Robin Hood Dev Pty Ltd & Anor v Apadana Dev Pty Ltd & Ors [2022] VCC 1925 (14 November 2022)

Last Updated: 17 November 2022

IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION

Revised Not Restricted Suitable for Publication

GENERAL LIST

Case No. CI-20-04142

ROBIN HOOD DEV PTY LTD & ANOR	Plaintiffs/Defendants by Counterclaim
v
APADANA DEV PTY LTD & ORS	Defendants/Plaintiffs by Counterclaim

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JUDGE:	HIS HONOUR JUDGE MACNAMARA
WHERE HELD:	Melbourne
DATE OF HEARING:	21, 26, 27, 28, 29, 30 September and 3, 4, 5, 6, 7, 11, 13, 14, 18, 19, 21 October 2022
DATE OF JUDGMENT:	14 November 2022
CASE MAY BE CITED AS:	Robin Hood Dev Pty Ltd & Anor v Apadana Dev Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2022] VCC 1925

REASONS FOR JUDGMENT
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Subject:

Catchwords: Joint venture – Purchase of subject land and joint venture agreement alleged to be the result of misleading or deceptive conduct – Purchase transaction “restructured” based on apparent stamp duty consideration – No evidence in admissible form as to value of land at the date of purchase or joint venture agreement – No valuer called to give evidence – Misleading or deceptive conduct established – Whether damages can be fixed in the absence of evidence of the value of land and first plaintiff’s interest therein – Whether relief may be granted pursuant to Part IV of Property Law Act 1958 – Counterclaim based on alleged loan transaction

Legislation Cited: Building Act 1993; Penalty Interest Rates Act 1983; Evidence Act 2008, Civil Procedure Act 2010; Civil Procedure Amendment Act 2012; Duties Act 2000; Property Law Act 1958

Cases Cited: Turner v Minister of Public Instruction [1956] HCA 7; (1956) 95 CLR 245; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; Marks v GIO Australia Holdings Ltd [1998] HCA 69; (1998) 196 CLR 494; Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661; Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336; Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413; Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1996] UKHL 10; [1997] AC 191

Judgment: Orders: 1. Within 14 days of this date the parties must bring in short minutes to give effect to these reasons. 2. Costs reserved.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms K Anderson	AMS Ivanhoe Lawyers
For the Defendants	Mr B Harding	Jeremy Johnson & Associates

HIS HONOUR:

Background

1. Mr Maddah, the second plaintiff in this proceeding was born in Iran in 1981. (Court Book (“CB”) 2778). He lodged an application dated 26 April 2015 with the Commonwealth Department of Immigration and Border Protection seeking a Business Innovation and Investment (Provisional) Visa. According to his application, in his native Iran, he was “Director Manager and Shareholder” of a company engaged in manufacturing kitchens and distributing kitchen appliances, in particular kitchen rangehoods, sinks and gas stoves”. The registered name of this company was said to be “Rabin Ghomes Co”, carrying on business as “Rabin Kitchen Appliances”. (CB 2787-2791)
2. Mr Maddah said he arrived in Australia in October 2016 with the benefit of a “Business Visa Subclass 188”. (Transcript (“T”) 76, Lines (“L”) 12-17) He is resident in Australia at present in accordance with the terms of a bridging visa. (CB 517-519, T77, L10-12) According to Mr Maddah’s visa application, as at April 2015, his “main language” was Persian, also referred to as Farsi. He claimed to “have at least functional English language ability”, though he had not taken an English language test within the previous 36 months from that date. (CB 2789) In those circumstances, he was required to undertake 510 hours of English language study. A training provider known as AMES determined his International Second Language Proficiency Rate as at 12 December 2016. According to Mr Maddah, “the level was negative one, ...minus one”. (T78, L4-7) The assessment itself rated him for speaking, listening, reading and writing at “1-”. (CB 2759) Mr Maddah, it seems, read this as “minus one”, viz, a negative value. I would have read it as a positive number, albeit less than one; for instance, 0.75. Almost six years since this assessment, Mr Maddah has completed only approximately 100 of the prescribed 510 hours of English study. (T304, L24)
3. Mr Maddah sought to migrate to Australia under these arrangements with his wife, Elahe, and his son, Sam. (CB 2781-2784)
4. According to the 2016 application, Mr Maddah’s highest educational attainment was a high school diploma in “computer” obtained from the Iran computer industry technical school in 1997. (CB 2765-2766) His wife, however, was the holder of a Bachelor’s Degree in German Language Translation obtained from Islamic Azad University in central Tehran. (CB 2766) Mrs Maddah attended the premises of AMES on the same day as her husband for assessment of her English language skills. (T304, L8-10)
5. Mr Maddah understood that his application for an Australian resident visa required him to invest between $500,000 and $600,000 in Australia. (T78, L28‑31) To comply with this condition, according to Mr Maddah, “because I didn’t have good language skills and nobody whom I knew in Australia. I became familiar with a group of Iranians, and also based on the advertisements on TV in Australia ... It was Iranian television [presumably Farsi language program screened in Australia], and also Facebook.” (T79, L2-8) Mr Maddah said he “saw on Facebook, advertisement by Mr Nikfar, who introduced himself as the owner of the Apadana building.” (Ibid, L14-16) Apadana Developments Pty Ltd is the first defendant in this proceeding. The “Apadana building”, to which Mr Maddah referred, is situated at number 3 Red Hill Terrace, Doncaster East. As will appear, this proceeding centres around a development site on the opposite side of the same street at number 10. (Ibid, L25-30)
6. According to Mr Maddah, number 3 was an apartment building comprising some 37 units. (T80, L5-8) This building was under construction in 2017. Mr Maddah said he telephoned Mr Nikfar on the telephone number “based on advertisement” [presumably as quoted on Facebook]. (T80, L22-23) Mr Maddah said he [Mr Maddah] “asked him [Mr Nikfar] information and he also asked me for some information. What I was doing in Iran. And I also in return asked, ‘What are you doing here and how long have you been in Australia?’ And the answer was that, ‘I have been here for a long time, and I am here as a developer and construction builder’.” (Ibid, L14-19)
7. It seems Mr Maddah then attended a meeting with Mr Nikfar at the Apadana building, explaining to Mr Nikfar that he (Mr Maddah) was seeking investment opportunities to meet the requirements of his visa. (T80, L29-T81, L3) He said Mr Nikfar told him he was aware of the visa requirements “because there are quite a number of people with that type of visa who came here and I assisted them.” (T81, L6-8) Mr Maddah explained that he needed “to bring to Australia five to six hundred thousand dollars and invest here.” (Ibid, L12-14)
8. According to Mr Maddah, Mr Nikfar first referred him to a friend of his who owned a restaurant which he was willing to sell, telling Mr Maddah, “You go and have a look and, if you decided to buy, I can help you to buy this.” (Ibid, L17-18) Mr Maddah said he discussed his own business experience in Iran, telling Mr Nikfar that his “father was in development and construction work, but it is many years that he has passed away, and I have a factory of kitchen cabinets and rangehoods.” (Ibid, L21‑25) Mr Maddah said he told Mr Nikfar that he had “apartments and also a factory in Iran.” (T82, L23)
9. Mr Maddah said, “The next meeting I had with him and his partners at a coffee shop in Doncaster.” This was about a week after his first meeting with Mr Nikfar in early 2017. (T82, L31‑T83, L7) He said this was “coinciding with the time that I was doing the [English] course.” (T83, L12‑13) Mr Nikfar and Mr Maddah had had dinner at the Mexican restaurant which Mr Nikfar had recommended to Mr Maddah as an investment. This dinner was about a month after the first meeting onsite at number 3 Red Hill Rise, the Apadana building. Mr Maddah said he told Mr Nikfar that his English was not good enough to enable him to operate as a restaurateur. (T84) Mr Nikfar said he migrated to Australia in the year 2000 with his then wife, Ms Shams. (T852, L20‑22) They are both defendants in this proceeding. According to Mr Nikfar:

“When I came to Australia I starting as a construction labour job. I done any job, tiling and painting, and from 2006 – I forgot exactly, I went for a school – I forget the date exactly, which date, it will be in the court book. And I got a certificate for the Master Building Association.” [scil, the Master Builders Association] (Ibid, L24‑29)

10. He said this qualification was a “Masters in Building”. (Ibid, L30‑31) He and Ms Shams worked on the renovation of some six to seven properties. According to Mr Nikfar:

“Most of them was the domestic one, we purchasing, like, the old house, we renovate it and we put it on the market to sell it. And sometimes during that time we find a property has a potential for a permit, we get an architect to apply for us to get a permit and at that time the architect, I believe, for sure is famous in the Doncaster area, and we put it on the market to sell.”

(T853, L13-31)

11. Mr Nikfar’s work was a small residential rather than major buildings. (T854, L18‑20) According to Mr Nikfar, he and his family are renowned in the expatriate Iranian community:

“We are on the social media, almost nearly 2.5 million we have followers and we showed the Iranian people the corruption of the Iranian Government. Our group convinced the United States and Australia to Iran not (indistinct) but we more talked with the Iranian Government ...”.

(T852, L2-7)

12. Mr Nikfar said that he and Ms Shams “separated in 2013” (T851, L15), though, as will appear, they continue to cooperate in business matters. Mr Nikfar says that he has suffered psychological problems. He said:

“I was nearly two years when the Iranians kidnapped a friend of mine, Mr Zam, I get a problem for my mental and I get depression very badly and when I heard about the Iranian Government has been torturing and hanging my partner, Mr Zam, I get a bad depression and from that day I was under the psychologist and psychiatrist too.” (Ibid, L20-26)

13. He continued, “And from 2015 ... I became activated for the human rights”. (T852, L13-14)
14. Mr Nikfar placed his first meeting with Mr Maddah on-site at 3 Red Hill Terrace, East Doncaster in May 2017. (T854, L23-28) When Mr Maddah telephoned, Mr Nikfar believed he was looking to buy an apartment at number 3. (T855, L19-23) This “Apadana building” was under construction in 2017. Mr Nikfar was on-site to discuss apartment sales with any Iranian people who might attend the site. (T856) The meeting, he said, took place in a site constituted by a shipping container. (T856, L22 – T857, L2) This was the area used by the builders, not a dedicated sales office. (T857, L15)
15. Mr Nikfar said that Mr Maddah showed photographs of high rise buildings in Tehran. (T857, L18 – T858, L5) He said Mr Maddah told him that he:

“had a company in the Persian, Robin Hood, and I was surprised Robin Hood, because Iran doesn't like the name of – it is like robbing, I said, 'How could you get this name in Persia?', he said, 'From the corruption, we pay to get this name, exactly this one, it has been so hard', control of the Islamic revolution and it is impossible for normal people, they get such a name like Robin Hood.” (T858, L8-16)

16. As to the qualifications, according to Mr Nikfar, Mr Maddah told him he had “a licence in the concrete”. (Ibid, L22-23) According to Mr Nikfar, Mr Maddah said that his family owned a site in Tehran of 5,000 or 2,000 square metres, which he said was worth 100 million Australian Dollars. (Ibid, L26-29)
17. Mr Nikfar said that following this initial meeting, Mr Maddah was “every day [on-site at number 3] without any welcome”. (T860, L4) He said Mr Maddah told him, “I love the construction, sometimes when I have the time to come to visit at the site”. (Ibid, L19-21)
18. Mr Nikfar said he showed Mr Maddah the basement at number 3:

“and he was so interested for the concrete and at that time I believe level basement - I think (indistinct) basement and the ground floor has some problem of concrete and I was so upset, has some like broken scratching on the concrete, I was so upset with the builder. And Mr Maddah mentioned to me, 'I'm so qualified to construction, I'm happy to visit that one to give you advice if you want' and I accepted. And I showed him the cracked one on the side, the metal. He said, 'It's normal. In the construction it happens'.” (T860, L27-31 – T861, L1-6)

19. Whilst Mr Nikfar did not accept this, he ultimately discovered that it was correct following advice from an engineer. (T860, L29 – T861, L13)
20. Mr Nikfar remembered the dinner at the Mexican restaurant being a Taco Bill franchise in Chapel Street. (T870) He said the discussion on that occasion was about “the Iran politics”. There was loud singing and dancing, which limited discussion on any subject. (T872)
21. Mr Nikfar remembered a telephone call to his residence at what he regarded as an unduly late hour, namely 8.30pm to 9.00pm. This was in early June 2017. (T873) According to Mr Nikfar, Mr Maddah said: “I have to see you to discuss about business ... I have some project I want to show you”. Mr Nikfar said he agreed to meet Mr Maddah the following morning. (Ibid, L22-30)
22. At the meeting, according to Mr Nikfar, Mr Maddah had a folder of documents and his laptop computer. The folder contained materials relative to six or seven projects, being plans and planning permits. (T875, L26-30) Mr Nikfar said that Mr Maddah explained that he had obtained this material from an estate agent and had “checked” with Manningham City Council (the municipal council governing the Doncaster area). (T876, L1-3)
23. According to Mr Maddah, his next meeting with Mr Nikfar was at a coffee shop with “a Mr Lokhmani and Dodwa, who are in a joint ownership with the wife of Mr Nikfar [viz, Ms Shams]”. (T84, 31 – T85, L3) Mr Maddah said, “The wife [viz, Ms Shams] and the other two, Lokhmani and Dodwa, were jointly owning the Apadana building”. (T85, L5 and 6) It would seem this was a reference to the shareholding and directorship of the developer company, Nestco Pty Ltd.
24. Mr Maddah said that Mr Nikfar broached the subject of a development site at number 10 Red Hill Terrace, stating: “John Troiano is a friend of mine and I purchased the land for Apadana from him”. (T85, L13-14) Mr Maddah was asked by his counsel, Ms Anderson, what was said about “the land” in the meeting at the coffee shop, and Mr Maddah replied: “Mr Nikfar and the partners, they all said that this is a good land for investment and has very good return”. (Ibid, L16-19)
25. The reference to “the land” has some ambiguity. Mr Maddah had referred, immediately prior to this statement, to two pieces of land, namely number 3 and number 10. In context, however, the reference to “the land” would appear to be to number 10, which is the subject of this proceeding. Mr Maddah said that no other investment opportunities were raised or canvassed at this meeting, which he said lasted for an hour and a half. (Ibid, L24, 29-30)
26. It will be seen that on Mr Nikfar’s account, number 10 as an investment opportunity was identified by Mr Maddah and not by him, Mr Nikfar, and it was Mr Maddah, and not Mr Nikfar, who attempted to “sell” number 10 as an investment opportunity. Mr Maddah’s account and case is that number 10, as an opportunity, was raised by Mr Nikfar and not by him, Mr Maddah, and was advocated by Mr Nikfar, and not by him, though Mr Maddah did decide to invest in number 10 via his company, the first plaintiff, which seems to have been named for his factory in Iran and the corporation which operated it.
27. According to Mr Maddah, he had a further meeting about a month before the joint venture companies executed the initial contract to purchase number 10. Mr Maddah said that he met Ms Shams, “In the company with Nikfar”. He said, “Ms Shams and Mr Nikfar explained to me regarding this parcel of land to be purchased [viz, number 10] and that it is going to be a profitable business”. (T101, L18 – 102, L3) No documents were considered. According to Mr Maddah, “It was verbal discussion [viz, oral]”. (T103, L2) Mr Maddah said the discussion on that occasion was “solely on this project and the discussion was that the owner of this property is a close friend of us [viz, Mr Nikfar and Ms Shams]”. (Ibid, L9-12)
28. Asked about this meeting, Mr Nikfar said, “Your Honour, we don’t have any meeting on the restaurant”. (T1068, L18-19) Mr Nikfar continued “We had just one times in the restaurant and I have a video that I’m happy to show you. In that video, it was the music so loud in there, you can see about this.” (Ibid, L24-27) Mr Nikfar, it seems, was referring to the meeting at Taco Bill.
29. Robin Hood Dev Pty Ltd was incorporated in Australia on 12 July 2017, with Mr Maddah as its director and secretary and Mr Maddah as its shareholder. (CB 467‑8)
30. Mr Maddah said that the meeting concluded on this note, “I was told that if you bring your money, and if you bring your money quickly, you can purchase this land.” (T86, L1-3)
31. Asked in-chief whether he had any further meetings with Mr Nikfar, Mr Maddah said:

“I was told if you bring the money for investment soon, Mr Nikfar is going to go to Hong Kong and he’s there to purchase for the 37 units at Apadana. He can also purchase materials for your building as well, and this could be much more profitable.” (Ibid, L6-11)

32. Mr Maddah said, “the idea was to join with Mr Nikfar, because I did not know the language nor I was familiar with the law here”. (Ibid, L13-15) He continued, “We discussed the price of the land and also the cost of construction”. (Ibid, L17-18) This, according to Mr Maddah, transpired at the coffee shop meeting attended by the individuals whom he described as Mr Nikfar’s partner. (Ibid, L19-21)
33. Thereafter, Mr Maddah said he received an email “from Nazanin [viz, Ms Shams]”. The email and attached invoice appears at CB 881-2, with most of the text in Farsi. A translation appears at CB 883. The invoice was on the letterhead of “Apadana Dev Pty Ltd [viz, the first defendant]”, and it was headed “10 Red Hill Terrace, Doncaster Easter, Vic, 3109” and included the following text:

“For building three units as agreement

Mr Ehsan CEO of Robin Hood company must pay $1,120,000 and 40% owns share.

