Reliance Financial Services (NSW) Pty Ltd (ACN 131 889 766) v Michael Abdallah

Judgment 1Reliance Financial Services (NSW) Pty Ltd ("RFS(2)") is the current trustee of a trust known as the Reliance Discretionary Trust ("the Trust") . Reliance Financial Services Pty Limited ("RFS(1)") is the former trustee of the Trust. RFS1 was an entity associated with an accountant, Mr Sam Cassaniti, who practised at Liverpool under the name Cassaniti & Associates. I will refer to Mr Sam Cassaniti as "Mr Cassaniti" and other members of the Cassaniti family by their respective first names. 2RFS(2) contends that RFS(1), as trustee of the Trust, lent substantial amounts of money to the Defendant, Mr Michael Abdallah ("Mr Abdallah") and an associated entity, Highrise Developments Pty Limited ("Highrise Developments"). I will refer to the Defendant as "Mr Abdallah" and other members of the Abdallah family by their respective first names. Mr Abdallah was a director of Highrise Developments at all times until that company's deregistration on 5 March 2008. RFS(2) now seeks various orders including a money judgment and interest against Mr Abdallah, declarations that it is entitled to appoint a receiver to specified properties and as to the powers which that receiver is entitled to exercise and orders for the judicial sale of any property of which Mr Abdallah is a registered proprietor situated in New South Wales. 3The following issues will need to be addressed: Whether three written loan agreements dated 25 November 2002, 28 November 2002 and 2 December 2002 ("the Loan Agreements") were intended to be operative in accordance with their terms; Whether subsequent monies paid to Mr Abdallah and Highrise Developments had the character of loans or monies otherwise owing to RFS(1) so as to fall within "all monies" provisions of the Loan Agreements, having regard to alleged conversations between Mr Cassaniti on behalf of RFS(1) and Mr Abdallah and the other evidence before me; Whether the relevant payments made by Cassaniti & Associates were made as agent for or on behalf of RFS(1) as trustee of the Trust so that RFS(2), as the current trustee of the Trust, has standing to seek the relevant orders; A limitations defence raised by Mr Abdallah; and An alternative claim brought by RFS(2) in unjust enrichment. The Loan Agreements and subsequent payments 4The first three payments were made by Cassaniti & Associates and were purportedly the subject of three separate Loan Agreements. The three Loan Agreements contain substantially the same standard terms. Clause 1 of the Loan Agreement defines "all monies due" as the loan amount together with all monies owing to the lender by the borrower, including money which will be owing in the future on any account whatsoever. Clause 2 of the Loan Agreements provides that Mr Abdallah would pay to RFS(2) all monies owing to it by entities of which he was at any time a shareholder or director which include Highrise Developments. 5Clauses 7 and 8 of the Loan Agreements in turn provide that: "7. The Borrower grants a charge in favour of the Lender in respect of any real or personal property owned by the borrower ... to secure payment of All Monies Due. 8. The Borrower agrees to grant to the Lender a legal Mortgage of any real property which the Borrower may own ... from time to time to secure payment of All Monies Due." Clause 9(b) of the Loan Agreement relates to the terms of the mortgage and provides that such a mortgage shall: "(b) Incorporate a power to appoint a receiver to any property subject to such mortgage (such receiver to be remunerated at such a rate as the Lender agrees with the receiver), or to exercise such powers as mortgagee in possession, with the powers conferred on a receiver by s 420 of the Corporations Act mutatis mutandis (which provision shall prevail to the extent of any such inconsistency with the said Memorandum)." 6There were, however, some differences in the three Loan Agreements. The first Loan Agreement dated 25 November 2002 in the amount of $60,000 provided that the loan was to be repaid no later than 25 November 2006 and provided for the payment of interest of $1,000 a month, which approximates to a rate of 20% per annum. An amount of $60,000 was paid by Cassaniti & Associates to Mr Abdallah on 25 November 2002 (chq 1802) but that cheque was dishonoured, and the amount of $60,000 was subsequently paid by Cassaniti & Associates to Mr Abdallah on 2 December 2002 (chq 1718) to replace that cheque and deposited into the account of Highrise Developments. 7The second Loan Agreement dated 28 November 2002 in the amount of $100,000 had a term of one year and required interest to be paid at a non-default rate of 12% per annum and a default rate of 10% per annum. (The fact that the default rate was lower than the non-default rate is an indication of, at least, a lack of care in respect of that Loan Agreement). An amount of $100,000 was paid by Cassaniti & Associates to Mr Abdallah on 28 November 2002 (chq 1804). 8The third Loan Agreement dated 2 December 2002 was in the amount of $100,000 and the provisions for interest and term were left blank in that Loan Agreement. An amount of $100,000 was paid by Cassaniti & Associates to Mr Abdallah on 2 December 2002 (chq 1717) and deposited into the account of Highrise Developments. 9Substantial further amounts were paid by Cassaniti & Associates to Mr Abdallah and Highrise Developments between 28 March 2003 and 2 January 2004 which were not the subject of separate Loan Agreements, as set out in the Schedule to this judgment. Mr Cassaniti contends, and Mr Abdallah denies, that the application of the Loan Agreements to those payments confirmed during conversations between them. 10Mr Abdallah denies that RFS(1) lent any money to him and denies any agreement to repay any money to RFS(1) or RFS(2). Mr Abdallah contends that the Loan Agreements were not intended to have legal effect and are ineffective as contracts or alternatively should be set aside; that those documents were signed at Mr Cassaniti's request, when Mr Cassaniti was Mr Abdallah's accountant, because of a representation by Mr Cassaniti that there were tax advantages in doing so; and that Mr Abdallah was unaware of the legal or practical implications of the documents, which were not explained to him. I understand this defence to include at least the proposition that the Loan Agreements were not intended to take effect in accordance with their terms. The substance of his defence is that monies paid to him were paid at Mr Cassaniti's direction in repayment of monies lent by Mr Abdallah or entities controlled by him to or at the direction of Mr Cassaniti. 11I now turn to review the evidence which is relevant to the question whether the Loan Agreements were operative in accordance with their terms and whether subsequent payments made by Cassaniti & Associates to Mr Abdallah and Highrise Developments were in the nature of monies otherwise owing to RFS(1) for the purposes of the "all monies" clause in the Loan Agreements. In considering this evidence, I have had regard to Dixon J's outline of the degree of cogency which evidence must reach to discharge the burden in a civil case in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362, where his Honour observed that: "The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality ... it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences." 12In Ho v Powell [2001] NSWCA 168; (2001) 51 NSWLR 572, Hodgson JA (Beazley JA, Davies AJA agreeing) observed that: "There is a long-standing controversy whether the civil standard of proof requires a numerical probability in excess of 50 per cent (see Davies v Taylor [1974] AC 207 at 219), or belief amounting to reasonable satisfaction (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362). My own opinion is that the resolution of the controversy involves recognition that, in deciding facts according to the civil standard of proof, the court is dealing with two questions: not just what are the probabilities on the limited material which the court has, but also whether that limited material is an appropriate basis on which to reach a reasonable decision. I discussed this in some detail in an article published at (1995) 69 ALJ 731 (D H Hodgson, "The Scales of Justice: Probability and Proof in Legal Fact-finding")." 