevant events took place, Mr Sukkar was suffering from terminal cancer that led to his death on 17 October 2019.
The plaintiff is now Gary Neville Penhall, who is a solicitor of this Court. Mr Penhall acted for Mr Sukkar on the transactions the subject of the contracts, and initially acted for Mr Sukkar in commencing and prosecuting these proceedings. After Mr Sukkar's death, Mr Penhall became substituted as the plaintiff in his capacity as the executor of Mr Sukkar's estate.
Before his death, Mr Sukkar affirmed affidavits in these proceedings on 11 December 2018 and 7 March 2019. Mr Sukkar gave evidence on commission pursuant to ss 32 and 33 of the Evidence on Commission Act 1995 (NSW) on 24 May 2019. Mr Sukkar was cross-examined by senior counsel for the defendants. As Mr Penhall elected to read Mr Sukkar's affidavits at the hearing, the transcript of the evidence given by Mr Sukkar on commission was received by the Court and treated by agreement of the parties in the same manner as the Court would treat the transcript of evidence given in open court: see CB 2735-2839, being MFI 9.

The defendants

The first defendant is a company called Abu.Tony Pty Ltd, as trustee for the Abu.Tony Discretionary Trust (Abu.Tony). Abu.Tony is the vendor under each of the contracts. The second defendant is Mr Michael Taouk. Mr Taouk did not have a formal role in the ownership or management of Abu.Tony. However, the defendants have accepted that Mr Taouk acted as the agent of Abu.Tony. Mr Taouk signed the contracts on behalf of Abu.Tony. The third defendant is Mrs Amal Taouk, Mr Taouk's wife. She is the sole shareholder and director of Abu.Tony. Mrs Taouk had little involvement in the relevant events. Mrs Taouk was a witness to conversations in which she participated or overheard.
As the proceedings were constituted before the commencement of the hearing on 28 July 2022, Mr and Mrs Taouk were active defendants to some of the claims made by Mr Penhall. In opening, senior counsel for Mr Penhall abandoned a number of the pleaded claims, which had the effect that Mr Penhall was no longer seeking relief against Mr and Mrs Taouk personally. Consequently, Mr Penhall accepted that, in due course, the Court will make orders in favour of Mr and Mrs Taouk dismissing the claims against them. The Court must decide what costs order should be made concerning those claims. In these circumstances, Abu.Tony is the only active defendant.

Some agreed matters

Lots 15 and 16 are two lots in a strata plan the subject of a home unit development constructed by Abu.Tony.
The parties agreed to a number of significant facts. First, the parties have agreed that Lots 15 and 16 each have a market value of $520,000. Consequently, if the Court finds in favour of Mr Penhall's claim but decides that damages should be awarded rather than specific performance, the Court will order Abu.Tony to pay to Mr Penhall $1,040,000.
Mr Penhall makes a claim against Abu.Tony that it is obliged to pay to him the net rents received by Abu.Tony from letting the two Lots after it repudiated the two contracts for sale. Secondly, the parties agreed to the accuracy of a rental summary that showed that the net amounts paid to Abu.Tony from leasing the two Lots for the period 19 September 2018 to 31 May 2022 was $114,480.08 in total: see Exhibit PD1.

Issues

In essence, Mr Penhall's claim for orders specifically enforcing the contracts would be straightforward save for two matters. First, the contracts did not provide in the conventional way for Mr Sukkar to pay an agreed price for the transfer of each of the Lots. The contracts contained a provision, which I will shortly set out, that had the effect of an acknowledgement by Abu.Tony that Mr Sukkar had already paid the price. The parties are in dispute about the proper legal analysis of this provision. On the one hand, Mr Penhall's case is that Abu.Tony must complete the contracts because it is bound by the acknowledgements. Abu.Tony's response is that the acknowledgements had the effect of acknowledgement that it had received the price for each of the Lots from Mr Sukkar. Such acknowledgements of receipt do not bind a vendor. Abu.Tony contended that the evidence established that no price had in fact been paid for either Lot, so that both contracts were invalid because they were not supported by consideration.
Abu.Tony's second defence was that, whether or not the contracts were supported by consideration, they had been induced by duress exercised by Paul, or by Steven on Paul's behalf, and that Abu.Tony had effectively exercised its right to rescind the contracts.
Mr Penhall responded to this second defence with an argument that Abu.Tony had lost any right it had to rescind the contracts, because it had affirmed them by exercising a right contained in the contracts to extend a sunset date for the satisfaction of a condition to completion of the contracts.

Primary documents

The documents that lie at the heart of the dispute between the parties are the contracts that were dated 16 April 2015 and a separate acknowledgement signed by Mr Sukkar and Mr Taouk on the same date.

The contracts for sale

The contracts for the sale of Lots 15 and 16 were in identical terms and each contained in the usual place on the first page a statement that the price of the Lot was $450,000, and the deposit was $45,000, leaving a balance payable of $405,000.
The most significant term of the contracts is special condition 59 (SC 59), which, notwithstanding the provision for payment of the price, provided: 59. Notwithstanding anything herein contained, the vendor acknowledges that the purchaser has paid the price of $450,000.00 to or on behalf of the vendor prior to the date of this agreement. Accordingly, the deposit specified herein is deemed to have been paid and received by the vendor and the balance of [the] purchase price required on completion is also deemed to have been paid by the purchaser and received by the vendor and no money shall be payable by the purchaser to the vendor on completion other than the usual adjustments otherwise provided for in the special conditions.
The significance of the inclusion of this special condition in the contracts must be determined on the assumption that Abu.Tony's duress defence fails. Otherwise, the special condition would fall with all other terms of the invalid contracts.
There is an issue as to whether this special condition should be treated as having the same effect as, for example, a provision in a transfer that says: "Price $X, receipt whereof is hereby acknowledged". It will be noted that the special condition is expressed to operate notwithstanding anything else in the contract, which is capable of extending to the statement of the price. It is an acknowledgement that the price, including the deposit, has been paid before the date of the contract. It is an agreement that certain things have been and will be deemed to have taken place - the payment and receipt of the deposit and the payment and receipt of the balance of the purchase price. There is also an agreement that no money shall be payable by the purchaser to the vendor on completion other than the usual adjustments.
The following terms of the contracts are also relevant to the determination of these proceedings.
The additional clauses attaching to each of the contracts contained in clause 31.1 a definition of "Date for Registration" as "31 January 2017 or such other date determined under clause 41."
As the development containing Lot 15 and Lot 16 had not yet commenced construction, clause 34.1 required the vendor to serve a notice on the purchaser indicating when the vendor intended to commence or had actually commenced construction. If the vendor did not serve a notice on the purchaser before 31 December 2015, then either party was entitled to rescind the contract. Recission could also occur if the vendor did not substantially commence construction within 3 months from the date of service of a notice under clause 34.1.
Clause 37.1 required the vendor to construct the part of the development containing Lot 15 and Lot 16 in a proper and workmanlike manner before the Completion date.
Under clause 40.1, the contract was made subject to and conditional upon the registration of the "Strata Plan at the Land and Property Information". The vendor was required to do everything reasonable to have the strata plan registered by the Date for Registration.
Clause 41 of the contracts provided: 41. EXTENSION OF DATE FOR REGISTRATION 41.1 If the construction of the Building and consequently the registration of the Strata Plan is delayed due in whole or in part to one or more of the following: [five possible causes of building delays were listed] and the Vendor's Superintendent certifies to the period and cause of delay, then the vendor may, at any time from the date of this contract to the date that either party serves a notice of rescission under clause 40.2, extend the Date for Registration by the period of delay certified to by the Vendor's Superintendent by written notice to the purchaser. The Vendor's Superintendent's certification will be conclusive evidence of the nature and extent of the delay.
Notwithstanding that the first page of each contract provided that completion was to take place on the 42nd day after the date of the contract, clause 46 provided as follows: 46. COMPLETION DATE 46.1 The Completion date of this contract shall be: (a) thirty five (35) days from the date hereof; or (b) twenty one (21) days after the Service Date; or (c) twenty one (21) days after the vendor serves a copy of an Occupation Certificate in respect of the Property on the purchaser; whichever is the later.
The standard term that is often contained in contracts for the sale of land that permits the vendor to rescind the contract upon the death of the purchaser in clause 53 was deleted. That was evidently done because Mr Sukkar was suffering from a terminal disease at the date of the contracts.
The contracts contained SC 59 that is set out above and then provided: 60. Notwithstanding anything herein contained, the usual adjustments referred to in special condition 59 are deemed to include an adjustment amounting to 6% of the sale price which the purchaser has agreed to reimburse to the vendor on completion as a liquidated sum which the parties agree approximately reflects the margin scheme GST liability of the vendor for the development and construction of the property.

The Acknowledgement

The second significant document, which I will call the "Acknowledgement", was signed by Mr Sukkar and Mr Taouk, and provided: ACKNOWLEDGEMENT I Michael Taouk of [address] ("the borrower") undersigned hereby acknowledge that over about the last 5 years I have borrowed from Paul Sukkar of [address] amounts of money totalling $900,000.00 (the receipt whereof is hereby acknowledged) and in respect of which I intend to make repayment and give satisfaction either in money or in kind. I Paul Sukkar of [address] ("the lender") undersigned hereby confirm that I have made loans to Michael Taouk as aforesaid totalling $900,000.00. In the event that Michael Taouk procures the conveyance to me or at my direction of two home units at Lot 15 and Lot 16 [address] for a price of $450,000.00 each, I will accept title to those units in full satisfaction of Michael Taouk's debt to me of $900,000.00.
As I have noted above, the defendants accepted that Abu.Tony was bound by the contracts, even though Mr Taouk did not have that company's apparent authority to sign them. That concession was first made in the defence to the statement of claim. Although the issue was not determined by the pleadings, the defendants have implicitly conceded by the way they conducted the defence at the hearing that the terms of the Acknowledgement could be relied upon by Mr Penhall (if otherwise shown to be legally significant) in his claim to enforce the contracts against Abu.Tony, notwithstanding that SC 59 of the contracts referred to Mr Sukkar having paid the price of $450,000 for each of the Lots to Abu.Tony, while the Acknowledgement was of a debt of $900,000 owed by Mr Taouk to Mr Sukkar. The parties implicitly proceeded upon the basis that (if the defendants were bound by SC 59 and the Acknowledgement) Mr Taouk had effectively repaid the loan that he acknowledged that he owed to Mr Sukkar by procuring Abu.Tony to agree to transfer the two Lots to Mr Sukkar.
Relevantly to Abu.Tony's reliance upon the legal principles that apply to factually false acknowledgements of receipts of money in some circumstances, it will be noted that the Acknowledgement included an acknowledgement by Mr Taouk that he had received a total of $900,000 from Mr Sukkar - see in the first paragraph "(the receipt whereof is hereby acknowledged)". Then, in the second paragraph, Mr Sukkar confirmed that he had made the loans to Mr Taouk. That paragraph also contained an agreement by Mr Sukkar that he would accept title to the two Lots procured by Mr Taouk to be transferred to him in full satisfaction of the debt.
There is an issue as to whether the proper legal analysis of the relevant parts of the two documents is that they merely had the effect of acknowledgements of receipts of money (which may be ineffective if shown to be false on the evidence) or whether their wording goes further to add elements of agreement that are capable of having a promissory effect able to support an argument made by Mr Pennell that the documents established a convention that is binding on Abu.Tony.

Pleadings

It will be necessary to consider the evolution of the parties' pleadings, even though the issues that are required to be decided were simplified because Mr Penhall abandoned at the hearing some of his pleaded claims against Abu.Tony and all of his claims against Mr and Mrs Taouk.
This analysis is required, first, because Abu.Tony based its claim that the contracts were invalid for want of consideration partly on aspects of Mr Penhall's pleaded claim that were introduced by amendment and then abandoned. Abu.Tony submitted that the rules that govern pleading did not permit Mr Penhall to abandon the pleaded allegations. Secondly, Mr Sukkar was cross-examined on the content of his amended statement of claim, before significant parts of that pleading were abandoned, so those parts are relevant to an understanding of the effect of the cross-examination. Thirdly, revisions that were made by Abu.Tony to the particulars of its duress defence are important to the effectiveness of that defence and to the credibility of Mr Taouk's evidence. Finally, the consideration of the costs order that should be made following the abandonment of the claims against Mr and Mrs Taouk requires reference to those claims as pleaded.

Statement of claim

The proceedings were commenced by statement of claim filed on 31 August 2018. The relevant prayers for relief against Abu.Tony were: 1. Declaration that the sale contracts between the first defendant as vendor and the plaintiff as purchaser for [Lots 15 and 16] ("the sale contracts") ought to be specifically performed, and carried into execution by the first defendant, and that the same may be decreed accordingly, (the plaintiff hereby offering to specifically perform the same so far as the same remains to be performed on his part). 2. Declaration that the first defendant is estopped from repudiating the sale contracts for [Lots 15 and 16].
Mr Sukkar made alternative claims for damages or equitable compensation.
The only relief claimed against Mr and Mrs Taouk in the original statement of claim was in the following prayers: 10. Declaration that in acting as he did, in executing the sale contracts for [Lots 15 and 16] the second defendant was a de facto director of the first defendant and was its authorised agent for those purposes. 11. Declaration that the actions of the second defendant in executing the sale contracts for [Lots 15 and 16] were authorised and sanctioned by the third defendant. 12. That in the alternative, the second and third defendants pay to the plaintiff equitable compensation. 13. That in the alternative to the first defendant paying the plaintiff's costs, the second and third defendants are jointly and severally ordered to bear and pay those costs.
Prayer 10 is explained by the fact that Mr Taouk executed the two contracts of sale as if he was authorised to do so by Abu.Tony, notwithstanding that he did not have any formal management authority of that company.