A development corporation is established between Apadana Company as the executor of the entire project with the ownership of 60% of the shares under the management of Ms Nazanin Shams and Robin Hood Company with the ownership of 40% of the shares with the management of Mr Ehsan Maddah.

According to this cooperation agreement, Ms Nazanin Shams is appointed the executor of the project with full authority and Mr Ehsan Maddah is appointed the investor and the employee of the Company.

Upon signing the contract, Mr Maddah is obligated to purchase a land and deposit an amount of $100,000.00 to Apadana company’s account followed by the payment of $300,000.00 at the end of September 2017 and an amount of $480,000.00 to be deposited to Apadana Company’s account by the end of October. The remaining $240,000.00 shall be paid to Apadana Company’s account over a period of 8 months.

This invoice is legally binding. It becomes legally binding once it is signed.

With great appreciation.

Nazanin Shams, Director

Apadana Company

This invoice should be signed by Mr Ehsan Maddah at the presence of Nazanin Shams, the Director of Apadana Company.

Thank you for your business.”

34. The invoice was designated “Number 1” and referred to a quantity of one item at a rate of $1,120,000, making a total amount of $1,120,000. No GST was provided for, and the invoice concluded: “Balance due $1,120,000”. The invoice was dated 18 July 2017 and stated “Due date: 17 August 2017”. There was a heading “Bill to: Robin Hood Dev Pty Ltd”. (CB 883)
35. A document which assumed some significance in the narrative, was a document headed “FEASIBILITY 10 Red Hill Terrace, Doncaster East, 3 Penthouse Apartments, 3 Level Building – Developer’s View” dated 12.4.2017”. This document appears at CB 1701 and projected a total project cost described as “Grand Total” of $2,793,839, with a total net profit of $596,961, representing a 24 per cent return on invested capital and a 21 per cent return on project costs. The “asking price” for the land “with a permit” was stated to be $1,300,000, to which were added a variety of additional items such as legal fees, rates and taxes, interest holding costs at 5.5 per cent, a borrowing cost of 1 per cent, and stamp duty of $71,500, making a sub-total attributed to “land costs” of $1,447,986.
36. I asked Mr Maddah during his evidence-in-chief: “Did you first see this page, the feasibility, before or after you signed the contract?” Mr Maddah replied, “After the signature”. (T124, L14-16) This was a significant statement because the plaintiffs’ principal claim here is for damage suffered by reason of misleading or deceptive conduct. The damage is said to flow from Robin Hood’s entry into a contract to purchase number 10.
37. If, as Mr Maddah’s answer just quoted, indicated he first sighted this feasibility only after the contract was signed on behalf of his company, and it was committed, the feasibility would be causally irrelevant to any loss said to flow from the first plaintiff’s entry into the contract. It was for this reason, presumably, that two days after Mr Maddah gave this evidence, though still in the course of his evidence-in-chief, the plaintiffs’ counsel, Ms Anderson, asked him: “Is it correct that you first received that feasibility study after you got back from Iran?” Mr Maddah answered: “Yes”. The transcript describes that answer as “direct” [viz, given without intervention of the interpreter]. (T236, L12-14)
38. As the narrative hereafter will show, Mr Maddah’s trip to Iran was after the contract for the purchase of number 10 was entered into by Robin Hood, Mr Maddah’s company, by signature on its behalf by Mr Maddah.
39. Following further questions from Ms Anderson, Mr Maddah said:

“I was told that John Troiano has worked on the profit that you could have from this joint venture and also I was told, 'We have also investigated that with our partners and this has a good profit in it' and he showed me these figures and the profit in it.” (T236, L29 – T237, L3)

40. I pointed out that his earlier evidence was that he had only received the booklet which contained the “feasibility” after his return from Iran, which would place the matter some months after Robin Hood signed up to buy number 10 [viz, his signature]. Mr Maddah replied, “It could be my mistake. I had not been given this to me before travelling and I was given this when I came back from travel, but I had seen it before.” (T237, L11-13)
41. Mr Nikfar said that Mr Maddah had already made his own feasibility study prior to the meeting and had it available in electronic form on his laptop. The narrative, he said, was “in the Persian language”. (T879, L11-15) He said this feasibility included an amount of $5,000 for bribes. (Ibid, L29-30) Mr Nikfar said that Mr Maddah asked him to contact Mr Troiano as putative vendor of number 10 seeking some information. Mr Nikfar said Mr Maddah asked if Mr Troiano still owned number 10, and he replied it was still under his control. (T880, L5-7) Mr Nikfar said that Mr Troiano delivered a box of documents relative to number 10 and other pieces of land. (Ibid, L21-30)
42. Perhaps, surprisingly, according to Mr Nikfar, he did not, in his initial conversation with Mr Troiano relative to number 10, seek the asking price. (T881, L9-13) It seemed to him that there was some reference to price, but Mr Troiano replied, “I bring for you the document and we can discuss”. (Ibid, L20) He said Mr Troiano added, “I am a negotiable person”. (Ibid, L26) Once the box arrived, according to Mr Nikfar:

“Mr Maddah, he carrying the box and we went to the site office and almost two or three hours we discussed about the paperwork and having a look at the plan, the plan it was amazing really. And I wasn't happy with the feasibility at that time.” (T882, L21-25)

43. According to Mr Nikfar, the box of documents produced by Mr Troiano included a booklet comprising various plans and drawings and the feasibility study already referred to (CB 1701), and a further booklet containing a different feasibility study. This one was dated “1.3.2017”, but otherwise had the same heading as the other feasibility study. It described the asking price as $1,450,000 in contrast to the $1.3 million on the other feasibility. The total land cost was put at $1,635,445. The total development cost was shown as $2.640.366, with the total development cost, “the grand total” of $3,030,815, yielding a total at profit of $1,069,505, representing a 41 per cent return on invested capital and a 35 per cent return on project cost. (CB 2216)
44. Also included in the box of documents from Mr Troiano, according to Mr Nikfar, was a valuation of number 10 by Savills, as at 28 April 2017. This valuation gave an “as is” market value of $1,070,000 excluding GST or a “project related site assessment of $1,260,000 excluding GST”. The latter valuation, which made allowance for the land’s potentiality, would appear to be the appropriate evaluation for present purposes. (Turner v Minister of Public Instruction [1956] HCA 7; (1956) 95 CLR 245) It will be seen that this valuation appears to line up with the first feasibility which refers to an “asking price” of $1.3 million.
45. The Savills valuation was made on the basis of the pre-sale of apartments 1 and 3 for $1.2 and $900,000 respectively. Both sales were said to have been made on 12 April 2017, with a 10 per cent deposit, the purchaser for unit 1 being Anita Paterson, and the purchaser for unit 3 being John Hassan. Ms Anderson observed the “asking price” of $1.45 million in the second of the higher of the feasibility studies was reached without the existence of either of those pre-sales dating back to March with the pre-sales said to have occurred in April.
46. Mr Nikfar said that he and Mr Maddah were looking at another property in a street called Gallon Way, also in the Doncaster area, with a permit for two units. Mr Maddah favoured Red Hill Terrace, remarking: “10 Red Hill is 1.45 [million dollars] for three”.(T897, L27-28)
47. Mr Nikfar said, “When Mr Maddah convinced me and I called John Troiano, I said, ‘Yes, we are interested in your project’.” (T898, L8-10) Mr Troiano, according to Mr Nikfar, said “just organise the pay for everything”. (Ibid, L15) He said he made the decision in principle that it would be profitable “for us” to buy number 10, remarking: “Mr Maddah convinced me”. (Ibid, L24-28)
48. After lengthy cross-examination by Ms Anderson, Mr Nikfar agreed that he told Mr Maddah in substance: “It’s a very good project, it’s a good site”, referring to Number 10. (T1048, L17-28)
49. Meanwhile, Mr Nikfar said he had planned to take a business trip to Hong Kong “to check the quality of the 3 Red Hill Terrace [materials]”. (T900, L6-9) Mr Nikfar said:

“I tell Ms Shams, this guy came from Persia, he would like to do some business with us, he has fantastic knowledge. Ms Shams said, 'Definitely answer is no. The project is small for me and I'm busy with 3 Red Hill Terrace.' And I didn't push her because we have some personal problem in the family. I said, 'Okay, you're the boss, I will come back to Mr Maddah and tell Ms Shams didn't accept it.' And I tell Mr Maddah Ms Shams didn't accept it, she is the director of Nestco, I said, 'Let me try and I will discuss with Ms Shams', he said, 'Most welcome.' And Mr Maddah then to see Ms Shams, it was 3 Red Hill Terrace, Doncaster East with the computer and some hard copy, but I wasn't present at that time. When Mr Maddah came back he said, 'She loved the plan when I explained it', 'I have to think about it.'.” (T899, L12-28)

50. Mr Maddah said:

“With the coordination with Mrs Shams and together and her daughter, we went to a district called Kew and at a commercial building. We entered an office and we sat there and Mr John Troiano came and it was the first time that I met Mr John Troiano.” (T122, L14-18)

51. This, it seems, occurred on 20 July 2017. The signatures of Ms Shams on behalf of Apadana, the first defendant, and Mr Maddah on behalf of the second plaintiff, Robin Hood Dev Pty Ltd, appear on a contract for the purchase of 10 Red Hill Terrace, Doncaster East from Lextrip Pty Ltd, a company apparently associated with Mr Troiano. Mr Troiano’s signature with the same date appears on behalf of Lextrip. (CB 153)
52. The price for the property was $1,450,000, with a deposit of $145,000, $72,500 of which was expressed to have already been paid, with the balance payable 7 August 2017, with a balance of $1,305,000 payable. (CB 154) Settlement was due on 21 November 2017. (CB 155)
53. The vendor’s solicitor, who apparently drew the contract and associated documentation, was Sergio Guerra, with the purchasers’ solicitors being shown as Mahons Lawyers, Mr Roger Johnson. Mr Roger Johnson was called as a witness for the defendants. He said that he had acted for Mr Nikfar and Ms Shams over a number of years “in relation to property development and commercial matters” and had known them for eight years. (T400, L15-20) Since the events of 2017, he had retired from practice on 31 March 2021. (Ibid, L14)
54. Mr Johnson said that he met Mr Maddah for the first time when Mr Maddah drove Mr Nikfar and Ms Shams “to VCAT, to do a directions hearing”. (Ibid, L22-23) Mr Maddah drove Mr Johnson back to Mahons and then drove Mr Nikfar and Ms Shams back to their home. (Ibid, L24-27)
55. As will appear, Mr Johnson was involved in drawing a joint venture agreement. Whilst Mr Mahon, as a partner of the firm, had overall responsibility for the conveyancing relative to number 10, in practice this conveyancing element was dealt with exclusively by conveyancer, Mr Ken Chalmers. (T427)
56. At some stage, the parties executed a document styled “Joint Venture Operations Deed”. (CB 128) Precisely when and in what circumstances this document was executed was in dispute between the parties. It is common ground that Ms Shams signed the document on behalf of Apadana Dev Pty Ltd, and Mr Maddah signed on behalf of Robin Hood Dev Pty Ltd. The document included a Schedule which assigned a 60 per cent participation interest to Apadana, and a 40 per cent participation interest to Robin Hood. (CB 149-150)
57. Clause 6.1(b) required Robin Hood to contribute $1,120,000, $100,000 of which was expressed to have been paid to Apadana already; $300,000 was to be paid by 30 September 2017; $480,000 “on or before 31 October 2017”; and the balance of $240,000 was payable “on or before 8 August 2018”. (CB 139)
58. According to Clause 3.2, under the heading “Participant’s Acknowledgments“ paragraph B(ii):

“ROBIN HOOD: IN ADDITION TO PROVIDING ROBIN HOOD’S FINANCIAL CONTRIBUTION, ROBIN HOOD WILL PROVIDE THE SERVICES OF ESHAN MADDAH WHO WILL BE EMPLOYED BY THE MANAGER AS A SITE MANAGER AT A SALARY OF $40,000 PER ANNUM WHICH IS A JOINT VENTURE EXPENSE”. (CB 138)

59. The project the subject of the joint venture was defined as the maintenance, division into the lots, development, partition and distribution in kind of the land in accordance with the plan of sub-division or as determined by the manager. The land was defined to mean 10 Red Hill Terrace, Doncaster East. The manager was defined to mean Apadana which, according to the definition at CB 134, was “appointed by this agreement to manage the affairs of the joint venture and carry out the project”.
60. Clause 6.3 obliged Apadana to open a joint venture account and participants’ account.
61. Clause 11.1 restricted the entitlement of participants unilaterally to deal with its interest in the land or the joint venture. (CB 143)
62. A 50 per cent or more change in the underlying beneficial ownership of the shares in Robin Hood or Apadana was designated as an event of default. (CB 131-132) There was also a covenant on the part of Robin Hood not to “DISCLOSE OR AGREE TO DISPOSE OF AN INTEREST IN ANY JOINT VENTURE ASSETS OR THE JOINT VENTURE OPERATION OTHERWISE THAN PURSUANT TO THIS DEED”. (Clause 3.1.2(K), CB 137)
63. Mr Johnson produced a diary note dated 25 July 2017 of a meeting which he said occurred at his office attended by Mr Nikfar, Ms Shams and Mr Maddah. He said, “and the purpose of the meeting was for the joint venture participants to provide me with the terms to enable me to prepare the joint venture agreement”. (T402, L12-15) It was not suggested that the joint venture agreement as drawn, and already referred to, departed from the instructions recorded in the diary note.
64. The meeting was conducted in English and Mr Johnson said he spoke to Mr Maddah in English. (T403, L25-26) He said it seemed to him, Mr Johnson, that Mr Maddah was understanding what transpired. From time to time he sought clarifications from Ms Shams, who provided them to him in Farsi. (T404, L6-12)
65. Mr Johnson’s belief that Mr Maddah understood what was being said derived not so much from his speaking up and engaging in conversation, but, rather, remaining silent and looking sage. (Ibid, L13-17). Mr Johnson said that this was the one and only conference held at his offices relative to the joint venture. (T410, L14-17)
66. As noted, according to Mr Johnson, his one and only meeting with the parties in this proceeding was to take instructions as to the provisions to be included in the joint venture agreement. By definition, the agreement was not available for signature on that day. According to Mr Maddah, however, there was a further meeting at which the agreement was executed and discussion was had between Mr Nikfar, Ms Shams and Mr Johnson, with Mr Nikfar and Ms Shams providing explanations to Mr Maddah of at least part of what Mr Johnson was saying. (T137‑9) Mr Maddah seemed uncertain as to whether there were two meetings with Mr Johnson or only one. At any rate, he put the meeting at which he signed the joint venture agreement before his departure to Iran on 14 August 2017. (T140‑1)
67. Whilst Mr Johnson did not investigate his former firm’s time ledger to exclude the possibility that there was a second conference, his memory was that none occurred. (T423) He categorically denied that the joint venture agreement was signed at his office. (T423, L27 – T424, L1) Mr Johnson said he remembered telephoning Mr Nikfar to follow up the fate of the joint venture agreement asking, “What’s happening with the joint venture agreement?” and being told it had been signed, he said he needed an original and one was dropped into his office. (T424, L3-7) In contrast to the document as executed, the final page of the version as prepared by Mahons omits a final blank page contained in the execution copy, something which would be unusual and somewhat unprofessional for a document prepared by a law office. In addition, the format of the document as executed is irregular. Most of the print in the execution copy is in the customary capitals and lower case. However, in paragraph 1.2 to the end of paragraph 3.3 of the document as executed the clauses are all in block capitals, again a feature which would appear unprofessional in a document prepared by a law office. Indeed, within the island of block capitals, a further island of orthodox caps and lower-case print appears at paragraph 1.3. (CB 1090)
68. The next document chronologically, assuming the correctness of the date which it bears, is a document styled “Agreement” between Apadana and Robin Hood of the first part, ascribed as the ‘Developer’, and Hassan Developments Pty Ltd ascribed as the ‘Project Dealer’. This agreement (CB 317) bears the date 20 October 2017, that is, some three months after the date of the real estate sale agreement relative to number 10 and prior to the date in November scheduled for completion of that contract.
69. The agreement appears to be executed by Hassan Developments via an attorney, Mr John Troiano, by Apadana via the signature of Ms Shams as its Director and by Robin Hood by way of signature by its director, Mr Maddah. (CB 329) The terminology in the agreement is inconsistent. It refers to Hassan Developments in the heading as “The Project Dealer” and Apadana and Robin Hood collectively as “The Developer”, but refers to them in the operative clauses and the recitals as “TD” [viz, Apadana and Robin Hood] and Hassan Developments as “TPD”.
70. The purpose of the agreement, according to the recitals, was a wish by Apadana and Robin Hood to reimburse Hassan Developments “all costs it has incurred for the creation of the Project on the Property including any interest in the land, the plans conceived, marketing material and any other items belonging to ‘TPD’ relating to the property as described in the schedule. (“The Property”) and the parties are now formalises [sic] their arrangement outlined in this agreement.” The property is described in the schedule as being number 10. The reimbursement sum is $785,000 with $145,000 expressed to be payable to Hassan Developments “on the Signing of this Agreement”, $155,000 payable to Hassan’s “Lawyers trust account on the Signing of this Agreement and released to [Hassan] when the Developer and the Registered Proprietor, Anna Darroch, exchange a Contract of Sale for the Property herein”, and the balance of $485,000 said to be payable on the settlement of the property. (CB 328)
71. Mr Maddah agreed that he had signed this agreement (T185, L21-25) with Mr Troiano and Ms Shams signing at the same time. Mr Maddah also agreed that initials appearing at various places on the agreement were his. (T186, L11-13) Mr Maddah said, “Wherever they asked me to put my initials, I placed my initials.” (T187, L28-29) Mr Maddah also identified his signature appearing on a contract for the purchase of number 10 from a Ms Anna Darroch for a total sum of $630,000. The sale agreement bears the date 23 October. Mr Maddah said, “I didn’t go anywhere on 23 October to sign anything.” (T188, L19-20) He said he did not write the date on the document. (Ibid, L30) Mr Maddah said that he signed the Darroch agreement, “In Troiano’s office where Mrs Shams signed and I signed above it.” That is, he said he signed the Darroch contract on 20 July 2017, not 23 October, the date which it bears. (T189, L15-17) CB 2280 includes a Deed of Mutual Surrender as between Ms Darroch and Lextrip. The contract so surrendered is not in the Court Book.
72. Mr Maddah’s account would seem to have it that he, as a non-English speaker, was ignorant of the various manoeuvres and was simply led blindly to execute documents inspired by others without his appreciating what was going on, even in the broadest terms.
73. The Hassan agreement included a special condition (CB 327) on a page subscribed apparently by Ms Shams, Mr Maddah and Mr Troiano, on behalf of Hassan Developments, in the following terms:

“PRICE ADJUSTMENT DISCOUNT

In the event that the deposit is released in accordance with Item 3 stages 1 and 2 of the schedule herein then this agreement shall be discounted by the sum of $485,00 (FOUR HUNDRED & EIGHTY FIVE THOUSAND DOLLARS)”

74. Mr Nikfar gave a different account of how these documents purporting to have been executed in October 2017 came into existence. According to Mr Nikfar, when he returned from Hong Kong after the execution of the original contract with Lextrip on 20 July, Mr Maddah called on him “with the computer, he showed me again the feasibility. On his feasibility he show but he pay around $89,000, something like that, $82 [viz, $82,000] or $89,000 for the FIRB.” [viz, Foreign Investment Review Board] (T915, L13-16)
75. According to Mr Nikfar the parties [viz, Ms Shams’ company and Mr Maddah’s company] were “trying to save their FIRB and stamp duty. (Ibid, L20-21) Mr Nikfar said, “Every single day Mr Maddah, he said, ‘if I was in Iran we can do many things to save for the legal cost all the stamp duty’ they call them in Iran in different way. And I tell Mr Maddah, ‘Regardless, we sign it three days, we finished’ [a reference to the cooling off period] and he said, ‘Why you shouldn’t ask him, John Troiano, maybe we can sell the contract and get a new one.’” (T917, L29 – T918, L4) Mr Nikfar said he spoke to John Troiano who was enthusiastic to solve the problem. (T919, L11-17)
76. The effect then, according to Mr Nikfar, was that these documents were brought into existence to minimise stamp duty or some levy made by the Foreign Investment Review Board. Ms Shams said Mr Maddah’s account of having signed the Darroch contract at Mr Troiano’s office on 20 July was “Completely lie”. (T567, L14‑19).
77. Ms Shams summarised the arrangements apparently made in October 2017 as follows. “Cancel the Lextrip ... enter to the Hassan ... Because we try to settle directly with the Anna Darroch and we have to pay the people who operating the plan and permit for that property, which is, they had a caveat with the vendor at the time.” (T562, L5-15) She referred to the schedule to the Hassan Developments Pty Ltd agreement and the $485,000 which according to Item 3 of the schedule was “payable on the Settlement of the Property”, the final payment provided for in that agreement. Ms Shams said, “we pay $785,000 as part of the land price. This is part of the land price.” (Ibid, L27-29) She said settlement of the Darroch contract took place on 3 November 2017. (T565, L6-7) She said funds provided by Mr Maddah were used to settle the Darroch contract and the Hassan Developments contract was settled with money provided by her. (Ibid, L8 and 9) According to Ms Shams, this $485,000 was paid in cash, literally, viz, in bank notes, not by computer transaction or bank cheque. She said she had the cash as a receipt from two purchases of apartments, presumably at number 3. (T564) Ms Shams said, “I ask Mr Nikfar to carry the money and hand it to Mr Troiano.” (Ibid, L26-27)
78. As to Robin Hood’s obligations under the joint venture agreement, Mr Maddah said, “I [viz, Robin Hood] honoured the payment according to the schedule in the document.” (T147, L21-22) He said a payment of $100,000 was deposited in Apadana’s bank account on 21 July 2017. (T149, L17-21) An ANZ deposit slip appears at CB 310. A further deposit of $300,000 was recorded on an ANZ deposit slip dated 2 October 2017 at CB 311. Mr Maddah said that Ms Shams, Mr Nikfar and he went to the ANZ Bank Donvale Branch to make the deposit. (T150, L1-6) He said, “The arrangement was that an account be opened and the amount be deposited into that account.” (Ibid, L5-6) The deposit was made he said by transferring the funds from the Westfield Branch of the bank, presumably from an account controlled by Mr Maddah or Robin Hood, to the newly established Apadana account. (T150, L10-11) Court Book 312 includes a photocopy of a cheque drawn on Robin Hood’s account at ANZ Donvale for $480,000 payable to “Apadana Dev”. The cheque is dated 20 October 2017. Mr Maddah said that the cheque was written out by Mr Lokhmani, who Mr Maddah described as “a business partner with Ms Shams”.
79. It will be recalled that Mr Lokhmani was a director of Nestco, the developer of number 3. (Ibid, L19-31) Mr Maddah said that the next payment due by Robin Hood under the joint venture agreement was $100,000 payable in February 2018. At CB 341, there is a printout of a “transfer withdrawal ... at the Pines Shopping Centre Vic” relative to a Westpac Business One account. Mr Maddah said that he went to the bank branch at the Pines Shopping Centre with Mr Nikfar to affect this transaction. (T154, L21-25) Mr Maddah said that Mr Nikfar provided him “with the account details”, presumably the details of the account into which the transfer was to be credited. (T154, L21-26) The making of these several payments on behalf of Robin Hood is common ground between the parties.
80. A further payment said to have been $100,000 in total, consisting of bank cheques for $30,000 and $70,000 respectively, drawn by the Commonwealth Bank of Australia is disputed. Copies of these bank cheques appear at CB 344 and 345. They are both expressed to be payable to a company known as “Australian MIS Pty Ltd”. Mr Maddah explained that though the $100,000 was not then due by Robin Hood under the joint venture agreement, “They [presumably Mr Nikfar and Ms Shams] asked me to pay earlier.” (T155, L12-13)
81. An ASIC extract at CB 505 printed out as at 27 July 2020, shows that on that date “Strike-Off Action” was “In Progress” in relation to this company. It had been incorporated on 7 May 2015. Its shares were owned by Mr Nikfar and he was its sole director. Mr Maddah explained that Robin Hood had an account at Westpac but also another one with the Commonwealth Bank. (T156, L20-21)
82. Mr Maddah said that he was on site, presumably at number 3, with Ms Shams and Mr Nikfar and they requested the payment. It was Mr Nikfar who stipulated the bank cheque. He said the payment in pursuance of the joint venture agreement was made to Australian MIS at Mr Nikfar’s request. He gave the bank cheque to Mr Nikfar. (T157) Mr Maddah said it was only when he saw the cheque that he realised it was payable to MIS. (T158, L6-7) The bank teller had required Mr Maddah’s signature because it was Robin Hood’s account that was to be deducted. (Ibid, L13-16) Mr Maddah said Mr Nikfar had told him that he had a company named MIS. (T159, L2-4) The process a couple of days later with respect to the further bank cheque for $30,000 was, according to Mr Maddah, “exactly the same as before”. (T159 L31 – T160, L1)
83. There was an email in Farsi which was translated by the interpreter engaged on behalf of the defendants as reading, inter alia: “The above amount was received from Ehsan ... and the amount is $70,000 plus $30,000” - plus $11,000.” (T161 L21-23) The email was from Mr Nikfar but addressed to Ms Shams.
84. A certified translation of that email appears at CB 2757.
85. Mr Maddah said that, according to his understanding of the joint venture arrangements, his $40,000 salary for acting as site manager “would be paid ... as a lump sum”. (T181, L14-17) He said this was the subject of a discussion with Mr Nikfar and Ms Shams. (Ibid, L20-22)
86. Mr Maddah said they told him, ‘“Because you have given us the money early [viz, certain joint venture subscription monies] you don’t need to pay the $40,000”’. (T182, L6-7) He said Mr Nikfar and Ms Shams continued, “`Because your salary will be $40,000, you don’t need to pay now, So that $40,000 salary is for this payment.’”. (Ibid, L10-11) He said this discussion occurred when the last of the instalments under the joint venture was due from Robin Hood [viz, the beginning of 2018]. (Ibid, L12-15)
87. Mr Maddah envisaged that his salary of $40,000 would be payable upon the commencement of the development. According to plaintiffs’ counsel, the development never commenced and so the salary was never payable. (T199)
88. A building agreement relative to the development of number 10 was signed and dated 31 January 2019. (CB 386, 389) The parties to that agreement were a company, 10 Red Hill Operations Pty Ltd as “principal” and Bluesky Building and Construction Group Pty Ltd (“Bluesky”) as “contractor”. Mr Ahmad Hamoud [or, Mr Ahmad], the principal of Bluesky, also executed as guarantor. (CB 391) The contract was signed on behalf of the “principal” by Mr Nikfar, and Mr Ahmad as guarantor, with his signature witnessed by Mr Maddah, and by Mr Ahmad as director and secretary of Bluesky. (CB 393)
89. Mr Maddah said, “For 10 Red Hill, Mr and Mrs Nikfar decided to register new company and they said, ‘We want to make a contract with Ahmad’s company with the new company that we create’.” He continued, stating that Mr Nikfar and Ms Shams said, “`We want to make a new company so that (indistinct) [scil, Mr Nikfar] and Shams do not have any role in it and if we have difficulty – face difficulty with the builder, the land won’t be in danger’”. (T201, L22-30)
90. Mr Maddah said that the exclusion of Apadana and Robin Hood as parties was not discussed with him. (Ibid, L21-22) The contract included general conditions of contract published by Standards Australia Limited. (CD2, CB 399) The general conditions were AS 4000 – 1997 as amended. (CB 400)
91. On 13 February 2019, Mr Nikfar sent Mr Maddah a text partially in Farsi and partially in English. The Farsi portion translated as “Hello Ehsan my dear! I have sent you the construction permit”. Mr Nikfar signed off with the salutation, “God is kind”. (CB 1456-7) The “permit” in question was granted under the terms of the Building Act 1993 by Mr John Grimbos, building surveyor. (CB 1459-61) It covered “Stage One – To Permit Bored Piers, Capping Beam and Excavation Works Only”.
92. Mr Maddah said that on 15 February 2019, Mr Nikfar invited Mr Maddah to call at Mr Nikfar’s residence. Mr Nikfar, according to Mr Maddah, told him that he had to sign some documents which were contained in a large green folder. According to Mr Maddah, Mr Nikfar told him “Nazanin [viz, Ms Shams] has signed all of these documents and you need to sign all of them”. Mr Maddah continued, “and the pen by which Mrs Shams had signed the document was included in the folder. I took that folder and took it home.” (T204, L11-27)
93. Mr Maddah said that, amongst the many documents for signature, were documents pertaining to the building contract. In addition, he said: “I saw several invoices and one of the invoices was with the letterhead of my own company and had written a text in it”. (T205, L1-3)
94. Mr Maddah identified the invoices to which he referred as being in the Court Book at 449-452. The first of those documents was on what purported to be Robin Hood letterhead. It stated:

“I Eshsan Maddah the director of Robin Hood Pty Limited, authorize your company 10 Red Hill Operations Pty Ltd to choose any builder, with agreed price, to build according to Manningham Council approved plan of three apartments.

Regarding your salary as a director we will be happy when the construction is finalized and I receive your final invoice then I will settle the account within 14 days.”(CB 449)

95. A second document in similar form but on the letterhead of Apadana was expressed to be from “Nazanin Shams”. The text was corrected in manuscript so that the document described her as a director of Apadana rather than Robin Hood. The document appeared to have been signed by Ms Shams on 15 February 2019. (CB 450)
96. Next, according to Mr Maddah, there was a tax invoice on the letterhead of a company “10 Red Hill Pty Ltd” (not “10 Red Hill Operations Pty Ltd”, the name of the company that entered into the building contract with Bluesky). This purported to charge Apadana $275,000 for “superintendent – building cost control at the site 10 Red Hill Terrace”. Goods and Services Tax of $27,500 was allowed for with the invoice total being $302,500. This document also purported to have been signed by Ms Shams on 15 February 2019, though her name in English is printed in manuscript and was misspelled as “Shmas”.
97. The last of the documents which attracted Mr Maddah’s attention, on his account, was another tax invoice in the name of “10 Red Hill Pty Ltd”. Once again for “superintendent – building cost control” at number 10, there was a charge of $275,000 but no allowance for Goods and Services Tax. Again, the document purported to have been signed by Ms Shams on 15 February 2019, and the printed manuscript of her name in English was correctly spelled. (CB 452)
98. Mr Maddah said that his lack of English language skills required him to refer these documents to his wife, who does read the English language. (T214, L25-31) Mr Maddah said that as at 2017, his wife was unable to speak English but, having attended English classes since, she had acquired the skill to read English by 2019. (T215, L1-9)
99. Mr Maddah was apparently troubled by the demand that he sign all the documents in the folder. He said:

“I can vividly remember that it was a Friday afternoon. I was told that, ‘You need to take all of them to me by next Monday’. I looked at all of the documents [having referred them to his wife he continued] ... I became extremely worried. From Monday, the whole of the documents, I took it to my accountant and because he was working in a company and very proficient in English, because my English was not up to it, I ask if he could make sense of the documents.” (The accountant spoke Farsi) (T216, L9-24)

100. After referring the documents to his wife and his accountant, Mr Maddah said, “I realised that I no longer can trust Mr Nikfar and particularly with regard to a blank page that had been signed already”. (T216, L28-31)
101. On Monday, he said Mr Nikfar rang him wanting him to hand over the signed documents. (T217, L1-6) He said Mr Nikfar pressed for the signed documents and Mr Maddah declined to sign. Mr Maddah then refused to take Mr Nikfar’s phone calls, and Mr Maddah transmitted a series of text messages in Farsi which translated in English stated:

“Can I call you later?

If you bring all my documents by 12:00 am tomorrow, that would be OK. Otherwise, we will come there by the Police.

Ehsan Maddah: Sorry, I can’t talk right now.

We are coming to your house.

I really hope you act like a man.

Be at home in the next 2 minutes.

I am at the door. Come out because I don’t want to enter your house.

I am at the door, step out the door.

Didn’t you tell me that I am hallucinating? Come out the door.