13These principles were in turn applied by Nicholas J in Aksu v Ilhan [2011] NSWSC 970 at [37]ff in determining whether a plaintiff had established the existence of an enforceable oral loan agreement. The Loan Agreements and Mr Cassaniti's evidence 14The fact that the Loan Agreements were signed by the parties is a matter which would, in the ordinary course, strongly support a conclusion that they were intended to be binding upon them and to operate in accordance with their terms. However, that finding would be displaced if other circumstances indicate, on the balance of probabilities, that the common intention of the parties was that the Loan Agreements would not have that effect. 15RFS(2) relies on Mr Cassaniti's evidence to support the Loan Agreements and the characterisation of the other payments made by Cassaniti & Partners to Mr Abdallah and Highrise Developments as monies otherwise owing to RFS(1) for the purposes of the "all monies" clause in the Loan Agreements. In my view, Mr Cassaniti was an unimpressive witness and his evidence as to many aspects of the transactions was highly implausible. The range of difficulties with his evidence are such that I do not consider that I should accept it unless it is corroborated by documents, which generally it was not. I set out examples of such matters below, which are by no means exhaustive: Mr Cassaniti's evidence under cross-examination was initially that the first loan was made to Mr Abdallah so that he could pay off his mortgage or so that Mr Abdallah might resolve a problem with the New South Wales Crime Commission concerning his house. That evidence was inconsistent with the declaration as to the purpose for which the funds were advanced contained in the first Loan Agreement and, when that inconsistency was put to Mr Cassaniti in cross-examination, he conceded that he did not remember exactly what the first loan was for (TD1 43). Mr Cassaniti was unable to offer any plausible explanation of why the interest rate under the second Loan Agreement was half the rate that Mr Abdallah was charged under the first Loan Agreement made three days earlier, although no better security was obtained (TD1 49-50). Mr Cassaniti accepted that the third "loan" of $100,000 was made to Mr Abdallah three days after the second "loan" of $60,000 and Mr Cassaniti did not recall making any inquiry why Mr Abdallah would have sought consecutive payments in such a short period (TD1 49). He then gave evidence that he believed that Mr Abdallah's request for a further $100,000 was "to do the development" (TD1 51.3) notwithstanding his earlier affidavit evidence that Mr Abdallah was not a property developer and Mr Cassaniti did not know how he earned his income (Cassaniti 12.11.09 [7]). Mr Cassaniti gave evidence that subsequent loans were made at Mr Abdallah's request, and subsequently gave evidence in cross-examination that he had made advances to Mr Abdallah because he was "intimidated" into doing so by threats of violence made by Mr Abdallah on numerous occasions (TD2 8). That evidence was inconsistent with the description of the business relationship between Cassaniti and Mr Abdallah in Mr Cassaniti's earlier affidavit evidence. Mr Cassaniti suggested in cross-examination that those threats of intimidation went back for a "few" years, but had not been made prior to the entry into the first Loan Agreement in late 2002. He also gave evidence under cross-examination that he did not consider that the allegation that money was advanced by reason of threats made by Mr Abdallah was a matter which needed to be included in his evidence prior to his giving evidence of it in cross-examination (TD2 12.39). 16The difficulties with Mr Cassaniti's evidence are such that I cannot accept that evidence as providing support for a conclusion that the Loan Agreements were operative in accordance with their terms or that the other payments made by Cassaniti & Associates to Mr Abdallah and Highrise Developments were monies otherwise owing to RFS(1) for the purposes of the "all monies" clause in the Loan Agreements. The loan file 17RFS(2) relies on a loan file maintained by RFS(1) in respect of Mr Abdallah (Ex SPC 3) to support the characterisation of the relevant payments as loans or monies otherwise owing to RFS(1) for the purposes of the "all monies" clause in the Loan Agreements. That loan file contains a schedule of payments appearing under the heading "Reliance Financial Services (NSW) Pty Ltd (as trustee for The Reliance Discretionary Trust)" described as "loan to Michael Abdallah". That schedule sets out the date of payments, the account from which they are made, the amount of the payment (under the heading "amount borrowed") and the person to whom the funds were directed. The schedule is typewritten and records payments between 25 November 2002 and 25 June 2005, so the version in evidence must have been prepared after the latter date. The loan file includes copies of the three Loan Agreements, copies of various cheques and other payment records. 18Mr Cassaniti gave the following evidence as to the origin of the "schedule of payments" contained in the loan file: "This statement was prepared by Patricia Cassaniti my former wife who was the bookkeeper for Cassaniti [& Associates] and [RFS (1)]. I observed during the years that Pat worked for [RFS (1)] that she would prepare an account statement for every loan file that [RFS (1)] opened. When she was preparing the statement she would ask me for copies of the cheques, the cheque butts, deposit slips and other records I had regarding a particular loan. Then she would prepare a statement of the kind known in the "loan statement" that is in EX SPC 3. Pat would then regularly update the loan statement (using the information in the former loan statement) and then dispose of the former loan statement. I note that this particular loan statement is in the name "Reliance Financial Services (NSW) Pty Ltd" [RFS (2)] which tells me that the statement was updated after this company became the trustee of the Reliance [Discretionary] Trust in 2008." I consider that evidence has little weight as corroboration for the information contained in that schedule of payments. Mrs Cassaniti, who prepared that schedule, did not give evidence. There is no evidence as to the basis on which she characterised the relevant transactions as "loans". The loan file otherwise does not advance matters beyond the Loan Agreements and the evidence of payments made by Cassaniti & Associates to Mr Abdallah and Highrise Developments. The fact of those payments is largely not in dispute although their characterisation as advances is disputed by Mr Abdallah. 19It is also convenient to note here that RFS(2) did not tender other documents which would be expected to exist, if the payments had the character for which it contends, particularly its tax returns and those of the Trust and other documentation recording the tax treatment of the "loans" and the interest derived (but not paid) on them. An explanation of the absence of that evidence was offered by references to break-ins at the offices of Cassaniti & Associates. On balance, I did not consider that any inference should be drawn that such evidence would not have assisted RFS(2): Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389; Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 85 ALJR 533. Nonetheless, that evidence is not available to support the inferences for which RFS(2) contends. Mr David Cassaniti's evidence 20RFS(2) also relies on an affidavit of Mr David Salvatore Cassaniti sworn 16 March 2010, but I do not consider that Mr David Cassaniti's evidence advances RFS(2)'s case. He gave evidence that he was not aware of any repayments being made by Mr Abdallah to RFS(2) or RFS(1), but conceded under cross-examination that that evidence reflected the fact that he had no knowledge of that matter and had not made any investigation or formed any view as to that matter when he swore his affidavit (TD1 35.36, 46). RFS(1)'s administration of the "loans " 21Before turning to evidence of other matters which is contradictory in some respects and involves issues as to credit, I should first refer to evidence as to the manner in which RFS(1) administered the "loans" to Mr Abdallah and Highrise Developments. As noted above, Mr Cassaniti's affidavit evidence was that Mr Abdallah was not, as he claims, a property developer and that Mr Cassaniti did not know how he earned his income. Mr Cassaniti's evidence was that he knew the level of equity that Mr Abdallah had in his properties by reference to bank statements and his knowledge of the value of those properties, although he gave no evidence of any process of valuation of those properties or any steps taken to satisfy himself that they supported the significant increase in the amounts "advanced" over the relevant period. When Mr Cassaniti subsequently produced documents from the loan files, they contained no valuations of those properties, other than tax depreciation schedules which valued only the cost of the buildings for tax purposes. 