Thompson v White & Anor; ACDC v Thompson

Background 5 There are no contemporaneous documents that record the agreement between the parties. It was made verbally. Notwithstanding this, the evidence contained a plethora of documents to most of which no reference was made in oral evidence or in submissions. And this notwithstanding wide-ranging cross-examinations directed predominately to credit. 6 ACDC was established about 1995 to carry out subcontracting work in the building industry specialising in concrete panel construction. 7 Mr Thompson was a licensed builder. In October 1995 he was employed by ACDC on an hourly rate plus expense allowance and a 10% share of any profits made by ACDC. Neither Mr White nor Mr Libut held any qualification or licence to undertake residential building work. 8 Mr White spoke to Mr Thompson soon after his employment with ACDC about he, Mr White and Mr Libut developing properties as equal members of a joint venture. Mr White said he and Mr Libut were anxious to act through a joint venture vehicle, a company in which the three would be equal shareholders named Australian Hebel House Pty Ltd. In cross-examination, Mr Thompson agreed that discussions about joint venture development on an equal basis with outside finance was discussed on a number of occasions from shortly after his employment by ACDC and various properties were inspected for that purpose. 9 From February 1997 through to about May 1997, conversations took place between Messrs Thompson, White and Libut to the effect that to obtain money to build ventures, ACDC had to get into major building contracts. That was a role that the individuals could not accomplish themselves. Mr Thompson said that was a very good way to go and Mr Libut agreed because none had any money at that time. Mr White said that Mr Thompson's licence could be transferred to Australian Hebel House so that it had a building licence to do residential work and to do their residential development. 10 Mr Thompson had accumulated debts through his activities prior to his employment by ACDC. He and Mrs Thompson were forced to sell their Palm Beach property. The sale settled in February 1997 and, after paying out creditors, there was a balance of approximately $285,000.00. 11 Mr and Mrs Thompson had agreed that her 50% interest in the Palm Beach house was worth more than $285,000.00 and that the entirety of that amount should be treated as hers with an undertaking by Mr Thompson to make up the figure to the value of her 50% interest. Mrs Thompson contributed that amount to the purchase price of the Seaforth property. This was later recorded in a document back-dated to the time of the oral agreement between Mr and Mrs Thompson. 12 Mr White located the property at Seaforth. He said that a number of meetings took place on the site between Mr Thompson, Mr Libut and himself. He said the initial meeting was between him and Mr Thompson soon after he had located the site. Mr White said he informed Mr Thompson that the developer was going into liquidation and there were two or three blocks for sale that looked ideal. Mr Thompson agreed and said he would discuss it with his wife. Mr White said he would discuss it with Mr Libut. 13 According to Mr White the next meeting involved Mr Thompson, Mr Libut and himself at which the following conversations took place. Mr White told Mr Libut that Mr Thompson thought the property was a good venture site and had great potential in terms of resale value. Mr Libut said it looked really good. Mr Thompson agreed it was a good joint venture site and ideal for an aerated concrete system. Mr White said the parties could proceed with the joint ventures as already discussed and planned with Australian Hebel House. Mr Libut said: "It is really great to be starting our first venture at last." Mr Thompson said: "Yes I agree it is a good opportunity, we must pursue it, find out the details from the estate agent". 14 Mr white said a further meeting took place about the middle of March 1997 that included the following conversations. Mr White said: "We can purchase the property as we have already agreed in the name of the venture company, the one we have discussed, Australian Hebel House". Mr Thompson said: "I'll have to think about that and talk to my wife. We are putting up the money and may have to leave it. We would like it in our name". 