Claim against Abu.Tony

In his pleadings and particulars, Mr Sukkar pleaded the existence of contracts dated 16 April 2015 between himself as purchaser and Abu.Tony as vendor for the sale of Lots 15 and 16: par 1(a).
Mr Sukkar pleaded the document headed "Acknowledgement" that was executed by Mr Taouk and Mr Sukkar, in which Mr Taouk acknowledged that he had borrowed amounts totalling $900,000 from Mr Sukkar, and Mr Sukkar acknowledged that he would accept the conveyance to him of Lots 15 and 16 for a price of $450,000 each in full satisfaction of the debt: par 1(c) and (d).
Mr Sukkar pleaded, under the heading "Estoppel by Conduct", a claim in apparent anticipation of an expected defence by Abu.Tony that it had effectively rescinded the contracts. The pleading appears to be partly one of estoppel by conduct and partly an allegation of affirmation of the contracts. Mr Sukkar alleged: 1… ESTOPPEL BY CONDUCT (g) At the time of entry into of the sale contracts by the first defendant, Michael Taouk ("Michael") was the registered proprietor of the land jointly with his wife Amal Taouk as tenants in common, in unequal shares - Michael 90% and his wife 10%. Michael acted as the agent of his wife and of the first defendant at the point of time when the contracts to sell [Lots 15 and 16] were entered into by the plaintiff and the first defendant. The first defendant, by way of its ongoing actions and its solicitor's ongoing actions following exchange of the sale contracts affirmed the contracts for sale of the Strata Lots over a period of more than 3 years. PARTICULARS (i) By email letter sent at 12:53 PM on 22 April 2015, the plaintiff's solicitors noted that special conditions 59 and 60 had been omitted from the contracts for acquisition of [Lots 15 and 16], and sought authority to include them. By email from the first defendant's solicitors to the plaintiff's solicitors at 3:41 PM on 22 April 2015, the first defendant authorised the insertion into the contracts for [Lots 15 and 16] of those conditions ("the added conditions") as follows: [Conditions 59 and 60 are then set out. They have been set out in full above. They had the effect of an acknowledgement of payment of the price of $450,000, and the deposit. There was also a provision for how the usual adjustments would be treated on settlement]. (ii) The extension of the completion notified by the solicitor for the first defendant to the plaintiff's solicitor and particularised in paragraph 7 hereof, was and remains conduct which encouraged the plaintiff to believe that the sale contracts would eventually be completed in his favour.
The matter particularised in par 7, as referred to in par 1(g)(ii), consisted of four separate extensions of time for completion of the development and procurement of registration of the strata plan notified to Mr Sukkar by Abu.Tony's solicitors.
Mr Sukkar pleaded in par 1(h) to (j): (h) The plaintiff relied upon the exchange of the sale contracts for the strata lots and the subsequent affirmation thereof by the first defendant and has suffered detriment. PARTICULARS (i) The plaintiff forbore to sue the second defendant for recovery of the debt acknowledged in paragraph 1(d) herein; (ii) The plaintiff arranged his financial affairs and borrowed money on the faith of completion of the purchase by him of the strata lots; (iii) The plaintiff, at a time when he is being treated for serious illness, is obliged to suffer the anxiety and expensive legal proceedings for specific performance of the promises made to him. (i) In the premises, the first defendant is estopped from repudiating the sale contracts for the strata lots. (j) The plaintiff has suffered damage.
Mr Sukkar's estoppel case, as originally pleaded, thus assumed that the Acknowledgement was effective to establish that he was owed $900,000 by Mr Taouk, and the detriment relied upon by Mr Sukkar was that, in the belief that the contracts for sale were valid and would be performed by Abu.Tony, Mr Sukkar forbore from seeking recovery of the debt from Mr Taouk, he arranged his financial affairs and borrowed money in the belief that the contracts for sale would be performed, and he suffered anxiety and expense as a result of these proceedings.
It may be noted at this point that, although it is true that Mr Sukkar did not prosecute a claim in debt against Mr Taouk, there was no evidence in the proceedings that Mr Sukkar arranged his financial affairs and borrowed money on the faith of a belief that the contracts would be performed.
Mr Sukkar pleaded various steps in the transaction, including registration of the strata plan, that do not need to be set out in detail.
In par 9, Mr Sukkar pleaded that Abu.Tony had repudiated the contracts for sale by means of its solicitor's letters dated 9 August 2018 in respect of each of the Lots to Mr Sukkar's solicitor, in which it was stated that Abu.Tony did not recognise the existence of any contracts for the sale of the two Lots. It is only necessary to set out the following pleaded extract from the letters, which contains a statement of the grounds upon which the assertion was made that the contracts were invalid: We refer to the above matter and have been instructed by our client's Sole Director and Secretary that the Contract was not executed validly. We understand that the defective execution arises due to the fact that the Contract was not in fact executed by Amal Taouk, being the Sole Director and Secretary of the Vendor company. On that basis, we wish to advise that neither party is bound by the terms of the Contract. Further, we understand that there was no deposit paid for this purported purchase. Accordingly, this brings the matter to an end.
The letters thus gave two reasons as to why the contracts were invalid. The first was that they had been executed by Mr Taouk rather than Mrs Taouk, and the former lacked authority to do so. Secondly, the letters asserted that no deposit had been paid. Significantly, these letters did not contain an allegation that Abu.Tony was entitled to rescind the contracts on the ground that they had been procured by duress for which Mr Sukkar was responsible.
As I have explained above, the absence of authority on the part of Mr Taouk is no longer relevant. The alleged non-payment of the deposits remains relevant to Abu.Tony's defence that the contracts are not supported by consideration.
Mr Sukkar then pleaded that he was ready, willing and able to complete the contracts, and that, as Abu.Tony had already been paid the price for the two Lots, it held those Lots on a bare trust for Mr Sukkar: pars 10 to 12.
It will be convenient to make an observation concerning Mr Penhall's allegation that he is ready, willing and able to complete the contracts. Abu.Tony made a submission that there was no evidence that Mr Penhall was able to pay a total price of $900,000 from Mr Sukkar's estate. That is true, but I understand that the absence of this evidence is irrelevant to Mr Penhall's case. That is because Mr Penhall claims that he is able to complete the contracts because the combined effect of SC 59 and the Acknowledgement is that he will not be required to pay any money in exchange for the transfers of the two Lots. As I understand it, Mr Penhall does not propound a claim that he is entitled to orders for the specific performance of the contracts if he is required to pay $450,000 for each Lot on settlement.

Claims against Mr and Mrs Taouk

Mr Sukkar's claim against Mr and Mrs Taouk was pleaded in pars 13 to 20. Mr Sukkar relied upon the aggregate of a number of unorthodox allegations; including that Mr and Mrs Taouk were initially the registered proprietors of the land upon which the home unit development was constructed, Abu.Tony was the trustee of a discretionary trust, Mr Taouk was a de facto director of Abu.Tony (including because Mr and Mrs Taouk "are of Lebanese heritage and it is customary in that heritage for the husband to be in control of business matters"), Mrs Taouk as the sole director and shareholder of Abu.Tony permitted Mr Taouk to sign the contracts for sale, and Mr and Mrs Taouk "are reasonably likely to be discretionary objects of the Trust". Mr Sukkar alleged that Mrs Taouk had a duty to administer the affairs of Abu.Tony and to be aware of its actions. Mr Sukkar alleged that Mrs Taouk knew or ought to have known that Mr Taouk had acted in the role of shadow director when he executed the contracts for sale, and, because Mrs Taouk was a 10% owner of the land, she "appointed her husband as agent to effect the transactions comprised in the sale contracts and subsequently affirmed those sales to the plaintiff."
It is not necessary for the Court to comment on the validity of the claims pleaded by Mr Sukkar against Mr and Mrs Taouk.

Defence

The defendants filed their defence to the statement of claim on 28 September 2018. It is not necessary to analyse that pleading in detail. By par 1(a), the defendants admitted that Mr Taouk executed the two contracts for sale on behalf of Abu.Tony. This is an important event in the proceedings, because from this time, the defendants have accepted that Mr Taouk acted as the lawful agent of Abu.Tony when he executed the two contracts for sale on its behalf, and from the time the defence was filed, the question of Mr Taouk's agency has not been an issue in the proceedings. The defendants explicitly admitted in par 18(a) that "the contracts of sale were executed by the second defendant on behalf of the first defendant, and that the second defendant was authorised by the first defendant to do so".
The only other aspect of the defence that need be noted is the basis pleaded for the contracts for sale not being enforceable. The defendants pleaded in par 1: (i) They say that, notwithstanding the terms of the Acknowledgement the plaintiff had not made any loans or advanced any monies to the second defendant (or any of the defendants) and that the plaintiff has not paid or given any consideration in respect of the sale contracts and accordingly the sale contracts are unenforceable. (j) They say that: (i) the second defendant executed the sale contracts on behalf of the first defendant; and (ii) the second defendant signed the Acknowledgement; and (iii) further steps were taken in respect of the sale contracts as a result of duress on the part of the plaintiff. PARTICULARS OF DURESS The Plaintiff and his brother Steven Sukkar threatened to kill the second defendant, "walk on his grave" and harm his family if he did not sign over two lots in the development at [address of property] to the Plaintiff and or Steven Sukkar. (k) They say that by reason of the foregoing the sale contracts are void and unenforceable.
This was the first time the defendants raised the defence of duress. The only threat that was relied upon was the alleged threat by Paul and Steven Sukkar to kill Mr Taouk and to "walk on his grave" and harm his family. As will be seen below, in its submissions Abu.Tony referred to six separate incidents that were relevant to the duress defence. Only two of those alleged incidents took place before the contracts were exchanged. A crucial issue in these proceedings is, assuming the "walk on his grave" threat was made, whether it was made before the date of the contracts, so that it was capable of inducing Abu.Tony to enter into them.

Amended statement of claim

Mr Sukkar filed an amended statement of claim on 15 April 2019, about one month before he gave evidence on commission. It is not necessary to record all of the amendments that were made to the original statement of claim.
By a new prayer 9, Mr Sukkar sought a declaration that Mr Taouk acted with the actual or ostensible authority of Mrs Taouk when he executed the contracts for sale. This prayer was sought notwithstanding that the defendants had already admitted in their defence that Mr Taouk had executed the contracts for sale with the authority of Abu.Tony.
More significantly, Mr Sukkar added additional prayers for relief against Mr and Mrs Taouk.
The new prayers sought relief in respect of the involvement of Mr Sukkar and Mr Taouk in an earlier development of home units undertaken by a company controlled by Mr Taouk. It is sufficient to note that the new allegations concerned a lot in a strata plan that may conveniently be called Lot 2.
The new prayers for relief were: 12. Declaration that the 2nd defendant was at all material times an agent of the plaintiff and was accordingly owed the obligation of a fiduciary to the plaintiff with respect to the real estate of the plaintiff comprised in [Lot 2]. 13. By virtue of being a fiduciary of the plaintiff's, the second defendant caused loss and damage to the plaintiff by reason of ignoring his obligation to avoid a conflict of interest, and by enriching Ozbuild Constructions Pty Ltd, a company now deregistered ("Ozbuild"), a company of which he was a shareholder. 14. Declaration that the 2nd defendant breached the duties imposed on him as an agent of the plaintiff in that he failed to protect and invest the net sale proceeds received by Ozbuild from the sale of [Lot 2] in February or March 2010, i.e. $436,500.00 and by reason of the intermingling of the funds of the plaintiff with the funds of Ozbuild resulting in the total loss thereof as a consequence of the liquidation of Ozbuild; 15. Declaration that, when Ozbuild received the sum of $425,000.00 from the plaintiff during 2005 for the purchase of [Lot 2] as an "off the plan" purchase, that Ozbuild, from the moment of registration of the Strata Plan for the Block of Units, held [Lot 2] and the subsequent sale proceeds thereof in the sum of $436,500.00 received by them in February 2010, upon a resulting trust for the plaintiff; 16. That the 2nd defendant as a fiduciary, give an account to the plaintiff for the sale proceeds of [Lot 2], and for received rents of [Lot 2], and all other benefits accruing thereon from ownership prior to sale; 17. That the 2nd defendant pay equitable compensation for breach of his duties as a fiduciary to the plaintiff; 18. That the 1st, 2nd and 3rd defendants jointly and severally pay the plaintiff's costs of these proceedings. 19. That as from the date of sale of [Lot 2], the 2nd defendant pay compound interest on the amount of the proceeds of sale up to and inclusive of the date of making of these orders. 20. Declaration that, as and from the breach of his fiduciary obligations under which, as the plaintiff's agent and contrary to his duties as such a fiduciary, an Institutional Constructive Trust arose in favour of the plaintiff with respect to [Lot 2] and, when [Lot 2] was sold, the net proceeds of sale. …
The particulars of detriment in par 1(h) of the original statement of claim were augmented by adding the following: (i) In or about the following dates the plaintiff had paid to the second defendant the following amounts: 2005 $100,000 Cash. 2005 $500,000 Cash. 2009 $300,000 Cash. 2010 $250,000 Cheque. Details of the payments are set out in paragraphs 4, 11 and 12 of the plaintiff's affidavit affirmed 25 November 2018. (ii) The second defendant acknowledged owing the plaintiff a debt of $900,000 in the document referred to in paragraph 1(d) hereof.
Mr Sukkar pleaded the basis of his new claims for relief in pars 20 to 36 of his amended statement of claim, as follows: 20. At all relevant times between 1 July 1998 and 19 May 2013, Ozbuild Constructions Pty Ltd ("Ozbuild") was a company incorporated pursuant to the Corporations Act 2001 ("the C Act"). The company carried on a business as a home unit builder. 21. On or about 6 November 2011, David Solomons and Riad Tayell were appointed liquidators of Ozbuild. 22. On or about 19th May 2013, Ozbuild was deregistered. 23. At all relevant times between 1 July 1998 and 6 November 2011, Mr Taouk was: (a) A director of Ozbuild; (b) Held one of the three issued shares (the other two, were held by the other respective shareholders) in Ozbuild; (c) Was an agent of Ozbuild. 24. In or about the year 2005, Ozbuild was commencing to carry on the business of building home units on land which is owned at [address in Lane Cove] ("the block of units"). 25. By an oral agreement made in 2005, Ozbuild, by its agent, Mr Taouk, agreed to sell [Lot 2] in the block of units to the plaintiff for the price of $425,000.00. The plaintiff agreed to by [Lot 2] on those terms. PARTICULARS The agreement was oral and was made between the plaintiff and Mr Taouk on behalf of Ozbuild. Details of the agreement are set out in paragraphs 28-30 of Mr Taouk's affidavit of 21 February 2019 ("the Taouk affidavit"). 26. At various times between March and July 2005, the plaintiff made a number of payments to Mr Taouk on behalf of Ozbuild. The total amount paid by the plaintiff to Mr Taouk amounted to not less than $425,000, and the 2nd defendant admits to receiving $425,000 on behalf of Ozbuild. PARTICULARS (i) Paragraphs 28-30 of the Taouk affidavit. (ii) The payments are also identified in paragraph 4 of the plaintiff's affidavit affirmed 25 November 2018. 27. There was no formal exchange of contracts between the parties. 28. The payment was made prior to [Lot 2] coming into being, which actually took place upon registration of the Strata Plan for the block of units. 29. Construction of the block of units was finalised in either late 2006 or early 2007 and the Strata Plan was registered. 30. By December 2009, all the units in the block of units had been sold, save for [Lot 2]. This unit was the home unit owned by the plaintiff. 31. By reason of being a paid vendor, Ozbuild was, from the date of registration of the Strata Plan for the block of units, a trustee for the plaintiff of [Lot 2] and held the legal title to [Lot 2] on a resulting trust for the plaintiff. 32. Some time between August 2005 and December 2007, Mr Taouk visited the plaintiff who was at this particular time, incarcerated in jail at the Junee Correction Centre or was incarcerated elsewhere. On the day of the visit, the plaintiff and Mr Taouk had a conversation in which Mr Taouk asked the plaintiff what he wanted to do with [Lot 2]. The plaintiff requested that Mr Taouk arrange for the sale of [Lot 2] for the best price reasonably possible, and also requested that after the sale was completed by Ozbuild, Mr Taouk hold the net proceeds of that sale on the plaintiff's behalf. Mr Taouk agreed to arrange for Ozbuild to sell [Lot 2] and undertook to the plaintiff that he would hold the net proceeds of sale on the plaintiff's behalf. PARTICULARS Conversation deposed to by Mr Taouk in paragraph 30 of the Taouk affidavit and the conversation deposed to by the plaintiff in paragraph 15 of the plaintiff's affidavit of 7 March 2019 ("the plaintiff's affidavit"). 33. (a) By his acceptance of and agreeing to act on behalf of the plaintiff, Mr Taouk became with respect to the request made, the plaintiff's agent, a person upon whom he relied and depended to act in his best interests as agreed between them. (b) At no time between the period of registration of the Strata Plan up to entry into of a contract of sale for [Lot 2], which occurred in or about November 2009 to February 2010, did Ozbuild contract to sell [Lot 2], as Mr Taouk had earlier promised the plaintiff he would arrange to take place. 34 [In par 34 Mr Sukkar set out the fiduciary duties that he alleged Mr Taouk owed to him as his agent] 35. The second defendant breached those duties he owed to the plaintiff in that: (a) He delayed arranging for the sale of [Lot 2] until November 2009. (b) He did not inform the plaintiff that the sale of [Lot 2] had taken place. (c) He allowed Ozbuild to use the net proceeds of sale of [Lot 2], and to mix those proceeds of sale with Ozbuild's own money. (d) He did not pay the proceeds of sale of [Lot 2] to the plaintiff. (e) Failed to invest the aforesaid net proceeds of sale with safety. (f) Failed to ensure that the plaintiff received interest on those net proceeds. (g) Wrongly permitted Ozbuild to deduct Land Tax liability from the net proceeds of sale of [Lot 2]. 36. By reason of the foregoing, the plaintiff has suffered loss and damage as follows: (a) The proceeds of sale of [Lot 2] and interest on those funds. (c) Loss of the opportunity to invest or otherwise deal with those funds.