22Mr Cassaniti's evidence was that he did not believe that Mr Abdallah made any interest payments on the loans between December 2002 and November 2006 (TD1 45.3) and that he did not take any steps in, for example, the 12 months after entry into the loan agreements to seek payment of any of the interest amounts contemplated by them because he was "always so busy doing a thousand things" (TD1 45.27). Mr Cassaniti accepted that no demand was made to Mr Abdallah for repayment of any of the monies claimed to have been advanced to him prior to a demand made in July 2005 (TD1 52). Mr Cassaniti sought to justify that position by the fact that he was incarcerated prior to sending the letter of demand sent in July 2005 and could not send it previously, although he then conceded that he was not gaoled until several months after sending the letter of demand (TD1 53). 23In my view, RFS(1)'s apparent indifference to Mr Abdallah's occupation, the sources of his income and the value of his assets and the absence of any security for the loan or any attempt to secure repayment are strikingly inconsistent with ordinary experience, but readily explicable if (as Mr Abdallah contends) the monies purportedly "lent" to Mr Abdallah were the repayment by of funds previously paid by Mr Abdallah to Cassaniti & Associates or Mr Cassaniti. I give particular weight to these matters because they do not depend on contested accounts of dealings or conversations in circumstances that there are difficulties with the credit of both Mr Cassaniti and Mr Abdallah. In my view, these matters provide support for Mr Abdallah's account of the nature of the transactions, to which I will refer below, and support for the conclusion that the Loan Agreements were not operative in accordance with their terms and that subsequent payments advanced were not monies otherwise owing to RFS(1) for the purposes of the "all monies" clause in the Loan Agreements. Mr Abdallah's evidence 24As I noted above, Mr Abdallah's evidence is that monies paid to him and Highrise Developments by Cassaniti & Associates were not loans but the repayment of monies lent by Mr Abdallah or entities controlled by him to or at the direction of Mr Cassaniti. There have been significant changes in Mr Abdallah's evidence over time and significant parts of that evidence have been, at best, inaccurate. In particular: Mr Abdallah initially gave evidence that he did not recall signing the Loan Agreement dated 25 November 2002 and that the signatures on it did not look like his signature (Abdallah 9.11.2009 [4]), but then admitted in paragraph 7 of his Defence to Amended Statement of Claim that he signed the Loan Agreements, and conceded in cross-examination that his handwriting was on the front page of all of the Loan Agreements and on some other pages of the Loan Agreements (TD3 19-22). Mr Abdallah deposed to the fact that Mr Cassaniti would give him documents in blank which Mr Abdallah would sign and that he signed the first of the Loan Agreements after Mr Cassaniti told him that "it will be better for your tax". Mr Abdallah's evidence on cross-examination was initially that he had no recollection of signing the Loan Agreements but it was possible that he signed them when Mr Cassaniti put documents before him and told him that this would assist in minimising his income tax (TD3 18). That evidence then shifted somewhat when Mr Abdallah contended that Mr Cassaniti suggested the agreements be completed when Mr Cassaniti started to pay the money back because it would assist Mr Abdallah's tax position and, if Mr Cassaniti was investigated, it would not appear that he was engaged in money laundering (TD3 23.44, 26.20). In particular, Mr Abdallah's evidence was that: "I signed these loan agreements because Mr Cassaniti said it would help him and help me with tax reasons and also if he got investigated he wouldn't get in trouble for money laundering. That's why we'd leave them undated and he would fill them out if he needed to." Mr Abdallah's evidence on cross-examination was also that the Loan Agreements were not dated at the time they were signed, which was after Mr Abdallah first gave Mr Cassaniti $550,000 in cash (TD3 23, TD 3 25.11). 25Mr Abdallah acknowledged that there was no reference to tax reasons or money laundering in his affidavits but rejected the proposition that was because this evidence was being made up (TD3 23-24), and gave evidence that: "If I was allowed to say that in the beginning I would have said that. ... If I was allowed to express that in the beginning with these loan documents I would have." 26In my view, the inference of late invention which normally might arise in this situation is not so readily drawn given that Mr Abdallah would have had reason for reluctance to characterise the transaction as "money laundering" in his original affidavit, when he would not then have had the protection of a certificate given under s 128 of the Evidence Act 1995 (NSW) which was available to him under cross-examination. Nonetheless, the extent to which Mr Abdallah's defence and evidence has shifted over the course of the proceedings is a matter to which I have had regard in assessing the strength of that defence. The evidence as to the $550,000 transaction 27As noted above, Mr Abdallah contends that the monies paid by Cassaniti & Associates were in repayment of monies lent by Mr Abdallah or entities controlled by him. By his affidavit dated 16 April 2011, Mr Abdallah gave evidence of a request by Mr Cassaniti in mid-2002 that Mr Abdallah lend him $550,000 on the basis that Mr Cassaniti would pay $5,000 a week in interest until the full amount was paid back (Abdallah 16.4.11 [5]). Mr Abdallah's evidence was to the effect that: "At the time I had only $200,000 which I could forward to him [i.e. Mr Cassaniti] but I borrowed a further $350,000 and forwarded the full amount of $550,000 to Sam [Cassaniti]. I provided the money to Sam at his office in Liverpool. At that time, Gino Cassaniti, Sam's cousin was present. I provided the cash to Sam in a bag, who gave the bag to Gino who placed it in a safe that was in Sam's office." 28Mr Cassaniti denied Mr Abdallah's evidence that he asked Mr Abdallah for a loan of $550,000 and denied that he received $550,000 in cash from Mr Abdallah (Cassaniti 2.6.11 [3-4]). Mr Cassaniti's evidence was that he would not have been able to use amounts in cash without depositing it into a bank account (Cassaniti 28.9.2011 [8]). I have indicated reservations as to Mr Cassaniti's evidence generally above, and the proposition that he could not have used cash is not otherwise self-evident. 29Mr Abdallah subsequently gave evidence that the loan of $550,000 to Mr Cassaniti made on mid-2002 was partly sourced from a borrowing of $350,000 from his brother Mr Andre Abdallah. There is a somewhat cryptic reference in a notebook ("the blue book") maintained by Mr Abdallah which is consistent with a borrowing of $321,000 by Mr Abdallah from Mr Andre Abdallah. 30Mr Andre Abdallah gave oral evidence under subpoena, with the protection of a certificate under s 128 of the Evidence Act . His evidence was that Mr Abdallah approached him in about 2002 and advised him that if he had money it could be lent to someone, who was not named at that time, and he was later told that person was Mr Sam Cassaniti (the latter evidence was admitted as proof of the conversation but not proof of the fact). Mr Andre Abdallah gave evidence that he had at that time had access to about $350,000 in cash which had been obtained by the illegal sale of drugs and he had lent that money to Mr Abdallah. Mr Andre Abdallah also gave evidence that he could not properly read or write and there were no records of the transaction. 