Slaveski v Nanevski Developments Pty Ltd

Court of Appeal (NSW)|2023-06-05|Before: Meagher JA, Kirk JA

Biljana Slaveski (Second Appellant) James Slaveski (Third Appellant) Mega-Top Cargo Pty Ltd (Fourth Appellant)

Nanevski Developments Pty Ltd (Respondent) Representation: Counsel:

Everingham Solomons (Respondent) File Number(s): 2022/268686 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Citation: Nanevski Developments Pty Ltd v Slaveski; Mega-Top Cargo Pty Ltd v Nanevski Developments Pty Ltd [2022] NSWSC 1066 Date of Decision: 09 August 2022 Before: Kunc J File Number(s): 2019/153341; 2019/95876

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] The appellants had business dealings with the respondent for the development of two residential properties in Sans Souci, Sydney. The primary judge found that a partnership was formed in February 2015 between the parties for the purchase and development of these two properties and ordered that the partnership be wound up and an account be taken by the receiver in respect of the partnership (matters which were not disputed on appeal). The appellants' appeal challenged certain factual findings made with respect to monies said to have been paid in the course of the dealings between the parties, raising four issues: 1. whether advances from the appellants' side to the respondent totalling $590,000 were contributions made to the partnership which were then loaned to the respondent, or a direct loan outside of the partnership; 2. whether the respondent made a $302,500 cash payment to the appellants in $50 notes; 3. whether a $200,000 cash payment was made by the respondent to the appellants; 4. whether the respondent was entitled to charge for consultancy services rendered to the partnership. Considerably more attention was directed to these issues by the parties in the appeal than had occurred in the hearing below. The Court (Kirk JA, Meagher JA and Griffiths AJA agreeing) allowing the appeal on issues 1, 2 and 4 but dismissing the appeal on issue 3, held as follows: As to issue 1, the $590,000 loan

On either side's characterisation there was a loan to the respondent for a project not undertaken by the partnership - the appellants saying it was a direct loan to the respondent, whilst the primary judge accepted the respondent's characterisation of it as a contribution by the appellants' side to the partnership (to be matched by offsetting building work by the respondent) with the partnership then loaning it to the respondent. No benefit to either side from the additional complexity suggested by the respondent is apparent. It seems unlikely that the unnecessarily complicated arrangement would have been intended, and the parties were not using language of legal sophistication. Occam's Razor should be applied: at [24]-[26]. The factual matters relied upon by the judge did not lead to a contrary conclusion: at [27]-[34]. As to issue 2, the claimed cash payment of $302,500
The proof of undocumented payments of large sums of cash is fraught. There is an "inherent unlikelihood" in the present day of the payment of very large sums in physical cash for a commercial transaction: at [37]-[38]. With the benefit of the more extensive submissions to this Court there was a compelling case against the primary judge's conclusion, even allowing for his Honour's favourable view of the credibility and reliability of the respondent's main witness: [73]. Sergei Sergienko v AXL Financial Pty Limited [2021] NSWSC 297; Briginshaw v Briginshaw (1938) 60 CLR 336, considered. As to issue 3, the cash payment of $200,000
The appellants disputed that $200,000 had been paid by the respondent in cash in the first half of 2015 with respect to one of the properties, but accepted that the respondent had paid $200,000 in that time towards the other. There was just one partnership relating to development of the two properties. Whether or not the payments were made in cash or by cheques, and in the context of contributing to one property or the other, has not been shown to make any difference to the accounting process that will be undertaken. The appellants have not established error in the finding of the primary judge: at [81] As to issue 4, the claim for consultancy fees
The declaration that the respondent was entitled to charge $120 plus GST per hour on consultancy work should not have been made as it went beyond what had been pleaded and the claimed contractual entitlement was not an issue fairly raised in the proceedings: at [84]-[86].

JUDGMENT

MEAGHER JA: I agree with the orders proposed by Kirk JA and his Honour's reasons for the making of those orders.
KIRK JA: This appeal concerns business dealings between two neighbouring families, the Slaveskis and Nanevskis, associated with the development of two residential properties in Sans Souci in Sydney. The properties, identified by the parties as "Riverside" and "Vista Street", were purchased in the first half of 2015 and registered in the names of members of the Slaveski family.
The appellants are Ken Slaveski, his wife Biljana Slaveski, their son James Slaveski, and a company, Mega-Top Cargo Pty Ltd, of which Ken Slaveski and Biljana Slaveski are the directors. Ken Slaveski played the most prominent role in the relevant dealings on the appellants' side.
The Nanevskis run a building and development company, being the respondent (Nanevski Developments Pty Ltd). The directors of that company are Ivan Nanevski and Makedonka Nanevski. Their son Tom Nanevski is employed by the company as "Project Manager", and it was through him that the business of Nanevski Developments primarily was conducted. Consistently with the approach taken by the parties and the Court below I will refer to the main natural persons in this appeal by their first names.
The central dispute at first instance related to whether, as the respondent claimed, the two properties were purchased as part of partnership dealings between it and the Slaveskis. The primary judge, Kunc J, found that there was indeed a partnership entered into between Nanevski Developments and Ken concerning the purchase and development of Vista Street and Riverside: Nanevski Developments Pty Ltd v Slaveski; Mega-Top Cargo Pty Ltd v Nanevski Developments Pty Ltd [2022] NSWSC 1066. His Honour found that the two properties were held on trust for the partnership, and that each partner was liable for one half of the liabilities and entitled to one half of the assets and income of the partnership. He ordered that the partnership be wound up by a court-appointed receiver, who was empowered to sell the properties. A further order was that "an account be taken by the receiver in respect of the Partnership … with such account to, where relevant, be consistent with the factual findings made by the Court". His Honour contemplated that in the taking of an account the partners would be able to claim credit for their respective economic contributions. These findings and orders are not challenged on appeal. The receiver is yet to take the account.
The issues on appeal involve challenges to findings of fact made below in relation to a number of claims made with respect to monies said to have been paid in the course of the dealings between the parties.
The two main witnesses below were Ken for the appellants and Tom for the respondent. As regards Ken, the primary judge gave reasons for concluding that he "was not a witness whose uncorroborated evidence can be relied upon", and that "[h]is evidence has only been given weight where it was inherently probable, against interest or corroborated by independent evidence … or reliable contemporaneous documents" (at [160]). Those conclusions have not been challenged. As regards Tom, his Honour said the following at [150], which was the subject of some attack by the appellants: Even allowing for some degree of exaggeration in his evidence, the Court accepts Tom as a generally reliable witness on the essential matters in dispute. That is not to suggest that the Court adopts a position of uncritical acceptance of all of Tom's evidence. Having regard to the considerations identified by McClelland J in Watson v Foxman … the Court adopts the prudential approach of accepting Tom's evidence insofar as it is inherently credible or is supported by contemporaneous documentary evidence. As it happens, no essential conclusion in these proceedings solely depends upon Tom's evidence alone or upon something on which he was challenged in cross-examination.
The four findings challenged on appeal are as follows (noting that Grounds 6 and 9 of the notice of appeal were not pressed): 1. Advances totalling $590,000 were contributions made by Ken to the partnership - the appellants contend that in fact these payments constituted loans made by Mega-Top to Nanevski Developments outside of the partnership (raised by Grounds 1 and 2); 2. Tom paid $302,500 on behalf of Nanevski Developments, in cash comprised of $50 notes, to Ken to use to finance a deposit for Vista Street - the appellants say no such payment was made (Grounds 3 and 4); 3. Tom paid a total of $200,000 on behalf of Nanevski Developments in cash to Ken to use for the purchase of Riverside - the appellants contend that this payment was not made (Ground 5); and 4. Nanevski Developments was entitled to charge $120 plus GST per hour for consultancy services rendered to the partnership - the appellants dispute this entitlement (Grounds 7 and 8).
The first issue crystallised below in an order dismissing the appellants' cross-claim. The fourth issue was the subject of a declaration. The findings on the second and third issues are not reflected in orders of the Court. Appeals are from orders, not reasons. However, as noted, an account is to be taken which is required to be consistent with the factual findings made by the Court below. There is thus a live dispute between the parties on these points which is capable of being resolved by further declarations, if needs be, and which will potentially modify the practical operation of the order relating to the taking of an account. It is in the interests of the administration of justice that these disputes be finally resolved now.
I will address the four identified issues in turn. For the reasons below, the appellants succeed on the first, second and fourth issues. Although I disagree with the conclusions of the primary judge on those matters, it is clear that they received considerably less attention before his Honour than they did in this Court. Indeed, the appellants' submissions below on the first issue amounted to three sentences asserting a conclusion without any supportive reasoning.