Defence to the amended statement of claim

The defendants filed their defence to the amended statement of claim on 2 May 2019. It is only necessary to note the following aspects of the defence.
The defendants revised their particulars of duress in par 1(j) as follows: PARTICULARS OF DURESS The Plaintiff and his brother Steven Sukkar threatened to kill the second defendant, "walk on his grave" and harm his family if he did not sign over two lots in the [development] to the Plaintiff and or Steven Sukkar. The plaintiff told the second defendant that he was working with Monzer El Husseini and Walid Ahmad, who were both well-known criminals with a reputation for violence.
Compared to the particulars of duress in the original defence, which were limited to the claim that Paul and Steven had threatened to kill Mr Taouk and to harm his family, these particulars added a claim that Mr Sukkar made an additional threat by reference to the possible conduct of Monzer El Husseini and Walid Ahmad.
The defendants responded to the allegations in par 32 of the amended statement of claim by pleading that it was agreed that Ozbuild Constructions Pty Ltd (Ozbuild) would hold the proceeds of sale of Lot 2 on behalf of the plaintiff.

Further amended statement of claim and defence

Mr Penhall filed a further amended statement of claim on 6 April 2021, pursuant to leave granted by Darke J on 25 March 2021. This pleading made only minor amendments to the amended statement of claim.
It is not necessary to make any comments on the defendants' defence to the further amended statement of claim that was filed on 26 April 2021.

Abandonment of plaintiff's claims at the hearing

The most significant changes to Mr Penhall's pleaded claims were made by senior counsel during his opening at the beginning of the hearing, when he informed the Court that Mr Penhall did not press the claims for relief that had been introduced in prayers 12 to 17 (retention of sale proceeds of Lot 2 by Ozbuild) and 19 and 20 (liability of Mr Taouk for that claim) of the amended statement of claim. Mr Penhall also deleted particular (i) to the allegation in par 1(h) (that Mr Sukkar made four payments totalling $1,150,000 to Mr Taouk). Pars 13 to 36 of the pleadings and particulars (the whole of the allegations in the claim pleaded against Mr and Mrs Taouk) were also abandoned.

Remaining issues for hearing

At the hearing, Mr Penhall's claim was limited to a claim for specific performance of the contracts, or alternatively damages, based solely upon the contracts and the Acknowledgement and the agreement between the parties concerning the values of Lots 15 and 16 and the rent received by Abu.Tony after the alleged repudiation of the contracts.
The result was that Mr Penhall was only required to present a limited case in chief, and the hearing was conducted on the basis that Abu.Tony had the burden of establishing that the contracts were invalid for want of consideration, or that they had validly been rescinded on the ground that they had been procured by duress by Mr Sukkar or for which he was responsible.
Mr Penhall responded to the latter defence by claiming that Abu.Tony had affirmed the contracts before it purported to rescind them, so that it had lost any right it had to do so.

Defence of lack of consideration

Abu.Tony's claim that the contracts were invalid because they were not supported by consideration had two parts. The first was that neither SC 59 nor the Acknowledgement generally, or in particular the statement in the latter acknowledging receipt of the $900,000, proved conclusively that Mr Sukkar had loaned $900,000 to Mr Taouk. The second was that, as a matter of fact, the evidence established that Mr Taouk was not on balance indebted to Mr Sukkar for any amount at all. Consequently, Abu.Tony submitted, the contracts were not supported by consideration. Furthermore, Abu.Tony submitted that it was not prevented, by reason of a conventional or other estoppel, from proving that the contracts were not supported by consideration. To the extent that a claim of estoppel may otherwise have been available, Abu.Tony submitted that the evidence did not demonstrate detrimental reliance by Mr Sukkar, so that no estoppel could bind Abu.Tony.

Evidentiary significance of SC 59 and the Acknowledgement

The first legal issue that must be addressed is Abu.Tony's submission that SC 59 and the Acknowledgement do not provide conclusive proof that Mr Taouk was indebted to Mr Sukkar, as stated in the documents.
In support of this submission, Abu.Tony relied upon the well-established principle that acknowledgements of the receipt of money in a conveyance or transfer or a mortgage, or similar instrument, do not conclusively prove the receipt. At most, the acknowledgement will be evidence of the receipt, with the weight of such evidence depending upon the circumstances. As the High Court (Dixon, Fullagar and Kitto JJ) said in Petersen v Moloney (1951) 84 CLR 91; [1951] HCA 57 at 100: "The acknowledgement of payment in the transfer does not create an estoppel against the plaintiff (Burchell v Thompson (1920) 2 KB 80 at 86, per Lush J), but it is evidence against her, though in the circumstances not strong evidence…". This statement of principle was accepted by Kiefel and Gordon JJ (both in dissent) in Fischer v Nemeske (2016) 257 CLR 615; [2016] HCA 11 at [87] and [193] respectively. The Court of Appeal accepted the principle in its application to an acknowledgement of receipt of an advance in a mortgage in Ippin Textiles Pty Ltd v Winau Aust Pty Ltd [2021] NSWCA 9; (2021) 20 BPR 41,125 at [34]-[41] (Macfarlan JA, Leeming and Brereton JJA agreeing).
The further acceptance of the principle by the Appeal Division of the Supreme Court of Victoria in Pascon Pty Ltd v San Marco in Lamis Cooperative Social Club Ltd [1991] 2 VR 227 (Kaye, McGarvie and Brooking JJ) is illuminating insofar as it provides an elaboration of the operation of the principle. As Brooking J (who delivered the leading judgment) explained at 230: "Acknowledgements of payment in a conveyance or transfer are not, to use the language of Bowen LJ in Clarke v Ramuz [1891] 2 QB 456, at p 461, provisions of a kind which the parties could have intended should extinguish the obligation to pay the price." Consequently, the obligation on the purchaser to pay the price does not usually merge in completion of the contract. Therefore: "the fact that the conveyance or transfer contains a receipt by the vendor for the purchase price when that price has in fact not been paid will not prevent the vendor from asserting his lien or from recovering the price…" His Honour, at 232, accepted the principle stated in Petersen v Moloney, and then observed in relation to any argument that the vendor may be estopped from denying receipt of the price: "This impudent defence was abandoned below, and rightly so. The purchaser was in no way misled…". That observation recognised the reality that a purchaser who has not paid the purchase price will not usually be able to say that the existence of the acknowledgement of receipt in the transfer caused it to believe that it had paid the price.
McGarvie J, who agreed with Brooking J but added some additional reasons, made an observation that is important to the resolution of the present dispute. His Honour said, at 232, in the context that the vendor had mistakenly nominated a final instalment of the price that was less than the amount due: "Unless it is shown that there was contractual agreement between the parties that in the circumstances which occurred the purchaser was to pay less than the full price, the vendor is entitled to recover the balance of it." His Honour added, at 233: "Did the parties by executing the transfer, which had the effect of a deed on registration, show an intention that the vendor was no longer to have the right to the purchase price which was given by the contract of sale?" His Honour answered that question in the negative.
This decision illustrates the fact that, in the usual case, the presence in a transfer or conveyance of an acknowledgement of receipt of the price is only a statement of fact, and that the mere statement will usually not affect the obligation created by the contract for the purchaser to pay the price. The execution by the vendor of the transfer or conveyance is capable of being an admission that may be tendered against the vendor. Such an admission is not generally conclusive, and can be controverted by inconsistent evidence. Further, the existence of the acknowledgement of receipt will not usually give rise to an estoppel binding the vendor because the purchaser will know that it has not paid the price. These considerations say nothing about the possibility that the parties may make an agreement that satisfies the requirements of a binding contract whereby in some way they change the obligation on the purchaser created by the contract of sale in relation to the payment of the price.
I do not accept Abu.Tony's submission that the individual or collective effect of SC 59 and the Acknowledgement is only that, the contracts having created an obligation on Mr Sukkar to pay a purchase price of $450,000 for each Lot, receipt of that price was acknowledged by Abu.Tony.
First, in relation to SC 59, the term commenced with the words: "Notwithstanding anything herein contained…". That form of words signified an intention by the parties that the provisions that followed would, as a matter of contract, apply notwithstanding any other inconsistent provision in the contract. The acknowledgement that followed was not an acknowledgement of receipt of the price, but a contractually binding acknowledgement that Mr Sukkar had paid Abu.Tony the price "prior to the date of this agreement." In the circumstances of this case (which will be explained more fully below) it cannot simply be said that this acknowledgement will have no effect, if it can be proved on the evidence that Mr Sukkar had not paid the $450,000, as stated. There then followed a contractual agreement that "the deposit specified herein is deemed to have been paid and received by the vendor and the balance of the purchase price required on completion is also deemed to have been paid by the purchaser and received by the vendor and no money shall be payable by the purchaser to the vendor on completion other than the usual adjustments otherwise provided for in the special conditions."
The proper legal characterisation of SC 59 is thus not that it is a mere acknowledgement of receipt of the purchase price, but it is a contractually binding term to the effect that the payment of the deposit is to be deemed to have occurred and no balance is payable on completion, save for contractual adjustments.
Putting aside the fact, as no significance has been attributed to it, that the Acknowledgement contained an acknowledgement by Mr Taouk and not Abu.Tony, the Acknowledgement only has the effect of supplementing the agreement of the parties to the contracts that the price shall be deemed to have been paid. Whether or not it was necessary, the effect of the Acknowledgement was to record that Mr Taouk acknowledged a debt of $900,000 to Mr Sukkar, and Mr Sukkar bound himself to accept the transfer to himself of the two Lots for a price of $450,000 each in full satisfaction of the debt.
Consequently, as a matter of principle, I reject Abu.Tony's argument that the contracts are invalid because they are not supported by consideration.