31Mr Andre Abdallah's evidence that he initially gave Mr Abdallah the amount of $200,000 then gave him extra amounts of $50,000 each time he got money was not entirely consistent with Mr Abdallah's evidence which appeared to refer to a single transaction of $350,000. Mr Andre Abdallah rejected the proposition put to him in cross-examination that he gave Mr Abdallah that money in 2003 rather than 2002 and indicated that he could date the transaction to 2002 because a "shipment" came in at that time and he then had the money available. Mr Andre Abdallah was imprecise in his recollection of when amounts were repaid, but gave evidence that Mr Abdallah would repay him money when he asked for it. RFS(2) sought to expand its cross-examination to the scope of Mr Andre Abdallah's activities over a wider period, Mr Andre Abdallah objected to answering such questions on the basis of the privilege against self-incrimination, and I declined to direct that he answer questions as to those activities over the wider period, on the basis that it was not in the interests of justice to require him to do so. 32RFS(2) criticises this evidence on the basis that it comes from an admitted drug dealer; that Mr Abdallah's affidavit dated 16 April 2011 refers to receiving loan monies from his brothers Messrs Brian Abdallah and Ayssor Abdallah which he loaned to Mr Cassaniti in 2003 but not to receiving money from Andre Abdallah; and that Mr Abdallah's blue book records the existence of these loans in late 2003 or early 2004. I have referred above to the changes in Mr Abdallah's evidence over time, to which I have had regard. I do not consider the timing of entries in the blue book to be inconsistent with Mr Andre Abdallah's evidence, since they seem to reflect the point at which Mr Abdallah began to keep a note of the transactions rather than the time at which the transactions occurred. I generally accept Mr Andre Abdallah's evidence and, in my view, it broadly supports Mr Abdallah's account of the $550,000 transaction. 33RFS(2) contends that several other matters should lead to the rejection of Mr Abdallah's evidence as to the $550,000 transaction. RFS(2) contends that Mr Abdallah's claim regarding the $550,000 payment should be rejected because it would be expected that Cassaniti & Associates would have provided some form of receipt to Mr Abdallah if there were any truth in Mr Abdallah's claim or Mr Abdallah would have taken security. I do not accept that submission, since there again is no basis to assume that if a cash transaction of this character took place at all, Cassaniti & Associates would issue a receipt for it and, as I note in paragraph 50 below, there is evidence that Mr Abdallah later took security, albeit in a somewhat informal way, by being provided with certificates of title which had in turn been provided by other borrowers to RFS(1) and Mr Cassaniti. 34RFS(2) also points out that there is no evidence from Mr Abdallah as to the source of the sum of $200,000 which he claims to have contributed to the loan to Mr Cassaniti, including no evidence that he withdrew or had that sum available to him in 2002. This matter weakens Mr Abdallah's case and I have had regard to it in my assessment of the evidence. RFS(2) also attacks Mr Abdallah's evidence as to the $550,000 loan on the basis that he did not mention that loan in the first four affidavits he swore in the proceedings, and that his earlier evidence as to the Loan Agreements being forgeries and signing them in blank damages his credit. I have observed above that there have been several changes in the course of Mr Abdallah's evidence and I have also had regard to this matter in assessing the evidence. 35RFS(2) also attacks Mr Abdallah's evidence as to the $550,000 loan on the basis that Mr Gino Cassaniti (who was called by Mr Abdallah) did not corroborate Mr Abdallah's evidence regarding the loan. Mr Gino Cassaniti gave affidavit evidence that he may have been present with Mr Abdallah and Mr Cassaniti when money was passed from Mr Abdallah to Mr Cassaniti but had no "present recollection" of it. Mr Gino Cassaniti's oral evidence in cross-examination was: Q. "Mr Cassaniti, do you recall in your lifetime ever seeing the sum of half a million dollars in cash or greater?" A. "You mean in front of me?" Q. "Yes." A. "No." Q. "It's not something you're likely to forget is it?" A. "No." In my view, the clarification sought and obtained by Mr Gino Cassaniti ("you mean in front of me?") had the consequence that Mr Gino Cassaniti's evidence is limited to a denial that a cash amount of $500,000 or more was placed in front of him. That evidence does not exclude, for example, his having handled a bag containing that amount and is therefore of little assistance. 36RFS(2) also contends that even if this amount had been lent by Mr Abdallah at an earlier point in time, it was repaid prior to the first of the payments by Cassaniti & Associates to Mr Abdallah and Highrise Developments and those amounts could not be in repayment of the $550,000 "loan". In support of this contention, RFS(2) refers to evidence of Mr Abdallah that it contends was to the effect that the $550,000 had been repaid by Cassaniti prior to 25 November 2002 (TD3 4.23, 23.5). However, Mr Abdallah's evidence at TD3 4.23 was not that Mr Cassaniti had paid the amount of $550,000 back by mid-2002, but merely that Mr Cassaniti had paid that amount back, and was indefinite as to when that occurred. The evidence at TD3 23.5 was not that that amount was paid back before mid-2002 but that it was paid back before 2003 and was given in answer to a question directing Mr Abdallah's attention to whether he had been "chasing Mr Cassaniti in late 2003". I do not understand that evidence to be inconsistent with Mr Abdallah's contention that the monies paid by Cassaniti & Associates were repayments of the $550,000 loan. The evidence as to the $900,000 transaction 37I now turn to a second transaction on which Mr Abdallah relies. Mr Abdallah gave evidence of a further request by Mr Cassaniti for a loan of $900,000 made on 13 August 2003 at lunch at the Black Stump Restaurant at Liverpool and that Mr Cassaniti requested that money in cash and Mr Abdallah indicated it would have to be by cheque (Abdallah 16.4.11 [6-8]). There was also no reference to this amount in Mr Abdallah's first affidavit, although that affidavit referred to three cheques given to Mr Cassaniti in 2003 that Mr Abdallah later claimed were part of that $900,000 loan. Mr Abdallah gave evidence that he obtained cheques for $200,000 and $50,000 made out to Cassaniti & Associates, a cheque for $150,000 made out to another person and a cheque for $100,000 made out to Ms Patricia Cassaniti; and that he obtained from his brother Mr Ayssor Abdallah a cheque for $200,000 made out to Blue Jeans Pty Ltd which his brother gave to Mr Cassaniti in the carpark next to Mr Cassaniti's office. 38Mr Ayssor Abdallah was called by Mr Abdallah but, with the Plaintiff's agreement, no questions were asked of him in chief and he was made available for cross-examination. He gave evidence under cross-examination that he made a loan to Mr Abdallah in about 2003 in the form of a cheque payable to Blue Jeans Pty Ltd, which he said was associated with a third party, Mr Jabor Lahood. RFS(2) submitted that the Court might well accept Mr Ayssor Abdallah's evidence but that was inconsistent with Mr Abdallah's claim that part of the $900,000 loan to Mr Cassaniti was the cheque made out to Blue Jeans Pty Ltd. I do not consider that inconsistency was established. It is common ground that the ultimate recipient of the cheque for $200,000 was a company associated with Mr Lahood. Mr Abdallah's evidence was that the loan was made to Mr Cassaniti and paid by direction to Blue Jeans Pty Ltd, and Mr Ayssor Abdallah's evidence was not inconsistent with Mr Abdallah's account. There is also evidence in a cheque book of Highrise Developments that payments, some described as "loan repayments", were made by Highrise Developments to Mr Ayssor Abdallah in October and November 2003. 