District Court New South Wales Medium Neutral Citation: Tan Republic Pty Ltd (ACN 147 290 926) v Isabella Shop Fitout & Design Pty Ltd (ACN 147 193 815) & Ors [2013] NSWDC 320 Hearing dates: 11-15 March 2013; 24 April 2013; 13 May 2013 Decision date: 21 June 2013 Jurisdiction: Civil Before: Gibson DCJ Decision: (1) Judgment for the plaintiff against the first and second defendants. (2) Judgment for the third defendant against the plaintiff. (3) Parties to bring in Short Minutes of Order reflecting the calculation of damages and the agreed sums for GST and interest. (4) Liberty to apply in relation to costs. (5) Exhibits retained for 28 days. Catchwords: CONTRACTS - general contractual principles - parties - sham corporate entities - plaintiff enters into contract for shop fitout design with sham "corporation" using other companies' ACN and ABN numbers - whether plaintiff contracted with any corporation, or with the individuals who conducted the businesses CORPORATIONS - identification of - Australian Business Numbers (ABNs) and Australian Company Numbers (ACNs) TRADE PRACTICES - contract for shop fitout - fitout negligently designed and installed - whether conduct of defendants misleading and deceptive - concurrent tortfeasors - quantum Legislation Cited: Australian Consumer Law (Cth), ss 18, 87CB, 87CD and 236 Civil Liability Act 2002 (NSW), s 35 Competition and Consumer Act 2010 (Cth), s 137B Corporations Act 2001 (Cth), s 153 Fair Trading Act 1987 (NSW), s 42 Financial Transaction Reports Act 1988 (Cth), ss 3 and 18 Retail Leases Act 1994 (NSW), s 16 Trade Practices Act 1974 (Cth), ss 51AA, 51AB, 51AC, 51, 52, 53 and 82 Uniform Civil Procedure Rules 2004 (NSW), r 42.1 Cases Cited: Bullock v London General Omnibus Company [1907] 1 KB 264 Ferdinand Nemeth v Prynew Pty Ltd [2005] NSWSC 1296 Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10 Jones v Dunkel (1959) 101 CLR 298 Sanderson v Blyth Theatre Co [1903] 2 KB 533 Texts Cited: - Category: Principal judgment Parties: Plaintiff: Tan Republic Pty Ltd (ACN 147 290 926) First Defendant: Isabella Shop Fitout & Design Pty Ltd (ACN 147 193 815) Second Defendant: Bill Issa Third Defendant: Tina Issa Representation: Plaintiff: Mr R P Freeman Defendants: Mrs J M Whitaker Plaintiff: Harbourside Legal Services Defendants: Agostino & Co. File Number(s): 2011/351285 Publication restriction: None Judgment Introduction 1The plaintiff (in a "Further Further Amended Statement of Claim", filed on 10 December 2012) seeks damages against the defendants for breach of contract, negligence and conduct in contravention of ss 51AA, 51AB, 51AC, 51, 52 and 53 of the Trade Practices Act 1974 ("the TPA"). Relief is also sought pursuant to s 42 Fair Trading Act 1987 (NSW) ("the FTA") and s 18 Australian Consumer Law (Cth) ("the ACL"). 2The second and third defendants, who are husband and wife, were sole directors respectively of companies which carried on the business of shopfitting at premises in Smithfield, New South Wales. The second defendant was the sole director of Isabella Australasian Pty Ltd ACN 128 689 314 ABN 78 128 689 314, a company which went into liquidation on 1 February 2011. The third defendant is the sole director and secretary of the first defendant (T 419), which was incorporated on 4 November 2010. The statement of claim (paragraphs 6B, 13B and 13C) also asserts that the second and third defendants are partners carrying on the business of shop fitouts. 3An Amended Defence, filed by the defendants on 30 January 2013, denies liability, challenge quantum and brings claims against concurrent tortfeasors under s 35 Civil Liability Act 2002 (NSW) including the solicitor for the plaintiff, and a claim for contributory negligence. A claim against the solicitor for the plaintiff and "the Centre Management of Pacific Square, Maroubra" as "potential" concurrent wrongdoers had previously been foreshadowed in paragraph 38 of the 29 March 2012 defence, but the defendants merely reserved their rights. These pleadings (and a claim against the plaintiff for contributory negligence) were then formulated as a 70-paragraph amendment of thirteen pages to the defence six weeks before the trial. An overview of the plaintiff's case 4The plaintiff was incorporated on 10 November 2010 for the purpose of conducting a tanning and beauty salon in premises at the Pacific Square Shopping Centre, Maroubra. The plaintiff's sole director was Maggy der Bedrossian ("Maggy" or "Ms Der Bedrossian"). As the premises over which the plaintiff proposed to take a lease were not set up for a tanning and beauty salon, it was necessary to engage the services of a shopfitter. Maggy looked on the Internet for shopfitters and found a business operating from premises at 2-3 / 44 Smithfield Road, Smithfield, NSW. 5The shopfitters Maggy found on the Internet operated under the name "Isabella". The identity of the "Isabella" business entity that Maggy, on behalf of the plaintiff, found on the Internet, and with whom the plaintiff entered into first a design and then a fitout contract, has been an issue of dispute during these proceedings. 