Grounds 1 and 2: the $590,000 loan

There was and is no dispute that Mega-Top advanced $590,000 to Nanevski Developments in the following tranches: $500,000 on or about 25 May 2015, $50,000 on or about 22 December 2017 and $40,000 on or about 9 February 2018. In the proceedings below Mega-Top filed a cross-claim seeking an order for repayment of these amounts plus interest at 4.5% per annum. However, the primary judge accepted the submission of Nanevski Developments that "these amounts were advanced by Ken (albeit sourced from Mega-Top) to Nanevski Developments in the course of the Partnership" (J [228]), and that Ken's remedy was not judgment in favour of Mega-Top but that he "should receive credit on the winding up" of the partnership (J [230]).
On appeal, Mega-Top again seeks judgment for the $590,000, but has abandoned its claim for interest at 4.5%. Rather, interest is sought at court rates from the date of a formal demand for repayment issued on 5 March 2019.
The respondent submitted that the contention that the money was loaned by Mega-Top was effectively abandoned at trial because it was not addressed by the appellants in their closing submissions below beyond reproducing in the written closing the three sentences which had addressed the issue in the written opening. Those three sentences provided no actual reasons why the Court should adopt the appellants' characterisation. Nevertheless, his Honour addressed the issue, illustrating that it cannot be said to have been abandoned, nor can the appellants' challenge be characterised as raising a new issue on appeal.
That being said, and leaving aside the issue relating to interest, the practical difference between what was ordered by the primary judge and what is sought by the appellants is not apparent. It has not been suggested that it matters whether repayment is made to Ken rather than to his family company, Mega-Top. When pressed, senior counsel for the appellants submitted that the significance of the point was that on the Court's orders the repayment would be "out of partnership assets which are held by the partnership, and the effect of that requirement to be repaid from the partnership assets is that, in effect, 50% of the amount becomes repayable by Slaveski". But senior counsel for Nanevski Developments made clear in response that "it's never been the case advanced by the Nanevskis that they were entitled to use partnership funds to repay a non-partnership debt, and somehow that would be 50% funded through contributions from [Ken]". The practical significance claimed by the appellants thus fell away.
In this context, and given that Ground 5 also appears to lack practical significance (as explained below), the Court encouraged the parties to seek to come to some agreement on issues which did not seem to matter. The parties were not able to do so. It is thus necessary to resolve Grounds 1-2 and 5 despite the apparent lack of significance, although I will return to the point when considering what costs orders should be made.
The main focus of his Honour on this issue, and of the parties in submissions in this Court, was on what occurred in relation to the first payment of $500,000. The parties implicitly accepted that the characterisation of that payment would also govern the later two payments totalling $90,000.
The context of the $500,000 payment was as follows. Tom and Ken agreed in early February 2015 to form a partnership to purchase and develop the Riverside property. That property was bought at auction on 7 February. On 28 March 2015 the Vista Street property was also bought on behalf of the partnership for the purposes of redevelopment. At that time Nanevski Developments was separately undertaking construction of a nursing home on a site that it owned at Lawson Street, Sans Souci. Around early May 2015 Nanevski Developments had a need to obtain some $500,000 for the purposes of its Lawson Street development. Tom gave the following evidence in his affidavit: At this time I was having trouble refinancing out of the CBA. I required $500,000 to be able to refinance. At about this time I had a conversation with Ken at his house: Me: "Ken, I'm having trouble with the CBA in gaining enough finance. I need half a million quickly to get this over the line. I'm embarrassed to ask but are you able to lend me the money." Ken: "Tom mate this is actually good that you asked. As you know Biljana and I are going through a divorce and she is being really difficult. It would be handy if I could hide some monies. I'd be more than happy to lend you the money and could get it quite quickly." Me: "Ken that would be fantastic. How do you want it repaid?" Ken: "Tom we are business partners. You're my builder. Let's be sensible about it. You work off the money on developing Riverside and when you've done so let me know what and I will go back to contributing 50-50 with you. This will be between us I do not want Biljana to know."
Ken's evidence was that there was some such conversation, but that the agreement was that Mega-Top would lend Nanevski Developments the money. The $500,000 was paid from Mega-Top accounts in three transfers on 25 May 2015.
In submissions to this Court the appellants placed much emphasis on the first two exchanges from Tom's version of the conversation, referring to the money being lent. On the other hand Ken's statement at the end of the exchange is more consistent with the payment being part of the partnership business, although quite what was meant by those claimed statements is far from clear.
The question of whether the payment should be characterised as a distinct loan by Mega-Top or as a contribution to the partnership is an issue of mixed fact and law, involving identification of what was said/agreed and then attributing a legal characterisation to those words. It was not disputed that subsequent conduct could permissibly assist in ascertaining the terms of an oral agreement: see eg Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 96 ALJR 89; [2022] HCA 1 at [177], and authority there cited. In my view, for the reasons that follow, the better understanding and characterisation of the arrangement was that it was a loan from Mega-Top to Nanevski Developments.
The facts are far from clear. Even allowing for Tom having been found to be a generally reliable witness - and as shall be seen with respect to Grounds 3-4, there is reason to doubt that - his version of the conversation was set out in an affidavit made nearly five and a half years after it had occurred. There is no suggestion he made any contemporary note of what had been said. It would be dangerous, thus, to attribute substantial weight to the precise words employed.
That being said, it is notable that what Tom set out in his affidavit appears to be missing a key element of what would have been involved in treating the payment as a partnership contribution. The immediate use of the money was not for a project of the partnership but rather for Nanevski Developments' separate project at Lawson Street. Thus if Nanevski Developments did $500,000 worth of work (as purportedly proposed by Ken) then that would act to match the contribution to the partnership made by Ken. But it would still leave Nanevski Developments having to repay to the partnership the money loaned to it for the purposes of Lawson Street. There is no recognition of that key necessity in what Ken was supposed to have said in Tom's version of the conversation.
So much was recognised by Tom when he gave a different account of this portion of the conversation in cross-examination, claiming that Ken had said "[w]ork it off at Riverside, when you've worked off the $500,000 that I've lent you and you put in additional $500,000 we will then contribute 50/50" (emphasis added). Tom said, in giving this answer, that "I can remember it like yesterday". The fact that his oral evidence claiming a clear memory was inconsistent with his earlier affidavit in a significant respect undermines the value of his evidence on this topic.
Relatedly, as senior counsel for the respondent accepted in this Court, his client's legal characterisation involved there being a loan to Nanevski Developments from the partnership. So on either competing characterisation there was a loan. To treat it as a contribution by Ken to the partnership, then a loan from the partnership to Nanevski Developments, is more complicated than treating it as a simple direct loan from Ken/Mega-Top to Nanevski Developments. No benefit to either side from the additional complexity is apparent. It seems unlikely that the unnecessarily complicated arrangement would have been intended. As senior counsel for the respondent noted, aptly, "the parties weren't talking in any language of legal sophistication".