Evidence relevant to the existence of the debt

Against the possibility that I am wrong in that conclusion, it will be necessary to consider the validity of the argument advanced by Abu.Tony that the evidence establishes that Mr Taouk was not in fact indebted to Mr Sukkar for any amount at the date of the contracts.
Before I consider Abu.Tony's submissions on the evidence, it is necessary to address a legal question that is implicit in Abu.Tony's submissions to which I have referred above. That is that the question of whether consideration was provided by Mr Sukkar in fact is to be limited by the description of that consideration in the Acknowledgement as the acceptance of the satisfaction of a loan, so that the absence of consideration can be proved by establishing that there was no indebtedness in fact.
The first matter to note is that this issue will be irrelevant if SC 59 does have the contractual effect of an agreement that Mr Sukkar had already paid the price and that he will be deemed to have done so by completion. If that is true, any acknowledgement by Mr Taouk of indebtedness in the Acknowledgement will be immaterial.
However, it is necessary to consider the principles that apply when the issue is whether a contract is supported by consideration when the instrument that creates the contract does not identify any consideration, or when the evidence establishes that the consideration that is identified was not actually provided. This issue raises the question of whether, to what extent and in what circumstances may the existence of sufficient consideration be established by parol evidence.
It is clear, following Pao On v Lau Yiu Long [1980] AC 614 at 631, that extrinsic evidence is admissible to prove the real consideration in circumstances where no consideration, or nominal consideration, is expressed in the instrument, or where a substantial consideration is stated but an additional consideration exists. This will be the case provided that the additional consideration is "not inconsistent" with the terms of the written instrument. The Privy Council said: There is no doubt - and it was not challenged - that extrinsic evidence is admissible to prove the real consideration where (a) no consideration, or a nominal consideration, is expressed in the instrument, or (b) the expressed consideration is in general terms or ambiguously stated, or (c) a substantial consideration is stated, but an additional consideration exists. The additional consideration must not, however, be inconsistent with the terms of the written instrument. Extrinsic evidence is also admissible to prove the illegality of the consideration. In their Lordships' opinion the law is correctly stated in Halsbury's Laws of England, 4th ed, vol 12 (1975), par 1487.
Giles J (as his Honour then was) said in Yaroomba Beach Development Co v Coeur de Lion Investments (1989) 18 NSWLR 398 at 407-408: Halsbury's Laws of England ((1975) 4th ed, vol 12, par 1487 at 620) states the position in similar terms, but says specifically that it is not in contradiction to the instrument to prove a larger consideration than that which is stated, referring to Clifford v Turrell (1845) 14 LJ Ch 390; Frith v Frith [1906] AC 254 and Turner v Forwood [1951] 1 All ER 746 at 748. In Pao On v Lau Yiu Long, the written contract expressed a consideration of agreement to sell shares in a company, and it was held that extrinsic evidence was admissible to show consideration of a promise to perform a contract with a third party; the agreement and the promise were said to be consistent with each other. In Barba v Gas & Fuel Corporation of Victoria (1976) 136 CLR 120 at 131- 132, Gibbs J, with whom Stephen and Jacobs JJ agreed, said of an option stated to be in consideration of a paid sum of $10, when no payment had in fact been made, that oral evidence was admissible to prove that the option was in truth given for valuable consideration namely the promise to pay the $10. His Honour referred to two decisions: In Re Holland; Gregg v Holland [1902] 2 Ch 360 and Frith v Frith. In the first of these decisions Cozens- Hardy LJ said (at 388) that as a general rule evidence may be given to show that a deed in form voluntary was in truth for valuable consideration, while in the second Lord Atkinson speaking for the Privy Council adopted (at 259) the statement of the Vice Chancellor in Clifford v Turrell: "Rules of law may exclude parol evidence where a written instrument stands in competition with it, but it has long been settled that it is not within any rule of this nature to adduce evidence of a consideration additional to what is stated in a written instrument. The rule is, that where there is one consideration stated in the deed, you may prove any other consideration which existed, not in contradiction to the instrument; and it is not in contradiction to the instrument to prove a larger consideration than that which is stated." Where the instrument states no consideration, or a nominal consideration, it can readily be concluded that an additional consideration is not inconsistent therewith. Where the instrument states a substantial consideration, and the additional consideration is of a different kind (as in Pao On v Lau Yiu Long), it can also be concluded that the additional consideration is not inconsistent therewith - although perhaps it could not be so concluded if it was said in the instrument that the stated consideration was the only consideration…
In the present case, the consideration expressed in the contracts was, strictly analysed, past consideration. Although the first page of the contracts specified that in each case a price of $450,000 was payable, SC 59 negatived that position and stipulated that the price had already been paid. The Acknowledgement provided evidence that Mr Taouk had borrowed $900,000 from Mr Sukkar, and Mr Sukkar had agreed to accept the transfer of the two Lots in full satisfaction of the debt. Proof by Abu.Tony on the evidence before the Court that in fact Mr Taouk was not indebted to Mr Sukkar will not, on the above principles, be conclusive. If the evidence establishes that in fact there was a dispute between Mr Sukkar and Mr Taouk as to what the true balance of account between them was, and they agreed by way of a compromise that Mr Taouk was indebted to Mr Sukkar in the sum of $900,000, that compromise would be effective to create the debt of $900,000, so that the contracts would be proved to be supported by consideration, notwithstanding whatever the objectively proved true balance of account may have been between them. This consideration may have been additional to the consideration expressed in the contracts (which may have not been adequate, if treated as past consideration) but it would not be treated as inconsistent with the consideration expressed in the contracts.
Mr Penhall's case was that if consideration external to the contracts was required to be shown, there was ample evidence that the acknowledgement that Mr Taouk was indebted to Mr Sukkar for $900,000 was the result of a compromise of Mr Sukkar's claim against Mr Taouk. Mr Penhall did not attempt to separately prove that Mr Taouk was indebted to Mr Sukkar for $900,000, or any other sum, on the basis of direct evidence of the creation of the debt. Mr Penhall relied only on the compromise. That is reflected in Mr Penhall's abandonment of the allegation in particular (i) to par 1(h) of the further amended statement of claim, that Mr Sukkar had made four payments to Mr Taouk totalling $1,150,000. Consequently, the exercise conducted on behalf of Abu.Tony in attempting to establish that the evidence did not prove that Mr Taouk was indebted to Mr Sukkar for $900,000, or any other sum, took place in the absence of any real opposition from Mr Penhall. Mr Penhall's position was that the exercise was irrelevant.
The evidence that both the contracts and the Acknowledgement were the fruit of a compromise negotiated between Mr Sukkar and Mr Taouk (the latter effectively on behalf of Abu.Tony) overwhelmingly supports a conclusion that the transaction was the manifestation of a negotiated compromise of a dispute between Mr Sukkar and Mr Taouk.
The whole exercise of attempting to prove - in the absence of any real opposition - that Mr Taouk was not in fact indebted to Mr Sukkar misses the point. The consideration was provided by the compromise and the agreement of Mr Sukkar to accept the transfer of the two Lots in repayment of the agreed debt.

Entitlement of Mr Penhall to withdraw allegation that loans were made to Mr Taouk

Abu.Tony submitted that the effect of the rules that govern parties' pleadings was that Mr Penhall, having amended his claim to prove that Mr Sukkar had made four payments to Mr Taouk in the total sum of $1,150,000, was not permitted to withdraw that claim at the beginning of the hearing in a manner that had the effect of depriving Abu.Tony of the right to defeat Mr Penhall's claim that the contracts were not supported by consideration because, on the evidence before the Court, Mr Penhall had not established that in fact Mr Taouk owed any debt to Mr Sukkar. The import of this submission was that the course of Mr Sukkar's, and then Mr Penhall's, pleading was that the finding stated above that the contracts were supported by consideration in the form of a debt established by a compromise and an agreement to accept the transfer of the two Lots in repayment of the agreed debt was not, as a matter of law, available to Mr Penhall.
Abu.Tony started by referring to the defendants' request for particulars in their solicitor's letter to Mr Penhall dated 24 September 2018: Exhibit D3. It is necessary to start this explanation by referring to some parts of the original statement of claim. In essence, Mr Sukkar pleaded, as explained above, the contracts and the Acknowledgement, as well as certain correspondence, and then alleged in par 1(h) in support of an estoppel claim against the defendants: 1… (h) The plaintiff relied upon the exchange of the sale contracts for the strata lots and the subsequent affirmation thereof by the first defendant and has suffered detriment. PARTICULARS (i) The plaintiff forbore to sue the second defendant for recovery of the debt acknowledged in paragraph 1(d) herein; …
The debt referred to in par 1(d) was the debt that Mr Taouk acknowledged in the Acknowledgement.
The defendants' request for particulars asked whether it was alleged that Mr Taouk had actually borrowed any monies from Mr Sukkar, and if so asked to be provided the usual particulars of the borrowings.
The particulars did not relate to Mr Sukkar's direct contract claim, but related to what appears to be an alternative claim to the effect that, because Mr Sukkar relied upon the contracts and the subsequent alleged affirmations of the contracts, Abu.Tony was estopped from repudiating the contracts. This pleading was probably misconceived, as if Mr Sukkar had a legal right to enforce contracts that had been affirmed, there was no place for an assertion that Abu.Tony was estopped from repudiating the contracts. As Mr Sukkar did not accept the repudiations, the Court would be able to order specific performance of the contracts on the basis that the repudiations were ineffective.
Abu.Tony's submission was that Mr Sukkar provided the particulars that were sought by filing the amended statement of claim. As recorded above, Mr Sukkar added, as particulars to par 1(h), a list of four payments to Mr Taouk that added up to $1,150,000.
Abu.Tony submitted further that the amended statement of claim was current at the time Mr Sukkar gave evidence on commission, and was the document upon which he was cross-examined. So far as it goes, that submission is correct.
The submission was then made - correctly - that, in opening submissions, Mr Penhall sought to withdraw these particulars. Abu.Tony then submitted in par 22 of its closing submissions: "…It appears now that the plaintiff wants to run some different unparticularised case which appears to be to the effect that the acknowledgement was signed in settlement of some broader dispute. It is submitted that the plaintiff ought not be allowed to vary its case in this way." Abu.Tony then referred to well-established authority that the function of pleadings is to state with sufficient clarity the case that must be met. It then added, at par 25: "It is submitted that the plaintiff cannot now run a case other than that the debt referred to in the acknowledgement is other than the debt particularised, that is the plaintiff cannot now run a case about some other liability or some cultural practice that is not pleaded and about which there is no evidence."
I consider that this argument is misconceived, and it does not prevent the Court from finding in favour of Mr Penhall on Abu.Tony's want of consideration defence for the reasons given above. The only significance of the particulars that Mr Penhall withdrew at the hearing was that they were a - probably unnecessary and misconceived - list of the payments that Mr Sukkar forbore from recovering as a result of Mr Taouk having acknowledged a debt of $900,000 in the Acknowledgement, to support the claim that Abu.Tony was estopped from repudiating the contracts. The particulars of the debt were not particulars of an essential part of Mr Sukkar's contract claim. The provision of the particulars did not commit Mr Penhall to a claim that required him to prove the actual indebtedness of Mr Taouk to Mr Sukkar at the date of the contracts and the Acknowledgement.
No rule of pleading precluded Mr Penhall from abandoning the particulars to par 1(h) of what became the further amended statement of claim. The amendment of a pleading to include a new claim or particular does not oblige the party to prosecute the relevant claim to judgment. An adverse costs order may follow its abandonment. The inclusion of the allegation, particularly where - as here - the amended pleading is verified, may allow the new allegation to be tendered against the party as an admission. But the other party cannot require the amending party to prosecute the amended claim.