6What is not in dispute is that, following discussions with Mr Issa, the second defendant in these proceedings, the plaintiff made a series of payments by instalment pursuant to two contracts. On 19 November 2010, she entered into a design contract agreement for the sum of $2,750 for a shop design, after receiving an "Architectural & Design Offer" from Bella Retail Design Pty Ltd ACN 128 689 314 ABN 46 602 945, a non-existent company using false ACN and ABN numbers (cf s 153 Corporations Act 2001 (Cth)). On 3 February 2011, the plaintiff entered into a written agreement for the fitout of premises, after receiving a quotation from "Isabella Shop Fitouts & Design Pty Ltd" (ACN 128 689 314, ABN 46 602 142 945), which identified the contracting party on page one as a company placed in liquidation two days beforehand and, on other pages, a company identified as "Isabella Shopfitouts and Design Pty Ltd", which closely resembles, but is not, the name of the first defendant. The terms of these agreements ("the "the design agreement" and "the fitout agreement") are set out in more detail below. 7The issues in these proceedings should be simple. The plaintiff entered into two contracts, one oral and one written, one being for a shop design and the other for a fitout. The issues for determination should be whether the persons/companies with whom the plaintiff contracted made representations upon which the plaintiff relied, whether they were misleading and deceptive as alleged, and whether there was breach of contract and/or negligence by the other contracting party in the design or work performed. 8Unfortunately, as the contractual documents and correspondence make only too clear, the true identity of who ran the "Isabella" shopfitting business was hidden behind a maze of fictitious company names, business names, ABNs and ACNs. A list of those names, where they occur, and whether they are genuine business entities, is set out as a schedule to this judgment. 9A finding as to which company and/or individual contracted with the plaintiff is a pre-requisite to the findings for breach of contract. Chronological review of each of the contemporaneous documents and comparison of these with the evidence of the witnesses would be the only reliable means of identifying the party contracting with the plaintiff, making the representations, and carrying out the work. This is particularly the case in relation to correspondence sent by the second defendant, Mr Issa, in the hiatus between these two contracts, which correspondence I find was the principal cause of the problems, as well as compounding errors in design. 10The negligence claim relates principally to the circumstances in which the second defendant told the shopping centre manager that his business had other work to do, and wanted the lessor to complete the plumbing work before 13 December 2010, despite the plaintiff not yet having entered into any fitout contract with him or any corporate entity with which he was associated. The shopping centre was responsible, under the lease, for the placement of core holes to accommodate the drainage pipes and sewerage pipes. The second defendant sent an email to the shopping centre management on 9 December 2010 saying he wanted to "wrap up" Tan Republic and have it to the certifier before 13 December. The plumbing would be "addressed at a later stage" as the certifier would not be concerned where the core holes were. 11Unfortunately, the placement of these core holes did matter, and the work had to be done again. In addition, the revised plan by the second defendant to accommodate this error, namely to raise the floor, turned out to be unworkable. Further, when work was done, it was not performed competently. An expert called by the plaintiff provided a report saying the fitout had to be removed and completely replaced. The expert evidence on quantum clearly demonstrates the failings of the design and fit-out contracts and the quantum, consisting of the actual fit-out costs, the consequential loss claim and the Consumer Law claim, consists of claims for readily ascertainable sums (a claim for loss of profit was dropped before the hearing). 