I swear by God, you are not a man.” (CB 1478)

102. The only response made by Mr Maddah to any of these texts was “Sorry, I can’t talk right now”. (Ibid)
103. As appears, Mr Nikfar came to Mr Maddah’s doorstep. Mr Maddah said he responded, “I don’t want to speak to you any more”. According to Mr Maddah, his wife had just delivered a baby. (T219, L29-31)
104. Mr Maddah said, “she did not feel well ... and ... asked me not to go out and she had been really frightened [that he] would press the horn of his car and it was a very bad night for my family and I”. (T220, L3-11)
105. Mr Maddah said that Mr Nikfar “started SMSing my wife and my wife had absolutely nothing to do with this”. (Ibid, L19-21)
106. Mr Maddah said that these events caused him to consult his accountant again, “and I said that I have reached a conclusion that I do not want to have anything to do with Mr Nikfar any more, for the sake of serenity at my family and myself”. (T220, L29 – T221, L1)
107. Mr Maddah said he then placed matters in the hands of a Mr Mansour Rahimi of Roxan Int Pty Ltd. He said at Mr Rahimi’s office he composed an email which was addressed to Ms Shams, Mr Nikfar and “Roger” (presumably, Roger Johnson at Mahons Lawyers, solicitor to the joint venture). He said Mr Rahimi translated it into English and transmitted it. (T221, L21-29)
108. Mr Maddah’s accountant had referred him to Mr Rahimi, who “had a construction company and was a friend of my accountant”. (T222, L6-7) The email said that Mr Rahimi’s company was authorised to speak and act on behalf of Mr Maddah and, inferentially, Robin Hood in all matters relative to the development at number 10. (CB 1479)
109. The following day, 23 February 2019, Mr Rahimi, on Mr Maddah’s behalf, sent an email to Mr Roger Johnson at Mahons headed:

“Re: The payment summary and compliance with clause 6.1(b) of the terms of the Joint Venture Operations Deed for the Development at 10 Red Hill Terrance Doncaster” (CB 1481)

110. The email included text designated “Appendix A”, which, according to the email, was:

“a summary of all payments paid by our client via banks transfers and cash payments to the Joint Venture Operations Deed account and Apadana and its related entities under the instructions of Apadana’s management within Australia and Iran”. (Ibid)

111. The appendix purported to identify some 10 payments made in Australia as follows:

“Payment 1- $100,000.00 Bank Transfer 21^st July 2017

Payment 2- $300,000.00 Bank Transfer 02^nd October 2017

Payment 3- $480,000.00 Bank Transfer 20^st October 2017 [sic]

Payment 4- $100,000.00 Bank Transfer 12^th February 2017

Payment 5- $70,000.00 Bank Cheque 14^th May 2018

Payment 6- $25,000.00 Bank Cheque 12^th April 2018

Payment 7- $5,000.00 Cash Payment 12^th April 2018

Payment 8- $11,000.00 Cash Payment 12^th April 2018

Payment 9- $5,000.00 Cash Payment 12^th April 2018

Payment 10- $1,400.00 Cash Payment 12^th April 2018

(CB 1482)

112. Somewhat confusingly, this email dated 23 February 2019 was expressed to be responsive to a letter by email from Mr Johnson of Mahons to Mr Rahimi on behalf of Robin Hood and Mr Maddah, in which Mr Johnson made demand on behalf of Apadana for some $240,000 “that Robin Hood has failed to pay Apadana ... which required payment on or before 8 August 2018. ... we refer you to clause 6.1(b)(iv) of the [Joint Venture Agreement]”. (CB 1485)
113. Mr Rahimi sent an email to Ms Shams as director of Apadana introducing himself, stating that his company had been engaged by Mr Maddah:

“to provide support and management consulting services to establish the framework and to represent his interest in the joint venture property development who he is sharing interest with you and your company said Apadana Development.” (CB 1486)

114. He suggested a meeting with Ms Shams to discuss the project. (Ibid)
115. Mr Maddah had executed a document styled “Service Agreement” on behalf of Robin Hood, appointing Mr Rahimi’s company to provide the following services:
     • Management, business consulting and advisory services;
     • Construction projects/program management services;
     • Complete building and construction services where required. (CB 2546-9)
116. The plaintiffs’ counsel, Ms Anderson, agreed the effect of this agreement was that “from here on [viz, 22 April 2019], Roxan was going to do the talking and exercise the powers of Robin Hood as a joint venturer”. (T226, L18-20) The first payment due to Roxan was $26,950. (T226, L29 – T227, L1)
117. Mahons then served a document styled “Notice of Default”, given on behalf of Apadana and addressed to Robin Hood and demanding the sum of $255,148.49 by Tuesday, 19 March 2019 [viz, seven days from the date of the demand]. This amount was constituted by the $240,000 previously demanded and said to have been payable in August 2018, with interest of $14,268.49 and $880 costs. (CB 464-6)
118. It will be recalled that Mahons had acted for the joint venture and set up the joint venture by drafting the agreement which constituted it. Mr Roger Johnson, who gave evidence on behalf of the defendants, conceded that it was a mistake for his firm having acted for both sides of the joint venture to take a partisan position on behalf of one against the other. He conceded that his willingness to do this derived from his perception that Ms Shams and Mr Nikfar were his “real clients”. (T445, L26-27, T446, L6-7)
119. It boded ill for the joint venture that the parties were, by March 2019, communicating only via intermediaries. By the time the trial commenced I was told there were intervention proceedings in the Magistrates’ Court which had led to orders restricting contact between Mr Maddah, on the one hand, and Ms Shams and Mr Nikfar on the other.
120. Mr Nikfar gave a different account of the breakdown of relations between the parties. According to him, a document styled “Meeting Minutes” and dated 16 February 2019 was at the centre of the breakdown. As translated, that document stated:

“MEETING MINUTES

Date: 16/2/2019

Parties:

Mr Ehsan Maddah (Borrower)

Address: Units 28-30 Winfield Road, Balwyn North

Mr Vafa Nikfar (Lender)

Address: 5 Friars Court Doncaster East

I, Vafa Nikfar, have deposited the entire amount specified below to the account of Mr Ehsan Maddah. Mr Ehsan Maddah is committed to return the entire principal in addition to 10% interest by 25/9/2019. If Mr Mr [sic] Ehsan Maddah fails to return the principal and the accrued interest by 25/9/2019, the interest will be increased to 15%.

The following is the list of dollar amounts deposited to Mr Ehsab Maddah’s account and his company, Robinhood, on the given dates:

1- 23/10/2017 $14,500 2- 24/11/2017 $5,000

3- 22/12/2017 $5,000 4- 16/02/2018 $$2,522

5- 21/02/2018 $$9,750 6- 19/03/2018 $3,500

7- 04/04/2018 $49,000 8- 07/06/2018 $14,500

9- 20/11/2018 $10,000 10- 02/11/2018 $$12,400

11- 29/03/2018 $5,850 12- 07/06/2018 $$5,850

13- 05/07/2018 $7,000 14- 13/07/2018 $5,500

15- 23/07/2018 $$2,200 16- 30/07/2018 $5,850

17- 17/04/2018 $2,200 18- 24/08/2018 $5,850

19- 25/09/2018 [illegible] 20- 15/10/2018 $5,850

21- 16/02/2019 $30,000

TOTAL AMOUNT: $205,122.00

Ehsan Maddah [Signed]

Vafa Nikfar [Signed]” (CB 1476)

121. It will be seen that this document purports to be an acknowledgment ex post facto of a series of advances totalling $205,122 made to Mr Maddah and/or Robin Hood over the period 23 October 2017 to 15 October 2018. Such a document would typically speak in the voice of the debtor – the classic promissory note being an acknowledgment of debt by the debtor or, as it is popularly rendered, “IOU”. Here, the document speaks in the voice of Mr Nikfar and the signature, or purported signature, of Mr Maddah constitutes, or purports to constitute, an acknowledgment or acceptance of the creditor’s assertion of an entitlement to repayment. Ideally, one might think that in the event of a series of loans there would be separate “IOUs” or promissory notes signed by the debtor for each advance. If no such notes were required at the time that the advances were made, why, one may ask, was acknowledgment sought in the form of “Minutes of Meeting”.
122. Mr Nikfar said: “Mr Maddah, he trying to (indistinct) [scil, sell] his company to his brother-in-law or the friend who came from Germany”. (T934, L13-15) The “company” referred to was Robin Hood. (Ibid, L16-17)
123. According to Mr Nikfar, Mr Maddah told him, “’I’m going out of this business’” (Ibid, L24-25) According to Mr Nikfar, he “agreed to meet with that young guy [viz, the brother-in-law or friend of the brother-in-law from Germany] at Carlucci’s Templestowe”. (T935, L4-5) This establishment is apparently an Italian restaurant. (Ibid, L10-11) Mr Maddah was also in attendance. (Ibid, L26)
124. According to Mr Nikfar, the would-be purchaser said that Mr Maddah was “asking around $1.8 million for the land enterprise without the construction”. (T936, L6-7) According to Mr Nikfar:

“Mr Maddah explained, because he’s trying to run away from the FRIB [viz, FIRB – Foreign Investment Review Board] for the stamp duty, and I understand if I going to buy in completely the Robin Hood I don’t need to pay again for the FRIB.” (Ibid, L15-18)

125. Mr Nikfar said that it would be preferable for Mr Maddah or Robin Hood to sell out to him or to Ms Shams. (T937)
126. Ultimately, there seemed to be no clear explanation as to how the meeting at Carlucci’s bore on the Minutes of Meeting dated 16 February.
127. Mr Nikfar referred to a complaint made by Mr Maddah to Victoria Police, which appears at CB 109. (T937, L28-31) Given that Mr Maddah’s statement to police was made 19 March 2021, it seems difficult to see this as in any way causative of Minutes of Meeting said to have been brought into existence some two years previously. The burden of the complaint is that the Minutes of Meeting which were the subject of a debt collecting demand by Mahons solicitors, and form the basis for the counterclaim in this proceeding, was a forgery.
128. In the course of giving his evidence-in-chief, Mr Nikfar produced an email dated 16 February 2019 transmitted that afternoon at 4.25pm to Ms Shams and Mr Maddah, which he said responded to the proposal for Mr Maddah to sell his shares in Robin Hood. The email began, as translated from Farsi into English, “According to the conversation I had with the lawyer, we cannot transfer the shares of our company, we can only transfer units because the work has started and there is a problem in the book account ...”. (CB 3323)
129. Mr Nikfar said that Ms Shams was “so worried, she said, ‘What we have to do now, with this guy, is get a loan from us, so much messy’.” (T937, L18-20)
130. Mr Nikfar said he responded: “Relax, I will get some paperwork from Mr Maddah to get evidence and later we’re going to the lawyer and we discuss with the lawyer”. (Ibid, L20-23)
131. Mr Nikfar said that “the loan agreement” was drawn up “at our house”. (T941, L14) He said Mr Maddah stated, “I will get a copy and I will certify it and I will return it back to you”. (T941, L31 – T942, L1)
132. The hostile texts or SMSs and the “screaming match” on Mr Maddah’s doorstep were, according to Mr Nikfar, not in relation to a green folder of documents, but rather the “loan agreement”. (T942)
133. I asked him why his text or SMS referred to “all of my documents” when, on this account, he was seeking the return of a single document. Mr Nikfar responded, “Your Honour, this is a good question. I signing the paperwork with the Bluesky, he took that document too”. (T944, L30 – T945, L1)
134. I asked, ‘What else did he take? And Mr Nikfar replied, “Bluesky contract of the building”. (CB 945, L2) He said that this contract included not only the legal clauses but specifications and plans: “it was maybe 1,000 pages including the plan and everything, when we sign the paper with Ahmad Hamoud, the builder. He took it himself [that is, Mr Maddah took it]’.” (T945, L23-28)
135. Mr Nikfar said that he never recovered the original loan agreement or the original building contract. (T946, L14-15)
136. The four contentious documents which, according to Mr Maddah, raised his concerns and led him to seek counsel from his accountant and ultimately placed matters in the hands of Mr Rahimi, namely the letters of authority in favour of Mr Nikfar’s company, 10 Red Hill Operations Pty Ltd, and the tax invoices purporting to be from that company, were discovered and included in the initial version of the Court Book.
137. I enquired as to the fate of the “green folder”, given that 16 February seems to have been a pivotal date in the breakdown of the joint venture, and the parties’ accounts were so inconsistent. Further investigation seemed appropriate.
138. In response to the interest which I expressed in this “bundle”, it was produced by plaintiffs’ counsel, Ms Anderson, on the morning of day 14 of the trial. It provided a zipper which could enclose all of the documents. It appeared to answer the description given to it by Mr Maddah. It included a number of documents relative to the development, including the legal clauses of the building contract with Bluesky.
139. Mr Nikfar was correct in stating that that document had not been returned to him. Presumably, the other part of that contract would have been taken by Mr Ahmad of Bluesky. There was even a felt-tipped pen in a polythene sleeve, as described by Mr Maddah.
140. As to the documents which were placed in the original version of the Court Book at 449-452, Ms Shams said they were fake. (T654, L25)
141. Mr Nikfar identified a document in a polythene sleeve within the folder as a manuscript document in Farsi in his writing, albeit undated. (T1179) The Farsi document was similar to the document at CB 450. (T1180, L17-18) Mr Nikfar said, as to the latter, “This is a fake document. Because when Ms Shams – we agree and we sign it in the Persian language, doesn’t need it for me writing again for English and writing again fake document.” (T1180, L23-27)
142. I asked what the difference was between the typed document at CB 450 and the manuscript document in Mr Nikfar’s handwriting in the bundle, and he replied: “The different, Ms Shams, under that one, is that must be – do it as – doesn’t have any value (indistinct) this paperwork must (indistinct) correctly from the lawyer”. [sic] (T1181, L10-13)
143. I told Mr Nikfar that I did not understand what he had said. As best I could understand, he was meaning to convey that the handwritten document was “all subject to legal opinion”. (Ibid, L18)
144. Asked about signatures on the documents in the folder purporting to be those of Ms Shams, Mr Nikfar said he did not think it was her signature. (T1182, L2) He had no idea whose signature it was. (Ibid, L6-7) He gave similar evidence with respect to a number of other documents purporting to have been signed by Ms Shams.
145. Ms Shams said that during the meeting reportedly recorded in the “Minutes” dated 16 February 2019 attended by Mr Maddah, Mr Nikfar and her, Mr Maddah told her and Mr Nikfar, “I’ve got a really big problem. I’ve told you about problems before but this is really big”. (T592, L1-3) She said that, as a result of this big problem, Mr Maddah sought an advance to him or his company of some $300,000. In fact, Mr Nikfar and Ms Shams were only willing to make $30,000 available. She said the “loan agreement” or “Minutes” were in error in showing this advance as having been made on 16 February, that is, the date of the meeting at which it was signed. The advance was in fact made on 6 February. (Ibid)
146. As to these items said to be loans, Mr Maddah said:

“these are the amounts that Mr Nikfar told me as reimbursement of things that I would buy or purchase with his instruction, like paying for Persian rugs, and he would reimburse me some time later, and it was related to the work done at 3 Red Hill Terrace and that I would, as part of my work, do for him and being reimbursed.” (T260, L11-18)

147. By a letter transmitted by email, Mahons demanded repayment of a principal sum of $204,995, together with interest of $63,958.82 for the period 23 October 2017 to 14 July 2020, making a total sum demanded of $268,953.62. (CB 1592-3) Mr Maddah denies liability.
148. The loans in question were said to have been made by Ms Shams, Apadana, Australian MIS Pty Ltd and Varvi Pty Ltd.
149. The breakdown in relations between the joint venturers meant that the development at number 10 did not proceed. Bluesky claimed to have undertaken preliminary works onsite, including site preparation, excavations, soil removal, underpinning, piling and capping beams. It rendered an invoice dated 13 June 2019 in the sum of $126,569.05 (CB 1530).
150. Mr Nikfar said that his company, 10 Red Hill Operations Pty Ltd, was dubious as to the validity of this claim and sought advice from a quantity surveyor. The claim was compromised for $85,000. (T1186) There seemed to be some confusion in Mr Nikfar’s evidence as to whether he had given a personal guarantee as director of 10 Red Hill Operations Pty Ltd, and that company’s obligations to Bluesky. Ms Anderson and I, and perhaps Mr Harding, had understood Mr Nikfar to say that he had, though no documents to that effect have been produced. According to the transcript, Mr Nikfar said: “I give him my personal guarantee (indistinct words) Bluesky as a director and I wouldn’t do it at all”. (T1186, L31 – T1187, L2) Whilst it seems to have been appreciated in the opposite manner when the evidence was given, a reading of the transcript shows Mr Nikfar saying he refused to give a personal guarantee.
151. Ms Anderson, on behalf of the plaintiffs, put it to Mr Nikfar that in fact no stage 1 works had been carried out. She took him to a photograph at CB 2104, which she said made good that proposition. (T1188)
152. Mr Nikfar said that a concrete structure which could be seen at the rear of the allotment, and which concealed some 26 piles, represented the preliminary work undertaken, apart from, one would imagine, some certain works involving the removal or redeployment of soil on the site. (T1189)

This proceeding

153. Solicitors acting for Robin Hood and Mr Maddah filed a Writ dated 15 September 2020 commencing this proceeding.

Plaintiffs’ claim

154. The plaintiffs sought relief for two distinct pieces of misleading conduct and also relative to what were characterised as “uncommercial transactions”.
155. The first piece of misleading conduct was said to have arisen in this way. Mr Maddah was said to have approached Mr Nikfar to “ask for advice in identifying a suitable business or investment opportunity” for Mr Maddah to pursue. His approach was said to have been “oral”, preceded by a telephone call making an appointment and then occurring at 5 Red Hill Terrace, Doncaster East, presumably this is intended to be a reference to number 3 where Apadana was, at that stage, carrying out a large scale residential development.
156. Mr Nikfar was said to have referred Mr Maddah to a friend who conducted a restaurant business known as “Jalisco Mexican Restaurant”, which ultimately did not interest Mr Maddah. Then, it is said that “in mid-2017” Mr Nikfar told Mr Maddah that Mr Maddah could invest in a property at 10 Red Hill Terrace, East Doncaster “with him” [viz, with Mr Nikfar]. This advice was said to have been given at Ampang Ria Coffee Shop in Blackburn Road, Doncaster East with a Mr Lokhmani and Mr Dalvand, described as Mr Nikfar’s business partners, in attendance.
157. Next, it is said that Mr Nikfar arranged a meeting for Mr Maddah attended by Ms Shams and Mr John Troiano, whom Mr Nikfar is said to have described as “the owner of Red Hill Terrace”.
158. The first set of misleading conduct was described as follows:

“In and about 20 July 2017 each of Nikfar and Shams on their own account and as officers and agents of Apadana represented to Ehsan Maddah and the Plaintiff that:

(a) the project was a great development and represented a great opportunity for the Plaintiff;

(b) the project would realise approximately $500,000 to $700,000 net profit when completed;

(c) the development would have a total cost of $2,800,000 and would sell for between $3.3 and $3.4 million;

(d) they were prepared to let the Plaintiff share in 40% of the costs and the profit;

(‘the investment representations’).” (CB 25-26) ”

159. Mr Maddah, it was said, relying on the truth of these representations, signed a purchase contract for number 10 from a company, Lextrip Pty Ltd, such contract dated 20 July 2017.
160. According to the Statement of Claim, “immediately following” the meeting where the contract was signed, Ms Shams was said to have “escorted” Mr Maddah to a meeting with Mr Nikfar at the offices of Mahons solicitors with one of its then partners, Mr Roger Johnson. Ms Shams, it was said, “purported to translate what was said by ... Roger Johnson”. The joint venture agreement was produced for execution and was then and there executed.
161. Further representations were alleged to have been made at that meeting in the following terms:

“In the course of the Mahons meeting Shams on behalf of the Defendants again represented to Ehsan Maddah and the Plaintiff that:

(a) purchasing and developing Red Hill Terrace with them was a good investment that would make him a lot of money;

(b) Mahon’s solicitors said that it was a great investment;

(c) Ehsan Maddah and the Plaintiff did not need their own solicitor as Mahons would look after things;

(‘the solicitor representations’). (CB 27)

162. The contract for the purchase of number 10 from Lextrip Pty Ltd was said to be an “uncommercial transaction” because neither Mr Troiano nor his company Lextrip owned number 10, and its true value was “approximately $665,000”. The Statement of Claim next alleged the execution of the agreement dated 20 October 2017 between Apadana and Robin Hood and Hassan Developments Pty Ltd for the purchase of architectural plans and approval documents for $785,000. The final “uncommercial transaction” alleged was the interposition of Mr Nikfar’s company, 10 Red Hill Operations Pty Ltd, as contracting party with Bluesky.
163. According to paragraph 23 of the Statement of Claim, “each of Nikfar and Apadana were knowingly involved in the making of the solicitor representations by Shams and were aware that those representations were false”. It was said that Apadana was also knowingly involved in the making of the “investment representations” by Shams and was aware that those representations were false”.
164. The two species of representations were said to be “false” because the land was “purchased at a price that was commercially over-valued and not as part of an arms-length transaction, and the methods of developing the land intended by the defendants were uncommercial and would operate to syphon the investment funds away for uncommercial purposes”. Therefore, the project “would not be completed but rather the funds invested would be paid away and lost for unproductive purposes”, with the defendants applying all of the investment “for their own purposes or in an uncommercial manner”.
165. Further, it was said that Mahons did not make a representation that number 10 “was a great investment” but, rather, acted only as solicitors to advise on documentation and risks inherent in the proposed transaction. Therefore, it was said, the two classes of representations were made in trade and commerce and, being misleading or deceptive, constituted a breach of s18 of the Australian Consumer Law.
166. Robin Hood, it was said, had executed the contract to purchase the land in the joint venture agreement and paid funds “to the defendants” in reliance on the representations and, accordingly, has suffered loss and damage. The loss and damage was said to have been constituted by the funds outlaid by Robin Hood under the terms of the joint venture agreement, totalling $1,080,000. In the event, according to the Statement of Claim, “the joint venture works have not progressed and no building works have been carried out at the site. Apadana have not entered into a building contract.” No accounting had been given to Robin Hood relative to its outlays, and no participant account had been established by Apadana as required by the joint venture agreement. No account had been given by the defendants despite demands that they do so.
167. Finally, it was said that the demand for repayment of monies under the “loan agreement” (presumably the one said to be constituted by a document styled “Minutes” dated 16 February 2019) was misleading or deceptive because “there was never any loan agreement”.
168. The Statement of Claim sought relief by way of damages and orders for the taking of accounts, a declaration that neither of the plaintiffs had borrowed $204,959 from any of the defendants, a declaration that the “loan agreement” “is not a genuine document and has not been agreed to by either of the plaintiffs”, and an order that the defendants deliver up the original and all copies thereof.

Defence and Counterclaim

169. By their Amended Defence and Counterclaim dated 25 January 2021, the defendants said that, despite the allegation in the Statement of Claim that Mr Maddah “speaks little or no English”, he “speaks some English”. They said that Mr Maddah represented that he was an experienced property developer in Iran, that he owned and operated a cabinet factory and kitchen rangehood business in Iran, had completed “numerous property development projects in Iran”, and had a business skills visa “which required him to invest a sum of money in Australia”.
170. They said that Mr Nikfar and Ms Shams married in 1999 but separated in 2013. They admitted that Mr Nikfar was involved in property development investments in the suburbs of Melbourne, and said that was also so for Ms Shams.
171. The defendants admitted that Mr Maddah said he was “looking for an investment opportunity to satisfy a condition of the Visa”. They admitted that Mr Nikfar had introduced Mr Maddah to a friend who had a restaurant business known as Jalisco Mexican Restaurant in Chapel Street, Windsor, and that Mr Maddah stated “he had decided not to purchase a restaurant business”.
172. They denied that Mr Nikfar knew, or ought to have known, that the plaintiffs relied upon the advice of Mr Nikfar and were likely to act in accordance with it. They also denied that Mr Nikfar had advised Mr Maddah that he, Mr Nikfar, had a property at number 10, which Mr Maddah could invest in with him, alleging, rather, that Mr Maddah approached Mr Nikfar with a suggestion that they develop number 10 together.
173. As to the meeting on 20 July 2017, described in the Statement of Claim as “the Troiano meeting”, the defendants admitted that it took place, but that Mr Nikfar was not in attendance, being in Hong Kong at the time.
174. They denied the making of what were described in the Statement of Claim as the “investment representations”, alleging that it was Mr Maddah who made representations to the defendants as to the project at number 10.
175. The defendants admitted execution by Robin Hood of the contract with Lextrip Pty Ltd on 20 July 2017. They said, further, that Robin Hood executed another contract of sale for the purpose of number 10 with Apadana from one Anna Darroch for $665,000.
176. As to the joint venture agreement, they said that Shams, Nikfar and Maddah attended Mahons “on or around 20 July 2017”, with a draft joint venture agreement being provided by Mahons on 11 August 2017. They said that, following Mr Maddah’s return from Iran in late September 2017, he produced an amended version of the joint venture agreement prepared “unbeknownst to the defendants”, and that three or four copies of this document were executed at Ms Shams’ residence at 5 Friars Court, Doncaster East.
177. They denied that Ms Shams made what were described in the Statement of Claim as “the solicitor representations”, and that in any event such alleged representation was a representation as to a future matter.
178. As to the “uncommercial transactions” alleged in the Statement of Claim, the defendants said the Lextrip contract “was terminated by agreement when the 23 October 2017 contract with Anna Darroch was executed”. They said, in any event, the value of number 10 was “approximately $1,450,000”.
179. As to the agreement with Hassan Developments, the defendants admitted its execution and that $785,000 “exceeded the value of the architectural plans and approval documents”, but denied that it was “greatly in excess of the value of any benefit obtained thereby”. They admitted the agreement between 10 Red Hill Operations Pty Ltd and Bluesky, but denied that Ms Shams caused the entry into that contract. They said that Mr Maddah was informed of this arrangement prior to the execution of the contract and told “it would be better if the customer under the building contract was 10 Red Hill Operations Pty Ltd to avoid exposing Robin Hood and Apadana to the liabilities under the building contract”, and that Mr Maddah agreed.
180. The defendants denied that Nikfar and Apadana were knowingly involved in the making of the solicitor representations or that Apadana was knowingly involved in the making of the investment representations.
181. According to the defendants, “all money received from the plaintiffs for joint venture purposes were intended to be used and were in fact used for joint venture purposes”. They agreed that Mahons lawyers did not represent that number 10 was a great investment. They agreed that Mahons lawyers “was not acting for Robin Hood and Maddah but say that Maddah represented to Nikfar and Shams that he had sought and obtained legal advice about the draft joint venture agreement from a commercial lawyer in Iran”. This was said to have been conveyed to the defendants orally in September 2017.
182. They denied that the investment representations and the solicitor representations were made in trade or commerce.
183. They said, further, that the investment representations were representations as to future matters. They further denied that they were misleading or deceptive, that they were relied on by the plaintiffs or either of them, or that the plaintiffs had suffered loss or damage as a result.
184. As to the joint venture agreement, the defendants admitted its existence and terms, noting that the obligation of Robin Hood was to pay Apadana $1,120,000. As to the $70,000 paid on or around 14 May 2018, and the $30,000 paid on or around 17 May 2018, both to Australian MIS Pty Ltd, each was said to be a gift from Mr Nikfar’s family to Mr Nikfar “and did not relate to the joint venture”. Therefore, they said, Robin Hood’s contribution to the joint venture was $980,000 only, and Robin Hood therefore remained liable to pay a further $140,000.
185. According to the defendants, the building contract was entered into with the knowledge and consent of the plaintiffs and stage 1 of the building works had been completed. They said Apadana “has contributed $673,000 towards the joint venture”.
186. As to the lack of a joint venture account, they said this was because Mr Maddah had advised Ms Shams that he was “a high risk customer for the bank because he had an Iranian passport and was transferring his money from overseas, and accordingly it would be better not to open [a joint venture] account”. ANZ Bank had given notice to Apadana on 20 November 2017 that it would close one of its accounts and closed the account on 10 January 2018, and Ms Shams and Mr Maddah agreed to open an account with Westpac in the name of Apadana, only, which would serve as a joint venture account, which account was opened.
187. They denied the allegations as to the allegedly false loan agreement and said that “where Maddah denies the loan, generally and in his statement of claim, the demand for repayment of the loan could not and did not mislead or deceive him”.
188. In the Amended Counterclaim, the defendants assert that Robin Hood remains liable to pay $140,000 to Apadana under the terms of the joint venture agreement. Accordingly, Robin Hood was indebted to Apadana in that sum and was entitled to interest under s2 of the Penalty Interest Rates Act 1983 “accrued daily and compounded monthly until payment in full”, pursuant to clause 17.5 of the joint venture agreement.
189. The plaintiffs, by counterclaim, being Apadana, Ms Shams and Vavi Pty Ltd, alleged that they transferred money totalling $95,964 to Robin Hood in the period 16 February 2018 to 6 February 2019. These monies, it was said, “became repayable in March 2019 or alternatively repayable on demand”. These monies have not been repaid.
190. The failure to repay the money and the allegation that Apadana, Ms Shams and Mr Nikfar “engaged in misleading or deceptive conduct by falsely claiming the existence of the loans” constituted a repudiation of the loan arrangements, which was accepted.
191. Alternatively, it was said, that “Robin Hood and Maddah, and further and/or alternatively Maddah” had been unjustly enriched “at the expense of the remitters [viz, Apadana, Vavi and Shams].
192. Next, it was said that the document dated 16 February 2019 constituted an accord and satisfaction, providing terms for repayment of $205,122, with Mr Maddah having failed to repay any part of it. Therefore, it was said, “Maddah breached the Agreement to Repay and Nikfar suffered loss and damage equal to amounts owed under the Agreement to Repay”.
193. Therefore, Mr Maddah was liable to pay damages for the loss caused by his breach of the Agreement to Repay. Alternatively, Mr Maddah and Robin Hood were “liable to provide restitution” of the $95,000 to “Nikfar and Shams” or, alternatively, to Apadana, Vavi and Shams. There was a claim for interest pursuant to the Supreme Court Act. The relief sought in the Counterclaim was damages or repayment of a debt, restitution, interest and costs.

Defence to Counterclaim

194. In their Defence to Amended Counterclaim dated 8 February 2021, the defendants to counterclaim [viz, the plaintiffs], subject to certain admissions of uncontroversial matters, denied the allegations in the counterclaim.

Special Referee

195. By order made 8 September 2021, Judge Burchell referred certain questions to a special referee for consideration and report. The questions for the special referee were to be found in Annexure 1 to her Honour’s orders. Amongst the questions referred to was a request for an accounting of the payment “as to contributions of funds into, or for the benefit of, the Joint Venture” by the several parties to the proceeding. The referee was also directed to “provide verification of other payments, including ... c.(i) any Remitted Money” as defined in paragraph 49 of the Amended Counterclaim ...”. This is a reference to the approximately $95,000 alleged in the counterclaim to have been paid to Robin Hood by Apadana, Vavi Pty Ltd and Ms Shams. The referee’s report dated 7 January 2022, as amended 3 October 2022, appears at p3128 of the Court Book.
196. Special referee, Mr Matthew Kucianski, was called as a witness on behalf of the plaintiffs. He confirmed that, insofar as his report finds any payment or liability not to have been substantiated, or adequately substantiated, this was an effective finding that such payment or alleged liability was not valid and was the equivalent of a finding by a court that the alleged debt had not been proven, such that the claim to recover it must be dismissed. (T1010, L29-T1011, L11)