Moreover, there is no evidence that the parties attributed any of the work subsequently done by Nanevski Developments for the partnership as a matching contribution for the $500,000 payment. Indeed, Nanevski Developments sent a payment claim to Ken dated 8 October 2018 which claimed for work done at the Riverside property from 13 March 2015 onwards, including a claim for 20% contractor's margin, which did not suggest that any of the work was to be treated as a partnership contribution up to $500,000. This subsequent conduct thus tends to undermine the respondent's arguments as to what had been agreed.
The primary judge gave seven succinct reasons at [229] for accepting Nanevski Developments' characterisation. The first was that there was no written loan agreement. If anything, that fact militates in favour of applying Occam's Razor, consistently with the point already made.
His Honour's second reason was that "Ken's text message to Tom of 20 May 2015 [says] that no interest would be payable". That reason illustrates that a key issue his Honour was addressing was the claimed contractual entitlement to interest, which point is no longer pursued by the appellants. In fact, the text message exchanges on 20 May 2015 are more consistent with the parties having intended there be a loan from Mega-Top to Nanevski Developments. As part of the exchange Tom said "I'll pay you interest as well". Ken replied "No interest. The company Megatop can write it off", thus suggesting it was to be a loan from that company. In a following text Ken referred to his wife not releasing money to him - it seems that they were separated at the time - to which Tom suggested Ken tell her "I'll pay her better interest that [sic] she's getting and I'll give her the deeds to lawson st". That statement is more consistent with there being a direct loan from Ken's side to Tom/Nanevski Developments than it being a partnership contribution.
The third reason of the primary judge involved referring to minutes of a meeting of Mega-Top dated 22 May 2015 - which listed Ken, Biljana and Ms Grace El-Turk (the financial controller of Mega-Top) as having attended - which records that Mega-Top "agrees to lend Nanevski Developments $500,000 for the purposes of their Nursing Home development at Lawson Street" (and there were similar minutes for the two later payments). His Honour found that this was an example of "Ken telling Tom one thing and Biljana and Ms El-Turk another". He contrasted the minute with an email from Ken to Ms El-Turk on 25 May 2015 which says, in reference to Vista Street, "I will throw in $500k now and another $500k when I get the NAB money". Yet it is unclear how the email is said to involve telling Ms El-Turk different stories, given that she was also listed as an attendee at the meeting on 22 May.
In any case, the loose colloquial language in the email throws little if any light on what had been agreed, especially given that neither side contends that the $500,000 had anything directly to do with the Vista Street development. It was paid to assist Nanevski Developments with its separate Lawson Street development. There are also other emails which link the $500,000 to Vista Street. As the appellants submitted, a possible explanation for this was the belief that Nanevski Developments needed to complete the refinancing of its Lawson Street debt in order to improve its capacity to raise the money required to finance its contribution to Vista Street.
The primary judge's fourth reason was relevantly that "Mega-Top's records record the three payments comprising the $500,000 advance by reference to 'Ken Slaveski' suggesting that these were personal rather than business expenses and were described in Grace's emails to Tom as 'payment' rather than 'loan'". The bank documents in question record "Ken Slaveski" or "Ken" in the column headed "Reference". The correlative entries on a bank statement from the respondent's side refer to both Mega-Top and Ken. The significance of all these entries is not apparent. The fact that Ken's name was used in conjunction with the transfers again throws little light on what had been agreed. It may simply have recorded that he was the person who implemented the transfers. As for the difference between "payment" and "loan", on either characterisation there was going to be a loan to Nanevski Developments, to whom the money was being transferred. Thus Ms El-Turk's use of the word "payment" does not advance matters.
His Honour's fifth reason referred to an email from Ken to Tom and Biljana on 28 July 2015, with the subject heading "Vista Street/NAB Loan" (the email is quoted in full at J [95]). It first set out the total cost of purchasing the Vista Street property and then, under a sub-heading of "Kens contribution so far", identified three contributions made by Ken of which the first was said to be "$500k (payment by Ken to Tom to secure Vista Street)". I agree with the primary judge that this email is supportive of the payment being one towards the partnership. Yet I would not place substantial weight on this. Ken was reminding Tom that the amount had to be accounted for. As senior counsel for the appellants submitted, it is necessary to keep in mind "that these are, in effect, neighbours who are, in an informal way, trying to keep track of the moneys that each of them have advanced".
The sixth and seventh reasons of the primary judge were as follows: (6) The reconciliation which Ms El-Turk sent to Tom copied to Ken on 18 August 2015 (see paragraph [98] above) is described by Ms El-Turk as the "reconciliation for the purchase of Vista Street" and includes a reference to the $500,000 as "advance[d] by Ken to Tom for Lawson". This appears to make clear that it was an advance by Ken and that even if had originally been intended for Lawson Street it had come within the Partnership as falling within a reconciliation for the purchase of Vista Street. (7) The next day, 19 August 2015, Mr El-Turk sent an email to Tom, copied to Ken with the subject line "NAB Loan documents" (see paragraph [99] above) attaching "Loan documents for both Vista and Riverside". This explains that the "500k advance and the balance of the deposit of $302,500 which was paid from Megatop Cargo overdraft which is the reason for the interest charge. It was billed at 4.5% which is at cost". This clearly treats the $500,000 as an advance to the Partnership but appears to be a unilateral attempt to charge the interest to reflect the fact that such interest was being paid by Mega-Top on its overdraft as the source of the funds. There is no suggestion in the email, or anywhere else in the evidence, that Tom had actually agreed to any such interest charge.
Ms El-Turk's reference in the reconciliation to what had been "advanced by Ken to Tom for Lawson" is more consistent with the money having been advanced as a direct loan rather than something involving the partnership, as his Honour implicitly acknowledges. That Ms El-Turk included it in her reconciliation offers some support for the respondent's characterisation, but again can reasonably be seen simply as a way of recording and reminding Tom of his obligation to account for the amount. The fact that Ms El-Turk's email of the next day says that the "500k advance … was paid from [the] Megatop Cargo overdraft", and claiming a right to charge interest accordingly, is more consistent with the loan having been one from Mega-Top to Nanevski Developments.
In summary, there is no clear evidence of what was agreed. Given Tom's sparse and inconsistent testimony, and the passage of time, his Honour's conclusion cannot be said to be founded upon his view as to Tom's general reliability (as quoted at [7] above). The surrounding and subsequent evidence points in different directions, but overall tends to favour the appellants' argument that the arrangement was best understood as a loan from Mega-Top to Nanevski Developments. As senior counsel for the respondent recognised, "this isn't a situation where the character of transactions is neatly identifiable, because that's just not the way that these parties worked". This is a case where the simplest explanation is the most likely one. Although I disagree with the primary judge, his conclusion was understandable given he was provided no assistance on the issues by the appellants.
Mega-Top was thus entitled to succeed on its cross-claim to the extent of claiming an order that Nanevski Developments repay $590,000. Nanevski Developments did not dispute the appellants' argument that in circumstances where Mega-Top no longer claimed interest at 4.5% per annum, Mega-Top could claim interest from the date of its formal demand for repayment at court rates.