39Mr Abdallah also gave evidence of giving Mr Cassaniti another $150,000 cash borrowed from his brother Mr Brian Abdallah in August 2003 and $50,000 of his own money (Abdallah 16.4.11 [11]). Mr Brian Abdallah's evidence was that he was approached by Mr Abdallah in 2003 in respect of a loan to Mr Cassaniti; agreed to lend Mr Abdallah money to be given to Mr Cassaniti and gave Mr Abdallah $150,000; and subsequently received money from Mr Abdallah by way of interest. When Mr Brian Abdallah was cross-examined as to when that loan was made, his evidence was that it was made in 2003 after he had returned from overseas in 2002 or early 2003, although he plainly did not have a precise recollection of this timing. In cross-examination, Mr Brian Abdallah qualified the reference to $150,000 in his proof of anticipated evidence by indicating that he initially provided the amount of $100,000 and subsequently the amount of $50,000 to Mr Abdallah. Mr Brian Abdallah's evidence was that that money was sourced from his savings which he had kept in cash rather than in a bank account; and he also gave evidence, under a certificate under s 128 of the Evidence Act , that he had saved that money from his earnings over several years, derived from work such as debt collecting, and kept it in a place which he named in evidence. 40Mr Brian Abdallah's reference to two loans to Mr Abdallah in amounts of $100,000 and $50,000 was inconsistent with Mr Abdallah's evidence of a single loan of $150,000. In my view, that inconsistency supported rather than impeached his credit and that of Mr Abdallah. If the evidence as to the loan of the amount of $150,000 by Mr Brian Abdallah to Mr Abdallah had been invented, one would have expected Mr Brian Abdallah to hold to the version that he had recently adopted in his proof of evidence and to ensure that his evidence was consistent with Mr Abdallah's evidence. Instead, he volunteered the somewhat different account without prompting under cross-examination. 41I considered Mr Brian Abdallah's evidence was credible. I should note, for completeness, that there was reference in cross-examination to proceedings brought against Mr Brian Abdallah in respect of monies repaid to him which are contended to be a loan to Mr Brian Abdallah and I have had regard to the matter in forming that view. 42RFS(2) submitted that the Court should accept Mr Brian Abdallah's evidence but emphasised that a loan in early 2003 did not accord with Mr Abdallah's evidence of a loan in August 2003 being part of the $900,000 which Mr Abdallah claimed to have lent to Mr Cassaniti in August 2003. Mr Brian Abdallah's evidence that the loan of $100,000 was made in early 2003 (although, as I have noted above, he was not precise as to the timing) leaves an unexplained time gap to the loan which Mr Abdallah claims to have made to Mr Cassaniti in August 2003. Nonetheless, Mr Brian Abdallah's evidence that Mr Abdallah had borrowed a total amount of $150,000 from him and that had occurred for the purpose of lending it to Mr Cassaniti supports the inference that loan was in fact made as Mr Abdallah contends. 43Mr Cassaniti denied Mr Abdallah's account of this transaction although he acknowledged in his affidavit evidence that he "may have" received specified payments from Mr Abdallah and claimed that he had repaid the monies to Mr Abdallah shortly after receipt (Cassaniti 2.6.11 [5-8]), although he also denied in cross-examination that such loans had occurred (TD2 24.29). Mr Cassaniti also denied that he received a cheque made payable to Blue Jeans Pty Ltd (Cassaniti 28.9.2011 [7]). Mr Cassaniti's evidence in cross-examination was that those monies which were paid by Mr Abdallah represented a partial repayment of the claimed indebtedness of Mr Abdallah for advances made prior to that time (TD2 22). 44RFS(2) contends that there is no documentary evidence to support the $200,000 cheque to Blue Jeans Pty Ltd, the $150,000 cash from Mr Brian Abdallah and the $50,000 cash from Mr Abdallah and that no banking records were produced that established either the cheque or those cash transactions. I have had regard to the absence of such records, although that is of less significance in respect of Mr Brian Abdallah since I accept his evidence that he had held the funds in cash. RFS(2) points out that Mr Abdallah did not include reference to the fact that his brothers could corroborate this evidence in the original draft of his affidavit of 16 April 2011, although that was included in that affidavit by a handwritten addition made by Mr Abdallah; however, Mr Abdallah's solicitor gave evidence that he had been informed, several months before, that Mr Ayssor Abdallah was present when monies were handed to Mr Cassaniti (TD4 15.47). RFS(2) points out that entries were not made in the blue book as to what "Sam [Cassaniti] owes" until January 2004, after the "guarantee" (to which I refer below) was given; that it was inconceivable that the other components of a larger $900,000 loan would not have been mentioned in Mr Abdallah's first affidavit when he was referring to the cheques which are said to be part of the loan; and that Mr Abdallah's belief that Mr Cassaniti "owed" him this amount reflected not a loan but the fact that Mr Cassaniti had some involvement in Mr Abdallah making loans to third parties. I address the question of the blue book and the guarantee below and I have addressed the changes in Mr Abdallah's evidence over time above. 45RFS(2) also points to Mr Abdallah's claim that Mr Lahood was present when the additional $900,000 loan was agreed to and notes that Mr Abdallah did not call Mr Lahood to support his claim. However, there is no basis for a finding that Mr Lahood should be treated as a witness in Mr Abdallah's camp so as to support a Jones v Dunkel ((1959) 101 CLR 298) inference, and RFS(2) also did not call Mr Lahood to give evidence. The blue book and Mr Cassaniti's guarantee 46Mr Abdallah's account of the $900,000 transaction finds some support from a reference to $900,000 as the amount owing by Mr Cassaniti as at 7 October 2003 in the blue book maintained by Mr Abdallah (Ex D1) which contains records of monies said to be owed by Mr Cassaniti (TD2 48) and of payments which Mr Abdallah characterised as repayment of monies owed by Mr Cassaniti to Mr Abdallah (TD2 52). Mr Abdallah rejected the proposition put to him in cross-examination that these monies reflected only amounts which he had lent to Mr Lahood at Mr Cassaniti's suggestion which he considered Mr Cassaniti was responsible for and maintained that they included loans made to Mr Cassaniti (TD3 12) and, on balance, I accept this evidence. The record in the blue book of the amount of $900,000 owing by Mr Cassaniti has a further significance, since the form of the blue book indicates it was prepared for Mr Abdallah's private use and there would have been no reason for Mr Abdallah to misrepresent the position in it. The reference to $900,000 in the blue book indicates at least Mr Abdallah's understanding that the earlier amounts paid by Cassaniti & Associates were not "loans" since otherwise the $900,000 transaction could not have given rise to a liability of that amount (but only a lesser amount) owing by Mr Cassaniti to Mr Abdallah. 47Mr Abdallah's blue book also records that Mr Cassaniti owed Mr Abdallah the amount of $2,730,000 at 9 November 2003 (TD3 79), which appears to include an amount referable to a loan made by Mr Abdallah to Mr Lahood. On 15 December 2003 a document was executed by Mr Cassaniti which provided that: "I Sam Peter Cassaniti hereby acknowledge that I guarantee the debt of Mr Jabour Lahood to Michael Abdallah. I acknowledge that the debt is currently $2,600,000 and I agree to mortgage three properties that are controlled by me. I acknowledge that I am responsible for the debt and I will be indemnified from Mr J Lahood. I allow the registration of a caveat on certain properties." Mr Abdallah's evidence was that the amount of $2.6 million referred to in the guarantee was a combination of Mr Cassaniti's debt and Mr Lahood's debt at that time, with Mr Lahood's debt comprising $1.2 to $1.3 million of that amount, and the balance was made up of the $900,000 provided to Mr Cassaniti in August and interest, being an extra $200,000 in eight weeks which was not paid and $25,000 per week after that (TD3 34.35). There is a reference on the fourth last page of the blue book to an amount of $1,500,000 in respect of Mr Lahood and an amount of $900,000 in respect of Mr Cassaniti. Mr Abdallah's evidence was that the guarantee was obtained in circumstances that he was pressing for comfort where he had returned a certificate of title which he had previously held as security for the monies he had advanced to Mr Cassaniti to assist Mr Cassaniti in raising funds for his defence of criminal proceedings brought against him. Mr Gino Cassaniti's evidence was also that the guarantee was obtained where Mr Abdallah was asking for "some comfort" (TD3 41.41). 