New South Wales Supreme Court CITATION : Visnic v Sywak & Ors [2007] NSWSC 701 HEARING DATE(S) : 21, 22, 23, 24 February 2006; 26, 27, 28 June 2006; 21 August 2006 JUDGMENT DATE : 3 July 2007 JURISDICTION : Equity Division JUDGMENT OF : Brereton J DECISION : (1) Declare that plaintiff is entitled at law and in equity to (i) one of two issued shares in capital of fourth defendant, Castlove (ii) nine of eighteen issued shares in capital of fifth defendant, Donovi (iii) two of eight issued shares in capital of each of second defendant, Adellos and third defendant, Parlamartu. (2) Declare that plaintiff is beneficially entitled to further two of the eight issued shares in capital of each of Adellos and Parlamartu, being two of the shares held legally by first defendant, Peter Sywak, in each of those companies. (3) Order that first defendant transfer to Plaintiff two of the shares held by first defendant in each of Adellos and Parlamartu. (4) Order that registers of each of Adellos, Parlamartu, Castlove and Donovi be rectified pursuant to Corporations Act, s 175 to the following effect: (i) Adellos, so that plaintiff be registered as holder of four of eight issued shares and first defendant as holder of four of eight issued shares; (ii) Parlamartu, so that plaintiff is registered as holder of four of eight issued shares and first defendant as holder of four of eight issued shares; (iii) Castlove, so that plaintiff is registered as holder of one of two issued shares and first defendant as holder of one of two issued shares; (iv) Donovi, so that plaintiff is registered as holder of nine of eighteen issued shares, and first defendant as holder of nine of eighteen issued shares. (5) Order that each of second, third, fourth and fifth defendants be wound up pursuant to Corporations Act, s 461(1)(k). (6) Order that Michael Gregory Jones be appointed liquidator of each of second, third, fourth and fifth defendants. (7) Reserve liberty to apply, if it is desired to refer the matter for an inquiry. (8) Order that first defendant pay plaintiff's costs. CATCHWORDS : CORPORATIONS – whether shares in corporate defendants acquired by first defendant beneficially or upon trust as to half for plaintiff – competing versions of facts – Winding up – Just and equitable ground – deadlock – no question of principle LEGISLATION CITED : (CTH) Corporations Act 2001 ss 175, 233, 461 Milan Visnic (plaintiff) Peter Orest Sywak (first defendant) PARTIES : Adellos Pty Limited (second defendant) Parlamartu Pty Limited (third defendant) Castlove Pty Limited (fourth defendant) Donovi Pty Limited (fifth defendant) FILE NUMBER(S) : SC 1278/03 COUNSEL : Mr A W Street SC w Ms S Kaur-Bains (plaintiff) Mr M J Stevenson SC w Mr J M White (defendants) SOLICITORS : Thomson Playford (plaintiff) Cosoff Cudmore Knox (defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRERETON J Tuesday, 3 July 2007 1278/03 Milan Visnic v Peter Sywak & 4 Ors JUDGMENT 1 HIS HONOUR: The plaintiff Milan Visnic, and the first defendant Peter Orest Sywak, an accountant, were formerly both shareholders in each of the second defendant Adellos Pty Limited, the third defendant Parlamartu Pty Limited, the fourth defendant Castlove Pty Ltd, and the fifth defendant Donovi Pty Limited. No share register for any of the corporate defendants has been produced, but the ASIC searches record that Mr Sywak is now the sole shareholder in each of them. By his further amended Statement of Claim, Mr Visnic claims declarations that he is beneficially entitled to half of the shares in Adellos, Parlamartu, Castlove and Donovi; and, to the extent that they are not in Mr Visnic's name, declarations that Mr Sywak holds those shares upon trust for him, and an order that Mr Sywak transfer them to him. Mr Visnic also seeks rectification of the share register of the corporate defendants so as to reflect the shareholdings as he contends they should be. The result of the relief sought by Mr Visnic, if granted, would be that he would be an equal shareholder with Mr Sywak in each of the corporate defendants. Mr Visnic also claims equitable compensation, and relief under the (CTH) Corporations Act 2001, s 233, for oppression and, in the alternative, an order for the winding up of the corporate defendants on the oppression, and/or the just and equitable ground. By agreement between the parties, issues of damages or equitable compensation have been deferred for subsequent consideration, if they arise. 2 In short, Mr Visnic alleges that the situation that the shareholdings are now in the name of Mr Sywak has come about as a result of an abuse by Mr Sywak of trust reposed in him by Mr Visnic. Mr Sywak says that it is in accordance with agreements made between him and Mr Visnic. The essential issues are: · first, the basis upon which, in 1996, shares in Adellos and Parlamartu were transferred by former business associates of Mr Visnic to Mr Sywak; and · secondly, whether, as Mr Sywak contends, there was an agreement made between him and Mr Visnic on or about 1 May 1999 for the transfer by Mr Visnic to Mr Sywak of all his remaining shareholdings. 3 Counsel recently communicated to me that urgency now attended the determination of the matter – the delay, which I regret, having been occasioned by the need to review evidence taken and submissions made in three tranches of a hearing which was twice part-heard between February and August last year. Although detailed reasons were in an advanced state of preparation, they were not yet ready for publication when I was about to commence vacation on 15 June 2006, and accordingly I thought it best that day to announce my decision and orders, and a summary of my reasoning, and to publish the full reasons upon my return. These are those reasons; and the outline that I gave on 15 June is incorporated within paragraphs [100] – [125] below. Background 4 Mr Visnic, who was born in Yugoslavia in 1946, migrated to Australia in 1970 at the age of 24. He had by then acquired some experience in the metal trade and construction industry and continued to work in that industry in Australia. In the 1970s, he became involved in business ventures with his uncle Robert Kusic, Peter Kusic, Slavko Zubovic, Frank Juracic and Milos Vasic (the "Business Associates"). Several corporate vehicles were used for the businesses, which were involved in building and formwork, and in property development. The first, Auburn United Formwork and Fixing Pty Limited ("AUFF") was incorporated in the early 1970s. Initially, a friend's farm was used for storing the business equipment, but later in the 1970s, in 1979, a property at Kemps Creek was purchased in the names of all the Business Associates for that purpose. The Kemps Creek property was sold in the early 1980s, when they acquired, again in the names of all the Business Associates personally, industrial property at Wetherill Park. 5 Mr Sywak was born in Ukraine in 1941. He holds a Bachelor of Business from the University of Technology Sydney, and is now a certified practising accountant practising on his own account as Sywak & Associates as 40 Parramatta Road, Homebush. He is a registered company auditor and registered tax agent, and has practised as a CPA on his own account since 1981, when he purchased the accounting practice of the firm Kelly & Staines. 6 Robert Kusic was a client of Kelly & Staines, as was AUFF, when Mr Sywak purchased the practice in 1981. Mr Sywak says he became acquainted with Mr Visnic and his Business Associates at that time, although Mr Visnic says that Mr Sywak's involvement commenced earlier. 7 On 9 June 1981, Mr Visnic and his Business Associates caused to be incorporated a further trading company, Auburn United Form Work Pty Limited ("Auburn"), and on 11 August 1981, Auburn United Concrete Pty Limited ("Concrete"). 8 Donovi was incorporated on 22 August 1984. According to its 1991 annual return, it by then had six shareholders, Frank Juracic holding one share, Robert Kusic two, Mr Sywak one, Milos Vasic one, Slavko Zubovic one, and Mr Visnic one; Mr Visnic having apparently acquired his share in the course of that year. The directors were Frank Juracic, Robert Kusic, Mr Sywak and Slavko Zubovic. Mr Sywak and Robert Kusic were principal executive officers from 3 September 1984. The registered office was the office of Mr Sywak's accountancy practice. At least by the early 1990s, Donovi did not trade, but held valuable land at 406 Old Northern Road, Castle Hill, which could be developed. 9 Adellos was incorporated on 30 November 1984. According to its 1990 annual return, it had seven issued shares, held one each by Robert Kusic, Peter Kusic, Milos Vasic, Mr Sywak, Frank Juracic, Slavko Zubovic, and Mitshell (NSW) Pty Limited. Mr Visnic acquired Mitshell's share in 1991. From 29 January 1985, Adellos' principal executive officers were Robert Kusic and Mr Sywak. The directors were Frank Juracic, Peter Kusic, Robert Kusic, Mr Sywak, Milos Vasic and Slavko Zubovic. Adellos did not trade, but held property at 1005 Cobbitty Road, Narellan. 10 Parlamartu was incorporated on 5 March 1985. Mr Sywak says that the Business Associates were concerned with exposure to potential liability, and that he suggested that they transfer the land at Redfern Street in Wetherill Park, which was in the partners' own names, and the equipment, also in the Business Associates' own names, to another company. Mr Sywak arranged for the Business Associates to acquire Parlamartu for this purpose, and for the land at Redfern Street and the equipment to be transferred to Parlamartu. Mr Sywak set up loan accounts for the partners in Parlamartu as a result of Parlamartu acquiring the land and equipment from the Business Associates. 11 By 1990, the shareholders in Parlamartu were Peter Kusic, Robert Kusic, Milos Vasic, Slavko Zubovic, Frank Juracic, Mr Sywak and Mitshell; Mr Visnic appears to have acquired Mitshell's share in 1991. Mr Robert Kusic was principal executive officer from 1985 to 1995. The 1991 annual return reveals the directors to be Frank Juracic, Robert Kusic, Slavko Zubovic and Mr Visnic, the latter said to have been appointed on 30 December 1991. Parlamartu owned the plant, vehicles and equipment, including the formwork, used in the businesses. 12 In addition to these jointly held companies, Mr Visnic separately operated his own group of four companies known as the "Sky Group", which engaged in various formwork businesses independently of the joint companies. According to Mr Visnic, tensions arose between the Business Associates in 1991, when there was an economic downturn and reduction of available work, and it is likely that the circumstance that Mr Visnic was separately conducting the "Sky Group" businesses, for his own benefit, contributed to those tensions. Donovi 13 Mr Sywak says that in about 1991 or 1992, Donovi needed to borrow between $600,000 and $700,000 from Metway to pursue the subdivision and development of its Castle Hill property, but only Mr Visnic and he were prepared to provide guarantees to secure that funding, and he and Mr Visnic agreed to acquire, from Juracic, Robert Kusic, Peter Kusic, Vasic and Zubovic, all of the shares held by them in Donovi, and to procure Donovi to allot such further shares as were necessary to result in Mr Sywak and Mr Visnic each holding one half of the issued shares. Mr Visnic's version, though somewhat different, is immaterially so. Donovi's 1992 annual return, signed by Mr Sywak as secretary on 15 April 1993, records the directors as Mr Sywak and Mr Visnic, and the shareholders as Mr Sywak and Mr Visnic as to four ordinary shares each. The 1993 annual return, signed by Mr Sywak on 31 December 1993, continues to record them both as directors and shows them as shareholders as to nine ordinary shares each. That remained the position in ensuing annual returns up to and including that for 1998, signed by Mr Sywak on 30 December 1998. The Jarika Transaction 14 In early 1988, Jarika, a company of which Mr Rocco Polito was a director, paid a $100,000 option fee for the right to purchase land at Parramatta, for price of $17 million, exercisable by 30 June 1988. Mr Polito asked Mr Visnic if he would like to be involved. According to Mr Polito, Mr Visnic said that he would speak to his Business Associates. Mr Polito said he approached Mr Visnic and his Business Associates because he classed them as friends, and that from May 1988 there were ongoing meetings between him and each of the partners of AUFF about the transaction. The contribution required was $700,000, or possibly $800,000. 15 Mr Sywak says that he met Mr Visnic and Bob Kusic at Kusic's office in Baulkham Hills, when mention was first made of needing $700,000 for the purchase. Mr Sywak says it was to be a loan from Parlamartu to Mr Visnic. He says Parlamartu drew a personal cheque to purchase a bank cheque for the purpose. Mr Sywak says a further $100,000 was provided by AUFF. 16 Mr Kusic says that he went to the Auburn branch of Westpac with Mr Sywak to obtain a bank cheque from Parlamartu's funds, through Barry Brooker, their bank manager, being part of the $800,000 required to be contributed. 17 The evidence of Barry Brooker, the bank manager at Westpac Auburn through whom the bank cheque of $700,000 was obtained, is to the effect that to obtain a bank cheque required a requisition by the customer which was then approved by the relationship manager and taken to the back office to be issued. 18 Exercise of the option and exchange of contracts took place at the offices of Blake Dawson Waldron on 30 June 1988. According to Mr Polito, amongst those present were himself, Mr Visnic and Mr Sywak. Mr Sywak denies that he was there. Mr Visnic produced a bank cheque for $700,000. Mr Polito had a conversation with Mr Visnic, who said that AUFF was contributing the $700,000. Mr Polito made a note at the time, which records that AUFF was contributing $700,000 (and a further $100,000). 19 The purchase apparently collapsed in about December 1998. Proceedings by Jarika to recover the deposit were abandoned in or about late 1990. 20 Mr Visnic says that the transaction was one on behalf of the Business Associates, and not a personal borrowing by him from Parlamartu. He points to the financial statements of Parlamartu up until and including 1994, which showed no indebtedness on his behalf to Parlamartu. 21 Mr Kusic, who is Mr Visnic's uncle, also gave evidence to the effect that the transaction was one on behalf of the Business Associates. He described the transaction as a joint venture between AUFF, Parlamartu and Jarika, involving the purchase of a property in Parramatta from which, if successful, the Business Associates would profit; Mr Visnic used the moneys in Parlamartu for that purpose, but the deal fell through and the money was lost. He denied that he had ever had any other view. But it is clear enough that in late 1995 he did. Not only did he sign and verify financial statements compiled in 1995, which showed "M & N Visnic" as indebted to Parlamartu for $690,000 approximately, but he participated in meetings that sought to amend the articles of Parlamartu so as to attach a lien to shares, specifically for the purpose recovering this supposed debt from Mr Visnic. He told Mr Hor, solicitor, of Champion & Partners who were acting for the Business Associates, that the debt had been included in that year's financial statements by Mr Sywak. He did not handle this part of his cross examination at all well – unsurprisingly, since the documents told a story quite inconsistent with his assertion that he had never believed that Mr Visnic was indebted to Parlamartu. He sought to explain what the documents recorded as "the only way out", namely that the only way he could get out of the company and away from partners with whom he no longer wished to be associated was "to go through the procedure and get Charlie [Mr Visnic] out of the share of sale. That is why we had to lean on him to agree on that, and in the meantime, that anybody else that owed money to companies was wiped clean". Demanding the $700,000 was part of "leaning" on him. 22 Although Mr Kusic denied it, there is force in Mr Stevenson SC's submission that he was determined to be of as much assistance to Mr Visnic's case as he could. He repeatedly stressed that the 30 April 1996 agreement was one which involved all debts being extinguished, even when it was not relevant to say so; and he was unduly reluctant to make reasonable concessions which documentary material compelled. 23 Notwithstanding this, I am inclined to accept that the $700,000 was not, at least originally, regarded as a loan to Mr Visnic, and was not intended to be such. Mr Polito's evidence was not the subject of serious challenge, and suggests that it was not Mr Visnic personally but him and his associates in AUFF who were participants in the venture. So does his contemporaneous note, recording that AUFF was the contributor of the $700,000. Mr Booker's evidence tells against the cheque having been obtained via a personal cheque being first drawn, in the manner alleged by Mr Sywak's. The absence of any reference in the accounts to any debt from Mr Visnic until 1995 is telling. The 1995 dispute 24 Relations between the Business Associates and Mr Visnic deteriorated, and according to Mr Visnic reached the point that he and the others were not on speaking terms (although, in his oral evidence, he suggested that this was only because there was nothing to talk about). Mr Visnic had commercially gone his own way, and there was no relationship worth speaking of between him and the Business Associates. It is clear enough that they wanted him out, and that relations were poor. At least by the second half of 1995, the Business Associates were asserting that Mr Visnic was personally indebted to Parlamartu for the $700,000 advanced for the Jarika project. The Business Associates threatened to amend the articles of association of Parlamartu, to impose a lien on shares for all debts due to the company – the existing articles provided for a lien only on shares that were not fully paid, and there is no reason to suppose that Mr Visnic's share was other than fully paid. In turn, Mr Visnic sought to evade the proposed lien by transferring his share to Mr Sywak. 25 Mr Sywak acted as an intermediary between Mr Visnic and the Business Associates. Mr Visnic believed that Mr Sywak always told him what was happening on the other side and what the Business Associates were saying. Champions, solicitors of Parramatta, acted for the Business Associates. Mr Sywak recommended that Mr Visnic see a solicitor, Stephen Polczynski, then of Balkan & Lewis, but who now has the conduct of this matter for Mr Sywak. 26 In connection with the proposed transfer of his share to Mr Sywak, in order to evade the threatened lien, on 23 August 1995 Mr Visnic signed what appears to be a resolution of directors of Parlamartu referring to a proposed transfer of one share in that company to Mr Sywak. Mr Visnic says that before he signed that document, he had a conversation with Mr Sywak, at the office of Stephen Polczynski, in which Mr Sywak said that a way to get around the Business Associates getting a lien over Mr Visnic's share in Parlamartu was that Mr Sywak could hold the share on trust for Mr Visnic: "You can transfer that share in trust to me", to which Mr Polczynski replied: "It might work" – as a means of avoiding the proposed lien. 27 Mr Sywak says that he had a conversation with Mr Visnic where Mr Visnic asked Mr Sywak if he could take Mr Visnic's share in Parlamartu as the Business Associates were claiming a lien over his share. Mr Visnic asked him whether that would be a way around the lien and Mr Sywak says that he answered it might be, but they would have to get advice from a solicitor. 28 On 1 September 1995, Bob Kusic met with Brian Hor, solicitor, of Champions, who acted for the Business Associates. Mr Hor's note refers to a $700,000 loan to Mr Visnic. 29 At about this time, a proposal emerged to buy out the Business Associates; the minutes of a meeting of the directors of Parlamartu held on 15 December 1995 resolved to reject an offer put to the company by Mr Sywak to purchase its assets for $1.25 million, as "insufficient having regard to the value of the assets". At the same meeting, the directors of Parlamartu resolved to hold a general meeting to consider variation of the Articles to permit the company to have a paramount lien over shares registered in the name of a member owing a debt to the Company. 30 On 18 December 1995, Mr Visnic sent a letter to the secretary of Parlamartu, recording that he was selling his share to Mr Sywak. The directors declined to register the proposed transfer. Mr Sywak says that he recalls seeing, in about January 1996, a letter from Champions by which Mr Visnic was advised that the remaining partners refused to register the share transfer from Mr Visnic to Mr Sywak. On 23 January 1996, a general meeting of Parlamartu resolved to amend the Articles to give the company a paramount lien over issued shares. Mr Visnic's solicitors, then Balkan & Lewis, wrote to Parlamartu, denying the alleged indebtedness. 31 The Business Associates instructed Mr Sywak to include the loan in the accounts. In financial statements of Parlamartu prepared by Mr Sywak and purportedly adopted at a directors' meeting on 23 December and a general meeting on 27 December 1995, a debt due from M & N Visnic of $690,000 was recorded. Although it was put to Mr Visnic that he was present at those meetings, as the minutes suggest, I do not accept that he was, and I do not accept that any such meetings were held. 23 December 1995 – two days before Christmas – was a Saturday. 27 December was two days after Christmas. Mr Sywak's office, which the minutes record as the place of the meeting, was as a matter of practice closed over the Christmas period. There is no evidence from any witness that there was any such meeting. Moreover, other directors' meetings were being held in December (albeit a little earlier, on 20 December) and in January/February, and none of them refer to these alleged meetings. 32 On 6 February 1996, Mr Visnic wrote to the secretary of Parlamartu, requisitioning a meeting of directors to obtain, inter alia, "full details… of a debt the directors of Parlamartu … allege Mr Visnic owes to the company". On 9 February 1996, Mr Robert Kusic discussed with Brian Hor "how to sue Visnic for what he owes" Parlamartu. On 15 February 1996, Champions wrote to Parlamartu's managing director, concerning the requisitioned meeting and the proposed proceedings against Mr Visnic. Towards the April 1996 transaction 33 Progress towards instituting proceedings against Mr Visnic was halted on about 8 March 1996. In the Champions file there is a letter bearing that date, addressed to Mr Visnic, enclosing a Notice of Meeting of members of Parlamartu and providing, inter alia, for the removal of Mr Visnic as director. It bears a handwritten notation of a call to Bob Kusic, "New Offer made," and "Hold off sending". 34 According to Mr Visnic, in early 1996 Mr Sywak suggested to Mr Visnic that they could together buy out the Business Associates' shares in Adellos and Parlamartu. Mr Visnic agreed. Mr Visnic says Mr Sywak negotiated on his behalf with the Business Associates in relation to the purchase of the Business Associates' shares in Adellos and Parlamartu. Mr Visnic never attended any meetings nor had any conversations with the Business Associates in regard to the sale of their shares, and any information Mr Visnic received came from Mr Sywak. Mr Sywak spoke to the Business Associates and then reported back to Mr Visnic. Mr Visnic and Mr Sywak met at Mr Sywak's offices when necessary, so that Mr Sywak could update Mr Visnic on progress and developments. Mr Sywak, in his affidavit evidence, did not deny this. 35 A file note in the Champions file dated 13 March 1996 records a phone call from Bob Kusic, advising that John Boxsell solicitor "is drawing up contracts …". Mr Boxsell was a solicitor, of Williams Palmer Noss, who had acted in the past for Mr Visnic, though not for Mr Sywak; it seems that Mr Visnic introduced Mr Sywak to him. 36 Mr Sywak says that in March or April 1996 he had a discussion at his offices with the Business Associates, with a view to Mr Sywak acquiring their shares in Parlamartu and Adellos, in which he outlined the amount that each partner could hope to receive on several bases, including, if Mr Visnic were relieved of any obligation to repay debt to Parlamartu and "walked away" taking no moneys, then each of the six shareholders (other than Mr Visnic) would receive about $200,000 (based on valuing Parlamartu's property at $1.2 million); but on the assumption that Mr Visnic repaid the amount claimed by Parlamartu and was entitled to distributions in accordance with his shareholdings in Parlamartu and Adellos, then each of the partners, including Mr Visnic, would receive about $260,000. According to Mr Sywak, Mr Juracic summarised the position: given that Mr Visnic could not pay anything, it was best to sell Parlamartu's property at Wetherill Park for $1.2 million, and for each shareholder (not including Mr Visnic) to receive $200,000. Mr Sywak said that the best way to achieve what Mr Juracic wanted was for the Business Associates to sell their shares in Adellos and Parlamartu to Mr Sywak, who would take over the company, dispose of the property, pay the tax and works things out so that each of the shareholders other than Mr Visnic to receive $280,000 tax free, as the transaction could be structured as repayments of their loan accounts. Mr Sywak said that the Wetherill Park land owned by Parlamartu could be sold for $1.1 million, with each shareholder being paid $220,000 and being owed $60,000. Mr Juracic said that he wanted Mr Visnic to guarantee the payments to the Business Associates. 37 Mr Visnic says that in about mid-April 1996, he and Mr Sywak had a conversation in which Mr Sywak suggested that together they "buy the partners out equally". Mr Sywak had the conduct of the negotiations. According to Mr Visnic, the first offer – as relayed to him by Mr Sywak – was that each of the five Business Associates would be paid $250,000. Mr Visnic says Mr Sywak told him that Bob Kusic also wanted any agreement to be on the basis that it was a term of the agreement that all other debts and loans from all the companies that they operated together by any of the partners would not be owed any more. 38 Mr Visnic says that a day or two later he had another meeting with Mr Sywak, when Mr Sywak told him that the real problem was that Slavko, Kusic and Milos Vasic would not sell their shares in Parlamartu to Mr Visnic, because they were still angry about the money that was lost in the Jarika transaction. Mr Sywak said that while they refused to sell to Mr Visnic, he could get the Business Associates to sell all their shares in Parlamartu to Mr Sywak, and he would hold half on trust for Mr Visnic; in that way the Business Associates would not know that Mr Visnic was acquiring any of their shares in Parlamartu. Mr Visnic agreed to this proposal, and trusted Mr Sywak to hold the shares on his behalf. 39 A few days later, Mr Visnic says that Mr Sywak came to see him and said that all the partners would accept $280,000 each in respect of their shares, which would require a total of $1.4m to be paid to the Business Associates for their shares in Parlamartu and Adellos. Mr Visnic says that he discussed with Mr Sywak that there was not enough money to pay out the Business Associates. Sale of the property owned by Parlamartu at 10 Redfern Street, Wetherill Park would only raise $1.2m. However, Mr Visnic says that he just wanted the deal to go through, as the fighting with the Business Associates was causing distress to all families concerned. According to Mr Visnic, Mr Sywak told Mr Visnic that he would "get John Boxsell to draw up the documents." 40 According to Mr Sywak, he had discussions with Mr Visnic between February and April 1996 about resolving the disputes and shareholdings in Adellos and Parlamartu, in which he explained his discussions with the Business Associates and conveyed a proposal that Mr Visnic "can fall out of the picture completely as far as Adellos and Parlamartu is concerned. That is, you won't owe anything and nothing will be owed to you. It will be a clean break for you". He says that Mr Visnic assented to this proposition. Mr Visnic indicated a preference to have "nothing further to do with them or the companies", agreed to "not have any shares in the companies" in return for the discharge of his indebtedness to Parlamartu, and also agreed to hold his share in each company on trust for Mr Sywak – after Mr Sywak indicated that the Corporations Law and the Articles required that there be two shareholders and directors. Mr Sywak denies that he ever said to Mr Visnic anything to the effect that he would hold shares in Parlamartu, or Adellos, on trust for him. 41 Mr Sywak says that Mr Juracic told him in about April 1996 that the Business Associates wanted nothing to do with Mr Visnic and wanted to be paid on settlement, though Bob Kusic and Frank Juracic were more flexible and would agree to a deferred payment with security, and that Mr Visnic must guarantee Mr Sywak's obligations. Mr Sywak subsequently informed Mr Visnic that they would have to enter into a loan or guarantee agreement with Bob Kusic and Frank Juracic in order for the purchase of the shares in Adellos and Parlamartu to proceed. 42 On 19 April 1996, Mr Hor received a phone call from John Boxsell, who confirmed that the shares in both Parlamartu and Adellos were to be sold. 43 On 24 April, Mr Boxsell, claiming to act for Mr Sywak, Mr Visnic, Parlamartu and Adellos, submitted to Champions two draft Deeds, one relating to the three shareholders who were to be paid out in full, and the other to the two who were to provide some vendor finance. The first provided for the transfer of the Business Associates' shares in Parlamartu and Adellos to Mr Sywak. The second provided for the transfer of their shares in Parlamartu to Mr Sywak and Mr Visnic, and their shares in Adellos to Mr Sywak. From annotations on the draft in the Champions file, it seems that Mr Hor observed the inconsistency and set out to resolve it. A file note of Mr Hor dated 26 April 1996 records a discussion with "Kusic, Juracic, Sywak", in which it was confirmed "Sywak is getting all the shares, nothing to Milan". 44 Mr Hor redrafted the two Deeds and sometime on 30 April forwarded them to Mr Sywak, with a request that he and Mr Visnic initial and sign them in the places marked. 45 Mr Visnic says he did not authorise Mr Sywak to offer any deal to the Business Associates whereby Mr Visnic would walk away from Parlamartu or walk away from Adellos, or accepted any liability to pay Parlamartu the amount of $700,000. 46 Mr Robert Kusic confirms, substantially, Mr Visnic's version. Mr Kusic is Mr Visnic's uncle. He has lent Mr Visnic money to fund this litigation, despite the earlier falling out between the early 1990s and 2000. He says that by about 1995 all of the Business Associates except Visnic wanted to sell AUFF and the property at Cobbitty, but Mr Visnic and Mr Sywak wanted to take over the company and run it for themselves. He says that in early l995 he decided he wanted to end his business relationship with the Business Associates as their relationships had become unhappy. There was also annoyance that Mr Visnic had set up and was running his own separate companies. He says that in about mid-1995 Mr Sywak and Mr Visnic approached him about taking over the companies and acquiring the Business Associates' shares. He says that Mr Sywak said: "Charlie [Visnic] and I want to continue to operate the companies and want you all to sell your shares to us. We are going to run the companies equally together". Eventually, the parties agreed to sell to Mr Sywak and Mr Visnic, and retained Champions to act for them, while Mr Sywak and Mr Visnic retained John Boxsell of William Palmer Noss. While he does not recall all the conversations, he recalls that each of the partners was to be paid $280,000, and any loan accounts cancelled. Mr Juracic and Mr Kusic agreed that instead of receiving their $280,000 upon sale, they would advance it back to Parlamartu to be repaid within two years (at least those were the terms so far as Mr Kusic was concerned; Juracic was to receive $100,000 on settlement and lend back $180,000). The others all received $280,000 on settlement, and transferred their shares in Parlamartu and Adellos for $10.00 per share. Mr Kusic says that he did not realise that the deed for repayment of loans and transfer of shares did not contain a clause confirming that all loans were forgiven or discharged. 47 The transaction was settled by two deeds of 30 April 1996. 48 By Deed for Repayment of Loans and Transfer of Shares, each of Mr Peter Kusic, Mr Zubovic and Mr Vasic agreed to transfer all their shares in Parlamartu and Adellos to Mr Sywak, who agreed to purchase them for $10.00 per share on 30 April 1996. Parlamartu and Adellos agreed to indemnify each of the outgoing shareholders against any past, present and future actions, costs, damages or other claims or liabilities in respect of which the shareholders might have been liable in their capacity as shareholders, directors or other officers of those companies. Parlamartu agreed to pay to each of those shareholders or as directed the sum of $280,000 on 30 April 1996, upon which each of those shareholders released the companies and their present and future directors and officers from all claims except any in respect of which they were to be indemnified under the deed. Mr Sywak and Mr Visnic each jointly and severally guaranteed all the obligations of Mr Sywak and Parlamartu and Adellos under the deed, including but not limited to repayment in full to each of the shareholders of the loan accounts and performance of the indemnities. 49 By deed for deferred repayment of loans and transfer of shares, each of Mr Robert Kusic and Mr Juracic agreed to transfer their shares in Parlamartu and Adellos to Mr Sywak, who agreed to purchase them for $10.00 per share on 30 April 1996. Each of those shareholders agreed to resign as directors and other officers of the companies immediately upon transfer of their shares. The companies undertook to indemnify each of them against any past, present and future actions and claims in their capacity as shareholders, directors or other officers. Parlamartu was to pay Mr Juracic the sum of $100,000 on 30 April 1996. Parlamartu was to repay the balance of the loan owing to Mr Juracic ($180,000) and the whole of that owing to Mr Kusic ($280,000) by no later than 30 April 1998 (a total of $460,000). Parlamartu was to pay interest at 8.5% per annum to each of Mr Kusic and Mr Juracic on the moneys owing to them. Adellos was to secure the obligations of Parlamartu and itself by granting a second mortgage of property owned by it in Cobbitty Road Narellan to Mr Juracic and a third mortgage to Mr Kusic. Mr Sywak and Mr Visnic jointly and severally guaranteed all of the obligations of Mr Sywak, Parlamartu and Adellos under the deed. 50 In connection with the settlement, at a shareholders extraordinary meeting of Adellos and Parlamartu on 30 April 1996, F. Juracic, R. Kusic, P. Kusic, M. Vasic and S. Zubovic resigned as directors, and the transfer of their shares to Mr Sywak was approved. Mr Visnic, having tendered his apology, was not present in person, and Mr Sywak held his proxy. Adellos granted mortgages to R. Kusic and F. Juracic securing repayment of $280,000 and $180,000 respectively. 51 Mr Visnic says that he did not consent to the transfer of his one share in each of Parlamartu and Adellos to Mr Sywak and did not execute any share transfer or other documentation to effect such a transfer. There is no evidence that there was any such transfer. 52 Mr Sywak says that the transaction was settled at the offices of Champions at 2.00 pm, in the absence of Mr Visnic. 53 Mr Visnic says that the transaction was settled late on 30 April at the Castle Hill office of his solicitor John Boxsell, and that as well as Mr Boxsell, Mr Visnic and Mr Sywak, the Business Associates were present but unrepresented by their solicitor. He supposes, but did not actually see, that cheques payable to the Business Associates were present. He cannot actually confirm that any documents were handed over from one party to another. He has a recollection of being there until late – perhaps 6.00 pm – because some documentation was not yet ready. Mr Visnic says that the only information he ever received about the agreement and the drafting of the documents required for the purchase of the shares in Adellos and Parlamartu from the Business Associates was through Mr Sywak. Mr Visnic thought that John Boxsell was technically acting for him, but Mr Visnic did not speak to Mr Boxsell about the transaction at all; his only contact was with Mr Sywak, who said that he would organise for Mr Boxsell to draw up all the agreements and would let Mr Visnic know when he was needed to sign anything. Mr Boxsell never contacted Mr Visnic or spoke to him. Mr Visnic said he was asked to attend at John Boxsell's office on 30 April 1996 with the Business Associates, along with Mr Sywak and Mr Boxsell. This was the first time Mr Visnic saw Mr Boxsell in relation to the transaction. Mr Visnic says that he did not read any of the documents presented that day, and that Mr Boxsell did not show him any documents or speak to him about what was in the agreements. Mr Visnic says that Mr Sywak and Mr Boxsell handed documents to him and Mr Sywak said, "Just sign here", pointing to the appropriate place in the documents for the parties to sign, where there were crosses in those places where a signature was required. Mr Visnic's recollection is of there being "a lot of documents" and that the whole process was quite rushed. Mr Visnic thought that since Mr Sywak had organised everything and the Business Associates were happy to sign, that he would sign the documents. He says that at that time, he completely trusted Mr Sywak to honour the agreement that they had reached and relied upon him to do what was agreed. 54 Mr Kusic says that after a short attendance at Champion's office at about 2.00 pm on 30 April, the transaction was settled at Mr Boxsell's office at about 6.00 pm. Mr Kusic says that all the partners, as well as Mr Sywak and Mr Visnic, were there. He says he had never been shown any documents or signed anything before that meeting, but that there was a bundle of documents on the table that were not explained to him nor read by him. He says that he was passed what he recognised to be share transfer forms, and that Mr Sywak said to Mr Visnic, in front of Mr Juracic, Mr Vasic, Mr Zubovic and Peter Kusic: "Just transfer your shares over to me. You can trust me to your shares". He says that in the presence of John Boxsell, Mr Visnic said to him: "It is best for me not to hold the shares in my name because of these other problems I'm having". Mr Kusic says that he assumed that there was some arrangement between Mr Visnic and Mr Sywak about this and that he signed all the documents passed to him but did not read them nor notice the terms of the deed. 55 The documentary record strongly favours the view that settlement took place at the office of Champions at Parramatta, in Mr Visnic's absence, at 2.00 pm on Tuesday 30 April 1996. The deeds were exchanged, and those of the Business Associates who were to receive immediate payment received their cheques. Share transfers in favour of Mr Sywak were handed over. As the mortgages to be given by Adellos had not been executed by Mr Visnic, an undertaking was provided that they would be executed. A possible explanation for the confusion is that undertakings were required of Mr Boxsell to obtain Mr Visnic's execution of mortgages, and it may be that the events late on 30 April at Mr Boxsell's office involved the execution of those mortgages. 56 On 6 May 1996, Champions wrote to the Business Associates, confirming the settlement of the share sale in Parlamartu and Adellos and the related mortgages. There were no further demands for Mr Visnic to repay his alleged indebtedness of $700,000 to Parlamartu. Mr Sywak and the solicitors retained all of the documents signed by Mr Visnic on 30 April 1996, and Mr Visnic was not given a copy of anything. 57 According to ASIC's records, Mr Sywak and Mr Visnic were appointed directors of Adellos and Parlamartu with effect from 30 April 1996. On 1 May 1996, an additional (eighth) share in each of Parlamartu and Adellos those companies was allotted to Mr Visnic. Mr Sywak signed the Return of Allotment form lodged with ASIC. Mr Sywak says that the reason for the allotment was that he had not changed the articles of association of the company to allow only one shareholder. 58 The 1996 Annual Return for Adellos, signed by Mr Sywak, shows Mr Sywak and Mr Visnic each holding one share of a total of seven issued shares, the Business Associates holding the other five; while the 1996 return for Parlamartu shows Mr Sywak holding six and Mr Visnic holding one of seven issued shares. However, the 1997 annual return for Adellos, executed by Mr Sywak on 20 October 1997 shows Mr Visnic and Mr Sywak each holding four of a total of eight issued shares. The 1997 return for Parlamartu showed Mr Sywak holding six and Mr Visnic one of seven issued shares. Those positions were also reflected in the 1998 returns of both companies. Castlove 59 According to Mr Visnic, he and Mr Sywak became associated in Castlove in May 1996. Mr Sywak and Mr Visnic were appointed directors on 1 May 1996. According to the 1996 annual return, they were the only directors and each held one of two issued shares. That position was reflected in the 1997 and 1998 annual returns. 60 Mr Sywak says that they agreed to acquire the company for the acquisition of a property at 65 Elizabeth Street, Wetherill Park, which was used as a storage yard for Parlamartu's equipment. This property was acquired for $310,000 in late 1996 or early 1997, with a loan of $30,000 from Mr Sywak. Castlove received rent from Parlamartu in return for use of the yard. The Events of 1999 61 Mr Visnic says that following 30 April 1996 he and Mr Sywak continued to run the companies together, though it was left to Mr Sywak as the accountant for the companies to attend to lodgement of documents with ASIC and "allotting any necessary shares … so that we shared the companies equally". According to Mr Sywak, Mr Visnic played no further role in the affairs of Adellos or Parlamartu. 62 Mr Visnic says that by 1999 he was again on speaking terms with his uncle Robert Kusic and with Frank Juracic. 63 Mr Visnic says that in the course of a project on 1 Aurora Place, in which his company Sky Contracting was involved, a dispute arose with Civil & Civic, which proved costly to Sky Contracting. The dispute was settled in April 1999, following which Sky Contracting withdrew from the project. Mr Visnic says that at about the beginning of May 1999 he went to see Mr Sywak at his Homebush office, said that the issue with Civil & Civic had been resolved and that there were no further problems, and that Mr Sywak suggested that if he had any further problems he should resign as a director of the Visnic/Sywak companies in order to ensure that his problems with Civil & Civic and his connection with Aurora Place did not affect AUFF's chances of gaining further work from them. 64 Mr Visnic says that he did not really see how his dealings through Sky Contracting with Civil & Civic would affect AUFF's capacity to obtain further work, but that he was not concerned about resigning as a director as he had previously been involved with and run several companies without being a director. As Mr Sywak was the accountant for the companies and he could give him instructions, he felt that he still retained control. Mr Sywak had his employee Gail Fraser prepare a resignation form as a director of AUFF and she brought the document upstairs. Mr Sywak then asked her to bring up "the other documents" which she did, bringing a bundle of documents about two inches thick. Mr Visnic was handed a form of resignation as a director for AUFF but did not sign it and just placed it on the table. He was also handed a resignation as a director from Concrete. He says that Mr Sywak suggested that as he was a director and everyone in the industry knew it, it made the company vulnerable. Mr Visnic said that this did not make sense to him, but that he was not worried about resigning as a director from AUFF or from Concrete because they were both just shelf companies. Mr Visnic says that Mr Sywak then handed over share transfer forms for all the companies. He says he asked: "What are all these other forms?", and then without an answer: "Leave all that for later". Mr Visnic says that he intended to leave the whole matter for another day, and did not understand why Mr Sywak wanted him to do it and was not interested in it. He wanted time to think about what was going on. He says that he would probably have signed resignation forms as director, but that the share transfer forms made him suspicious. He says that he left the office at about 8.00 pm having been there for two or three hours, and did not sign any documents at all. 65 Mr Visnic says that in June and July 1999 he was very busy with his personal businesses and had not spoken to Mr Sywak since the visit to his office in May. He says that in June or July he received a call from Mr Sywak at his office in Granville, and that Mr Sywak then, at his invitation, arrived at his office. Mr Sywak repeated that it was necessary to cut Mr Visnic's connection with AUFF because of its possible effect on future work with Civil & Civic, but did not mention anything about share transfers. Mr Visnic agreed to resign as a director from AUFF, Concrete, Donovi, Adellos, Castlove and Parlamartu, and signed typed letters of resignation. Mr Visnic says he was not sure why Mr Sywak was so adamant that it was the best course, but trusted him. 66 A few weeks later Mr Sywak telephoned him again and said that he had not signed everything correctly. He again came to Mr Visnic's office, bringing a resignation as secretary for Castlove, which he signed. Again, there was no mention of share transfers. Mr Visnic says that at this time he was busy with his own affairs and was completely relying on Mr Sywak to conduct the company affairs. 67 Mr Sywak's version is, of course, quite different. His initial version was that in about 1999, he had a discussion with Mr Visnic in which he said that as directors they were required to guarantee the refinancing of Castlove's obligations to St George, and that Mr Visnic should contribute the same amount that Mr Sywak had contributed to Castlove. Mr Visnic replied that he was having problems with his other companies, did not want to give personal guarantees, and did not want to pay any money, to which Mr Sywak responded that if Mr Visnic was not prepared to sign as guarantor he should resign as a director and shareholder of the company. He added that the shares were not worth anything, because the company did not have any equity. Mr Sywak says that Mr Visnic agreed to this, and that Mr Sywak added that he would prepare the documents for Castlove, and also for resignation from Adellos and Parlamartu since those companies could now have a single director and shareholder. 68 In a recent affidavit, Mr Sywak has elaborated. He says that when in the United Kingdom in or about February 1999 he received a mobile telephone call from Mr Visnic, who said that Federal Police had arrested another formwork operator for not remitting group tax, and that he was also in arrears and was concerned. Mr Sywak says that as a result he became concerned about his association with Mr Visnic and had some conversations with Mr Visnic concerning the shareholdings in the companies. He says that he had a discussion concerning the transfer of Mr Visnic's share in Donovi, to the effect that he said: "We must tidy up the shareholding in Donovi. If you transfer your shares in Donovi to me, then this will remove my association from you. I may also have a conflict of interest in that I act for various companies where your wife is a director. It may be better for you to take your work away from my practice. The shares in Donovi have no value at the moment and you have potential problems regarding your indebtedness to the tax office. It would be better for both of us if you transferred your shares in Donovi to me", to which Mr Visnic is said to have replied: "That is fine with me. Prepare the documents to transfer my shares in Donovi to you". 69 The documentary evidence includes a written minute of acceptance, signed by Mr Visnic, of short notice of meeting to be held on 1 May 1999 for Castlove and Donovi; minutes of Extraordinary General Meetings purportedly held on 1 May 1999 of Castlove, Adellos and Donovi resolving to amend the articles to permit the company to have one shareholder only; written notices of resignation by Mr Visnic as a director and secretary of each of Castlove and Donovi dated 1 May 1999 (save for the resignation as director of Castlove which is dated 24 June 1999), and minutes of directors' meetings of Castlove and Donovi, signed by Mr Sywak, purporting to record acceptance of Mr Visnic's resignation as director and secretary, and approval of the transfer of Mr Visnic's share in each of those companies to Mr Sywak. Mr Visnic says that there were no such meetings on 1 May 1999, and that he never signed transfers of his shares to Mr Sywak. 70 The ASIC records indicate that Mr Visnic ceased to be a director of Adellos on 1 May 1999. The 1999 and subsequent annual returns show Mr Sywak as the sole director and as sole shareholder holding eight issued shares. The ASIC records show also that Mr Visnic ceased to be a director of Parlamartu on 1 May 1999, and the 1999 annual return shows Mr Sywak as sole director and sole shareholder holding all seven issued shares. The ASIC records show also that Mr Visnic ceased to be a director of Castlove on 1 May 1999. The 1999 annual return shows Mr Sywak as the sole director and sole shareholder holding two issued shares. [The 2000 return shows Messrs Sywak and Visnic as directors, both holding one of two issued shares; but this was not prepared by Mr Sywak but by Kampfer & Co, Mr Visnic's accountants]. The ASIC records also show Mr Visnic ceasing to be a director of Donovi on 1 May 1999, and the 1999 annual return shows Mr Sywak as the only director and sole shareholder, holding all eighteen issued shares. Mr Sywak lodged all the relevant ASIC forms. 71 No share transfers have been produced, despite repeated requests, subpoenas and notices to produce. 72 Mr Sywak's affidavit evidence was that he did not have an independent recollection of the meetings of 1 May 1999 taking place, though he gave some evidence that his general practice was to read aloud the proposed minutes and seek assent from those present. He said that he has been able to locate the various minutes, notices and resignations, but not any share transfers. He said that he could not recall whether share registers were maintained in respect of any of the four companies; in any event, he could not now find or produce them. I cannot accept that Mr Sywak would not recollect these meetings, if they had in fact occurred: this was no formal; meeting in which he was but the accountant, but a meeting in which he bought out his partner. 73 In cross-examination, Mr Sywak claimed "an actual recollection" of the meeting on 1 May 1999. When referred to his statement: "I do not have an independent recollection of these meetings taking place", and asked which was true – "the affidavit evidence you have given or the evidence in court today?", he answered "What I have told the court". He agreed that that evidence was inconsistent with the affidavit. Next, Mr Sywak said he saw Mr Visnic sign a transfer of shares. He agreed that nowhere in his affidavit evidence did he say any such thing [which would have been a highly and obviously material fact to address], and that there was no proper explanation for that. Next, he claimed a recollection of having in his possession a signed share transfer in respect of Adellos and Parlamartu, and that he had all signed transfers in his possession at the same time. He accepted that it followed that his Affidavit of Discovery was necessarily false in respect of paragraph 3 and Schedule 2, identifying what documents he had in his possession at one time, and that he could not explain the inconsistency. While the omission of a document formerly but no longer in a party's possession might often be the result of innocent oversight, the provenance of the share transfers was so central in this case, and any contention that Mr Sywak had once had them in his possession so obviously critical, that it would require altogether too benign a view to attribute this to oversight; the more likely explanation is that the Affidavit of Discovery was correct, and the claim to have had them, recent invention. 74 Then, Mr Sywak said that he did not recall seeing Mr Visnic sign the share transfers – directly inconsistent with an earlier answer mentioned in the previous paragraph. He did not know how many transfers he recollected seeing Mr Visnic's signature on – he does not remember whether it was one, two or five share transfers. He said he would have had the signed transfers in his possession. He said he recalled seeing a share transfer for each of the four defendant companies, signed by Mr Visnic. But he says that he did not himself sign the share transfers (as transferee). Then, he recanted his evidence that the share transfers came into his possession at the same time as the 1 May 1999 meeting, and said that he did not know whether they came into his possession at that meeting, months before, or later. He said that when he received the share transfers, the signature of Mr Visnic had not been witnessed. They were never stamped, and never entered in a register. After 1999 75 The relationship between Mr Visnic and Mr Sywak deteriorated from late 1999 onwards. In late 1999, Mr Visnic instructed Mr Savio, solicitor, to conduct searches, which revealed the changes that had been effected that year. In mid-2000, Mr Visnic instructed new accountants, Kamper & Co, and asked them to write to Mr Sywak to ascertain what had happened with Mr Visnic's interests in the companies. 76 On 21 July 2000, Kamper & Co wrote to Mr Sywak, advising that they had been approached by Mr Visnic to take over his accounting and taxation requirements, and continuing: Further, in addition to the Sky group of companies, Mr Visnic has advised of his ownership interests in the following companies: Castlove Pty Limited Donovi Pty Limited Auburn United Concrete Pty Limited Parlamartu Pty Limited Auburn United Formwork Pty Limited, and Adellos Pty Limited In order to be able to form a complete opinion of Mr Visnic's shareholding interests please provide us with a copy of the latest ASIC returns of the above companies. We understand that Mr Visnic has resigned his position as a director but still retains his 50% interest in the above companies. 77 Mr Sywak replied by letter dated 19 August 2000, relevantly as follows: Regarding the matter of Mr M Visnic's holding, we advise that legal proceedings are on foot in the Supreme Court for the recovery in excess of $1 million of personal debts owing by Mr M Visnic. Furthermore, Mr M Visnic has failed to establish how he has acquired these holdings. 78 Kampfer & Co wrote a further letter dated 7 September 2000, relevantly as follows: Thank you for your letter of 19 August 2000. However, our letter of 21 July 2000 requested that we be provided with copies of the annual returns of certain companies which, we understand are partly owned by our client. The "indebtedness" of the Sky group of companies to your firm and/or your decision to take action in the Supreme Court for the recovery of debts owing by Mr Visnic are separate issues and not even remotely connected with our request. Mr Visnic has advised us that he is the holder of a 50% interest in the following companies: Castlove Pty Limited Donovi Pty Limited Auburn United Concrete Pty Limited Parlamartu Pty Limited Auburn United Formwork Pty Limited, and Adellos Pty Limited A recent review of the ASIC records has shown that our client is no longer a shareholder in those companies. Mr Visnic maintains that his shares were never transferred or assigned to other individuals. Since it is not uncommon for errors to occur in the lodgement documents of annual returns, we kindly request your assistance in order to have those issues clarified. We further advise that in the absence of a satisfactory reply within seven working days, we will be left with no other option but to request the ASIC (copy of letter enclosed) to look into the transfer of the shares and the validity of those transactions. 79 Mr Sywak replied on 22 September 2000, relevantly as follows: As previously advised in correspondence. That unless your client can substantiate how he acquired the shareholdings in the above companies, and show proof beyond any doubt the consideration he paid for the alleged acquisition, we are unable to make any further comments on this baseless claim. 80 On 31 October 2002, Mr Visnic's solicitors wrote to Mr Sywak, setting out in detail Mr Visnic's allegations and requesting explanation. Mr Sywak's solicitors replied on 14 November 2002, asserting that Mr Visnic had "failed to provide any detail of the consideration price paid by your client to allegedly acquire shares in Adellos Pty Limited and Parlamartu Pty Limited from the other shareholders of the company. No transactional evidence has been provided to substantiate your client's assertions". 81 Mr Visnic's solicitors wrote again on 21 November 2002, pressing for a substantive response. On 29 November 2002, Mr Sywak's solicitors replied, enclosing minutes and other documents pertaining to the purported 1 May 1999 meetings of Castlove and Adellos, the 30 April 1996 share transfers in Parlamartu and Adellos, and a minute of a directors' resolution of Parlamartu of 23 August 1995, by which it was said that Mr Visnic had agreed to transfer his shares in Parlamartu to Mr Sywak. [That, of course, was the transfer of one share, which never proceeded, to evade the threatened lien]. On 20 December 2002, Mr Visnic's solicitors disputed the authenticity of many of those documents. 82 The proceedings were commenced on 31 January 2003. On 6 March, Mr Visnic's solicitors issued notices to produce and served Mr Visnic's first affidavit. Credit of Mr Visnic 83 Mr Visnic's evidence was shown to be incorrect or unreliable in a number of respects. 84 First, he claimed that Mr Sywak did not inform him when the sale of the last five blocks of the Glenhaven land owned by Donovi occurred. It became apparent, from financial statements of the company, and from the instruments of transfer which he had signed, that this was not correct. He implausibly endeavoured to explain his position by asserting that it was not uncommon for deals to "fall through". 85 Secondly, he said that he never consented to the creation of mortgages by Adellos securing obligations under the deferred payment agreement. Not only do the terms of the deferred payment agreement signed by him contradict that, so too does the fact that his signature appears on the mortgages themselves. However, if his evidence be accepted, he did not read and may not have been aware of the contents and effect of those documents. 86 Thirdly, Mr Visnic separated from his second wife in about December 2002. Proceedings in the Family Court of Australia ensued, in the course of which a maintenance order was made against Mr Visnic. He made application to have that order reviewed, and swore several affidavits and financial statements (on 27 January and 3 November 2004, and 19 May 2005) in the course of those proceedings. In his evidence before me, he said that he believed throughout that period that he had a valuable interest in the four companies the subject of these proceedings. Yet he did not disclose any such interest in any of the financial statements in the family law proceedings. Nor did he disclose as expenditure, or as a liability, any costs incurred by him in the conduct of these proceedings. Mr Visnic instructed his accountants, Kampfer & Co, to write a letter of 22 December 2003 for the purpose of the Family Court proceedings, which stated that Mr Visnic had requested that Kampfer & Co express an opinion in relation to his "current status of office holdings" as they appeared in the ASIC records; Mr Visnic agreed he had given those instructions, and yet also agreed that, in these proceedings (which had, by then, been commenced), he was asserting that the ASIC records were wrong. Although his affidavit evidence in the Family Court proceedings included passages that cast responsibility for his poor financial straits upon Mr Sywak, he made no reference at all to his alleged entitlements to the shares in the defendant companies, or to Mr Sywak's alleged role in relation to those shares. 87 To my mind there is a powerful inference that – perhaps because it was disputed and he thought the interest dubious for that reason – Mr Visnic did not disclose his interests in the four defendant companies to the Family Court or to his wife, notwithstanding that he swore affidavits deposing to his appreciation that he was obliged to make a full and frank disclosure of his financial position. This is undoubtedly adverse to his credit. Nonetheless, it does not necessarily mean that the position disclosed by him in the Family Court was the truth and that alleged in this court, false. While it requires that his evidence be closely scrutinised, many men and women behave uncharacteristically in the context of divorce proceedings. 88 Fourthly, Mr Visnic's case that Mr Sywak had agreed to hold shares in Parlamartu and Adellos upon trust for him was articulated only after the Deeds of 30 April 1996 were produced on subpoena by Champions. As Mr Stevenson points out, the correspondence before proceedings were commenced contained no assertion of a trust in respect of the shares in Parlamartu. The summons that initiated the proceedings, filed on 31 January 2003, did not speak of any trust. Mr Visnic's original affidavit of 6 March 2003 did not speak of any trust in relation to the Parlamartu shares. On 31 March 2003, two months after the proceedings were commenced, a subpoena was issued to Champions for production of documents, which were inspected by Mr Visnic, in the course of which he saw the two deeds of 30 April 1996 and realised that he had signed a document recording the sale of shares in both Parlamartu and Adellos to Mr Sywak. Mr Visnic's second affidavit, of 18 March 2004, contains the first mention in these proceedings of the alleged arrangement for the shares to be held on trust for him by Mr Sywak. 89 Mr Visnic denies that he had forgotten about the 30 April 1996 deeds when he commenced the proceedings, but Mr Stevenson points out that they are referred to neither in his first affidavit nor in the pre-action correspondence. Mr Visnic accepted that when he read the deeds he realised that he had to explain how it could be that the shares were sold to Mr Sywak, but protested that his explanation – about Mr Sywak saying that he would hold shares in Parlamartu in trust for him was true. Mr Visnic added that he had previously told Mr Savio, solicitor, of the situation, but he did not mention that in his affidavit of 6 March 2003, and as Mr Stevenson put it: "It only pops up in your affidavit of 18 March 2004, after you'd seen the 30 April 1996 deeds produced by Champions in response to the subpoena". 90 Although there is some force in this criticism, Mr Visnic's assertion has consistently – including in the correspondence before action – been that the underlying agreement between him and Mr Sywak was that following the acquisition of the Business Associates' shares, they were equal shareholders in Parlamartu and Adellos. If it is accepted that he did not read the documentation on 30 April 1996, then he may not have appreciated the precise nature of what took place, and may have been ignorant of the content of those deeds. I do not attach significance to the circumstance that at times in his pleadings and evidence, reference was made only to Parlamartu and not Adellos; viewing the evidence as a whole, at no point did the negotiations distinguish between the two. 91 Fifthly, Mr Visnic asserted that he had "never heard" of the idea that the Business Associates were threatening to sue him for $700,000, but when pressed, agreed he was aware of it and implausibly asserted that his earlier denial was because he thought the question concerned the sum of $200,000, not $700,000. Having stated in his affidavit that he fell out with the Business Associates because of a "business deal that went bad", he sought, in cross-examination, to explain his lack of contact with them by reference to a down turn in the industry. He then asserted that there was in fact "no problem" and that he would have felt comfortable speaking to the Business Associates about a business matter between 1993 and 1996. This was frankly incredible. 92 Sixthly, although he had acknowledged in his affidavit of 18 March 2004 that he did not remember the documents that he signed on or about 1 May 1999, Mr Visnic became adamant that he signed only resignations as director of the four companies, the incorrectness of which assertion he was then compelled to acknowledge: he also signed consents to short notice meetings, and resignations as secretary. 93 Seventhly, although now admitting his signature on the 23 August 1995 Parlamartu "resolution", he had earlier instructed his solicitors to deny it and, in cross-examination, at first denied that his solicitors' letter even referred to that resolution. He then asserted that he did not "remember", and that he had "other problems" and "another court case" and that he did not "really know what was happening at the time". References to "other problems" became a fairly standard excuse for Mr Visnic's lapses of memory. Mr Visnic denied having informed the Business Associates of his intention to transfer his share to Mr Sywak in 1995 – until he was shown the 18 December 1995 letter to the secretary of Parlamartu, which advised that he was attempting to do exactly that. Before being shown that letter, he asserted that it would have been Mr Sywak who told the Business Associates of the proposal. He said he had forgotten the existence of that letter, but he was able to clearly and readily read it aloud in Court, and I am quite satisfied that no language difficulty inhibits his understanding. 94 Eighthly, in his 6 March 2003 affidavit, Mr Visnic said that the 1996 deeds for the transfer of the shares in Adellos and Parlamartu were executed separately from the personal guarantees (of Sywak and him), which, he asserted, were not signed at that meeting. However, the guarantees were incorporated into the 30 April 1996 Deeds. In his reply affidavit, Mr Visnic denied being aware that Adellos had given a mortgage to secure the outstanding amounts due to Messrs Kusic and Juracic. In cross-examination, he repeated that he was unaware that Adellos had entered into the mortgages, and said that his first awareness of them was "now". But the mortgages, which bear Mr Visnic's signatures, were annexed to Mr Sywak's 7 July 2004 affidavit, to which Mr Visnic was replying. Mr Visnic asserted that he "didn't notice them", despite having read Mr Sywak's evidence before giving instructions to reply. 95 Ninthly, Mr Visnic initially denied that his uncle, Robert Kusic, had lent him any money to assist with the legal costs of these proceedings, and confirmed that denial. When asked the same question some time later during cross-examination, he prevaricated, before finally admitting that Bob Kusic had, during the last year, lent him $50,000 for the legal costs of these proceedings. 96 Together, those matters do not produce confidence in Mr Visnic as an accurate or reliable historian. Mr Sywak's credit 97 However, Mr Sywak's evidence suffers from at least equal difficulties. It is unnecessary to recite all of its deficiencies: the most striking illustration is his evidence, to which reference has already been made, concerning the alleged 1 May 1999 meeting and the share transfers allegedly signed at it, which presented the Court with such an extraordinary series of inconsistent answers and contradictions on material matters that there could be no confidence in the accuracy or reliability of his evidence on that topic. 98 In addition, Mr Sywak admitted, more than once, that he had lied to the Court. He sought to explain the non-production of the original minute books or share registers by a false theory of possible loss by reason of moving premises. Although the creation in the 1995 accounts of the alleged indebtedness of Mr Visnic may have been upon instructions from his clients the Business Associates, it involved extraordinary and unsupportable manipulation of the balance sheet to produce the desired result. 99 The foregoing is a far from complete catalogue of the shortcomings of Mr Sywak's evidence. Resolution – the April 1996 transaction 100 Mr Visnic contends that the April 1996 agreement between him and Mr Sywak was one whereby they would acquire the shares of the Business Associates in each of Adellos and Parlamartu, to the intent that upon completion of that acquisition they would be beneficially entitled to equal shareholdings in those corporations, although the shares to be acquired from the Business Associates would be held in the name of Mr Sywak. Mr Sywak says that the agreement was that he would purchase all the shares held by the Business Associates in Parlamartu and Adellos, to the intent that he would own all of the issued shares, save and except for one in each which Mr Visnic would retain nominally, but hold on trust for Mr Sywak (this being necessary, it was supposed, to meet the two shareholder/director requirement). On both versions, Parlamartu was to repay to the Business Associates their loan accounts and forgive any loan that it had made to Mr Visnic, and Mr Visnic and Mr Sywak would both guarantee Parlamartu's obligations. The fundamental issue is whether or not the agreement between Mr Visnic and Mr Sywak was one by which the shares of the Business Associates in Parlamartu and Adellos would be acquired by Mr Sywak beneficially, or rather, by Mr Sywak for himself and Mr Visnic to the intent that they would each be beneficially entitled to half of the shares in each of those companies. On that issue, Mr Visnic bears the onus of proof. 101 As has already been explained, many, though not all, of Mr Stevenson's attacks on Mr Visnic's credit were sustained, and where Mr Visnic bears an onus, it does not much avail him to point out that Mr Sywak's credit has been at least equally tarnished. The safest guide in such a situation is not the oral evidence of either party, but such objective evidence as is available, and its consistency or inconsistency with the cases of each of the parties. 102 Mr Stevenson undertook a careful and helpful analysis of the correspondence and file notes from the file of Champions. I have reviewed that correspondence and those file notes closely, several times, and ultimately, to my mind, despite Mr Stevenson's submissions, they contain nothing that favours Mr Sywak's version over that of Mr Visnic, once it is recognised that it is common ground that the shares were to be acquired in the name of Mr Sywak, and the issue is whether if, as Mr Visnic contends, that was because the Business Associates refused to sell to him (or, at least, that he was told as much by Mr Sywak), or whether, as Mr Sywak contends, it was because Mr Visnic was content to be bought out of the predicament in which he was, when faced by allegations of a large indebtedness to Parlamartu. There is no doubt that extrication from the claimed debt to Parlamartu was a motive for the transaction, but that motive is equivocal as to what were the arrangements between Mr Visnic and Mr Sywak, as distinct from what were the arrangements between them and the Business Associates. 103 There are, however, several matters, some of them slight but some of more substance, which assist in forming a view as to which of the versions is more consistent with the available objective evidence. 104 First, there is the evidence relating to the Jarika transaction, out of which Mr Visnic's alleged indebtedness to Parlamartu arose. Although the evidence on that transaction is far from conclusive, so far as it goes, the evidence of Mr Politi and Mr Booker, and the contemporaneous note made by Mr Politi, tends in favour the version of Mr Visnic over than that of Mr Sywak. As I have said, it is far from conclusive, and acceptance of Mr Visnic's version of that transaction does not advance the case on the ultimate issue very far – because it is not in doubt that, by late 1995, the Business Associates were demanding repayment of the alleged indebtedness, however it arose. Nonetheless, it provides an illustration of a situation that involves a contest between versions offered by Mr Sywak and Mr Visnic, in which Mr Visnic's is more likely to be the correct one. 105 The next, and somewhat more significant matter, is that there were other arrangements between Mr Visnic and Mr Sywak conducted on terms of equality. First, some years before 1996, they had in about 1991 together bought out the other Business Associates in Donovi, with the result that they became equal shareholders in Donovi. That, of itself, would not be of much significance, given that it was years before 1996. But much more telling is the circumstance that, at the very time of these transactions, in April 1996, Mr Visnic and Mr Sywak together entered into a joint and equal shareholding relationship in Castlove. That assumes even more significance when it is appreciated that the function of Castlove was to acquire and hold land at Elizabeth Street, Wetherill Park, upon which the equipment of Parlamartu was stored and to which Parlamartu paid rent. It would be, at least, curious if they were to be equal shareholders in the landholding company, yet not in Parlamartu, which occupied and used that land. 106 The third matter is the role in the transaction of the solicitor, Mr Boxsell. Mr Boxsell was a solicitor who had acted for Mr Visnic in the past, and who continued to act for Mr Visnic after the relevant transaction – and was, indeed, acting for him in an unrelated conveyancing transaction current at the time of or shortly before the hearing. It was Mr Visnic who introduced Mr Sywak to Mr Boxsell. In contemporaneous correspondence to Champions, Mr Boxsell claimed to be acting for Mr Sywak, Mr Visnic, Parlamartu and Adellos. There are a number of contentious facts in the proceedings, of which one would have expected Mr Boxsell to have knowledge and on which one would have expected him to have been able to cast some light. Both parties could have called him and, ultimately, I think Mr Stevenson's suggestion – that the only inference I could safely draw in those circumstances was that there was nothing he could say and no document in his possession that would have advanced the case of either party – is correct. Nonetheless, it is of some slight significance that he claimed to be acting for both Mr Sywak and Mr Visnic. It would be curious if he were acting for both in the context that their interests were disparate rather than concurrent, and it would be surprising if he – as someone who might be viewed up to that time as more closely connected with Mr Visnic than with Mr Sywak, and who was acting in this transaction as a result of an introduction by Mr Visnic – were acting for Mr Sywak if he were the only beneficial purchaser, rather than they being jointly interested. 107 Next, it is clear from the Champions files that Mr Sywak was representing both himself and Mr Visnic in the negotiations with the Business Associates, and that Mr Visnic was not involved in those negotiations, receiving information only through Mr Sywak. In particular, Mr Hor's file note of 26 April 1996, recording a discussion with "Kusic, Juracic, Sywak", in which it was confirmed "Sywak is getting all the shares, nothing to Milan", illustrates this: it is probative of Mr Sywak directing, or at least acquiescing in, a transfer to him alone, in the absence of Mr Visnic; and it is consistent with Mr Visnic's version that the Business Associates refused to sell to him. 108 While these matters tell, to some extent, in favour of Mr Visnic's case, they might, on their own, or even taken together, have been insufficient to satisfy me of it to the requisite standard. However, there are more decisive matters. 109 One is an analysis of the commercial sense of the transaction. When Mr Sywak proposed the transaction to the Business Associates, he advanced it on two bases. The first was that, having regard to the value of Parlamartu's assets – essentially another property at Wetherill Park worth $1.2 million – and treating Mr Visnic as discharged from his alleged debt, but providing for him to retain no interest, then the interest of each of the six Business Associates (including Mr Sywak) would be $200,000 – that is, one sixth of $1.2 million. Alternatively, treating Mr Visnic's debt – said to be $690,000 – as recoverable, but allowing that Mr Visnic would retain his one seventh share in Parlamartu, then the interests of the seven shareholders (including Mr Visnic) would be worth about $260,000 each. (This slightly, but by not very much, understated the valuation of the company, on that basis, of $1.89 million). Significantly, on that basis, it was implicit that Mr Visnic retained a one seventh share. Ultimately, a still higher figure of $280,000 was negotiated, implying an overall valuation of the company of $1.96 million, including the alleged Visnic debt. Five of the shareholders were paid out $280,000 each, leaving two shares – Mr Sywak's and Mr Visnic's. In that context, it does not make commercial sense that Mr Visnic would effectively make a gift of his share to Mr Sywak, yet agree to remain liable on a personal guarantee for the amounts for which Parlamartu was to be liable to the Business Associates. 110 On behalf of Mr Sywak, it was submitted that there was significance in the circumstance that he contributed some of the funds required to pay out the Business Associates, while Mr Visnic contributed none. However, under the Deeds of 30 April 1996, Parlamartu was primarily liable to pay the Business Associates. The asset which it had available to satisfy that obligation was its Wetherill Park property. Mr Sywak and Mr Visnic both guaranteed Parlamartu's obligations to the Business Associates. Three of the Business Associates were paid out immediately on settlement. Two of them provided vendor finance and were to be paid out over a period of time. Ultimately, Mr Sywak, to the exclusion of Mr Visnic, appears to have paid out at least some of what was due to the two Business Associates who provided vendor finance. He did so because they sued him. But although he asserts that this is some indication of an intention that he and not Mr Visnic be beneficially entitled, the fact is that Mr Visnic was his co-guarantor, and Mr Sywak had a perfectly good claim for contribution against his co-guarantor to meet that liability. To my mind, far from favouring the view that Mr Sywak alone was to be beneficially entitled, this circumstances tend to favour the view that both were to be beneficially entitled. 111 However, the most decisive and most determinative factor is that on 30 April 2006, following completion of the acquisition of the Business Associates' shares, there was an allotment of additional shares in both Adellos and Parlamartu to Mr Visnic. Up to that point, there were seven issued shares in each of the Adellos and Parlamartu. Mr Visnic held one of those seven shares in each corporation; Mr Sywak held one of the shares in Parlamartu; the Business Associates held five shares in Parlamartu and six shares in Adellos. After the transfers of 30 April 2006, Mr Sywak legally held six of the seven shares in each of Parlamartu and Adellos, and Mr Visnic held one in each. The effect of allotting an additional share on 30 April 2006 was to create an eighth share, and to allot it to Mr Visnic. Mr Sywak says that this was done under the belief that it was necessary that there be two shareholders in the companies, the Articles not having been amended to be single-shareholder companies. But whether or not that was at case, what is telling is, first, that Mr Visnic already held a share and it was quite unnecessary to allot any additional share for that purpose, and, secondly, that this increased from an odd number of shares to an even number, eight, the number of shares in each company – facilitating the allocation beneficially of four to each, given Mr Visnic's existing shareholding of one in each company. I can see no sensible explanation of those allotments other than to provide an even number of shares, reflecting an understanding that the parties would be beneficially entitled to an equal number in each company. This understanding was subsequently reflected, at least in the case of Adellos, though not for Parlamartu, in subsequent annual returns signed by Mr Sywak and lodged on behalf of Adellos, for 1997 and 1998, in which the shareholders were shown as being Mr Sywak as to four, and Mr Visnic as to four. Mr Sywak attributes this to a mistake in his office, but acceptance of that explanation would require acceptance of Mr Sywak's evidence on the issue, which is uncorroborated, where corroboration might have been expected from whomever in his office was responsible for the alleged mistake. 112 To those considerations must be added the course of correspondence, in the early 2000s, when the present dispute arose and accountants, Kampfer & Co, acting for Mr Visnic, wrote on several occasions to Mr Sywak, and then to solicitors acting for him, seeking an account of Mr Visnic's shareholdings and what had become of them. It would have been very easy for Mr Sywak to assert, if it were the truth, that he had acquired them, as to part in 1996 and as to the balance in 1999. But no such explanation was at first forthcoming: the responses, rather than advancing any such explanation, more or less merely put Mr Visnic to proof, to the effect that no further information or explanation would be provided unless Mr Visnic showed how he had acquired and provided consideration for the shares. The failure to advance then the explanation that he now proffers suggests that Mr Sywak was for some reason reluctant to commit to the version that he now propounds, and detracts from the acceptance of that version. 113 For all those reasons, and despite the considerable difficulties with Mr Visnic's own evidence, the objective factors favour his contention far more than they do Mr Sywak's. Indeed, I have struggled to find any objective factor that favours Mr Sywak's version – other than the Deeds themselves, but that they are silent as to any underlying understanding between Mr Visnic and Mr Sywak is unsurprising, since they were transactions with third parties, whose reluctance to sell to Mr Visnic, at least on his version, demanded that any such understanding not be disclosed to them. 114 Accordingly, I find that the arrangement between Mr Visnic and Mr Sywak culminating in the April 1996 transaction was, as Mr Visnic contended, that while the shares of the Business Associates would be acquired in the name of Mr Sywak, they would be acquired for the benefit of both gentlemen, to the intent that each would be beneficially entitled to half the shareholding in Adellos and Parlamartu. Resolution – the April 1996 transaction 115 As to the 1999 transaction, in which Mr Sywak contends there was an agreement for the transfer by Mr Visnic to Mr Sywak of all Mr Visnic's shareholdings or remaining shareholdings in all four companies, I am satisfied – by the combination of Mr Visnic's evidence, the absence of any acceptable evidence that there ever was a signed share transfer of any of those shares, and the prevarication of Mr Sywak on the topic – that there never were any such share transfers. 116 Having reached that conclusion, the onus of proving that there was some anterior agreement, having the effect of making Mr Sywak entitled in equity to those shares, falls on Mr Sywak. Especially in the absence of any external factor corroborating his version, I am unprepared to accept that his evidence discharges that onus. 117 Mr Stevenson identified two potentially significant objective matters in this respect: first, that there was a requirement to guarantee the refinancing of Castlove's obligations to the St George Bank, which Mr Visnic declined to join in; and, secondly, that Castlove and Donovi then had no significant value. 118 As to the first, while it was submitted on behalf of Mr Sywak that there was no reason to doubt that the circumstances were such as he alleges in respect of the St George Bank, there is simply no external or objective evidence on that topic, though it must surely have been capable of corroboration. As to the second, while it may be that a shareholder will be more prepared to surrender a share in a company believed to be valueless, that adds nothing unless there is some other reason in the first place for him to surrender the share. Other than the uncorroborated suggestion about the St George Bank, no such reason is advanced. 119 Accordingly, in my view, the parties remain beneficially entitled to equal shareholdings in each of the four companies. Orders 120 I propose to make the following orders: 1. Declare that the plaintiff, Milan Visnic, is entitled at law and in equity to: 1.1 one of the two issued shares in the capital of the fourth defendant, Castlove Pty Limited; 1.2 nine of the eighteen issued shares in the capital of the fifth defendant, Donovi Pty Limited; 1.3 two of the eight issued shares in the capital of each of the second defendant, Adellos Pty Limited, and the third defendant, Parlamartu Pty Limited. 2. Declare that the plaintiff is beneficially entitled to a further two of the eight issued shares in the capital of each of the second defendant, Adellos, and the third defendant, Parlamartu, being two of the shares that are held legally by the first defendant, Peter Sywak, in each of those companies. 3. Order that the first defendant transfer to the plaintiff two of the shares held by the first defendant in each of Adellos and Parlamartu 4. Order that the registers of each of Adellos, Parlamartu, Castlove and Donovi be rectified pursuant to Corporations Act , s 175 to the following effect: 4.1 The second defendant, Adellos, so that the plaintiff be registered as the holder of four of the eight issued shares and the first defendant as the holder of four of the eight issued shares. 4.2. The third defendant, Parlamartu, so that the plaintiff is registered as the holder of four of the eight issued shares and the first defendant as the holder of four of the eight issued shares. 4.3 The fourth defendant, Castlove, so that the plaintiff is registered as the holder of one of the two issued shares and the first defendant as the holder of one of the two issued shares. 4.4. The fifth defendant, Donovi, so that the plaintiff is registered as the holder of nine of the eighteen issued shares, and the first defendant as the holder of nine of the eighteen issued shares. 121 The result of those orders will be that each of the four corporations is deadlocked, in circumstances where there has been a total breakdown of trust and confidence between the shareholders. No evidence was adduced during the trial on which a "buy-out order" could be made. The plaintiff pressed for a winding-up order, and for the defendant it was recognised that if the conclusion were reached that the shareholdings were equal, there was little that could be said against such an order. In those circumstances, I am satisfied that the appropriate course is to make an order for the winding up of each company on the just and equitable ground. 122 Accordingly, I make the following further orders: 5. Order that each of the second, third, fourth and fifth defendants be wound up pursuant to Corporations Act , s 461(1)(k) 6. Order that Michael Gregory Jones be appointed liquidator of each of the second, third, fourth and fifth defendants. 123 The plaintiff has sought an order that it be referred to an Associate Judge to inquire into and certify the damages allegedly suffered by reason of the first defendant's breaches of fiduciary duty, and that the first defendant be directed to file an affidavit accounting for his dealings with the assets and income of the four corporations. I accept that, at least, in respect of the negotiations with the Business Associates, and as the legal owner of shares of which Mr Visnic was a beneficiary, that Mr Sywak was a fiduciary. However, the Statement of Claim identifies no damage resulting from a breach of fiduciary duty, other than depriving Mr Visnic of his shareholdings. It seems to me that the only damage that could have been occasioned to Mr Visnic is loss of the dividend that he might otherwise have received, but there is no evidence that dividends were declared or paid during the relevant period. Accordingly, as presently advised, it seems to me that there is not the necessary evidence of some damage that would be required to refer the matter for an inquiry. The orders that I have already pronounced will restore to him his shareholding. If there has been some breach by Mr Sywak of some obligation owed by him to any of the companies – whether as their accountant or as a director – prima facie, that is a matter for the liquidator to pursue. Lest I have overlooked something in this respect, however, I will reserve liberty to apply if it is desired to pursue an inquiry as to damages. 124 The plaintiff has succeeded, and there is no reason why the first defendant should not pay the plaintiff's costs. The plaintiff has foreshadowed a claim for indemnity costs, to which I have given consideration. Although it is true that there were serious problems with Mr Sywak's evidence, there were also serious problems with Mr Visnic's evidence. Although I have found that the plaintiff's case prevails – and does so distinctly on the balance of the probabilities – that is by reference not so much to the plaintiff's own evidence, as to external factors to which resort had to be had to resolve the conflict. I do not think that the defence in this case, in substance or in presentation, has descended to such a level of delinquency as warrants an indemnity costs order. 125 I therefore make the following further orders: 7. Reserve liberty to apply, if it is desired, to refer the matter for an inquiry. 8. Order that the first defendant pay the plaintiff's 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.