Grounds 3 and 4: the $302,500 claimed cash payment

Grounds 3 and 4 concern the payment of $302,500 to finance a portion of the deposit for Vista Street. That portion was paid to McGrath Real Estate, the agents of the vendors of Vista Street, by means of a bank cheque acquired using money from a Mega-Top bank account held at NAB. The essential dispute was whether or not that bank cheque was ultimately financed using cash provided by Tom on behalf of Nanevski Developments. The respondent accepted that it had had the onus to prove that Tom had paid $302,500 in cash to Ken as he claimed. In my view the primary judge erred in concluding that this onus was discharged.
Proving that undocumented payments of large sums of cash occurred is fraught. Justice Hammerschlag indicated as much in the following acute observation in Sergei Sergienko v AXL Financial Pty Limited [2021] NSWSC 297 at [1]: A party asserting, and seeking to rely upon, the terms of an alleged, undocumented commercial transaction said to involve the transfer of very large sums of cash, ought not to be taken by surprise when he, she or it fails to persuade the Court of its existence.
This sentiment was echoed recently by Ward P in Bale v Kimberley Developments Pty Ltd [2022] NSWSC 820 at [171], [321] and [448], as relevantly upheld on appeal in Kimberley Developments Pty Ltd v Bale [2023] NSWCA 25 at [58]-[61]. As Dixon J said in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362, "the inherent unlikelihood of an occurrence of a given description" is a consideration "which must affect the answer to the question whether the issue has been proved". There is an "inherent unlikelihood" in the present day of the payment of very large sums in physical cash for a commercial transaction.

Facts not in dispute

At an auction on 28 March 2015 Tom placed the successful bid for Vista Street. A contract of sale was executed with Nanevski Developments identified as the purchaser and a completion date of 19 June 2015. The deposit was 10%, half of which was required to be paid immediately.
Mr David Glamcevski was a solicitor acting on the transaction for the current parties. A file note created by him on 19 June 2015 - the date settlement was due to take place - records that there were some difficulties obtaining finance. In an email later that day to Mr Glamcevski and Tom, Ken suggested that the contract be amended so as to make him the purchaser because, he said, he could obtain finance promptly. He noted a concern about having to pay the vendor penalty interest for late settlement.
This proposed course was put to the vendors. The vendors had in the meantime, it seems, issued a notice to complete by 10 July 2015. In an email from Mr Glamcevski to Ken and Tom on 29 June 2015 he advised that Nanevski Developments should ensure that it was in a position to complete on 10 July, noting that if it was not able to do so then it risked forfeiting the full 10% deposit.
In a solicitor's letter dated 6 July 2015 the vendors indicated their inclination to accept the variation and to agree to an extension of time for completion (which it seems had been requested) on condition that the balance of the 10% deposit, being $302,500, be paid immediately. Mr Glamcevski attached the letter to an email sent to Ken and Tom at 1:21pm on 6 July 2015.
A letter was then sent by Mr Glamcevski on 7 July 2015, at 12:25pm, to the vendors confirming that his clients "will be making arrangements to pay the balance of the ten percent (10%) deposit to the Agent prior to 10 July 2015 as per your requirements".
Ken caught a flight leaving Australia early on the afternoon of 7 July 2015. A text message exchange between Tom and Ken at 12:09pm on that day involved Tom offering Ken a lift to the airport, with Ken responding that it was not necessary and "I'll call you before I board the flight in about an hour or so".
In an email sent at 11:43am on 8 July 2015 to Ken, Biljana and Tom, Mr Glamcevski indicated that he had spoken to the vendors' solicitor and the extension of time had been granted, that in accordance with the agreement "the balance of the 10% deposit has to be paid now", and asked: Biljana & Tom can you please organise the payment of a further $302,500.00 into the Agent account. I would prefer if possible for a bank cheque in favour of McGrath St George or if you wish to do a direct debit please provide me with details including deposit slips etc, so I can show the vendor's solicitor that the payment has been made.
Ken replied at 4:55pm that day, saying that "I will get grace to arrange the bank cheque".
On 9 July 2015 $302,500 was transferred from a savings account in the name of Mega-Top to a cheque account also in the name of Mega-Top. A withdrawal from the cheque account in the sum of $302,500 was made the same day.
On that same day Tom delivered to McGrath Real Estate a bank cheque made out to the sum of $302,500. His evidence as to how he acquired the cheque was as follows: … on 9 July 2015 I then went and saw Biljana and Grace outside the NAB in Mascot. Biljana handed me a bank cheque made out to McGrath Real Estate for $302,500. I then went from the NAB branch to the real estate agent and handed the bank cheque to Julie Pollard.
Ms Pollard issued a receipt for payment of $302,500 by way of bank cheque, which recorded the following: Received from: Tom Nanevski: Nanevksi Developments Pty Ltd