Claim that Mr Taouk was not indebted to Mr Sukkar

The only remaining aspect of Abu.Tony's lack of consideration defence concerns the submissions that were made on the evidence as to why Mr Taouk was not in fact indebted to Mr Sukkar at all. For the reasons I have given above, proof of that submission on the existing evidence is immaterial. As I have explained, the issue was not contested by Mr Penhall.
Abu.Tony, in effect, set about disproving the claim in the withdrawn particulars to par 1(h). It relied in part on pars 20 to 36 that were added to Mr Sukkar's pleading in the amended statement of claim and then abandoned at the hearing. The essence of the new claim was that Mr Sukkar paid $425,000 to Mr Taouk on behalf of Ozbuild to be used for a real estate development by that company. It is clear from the amended statement of claim that the amendment was prompted by an affidavit made by Mr Taouk to the effect that he had been paid the money not for his own purposes but to be given to Ozbuild. Mr Sukkar's claim in relation to this money is expressed to be in the alternative to the claim against Abu.Tony that he had already pleaded in pars 1 to 19. Although Mr Sukkar pleaded that the $425,000 was paid to Ozbuild, he also claimed that Mr Taouk agreed to cause Ozbuild to sell the relevant Lot 2, and for Mr Taouk to retain the proceeds of sale for Mr Sukkar. The allegation was that Lot 2 was sold, but Mr Taouk wrongfully allowed Ozbuild to retain the proceeds of sale, so that they were lost when Ozbuild was deregistered. The relevant point is that, according to the amended statement of claim, although the $425,000 was in effect paid to Ozbuild, Mr Taouk was personally liable to Mr Sukkar for having lost the proceeds of sale of Lot 2. Although this amendment to the statement of claim changed the character of the debt that Mr Sukkar claimed in the alternative from Mr Taouk, it was not simply a claim that the debt was only owed to Mr Sukkar by Ozbuild.
The upshot of this submission by Abu.Tony was that, of the initial two alleged payments by Mr Sukkar to Mr Taouk of $100,000 and $500,000, the evidence only established that Mr Taouk had received $425,000 (because he had admitted it in his affidavit) but that amount was received for Ozbuild, as explained above.
In respect of an alleged payment of $300,000 by Mr Sukkar to Mr Taouk in 2009, Abu.Tony submitted that Mr Taouk had denied this receipt and on the evidence the Court could not conclude that the amount was paid to him.
In respect of the final alleged payment of $250,000, said to have been made in 2010, Abu.Tony submitted that the Court should accept Mr Taouk's evidence that he only received $210,000.
Abu.Tony then submitted that, having regard to certain evidence that Mr Taouk had expended considerable amounts for the support of Mr Sukkar's family while Mr Sukkar was incarcerated, the Court should be satisfied that the amount that Mr Sukkar owed Mr Taouk was more than the $210,000 paid to him by Mr Sukkar, so that the evidence required an overall finding that, at the date of the contracts and the Acknowledgement, Mr Taouk was not indebted to Mr Sukkar.
Experience shows that sometimes parties plunge into the exercise of attempting to prove a particular fact on the basis of detailed, contentious evidence and submissions, when the exercise is plainly futile. This is such a case. In circumstances that will be explained more fully below in the context of dealing with Abu.Tony's duress defence, I will explain how Mr Taouk gave a statement to the Police on 26 August 2015, in which he said, among other things: 9. … After Paul brought the unit, he was incaserated [sic] and OZ Build Construction went into liquidation. I visited Paul in Gaol, I think it was in Winsor and told him that we went into liquidation but when you get out of gaol, we will work something out to see you right because I didnt want him to lose as a personal friend. 10. About three years ago when he was released from gaol, he came to my home and asked about his investment. I told him I had a development happening and that I just needed some time to get it together and I'll make sure to see you right. Until March of 2015, he continued coming to my house as a friend and asking about what's happening with the project. 11. In March 2015, I through both our lawyers, provided Paul with two units from the plan at [suburb]. He agreed and was happy and signed the paperwork…
By this contemporaneous evidence, Mr Taouk made an admission that he believed that he was obliged to compensate Mr Sukkar for the loss of Mr Sukkar's investment as a result of the deregistration of Ozbuild, and that Mr Taouk offered to provide that compensation from the completion of the development project then being undertaken by Abu.Tony. The obligation to compensate Mr Sukkar was fulfilled through the contracts executed in March 2015 through the parties' lawyers. This submission establishes to my satisfaction that Mr Taouk accepted at the time he gave his statement to the Police that the quantum of his obligation to Mr Sukkar approximated the value of the two Lots that he caused Abu.Tony to contract to sell to Mr Sukkar.
The evidence was entirely inadequate for the purpose of the Court making any positive finding as to whether Mr Taouk was in fact indebted to Mr Sukkar, and if so what the amount of that debt was. The evidence clearly establishes that, as between the two men, there were claims and counterclaims. The agreement reflected in the contracts and the Acknowledgement that on balance Mr Taouk owed Mr Sukkar $900,000 was clearly the result of a compromise. If the compromise is valid, there was a debt of $900,000 owed by Mr Taouk to Mr Sukkar. That amount was reached as a round estimate without any attempt at a meticulous accounting. The contracts are therefore valid and enforceable, unless they were effectively rescinded because they were induced by duress for which Mr Sukkar was responsible.
This conclusion is available irrespective of whether Abu.Tony is estopped from denying that Mr Taouk was indebted to Mr Sukkar for $900,000. Mr Penhall is entitled to succeed on a contract claim. Mr Taouk's agreement that he owed Mr Sukkar $900,000 was part of an enforceable contract. Mr Penhall does not have to establish that Mr Sukkar would suffer some detriment if Abu.Tony or Mr Taouk was permitted to depart from the compromise. Mr Penhall definitely does not have to prove that Abu.Tony is estopped from having repudiated the contracts. In any event, the Court is entitled to infer on the evidence that Mr Sukkar did rely upon the rights granted to him by the contracts, and that he did not take any legal action to recover from Mr Taouk the debt that he claimed because he had the benefit of the contracts. That conclusion is not undermined by the evidence that Mr Sukkar was himself unhappy with the compromise and that he agitated to receive more.

Defence of duress

Abu.Tony claims that both of the contracts for sale were rescinded by it in the exercise of a right to do so on the ground that the contracts were procured by duress engaged in by Mr Sukkar or for which he was responsible. While the contracts were dated 6 March 2015, the claimed act of rescission did not occur until 9 August 2018 by means of Abu.Tony's solicitor's letter to Mr Sukkar's solicitor of that date.
The acts of duress alleged by Abu.Tony consisted of threats by Mr Sukkar that he would kill Mr Taouk ("I will walk in your funeral") or that he would cause that to happen, or otherwise cause serious injury to Mr Taouk and his family through the medium of criminal associates that were renowned for their violence. Alternatively, Mr Sukkar would seriously disrupt the building development in which Mr Taouk was engaged.
Abu.Tony submitted that where unlawful threats have been made, and such threats are a reason for the contracts being entered into, the person who is the subject of the threats is entitled to relief: Barton v Armstrong [1976] AC 104. It is sufficient to enable a party to rely on duress for the pressure to have been a cause of the decision to contract, even if the pressure complained of is not the sole or principal cause of the decision to contract: Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46. Duress may also be found in a series of threats: Ampol Ltd v Caltex Oil (Aust) Pty Ltd (Supreme Court (NSW), Foster J, 22 December 1982, unrep). A threat that constitutes duress may be express or implied: Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 at 301. A threat may be veiled: B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419. A party who enters into a contract under duress may elect to enforce it, and a party who does so may be taken to have affirmed the contract so that the right to rescind for duress is lost: Barton v Armstrong at 120. Conduct that would otherwise constitute the affirmation of the contract will not have that effect if it is the residual effect of the duress: Nazzal v 1Quay Corporation Pty Ltd [2022] NSWSC 742 at [60].
There was no contest between the parties concerning the principles that govern the defence of duress, and indeed Mr Penhall did not make any submissions on the subject in response to the brief and uncontroversial submissions on the legal principles made on behalf of Abu.Tony. That is plainly because it was properly accepted that if Mr Taouk had executed and exchanged the contracts under the inducements that were alleged, then the contracts were procured by duress of a sufficient nature to entitle Abu.Tony to rescind them at its election.
The issue is one of fact. Mr Penhall denies that the conduct said to constitute duress occurred in a manner that would sustain that defence, and in any event submits that the conduct that Abu.Tony claimed constituted duress could not on the evidence have taken place before the date of the contracts. Mr Penhall denies that the alleged conduct on the part of Mr Sukkar that occurred after the date of the contracts occurred at all, and in any event could not amount to further duress or sustain the effect of the original alleged duress, in order to explain and justify the delay in Abu.Tony acting to rescind the contracts.
Mr Penhall claims that, even if, contrary to his primary submissions, Abu.Tony entered into the contracts under the influence of duress for which Mr Sukkar was responsible, the repeated actions of Abu.Tony in exercising its contractual right to extend the date for completion amounted to the affirmation of the contracts, with the result that any right of rescission that had existed was lost before the rescission could take effect.
The direct evidence of the events that Abu.Tony claimed amounted to duress for which Mr Sukkar was responsible was limited to the testimonial evidence of the parties' witnesses - Mr and Mrs Taouk in Abu.Tony's case and Paul and Steven Sukkar in Mr Penhall's case. The witnesses gave detailed evidence of their recollections of conversations in which they participated or which they overheard. The witnesses were cross-examined extensively, including Mr Sukkar on commission. The parties provided detailed submissions which analysed the minutiae of the evidence for the apparent purpose of exposing error and inconsistency in the opposing witnesses, in order to persuade the Court of the righteousness of the party's case by securing a finding that on balance - when featherweights of evidence were distributed between the parties' witnesses - that party's case should prevail on the balance of probabilities.
That approach may be viable in cases where the Court is satisfied of the integrity and reliability of the witnesses, but it is necessary to resolve inconsistencies in the witnesses' recollections of events. It is not an effective approach in this case, as I am not satisfied that the Court can rely sufficiently on the accuracy of the evidence given by any of the witnesses, so that their testimonial evidence provides a sound foundation for the forensic exercise of determining the relevant facts. My explanation for my wariness in accepting the testimonial evidence of the witnesses will best be explained after I have considered the forensic issues and the objective evidence relevant to their determination.
The first objective factor that is relevant is that Abu.Tony took almost three and a half years to rescind the contracts, and then only did so when the time had come to complete them. Mr Penhall notified Abu.Tony's solicitor on 2 August 2018 that the strata plan had been registered, and Abu.Tony's solicitor wrote his rescission letter one week later. Abu.Tony says that it did not act to rescind the contracts earlier because Mr Taouk continued to be inhibited by the events that occurred before and shortly after the contracts were exchanged that it claims involved duress. That response is merely a matter of assertion, as, if circumstances changed in a way that dissipated the effect of the duress so that Abu.Tony could allege duress in its defence, it should have been possible for Abu.Tony to explain the change. It did not do so. As already noted, Mr Sukkar did not die until 17 October 2019. One of his alleged villainous associates, Walid Ahmad, was murdered on 29 April 2016, but the other, Monzer El Husseini, remained alive. As will be seen, in any event, Mr Taouk described Walid Ahmad as his friend. Not only did Abu.Tony fail to explain the change in circumstances that lifted the effect of the duress from Mr Taouk, Mr Taouk claimed in evidence that it was "solely" Mrs Taouk's decision not to go ahead with the contracts: Tcpt, 1 August 2022, p 109(30). Given that the evidence suggests that Mr Taouk managed the business of Abu.Tony and that it was Mr Taouk that signed the contracts on its behalf, the assertion that Mrs Taouk was solely responsible for the decision to rescind the contracts is incredible.
Mr Taouk's evidence was that, as at the 9 August 2018 date of rescission of the contracts, he had not said anything to his solicitor about the duress that led to their execution: Tcpt, 1 August 2022, p 111(16). That evidence is consistent with the terms of the 9 August 2018 letter, which relied only on the fact that Mrs Taouk had not signed the contracts and that no deposits had been paid.
The apparent failure to so instruct the solicitor must have been rectified by the time the original defence was filed on 28 September 2018. However, as recorded above, the particulars of duress given were that Paul and Steven Sukkar had threatened to kill Mr Taouk, and "walk on his grave" and harm his family if he did not sign the contracts. It is critical that these particulars specified the "walk on his grave" threat as having occurred before the date of the contracts.
Abu.Tony offered no explanation of what happened between 9 August and 20 September 2018 that caused Mr Taouk to inform the solicitor about the alleged duress.
Between the 28 September 2018 date of the filing of the defence and the 2 May 2019 filing of the defence to the amended statement of claim, the particulars of duress were revised to add a claim that Mr Sukkar had informed Mr Taouk that he was working with Monzer El Husseini and Walid Ahmad. No explanation has been provided for this embellishment of the particulars.
If nothing else, the fact of so significant a change to the particulars of duress casts doubt on the reliability of Mr Taouk's recollection of events, even for the period up to 2 May 2019.

Abu.Tony's duress case

In its submissions, Abu.Tony referred to six separate "incidents" that it submitted were of relevance to its duress defence. Only the first two incidents took place before the contracts were exchanged on 6 March 2015.
Mr Taouk claimed in his primary affidavit sworn on 21 February 2019 that the first of these incidents took place in November 2013. This incident occurred after Mr Sukkar was released from prison. Mr Taouk's evidence was that Mr Sukkar claimed that he was owed $6 million by Mr Taouk and that during the course of an unpleasant meeting at Mr Taouk's home, during which Mr Sukkar acted aggressively, Mr Sukkar demanded repayment. Most relevantly, Mr Taouk gave evidence at par 67 that Mr Sukkar's statements included: "Paul said: "you owe me 6 million. If you don't pay me back I will walk in your funeral." … "This is not a discussion. If you don't pay you know what I will do. I will work with Monzer and Wally Ahmad and you know what I can arrange to happen."
This evidence placed Mr Sukkar's threat about Mr Taouk's funeral and his enlistment of the assistance of his criminal associates as having occurred as part of the first incident.
Abu.Tony's case was that the second incident occurred in February 2015, which was shortly before the date of the contracts. This was also a meeting in Mr Taouk's house but in this case between Mr Taouk and Steven Sukkar. Mr Taouk's evidence was that Steven initially demanded the transfer of six apartments in the development that contained Lots 15 and 16. Mr Taouk gave evidence of the following exchange, in par 71: I said: "That's absurd Steven, I don't owe you or your brother that sort of amount at all. Your brother would not communicate with me in a rational manner." Steven said: "Make it two units and we will call it even. You give those two units if you want things with your project to run smooth." I said: "Why should I give you two units?" Steven said "because that's what you're going to do, or it gets nasty from here onwards. You know who Paul and I have behind us, this is happening."
In the following paragraphs, Mr Taouk explained the process of reasoning that caused him, as a result of the first two incidents, such fear for himself, his family and his business that he executed the two contracts on behalf of Abu.Tony. There was no issue that this evidence would be sufficient to establish duress, if the Court were satisfied that the events as related by Mr Taouk occurred.
The third incident occurred in March 2015, but after the contracts were exchanged on 6 March 2015. Mr Taouk complained that Mr Sukkar attended his house without prior notice. He said that Mr Sukkar said to him: "I am not happy with the deal. You owe me six million. I want at least 6 units or the six million." When Mr Taouk responded by saying that he did not owe $6 million, that he did not owe anything and that Mr Sukkar should leave, Mr Sukkar replied: "you know where this is going. Pull your head in." Mr Taouk responded by saying that he had agreed to two units with Steven, and Mr Sukkar's final words were: "the two units will be in my name then not Steven's. My lawyer will send yours a letter soon. Just make sure the two units are in my name and not Steven's".
Although, if Mr Taouk's evidence is accepted, it would establish that Mr Sukkar made a serious, veiled threat, it also establishes that Mr Taouk resisted transferring to Mr Sukkar any more than the two Lots the subject of the contracts, and Mr Sukkar accepted that outcome, save that he required that the Lots be transferred to him rather than Steven.
Abu.Tony claims that the fourth incident happened in May 2015, when Mr Sukkar arrived at Mr Taouk's house and said: "I am not happy with the deal. You owe me six million. I want at least 6 units or the 6 million." After Mr Taouk resisted this demand, the following conversation occurred, according to Mr Taouk, before Mr Sukkar left: Paul said: "you know where this is going, pull your head in. I have cancer so I have nothing to lose. I will walk in your funeral. What can the police or the law do to me." I said: "you need to leave." Paul said: "I will walk in your funeral."
The fifth incident relied upon by Abu.Tony is said to have occurred in May or June 2015 at the panel shop owned by Walid Ahmad. Mr Taouk claimed that Walid Ahmad called him and said: "You owe Paul Sukkar some money. We want to have a meeting at Condell Park, at the panel shop." Mr Taouk said that Walid Ahmad said to him in response to a request that the caller identify himself: "Wally Ahmad. I am the man, brother. You come to my shop we need to sort this out." Mr Taouk said that at this stage he became aware he was talking to the criminal underworld figure Walid Ahmad. Mr Taouk gave evidence of the following conversation at the panel shop in which Mr Sukkar participated. Mr Taouk said that he presented the records that he had that he claimed substantiated that Mr Sukkar owed him money rather than vice versa: Walid asked me: "Do you owe money to Paul?" I said: "No I don't." Walid said to Paul: "how do you tell me that he owes you six million dollars." I then took out the records I had and said to Walid: "I have records of everything I have paid for Paul while he was in jail." Paul then said: "He had an affair with my wife." Walid said "if that is true Paul, how could you be visiting his house." Paul and Walid then had a discussion to the side that I could not hear. Walid then said: "Paul it looks like you owe him money, not that he owes you money. Get out of my shop Paul."
Mr Taouk said that he felt after this meeting that Walid Ahmad would not back up Mr Sukkar unconditionally. This evidence does not support a finding that Walid Ahmad threatened Mr Taouk during the meeting at the panel shop.
Mr Taouk gave evidence that, after this incident, he was visited by Walid Ahmed who pressed Mr Taouk into causing Abu.Tony to enter into a contract on 7 January 2016 to sell one of the units in his development to Hana El Husseini.
The sixth and final incident occurred on 26 August 2015, when an unidentified person fired shots into Mr Taouk's home. Mr Taouk gave evidence that he suspected Mr Sukkar was behind the shooting at his house, but this evidence was only admitted as evidence of Mr Taouk's state of mind. There is no evidence at all that Mr Sukkar was responsible for the shooting. After Mr Taouk telephoned the Police, he called Walid Ahmad who attended the premises. Mr Taouk gave evidence that he had the following conversation: … Walid said to me "Don't you dare say anything about the units. You stick with what we have agreed and what you have agreed with Paul. You stick with the contracts and what has been signed. Got it!" I said: "yeah ok." He said: "I will find out who shot your house and it won't happen again, just keep your mouth shut about the units. Stick with the deal."