12The representations identified in the current statement of claim as false and/or misleading or deceptive are important. These were: (a)On 2 December 2010 the defendants represented to the plaintiff that they were appointing Metropolitan Building Approvals as Principal Certifying Authority (PCA) for the job, to provide a Complying Development Certificate (CDC) to enable works to be commenced (paragraph 14); (b)On 5 January 2011 the second defendant represented to the plaintiff that it could commence works immediately without a Development Approval (DA) and that if there were difficulties with Randwick Council he would take responsibility for this (paragraph 15); (c)On 7 January 2011 the second defendant represented to the plaintiff that "Bella", the non-existent company, was obtaining a CDC from City Plan Services to enable a company named Tank to carry out works (paragraph 16); (d)On 10 January 2011 the second defendant represented to the plaintiff that he, the fictitious company Bella and another company the plaintiff asserts is fictitious ("Fitouts") would obtain all DAs and certificates (paragraph 17); (e)On 3 February 2011 Maggy, on behalf of the plaintiff, was induced to sign a second written contract for fitout work, without being informed of the matters set out in paragraphs 20(a)-(h) of the statement of claim; (f)In contravention of ss 51AA, 51AB, 51AC, 51A, 52 and 53 of the TPA and s 42 of the FTA, during the period November 2010 to May 2011, the defendants purported to contract using misleading or fictitious names, ABNs and ACNs of companies in order to avoid responsibility under the contracts arising from their incompetence (paragraphs 23 and 24 of the statement of claim). The defendants' argument 13The defence filed on 29 March 2012 was conceded, by Mrs Whitaker for the defendants, to have failed to identify the contracting party to either contract. The Amended Defence filed on 30 January 2013 does not make this clear either, but pleads the following defences: (a)Admissions and non admissions to paragraphs 1-13 concerning the identity of certain of the parties and companies identified (including the admission that Bella Retail was not a corporation); (b)The matters in paragraphs 6B, 6C, 13B, 13C and 15 onwards (save for certain admissions) including any partnership between the second and third defendants are denied; (c)Quantum is denied (paragraphs 31-33) as is causation (paragraph 37); (d)A denial of certain contractual claims is made (paragraph 34) as is any liability on the part of the third defendant (paragraph 35); (e)A lengthy claim under Part 4 Civil Liability Act 2002 (NSW) and s 137B Competition and Consumer Act 2010 (Cth) ("the CCA") is made. The claim for proportionate liability is brought against four parties: (i)Clycut Pty Ltd, the lessor of the premises and registered proprietor of "Pacific Square"; (ii)Alpine Hotels Pty Ltd, the lessor of the premises; (iii)Caverstock Group Pty Ltd, the project manager for the lessor; and, (iv)Mr Ishkhanian and Habourside Legal Services Pty Ltd, the solicitor for the plaintiff with carriage of this matter and his employer. Who do the defendants say was the contracting party in the design and fitout contracts? 14Mr Freeman states, at page 21 of his submissions in reply, that the defendants pleaded in their original defence of 29 March 2012 that Isabella Australasian Pty Ltd, the company in liquidation, traded as "Bella Retail Design", and that references to "Australasian" (particularly in paragraphs 13, 14 and 16 of this defence) refer to the company in liquidation, asserting this company to be the contracting party. Mr Freeman goes on to state that it was only in the amended defence that the defendants asserted the contracting party was the first defendant. It is by no means clear, from either the original defence or the amended defence, who the contracting party providing the design and shopfitting is pleaded to be. It was in an endeavour to elicit submissions on this issue that I prepared the list of names of business entities that is a schedule to this judgment. 15I agree that the original and amended defence are pleaded in this fashion. The amended defence adds further confusion in relation to paragraph 6B: "Paragraph 6B is denied. The business of shop fit out and design for reward was carried out at all material times by the First Defendant and Isabella Australasian Pty Ltd (now deregistered). Bill and Tina say in further response to the paragraph that at all material times the only partnership that Bill and Tina were involved in was a partnership known as the B & T Issa Partnership whose sole business activity was the management of real property known as 2/46-48 Smithfield Road, Smithfield which was owned by the partnership, and which received rental income from the property." 