The alleged payment of $302,500 in cash

The primary judge accepted Tom's evidence that he had paid $302,500 in physical cash to Ken to fund the purchase of the bank cheque. Tom's affidavit evidence on point was as follows: 174. In or about early July 2015 I had a conversation with Ken: Me: "Ken, David has advised me that one of the conditions to rescind the contract is that the vendor is going to require the other 5%." Ken: "I don't have cash at the moment but if you're able to give me the cash, and I can convince Biljana, what we'll do is this. Give me the cash, I will convince Biljana to make out a bank cheque from her money to give to you but I'll make sure that the Real Estate Agent receipts it as coming from Nanevski Developments." Me: "Ok Ken we can do that." 175. Shortly after this I went to Ken's house with $302,500 in $50 notes. Ken and I sat in his study and counted it out together on an L-shaped fabric sofa. 176. We counted out 100 $50 notes to make bundles of $5,000 then placed bands around each pile. I remember that it took about one and a half hours to count. At the time we had a conversation as follows: Tom: "Make sure that you instruct the agent to make the receipt for the next 5% deposit out to Nanevski Developments." Ken: "No problems. I will call the agent and tell her to do that."
The primary judge's reasons for accepting this account were as follows (at [202]): (1) On its face, the 9 July Receipt is evidence that Nanevski Developments paid that sum and therefore corroborates Tom's version of events. An affidavit from Ms Pollard was read in the Nanevski parties' case in which she deposed "On 9 July 2015 I received payment of the balance of the 5%. McGrath St George were not a party to any agreement as to how the remainder of the 5% was paid and I do [sic, presumably not] know anything about that."; (2) Notwithstanding being aware of what the receipt said, Ken accepted that he had never taken any steps to have the receipt corrected; (3) If the bank cheque had not been funded by the cash provided by Tom, that would have been a matter about which certainly Ms El-Turk, and possibly Biljana, could have given evidence. Neither was called and, as I have already indicated, the Court draws both the inference that their evidence would not have assisted the Slaveski parties and more easily draws the inference already founded in the 9 July Receipt; (4) Quite apart from failing to call Ms El-Turk and Biljana, had the bank cheque been bought with funds out of Mega-Top's own resources (including the possibility of having been advanced, as sometimes appears to have been the case, by Ms El-Turk from her own funds), the Slaveski parties would have had access to bank records to make that case if it was open to them. While various bank records of Mega-Top and Ms El-Turk were in evidence, the Court was not taken to any which were said to cast light on this question.
As to the first and second reasons, the receipt does not have the significance attributed to it by the primary judge. The appellants rightly observe that (a) it was Tom who presented the bank cheque to the agent, and (b) it was Nanevski Developments who remained the purchaser under the sale contract at that point in time, the variation to include Ken and Biljana being conditional upon payment of the $302,500. In these circumstances, the fact that the receipt says it was "received from" Tom Nanevski of Nanevksi Developments reflects, respectively, who actually presented it and whose liability it was discharging. It is not evidence from which an inference can be drawn that Tom paid $302,500 in cash to Ken in order for Ken to arrange the purchase of the bank cheque. The agent, Ms Pollard, had no reason whatsoever to know anything about the circumstances in which the cheque was purchased, and how it had been funded was of no concern to her or the vendors in any event. She effectively made that very point in the portion of her evidence quoted by the primary judge at [202(1)].
A contemporaneous email confirms that it was the recording of Nanevksi Developments as purchaser that stood in the way of recording any other name on the receipt. In an email to Ken on 9 July 2015, Biljana explained: Grace gave the cheque to Tom who took it to the real estate. They put the receipt in toms name. Tom explained the receipt should be I [sic - in] k and b but they didn't have a copy of the new contract. Tom rang grace who is going to call the solicitor to make sure the receipt is reissued in k&b.
This email was not an email to or from Tom, but there is no reason to doubt it accurately records Biljana's understanding. It seems to be at odds with Tom's account. It also undermines the second of the primary judge's reasons for accepting Tom's account, relating to Ken not taking any steps to have the receipt corrected. Biljana's email suggests that some step was proposed to be taken to correct the receipt, perhaps misguidedly given the very limited significance of the receipt. At the least, Ken had reason to believe that some step had been taken.
As for the third reason given by the primary judge, relating to the appellants' failure to call Biljana or Ms El-Turk, this has some force. Given that Biljana was involved in the collection of the bank cheque, and subsequently communicated with Ken about the receipt, it is possible that she could have given relevant evidence. Ms El-Turk could have given evidence that she had not been asked - in her capacity as financial controller of Mega-Top - to bank or deal with $302,500 in cash, which would likely have been a memorable event. She also may have been able to throw light on what the source of funds was for the bank cheque from the Mega-Top account. It was thus open to make a Jones v Dunkel inference that the evidence of Biljana and Ms El-Turk would not have assisted the appellants on this point. I do not agree with the primary judge, however, that it was also open to "more easily draw[]s the inference already founded in the 9 July Receipt", as I do not accept that any relevant inference can be drawn from the receipt.
The fourth reason was the absence of evidence that "the bank cheque been bought with funds out of Mega-Top's own resources", with his Honour noting he was not taken to any bank records casting light on this question. The appellants have not pointed to any submissions suggesting that his Honour was taken to relevant bank records, and no criticism can possibly be made that he did not search them out for himself in the 5,000 page court book. In fact, however, some of Mega-Top's bank records were in evidence. Those records revealed a deposit into a Mega-Top savings account of $439,844.58 made on 3 July 2015, well before Tom says he paid Ken the cash. The records then reveal a debit from that savings account of $302,500 on 9 July 2015 and a credit in the same amount to a Mega-Top cheque account that same day. Later that day, a withdrawal in the sum of $302,500 was made from the same cheque account, which appears to represent the acquisition of the bank cheque. These records are consistent with the appellants' version of events.
Thus three of the four reasons provided by the primary judge do not survive critical scrutiny having had the benefit of careful submissions in this Court. It is then necessary to take account of reasons to doubt Tom's account.
First, there is the inherent implausibility of such a large payment of cash, as referred to above. In the somewhat murky state of the evidence I would place some, but not substantial, weight on this factor. The respondent submitted that there was evidence that other large physical cash payments had been made in the course of the parties' dealings. The respondent pointed to an email in which Ken suggested Tom pay another amount of $150,000 by "cash or cheque". Ken was cross-examined on this email at some length, and it was suggested to him that on this and other occasions he had accepted or been prepared to accept payments in "cash". As Ken pointed out in response, "cash" can readily refer to payment by direct deposit, and the cross-examiner did not pin him down to accepting that he had ever received large payments in physical cash, with one apparent exception. That exception was that Ken's affidavit recorded that he had received cash from Tom for an amount of $22,000 on 30 June 2014. But there is a significant difference between that amount and $302,500. In the course of cross-examination Ken appeared to concede that it was possible that he had received cash payments for Riverside and Vista Street, but the significance of this concession is not clear.
There was evidence from a person who was a friend of Tom's that he had paid her $67,500 in physical cash, asked her to bank it in her bank account then obtain a bank cheque to give to Ken. The cheque was "drawn in the name of Slaveski". This constituted evidence that Tom did have a large quantity of physical cash on at least one occasion, but does little to establish a tendency. Tom was asked in cross-examination where he had obtained the $67,500 in cash from, and said "I lease, sell, formwork, scaffold, I resell steel, concrete that I import through Mega-Top". The implication seemed to be that a significant part of his business was conducted in cash. The fact that this cash was used to obtain a cheque to pay to Ken is not supportive of Ken having a practice of receiving very large amounts in physical cash. On the contrary, it is notable that Tom was going to some trouble to obtain a bank cheque to give to Ken rather than providing him with the cash directly. Thus the evidence pointed to by the respondent does little to overcome the practical scepticism of the claim that a payment of $302,500 was made by Tom to Ken in $50 notes.
