District Court New South Wales Medium Neutral Citation: PCL Holdings Pty Limited v C & D Tahatos Investments [2023] NSWDC 303 Hearing dates: 16, 17 May and 14 July 2023 Date of orders: 11 August 2023 Decision date: 11 August 2023 Jurisdiction: Civil Before: Weber SC DCJ Decision: (1) There be judgment and verdict for the plaintiff in the sum of $190,729.89. (2) Interest thereon at the rates pertaining from time to time pursuant to s 100 of the Civil Procedure Act 2005 (NSW). (3) The defendants/cross claimants pay the plaintiff/cross defendants' costs. Catchwords: CONTRACT – Misleading and deceptive conduct – Silence Legislation Cited: Competition and Consumer Act 2010 (Cth), Sch 2 Australian Consumer Law s 18 Civil Procedure Act 2005 (NSW) Cases Cited: Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75 Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357; [1999] ANZ Conv R 246 Luben Petkovski v Kai Yin Huang [2018] NSWSC 1667 Legione v Hately (1983) 192 CLR 406 Western Australia Insurance Co. Ltd v Dayton (1924) 35 CLR 355 Texts Cited: Nil Category: Principal judgment Parties: PCL Holdings Pty Limited (Plaintiff/Cross Defendant) Michael Roger O'Sullivan (Cross Defendant) C & D Tahatos Investments (1st Defendant/Cross Claimant) Constantine Tahatos (2nd Defendant/Cross Claimant) Despina Tahatos (3rd Defendant/Cross Claimant) Representation: Counsel: Mr B Lloyd (Plaintiff/Cross Defendants) Mr P Finch (Defendants/Cross Claimants) Solicitors: George Gourlas Lawyer (Plaintiff/Cross Defendants) Tsintilas & Associates (Defendants/Cross Claimants) File Number(s): 2022/00068152 Publication restriction: Nil JUDGMENT Introduction 1. On 7 May 2021, the plaintiff (PCL) agreed to lend money pursuant to a Provisional Offer of Loan Funding (the Loan Agreement). The borrower was the first defendant (C & D) which entered into the Loan Agreement in its own name, and as trustee for the C&D Tahatos Investment Trust. 2. The second and third defendants (Mr and Mrs Tahatos) are husband and wife, who have given guarantees of the obligations of C&D pursuant to the Loan Agreement. 3. The loan to be advanced pursuant to the Loan Agreement was in the sum of $3,025,000.00. The Loan was to be advanced in order to assist in the completion of a 20 lot subdivision and construction project at Tahmoor. C&D had previously purchased the Tahmoor property for a purchase in excess of $2 million. 4. Upon execution of the Loan Agreement, C&D paid the Loan Assessment and Commitment Fee of $11,000 and a Security Assessment Fee of $5500. 5. Ultimately the Tahmoor development was not undertaken by C&D. Rather the undeveloped site was sold in that condition. 6. The sale occurred on 27 September 2021. Two days later, C&D confirmed to PCL that the loan would not be proceeding. Thereafter PCL rendered invoices in respect of various fees which it alleged were payable pursuant to the terms of the Loan Agreement. 7. The defendants refused to pay the amounts sought in the invoice. As a consequence, PCL commenced these proceedings seeking what it claimed to be outstanding Loan Agreement fees in the sum of $193,097.89, together with interest thereon. 8. The defendants raised by way of defence certain matters which they alleged were misleading and deceptive for the purposes of s 18 of the Australian Consumer Law (ACL). They also sought relief under s 243 of schedule 2 to the Competition and Consumer Act 2010 (Cth). The Cross Claims 1. Subsequently, the defendants put on cross claims substantially replicating the ACL causes of action which has been outlined in their defences. In addition to relief claimed under s 243, C&D sought damages in the sum of $16,500, being the amount which they had already paid to PCL on account of fees, on the date of the execution of the Loan Agreement (See Paragraph 4 herein). 2. The cross defendant to the first cross claim is the lender PCL, while the cross defendant to the second cross claim is Mr Michael O'Sullivan (Mr O'Sullivan). Mr O'Sullivan was both a director and shareholder of PCL. He also acted as a broker in relation to the Loan Agreement. 3. The matter proceeded on the basis that the cross claims provided the real battleground between the parties, that is to say the matter was conducted on the basis that if the defendants could not succeed on their cross claims, then PCL would be entitled to judgment in the sum sought in the Statement of Claim. 4. Consequently, with the concurrence of the parties, the cross claimants addressed first, and then in reply. The Submissions 1. Unfortunately, the submissions made by the cross claimants in many respects bore little resemblance to the pleaded case. I trust that I was not being too unkind when I suggested to counsel for the cross claimants that the cross claimants' submissions and their pleadings were like ships that passed in the night. 2. In exchanges with counsel for the cross claimants, I made it clear that I would not allow the matter to proceed outside of the confines of the pleaded case. 3. One notable example of the submissions exceeding the pleaded case, was that the cross claimants in their final submissions sought to advance a case of statutory unconscionability under the ACL. 4. On 14 June 2023, the cross claimants had been put on notice by the cross defendants in their written submissions, that the cross defendants did not accept that the cross claimants had pleaded a case in unconscionability. Notwithstanding this, the cross claimants made no attempt to seek leave to amend to plead such a case. 5. On 28 June 2023, the cross claimants put on written submissions in reply in which they asserted that the unconscionability case was available to them. At the hearing of oral submissions on 14 July 2023, I indicated that I was against the cross claimants on this point. 6. The cross claimants then sought leave to amend to plead such a case. 7. In face of the cross defendants' opposition to the grant of leave to amend, I refused the cross claimants' application. This decision was the subject of a separately delivered ex tempore judgment of that date. 8. Some other examples of reliance by the cross claimants on submissions not pleaded included: 1. Allegations of what was in reality a negligence case against Mr O'Sullivan in relation to his role as a broker; and 2. Complainants about Mr O'Sullivan's role in advising on the sale of the Tahmoor Property; and 3. Allegations of conflict of interest on the part of Mr O'Sullivan. The Cases Pleaded in the Cross Claims 1. It is important therefore to revert to the pleadings. In the cross claims, there are pleaded eight Non-Disclosures and one Representation. The Non-Disclosures were as follows: 1. The First Non-Disclosure is alleged to be: The Cross Defendant did not disclose to the First, Second or Third Cross Claimants that Michael O'Sullivan was the managing director of the Cross Defendant and the only other director of the company was Michael O'Sullivan's 75-year-old father, Bernard Michael O'Sullivan who resided in Queensland. 1. The Second Non-Disclosure is alleged to be: The Cross Defendant did not disclose to the First, Second or Third Cross Claimants that 100% of the shares in it was held for the benefit of Michael O'Sullivan and his family. 1. The Third Non-Disclosure is alleged to be: The Cross Defendant did not disclose to the First, Second or Third Cross Claimants that Michael O'Sullivan controlled the Cross Defendant. 1. The Fourth Non-Disclosure is alleged to be: The Cross-Defendant [did] not disclose to the First, Second or Third Cross Claimants that Michael O'Sullivan was an Australian Financial Services banned or disqualified person. 1. The Fifth Non-Disclosure is alleged to be: The Cross Defendant did not disclose to the First, Second or Third Cross Claimant that it did not have an Australian Credit Licence (ACL) or other licence to allow the Cross Defendant to make loans secured by mortgage over property. 1. The Sixth Non-Disclosure is alleged to be: The Cross Defendant did not disclose to the First, Second or Third Cross Claimant that it was not a member of the Australian Financial Complaints Authority (AFCA), and consequently a complaint could not be made to AFCA regarding the Cross Defendant. 1. The Seventh Non-Disclosures is alleged to be: Prior to the exchange of the Contract the Cross Defendant did not disclose to the First Cross Claimant that if the First Cross claimant exchanged contracts it would be obligated to pay the amounts claimed by the Cross Defendant. 1. The Eighth Non-Disclosure is alleged to be: The Cross Defendant before the exchange of contract did not disclose to the First Cross Claimant it that (sic) would not waive the amounts claimed. 1. The Representation pleaded was that both PCL and O'Sullivan represented to C&D, as well as Mr and Mrs Tahatos that PCL would be able to obtain funds by having persons invest in the loan to C&D. The Non-Disclosures Cases 1. Self-evidently the claims in relation to the eight Non-Disclosures are claims in respect of representations alleged to have been made by silence. The principles relevant to representations by silence have been very helpfully set out by Slattery J in Luben Petkovski v Kai Yin Huang [2018] NSWSC 1667. In that case, his Honour stated as follows: "[343] The Huangs also plead a limited contravention of ACL, s 18, which prohibits a person in trade or commerce from engaging in conduct that is misleading or deceptive or likely to mislead or deceive. This claim is limited to the alleged unauthorised reduction in the size of the lots conveyed to the Huangs as a result of the Modified Development Consent. [344] The two step analysis required to establish s 18 liability was discussed by the High Court in Campbell v Backoffice Investments Pty Limited (2009) 238 CLR 304; [2009] HCA 25. The two step process is: (1) whether facts establish conduct pleaded; and (2) whether as a matter of fact the conduct is false misleading or deceptive or likely to mislead or deceive. [345] The ACL, s 18 claim is pleaded as one of representation by silence. Special principles are engaged when such a pleading is raised. [346] Whether silence or non-disclosure of certain information constitutes misleading or deceptive conduct is to be "assessed as a circumstance like any other": Demagogue Pty Ltd v Ramensky & Anor (1992) 110 ALR 608, 609; [1992] FCA 851 at 609. Black CJ articulated the principle in the following terms (at 609-610, emphasis added): "To say this is certainly not to impose any general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive, or likely to mislead or deceive. To speak of "mere silence" or of a duty of disclosure can divert attention from that primary question. Although "mere silence" is a convenient way of describing some fact situations, there is in truth no such thing as "mere silence" because the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed." [347] Silence as constituting misleading or deceptive conduct was most recently considered by the High Court in Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31. In that case, the High Court endorsed the language of a "reasonable expectation" of disclosure (at [18]-[23]). The Court also emphasised that the application of the "reasonable expectation" approach may differ depending on whether the non-disclosure is said to be misleading or deceptive to members of the public, or whether it arises between parties to commercial negotiations (at [19]). [348] In deciding whether a reasonable expectation exists, regard may be had to the knowledge of the parties to the transaction, and the existence of any common assumptions and practices established between the parties (at [20]). The High Court reaffirmed that, as a general proposition, Trade Practices Act, s 52 (and for present purposes, ACL, s 18) does not require a party to commercial negotiations to volunteer information which will be of assistance to the other party's decision-making. Nor does it impose on a party an obligation to disclose information to avoid the consequences of the careless disregard of another party of equal bargaining power and competence (at [22])." 1. The cross claimants did not place these principles in doubt. Reliance 1. The cross claimants, no doubt conscious of the importance of reliance in establishing a causal link between the alleged misleading and deceptive conduct and loss, pleaded that in absence of the Non-Disclosures, the cross claimants would not have entered into either the Loan Agreement or the Guarantees. 2. In their evidence however, the cross claimants made no attempt to prove such reliance. For example, the cross claimants adduced no evidence to the effect that, had the matters the subject of the alleged non-disclosures been revealed to them, they would have acted differently to the manner in which they in fact acted. Specifically, there is no evidence that had the matters set out in the first to sixth alleged Non-Disclosures been made aware to them on or before 7 May 2021, C&D would not have entered into the Loan Agreement, and Mr and Mrs Tahatos would not have executed the Guarantees. 3. To the contrary, the evidence was that Mrs Tahatos, the director of C&D, entered into the Loan Agreement because she considered it to be the best deal available to the company in order to allow it to develop the Property. She gave evidence that in her view, the Loan Agreement was in the best interests of both C&D and the C&D Tahatos Investment Trust, of which it is trustee (TP 88.34-44). 4. In summary therefore, it seems to me, that there is a total absence of evidence of any form of reliance by the cross claimants on the representations by silence which have been pleaded. In saying this, I am conscious of the authorities which suggest that in certain circumstances reliance can be inferred without direct evidence of it (Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357; [1999] ANZ ConvR 246). This is especially so where a contract is entered into based on a representation which is materially likely to have induced such an act (Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75). 5. It seems to me however that in cases of alleged misrepresentation by silence reliance will usually be necessary to be established on the evidence. I take this view as in cases of misrepresentation by silence, it will seldom be the case that the silence was "calculated to induce the representee to enter into a contract" (Gould v Vaggelas at 236 per Wilson J). 6. I should also add that the pleaded First Representation is also unsupported by any evidence of reliance on the part of the cross claimants. 7. Thus, in my view, reliance has not been established by the cross claimants and none can be inferred. This conclusion is sufficient to dispose of the proceedings, nonetheless I will proceed to briefly consider the alleged Non-Disclosures, and the Representation Non-Disclosures 1-3 1. It is convenient to consider Non-Disclosures 1-3 together as they concern the ownership and control of PCL by Mr O'Sullivan. 2. I must say that I found this aspect of the cross claims puzzling. The source of my state of puzzlement was that contrary to the assertion that Mr O'Sullivan did not reveal his interest in PCL, and thus his indirect interest in the loan advanced, the evidence discloses quite the opposite. PCL made three separate loan offers to the cross claimants. Each of the loan offers was made on PCL's letterhead and each covering letter is signed by "Michael O'Sullivan Director." (PX1 at 217, 232 and 250). 3. Mr O'Sullivan's signature moreover is quite an extravagant one. Indeed, it is a signature which naturally draws the eye to it. Mr O'Sullivan's signature is so prominent on the covering letters that, in my view, it is inconceivable that anybody receiving these three pieces of correspondence would not have understood that Mr O'Sullivan was a director of PCL the lender. 4. Further in relation to Mr O'Sullivan's control of PCL Holdings, in cross-examination Mrs Tahatos, confirmed that she was aware that Mr O'Sullivan was a director of PCL before she executed the Loan Agreement and Guarantee on 7 May 2021 (TP 82.34-45). 5. Mr Tahatos, the second cross claimant, initially admitted that as at 19 February 2021, he was aware that Mr O'Sullivan was the director of PCL Holdings (TP 120.11-14). Mr Tahatos later sought to step back from that admission, but he did concede that he should have been aware of this fact when he signed the Loan Agreement (TP 123.16-50). 6. Further to the issue of Mr O'Sullivan's interest in PCL and thus in the loan, in cross examination it was put to Mr Tahatos that he was aware that Mr O'Sullivan was likely to invest in PCL Holdings' loan and that he was unconcerned by this: "Q. Your evidence to the Court is you have no issue with Mr O'Sullivan investing in the loan that was being offered to C & D Tahatos Investments Pty Ltd. Is that correct? A. I have no issues with them." (TP 116.26-40) 1. To the puzzling aspects of the alleged Non-Disclosures in the case should be added the following. On 13 August 2020, Mr O'Sullivan sent an email to Mr and Mrs Tahatos relating to the proposed loan which he stated: "For complete disclosure, I am likely to invest in the loan either in my own name or through one of my entities. Other investors are always comforted by seeing "skin" in the game. I don't envisage a problem but let me know if it is." (CB 199) 1. Neither cross defendant raised any objection to this suggestion by Mr O'Sullivan. Thus, in my view the evidence discloses that the substance of the Non-Disclosures 1-3 was in fact disclosed to the cross claimants. 2. I am conscious of the fact that the pleaded first to third Non-Disclosures go beyond an allegation of Mr O'Sullivan allegedly not disclosing that he was a director of PCL, and that he had an interest in the loan. The cross claimants allege that Mr O'Sullivan should have disclosed: 1. That he was the managing director of PCL. 2. That his father was the other shareholder in the company. 3. That Mr O'Sullivan was the beneficial owner of 100% of the shares in PCL. 4. That Mr O'Sullivan was the controller of PCL 1. I do not accept that it was necessary for Mr O'Sullivan to make these disclosures, and I do not consider that in the circumstances there is a reasonable expectation of such disclosure. 2. In my view, ultimately, as Mrs Tahatos conceded in cross-examination, C&D entered into the Loan Agreement because it was a good deal, having regard to such matters as the loan amount, the interest rate, the security required and the fees and charges payable. In my view, the detail of the ownership and control of the lender over and above what had already been made known to them, was not a material consideration to any of the cross claimants. 3. In addition, as I have earlier indicated, the cross claimants gave no evidence of their reliance on the alleged misrepresentations by silence constituted by Non-Disclosures 1-3. In my view, they did not give such evidence because in reality the identity of Mr O'Sullivan as being associated with PCL and the loan was something which was irrelevant to the cross claimants. 4. In my view, the commercial reality was that the cross claimants were seeking funds to complete the Tahmoor subdivision and development, and, in the circumstances, it is highly unlikely that they cared whose money they were borrowing, just as long as the money was available when required, on acceptable terms. Non-Disclosure 4 1. This issue involves a contest of credit between Mr Tahatos on the one hand, and Mr O'Sullivan on the other. 2. Mr Tahatos in his affidavit gives evidence that Mr O'Sullivan did not make clear to him that ASIC was attempting to disqualify him from managing corporations. In cross examination, Mr O'Sullivan rejected that proposition (TP 63.39 – 49). Credit 1. I accept Mr O'Sullivan's evidence in preference to that of Mr Tahatos. I found Mr O'Sullivan to be a straightforward, and indeed an impressive witness who gave his evidence in a frank and concise way, and in a manner which was intended to assist the Court. 2. As to Mr Tahatos, I found him to be a much less satisfactory witness. He suffered from a desire to use his time in the witness box as an opportunity to advance his case, by way of advocacy, rather than as an opportunity to assist the Court by directly answering the questions posed of him. This was especially evident in respect of the many times in which he added unresponsively to his answers words to the effect of "on Mr O'Sullivan's advice" or "because I trusted Mr O'Sullivan" or the like. 3. Mr Tahatos was regularly argumentative, and I do not have any confidence in his evidence. 4. I am also of the view that Mr Tahatos attempts to portray himself as an uneducated and unsophisticated person in matters of business and finance reflected poorly on his credit. That these assertions were false can be demonstrated inter alia from the fact that he was able to read the loan documentation provided to him by Mr O'Sullivan, and understand that documentation. It can also be demonstrated that over a lengthy period, he had run an apparently successful business. 5. Moreover, the evidence also demonstrates that in 2013, Mr Tahatos approached Mr O'Sullivan with a business proposal which involved the possible acquisition of a cemetery. In the proposal, Mr Tahatos estimated that the project would generate a profit of $600 million (PX1 at pages 516 – 519). Mr Finch of counsel attempted to downplay these documents as an example of what might be called "pie in the sky" type business planning. In my view however even if the profit from the proposed cemetery acquisition projected by Mr Tahatos was unrealistic, the financial reasoning set forth in the analysis provided to Mr O'Sullivan by Mr Tahatos and the financial projections on which they were based, to my mind deny Mr Tahatos any opportunity to paint himself as in any way uneducated and unsophisticated in matters of commerce. 6. To similar effect, was the fact that the evidence also shows Mr Tahatos being interested in business opportunities involving the sale of wine to China (PX1 at page 521). 7. I also consider that the inherent probabilities suggest that Mr O'Sullivan did in fact make the disclosure to Mr Tahatos, as he stated in his evidence. I take this view as the evidence was that: 1. Mr O'Sullivan was a long-standing friend of Mr Tahatos and before him Mr Tahatos' father; 2. In 2012, Mr Tahatos was aware Mr O'Sullivan's company Provident Capital Limited was placed into receivership and later liquidation; 3. At the time of Providential Capital Limited's liquidation, Mr Tahatos' father's company, George Tahatos Holdings Pty Ltd, owed a substantial loan to Provident Capital Limited, which Mr Tahatos had guaranteed; 4. In mid-2012, Mr Tahatos saw Mr O'Sullivan on the television news in connection with the liquidation of Provident Capital Limited; and 5. Six months after seeing Mr O'Sullivan on the television, Mr Tahatos contacted him to discuss the liquidation of Provident Capital Limited, and Mr O'Sullivan's role in relation to it; and 6. They were on such social terms that they lunched together. 1. Given this evidence, I consider that it is implausible for Mr Tahatos to suggest that until November 2021 he was unaware of Mr O'Sullivan's status as a disqualified person. 2. I should also add that in any event, as I have earlier indicated, neither Mr Tahatos nor Mrs Tahatos gave evidence of reliance on this alleged Non-Disclosure. Non-Disclosure 5 1. The cross claimants have adduced no evidence to support their case in relation to this allegation. Indeed, in their evidence, Mr and Mrs Tahatos never mentioned the issue of an Australian Credit Licence. In addition, there was no evidence that the cross defendants did not in fact hold an Australian Credit Licence "or other licence" (which is not identified), and there was no attempt made to establish either by way of submission or evidence that such a licence was necessary in order for PCL to make loans secured over land. 2. I should also add that the cross claimants did not to put the factual matters which would underpin this alleged Non-Disclosure to Mr O'Sullivan in cross examination. In my view, the cross claimants have therefore failed to establish the factual assumptions underpinning this allegation. 3. Finally, as I have earlier indicated, there is no evidence of any form of reliance on this Non-Disclosure. Non-Disclosure 6 1. Similarly, I believe that the Sixth Non-Disclosure can be dealt with readily. 2. In her evidence, Mrs Tahatos never mentions the Australia Financial Complaints Authority. 3. Mr Tahatos does mention that body, but fails to give evidence of the relevance of the body and PCL's alleged non membership of it, to any of his decision making (See Affidavit of Con Tahatos para [146]). 4. Indeed, there is also no evidence that PCL was not in fact a member of AFCA. Similarly, there is no evidence that Mr O'Sullivan is not a member of that body. 5. I also note that no matters relating to the AFCA were put to Mr O'Sullivan in cross examination, as such I am comfortably satisfied that the factual assumptions comprising the Sixth Non-Disclosure have been made out. 6. Finally, again I should reiterate that I find that no reliance on the alleged Non-Disclosure has been established by the cross claimants. Non-Disclosures 7-8 1. The Cross-Claimants plead that, had the subject of the Seventh and Eighth Non-Disclosures been made known to them, C&D would not have agreed to sell the Tahmoor property in September 2021. 2. I consider these pleaded causes of action to be misconceived. In the cross claims, the cross claimants are seeking to avoid the consequences of entering into the Loan Agreement and Guarantees. This occurred on 7 May 2021. As I have earlier indicated they do so on the basis that these otherwise binding agreements were entered into by reason of the cross defendants' misleading and deceptive conduct. 3. The cross defendants are not seeking damages arising from the consequences of their decision to sell the Tahmoor property. This sale occurred in September 2021, that is to say 6 months after the Loan Agreement. 4. As such, the circumstances in which the first cross claimant agreed to sell the Tahmoor property, months after the Loan Agreement and Guarantees were entered into, can be of no relevance to the issues in dispute which arise on the cross claims. As such, the Seventh and Eighth Non-Disclosures must fail. 5. I should also add parenthetically that the sale of the Tahmoor generated a substantial profit. 6. Finally, I should also add that in any event, the Seventh Non-Disclosure has not been falsified. The evidence establishes that on 19 August 2021 (being a date prior to the date of the contract for sale of the Tahmoor Property), Mr O'Sullivan emailed Mr and Mrs Tahatos regarding the proposed sale and provided a comparative analysis of their financial positions if they sold the Property on the one hand, or developed it on the other. 7. Attached to that email was a table which clearly stated, that if C&D sold the Property, it would still need to pay around $160,000.00 in fees under the Loan Agreement. In cross-examination, Mr Tahatos accepted that he had received this email before the sale of the Property, and that the document stated that loan fees of $160,000.00 would be payable even if the Property was sold (TP 135.35-50). 8. Thus, the subject matter of the Seventh Non-Disclosure was in fact a matter which was disclosed to the cross claimants, and by that disclosure the cross defendants made clear that they were not waiving their legal rights under the Loan Agreement. 9. Thus, the Eighth Non-Disclosure was also in fact disclosed. The First Representation 1. In my view this cause of action is also very problematic. The first representation is pleaded as follows: "The Cross Defendant represented to the First, Second and Third Cross Claimants that it would be able to have persons to invest in the loan to the First Cross Claimant. ("First Representation"). Particulars Email 13 August 2020: "For complete disclosure I am likely to invest in the loan either in my own name or through one of my entities. Other investors are always comfort in seeing 'skin' in the game." 1. The first matter that should be observed is that the alleged misrepresentation simply does not arise from the particularised email. It is well established that for a misrepresentation to be actionable it must be clear and unequivocal (Legione v Hately (1983) 192 CLR 406 at 435; Western Australia Insurance Co. Ltd v Dayton (1924) 35 CLR 355 at [374-375] per Isaacs A. CJ). 2. In my view, far from the email making the alleged misrepresentation in a clear and unequivocal way, the alleged misrepresentation does not arise from the particularised email at all. 3. Next it should be noted that the cross claimants do not go on to plead that the representation alleged was misleading and deceptive, nor do they particularise why that is said to be so. 4. Similarly, no attempt is made in the evidence to falsify the alleged misrepresentation. In addition, the facts said to underlie the alleged misrepresentation were never put to Mr O'Sullivan. 5. It should also be noted that even if the misrepresentation could be made out definitionally, the alleged misrepresentation could not have led to loss. This is so, as no loss would be suffered by the cross claimants unless and until the loan funds pursuant to the Loan Agreement were unable to be drawn down due to a lack of investors in the loan. 6. Thus, as the loan was never drawn down (due to commercial decisions of the borrower) the misrepresentation, even if made, never had the opportunity to be misleading and deceptive, and as such could never have led to loss. 7. No doubt because of this, the cross claimants led no evidence of reliance on the misrepresentation. 8. The alleged representation case must also fail. Conclusion 1. For the foregoing reasons, the cross claims must fail and as a consequence, the plaintiff is entitled to the relief sought in the Statement of Claim. 2. Costs should follow the event. Orders 1. The Court orders: 1. There be judgment and verdict for the plaintiff in the sum of $190,729.89. 2. Interest thereon at the rates pertaining from time to time pursuant to s 100 of the Civil Procedure Act 2005 (NSW). 3. The defendants/cross claimants pay the plaintiff/cross defendants' costs. ********** 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: 24 November 2023