The witnesses

197. Including one day for closing submissions, the hearing of the trial of this case extended over some 17 days. The hearing time, therefore, was very extensive indeed, even though there were very few witnesses. Most of the sitting days were slightly shortened by reason of COVID restrictions. Nevertheless, the hearings continued throughout the sitting hours and there were no lengthy delays or stand-downs. Fact finding has proved extremely problematic. Mr Maddah gave his evidence in its totality via an interpreter. The interpreter was very assiduous and showed great endurance, given that Mr Maddah was in the box for several days and returned for a half day of rebuttal evidence, to which I will refer in due course. Nevertheless, the requirement to rely on an interpreter necessarily doubled the length of time required for counsel to put a question and receive an answer. Mr Nikfar gave his evidence entirely without the assistance of an interpreter. He said that a member of counsel who had previously held the brief to represent the defendants at trial had urged him to employ an interpreter. (T1093, L15‑20) I found Mr Nikfar’s accent difficult to follow, as I think did both counsel.
198. A more fundamental difficulty is that I feel unable to give uncritical acceptance to the accounts given by any of the principal witnesses. What I will say hereafter as to the provenance of the “minutes” dated 16 February 2019 will explain my misgivings as to the evidence of Mr Nikfar and Ms Shams. For perhaps somewhat different reasons, I approach Mr Maddah’s account of events with caution.
199. It will be recalled that Mr Maddah roundly asserted that the second contract of sale for number 10 – that is, the one for the lower price between the joint venturers and Ms Darroch – was signed by him on behalf of Robin Hood during the meeting at Mr Troiano’s office on 20 July 2017. Mr Nikfar and Ms Shams say it was signed the following October. Their account is infinitely more plausible than Mr Maddah’s. What reason could there be for signing two inconsistent contracts on the same day? The motive for the second contract, namely to minimise stamp duty, is obvious enough. If that motive was entertained, as plausibly as it must have been, from the very day that the Darroch contract was signed, what reason could there be to sign the contract with Lextrip? The Lextrip contract only served to draw attention to what some might regard as a fraud on the State Revenue or, at the very least, raise a suspicion that such a thing had occurred. Granted that the parties are at odds as to whose idea the Darroch contract was, there is no obvious reason why regarding it as dating from July 2017 rather than October 2017 would in itself be of assistance to the plaintiffs’ case or detrimental to the defendants’ case. I can only conclude that Mr Maddah’s limited capacities in the English language, to which I will return hereafter, has diminished his capacity to follow the “ins and outs” of the transactions here in question. Having a faulty memory, he has nevertheless chosen to take a dogmatic stand.
200. There were other aspects of Mr Maddah’s evidence which aroused my misgivings. Neither Robin Hood nor Mr Maddah is a registered building practitioner. Yet the website, current as at Mr Maddah’s cross-examination on 29 September 2022, which he said was established by a Mr Milod Zorkaban, who inserted the material which Mr Maddah directed, claims that “Robin Hood Dev” is one of the best construction and building companies in Australia. (T331) The website depicts smiling young men in overalls. These were not employees of Robin Hood, but rather models. (T361, L9-17) The website included a testimonial from a customer, or alleged customer, “I had no clue where to start my renovation project and how to do. Robin Hood Services saved me time with their professional consultation. The construction phase was also quick and smooth. I had a pleasant experience working with them.” (T360, L22-30) The website claimed that Robin Hood had 153 satisfied customers. (T360, L19-21) I observed that, according to a profit and loss account for Robin Hood submitted to the Department of Immigration and Home Affairs in support of Mr Maddah’s visa application, Robin Hood, in the year ending 30 June 2019, had an operating profit of $60. The following year, to 30 June 2020, the operating profit was $796. Mr Maddah said, “Yes, all of these, the income here is from renovation.” (T502, L21-25) I asked him where his “real income” arises from given that, according to the evidence, he seems to have been resident in Australia since 2016, or at least 2017, a period of five years. His answer was, “My source of income is still from Iran ... During this time I borrowed money from my uncle and my family.” (Ibid, L26-30) I regarded that account of Mr Maddah’s income source as unconvincing, particularly in light of the contention on behalf of the defendants that he, Mr Maddah, had operated as a “money changer” [viz, carrying on a potentially illegal business of facilitating capital transfers from Iran to Australia and vice versa, and necessarily converting from one currency to another].
201. My misgivings were further increased by Mr Maddah’s evidence relative to a valuation prepared by real estate and valuation house CBRE, and dated 5 July 2018. Mr Nikfar had a photocopy of an “executive summary” page of that valuation which had apparently been transmitted to him by Mr Maddah. I directed the issue of a subpoena to produce that document addressed to CBRE early in the trial with an authorisation for short service. In the short term, no document was forthcoming, though it did eventually become available for Mr Nikfar’s re-examination. The face sheet of the document, which was part of the executive summary page, showed that the valuation was undertaken for National Australia Bank Limited. The executive summary page showed the “borrowers” as “Ehsan Maddah”. (CB 3327, 3330) When asked about this document before its full text was available, and only the executive summary page could be shown to him (CB 2940), Mr Harding told Mr Maddah, “Mr Nikfar and Ms Shams say that that is a photograph of the CBRE valuation you showed them on that meeting in July 17.” Mr Maddah responded, “Never. Can I explain?” He continued, “To me this didn’t exist then.” (T352, L20‑27) Asked if he commissioned the valuation, he replied, “No”. (T353, L5) He said he did not know why he was nominated as borrower. (Ibid, L6‑7) He said he had seen the full document “when we had a showroom at 3 Red Hill Terrace in 2018, perhaps June”. (Ibid, L11-14) He gave further evidence to similar effect later. He said, “a gentleman called Peter, perhaps Peter Boutros, brought the document and left it in the showroom at no 3.” (T1346) He said Mr Nikfar told him to leave the valuation in the showroom at no 3. (T1347) In her opening statement, Ms Anderson, presumably upon instructions, said that the report was commissioned by Mr Troiano. Mr Maddah’s account was therefore inconsistent and somewhat implausible.
202. There was also the issue as to witnesses who were not called. On the face of it, the person who could have given independent, and one would think authoritative, evidence as to the relationship between the two contracts for the sale of number 10 would have been the gentleman from Mahons who did the relevant conveyancing under the supervision of Mr Roger Johnson, namely, Mr Ken Chalmers. Mr Johnson’s evidence gave the impression that whilst he bore formal, and perhaps legal, responsibility for the conduct of the conveyancing matters, in practice they were left entirely to Mr Chalmers.
203. A more notable absentee from the witness box was Mr John Troiano. He could certainly have given evidence on the subject of the two contracts and the change of front that led to the restructuring, if indeed there was a change of front. It was said that he would give evidence on behalf of the defendants. I looked forward to his evidence as a potential shaft of light in the darkness and confusion. On the morning of 13 October 2022, which was the 13^th day of the hearing, Mr Harding announced:

“An issue has arisen this morning which has made things a bit difficult for us and this is what it is: Mr Troiano is due to give evidence after Mr Nikfar, whether that be later this afternoon or tomorrow morning ... He has today sent an email to my client demanding $250,000 to attend to give evidence. He’s termed that to be a consultancy fee and that is because the $485,000 in cash that was paid to him, I suspect that he has not paid tax on and he now needs to declare that and make some more money. Obviously, we are not paying him that and that might be considered a bribe to give his evidence.

So what I propose to do is to dump him as a witness and rely on his affidavit which has been filed some time ago, in September last year. I suppose the options then open to my friend are to subpoena him, or call him to be cross-examined on his affidavit.” (T1051)

204. I said that for the affidavit to be available as evidence if plaintiffs’ counsel wish to cross-examine Mr Troiano, it would be necessary for him to be produced. I pointed out that it was still possible to subpoena Mr Troiano. Mr Harding demurred. He said, “I would have difficulty...in calling him as a witness for us where he now has an axe to grind and I have no idea what he’s going to say now because he may depart from his witness outline and affidavit.” Ms Anderson objected to receipt of the affidavit without Mr Troiano’s being available for cross-examination. (T1051‑52) As I observed on that day, it would have been possible for the defendants to have subpoenaed Mr Troiano – and I would have cooperated in directing the issue of the subpoena and approving short service. By reason of s38 of the Evidence Act 2008 counsel calling a potentially unfavourable witness is placed in a far more advantageous position than he would have been at common law. Nevertheless, Mr Harding elected to dispense with Mr Troiano’s evidence.
205. There are obvious inferences which may be drawn from the non-appearance of Mr Chalmers and Mr Troiano.
206. Mr Nikfar and Ms Shams also featured in the online world in a manner that is difficult to square with reality. Ms Anderson played two short videos during her cross-examination of Mr Nikfar. One was dated 2017 and the other was dated 2019. At least one of them depicted a much more youthful Mr Nikfar with his contact telephone number highlighted, mixed with images of luxurious high-rise buildings, all to the strains of Brahms’ Hungarian Dance in D Minor. On my observation, the videos depicted “scenes of wealth and opulence ... [but without] a particular product that’s named as being offered for sale”. One of the videos referred to Aust MIS, a company controlled by Mr Nikfar. (T990‑1) Mr Nikfar explained that he had a friend who worked at a well-known Melbourne estate agency, who told him: “if you have any buyer, offer us, we will be paid with some commission.” In fact, Mr Nikfar was unable to secure any sale. (T992, L17‑25) The high-rise apartments depicted were from the residential unit development, for which sales “off the plan” were being sought, located in St Kilda Road. (T1014) Mr Nikfar has no experience in the construction or design of high-rise apartments. Mr Nikfar was also taken to a website for “Apadana Dev” (CB 3209‑3233) which seems to advertise “Apadana Dev” as having a business or expertise in web design and development, digital marketing and android development. Under the heading “Why Choose Us?”, the material on the website stated, “There is excellence in all the services we offer to our valuable clients no matter if it belongs to the website or mobile applications. Whatever we provide to our clients, all of them are hosted using the most secure servers based in Australia ...” It continued, “Our experts will be always available to offer [all kinds of services] to you. With the evergreen marketing strategies, we follow the new ones as well to give your firm the shape it deserves.” The website also advertises “a range of businesses covered by eCommerce and designing websites for eCommerce.” The website also offered an apartment rental service describing “Apadana Dev” as a real estate agency with its address at 10 Red Hill Terrace, Doncaster East. (CB 3220) As previously noted, that address is an open, undeveloped vacant allotment with at most a concrete structure supported by piles at the rear. There is also reference to “making studying an adventure” and “apartment finder” service and a business known as “Pascoe Vale Conveyancer”, improbably located at number 10 [viz, on the far side of the metropolis from Pascoe Vale]. The website also refers to “Local Experts Pakenham”. (CB 3231) Mr Nikfar generally disclaimed knowledge of these matters. (T1017) He repeated this denial in re‑examination. (T1225, L3‑10) Ms Shams was not asked about these bizarre website items.

Open offer

207. Mr Harding, on behalf of the defendants, offered to settle the proceeding with his clients paying the plaintiffs $980,000 subject to the transfer of Robin Hood’s interest in number 10; alternatively, an order that number 10 be sold with the proceeds being divided between Apadana and Robin Hood. (T54) This offer was renewed in closing submissions.

Conclusions

The green folder and the minutes of meeting

208. The pivotal point at which relations between the joint venturers soured seems to have been on or around 16 February 2019. The parties are at odds as to what precipitated the breakdown in relations. Mr Nikfar says it was Mr Maddah’s failure and refusal to return the signed original version of the minutes, whilst Mr Maddah says it was Mr Nikfar’s demand that Mr Maddah sign the bundle of documents in the “green folder” which included invoices which, on their face, appeared to entail the creaming off of excessive superintendency charges by Mr Nikfar’s company, 10 Red Hill Operations Pty Ltd. Ultimately, as to the relief to be granted, this issue does not appear to be crucial. It is crucial, however, in the general narrative and also as to the relative reliability of the evidence relied on, by the plaintiffs on the one hand and the defendants on the other.
209. Mr Maddah said that the photocopy of the minutes produced and relied on in Court did include a photocopy of his signature. He said, however, that the “minutes” were fabricated by taking a photocopy of the blank, albeit signed, final page of the joint venture agreement, photocopying the blank page with Mr Maddah’s signature on it and adding the text relative to the alleged debts. He said, on his observation, Mr Nikfar’s signature had been added with the document code from the relevant page of the joint venture agreement immediately below Mr Nikfar’s added signature being scored out. Upon examination of the “minutes”, Mr Maddah’s explanation appears the more probable. It also explains why Mr Nikfar is not in a position to produce the original of the “minutes” with Mr Nikfar’s original manuscript and the original signature. The document as produced was bogus, created by photocopying. No “original” with original signatures could be produced because none existed. I reject as improbable Mr Nikfar’s account that an original was signed, but uplifted by Mr Maddah and returned only in photocopy form somewhat mutilated by the strikeout marks immediately below Mr Nikfar’s signature.
210. What remains, then, is the explanation given by Mr Maddah that the dispute was over the documents in the green folder. This green folder was produced only late in the trial. The offending invoices, which Mr Maddah took to indicate a fraudulent scheme on the part of Mr Nikfar and his company, were produced, but not the folder or its other contents. The folder, when produced, answered the description which Mr Maddah had given us right down to a felt-tipped pen in a plastic sleeve to facilitate Mr Maddah’s signature of the contents. No doubt, a green folder and felt-tipped pen could have been produced from Officeworks and a collection of documents relative to the development of number 10 could have been cobbled together. This is possible but, in my view, less than probable.
211. Mr Harding, in closing address, said that what purported to be Ms Shams’ signature on a number of the documents produced from the green folder was clearly not her signature. He reproduced, in his final submissions, one of her signatures which he said should be regarded as established as genuine, and a signature from the green folder which seemed quite different. The contention therefore would be that the green folder, its contents, or maybe both, are fakes. Apparently a handwriting expert was engaged by one of the parties but not called as a witness, and the expert report was not put into evidence.
212. Issues relative to the genuineness of Iranian signatures create problems which do not arise in connection with signatures in European languages made by persons using the Roman alphabet. In these latter situations, an individual signature is a handwritten depiction of the signatory’s name in the relevant language. In Farsi, however, as the Court’s interpreter explained, it is a sign or a mark intended to be unique to the signatory. These “signatures” appear to an English speaker and writer to be somewhat flamboyant initials. (T1355-6) This is perhaps another illustration of the problem which confronts me in fact-finding in this proceeding. Neither side’s story or evidence seems entirely reliable. Ultimately, however, the better view is that Mr Maddah’s account relative to the green folder is to be preferred to the account given by Mr Nikfar and Ms Shams relative to the “minutes”.
213. There remains the issue of an email on the late afternoon of 16 February which, once again, appeared for the first time late in the trial and was not discovered in accordance with the ordinary processes. Ms Anderson, on Mr Maddah’s behalf, contended that this document pertained to a proposal to carve up the unit development upon its completion, rather than a proposal in February 2019 that Mr Maddah should sell out or sell down his interests in Robin Hood, whether to a friend of his brother-in-law from Germany or someone else. The language of the email, albeit somewhat opaque, might be thought to fit better with Mr Nikfar’s account of a proposal for a sell-out by Mr Maddah in February 2019. Ultimately, however, whether Mr Maddah sought a sell-out or a sell-down at that point is relevant only insofar as it is said it provides a rationale for Mr Nikfar’s desire to document loans which he had made to Mr Maddah and his interests earlier on. Whatever the true explanation of the email may be, the matters that I have already mentioned lead me to conclude that the green folder and its contents were the precipitating point for the breakdown and the “minutes” were bogus.
214. I am fortified in that view by the following additional considerations. First, the green folder contained a multiplicity of documents and Mr Nikfar’s demands by text for Mr Maddah to return “all my documents” fits best the compendium in the green folder than it would the “minutes” document, whether or not, as Mr Nikfar said, he was also demanding return of the original signed building contract with Bluesky. Secondly, whilst Mahons in March 2019, on behalf of Apadana, served default notices and demands on Robin Hood relative to joint venture matters, as narrated above, it was not until 15 July 2020 that a demand was made for payment under the terms of the “minutes” by Mahons. Finally, there is the consideration that, whilst the “minutes” are pleaded as part of the Defence and Counterclaim and perhaps, surprisingly, characterised as an “accord and satisfaction”, the disposition proposed by defendants’ counsel in which he advocated adoption in toto of the special referee’s determination did not entail the finding of any liability under the “minutes”, as distinct from relative to what were described in the counterclaim as “remitted monies”.
215. These findings entail a conclusion that the defendants had been prepared to propound a bogus document and assert its validity by their evidence at trial. Accordingly, where there is a clash of evidence between the defendants and the plaintiffs, unless the plaintiffs’ evidence is contradicted by documentary evidence or plain implausibility, I will prefer the plaintiffs’ account.

The two bank cheques

216. Question 1(a)(i) posed by Judge Burchell for the special referee required him to provide “...an accounting of the payments as to contributions of funds into, or for the benefit of, the Joint Venture”. Mr Kucianski, the special referee, noted first, according to the plaintiffs’ Statement of Claim, that contributions totalling $1,080,000 had been made to the Joint Venture by or on behalf of Robin Hood. The last of the contributions alleged in the Statement of Claim to have been made on Robin Hood’s behalf were constituted by a bank cheque dated 14 May 2018 in the sum of $70,000, and a further bank cheque for $30,000 dated 17 May. (CB 3138) These cheques, as the narration of the evidence above shows, were made payable to “Aust MIS Pty Ltd”, a company controlled by Mr Nikfar.
217. As to the proceeds of these two bank cheques, the special referee found “the available evidence is consistent with Robin Hood having made $980K in cash contributions to the Joint Venture. There was insufficient evidence to provide an opinion regarding the balance of its exposure under the Joint Venture Deed”. (CB 3139)
218. As recorded above, both according to general principle and the opinion of the referee himself, this finding is not to be regarded as leaving the matter open, but rather as being a dismissal of the plaintiffs’ allegation that the two bank cheques were contributed to the Joint Venture.
219. I have referred above to the evidence on behalf of the plaintiffs to the effect that these bank cheques were procured in performance of Robin Hood’s obligation to contribute funds to the Joint Venture, and made payable to Mr Nikfar’s company rather than to Apadana at his request.
220. Whilst Mr Nikfar and his estranged wife, Ms Shams, have been estranged since 2013, the evidence discloses that they have worked closely as business associates and as a single unit, insofar as their dealings with Mr Maddah and Robin Hood are concerned. There was no suggestion that, if Mr Nikfar directed payment to his company, Aust MIS Pty Ltd, (of what would otherwise be a Joint Venture contribution) such a direction was made by him without authority from Ms Shams, as the principal of Apadana.
221. Rather, Mr Nikfar said that this $100,000 constituted a gift from one of his relatives in Iran, which came through Mr Maddah’s hands because Mr Maddah was carrying on the business of a money changer.
222. All witnesses seemed to accept that, at material times, there was a variety of restrictions on the remittance of funds from Australia to Iran and Iran to Australia. I was not referred to any legislative instruments, either of the Australian or Iranian authorities, but it seems to be common ground that easy transfer of funds between the two countries could be achieved only via informal and potentially illegal operators, viz money changers.
223. I will say something more as to whether, in the circumstances, it should be found that Mr Maddah did carry on such a money-changing business in 2018. The significance of Mr Maddah’s engagement or non-engagement in this business seems to pertain solely to the issue of the two bank cheques.
224. In the event, I have concluded that whether Mr Maddah was a money changer or not, the two bank cheques should be regarded as Joint Venture contributions so that Robin Hood made the $1,080,000 contribution to the Joint Venture which the plaintiffs allege in their Statement of Claim.
225. I have reached this conclusion, first, because of the general preference which I have expressed for the evidence of the plaintiffs over the evidence given on behalf of the defendants. Secondly, because of the inherent plausibility of the plaintiffs’ costs and the relative implausibility of the defendants’.
226. No doubt, a debtor, seeking to make an overseas payment in a foreign currency of a debt denominated in the foreign currency, approaches the task by purchasing actual currency or a foreign currency draft having the face value of the debt to be paid. The bank, money changer or other intermediary would calculate the quantity of local currency required to obtain foreign currency to the face value of the debt and then add a further charge in local currency for commission or other charges or outlays. Where, as Mr Nikfar alleges, a party in one country wishes to make a cash gift to a relative in another country, one would suppose that the donor would be familiar with his or her own resources as expressed in the local currency, and would have a “feel” for the size of the gift by reference to its value in local currency. An Australian donor to a relative in Iran, for instance, might feel able to spare, for instance, AUD $100,000.
227. Perhaps an Iranian expatriate resident in Australia would have a “feel” for the size of a proposed gift expressed in Iranian currency. An Iranian national resident in Iran (such as the donor referred to by Mr Nikfar) would be unlikely to have a “feel” for the size of the gift as expressed in Australian currency, and would judge his or her ability to make the donation based on his or her resources expressed in Iranian currency.
228. Therefore, the gift would be likely a “round sum” in Iranian currency. Inevitably, the straight conversion of the “round sum” in Iranian currency would lead to an odd and non-round sum in Australian currency. That effect would be furthered by the need to add or deduct the commission which the intermediary would charge. In those circumstances, it seems to me quite unlikely that a gift for an Iranian national being a permanent resident of Iran would arrive in Australia in so round a sum as $100,000.
229. Mr Nikfar said that he told his family in Iran that he needed $100,000 in Australia, with the result that they grossed up their remittance to ensure that it yielded around the sum of $100,000 in Australian currency without deduction of any commissions. This narrative seems highly improbable. It was proffered only after I questioned him based on the matters referred to in the last few paragraphs.