48Mr Abdallah's blue book also records that Mr Cassaniti owed Mr Abdallah the amount of $2,573,600 on 23 January 2004 (TD2 51.14). Mr Abdallah accepted that he reached that figure by taking the amount that appears in the guarantee as at 15 December 2003, subtracting an amount received from Cassaniti & Associates of $30,000 on 5 January 2004 and adding interest (TD2 61). Mr Abdallah's evidence was that the basis of this amount was not only money lent to Mr Lahood but also money lent to Mr Cassaniti (TD2 61.35). 49Mr Abdallah also gave evidence that Mr Cassaniti gave him four original certificates of title of clients of Cassaniti & Associates or RFS(1) as security for loans made by Mr Abdallah to Mr Cassaniti, one of which was returned to Mr Cassaniti and three of which were later seized by the New South Wales Crime Commission. Mr Cassaniti denied under cross-examination that he gave those certificates of title to Mr Abdallah although he had not sought to contradict Mr Abdallah's evidence to that effect in his affidavit evidence (TD2 14). Mr Abdallah's evidence that three certificates of title had been seized by the New South Wales Crime Commission was corroborated by evidence of an employee of his solicitors which established that those certificates of title were made available for collection from the New South Wales Crime Commission on the solicitor's request. Those certificates of title related to property of third parties which had been mortgaged to RFS(1) (in the case of two properties) and to Mr Cassaniti (in respect of the third). These matters support the comments which I have made as to Mr Cassaniti's evidence in paragraph 15 above and provide some support for Mr Abdallah's credit. The "repayment" notation 50A cheque butt (number 2134) dated 23 September 2003 recording a payment by Cassaniti & Associates to Mr Abdallah, which was written by Mr Cassaniti (TD2 24.32), contains the handwritten word "repayment" on the cheque butt. Mr Cassaniti's evidence was that he assumed the word "repayment" was written with reference to a cancelled cheque (TD2 25.05), and that cheque was in fact reversed several days later. However, that explanation is not consistent with the normal usage of the term "repayment" and I do not accept it. Alternatively, RFS(2) contends that, at the highest, the cheque butt recording the term "repayment" establishes that there had been at least one loan from Highrise Developments to Mr Cassaniti personally. That position is inconsistent with Mr Cassaniti's denial in cross-examination that either Mr Abdallah or Highrise Developments ever advanced any money to him (TD2 24.49) and his claim that there was never any cause for him to repay any money to Mr Abdallah (TD2 25.3) which was in turn inconsistent with his affidavit evidence to which I referred in paragraph 43 above. In my view, that cheque butt has wider significance, in supporting an inference that interests associated with Mr Cassaniti were indebted to interests associated with Mr Abdallah which is consistent with Mr Abdallah's case. Mr Gino Cassaniti's evidence 51Mr Abdallah relies on a letter dated 19 December 2007 from RFS(1) signed by Mr Gino Cassaniti stating that Mr Abdallah was not indebted to that company or any associated trust. In my view, that statement has little weight since it was not established that Mr Gino Cassaniti had the necessary information to properly make any admission as to that matter: The Nominal Defendant v Gabriel [2007] NSWCA 52; (2007) 71 NSWLR 150 at [113]. 52Mr Abdallah also relies on Mr Gino Cassaniti's affidavit dated 9 November 2009. There is evidence that Mr Cassaniti and Mr Gino Cassaniti are in dispute in other matters, and I have had regard to this in assessing the weight to be given to Mr Gino Cassaniti's evidence. Mr Gino Cassaniti gave evidence that he had been unable to find any company records which indicated that RFS(1) had in fact advanced the amount of $60,000 referred to in the Loan Agreement dated 25 November 2002 to Mr Abdallah. I do not consider this evidence should be given significant weight absent any adequate searches by Mr Gino Cassaniti to identify such records. 53Mr Gino Cassaniti also gave evidence of a conversation with Mr Cassaniti, when Mr Cassaniti was in Silverwater Prison in April 2008, to the following effect: Gino Cassaniti: "Mick (Michael) [Abdallah] wants his money. He is coming to see me. What can I do?" Sam Cassaniti: "Tell him to chase Jabour [Lahood]. I am not going to give him anything any more, tell him to get it off Jabour. I've got him to sign a million things with me, and if he wants to get smart, I will take his house off him." That conversation is denied by Mr Cassaniti. Neither account of this conversation is corroborated by contemporaneous records. However, on balance, I prefer Mr Gino Cassaniti's evidence to Mr Cassaniti's evidence (which has the difficulties to which I have referred above). This conversation tends to undercut RFS(2)'s reliance on the Loan Agreements and Mr Cassaniti's evidence of subsequent conversations by which additional payments were acknowledged to be subject to the terms of those agreements. Conclusions as to the Loan Agreements 54I have concluded that, having regard to the evidence which I have reviewed above, RFS(2) has not established on the balance of probabilities that the three Loan Agreements were operative in accordance with their terms, and RFS(2)'s case as to the first three payments must fail. 55In Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 454, Lockhart J observed that: "A 'sham' is ... for the purposes of Australian law, something that is intended to be mistaken for something else or that is not really what it purports to be. It is a spurious imitation, a counterfeit, a disguise or a false front." A transaction will be a sham if the parties to it share a common intention that it will not create the legal rights and obligations that it appears to create: Snook v London & West Riding Investments Ltd [1967] 2 QB 786 at 802; Dalton v Ellis; Estate of Bristow [2005] NSWSC 1252; (2005) 65 NSWLR 134 at 139. In Equuscorp Pty Ltd v Glengallen Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 at [46], the High Court referred to Sharrment and held that whether a sham is established depends on whether the parties intended their respective rights and obligations to derive from what appears to be a legal instrument, although the Court there held that a loan agreement was not shown to be a "sham" merely because the relevant transactions were not commercially sensible. In Raftland Pty Ltd v Federal Commissioner of Taxation [2008] HCA 21; (2008) 238 CLR 516 at [35]-[36], Gleeson CJ, Gummow and Crennan JJ observed that the term "sham" is correctly used at least where there is an objective of deliberate deception of third parties, but left open a less pejorative usage which still denied the legal effect of the relevant arrangement based on an examination of the whole of the relevant circumstances. 56I have had regard to the fact that the finding that an apparently regular agreement signed by the parties is a sham, or at least is not intended to have legal effect should be reached with caution, since that is not a common occurrence. However, I consider that it is also unlikely, on all the evidence before me, that a party engaged in the business of money lending would make unsecured loans, with its own monies, in the order of $2.8 million in numerous payments over a 13 month period to a borrower who claimed to be, but the lender believed was not, a property developer; where the lender did not know how that borrower earned an income; and where the lender did not take any step to follow up repayment of either principal or interest during that period. 57I should, for completeness, address several other matters raised by RFS(2) in response to the allegation that the Loan Agreements were a sham. RFS(2) contends that Mr Abdallah's defence that the Loan Agreements were a "sham transaction" should be dismissed because it was a late or recent invention which occurred only after Mr Abdallah was confronted with difficulties with an earlier non est factum defence. In some circumstances, that criticism might have had considerable force. However, as I have noted above, the lateness of evidence as to avoidance of income tax or money laundering is readily explicable and is not necessarily indicative of its falsity. 58RFS(2) contends that it was not put to Mr Cassaniti that the Loan Agreements were sham transactions. In my view, Mr Abdallah's Defence squarely placed that matter in issue and put RFS(2) and Mr Cassaniti on notice of the need to address it by pleading that the Loan Agreements were not intended to have legal effect and were entered into only after Mr Cassaniti said that there were tax advantages doing so (para 7(d)). Mr Cassaniti was cross-examined at some length as to the tax advantages where monies were characterised as a loan (TD2 32-34). 59RFS(2) also contends that the Loan Agreements themselves were inconsistent with sham transactions, because of the differences between the three Loan Agreements. RFS(2) contends that, had the Loan Agreements had the character of shams, it would have been expected that they would be in the same terms, executed at the same time and signed by the same representative of RFS(1), whereas the interest rates and terms of the first two loans were in different terms from one another; the interest rate and term clause was left blank in the third agreement; two of the agreements were signed by Mr Cassaniti on behalf of RFS(1) and the other by Mr Gino Cassaniti and the portion of the loan agreements completed by Mr Abdallah personally differed between each document. I do not accept this submission. In my view, the differences between those documents and the gaps in the third of them are equally consistent with a lack of attention to their detail reflecting the fact that they were not intended to have legal effect. The terms of the third Loan Agreement 60I should address an issue that arises only in respect of the third Loan Agreement, although it is ultimately not critical to my decision having regard to the findings I have reached above. 61RFS(2) contends that the interest and term in that third Loan Agreement were intended to be unchanged from that agreed on 28 November 2002, as set out in the second Loan Agreement and that the blanks left in the agreement of 2 December 2002 meant that the terms of the loan and the interest payable were unchanged rather than that there was no interest or that the loan was at call. RFS(2) relies on the decision in Toohey v Gunther (1928) 41 CLR 181 at 196 for that proposition. That decision is authority that, where parties execute several documents relating to different parts of the same transaction contemporaneously, those documents must be read together and effect given to the intention of the parties arising from all of the documents; see also Pang v Bydand Holdings Pty Ltd [2010] NSWCA 175. Here, the three loan documents are not inter-dependent; there are significant variations between the term and interest specified in the first and second Loan Agreements; there is no obvious reason to assume that the parties intended to adopt the terms of the second Loan Agreement rather than the first or different terms; there is no evidence of any discussion between the parties as to what would be the term of the third Loan Agreement or interest payable under it; and, since RFS(1) did not require payment of, and Mr Abdallah did not pay, interest under the third Loan Agreement, their subsequent conduct provides no evidence of any agreement as to the interest rate payable. 62In my view, even if the third Loan Agreement had otherwise been intended to operate in accordance with its terms, there is an issue as to whether it would fail for incompleteness or uncertainty. That question must be approached on the basis that a principal objective of the law of contract is that the reasonable expectations of honest persons should be protected, and a narrow and pedantic approach is not taken in interpreting a contract between commercial parties: First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] 2 Ll Rep 194 at 196; DSE (Holdings) Pty Ltd v InterTAN Inc [2004] FCA 1159 at [278]-[279] per Allsop J. However, a contract will not be binding where essential or critical terms of the contract had not been agreed: Thorby v Goldberg (1964) 112 CLR 597 per Menzies J at 607; Australian and New Zealand Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 695; Custom Credit Corp Ltd v Gray [1992] 1 VR 540; Carter on Contract , [04-120]. In my view, the third Loan Agreement would fail for incompleteness or uncertainty because, for the reasons I have noted above, content cannot be given to the critical terms as to the term of the loan and the interest rate payable, which are an essential part of the bargain. I will address RFS(2)'s restitutionary claim, which would be relevant in this situation, below. Whether subsequent payments to Mr Abdallah and Highrise Developments were agreed to be loans by reason of an oral agreement 63As I noted above, substantial further amounts were paid by Cassaniti & Associates to Mr Abdallah and Highrise Developments between 28 March 2003 and 2 January 2004 which were not the subject of Loan Agreements. 64The first basis on which RFS(2) contends that further payments were recoverable as loans is that Mr Abdallah agreed to repay those amounts together with interest, on the terms the Loan Agreements, in conversations between Mr Cassaniti and Mr Abdallah when further advances were made to Mr Abdallah. 65Mr Cassaniti's evidence of conversations with Mr Abdallah relating to the subsequent payments to him and Highrise Developments was as follows: "I do not recall the occasion that each cheque or transfer was arranged. Michael Abdallah would telephone me. He would say words to the effect, "Sam, I need more money." I would say, "OK, how much do you need." He would then tell me the amount. I would say "This money is repayable on the terms in our Loan Agreement." He would say, "Fine, when can I get the money." I would tell him the time and say, "How do you want it?" He would tell me. On occasion he would say, "Cheque" and on others, "By cheque payable to Highrise Developments". I took this to mean Highrise Developments Pty Ltd. I would then give instructions to someone in the office of Cassaniti & Associates to draw a cheque. Mr Abdallah denied Mr Cassaniti's evidence that, when further monies were paid to him, Mr Cassaniti said they would be on the same terms as the earlier Loan Agreements (TD3 32.43). 66The first difficulty with Mr Cassaniti's account of the conversations is that it commences with an acknowledgment as to his lack of recollection, suggesting an element of reconstruction in what follows. A second difficulty is that the reference to "on the terms in our Loan Agreement" in this conversation is uncertain, where there were three Loan Agreements in different terms. In any event, I am unable to accept Mr Cassaniti's evidence of oral conversations bringing the subsequent payments under the Loan Agreements, having regard to the view I have formed as to his evidence generally as set out in paragraphs 15-16 above. Whether subsequent payments to Mr Abdallah and Highrise Developments fell under the "all monies" provisions of the Loan Agreements 67The subsequent payments to Mr Abdallah and Highrise Developments would also be recoverable, even if they are not shown to have come under the terms of the Loan Agreements by reason of conversations between Mr Cassaniti and Mr Abdallah, if it was established that the relevant amounts were monies otherwise owing by Mr Abdallah or entities of which he was a shareholder or director to RFS(1), so as to fall within the definition of "all monies owing" in clause 2 of the Loan Agreements, and if the Loan Agreements were otherwise operative in accordance with their terms. 68I do not consider the loan files lead to a characterisation of the subsequent payments as monies owing to RFS(1), for the reasons I have set out above. In my view, the character of RFS(1)'s dealings with Mr Abdallah, as they emerged from the evidence to which I have referred above, were so substantially inconsistent with loan transactions as to require a finding that, on the balance of probabilities, the subsequent payments by Cassaniti & Associates to Mr Abdallah or High Rise Developments were not monies "otherwise owing" by Mr Abdallah or entities of which he was a shareholder or director to RFS(1). In any event, I have held above that, on the balance of probabilities, the Loan Agreements were not intended to have operative legal effect and this deprives the "all monies" provisions in those agreements of such effect. 