Supreme Court New South Wales Medium Neutral Citation: Reliance Financial Services Pty Ltd v Antalija Developments No 4 Pty Ltd [2022] NSWSC 519 Hearing dates: 14 – 18, 25 February, 2 – 3 March 2022 Decision date: 02 May 2022 Jurisdiction: Equity Before: Robb J Decision: The parties should confer for the purpose of preparing short minutes of order to give effect to these reasons and they should include case management orders to deal with all outstanding issues Catchwords: CONTRACTS — misleading conduct under statute — misleading or deceptive conduct — third and fourth defendants operate residential development business through second defendant — second plaintiff through her agent arranges for residential development project with third and fifth defendants — first defendant incorporated to purchase land on unit trust for second plaintiff, third defendant and fifth defendant themselves as trustees of separate discretionary trusts — plaintiffs claim enforcement of contract between unit holders containing clause giving rise to breach of contract by third defendant and liability of first defendant to second plaintiff for loan at substantial interest rate — whether particular clause of contract void for misleading or deceptive conduct by agent of second plaintiff — development arrangements made in quasi-familial context — request by third defendant of agent of second plaintiff whether legal or financial advice required in respect of contract — response by agent of second plaintiff that contract contained 'standard' or 'simple' terms — failure by agent of second plaintiff to bring third defendant's attention to unusual term — declaration that particular clause void ab initio EQUITY — trusts and trustees — breaches of trust — plaintiffs claim that first defendant as corporate trustee breached its duties by securing loan over trust property to pay other corporate vehicle of third and fourth defendants — plaintiffs claim that first defendant breached its duties by making unauthorised repayment of third and fifth plaintiffs' contribution to development arrangement — plaintiffs claim that first defendant breached its duties by entering into costs agreement with defendants' solicitors — plaintiffs seek replacement of first defendant as trustee of unit trust — plaintiffs seek account of unit trust AGENCY — liability of principal — relations between principals and third parties — second plaintiff bound by misleading or deceptive conduct of agent in respect of third defendant Legislation Cited: Australian Consumer Law, ss 18, 237, 243 Fair Trading Act 1987 (NSW), s 28 Competition and Consumer Act 2010 (Cth), Sch 2 Trustee Act 1925 (NSW), s 70 Cases Cited: Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 17 L'Estrange v F Graucob Ltd [1934] 2 KB 394 Manning v Commissioner of Taxation (1928) 40 CLR 506 Nadinic v Cheryl Drinkwater as Trustee for the Cheryl Drinkwater Trust [2020] NSWCA 2 Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 22 ALR 621 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 Texts Cited: JD Heydon and MJ Leeming, Jacobs' Law of Trust in Australia (8th ed, 2016, LexisNexis Butterworths) Category: Principal judgment Parties: Reliance Financial Services Pty Ltd (First Plaintiff) Nancy Morvillo (Second Plaintiff) Marginata Securities Pty Ltd (Third Plaintiff) Accolade Advisory Pty Ltd (Fourth Plaintiff) Antalija Developments No 4 Pty Ltd (First Defendant) Antalija Constructions Pty Ltd (Second Defendant) Dennis Katavic (Third Defendant) Jocelyn Katavic (Fourth Defendant) Sue Price-Arcidiacono (Fifth Defendant) Representation: Counsel: M Ashhurst SC & D Allen (Plaintiffs) P Greenwood SC & A Oakes (First to Fourth Defendants) Solicitors: McEvoy Legal (Plaintiffs) Kamy Saeedi Law (First to Fourth Defendants) File Number(s): 2019/00372019 Publication restriction: Nil Judgment 1. These proceedings were commenced on 26 November 2019 by the filing of the plaintiffs' summons in court by leave granted by Kunc J, sitting as the duty judge. The parties 1. The plaintiffs are Reliance Financial Services Pty Ltd (Reliance), Nancy Morvillo, Marginata Securities Pty Ltd (Marginata) and Accolade Advisory Pty Ltd (Accolade). 2. The defendants are Antalija Developments No 4 Pty Ltd (Antalija No 4), Antalija Constructions Pty Ltd (Antalija Constructions), Dennis Katavic, Jocelyn Katavic and Sue Price-Arcidiacono (who I will call, as did the parties, Ms Price). Westpac Banking Corporation (Westpac) was formerly a defendant. There are other defendants against whom the plaintiffs have made claims that are not relevant to the issues dealt with in these reasons. 3. These reasons for judgment concern the hearing of a claim by the plaintiffs against the first four defendants. The claim against Ms Price will proceed separately. I will not refer in detail to the circumstances of the claim against Ms Price unless they are relevant to the claims made against the first four defendants. 4. It will be convenient to refer to the first four defendants simply as the defendants and to refer to Ms Price separately. The proceedings 1. The proceedings arose out of the development by Antalija No 4, in its capacity as trustee of the Antalija No 4 Unit Trust (Unit Trust), of land at Moncrieff in the Australian Capital Territory (Moncrieff land) by the construction of 40 townhouses. 2. The final relief sought in the summons included a declaration that Reliance had an equitable mortgage over the assets of the defendants other than Westpac, a declaration that the proceeds of sale of the townhouses on the Moncrieff land were charged with all of the plaintiffs' interests, and other relief arising out of alleged breaches of trust involving Antalija No 4, Mr Katavic and Ms Price. 3. The primary interlocutory relief sought consisted of asset preservation orders against the defendants in the terms contained in Practice Note SC Gen No 14. The orders would prohibit the defendants from removing from Australia or in any way disposing of the defendants' assets up to an unencumbered value of $8,874,928.03. That order obviously was not sought against Westpac. 4. The complex issues that have arisen in these proceedings are not readily summarised. In essence, the plaintiffs seek to enforce rights that they claim to exist under agreements reached between them and one or more of the defendants concerning the development of the Moncrieff land. There are issues as to the existence and terms of any such agreements, and whether one agreement was induced by misleading and deceptive conduct. The parties established a trust vehicle for the purpose of the development and there are issues as to whether breaches of trust have been committed, and if so what the consequences of those breaches should be. 5. I will soon consider the circumstances in which the plaintiffs obtained interlocutory relief against the defendants. That is because, after these reasons for judgment are delivered, an issue will remain outstanding concerning the continuation of the asset preservation orders. Furthermore, as will be seen, the plaintiffs obtained interlocutory relief on grounds that have not been sustained, and in some cases were not sustainable. The manner in which the plaintiffs obtained interlocutory relief is material to the general credibility of the case that they prosecuted at the hearing. 6. I will also analyse the pleadings in this matter in some detail. That is necessary to determine with precision the issues that require determination in these reasons. The manner in which the plaintiffs have pleaded and revised their claims, which has involved the substantial abandonment and revision of particular claims, is also relevant to the general credibility of the plaintiffs' case. It will be necessary for the Court to deal with relevant aspects of the pleadings at a level of detail that will have the unfortunate result that the reasons will be opaque to the reader. It may be necessary for the reader to suspend understanding of the issues raised by the pleadings until the analysis of the evidence that follows will hopefully make the commentary on the pleadings more transparent. An attempt artificially to simplify the pleadings and the issues raised by them would be unhelpful. 7. At the end of the hearing, after the agitation of a number of matters that ultimately ceased to be relevant, three broad issues remained for determination that are summarised below at [339] of these reasons. Evidence in support of interlocutory relief 1. The summons was supported by an affidavit of Sam Peter Cassaniti sworn on 26 November 2019. Mr Cassaniti claimed to be authorised to make the affidavit on behalf of each of the plaintiffs. Mr Cassaniti said that he was Ms Morvillo's brother. 2. Mr Cassaniti said that, for the purpose of the urgent application, Reliance claimed an interest in the proceeds of sale of the Moncrieff land as a secured creditor of Antalija No 4, Ms Morvillo claimed an interest in the proceeds as a 25% unit holder in the Unit Trust, Marginata claimed an interest in the proceeds as a secured creditor of Ms Price's 25% unit holding in the Unit Trust, and Accolade claimed an interest as a secured creditor arising out of the provision of accountancy and advisory services. 3. Mr Cassaniti exhibited to his affidavit an undated Unit Holders Agreement (Unit Holders Agreement) between Antalija No 4 and the unit holders of the Unit Trust, a so-called Development Funding Agreement dated 11 May 2017 between Antalija No 4, Mr Katavic and Reliance, and an agreement amending that agreement. Mr Cassaniti said that, under the Development Funding Agreement as amended (Amended Development Funding Agreement), Reliance paid Antalija No 4 $2,250,000, comprised of a loan of about $1.16 million and the payment of Ms Morvillo's capital contribution under the Unit Holders Agreement. Of the total amount of $8,574,928.03 sought to be protected by the asset preservation orders, $4,389,076.76 was attributed by Mr Cassaniti to the amount owed by Antalija No 4 under the Amended Development Funding Agreement with Reliance. The balance was comprised of an amount of $1,869,601.27, said to be the amount owed by Ms Price to Marginata secured by her interest in the Unit Trust, and $2,316,250, being what Mr Cassaniti claimed was the value of Ms Morvillo's interest in the Unit Trust. 4. Mr Cassaniti gave evidence in his affidavit of a number of matters that caused Mr Cassaniti to fear that Mr Katavic would cause Antalija No 4 to misappropriate the net proceeds of sale of the Moncrieff land. Those matters included that Antalija No 4 had not repaid any of the amount owed to Reliance under the Amended Development Funding Agreement, that Mr Katavic had caused Antalija No 4 to enter into a construction contract with Mr Katavic's building company, Antalija Constructions, without any notice to or consultation with Reliance or Ms Morvillo, and that Mr and Ms Katavic had redeveloped their home, which is in Ms Katavic's name, when the only way they could have afforded the redevelopment is if a substantial portion of the funds of the Unit Trust had been directed towards the construction costs, and materials purchased for the redevelopment had been charged as materials costs under the contract for the development of the Moncrieff land. Asset preservation orders 1. Based on this evidence, Kunc J made ex parte asset preservation orders substantially as sought by the plaintiffs until 28 November 2019. His Honour also made an order that the first to fifth defendants be restrained until further order from disbursing, disposing of or dealing with any of the proceeds of sale of the Moncrieff land. 2. As will be seen, however, the plaintiffs ultimately did not, at the hearing, pursue their attempt to prove the validity of the Amended Development Funding Agreement. As will also be seen, the Unit Holders Agreement specifically authorised Antalija No 4 to enter into a construction contract with Antalija Constructions. There has been no attempt at all by the plaintiffs to make good their claim that Mr and Ms Katavic have misused the funds of the Unit Trust in the redevelopment of their home. 3. In retrospect, the plaintiffs appear to have misled Kunc J on the grounds that they put forward ex parte that persuaded his Honour to make the asset preservation orders. 4. On 29 November 2019, Kunc J by consent made certain amendments to the orders made ex parte on 26 November 2019. Putting aside the orders made against Ms Price, the most relevant amendments were: * The asset preservation orders against Ms Katavic were discharged. * Ms Katavic was ordered not to further encumber or otherwise deal with her residential property. * Westpac was ordered to pay into court the funds held in the St George Bank account in the name of Antalija No 4. * The plaintiffs were given leave to discontinue the proceedings against Westpac. 1. On 5 December 2019, Pembroke J made an order that the matter proceed on pleadings. 2. On 13 December 2019, Pembroke J made a number of orders that varied the orders then in place, the most relevant being: * An amount of $1,925,000 from the sum paid into court by Westpac was ordered to be paid out to Reliance. The payment was net of an amount of $325,000 of GST refunds made to Antalija No 4 by the Australian Taxation Office (ATO) that had been retained by Accolade. The practical effect is that Reliance has been repaid its advance (without the interest and Establishment Fee originally claimed under the Amended Development Funding Agreement) and Ms Morvillo has been repaid her capital contribution to the Unit Trust. * The remainder of the money paid into court by Westpac was ordered to remain there until further order. * The asset preservation orders were discharged as against Mr and Ms Katavic. * Ms Katavic was ordered not to further encumber, dispose of or otherwise deal with her residential property without giving the plaintiffs 14 days' written notice. * The asset preservation orders made against Antalija Constructions were varied by reducing the sum to $1,000,000 and by permitting that company to pay its reasonable legal expenses. 1. It will be convenient to note that the plaintiffs did not attempt to prove at the hearing that Antalija Constructions has any liability to any of them. Initial statement of claim 1. The plaintiffs filed their statement of claim on 17 December 2019. As the statement of claim has been amended on a number of occasions, it is only necessary to note a number of aspects that have some significance to the plaintiffs' case as ultimately presented at the hearing, as follows: * Reliance claimed judgment in the sum of $4,415,407.47 against Antalija No 4 and Mr Katavic and declarations that the proceeds of sale of the Moncrieff land and monies payable by Antalija No 4 to Mr Katavic were charged in favour of Reliance pursuant to the Amended Development Funding Agreement. * Reliance claimed judgment in the sum of $4,932,388.99 against Ms Katavic. * Ms Morvillo sought an order for the replacement of Antalija No 4 as trustee of the Unit Trust and related orders, including an order that Antalija No 4 provide an account within 14 days. * Ms Morvillo sought a declaration against Antalija Constructions that the construction contract with Antalija No 4 was rescinded, and that Antalija Constructions holds the $9,134,304 paid under the construction contract on a constructive trust for the trustee of the Unit Trust, and a judgment for $9,134,304 plus interest. * Ms Morvillo claimed relief against Mr Katavic in order to restore alleged misappropriations of trust property committed by Mr Katavic, and that any property purchased with the money of the Unit Trust be held on trust for the trustee. * Ms Morvillo claimed against Ms Katavic an account and consequential relief in relation to receipts from Antalija No 4. * Accolade claimed judgment against Ms Katavic in the sum of $1,107,529.61 plus interest. 1. I have already mentioned that the plaintiffs did not pursue the claim based upon the Amended Development Funding Agreement. Ms Morvillo did not attempt at the hearing to prove that Mr Katavic misappropriated property of the Unit Trust. The plaintiffs also abandoned their claims against Ms Katavic personally and the relief sought against Antalija Constructions. Of the foregoing prayers for relief, the plaintiffs prosecuted at the hearing their claim for an order replacing Antalija No 4 as trustee of the Unit Trust and an order requiring Antalija No 4 to provide an account to the new trustee. 2. The following allegations of fact made by the plaintiffs in the initial statement of claim also have some continuing relevance for the purposes of these reasons: * The plaintiffs pleaded that Mr Katavic informed Mr Cassaniti during negotiations in November 2016 "that Katavic and his companies had no money and no work". This is an important background fact which the defendants partially disputed at the hearing, in that they accepted that they did not have cash available for immediate investment, but they denied that they had no work. This is relevant to whether the substance of the agreement between the parties to the Unit Holders Agreement was as alleged by the plaintiffs or the defendants. * The statement of claim contained an allegation that, on 11 May 2017, Reliance, Antalija No 4 and Mr Katavic executed the Development Funding Agreement under which Reliance advanced the sum of $1,159,691.25 to Antalija No 4. It was alleged that the amount advanced was used to pay the purchase price for the Moncrieff land and that the advance was a charge on that land. It was alleged that the Moncrieff land was purchased by Antalija No 4 as trustee for the Unit Trust. * Further, it was alleged that, on 23 July 2018, Reliance, Antalija No 4 and Mr Katavic executed an amendment to the Development Funding Agreement. * The statement of claim contained allegations concerning the constitution and terms of the Unit Trust, including that distributions of income and returns of capital were not permitted prior to the termination of the trust. There were allegations that Ms Price had provided $740,000 in capital, rather than the $1,090,308.75 that was required, and Mr Katavic had provided $2,180,617.50 in capital. * Ms Morvillo alleged that Antalija No 4 had breached its obligations as trustee of the Unit Trust in three ways: namely (1) by borrowing $2,075,000 on 1 June 2017 from the St George Bank on the security of the Moncrieff land and paying that amount to Antalija Developments No 2 Pty Ltd (Antalija No 2); (2) by entering into a construction contract with Antalija Constructions on 24 April 2018 and paying $9,134,304 to Antalija Constructions; and (3) by returning Ms Price's capital of $740,000 to Ms Price. * The statement of claim also contained allegations of knowing participation in Antalija No 4's breaches of trust against Mr and Ms Katavic, Antalija Constructions and Antalija No 2 (even though the last-mentioned company was not a party to the proceedings). 1. As already noted, Ms Morvillo abandoned ground (2) of her breach of trust claim against Antalija No 4. 2. It is not necessary for the purpose of these reasons to trace the complete history of the pleadings. Second further amended statement of claim 1. On 10 February 2022, at a directions hearing before the hearing of the claim commenced on 14 February 2022, the plaintiffs were given leave to file a second further amended statement of claim. 2. Relevantly to the claim against the defendants, Ms Morvillo added a claim for an order that Antalija No 4, as trustee of the Unit Trust, pay to her such money as was properly payable upon the taking and giving of the account. 3. Ms Morvillo also claimed declarations that Ms Morvillo was entitled to be paid interest on the excess of her proportionate contribution to the capital of the Unit Trust, being interest of $471,920.22 as at 31 January 2022, and that she was entitled to a return of any outstanding contributions of her capital. Ms Morvillo added a claim against Mr Katavic that he pay damages for breach of contract to Antalija No 4, being the amount of interest payable to Ms Morvillo of $471,920.22. 4. The basis of this new claim was pleaded in pars 99A to 99D. As I have noted above, the plaintiffs pleaded in the initial statement of claim that Mr Katavic had contributed capital of $2,180,617.50 to the Unit Trust. The defendants responded by pleading that the payment attributed to Mr Katavic by the plaintiffs was not a capital payment by Mr Katavic but was an amount borrowed from the St George Bank. That was consistent with the defendants' case that 50% of the capital needed to buy the Moncrieff land would be paid to Antalija No 4 by Ms Morvillo and Ms Price and the remaining 50% would be borrowed by Antalija No 4. This new claim by Ms Morvillo appears to be a response to this claim by the defendants. Ms Morvillo alleged that clause 9 of the Unit Holders Agreement obliged each unit holder to contribute a proportionate share of the costs and expenses towards the purchase of the Moncrieff land and its development by way of payment of capital to Antalija No 4. That proportionate share was 50% by Mr Katavic, 25% by Ms Morvillo and 25% by Ms Price. That was because the number of units held by those unit holders were respectively 50, 25 and 25. The plaintiffs alleged Mr Katavic breached clause 9 by not contributing his proportionate share of the capital. The amount of the default was alleged to be $1,143,117.50, being 50% of the purchase price and stamp duty for the Moncrieff land of $4,361,235, less the amount of the $2,075,000 loan from the St George Bank. Ms Morvillo alleged that, pursuant to clause 9, Antalija No 4 is obliged to pay compound interest at 8.5% per annum to Ms Morvillo. Third further amended statement of claim 1. The final version of the plaintiffs' statement of claim was the third further amended statement of claim filed in court on 17 February 2022 by leave given by me on that date. That amendment to the statement of claim occurred during the course of the cross-examination of Mr Cassaniti. 2. So far as the amendments are relevant to the claims made against the defendants, the material changes were: * Reliance abandoned all of its claims, but it introduced a new claim against Antalija No 4 for $1,159,691.25, as an alternative to the existing claim made by Ms Morvillo against Antalija No 4 for breach of trust. The basis of this claim is obscure, and I do not understand Reliance to have pursued it in final submissions. * Ms Morvillo abandoned her claim for a declaration that the construction contract between Antalija No 4 and Antalija Constructions was rescinded, and that Antalija Constructions pay $9,134,304 to the new trustee of the Unit Trust. * Ms Morvillo added a claim against Mr Katavic that he indemnify the Unit Trust for any legal fees incurred by Antalija No 4 in the defence of these proceedings. * The plaintiffs deleted all of the allegations concerning the making and performance of the alleged Development Funding Agreement and the amendment of that agreement, and consequently they abandoned Reliance's claim against Antalija No 4 for breach of that agreement and the related equitable claims against Antalija No 4 and Mr Katavic. * Ms Morvillo added a further claim of breach of trust against Antalija No 4. That claim was based upon the fact that, under the original asset preservation orders, Antalija No 4 was restrained from diminishing the value of its assets below the unencumbered value of $8,574,928.03. Ms Morvillo alleged that, at the date the asset preservation orders were made, the only assets held by Antalija No 4 were the $3,613,856.70 that was paid by Westpac into court and an amount of $415,000 held by the defendants' solicitors. Ms Morvillo alleged that, after the date the asset preservation orders were made, Mr Katavic caused Antalija No 4 to incur legal costs in defending and prosecuting these proceedings under a costs agreement with the solicitors for the defendants dated 27 November 2019. Ms Morvillo alleged that this conduct by Antalija No 4 constituted a breach of the Unit Trust and that Mr Katavic was a party knowingly concerned in the breach. 1. It will be convenient to note that the defendants' response to this last new claim was to inform the Court that, although Antalija No 4 was a joint party to the costs agreement, it had not used any of the funds of the Unit Trust to pay any legal fees and would not do so unless and until authorised by the Court. 