Even if Tom was in the habit of keeping large amounts of physical cash, there is no particular suggestion that Ken or the other appellants were. No bank records were identified showing that a large cash deposit had been made into bank accounts of the appellants around 6-10 July 2015. That being said, it seems not all relevant bank statements were in evidence.
Secondly, there is not a jot of corroborative evidence supporting the claimed cash payment. Despite all the emphasis placed by the respondent on the significance of the receipt issued by the agent, it is notable that Tom did not obtain a receipt from Ken for handing over $302,500 in cash. That they were friendly and trusting at the time may be accepted, but even close friends might be expected to acknowledge receipt of such a large payment in notes. More generally, no email, text message or other form of communication between the parties record or refer to the purported payment. In submissions to this Court senior counsel for the respondent indicated that whilst "the preponderance of the emails only goes one way", that is mainly from Ken to Tom, he accepted that text message correspondence went both ways. In that context, the lack of any reference to the payment is somewhat surprising.
What is more, in an email from Ken to Tom of 28 July 2015, the following contributions are set out: Kens contribution so far as follows $500k (payment by Ken to Tom to secure Vista Street) 500,000.00 $175k (deposit paid at Auction) 175,000.00 $302.5K deposit paid July balance of the 5% as requested by seller 302,500.00 TOTAL 977,500.00 Toms contribution so far $127.5k deposit paid at auction
Ken records the $302,500 as being a contribution on his part; not on Tom's part. There is no email or text response from Tom in evidence objecting to this characterisation of the contribution. Tom gave evidence that he telephoned Ken to complain about the email. But there is no corroborative evidence of such a call having been made. The implication of the claimed conversation seems to be that Ken had put this in the email because he was not revealing his financial situation to Biljana. Yet any such implication is unpersuasive. The primary judge stated at [201] that "while the Court was satisfied that around March 2015 Ken was trying to conceal what was happening from Biljana, that was evidently not the case by 9 July 2015". There is no other apparent reason why Ken would seek to rewrite history in an email to Tom some 20 or so days after the supposed cash payment. In these circumstances the 28 July 2015 email constitutes strong evidence suggesting Tom's claim is false.
Thirdly, there is a substantial difficulty with the timing of the purported payment. Tom's affidavit evidence was that the counting of the money occurred the day before he delivered the cheque to the real estate agents, that is, that the counting occurred on 8 July 2015. But it was not disputed that Ken departed Australia on the afternoon of 7 July 2015. In cross-examination Tom said "I'm not sure. It was one or two days prior, something along those lines".
The primary judge accepted at [203] that payment must have occurred before Ken departed, and that Tom's statement in his affidavit must be incorrect, but said "there are least two or three days earlier on which the parties were on notice that the additional deposit may be required, [such that] there was time for the funds to be provided by Tom to Ken before Ken left for overseas". Yet that explanation seems unlikely.
The respondent points to the email from Mr Glamcevski of 29 June 2015, arguing that from that date "the Nanevskis were on notice that they may need to pay the additional deposit". Yet noting that the whole deposit might be forfeited if the respondent could not complete the purchase on 10 July 2015 had nothing to do with needing to provide the further 5% of the deposit in order to obtain an extension of time. It was from 1:21pm on 6 July 2015 that Tom and Ken were on notice that the vendors were "minded to grant the extension" sought on condition of payment of the outstanding 5% deposit. Mr Glamcevski wrote to the vendors' solicitor on 7 July 2015 saying that his clients "will be making arrangements" to pay the balance, which was forwarded to Tom and Ken at 12:25pm. That use of the future tense does not tend to suggest that the arrangements were already well in hand, recalling that at 12:09pm on that day Tom and Ken were texting each other about Ken's imminent trip to the airport. No mention was made in those texts of the large cash payment supposedly just made, nor of them having just met. Further, it was only on 8 July at 11:43am that Mr Glamcevski emailed Tom and Ken to confirm that the extension of time had been granted and requesting Biljana and Tom to "please organise the payment". And, as noted, Ken responded at 4:55pm that day, copied to Biljana and Tom, saying "I will get grace to arrange the bank cheque", which is suggestive of the money coming from Ken only.
Tom's affidavit made no mention of having to rush to organise cash in the less than 24 hours between the 1:21pm email of 6 July 2015 and Ken's leaving for his trip around midday the next day. One might have thought the rush would itself have been memorable.
In Tom's cross-examination there was the following exchange: Q. Do you see that? On 8 July you received notice that you and Lilliana and Ken were going to have to come up with another 5% for the extension of time on the contract. Isn't that correct? A. Yes, that is correct. Q. And you then went to Ken and had a conversation with him in which you say he was trying to hide money from Lilliana [sic - Biljana] or extract money from Lilliana [sic - Biljana] deceptively. Is that right? A. Those things that he was telling me, yes. Q. Then you took $302,500 in $50 notes to Ken and counted them out on his L-shaped fabric sofa. Isn't that what you're saying? A. Yes, I did. Yes, we did. Q. And it all happened in that order, did it? A. It happened in that day or two, yes.
The final answer is not quite conclusive but does seem to accept that the order was as the questioner suggested. That order is not consistent with the cash payment having been made in the way Tom suggested.
Fourthly, Tom's affidavit in the proceedings below was made on 21 October 2020. However, he had sworn an earlier affidavit on 18 April 2019 in answer to a statutory demand in which he said: On or about 9 July 2015 Nanevski Developments provided $302,500 towards the purchase of Vista Street. … Of this $151,250 was provided by Ken to Nanevski Developments for the purpose of the deposit.
That version is quite different to Tom's testimony relied upon by the respondent. Both versions cannot be true. That inconsistent versions have been given under oath undermines both Tom's claim about the cash payment and his credibility more generally. Again, however, it should be noted that this affidavit was seemingly not drawn to the attention of the primary judge, although it was in evidence.
Fifthly, as explained above with respect to Grounds 1 and 2, it was not in dispute that some six or seven weeks earlier Nanevski Developments was having trouble refinancing a Commonwealth Bank facility, that Tom asked for a loan of $500,000 from Ken to assist, and that this money was provided on 25 May 2015. The fact that the respondent had been having a cash flow difficulty a relatively short time before the events of early July 2015 undermines the claim that Tom could readily and rapidly produce $302,500 in cash when the need for it arose. The respondent submits that it was also seeking funding at the time for settlement on the Vista Street property, and that it received an offer of a loan of $10 million. However, that offer is dated 14 July 2015 and is not relevant to what finances were available to the respondent on 6-9 July 2015.
In the end, the only factors in support of the claimed cash payment are: first, that Tom said it occurred, and the primary judge found that he was "a generally reliable witness on the essential matters in dispute" (at J [150]; see the fuller quotation above at [7]); secondly, that a Jones v Dunkel inference can be drawn against the appellants for their failure to call Biljana and Ms El-Turk. Against that are all the matters outlined above. It seems that his Honour was not addressed on all of the above points, and certainly not with the same level of detail as was raised in this Court. He may well have reached a different conclusion if he had been. None of those matters depend upon accepting the testimony of Ken. His Honour's acceptance of Tom's reliability was not unqualified. Further, that finding is itself undermined by Tom's inconsistent earlier affidavit, to which his Honour did not refer. But even if it was assumed that his Honour had accepted Tom as a credible and reliable witness in full, there is a compelling case based on the whole of the evidence - including what is present, and absent, in the contemporaneous documents and communications - against the conclusion drawn: note Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 at [55]. The correct finding was that Tom did not pay $302,500 to finance the further 5% deposit in July 2015 and that, rather, the deposit was paid from the bank accounts of Mega-Top as a contribution to the partnership by Ken. In order to crystallise that finding it is appropriate that a declaration be made in such terms.