Mr Maddah as money changer

230. There was extensive cross-examination of Mr Maddah and Ms Shams relative to Mr Maddah’s alleged money-changing business. Given that I have been able to reach a conclusion on the substantive issue as to the two bank cheques without reliance on a finding relative to the money-changing business, it is unnecessary for me to say too much on the subject. There was extensive cross-examination of Ms Shams as to her work as Mr Maddah’s actual or alleged bookkeeper in the money-changing business, and the office from which she operated.
231. The only thing which gives the money-changing business plausibility is the fact that Mr Maddah has not disclosed the means whereby he has supported himself and his family in Australia since 2017. Whatever business Robin Hood was or was not carrying on, its reported profit amounted to no more than “peanuts”. There was no explanation of what interests Mr Maddah continues to have in Iran and whether those interests, for instance the rangehood factory, allow him to derive an income in Australia. Of course, his ability to resort to an Iranian-sourced income is subject to the admitted but undetailed restrictions on inter-country remittances between Australia and Iran. I found Mr Maddah’s statement that he lived on a borrowing from his uncle in Iran unconvincing. (T502, L28-30)

The $485,000 cash

232. The special referee was ordered by Judge Burchell, amongst other things, to make findings as to the contributions of funds into or for the benefit of the Joint Venture by the various parties. ([195] above) Amongst the amounts claimed to have been contributed to the Joint Venture by the defendants was an instalment of $485,000 provided for by the Hassan Developments agreement. Ms Shams said this payment was made in cash received from the purchaser of two apartments presumably in the number 3 complex. I asked Ms Shams if there was any documentary evidence of this payment. She shrugged her shoulders and said “cash has no record. If somebody give you cash, it’s cash, you didn’t go to the bank”. (T743, L18-19)
233. These payments from the apartment purchaser or purchasers were said not to be part of the deposit or the final balance payable at settlement, but an intermediate payment made between the signing of the contract and the paying of the deposit and final settlement. (T744, L12 – T745, L31) Ms Anderson called for production of the settlement statement or statements relative to the final payments for the apartments but they were not produced. (T746-7)
234. It is not correct to say, as Ms Shams did, that “cash has no record”. Payment of a large sum of money such as $485,000 in cash would lead the paying party to require a receipt in writing. According to Mr Nikfar, the money was delivered in a “Country Road” bag which was apparently some type of tote bag. He said it was not heavy. He delivered it to Mr Troiano at his office, and Mr Troiano told him there was no need for him to count it. (T913-4) This seems remarkably trusting for someone who, according to Mr Nikfar, was not his friend and had dealt with him only in one previous transaction. (T122, L11-12)
235. This narrative sounds suspicious and unconvincing. Since the 1980s, with the introduction of cash transactions reporting requirements, cash transactions have taken on a dubious aspect with the distinct implication of some sort of illegality. Cash transactions at banks are subject to statutory reporting requirements precisely because absence such a report it may be difficult or impossible for investigators to trace cashflows. In the case of a private cash transaction, one needs to consider not merely the immediate parties to the transaction but also the source and the destination of the cash, unless some sort of unorthodox or potentially illegal conduct is involved such as receiving money as part of a drug transaction or receiving legal money and hiding it in a mattress. The cash is likely to have left some sort of record either in its acquisition by the payer or its disposition by the payee.
236. This payment was one of the largest disputed matters in the present proceeding, yet no documentary evidence has been produced. In particular, no settlement statement relative to the apartment sales which is said to have provided the funds to Ms Shams or Apadana.
237. Had the cash come to Ms Shams in the manner which she described, the settlement statement for the apartment or apartments would record a credit in favour of the purchaser or purchasers for the intermediate payment or payments. There was no explanation as to why such documentation was not provided. I would adopt the finding of the special referee that no such contribution was made to the Joint Venture or for its benefit by the defendants. Independently of the special referee’s report, having heard Ms Shams and Mr Nikfar examined and cross-examined and considered their evidence, and considered the failure to produce the settlement statement or statements, I would reach the same conclusion myself.

Mr Maddah’s English

238. Acceptance of the contention that Mr Maddah was hobbled by lack of ability to speak, write and understand English in 2017 means the plaintiffs’ case that he was led into the number 10 development proposal and the Joint Venture by the defendants becomes more plausible.
239. Mr Maddah’s current English language skills are relevant, both because they shed light on his English language abilities in 2017, and either support or give the lie to a contention put by Mr Harding for the defendants in final submissions that Mr Maddah had “hidden behind” his interpreter.
240. Mr Harding identified a number of instances in the transcript in which he said the transcribers attributed statements to “the interpreter” as a means of distinguishing these utterances from ones made directly by Mr Maddah in the course of his evidence. It was not clear to me that this was a correct interpretation of the transcript. I read these passages as occasions when the interpreter “stepped out of character” as Mr Maddah’s mouthpiece, and spoke directly on his own behalf.
241. There was at least one occasion on which, according to the transcript, Mr Maddah gave a direct response and this is identified in the transcript by the word “direct”. The answer is followed-up with a repetition of the same answer via the interpreter. (T236) Perhaps more pertinently, I observed on a number of occasions that Mr Maddah reacted directly by way of body language to questions asked before they were interpreted for him, indicating that he understood the question in the English language. (T307)
242. I asked Mr Maddah if it was possible the reason that he did not complete the 510-hour course with AMES, undertaking only about 100 of the 510 hours of instruction scheduled, that he acquired functional English sufficient to carry on business in Australia and no longer needed further instruction. According to the transcript, he replied “No”. I then put to him that there were insufficient Farsi speakers resident in Melbourne to enable him to conduct a business career here without being able to speak English. He replied that this was correct but that he managed to function with the assistance of his wife. This rather lengthier answer is described in the transcript as “through interpreter”, indicating the first answer was given directly, as was another answer earlier on the same page of transcript. (T307, L1, 17-31)
243. For the purposes of this determination, it is Mr Maddah’s accomplishments in the English language as at 2017, rather than his present abilities, which are of the greatest importance. As to these, I accept Mr Johnson’s evidence that in 2017 Mr Maddah was able to speak “broken English”. Accepting that Mr Johnson believed, and perhaps reasonably believed, that Mr Maddah was following the discussion which he, Mr Johnson, had in conference with Mr Nikfar and Ms Shams, Mr Johnson’s concession that Mr Maddah’s contribution was “nodding sagely” rather than intervening in the conversations himself, indicates that Mr Maddah had limited appreciation of what was being discussed, or at least its detail. This is supported by the fact that Mr Johnson described Mr Maddah as receiving explanations from Ms Shams in Farsi from time to time during the conference.
244. After living five years in an English-speaking society, it would be astonishing if a relatively young man like Mr Maddah did not achieve a very substantial improvement in his English-speaking skills. I believe he now has achieved what was described in the Immigration Department documentation as “functional English”.
245. It would be going too far, however, to suggest that he “hid behind” the interpreter. As previously noted, Mr Nikfar has, in the past, resorted to the use of an interpreter, and at least one of his previous counsel advised him to seek the services of an interpreter. A person whose first language is not English involved as a witness in a trial in the English language is at a necessary disadvantage. Where the assistance of an interpreter at trial is sought, the balance may tip. The witness understands most of the questions as posed but, by having an interpretation in his or her mother tongue, has those questions further clarified and is given the opportunity for further reflection and, therefore, the opportunity to avoid a hasty or ill-considered answers.
246. As far as the court is concerned, the use of interpreters might be thought to be a two-edged sword. It is generally far easier for a judge or magistrate to follow the interpretations of a professional interpreter than it is to follow the broken English of a witness whose first language is not English. On the other hand, since both question and answer must be interpreted, the length of time required to lead evidence from a witness with the assistance of an interpreter doubles from what it would have been had no interpreter been engaged. It would be wrong to accuse witnesses with limited English of hiding behind interpreters. The use of the interpreter might give the witness a net advantage which, on one view, is unfair. On the other hand, it could not be fair to require the witness and the party relying on that witness to accept the injustice of requiring the witness to give evidence without the assistance of an interpreter.

Whose idea was number 10?

247. In 2017, in light of what I have said above, Mr Maddah did possess some skills in the English language. As Mr Harding observed, he had the opportunity to obtain professional assistance from a variety of sources, accountants, immigration lawyers and other legal practitioners, had he wanted to do so. Moreover, it seems his wife has and had greater facility with the English language than does Mr Maddah. (T307)
248. He was not being led unknowingly into transactions which were beyond his understanding, both from linguistic and commercial reasons. Precisely what Mr Maddah’s business accomplishments in Iran before his arrival in Australia were remained unclear but, on his own account, he had been engaged in the construction and development industry in that country.
249. Nevertheless, it is overwhelmingly more probably that he, as the newcomer to Australia, Mr Maddah would have deferred and relied upon the expertise of Mr Nikfar and Ms Shams, as relatively long-established operators in the building, development and construction industries in Australia, for guidance, in identifying a likely investment opportunity, to meet the requirements of his visa application. With his then “broken English”, however, the thought that he took the lead and the initiative and made extensive independent enquiries, both of estate agents operating in the Doncaster area and the Planning Department of the Manningham City Council, is difficult to credit.

The representations

250. The thought that Mr Maddah, as the newcomer to Australia, would be relying on the established operators, Mr Nikfar and Ms Shams, to take the lead in identifying a development opportunity is as plausible as the thought that the newcomer, Mr Maddah, with only broken English and no history of work in building and development in Australia, would have identified his own opportunity and then “sold” the proposal to the old-hands, Mr Nikfar and Ms Shams, is implausible.
251. Again, in the context of Mr Nikfar and Ms Shams taking the lead, the thought that they would have made the range of representations attributed to them in the plaintiffs’ Statement of Claim, and attested to by Mr Maddah’s evidence, is plausible and should be accepted. The thought that Mr Nikfar and Ms Shams would have “signed up” for the development without expressing any favourable view as to its likely outcome, as their evidence would suggest, is implausible and should be rejected.

Were the representations “misleading or deceptive”, as that phrase is used in s18 of the Australian Consumer Law?

252. Section 18 of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 of the Commonwealth, provides inter alia:

“A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

253. Self-evidently, the transactions with which we are dealing took place in trade or commerce. Speaking of this provision’s predecessor, s52 of the Trade Practices Act 1974 of the Commonwealth, Gibbs CJ said:

“The words of s52 require the Court to consider the nature of the conduct of the corporation against which proceedings are brought and to decide whether that conduct was, within the meaning of that section, misleading or deceptive or likely to mislead or deceive. Those words are on any view tautologous. One meaning which the words ‘mislead’ and ‘deceive’ share in common is ‘to lead into error’. If the word ‘deceptive’ in s52 stood alone, it would be a question whether it was used in a bad sense, with a connotation of craft or overreaching, but ‘misleading’ carries no such flavour, and the use of that word appears to render ‘deceptive’ redundant.” (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191, 198)

254. According to Ms Anderson the representations were misleading because number 10 was overpriced. It may be accepted, if that were true, that the transaction as undertaken was not a good investment and was not calculated to return a good profit. The difficulty facing the plaintiffs is the lack of admissible evidence to make good the contention that number 10 was overpriced.
255. The Court Book contained numerous valuations. I have referred to some but not all of them already. None of those put into evidence, however, was presented in the manner required by Order 44 of the court’s rules. Nor did any valuer give evidence on behalf of the plaintiffs. A valuer was engaged and a report in Order 44 form was included in the Court Book, but that witness was not ultimately called.
256. Commenting upon this, in a further submission made after the close of the trial with leave, the plaintiffs’ solicitor said:

“The special referee was appointed by order of Judge Burchell dated 8 September 2021 pursuant to r50.01(1)(b) of the County Court Civil Procedure Rules 2018 (‘Rules’). In those circumstances a party may not adduce evidence of any other expert on any issue in the report: see s60O(1) of the Civil Procedure Act 2010 (‘CPA’). Accordingly, the expert evidence of Mr John Sly was not called at trial, despite notice being given under O44 of the Rules on 6 August 2021.”

Section 65O of the Civil Procedure Act which was added by an amendment to that Act in 2012, states:

“(1) Except by leave of the court, a party to a proceeding may not adduce evidence of any other expert witness on any issue arising in proceedings if, in relation to that issue—

(a) a single joint expert has been engaged; or

(b) a court appointed expert has been appointed."

257. The contention appears to be that Judge Burchell’s order appointing the special referee precluded the calling of an expert on the value of number 10 at trial. This contention is misconceived.
258. Section 65O was inserted into the Civil Procedure Act in 2012 by amendments effected by the Civil Procedure Amendment Act 2012. Introducing the Bill which became the amending statute, the then Attorney-General, Mr Clark, said:

“The Bill gives discretionary powers to a court to order that two or more parties jointly retain an expert, or that a court appoint its own expert to assist the court in the proceeding. Using a single, joint expert or court-appointed expert to give evidence on a particular issue can reduce the time and costs associated with expert evidence on that issue and may assist in the efficient conduct of the proceeding more generally. These types of experts are used in other Australian jurisdictions, including Queensland and the Family Court, although the concept is relatively new to litigation in Victoria. The Bill therefore provides guidance to the courts as to when it may be appropriate and useful to appoint such an expert.

In addition, the Bill requires parties to seek leave of the court to adduce further evidence where a single, joint or court-appointed expert has given evidence on a particular issue. This ensures that the benefits associated with the appointment of a single, joint or court-appointed expert are not undermined by the unnecessary presentation of further evidence, while also ensuring that additional evidence can be presented if required in the interests of justice, or to ensure that a party is not prejudiced in the proceeding.” (Legislative Assembly 21 June 2012, 2948) (Emphasis added)

259. The regime to which s65O of the Civil Procedure Act applies is one in which a single joint expert or a court-appointed expert is retained to give evidence at trial as part of a determination by a judge. It has no application to the pre-existing entitlement of a court to appoint a special referee under Order 50 of the Rules of the Supreme or County Courts.
260. If I were wrong in this, s65O entitles a court to receive additional expert evidence if the interests of justice require it. Here, where the court is being invited to make a finding that the land the subject of this proceeding was overpriced, it is clearly in the interests of justice that admissible evidence as to the proper value of the land, as at the material time, be available to assist the court in its determination on that subject. Subject to anything that might have been urged on behalf of the defendants, I would have been receptive to an application for leave to adduce valuation evidence in admissible form if such leave were required.
261. As it was, when I asked Ms Anderson on what basis I could find that $1.45 million constituted an excessive price for number 10, I was referred, first, to the price for the land under the Darroch contract, and secondly, to a valuation to be found in Annexure J to the special referee’s report which, as at the date of the commencement of the joint venture in July 2017, valued number 10 at $900,000. (CB 2358) To the best of my recollection, this valuation was mentioned by Ms Anderson for the first time at trial during her final submissions.
262. During closing submissions I informed both counsel that whilst I could indirectly adopt the valuation by adopting the special referee’s report pursuant to Order 50, I could not myself make a direct finding based upon it because of the failure to comply with Order 44 relative to expert evidence. It occurred to me afterwards that I might retrospectively “otherwise order”. I sought further submissions from the parties as to this point.
263. The defendants’ solicitor opposed my making any such order. Upon further consideration, I conclude it is inappropriate after the event for me to seek to receive this valuation as evidence of the correctness of the opinions which it expresses in circumstances where the valuer has not been produced for cross-examination. Moreover, there is other material available to me as to the appropriateness of the value of $1,450,000 for number 10.
264. I reject the contention that the Darroch contract can provide a proper yardstick to judge the appropriate value of number 10 in 2017. As explained, it was part of a scheme to reduce the stamp duty which was payable on the transaction without expressing any view as to the legality of this scheme, its effectiveness under the Duties Act 2000, or whether its implementation entailed the commencement of any offences by any and if so what person. The Darroch contract must be seen in context. The value of number 10 must be judged by the total sums of money changing hands as part of the deal effecting its sale. This must include the amounts paid under the Hassan Developments contract.
265. As Ms Shams herself said, $785,000 paid or payable under the Hassan Developments contract was “part of the land price”. ([77] above) This accords with fundamental land valuation principles as exemplified in the High Court’s decision in Turner’s case.
266. For reasons explained above, however, I, like the special referee, have rejected the contention that some $485,000 was paid by or on behalf of the defendants or any one of them under the Hassan Developments contract. Number 10 was, however, transferred to the joint venture under Apadana’s management. It follows that the price of $1,450,000 is over the odds by almost half a million dollars. The fact that these transactions proceeded without the payment of $485,000 that was apparently payable, but remained unpaid, indicates that they were phoney – in at least some respects. It may be that whatever monies in fact changed hands, the total consideration for the land was potentially more than $1,450,000 minus $485,000. The clear probabilities are, however, that $1,450,000 represented a substantial exaggeration of the true price.
267. Accordingly, a contravention of s18 of the Australian Consumer Law has been established.