15 There was another meeting in March 1997 between the three on the site according to Mr White. His recollection of the conversations was as follows. Mr Thompson said: "We would like to have the property in our name because - as security because we are the ones who will put up the initial money from the sale of our land at Palm Beach". Mr White said he could understand Mr Thompson's position because the money from him and his wife were some time away. Mr White said: "ACDC could provide services to help construct and provide loans. If ACDC is trading we can utilise any profits ACDC makes to go towards - as loans towards the venture". Mr Libut agreed that it was a good idea. He suggested that they should think of taking on major contracts because that was where they could obtain some profit. Mr Thompson agreed that would be a good role for ACDC. 16 At the next meeting in March 1997 at the site, Mr White said that Alfredo Matayag Aban was present in addition to himself, Mr Thompson and Mr Libut. Mr Thompson said that Mr Aban would be able to do the drawings. Mr White said he could obtain the plan and Manly Council design criteria and requirements. Mr Libut agreed, and Mr White asked Mr Aban to start on concept drawings. Mr White then obtained details from Manly Council. 17 At a further meeting Mr White said that he and Mr Libut agreed that Mr Thompson needed security. Mr White had no money. Mr Libut had no money. ACDC had no money. It was agreed that Australian Hebel House would be established at a later date when Mr White's funds had come through. 18 In April 1997, after a survey of the property had been completed, Mr White said there was a further meeting at the property when Mr White said to Mr Thompson that they would prefer the land to be bought in the name of Australian Hebel House but they understood his position. Mr White said the property would be held in trust until he and his wife got their funds and then Australian Hebel House could be established and the title transferred to it. Mr White said: "We must remember that it's still on, as we agreed in the beginning, any ventures between us would be on a third to third to third basis. The same as we discussed at Eastwood the same as we discussed during conversations at Wattle Grove". According to Mr White, Mr Thompson said: "Yes, we will proceed with it in my name and, yes, we will still divide it as a joint venture property 30/30/30". 19 In a later meeting in April 1997, Mr White said that Mr Thompson asked whether the others agreed that the property be put in his name. Mr White agreed because Mr Thompson was putting up the money for the venture. Mr Libut said the same thing. Mr White reminded Mr Thompson again that it would be the same as had always been discussed, the ventures would still be a third, a third, a third. Mr Thompson agreed. Mr White said that Australian Hebel House would be established later and the title transferred to it. Mr Thompson pointed out that a transfer would involve stamp duty costs. Mr White agreed and said that they could easily draw up agreements to protect the parties. 20 In April 1997, contracts were exchanged for the purchase by Mr Thompson of the Seaforth land. 21 Mr white said similar conversations took place later in April 1997 and in early May 1997 before the purchase of the land was settled. About the same time, the three had a discussion about ACDC. Mr White said that he and Mr Libut had agreed that Mr Thompson's profit share in ACDC should increase from 10% to 20%. Mr Thompson agreed. 22 Mr Thompson's version of events was that, following a site meeting with Mr White, he negotiated the purchase of the Seaforth property at $495,000.00, informed Mr White of this and asked whether ACDC could build the house at a good rate. He said Mr White responded that ACDC would build the house at a reasonable rate and then he and Mr Libut could get some money together and ACDC could build houses for them as well. Mr White said that the house, like the one at Sans Souci, would cost between $270,000.00 and $290,000.00 and ACDC should be able to start construction within six months of planning approval. 23 Mr Thompson said he had no conversations with Mr White or Mr Libut about being involved in the project other than as an employee of ACDC. 24 Mr Libut swore affidavits recalling the events as Mr White had done. The wording of his recollections of conversations was almost identical with that of Mr White who had assisted Mr Libut in the preparation of those documents. I doubt that Mr Libut had any clear independent recollection of the terms of the conversations. 25 Mrs Thompson swore an affidavit and was cross-examined. But she did not give evidence as to the on-site conversations. 