2. Further, the plaintiffs gave as a particular to par 108I of the new breach of trust claim that: "1. The acts constituted a contempt of Court". I record that, during the course of the hearing, the plaintiffs advised the Court that they abandoned the claim that the alleged conduct by Antalija No 4 and Mr Katavic constituted a contempt of the asset preservation orders. Defence to the third further amended statement of claim 1. The operative defence of the defendants is their defence to the third further amended statement of claim. The most significant aspects of that defence are: * The defendants did not admit the plaintiffs' allegation that Mr Cassaniti acted as their agent. They therefore put the plaintiffs to proof of the agency. * The defendants specifically denied the plaintiffs' allegation that in November 2016, when Mr Cassaniti negotiated with Mr Katavic as to the form and funding of the proposed venture, Mr Katavic informed Mr Cassaniti that Mr Katavic and his companies had no money and no work. * The defendants pleaded in par 7 that the terms of the agreement reached in about November 2016 between Mr Katavic and Mr Cassaniti were that, if the property development were to occur: a it would be done through a trust company formed for that specific purpose; b 50% of the purchase price of the property would be funded by a bank loan and the remainder by contributions made by Mr Cassaniti and Ms Price and Mr Arcidiacono; c Mr Katavic would, at a later date, also make contributions towards the cost of the development; d construction of the development would be carried out by Mr Katavic (through Antalija Constructions); e in order to have control, Mr Katavic would have a 50% interest in the development and the remaining 50% would be shared between Mr Cassaniti and Ms Price and Mr Arcidiacono. * The defendants did not admit that on 11 May 2017 Reliance advanced the sum of $1,159,691.25 to Antalija No 4. They alleged instead that Antalija No 4 received $2,250,000 from Accolade on 11 May 2017, and that the deposit was recorded as a deposit by Mr Cassaniti in accordance with the agreement pleaded by the defendants in par 7. * The defendants denied that the alleged advance of $1,159,691.25 constituted a "further contribution" in accordance with clauses 9(e) and 9(f) of the Unit Holders Agreement. * The defendants admitted that Antalija No 4 paid $740,000 to Ms Price on 18 November 2019. * The defendants pleaded that Mr Katavic made contributions to the development of the Moncrieff land through Antalija Constructions in the total amount of $1,390,000. The defendants said that on 18 November 2019, Antalija No 4 paid $1,500,000 to Antalija Constructions in reimbursement of the contribution and admitted that this payment involved an overpayment of $110,000. The defendants pleaded that on 19 November 2018, $70,000 of the overpayment was repaid to Antalija No 4. * The defendants denied an allegation by the plaintiffs that the terms of the Unit Trust did not permit Antalija No 4 to distribute income and return capital to unit holders prior to the termination of the trust. * The defendants admitted that Mr Katavic and Ms Price executed the Unit Holders Agreement on or around 10 May 2017 (rather than the 11 May 2017 date alleged by the plaintiffs). * The defendants denied the allegation that it was a term of the Unit Holders Agreement that each Unit Holder would provide capital in proportion to the units held. * In response to allegations made by the plaintiffs that Ms Morvillo provided Antalija No 4 with $1,090,308.75 as capital, and that Ms Price only provided $740,000 instead of $1,090,308.75, the defendants simply said that Accolade paid $2,250,000 and Ms Price paid $740,000 to Antalija No 4. * In response to an allegation made by the plaintiffs that Mr Katavic initially provided $2,180,617.50 in capital, the defendants replied that Mr Katavic made contributions of $1,390,000 through Antalija Constructions, and then alleged in par 40: a in about April 2017 funding of $2,075,000 was sought from the St George Bank by Antalija No 4 in order to fund the purchase of the Moncrieff land, b due to delays caused by St George Bank, the funds were not approved in time for completion of the purchase of the Moncrieff land on 12 May 2017; c in order to complete the purchase of the Moncrieff land, St George Bank caused Antalija No 2 to draw down on a facility it had with St George Bank and loan Antalija No 4 the sum of $2,075,000; d funding was obtained by Antalija No 4 from St George Bank in June 2017 in order to repay the loan from Antalija No 2. * In essence, the defendants responded to the plaintiffs' claim that Mr Katavic had initially contributed $2,180,617.50 in capital to enable the purchase of the Moncrieff land, and then caused Antalija No 4 to borrow that amount from St George Bank on the security of the Moncrieff land and then pay that amount to Antalija No 2, by alleging that it was a term of the real agreement that Antalija No 4 would borrow half the purchase price, St George Bank wrongly used a loan facility granted to Antalija No 2 to fund that amount, and eventually the amount was repaid by Antalija No 4 to Antalija No 2 when the former was able to establish its own loan facility with the St George Bank. The defendants accordingly denied that these events involved a breach of trust by Antalija No 4 or that it preferred the interests of Mr Katavic over those of the other unit holders. * In response to the plaintiffs' claim based upon clause 9 of the Unit Holders Agreement, the defendants alleged (1) that the Unit Holders Agreement was not legally enforceable, (2) if it was, it did not have the operation pleaded by the plaintiffs, and (3) the defendants relied upon their cross claim for an order declaring the Unit Holders Agreement to be void or varied. * Finally, the defendants in effect denied that the payment of the $740,000 to Ms Price or any consequence of the defendants entering into the costs agreement with their solicitors involved a breach of trust by Antalija No 4. Further amended cross claim 1. Antalija No 4 and Mr Katavic filed a further amended statement of cross claim on 22 March 2022. 2. Initially, there was an issue as to whether Accolade had misappropriated GST repayments received on behalf of Antalija No 4 from the ATO in a total amount of $325,594.11. That, as I understand it, is no longer an issue because the $1,925,000 paid to Reliance out of the money paid into court by Westpac was net of the amount of $325,594.11. Effectively, that amount is now available to be repaid to Antalija No 4. 3. For the purpose of these reasons, the most significant issue raised by the cross claim is pleaded in the alternative to the defendants' allegation that the Unit Holders Agreement is of no legal effect. If it is found to be effective, Antalija No 4 and Mr Katavic allege that the Unit Holders Agreement was entered into by them as a result of misleading or deceptive conduct by Mr Cassaniti, as the agent of Ms Morvillo, with the result that Antalija No 4 and Mr Katavic are entitled to an order that the Unit Holders Agreement is void or that it be varied in a manner in which Ms Morvillo would cease to be entitled to maintain the debt claim based upon clause 9 of the Unit Holders Agreement. The essence of this claim is that the real agreement for the funding of the Moncrieff land development was as pleaded in par 7 of the defence to the third further amended statement of claim. The cross claim alleges that Mr Katavic informed Mr Cassaniti that he did not have enough money at the time to contribute capital to the development, and that Mr Cassaniti agreed that Mr Cassaniti could contribute around $2 million. The cross claim further alleges that, on around 10 May 2017, when the Unit Holders Agreement was signed, Mr Katavic asked whether he needed to get his "team" (meaning his solicitor and accountant) to look over anything and was advised by Mr Cassaniti that he did not, as "it's all just standard contracts". The cross claim alleges that Mr Katavic had a reasonable expectation that, if the Unit Holders Agreement contained terms with the effect of clause 9, that would have been disclosed to Mr Katavic. It further alleges that Mr Cassaniti represented to Mr Katavic that the terms of the Unit Holders Agreement reflected the agreement alleged in par 7 of the defence. The cross claim alleges that Mr Cassaniti's conduct was a contravention of s 18 of the Australian Consumer Law (Competition and Consumer Act 2010 (Cth), Sch 2; Fair Trading Act 1987 (NSW), s 28(1)) and that it was engaged in as agent of Ms Morvillo and within the scope of his actual or apparent authority granted by Ms Morvillo. 4. The defendants to the cross claim denied the allegations made in it. Interestingly, in par 25L of the defence, Mr Cassaniti and Ms Morvillo deny that the former was the agent of the latter or held out by the latter as her agent and say that Mr Cassaniti's only authority was to formally bind the unit holders to the terms of the Unit Holders Agreement. Both sides of this dispute allege that Mr Cassaniti was and was not the agent of Ms Morvillo when it suits their cases. 5. It is not necessary at this stage to analyse the defence to the cross claim in detail. Order for an account of 31 March 2020 1. On 31 March 2020, Ward CJ in Eq (as her Honour then was) made the following order: 1.Without admission of liability, the trustee of the Antalija Unit Trust to provide an account to the Second Plaintiff as a beneficiary of the trust by 27 April 2020. 1. As I understand matters, it is not controversial that Antalija No 4 has not complied with this order in the sense of preparing and delivering to the unit holders a conventional account of its activities as trustee of the Unit Trust on a line-by-line basis identifying all receipts and expenditures and providing supporting vouchers to prove each entry. Antalija No 4 apparently provided some information to the plaintiffs that fell short of a conventional account. 2. As I have explained above, one of the issues in these proceedings that remains alive is Ms Morvillo's claim that Antalija No 4 be ordered to provide an account to her as trustee of the Unit Trust. I will deal with this claim below. Factual background 1. As the claims made by Reliance have been abandoned or not prosecuted, it is not necessary to refer further to the circumstances of that company. 2. It is also not necessary to consider the involvement of Marginata, as that company's claim is against Ms Price. Mr Cassaniti 1. Accolade is a company that provides accountancy and other services to its clients. At relevant times, Mr Cassaniti was employed by Accolade as a consultant. Accolade's business was a continuation of an accountancy business of which Mr Cassaniti was formally a principal. It appears that Mr Cassaniti ceased to be a principal as a result of Mr Cassaniti having been declared bankrupt in April 2007, with his bankruptcy lasting 10 years. Mr Cassaniti continued his association with Accolade as a consultant. 2. As mentioned, Mr Cassaniti is Ms Morvillo's brother. It is clear from the whole of the evidence that Ms Morvillo agreed to become a unit holder in the Unit Trust as a trustee for the Cassaniti Discretionary Trust. Mr Cassaniti's mother is the principal beneficiary of that trust. In practical terms, Ms Morvillo acted as Mr Cassaniti's nominee, and Mr Cassaniti negotiated Ms Morvillo's involvement in the Unit Trust as if he had her plenary authority. 3. Although Mr Cassaniti's authority to act for and bind Ms Morvillo was not specifically proven, I am satisfied I should infer that Mr Cassaniti had Ms Morvillo's authority to act for her in relation to all aspects of her participation in the Unit Trust and the redevelopment of the Moncrieff land. 4. Accordingly, if Mr Cassaniti induced Antalija No 4 and Mr Katavic to execute the Unit Holders Agreement by engaging in misleading or deceptive conduct, his conduct bound Ms Morvillo. 5. Mr Cassaniti accepted in evidence that on 30 September 2005 he was convicted of 23 criminal charges involving acts defrauding the Commonwealth in respect of what were found to be false claims for tax deductions by Mr Cassaniti's accounting clients. Mr Cassaniti agreed that he was sentenced to a term of two years and nine months imprisonment. Mr Cassaniti maintained in cross-examination that he had done nothing wrong in relation to any of the charges. Mr and Ms Katavic 1. Mr and Ms Katavic married in October 2005. 2. At the beginning of that year, Mr Katavic completed a Certificate IV in building at TAFE and obtained his builder's licence. Mr Katavic started building homes for he and Ms Katavic to live in and then sell. Over the next few years, Mr Katavic engaged in employment that gave him further experience in the building industry. 3. Mr Katavic registered Antalija Constructions in November 2008, and in 2009 that company was granted a builder's licence. After that, Mr Katavic conducted his building business through Antalija Constructions. 4. Ms Katavic looked after paying the company's bills and they had an accountant and solicitor giving them advice. 5. Mr Katavic gave evidence that, after he had gained some experience with residential building projects with Antalija Constructions, he was given advice that the best way for him to do large scale developments was to have separate development and building companies. He was told that the developments should be in a trust name with the development company as trustee. Each project would have a separate company and trust. Mr Katavic said that he was not familiar with trusts but accepted the advice and left it to the accountant to organise the necessary paperwork. 6. Mr Katavic gave evidence of undertaking residential developments starting in mid-2014 through three separate development companies, which I will call, as abbreviations of their names, Antalija No 1, Antalija No 2 and Antalija No 3. 7. Antalija No 1 purchased a block of land for $1.75 million in October 2014 to build 15 units. The purchase was partly financed by a bank loan of $1 million. Antalija No 1 contracted with Antalija Constructions to do the work. The work on site started in October 2015 and was successfully completed in April 2017. 8. Antalija No 2 purchased a development site for $4.85 million in March 2015 to build 52 apartments. A bank loan of $2.8 million was obtained. The development was completed under a contract between Antalija No 2 and Antalija Constructions. Work on the site started in July 2016 and was successfully completed in November 2017. 9. In August 2015, Antalija No 3 was registered with Mr Katavic as a 60% shareholder and another investor with 40%. In May 2016, Antalija No 3 purchased a development site at Moncrieff for $5.025 million for the development of 54 residential apartments. On that occasion, a loan of $2.5 million for the purchase was arranged through the St George Bank. Antalija No 3 contracted with Antalija Constructions to do the work. 10. Mr Katavic's evidence was that in the case of each of the three developments the development company became the trustee of a discretionary trust. 11. Also, in each case, construction funding was arranged through a bank. 12. As I will shortly consider, the agreement to develop the Moncrieff land arose out of an initial discussion between Mr Katavic, Mr Cassaniti and Mr Arcidiacono, Ms Price's husband, that took place in November 2016. As at November 2016, the work on Antalija No 1's project had been proceeding for a little over a year but was still about five months away from completion. At that time, work on Antalija No 2's development had been proceeding since July of that year but still had a further 12 months to complete. Antalija No 3 had purchased its development site in May 2016 but work on the site would not start until June 2017. 13. By November 2016, Mr Katavic, through Antalija Constructions and the special purpose development companies, had established a successful reasonably large scale residential development business, albeit that it had only recently been established. Each development project appears to have been funded by the initial capital available to Mr Katavic and then his use of the proceeds of sale of completed apartments to fund or secure borrowing for further developments. 14. The evidence given by Mr Katavic about the development projects conducted by Antalija No 1, No 2 and No 3 was not challenged by the plaintiffs. 15. As of November 2016, Mr Katavic, through Antalija Constructions, had a substantial amount of work ongoing, in that two development projects were under construction, and one was being made ready for the commencement of work. 16. It is also highly probable that the capital available to Mr Katavic for engaging in any new development project was limited, as all three existing development projects were continuing, and even the first project undertaken by Antalija No 1 would not be completed for a further five months. Capital would not become available to Mr Katavic to provide his share of equity in any new development project until the sale prices for the apartments in Antalija No 1's development project became available upon completion of contracts for the sale of apartments in that development following the end of construction. 17. As I have mentioned above, the plaintiffs pleaded that Mr Katavic told Mr Cassaniti in November 2016 that he and his companies had no money and no work. The defendants accepted that Mr Katavic said that he and his companies had no money, but they denied they had no work. 18. The objective evidence supports a finding that the reality of the circumstances of Mr Katavic and his companies was consistent with the version of the event asserted by the defendants. 19. Furthermore, for commercial reasons, it is improbable that Mr Katavic agreed to fund half of the purchase price of the land for a new development project in respect of which settlement of the purchase could be expected to take place in about May 2017 from his own capital resources. That conclusion is justified notwithstanding the absence of comprehensive evidence concerning the financial position of Mr Katavic and his companies. As I have noted above, for the purposes of their interlocutory application the plaintiffs alleged that the only way Ms Katavic could have redeveloped the home owned by her was by misappropriation of the funds of the Unit Trust. Furthermore, as will be explained below, Mr Cassaniti gave evidence that Mr Katavic told him that Mr Katavic's financial circumstances were that he would have to lay off his staff if the development of the Moncrieff land did not proceed (a claim that Mr Katavic denied). I would not infer that Mr Katavic had the capital to fund his participation in any number of additional development projects, given his commitment to the existing uncompleted projects. As at November 2016, Mr Katavic could not be confident that the completion of the development project being undertaken by Antalija No 1 would generate sufficient funds in time. Ms Price and Mr Arcidiacono 1. Ms Price is Ms Katavic's mother. As of November 2016, Ms Price was married to Mr Arcidiacono. Mr Arcidiacono has since died. 2. Ms Price and Mr Arcidiacono had for many years conducted businesses in the Australian Capital Territory through a number of companies, which were principally engaged in providing building cleaning services to their customers. Financial circumstances of Ms Price and Mr Arcidiacono 1. On 22 July 2016, the Deputy Commissioner of Taxation commenced proceedings in the Supreme Court of the Australian Capital Territory against Mr Arcidiacono to recover the sum of $308,208.99, plus a general interest charge. 2. It is not necessary to explain the evidence in detail, but it is clear that Ms Price and Mr Arcidiacono were under enormous financial pressure caused by actions taken by the ATO and the revenue authorities of the Australian Capital Territory to recover unpaid tax and payroll tax that was alleged to be owing as a result of the activities of the couple and the companies through which they conducted their businesses. Those actions included the service of garnishee orders against the clients of the couple's businesses. 3. The genesis of the transaction involving the purchase and development of the Moncrieff land was the urgent need of Ms Price and Mr Arcidiacono to raise funds. 4. The only asset available to the couple that was not subject to restraint was a sum of $740,000 in Ms Price's superannuation fund. Relationship between Mr and Ms Katavic, Ms Price and Mr Cassaniti 1. Ms Price and Mr Arcidiacono used an accountant called David Cassaniti at what was then called CAP Accounting, which later, as I understand it, became Accolade. David Cassaniti was Mr Cassaniti's cousin. There was evidence that Mr Cassaniti came to provide consultancy services to Ms Price and Mr Arcidiacono, particularly in relation to the consequences of the actions taken by the revenue authorities against them. 2. Mr Katavic said that he first met Mr Cassaniti at the 2015 Christmas party held by CAP Accounting at The Star in Sydney. Mr Katavic said that Mr Cassaniti appeared to have a close personal relationship with Ms Price and Mr Arcidiacono and was friendly and engaging. 3. Mr Katavic said that he became aware at some stage that Mr Cassaniti had been in jail, but when he raised it with Mr Cassaniti, he claimed that he had done nothing wrong, that he was not guilty, and that the tax office "came after me". 4. Mr Katavic said that Mr Cassaniti presented as a very successful accountant who drove new expensive vehicles and dressed smartly. 5. During 2016, Mr Cassaniti formed a close relationship with the Katavic family and, in particular, a close bond with Mr and Ms Katavic's daughter. Mr Katavic said that Mr Cassaniti often used the phrase 'we are family' in reference to him, Mr Katavic's immediate family and his in-laws. Mr Katavic said that he grew to be familiar with Mr Cassaniti and trusted him. The friendship was, however, a friendship through Ms Price and Mr Arcidiacono, who would always be present at social functions with Mr Cassaniti. The November 2016 arrangement 1. The ascertainment of the terms of any arrangement that was made between Mr Katavic, Mr Cassaniti and Mr Arcidiacono in November 2016 is critical to the determination of the present dispute, as it would establish the parameters of the expectations of the parties concerning their involvement in the development of the Moncrieff land. 2. It will be convenient to note that a primary aspect of the plaintiffs' case was that no agreement was reached between the three men in November 2016, and that the first and only binding agreement consisted of the Unit Holders Agreement that was signed on 10 May 2017. The plaintiffs' case was put on the basis that there were only two possibilities: (1) there was a complete and binding agreement made in November 2016, and the Unit Holders Agreement was a manifestation of the initial agreement; or (2) there was no agreement at all until the only binding agreement was made by the Unit Holders Agreement. I note briefly at this stage that this approach is an oversimplification of the relationship between the relevant parties. It excludes a third possibility, being that because of the close interpersonal relationship between the parties and the high level of trust, an agreement in principle was made in November 2016 that dealt with the major issues, but the parties did not attend to the detail and proceeded upon the basis that, over time, all parties would act in the common interest and that details would be agreed, if needed, consistently with the original plan. 3. The relevant conversation happened before a dinner in November 2016 at the QT Hotel in Canberra attended by Mr and Ms Katavic and their two children, Ms Price, Mr Arcidiacono and Mr Cassaniti. 4. The conversation took place at the bar between the three men before the dinner began. The men had a number of drinks while they were chatting. Obviously, in the circumstances, no note was taken of the agreement. 5. Mr Cassaniti gave the following evidence of the substance of the conversation: Cassaniti: I've spoken a lot with Phil and Sue. They said you were happy for them to speak for you, but I want to make sure we're on the same page. As I understand it, the deal is broadly that if we can find a suitable block of land for development, around $4 million, we'll buy it, get finance to do the build and sell for profit. You put in 50% (however you want to structure it), Phil and Sue 25% and us 25%. Your building company can do the build. Sound right? Katavic: Yes, champ. Cassaniti: Obviously we'll each have our own legal structures for it all. I can help with the trust side of things. I don't want to be taking the risk here. Our side is only going to put in money if everyone else has put in their share. If we can agree on a project, I'd only be arranging money on our side to complete the purchase. Katavic: That's all fine. We can really make this work, I promise you. Cassaniti: If money is going to be put in, there's going to have to be a control on construction costs. It can't just be a big win for you. Otherwise you'd be taking the benefit and us all the risk. Katavic: Antalija Constructions doesn't have much work on at the moment. If it can't give (sic) involved in the construction, I'm going to have to let go my workers. Cassaniti: Yes, Phil mentioned about that. Katavic: How about if I do that construction as a 4% margin on costs? Cassaniti: But what are costs? You might be paying yourself and Jocelyn a lot and then adding your margin. If this is going to be of interest, you only get to pay yourself $300 per day for the build and Jocelyn $60 per hour for any bookkeeping. Your upside would have to come out of sharing in the profits at the end? Katavic: Ok, fine, I need to get this done. We can find a great property and it'll be a win for all of us. 1. Mr Katavic gave the following affidavit evidence of the conversation in the bar area before dinner at the QT Hotel: Arcidiacono: Dennis, we want to invest with you in a build to make some money. Katavic: Why do you want to invest with me? Cassaniti: Phil has spoken very highly of you. He told me about the projects you've done and the money you're making and I want a piece of the pie. Katavic: I'd love to do this to help out Phil and Sue, but I've got no cash. My money is tied up in other projects. Cassaniti: Don't worry about that. I will look after that part, as long as you can make me money. How do you go about acquiring land? Katavic: I purchase the land at land auctions. When you purchase on the day, you need a 10% deposit. Cassaniti: What type of land is it and what can you do with it? Katavic: I prefer to go for 40 unit sites – they are more manageable and pre-sales are lower so less funding is required. But if I go to auction, I need a deposit. Without money in the bank, it's not worth showing up. Cassaniti: Don't worry about it. Phil and Sue can get money from their super. Katavic: How do you get money from super? Cassaniti: You can invest super as long as you return the money to the super account. Katavic: OK. Well, once we acquire a block, to get settlement on the land, the bank will fund 50% of the land value which is determined by a valuer. You will need to fund the other 50% of the land purchase price. Cassaniti: Don't stress about the money, I'll have that part sorted. Katavic: OK. What happens next is that, once I buy a block, I engage an architect to give us a sketch drawing to see what we can build on the block. From there, I will contact the bank to tell them what I think my sales and costs will be. I will then engage a QS to do a full breakdown of costs and a valuer. Then a build contract between my construction company and the development company gets submitted to the bank to proceed with construction funding. The contract would be based on the QS report, valuation, and my break down. I wouldn't be able to just put my own price on it. Cassaniti: I understand the process. Katavic: If we do something, then I won't be able to put any money in until we are closer to the start of construction. I should have money from settlements free by that time. The project will need additional cash. In addition to bank funding to deal with cash flow. 1. Mr Katavic also said that Mr Cassaniti agreed with the statement made by Mr Katavic as follows: "We can do this as long as I'm in control. I will be doing the build so it needs to be done my way. I will be a 50% shareholder. You guys can share the remaining 50% share". 