Relief

268. Section 236 of the Australian Consumer Law entitles a person who has suffered loss “because of the conduct of another person” which contravened, inter alia, s18 of the law, to recover “the amount of the loss or damage by action against that other person”.
269. The plaintiffs’ case is that their outlays to the Joint Venture, including all those which were accepted as such by the special referee, together with the two bank cheques in the sums of $30,000 and $70,000 in May 2018 made payable to Aust MIS Pty Ltd, were made as a result of misleading or deceptive conduct by the defendants. Given that these outlays have resulted in Robin Hood’s being a co‑owner of number 10, they cannot be regarded as a total or dead loss. Ms Anderson contended:

“that the resulting loss or damage to the plaintiffs, pursuant to s 236 of the Australian Consumer Law, includes not just the payments made to the defendants, but also interest and the costs incurred as a result of the misleading and deceptive conduct.”

270. She referred to Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388. She continued (closing submissions paragraph 88):

“ The plaintiffs also claim any increase in value of the Property [viz number 10], less any costs including transfer or sale costs, since its purchase. As the plaintiffs were looking to make an investment and did in fact contribute the full costs of the purchase price of the Property from Ms Darroch, it would be inappropriate for the first defendant as joint proprietors [sic] in equal shares with the first plaintiff to benefit from the increase in property prices when it did not contribute to its purchase and at best only contributed $286,000 to the joint venture.”

271. This last proposition is problematic. How can it be right on the one hand for the plaintiffs to say that Robin Hood would not have involved itself in the joint venture for number 10 at all, such that Robin Hood should be compensated for its outlays on the one hand, but claim a share in the transaction which Robin Hood seeks to be relieved from on the other?
272. In Marks v GIO Australia Holdings Ltd [1998] HCA 69; (1998) 196 CLR 494, a group of borrowers represented by Mr Marks sought damages against GIO relative to borrowings which they had undertaken. The borrowers’ claim related to a loan facility described as an “Asset Accumulator Account”. GIO had told the borrowers that it would charge interest at a rate calculated by reference to a base rate plus a margin of 1.25 per cent per annum. The base rate was said to be the average for the month of the 90 day bank bill rate. GIO then exercised a power given to it by the loan contracts to increase the interest rate margin to 2.25 per cent.
273. The trial judge, Einfeld J, held that GIO had engaged in misleading or deceptive conduct by leading borrowers to believe that the interest rate margin was fixed at 1.25 per cent, and gave damages calculated by reference to the difference between the interest calculated on a margin of 1.25 per cent compared to the interest charged at the higher margin of 2.25 per cent for the relevant loan period.
274. The Full Court of the Federal Court held that such an award of damages, being by reference to expectation loss, was not authorised by s82 of the Trade Practices Act 1974 (the equivalent of s236 of the Australian Consumer Law). The borrowers appealed by special leave to the High Court of Australia.
275. On appeal, the High Court held that it was wrong to restrict the damages awarded under s82 by reference to analogies drawn from common law or equitable damages. McHugh, Hayne and Callinan JJ said that s82, in empowering the award of damages for contraventions of the prohibition on misleading or deceptive conduct, mandated an inquiry that “is one that seeks to identify a causal connection between the loss or damage that it is alleged has been or is likely to be suffered and the contravening conduct.” ((1998) [1998] HCA 69; 196 CLR 494, 510 [38]) Their Honours said, therefore, that in assessing damages:

“[A] comparison must be made between the position in which the party that allegedly has suffered loss or damage is and the position in which that party would have been but for the contravening conduct. And even this inquiry may not conclude the question. Analysing the question of causation only by reference to what is, in essence, a ‘but for’ test has been found wanting in other contexts and it may well be that it is not an exclusive test of causation in this area either. But that is not a question which we need to consider in this case. For the moment it is enough to say that s82 requires identification of a causal link between loss or damage and conduct done in contravention of the Act.” ((1998) [1998] HCA 69; 196 CLR 494, 512-3 [42])

276. Turning to the facts before them in the Marks appeal, their Honours said:

“A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted. Thus, the party that is misled will have suffered loss if a chose in action which was acquired was worth less than the amount paid for it. There may well be other ways in which it might suffer loss or damage. For example, consequential loss may be suffered. But no loss of that kind was alleged in this case and, putting that kind of loss to one side, we focus only on loss said to be suffered by the making of the contract.” ((1998) [1998] HCA 69; 196 CLR 494, 514 [48])

277. They said:

“It is only if some alternative (less detrimental or more beneficial course) were available, that it can be said that the contract which was made was less valuable to the party that was misled than had been represented – for it is only then that a comparison of value can be made.” ((1998) [1998] HCA 69; 196 CLR 494, 515 [51])

278. It was not shown in Marks’ case that the borrowers could have obtained a loan facility on a fixed margin of 1.25 per cent if they had not been misled or deceived into signing up for the Asset Accumulator Account with GIO. Logically, no investor has unlimited funds to invest. Deciding to undertake one investment necessarily precludes the use of the funds employed in another investment. By investing in one project, the investor necessarily suffers an opportunity cost in being precluded from investing in another project or a range of other projects. Were there evidence here of such an alternative project forgone, and the profit which might have been realised from it, for the purposes of s236 this opportunity cost could be regarded as recoverable loss or damage. No such evidence was adduced.
279. The increase in value said to have occurred relative to number 10 cannot be regarded as loss suffered by reason of the plaintiffs or one or more of them being misled or deceived. Had they not been misled or deceived, upon the evidence I have heard, they would have had nothing to do with investing in number 10, or certainly not at the price of $1.45m. Even if I were wrong, there would surely be difficulties in making a damages award on this basis, since no “profit” has at this stage been realised on the land. It is notorious that with interest rates on the rise, and further rises threatened, real estate values are for the moment, and for the immediate future, depressed rather than buoyant. I have already commented upon the absence at trial of admissible evidence as to the value of number 10.
280. Finally, as I have explained, I do not regard the Darroch contract as being a true indication of the value of number 10. Therefore, I cannot accept the proposition that the acquisition of number 10 has been wholly funded by Robin Hood as Ms Anderson contended.
281. Mr Harding observed that the plaintiffs’ claim was for damages for misleading or deceptive conduct, not for an account. (T46-7) Yet as I previously observed, viewed solely as a claim for damages for misleading or deceptive conduct, the plaintiffs’ claim must necessarily take account of the value of the interest which Robin Hood acquired in number 10. To the extent that it has derived that value the outlays cannot be said to be dead losses.
282. In his opening, Mr Harding said that these issues could be dealt with by proceedings under Part IV of the Property Law Act, which are generally within the exclusive jurisdiction of the Victorian Civil and Administrative Tribunal: the Property Law Act 1958, s234C. However, that is not the end of the matter. Subsection (4) of that section provides:

“The Supreme Court and the County Court have jurisdiction to hear an application under this Part if—

(a) in any proceeding which has commenced in the Supreme Court or the County Court (as the case requires), the issue of co-ownership of land or goods arises in the course of that proceeding; or

(b) * * *”

283. What has occurred in the present proceeding, in my view, engages this provision, and, subject to the late stage that they have reached and the necessity to go beyond the pleading, it may be appropriate to consider exercising the Part IV jurisdiction here. Further, in so far as the contention is that Robin Hood should be regarded as having paid the entire price or more than its fair share for the acquisition of its co‑owned interest in number 10, such a contention, if made good, might be reflected in a finding as to the proportions in which the co‑owners hold their shares in number 10 in equity. Alternatively, there might be some invocation of the powers bestowed by s233 of the Property Law Act or s230 thereof.
284. An alternative course would be to turn aside from Part IV and seek to deal with the plaintiffs’ claim solely as pleaded. Such a course would be embarrassed by the lack of admissible evidence as to the current value of number 10 or its value at some other date judged to be appropriate for the calculation of damages.
285. In the circumstances, I believe I should hear further submissions as to whether I should consider granting relief under Part IV of the Property Law Act and/or fixing damages based on an allowance for the value of number 10 as at the date of the Lextrip contract, the Darroch contract, the date of judgment, or any other – and if so, what – date.

Rights and liabilities of the parties

286. The narrative so far has dealt with the plaintiffs and the defendants as single units. It must be remembered, however, that there is a plurality of both plaintiffs and defendants, and the rights and liabilities of individual plaintiffs and defendants may not be strictly aligned with the rights and liabilities of other plaintiffs or defendants.
287. Relief relative to misleading or deceptive conduct inducing the plaintiff Robin Hood to purchase number 10, or enter a joint venture with Apadana and place moneys under the control of Apadana as manager of the joint venture, would be available to the plaintiff Robin Hood but not to the plaintiff Mr Maddah. The liability of any one or more of the defendants depends upon its being established that such defendant contravened the Australian Consumer Law or was knowingly concerned in such contravention. According to paragraph 24 of the Statement of Claim:

“Apadana was knowingly involved in the making of the investment representations by Shams and was aware that those representations were false.”

288. The narrative as to the making of the “investment representations” as narrated above is relatively complex. Precise dates could not and were not given in evidence as to when the various meetings took place. The purchase contract for number 10 in its original form was entered into on 20 July 2017 ([51] above). Apadana was incorporated on 13 July 2017: that is, seven days previously. (CB 477) Ms Shams is and was the sole office-holder and shareholder of Apadana. (CB 417-8) It seems likely that the investment representations were made before Apadana was incorporated.
289. A person will only be knowingly concerned in misleading or deceptive conduct if that person intentionally aided, abetted, counselled, or procured the relevant contravention: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661. Assuming that the investment representations were made before Apadana’s incorporation, it can be said that Apadana aided and abetted the misleading or deceptive conduct by, after its incorporation, joining in the execution of the purchase contract, the Darroch contract, and the Hassan Developments contract. These actions were knowing in the relevant sense because Apadana’s controller, Ms Shams, must have been well aware of the “phoney” nature of the price of $1.45m, both because of her association with Mr Nikfar and her pretence at having paid $485,000 in cash as part of the total consideration for the acquisition of number 10.
290. To the extent that representations were made by Mr Nikfar and Ms Shams directly, as recorded above, they were principal contraveners of s18 of the Australian Consumer Law. Otherwise, according to the explanation which I have just given, they can be regarded as having been knowingly concerned in the contravention by way of misleading or deceptive conduct, given the knowledge which they had as close business associates and their actions in carrying into effect the transactions which the misleading or deceptive conduct was intended to induce.
291. Robin Hood was incorporated on 12 July 2017 ([29] above). To the extent that any misleading or deceptive conduct was engaged in prior to that date, Robin Hood can be regarded as having been induced by that misleading or deceptive conduct to enter into the purchase contracts for number 10 and the joint venture agreement since Mr Maddah was the sole director, shareholder, and office-holder, and therefore its controlling mind. His inducement was its inducement.

Standard of proof

292. I have made my findings, conscious of the principles stated in s140 of the Evidence Act 2008 and by Dixon J, as he then was, in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336.

Miscellaneous plaintiffs’ claims

293. At paragraph [99] of her closing submission, Ms Anderson sought on behalf of the plaintiffs the costs of a contravention notice issued by the Foreign Investment Review Board in the sum of $10,800. According to Ms Anderson, the liability for this contravention should lie upon the defendants, because if the plaintiffs had not been misled or deceived Robin Hood would not have purchased number 10, and Mr Johnson would not have advised Mr Maddah that no board consent or approval was required for Robin Hood’s purchase. If the incurring of this penalty was, as a result of defective advice from Mr Johnson, as alleged, the liability would lie with him and his former firm, not with the defendants, who did not hold themselves out, according to anything that I heard, as experts on this subject to advise.
294. For purposes of causation, all that is required is that the alleged causal event be a cause of the loss claimed. It is not necessary to establish it as the sole or predominant cause. In Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413, the High Court held that a valuer which had provided a negligent valuation to a lending institution was liable in damages not only for the extent of the overvaluation but also for the lender’s losses incurred as a result of a subsequent market collapse, on the footing that but for the negligent valuation the lending transaction would not have taken place and the lender would not have been exposed to losses on that security property. Their Honours rejected the contrary approach adopted by the House of Lords in Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1996] UKHL 10; [1997] AC 191. Kenny & Good’s case was in the common law of negligence, not for misleading or deceptive conduct. It represents, to my mind, an example of how far the “but for” test for causation may extend. As has been said by the High Court elsewhere, causation is ultimately a matter of common sense. With some hesitation, I conclude that the connection between the contravention fee and the misleading or deceptive conduct goes beyond what common sense would regard as causally linked.
295. Likewise, a claim for the costs and services of Mr Rahimi, who, it will be recalled, acted as spokesperson and manager for Robin Hood and Mr Maddah after the “blow up” on 16 February 2019. Mr Rahimi’s commission, according to Ms Anderson’s closing submissions, was “to obtain the accounts for the joint venture”. He was not engaged to deal with the consequences of the misleading or deceptive conduct which I have held occurred relative to the purchase of number 10. Again, it must be accepted that had number 10 not been purchased, the issue relative to the invoices contained in the green folder would not have arisen. In my view, however, this stretches the causal link beyond what common sense would indicate.
296. I am fortified in refusing to award the amount claimed for Mr Rahimi’s services because of the total absence of evidence as to precisely what he did, on what basis, according to what charge-out rates, and so forth.

Counterclaim

297. The defendant makes a counterclaim in the sum of $95,600, representing amounts said to be outstanding relative to the loan agreement or acknowledgment constituted by the “minutes” of 16 February 2019. In so far as the alleged lender was Aust MIS Pty Ltd, these amounts are not the subject of any counterclaim because that company is not a party to this proceeding. The special referee said at paragraph 4.36 of his determination (CB 3148):

“While there does not appear to be any disagreement that Robin Hood received the ‘Remitted Money’, as to the question of whether those funds constituted a loan or were transferred for another purpose, it is my opinion that the available evidence, excluding the Alleged False Document [the minutes dated 16 February 2019], is inconclusive and thus I cannot offer any relevant findings. That said, if the Court regarded the narrations on the relevant bank statements as definitive, then it would follow that $36,522 of the ‘Remitted Money’ constituted a loan ...”

298. He had earlier noted that the bank narration included references to Robin Hood and a loan. The special referee also noted at paragraph 4.35.5:

“Robin Hood has not, to the best of my knowledge, disputed receipt of the ‘Remitted Money’. Rather, it has asserted that those funds were in reimbursement of expenses it had paid in connection with unrelated property developments. What evidence has been provided by Robin Hood to support its position is, in my opinion, inconclusive.”

299. I respectfully concur in the special referee’s characterisation of the evidence on those matters. Mr Harding said I should regard his finding as the allowance of the counterclaim to the tune of $36,522. Like the special referee I reach this conclusion based on proven cashflows and narrations in accounting documents, not the “minutes” dated 16 February 2018.
300. One possible objection to the success of the counterclaim in this sum is the thought that the relevant dealings occurred only because of the misleading or deceptive conduct which led Robin Hood and Apadana to become joint venturers for the proposed development of number 10. Nevertheless, Robin Hood’s case, as noted by the special referee, was that these outlays were not directly related to the joint venture. Accordingly, in my view, there is no circuity or circularity in allowing Robin Hood’s claim for misleading or deceptive conduct on the one hand, and also the counterclaim in the sum of $36,522.

Disposition

301. I will direct the parties within 14 days to bring in short minutes to give effect to these reasons. In light of what I have said above, it is likely there will be a need for further legal argument. Since I have heard no submissions on the question of costs, I will reserve them.

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