16In oral submissions on 13 May 2013, counsel for the defendants said that the pleading concerning paragraph 6B was a "mistake", and that the "and" between the First Defendant and Isabella Australasian Pty Ltd should be read as an "or". These companies were not in partnership. Although the defendants admitted that both company names were on the bank account into which the plaintiff's payments were banked and that, as the profit and loss accounts for both companies show, the first defendant simply absorbed the income and outgoings of the company in liquidation (Exhibit 14), the companies were separate entities. 17This is only one of the many uncertainties about the identity of the person or company who contracted with the plaintiff. A short summary of the identity problem is as follows: (a)The defendants admit the shopfitting business traded, inter alia, under a company name "Bella Retail Design Pty Ltd" when it was neither incorporated or registered (Defence, paragraph 3). This is clearly the company which gave the design offer to the plaintiff. The question is who was trading as "Bella Retail Design" in November 2010; (b)The next issue is the conduct of Mr Issa between the time the design was provided in accordance with the contract in November 2010 and the fitout contract entered into on 3 February 2011; (c)Whether the offer of 2 February 2011 was made by Isabella Shop Fitouts & Design Pty Ltd (ACN 128 689 314, ABN 46 602 142 945) and whether this purported company was a contracting party for the fitout contract. How these proceedings were conducted 18Although the amount involved is comparatively modest, and the incompetence of the work clearly demonstrated by expert evidence, the hearing took five days, and the submissions are lengthy. This is in part because the hearing has been conducted, on the part of the defendants, in an atmosphere of white-hot hostility. The defendants objected to submissions based on Bella Retail Design's false corporate status and ABN and ACN numbers, and the circumstances in which bank funds appeared to travel to the first defendant from a company in liquidation, as matters which should not have been raised unless they were pleaded and particularised. The defendants' submissions complain of "multiple serious allegations" not put to the second and third defendants, failure to comply with Bar Rules 63 and 64 and the plaintiff's "extraordinary" submissions (see submissions in reply, pp. 1 - 2). The defendants are entitled to conduct the case as they see fit, but the combination of late amendments, angry exchanges in court and serious allegations in the defendants' written submissions made the case extremely difficult to manage. I encouraged the parties to provide their submissions in writing only, and provided a second date for submissions and brief argument in order to accommodate submissions in reply. 19I shall first determine which of the individuals and/or corporate entities contracted with the plaintiff in November 2010 for the design of shop fittings and on 3 November 2011 for the fitout of the shop. This can best be demonstrated by a careful chronology of events. The evidence in these proceedings 20I shall first set out the evidence as to how the plaintiff's principal director, Margaret Der Bedrossian, came to get in touch with the persons operating the business at the Smithfield address. I shall next set out the names of the parties on the contractual documents for the two respective contracts. I shall then endeavour to identify who made the representations to the plaintiff, and who performed the work which the plaintiff claims was performed negligently. This requires a lengthy analysis of the factual material. 21Once the mystery of who the contracting parties are, or should be, has been solved, I will consider the claims for breach of contract, negligence and misleading and deceptive conduct. The preliminary discussions leading to the contracts 22In Ms Der Bedrossian's affidavit dated 26 October 2011 at paragraph 16 she states that while she was researching shopfitters for the design plan of the premises she found contact details for "Isabella" on an internet search through Google. She left a message on their voicemail service. She then received a telephone call from a man who introduced himself as "Bill" (Mr Issa, the second defendant) from Isabella (paragraph 17 of Ms Der Bedrossian's affidavit). 