Mr Penhall's duress case

Mr Sukkar deposed in his 25 November 2018 affidavit (filed 11 December 2018) that, in early 2005, he gave Mr Taouk separate amounts of $100,000 and $500,000 as deposits for home units that Mr Taouk was building at Lane Cove. Ozbuild was apparently the actual developer. The units were to be purchased off the plan, and Mr Sukkar said that he left it to Mr Taouk to decide how many units would be sold to Mr Sukkar.
Mr Sukkar was arrested in August 2005, and subsequently convicted for taking part in the commercial supply of a substantial amount of ecstasy tablets. Mr Sukkar gave evidence that he was visited by Mr Taouk at the Silverwater Correctional Complex while on remand, with a solicitor who, Mr Taouk said, would represent Mr Sukkar in his criminal proceedings. Mr Sukkar related a conversation about what would be done with the $600,000, in which Mr Sukkar said that his preference was to use the money to buy a house for his family. Mr Sukkar said: "… We have known each other all our lives. You are like a brother to me. I will trust you to look after my money and family". Mr Sukkar related that Mr Taouk said that he would make sure that Mr Sukkar's family had a home unit to live in rent free. According to Mr Sukkar, the conversation ended with Mr Taouk saying: I know you're under a lot of pressure. Not only the criminal case, but you are still fighting the bank case. You need someone to help. You can rely on me to invest your money and look after your family. When you come out, you should have a few million.
Mr Sukkar said that, in or about 2009, Mr Taouk visited him in jail and said: "I have lost a lot of money with the global financial crisis. The banks are pressing me. Can you help me?" Mr Sukkar said that he replied: "talk to Samir. I will tell him to give you $300,000".
Mr Sukkar said that in about 2010 he was visited in jail by Mr Taouk and he directed an amount of approximately $250,000 that was held for him by a solicitor to be paid to Mr Taouk. It should be noted that Abu.Tony accepted that Mr Taouk received an amount of $212,000 as a result of this transaction. Mr Sukkar said that Mr Taouk said: "I'm about to purchase another block of land at Waverton for home unit development. If you lend me the extra money, I will see that you get a home unit in that development".
Mr Sukkar's evidence was that he was visited while in jail by Mr Taouk on average about every three weeks. Mr Sukkar said that a number of times, Mr Taouk said words to the effect: "I have put you in for a unit", that caused Mr Sukkar to expect that, at the time that he was released from jail in March 2013, he had at least four or five home units.
Mr Sukkar gave evidence of a meeting that he had with Mr Taouk after his release from jail in which he and Mr Taouk discussed the balance of the financial transactions between the two men. Mr Sukkar's evidence was: 29. Whatever papers were shown to me by Michael at the financial meeting in April/May 2013, I recollect that there were no invoices. We had a conversation to the following effect: PS: "Michael, I don't understand. I expected from what you told me when I was in gaol, that I would have at least 4 or 5 home units on the North Shore. What has changed? MT: (Michael just stared at me. He said nothing). PS: I can't believe all this bullshit. By the look of things, I now owe you money. I am not in the mood to argue with you. Deal with your conscience, and when you have figured out what you owe me, or I owe you, then contact me. I can't do this bull shit with you anymore. I did not give Michael an opportunity to say anything further. I walked out. 30. I left in the premises in an angry state. I received 3 or 4 telephones call [sic] from Michael. I answered the last and Michael said, "Please come back. You can't leave like this. Please come back, whatever you want, I will fix it. Whatever the you don't like in the papers, I will remove. Just come back". 31. I returned to Michael's home about 10 minutes later. We had a further conversation to the following effect (on the front veranda): MT: "Look Paul, whatever you don't like from the papers. I will take it out". PS: "Look mate, I don't agree with any of them". MT: "What about this one? I will tear it up". (One by one, he went through the papers and eventually tore them all up). MT: "Look, you have given me a bit over a million dollars. I have lost a fair bit myself. I didn't put you in for any of the losses. How about we call it $1 million, and I will give it back to you within a couple of months. First, I will give you $200,000.00 in the next couple of weeks. Then I will give you the rest in 2 or 3 months". PS: "You sort it out, you and your conscience. Let me know exactly what you want to do. If that is what you want to do, just do it. I am upset. I need to go".
The evidence established that the arrangement that led to the preparation of the Acknowledgement and the contracts of sale was negotiated at a meeting between Steven Sukkar and Mr Taouk at which Paul was not present.
Steven Sukkar gave the following evidence in his 5 December 2018 affidavit about the negotiation that occurred at his meeting with Mr Taouk. Steven Sukkar said that the meeting occurred in late 2014 or early 2015. The evidence was: 5. We had a conversation to the following effect: SS: "Michael, I am here to see you regarding my brother Paul. We have known each [sic] for most of our lives. It is embarrassing that there is a dispute between you and Paul and we need to resolve it". MT: "I want to resolve it. I don't want any issues to arise. You are my brother. I swear I have had bad financial problems. You guys are like my brothers". (He commenced to cry and I attempted to console him). SS: "Michael we are family. What can we do to put this behind us? How do you want to resolve the problem? Do you want to give him some units in the development that's coming? Do you want to give him cash or a cheque?" 6. Michael took out a pen and paper and did some calculations. He was saying to the effect, "There is the funeral cost for your father, school fees for Paul's family, rent for the place I gave them to live and money I gave to Paul's family when they needed it. If I take that off, I should only pay back a bit over $900,000". I responded, "I don't have any of the details of what you did. I am happy to agree with your figures. We are family". 7. The conversation between us then continued to the following effect: MT: (After further statements by Michael about family and honour) "I suppose I can give him a unit". SS: "How much would a unit be worth?" MT: "Between $450,000.00 to $500,000.00". SS: "That is only about half of what we discussed a few minutes ago from your own calculations. I would be embarrassed to go back to Paul and suggest one unit. What you calculated was a bit over $900,000. Please make it 2 units. Then I can go to Paul with some strength and tell him to take it". MT: "All right, I will give him 2 units. But if I do that, this has to be the end of it. I don't want Paul coming back and asking me for more. We have to call it square". SS: "Michael, I give you my assurance that 2 units will settle the matter. You have my word". 8. Before I left, as is our Lebanese custom, we hugged and kissed each other on the cheeks. The whole of our conversation was friendly and cordial. His wife and son came out to say good bye. 9. I then went and reported the agreement to my brother Paul at our mother's home at Galston. I had been concerned to mediate the dispute, in particular because my brother had been diagnosed with cancer and was unwell.
It was this conversation between Steven Sukkar and Mr Taouk that was implemented by the solicitors who acted on the transaction that gave rise to the Acknowledgement and the two contracts for sale.
It is necessary to mention a strange and unexplained aspect of the consequences of this discussion. The evidence shows that Mr Taouk's solicitor prepared documents to implement the transaction on the basis that the purchaser of the two Lots would be Steven, rather than Paul. Steven could not explain in evidence why this had happened. Abu.Tony made submissions by which it sought to benefit from the apparent misunderstanding as to who the purchaser was intended to be. If there is any real significance to this evidence, it is not clear what that significance is. I propose to treat it as an unexplained misunderstanding.
Although Paul Sukkar accepted the agreement made on his behalf by Steven, he was not happy with the terms of the agreement, because he believed that he should have received more than the two Lots as a result of the money that he had paid to Mr Taouk. As part of the arrangements that were made to try to mediate a final agreement between Mr Sukkar and Mr Taouk, a cousin of Mr Sukkar, named Joseph Succar (whose surname is spelt differently to that of Paul and Steven), became involved. Mr Succar gave evidence in his 17 October 2018 affidavit in the following terms: 11. After that I had a telephone conversation with Michael Taouk to the following effect: JS: "I have talked to David Taouk. He tells me you are not going to do what the Taouk association recommended. Is that the case?" MT: "Yes. I have spoken with my father and my father is coming to Australia. We both think that the 2 units I am giving Paul is enough. You will meet my father when he comes, and you will find out". 12. Sometime later, by arrangement, I met with Michael Taouk and his father at [Mr Taouk's residence]. I took with me my cousin Salem Sukkar. We had a conversation to the following effect: JS: "We have come to ask that you resolve the family dispute between Michael and Paul for the amount which the Taouk association recommended". BD (Michael's father): "We gave him 2 units. That's enough". 13. Salem and I were disappointed. We left without the usual pleasantries.