Ground 5: cash payments of $200,000

Ground 5 is expressed as follows: The trial judge erred in holding (at J[47], J[51], J[56] and J[178]-[187]) that Mr Nanevski paid Ken $200,000 in cash and that Nanevski Developments thereby contributed $200,000 in cash towards the purchase of the Riverside asset … which conclusion was based on evidence of Mr Nanevski that was contrary to incontrovertible facts, glaringly improbable and/or contrary to compelling inferences.
The primary judge's findings on this issue are captured in these paragraphs: [181] There are five reasons why the Court accepts Tom's evidence and finds that Nanevski Developments contributed $200,000 in cash towards the purchase of Riverside. … [189] … even if my conclusion is wrong as to when and in what circumstances the $200,000 was paid, there can be no doubt, based on Ms El-Turk's documents, that $200,000 was received by Ken from Tom which should be credited to Nanevski Developments' account in the Partnership in determining the parties' respective contributions to their project of developing the two properties.
Relatively extensive submissions were made by the appellants as to why the finding about $200,000 in cash payments to assist in the purchase of the Riverside property should be rejected. However, as alluded to in the latter paragraph just quoted from the judgment, there are three documents dating from 2017, prepared by Ken or Ms El-Turk, which acknowledge that Nanevski Developments had contributed a sum of $200,000, albeit that this was said to have been made in "two separate payments of $100,000 each", and directed to assisting with settlement of the Vista Street property. Purchase of the Riverside property settled on 8 May 2015, and purchase of the Riverside property settled just under two months later on 31 July 2015.
Senior counsel for the respondent made clear that his client was not seeking credit for two lots of payments of $200,000, saying: I can say it's always been the case that we've advanced, there were not two payments or lots of payments of $200,000 totalling $400,000. There was one payment of $200,000. Whether that was allocated rightly or wrongly to Vista Street or to Riverside, doesn't much matter in circumstances where all that's in issue is the partnership accounting process. I can indicate that in any account that is ultimately conducted, my client wouldn't be seeking credit overall for $400,000, it would be seeking credit for $200,000.
In making this submission, it was made absolutely clear on behalf of the respondent that it was not saying it had an entitlement to be credited with $200,000 payments towards Vista Street and $200,000 payment towards Riverside - it only asserted that it should be given credit for one payment of $200,000.
The apparent absence of practical significance to this ground was raised in the course of the hearing even prior to this clear statement. After taking instructions over the luncheon adjournment, senior counsel for the appellants said that "at the moment" he did not have instructions to concede that this ground fell away if (as occurred) the respondent confirmed it was only seeking credit for one lot of payments of $200,000. He said that "there is an issue, I'm told, as to whether the two $100,000 payments have been accurately allocated to the Vista property as opposed to [the] other". Yet the primary judge found that there was just one partnership relating to development of the two properties. There were not two separate partnerships. The partnership is to be wound up and an account taken. In that context, it does not matter whether the payments were made to assist in the purchase of one property rather than another, where the two were purchased in close temporal proximity.
Senior counsel for the respondent then submitted that What we wanted was the alleged $200,000 cash payments not to be brought into account. That's what was put against us in the proceedings below. Beyond that, it's for the receiver to deal with the questions of accounting including any subsequent payments which may have totalled $200,000 coincidentally but were not the subject of claims that were made below and weren't the subject of any significant investigation in the trial below in circumstances where I'm told there may be an issue as to whether, notwithstanding what the emails say, those amounts are appropriately allocated to the partnership as opposed to other dealings between the parties.
It was evident from the judgment of the primary judge at [189], as quoted, that his Honour had not found an entitlement to two lots of $200,000. That position has been confirmed by what has been said by the respondent in this Court. In this context, whether or not the payments were made in cash or by cheques, and in the context of contributing to one property or the other, has not been shown to make any difference to the accounting process that will be undertaken. The appellants have not established error in the finding of the primary judge that matters for the purposes of the taking of an account, namely that in the first half of 2015 the respondent contributed a monetary amount of $200,000 to the partnership. Ground 5 should be rejected.

Grounds 7 and 8: the claim for consultancy fees

Grounds 7 and 8 concern the primary judge's finding at [172] that "Nanevski Developments was entitled to charge $120 plus GST per hour for consultancy work for liaising with Council, architects, planners and the like". That finding was reflected in a declaration which was expressed to relate to "work undertaken in relation to design, planning and administrative aspects of the business of the Partnership". Ground 7 challenges the finding and declaration on the basis that no such term was pleaded, that any such term was not enforceable by reason of s 10 of the Home Building Act 1989 (NSW), and that it was contrary to the facts. Ground 8, in the alternative, challenges the scope of the term as found.
The primary judge's finding was based on a conversation deposed to by Tom which was said to involve an agreement regarding the Riverside development that "[f]or the consultancy work which will involve a lot of toing and froing with Council, architects, planners etc [the respondent] will charge $120 plus GST per hour": see J [37]. Section 24(1) of the Partnership Act 1892 (NSW) relevantly provides that "subject to any agreement expressed or implied between the partners … [n]o partner shall be entitled to remuneration for acting in the partnership business". The respondent did not dispute that any entitlement to claim for the consultancy work depended upon there being an agreement in the terms claimed by Tom. The appellants complain that the supposed agreement was not pleaded as a term of the partnership agreement or at all.
This case proceeded by way of pleadings. Senior counsel for the respondent accepted "that on the pleading there, there was no precise identification of a term sued upon for a consultancy fee". The respondent, however, contended that the case was conducted in a way that went beyond the pleadings, relying on Dare v Pulham (1982) 148 CLR 658 at 664. The respondent referred in that regard to a document it had provided to the primary judge entitled "List of issues on primary claim". It also referred to its closing submissions below. As to the former, the list posed the following question: Is Nanevski Developments entitled to bring to account amounts referable to the labour, skill and effort provided by Tom Nanevski and, if so, on what basis is such an amount to be determined?
The question is general; it does not clearly set out a claim that there was an agreed term to that effect. And the list was not an agreed one, with the appellants supplying a competing list of issues: see J [17]. The respondent's submissions are clearer than its list in making such a claim. But both documents are affected by a more serious difficulty. The list was annexed to the submissions, which were final submissions provided after the close of evidence. It cannot be said that either document meant that the issue was, and was understood to be, in play over the course of the trial.
The appellants also sought to argue that the agreement as to remuneration as alleged did not meet the requirement of s 10 of the Home Building Act that it be in writing, where that requirement applies to a person "who contracts to do any residential building work". The respondent contended that the terms of s 10 were not engaged by this contract. It also asserted that the appellants' argument was undeveloped and "[i]f developed, would need to address nuanced questions … concerning the interaction between the Home Building Act and the Partnership Act". The respondent's latter argument is both correct and undermining of its own case. Neither side did much to grapple with the potentially significant legal issues that arose in seeking to apply s 10 to a partnership agreement of the kind at issue here, and it was not the subject of any argument or consideration in the Court below. Those very points illustrate that the claimed contractual entitlement was not an issue fairly raised in the proceedings.
The declaration made in order 3(b) that Nanevski Developments was entitled to charge $120 plus GST per hour for consultancy work thus should not have been made. That conclusion disposes of Ground 7 and renders it unnecessary to determine Ground 8. However, it should be noted that senior counsel for the respondent appropriately acknowledged that there was force in the appellants' argument that the primary judge's declaration of the entitlement of the respondent went beyond what had been submitted by the respondent below.

Costs and orders

The appellants have succeeded on three out of four issues (ie all but the third issue, relating to Ground 5). Yet for the first issue, relating to the $590,000 loan, it is difficult to discern any practical significance to the claim beyond a minor entitlement to interest, and in circumstances where the appellants advanced not a skerrick of reasoning in support of their position in the Court below. On the second issue, dealing with the $302,500 in cash, a number of the points significant to the appellants' success were not raised below. On the fourth issue, relating to the consultancy fees, the amounts in issue are not known to the Court but it appears unlikely that they will be substantial. Taking account of all the circumstances each side should bear their own costs of the appeal.
As to costs below, the primary judge ordered that the appellants pay the respondent's costs both on the latter's claim, up to 30 August 2022, and on the appellants' cross-claim (which he dismissed). The appellants originally had relied on a separate ground of challenge to the costs orders made below, which was abandoned. However, in light of the appellants' partial success on appeal they are entitled to some allowance being made in the costs orders for the trial.
To make different allocations of costs on the respondent's claim and the cross-claim, or to otherwise order costs for one side on one set of issues and for the other side on other issues, would be likely to add to the difficulties and costs of assessment. The better course is to make one costs order involving an approximate assessment of overall success below in the proceeding at issue, and taking account of the degree to which resources of the parties were directed to those issues. The respondent succeeded on the main dispute below, being the existence and core terms of the partnership, with the correlative finding that the two properties were held on trust. The issues on which the appellants have now succeeded appear to have occupied limited resources below. Making an allowance for not ordering any costs in favour of the appellants at first instance, my preliminary view is that it is appropriate that the appellants be ordered to pay 75% of the respondent's costs of the proceedings below (including as to the cross-claim). For the avoidance of doubt this would not affect the costs order made for the separate proceeding heard at the same time, matter number 2019/95876, which has not been challenged in this appeal. The order would be as follows: Set aside orders 17 and 18 made by the Supreme Court on 6 September 2022 (relating to costs of the proceedings below) and in lieu thereof order that the defendants are to pay 75% of the plaintiff's costs of proceedings 2019/153341 up until 30 August 2022, including as regards the cross-claim, noting that this order does not affect any costs the subject of a separate costs order.
However, it is appropriate that the parties be given an opportunity to be heard on this issue. An order will be made in the terms just identified subject to any submissions made by the parties, which may be made pursuant to the timetable set out below.
The orders of the Court should be as follows: 1. Appeal allowed in part, with no order made as to the costs of the appeal. 2. Set aside order 14 made by the Supreme Court on 6 September 2022 (dismissing the cross-claim) to the extent that the cross-claim relates to the claimed $590,000 loan from Mega-Top Cargo Pty Ltd to Nanevski Developments Pty Ltd, and in lieu thereof order judgment for Mega-Top Cargo Pty Ltd in the amount of $590,000 plus interest on that amount from 5 March 2019 calculated at the rates referred to in Practice Note SC Gen 16. 3. Declare that the $302,500 further deposit paid towards the Vista Street property on 9 July 2015 was paid from the bank accounts of Mega-Top Cargo Pty Ltd as a contribution to the partnership by Ken Slaveski. 4. Set aside the declaration in order 3(a) (relating to the entitlement to charge for consultancy work) made by the Supreme Court on 6 September 2022. 5. Amend order 12 made by the Supreme Court on 6 September 2022 (relating to the taking of an account) such that at the end of the sentence the following words are added: "as varied by the Court of Appeal". 6. If either the appellants or the respondents seek an order relating to the costs of the proceedings below other than that proposed at [90] of this Court's judgment then they may file and serve submissions of no more than three pages, along with any supporting materials, within seven days of these orders, with any reply submissions of no more than one page to be filed and served within a further two business days.
GRIFFITHS AJA: I have had the advantage of reading Kirk JA's reasons in draft. I agree with them and with the proposed orders.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 June 2023

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (14 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (10)

Cited By (2)