23Maggy described the conversation in question as follows (paragraph 17 of Ms Der Bedrossian's affidavit): "I said: I am in the process of opening a spray tanning and waxing salon and I need plans drawn up to submit to the shopping centre and some assistance with council regulations and requirements. Issa said: I can help you with all of that. I said: I am very confused about the Council regulations as I have been given 2 different stories form [sic] the Centre and from the Council can you help me with this? Issa said: I have seen things like this happen all the time, I have been doing this for years and I can help you out. I can even come to the Council with you to submit the paperwork. I said: I was going to go to the Council in the morning to see what I need. Issa said: Don't go yet, come and see me first and we can do it together with all the right paperwork. I said: Ok." 24The plaintiff was incorporated on 10 November 2010. On 13 November 2010, Maggy went to the office of "Isabella" and met the second defendant, as well as a lady who introduced herself as "Helen". She was shown different design concepts and samples of fabrics and other materials from the resources of the shop. Maggy said that she had a conversation as follows with Mr Issa concerning forms from Randwick Council (paragraph 19 of Ms Der Bedrossian's affidavit): "Issa said: These are the required forms for the Council for a Beauty Salon. I said: Ok. Issa said: I will contact the shopping Centre and find out what is needed to clear up the confusion about the DA. I know Aaron and I have worked with him before." 25During this conversation, Maggy says the second defendant showed her a document entitled "Architectural & Design Offer" and the conversation continued as follows: "Issa said: This is what we cover, this is all a package, and this is what you present to the Council and to the shopping Centre. I will personally assist you when you go to the council to submit the forms. I said: Great I feel relieved that I am on the right track and that someone can advise me on what to do. The Council requirements and applications have been confusing me because of what I have been told, I am glad that you know what I need." 26On or shortly after 19 November 2010, Maggy received a letter from the second defendant as follows: "[Bella RETAIL DESIGN PTY LTD 3/44 Smithfield Road, Smithfield NSW 2164p. 9757 2221f. 9757 1223acn. 128 689 314abn. 46 602 142 945]19/11/2010Dear Valued Client, Thank you for appointing Bella Retail Design to your new project. At this stage we are waiting for a design offer to be signed and monetary requirements cleared as to schedule a start date.When correspondence is received Bella will endeavour to complete your project in the shortest possible time. It is a preference that projects not be left till the last moment as time is required to produce the quality of work expected in today's competitive market where an exceptional fitout will give you the image that you are looking for. Please note the total amount of design fee less the GST will be credited to your build offer if Isabella Australasian is awarded the fit out. This amount will be credited to your final payment. Also note that the industry rate for this type of design is 10% of the estimated fit out. We have decided to discount this as you can see by the attached Design Offer.Yours Sincerely,Bill Issa[How to payBY MAILPO Box 36Kemps Creek 2178NSWBY DIRECT DEBIT PAYMENTNAB Business Cheque accountAccount name: Isabella Shop Fitouts & DesignBSB No: 082-366 Account No: 183238678]" (Exhibit A, tab 6) 27It should be noted that four entities were referred to in this first correspondence: (a)"Bella RETAIL DESIGN PTY LTD" was referred to in the letterhead; (b)"Bella Retail Design" was referred to in the first paragraph; (c)"Isabella Australasian" was referred to in the second paragraph and marked up in bold; and, (d)"Isabella Shop Fitouts & Design" was referred to in the "How to pay" field. 28At the time of entering into the contract, the company placed into liquidation on 1 February 2010, Isabella Australasian Pty Ltd (with a corporation registration number of 128 689 314), did hold a business name for 'BELLA RETAIL DESIGN' (Exhibit A, tab 6). This was the same ACN number as that given on the letterhead for "Bella Retail Design". The ABN given on the letterhead for this fictitious company was ABN 46 602 142 945, the ABN for the Brandon Discretionary Trust. The ABN for Isabella Australasian Pty Ltd was ABN 78 128 689 314 (Exhibit A, tab 4). The business name "Bella Retail Design" does not appear in either the design or fitout contracts. 29Behind this letter was a document headed "Architectural & Design Offer" which Maggy recognised as the same document she had seen and discussed when she attended the second defendant's office. The heading on that document contains the same "Bella" logo and the company in question is "Bella Retail Design Pty Ltd" at the Smithfield address. The ACN is 128 689 314 and the ABN is 46 602 142 945. 