Admissions made by Mr Taouk

It will assist the explanation of these reasons to refer at this point to certain objective evidence that I consider throws conclusive light on the validity of the evidence given by Mr Taouk that I have extracted above. That evidence consists of statements given by Mr Taouk to the Police, or apparently recorded by the Police following an interview with Mr Taouk.
The first document arose out of what Abu.Tony's submissions called the sixth incident that occurred in August 2015. Mr Taouk gave a Statement of a Witness to the Police dated 26 August 2015, which included: 1. This statement made by me accurately sets out the evidence that I would be prepared, if necessary, to give in court as a witness. The statement is true to the best of my knowledge and belief and I make it knowing that, if it is tendered in evidence, I will be liable to prosecution if I have wilfully stated in it anything that I know to be false, or do not believe to be true. … 4. About 7:30pm on Wednesday the 26th August 2015, I was at my home address being [address] with my wife and son… … 6. … My wife also came into the hallway and asked me what was that. I told my wife quietly that I thought it was a gun shot… I got my mobile phone from the tv room where it was charging and I called the police. 7. It was 8:02pm when I called the police. I was back in the computer room when I was talking to the operator. I saw that there was a hole in the bay window of the computer room. The hole was on the top right hand side when I was looking at it from the inside. I told them what I thought had happened and they told me that police were on the way and to call again if I heard more shots. I called my friend Wally who owns a panel beating shop and told him what happened…The police arrived not long after and I was showing them the room inside the house… 8. Detectives arrived a little later on and I spoke with one of them. He asked if I had any debt owing to people or if I have had any threats made towards me recently. I told him that I did not have any debts owing to anyone that I know of other than the banks. I did tell him that over the twenty years I've been in business, that I've only been threatened once by Paul SUKKAR in April 2015. The detectives asked me to go to the Liverpool police station to provide the statement and I did. 9. … After Paul brought the unit, he was incaserated [sic] and OZ Build Construction went into liquidation. I visited Paul in Gaol, I think it was in Winsor and told him that we went into liquidation but when you get out of gaol, we will work something out to see you right because I didnt want him to lose as a personal friend. 10. About three years ago when he was released from gaol, he came to my home and asked about his investment. I told him I had a development happening and that I just needed some time to get it together and I'll make sure to see you right. Until March of 2015, he continued coming to my house as a friend and asking about what's happening with the project. 11. In March of 2015, I through both our lawyers, provided Paul with two units from the plan at [suburb]. He agreed and was happy and signed the paperwork. I provided police a copy of a letter from my Lawyers about the two units provided to Paul. I didn't hear from Paul again for about a month and a half. 12. It would have been around the end of April or the beginning of May when Paul came to my house and asked to talk to me. We sat at the front porch and he told me that he was not happy with this deal which was in my eyes a done deal because he signed with the lawyers. I told him that as far as I was concerned, I've done my duties and paid him back. Paul said to me "I will walk in your funeral." I asked him to please have his coffee and leave my house. He got in his car and left my house. I have not heard from him since. …
The principal significance of Mr Taouk's statement to the Police is his statement, in par 8, that he had only been threatened once in 20 years and that that was by Mr Sukkar in April 2015. Mr Taouk added, in par 12, that the relevant meeting had been around the end of April or the beginning of May. That was after the 6 March 2015 date of the contracts. Mr Taouk said that Mr Sukkar stated that "he was not happy with this deal which was in my eyes a done deal because he signed with the lawyers." That proves that this event, if it occurred as related by Mr Taouk, happened after the contracts were exchanged. Further, Mr Taouk stated that it was during this conversation when Mr Sukkar said: "I will walk in your funeral."
Not only did Mr Taouk not say that he was threatened by Mr Sukkar before the date of the exchange of contracts, but he specifically said that he had only been threatened once by Mr Sukkar, and that was after the date of the contracts.
As it was Steven Sukkar who acted for Paul during the second incident, it is necessary to consider whether Mr Taouk's statement to the Police that "over the 20 years I've been in business, that I've only been threatened once by Paul SUKKAR in April 2015" leaves open the possibility that Mr Taouk was threatened by Steven during the second incident. I reject that possibility, as the statement made by Mr Taouk was in response to a request to say whether he had "had any threats made towards me recently". That question would naturally have elicited information that Steven Sukkar had threatened Mr Taouk if Mr Taouk had remembered that occurring at the time he gave the statement to the Police. There is no rational reason why Mr Taouk would have mentioned threats made by Paul Sukkar but not disclosed threats made by Steven.
In cross-examination, Mr Taouk tried to explain his failure to inform the Police of the threat made by Steven Sukkar by saying that Walid Ahmad had told him on the night of the shooting: "don't tell the police about any units": Tcpt, 1 August 2018, p 153(35). No reason has been given by Abu.Tony as to why Mr Taouk, acting upon Walid Ahmad's instruction not to tell the Police about any units, would have informed the Police about a threat allegedly made by Paul Sukkar after the date of the contracts, but not informed them about threats made by Paul and Steven Sukkar before the date of the contracts. All of the alleged threats were equally concerned with Mr Sukkar's demand for payment or the transfer of units instead.
It is also significant (albeit primarily to the issue of whether Mr Sukkar provided consideration for the contracts) that Mr Taouk volunteered, in par 9, that he visited Mr Sukkar in jail and told him that his company had gone into liquidation, but that when Mr Sukkar got out of jail "we will work something out to see you right because I didn't want him to lose as a personal friend." Mr Taouk's statement in par 11 that in March 2015, through their lawyers, he provided Mr Sukkar with two units and: "He agreed and was happy and signed the paperwork", is positive evidence that Mr Taouk caused Abu.Tony to enter into the contracts, of his own volition, in order to compensate Mr Sukkar for a loss that he suffered as a result of the liquidation of Ozbuild.
Finally, in relation to Abu.Tony's claim that Mr Taouk acted in fear of while led Ahmad, Mr Taouk referred in par 7 to having "called my friend Wally".
Mr Taouk provided a further Statement of a Witness to the Police dated 11 March 2016, after it had come to Mr Taouk's attention that Mr Sukkar had had a conversation with a distant cousin of Mr Taouk in which, in so many words, Mr Sukkar had threatened to kill Mr Taouk because of an alleged love affair between Mr Taouk and Mr Sukkar's wife that Mr Sukkar claimed had lasted seven years. This event apparently led to the issue, on 11 March 2016, by Mount Druitt Local Court ex parte of a provisional apprehended violence order against Mr Sukkar to protect Mr Taouk. I infer that the Grounds of the Application, as stated in the order, were provided by Mr Taouk to the detective who applied for the order. The statement repeated Mr Taouk's claim that Mr Sukkar had attended his home in April 2015 and made a threat against Mr Taouk: "in relation to not being satisfied with the agreement made through their respective lawyers." This evidence supports a finding that, if Mr Sukkar threatened Mr Taouk, that threat was only made after the date of the contracts.
In par 13 of its closing submissions in respect of duress, Abu.Tony accepted that Mr Taouk had conceded that Mr Sukkar made no threats to him as part of the first incident. Mr Taouk had claimed, in par 67 of his 21 February 2019 affidavit, that during this meeting, Mr Sukkar had said that he would "walk in your funeral" and involve Monzer El Husseini and Walid Ahmad. Abu.Tony submitted that this concession "reflects positively on Mr Taouk's credit", and that it was possible that Mr Taouk "in preparing his affidavit conflated what was said in one of the subsequent incidents with this incident."
Abu.Tony then submitted, in par 20, that the Court should accept that, as part of the second incident, Mr Sukkar had made the threat as stated in par 71 of Mr Taouk's affidavit, about Abu.Tony's project not running smoothly, and Mr Sukkar saying that, if the two Lots were not transferred "it gets nasty from here onwards".
However, it is clear from the statements that Mr Taouk made to the Police that Mr Taouk only claimed that Mr Sukkar had threatened him once, and that was during the fourth incident in April or May 2015. Mr Taouk accepted in cross-examination that he had told the Police, after the shooting incident, that he had only been threatened once over 20 years by Mr Sukkar: Tcpt, 1 August 2022, p 114(37).
Fairness to Abu.Tony and Mr Taouk requires that some relevant extracts from the transcript be set out in full, as those extracts cannot be abbreviated without changing their sense. The cross examination then continued as follows: Tcpt, 1 August 2022, pp 114(39)-116(44): Q. That was April 2015. A. Mm, yes. Q. The incident to which you were referring is set out in paragraph 12 at 944. A. Mm. It would have been - well, yes. I don't follow, yes. Q. That's correct? A. I'm sorry. I'm not - can you clarify a bit more, please? Q. You said that "I've only being threatened once by Paul Sukkar", and that it was in April 2015. And the incident you were referring to is the incident referred to in paragraph 12 on page 944. A. In relation to the shooting. Yes, yes. Q. Correct? A. Yes. That night, yes. Q. That would have been around the end of April or the beginning of May when Paul came to my house. A. Yes. Q. You see that? A. Yes. Q. That was what you were referring to is the only occasion which you had been threatened by Paul Sukkar. A. The last occasion. Q. That was the only occasion upon, which you were telling the police, that you had been threatened by Paul Sukkar. A. No. Q. So where are the other occasions that you were telling the police that you'd been threatened by Paul Sukkar other than what we see in paragraph 12? A. The only relevant thing I should tell the police when a human being tells you - - - Q. No, please, listen to the question. A. Yes. Q. What were the other occasions, other than the one referred to in paragraph 12, that you told the police that you had been threatened by Paul Sukkar? A. I didn't, Q. You didn't. A. No. Q. So you told the police he'd only been threatened once by Paul Sukkar. A. I said at that time when he walks in the grave. Q. You told the police-- A. Yes. Q. --that you had only been threatened once by Paul Sukkar, correct? A. No. Q. You didn't. A. No. Q. Would you accept that in paragraph 8 at the bottom of the page 243 to 24, you told the police "I have only been threatened once by Paul Sukkar in April 2015". That's what you told the police, wasn't it? A. On the - the reason why- Q. That's what you told the police. A. Yes. Yes. Q. You were trying to tell the police everything you thought was relevant. A. Yeah, everything what happened before the shooting. They put the question to me "Have you been threatened by anybody", I said "Mr Sukkar". Q. Threatened once. A. That never came into discussion. Q. All right. A. Yes. Q. So you think the police just made that up, put it in the statement. A. No they did not. This is my statement. Police don't make anything up. Q. Now the occasion to which you were referring in paragraph - is the occasion that's referred to in paragraph 12, isn't it? A. Paragraph 8. Q. Which was "It would have been around the end of April or the beginning of May"-- A. Yes. Q. --"when Paul came to my house and asked to talk to me." Do you see that? A. Yes. Q. That, of course, was a date after the exchange of contracts on 16 April 2015. A. Correct. Q. So you're telling the police the only occasion upon which you had been threatened by Paul Sukkar was on an occasion after-- A. Mm. Q. --the exchange of contracts on 16 April 2015. A. Never came up. They said "Who threatened" Q. Mm? A. Of course, yes.
Mr Taouk appears to have realised that the statement that he made to Police meant that he had only been threatened by Mr Sukkar once and that that happened after the contracts were exchanged. Mr Taouk responded initially by prevaricating, and then when he was asked to admit that the effect of his statement was that the "only occasion" when he was threatened by Mr Sukkar occurred around the end of April or the beginning of May 2015, he responded by saying: "The last occasion". He then denied that the episode to which he referred in his statement was the only occasion when he was threatened by Mr Sukkar. Thereafter, Mr Taouk equivocated when senior counsel asked him questions directed at obtaining his admission as to the obvious meaning of his statement to the Police.
Mr Taouk "absolutely" denied that, after Mr Sukkar was released from jail, Mr Taouk said to him: "I will make sure to see you right": Tcpt, 1 August 2022, p 103(40). He said it was "absolutely not" the case that he caused Abu.Tony to enter into the contracts to resolve the disagreement he had with Mr Sukkar about who owed who money and how much: Tcpt, 1 August 2022, p 104(8). However, when he was taken to par 10 of his statement to the Police, he acknowledged that "half an hour ago" in the cross-examination he had absolutely denied that he signed the contracts in order to make "right" his dispute with Mr Sukkar: Tcpt, 1 August 2022, p 117(9). The most Mr Taouk could say was that he did not remember making the statement to the Police.
It was put to Mr Taouk by senior counsel that there was no suggestion in the statement to the Police of any threat by Mr Sukkar that led Mr Taouk to sign the contracts. Mr Taouk accepted that proposition: Tcpt, 1 August 2022, p 119(10). The following cross-examination then occurred: Tcpt, 1 August 2022, pp 119(12)-121(43) Q. And if it were the case that there were a threat made by Steven Sukkar, recently made by Steven Sukkar, isn't that a matter that you would have told the police about? A. Absolutely not. Q. Definitely not. A. Absolutely not. Q. Why is that? A. Police don't guard your house 24-7 - no, sir. These are criminals we're talking about, in my belief. Q. I see. You say nothing about any prior meeting with Paul Sukkar prior to April in which he made any threats. A. Sorry? Q. In the statement, you make no statement that Paul Sukkar threatened you at any time prior to April or the beginning of May-- A. No. Q. And if, in fact, there had been a threat on that earlier occasion, there's no reason why you wouldn't tell the police. A. There would be, yes. There would be a reason. Q. I see and what, you say you would fear for your life in disclosing an earlier threat. A. Yes, I would. Q. But not the threat that you referred to in paragraph 12. A. If I may go to it? Q. Yes. A. It would have been a greater threat. Q. So, you had no hesitation whatsoever in advising the police of the threat that was made in April or May, which you referred to in paragraph 12, no hesitation at all. A. I - I don't quite understand when you say this. Q. You had no hesitation at all in telling the police about what you say was the threat in April or the beginning of May 2015, which is at paragraph 12 of your statement. A. Not at the - well, the only thing I told about the latest threat. Q. Please stay with the question. A. I apologise. I've just got to understand the question to answer it if you don't mind, sir. Q. You had no hesitation at all-- A. Yes. Q. --in telling the police of the alleged threat in April or early May made by Paul Sukkar which is referred to in paragraph 12. A. No, I didn't. Q. No hesitation. A. No. Q. Not at all concerned about that it might lead to further threats to you by disclosing what happened in April May. A. No. They were - I only told him about the one that escalated, that kept going more heavier. Q. I see. Does it follow when you told the police, "I've only been threatened once"-- A. Yes. Q. --"you were not telling the police the truth. A. I didn't have to disclose other threats made to me. Q. I will ask you again. When you told the police that, "I have only been threatened once by Paul Sukkar"-- A. Yes. Q. --is it the case you are not telling the police-- A. I was telling-- Q. --the truth. A. Yes, I was. Q. You lied to the police. A. No, I was not. Q. Is it true to say that as at the date of this statement, you had only been threatened once by Paul Sukkar? A. At the time, yes. That's what I disclosed to the police. That's my statement, yes. Q. So, there can be no doubt about this, at 26 August 2015, you had only been threatened once by Paul Sukkar. A. That's what I told the police, yes. Q. Was that true? A. In my mind? Q. Yes. A. No. Q. I see. Do I understand you; you told the police something which in your own mind you knew was false? A. It wasn't false at all. Q. Please explain why it is not false to say I have only been threatened once by Paul Sukkar when in fact you'd been threatened on more than one occasion. A. Well, no that's not correct at all. If you let - if you give me the chance to answer the question. A threat, a threat and another threat. The only threat was concerning me when he told me he wants to walk in my grave. Q. The only threat that he ever made that concerned you was when he-- A. That worried me and scared me. Q. Am I to understand the only threat that he ever made that ever concerned you or scared you is when he said, "I will walk in your funeral"? A. Funeral - I'm sorry. Yes, that one. Q. Is that the only threat that ever concerned-- A. That - well, the other ones did scare me but this is the one I - alerted my attention to tell the police. Q. Did you or did you not say a few moments ago that this meaning the where he said I will walk in your grave or your funeral, was the only threat that ever concerned you? Did you say that? The transcript will reveal it. A. Yes. Q. Was it true when you said that the only threat Paul ever made that concerned you was the one in April or the beginning of May 2015? A. It concerned me the most. Q. No, you didn't say that, did you? You said the only one that concerned me. A. Well, I don't know how to answer your question to be honest with you. I'm so sorry. Forgive me.
Mr Taouk started this part of the cross-examination by absolutely denying that, if there had been any additional threat by Mr Sukkar made before he signed the contracts, he would have told the Police. There is no reason why Mr Taouk, having informed the Police of one threat made after the contracts were signed, would not have informed them of an additional threat made before that time. Nonetheless, Mr Taouk asserted, at Tcpt, 1 August 2022, p 119(39), that there was a reason, being that he would fear for his life in disclosing an earlier threat. That is because it would have been a greater threat: Tcpt, 1 August 2022, p 119(44). Mr Taouk then equivocated in response to the obvious inconsistency in his position. He was forced to concede that what he told the Police about being threatened once was not true in his mind: Tcpt, 1 August 2022, p 121(8), but then claimed inconsistently that it was not false at all: p 121(12). Mr Taouk's explanation was that the only threat that was concerning him was when Mr Sukkar said that he wanted to walk in Mr Taouk's grave: Tcpt, 1 August 2022, p 121(18). When asked to confirm that this was the only threat that ever concerned him, Mr Taouk sought to avoid a concession to that effect by saying "the other ones did scare me but this is the one I - alerted my attention to tell the police:" Tcpt, 1 August 2022, p 121(20). Mr Taouk was forced to concede that he had no answer to the proposition that he had in fact said that there was only one threat that concerned him: Tcpt, 1 August 2022, p 121(43).
Mr Taouk accepted that the threat of which he informed the Police in his statement was a reference to the fourth incident in late April or early May 2015: Tcpt, 1 August 2022, p 137(17). Mr Taouk was questioned about what he understood Mr Sukkar meant when he said in the conversation related in par 86 of Mr Taouk's 21 February 2019 affidavit: "I am not happy with the deal." The cross examination was as follows: Tcpt, 1 August 2022, pp 137(29)-138(14) A. And I'm not happy with the deal. I don't know which deal he's referring to. Q. You didn't know which deal he was referring to? A. Absolutely not. Q. You had no - it didn't even occur to you that it might have been the two contracts for sale for the unit of the 16th-- A. No. No. Q. --didn't even occur to you? A. That was - should have been enough to satisfy him, and his anger. Q. It should have been enough? A. Yes. Q. So, you did know that he was referring to-- A. I don't know when he says which, he could have other here - he might have a lot of deals in his mind. Q. Really? A. Well, you're asking me and I'm on oath. Q. Are you in any doubt-- A. Yes. Q. --that when he referred to, "I'm not happy with the deal", he was referring to the two contracts exchanged on the 16th of April? A. I repeat myself - I cannot answer that, I don't know what's in his mind. I didn't say it, he said it, at the time. Q. Did you seek to enquire from him what deal it was? A. No, I - I - as I said in my statement, I don't owe you anything. Q. So, the court should find that at the time you had no idea at all what the deal was he was referring to? A. We'll leave that up to the Court.
Senior counsel return to this subject at Tcpt, 1 August 2022, pp 141(27)-141(38): Q. So you knew exactly what the deal was. A. No, I don't. Q. I see. So you say I agree with Steven to two units, which is obviously a deal, isn't it. A. But he - he - he - he says this deal on a number of occasions. He's got this deal in his head. I don't know what the deal is. He's got all sorts of deals in his head, sir. Q. Even though you said, "I agreed with Stephen to two units," you didn't see that as being the deal that he was unhappy about. A. No.
It is inconceivable that Mr Taouk did not understand that the deal that Mr Sukkar was referring to was the agreement embodied in the contracts that had been exchanged less than a month before the fourth incident. This example of equivocation on Mr Taouk's part appears to be gratuitous, as it could not have advanced Abu.Tony's case.
Abu.Tony had the burden of proving that it was induced to enter into the contracts because of the duress caused by Mr Sukkar, or for which he was responsible. That proof depended upon the evidence of Mr Taouk. Mrs Taouk's evidence was only significant insofar as it may have corroborated the evidence of Mr Taouk. When all of the evidence of the statements made by Mr Taouk concerning the alleged duress by Mr Sukkar is given due weight, whether made in court or elsewhere, the inference is overwhelming that Mr Sukkar did not procure the making of the contracts by duress. It may be that there was a level of acrimony between Mr Sukkar and Mr Taouk on the issue of the striking of a proper balance of account as between them. If so, that acrimony did not rise to the level of a threat before 6 March 2015. I accept the truth of the statement made by Mr Taouk to the Police on 26 August 2015 that Mr Taouk told Mr Sukkar, when he was in jail, that "we will work something out to see you right". After Mr Sukkar's release, Mr Taouk told him about the development that he was undertaking and that "I just need some time to get it together and I'll make sure to see you right." Mr Taouk caused Abu.Tony to enter into the two contracts as a result of the agreement struck with Steven on behalf of Paul during what Abu.Tony described as the second incident and that: "[Mr Sukkar] agreed and was happy and signed the paperwork".
These findings are fatal to Abu.Tony's defence that it had effectively rescinded the two contracts for duress.
It is strictly not necessary for the Court to make elaborate findings concerning its view as to the credibility of the other witnesses, or to decide whether Abu.Tony affirmed the contracts so that it lost a right to rescind them.
I will in the circumstances record only a brief outline of my conclusions on these matters. Mrs Taouk only had incidental involvement in the incidents relied upon by Abu.Tony. Mrs Taouk said that during the first incident she heard Mr Sukkar raise his voice and that he used bad language. She said that she stopped listening as she did not want to hear Mr Taouk and Mr Sukkar fight. She could recall hearing a bang that sounded like a table falling over and more heated words. In relation to the second incident, involving Steven Sukkar, Mrs Taouk in par 29 of her 19 February 2019 affidavit corroborated Mr Taouk's evidence that Steven said: "You give us two units if you want everything to go good for you with your project." Further, that Steven said: "that is what you have to do, or we can get nasty. You know we can do things to you. We have people behind us." This evidence must be compared with the evidence given by Mr Taouk in par 71 of his 21 February 2019 affidavit, where Mr Taouk said that Steven Sukkar said: "You give us two units if you want things with your project to run smooth", and "because that's what you're going to do, or it gets nasty from here onwards. You know who Paul and I have behind us, this is happening." On this occasion, Mrs Taouk claimed that she was in the room and heard the conversation. The versions of the evidence given by Mr and Mrs Taouk are remarkably the same, particularly having regard to the fact that the affidavits were sworn almost four years after the event. In cross-examination, Mrs Taouk was able to say that she could recall Steven Sukkar making a statement about the construction project going "smoothly": Tcpt, 23 August 2022, p 358(16). Mrs Taouk evidently did not remember at that time Steven Sukkar saying anything about Paul and Steven having people behind them. Mrs Taouk appeared to have a poor recollection about the timing and circumstances of the alleged conversation.
I am satisfied that Mrs Taouk gave her evidence conscientiously, but I believe that it is highly likely that Mr and Mrs Taouk discussed relevant events over the years and that Mrs Taouk has transposed the effect of those conversations into her own memory. I do not accept that Mrs Taouk's evidence was reliable or that the Court ought to give it significant weight.
Steven Sukkar gave his evidence in a relatively convincing manner. In large part that was a result of the fact that the level of recollection of the events of February 2015 that Steven claimed to possess was consistent with what would ordinarily be expected of a witness asked to relate those events from memory some seven years later. Steven appeared to make concessions when he should have, but he consistently avoided expressing his recollection in terms that were more definite than his failing recollection would permit.
I would be inclined to accept Steven's claim that he visited Mr Taouk in order to mediate between Paul and Mr Taouk: Tcpt, 3 August 2022, p 245(35). Steven acknowledged that the documents that were initially prepared by Mr Taouk's solicitor stated Steven as the proposed purchaser of the Lots. Steven was apparently nonplussed by this fact, and said: "There is no reason for that to have happened. I know it happened, but there was no reason for that to happen.": Tcpt, 3 August 2022, p 246(12). I would be inclined to accept this evidence, as there is no rational reason at all suggested by the evidence as to why the Lots would have been transferred to Steven, or why Paul would have accepted that outcome. Steven firmly denied the version of his conversation with Mr Taouk in about February 2015 that Mr Taouk claimed took place: Tcpt, 3 August 2022, pp 251(16)-252(32).
Very significant doubt, would be cast on Steven's credibility by the evidence that was received concerning his criminal conduct and dishonesty. Steven accepted that he had been convicted of having been knowingly involved in the importation of ecstasy tablets with a value of between $7.2 million and $12 million: Tcpt, 3 August 2022, p 252(7). It is not clear whether the term of imprisonment imposed was 12 years or 14 years, but Steven accepted that the non-parole period was nine years: Tcpt, 3 August 2022, p 252(45). Steven accepted that he had been convicted and sentenced although he claimed not to have been involved in the importation.
Furthermore, on 29 November 2007, an order was made that Steven's name be removed from the role of lawyers of the Supreme Court of New South Wales: Tcpt, 3 August 2022, p 253(14). In The Prothonotary of the Supreme Court of New South Wales v Sukkar [2007] NSWCA 341, Hodgson JA, giving the primary judgment of the Court of Appeal, said: 27 In my opinion, the gravity of the offence of which the opponent was convicted is such as to demonstrate present unfitness to practice, that is likely to continue indefinitely. This is strongly confirmed by the opponent's failure to acknowledge the full extent of his involvement in the importation of ecstasy, his giving of false evidence at his trial, and his failure to acknowledge that he gave false evidence. 28 In my opinion, although the conduct in question was outside the course of the opponent's practice as a lawyer, it was conduct involving a very serious breach of the law, and involving assistance to others to commit a serious breach of the law and the giving of false evidence in court. As such, this conduct manifested qualities incompatible with the conduct of professional practice; and in my opinion, the opponent's conduct amounted to professional misconduct, in accordance with the discussion of that term in Cummins.
It is not necessary for the Court to make any final determination concerning the credibility of the evidence given by Steven Sukkar. The events in his earlier life that I have just recorded would naturally undermine his creditworthiness. However, Steven has served his sentence and may well have reformed as a result of the punishments that he has suffered. The evidence that he gave was consistent with the evidence given by the other witnesses called in Mr Penhall's case, and, importantly, was reasonably consistent with the objective evidence of the statements given by Mr Taouk to the Police that I have discussed above.
I have reached the conclusion that Mr Penhall is entitled to succeed on his case that Abu.Tony was not induced to enter into the contracts because of duress imposed by Steven on behalf of Mr Sukkar without it being necessary for the Court to treat the evidence given by Steven as being determinative of the issue.
I have reached essentially the same conclusion on the question of the credit to be given to the evidence of Mr Sukkar. Obviously, the Court has not had the benefit of witnessing Mr Sukkar giving his evidence. Mr Sukkar's version of events was consistent with the basic facts that Mr Taouk admitted in the statements that he gave to the Police.
As I have noted above, at the time Mr Sukkar was cross-examined by senior counsel for the defendants the amended statement of claim was the current pleading, so it included the new claim in pars 20 to 36 that I have set out above at [62]. Senior counsel made some hay from the fact that Mr Sukkar had verified the truth of the facts alleged in the amended statement of claim, but the newly introduced claim was at least to a significant extent inconsistent with the original claim. At the time of the cross-examination, Mr Sukkar maintained his pleaded claim that he had made four payments to Mr Taouk in the total sum of $1,150,000. It appears from the transcript of the cross-examination that Mr Sukkar maintained his evidence of the events in which he was involved that Abu.Tony now claims were relevant to its duress defence. It seems that Mr Sukkar was bemused by the lawyer's proposition that he had sworn to the truth of two insist consistent claims. It also appears that his recollection of the events relevant to his making the claimed individual payments to Mr Taouk was not clear.
It appears that Mr Sukkar struggled to some extent with questions put to him about the payments that he made to Ozbuild having been lost because of Ozbuild's deregistration, rather than the amount paid remaining as a live debt owed by Mr Taouk to Mr Sukkar. The questions on that subject were perhaps not entirely fair, because the claim pleaded by Mr Sukkar against Mr Taouk at that stage was that Mr Taouk was responsible to Mr Sukkar to recover the money from the sale of Lot 2 from Ozbuild so that it could be applied for the benefit of Mr Sukkar, and the relevant breach was that Mr Taouk left the money with Ozbuild so that it became irrecoverable when Ozbuild was deregistered.
In all of the circumstances, the Court's finding that Mr Penhall is entitled to enforce the contracts against Abu. Tony does not depend upon a finding by the Court as to the creditworthiness of Mr Sukkar's evidence.
As Mr Penhall's argument that Abu.Tony lost the right to rescind the contracts because its repeated reliance upon the contractual term that allowed it to postpone the date for completion constituted the affirmation of the contract does not need to be determined in order for Mr Penhall to succeed on his claim, I will not deal with it in these reasons. First, as I have found as a fact that Abu.Tony was not induced to enter into the contracts by duress for which Mr Sukkar was responsible, any consideration of the affirmation argument would be artificial, as it would be necessary for the Court to assume in a speculative way that some conduct capable of constituting duress had occurred. Furthermore, as considered in JD Heydon, Heydon on Contract: The General Part (2019, Thomson Reuters) at [31.730], there is a contentious issue of principle as to whether a party who has been induced by duress to enter into a contract may lose the right of rescission through affirmation provided that the party is aware of the facts that constitute duress, or whether it is also necessary that the party know of the right to rescind as a result of those facts. Mr Penhall did not explore in cross-examination of Mr Taouk the question of whether he became aware of Abu.Tony's right of rescission, and, if so, when he became aware of that right. This is therefore not an appropriate case for the Court to consider in detail the authorities that deal with the circumstances in which a party may lose its right to rescind a contract for duress as a result of affirmation, or to decide the correct principle.