26 In May or June 1997 at a meeting on site with Mr Thompson and Mr Libut, Mr White said he suggested to the others that in order to maximise the profits from ACDC that would be put directly into the Seaforth venture, they should all accept a minimum wage of $25.00 per hour. Mr Libut agreed because it was important to sacrifice to obtain money to put into the venture. Mr Thompson agreed but said he would not be able to survive on $800.00 a week and he would have to do other work. Mr White then said that was the way he would pay wages coming out of ACDC. 27 Mr White introduced Mr Thompson to Anthony Tomazin, a financial broker, who arranged a loan to Mr Thompson of $270,000.00 from Advance Bank Ltd. After the purchase of the Seaforth property, Mr Thompson had about $60,000.00 left from the loan. The Advance Bank had offered a further loan facility for construction of $270,000.00. However, it was subject to the condition that the house could be completed for no more than $270,000.00 and by June 1997, that was not possible. 28 In June 1997, Mr Thompson and Mr Libut approached Mr White and explained that they thought an hydraulic elevator garage should be installed that might cost $50,000.00 or more but would add to the selling price and therefore to the profit of the venture. Mr White agreed that it was a good idea although it would cause pressure in that more loan funds would be needed. 29 Also in June 1997 a discussion took place between Mr White, Mr Libut and Mr and Mrs Thompson. Mr Thompson's son-in-law, Steven Stinton, was an architect. He had drawn up a new design for the house. Mr White thought the design was an excellent one. Mr Libut thought it was a very good design as well. A Mr Lee took over and then did the drafting and drawings with construction details. 30 Mr Thompson said that he and his wife approached Mr Stinton and retained him as their architect. The plans were approved by Manly Council. Mr Thompson estimated the cost of Mr Stinton's design at $520,000.00. After the plans were completed he spoke with Mr White who said it would cost around $500,000.00. 31 The building application to Manly Council was drawn up by Mr White in the name of Mr Thompson and signed by Mr Thompson. 32 Some preliminary work was performed on the site but Mr Thompson, Mr White and Mr Libut spent their time working for ACDC on other building projects. 33 Australian Hebel House Pty Ltd was established in September 1997 with an issued capital of $30,000.00. Mr White and Mr Libut each contributed $10,000.00 and shared a further contribution of $10,000.00 on behalf of Mr and Mrs Thompson. 34 Advance Bank Ltd was taken over by St George Bank Ltd which, in July 1998, offered Mr Thompson a construction loan facility of $270,000.00 on the same terms and conditions as applied to the Advance Bank facility. It was not accepted. 35 From January 1999, moneys were paid to St George Bank to discharge the interest obligation of Mr Thompson. There is some confusion in the evidence as to the source of those funds. Mr Libut said he made the payments and his source of funds was ACDC. I need not resolve that issue. It is one of the matters for the proposed reference. 36 During 1999 some preliminary work was undertaken at the site but it was not until February 2000 that ACDC commenced full-time work on the construction of the house. 37 In January 2000, ACDC was to receive about $280,000.00 to $300,000.00. According to Mr White he spoke with Mr Libut and Mr Thompson saying that they could start the Seaforth project fulltime. They both said that it was great. Mr White said he would record all wages paid as loans to the Seaforth project and would record all materials and contractors paid in a loan account from ACDC to the venture. Mr Thompson agreed. Mr Libut agreed. Mr White suggested a 15% margin on wage cost and materials cost to cover overheads. This was subsequently agreed at 10%. 38 Around February 2000, Mr White said that Mr Thompson spoke to him and Mr Libut about the fact that he and Mrs Thompson had been renting for some time and it was costing $600.00 a week and they had hoped to occupy the house and pay rent towards the venture. Mr White said that was a good idea and when they moved in he suggested they pay $500.00 per week. Mr Libut agreed. Mr Thompson agreed. It was agreed that Mr Thompson and Mr Libut would work on site and Mr White would be involved in office management and general coordination. 39 Moneys became available to Mr and Mrs White. They lent $305,500.00 to Mr Thompson at 15% interest by varying instalments between June and August 2000. Mr Thompson paid ACDC progress payments with the borrowed funds. 40 In August 2000, Mr White drew four agreements said to record the relationship between the parties and asked Mr Thompson to sign them. Mr Thompson refused to do so. They comprised a deed of agreement and three deed of loan agreements. 41 The deed of agreement was between Mr and Mrs Thompson, Mr White, Mr Libut and ACDC. It recited that Mr and Mrs Thompson were to purchase the Seaforth property in Mr Thompson's name, Mrs Thompson was to provide $285,000.00 towards the purchase and Mr Thompson would provide $270,000.00 to complete the purchase by raising a first mortgage loan with St George Building Society. The deed provided that Mr White, Mr Libut and ACDC agreed to provide moneys to Mr and Mrs Thompson by whatever means in order that their property at Seaforth be developed as an up-market residential property worth upwards of an estimated $2 million. All parties agreed that the developed property would be sold as soon as possible with due regard to maximising the profit realisable on the development. The parties agreed that prior to calculating the profit of the venture, all moneys each party provided to the venture be calculated, totalled and paid a dividend at an interest rate of 10% per annum simple interest for the duration of their respective loans and all parties agreed that after all venture costs and disbursements, the remaining profit of the venture be divided into three equal shares between the Thompsons, Mr White and Mr Libut. 42 The deed of loan between Mr and Mrs Thompson and ACDC recited that Mr and Mrs Thompson owned the Seaforth property with the title in Mr Thompson's name and that they had approached ACDC for a loan in order that they might build a house on the property. The deed provided that ACDC agreed to lend Mr and Mrs Thompson up to $350,000.00 in order to build a house on the property, the loan was to be a line of credit up to a limit of $350,000.00 with summary of the various loan draws agreed to be recorded from time to time in an annexure attached to the document denoting the date, summary of the amount lent and signed by the representative of both parties with associated details also attached. The loan was to be paid at interest of 15% per annum simple interest until repaid and Mr and Mrs Thompson agreed that ACDC might use the document to place a caveat or mortgage upon the title of the property at any time in order to protect and secure the company loan interests. 43 The deed of loan agreement between Mrs Thompson, Mr White and Mr Libut recited that Mrs Thompson was a member of the Australian Hebel House Superannuation Fund and that Mr White and Mr Libut were members of the ACDC Superannuation Fund. The agreement provided that Mr Libut and Mr White each agreed to lend Mrs Thompson $33,500.00 and place those amounts into her superannuation fund account, that those moneys were liable to be repaid as priority payments from any financial dividends or returns she received from the superannuation fund or any other source such as the sale of her share in the Seaforth property held in trust in her husband's name, that any interest or dividend accumulated in the superannuation fund by the loan moneys were also due and payable to Messrs White and Libut and if no interest or dividends accumulated, a return calculated at an interest rate of 10% per annum simple was to be paid to Messrs White and Libut. 44 The final deed of loan agreement was between Mr and Mrs Thompson and Mr and Mr White. It was recited that Mr and Mrs Thompson owned the Seaforth property with the title in Mr Thompson's name and that Mr and Mrs Thompson had approached Mr and Mrs White for a loan in order that they might build a house on the property. Mr and Mrs White agreed to lend Mr and Mrs Thompson up to $350,000.00 in order to build a house on the land, the loan was to be a line of credit to a limit of $350,000.00 with loan draws recorded in an attached annexure denoting date, amount and signed by the representative of both parties. The loan was to be at an interest rate of 15% per annum simple interest until repaid and Mr and Mrs Thompson agreed that Mr and Mrs White might use the document to place a caveat or mortgage upon the title to the property at any time in order to protect and secure their personal interests. 45 By September 2000, neither Mr Thompson, nor Mr White, nor Mr Libut nor ACDC had any further funds and work at Seaforth ceased. According to Mr White, Mr Thompson informed him that he had spoken with Mrs Thompson, they had rented for a long time and they thought they should be reimbursed from the venture for that and they thought the profit share arrangement should be changed so that they received 50%. Mr White said that a meeting was held at the Dee Why hotel on 29 September 2000 between Mr Thompson, Mr White and Mr Libut and to discuss this issue. 46 Mr White said that at the meeting at the hotel, Mr Thompson said he and Mrs Thompson wanted a 50% share of the venture as they had rented for a long time and it was costing them money. Mr White argued for the continuance of a third profit share to each participant. Mr Thompson persisted with his 50% request. Mr Libut suggested that Mr Thompson could be reimbursed for the rent by getting 50% of the first $500,000.00 profit and any balance should be split one third to each. Mr Thompson accepted this proposal. As did Mr White. He and Mr Libut had already discussed Mr Thompson's request and had agreed that if they agreed to Mr Thompson having a 50% share, they would split the balance 25% to each. 47 Mr Thompson denied that any conversation about profit sharing took place at the Dee Why hotel. Mr Thompson said that at the meeting jobs for which ACDC had quoted, work coming up and the attitude of CSR Hebel towards ACDC were discussed. 48 In December 2000, Mr Tomazin arranged a loan of $600,000.00 in Mr Thompson's name. The funds were used to repay the loan of approximately $270,000.00 to St George Bank and $110,000.00 was used to pay a District Court judgment secured by Fair Trading Administration Corporation against Mr Thompson. The parties agreed that this liability should be discharged because ACDC had ceased trading for lack of funds, there was no other source of funds and if Mr Thompson was bankrupted the Seaforth property would be lost. The parties noted that the remaining funds were insufficient to advance construction to a lock-up stage. 49 Mr White said that in July or August 2001, he suggested to Mr Thompson that rent payable by Mr and Mrs Thompson when they went into occupation of the house at Seaforth should be $600.00 per week rather than the $500.00 earlier agreed. He said that Mr Thompson agreed that the new figure was fair. 50 Approximately $190,000.00 was drawn from the ACDC superannuation fund during 2001 to bring the house to lock-up stage which was reached in September 2001. Mr and Mrs Thompson then occupied the house from October 2001 until its sale in May 2003. 51 Mr Thompson said that his original intention to occupy the house with Mrs Thompson as their residence changed when he realised that he could not afford to service the loans he had incurred and he resolved to sell the property to discharge those obligations. 52 Mr Thompson said there was no mention of interest on the loans from the superannuation fund but he assumed that he would have to pay 10%. 53 Originally it was the claim of Mr Libut that he advanced the superannuation funds but, subsequently, ACDC amended its pleading to claim the repayment of those loans from Mr Thompson. 54 The relationship between the parties became strained and neither Mr White nor ACDC performed any further works at Seaforth after October 2001. 55 In December 2001, Mr Tomazin arranged an increase of $150,000.00 on the loan to Mr Thompson. 56 During April or May 2002, Mr Libut worked on a swimming pool being constructed at Seaforth. 57 In June 2002, Mr Tomazin arranged a second mortgage for $152,000.00 which was advanced to Mr Thompson who oversaw the house's completion between lock-up and sale. 58 In December 2002, Mr and Mrs Thompson exchanged contracts to purchase a property at Somersby. 59 In February 2003, Mr Thompson arranged a further loan of $250,000.00 which he used to redeem the second mortgage and to provide himself with further funds of approximately $98,000.00. 60 In April 2003, contracts to sell the Seaforth property for $3.1 million were exchanged. 61 The moneys lent to Mr Thompson by ACDC and Mr White and any moneys lent to Mr Thompson by Mr Libut had not been repaid. Mr White and Mr Libut lodged caveats on the Seaforth land. On 9 May 2003, by consent, Barrett J ordered the caveats be withdrawn that Mr Thompson pay from the proceeds of sale of the Seaforth property $800,000.00 into a controlled moneys account in the joint names of the solicitors for Mr Thompson and Mr Libut and that Mr Thompson pay from the proceeds of sale of the Seaforth property $100,000.00 to Messrs White and Libut. 62 On 13 May 2003, Hamilton J ordered Mr Thompson to pay a further $200,000.00 from the proceeds of sale of the Seaforth property into the controlled moneys account and restrained Mr Thompson from selling or disposing of any interest in the Somersby property until further order.

The further witnesses 63 David John Glover is a friend of Mr White. He said he visited Mr White at ACDC's office and yard in Mona Vale in December 1996. Mr Glover was aware that Mr White and Mr Libut owned ACDC. He said that he was introduced to Mr Thompson whom Mr White said was Mr Libut's and his new partner. Mr Thompson said: "We're getting a bit sick of doing all the hard work for others and them making all the money. It's just common sense to get doing your own ventures". During the conversation Mr White said: "Byron's in the process of selling his house and keen to get our own venture going. Byron, Romy and I are all looking around at the moment for suitable sites." 64 Mr Glover said he visited the Mona Vale office in early February 2000. Mr Thompson had loaded his trailer with a large amount of timber and ply and other gear. Mr Thompson said: "Julian's probably told you we're finally getting into our own venture at Seaforth. I am taking all this gear to there now. Boy have we had our share of problems with big builders since I saw you last." 65 In October 2000, Mr Glover said Mr White took him to the Seaforth site where he spoke to Mr Thompson. Mr Glover said Mr Thompson told him: "A finance friend of Julian is organising us another loan and it should be coming through soon." 66 Mr Glover was cross-examined but maintained that he had recorded the gist of conversations that had taken place. It was submitted that his evidence was unconvincing because he was personally and financially indebted to Mr White in respect of moneys lent to him and with respect to a court case in which he required evidence from Mr White. Those are bases for approaching Mr Glover's evidence with caution. But his cross-examination did not lead me to conclude that the evidence should be rejected. It was consistent with the case being put by ACDC, Mr White and Mr Libut. And it was consistent with the evidence of other witnesses discussed below. 67 Sam Safetli owned land next door to the Seaforth property. At the time Mr Thompson bought the land he had a conversation with Mr Safetli who said that Mr Thompson told him how much he paid for the land and that it was a business venture between him and his partners. On another occasion Mr Thompson informed him that he had been to an auction and: "He said he and - him and the boys looking to start another venture." 68 It was submitted that Mr Safetli's evidence should be rejected. No other witness, including Messrs White and Libut, had suggested that the three were engaged in any investigations or assessments of other potential sites let alone attending auctions for that purpose. That raises a doubt as to the accuracy of Mr Safetli's recollection of the second conversation. But the first conversation is consistent with the evidence of other witnesses and I see no reason to reject it. 69 Patrick Swart gave evidence that he had discussed with Messrs Thompson, White and Libut starting a new business venture called Rapid Crane Pty Ltd in which each would have a 25%. Mr Swart had no funds. He said that at a meeting at Glebe Island with the three others, he was informed that money for the crane venture would come from the Seaforth property when it was sold. 70 Leonard Dudley Gibbons was employed by CSR Hebel during 2000 and ACDC was one of his accounts. He said that in July or August 2000 he was informed by Mr White in Mr Thompson's presence that the Seaforth project was a business venture and that Mr Thompson, Mr White and Mr Libut were partners in that venture. He said that Mr Thompson nodded and did not dispute the observation. 71 It was submitted that Mr Gibbons had no real recollection of events and conversations. He was cross-examined and did not depart from his evidence as to the conversation. I see no reason to reject his evidence. 72 Robert Zol was also employed by CSR Hebel. He was called by Mr White. He said he had discussions with Mr White, Mr Libut and Mr Thompson: "Only with relation to an idea you gentlemen had in relation to doing a joint venture development at Seaforth". He said he often requested ACDC to price projects but was met by the comment: "We're not interested in doing work for others, we're going to - the project they were always talking about was this development at Seaforth." 73 It was submitted that Mr Zol gave no evidence of any direct conversations involving Mr Thompson and property at Seaforth suggesting a joint venture. To the contrary his evidence implicated Mr Thompson in conversations regarding joint venture development at Seaforth. 74 Mr Aban was also called by Mr White. He met with Messrs Thompson. White and Libut on the site in early 1997 when the fruitful beginning of a joint venture was stated. He said he met Mr White and Mr Libut again and Mr and Mrs Thompson at their home in Neutral Bay as the designer of the original house on the property. He said all of them were talking about a joint venture. All of them used the words "joint venture." 75 It was submitted that Mr Aban had no real recollection of individual conversations. That is true. He could not separate individual conversations and identify the author. But he was firm in his evidence that each of the persons at that meeting used the phrase "joint venture" during the course of the discussions. His evidence accords with that of the other witnesses mentioned above. The consistency in the evidence of these people leads me to the view that Mr Aban's evidence, although vague, should be accepted.

Resolution of the conflict 76 In the absence of contemporary documents supporting the existence of a joint venture on the one hand or an individual investment through loan funds on the other, the nature of the relationship between the parties depends, as I have said, on the oral evidence of the parties involved. 77 The consistent evidence of those who heard the conversations about the Seaforth property in the presence of Mr Thompson that the relationship between parties was described by them as a joint venture, leads me to reject the evidence of Mr Thompson that no such venture existed. 78 In my view, Messrs Thompson, White and Libut agreed, shortly after Mr Thompson was employed by ACDC, that they would form a joint venture company in which each held a one third interest and they would purchase, develop and sell suitable properties with a combination of third party finance and profits generated in ACDC. 79 I accept the evidence that Mr Thompson was to cause $285,000.00 to be contributed to the purchase of the Seaforth property in order that it became the parties' first joint venture. I accept the evidence that Mr Thompson required the property to be registered in his name as he was to contribute, or cause Mrs Thompson to contribute, the only initial funds. Nonetheless, the property was to be developed as a joint venture with Mr Thompson, Mr White and Mr Libut to share the profits equally. 80 That relationship was varied at the Dee Why hotel in September 2000 with Mr Thompson to have 50% of the profit up to $500,000.00, but any profit over and above that figure was to be shared equally by the three participants. 81 It was submitted that the loans made by ACDC and by Mr White to Mr Thompson belied such a relationship. On the contrary, the draft agreements of August 2000 indicate that the contributions of each were to be treated as interest bearing loans that were to be repaid before the profit on the venture was calculated. 82 It was submitted that the arrangement was too vague to be enforced because there had been no mention of how losses, if any, might be treated. It is true that the sharing of losses was not discussed by the parties. But the inescapable inference is that, in the event of a loss, each of the parties would bear an equal share. 83 It was submitted that the arrangement should not be enforced because there was no indemnification or guarantee given by Messrs White and Libut to Mr Thompson who, as registered proprietor of the land, and the person to whom all loans were made, bore all risks with respect to the purchase of the land and the performance of the construction works. 84 That is a submission allied to the former one. If a liability was incurred by Mr Thompson that could not be discharged when the property was sold, or could not be discharged by further mortgaging the property, because the parties were obliged to share any losses equally, Mr Thompson would have been entitled to contribution from each of Mr White and Mr Libut. 85 It was submitted that the relationship could not be as I have described it because neither Mr White nor Mr Libut made any direct contribution to the purchase price of the land or the cost of construction of the house. That is not so. Mr White and his wife advanced in access of $300,000.00 to the project. The fact that those funds were advanced to Mr Thompson by way of loan does not exclude them as a contribution to the joint venture. Its structure required funds to be provided by way of loan, to be discharged from the proceeds of sale of the Seaforth property before the profit of the venture was calculated. 86 As counsel for ACDC and Mr Libut put it in final submission, once I have determined the basis upon which Messrs Thompson, White and Libut had an interest, if any, in the Seaforth property: "the Court's work will be completed." 87 Subject to my formalising what I have said by way of declaration and once I have settled the questions to be referred and to whom they should be referred, I agree with that submission. 88 I will hear the parties on the appropriate terms of those declarations and the reference or references. I will hear the parties on costs. I direct the parties to bring in short minutes of orders reflecting these reasons. **********

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