30The "Architectural & Design Offer" is a key document in this case. It is on the letterhead of Bella Retail Design Pty Ltd, with the ACN is 128 689 314 and the ABN is 46 602 142 945, and this is the best indication of the contracting party. On the left hand side appears a logo "Bella", which reinforces this. "Isabella Australasian" is not identified, and as the banking record show, this company was largely inactive by November 2010. The reference in the "How to pay" field to "Isabella Shop Fitouts & Design" does not give the company ACN or ABN. It is named as a vehicle for payment only. 31I note, looking at the list of representations in the claim, that the only representation which would appear to relate to events relating to the signing of this contract is representation (f). 32On 23 November 2010, Maggy received an email addressed to Aaron Malouf, the Asset Manager at Pacific Square. The text of this email is as follows: "From: Isabella Retail - Shopfitouts and Design [mailto: info@isabellaretail.com.au]Sent: Tuesday, 23 November 2010 8:52 AM To: aaron.malouf@pacificsquare.com.auCc: 'maggy der bedrossian'; 'Helen Tsigounis'Subject: Tan Republic - Maggy Der Bedrossian - Requested informationImportance: HighHi AaronThankyou [sic] for the chat this morning and I will be looking forward to submitting the design for Tan Republic for your approvalI would request that you provide the following; [sic]» Letter of consent by owners (please make sure that the person/persons signing this letter are the rate payers at council)» Fire schedule for the building. You have advised that you are waiting on an updated [sic]» Allocated parking. You have advised that this will be covered under the blanket DA of Pacific Sq which I am happy withPlease also find attached our company portfolio for your records, [sic]Once again, thankyou [sic] for your helpKind Regards,Bill IssaManaging DirectorIsabella Retail - Shop Fit Outs & Designa. 2/44 Smithfield Road, Smithfield NSW 2164p. (02) 97572221f. (02) 97571223m. 0413 670 757w. http://www.isabellaretail.com.au/ [Logo 1:] [ISABELLA SHOP FITOUTS & DESIGNBill IssaDirectorIsabella Australasian PTY LTDp (02) [illegible]f (02) [illegible]a 2/44 Smithfield Rd, Smithfield 2164w www.isabellaretail.com.au][Logo 2:][Isabella Design Headquarters"Finalist" in the 2010 Dulux Colour Awards]" (Exhibit A, tab 7) 33It can be seen from this email that the following entities were referred to: (a)"Isabella Retail - Shop Fitouts & Design" was referred to at the footer of the email, as well as in the "From" field at the beginning of the email; (b)"Isabella Shop Fitouts & Design" was referred to in Logo 1; (c)"Isabella Australasian PTY LTD" was also referred to in Logo 1; and, (d)An entity called "Isabella Design Headquarters" was referred to in Logo 2. 34It should be noted that both "Isabella Shop Fitouts & Design" and "Isabella Australasian PTY LTD [sic]" appear on the same logo (Logo 1) and share the same address, which address also appears at the bottom of the second defendant's email footer which reads "Isabella Retail - Shop Fitouts & Design". 35Included in this 23 November 2010 email was "our company portfolio". This document was not tendered. 36On the same day, Maggy met the second defendant on site, and they went to a café where Maggy and the second defendant filled out the Council documents which the second defendant had in his possession. Maggy says the second defendant said to her "this is everything that will be required to finish the package and submitted to the Council". He then asked her to fill in the DA application form and to use Isabella's address and phone number. He handed her a letter that was on "Isabella Shop Fitout and Design" letterhead, which was addressed to Randwick Council with respect to the Council DA and Construction Certificate (CC) application. The text of this letter was as follows: "ISABELLA SHOP FITOUTS & DESIGN [Isabella Shop Fitouts & Design PTY LTD2/44 Smithfield Road, Smithfield NSW 2164p. 9757 2221f. 9757 1223acn. 128 689 314abn. 46 602 142 945][We share our clients vision]November 24, 2010To City of Randwhick [sic] CouncilAdministration Centre30 Frances StreetRandwick NSW 2031Re: Tan RepublicOwner: Margaret Der BedrossianSite: 108A, 737 Anzac Parade Maroubra NSW 2035Council DA and CC ApplicationTo Whom It May ConcernThe proposed use of the premises known as Tan Republic at address 108A, 737 Anzac Parade Maroubra NSW 2035 is as follows. The Premises proposed use is primarily for spray tanning and also from time to time we propose to perform waxing.We propose to have 3x treatment rooms and a bathroom for the convenience of our clients. Tan Republic has always been to provide a spray tan application that is reminiscent of a "Real Sun-Tan". We have perfected this process through our flawless application techniques, our purpose built equipment & spray guns, the widest range of colours to suit every skin type, and also we are offering an eyelash tinting service and most importantly our superior attention to detail.Our reputation is built on our attention to detail, great friendly service, highly trained staff, and our money-back-guarantee!The hours of trade are proposed to be as follows:- Monday 7:30am to 7:00pm- Tuesday 7:30am to 7:00pm- Wednesday 7:30am to 9:00pm- Thursday 7:30am to 10:00pm- Friday 7:30am to 10:00pm- Saturday 7:30am to 5:00pm- Sunday 7:30am to 5:00pm- Public Holidays 7:00am to 5:00pm[1]ISABELLA SHOP FITOUTS & DESIGN [Isabella Shop Fitouts & Design PTY LTD2/44 Smithfield Road, Smithfield NSW 2164p. 9757 2221f. 9757 1223acn. 128 689 314abn. 46 602 142 945]We are expecting to have 1 Full time employees [sic] and 2 x casuals which will be hired as required.We will be encouraging our staff to use public transport as a bus stop is within walking distance of the above premises.We have allowed for disabled access within our premises.Fit out Rubbish will be collected by local contractor and all cardboard will be bailed and picked up for recyclying.All off cuts from building materials during fit-out period will be used were [sic] possible to minimize wastage.All methods of construction are in compliance with the BCA of Australia.- Disability Discrimination ActYours faithfully,[Signature]Margaret Der Bedrossian[2]" (Exhibit A, tab 8) 37At a follow up meeting on 26 November 2010 Maggy looked at the plans for approval and handed the second defendant a cheque for $1,350, which was part payment for the architectural and design fee. According to paragraph 5 of her affidavit of 16 April 2012, Maggy asked the second defendant: "Who am I making this cheque out to?". He told her to write "Isabella Shopfitouts [sic] & Design" and this was how Maggy then drew the cheque. 38This related to the Architectural & Design Offer for a total $2,500, which was an attachment to the offer of 19 November 2010. That document had been sent by "Bella Retail Design Pty Ltd", the non-existent company. The question is who was behind this non-existent company - the company the third defendant had just setup but which was not yet trading; the company of which the second defendant was sole director which had just ceased trading; and/or one or both of the second and third defendants. 39While other names appeared in the documentation, all of the plaintiff's money, as it transpires, went into the same account, namely the account in the name of Isabella Australasian as Trustee for the Brandon Discretionary Trust, account number 183238678 established on 27 October 2010, before the first defendant was incorporated (4 November 2010). The defendants claim that this account was actually an account for the first defendant, not Isabella Australasian Pty Ltd, and that the circumstances in which the name for Isabella Australasian Pty Ltd appeared were due to bank error on NAB's part. 40After a further conversation with the second defendant about how to obtain materials for a cheaper price, Maggy went to Randwick Council to submit the package to them. There was an exchange of emails between Helen Tsigounis (the "Senior Interior Designer" for "Bella") and Aaron Malouf on 1 and 3 December 2010 in relation to a list of requests for information (such as a letter of consent by the owners, the fire schedule and the allocated parking information) requested by the second defendant on 23 November 2010 (Exhibit A, tab 9). In these correspondence, Ms Tsigounis used the email account "helen@bellaretail.com.au" and had a corresponding footer which reads: "Helen Tsigounis Senior Interior DesignerBella[Isabella Design Headquarters"Finalist" in the 2010 Dulux Colour Awards]p. 02 9757 2221f. 02 9757 1223e. helen@bellaretail.com.auw. www.bellaretail.com.au" (Exhibit A, tab 9) 41Further, each of Ms Tsigounis' emails dated 1 and 3 December 2010 were forwarded to "Isabella Retail - Shopfitouts and Design <info@isabellaretail.com.au>" in the "Cc" field. 