Conclusion

Mr Penhall is now entitled to make an election as to whether he asks the Court to make orders for the specific performance of the contracts, or whether alternatively he asks for an award of damages: see Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514 at 521 and Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2022] HCA 38 at [64].
My understanding is that Mr Penhall proposes to ask for specific performance, but the Court should give him the opportunity to make a final election.
I understand that Abu.Tony does not contest Mr Penhall's claim that, if orders for specific performance of the contracts are made, he will also be entitled to damages calculated by reference to the total rent received by Abu.Tony for the period from 19 September 2018. The agreed amount of $114,480.08 related to the period up to 31 May 2022. I do not know whether Mr Penhall's claim includes additional amounts after 31 May 2022. I do not know whether there is any contest on that issue. There is no evidence of the rent received after 31 May 2022.
In principle, Mr Penhall is entitled to be paid by Abu.Tony his costs of his claim for specific performance of the contracts.
As I have noted above, Mr Penhall's claims against Mr and Mrs Taouk must be dismissed. In principle, Mr Penhall should be ordered to pay the costs of his claim against Mr and Mrs Taouk.
There may be further issues concerning the final orders that should be made in these proceedings, as well as the appropriate orders for costs that have not yet been brought to the Court's attention.
The parties should consider these reasons for judgment and consult about whether appropriate short minutes of order can be agreed. Alternatively, the parties are invited to approach my Associate for the purpose of listing the proceedings for directions in order to determine what should be done to enable the Court to make orders that dispose of the proceedings.

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: 28 April 2023

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