2. Mr Katavic said that the conversation lasted about half an hour, and the men had a few beers each. At the end of the conversation, the men shook hands and returned to the table with the rest of the family. Mr Katavic said there was some general discussion about the proposed project with Ms Katavic and Ms Price. 3. Mr Katavic denied that he agreed he would pay for 50% of the cost of the land, as he did not have $2 million available at the time to do so. He also denied that he told Mr Cassaniti that Antalija Constructions did not have much work on at the moment. Finally, Mr Katavic said that there was no discussion at the time about a 4% margin on costs or that he would only be paid $300 per day and Ms Katavic $60 per hour. He said the conversation at the QT Hotel did not go into that kind of detail. 4. In an affidavit in reply, Mr Cassaniti denied that there was any discussion about Ms Price's and Mr Arcidiacono's access to their superannuation fund. He denied that Mr Katavic said that the bank would fund 50% of the land value and that Mr Cassaniti would have to fund the other 50% of the land purchase price. He also denied that Mr Katavic said that he would not be able to put in any money until closer to the start of construction or that Mr Katavic said that he could do the project as long as he was in control. 5. Mr Cassaniti agreed that the conversation at the bar lasted about 25 to 30 minutes, but he said there was no handshake, as described by Mr Katavic. 6. Both Mr Cassaniti and Mr Katavic adhered in cross-examination to their versions of the conversation at the bar of the QT Hotel. 7. Ms Price made one observation in her cross-examination that tends to support the evidence given by Mr Katavic when she said that she disagreed that it would be pretty unusual for Mr Katavic to be entitled to 50% of the profit without an obligation to put in 50% of the money, saying [T 212.20-212.21]: "No, it's my understanding that myself and Mr Cassaniti had to put in and they were to borrow the rest from the bank." 8. Ms Katavic said in cross-examination [T 337.8-337.10] that in the car going home after the dinner she asked Mr Katavic why he had agreed to do the development "because I didn't think we needed to be doing any more. We had several sites going at the time." Mr Katavic replied that he was happy to help out Ms Katavic's parents. 9. I will return to the consideration of what was agreed at the November 2016 meeting after I have dealt with the evidence of later events relevant to the credibility that should be assigned to the evidence given by Mr Cassaniti and Mr Katavic. 10. However, at this stage, the following observations should be made about the objective significance of the evidence. First, the conversation was brief and did not deal with the terms of the proposed venture in detail. Secondly, the conversation took place in an informal, 'family' context. Thirdly, the discussion was probably convivial, and all participants consumed a number of alcoholic drinks. It seems, fourthly, that the conversation was relatively spontaneous in that none of the participants had had the opportunity to consider the terms of the proposed venture in any detail. Fifthly, Mr Katavic and Mr Cassaniti were motivated to participate in the proposed venture to alleviate the financial difficulties faced by Ms Price and Mr Arcidiacono, as well as to make the profits that might flow from their own participation. Finally, it may be that the participants in the conversation did not really listen to what the others said, and there is a chance that they have remembered the conversation through the prism of their own self-interest, retrospectively assuming that the terms of the conversation reflected the commercial needs of the particular participants. 11. That said, it remains objectively the case that Mr Katavic and Antalija Constructions did not need more work, and there was no apparent risk that Antalija Constructions would have to lay off its employees if the proposed venture did not go ahead. Further, it is improbable that Mr Katavic agreed to provide half of the price of the development site from his own financial resources, as the progress of his other developments was inconsistent with funds of the necessary magnitude becoming available by the time of settlement of the proposed purchase. Incorporation of Antalija No 4 1. On 22 November 2016, Mr Katavic asked his accountant, Dominic Bartone, to incorporate Antalija No 4 and the company was incorporated on 29 November 2016. Unit Trust Deed 1. The Unit Trust was created by deed of trust (Unit Trust Deed), bearing the date 29 November 2016, between Charlie Duardo, as Settlor, and Antalija No 4, as Trustee. Mr Duardo was apparently the principal of Accolade. 2. Clause 1(a) defined "Commencement Date" as the date of the deed. 3. Recital D stated that the Unit Trust Deed was made with the intention that each Registered Unit Holder (as afterwards defined) shall take and hold Units upon the terms and conditions of the Deed. Clause 1(c) defined "Fund" and "Trust Fund" as meaning all the property held by the Trustee upon the trusts of the Unit Trust Deed, including the original settlement sum of $100 and "all other monies and property paid or transferred to vested in and accepted by the Trustee as additional to the Fund, including amounts received by the Trustee by way of subscription for Units and the monies and investments for the time being representing the same". 4. "Registered Unit Holder" was defined in clause 1(e) as meaning "the person for the time being registered under the provisions of this Deed as the holder of a Unit and includes persons so registered". 5. By clause 2(b) the Fund included: With the consent of the Trustee other monies and property may be paid or transferred to vested in and accepted by the Trustee as additions to the Trust Fund and to be held by the Trustee as part of the Trust Fund." 1. Clause 4(a)(ii) had the effect that the Vesting Day, being the date of termination of the Unit Trust, could be any date which the Trustee in its absolute discretion appointed as the Vesting Date. By clause 4(b), upon the termination of the Unit Trust, the Fund was required to be realised and the proceeds of the realisation and other available cash distributed among the Registered Unit Holders in proportion to the number of Units held by them. 2. Clause 5(d) provided: The beneficial interest in the Fund as originally constituted by the payment to the Trustee of the sum of One Hundred Dollars ($100.00) as referred to in Recital C hereof shall be divided into One Hundred (100) Units having an initial value of one dollar ($1.00) each. The said Units shall be held subject to this Deed by the following person as the Registered Unit Holder of those Units: Dennis Katavic ATF The Katavic Discretionary Trust 50 Units. Susan Price ATF The Price-Arcidiacono Discretionary Trust 25 Units. Nancy Morvillo ATF The Cassaniti Discretionary Trust 25 Units. 1. Clause 5(e) had the effect that, when any addition was made to the Fund, additional Units were required to be created and issued by the Trustee, having regard to the value of the Units in existence immediately before the addition to the Fund. 2. It appears that Antalija No 4 did not maintain a formal register of unit holders as required by the Unit Trust Deed. Nor did Antalija No 4 issue new units in response to the receipt of capital payments from any of the unit holders. As will be seen, when the financial statements of the Unit Trust were prepared for Antalija No 4 by Accolade, the capital contributions were treated as secured debts owed by Antalija No 4 to the unit holders. That accounting treatment may or may not have been correct. The issue apparently does not matter, as the parties proceeded upon the basis that Mr Katavic, Ms Morvillo and Ms Price held 50, 25 and 25 units in the Unit Trust respectively. Clause 5(d) took effect notwithstanding the non-compliance with the terms of the Unit Trust Deed concerning the issue of new units and the maintenance of a register of unit holders. 3. Clause 9(a) entitled a Registered Unit Holder "by notice in writing to the Trustee [to] request redemption of the Units specified in such request or request the return of the capital or part thereof, paid on the Units specified in such request." Clause 9(b) gave the Trustee a discretion to refuse or consent to any such request on such terms and conditions as the Trustee may consider appropriate, "having regard to the interests of all Registered Unit Holders". 4. Although clause 9 provides for a written request, it is significant that it gives the Trustee a discretion to return capital to unit holders on request. This term is relevant to the claim made by the plaintiffs that Antalija No 4 was only authorised to return the unit holders' capital upon the determination of the Unit Trust after all creditors had been repaid. 5. Clause 10 required the Trustee to keep and maintain an up-to-date register of Registered Unit Holders. 6. Clause 11 of the Unit Trust Deed provided for very wide powers of investment of the Fund by the Trustee. 7. Clause 12.1 empowered the Trustee to pay out of the Trust Fund or the income thereof any legal fees incurred in the maintenance of the trusts declared by the Unit Trust Deed "and, in respect of the supervision, management, acquisition, development, disposal or otherwise dealing in any of the investments of the Trust Fund…" 8. Clause 15 provided that the Trustee "may, with the approval of the majority of the Registered Unit Holders be … removed…" 9. The Unit Trust Deed was not executed by Mr Duardo or by Antalija No 4. 10. The Unit Certificates for each of the proposed unit holders were not executed by the unit holders or Antalija No 4. 11. A paralegal at Accolade sent a draft of the Unit Trust Deed to Ms Katavic on 15 February 2017. Unit holders' discretionary trusts 1. By deeds bearing the same type-written date as the Unit Trust Deed, Mr Duardo also settled $10 on Ms Morvillo as trustee for the Cassaniti Discretionary Trust, on Ms Price as trustee for the Price-Arcidiacono Discretionary Trust, and on Mr Katavic as trustee for the Katavic Discretionary Trust. Each of these deeds appears to have been executed by the Settlor and the Trustee. 2. Thus, the arrangement was that each unit holder would hold the relevant units in the Unit Trust as trustee of a separate discretionary trust in accordance with clause 5(d) of the Unit Trust Deed. Evidence of execution of deeds 1. As I understand it, the defendants do not challenge the validity of the Unit Trust Deed or the three discretionary trust deeds that all bear the type-written date 29 November 2016. 2. However, there was a subsidiary dispute about when the deeds were executed that is relevant to the credibility of Mr Cassaniti's evidence generally. 3. Mr Cassaniti said in his affidavit evidence that in preparation for the development project he asked Mr Duardo to prepare the four deeds and that, in or around late November 2016, he met with Mr Katavic at Mr Katavic's office. To the best of Mr Cassaniti's memory, this meeting took place on 29 November 2016 "as the documents were prepared with that date". Mr Cassaniti gave evidence of witnessing Mr Katavic executing the Unit Trust Deed and the deed creating the Katavic Discretionary Trust. 4. Mr Katavic denied that evidence and said that he only had one meeting with Mr Cassaniti at which he signed documents, which occurred on 10 May 2017. 5. In cross-examination, Mr Cassaniti accepted that he had given evidence that the documents were signed on 29 November 2016 because that was the day typed on the documents. He acknowledged that in his reply to Mr Katavic's affidavit he had not specifically challenged Mr Katavic's evidence that he had only signed documents with Mr Cassaniti on 10 May 2017. 6. The day before the relevant part of his cross-examination, Mr Cassaniti swore an affidavit that the meeting was not on 29 November 2016, because Mr Cassaniti had realised that he was not in Canberra on that day. Mr Cassaniti said in his affidavit that the deeds were signed on 9 or 10 December 2016, as he was able to identify the correct approximate dates from photos on his phone. 7. Mr Cassaniti said that he could remember having the deeds signed because he brought them back to Sydney to be stamped by his staff. However, he conceded that his staff had not caused the documents to be stamped. 8. At this point it only need be said that Mr Cassaniti's evidence concerning the date and circumstances of the execution of the Unit Trust Deed and the deed creating the Katavic Discretionary Trust was not persuasive. Payroll tax claim against Mr Arcidiacono 1. On 29 November 2016, a Delegate of the Commissioner for ACT Revenue made a claim on Mr Arcidiacono trading as Rose Cleaning Service for an outstanding ACT payroll tax liability from 1 July 2009. The amount claimed was $4,612,887.59. Antalija Developments Property Trust 1. On 21 December 2016, Mr Bartone, as Settlor, paid $10 to Antalija No 4 as Trustee under a trust deed of that date to establish the Antalija Developments Property Trust No. 4. Mr Katavic was the principal beneficiary under that discretionary trust. Mr Bartone was Mr and Ms Katavic's usual accountant. 2. The evidence is not clear as to why the Antalija Developments Property Trust No 4 was created, with Antalija No 4 being the trustee of that discretionary trust as well as of the Unit Trust. The first-mentioned trust was created by Mr Bartone. The Unit Trust was created by Mr Duardo, the principal of Accolade. There was evidence that it was the practice of Mr and Ms Katavic to incorporate a new company to conduct each real property development in which they were engaged (hence Antalija No 1, No 2, No 3 and No 4) and that the company operated as the trustee of a discretionary trust. It may be that Mr Bartone created the Antalija Developments Property Trust No 4 as an extension of Mr and Ms Katavic's general practice. As will be seen, the existence of two trusts with the same trustee in Antalija No 4 caused confusion as to the trust for whom Antalija No 4 was developing the Moncrieff land. As Mr Duardo created the Katavic Discretionary Trust with Mr Katavic as trustee to hold the 50 units in the Unit Trust, it may be that the creation of the Antalija Developments Property Trust No 4 was superfluous. This issue does not matter save for the fact of the confusion that it apparently caused. Late-January 2017 meeting 1. Mr Katavic gave evidence that in late-January 2017 he had a conversation with Mr Cassaniti and Mr Arcidiacono in which he advised them that he had found two suitable sites for the proposed development, and they both agreed to continue. Mr Katavic said the conversation included: Katavic: Make sure you have your money for settlement because I have none. Cassaniti: I've got it sorted. Don't stress. 1. Mr Cassaniti's version of this conversation, which he said occurred in or around mid-January 2017, was that after Mr Katavic had told him that he had found a suitable property at Moncrieff, Mr Cassaniti said: "Dennis, I do not know whether I will go into this investment but I will look into any proposal you have to see if it stacks up." 2. In cross-examination, Mr Cassaniti admitted that he had a conversation with Mr Katavic in which he was told about the sites that Mr Katavic had identified and that they would cost about $4 million, and that $400,000 would be necessary for the deposit plus stamp duty. Mr Cassaniti accepted that he said to Mr Katavic words to the effect [T 74.49]: "We're happy to commit". Mr Cassaniti then qualified his answer by saying that he did not say that he had committed to anything at that point. He said that there was no way that Mr Katavic said [T 75.13-75.15]: "Make sure you have your money for settlement because I have none", or that Mr Cassaniti said [T 75.17-75.19]: "I've got it sorted, don't stress". Mr Cassaniti said that there was no way that he would have said that because he did not have it sorted. Purchase of the Moncrieff land 1. On 17 February 2017, Mr Duardo advised Mr Katavic that the entity to purchase the Moncrieff land was Antalija No 4 as trustee for the Unit Trust. 2. Antalija No 4 entered into a contract with the ACT Land Development Agency on 22 February 2017 to purchase the Moncrieff land for a price of $4,150,000 and a deposit of $415,000. The date for completion was 12 May 2017. Ms Price's capital contribution 1. The deposit for the Moncrieff land was paid out of the capital contribution of $740,000 paid by Ms Price to Antalija No 4 from her self-managed super fund on 21 February 2017. Alleged conversation in early March 2017 1. Mr Cassaniti gave affidavit evidence of a conversation with Mr Katavic that he said occurred on a date in March 2017 before the 14th of that month. According to Mr Cassaniti, the conversation was in the following terms: Katavic: If we are going to be able to settle on the property, we're going to need over $2 million. Cassaniti: You've gone into this without you and Sue having your money lined up. Nancy doesn't have to put in if you and Sue aren't putting in your share. Katavic: Look, I know. Please, champ. Cassaniti: Sue's worried about losing her deposit. Katavic: I am worried about that, too. I am worried about myself as well. Cassaniti: I told you before, I am not doing this if you're going to treat this as a big pay day for Antalija Constructions. You agree that it's a 4% margin on costs with the caps we discussed before? Katavic: Yes, mate. I am not going to do over my own in-laws, am I? Antalija Constructions doesn't have much work on at the moment. If I can't get involved in the construction, I'm going to have to let go my workers. How about if I do it as a 4% margin on costs? Cassaniti: You only get to pay yourself $300 per day for the build. I will need to control all expenses. Your upside would have to come out of sharing in the profits at the end? Katavic: Yes, fine. I need to get this done. Cassaniti: Nancy will put in her contribution, and the rest will be a loan from Reliance. It'll have a high interest rate because of the risk and I need it secured on the property with a guarantee too. Katavic: Whatever you want, I need this money. If Reliance is going to be lending the rest, I should be able to make up the rest of the contributions and pay it back quickly, anyway. I have some units being sold on another project. Cassaniti: I need you to send me a full breakdown of costs for what you need. I'll look at it. But if I decide to move ahead, we're agreed on this? Katavic: Yes. This project can make a lot of profit. Cassaniti: I'll need a couple of weeks to see if I can make this work. I need to discuss it with David [my cousin]. I'll be in touch. 1. In his affidavit evidence, Mr Katavic denied this conversation took place and in particular denied that he had any conversation with Mr Cassaniti concerning a loan to be made by Reliance at a high rate of interest. 2. Mr Cassaniti denied the suggestion put to him in cross-examination that his evidence of this conversation was a complete fabrication. Mr Katavic was not cross-examined on the issue. Mr Katavic's 14 March 2017 email 1. On 14 March 2017, Mr Katavic sent an email to Mr Cassaniti, that was copied to Ms Katavic and Ms Price, on the subject: "Cash required Moncrieff". The email stated: Sam Land Purchase $4,150,000 Cash required by 15th of may $2,075,000 Stamp duty $211,235 Deposite (sic) bond $415,000 DA fees to lodge plans $26,000 Plans $83,435 Access report $1,650 Acoustic reprot (sic) $3,025 Temp power $1,500 Temp fencing $5,500 Interior design $17,500 Electrical engineer $7,600 Marketing $37,000 Display Shed $30,000 Web site $15,000 What we need by the 15th of may is $2,701,235. We already put in $415,000 so we only need $2,286,235 While this is all taking shape we also need the other money to push the project along so another total of aprox $250k will be required The bank looks at this as cash into the project, so once the QS dose (sic) his report this is all taken into consideration. Construction cash in will also be around the $2,000,000 mark, but this is about 12months (sic) away I will have my cash available by the end of may, as discussed earlier you will have to put the cash up until I have mine back for a few weeks So by the 15th of May we will need around 2.3m in the account We (sic) currently doing the plans and will hopefully submit the DA in about 4 weeks Once I have these I will then have a strong indication of what our sale prices will be and what our aprox construction costs will be, so then I will be in a good position to let you know what your return on investment will be If you have any questions please call me 1. In the original email, the second to fourth items in the list of sums and the amount needed of $2,286,235 were in red type, apparently for emphasis. 2. The $2,701,235 is the total of the $2,075,000 cash required plus the stamp duty and the deposit bond. The reference to 15 May 2017 is an error as settlement was to take place on 12 May 2017. The statement that only $2,286,235 was needed allows for the credit of the deposit already paid. The statement that $2,075,000 cash was required by 15 May 2017 implies that the other half of the purchase price had already been arranged. The only possibilities from Mr Cassaniti's perspective were either that Mr Katavic had the cash to pay the balance of the purchase price or that an arrangement had been made to borrow the money. 3. The email does not make clear what Mr Katavic was referring to when he said that he would have his cash available by the end of May. The plaintiffs say that the reference was to the 50% Proportionate Share that Mr Katavic, as a 50%-unit holder, had to meet of the purchase price of the Moncrieff land. The reference to "Proportionate Share" will be explained when I consider the relevant terms of the Unit Holders Agreement. Mr Katavic says that he only meant his share of the additional $250,000 that would be needed "to push the project along." 4. In fact, Mr Katavic had arranged with the St George Bank to borrow $2,075,000 to pay half of the purchase price for the Moncrieff land. I will explain the events related to that borrowing below. 5. On that basis, I understand Mr Katavic's email to have the following meaning: Capital required $4,150,000 Purchase price $211,235 Stamp duty $415,000 Deposit bond $250,000 Initial expenses Total $5,026,235 Available capital $2,075,000 Borrowing from St George $1,037,500 Cassaniti contribution $740,000 Price contribution Total $3,852,500 Shortfall $1,173,735 Required to be paid by Cassaniti 1. What I have called the "Cassaniti contribution" is the amount payable on behalf of Ms Morvillo as the holder of 25 units in the Unit Trust and as trustee of the Cassaniti Discretionary Trust. 2. The shortfall is equivalent to the amounts required to pay stamp duty, deposit bond, initial expenses and the unpaid contribution of Ms Price of $297,500. When the shortfall is added to Mr Cassaniti's required contribution of $1,037,500, the total is $2,211,235, which was rounded up to $2,250,000 when Accolade actually made the payment on behalf of Ms Morvillo and Ms Price to Antalija No 4. 3. The email included advice that around $2 million would be required as construction cash in about 12 months. The defendants' case was that Mr Katavic expected to pay whatever additional construction cash was required during the course of the construction of the Moncrieff land development when that cash was needed. Although Mr and Ms Katavic did not have cash to invest at the date that settlement of the contract to purchase the Moncrieff land took place, their case was that they expected to be able to raise cash from the sale of units in another development in the Australian Capital Territory that a company owned by Mr Katavic was in the course of developing. 4. Mr Cassaniti did not reply to this email. 5. The plaintiffs made a submission that it is significant that Mr Katavic did not refer specifically in this email to the existence of an agreement made in November 2016. I do not accept this submission, as the terms of the email are equally consistent with an assumption that there was an existing agreement, whether or not formally binding, and that, as Mr Katavic and Mr Cassaniti were already familiar with its terms, they could be assumed for the purposes of the email, and it was not necessary to make specific reference to them. The making of such an assumption was the more likely because of the interpersonal relationship between the parties. Certification of Unit Trust Deed 1. On 17 February 2017, Mr Katavic certified a copy of the Unit Trust Deed as a true copy of the original document for the benefit of the Commonwealth Bank of Australia at which Antalija No 4 opened a bank account. Mr Katavic's signature appears on the document on behalf of Antalija No 4. His signature was witnessed by one of his employees Adam Dukic. Emails that were in evidence dated 15 and 16 February 2017 suggest that the copy of the Unit Trust Deed that had been provided to Mr and Ms Katavic as of those dates was unsigned. Loan of $2,075,000 by St George Bank 1. Mr Katavic initiated steps to borrow half of the purchase price from the St George Bank by an email in which he informed the bank that he had bought a new property. I attribute little significance to Mr Katavic not having informed the Bank that the purchaser would be Antalija No 4 as trustee for the Unit Trust at this initial stage. It is simply the informal language that I consider Mr Katavic would have used. 2. On 11 April 2017, Mr Katavic sent an email to Mr Claudianos at St George Bank asking: "How are we travelling with block settlement, date is sneaking up on us fast, 3 weeks to go". 3. Subsequently, Mr Katavic followed up Mr Claudianos in a series of text messages. 4. Mr Katavic said in his affidavit evidence that on 8 May 2017 he had a meeting with Mr Claudianos in which he was told that the Bank was not quite ready for settlement. The loan application was not ready, but Mr Katavic said that Mr Claudianos replied: "but you will have your money for settlement." Mr Katavic said that he replied: "Jason, I don't care what you've got to do, just get the money." 5. There was no direct documentary evidence of the steps taken by the St George Bank to lend to Antalija No 4 the amount of $2,075,000 on 11 May 2017 to enable settlement of the contract to purchase the Moncrieff land. The Bank did, however, pay that amount to Antalija No 4 to fund the settlement. Birthday party on 17 April 2017 1. Mr Katavic gave evidence of a conversation with Mr Cassaniti at a party held for Mr Katavic's 40th birthday on 29 April 2017. The most relevant aspect of that evidence is a statement made by Mr Katavic to Mr Cassaniti in response to a question as to how things were progressing, where Mr Katavic claims to have said: "Progressing well. The finance is being approved for the purchase of the land…" 2. Mr Cassaniti responded by denying the conversation and saying that he only exchanged pleasantries with Mr Katavic. 3. I place little store on this disagreement as there is obvious scope for reasonable differences in recollection of the substance of brief conversations at a birthday party. Settlement of the contract to purchase the Moncrieff land 1. On 11 May 2017, Accolade transferred $2,250,000 to Antalija No 4's bank account. 2. Mr Katavic gave evidence that on 11 May 2017, he checked Antalija No 4's CBA Account and saw that the money for settlement had been deposited. He said he believed that the money included the amount that had been borrowed from St George Bank in accordance with his discussions with Mr Claudianos. 3. Settlement of the contract to purchase the Moncrieff land took place on 12 May 2017. Unit Holders Agreement 1. As I have explained above, Reliance ultimately abandoned its claims based upon the Amended Development Funding Agreement, but the plaintiffs substituted a claim made by Ms Morvillo based upon the Unit Holders Agreement. It will be convenient to consider the terms of that agreement before the evidence concerning the circumstances in which it was executed by Mr Katavic. 2. As the plaintiffs' claim depends upon the application of clause 9 of the Unit Holders Agreement, it will be convenient to consider the effect of that term first. It provides: PROPERTY AND BUSINESS FUNDING The parties contemplate and agree as follows: (a) There will be a cost associated with the Company purchasing a Property (principally a purchase price and stamp duty); (b) There will be regulatory costs, taxes, fees, duties and charges associated with the Company owing (sic) a Property; (c) There will be regulatory costs, taxes, fees, duties and charges associated with the Company gaining approval for the development of the Property; (d) There will be costs, fees and expenses (including building costs) associated with the development of the Property; (e) Subject to the ability of the Company to obtain third-party finance (such as from a bank) to pay for the amounts referred to in clause 9(a) – (d) and/or otherwise associated with the Business, those amounts are to be met by the Securityholders according to their respective Proportionate Shares; (f) Unless agreed otherwise between the Securityholders, to the extent any Securityholder contributes money with the agreement of the other Securityholders in excess of what is required by that Securityholder's Proportionate Share, then: (i) That excess is to be treated as a loan to the Company by that Securityholder with: (1) A one year term, and (2) An (sic) attracting interest rate of 8.5% per annum (compounding); and (ii) Subject to the terms of any priority security over the Property, the Company (as trustee of the Unit Trust) charges in favour of the relevant Securityholder all its right, title and interest in the Property to secure repayment of amounts referred to in clause 9(f)(i); (g) For the purposes of undertaking the development (building) of the Property, the Company will engage Antalija Constructions Pty Ltd (ACN 134 351 787) (Builder) of [address inserted], being a company of which Securityholder Dennis Katavic is associated and of which he is director, and the Builder is entitled to be paid arms-length commercial rates for its work; (h) For the purpose of undertaking: (i) Book-keeping work relating to the Business, the Company will engage Jocelyn Katavic by (sic), who is entitled to be paid arms-length commercial rates for that work; and (ii) Accounting, tax and advisory work, the Company will engage a firm nominated by Securityholder Nancy Morvillo, presently nominated as Accolade Advisory Pty Ltd (ACN 604 214 100) of [address inserted] who is entitled to be paid its standard fees and charges for that work. (i) By the above provisions, it is contemplated that there will be no need for the unit structure under the Unit Trust Deed or the Proportionate Share of Securityholders to be varied. In circumstances where the Company is only to act as trustee of the Unit Trust, it is contemplated that there will be no legitimate circumstances in which the Company will or should issue, or agree to issue, any further Shares. Any such issue, or offer to issue, requires unanimous agreement of the Securityholders. 1. I will go directly to a consideration of the effect of clause 9(e) and (f), as they are the foundation of the plaintiffs' claim that Antalija No 4 is liable to pay interest to Ms Morvillo on her contributions to the capital of the Unit Trust that were above her Proportionate Share, as well as the claim that Mr Katavic is liable to pay damages to Antalija No 4 in an equivalent amount because he failed to make the contribution of his Proportionate Share required by clause 9(e). 2. Clause 9(e) has the effect that the obligation of the Securityholders (in fact the unit holders) to make contributions was subject to the ability of Antalija No 4 to obtain third-party finance for any of the costs listed in clause 9(a) – (d). Only in that case were Securityholders required to meet the costs according to their respective Proportionate Shares. 3. The obligation in clause 9(e) appears to be a separate obligation imposed upon the Securityholders that would be enforceable by Antalija No 4 and the other Securityholders vis-à-vis one another. 4. Clause 9(f) has the effect of creating a debt by Antalija No 4 to any Securityholder who contributed money in excess of what was required by that Securityholder's Proportionate Share, and that could only be done "with the agreement of the other Securityholders". 5. It will be necessary to compare the operation of the Unit Holders Agreement with that of the Development Funding Agreement. For that purpose, it will be necessary to consider the alternative possibilities that the $2,075,000 advanced by the St George Bank on 11 May 2017 was (1) a capital contribution by Mr Katavic (albeit borrowed by him from the Bank) or (2) a borrowing by Antalija No 4 as contemplated by clause 9(e) of the Unit Holders Agreement. 6. The purpose of this theoretical comparison is to show how the Unit Holders Agreement would have operated depending upon whether the amount advanced by the St George Bank was treated as a capital contribution by Mr Katavic or an independent borrowing by Antalija No 4. It is not suggested that any of the parties sought to enforce the Unit Holders Agreement on this basis. In fact, they appear to have ignored how the Unit Holders Agreement would actually have operated if the parties had acted as if that agreement governed their legal relationship. The further purpose of this exercise is to show how different the effect of the Unit Holders Agreement was from the Development Funding Agreement (which the plaintiffs claimed were both executed on the same date). As I have explained above, the Ms Morvillo only sought belatedly to enforce the Unit Holders Agreement in circumstances where the initial claim made by the plaintiffs was Reliance's attempt to enforce the Amended Development Funding Agreement. 7. Given Mr Cassaniti's evidence that Mr Katavic told him that Mr Katavic had no money, and Mr Cassaniti's evidence of the alleged conversation with Mr Katavic before 14 March 2017 (see [138] above) the alternative that Mr Cassaniti thought on the date of the Unit Holders Agreement that Mr Katavic was in a position to contribute his own borrowed capital seems to be unreal. 8. If it is assumed that the Unit Holders Agreement is valid and that the $2,075,000 advanced by the St George Bank to Antalija No 4 on 11 May 2017 was a loan to that company (i.e., alternative (2) above at [170]), then clause 9(e) and (f) would have the following effect in this case: * The initial capital contribution required (before addressing the construction costs) was $5,026,235 (as per the table above at [146]). * St George Bank's loan was to be applied to all of the costs of the development listed in clause 9(a) – (d) that had arisen at that time, leaving an amount of $2,951,235 to be contributed by the unit holders in their respective Proportionate Shares. * Those shares were Mr Katavic ($1,475,617.50) and Ms Price and Ms Morvillo ($737,808.75 each). * Mr Katavic's 14 March 2017 email to Mr Cassaniti was a request to Mr Cassaniti on behalf of Ms Morvillo that she contribute capital of $2,250,000, which contribution was made on her behalf by Accolade on 11 May 2017. * Ms Price's contribution of $740,000 on 21 February 2017 was slightly more than her Proportionate Share. * Mr Katavic will have breached clause 9(e) by failing to contribute capital of $1,475,617.50, for which he would be liable to Antalija No 4. * Ms Morvillo, as the unit holder on whose behalf the additional capital was contributed, would be entitled to repayment of the excess by Antalija No 4 together with interest calculated in accordance with clause 9(f). * The quantum of the damages payable by Mr Katavic to Antalija No 4 for breach of clause 9(e) would be the amount of interest payable by Antalija No 4 to Ms Morvillo. 1. This is obviously a completely different result than would apply if the arrangement was as submitted by the plaintiffs. In that case, by agreement, Mr Katavic's contribution to the capital needed to purchase the Moncrieff land took the form of the $2,075,000 loan by the St George Bank arranged by Mr Katavic. Ms Price and Ms Morvillo were required to contribute $1,037,500 each in cash. On an ad hoc basis, Mr Cassaniti agreed to fund on Ms Price's behalf the shortfall flowing from the fact that she could only contribute $740,000. Mr Cassaniti would also fund the additional capital required to cover stamp duty, the performance bond and other costs until Mr Katavic was in a position to contribute the further additional funds that would be required before commencement of the construction of the Moncrieff development. 2. On the other hand, if the St George Bank advance of $2,075,000 was a contribution of capital by Mr Katavic for the purposes of clause 9 of the Unit Holders Agreement, then the analysis set out above must be adjusted as follows: * Mr Katavic's Proportionate Share of the required capital was $2,513,117.50. * Each of Ms Price and Ms Morvillo were required to contribute $1,256,558.75 as their Proportionate Shares. * The shortfall in Mr Katavic's contribution was $438,117.50. * In the case of Ms Price, the shortfall was $516,558.75. * The total payment of $2,250,000 made by Accolade on behalf of Ms Morvillo comprised her Proportionate Share of $1,256,558.75 plus Mr Katavic's and Ms Price's combined shortfall. 1. The principal significance of these alternative analyses of the way in which the Unit Holders Agreement would operate on the case propounded by the plaintiffs will arise from a comparison of the results of the analysis with the terms of the Development Funding Agreement which the plaintiffs claim was executed on the same date as the Unit Holders Agreement. 2. Turning first, however, to other relevant aspects of clause 9 of the Unit Holders Agreement, clause 9(g) plainly authorised Antalija No 4 to enter into the construction contract with Antalija Constructions. That could not be a breach of trust by Antalija No 4. Consequently, this ground put to Kunc J for obtaining the asset preservation orders was always baseless. 3. Clause 9(h)(ii) is also significant, as Mr Cassaniti was a person associated with Accolade. As Mr Cassaniti on behalf of Accolade provided accountancy and advisory services to the parties named in the Unit Holders Agreement, he owed a duty to act in their interests. 4. There are a number of provisions of the Unit Holders Agreement that had no meaningful application to the actual purchase and development of the Moncrieff land or were not implemented in any way by the parties. They include: * Most spectacularly, clause 23 obliged Stephen Whelan to pay the costs of any notice given or made, and the performance of any action in compliance with any liability arising under the Unit Holders Agreement. No one, including Mr Cassaniti, has any idea who Stephen Whelan is. * Clause 1.1 defines "Subscription Amount" as meaning $5 million, but that term and that amount have no significance under the other terms of the Unit Holders Agreement. * Clause 11 provides for the stapling of securities on the assumption that the Securityholders held the same proportion of shares in Antalija No 4 as they held Units in the Unit Trust. In fact, at the date of the Unit Holders Agreement and at all subsequent times, Mr Katavic was the sole shareholder in and director of Antalija No 4. Consequently, the shares in Antalija No 4 could not be stapled to the Units, and the provisions in clause 4 concerning decisions of Antalija No 4 being made by way of Simple Resolution of Securityholders or by written circular resolutions signed by Securityholders entitled to vote were ineffective. * Antalija No 4 did not prepare the strategic plan, annual budget and business plan required by clause 6 or engage in the detailed reporting process provided for in clause 7. * The acknowledgement in clause 29.5 that each party had received legal advice in relation to the Unit Holders Agreement or had had the opportunity of receiving that legal advice was known by the parties to be false. 1. The Unit Holders Agreement was signed by Mr Katavic and Ms Price and in each case witnessed by Mr Cassaniti. 2. The Unit Holders Agreement was not signed by Ms Morvillo until 24 February 2022 during the course of the hearing. Involvement of Mr Cassaniti in preparation of Unit Holders Agreement 1. The evidence concerning Mr Cassaniti's involvement in the preparation of the Unit Holders Agreement and his knowledge of the terms of that agreement is important to the issue of whether Mr Cassaniti misled or deceived Mr Katavic about the effect of clause 9 of the agreement. 2. Mr Cassaniti was cross-examined at some length on that issue, and it will be appropriate to set out a substantial edited extract from that cross-examination [T 86.1-89.8]: Q. Did you prepare that unit holders agreement? A. No it was prepared by - it was sent to us by Kemp Strang and it was just completed - just you know the names and details were put in. … Q. Did you then complete the document? A. I didn't, I had someone do it for me. Q. Who did you have do it for you? A. One of the lawyers. … A. No, these were at - McEvoy Legal wasn't set up by then. It was just lawyers working there, Accolade. … Q. So you had somebody within the office at Accolade then make some changes to the document? A. Correct. Q. You told them what to put in I take it? A. Well the details, the names and so forth yes. Q. And they provided you with the document to then check that it was what you wanted? A. Probably yes. Q. And you read through the document did you? A. I'm very busy, a lot of the time I don't get to read anything so they prepare it, they put it - I have different coloured folders for wherever I'm going. A Canberra folder, a Melbourne folder, a Perth folder, Tasmania folder and they just put the documents in the folders for me. Q. And then what do you do with them? A. I take the folder - depending where I'm going I take that folder with me and get the document signed. Q. Yes and then what do you do with the documents? A. Then I give them to staff to do whatever they've got to do with them. … Q. As you look through this document, and I'd invite you to look as much as you want, do you recall actually ever reading it? A. No. Q. When you say no, do you mean you're confident you did not read it? A. That's correct. … Q. Did you check to see whether they'd inserted what you'd said? A. No, to be honest. 1. This evidence compels the conclusion that the substantive terms of the Unit Holders Agreement were composed by someone unknown, possibly a lawyer employed by Accolade. It may be more likely that some unknown person who was involved with Mr Cassaniti in raising the funds necessary to make the payment to Antalija No 4 that was organised by Mr Cassaniti decided to include clause 9 in the Unit Holders Agreement. 2. Consequently, not only is there no evidence that clause 9 was agreed between the parties to the Unit Holders Agreement before the document was executed, but on the evidence even Mr Cassaniti was not aware that the agreement contained that term. Mr Cassaniti was therefore not in a position to inform Mr Katavic whether the draft agreement only contained "standard" terms or was just a simple agreement. 3. This extraordinary circumstance is consistent with the plaintiffs having commenced these proceedings to recover for Reliance a substantial alleged debt based upon the Amended Development Funding Agreement, only to realise shortly before 10 February 2022, when the plaintiffs were given leave to file their second further amended statement of claim, that Ms Morvillo had an alternative claim based upon the enforcement of clause 9 of the Unit Holders Agreement: see [31]-[32] above. Circumstances of execution of Unit Holders Agreement 1. The circumstances in which the Unit Holders Agreement was executed by Mr Katavic are crucial to the outcome of Ms Morvillo's claim to be paid interest under clause 9, as Mr Katavic claims that the agreement should be declared to be void or should be varied to defeat Ms Morvillo's claim because Mr Katavic was induced to execute the agreement by misleading or deceptive conduct engaged in by Mr Cassaniti on behalf of Ms Morvillo. 2. Mr Cassaniti's original position was that the Unit Holders Agreement was executed on 11 May 2017. Ultimately, he accepted the defendants' case that it was executed on 10 May 2011. 3. Mr Cassaniti's affidavit evidence was that the Unit Holders Agreement was executed at the same time as the Development Funding Agreement. According to Mr Cassaniti, it was on the same occasion that Mr Katavic signed Accolade's cost agreement. Mr Katavic's evidence gave prominence to the Development Funding Agreement, which he said was executed first. 4. Mr Cassaniti's evidence was initially limited to saying that Mr Katavic signed each of the agreements. He did not say that Mr Katavic read through each of the agreements before they were signed. He did not give evidence of any explanation being given to Mr Katavic. Mr Cassaniti simply said that he instructed Mr Duardo to transfer money from Reliance to Antalija No 4 after the Development Funding Agreement had been executed, and that he told Mr Katavic that he would not go ahead without the Development Funding Agreement. 5. Mr Katavic's affidavit evidence was to the effect that he was asked to attend Ms Price's office in Fyshwick on 10 May 2017 to sign some documents at the request of Mr Cassaniti. Mr Katavic said that when he went into the boardroom together with Ms Price and Mr Cassaniti, the paperwork was already laid on the table with 'sign here' tabs throughout. Mr Katavic said that the following conversation took place: Cassaniti: Hurry and sign I need to get back. Katavic: Sam, I don't even know what I am signing here. Do I need to get my team to look over anything? Cassaniti: No, it's all just standard contracts. Dennis, you can trust me. We're family. All you are signing is unit holder's agreements and trusts, I am sure you've seen these types of documents before. Katavic: Yes, I have, but my accountant sends me away with these documents to read over before I sign. Cassaniti: Well if you want the money you need to sign. Once the paperwork is signed, I'll get my office to transfer the money. 1. In cross-examination, Mr Katavic rejected the suggestion that Mr Cassaniti might have said: "It's just simple, a simple document" by saying: "No. Standard contracts." Mr Katavic said that he was "pretty certain". 2. Mr Katavic said that he and Mr Cassaniti discussed the amount to be transferred into Antalija No 4's account. At the time the company still had approximately $100,000 in its account, being the balance of Ms Price's contribution after payment of the deposit, some expenses and the stamp duty. Mr Cassaniti confirmed that he would transfer $2,250,000 to Antalija No 4. 3. Mr Katavic's evidence was that he flicked through the documents and skimmed over each page. He did not read each document word by word, but he ran his eye over them, looking for things that stood out as unusual. Mr Katavic said that Mr Cassaniti appeared to be impatient and said on at least two occasions: "Hurry up, I've gotta go". 4. Mr Katavic said that when he signed the documents, they had not been signed by anyone else. He said that he believes that he signed the Unit Trust Deed, the Katavic Discretionary Trust Deed and the Unit Holders Agreement. Mr Katavic specifically denied that he signed the Development Funding Agreement. 5. Mr Cassaniti agreed in cross examination that he gave the documents to Mr Katavic to read "and then that was about it. It wasn't a detailed thing". There was therefore no discussion as to what the documents contained. Mr Cassaniti accepted that he had not read the Unit Holders Agreement, but he asked Mr Katavic to sign it, saying: "Well, it's up to him to have a look at it and read them. I gave them to him." Mr Cassaniti otherwise denied the version of the conversation deposed to by Mr Katavic. 6. In her cross-examination, Ms Price described the process of Mr Katavic looking at the documents by using the expression "him flicking through the documents, and then signing". 7. After Mr Katavic had signed the documents, the documents to be signed by Ms Price were given to her. Mr Katavic recalled the conversation to the following effect: Price: Sam, this document says I am a 25% shareholder. You know I only have $740,000. Cassaniti: I'm looking after you. 1. Ms Price gave affidavit evidence of her recollection of the circumstances in which Mr Katavic signed the documents on 10 May 2017. She said that she saw Mr Katavic look quickly through the documents and that he and Mr Cassaniti had a brief conversation to the following effect: Katavic: Do I need to take this and have it looked at? Cassaniti: Dennis, it's just a standard contract. You don't need to get legal advice. 1. Ms Price said that she did not recall any discussion at the meeting about a loan or seeing a copy of the Development Funding Agreement. 2. In cross examination, in response to an open question as to whether she could remember what questions Mr Katavic asked of Mr Cassaniti, Ms Price said: "Do I need to have this document looked at? Do I need to take it to someone?" And he said "No, it's just a simple contract." 3. In Mr Cassaniti's affidavit in response he denied the versions of the conversation given by Mr Katavic and Ms Price, except for the statement attributed to Mr Cassaniti: "Well if you want the money you need to sign. Once the paperwork is signed, I'll get my office to transfer the money." 4. The plaintiffs relied upon the following part of Mr Katavic's cross-examination [T 323.4-323.11]: Q. But since, you certainly understand that what you're now claiming is that you were effectively tricked into a document that caused you to agree to pay 8.5% interest. A. No, I never got – yeah, well, yeah, that's essentially, yeah, I got told that if I didn't sign it, that I wouldn't get the money. Q. You knew you had no choice but to sign it if you wanted to get the money. A. I had no choice but to sign it, yes. 1. The plaintiffs relied upon this part of Mr Katavic's evidence to support their claim that even if Mr Katavic was, as the defendants claimed, induced to sign the Unit Holders Agreement by being misled or deceived into not understanding that it contained clause 9, Mr Katavic would have executed the agreement anyway if he was told its real effect. I do not interpret Mr Katavic's evidence in that way. The reality was that the discussion took place on 10 May 2017 and settlement of the contract for the purchase of the Moncrieff land was due to take place the following day. The only way that Antalija No 4 could pay the price on settlement was if Accolade paid to it the $2,250,000. In that sense, Mr Katavic did not have a choice but to sign the Unit Holders Agreement. 2. It does not follow from the evidence given by Mr Katavic that what he meant by it was that he would have signed the agreement, come what may and irrespective of the contractual obligations that it imposed upon him. The primary effect of clause 9(e) of the Unit Holders Agreement was that the money that Mr Katavic was in the course of borrowing from the St George Bank would have been applied for the benefit of all unit holders, rather than being treated as his contribution to the capital of the Unit Trust, as he understood the effect of the November 2016 agreement to be. The consequent effect of clause 9(e) was that Mr Katavic would have to make a Proportionate Contribution of 50% of the balance of the capital required. Mr Katavic had made no arrangement to be able to make that payment, and the evidence establishes that he was not yet in a position to do so. The effect of clause 8(f) would then have been to impose an obligation on Antalija No 4 to pay 8.5% per annum compounding annually to Ms Morvillo. Mr Katavic would have been liable to pay that amount to Antalija No 4 for breaching clause 9(e). 3. Mr Katavic's acceptance that he had to sign the Unit Holders Agreement before Mr Cassaniti would cause Accolade to pay the $2,250,000 to Antalija No 4 entirely begs the question of whether he would have signed it if he had understood what the true effect of its terms was. 4. Mr Cassaniti's evidence was that, after he returned to Sydney with the documents signed on 10 May 2017, he gave the Development Funding Agreement to Mr Steven Vickers at the offices of Accolade and saw him sign the document. Mr Vickers signed as sole director/secretary. 5. The plaintiffs initially read an affidavit by Mr Vickers to prove his signature on the Development Funding Agreement, but after Reliance's case based upon the Amended Development Funding Agreement was withdrawn, the plaintiffs withdrew Mr Vickers' affidavit. Development Funding Agreement 1. Although the plaintiffs abandoned their case based upon the Development Funding Agreement, the document is in evidence and remains part of the narrative, and the evidence on the issue of whether it was ever executed by Mr Katavic is important to the determination of the credibility of both his and Mr Cassaniti's evidence. 2. The document bore a typed date 11 May 2017 and stated that the parties were Reliance, Antalija No 4 as trustee for the Unit Trust, and Mr Katavic. 3. The document recited that the price of the Moncrieff land including GST and stamp duty was $4,361,235, and added as Recital D: It has already been agreed between [Antalija No 4] and the Unit Holders that each of the Unit Holders are to make contributions to the Borrower amounting to the Price in proportion to their unit holding, so that the Borrower can complete its purchase of the Property and become registered as owner. 1. On the apparent assumption that the unit holders would contribute the whole of the price between them, and that no part would be borrowed by Antalija No 4, the document recited that Mr Katavic needed to contribute $2,180,617.50 and that each of Ms Price and Ms Morvillo needed to contribute $1,090,308.75. 2. The document recited that Mr Katavic had informed Reliance that Antalija No 4 would need $2,250,000 so that it could complete its purchase of the Moncrieff land. 3. The document recited that, on that basis, if Reliance transferred $2,250,000 to Antalija No 4, Ms Morvillo would be making her contribution, and Reliance would be advancing the balance of $1,159,691.25 to Antalija No 4 as a loan. 4. The Development Funding Agreement contained the following terms of particular relevance to these reasons: * By clause 4, Reliance agreed to pay Antalija No 4 $2,250,000, being the Morvillo Contribution and the Principal, which by clause 5 was to be a loan made by Reliance to Antalija No 4. * Clause 6 provided for an Establishment Fee of $75,000 on the Principal. * Clauses 7 and 8 had the effect that the interest rate payable on the Principal and Establishment Fee was 25% per annum compounding daily, but 18% per annum compounding daily would be accepted if there was no breach of the agreement. * Clause 9 established a timetable for repayment of the Principal, Interest and the Establishment Fee as being the first to occur of a number of dates, which meant that repayment had to occur no later than 31 November 2019. * It is to be noted that, by clause 16(b), Antalija No 4 was to ensure that Antalija Constructions was paid no more than the actual cost of undertaking the development works plus a margin of 4% on the costs. 1. Although the document recited that the unit holders needed to contribute the whole of the price, including GST and stamp duty, for the acquisition of the Moncrieff land, it seems to be implicit that Antalija No 4 would borrow half of that amount, as the document also recited that Antalija No 4 needed $2,250,000 to complete the purchase. 2. The Unit Holders Agreement and the Development Funding Agreement stand uneasily together. As explained above, clause 9 of the former provided for unit holders to agree that one or more of them would contribute more than their Proportionate Share of capital, in which event Antalija No 4 would become indebted to the excess contributor at a rate of 8.5% per annum compounding annually. Why in those circumstances would Antalija No 4 enter into the Development Funding Agreement under which it had to pay Reliance interest on the same debt at the rate of 18% per annum compounding daily, or 25% per annum compounding daily on default? Accolade costs agreement 1. A letter dated 11 May 2017 from Accolade to Antalija No 4 set out the former's terms of engagement. The letter provided for Mr Cassaniti to provide services as a consultant at a rate of $800 per hour. Mr Katavic has signed the letter. It appears that the letter was signed on behalf of Accolade by Mr Cassaniti. 2. The evidence suggests that the letter was in fact signed on 10 May 2017. Feasibility study 1. Mr Katavic sent a feasibility study for the Moncrieff land development to Mr Cassaniti as an attachment to an email dated 17 May 2017. Mr Cassaniti said that he did not read the feasibility study. 2. The total forecast profit after payment of GST for the development was $3,311,987.27. The total forecast sale price was $15,431,818.18 and the total expenses were $12,119,830.91. 3. Mr Katavic's 50% share of the forecast profit would be $1,655,993.64. 4. If Mr Katavic had borrowed the Principal under the Development Funding Agreement of $1,159,691.25 as well as the $75,000 Establishment Fee, and paid interest at 18% per annum compounding daily from 11 May 2017 to 31 November 2019, being the final repayment date under clause 9 of the Development Funding Agreement, the total interest payment would have been $568,135.82. 5. The feasibility study contained an allowance of $40,000 for "Loan Set up". Given that there was an Establishment Fee for the St George Bank construction funding, there was no allowance for an Establishment Fee under the Development Funding Agreement of $75,000. That suggests that Mr Katavic was not aware of that Establishment Fee when he prepared the feasibility study. Further communications between Mr Katavic and the St George Bank 1. Mr Katavic gave evidence that, during 2017, Antalija No 2 was completing work on a 52-apartment project at Lawson in the Australian Capital Territory. On around 16 May 2017, Antalija No 2 submitted a progress claim to draw down on the construction loan facility with the St George Bank for that project. When he checked Antalija No 2's bank account, the money for the drawdown was not there, so Mr Katavic was unable to pay the subcontractors for that project on time. Mr Katavic sent an email to Mr Claudianos on 30 May 2017 that read: Jason I have checked every account I have and guess what no money! You stretch me to the limit, I now have no money to pay my accounts. I really hope there is an error here, but to tell you the truth I have really had enough. This is becoming too much of a habit, you are so hard to rely on. This is starting to hurt my business. People have never had to wait for payment from me until I started dealing with you. Money better be in my account by the morning or an explanation as to why it is not there. 1. This is objective evidence that supports a conclusion that, although Mr Katavic had told Mr Claudianos that the Bank had to lend the money to Antalija No 4 to enable completion of the contract for the purchase of the Moncrieff land to take place, Mr Katavic did not know that Mr Claudianos had arranged for the payment to be made out of an existing facility of Antalija No 2 that had been established to fund progress payments for a completely different property development. The consequence was that the contract to purchase the Moncrieff land was completed, but there was insufficient borrowing limit in Antalija No 2's loan facility to enable the St George Bank to pay the progress claim. 2. On 1 June 2017, the St George Bank sent a Facility Offer to Antalija No 4 as "Trustee for Antalija Developments Property Trust No. 4" (not as trustee for the Unit Trust). The offer was for a business loan of $2,075,000. 3. The stated purpose of the loan was to assist with the purchase of the Moncrieff land. The term was 12 months from the first drawdown date. The interest rate was the Bank's business loan rate, currently 6.64% per annum, minus a margin of 2.44%, giving a current interest rate of 4.2%. 4. It was a condition of drawdown that the proceeds of the facility were to be directed to the Construction Loan Facility for $11.847 million in the name of Antalija No 2. 5. The security for the facility included a first registered real property mortgage by Antalija No 4 over the Moncrieff land, and a guarantee and indemnity by Mr and Ms Katavic. 6. The terms of this Facility Offer are confused on their face, because, while the purpose was stated to be to assist with the purchase of the Moncrieff land, it was a condition of drawdown that the proceeds be directed to an existing construction loan in the name of Antalija No 2. 7. The Facility Offer was signed by Jarrad Martin, Relationship Manager. 8. The acceptance note contained in the Facility Offer was signed on 7 June 2017 by Mr Katavic on behalf of Antalija No 4 in its own right and as trustee for the Antalija Developments Property Trust No. 4. It was also signed by Mr Katavic for Antalija Constructions and by Mr and Mrs Katavic. The signatures of Mr and Ms Katavic were witnessed by Adam Jukic, an employee of Mr Katavic. 9. On 2 June 2017, Mr Martin sent an email to Ben Gulan, Mr and Ms Katavic's then solicitor, which stated that the Bank was "providing finance for Dennis's block at Moncrieff that was recently purchased." The email asked to be able to collect the title to the property. 10. Mr Gulan responded on the same day by saying he would get the title out of safe custody and deliver it to Mr Martin. 11. Although it seems strange that Mr Martin was making arrangements to provide finance for the purchase of the Moncrieff land after the contract had been settled, Mr Martin appears to have been aware of that fact because he used the words "that was recently purchased". 12. This evidence justifies a conclusion that the St George Bank initially advanced the $2,075,000 that was used by Antalija No 4 to settle the contract for the purchase of the Moncrieff land by drawing down on a facility previously made in favour of Antalija No 2. Although that would appear to be unorthodox, it was apparently done because the Bank had not completed the arrangements necessary to offer a new facility to Antalija No 4. After the settlement of the purchase, the St George Bank offered to advance $2,075,000 to Antalija No 4. That was in the company's capacity as trustee of the Antalija Developments Property Trust No 4, and not as trustee of the Unit Trust. Although not felicitously worded, the Facility Offer required the advance to be applied against the Antalija No 2 facility to restore that account, but also described the purpose of the advance as being to assist in the purchase of the Moncrieff land. It is reasonable to infer that the Bank did not advert to the difference between the Antalija Developments Property Trust No 4 and the Unit Trust. Although the facility was secured by a mortgage granted by Antalija No 4, it was also supported by personal guarantees given by Mr and Ms Katavic. 13. The plaintiffs relied in their submission on a statement made by Mr Katavic to his solicitor in an email dated 28 November 2019 (Exhibit D8): "This is money we took from Antalija No 2 to settle on the land for the project…" They also relied upon the fact that Ms Katavic initially made a journal entry in the MYOB accounts of the Unit Trust which characterised the payment from Antalija No 2 as "Dennis' contributions." Furthermore, in the initial version of the defendants' defence the defendants described the payment in a way that was consistent with Mr Katavic having knowingly directed the St George Bank to transfer the money from Antalija No 2's loan facility. The defendants changed their position in a later amendment to the defence that suggested the payment was a mistake by the Bank. 14. The evidence is unclear as to the extent that Mr Katavic appreciated that settlement could only take place on the due date if the balance of the purchase price was drawn down from the Antalija No 2 loan facility. As I have noted above, Mr Katavic's 30 May 2017 email to the Bank objectively suggests that Mr Katavic was not aware of the true nature of the payment. 15. I do not accept that this issue has the significance that the plaintiffs seek to attribute to it. I do not think that it matters a great deal whether the funds were transferred from Antalija No 2's loan facility because someone in the Bank realised that it would not be able to process the new loan application by Antalija No 4 in time, or whether at the last-minute Mr Katavic authorised the transfer in order to avoid a breach of the contract to purchase the Moncrieff land. The real point is that the transfer of funds from the Antalija No 2 loan facility could only ever have been a short-term arrangement, as Antalija No 2 would have needed those funds to continue to pay the costs of its own development (as Mr Katavic's 30 May 2017 email attests). The funds transfer could never have been intended by Mr Katavic to be a permanent contribution of capital on his behalf to Antalija No 4 as trustee for the Unit Trust. A reversal of the transaction was always commercially necessary. 16. The mortgage over the Moncrieff land granted by Antalija No 4 does not appear to be in evidence, so it is not clear whether the company executed the mortgage in the capacity of a trustee, and if so, as trustee for which trust. 17. Later, on 19 October 1917, when Mr Bartone sent an email to Mr Cassaniti on the subject of Accolade taking over the accounting for the Moncrieff land development, Mr Bartone said: "Please note that we had set up Antalija Developments Property Trust No 4 and St George Bank Ltd has lent $2,077,916.36 as at 30 June 2017". This suggests that Antalija No 4 accepted the Facility Offer in its capacity as trustee of the Antalija Developments Property Trust No 4 because Mr Bartone's firm was involved in the transaction, and it had been responsible for establishing the Antalija Developments Property Trust No 4. The Unit Trust was established by Accolade, so there was scope for misunderstanding about the capacity in which Antalija No 4 was acting. Progress of the Moncrieff land development 1. Mr Katavic sent a progress report of the Moncrieff land development to Mr Cassaniti on 14 June 2017 including the final set of marketing plans. 2. A junior accountant at Accolade sent a copy of the Unit Holders Agreement to Ms Price and Mr Cassaniti on 21 June 2017, and on the same date Mr Cassaniti sent a copy of the document to Ms Katavic, saying "… I found it". In cross-examination, Mr Cassaniti said that he did not know whether he sent the email in response to a request to send to Ms Katavic the documents that had been signed on 10 May 2017. The clear inference from the words of Mr Cassaniti's email is that he had forwarded the Unit Holders Agreement in response to a request. It is not clear why Ms Katavic would only have asked to be given a copy of the Unit Holders Agreement if she had known that on 10 May 2017 Mr Katavic had also executed a Development Funding Agreement. 3. A bank statement for a St George Bank account in the name "ANTALIJA DEVELOPMENTS PROPERTY TRUST NO" (with the number missing) shows that a loan drawdown of $2,075,000 occurred on 22 June 2017. A somewhat obscure cheque directions form appears to show that $1,375,000 was paid to "ANTALIJADEV - CBR" and $700,000 was paid to an account of Antalija No 2. 4. A development application for the Moncrieff land was lodged on 29 June 2017. 5. Mr Bartone sent the email to Mr Cassaniti on 19 October 2017 that is referred to above concerning the handing over of accounting responsibility for the Moncrieff land development, and Mr Cassaniti replied on the same day, simply stating: "Thanks we will start it all tomorrow." From this time, Accolade was responsible for preparing the financial statements for the development of the Moncrieff land rather than Mr and Ms Katavic's usual accountant, Mr Bartone. 6. If Mr Cassaniti had read the attachments to Mr Bartone's email, he would have seen that they included a copy of the St George Bank's 1 June 2017 Facility Offer to Antalija No 4 as trustee for the Antalija Developments Property Trust No 4, which would have informed him that Antalija No 4 had borrowed $2,075,000 in that capacity, secured by registered real property mortgage over the Moncrieff land, to assist in the purchase of that land. 7. In cross-examination, Mr Cassaniti said [T 110.22]: "Number 1, I didn't look at them. No. I flicked them straight onto the accountants." The reference to accountants was to accountants employed within Accolade. Mr Cassaniti then conceded that if he had looked at the documents it would have been obvious that the $2,075,000 was half the purchase price for the Moncrieff land. 8. Although Mr Cassaniti did not learn the source of payment of half of the price for the Moncrieff land by looking at the attachments, the fact that the attachments to Mr Bartone's email disclosed the truth demonstrates that the defendants did not hide the circumstances from Mr Cassaniti. 9. Development approval of the Moncrieff land development was notified on 14 November 2017. 10. A quantity surveyor's report prepared for the Moncrieff land development for Antalija No 4 and the St George Bank dated 4 March 2018 concluded that the final total cost including GST would be $9,134,304. The report allowed for a builder's margin of 2.48%. 11. On 20 April 2018, the St George Bank gave Antalija No 4 an indicative facility offer to finance the development of the Moncrieff land with a limit of $8,815,000. 12. On 24 April 2018, Antalija No 4 entered into a building contract with Antalija Constructions for the construction of the development on the Moncrieff land for a fixed price of $9,134,304. That was the exact price assessed by the quantity surveyor in its report. 13. On 30 May 2018, St George Bank's Tracy Briggs sent an email to Mr Bartone concerning the funding for the Moncrieff land development in which she asked for "2017 financials and tax return for the borrowing entity Antalija Developments Property Trust No 4." Ms Briggs evidently misunderstood that Antalija No 4 intended to borrow the money as trustee for the Unit Trust. 14. Mr Katavic forwarded this email to Mr Cassaniti on 30 May 2018 asking for "all the information required to get loan approved for site in Moncrieff". He said it was very urgent as construction had started and first drawdown would need to be in four weeks. 15. Ms Katavic provided MYOB files to Accolade for the purpose of Accolade preparing the draft financial statements for Antalija No 4. 16. On 6 June 2018, Accolade enclosed with a letter to Mr Katavic in relation to Antalija No 4 as trustee of the Unit Trust "draft accounts that you required to fund the building of the development." It appears that the draft accounts were prepared by internal Accolade accountants on the basis of information and documents provided to them by Mr Cassaniti. 17. The draft accounts included financial statements for the Unit Trust for 30 June 2017 and for the period from 1 July 2017 to 31 March 2018. The balance sheet in the latter included the following items as secured financial liabilities: Secured 2018 2017 Loan – Dennis Katavic 2,305,000 2,075,000 Loan – The Cassaniti Disc Trust 2,250,000 2,250,000 Loan – The Price Arcidiacono Disc Trust 740,000 740,000 1. The 2017 figure of $2,075,000 described as a loan from Mr Katavic is consistent with the accountant who prepared the draft balance sheet treating the payment for half of the price of the Moncrieff land made from the St George Bank loan to Antalija No 4 as trustee for the Antalija Developments Property Trust No 4 as a loan made by Mr Katavic. 2. The figures of $2,250,000, described as a loan made by the Cassaniti Discretionary Trust in both 2017 and 2018, do not allow for the accumulation of any interest payable to either Ms Morvillo under clause 9 of the Unit Holders Agreement or the Establishment Fee of $75,000 and interest at the rate of 18% per annum compounding daily under the Development Funding Agreement. 3. Either the accountant who prepared the draft balance sheets was unaware of the terms of the Unit Holders Agreement and the Development Funding Agreement, or the draft balance sheets were prepared incompetently. 4. I am not aware of any evidence that Mr Cassaniti challenged the correctness of the draft balance sheets. He said in cross-examination that he did not prepare the draft financial statements or check them. 5. On 8 June 2018, Ms Briggs sent an email to Mr Katavic that included: Can you please clarify for us, we currently have the land debt/asset owner for Moncrieff as Antalija Developments No 4 Pty Ltd ATF Antalija Development Property Trust No 4 … The financials that came through are for The Antalija Unit Trust … Which entity is the correct entity? 1. Accolade advised Ms Briggs by letter dated 8 June 2018 that the Moncrieff land was owned by Antalija No 4 as trustee for the Unit Trust and that it was the borrowing entity. 2. Ms Briggs replied by email to Mr Cassaniti on 8 June 2018 in which she said that the trustee matched, however the trust was different. She attached a copy of the trust deed that the Bank was provided with when it settled the purchase of the Moncrieff land. She added: "Our facility for the land debt is in the name of Antalija Developments No 4 Pty Ltd ATF Antalija Developments Property Trust No 4. I can send you a copy of the facility letter of offer if you need it?" 3. Mr Cassaniti replied to Ms Briggs on the same day informing her that she was provided with the wrong trust deed, and that the deed she had given was for a discretionary trust that belonged to Mr Katavic. Mr Cassaniti enclosed a copy of the trust deed for the Unit Trust. 4. On 19 June 2018, Ms Briggs sent an email to Mr Cassaniti that said: I spoke to Denis, he has given me some of the details around the structure. He confirmed the other two parties are passive investors in the project and will be getting a return on the funds they have contributed. Can you please clarify the following for me: -How much money has each of the other parties contributed to the project? -Is there a set return agreed on? -The St George debt was drawn on the 22/6/17 but does not show in the balance sheet of the Antalija Unit Trust. Can you please explain the loan structure between the entities? Does the Antalija Developments Property Trust No 4 have financials for 2017, is this where the loan would be recorded? 1. Mr Cassaniti's reply to Ms Briggs dated 19 June 2018 stated: The amounts contributed are in the accounts, The investors where (sic) to receive 25percent (sic) of the profit each. We were not aware of the loan, until you advised me. It appears that the loan was for another project Dennis had to complete. That is why it is not in the balance sheet. … 1. Ms Briggs then said in an email to Mr Cassaniti dated 20 June 2018 at 9:04 am: … Can we please get financials for the entity that has the debt recorded? In regards to the amounts contributed, Cassaniti Disc Trust has contributed $2.305M while the Price Disc Trust has contributed $0.74M yet they both have a 25% shareholding, is that correct? 1. Mr Cassaniti replied to Ms Briggs' email on 20 June 2018 at 1:41 pm by stating: "Yes." 2. Mr Cassaniti's statement to Ms Briggs that Ms Morvillo and Ms Price were to receive 25% of the profit each and that they each had a 25% shareholding, notwithstanding the disparity in their contributions is significant. It is inconsistent with Ms Price being liable to Antalija No 4 under the Unit Holders Agreement to pay 8.5% per annum on the extra contribution made by Ms Morvillo to the capital of the Unit Trust to make up Ms Price's shortfall. It is also arguably implicitly inconsistent with Antalija No 4 being liable to Reliance to repay the Principal and Establishment Fee under the Development Funding Agreement with interest at 18% per annum compounding daily. 3. The following cross-examination of Mr Cassaniti took place concerning his "Yes" answer [T 116.32-116.40]: Q. That was your truthful view on 20 June 2018, wasn't it? A. No. Q. I beg your pardon? A. No. Q. Do you say that you deliberately told the bank something that you did not believe was true? A. Yes. 1. Further, [T 117.18-117.20]: Q. Were these accounts, when you sent them to the bank, did you believe them to be accurate? A. No. 1. The following was Mr Cassaniti's best attempt to explain himself [T 119.30]: Q. The accounts are not correct? A. That's right. Q. As we are waiting on further information however they will be good enough to get the loan over the line. A. That's right. Q. So you say do you Mr Cassaniti that you lied to the bank firstly when you said yes in your text message? A. (No verbal reply) Q. You've already said that, correct? A. I didn't lie - look I, I tried to get the loan over the line-- Q. Sorry did you say, "I didn't lie"? A. Well I didn't say, I said I tried to get the loan over the line, right, the quickest way possible with the mess it was in. Okay? Q. So let me ask again, when you said yes to the bank, were you telling a lie or not? A. Yes it was wrong, you're right. Q. It was a lie? A. Yes. Q. Then when you sent the bank these accounts, you were representing that they were not wrong, you were representing that they were accurate? A. Well they were draft accounts. They were draft. Q. There's no suggestion that they were not correct? A. No. Q. That was a lie to the bank, wasn't it? A. No, no they were only draft accounts. I'm not trying to lie to anybody. I'm trying to get the loan over the line. Q. And do whatever it takes? A. I wanted to get the construction loan over the line to get this thing out of my hair. Q. And you were prepared to lie to the bank in order to do that? A. No I didn't want to lie, I just think they were drafts. 1. It was at this stage of the cross-examination of Mr Cassaniti that senior counsel for the plaintiffs informed the Court, on the morning of 16 February 2022, the third day of the hearing, that he had taken instructions from Mr Cassaniti overnight, with the consent of senior counsel for the defendants, and that the plaintiffs would no longer be pressing their claims in respect of the Development Funding Agreement or the Amended Development Funding Agreement. 2. When the cross-examination of Mr Cassaniti recommenced, notwithstanding the withdrawal of this aspect of the plaintiffs' case, Mr Cassaniti maintained that the documents were signed by Mr Katavic. 3. Mr Cassaniti acknowledged at this point that there was nothing in the draft financial statements that recorded a liability of Antalija No 4 for the $75,000 Establishment Fee or the accumulated interest. He did try to explain this position by saying that the accountant who prepared the accounts did so on the basis of the MYOB files provided by Ms Katavic. 4. Mr Cassaniti sent an email on 20 June 2018 at 2:32 pm addressed "Hi All". The addressees appeared to have included at least Ms Katavic. The email stated: I (sic) replying to the St George bank manager's queries, but i was not aware of certain facts and i need some clarification. Would you please advise as follows: A) the money that was borrowed from St George using the Moncrieff property as security, how was it applied B) how much did you contribute to the project? C) how much are you borrowing from St George to complete the project? D) when will the project be completed ? I need to amend the accounts to reflect these answers to satisfy the bank 1. Ms Katavic replied to Mr Cassaniti on 20 June 2018 as follows: Money was applied as st George loan – drawdown, there is a joural (sic) entry dated 22/6/17. Dennis has so far contributed $3,275,000 Look through your letter of offer to find amount as I don't have it Can not give you a finish date, as conditions and trades affect this. The quicker we get this money the quicker we can start to push 1. Mr Cassaniti forwarded this email to David Cassaniti at Accolade, who replied to Mr Cassaniti on 20 June 2018 at 4:32 pm. It appears that David Cassaniti responded to the statements made by Ms Katavic in her email in italics, as follows: Money was applied as st George loan – drawdown, there is a joural entry dated 22/6/17. This does not answer the question. Dennis has so far contributed $3,275,000 Where is the proof of this. Where did the contribution come from? Look through your letter of offer to find amount as I don't have it What letter is she referring too (sic)? Cannot give you a finish date, as conditions and trades affect this. Why? This is not logical in construction, there is a finish date. The construction is programmed. The only reason trades will be affected is if they are not paying the trades. Ask for a copy of the construction program. If he has not got one then there are deeper issues. The quicker we get this money the quicker we can start to push The quicker we find out what they have done the quicker we can get out of this. 1. Mr Cassaniti sent an email to Ms Briggs on 22 June 2018 in which he said: "These are the draft accounts up to date. They include the St George loan as discussed…" 2. The attachments were draft financial statements for the Unit Trust for the year ended 30 June 2017 and the period 1 July 2017 to 31 March 2018. Compared to the balance sheet in the draft financial statements for the period 1 July 2017 to 31 March 2018 that are set out above, the new draft provided (omitting cents): Secured 2018 2017 St George Loan – 2577 2,025,045 2,077,916 CBA Loan 40,000 Loan – Dennis Katavic 230,000 Loan – The Cassaniti Disc Trust 2,250,000 2,250,000 Loan – The Price Arcidiacono Disc Trust 740,000 740,000 1. This change treated the loan originally attributed to Mr Katavic as being in fact a loan made by the St George Bank. 2. Although the plaintiffs now challenge the legitimacy of Mr Katavic causing the accounting treatment of the St George Bank loan to fund half the purchase price for the Moncrieff land to be changed from a loan from Mr Katavic out of money borrowed by Antalija No 4 as trustee for the Antalija Developments Property Trust No 4 to being one borrowed as trustee for the Unit Trust, this was a change advised by Mr Cassaniti to the Bank. 3. Mr Cassaniti forwarded his email to Ms Briggs to Mr and Ms Katavic and Ms Price on 22 June 2018, saying: I have send (sic) the bank the accounts in draft so that the loan can be processed quickly. The accounts are not correct as we are waiting on further information, however they will be good enough to get the loan over the line. We will send out more letters shortly so as to comprehend all of the transactions 1. It appears that on 23 June 2018, Ms Katavic sent to Mr Cassaniti, as attachments to an email, what she called "loan statements". These documents appeared to show a drawdown by Antalija No 4 as trustee for the Antalija Developments Property Trust No 4 (although, strangely, the "4" has been omitted in the description of the customer on each statement) of $2,075,000 on 22 June 2017, plus fees, interest and payments since that date. 2. On 25 June 2018, Accolade sent a letter to Mr Katavic which, among other things, observed that the St George Bank statements appeared to show that the drawdown had been made to the wrong trust, and should have been made to the Unit Trust. The letter raised other questions about the draft financial statements that do not appear to be relevant to the present dispute. 3. On 13 July 2018, Mr Cassaniti sent an email to Ms Briggs in which he advised her that the two other parties who had advanced monies were passive investors sharing in 25% of the profit each at the completion of the project. 4. The cross-examination of Mr Cassaniti about this email was as follows [T 135.28-136.23]: Q. Both are A, passive investor not having any involvement with the project other than B, sharing in 25% of the profit each at the completion of the project? A. Yes. Q. That's what you sent to her, and that was your true belief at the time, wasn't it? A. No, that's not correct. Q. Another lie to the bank? A. It wasn't a lie. Q. Which bit of it's not true? A. Dennis told me to tell the bank that if, if they saw the loans in the - in the balance sheet that they - the bank would not lend the money for the construction finance. Q. Dennis told you that? A. Yes. Q. When did Dennis tell you that? A. Sorry? Q. When did Dennis tell you-- A. He told me from day - early in the stage. Q. When? A. I can't remember the date. He did tell me though. Q. Really? A. Yes. Q. In an email? A. No. Q. Just verbal? A. Orally. Q. Going back to this email, which bits are untrue in your email to the bank manager? A. They're both passive investors as we weren't doing the building work. We weren't doing any works there, that's true. Q. What's not true? A. I couldn't say they were secured, because that would affect the bank lending. The bank would not lend you money if there was some secured creditor ahead of them. 1. Mr Cassaniti explained further, starting at [T 137.4], that the reason why Reliance's interest in the Moncrieff development was not mentioned in the draft financial statements, and in particular its right to the $75,000 Establishment Fee and the interest compounding daily was "because the bank wouldn't lend the money for the construction." He said [T 137.24]: "… We tried to get the finance for the building and construction. If the – if the bank knows there's someone secured ahead of them they won't lend you the money, so we couldn't disclose that." 2. Mr Cassaniti explained further [T 138.7-138.18]: Q. So you lied to the bank? A. Well, I didn't lie. I just told them part of the story. Q. Half-truth? A. Yeah. Q. That's not a lie? A. Well, it's a lie maybe, yes. Q. Yes, maybe, definitely? A. Well, not really. At the end of the day, the security got on afterwards. It was to get the loan over the line to finish the, the-- 1. Asked by Ms Briggs in a further email dated 13 July 2018 whether the loans from the passive investors were secured, Mr Cassaniti answered: "No". 2. The following cross-examination took place concerning this answer [T 138.33-138.49]: Q. That was true at the time, wasn't it? A. No, there was security, but it wasn't shown, it wasn't registered, it wasn't put out. Q. It was true because there had been no security given of any form for the contributions made on 10 May? A. No, that's not true. Q. That's another lie to the bank as well? A. Yes. Q. Do you say that that lie was also made because you thought it might imperil the bank granting the loan? A. That's what I was told, yes. Amendment to Development Funding Agreement 1. The evidence included a document called Amendment to Development Funding Agreement apparently dated 23 July 2018 and signed by Mr Katavic on behalf of himself and Antalija No 4. The plaintiffs abandoned their claims based on this document just as they did those based on the Development Funding Agreement. The effect of the document is to extend the terms of the Development Funding Agreement but to require repayment of the whole $2,250,000 plus interest on that amount by no later than 31 July 2019, with the security covering the $2,250,000 and not just the amount of the Principal. 2. Mr Cassaniti gave evidence of a conversation that he said he had with Mr Katavic on 23 July 2018, in the following terms: Cassaniti: This is outrageous. That is a fraud on our interests. Reliance and Nancy can commence proceedings against you and Antalija No 4, and Reliance can exercise its securities under the Funding Agreement. Unless Antalija No 4 agrees that its securities under the Funding Agreement extend to the entire $2,250,000.00 amount it has advanced, and is entitled to recover that entire amount with interest under the Funding Agreement, then that action will be taken. Katavic: OK, fine, do that then. 1. Following this part of his affidavit, Mr Cassaniti simply exhibited a copy of the Amended Development Funding Agreement. In a later affidavit, Mr Cassaniti added that he saw Mr Katavic sign the Amended Development Funding Agreement and that the signature was witnessed by Mr Cassaniti. 2. Mr Katavic denied that the conversation deposed to by Mr Cassaniti took place or that he signed the Amended Development Funding Agreement. 3. Although the document was dated 23 July 2018, Mr Cassaniti agreed that no relevant meeting occurred on that date and in his affidavit evidence he changed the actual date to 25 July 2018. 4. Mr Cassaniti was obliged to admit at [T 147.33] that instructions that he had provided to the plaintiffs' solicitors to give particulars of the meeting at which the alleged Amended Development Funding Agreement were incorrect. 5. The context in which this cross-examination took place was that the Amended Development Funding Agreement bore the date 23 July 2018. It appeared to be signed on behalf of Reliance by Mr Vickers, who was the only person authorised to execute it as a director of Reliance. According to the ASIC records, Mr Vickers ceased to be a director of Reliance two days after the date of the Amended Development Funding Agreement on 25 July 2018. In late 2021, the defendants discovered that Mr Vickers was in prison as at 23 July 2018. The plaintiffs resisted an application by the defendants to gain access to Mr Vickers' prison records, including his visitor record. On 26 October 2021, Rein J refused to set aside the defendants' subpoenas. Pursuant to one of the subpoenas, the defendants discovered that Mr Vickers did not receive any visitors between 16 July 2018 and 5 August 2018. 6. There was also a dispute between the parties concerning the defendants' efforts to require the plaintiffs to produce originals of the Development Funding Agreement and the Amended Development Funding Agreement. That led to the plaintiffs stating that the original documents had been lost. Consequently, the authenticity of Mr Vickers' signature could not be tested. 7. The following cross-examination of Mr Cassaniti occurred about the plaintiffs' failure to produce to the defendants a signed copy of the Amended Development Finance Agreement on request, at [T 147.47-148.36]: Q. Of course, documents signed by Dennis were requested repeatedly in May 2019, weren't they? A. By whom? Q. I beg your pardon? A. By whom? Q. By Jocelyn Katavic and by Dennis Katavic? A. Maybe, yes. Q. You never handed over the amendment to the development funding agreement, did you? A. Not that I know of, no. Q. Because you hadn't invented it yet? A. That's not true. Q. When the defendant subpoenaed your phone records and put the details in the court book, you realised your lie would be exposed about the 23 July, so you changed your story to 25 July? A. No, I just double-checked. Q. And today what you've done, today or yesterday, you've looked at the court book and you've seen that Mr Vickers, who is said to have co signed the document, wasn't visited in gaol until 5 August? A. Didn't have a look, haven't even looked at that. Q. Haven't looked at those records? A. No. Q. Really? A. Yes. Q. So you've made up this story today? A. No. Q. Just like when you saw in the court book that there were two different versions of the development funding agreement, that you realised you had to change your story on that too? A. No, I just remembered; I'd forgotten. Construction Facility Offer 1. On 7 August 2018, Ms Briggs sent an email to Mr Cassaniti asking for steps to be taken to cause the St George Bank's letter of offer to be signed. 2. Ms Briggs sent an email to Mr Katavic on 14 August 2018 to inform him that Mr Cassaniti had not provided the information requested and asking Mr Katavic to follow the issue up. 3. On the same date, Mr Katavic sent an email to Mr Cassaniti asking him to cause the letter of offer to be signed as a matter of urgency. 4. Ms Katavic followed this request up on 15 August 2018 saying: "I am desperate for the money to keep the job rolling." 5. Mr Cassaniti replied on the same date by saying that mistakes had been found in the loan agreement and that the bank was making adjustments and would resend the correct documents. 6. Ms Katavic responded by asking what the mistakes were and on 15 August 2018, Mr Cassaniti said: "Look at page 13. The numbers do not add up." This was a reference to a part of the St George Bank Facility Offer to Antalija No 4 dated 1 August 2018 that said: Facility Limit $9,890,000 Purpose Refinancing existing site finance and provide construction funding for the proposed development known as "Alpine Villas" Moncrieff ACT. Refinance Site Finance $2,075,000 Construction Costs $8,074,000 Contingency $415,000 Consultants $230,000 Statutory/Holding Costs $44,000 Interest Cap and Fees $472,000 TOTAL $9,890,000 1. This Facility Offer was signed by Antalija No 4 in its own right and as trustee for the Unit Trust, by Antalija Constructions, by Mr Katavic as trustee for the Katavic Discretionary Trust on 14 August 2018 and by Ms Price as trustee for the Price-Arcidiacono Discretionary Trust on 15 August 2018. 2. The evidence included a copy of the same Facility Offer dated 15 August 2018 signed by Ms Morvillo as trustee for the Cassaniti Discretionary Trust and witnessed by Mr Cassaniti. There was no change in this copy to the statement of the Facility Limit and the Purpose (as is set out above). Payments by Antalija Constructions to Antalija No 4 1. Ms Katavic gave unchallenged evidence that between 3 January 2018 and 16 October 2019 she caused Antalija Constructions to make eight payments to Antalija No 4 to assist in funding the construction of the Moncrieff land development. The total amount was $1,390,000, and the greatest single payment was $1,000,000 on 30 April 2018. I infer that these payments represented the contribution of capital that Mr Katavic had in mind during the November 2016 discussion at the QT Hotel. Breakdown in relationship between Mr and Ms Katavic and Mr Cassaniti 1. There were communications between representatives of Accolade and Ms Katavic in which Accolade sought information about the stage of completion of the development of the Moncrieff land. Ms Katavic provided that information but added in an email dated 17 August 2018: "… Dennis is very upset about the allegations and invites Sam to come and have a look if he needs reassurance." 2. Following a letter from Accolade to Mr Katavic dated 17 August 2018, which advised that Ms Morvillo wished to inspect the Moncrieff land, but included a suggestion that the development may have progressed further than Accolade had been advised, Ms Katavic sent an email in reply that stated: Are you kidding?!?!? You can tell Sam to shove this letter right where it fits, and he better NEVER send me a letter like that again. Anyone that has a vested interest in the project is more than welcome to come and inspect, and if they're interested in progress all they need to do is pick up the phone and make the call. No one has ever been told they're not welcome, and I really do not appreciate being sent this shit. Nor do we appreciate the accusations that were thrown around last week because someone doesn't have correct and updated information. As I said, all it takes is a phone call. Sam has everyone's phone number. Diversion of Antalija No 4's GST refunds 1. On 6 March 2019, Ms Katavic sent an email to an accountant at Accolade that asked: Can you please forward me any BAS statements from period we have completed. We believe there should have been some refunds, can you tell me which account they are going into? 1. Accolade advised by reply: "The refund will be going into Accolade Advisory Trust Account." 2. Ms Katavic responded by email on 6 March 2019 saying: The refunds need to go into the Antalija D4 account. ST George D4 account, I will provide details. Can you please forward to us. Our invoices are paid minus GST and that GST refund goes towards them. It is illegal to put the refund into your trust account, as we have not given our authority, and it belongs to our company. What about last quarter GST. 1. The statement "Our invoices are paid minus GST and that GST refund goes towards them" referred to the practice adopted by Antalija Constructions during the development of the Moncrieff land whereby, when it made progress claims to Antalija No 4, it did not add the GST payable on the claims. If it had added the GST, then Antalija No 4 would have been entitled to GST refunds. As it did not, any refunds of GST received by Antalija No 4 were payable by that company to Antalija Constructions. 2. Mr Cassaniti sent this email to Charlie Duardo within Accolade. 3. Ms Katavic sent a further email to Mr Duardo on 6 March 2019, saying: We have done two BAS for Antalija Developments No4, and haven't seen the GST refunds. Hoc has advised me this morning that our GST refunds go into the Accolade Advisory Trust account. When we submit an invoice for a progress claim the bank pays us minus the GST. The GST refund is needed to pay the difference on those invoices and keep the build going. I am unsure why our refunds are going into your account, but we need them to be transferred to the company they belong to. … Can you please do this as a matter of urgency and let me know once this has been done. Also forward me all documentation for the last two BAS quarters, as my accountant needs it. 1. Hoc was an accountant employed by Accolade. 2. By a chain of emails within Accolade, Ms Katavic's email was sent to Mr Cassaniti. The BASs sought by Ms Katavic were provided to her on 8 March 2019. That led to Ms Katavic on 12 March 2019 claiming in an email to representatives of Accolade: To date there are $325,508.00 in GST refunds owed to Antalija Developments No4. Please deposit these funds as a matter of urgency into the correct company account – … Please ensure that ALL future BAS refunds go into the above account. 1. This email prompted Mr Katavic on 13 March 2019 to send an email to Mr Cassaniti asking him to advise why the GST refunds had gone into the incorrect account. Mr Katavic said: "I need this money transfer today so that we can continue out on site without any unnecessary delays." 2. Mr Cassaniti responded by saying that he was in Canberra and that: "I will check it." 3. After receiving advice from Mr Bartone, on 14 March 2019 Mr Katavic sent an email to Mr Cassaniti raising a number of accounting issues and again asking for an explanation as to why GST refunds of $323,584 from the ATO had not been banked into the account of Antalija No 4. 4. Mr Cassaniti responded by advising Mr Katavic that he could not respond immediately because he had urgent work to do for Ms Price but that "I am not avoiding you…" 5. Ms Katavic then advised Mr Cassaniti on 14 March 2019 that he needed the money urgently, that someone had to transfer the money to the correct account, and that: "The job has now stopped." 6. Mr Cassaniti responded on 14 March 2019 by saying that he would look at the problem when he had finished Ms Price's work but added: "Where is all of the money from St George going?" 7. That question caused Mr Katavic to respond on 14 March 2019 by sending an email to Mr Cassaniti that said: It is going to construction along with the GST, I'm starting to feel this is the worst business decision I have ever made, Sam I need the money to continue with the construction, if you do not trust me call me, happy to pay you out, shake hands and move on. Nothing gets me more angry and upset than someone thinking I am ripping them off, you obviously think I am doing so so happy to pay you out and change owner ship over to me, I know your busy and so am I, so I need this money transferred today 1. Ms Katavic also sent an email to Mr Cassaniti on 18 March 2019 that said: I want the money that is owed to us deposited into the correct account today. I don't care how you do it, get it done. It should never have gone into the Accolade account to start with, it does not belong to you. Our business is suffering, trades don't want to come back because they can't be paid. I want it today. Enough bullshitting. 1. The plaintiffs have not proffered any justification for Accolade, who acted for Antalija No 4 in processing its applications for GST refunds, diverting those refunds into its own personal account. The only conclusion that can be drawn on the evidence is that Mr Cassaniti, and possibly others within Accolade, decided that they were entitled to some payment from Antalija No 4, and that they would use the remedy of self-help to secure the payment, without any proper basis or notice to Antalija No 4. I am satisfied that Mr Cassaniti acted evasively in response to Ms Katavic's numerous demands and avoided honestly informing her of what Accolade had done. Letter of demand by plaintiffs' solicitors 1. This apparently prompted Mr Cassaniti to cause Accolade's solicitors, McEvoy Legal, to write a formal letter to Ms Katavic at Antalija Constructions dated 18 March 2019. The letter stated that the solicitors acted for Ms Morvillo and Reliance. The most significant aspects of the letter were: * The author stated that the refunds of GST were the property of Antalija No 4 and that in principle Antalija Constructions had no entitlement or standing to raise any complaint. * An assertion was made that Antalija No 4 and Mr Katavic "have conducted matters in breach of the Development agreements." * The author claimed that the development of the Moncrieff land was to be completed by unitholder contributions and that this did not occur, resulting in the involvement of Reliance. The letter sought an accounting of the contributions of Mr Katavic as trustee for the Katavic Discretionary Trust. * A complaint was made that Antalija No 4 had borrowed $2,075,000 from the St George Bank secured on the Moncrieff land as trustee for the Antalija Developments Property Trust No 4. It was suggested that Mr Katavic may be treating the development of the Moncrieff land as an asset of the Antalija Discretionary Trust No 4 rather than the Unit Trust. * The letter asserted that the Facility Offer dated 1 June 2017 required that the proceeds of the facility be directed to the construction loan facility for $11.847m in the name of Antalija No 2. It further asserted that the purpose of the advance was either to pay back to the Katavic Discretionary Trust any contribution towards the purchase of the Moncrieff land or to assist Antalija No 2 to undertake its construction of its own separate development. * In relation to the second St George Bank Facility Offer dated 1 August 2018, the letter complained that $2,075,000 of the total credit available was to be applied in discharge of existing liabilities, being the borrowing under the earlier Facility Offer. * The author referred to Antalija No 4's MYOB file which contained a reference to Management Fees in the sum of $909,091.91 and said that such a claim was inconsistent with the agreement that Antalija Constructions would only charge a 4% margin on construction costs. * After raising a number of other concerns, the letter concluded: Essentially, our clients want to be satisfied that: a The Development is being undertaken with the objective of maximising unit-holders' returns as a whole and not prejudicing (by higher level registered mortgage encumbering) Reliance's entitlements; b The Development funds are not being used to benefit other developments, particularly to the detriment of the unit-holders as a whole; c The Development funds are not being used as a vehicle to, in breach of contractual arrangements and otherwise unfairly, strike a windfall for Antalija Constructions to the detriment of unit-holders as a whole; and d There has been no preferential repayment of any contribution made by the Katavic Discretionary Trust. 1. This letter prompted Antalija No 4 to make enquiries of the St George Bank about why Antalija No 2 had been mentioned in the first Facility Offer. Ms Katavic's email dated 19 March 2019 asked: "Can you please dig into this and let me know what has gone on? As you can imagine it, has worried the other partner and made him a little wary of our honesty." A representative of the Bank advised Ms Katavic on 19 March 2019 that he thought "the loan funds were to be disbursed to on drawdown of the new loan (e.g. to reimburse funds initially drawn from the Lawson facility to enable the Moncrieff purchase)." The same representative of the Bank stated on 20 March 2019: "The loan amount of $2,075,000.00 proceeds were credited to reimburse the Antalija Developments No 2 Pty Ltd Lawson loan facility as discussed with Jarrad Martin at the time." 2. On 17 May 2019, Ms Katavic wrote an email to Mr Cassaniti that said: Can you please forward all documentation that Dennis signed in regards to AD4 for our records. Including unit holders agreements and any accounting agreements between accolade and AD4. We don't have any documentation, except a unit holders agreement you have forwarded to me in the past that was for Mum. 1. By this stage, the relationship between the parties had broken down and the matter was in the hands of their solicitors. It is not necessary to record the course of communications between the solicitors. 2. It will be appropriate, however, to note the content of a letter from the present solicitors for the defendants to the solicitors for the plaintiffs dated 29 November 2019, in response to an order made by Kunc J on 26 November 2019 that the defendants provide a schedule of their assets and liabilities to the plaintiffs. One of the liabilities disclosed by Antalija No 4 was described as: "Loan-Reliance $2,250,000". The defendants' explanation for this apparent acknowledgement of a debt to Reliance was that their solicitors' letter was written in compliance with the order made by Kunc J and, at that stage, the defendants had received the plaintiffs' demands and they had acted on the basis that the Amended Development Funding Agreement was valid. This is no longer a material issue as the plaintiffs have abandoned the claim by Reliance. Return of capital to Antalija Constructions and Ms Price 1. Ms Katavic gave evidence that on 18 November 2019, she paid $1,500,000 out of the bank account of Antalija No 4 to Antalija Constructions, intending that to be a repayment of the capital contributions made on behalf of Mr Katavic to the construction of the Moncrieff land development. On the same date, Ms Katavic paid $740,000 out of Antalija No 4's bank account to the solicitors for Ms Price in response to a request made by those solicitors on 14 November 2019 that the amount be repaid to Ms Price's superannuation fund. 2. Ms Katavic acknowledged that the repayment of $1,500,000 was an error, as in fact Antalija Constructions had only paid a total of $1,390,000 to Antalija No 4. Ms Katavic caused Antalija Constructions to repay Antalija No 4 $70,000 on 19 November 2019 on the basis of what she now acknowledges was an incorrect belief that Antalija Constructions had in fact paid a total of $1,430,000. Consequently, the defendants acknowledge that Antalija Constructions is indebted to Antalija No 4 in the amount of $40,000. Issues for determination 1. As I understand it, after the abandonment by the plaintiffs of many of their claims as discussed above, three broad issues remain for determination. They are: * What are the terms binding Antalija No 4 and the unit holders in the Unit Trust concerning the contribution of capital to the Unit Trust, the payment of interest to any unit holder who contributed more than their proportionate share of capital, and the distribution of the proceeds of the Moncrieff land development after payment of all costs? * Should Antalija No 4 be replaced as trustee of the Unit Trust for breach of its duties as trustee, or for any other reason, and if so, who should be appointed as the replacement trustee? * Should Antalija No 4 or the replacement trustee be ordered to furnish an account of the affairs of the Unit Trust, and if so, what form should that account take? 1. I am aware that there are many subsidiary issues concerning the distribution of the funds in court or held on behalf of the parties, and issues of whether interest should be paid on amounts wrongly retained by parties. Those are questions that should follow from the way in which the principal questions are determined. For example, I note from Part 5 of the defendants' outline of submissions under the heading "Orders", the subsidiary matters include (1) what should be done with the asset preservation orders; (2) what steps should be taken to pay the outstanding tax liability in respect of the Moncrieff land development; (3) what orders should be made on the third further amended statement of claim; (4) what orders should be made on the further amended cross claim; (5) what orders should be made in relation to Antalija No 4's entitlement to pay its legal costs out of the assets of the Unit Trust, and how should those costs be assessed; and (6) what costs orders should be made generally in respect of the proceedings? 2. The Court did not receive detailed submissions on these subsidiary issues, and I propose to give the parties an opportunity to confer to see what level of agreement can be reached, and to identify any outstanding issues that may require determination. It should be possible for the parties to agree on many of the orders to be made to reflect these reasons for judgment. Credibility of witnesses 1. I am satisfied that each of the witnesses other than Mr Cassaniti gave their evidence in a satisfactory manner. Each of those witnesses made a genuine attempt to provide truthful evidence from their recollection of events. The witnesses did not, however, always have a comprehensive recollection of events. That is to be expected. Their evidence was not shown to be seriously inconsistent with the objective evidence. Some allowance should be made for the witnesses as there were some inherent causes of confusion in the events that led to this dispute. The relevant agreements were made in a quasi-family context. The agreement made in November 2016 was informal and initially undocumented. The St George Bank initially funded half of the purchase price for the Moncrieff land by making an advance out of an inappropriate loan facility in the name of Antalija No 2. Antalija No 4 was the trustee of two separate trusts, one of which had no real purpose for the conduct of the Moncrieff land development. 2. Mr Katavic was the principal witness for the defendants. Mr Katavic is a competent builder, but he did not claim to have any significant financial acumen or experience. He left the bookkeeping of the business to Ms Katavic and his accountant. He relied upon professional advice for the detail of the transactions in which he engaged through his companies. 3. I accept in particular Mr Katavic's evidence that his businesses were not short of work but were short of money at the inception of the development proposal for the Moncrieff land. 4. As for Mr Cassaniti, the plaintiffs' submissions explicitly conceded that he was not a witness of credit. 5. The damage done to Mr Cassaniti's credibility by the evidence of his criminal convictions was not alleviated by his refusal to accept any culpability. 6. The cross-examination of Mr Cassaniti revealed that he had intentionally provided false information to the St George Bank in order to induce it to make the construction loan to Antalija No 4: see [273]-[275], [290], [292] and [294] above. Not only did Mr Cassaniti lie to the bank, but he did not clearly own up to his conduct in cross-examination. 7. Perhaps the most directly relevant damage to Mr Cassaniti's credibility arose out of the fact that he was clearly trusted by Mr Katavic and Ms Price to document the agreement discussed at the meeting in the QT Hotel in November 2016. Mr Cassaniti arranged for whatever documents were actually executed to be prepared within Accolade. Mr Cassaniti's own evidence of the way in which relevant documents were executed showed that he made no attempt to explain to the other parties the effect of relevant parts of the documents. He did not ensure that they obtained independent advice, and he simply put the documents in front of the other parties and required them to sign, most probably in a hurry. Whether Mr Cassaniti said at the time that the documents contained standard or simple terms, neither was the case. Both the Unit Holders Agreement and the Development Funding Agreement contained unusual terms that imposed relatively high interest obligations on the other parties. 8. The Unit Holders Agreement and the Amended Development Funding Agreement contained inconsistent provisions and imposed different obligations on Mr Katavic and Ms Price to those that were discussed in the November 2016 meeting. The two agreements cannot comfortably stand together although Mr Cassaniti maintained that both were valid and executed by the other parties. 9. Although it is no longer necessary to determine the validity of the Development Funding Agreement and whether or not it was duly executed by the parties, this aspect of the plaintiffs' case profoundly undermines Mr Cassaniti's creditworthiness. 10. I accept Mr Katavic's evidence that he did not know the Amended Development Funding Agreement existed until it came to light after solicitors became involved in the dispute between the parties. I accept that Mr Katavic would not have entered into any agreement that imposed upon Antalija No 4 an obligation to pay, on default, interest at the rate of 25% per annum compounding daily, or 18% per annum in the absence of default. That was an entirely uncommercial interest regime for a development such as the construction of the townhouses on the Moncrieff land. 11. There was no evidence that the Development Funding Agreement or the agreement that amended it was given to any of the defendants at any time before the parties fell into dispute. The Katavics asked to be given all relevant documents signed by Mr Katavic, but they were not initially given the Development Funding Agreement or the agreement that amended it. 12. I am satisfied that the Court should find that either Mr Cassaniti fabricated the Development Funding Agreement and the agreement that amended it or else that he procured Mr Katavic's signature on the agreements by some subterfuge. 13. I will only accept the evidence given by Mr Cassaniti where it has not been challenged, it is inherently probable, or it is supported by objective evidence. Claim for enforcement of clause 9 of the Unit Holders Agreement November 2016 agreement 1. I have already made observations concerning this agreement at [98]-[99] above. In outline, the conversation was brief and did not deal with the terms of the proposed venture in detail. The conversation was an informal one in a 'family' context. The discussion was convivial, and the participants consumed a number of alcoholic drinks. The conversation was relatively spontaneous. Mr Katavic and Mr Cassaniti were motivated to alleviate the financial difficulties of Mr Price and Mr Arcidiacono. 2. However, one finding I confidently make is that Mr Katavic did not tell Mr Cassaniti that Antalija Constructions was desperate to enter into a new development project as otherwise it would have to lay off its employees. That was utterly untrue, as a matter of fact. On the other hand, it is highly probable that Mr Katavic told Mr Cassaniti that he did not have readily available funds to immediately contribute substantial capital to the proposed venture. The objective evidence establishes that it is most improbable that Mr Katavic's business would generate the necessary funds in a time frame that would enable him to make a substantial capital contribution by the time of the settlement of a contract to purchase the development site. 3. The discussion at the bar of the QT Hotel probably did not give rise to a binding agreement. The agreement matured into a binding one at a later stage by reason of the steps taken by the parties to commit funds to the venture and from the signature of various documents, even though it is possible that the parties did not become bound by all of the written terms of the documents by reason of the circumstances in which they were executed. 4. I am satisfied on the probabilities that the informal agreement reached between the parties to the discussion in November 2016 had the following material features: * The parties acted upon the basis of reposing a high level of trust in the other parties. * The parties other than Mr Katavic relied upon Mr Katavic to plan and execute the development competently and diligently in the interests of all of the parties. * The parties other than Mr Cassaniti relied upon Mr Cassaniti to deal with all legal and accountancy matters in the mutual interests of the parties. * Mr Katavic and Mr Cassaniti were aware of their responsibilities to the venture and of what was expected of them by the other parties. * Mr Katavic and Mr Arcidiacono understood that Mr Cassaniti was an experienced business consultant who had access to finance for the purposes of the proposed venture, and Mr Cassaniti conveyed to the other parties the impression that he was a man of substance. * A substantial purpose of the development was to alleviate the financial difficulties of Ms Price and Mr Arcidiacono (which ultimately manifested in Ms Price being permitted to contribute her superannuation balance of $740,000 on the basis that she would be carried by the other parties). * The parties would share in the proposed venture on the basis of an entitlement of 50% to Mr Katavic, 25% to Ms Price and 25% to Mr Cassaniti. This share would naturally mature into an equivalent proportionate right to receive any net profits from the venture. * The agreement was that, between them, Ms Price and Mr Cassaniti (by his nominee Ms Morvillo) would contribute 50% of the initial capital required to acquire the development site (leaving the construction finance to be dealt with later as organised by Mr Katavic). * Mr Katavic would arrange for the other half of the initial capital to be borrowed from a bank. * Mr Katavic would not be spared the need to contribute a substantial amount of capital to the proposed development, but by reason of his current shortage of funds, he would make his contribution during the construction phase of the development. 1. A number of features of this somewhat inchoate agreement are significant. They include: * While the parties addressed their attention to the possibility that the development site might cost in the order of $4 million, they did not address in any detail the likelihood that there would be additional initial transaction costs (noting that in fact about $5 million was actually required: see [146] above). * There was no detailed discussion at the meeting about the actual terms of the agreement, and, in particular, as to how the parties should deal with any initial extra costs. 1. It is likely that Mr Cassaniti was in fact surprised when he learned what the initial cash requirements were likely to be and the call that would be placed upon him to organise funding for the initial capital requirement of an amount substantially in excess of $4 million. 2. However, I am not satisfied that Mr Cassaniti resolved any concerns that he had about the initial funding of the proposed development by having detailed discussions with Mr Katavic and Ms Price. Instead, at the least, he arranged for clause 9 to be inserted in the draft Unit Holders Agreement (whether of his own motion, or by arrangement with the parties who provided the finance to Mr Cassaniti). Entitlement to 50% of the profit without contributing 50% of the capital 1. The plaintiffs supported their argument that a principal term of the November 2016 agreement was that Mr Katavic would himself contribute half of the initial capital to acquire the proposed development site by arguing, and putting to Mr Katavic in cross-examination, that it was commercially improbable that the other parties would have agreed to him receiving 50% of the profit if he did not contribute 50% of the capital. 2. I consider that argument to be too simplistic in the circumstances. This was not a simple symmetrical agreement where the cost and the benefit were agreed to be distributed in the proportion 50:25:25. 3. The commercial position of Mr Katavic was quite different to that occupied by Ms Price and Mr Cassaniti. They were, in practical terms, passive investors who were to receive a return on their capital investments (allowing for the indulgence to Ms Price arising from the limited amount of capital that she was able to contribute). 4. On the other hand, Mr Katavic was to be entirely responsible for the acquisition of the development site, the necessary design and the obtaining of planning approval, obtaining the necessary bank finance, and finally the construction of the development through his company, Antalija Constructions. 5. As I have explained above, although there may have been some discussion that Antalija Constructions' margin was to be limited to 4% on costs, it was in fact limited to 2.48%: see [252] above. The plaintiffs made a submission to the Court that there was no evidence that this margin was not a proper and fair margin commonly enjoyed by builders in the position of Antalija Constructions. Indeed, Mr Katavic was induced to say in cross-examination that his company had enjoyed its ordinary margin. The plaintiffs submitted that the Court could not properly find on the basis of judicial notice that a margin of 2.48% was not a proper commercial margin. While I agree that the Court could not make a finding as to what a proper commercial margin was in the circumstances, on the basis of judicial notice, I am perfectly satisfied from long experience that 2.48% is not a commercial margin. It was entirely minimal, and the conclusion is justified that Mr Katavic expected to get a minimal return from the work done by Antalija Constructions under its construction contract with Antalija No 4. Mr Katavic was to get substantially the whole of his profit from his holding of 50% of the units in the Unit Trust. 6. Furthermore, it was not the case that Mr Katavic was to be spared the need to contribute capital to the proposed development. Although the agreement concerning how Mr Katavic would procure bank finance for half the purchase price of the development site was indefinite, it was in fact left to him to do so. Although the borrowing was secured by a mortgage granted by Antalija No 4 over the Moncrieff land, the loan was required to be guaranteed by Mr and Ms Katavic. They were the only guarantors of the loan. Mr and Mrs Katavic were effectively risking their business by their participation in the Moncrieff land development by reason of the guarantees that they had to give. 7. Finally, the evidence shows that Mr Katavic through Antalija Constructions ultimately did contribute capital of $1,390,000 to the Moncrieff land development. Negotiations in early March 2017 1. As I have explained above, Mr Cassaniti gave evidence of the conversation with Mr Katavic that he said occurred in March 2017 before the date of Mr Katavic's 14 March 2017 email to Mr Cassaniti: see [138]. This is the only evidence of any discussion between Mr Cassaniti and Mr Katavic about arrangements to settle the purchase of the Moncrieff land after the discussion at the QT Hotel in November 2016, other than the brief discussion in late January 2017: see [132]-[133] above. 2. It is to be expected that there would have been discussions between Mr Katavic and Mr Cassaniti about what would be required to fund the settlement of the contract for the purchase of the Moncrieff land and the commencement of the process to develop that land. 3. I have found that the discussion at the QT Hotel probably focused on the likely cost of acquiring the development site being about $4 million, and not upon any additional 'upfront' costs that would have to be met. As it turned out that those additional costs would be in the order of $1 million, it is probable that there was some discussion between Mr Katavic and Mr Cassaniti as to how the additional costs would be paid. 4. Mr Katavic's position was that he informed Mr Cassaniti that it was his responsibility to ensure that the money for settlement was available as Mr Katavic had none, and that Mr Cassaniti replied: "I've got it sorted. Don't stress": see [132] above. 5. I am inclined to believe that Mr Katavic's stated position is an oversimplification of the discussions that took place. 6. However, Mr Cassaniti's version of the discussion was put specifically on the basis that: "Nancy will put in her contribution, and the rest will be a loan from Reliance. It will have a high interest rate because of the risk and I need it secured on the property with a guarantee too": see [138] above. 7. By that evidence, Mr Cassaniti committed the plaintiffs' case to one based upon an agreement by Mr Katavic that the excess funding requirement would be met by a loan from Reliance at a high interest rate. That underpins the case based upon the Amended Development Funding Agreement that has now been abandoned. 8. Quite apart from the fact that I do not accept Mr Cassaniti as a reliable witness, the plaintiffs' case is that the defendants through Mr Katavic agreed to proceed on the basis of the Amended Development Funding Agreement. On Mr Cassaniti's own evidence, nothing was said to Mr Katavic about an agreement in the terms of clause 9 of the Unit Holders Agreement. 9. This is the point, in my view, where the plaintiffs' abandonment of the Reliance's case based upon the Amended Development Funding Agreement undermines their alternative case that Ms Morvillo is entitled to interest at 8.5% per annum compounded annually on the amount of her contribution above her Proportionate Share. It is not forensically possible for the plaintiffs to jump in full gallop from one horse to another and make an alternative claim for interest under the Unit Holders Agreement. Clause 9 of the Unit Holders Agreement 1. Having regard to what I have found was the extent of the actual agreement between the parties to the Unit Holders Agreement, I consider that clause 9 should not be regarded as "standard" or "simple" for at least the following reasons: * The clause did not manifest a term that had actually been agreed between the parties to the Unit Holders Agreement. * Mr Katavic's obligation was to procure a bank loan for half of the price of the development site, which was to be treated in effect as his contribution. In fact, clause 9(e) had the effect that any amount that Mr Katavic was able to borrow would be for the benefit of all unit holders, and their obligations to contribute to all of the costs listed in clause 9(a) to (d) would be calculated on the basis of the amounts required to be funded after allowing for the amount that was borrowed. This had the effect of requiring Mr Katavic to fund from his own resources 50% of the costs that were not funded by the borrowing: see [173] above. * Clause 9(f) made Antalija No 4, the trustee, liable to pay the 8.5% per annum interest compounding annually in respect of any excess contribution by a unit holder. That made the interest obligation an expense of the Unit Trust, not an expense of the unit holder responsible for the shortfall. Consequently, unit holders who had paid their full contribution might share responsibility for the shortfall of another unit holder. Enforceability of clause 9 of the Unit Holders Agreement 1. Logically, the first issue to address is the defendants' claim that the Unit Holders Agreement is not a valid agreement at all. 2. The defendants have not explained in their submissions why the Court should find that the Unit Holders Agreement is entirely invalid. 3. As I have explained above at [179], there are a number of significant terms of the Unit Holders Agreement that had no meaningful application to the actual purchase and development of the Moncrieff land or were not implemented in any way by the parties. However, it does not follow from the fact that a written agreement may include meaningless terms that the entire agreement is invalid. 4. It is clear from Mr Katavic's evidence that he executed the Unit Holders Agreement that was proffered to him by Mr Cassaniti on 10 May 2017 on behalf of himself and Antalija No 4, understanding that it was intended by Mr Cassaniti to be an agreement that took effect for the purpose of the development by Antalija No 4 as trustee of the Unit Trust of the Moncrieff land. I would infer that Ms Price executed the document on the same basis. 5. It is a well-established legal principle that a party who executes a written document understanding it to be an agreement intended to create legal obligations that bind the person is bound by its terms, notwithstanding that the person has not sufficiently read the document or understood its legal effect: see L'Estrange v F Graucob Ltd [1934] 2 KB 394 at 403 (Scrutton LJ) and Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 180-2; [2004] HCA 52 at [44]-[46] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ). That will be the legal result unless the agreement is vitiated by application of some relevant principle of law. 6. In my view, the real issue on this aspect of the case is whether clause 9 of the Unit Holders Agreement is not binding on Antalija No 4 or Mr Katavic because Mr Katavic was induced to execute the agreement in the belief that it did not include a term with the effect of clause 9 by reason of the misleading or deceptive conduct of Mr Cassaniti on behalf of Ms Morvillo. 7. As I understand the plaintiffs' submissions, they have not challenged the defendants' submission that the alleged representations made by Mr Cassaniti at the time of execution of the Unit Holders Agreement were made in trade or commerce for the purposes of s 18 of the Australian Consumer Law. I am satisfied that the representations did have that quality. In Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604; [1990] HCA 17, Mason CJ, Deane, Dawson and Gaudron JJ considered that conduct 'in trade or commerce' concerned "activities or transactions which, of their nature, bear a trading or commercial character". Further, Deane J observed in Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 22 ALR 621 at 648-649 that the words 'trade' and 'commerce' are "clearly of the widest import". His Honour added at 649: They are not restricted to dealings or communications which can properly be described as being at arm's length in the sense that they are within open markets or between strangers or have a dominant objective of profit-making. 1. Although I have concluded that there was a 'quasi-family' quality to the conduct of the parties to the Unit Holders Agreement, that was only to explain the lack of formality and independent professional advice involved in the transaction, together with an enhanced level of trust reposed by each party in the others. The development of the Moncrieff land was clearly a commercial activity engaged in for profit and the representations made by Mr Cassaniti were made in trade or commerce. Even though Mr Cassaniti was not formally a party to the Unit Holders Agreement, Ms Morvillo held her units as the de facto nominee of Mr Cassaniti, and he acted for her in respect of her participation in the venture. 2. The starting point for determining this issue is the finding made above that the parties to the November 2016 agreement at the QT Hotel entered into the agreement in an informal way in a quasi-family context in which they relied upon trust in each other rather than formal legal advice and documentation. 3. A party to such an agreement is likely to be significantly more susceptible to misleading or deceptive conduct by another party because their guard will be down, and they are unlikely to adopt a self-defensive approach. 4. Mr Cassaniti must have understood that Mr Katavic was a builder by occupation who was not experienced in the complexities of commercial transactions and ordinarily relied upon accounting and legal advice. Mr Katavic informed Mr Cassaniti of his usual reliance upon professional advice at the time the Unit Holders Agreement was signed. 5. Both the Unit Holders Agreement (see [179] above) and the Unit Trust Deed (see [108]-[109]) contain terms that were either meaningless or not relevant to the implementation of the real agreement between the parties. That would naturally cause confusion to an inexperienced person in Mr Katavic's position who attempted to gain some understanding of the meaning of the draft Unit Holders Agreement by leafing through the pages. The creation of confusion may not be equivalent to misleading or deceptive conduct but conduct capable of having that effect is more likely actually to mislead or deceive in a context where the subject of the conduct is confused to begin with. 6. As found above, there was no actual agreement that Antalija No 4 would pay interest at 8.5% per annum compounding annually to unit holders who contributed more than their Proportionate Share. 7. As also found above, the effect of clause 9 of the Unit Holders Agreement was neither "standard" nor "simple". 8. I respectfully accept the correctness of the observation made by Barrett AJA (Meagher and Leeming JJA agreeing at [1] and [2] respectively) in Nadinic v Cheryl Drinkwater as Trustee for the Cheryl Drinkwater Trust [2020] NSWCA 2 at [40] that: "Silence is itself a fact that must be assessed like any other and, unless the circumstances as a whole are such as to give rise to a reasonable expectation of disclosure of some relevant fact known to exist but not communicated, there is no basis on which silence of itself can warrant an inference of a representation that the fact does not exist." 9. This is not a case of misleading or deceptive conduct by mere silence, although it is true that Mr Cassaniti did not draw Mr Katavic's attention to the inclusion or effect of clause 9 in the Unit Holders Agreement. 10. Rather, Mr Katavic specifically asked Mr Cassaniti whether there was any reason that Mr Katavic should only sign the draft Unit Holders Agreement after he received accounting and legal advice from his usual professional advisors. Mr Katavic should have been told to obtain independent advice, but instead he was led to believe that the draft Unit Holders Agreement embodied the terms of the true agreement between the parties, by reason of being told that it only contained "standard" or perhaps "simple" terms. 11. Mr Cassaniti's evidence was that the draft Unit Holders Agreement was prepared by a solicitor employed by Accolade. While that solicitor was not retained by Mr Katavic, Mr Cassaniti had accepted the task of arranging for the legal work relevant to the Moncrieff land venture to be done through Accolade. The likelihood that Mr Katavic would be misled or deceived by Mr Cassaniti's conduct was therefore enhanced by the fact that Mr Katavic was relying upon the lawyer chosen by Mr Cassaniti to draft the Unit Holders Agreement in a way that included the terms agreed between the parties and did not insert any other significant terms that were not brought to Mr Katavic's attention. 12. It was in my view misleading or deceptive for Mr Cassaniti to respond to Mr Katavic's question as to whether he should arrange for his solicitor and accountant to look at the draft Unit Holders Agreement by saying that it only contained 'standard' or 'simple' terms. It was misleading or deceptive for Mr Cassaniti to fail to specifically bring to Mr Katavic's attention that the draft contained clause 9 that imposed new obligations on the unit holders. 13. The misleading or deceptive nature of the conduct was enhanced by the fact that Mr Cassaniti himself had not read the draft Unit Holders Agreement and did not know all of the terms contained in it. Mr Cassaniti's own evidence of the conversation that he said took place in early March 2017 in which Mr Cassaniti claimed that he informed Mr Katavic of the loan to be made by Reliance supports the conclusion that Mr Cassaniti also was unaware of the effect of clause 9. 14. Had it been necessary to do so, I would have found that Mr Cassaniti's mere failure to inform Mr Katavic that the draft Unit Holders Agreement included clause 9, and of the broad effect of that term, was misleading or deceptive. I am satisfied on the basis of the evidence of how the Unit Holders Agreement was executed that Mr Cassaniti was aware that Mr Katavic was relying upon him to advise whether there was any unusual term that warranted Mr Katavic obtaining independent accounting and legal advice. 15. I am satisfied that Mr Katavic would not have signed the Unit Holders Agreement anyway if Mr Cassaniti had explained to him the effect of clause 9. I have already explained above why I consider that Mr Katavic's acknowledgement that he had to sign the agreement if he wanted Mr Cassaniti to cause the $2,250,000 to be paid to Antalija No 4 did not mean that he would have signed the Unit Holders Agreement come what may: see [204]-[206]. Having seen Mr Katavic in the witness box, I consider that it would have been out of character for him to have submitted to commercial blackmail by Mr Cassaniti. It is a matter for speculation what would have happened if the real effect of the Unit Holders Agreement had been explained to Mr Katavic. Mr Katavic and Ms Price may have had to accept some compromise arrangement with Mr Cassaniti, but I do not accept that the fact that the deposit under the contract for the purchase of the Moncrieff land was at risk would have been sufficient to cause Mr Katavic to capitulate. It is not possible on the evidence to make a comprehensive finding as to the alternative course of events that would have occurred in the absence of Mr Cassaniti's misleading or deceptive conduct. 16. I am satisfied in these circumstances that the Court should exercise its power under ss 237(1)(a)(i) and 243(a)(ii) of the Australian Consumer Law to make an order declaring clause 9(e) and (f) of the Unit Holders Agreement to be void ab initio. 17. That is a proper remedy, even though the effect will be that Ms Morvillo will lose any right to receive any interest on any contribution made by her above her Proportionate Share. In fact, the loss will fall on whichever party associated with Mr Cassaniti actually advanced the funds, as Ms Morvillo was only a nominal unit holder. The making of the declaration will have the effect that the Unit Holders Agreement will conform with the real agreement between the parties to that document. 18. It would not be appropriate for the Court to make an order that entitled Ms Morvillo to some amount of interest less than the 8.5% per annum compounding annually provided for in clause 9(f). The actual agreement made between the parties was a complex one that is not capable of transparent analysis, and it would not be just for the Court to impose upon Antalija No 4 or the other unit holders an interest obligation for which they did not bargain. Claim that Antalija No 4 has breached its duties as trustee 1. Three claims by the plaintiffs that Antalija No 4 has breached its duties as trustee of the Unit Trust have survived. They are: * Antalija No 4 borrowed $2,075,000 on 1 June 2017 from the St George Bank on the security of the Moncrieff land and paid that amount to Antalija No 2 in effective repayment of Mr Katavic's contribution to the capital of the Unit Trust. * Antalija No 4 repaid the capital contributed by Mr Katavic and Ms Price to the Unit Trust on about 18 November 2019 in circumstances where there was no repayment of the capital contributed by Ms Morvillo, Antalija No 4 had not yet repaid all of the creditors of the Unit Trust and the repayments were made before the occurrence of the Vesting Date. The amount repaid to Ms Price was $740,000 and the net amount of $1,430,000 paid to Mr Katavic was on any view an overpayment of $40,000. * Antalija No 4 breached its duties as trustee of the Unit Trust by entering into the costs agreement with the solicitors for the defendants dated 27 November 2019 jointly with the other defendants, thereby pledging the assets of the Unit Trust to repay the costs of these proceedings. Repayment of $2,075,000 to Antalija No 2 1. The success of this claim by the plaintiffs depends upon them establishing that the $2,075,000 paid into Antalija No 4's bank account on 11 May 2017 became an asset of the Unit Trust, and that the Unit Trust Deed did not authorise Antalija No 4 to borrow the same amount on the security of the Moncrieff land to fund the repayment to Antalija No 2. 2. Clause 2(b) of the Unit Trust Deed is set out above at [105]. It has the effect that money paid to the trustee with the consent of the trustee and accepted by the trustee as an addition to the Trust Fund is to be incorporated into the Trust Fund. 3. It follows from the evidence that I have accepted above, on the balance of probabilities, to the effect that the St George Bank advanced the $2,075,000 to Antalija No 4 out of an existing facility of Antalija No 2, without the specific knowledge or authority of Mr Katavic, that Antalija No 4 did not accept the money advanced as an asset of the Unit Trust. Mr Katavic understood that the advance was a new one made to Antalija No 4 in its own capacity and did not learn of the mistake until the St George Bank failed to pay a progress claim made by Antalija Constructions on Antalija No 2. 4. The advance thus received by mistake was not an asset of the Unit Trust and the steps taken by Mr Katavic to cause the advance mistakenly received to be repaid to Antalija No 2 was not a breach of trust. 5. The question whether it was separately a breach of trust for Mr Katavic to cause Antalija No 4 to borrow the $2,075,000 on 1 June 2017 on the security of the Moncrieff land, as the effective contribution of Mr Katavic's share of the capital of the Unit Trust, depends upon the true agreement between Antalija No 4 and the unit holders. I have found above that the obligations of the unit holders to contribute capital to the Unit Trust was not governed by clause 9(e) and (f) of the Unit Holders Agreement. It was governed by the more inchoate informal agreement that was primarily made in November 2016 at the QT Hotel. 6. Notwithstanding the indefinite nature of the agreement, it at least allowed Mr Katavic to arrange a bank loan to cover half of the purchase price of the Moncrieff land. That was in circumstances where Mr Katavic specifically advised Mr Cassaniti that he did not have the funds at the time to contribute the capital himself. The basis upon which Mr Katavic would raise the bank loan and secure repayment was left open. 7. I am not satisfied that the plaintiffs have proved that the terms upon which Antalija No 4 borrowed the $2,075,000 from the St George Bank on the security of the Moncrieff land was a breach of trust by Antalija No 4, given the terms of the underlying agreement. I infer that the St George Bank would not have advanced the money to either Mr Katavic or Antalija No 4 without being given security over the Moncrieff land. There is no evidence that Mr and Ms Katavic had any other means of borrowing the money, and the venture would not have gone ahead without a bank loan being raised for half of the purchase price of the Moncrieff land. 8. In any event, as I have explained above, in the course of Antalija No 4 entering into the facility to borrow the construction finance for the Moncrieff land development, Mr Cassaniti became aware of the $2,075,000 debt owed by Antalija No 4 to the St George Bank and acquiesced in that debt being refinanced under the Facility Offer dated 1 August 2018 (see [285] above). Repayment of capital contributions to Ms Price and Mr Katavic 1. Although clause 4 of the Unit Trust Deed required Antalija No 4 to realise the net assets of the Unit Trust and distribute them among the unit holders on the Vesting Date, which could be chosen at Antalija No 4's absolute discretion (see [106] above), clause 9 empowered Antalija No 4 to accept the request by a unit holder to return that unit holder's capital (see [110]-[111]). Clause 9(b) gave Antalija No 4 a discretion to refuse or consent to any such request. 2. As I have noted above at [337], Antalija No 4 returned Ms Price's capital contribution of $740,000 in response to a written request made by her solicitors on 14 November 2019. 3. Mr Katavic did not make a written request for the return of the $1,390,000 contributed by Antalija Constructions during the construction phase of the Moncrieff land development. Although the payments by Antalija Constructions to Antalija No 4 were in practical terms a contribution to the capital of the Unit Trust, Antalija Constructions was not a unit holder. There is scope for argument about whether Mr Katavic was obliged to contribute capital to the Unit Trust in addition to organising the $2,075,000 loan by the St George Bank to Antalija No 4. The agreement reached in November 2016 at the QT Hotel whereby Mr Katavic said that he would contribute funds to the proposed development nearer to the time of construction was indefinite as to the form in which the capital contribution would be made. As appears from the revised draft financial statements for Antalija No 4 prepared by Accolade, the additional capital contribution made by Antalija Constructions on behalf of Mr Katavic to 30 June 2018 was treated as: "Loan – Dennis Katavic 230,000" (see [283] above). Indeed, the contributions by all unit holders were treated as being secured loans. If the repayment that Ms Katavic caused to be made to Antalija Constructions is properly characterised as the repayment of the debt, then it would not be a breach of the Unit Trust Deed, except to the extent of the overpayment. 4. Even if the contributions by Antalija Constructions should be treated as capital payments to the Unit Trust by Mr Katavic, I do not think that the existence of a written request is a mandatory term of the Unit Trust Deed. Such a request was not as a practical matter necessary as Mr Katavic was the unit holder and he was the director of Antalija No 4. 5. To the extent that on 18 November 2019 Ms Katavic caused an overpayment of $110,000 to be made to Antalija Constructions on behalf of Mr Katavic, that was a breach of the Unit Trust Deed. The recording of a debt of $40,000 in the accounts of the Unit Trust after Antalija Constructions repaid $70,000 represents a continuing breach. 6. It does not follow from the fact that clause 9 of the Unit Trust Deed authorised Antalija No 4 to accede to redemption requests made by unit holders that the repayments made by Antalija No 4 on 18 November 2019 did not involve breaches of trust. Antalija No 4 was required to exercise its discretion in the interests of the unit holders as a whole, and there could be commercial circumstances in which it was imprudent for Antalija No 4 to return the capital contributions of some unit holders and not others. That would be particularly so if the return of capital contributions jeopardised Antalija No 4's ability to repay all creditors of the Unit Trust in a manner that would permit proportionate equality of return of capital to all unit holders. 7. The Court is aware that Antalija No 4 is indebted to the ATO for a substantial amount of GST in respect of the sale of townhouses in the Moncrieff land development. That debt is outstanding. 8. I am not aware of any current comprehensive balance sheet for the Unit Trust that is sufficient to enable the Court to make a judgment about whether the payments made to Ms Price and to Antalija Constructions involved a breach of trust by Antalija No 4. Entry by Antalija No 4 into the costs agreement 1. Clause 12.1 of the Unit Trust Deed empowered Antalija No 4 to pay out of the assets of the Unit Trust or its income any legal fees incurred in the management of the Unit Trust (see [114] above). 2. It was therefore not in principle a breach of trust by Antalija No 4 to execute the costs agreement jointly with the other defendants. 3. As noted above, the Court was informed that Antalija No 4 has not paid any assets of the Unit Trust to the solicitors for the defendants under the costs agreement, and it will not do so unless and until authorised by the Court. 4. The circumstances in which it will be proper for Antalija No 4 to pay the costs of these proceedings out of the assets of the Unit Trust, and the amount of any payment that is justified, are not yet known. It is therefore premature for the Court to examine the question whether it was a breach of trust for Antalija No 4 to enter into the costs agreement with the other defendants. Replacement of Antalija No 4 as trustee 1. Section 70 of the Trustee Act 1925 (NSW) relevantly provides: (1) The Court may make an order for the appointment of a new trustee or new trustees either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee. (2) The appointment may be made whenever it is expedient to appoint a new trustee or new trustees, and it is inexpedient difficult or impracticable so to do without the assistance of the Court. 1. Additionally, the Court has an inherent jurisdiction to remove and replace an existing trustee in certain circumstances: see JD Heydon and MJ Leeming, Jacobs' Law of Trust in Australia (8th ed, 2016, LexisNexis Butterworths) at [15-85]. 2. As appears from my consideration of the plaintiffs' claims that Antalija No 4 has already breached its duties as trustee of the Unit Trust, I am not yet satisfied that any breaches have been established, other than the initial overpayment of $110,000 when Ms Katavic caused $1,500,000 to be repaid to Antalija Constructions on 18 November 2019. That breach was of minimal significance and not sufficient to justify the Court in making an order replacing Antalija No 4 as trustee. 3. However, I consider that in principle there are reasons that would justify the Court making an order replacing Antalija No 4 as trustee of the Unit Trust in this case. They are: * As Mr Katavic is a unit holder and the sole director and shareholder of Antalija No 4, he may be in a position of conflict of interest in making decisions on behalf of Antalija No 4 in relation to the exercise of its powers under the Unit Trust Deed in respect of any outstanding disputes that may require to be resolved as between the trustee and the unit holders. * It follows from my findings above (1) that clause 9(e) and (f) of the Unit Holders Agreement are invalid, (2) that aspects of that agreement and the Unit Trust Deed are either meaningless or were never intended to be implemented, and (3) that the real agreement was an inchoate informal agreement substantially made in November 2016 at the QT Hotel, that there is an exceptional degree of ambiguity in this case concerning the real terms of the trust and the duties of Antalija No 4 as trustee of the Unit Trust. It is likely to be productive of further disputation between Antalija No 4 and the unit holders if Antalija No 4 continues to exercise the powers and discretions of the trustee in winding up the Unit Trust and resolving outstanding disputes. 1. However, it is not yet clear whether it will be necessary or convenient to replace Antalija No 4 as trustee of the Unit Trust, as it has not been shown what steps remain outstanding or whether the most convenient course will be to wind up the Unit Trust by means of orders made by the Court in these proceedings. The further consideration of that issue should await the provision to the Court of further information concerning what remains to be done to wind up the Unit Trust. It is material that the Moncrieff land development was successfully completed, and all townhouses sold and at least most of the creditors paid. The remaining assets of the Unit Trust are known and either held in court or in the defendants' solicitors' trust account. It is not yet clear whether it is in the unit holders' interests for the Unit Trust to incur the further costs that will inevitably be incurred if Antalija No 4 is replaced by a new trustee. 2. If Antalija No 4 should be replaced as trustee of the Unit Trust, it will be appropriate for a professional person or company to be appointed as trustee in its stead. Ms Morvillo will not be an appropriate replacement for equivalent reasons to those that would justify the replacement of Antalija No 4. 3. The Court will hear the parties concerning the most appropriate course to take in the efficient winding up of the Unit Trust. Claim that the Court make an order for an account 1. The final outstanding question is whether the Court should make an order for an account of the affairs of the Unit Trust to be taken. In principle, any unit holder is entitled to require that the trustee of the Unit Trust provide a complete and proper accounting: Manning v Commissioner of Taxation (1928) 40 CLR 506 at 509 (Knox CJ). However, except to the extent that the cost of undertaking the account is caused by some delinquency on the part of the trustee, the cost will be an expense of the Unit Trust. It is not yet clear what issues will arise in the accounting and whether a formal account is necessary and in the interests of the unit holders. 2. I consider that it will be preferable to defer making a final determination on this issue until the unit holders have been able to explain to the Court the nature of the accounting process that will be necessary and the issues that should arise. 3. The parties should confer for the purpose of preparing short minutes of order to give effect to these reasons and they should include case management orders to deal with all outstanding issues. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 May 2022