69RFS(2) contends that evidence of amounts lent by Mr Abdallah to Mr Cassaniti personally does not affect RFS(2)'s contractual claim for the recovery of its "loans" to Mr Abdallah. I do not accept that submission. In my view, once it is established that Mr Abdallah had advanced substantial funds to Mr Cassaniti or any other person associated with RFS(1), then it is more difficult to accept RFS(2)'s claim that the Loan Agreements are operative in accordance with their terms; Mr Cassaniti's evidence of conversations in which Mr Abdallah acknowledged that the payments to Mr Abdallah were subject to those Loan Agreements is less plausible; and it is less likely that the monies paid to Mr Abdallah in fact had the character of a "loan" or an "advance" so as to be repayable by Mr Abdallah. Whether monies were paid by Cassaniti & Associates on behalf of RFS(1) as trustee of the Trust 70Given the findings which I have made above, the questions whether payments were made by Cassaniti & Associates to Mr Abdallah or Highrise Developments as agent for or on behalf of RFS(1), and whether RFS(1) was then acting as trustee of the Trust, are not decisive of the outcome of the proceedings. However, I should address those questions in case an appellate Court takes a different view of the effect of the transactions than the view which I have reached above. 71It is necessary for RFS(2) establish that Cassaniti & Associates made the payments which are contended to be loans as agent for and on behalf of RFS(1) in its capacity as trustee of the Trust, since otherwise RFS(2) would not have standing, as the current trustee of the Trust, to recover monies due to RFS(1). Mr Abdallah does not admit that RFS(1) was the trustee of the Trust or acted as such in the relevant transactions. RFS(2) refers to evidence that most of the advances made by Cassaniti & Associates at this time were made on behalf of RFS(1) (Cassaniti 16.3.2010 [9], 16.3.2010 [2 nd ] [14] and [22], Letter of 13.12.2007 at "A" to Gino Cassaniti 9.11.09, TD1 36.33 (David Cassaniti), TD1 54.45-55.5, 55.39 and TD2 41.25 (Cassaniti)). In particular, Mr Cassaniti gave evidence in his affidavit dated 16 March 2010 of attending seminars in November and December 2003 by which he became aware of advantages in using a trust on his business activities, and that he thereafter decided to establish trusts for most trading entities. He gave evidence that after that seminar, he decided that loans could be made through RFS(1) acting as the trustee of a trust. Mr Cassaniti's evidence was that: "I used the trust to make loans. All loans were made through and using the trust. The money to make the loans was obtained from family members and through the accounting practice. I did keep a detailed record of who gave what amount of money, however, I do not have access to them now". 72The trust deed of the Trust was also in evidence before me and there is evidence of minutes of meetings of the directors of RFS(1) as trustee for the Trust which note that the Trust trades as an investment vehicle lending monies to various borrowers and resolves that the income of the Trust be paid to, applied for the benefit of or set aside for the beneficiaries of the Trust entitled to income under the Trust Deed. On the other hand, as I noted in paragraph 19 above, RFS(2) did not tender other documents which would be expected to exist, if the payments had been made as agent for or on behalf of RFS(1) as trustee of the Trust, particularly the tax returns of the Trust and other documentation recording the tax treatment of the "loans" and the interest derived (but not paid) on them. That evidence is therefore not available to support a finding that the payments had been made as agent for or on behalf of RFS(1) as trustee of the Trust, although I have (as I noted above) drawn no wider inference that such evidence would not have assisted RFS(2). 73In my view, this evidence was sufficient to establish that RFS(1) in its capacity as trustee of the Trust carried on a money-lending business and that it made some loans in the course of that business. However, I do not consider it to be sufficient to establish that the particular payments made by Cassaniti & Associates which are in issue in this case were made as agent for or on behalf of RFS(1) in its capacity as trustee of the Trust. In my view, the inference that those payments were made by Cassaniti & Associates in its own right in repayment of loans made by Mr Abdallah to Mr Cassaniti or his associated entities is at least equally probable. Accordingly, even if I had found that a debt was due by Mr Abdallah, I would not have held that RFS(2) was entitled to recover that debt by reason of its later appointment as trustee of the Trust and s 9 of the Trustee Act 1925 (NSW). Limitation defence 74Mr Abdallah also pleads a limitation defence and contends that any advance made before 4 November 2003, six years prior to the date of commencement of the proceedings, is not recoverable. 75RFS(2) contends that the initial "loan" of $60,000 was to be repaid with interest on 25 November 2006 and, the proceedings having commenced on 4 November 2009, that limitation period had not expired. RFS(2) contends that, in respect of the second "loan", time ran from the due date for repayment being 28 November 2003 and in the case of "loans" made after that date, time ran from one year from the date of the advance, so the limitation period had also not expired when the proceedings commenced. If, contrary to my view, RFS(2) had established that loans were made to Mr Abdallah or Highrise Developments, I would have accepted these submissions. 76Mr Abdallah contends that advances made payable prior to 23 June 2003 were repayable on that day because Mr Abdallah became entitled to a tax refund on that day. In my view, any agreement as to the application of a tax refund extended no further than the application of that refund to repayment of the loan, not a requirement that all of the "loans" be repaid. I would not have accepted that submission, had I otherwise held that the Loan Agreements operated in accordance with their terms and the subsequent payments were in the nature of "loans". 77RFS(2) also contends that the Loan Agreements evidenced mortgages within the meaning of s 11 of the Limitation Act 1969 (NSW), the action is an action to recover both the principal lent and possession. The limitation period for such actions is 12 years from the date the action accrued under s 42 of the Limitation Act . It is not necessary for me to determine that matter given the findings which I have otherwise reached as to this issue. Claim for unjust enrichment 78Alternatively, RFS(2) contends that each advance pleaded by it was made at Mr Abdallah's request and, should repayment of the advances not be subject to a binding agreement that the money be repaid, then Mr Abdallah has gained a benefit at RFS(2)'s expense that it did not intend Mr Abdallah to have and it would be unjust for Mr Abdallah not to make restitution of the money advanced. 79There are several cases in which restitution has been permitted where monies were paid over under ineffective loan agreements: for example, Hurst v Vestcorp Ltd (1988) 12 NSWLR 391; Australian Breeders Co-Operative Society Ltd v Jones (1997) 150 ALR 488. However, this claim depends on the premise that the relevant payments were in the nature of advances and cannot succeed where I have found that RFS(2) has not established, on the balance of probabilities, that those payments were in the nature of advances as to which it had any expectation of repayment. It also follows from the findings which I have made above that there is no element of unconscionability in Mr Abdallah or Highrise Developments retaining the monies paid to them in repayment of monies advanced by them. Orders 80The findings that I have made above mean that the Statement of Claim should be dismissed. RFS(2) has been unsuccessful in the proceedings and there is no reason why costs should not follow the event. Orders 81Accordingly, subject to hearing from Counsel, I will order that: