56 The investment sum and the above sums were collectively designated "the Unique moneys".
57 The plaintiff alleges that Mr Robertson agreed personally to pay the Unique moneys and the plaintiff's reasonable legal costs and disbursements incurred in connection with the Investment Agreement and personally guaranteed to the plaintiff the payment of the Unique moneys. It alleges that Mr Robertson, as a separate obligation, personally indemnified the plaintiff against all claims, demands, costs, expenses and liabilities it suffered by reason of any breach by B&R of its obligations under the Investment Agreement.
58 The plaintiff alleges that in performance of the Investment Agreement it advanced, or procured the advance of, the investment sum to Robertson and B&R.
59 The plaintiff further alleges that in part performance of the Investment Agreement, on 12 November 2001, Mr Robertson and B&R caused the plaintiff's investor fees and legal costs to be paid. Further, 50 shares in B&R were transferred to the plaintiff, and Mr Facione was appointed a director of B&R.
60 It is alleged that in breach of the Investment Agreement, neither Mr Robertson nor B&R has repaid any of the investment sum, the interest, the investor costs, the reward sum or the residential reward sum to the plaintiff.
61 The plaintiff alleged that Mr Robertson is indebted to the plaintiff for the relevant amounts, including the $2 million. Alternatively, the plaintiff relies on the indemnity allegedly given by Mr Robertson in relation to B&R's breach of its obligation to pay.
62 Alternatively, the plaintiff alleges that the purchase of the Riversdale Road land was not completed by B&R, due to a rescission notice based on its failure to pay the balance of the purchase price due on 1 November 2002 to Gemini, so that the Investment Agreement became impossible to perform and was frustrated.
63 The plaintiff also alleges misleading and deceptive conduct pursuant to s.52 of the Trade Practices Act 1974 (Cth).
Defence and Counterclaim
64 By defence and counterclaim dated 4 February 2005, the defendant, Mr Robertson, admits that he was a director of B&R, which was wound up on 8 August 2003. He admits that B&R entered the contract to purchase the Riversdale Road land, on the terms alleged.
65 The defence alleges that Mr Robertson was also a controller of 635 St Kilda Road Pty Ltd, a company which developed a property it owned at 635 St Kilda Road Melbourne, in December 2000. It alleges that Mr Robertson was introduced to Mr Facione, who subsequently purchased some apartments from 635 St Kilda Road Pty Ltd, by Mr Davis, a solicitor of Mills Oakley. The defence alleges that Robertson and Facione, in March 2001, agreed to purchase and develop the Riversdale Road land as a joint venture, on terms that Robertson would obtain finance and permits and would appoint a builder, while Facione would pay the deposit and $300,000 in consultant's fees in relation to permits and would purchase a number of apartments in the development on completion.
66 The defence alleges that Mr Facione, as a "joint venture partner", owed Robertson fiduciary duties.
67 The defence alleges that B&R's entry into the contract to purchase the Riversdale Road land was "for the purpose of giving effect to the joint venture" between Mr Robertson and Mr Facione. It alleges that Mr Facione provided the funds for the initial deposit.
68 The defence denies that on 2 July 2001, Mr Robertson and B&R executed the alleged Investment Agreement on the terms alleged.
69 It denies that the plaintiff ever provided any funds to B&R and/or Mr Robertson.
70 It alleges that Unique had no authority to make loans.
71 In relation to the denial that the plaintiff provided or advanced funds, the defence alleges that 50% of the shares in Unique are owned by Mr Facione and 50% by Elonica, a company owned by Unique's other director Mr Sonntag, who is a defendant in a proceeding issued by Unique for alleged breach of his fiduciary duties, in which proceeding Mr Sonntag has claimed that Unique was operated as a quasi-partnership whose sole activity was the development of a particular property ("the Stead Street property").
72 Further, the defence alleges that if B&R and/or Mr Robertson executed any agreement, there was no consideration, or only past consideration, and the terms of the alleged loan or investment agreement were so uncertain as to be unenforceable.
73 Further, the defence alleges that Mr Robertson signed any document on the terms alleged under duress, and that Mr Facione thereby breached his duties under the joint venture.
74 The defence alleges that, as at 8 June 2001, the sum of $1,179,350 was due and owing under the contract to purchase the Riversdale Road land and a rescission notice had been served. It alleges that Mr Robertson entered the contract, $521,150 was applied from his Mills Oakley account towards the deposit, and Mr Facione insisted that, unless Mr Robertson signed the document presented by Fiona Sonntag, Mr Facione would not continue with the joint venture and would not procure the release of the balance of the total funds of $1,677,000.
75 The defence further alleges that by an agreement subsequently made between Mssrs Robertson and Facione, Mr Facione agreed to release Mr Robertson from his obligations under the joint venture agreement, in consideration of Mr Robertson's release of Mr Facione.
76 The counterclaim repeats the above allegations and alleges that Mr Robertson and Mr Facione (the second defendant by counterclaim), agreed to purchase and develop the Riversdale Road land as a joint venture, pursuant to which Mr Facione was to pay the deposit on the signing of the contract and to pay the first $300,000 in consultant's fees. The counterclaim alleges that Mr Robertson incurred expenses, B&R entered the contract, and Mr Facione provided the funds to pay the deposit.
77 It claims that any liability to Unique arose as a result of duress and breach of Mr Facione's fiduciary duty, in which breach Unique was knowingly involved. It seeks declarations, damages under the Trade Practices Act and an order that "the Loan Agreement" is void.
THE PARTIES' MAIN CONTENTIONS
78 The plaintiff claims that it loaned or advanced the $2 million (which it had borrowed from various investors) to the defendant Mr Robertson and B&R pursuant to an Investment Agreement which provided that the funds would be applied in part to pay the deposit for the purchase of the Riversdale Road land, and in part to pay consultants retained in relation to the proposed development of the land by Mr Robertson, which would be conducted through the corporate vehicle for the development project, B&R.
79 The plaintiff further claims that, pursuant to the Investment Agreement, Robertson and B&R were jointly and severally liable as principal debtors to repay the $2 million advanced by Unique within one year. Alternatively, the plaintiff contends that Mr Robertson guaranteed B&R's obligation to repay the $2 million. It is not disputed that neither B&R, (which was wound up in insolvency in August 2003) nor Mr Robertson has paid the claimed $2 million, or any lesser amount, to the plaintiff in satisfaction of its claim.
80 By a defence filed 4 February 2004, discussed above, the defendant denied the agreement alleged by the plaintiff; denied that the plaintiff ever provided funds to B&R or to him; and claimed that the alleged agreement was uncertain, ultra vires, induced by duress and lacked consideration. At trial, however, the defendant did not seek to establish those defences. At the conclusion of the plaintiff's case, Mr Pirrie, counsel for the defendant, submitted that the defendant had no case to answer, on the basis of the deficiencies of the plaintiff's evidence and legal issues. He elected to call no evidence. That course was appropriate, given the grounds of the no case submission. Counsel for each party agreed that their submissions in relation to the "no case" should also constitute their final addresses.
81 In Protean Holdings Ltd (Receivers and Managers Appointed) v American Home Assurance Co, [1] Tadgell J stated that in determining a no case submission, the ultimate question for the court is whether the evidence adduced by the plaintiff is not sufficient to debar the defendant from obtaining judgment without attempting to answer it.[2]
82 A finding that there is sufficient evidence to debar the defendant from obtaining judgment without answering the plaintiff's evidence does not constitute a finding that the plaintiff has established its case on the balance of probabilities. While the rejection of a no case submission by the defendant does not necessarily ensure success for the plaintiff, the distinction is a fine one.[3]
83 In Sarkis v DCT,[4] Nettle JA, with whom Warren CJ and Charles JA agreed, considered that although it may be that upon a no case submission, the judge is prevented from drawing inferences against the applicant arising from its decision not to call evidence, it did not follow that the judge is also precluded from drawing inferences against the applicant on the basis of documents tendered by the other party to support its allegations.[5]
84 His Honour endorsed Windeyer J's observation in Jones v Dunkel[6] that, in a trial by a judge alone, a no case submission may mean "would you, the judge, on the evidence given, find for the plaintiff?"[7] His Honour stated that in such a case, the judge must decide whether he or she could find for the claimant on the evidence so far led. His Honour noted that, as Tadgell J reasoned in Protean, it would be "quite unrealistic to expect ... [the judge] to do so without being able to consider all questions which bear on the sufficiency of the evidence and without power to draw or decline to draw all inferences from the evidence given on which the respondent party may seek to rely."[8]
85 In submitting that the defendant in the present proceeding had no case to answer, Mr Pirrie, counsel for the defendant, argued that there was no evidence capable of establishing the case against the defendant, or alternatively, that the plaintiff's evidence was so unsatisfactory and unreliable that the Court should decline to act upon it.
86 Mr Pirrie argued that the Investment Agreement, on which the plaintiff relied, did not constitute an enforceable agreement. It merely recorded an informal arrangement. If, contrary to that submission, it did constitute an agreement, he contended that it was conditional upon the execution of further documentation, which had not occurred.
87 Further, he argued that if the Investment Agreement were otherwise an enforceable agreement, it was too vague and uncertain to be enforced and was either not supported by consideration, or by past consideration only.
88 Relevant authority establishes that the modern approach to the construction of commercial agreements of business people is, generally, to endeavour to uphold the bargain by eschewing a narrow or pedantic approach in favour of a commercially sensible construction, unless irremediable obscurity or a like fundamental flaw indicates that there is, in fact, no agreement. It is permissible to have regard to extrinsic evidence of the "factual matrix"[9] or surrounding circumstances in determining the meaning of contractual terms.
89 In Hillas & Co Ltd v Arcos Ltd,[10] Lord Tomlin stated: