New South Wales Supreme Court CITATION : Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd [2010] NSWSC 963 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 26 October 2009, 27 October 2009, 28 October 2009, 29 October 2009, 30 October 2009, 24 November 2009, 1 December 2009 JUDGMENT DATE : 13 September 2010 JUDGMENT OF : Slattery J at 1 CATCHWORDS : TRADE AND COMMERCE - Trade Practices Act 1974 and related legislation - family company makes $100,000 loan advance - borrower defaults - borrower's lessor and franchisor engages in misleading and deceptive conduct inducing advance - representation as to future matter, as to likelihood of future repayment of loan - operation of Trade Practices Act, s 51A - proof of reasonable grounds - concurrent wrongdoers - apportionment made under Trade Practices Act, s 87CD and Civil Liability Act, s 35 - DAMAGES - for lender's lost principal, interest and for expenses of recovery - CORPORATIONS - charges - operation of lender's floating charge over borrower's assets - nature of chargee's rights to presentation of charger's assets - lessor/franchisor seeks charged assets - TORTS - interference with contractual relations - claim lessor/franchisor's actions impair lenders' right under charge - EQUITY - trusts and trustees - claim of knowing receipt of trust property. Civil Liability Act 2002, ss 34(1)(b), 35(1)(b), 100 Corporations Act 2001 (Cth) Chapter 2, K.2 LEGISLATION CITED : Fair Trading Act 1987, ss 41, 42 Law Reform (Miscellaneous Provisions) Act 1946, s 5 Real Property Act 1900, s 57(2)(b) Trade Practices Act 1974, ss 51A, 52, 82(1) CATEGORY : Principal judgment ACCC v Dukemaster Pty Ltd [2009] FCA 682 ACCC v IMB Group Pty Ltd [2002] FCA 402 Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 Barnes v Addy (1874) LR9ChApp 244 Bill Acceptance Corporation Ltd v GWA Limited (1983) 50 ALR 242 Campomar v Nike International Ltd (2000) 202 CLR 45 Digi-Tech (Australia) Ltd v Brand [2004] NSWCA 58 Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994 Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 Gould v Vaggelas (1985) 157 CLR 215 Helton v Allen (1940) 63 CLR 691 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No.1) (1988) 39 FCR 546 Jacques v Cut Price Deli Pty Ltd (1993) ATPR 46-102 CASES CITED : Lewarne v Momentum Productions Pty Ltd [2007] FCA 1136 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 Quinlivan v ACCC [2004] FCAFC 175 Re McGrath; Pan Pharmaceuticals Limited (in liq) v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230 Robb Evans & Associates v European Bank Limited (2004) 61 NSWLR 75 Sykes v Reserve Bank of Australia (1998) 88 FCR 511 Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 111 ALR 61 Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 25,343 Vinidex Tubemakers Pty Ltd v Thiess Contractors Pty Ltd [2000] NSWCA 67 Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 Watson v Foxman & Ors (1995) 49 NSWLR 315 Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463 Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530 PARTIES : Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd FILE NUMBER(S) : SC 06/257602 COUNSEL : Plaintiff: S.A.Benson Defendant: D.L.Cook SOLICITORS : Plaintiff: Steven Valtas, Butlers Law Group Defendant: Basil John Macree, B J Macree & Co IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION SLATTERY J MONDAY 13 SEPTEMBER 2010 2006/257602 VENTOURIS ENTERPRISES PTY LTD v DIB GROUP PTY LTD & ANOR JUDGMENT 1 HIS HONOUR: The plaintiff, Ventouris Enterprises ("Enterprises") Pty Limited is a family company. Mrs Kathy Ventouris and her daughter Betty are its directors and shareholders. Enterprises loaned $100,000 to E-Style Marketing Pty Limited ("E-Style") in October 2003. The loan has not been repaid. In these proceedings Enterprises claims that the defendants, the Dib Group and its Chief Executive Officer Mr George Dib, induced it by misleading and deceptive conduct to make the loan. The defendants resist Enterprises' claim for damages. The primary issue before the Court is whether or not defendants engaged in actionable misleading and deceptive conduct. Introduction 2 In September 2003 Ms Betty Ventouris was an employee of St George Bank. Her job with the bank required her to market EFTPOS facilities to merchants in a range of industries. But she was enterprising in her own interests as well. Ms Ventouris had ambitions to start her own small lending business. Her plan was to use the proceeds of sale of a property that her mother owned to provide the capital to start her business. 3 In the middle of that month the Service Station Owners' Association was conducting a trade convention at Darling Harbour, in Sydney. St George Bank was an exhibitor at this convention. Ms Ventouris attended the convention on behalf of the bank to market its EFTPOS and electronic credit service facilities to service station owners and operators. 4 The Dib Group Pty Limited ("the Dib Group") is a franchisor of service stations. It owns service station sites, which it leases its franchisees, who operate these leased sites under franchising agreements. In September 2003 the Dib Group was one of the St George Bank's electronic credit customers. Ms Ventouris had dealt for some years with the Dib Group on behalf of the bank. Prior to September 2003 through her credit sales role with the bank she had regular dealings with Mr George Dib, then the CEO of the Dib Group. Her contact with the Dib Group up to this time gave her a good opinion of its financial reliability. 5 At the Darling Harbour convention Mr George Dib introduced Ms Ventouris to two of his cousins, Mr Anthony Zibara and Mr Joseph Antonios. By September 2003 Mr Zibara and Mr Antonios controlled E-Style which operated three service stations in the Hunter Valley as a franchisee and lessee from the Dib Group, service stations at Bellbird, at Cliftleigh and at Heddon Greta. E-Style wished to borrow funds. Mr George Dib's introduction led to Ms Ventouris negotiating with Mr Zibara and Mr Antonios about Ms Ventouris loaning the funds that E-Style wanted. The negotiations were successful. Ms Ventouris formed Enterprises as a special purpose company for her fledgling business. She loaned E-Style $100,000 through Enterprises, which took a floating change over E-Style's assets. Mr Zibara and Mr Antonios guaranteed E-Style's loan obligations to Enterprises. Mr Zibara's guarantee obligations were secured by a second mortgage over an apartment in Redfern. Ms Ventouris' mother, Mrs Kathy Ventouris, provided funds of $100,000 to Enterprises, which it on-lent to E-Style. Enterprises engaged a solicitor, Mr Robert Minter, to put in place the loan security documents to protect Enterprises' interests. 6 By July 2004 E-Style defaulted. Enterprises could not recover its loan from E-Style, which was placed in receivership. Mr Zibara and Mr Antonios also defaulted on their guarantees of E-Style's obligations. Enterprises bankrupted Mr Antonios. Mr Zibara cannot be served with a creditors' petition. Enterprises recovered nothing from either of them or from E-Style. Neither of them gave evidence in these proceedings. 7 Enterprises commenced these proceedings against the Dib Group as first defendant and Mr George Dib as second defendant. Its case is based upon conduct in two distinct time periods. It alleges that the Dib Group engaged in misleading and deceptive conduct in causing Enterprises to make the loan to E-Style in September/October 2003. Enterprises also relies upon other causes of action arising from the Dib Group's later dealings in relation to the assets of E-Style after E-Style had defaulted on the loan to Enterprises. This conduct mostly occurs from the end of 2004 through until early 2006. During this later period, Enterprises says that the Dib Group wrongfully appropriated E-Style's assets depriving Enterprises of the benefit of those assets when Enterprises was exercising its rights under the charge. An introductory analysis of each of these two categories of conduct is useful. 8 Ms Ventouris claims that Mr George Dib recommended E-Style to Enterprises as a suitable borrower. Enterprises' case is that Mr George Dib not only recommended E-Style but that he represented to Ms Ventouris that E-Style and its owners were running a good business and would be reliable borrowers. Alternatively Enterprises claims that the Dib Group concealed from Enterprises' material information that it had problems it was experiencing with E-Style as one of its franchisees. Specifically Ms Ventouris says that the Dib Group knew that the money that Enterprises was lending to E-Style would be used to pay past due franchise and rent payments that the Dib Group was then demanding from E-Style. In other words Ms Ventouris' case is that the Dib Group saw Ms Ventouris' proposed loan to E-Style as a way for the Dib Group to cure a problem with one of its franchisees. 9 The Dib Group's case is that Mr George Dib merely introduced Ms Ventouris to Mr Zibara and Mr Antonios without any recommendation of them or of E-Style's suitability as a borrower. Mr George Dib says he was unaware of any financial problem at E-Style in September 2003. 10 The first issue in these proceedings is what was said between Ms Ventouris and Mr George Dib at their meeting at the Darling Harbour convention and in their related conversations at about the same time. 11 There are other contests upon the plaintiff's claim of misleading and deceptive conduct. Even if Mr George Dib did recommend Mr Zibara and Mr Antonios to Ms Ventouris, the defendants contest that what he said was not misleading and contest that Enterprises did not suffer any loss as a result. These issues are analysed later in these reasons when the elements of the alleged misleading and deceptive conduct are assessed. 12 Enterprises also says that the Dib Group impaired Enterprises' capacity to enforce the floating charge that it took over E-Style's assets in support of the loan advance. The charge was signed with the other security documents in early October 2003 and was registered with the Australian Securities and Investment Commission on 20 October 2003 in accordance with Corporations Act 2001 (Cth) Chapter 2, K.2. Enterprises says that at the time E-Style gave the charge its three service stations in the Hunter Valley area, at Bellbird, at Cliftleigh and at Heddon Greta, were franchised from the Dib Group. E-Style held assets at all these three sites. The Dib Groups' alleged misconduct in dealing with assets at these three sites relates to is alleged to occur between first default on the loan in mid 2004 and Enterprises' decision to appoint a receiver under the charge on 24 March 2006. During this period of approximately 21 months Enterprises pursued a variety of remedies against the guarantors and brought action in the District Court against E-Style. But it chose not to appoint a receiver until much later. In the meantime the Dib Group dealt with the assets at the Cliftleigh, Heddon Greta and Bellbird service station sites. However whether the Dib Group's conduct in so doing is actionable is the issue for determination in the second part of these reasons. 13 Mr S. Benson of counsel appeared for Enterprises and Mr D. Cook for the Dib Group and Mr George Dib. The Dib Group brought a cross claim claiming that Enterprises converted its stock. At the end of the trial this cross claim was not pressed. MISLEADING AND DECEPTIVE CONDUCT 14 The parties agreed that Enterprises' claim of misleading and deceptive conduct raises seven separate issues for decision. They are the following: a) whether the words alleged to have been said by Mr George Dib were in fact said; b) in the event that it is found Mr George Dib spoke the words alleged, what representations were available to Enterprises from the speaking of those words in the circumstances in which they were spoken; c) whether Mr George Dib had knowledge of a substantial debt allegedly owing by E-Style to the Dib Group at the time the words were spoken and the extent to which his knowledge made the words spoken by him misleading; d) whether any conduct so proved was misleading or likely to mislead and to the extent that Trade Practices Act 1974 (Cth), s 51A is applicable, whether reasonable grounds for the making of those representations are established; e) whether Enterprises has established that it relied upon the representations made; f) whether Enterprises suffered any loss or damage due to its reliance upon the representations; g) whether any proved loss or damage was also caused by Ms Ventouris and/or Mr Zibara and if so the extent to which the proportion of liability for such loss or damage should be allocated. 15 This first part of these reasons deals with each of these issues. First though it is necessary to explain how this lending transaction arose between Enterprises and E-Style. This commences with my findings as to what actually passed between Ms Ventouris and Mr George Dib in the period August to October 2003. Betty Ventouris starts a small lending business 16 In early 2003 Ms Ventouris was a Business Development Manager in the Merchant Services Bank division of St George Bank Limited. Ms Ventouris' role involved approaching strategic groups within the business community. These included franchisor companies. Her objective was to sell St George EFTPOS facilities and other St George products in bulk to the franchisor and then to all the franchisees. A fellow bank employee introduced Ms Ventouris to the Dib Group. In early 2003 she telephoned Mr George Dib and arranged a meeting with him to discuss the bank's product range including its EFTPOS terminals. She met Mr George Dib at the offices of the Dib Group at Condell Park. She also met Mr John Dib and members of his family. Ms Ventouris persuaded the Dib Group to transfer their EFTPOS facilities, approximately thirty in number, from Westpac Banking Corporation to St George Bank Limited. The transfer of EFTPOS facilities for each individual service station involved Ms Ventouris meeting with Mr George Dib on many occasions at the Condell Park office at the Dib Group. Ms Ventouris met Mr George Dib on St George Bank business once or twice a month throughout 2003. Ms Ventouris met many Dib family members and came to see that the Dib Group was a family company. Mr George Dib's wife and two daughters also worked in the business, together with many members of Mr John Dib's family. 17 The frequency of Ms Ventouris' contact with the Dib Group meant that she also became acquainted with the Dib Group's accounts staff, Ms Elisa Dib and Mr Gary Tong, together with some of the company's main franchisors, Mr Colin Zibara and Mr Louis Haddad. As a result of this contact Ms Ventouris was able to deal easily and informally with members of the Dib family. 18 The Dib Group service stations operated under the name "Metro Petroleum". In April 2003 Ms Ventouris' mother, Mrs Kathy Ventouris decided to sell an investment property that she owned in Lake Munmorah NSW. Ms Betty Ventouris had to travel to Lake Munmorah to help prepare the property for sale. In doing so she noticed a number of "Metro" service stations operating in the Wyong area. This started her thinking about the success of the Dib Group in the same connection as using the proceeds of sale of her mother's property. She spoke to her mother about this idea. 19 Mrs Kathy Ventouris decided to leave it up to her daughter to manage the proceeds of sale. She relied on her daughter's advice about what to do about her funds. Mrs Ventouris knew that her daughter was inexperienced in running her own money lending business but she trusted her diligence, her experience with St George, her loyalty and her good judgment. 20 A conversation between mother and daughter took place one day in about August 2003 after Ms Ventouris had driven to visit the Lake Munmorah property. It was only a general conversation but the effect of it was that Mrs Kathy Ventouris gave her daughter the liberty to make "a safe investment" and preferably a secured investment with the expected proceeds of sale. 21 In about August 2003 Ms Ventouris explained to Mr George Dib that Mrs Kathy Ventouris' property in Wyong was being sold and that the Ventouris family were looking to invest about $100,000 of the proceeds of sale. Mr George Dib suggested that the money could be used to buy one of the Dib Group's service stations and to operate it as a franchisee. Mr George Dib suggested that Mr Colin Zibara or Mr Louis Haddad could help her set the service station up and then run it. Ms Ventouris was reluctant to become involved directly in an industry that she knew little about. She rejected this suggestion. However, I find that Mr George Dib advanced an alternative idea. Mr George Dib explained this idea to her in this way: "He said: 'Well if you like to do a short term loan with this money, you can invest in Colin's brother's business. He has three sites in Terrigal, and they are doing really well like Colin. They need some money to expand like Col.' I said: 'Where is Terrigal? I have never heard of it'. He said: 'It's a beautiful place. It's where they make the wines in the Hunter Valley. They are doing quite well but they need a bit of cash input in the short term so they can polish up the business and grow. They only need the money for a short term'. I said: 'What sort of money would I be looking at?' He said: 'Well it depends. You said you have about $100,000. About $100,000 should do it'. I said: 'If they are doing well, why doesn't Dib Group invest their money with their own sites?' He said: 'All our monies are tied up in assets. If we have liquid funds we buy service stations, the freehold. We have also tied up our funds in this development in the Central Coast. You should see this site. It's going to be beautiful'." 22 Ms Ventouris became interested in this idea. She says and I accept that she asked Mr George Dib a series of questions about the Dib Group's financial strategies. Mr George Dib explained the Dib Group's operations, which involved buying cheap petrol station sites, doing them up and improving the financial return from them. Mr George Dib then went on to say to her: "'We have been in business many years and we know what to do. Look at Colin's sites. He is making a killing. You're in banking Betty. If you keep your money in the bank you will get 5% return. If you invest your money with us, you will be the one putting a price on the return. You know that short term lending normally brings 20%. You will be helping us and we will be helping you. You know where we are Betty. We are not going anywhere and nothing will go wrong. You have seen how we do business. It will be good and you know we are all family here. Anthony Zibara is going to do well. See Colin, he is very successful and his brother will be too. Have a think about it, but with a brother like Colin nothing will go wrong, I assure you.' I said: 'You know George, it sounds interesting, I am going to have to speak with my mother to make sure that she is okay with it and you and I can speak again.' He said: 'Speak to your mum. Dib Group we have been in business for many years and we won't let anything go wrong. Anthony is my nephew. It will be OK trust me.'" 23 Mr George Dib disputes that he had any conversation prior to their meeting at Darling Harbour on 12 September 2003 in which Ms Ventouris discussed lending money to the Dib Group. In this conversation in August 2003 he encouraged Ms Ventouris to invest in service station sites franchised from the Dib Group by loaning money to the Dib Group franchisees Mr Zibara and Mr Antonios. I find that such a conversation did occur. This is an idea that Mr George Dib promoted to Ms Ventouris once he was aware that her mother had money to lend. This to a large extent answers a somewhat sterile debate in the proceedings as to who approached whom about this loan. Ms Ventouris let Mr Dib know she would soon have access to her mother's money. In response Mr George Dib pushed a loan investment idea to her. 24 Mr George Dib also denies that Mr Zibara was his nephew and says that this aspect of the conversation must be wrong. In that particular respect Ms Ventouris is mistaken. Mr Zibara was Mr George Dib's cousin. The "Colin" to whom George Dib was referring was Mr Colin Zibara, one of the Dib Group's successful franchisees who owned and operated four or five sites in the inner west and the north shore of Sydney with his business partner Mr Louis Haddad. Mr George Dib's reference to Colin's brother "Anthony" was a reference to Mr Anthony Zibara. 25 Ms Ventouris had a discussion with her mother about what to do with the proceeds of sale of the Lake Munmorah property. Together they decided to consider an investment of the kind that Mr George Dib had been suggesting to Ms Ventouris. 26 Once Betty Ventouris had received a general 'go-ahead' from her mother allowing her to use the funds she decided to get in touch with Mr George Dib about the subject of his prior discussion with her. A Deal at Darling Harbour 27 St George Bank arranged for Mr George Dib and Mr John Dib to attend the Service Stations Association National Exhibition and Convention at Darling Harbour in September 2003. St George Bank sent them both an invitation and tickets. Mr George Dib and Ms Betty Ventouris arranged to meet at the convention. They met at the St George Bank stand at the convention in the Darling Harbour Convention Centre on 12 September 2003. Issues arose in the proceedings as to who was present at this meeting. Certainly in her principal affidavit Ms Ventouris thought that apart from herself, Mr George Dib, Mr Gary Tong, Mr Louis Haddad, Mr Colin Zibara, Mr Anthony Zibara, Mr Joseph Antonios and his wife and some other cousins of Colin Zibara all met at the St George Bank stand and had coffee together. The meeting took place at a coffee shop outside but nearby the Convention Centre. There is controversy about what was said at this meeting. Ms Betty Ventoris gives full account of it in her affidavit, which Mr George Dib denies and counters with a different version. 28 What was said at this meeting is an important ingredient of Ms Betty Ventouris' case on liability against the Dib Group. For reasons, which are explained below, I accept Ms Betty Ventouris' version of this conversation, which is set out below. Mr George Dib's version is examined later. "George Dib said: 'Betty, I discussed our conversation regarding short term lending with the boys and they would like to go ahead. The boys will need the funds for about one (1) year.' Anthony Zibara said: 'Betty, George told us that you will be giving us a loan and we are happy to pay you interest on it. It will only be for a short time and we will be able to pay you back within the year. The Dib group is behind us all the way. You know that Colin has done miracles with the business and he will be helping us too. We are looking at expanding.' I said: 'I have thought about it and it has been recommended that 18% interest would be viable but I would need a security property and a fixed and floating charge over all company assets.' Anthony Zibara said: 'That's fine Betty. We are very happy with that. I have a property in Redfern which I can put down as security. It's a beautiful unit. We can also secure the loan with the business. We run three shops and they are fully stocked. If this is not enough, well I don't know what is. We have three sites. We are looking to expand and are following Colin's lead. We are doing very well. We just need the short term cash to build up the business. Our shops, including stock and fuel alone are probably worth about $80,000 to $100,000 each.' I said: 'How do you manage to run these three sites?' Anthony said: 'Joey (referring to Joseph Antonios) runs Bellbird, I run Greta and we have an Indian guy running Cliftleigh. It's shift work, they are all very close to each other, like a five minute drive.'" 29 On Ms Betty Ventouris' version of this conversation there was a final exchange between herself and Mr Antonios before they parted. She says she remembers this exchange and I also accept her evidence about this which was the following: Joseph Antonios said: "'I grew up with Anthony from the age of five. It's great to be in business with your best friend because they know you and you know them. We share everything and have a very strong working relationship. Betty, thank you for taking the time to meet with us today.' George Dib said: 'Great, so when can we organise the loan Betty and what do you need from us to proceed?' I said: 'I will have to discuss this once again with my solicitor to draw up the necessary Documentation.'" 30 Although Mr George Dib did not give the same specific assurances at this meeting about the quality of Mr Zibara or Mr Antonios as borrowers his participation in the detail of this meeting showed the range of their and E-Style's plans to which the assurances were applicable, that he was continuing to be interested in the idea of the loan and that he wanted the loan organised. There were a number of other meetings between Ms Betty Ventouris, Mr George Dib and Mr Anthony Zibara after the meeting at Darling Harbour. But the Darling Harbour meeting was a central contest because it represented the point of difference between the parties as to when discussions started between Ms Ventouris and Mr George Dib. 31 Ms Ventouris set in train steps after this meeting to prepare the loan documents. Ms Ventouris instructed Mr Robert Minter from Minter & Associates to prepare the necessary paperwork. She instructed her accountant to set up the plaintiff, Enterprises, to be the corporate lender. The plaintiff company was structured with Mrs Kathy Ventouris and Ms Betty Ventouris the directors with each holding one share. Ms Betty Ventouris' idea was that this corporate vehicle would provide the loan funds to E-Style and that Mrs Kathy Ventouris would loan the funds to Enterprises from the proceeds of the Lake Munmorah property. When Ms Ventouris set Enterprises up she had not thought through the idea of using it to lend money to other people in the future. This was a small beginning, a kind of pilot project for her. She did not know what else the company would do. Mr George Dib's Version 32 Mr George Dib has a quite different version of the course of his communications with Ms Ventouris. He says apart from speaking in general terms to Ms Betty Ventouris about the way the Dib Group operated, that prior to the Darling Harbour meeting he did not discuss with her at all the idea of her investing money with the Dib Group. He also says that he had not conversed with Ms Ventouris about her mother prior to the Darling Harbour meeting. He explains that he attended the Service Station Owners Association Convention at Darling Harbour in September 2003 with Mr Colin Zibara, Mr Anthony Zibara, Mr Joseph Antonios and some Dib Group franchisees. He says that he encountered Ms Ventouris at the St George Bank stand. He says that Ms Ventouris floated the idea of a loan for the first time as she was sitting next to him having coffee at Darling Harbour. He says that a conversation then took place to the following effect: Ms Ventouris: "Do you know anyone who wants to borrow money, no security, but money at a high interest rate?" 33 Mr George Dib says that as part of the same conversation Ms Ventouris said to him the following: Ms Ventouris: "I also have access to private money." 34 Mr George Dib says that he then said to Mr Zibara and Mr Antonios, pointing to Ms Ventouris, the following: Mr George Dib: "There is the lady who will get you money if you need it." 35 He did not say what happened in the conversation following upon or in response to this statement. The only other verbal exchange he can recall with Ms Ventouris about the loan to E-Style was when he met her in the Dib Group offices later when they were discussing EFTPOS machines. Ms Ventouris then said to him: " I am doing something for Joe and Anthony." He says that nothing more was said on the topic. 36 Mr George Dib's version of events was in stark contrast to that of Ms Ventouris. Her lengthy account goes into some detail of the proposed transaction at which he was alleged to be present. On his side, his involvement was seen as a first momentary casual comment on one occasion after which he showed no more interest in the loan to E-Style. There is no obvious middle course between these two versions. One is substantially right and one is substantially wrong. Choosing between the competing versions 37 I found Mr George Dib to be a markedly less satisfactory witness than Ms Ventouris. I generally preferred her evidence to his where they are in conflict. These two central figures in the case presented quite contrasting figures as witnesses. Ms Betty Ventouris 38 Ms Betty Ventouris spoke with unfeigned and at times passionate conviction about her account of events. She gave clear, direct and internally consistent evidence. She attempted to be helpful to the questioner and the Court and was complete in her answers. She was ready to concede where necessary that she may have made an error. In some minor aspects of meetings, I find she was prone to exaggeration. But I could see no reason to doubt her overall veracity. Her general account of her dealings with Mr George Dib was highly persuasive. 39 Ms Ventouris was criticised in cross-examination for leaving conversations that she referred to in oral evidence out of her affidavits. She explained that the solicitors had told her that she was giving them too much information and that not all conversations had to go in her affidavit. Given her performance in the witness box, this seems inherently credible. Ms Ventouris includes a lot of information in her answers. Mr George Dib 40 Mr George Dib was a strange witness. The courtroom contest seems to him to be some kind of amusing game in which he was prepared to engage but only because he condescended to do so. At times he conveyed a demonstrable ennui with having to be tested in cross-examination. He seemed to rather resent Ms Ventouris having set the Court's processes in train against him. 41 When the critical conversations alleged by Ms Betty Ventouris were put to Mr George Dib he often said "I can't recall" and "I don't remember" or "I can't say". Although he well understood the difference between "I deny, because it did not happen" and "I don't recall either way", he was ultimately not prepared to say that he was sure that Ms Betty Ventouris was wrong in her account. 42 Mr George Dib is a streetwise and intuitive businessman with well-developed persuasive skills. He is well capable of saying little or nothing when it suits him. He carefully considered exactly what he would and would not share with the Court. He did not exhibit the same sophistication as his more urbane elder brother Mr John Dib but he was certainly not naïve. 43 One of the most discreditable parts of Mr George Dib's evidence was his denial of comprehending the basic notions of a charge over a company's assets. His understanding of charges was relevant to the second part of the case. He had executed at least two charges on behalf of the Dib Group prior to September 2003 (Exhibits H & J). He had also been involved in negotiations for over twenty years on behalf of the Dib Group in buying or selling service station sites. It would be extraordinary that a charge to secure finance was not mentioned to him during any part of this period. Mr George Dib was likely to have encountered charges. His evidence about not understanding what a charge was was evasive and unbelievable. I find he was well aware of what a company charge was. 44 Mr George Dib was self-assured. He was readily able to either divert or clarify questions when he needed to: "Are we talking about Cliffleigh or other sites?" He spontaneously challenged the questioner when he detected an ambiguity in an unsuitable question, asking back on one occasion, "What do you mean by purpose?" None of his answers were mistakes under pressure. Other factors confirm Ms Ventouris' version 45 It would be sufficient to prefer Ms Ventouris' version of the September 2003 Darling Harbour conversation and what led up to it on the basis of my preference for the quality of her evidence as she gave it. However there are other factors that confirm that preference. 46 First, Mr George Dib's account of the conversation is incomplete and he was not able to expand it upon questioning. The only part of the conversation of which he has any memory is the few sentences that accommodate his version of events. He acknowledged that his recollection recorded on affidavit is only part of the whole conversation. When pressed he could not remember anything else out of the conversation. 47 Second, Mr George Dib's version does not fit together in a complete logical sequence that shows how the ideas developed in the conversation. He cannot place the words he does remember so as to fit them within any other broader conversational context. He cannot explain how what he does recall actually flows logically to or from any other part of the conversation. But the parts that he could remember needed to be supplemented in the course of his evidence so they made more sense. The loose conversational fragment that Mr George Dib advances does not fit comfortably into a wider conversation in a way that gives assurance as to its reliability. I do not think that this is explained by his turning away from the conversation. 48 Third, even the fragments of Mr George Dib's conversation with Ms Ventouris that he says he does remember, make insufficient sense to be accepted. Mr George Dib says that before the Darling Harbour meeting he did not have any conversation with Ms Ventouris about her mother or about lending money to E-Style. After the introduction to Ms Ventouris at Darling Harbour he says that she volunteered that she has access to "private money". On his version he then says to Mr Zibara and Mr Antonios, "There's the lady who will get you money if you need it". This seems to assume that he knows that Ms Ventouris has sufficient funds to meet E-Style's then known financial needs and that he knows that they might want money from her. It is very difficult to understand on his version, at the moment of this apparently spontaneous introduction: how he knows that Ms Ventouris will have enough funds to provide the financial accommodation that will meet E-Style's needs and how he knows that they want to borrow money from her. He explained in oral evidence that she said to him she had access to unlimited money, asserting, "I have access to any amount unsecured". That was not in fact objectively true. I do not accept she said this. He also has her saying, "Do you know anyone who wants to borrow money, no security, but money at a high interest rate?" If she were raising this idea for the first time, as he says, it would be expected, given her other well known role with St George Bank that she would have had to clearly explain that she, rather than, for example St George Bank, would be the lender. But it is difficult on his version to understand how her role as lender really becomes clear. I find that by the time of the Darling Harbour meeting it was already well understood between Ms Ventouris and Mr George Dib that her mother's money, not St George Bank's, would be lent to E-Style. 49 Fourth, George Dib gives an improbable account of his role in the Darling Harbour conversation to explain the fact that he did not hear the detail of the negotiations between Ms Ventouris and Mr Zibara. He says he turned away from the conversation and ignored what was said. But he does not say that he moved away from his place at the table. Yet he was introduced Ms Ventouris and Mr Zibara. He did so because he thought that they might have a common interest in a commercial transaction. It might be expected in those circumstances that he would be sufficiently interested in the success of his matchmaking role to listen to their conversation about the loan. Yet he says he did not. Neither Mr George Dib nor Ms Ventouris suggest that Mr George Dib was an unwelcome listener in the conversation. I do not accept that he turned away from the conversation. I have accepted Ms Ventouris' account of the contact between herself and Mr George Dib leading up to the meeting on 12 September 2003 at Darling Harbour. Mr George Dib's level of involvement through these previous contacts shows an interest on his part in the substance of the transaction and a general desire to have it completed. His turning away during the Darling Harbour discussion is quite inconsistent with his earlier and indeed his subsequent behaviour, which shows his involvement in progressing the making of the loan. I find that he heard the conversation between Ms Ventouris, Mr Zibara and Mr Antonios in full. Relationships between Ms Ventouris and Mr Dib were sufficiently relaxed at that time that his not turning away from the conversation was a natural course of events. 50 Fifth, it is objectively improbable that Ms Ventouris did not come to Mr George Dib and discuss with him something about E-Style, as she said she did. After all one of its principals, Mr Anthony Zibara, was close to and well known to Mr George Dib. The Dib Group was then leasing three service stations to E-Style, which was a Dib Group franchisee. Mr George Dib, not Mr John Dib, was the point of contact between Ms Ventouris and E-Style. Ms Ventouris had a history of frequent interaction with Dib family members. No impediment was identified to explain why Ms Ventouris would be reluctant to speak to Mr George Dib about E-Style. There seemed to be no downside risk for her in doing this. She was not shy and seemed to the Court to be just the kind of person who would look to Mr George Dib for information about E-Style. It is likely in the ordinary course of events that she did discuss E-Style with him, as she says that she did so in about August 2003. 51 Sixth, I had an impression that Ms Ventouris was not a person who would simply sit on a new investment idea without talking about it and trying to make it happen. She appears naturally communicative. It is an essential part of Mr George Dib's version of the Darling Harbour conversation that the idea of a loan to Mr Zibara and Mr Antonios just came up when Ms Ventouris raised it in his presence. This is highly unlikely when Ms Ventouris' natural disposition is taken into account. I doubt that she was able to not discuss the issue of how and where to invest the proceeds of sale of her mother's property with people she trusted and with whom she had regular contact such as Mr George Dib. Mrs Kathy Ventouris proposed the Lake Munmorah property for sale months before the Darling Harbour meeting. There was plenty of opportunity for Ms Ventouris to talk about her ideas for investing this money for her mother. 52 Seventh, even though she was not present, the evidence of Mrs Kathy Ventouris is important in choosing between the competing versions of what happened at Darling Harbour and in the other meetings. I wholly accept what Mrs Kathy Ventouris said about her discussions with her daughter and what her daughter said to her about her daughter's discussions with Mr George Dib. In these mother-daughter communications Ms Ventouris accurately conveyed to her mother what Mr George Dib had said to her. Importantly Mrs Kathy Ventouris said that although she was not sure, she thought it was about two or three months from the time that her daughter told her about the Dib Group and Metro Petroleum to when she actually had available the proceeds of sale of the Lake Munmorah property. This tends to indicate that Ms Ventouris conveyed the subject matter of discussions between Mr George Dib and Ms Ventouris to her mother two to three months before the proceeds of sale were paid over in early October. The existence of such discussions therefore predates the Darling Harbour meeting and tends to confirm Ms Ventouris' version of the course of earlier discussions with Mr George Dib. 53 Eighth, Mrs Kathy Ventouris' evidence assists in determining the content of Ms Ventouris' discussions with Mr George Dib. Mrs Ventouris made clear to her daughter: that she did not want a risky investment; that she wanted her money to be safe; and, that she needed assurance that the money would not be lost, although she did want a better return than from St George Bank. Ms Ventouris told her mother that her mother's money "was safe" and that she wanted to invest "the safe way". Mrs BettyVentouris was very conscious that she was dealing with money coming from her mother and that the Lake Munmorah property represented her mother's hard earned savings accumulated from a time before her marriage. She was looking for the kind of assurances that Mr George Dib gave her even before the Darling Harbour meeting when he said to her "we won't let anything go wrong" and "It will be okay. Trust me". She conveyed these assurances on to her mother. Her mother's recollection of them being conveyed to her at the time answers the defendant's case that Ms Ventouris made them up afterwards. Indeed, a feature of Ms Ventouris' evidence, which attracts criticism from the defendants is the repetitive way, in which she said she received assurances from Mr George Dib at later meetings when she had received them previously. This repetition is not in my view a signpost of Ms Ventouris' capacity for inventing presently convenient verbal assurances from Mr George Dib. Rather the repetition actually occurred. 54 Finally, at 5:10 pm later in the afternoon of 12 September 2003 the Darling Harbour meeting Mr George Dib sent an e-mail to Ms Ventouris entitled "Information required for E STYLE MARKETING PTY LIMITED". It commenced "Good afternoon Betty" and closed "Kind regards, George Dib". It supplied a copy of the franchise agreement that E-Style then had over the Cliftleigh Service Station, the address details of the Redfern apartment and gave her Mr Anthony Zibara's contact details. Mr George Dib denied that he sent the email. He claims that he does not use the salutation "kind regards". But I do not accept his denial. Ms Ventouris says, and I accept, that Mr George Dib sent this to her without her specifically asking for it. It shows on Mr George Dib's part a greater degree of involvement in assisting the progress of the loan than the impression he gave in evidence. 55 Mr Louis Haddad, who was also present at the Darling Harbour meeting, does not add very much to this picture. He was doing his best to give a genuine recollection of events in which he was involved. But he was at the periphery of the conversation. Mr Haddad says that he heard a short conversation then Ms Ventouris spoke to Mr Zibara for a period. Mr Haddad recalls Mr George Dib saying, "This is the lady to speak to if you need to borrow money", corroborating part of Mr George Dib's version. His evidence is the reason why I am prepared to find that Mr George Dib did say this but not in the context that Mr George Dib places it. Mr Haddad was unsure whether this was said as part of Ms Ventouris being introduced to Mr Zibara and Mr Antomios. Mr Haddad seemed to be more interested in the company present that day rather than listening into what was passing between Ms Ventouris and the others. 56 The defendants advanced other reasons why Mr George Dib's version of the Darling Harbour meeting should be accepted. 57 The defendants point out that Ms Ventouris only first confronted Mr George Dib a year after the E-Style loan defaulted, with an allegation that he was responsible for Enterprises' financial predicament. The defendants submit that this delay is a basis to infer that she did not then have a conviction that Mr George Dib had induced her to have Enterprises make this loan to E-Style. After all, it is said, if Mr George Dib had really said what she now alleges, she would have sought recompense from him much earlier. 58 When the overall pattern of Ms Ventouris' efforts at collection are analysed this was not a remarkably long time. The precise timetable of her recovery action is set out in the second part of these reasons. Her activity in the second half of 2004 after default was energetic but focussed on recovery from E-Style, Mr Zibara and Mr Antonios and gathering better intelligence about recovery. Ms Ventouris only started to realise after speaking to Mr Zibara late (after October) 2004 that Mr Zibara blamed Mr George Dib for his business failure. Mr Zibara said Mr George Dib had put Mr Zibara and Mr Antonios into poorly performing service stations. That led to the realisation on her part that Mr George Dib may have been responsible for her predicament. Yet she continued to value her relationship with members of the Dib family and was reluctant to reach the conclusion that she had been misled. She was still dealing with them on behalf of St George Bank. When she eventually did decide to confront Mr George Dib in about May or June 2005 his explanations did little to advance Enterprises' prospects of recovery. His unhelpful overall explanation of Mr Zibara's default was that Mr Zibara had led "the high life". 59 The defendants submit that it is significant that Enterprises did not call her St George Bank supervisor in its case. He was present for part of the Darling Harbour meeting. This is not a significant matter. There is no basis to infer that the St George Bank manager was sitting close to Ms Ventouris and Mr Zibara and Mr George Dib when they were having their conversation. Indeed it is unlikely that Ms Ventouris would have held such a discussion with his hearing. In any event I accept that he left within 10 minutes of the meeting commencing. A Meeting at Café Neptune 60 A café in Brighton-le-Sands called Café Neptune became the scene on 22 September 2003 of the next important meeting between Ms Betty Ventouris, Mr George Dib and Mr Anthony Zibara. By the time the Café Neptune meeting took place Enterprises had been incorporated and its solicitor Mr Robert Minter was well advanced in preparing the loan documentation. 61 Ms Betty Ventouris says and I accept that about a week before the Café Neptune meeting that she and Mr George Dib were having a discussion about EFTPOS terminals at the Dib Group's offices at Condell Park, when he asked her how she was going with the loan and the loan documents. He proposed a meeting with Mr Anthony Zibara about the loan. It was necessary to plan for Mr Zibara to come down for the day from the Hunter Valley, where he lived close to his service stations. All those attending drove together to Café Neptune where a Mr George Zaj joined them. Their travelling together is an indication that this meeting was prearranged. 62 Ms Betty Ventouris recalls that at the Café Neptune meeting, and I accept her recollection on this as correct, that Mr Anthony Zibara introduced her to Mr George Zaj, Mr Zibara's brother in law. Ms Ventouris recalls that Mr George Zaj was described as someone who worked with the lender, Sydney Home Loans and was involved in the loan application that assisted Mr Anthony Zibara to fund the purchase of his home unit at Redfern. Mr Zibara explained to her that Mr Zaj was married to Mr Anthony Zibara's sister. 63 Those present at Café Neptune discussed the preparation of the loan documentation for the Enterprises loan. Ms Ventouris says and I accept, that Mr George Dib and Mr Anthony Zibara were both involved in this conversation with her. I find that she, Mr George Dib and Mr Anthony Zibara exchanged the following in conversation, with Ms Ventouris leading off: "'My solicitor is in the process of drawing up a fixed and floating charge over all the assets of E-Style Marketing Pty Ltd. I am not that crash with legals, but a fixed and floating charge is kind of like a registered mortgage over all of E-Style's assets, stock, fuel and the cash in the bank. My solicitor is also preparing Documents to register a second mortgage over Anthony's residential property in Redfern.' Anthony Zibara said: 'Betty, this property is brand new. The development is beautiful. It's not really considered Redfern but Moore Park It's a property worth over $400,000.' George Dib said: 'That's right; it's got to be worth at least $400,000.' I said: 'The Documents have been a little delayed. We are waiting for consent from the first mortgagee to allow Ventouris Enterprises Pty Limited to be registered as second mortgagee.' George Zaj then said: 'Yes I know. I've seen the correspondence.' George Dib then said: 'I have heard of Robert Minter. He is a good solicitor. Nothing will go wrong. Betty I assure you. You have the three fully stocked shops now and a residential property too. See Col (referring to Anthony's brother), he is very successful and his brother will be too. Trust me. We are all family. It will be OK. You will be helping us and making a little bit of money too.'" 64 According to Ms Ventouris the Café Neptune meeting was to confirm what was to happen in the near term future. Mr George Dib repeated some assurances at this meeting but not all of what had been said before. The defendants allege that in her version of this meeting Ms Ventouris was trying to fit him with knowledge of various matters to assist her case and that there was no reason for him to continue his assurances to her. But with some exceptions, I generally accept her version, which I find is not an invention. The defendants' submission misses the dynamic of the relationship between Mr George Dib and Ms Ventouris. Right at the beginning of their discussions she had made clear to him that the money was coming from her mother. He was sufficiently intuitive to appreciate that this fact meant that she needed assurance about security if the loan was to proceed. I find that Mr George Dib gave her the assurances she claims about the safety of the loan investment. 65 There are some features of Ms Ventouris' version of this meeting that do not ring true. I doubt that she explained the nature of the charge over E-Style's assets to those assembled but I find that she did mention the two securities, the charge and the second mortgage over the Redfern Apartment. This was an arranged meeting to check on progress of the transaction so some mention of the securities was a natural part of its subject matter. Nor do I think that Mr George Dib confirmed to her that Mr Minter was a "good solicitor". I accept the correctness of Mr George Dib's evidence that he did not know Mr Minter and was not in a position to express an opinion about the quality of Mr Minter's legal work. The defendants also submit that Mr George Dib was unlikely to have represented at this meeting that Mr Anthony Zibara's Redfern apartment was worth "at least $400,000". Mr George Dib says he had never seen the apartment. But Mr Dib was only adding a comment after Mr Zibara had described the location and the development of which the apartment was a part. Whether or not Mr George Dib had seen the particular apartment I do not think his making such a comment is at all improbable. But this was only a casual, not particularly well-informed comment that Ms Ventouris did not intend to rely upon and did not rely on. 66 Mr George Dib says that Mr Zibara asked him to this meeting at the last minute. Whether that was so or not, he decided to attend. Mr George Dib says he was on his mobile phone throughout the meeting conducting business and was not involved in what was taking place. I do not accept that he took no part in the meeting. He was sufficiently involved to have the conversations that Ms Ventouris says she had with him. Mr Zibara seemed to think there was some point in him being there. 67 Mr Minter made progress in late September and early October in preparing the loan documentation, which will be identified below. When the documentation was close to complete Ms Betty Ventouris says and I accept that Mr Anthony Zibara and Mr Joseph Antonios contacted her to schedule a meeting to complete the signing of the documentation. They were keen to get the document signed as soon as possible. The group then arranged to convene for this purpose at a local bistro at Ryde. Signing at the Ryde Bistro 68 On 6 or 7 October 2003 Ms Ventouris met Mr Anthony Zibara and Mr Joseph Antonios and other family members and friends at a local bistro in Ryde to sign the loan and security documents. This venue has been identified as a bistro at the Gladesville Hotel where members of the Dib family regularly gathered. But it was often called "the Ryde bistro" in these proceedings and it will be so described in these reasons. Ms Ventouris recalls and I accept that also present on this occasion were Mr Colin Zibara, Mr Louis Haddad, Mr Antoun Zibara and some four other persons. 69 According to Ms Ventouris' version, which I accept as accurate, she confirmed that they understood that Enterprises was taking a floating charge to secure repayment of the money together with a mortgage over Mr Zibara's Redfern home unit. Mr Anthony Zibara said that he read and understood all the documents and was ready to proceed. He wished to sign and he did so. 70 The Ryde bistro meeting was arranged in something of a rush. So much so that by the time of the meeting Enterprises had not yet set up its own bank account. Once the documents were signed Mr Anthony Zibara and Mr Joseph Antonios wanted the funds as soon as possible. Ms Betty Ventouris arranged for the loan funds to be transferred directly from her mother's St George Savings Account into an E-Style account. The telegraphic transfer of the $100,000 took place on 8 October 2003. 71 A suite of documents was signed on this occasion. They consisted of the loan agreement and the related security documents. The loan agreement provided for Enterprises to advance $100,000 to E-Style for a term of 12 months. Interest on the advance was payable at the rate of 26 per cent per annum, reducible to 18 per cent per annum if paid within 10 days of the due monthly instalment dates. The loan agreement was actually dated 3 October 2003 and required the borrower to pay $3,000 for the lender's legal fees. It also provided for the giving of the securities that were taken. The supporting securities were signed on this occasion and were:- (a) a floating charge over the assets of E-Style; (b) a deed of guarantee and indemnity by which Mr Antonios guaranteed an indemnified Enterprises against default by E-Style and similar deed executed by Mr Zibara; (c) a mortgage of a lease of the premises in Main Road, Cliftleigh from which the Cliftleigh Metro Petroleum business was operated; (d) the second mortgage over Strata Title unit in Crescent Street, Redfern ("the Redfern apartment") in support of Mr Zibara's deed of indemnity and guarantee; (e) the Redfern apartment being in his name and a deed of priority between Perpetual Trustee Company, the first mortgagee of the Redfern apartment, and Enterprises in relation to the relative security priorities between them. 72 No issue arose in the proceedings between the parties about the form of execution of these documents. 73 After E-Style's default some events and conversations relevant to the assessment of the plaintiff's misrepresentation case took place. These are set out in the second part of this judgment, which relates to the period during which Enterprises attempted to enforce the loan. Non-Disclosure - was E-Style in financial difficulty in September 2003? 74 In the alternative to its positive representation case, Enterprises sought to make a case of misleading conduct through non-disclosure against the Dib Group and Mr George Dib. I find in this section that Enterprises' non-disclosure case fails because it did not establish that that E-Style was in financial difficulty in September 2003. The parties also contested the related question of what Mr George Dib knew of E-Style's financial position in September 2003. E-Style's Financial Position in September 2003 75 The defendants attacked the several ways that Enterprises sought to show that E-Style was in financial difficulties in September 2003. That attack was successful in my view. The first objective evidence of financial difficulties on the part of E-Style was in May - June 2004 when E Style surrendered the Heddon Greta lease to the Dib Group. 76 Enterprises relied upon an aged receivables document for the Heddon Greta site as at 7 April 2004 as showing arrears in E-Style's account with the Dib Group at that time. I do not accept that even if this showed arrears in the account that it showed general financial problems. Also it is difficult to infer what the situation was in September 2003 from a document dated April 2004. 77 Another amount of $30,000 said to be outstanding was relied upon but this appears to have been an error in entries to the MYOB system and not necessarily an amount outstanding at all. 78 A suggestion was made to Mr George Dib in cross-examination that rent was late from E-Style to the Dib Group but the amounts are not so large that any inference about E-Style having financial difficulties could be drawn from this. 79 Enterprises also relies upon the fact that a deposit of close to $55,000 was made to Hunter Petroleum on the day after E-Style received the loan proceeds. Attempts to show that this company was associated with the Dib Group failed in my view. The payment of that sum does not show financial difficulty on the part of E-Style on its own. 80 Despite the fact that the receivers were in possession from March 2006 the usual evidence of financial distress was not tendered by Enterprises in the proceedings. 81 The financial accounts for E-Style show that it made a profit the year ending 31 December 2003. None of this makes a convincing case of financial distress in September 2003. Nor does the seeking of the loan of $100,000 show that. George Dib's knowledge of E-Style's financial position in September 2003 82 Enterprises was not able to demonstrate that Mr George Dib or Mr John Dib knew that E-Style had financial difficulties in September 2003. But equally the evidence does not demonstrate Mr George Dib had any basis for confidence that E-Style would be able to meet its future liability to repay Enterprises $100,000 plus 18% interest in twelve months time. 83 The evidence about people within the Dib Group reporting to Mr George Dib is unsatisfactory and at times quite contradictory. It is difficult to accept that Mr George Dib's employees would not report to him about large amounts of money owed to the group from time to time by franchisees. But his actual knowledge of financial difficulty was not shown. There may have been some grounds for suspicion from the material set out above but that is all. Was George Dib's and the Dib Group's Conduct Misleading and Deceptive? 84 Several questions arise under this issue. The first question is whether the positive conduct proved was misleading and deceptive, the non-disclosure case having failed on the facts. The second is whether the defendants' conduct is misleading upon the operation of Trade Practices Act s 51A. The third is whether the Dib Group is legally responsible for any misleading conduct found against Mr George Dib. 85 The conclusions on these questions in this section are that: Enterprises' positive conduct case succeeds due to the operation of Trade Practices Act s 51A but otherwise fails; and, that both the Dib Group and Mr George Dib are legally responsible for the misleading and deceptive conduct proved. Misleading and Deceptive Conduct – Enterprises' Positive Representation case 86 Enterprises pleads that in August and September 2003 the defendants made representations to Ms Ventouris that (a) a loan of $100,000 to E –Style would be a safe investment, (b) a loan of $100,000 to E-Style would be repaid together with interest, and (c) the defendants would ensure that the loan of $100,000 to E-Style would be repaid. I find each of these three representations made out. Of course it is the defendant's "conduct" which must be established to be misleading and deceptive before a contravention of Trade Practices Act s 52 or Fair Trading Act s 42 is established: ACCC v Dukemaster Pty Ltd [2009] FCA 682 and Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994. But this case has been pleaded by reference to representations and the case relies on Trade Practices Act s 51A, which does refer to "representations" with respect to future matters. It is convenient therefore to analyse the conduct that the plaintiff relies upon by reference to the pleaded representations. 87 The principal conduct of the defendants that Enterprises alleges was misleading or deceptive was the speaking of words in the course of a series of conversations. Special considerations apply when assessing alleged misleading and deceptive conduct in such a context. It is necessary that the words spoken be proved with a degree of precision sufficient to enable the Court to be reasonably satisfied that they were in fact misleading in proved circumstances: Watson v Foxman & Ors (1995) 49 NSWLR 315 at 318 per McLelland CJ in Eq. In assessing whether spoken words were misleading the Court may have to examine relatively subtle nuances flowing from the use of one word, a phrase or a grammatical construction rather than another or the presence or absence of some qualifying word, phrase or condition: Watson v Foxman & Ors (1995) 49 NSWLR 315 at 31. The fallibility of human memory and the overlaying of memory with perceptions of self interest leading to sub conscious re-construction are all hazards of ordinary human experience to which a Court must be alert in assessing whether particular spoken words are misleading or deceptive: Watson v Foxman & Ors (1995) 49 NSWLR 315 at 319. Ultimately each element of the cause of action must be proved to the reasonable satisfaction of the Court which means that the Court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not obtained or established independently of the nature and consequences of the fact or facts to be proved", including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712. In this case it is possible for the Court to determine with reasonable satisfaction what was the alleged conduct and the circumstances which render that conduct misleading in this case. 88 Mr George Dib gave multiple assurances throughout his August 2003 discussions of the proposal that Ms Ventouris invest in one of the Dib Group franchisees that "it will be OK", " trust me", and of the proposed loan to E-Style, "nothing will go wrong, I assure you". He supported his assurances with reference to the quality of his family relationships with Dib Group franchisees such as Mr Anthony Zibara who was a cousin of his, "we are all family here", a statement which had the effect of strengthening the assurances he gave her. An assurance that nothing will go wrong should be read in this context as an assurance as to the security of the moneys to be advanced. At the Cafe Neptune meeting when the terms of the loan were defined the further assurances "I assure you Betty it will be OK". " Trust me", "You will make a little bit of extra money on the side and you'll be helping us", and "the Dib Group won't let anything go wrong" were made which were all equally assurances as to the security of the moneys to be advanced and as to their repayment with interest under the terms of the loan agreement then being discussed between E-Style and Enterprises. The repeated emphasis at the time of these assurances on the role of the Dib Group and the role of Mr George Dib as the speaker and CEO of the Dib Group also support the inference that the defendants were representing that they would ensure that the propose $100,000 loan would be repaid with interest. Considerable encouragement based upon Dib family associations was being directed at Ms Ventouris to induce her to make this loan. 89 The defendants submitted that Enterprises did not adduce any evidence of representations made by Mr George Dib about E-Style itself or its financial position as distinct from the position of a Mr Anthony Zibara. I do not accept this. The representations were made in a context where Mr George Dib was aware that the loan was going to be made to E-Style. His assurances of repayment were assurances about E-Style's future repayment. E-Style as the operator of franchised Metro Petroleum businesses was contemplated to be the borrower. The representations were not about Mr Zibara except to the extent he played a role in E-Style. 90 The defendants also submitted that Ms Ventouris never asked Mr George Dib if he thought the loan was secure. But there is ample evidence of him stating that the loan would be secure. This is correct. The importance of this to Ms Ventouris was obvious to Mr George Dib, as a result of her early communication to him that the money to be loaned was ultimately coming from her mother. Misleading Conduct and the Operation of Trade Practices Act s 51A 91 The next question is whether the representations were misleading or not at the time they were made. Enterprises pleads that they were misleading and deceptive because of particular E-Style financial problems but also because of the operation of Trade Practices Act s 51A. A strenuous contest took place about the existence of the particular E-Style financial problems. This is discussed in the previous section of these reasons. But the effect of Trade Practices Act s 51A is also important in this case because each of the representations established is a representation about the doing or not doing of something in the future. 92 Trade Practices Act s 51A (and Fair Trading Act s 41) provides that where a person makes a representation with respect to any future matter and the person does not have reasonable grounds for making the representation then it shall be taken to be misleading: Trade Practices Act s 51A(1). The onus of establishing that a person had reasonable grounds for making the representation lies on the maker: Trade Practices Act s 51A(2). Trade Practices Act, s 51A(2) effects the reversal of the evidential burden of proof rather than an absolute reversal of the onus of proof, by deeming a person who makes a representation of a future matter not to have had reasonable grounds for making the representation unless the person adduces evidence to the contrary: Re McGrath; Pan Pharmaceuticals Limited (in liq) v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230 per Allsop J. Some judges have taken the view that the section does indeed reverse the onus of proof and that a person making the representation can only avoid the deeming provision by establishing on the usual balance of probabilities that there were reasonable grounds for making the representation: Lewarne v Momentum Productions Pty Ltd [2007] FCA 1136 per Stone J and Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199. The preset proceedings do not turn on the difference between whether the defendants bear an evidential burden in the sense of an obligation to adduce evidence, rather than imposing upon the defendants the legal or persuasive burden to prove they had reasonable grounds for making the representations alleged. The debate provides a useful illustration though of the scope of the section which has been commonly applied, for example, to representations as to the profit potential of future returns from products: Digi-Tech (Australia) Ltd v Brand [2004] NSWCA 58, ACCC v IMB Group Pty Ltd [2002] FCA 402 and Jacques v Cut Price Deli Pty Ltd (1993) ATPR 46-102. A restriction on the operation of this section is that it cannot be relied upon in proceedings for accessorial liability: Quinlivan v ACCC [2004] FCAFC 175. Mr George Dib is joined as an accessory to the Dib Group's alleged contravention of Trade Practices Act, s 52. However, here Fair Trading Act, s 41 is pleaded against him as a principal. 93 If it is established that there is a representation as to a future matter Trade Practices Act, s 51A requires that the representor show (1) some facts or circumstances; (2) existing at the time of representation; (3) on which the representor in fact relied; (4) which are objectively reasonable, and; (5) which support the representations made: Sykes v Reserve Bank of Australia (1998) 88 FCR 511 per Heerey J. Apart from the operation of Trade Practices Act, s 51A, a promise that is not fulfilled or prediction that does not eventuate can amount to misleading or deceptive conduct but only in the limited circumstances where the prediction, promise or opinion contains a representation of present fact, usually about the state of mind of the representor; Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82. Subject to Trade Practices Act, s 51A, the mere fact that a representation as to future conduct or events does not come to pass does not make the representation misleading or deceptive: Bill Acceptance Corporation Ltd v GWA Limited (1983) 50 ALR 242. 94 The defendants have not established that they did have reasonable grounds for making representations as to the future matters about which Mr George Dib assured Ms Ventouris. The absence of evidence of reasonable grounds and evidence in this case compels the inference that the defendants engaged in misleading and deceptive conduct. 95 The defendants fought the misleading and deceptive conduct case firmly upon the basis that Enterprises had not established that E-Style was in demonstrable financial difficulty in September 2003. The defendants were quite successful in showing that the weakness of the inferences that Enterprises sought to have drawn about the financial position of E-Style in September 2003. But the defendants did not adduce evidence that would establish that Mr George Dib or the Dib Group did have reasonable grounds to make representations to the effect that E-Style would be able to repay the amount advanced. There were several representations as to future matters. The defendants did not advance reasonable grounds for any of them. 96 Mr George Dib did not identify particular facts or circumstances existing at the time of representation upon which he in fact relied to make the representations that he did about E-Style. He did not go to the lengths of establishing that any facts tending to prove E-style's financial stability that were objectively reasonable and that support the representations he had made. It was open to him to identify particular communications with Mr Zibara and Mr Antonios, particular financial plans or particular financial information about E-Style's business operations and prospects that he actually relied upon to give him the necessary basis to make representations that he did. Rather he took the opposite course of deliberately distancing himself from E-Style's affairs. He said, " I had no specific knowledge of the manner by which the E-Style Marketing Pty Limited accounts were conducted in September 2003." And again he said, "As at September 2000 I had no knowledge of the financial position of E Style Marketing Pty Limited. I was not aware that E Style had any financial difficulties at that time." And further he said, " I was not informed by Anthony Zibara or Joe Antonios as to how E-Style Marketing Pty Ltd was trading save for general comments they might have made concerning their businesses in general conversations. I did not have any recollection of what those statements might have been as they were not extraordinary." The price of this lack of knowledge for the defendant's case was that was it was very difficult for the defendants to demonstrate they had reasonable grounds for making the representations that I have found were made. 97 Some financial material relating to E-style was tendered but it was difficult to infer anything about E-Style's financial stability from it. Mr George Dib not identify that he actually relied upon any of it to give him a basis to make the representations. Reliance 98 Ms Ventouris says that she had trust and confidence in Mr George Dib and relied on his representations to her. The defendants point to several influences other than his representations about E-Style that they say fully account for her decision on behalf of Enterprises to proceed with the loan. In this section I find that none of those other influences displace her actual reliance on Mr George Dib's representations. 99 The applicable principles of law in relation to reliance may be clearly stated. To recover damages Enterprises must prove that any loss or damage it claims to have suffered was "by" conduct in breach of the Trade Practice Act. The statutory cause of action arises when a plaintiff suffers loss or damage "by" contravening conduct of another; and, the word "by" clearly expresses the notion of causation without defining or elucidating it; and, Trade Practices Act, s 82(1) should be understood as taking up the common law practical or common sense concept of causation: Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 525 per Mason CJ and March v E & MH Stramare Pty Ltd (1991) 171 CLR 506. If a material representation is materially likely to adduce the representee to enter into a contract and the person actually enters the contract a fair inference arises that the representation operated as an inducement: Gould v Vaggelas (1985) 157 CLR 215 per Wilson J at 236. 100 Recovery under Trade Practices Act, s 52 is found by the applicant's factual reliance upon the misleading or deceptive conduct of the respondent, although that conduct was not the only factor in the applicant's decision; and although the applicant did not seek to verify the representations or did so inadequately and so failed to discover their falsity: Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No.1) (1988) 39 FCR 546; 79 ALR 83. The Trade Practices Act does not erect any pre-condition that reliance by the representee on statements by representor should be "reasonable": Sykes v Reserve Bank of Australia (1998) 88 FCR 511. But if the applicant's conduct has been sufficiently careless causation may not be established: Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 and Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 at 138. 101 The defendants attack Enterprises reliance case several ways. They submit that Ms Ventouris simply relied upon (1) the introduction by and reputation of the Dib Group, (2) the securities that Enterprises was taking on the transaction, (3) her solicitor's competent legal advice, and (4) several incorrect assumptions that she made for which the Dib Group was not responsible. The defendants say in their closing submissions that that even if Mr George Dib did make the statements that Ms Ventouris alleges he did that "they were meaningless statements upon which she could not have placed any significant reliance, at least to the extent to which it could be said that her reliance on those statements was a cause of her loss". I find that each of these attacks fails. The introduction by and reputation of the Dib Group 102 The defendants point to a passage in Ms Ventouris' evidence, which they submit, demonstrates her true thought processes in relation to reliance. They submit that her decision on behalf of Enterprises to make the loan was based on her introduction to E-Style from a reliable source, such as the Dib Group. There is no doubt that the Dib Group's introduction was important to Ms Ventouris. She said the following: "I would - I never considered a transaction like this before, so when it was recommended to me by the Dib Group because of their stature, because of the business, because of the fact that my dealings with them were very good, I relied on their introduction and that introduction - or that introduction was a solid introduction just like the experience I had of their business dealings. So, yes, it was important to me that that introduction came from a reliable source. I don't think that is abnormal. I think that's - if the source was not reliable, then there would be doubt as to whether E-Style would have been reliable but because the source was reliable, in my opinion, and in my experience, I felt that E-Style was also reliable, (A) because they were family and (B) because it was introduced from I reliable source. I don't know what else to say." 103 But that association with a reputable group of companies and the introduction do not alone explain Ms Ventouris' decision to have Enterprises make the loan. It is true that through her work with St George Bank she had the experience of the Dib Group's senior executives proving themselves consistently reliable in their dealings. Their word had a potent authority for her. But their authority increased the persuasive force of what they actually said and recommended to Ms Ventouris here. This was in addition to the effect of their general reputation as a reliable source. Ms Ventouris herself says this in evidence that I accept as a sound account of her reasoning at the time: "Q. I will try to put it as simply as possible. I understand your evidence in this case to be that you were prepared to lend money to E-Style because Dib Group was behind E-Style? A. No, because they recommended E-Style to me and I thought they were a reliable source and-- Q. So your evidence is not that the Dib Group was behind E-Style in the sense that the Dib Group would repay the loan if E-Style didn't? A. Well, that too. " 104 Mr George Dib's recommendation of E-Style, through the various representations he made to Ms Ventouris, was centrally influential in her decision-making along with the other reputational factors. Those other factors did not eclipse the effect of his representations. 105 Now the Court has found that Mr George Dib made Enterprises' pleaded representations, the defendants' distinction that the reputation of the Dib Group is an influence upon her that was separate from his authority speaking as a senior group executive looks very artificial. That Mr George Dib as the CEO of the Dib Group was the speaker telling her that E-Style was a safe investment reinforced the content of what he said. She had developed considerable trust and respect for Mr George Dib and other members of his family and regarded their communications as inherently reliable. Ms Ventouris felt that the Dib Group had treated her well and that Mr George Dib was a valued St George customer. Ms Ventouris' dealings with the Dib Group, as she candidly explained, had been "very solid". All of this is a basis to infer, as I do, that Mr Dib's actual words about E-Style had a powerful effect on her. One of the curious features of this case is that I doubt that Mr George Dib fully appreciated this effect. 106 Ms Ventouris also conveyed to her mother the importance of her trust in Mr George Dib, whatever the other influences at work on her. I accept all the evidence of Mrs Kathy Ventouris as a correct account of what her daughter said to her. Ms Ventouris said in oral evidence of her daughter that " she trust Mr George" and "I think she knows that money go to the other person, not to George, but because she knows him and she trust him and because it was security there through the solicitor and....". This is an accurate account of her daughter's state of mind. The Transaction Securities 107 The defendants submit that Ms Ventouris relied when making her decision, upon the existence of the second mortgage over the Redfern Apartment, upon the floating charge over E-Style's assets at the three service station businesses and upon the personal guarantees. She relied upon her solicitor, Mr Minter to create legally effective securities for Enterprises. The defendants also submit that Ms Ventouris was only prepared to recommend the E-Style loan to her mother if the loan was properly secured. The evidence set out in the previous paragraph shows this submission to be wrong. Her mother gained the impression that Ms Ventouris' trust in Mr George Dib's assurances was at least of co-ordinate importance in her mind. The securities were important influences but did not displace the pre-eminent effect of Mr George Dib's statements to her. Mr Minter's competent legal advice 108 The defendants also submit that Ms Ventouris relied on Mr Minter. But to the extent that she did I find that her reliance on him did not exclude her reliance on what Mr George Dib said. Mr Minter's legal intervention seems to have been principally ministerial in the creating of security documents. He did not take a leading role in negotiations, or communicating with the borrowers or giving Ms Ventouris semi-commercial advice. Ms Ventouris' Erroneous Assumptions 109 The defendants point out that Ms Ventouris made a number of erroneous assumptions about the effect of Dib family relationships: E-Style's principal Mr Anthony Zibara was a relation (a cousin) of the Dibs. She assumed therefore that E-Style was part of the Dib Group and that the Dib Group would be liable to repay any loan made to E-Style. The defendants say that her spontaneous wrong assumptions do not allow the Court to infer misleading conduct on the part of Mr George Dib and the Dib Group: see Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 111 ALR 61. 110 The defendants draw upon what the High Court described in Campomar v Nike International Ltd [2000] HCA 12, (2000) 202 CLR 45, at [104] as: "the so-called 'doctrine' of 'erroneous assumption' said to be derived from particular decisions of the Full Court of the Federal Court in McWilliam's Wines Pty Ltd v McDonald's System of Australia Pty Ltd (1980) 49 FLR 455, 33 ALR 394, Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 and Lego Australia Pty Ltd v Paul's (Merchants) Pty Ltd (1982) 60 FLR 465; 42 ALR 344". 111 Here the defendants endeavoured to use the doctrine to show that Ms Ventouris had made some unwarranted assumptions which were not the product of any misleading conduct. Of course, "no conduct can mislead or deceive unless the representee labours under some erroneous assumption": Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 per Deane and Fitzgerald JJ at 200. Some erroneous assumptions will commonly arise from particular representations but some others are just fanciful. In Campomar the High Court cited with approval a passage from Taco Bell which explained the importance of identifying the nature of the erroneous assumption. The passage also rejects the notion that any misconception by representee will automatically break the chain of causation: Campomar at [104]: "Their Honours [in Taco Bell] added that, in determining the question whether conduct properly should be categorised as misleading or deceptive or as likely to mislead or deceive, the nature of the erroneous assumption which must be made before conduct could have that character 'will be a relevant, and sometimes decisive, factor': (1982) 42 ALR 177 at 200. Their Honours rejected (1982) 42 ALR 177 at 200: '[any] general proposition of law to the effect that intervention of an erroneous assumption between conduct and any misconception destroys a necessary chain of causation with the consequence that the conduct itself cannot properly be described as misleading or deceptive or as being likely to mislead or deceive'." 112 Ms Ventouris did regard E-Style as in substance part of the Dib Group and that the group would therefore be likely to meet E-Style's liabilities. She also thought that, as Mr Zibara was a relative of Mr George Dib that nothing would go wrong. She also seemed to think that Mr Colin Zibara's success would rub off on Mr Anthony Zibara. But Ms Ventouris drew these conclusions from what Mr George Dib said to her in the pleaded representations that the Court has found to be established. They were not assumptions that she just made independently of the impression that Mr George Dib created in her. These assumptions were somewhat naïve on her part, especially given her career in the bank. But the explanation for her outlook is the strong effect upon her of Mr George Dib's representations that an investment in E-Style was a safe investment. 113 Another assumption Ms Ventouris made was that the Dib Group had virtually guaranteed repayment by E-Style. This is really no different from her other assumptions. Ms Ventouris admitted that there was no direct guarantee obligation upon the Dib Group to repay the loan if E–Style defaulted. But she said that the Dib Group "virtually" guaranteed her verbally. This led the defendants to argue that (1) her failure to call on that virtual guarantee direct to Mr George Dib much earlier than she did was inexplicable, (2) as was her failure to tell Mr Minter that Mr George Dib had guaranteed the loan. 114 But her conduct was not inconsistent with the case she is now making. The course of events relating to Ms Ventouris' delay in making a demand upon Mr George Dib is explained elsewhere in these reasons. Mr George Dib did not give or offer to give a written legally enforceable guarantee of E-Style's obligations to Ms Ventouris. It is to be expected therefore that Ms Ventouris would not tell Mr Minter that George Dib had guaranteed the loan. Loss and Damage 115 The plaintiff's claim is that as a result of the defendants misleading and deceptive conduct it has (1) lost the capital of $100,000 it advanced to E-Style, (2) lost interest on that sum, and (3) incurred legal, accounting and other expenses in attempting to recover its money. The defendants' claim that the plaintiff has suffered no loss because there is no evidence of any loan between Mrs Kathy Ventouris and Enterprises and no evidence that Ms Ventouris will call on any loan she made to Enterprises. The submission is that if any loss has been suffered it is Mrs Kathy Ventouris' loss and she is not a plaintiff. Therefore the loss is not recoverable. 116 Much of the evidence related to the defendants' argument on the issue of loss and damage depends upon the evidence of Mrs Kathy Ventouris. I found her to be a reliable witness. I accept all her evidence. There was a degree of mingling of recollection between Ms Ventouris and her mother. Ms Ventouris read her mother's affidavit over to her in Greek before her mother swore it. But this did not impair the quality of Mrs Ventouris' evidence. Mrs Ventouris' affidavit accurately represented Mrs Ventouris' version of events. 117 Mrs Ventouris loaned the required funds to Enterprises. She said she did and I accept that as correct. I find that she paid the money directly to E-Style on behalf of Enterprises. These funds were not a gift to Enterprises. Many communications between mother and daughter support the inference that the advance was a loan and not a gift. Mrs Ventouris wanted to get a better return than investing the money at St. George. Ms Ventouris told her mother that her mother's money was safe. Mrs Ventouris knew the borrowers had given security for the loan. Ms Ventouris told her mother that Mrs Ventouris had enough security for the loan. 118 The defendants are correct that no liability in the precise sum of $100,000 is recorded in Enterprises' balance sheet as at 30 June 2004. But this is not of special consequence. Enterprises will still suffer loss if it is not able to recover the money it advanced to E-Style, whether or not Enterprises has to repay this sum to Mrs Kathy Ventouris. Furthermore in the balance sheet under the heading "Interest-bearing liabilities" a liability of $90,644.82 appears somewhat inaptly recorded as "Unsecured - loans to shareholders". This supplements a liability described as "Unsecured trade creditors" of $10,000. Enterprises' total liabilities are recorded therefore as $100,644.82. Whilst the break-up of this figure into amounts of approximately $10,000 and approximately $9,000 is unexplained, the total is sufficiently close to $100,000 to provide documentary support for the inference that Enterprises owed a liability in that sum to Mrs Kathy Ventouris. 119 If the loan advance had not been made the default would not have occurred and the recovery action would not have been necessary. All these expenses are recoverable. Enterprises is not entitled to interest at 18% or 26% though. These are the interest rates under the loan which Enterprises says could not have occurred but for the representations. Interest should be assessed at the rates prescribed under Civil Procedures Act, s100. 120 Enterprises has suffered the loss and damage for which it contends as a result of the defendants' misleading and deceptive conduct. Assessment of that loss should not be difficult as a result of these reasons for decision. If the parties cannot reach an agreed assessment based upon the material in evidence then I will determine that loss in a short further hearing. My findings as to proportionate liability in the next section of these reasons will require a result of that assessment to be modified before the entry of judgment. Concurrent wrongdoers - Proportionate Liability 121 The defendants argue that Ms Ventouris and Mr Zibara were the "real causes" of any loss or damage that Enterprises suffered. Upon the assumption that the rest of the plaintiff's case succeeds, the defendants put that Mr Zibara's misleading conduct and Ms Ventouris' gullibility led to this loan being made to the disadvantage of Enterprises. 122 The questions raised in relation to proportionate liability are (1) whether any award of damages to the plaintiff is capable of being reduced by reason of the conduct of Ms Ventouris or Mr Zibara, and (2) if so by what amount should that liability be reduced on account of their conduct. 123 Towards the conclusion of the hearing the defendants amended their defence to raise the concurrent liability provisions of the Civil Liability Act and the Trade Practices Act. Late though these amendments were they were allowed. The plaintiff could deal with them and they were the subject of submissions on both sides. The defendants relied upon Trade Practices Act, Part VIA and Civil Liability Act Part 4. The purpose of these provisions is to visit on each concurrent wrongdoer only that amount of liability which the Court considers "just" having regard to the comparative responsibilities of all wrongdoers for the plaintiff's loss: Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463 at [93]-[94] and Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 25,343. 124 The Trade Practices Act, Part VIA and Civil Liability Act, Part 4 were enacted in relevantly identical terms. Both are deployed by the defendants to meet Enterprises' Trade Practices Act and the Fair Trading Act claims. Trade Practices Act, s 87CD(1), (3) and (4) provide as follows: "(1) In any proceedings involving an apportionable claim: (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss; and (b) the court may give judgment against the defendant for not more than that amount. … (3) In apportioning responsibility between defendants in the proceedings: (a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and (b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings. (4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings . " Enterprises' claim in these proceedings is undoubtedly an "apportionable claim", being a claim for damages under Trade Practices Act , s 82 and Fair Trading Act , s 42. Civil Liability Act , s 34(1)(b) applies Part 4 to contraventions of Fair Trading Act , s 42. It also arises from a "failure to take reasonable care" on the part of the defendants: Civil Liability Act , s 34(1)(a). I do not accept that Mr George Dib's conduct involved an intentional deception of Ms Ventouris. I doubt he really knew much at all about E-Style's financial position at the time he made his representations to her. The representations were on his part a failure to take reasonable care. 125 Trade Practices Act, s 87CD and Civil Liability Act, s 35 are applied analogously with Law Reform (Miscellaneous Provisions) Act 1946, s 5; Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463 per Palmer J at [94]. The principle is applied analogously to the assessment of contribution between tortfeasors which requires the Court to have regard to comparative culpability, of the acts of the parties causing the damage, the relative blameworthiness and relevant causal potency of the negligence of each party and the whole of the conduct of each party in relation to the circumstances of the loss by way of a comparative examination: Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187 at [60] per Barrett J, Chandra v Perpetual Trustees Victoria Limited [2007] NSWSC 694 [110] and [111] and in Vinidex Tubemakers Pty Ltd v Thiess Contractors Pty Ltd [2000] NSWCA 67 at [29]. My approach to this apportionment is similar to taken by Barrett J in Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187 at [60] where his Honour described his principal task as making findings about (1) the degree of departure from the standard of care of the reasonable man as regards the causative conduct of the putative concurrent wrongdoer and the defendants, and (2) relative importance of the acts of the putative wrongdoer and the defendants in causing the economic loss suffered. 126 Enterprises did not contend that Trade Practices Act, Part VIA and Civil Liability Act, Part 4 did not apply to its claim. But one issue has arisen in the course of preparation of these reasons, which was not recognised in the course of final submissions. The parties did not specifically focus in final submissions upon the date of commencement of Trade Practices Act, Part VIA and Civil Liability Act, Part 4. The misleading and deceptive conduct that I have found against Enterprises occurred in September 2003. That appears to be after the commencement of Civil Liability Act, Part 4 but before the commencement of Trade Practices Act, Part VIA. The precise effect of this differential was not explored in submissions. I have decided that on this issue that I should give the parties an opportunity to make further short submissions. The parties will be given liberty to put on submissions on this issue within 21 days. As the Civil Liability Act at least applies to the events in question I will proceed to indicate the apportionment, which I regard as appropriate in this case. This is also possible because in my view the conduct and relative blameworthiness of Mr George Dib and Ms Ventouris are each respectively exactly identified with the corporate entities with which each is associated, namely the Dib Group and Enterprises. Thus there is unlikely to be any difference between an apportionment under Trade Practices Act, Part VIA and under Civil Liability Act, Part 4. But the parties are free to put submissions as to the application of such apportionment on the basis that Trade Practices Act, Part VIA does not appear to apply to the events in question. 127 Complexity can sometimes arise in the apportionment process when the position of a corporate actor is being assessed for apportionment purposes as well as the position of its individual directors or executives. In considering for example whether it has failed to take reasonable care for its own protection court does not concern itself, except incidentally with the knowledge of its individual directors. The complexity usually arises where the board of directors, which represents the corporate mind of a corporate actor, is comprised of a number of individuals with differing involvement in the underlying transactions and different personal culpability. Prominent examples of this in the cases are Daniels v Anderson (1995) 37 NSWLR 438 per Clark JA and Sheller JA 570G – 578E and Duke Group Ltd v (in Liq) v Pilmer (No 2) [2000] SASC 41. The present case in my view does not have this complexity. I identify Ms Ventouris as the directing mind responsible for the actions of Enterprises in this transaction. Its relevant conduct was Ms Ventouris' conduct. Due to her daughter's greater experience of the financial world and greater facility with English, Mrs Ventouris allowed her daughter to conduct the transaction on behalf of the company. For different reasons Mr John Dib allowed Mr George Dib to conduct this transaction as part of his executive duties. He relevantly became the directing mind and will of the Dib group in relation to the transaction. This case was not one where it could really be said that Mrs Kathy Ventouris had sufficient expertise to or should have become more closely involved in this transaction for Enterprises. Nor was there a basis in my view for a finding that Mr John Dib should have been more closely involved in the affairs of the Duke group in relation to this transaction. Both corporate entities are identified with their principal actors. There is no occasion for the corporate actors to have a different responsibility as wrongdoers from the responsibility of the natural persons who were their representatives in the transaction. 128 The questions for decision are (1) whether Ms Ventouris and Mr Zibara are concurrent wrongdoers with the defendants and (2) what is the amount that reflects the proportion of the damage that the Court considers "just" having regard to the extent of the defendants' responsibility for Enterprises' damage or loss. The assessment is a necessary element of the Court's reasoning to final judgment because the Court may only give judgment against the defendants for not more than the amount which is assessed to be just for the defendant concurrent wrongdoer: Trade Practices Act, s 87CD (1)(b) and Civil Liability Act, s 35(1)(b). 129 The defendants' allegation that Ms Ventouris was a concurrent wrongdoer is that Enterprises acted on her advice to make the loan to E-Style and that she caused Enterprises loss and damage by (i) not investing the funds with the Dib Group but rather lending them to E-Style; (ii) failing to make necessary inquiries as to the financial capacity of E-Style; (iii) failing to get proper professional advice; (iv) failing to take proper and adequate security; (v) representing to Enterprises that the loan was properly secured; (vi) relying upon unverified information as to the capacity of E-Style to repay the loan and as to the value and securities; (vii) unreasonably relying upon the oral and unenforceable assurances of guarantee of financial support from the Dib Group, and (viii) failing to advise Enterprises to take timely steps to enforce and protect its securities. 130 The defendants' case that Mr Anthony Zibara was a concurrent wrongdoer causing Enterprises' loss or damage is that he made misleading representations to Enterprises and failed to disclose the matters alleged by the plaintiff not to have been disclosed which were relied upon by Ms Ventouris and further that he failed to disclose that E-Style was trading at a loss. It is useful first to deal with the concurrent wrongdoer allegations relating to Mr Zibara. Mr Zibara as a concurrent wrongdoer. 131 My findings in this case make any apportionment against Mr Zibara very difficult. The plaintiff's positive case has succeeded. Its non-disclosure case has failed because the plaintiff has not demonstrated that E-Style was in actual financial difficulty in September 2003. The positive case succeeded because the defendants did not demonstrate they had reasonable grounds making the representations. The defendants' apportionment case, that Mr Zibara was a concurrent wrongdoer, largely assumes that the plaintiff makes out its nondisclosure case and proves E-Style was actually in financial difficulty in September 2003. My findings do not go so far as to show that E-Style was actually in financial difficulty in September 2003. To the extent that the allegation against Mr Zibara as a concurrent wrongdoer is that he did not disclose that E-Style was trading at a loss, the allegation will not succeed. It has not been established that E-Style was trading at a loss, or that even if it was, that it was thereby at relevant risk of not being able to meet its loan liabilities to Enterprises 12 months after the making of the loan. It is not established that Mr Zibara was current concurrent wrongdoer with the defendants. Ms Ventouris as a concurrent wrongdoer 132 Only some of the defendants' contentions that Ms Ventouris was a concurrent wrongdoer are effective. Most of the contentions fail. Investing the funds with the Dib Group was never offered as an option. She did obtain legal advice and her lawyers prepared securities, which prove legally but not commercially effective. It is difficult to say that the securities that Enterprises obtained were not reasonably appropriate at the time even though they turned out to be less than adequate. It was appropriate for her to draw considerable comfort from Mr George Dib's representations. It has not been shown that the timing of Enterprises' enforcement steps occasioned its losses. 133 But some of the defendants' contentions succeed. Despite her understandable reliance upon Mr George Dib's representations, Ms Ventouris did not cease to be a person of some financial maturity with current working experience in a bank. Her role with St George was more marketing than banking but a degree of financial prudence was to be expected of her given her background and experience. Her failure to get a reasonably detailed understanding of E-Style's business and its capacity to repay the loan and 12 months time was a significant departure from the standard of care of a reasonable lender in Enterprises circumstances. The failure to obtain information about the residual equity (after the first mortgagee) in Mr Zibara's Redfern apartment is a similar departure. Both these matters had a degree of importance in causing the loss suffered by Enterprises. 134 Of course all the other factors the subject of my previous findings are not excluded from consideration. The absence of any enquires on Ms Ventouris' part about the financial position of E-Style is remarkable. But it is not explained by careless lack of attention on her part to Enterprises' interests as the defendants submit. Rather the depth of her trust in Mr George Dib principally but not wholly explains what she did. 135 In my judgment the apportionment that is just, having regard to the respective degrees of responsibility for Enterprises' loss, is 80% to the defendants and 20% to Ms Ventouris. Thus, the operation of Civil Liability Act s35((1)(b) means that the Court may only give judgment against the defendants for 80% of Enterprises' total loss and damage. ALLEGED IMPAIRMENT OF ENTERPRISES' RIGHTS OF ENFORCEMENT 136 In this part of the proceedings Enterprises advanced three separate causes of action arising out of the same course of events. After E-Style defaulted on the loan in July 2004 and before Enterprises appointed a receiver to E-Style's assets on 24 March 2006 the Dib Group dealt with E-Style's assets at each of the three Metro Petroleum service stations at Bellbird, Cliftleigh and Heddon Greta. The question in this part of the proceedings is whether those dealings interfered with Enterprises' rights under its charge and whether they are actionable at the suit of Enterprises. 137 Enterprises relies upon one common law and two equitable causes of action based on an alleged impairment of its rights of enforcement under the charge. Enterprises claims in tort that the Dib Group has interfered with its contractual rights under the charge. In equity Enterprises says that the Dib Group has "converted" Enterprises' equitable proprietary interest in the charged property and is guilty of unconscionable conduct in circumstances, which will afford equitable relief to Enterprises. 138 The parties have agreed that these three causes of action raise the following issues: a) in relation to the tort of interference with contractual relations whether: i. the defendants induced E-Style to breach or unlawfully interfered with any contract with Enterprises, and if so; ii. whether that inducement and/ interference gives rise to any liability on the part of the defendants in favour of Enterprises and the extent of such liability; b) in relation to the alleged interference with Enterprises' equitable rights under the charge: i. whether the defendants received the benefits of the proceeds and any asset the subject of the plaintiff's charges and the extent of such a benefit; ii. whether the receipt of that benefit gives rise to any liability on the part of the defendants to the plaintiff. c) in relation to the claim of unconscionable conduct: i. whether the defendants are guilty of any actionable unconscionable conduct; ii. whether equitable relief is available in respect of such unconscionable conduct. d) in respect of the equitable causes of action whether equitable relief should be denied upon the ground of Enterprises alleged ? The Charge the Course of Events in relation to Enforcement 139 All Enterprises' causes of action in this part of the case derive from rights which Enterprises claims under the charge ("the Charge") between Enterprises and E-Style. The Charge describes itself as "floating charge". Under it E-Style as borrower charges its assets to Enterprises as lender. The Charge is taken in support of the "Agreement", which the Charge defines as the loan offer between the borrower and the lender executed on the same date as the charge. The rights conferred through the detailed provisions of the Charge are the foundation of all the plaintiff's causes of action in this part of the proceedings. The Charge 140 A number of the definitions in clause 1.1 of the Charge are of importance for understanding the operation of the Charge in relation to Enterprises' causes of action. The definitions of "Charged Property", "Secured Moneys" and "Security Interest" are: "'Charged Property' means all the assets and undertaking of the Borrower from time to time including; (a) all of the Borrower's property, privileges, rights and assets whether owned at present or acquainted in the future; (b) the goodwill of the Borrowers business; and (c) any property specifically charged. 'Secured Moneys' means all amounts: (a) which are payable or are to become payable to the Lender under the terms of the Agreement, or have been lent, advanced or paid by the Lender: (i) to or at the request or on behalf of the Borrower; or (ii) to protect any Charged Property or the Secured Interest created by this Charge; (b) whether the Borrower is liable alone, jointly, severally or jointly and severally; (c) whether the Borrower is liable as principal debtor, surety, guarantor for the Borrower or otherwise. 'Secured Interest' means: (a) a mortgage, pledge, guarantee, lien, charge, assignment, hypothecation, secured interest, title retention arrangement, preferential right, trust arrangement or other arrangement (including, without limitation, any set-off or 'flawed-asset' arrangement) having the same or equivalent commercial effect as a grant of security; or (b) an agreement to create or give any arrangement referred to in paragraph (a) of this definition;" 141 The expression "Event of Default" is also defined in clause 1.1 to mean any of the events described in clause 7.1. 142 The principal charging provision, its special characteristics as a floating charge, the borrower's rights to deal with Floating Charge Property and the process of crystallisation of the charge are dealt with in clauses 2.1 to 2.5 which are relevantly provide as follows: "2. CHARGE 2.1 Charging Provision To secure the due and punctual payment of the Secured Moneys, the Borrower as beneficial owner charges in favour of the Lender all its right, title and interest in, to, under or derived from the Charged Property. 2.1 Priority The charge created by Clause 2.1 2.3 Floating Charge This Charge operates subject to Clause 2.5 , as a floating charge over all the Charged Property. 2.4 Licence to Deal with Floating Charge Property Subject to Clause 2.5 and Clause 5 , the Borrower may, in the ordinary course of its ordinary business, dispose of or deal with any of the property or assets from time to time in respect of which this Charge operates as a floating charge (the ' Floating Charge Property ') and is licensed by the Lender to do so, subject to the obligations of the Borrower to account to the Lender for the proceeds of sale thereof in accordance with the terms of the Agreement or under this security upon default under clause 2.5. 2.5 Crystallisation This Charge will cease to operate as a floating charge and will operate as a fixed charge, and the licence conferred by Clause 2.4 for the Borrower to dispose of or deal with the Floating Charge Property will be withdrawn, automatically and immediately: (a) in respect of all the Floating Charge Property: (i) if any breach of the terms of the Agreement occurs; (ii) if the Borrower ceased or threatens to cease to carry on its business; (iii) if a receiver or receiver and manager is appointed for the whole or a substantial part of the Borrower's undertaking, property and assets; (iv) if the Borrower or any other person appoints an administrator to the Borrower, or takes any step to do so; or (v) upon this Charge being enforced; (b) in respect of all or a part of the Floating Charge Property: (i) if the Borrower creates any Security Interest over the Floating Charge Property or that part of it in breach of Clause 5 , or agrees or attempts to do so or takes any step towards doing so; (ii) if the Borrower disposes of or deals with the Floating Charge Property or that part of it in breach of Clause 5 , or agrees or attempts to do so or takes any step towards doing so;" 143 The borrower's general undertakings under the charge include: the obligation for the borrower to punctually pay the Secured Moneys and all interest thereon as and when they become due and payable in accordance with the terms of the Agreement, or after default under any such agreement, on demand by the Lender; and further on demand by the Lender to pay interest in any part of the Secured Moneys which has become due and payable: Charge clause 4.1 (a) and (b). 144 The borrower also specifically undertakes in relation to the Charged Property to carry on and conduct its business in a proper and efficient manner, to keep proper accounts and "promptly to do everything necessary and reasonably required by the Lender… to preserve and protect the value of the Charged Property and protect and enforce its title and the lender's title as lender to the Charged Property: Charge clause 4.2(b) (c) and (e). 145 The Charge imposes in Clause 5 restrictions on the borrower in dealing with Charged Property. Clause 5 provides as follows: "5. RESTRICTIONS ON DEALING WITH CHARGED PROPETY The Borrower shall not: (a) create or purport or attempt to create or suffer to subsist any Security Interest in respect of the Charged Property ranking in priority to, equally with or after this Charge; or (b) subject to Clause 2.4 , sell or otherwise dispose of, create or allow the creation of any interest in, or part with possession of, any of the Charged Property, without the prior consent of the Lender." 146 Enforcement is permitted under Clause 6 of the Charge after identified events of default. Clause 6 relevantly provides as follows: "6.1 Events of Default The Secured Moneys shall at the option of the Lender and notwithstanding any delay or previous waiver of the right to exercise such option immediately become payable without the necessity for any demand or notice, and this Charge shall at the option of the Lender become enforceable (whether or not the Secured Moneys have become payable in this manner) in each of the following events: (a) ( non-payment ) if any part of the Secured Moneys is not paid when due and payable; (b) ( other obligations ) if the Borrower fails to perform any provision of this Charge requiring observance or performance by it (other than a failure referred to elsewhere in this clause) and that failure is incapable of remedy or, if capable of remedy, continues for five (5) Business Days after the Borrower receives a notice from the Lender requiring that the failure be remedied; (c) ( misrepresentation ) if any representation, warranty or statement made or repeated in or in connection with this Charge is untrue or misleading (whether by omission or otherwise) in any material respect when so made or repeated; … (f) ( default under Agreement ) if any Event of Default (as defined in the Agreement) occurs." 147 The Charge may be enforced notwithstanding acceptance of any payment of interest or any other payment after default: Clause 6.2. 148 After the charge has become enforceable and whether or not the lender has entered into possession of any of the Charged Property the Charge authorises the lender to appoint a receiver or receiver and manager of the Charged Property: Clause 7.1; such person or persons act as the agent of the borrower and have extensive powers to take possession of the Charged Property, carry on business, settle disputes, transfer property and commence legal proceedings (Clause 7.3). 149 The Charge contains other incidental powers, which are not of immediate relevance to the issues joined in these proceedings. The Course of Events relating to Enforcement 150 E-Style made payments under the loan agreement until June 2004. An amount of $1,500 ($100,000 x 18% / 12) per month was deposited directly into Enterprises' bank account between November 2003 and June 2004. Mr Zibara telephoned Ms Ventouris in June 2004 and told her he was going through a divorce, he was having cash flow problems and needed additional time to pay the next instalment of $1,500. He explained that he could not make any more repayments until towards the end of the year and went on "please hold off, I promise you I will get your money". He explained that he was having personal problems. The loan agreement was interest only for 12 months. So she asked him "can you pay me the total in December as per our agreement?" He promised that he could. 151 Ms Ventouris agreed to let the matter ride for another 6 months. But she was uneasy. She called Mr Zibara about once a fortnight to ask when he would be able to make repayments. In these phone calls Mr Zibara kept saying that he would be "back on track" when he had finalised his divorce. Ms Ventouris asked him why Mr Antonios could not at least pay $750 per month but she did not receive a satisfactory answer to this inquiry. Ms Ventouris accepted Mr Zibara's plea for more time until the end of 2004. Her agreed tolerance of E-Style's default during this period is one of the reasons she did not need to contact Mr George Dib over the same period. She was waiting to see what would happen. She did not make contact with Mr George Dib until May 2005. The defendants criticise her for this but I find that it is quite explicable. 152 All repayments from E-Style to Enterprises ceased from August 2004. Ms Ventouris was greatly disturbed by the non-payment. The same month she encountered Mr Louis Haddad, one of the Dib Group's best performing franchisees, at a café in Marrickville. They had a conversation, which has become a matter of controversy in the proceedings. Ms Ventouris says that she and Mr Haddad spoke in the following terms: Ms Ventouris: "Louis how can George Dib do this to me? He purposely set me up to fund a lost cause. Anthony and Joseph had no hope of running any successful business. They are irresponsible and they never intended to pay me back my money. All this crap about divorce. I have problems too but I work two jobs and I never run away from debts. Why can't he work in your petrol station and pick up some extra cash? How is he going to pay me this $100,000 by the end of the year? If I was your sister and George Dib did this to me what would you do?" Mr Haddad: "I would kill him". 153 Mr Haddad agrees that Ms Ventouris came up to him in a café in Marrickville on what must have been this occasion in 2004, as Ms Ventouris alleges. He says that Ms Ventouris did complain but only about Mr Zibara and not about Mr George Dib, saying "Anthony is not paying me back the money. How can Anthony do this to me?" Apart from whether or not there was any mention of Mr George Dib, there is not much dispute about the rest of the conversation. I accept Mr Haddad's version of the introduction to this conversation. Ms Ventouris had not yet turned her attention to Mr George Dib. She was still waiting for Mr Zibara to pay her by the end of the year. She realigned her focus to Mr George Dib subsequently after a conversation with Mr Zibara in late 2004, which is recounted below. I find that she remembered the August 2004 conversation with Mr Haddad, in part because he made the startling statement, " I would kill him". But Mr Haddad made this comment about Mr Anthony Zibara not Mr George Dib. Mr Haddad had considerable empathy for the position in which Ms Ventouris found herself. But I do not accept that he would have said that he would "kill" Mr George Dib even in a hypothetical scenario. 154 In late July 2004 Ms Ventouris instructed her solicitor, Mr Minter to pursue recovery of the principal debt and interest from E-Style, from Mr Zibara and from Mr Antonios. Despite E-Style's default on instalments of interest for the 5 months of July, August, September, October and November 2004, the course decided upon was to issue a combined demand for principal and interest after E-Style defaulted on the final payment of principal on 30 November 2003. This action is consistent with Ms Ventouris giving some latitude to Mr Zibara until towards the end of the year. On 6 December 2004 Mr Minter demanded the return of the $100,000 plus the five instalments of interest at the default rate at 26 per cent being $2,166.00 each ($100,000 x 26 per cent / by 12), being in total $10, 833.00. His demand for $110,833.00 on behalf of Enterprises went unanswered. So did his simultaneous demand on the guarantors. 155 Ms Ventouris had an important meeting with Mr Zibara and Mr Antonios in late 2004. The defence contends that this meeting took place early in May 2005. But I accept Ms Ventouris' evidence that it took place in late 2004. The timing in late 2004 is consistent with the expiry of the extra time that Ms Ventouris had given Mr Zibara to get his house in order. They travelled from the Central Coast to meet her in Sydney for this meeting. The thrust of what Mr Zibara said to her on this occasion was that they could no longer afford to operate their three Metro Petroleum sites. Mr Zibara said to her, whether it was true or not, "George Dib promised us the world. He made us pay $80,000 and gave us three shit sites to run in woop woop, which he owned and we pay him monthly rental to make us his tenants. We spend money on stock. He sold us stock and fuel and put us in the shit. These sites do not turn over anything like Col's (referring to Mr Colin Zibara). Sales are not like what they are in Sydney. I have now walked away from the business due to my divorce and cannot repay you. This is not my fault. This is George's fault (referring to George Dibb)." Ms Ventouris was distressed to hear this news and asked Mr Zibara how he could do this to her. Mr Zibara said "I tried my best" and that he was walking away because he had problems with his divorce and could not make repayments. He further explained that he was walking away from his obligations on the Redfern apartment as well and was giving the key back to Sydney Home Loans. 156 Other enforcement action followed throughout 2005. On 28 April 2005 Enterprises issued a creditor's statutory demand to E-Style for $121,446.68. The winding up of E-Style was contested. On 30 June 2005 Enterprises issued an amended statement of liquidated claim in the District Court of New South Wales seeking the recovery of $125,999.97. No defence was filed and default judgment in the sum of $133,245.45 was entered on 25 August 2005. 157 Enterprises also advanced towards realising the Redfern apartment. Mr Minter served notices under Real Property Act 1900, s 57(2)(b). The first mortgagee of the Redfern apartment, Perpetual Trustee exercised its power of sale over the apartment. After satisfaction of all Mr Zibara's obligations to Perpetual Trustee no surplus was available to Enterprises. 158 Ms Ventouris decided to see Mr George Dib in about May or June 2005. She blamed him for what had happened and I find that she said "George you referred these people to me. You told me they are 'your family' and that everything would be OK. Anthony told me they were having issues initially with these sites? Is this true? If they were having problems why did you tell me otherwise?" Mr George Dib was not prepared to take the blame. He said, "This is not my fault. How was I to know they would not pay you? Col (Mr Colin Zibara) and Anthony are brothers, but I have found out that they are very different. Anthony spends too much money on himself. He lives the high life." Ms Ventouris pleaded that the money must be returned and Mr George Dib said "Leave it to me. I will set up a meeting with both of them and see what we can do". Mr George Dib suggested that he or Mr John Dib would call back to speak to her. Mr George Dib agrees that a conversation to this effect did take place with Ms Ventouris. Although he says that Mr Zibara had not complained to him of having "issues" with the three sites. Neither Mr George Dib nor Mr John Dib called Ms Ventouris back in the short term. 159 Ms Ventouris decided to take the matter one step further in March 2006. She made an appointment by telephone to see Mr John Dib. She appealed to his sense of fairness and said "I need your help to resolve this". She met him and Mr Colin Zibara at a cafe on Parramatta Road Croydon. At the time of the hearing Mr John Dib was in Lebanon and gave evidence about this meeting by video link. I generally accept Ms Ventouris version of this conversation. She said to him, " John is a huge problem here. You guys put me up to lending this money and I need your help to get it back." I find that, although he denies it, that Mr John Dib then said to her "Betty I know that you have been done in by this. My brother stuffed up. Anthony cares more about his lifestyle than the responsibilities he has and I am really sorry that we have caused you this grief." Ms Ventouris also says that Mr John Dib referred to his brother as "an idiot". But I do not accept that he said that to Ms Ventouris about his brother. Mr John Dib seemed to me, even with the disadvantage of trying to assess him by videolink, to be too diplomatic to say such a thing. Mr John Dib did arrange for Ms Ventouris to see Mr Macree but nothing came of their meeting. Mr John Dib's statement to Ms Ventouris about Mr George Dib having "stuffed up"is a weak admission Mr George Dib's involvement in and mismanagement of this whole transaction. It is not a direct admission that the representations were made. It is some admission of the Dib Group's responsibility for what happened. 160 The final contact between Ms Ventouris and Mr George Dib about non-payment of E-Style's debt to Enterprises was a meeting with Mr George Dib in July 2005. Ms Ventouris and Mr George Dib agree on the content of this conversation. In the conversation Mr George Dib asked why Enterprises was bankrupting E-Style and suggested that Enterprises should accept the sum of $70,000 that Mr Antonios was then seeking to raise. Otherwise, he warned her, nothing might be forthcoming. Ms Ventouris pointed out she was owed $100,000, not $70,000 and that although this proposal had ben suggested for about 12 months she had not yet heard of Mr Antonios receiving the unconditional loan approval that would allow it to proceed. 161 As none of the other enforcement avenues had borne fruit, on 24 March 2006 Enterprises appointed Geoffrey David MacDonald and Blair Pleash from the firm Hall Chadwick as receiver and manager of E-Style. During the receivership Mr MacDonald sought to identify and realise E-Style's alleged assets at the Metro Petroleum sites at Bellbird, Cliftleigh and Heddon Greta. He had difficulty in doing so because of what had occurred between first default in August 2004 and his appointment in March 2006. 162 The defendants say that this course of conduct involving significant delay in confronting Mr George Dib is not consistent with someone who really believed that she had a virtual guarantee from the Dib Group of the repayment of the $100,000 advance plus interest. But that argument fails to recognise a number of features of her situation. First she gave some time too Mr Zibara in late 2004. Second, she took enforcement action step-by-step as the chronoloogy shows and did not decide to take the matter to Mr George Dib until 2005 when it was quite clear that other avenues had failed. Third, well into the second half of 2005 Ms Ventouris was obliged as an employee of St George Bank to continue to conduct a cordial relationship with Mr George Dib to the advantage of her bank employer. It was her duty to maintain the bank's relationship with Mr George Dib and the Dib Group. She was hardly in a position to be too confrontational. 163 A sequestration order was made against the estate of Mr Antonios on 12 October 2009. As at the time of hearing Mr Zibara could not be served with a creditor's petition, which had issued from the Federal Magistrates Court on 7 July 2009. E-Style was deregistered 26 July 2009. Dealings with Charged property at Cliftleigh and Heddon Greta 164 The contest between Enterprises and the Dib Group about the assets at the Cliftleigh and Heddon Greta sites was different in relation to each site. no allegations were made about the Bellbird site. The existing legal arrangements and the course of events at each site was different. But Enterprises has a common difficulty in establishing any cause of action in relation to assets at these sites. The starting point is the plaintiff's pleaded allegations. The Pleaded Case 165 Enterprises alleged that it owned stock and other property subject to the Charge at Cliftleigh and Heddon Greta. Enterprises further pleaded that in November 2003 E-Style agreed to dispose of the charged property at Cliftleigh to the Dib Group. The plaintiff says that this disposal of property triggered a crystallisation of the charge because this disposal was other than the ordinary course of E-Style's business. Alternatively it is alleged that the charge crystallised when E-Style defaulted on paying interest in July 2004. Thus it is said that Enterprises acquired an equitable proprietary interest in all of E-Style's property either in November 2003 or July 2004. 166 Enterprises alleges that the Dib Group took possession of all the charged property at Cliftleigh and Heddon Greta and transferred that property to third parties. The timing of those transfers was different for each site. The transfers that were said to have taken place are the foundation of the allegation of interference with contractual relations and the defendants knowing receipt of Enterprises equitable property under the charge. It is alleged that the defendants knew (1) that the charge would crystallise at the moment that it did in fact crystallise (in either November 2003 or July 2004) and (2) that property subject to the charge was included in the property at Cliftleigh and Heddon Greta of which the Dib Group is alleged to have taken control. 167 The knowing receipt case is that the defendants knowingly received Enterprises' equitable proprietary interest in the charged property at Cliftleigh and Heddon Greta and that they are obliged to account to the plaintiff for the benefit obtained from that property. The unlawful interference with contractual relations case is that by taking possession of the property and selling it the defendants acted in disregard of Enterprises rights under the charge. The difficulty for Enterprises with both these equitable and common law claims is that they largely depend upon ambiguous inferences from documents in the period before the receivers were appointed. The elements of neither claim are made out. It is useful to consider each site in turn. The Cliftleigh Site 168 E-Style sold the assets at the Cliftleigh site in November 2003 to a third party, a Mr Raju. It was not sold to the defendants at that time. Mr Raju or not acting on behalf of the defendants when undertaking this sale. Mr Raju appears to have acquired the site to run his own business there. 169 There are two important consequences of Mr Raju's (and not the Dib Group's) acquisition of the Cliftleigh business and assets. The first is that Enterprises cannot show in respect of this site that the Dib Group received charged property. Rather the assets were put under the control of Mr Raju at his initiative. The second consequence is that Enterprises cannot show that the sale to Raju was not in the ordinary course of business leading to a crystallisation of the Charge as early as November 2003. 170 The stock report for the sale in November 2003 prepared by Precision Stocktaking Services identifies the purpose of their stock take at that time as "Sale of business from E Style marketing P/L to Raju". The documentary evidence supports the inference that Mr Raju did take control of the assets. 171 The Cliftleigh site did change hands again in March 2006 when it was acquired by Armora No 2 Pty Limited, a company controlled by the Dib Group. Armora No 2 was a company that the Dib Group used to acquire sites that were underperforming, so they could be operated on behalf of the group whilst a new tenant/franchisee was found. In my view Enterprises did not retain any proprietary interest in the assets of the Cliftleigh business that Raju acquired in November 2003. There was no receipt by the Dib Group of Enterprises' equitable property when Armora No 2 acquired the site in March 2006. 172 Enterprises also attempts to use the Raju sale to show that the Charge crystallised in her November 2003 on the basis that the sale was not "in the ordinary course of business". The difficulty with this part of the case is that this was not the only site operated by E-Style, Mr Zibara did not give evidence to explain what the course of E-Style's business was, doing up and on-selling rather than just operating service stations did not seem beyond some descriptions given of E-Style's operations. It should not be inferred that the sale to Raju was other than in the ordinary course of business. The Heddon Greta Site 173 There are difficulties with Enterprises case in respect of this site as well. Mr Zibara on behalf of E-Style surrendered this site and Armora No 2 took over the site in about June 2004. The site was not meeting financial expectations. This may well have been one of the reasons, in addition to personal problems, that impeded Mr Zibara's capacity to pay interest to Enterprises after July 2004. The central issue in relation to this site is what is to be inferred from Armora No 2's takeover of the site at this time. 174 Enterprises says that the Dib Group paid $80,000 for the goodwill of the site and acquired it. Enterprises relies upon an aged receivables document of the Dib Group dated 18 June 2004 that it says shows that such an acquisition was made and that goodwill was paid for. The defendants say that the site was surrendered, that no goodwill was paid for the business and that no business was acquired. There are many problems with the plaintiff's case in relation to this site. 175 First, the principal document said to support Enterprises' inference is ambiguous in my view. It refers to a figure of $127,578.54, which includes an aged receivables figure of $28,524.43 and a balancing figure of $99,054.16. Independently of the $127,578.54 the document contains a handwritten statement "Minus – Goodwill - $80,000" and "Minus – Stock - $15,668.41". Exactly what is the transaction being represented by the document is quite unclear. Enterprises says that it could refers to a sale price of which there was a goodwill component of $80,000. But it could also be an informal calculation of many kinds, which does not have any such meaning. The defendants say that the only logical inference to be drawn from the calculations is that against an amount owing to the Dib Group a credit of $80,000 was being given. That was the amount that Mr Zibara had originally paid for Heddon Greta. Unfortunately Mr George Dib, who gave this explanation of forgiveness of debt, was not cross-examined about this document. I do not think that anything can reliably be inferred from this document. 176 Second, I agree with the defendant's submission that what appears to have happened is that E-Style surrendered its sub-lease in about June 2004 and that the franchise agreement between E-Style and the Dib Group over this site effectively terminated. When E-Style acquired the site in May 2002 a franchise fee described as "goodwill" was paid. All that seems to have happened in June 2004 is that the Dib Group reduced E-Style's indebtedness to the Dib Group by the amount which E-Style had originally paid out to take up the franchise agreement. It is improbable that there was any other goodwill attaching to the business at the site in June 2004 as the business appeared near to closure and had to be surrendered. 177 Third, the evidence is that the site stock at the Heddon Greta was taken by Amora No. 2 and not the defendants. Amora No.2 is not a party to the proceedings. Liability does not automatically arise in the defendants merely because Amora No. 2 is an entity related to the first defendant. Indeed Amora No. 2 paid full value by cheque. 178 In summary, with respect to both the Cliftleigh and Heddon Greta sites the plaintiff fails to establish that the defendants actually acquired any property of the plaintiffs. At Cliftleigh the defendants acquired property of Mr Raju. At Heddon Greta Amora No. 2 acquired the defendant's property. Applicable Legal Principles 179 The elements of the tort of interference with contractual relations are well established: Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530. To make out a cause of action of interference with contractual relations the plaintiff must establish: (a) the existence of a contract between A and B; (b) C has knowledge of that contract, but it is not necessary that C has knowledge of its precise terms; (c) C interferes in some way with that contract; i. as to induce one party to break it; or ii. so as to interfere in some way with its performance without justification; and (d) the party bringing suit must prove damage. 180 The Dib Group contested all but the first of these elements. The Existence of a Contract 181 There was no contest between the parties that the loan agreement and the Charge existed between Enterprises and E-Style in the terms that they have already been described in these reasons. The Dib Group's Knowledge of the Contract 182 Enterprises claims that the Dib Group had actual knowledge of the loan agreement and the charge. I accept Ms Ventouris' evidence that she told Mr George Dib that Enterprises was making a loan agreement with E-Style. I also accept that she told Mr George Dib at the Café Neptune meeting that Enterprises was taking a charge over E-Style's assets. 183 I do not accept the defendant's denial of knowledge of the loan agreement and the charge. Some of the most unsatisfactory oral evidence that Mr George Dib gave related to his denial of understanding that a legal "charge" was a means of acquiring financial accommodation for the Dib Group. Enterprises demonstrated that Mr George Dib had signed company charges both as a witness and as a director of the Dib Group. It is inconceivable that he did not have at least a general understanding of that a charge was a security. He chose to defend himself by saying that he did not understand what charges were rather than saying that Ms Ventouris did not tell him there was going to be a charge over E-Style's property. In so doing he took a position in my assessment of him, which was unsupportable given his business experience. This is yet another reason for preferring Ms Ventouris' evidence. On the other hand I do not accept that there was anything more than the barest reference to the Charge at the Café Neptune meeting. Dib Group's Interference with Contractual Relations 184 The key contest is whether or not if there was an interference with contractual relations that it was "without justification". The Dib Group says that any interference with Enterprises' rights under the charge was a collateral product of the Dib Group exercising its rights under its own franchise and lease agreements. It says that in circumstances where Enterprises had not appointed a receiver and seemed content to allow E-Style to keep trading it did not have to stand back and avoid dealing with E-Style's assets in its own legitimate interests. There was no intentional conduct impairing Enterprises rights. In my view the Dib Group's argument on this element is correct for several reasons. Dib Group's Interference with Contractual Relations 185 The key contest on this issue is whether or not if there was an interference with contractual relations that it was "without justification". The Dib Group says that any interference with Enterprises' rights under the charge was a collateral product of the Dib Group exercising its rights under its own franchise and lease agreements. It further says that in circumstances where Enterprises had not appointed a receiver and seemed content to allow E-Style to keep trading it did not have to stand back and avoid dealing with E-Style's assets in its own legitimate interests. I agree with this submission. The claim fails at this point for several reasons. First there was no Dib Group intentional conduct impairing Enterprises' rights to the property the subject of the charge. Everything that Armora No 2 or the Dib Group seems to have done relative to these sites was to act upon rights under its franchise and lease agreements. Second there is the problem that the property affected is either that of Mr Raju or the relevant actor is Armora No 2, which is not a party to these proceedings. Thirdly the pleaded case claims that the defendants acted tortiously in taking possession of Enterprises equitable property. How the tort is alleged to arise in respect of equitable property was not explained. Loss and Damage 186 I have not found on the evidence any unjustified interference by the defendants with the performance of the loan agreement and the charge, even if the tort were otherwise to be made out there are significant problems in Enterprises' damages case. Enterprises seemed wrongly to assume in argument that if the tort of interference with contractual relations were made out that Enterprises' appropriate measure of damages was for the costs which Enterprises incurred in attempting to seek recovery from E-Style and its guarantors. I do not think that that is correct. 187 Enterprises can only make out the tort of interference with contractual relations when it can establish that the relevant interference has occurred. Loss will flow after that time. That is a matter of some subtlety in this case. It is not at all clear that Enterprises would ever have appointed a receiver before 24 March 2006. It was only after appointing a receiver that Enterprises first had a realistic opportunity of realising E-Style's assets. If the Dib Group interfered with those assets and Enterprises' rights by placing them beyond Enterprises' reach at some time before March 2006, it is not clear whether that would have occurred at a time when E-Style would otherwise have appointed a receiver to realise the assets soon thereafter. It may well be those assets would have been lost or consumed by some other means before the receiver was appointed. There are an immense number of unexplored contingencies in the assessment of any damages claim in tort here. 188 Furthermore, the Charge is in place to secure the repayment of the loan moneys. The Plaintiff could not recover damages in this tort as well as receiving full compensation for misleading and deceptive conduct. I do not have to decide these questions because I have found that Enterprises has not made out the essential element of interference without justification. Interference with Enterprises' Equitable Rights under the Charge 189 Paragraphs 19 to 24 of the Further Amended Statement of Claim are entitled "Receipt of Equitable Property". The pleading avers that on the happening of various events of crystallisation of the Charge, namely the sale of Cliftleigh in November 2003 and the default on the loan in July 2004, the plaintiff acquired an equitable proprietary interest in all of E-Style's property. The pleading further avers that E-Style transferred the Cliftleigh and Heddon Greta Charged Property to third parties. The basis of the remedy then said to arise is completed by the allegation that the defendants "knew the facts" as to the existence of the Charge and the property charged. The precise legal basis upon which Enterprises' claim rests is obscure. It appears to be a kind of first limb Barnes v Addy (1874) LR 9 Ch App 244 claim. But it is an essential element of liability under the first limb that the transfer of the property be in breach of a fiduciary obligation: Robb Evans & Associates v European Bank Limited (2004) 61 NSWLR 75 at [160]-[161]. 190 This equitable cause of action otherwise has the same problems as the common law cause of action. With respect to the Cliftleigh property the plaintiffs appear to have overlooked the intervention of Mr Raju. Again with respect to Heddon Greta the assumption is that there was a sale to the Dib Group which is an inference that I am not prepared to draw. Unconscionable Conduct 191 Enterprises' claim in unconscionable conduct seems to have been added something of an afterthought. It is pleaded as an addition to a number Enterprises' allegations. In my view it is not made out in respect of any of them. 192 Enterprises alleges that conduct of the defendants was unconscionable in engaging in that the alleged misleading conduct, in receiving equitable property and any intentionally interfering with Enterprises' contractual relations with E-Style. The claim for misleading and deceptive conduct succeeds without the need to prove unconscionable conduct. All the other claimed equitable remedies or causes of action fail upon the grounds already indicated. The additional plea of unconscionable conduct based upon the same facts does not produce a different result. 193 I also accept the correctness of the defendant's submission that there is no suggestion that the defendants overborne Ms Ventouris will at allot that she was approaching the loan transaction under any kind of special disability that might ordinarily attract relief for unconscionable conduct such as that considered in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461 (per Mason J) and 474 (per Deane J). Although Mr George Dib wanted the loan made an express expressed reassuring views that I have found, about the prospects of repayment, Ms Venturis, the practical decision maker on behalf of Enterprises, was not under undue pressure to make a loan. She was free not to make it. As a group acting as directors she and her mother were not under any illegitimate pressure. Nor has it been demonstrated that Mr George Dib was aware of a particular vulnerability on her part. Laches 194 The Dib Group also seeks to answer the plaintiff's unconscionable conduct and Barnes v Addy [(1874) LR9ChApp 244] case with a defence of laches. It is strictly not necessary to consider the defence, as the equitable claims are not made out. Even if they were, I do not think a defence of laches would succeed here the following reasons. 195 The Dib Group says that Enterprises was guilty of laches in taking some 21 months to appoint a receiver after the first default in August 2004. Whilst this is a long period Ms Ventouris' conduct during the period was not unreasonable when assessed in all the surrounding circumstances. I have made findings about the factors that account for this delay in other parts of these reasons. 196 The features of Enterprises conduct during that approximate 21-month period were that it was pursuing other remedies under the loan agreement and under its securities. Furthermore, it was in close and regular contact with representatives of the Dib Group, particularly, Mr George Dib. Enterprises gave time to pay to E-Style, issued letters of demand, obtained a District Court judgment against E-Style, communicated with Mr Zibara and Mr Antonios, served a statutory demand under the Corporations Act 2001 on E-Style, issued a Real Property Act s 57(2)(b) notice, took Mr Antonios to bankruptcy and issued a bankruptcy notice against Mr Zibara. All of this with inactivity and clearly signalled to the Dib Group Enterprises' continuing interest in recovery of the loan. 197 Finally it is difficult to see how the Dib Group has suffered any lasting detriment from the delay. In my view the Dib Group cannot make out the defence of laches. Conclusions and Orders 198 In conclusion therefore I have found that the plaintiff's positive case that the defendants made representations inducing the plaintiff to lend money to E-Style is made out. The representations are not misleading because Enterprises has established that E-Style was in financial difficulty in September 2003. The representations are as to future matters relating to the capacity of E-Style to repay the loans. Enterprises did establish some reasons to doubt E-Style's financial viability in September 2003. The representations were misleading because the defendants did not establish that there were reasonable grounds for making the representations under Trade Practices Act s 51A and Fair Trading Act s41 I have also found that Enterprises relied upon the representations and suffered loss and damage as a result. 199 Subject to questions of apportionment. Enterprises is entitled to recover the capital of $100,000, that it advanced, interest at the rates fixed from time to time under Civil Procedure Act, s 100 together with its costs of recovery. The parties will need to undertake a calculation of interest and either to agree upon or to put submissions about the quantum of the costs of recovery. The parties should agree upon a procedure for determining these questions of loss and damage if it cannot be agreed. 200 I have found that subject to questions of the application of the apportionment mechanism under the Trade Practices Act that the defendants are responsible for 80% of the plaintiff's loss and damage due to the making of the representations causing Enterprises to make a loan. Judgment may only be entered against them for that portion of the total loss and damage for misleading and deceptive conduct. Ms Betty Ventouris is a concurrent wrongdoer with the defendants and is responsible for the other 20% of the plaintiff's loss and damage for misleading and deceptive conduct. 201 The plaintiff did not make out against the defendants its case of interference with contractual relations. Nor did it make out its case of knowing receipt of Enterprises' equitable property under the Charge. Nor did it make out its case for relief based upon alleged unconscionable conduct. 202 I direct the parties to bring in short minutes of order to give effect to these reasons. I grant liberty to apply on three days' notice. ********** 14/09/2010 - typographical error - Paragraph(s) 1, last sentence- "Enterprises" replaced with "defendants" 25/10/2010 - Typographical error- 'Enterprises' changed to 'the defendants' - Paragraph(s) Last sentence, paragraph 1 10/02/2011 - typographical error - Paragraph(s) [94] 10/03/2011 - typographical error - Paragraph(s) paragraph 96 "not" added after the words "I was" in the sentence "I was informed by Anthony Zibara or Joe Antonios...." 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.