42On 2 December 2010, Maggy received from "Helen" a fee proposal from a private certifier named Metropolitan Building Approvals. The fee proposal was for fees relating to a Complying Development Certificate/Principal Certifying Authority (see Exhibit A, tab 10). This is the subject of the first false representation (a), namely that the defendants represented that they would appoint this body to obtain a CDC. 43On 6 December 2010, Aaron Malouf from Centre Management of the shopping centre sent an email to Maggy (and to a company identified in the defendants' chronology as "Isabella"), indicating that he was waiting for plumbing review and scheduling of works to be confirmed before he formally responded in relation to the shop fitout approval. 44The following day, 7 December 2010, the plaintiff executed a lease acknowledging that it had received a lessor disclosure statement under the Retail Leases Act at least seven days prior to entering into the lease. This lessor disclosure statement was prepared by Mr Abraham Ishkhanian, who is one of the parties named in the Amended Defence of 30 January 2013 as a concurrent wrongdoer pursuant to s 35 Civil Liability Act 2002 (NSW) (paragraphs 91-108). Essentially what is pleaded is that as at 7 December 2010, Mr Ishkhanian held the lessor disclosure statement and fitout guide in his file (paragraph 95) as a result of giving the Certificate of Advice. The "detailed procedure to be followed by the lessor and the plaintiff for the fitting out of the premises" (paragraph 97) and "handover" (paragraph 98) are set out as being matters by which he was therefore on notice. It was in these circumstances that Mr Ishkhanian first telephoned Mr Issa (paragraph 103) and then attended the meeting on 10 January 2011. 45It is helpful, in the chronology of events, to examine just what steps the defendants assert Mr Ishkhanian should have taken. It is asserted (paragraph 105) that Mr Ishkhanian owed a duty of care to "properly advise" the plaintiff as to the terms of the lease, the lessor disclosure statement and the fitout guide and that he and Maggy should therefore have taken the following steps: (a)That the Plaintiff or the Plaintiff's solicitor should establish whether or not a Construction Certificate or Complying Development Certificate was necessary prior to commencing any fitout works on the premises and prior to signing any agreement or contract with any of the Defendants [emphasis added]; (b)That the Plaintiff should ensure that a Certifying Authority or a Principal Certifying Authority ("PCA") had been retained or appointed per the requirements of the Environmental Planning & Assessment Act 1979 with respect to the fitout works prior to commencement of any works including any variations to the works [emphasis added]; (c)That the fitout guide set out a detailed process for approving any fitout works to be carried out on the premises and that the Plaintiff should have regard to the obligations and rights of the Plaintiff as referred to in the fitout guide and to the rights and obligations of the lessor and the lessor's fitout contracts prior to the commencement of any fitout works [emphasis added]; (d)That the Plaintiff should provide to Mr Ishkhanian a draft of any contract for fitout works so as to enable Mr Ishkhanian to provide the Plaintiff with legal advice about the draft; (e)That the Plaintiff should obtain legal advice about the terms of any draft contract for fitout works prior to executing it; (f)That the Plaintiff should seek clarification from the local council and the lessor about the need for a Construction Certificate or Complying Development Certificate prior to signing a contract for fitout works or commencing fitout works; and, (g)That it was necessary for the Plaintiff to ensure, prior to any commencement of fitout works including any variation to the works, that a Construction Certificate or Complying Development Certificate in addition to any relevant Development Consent had first been issued if this was required. 46It is important to look at these particulars in the chronological sequence of events. Each asserts that these duties were owed by Mr Ishkhanian and the plaintiff at a time prior to signing any agreement or contract with any of the defendants. These claims need to be seen in context of the correspondence below, as it was against this background that a quotation for $73,220.40 was provided on 8 December 2010 (Ms Der Bedrossian's affidavit sworn 16 April 2012, tab 4) but not accepted. It was also against this background that Maggy received one of the most important documents in these proceedings. 47On about 9 December 2010, Maggy received a copy of an email from the second defendant, this time with an "Isabella Retail - Shop Fitouts & Design" email footer, an "Isabella Shop Fitouts & Design" logo and another logo for "Isabella Design Headquarters "Finalist" in the 2010 Dulux Colour Awards", as follows: "From: "Isabella Retail - Shopfitouts and Design" <info@isabellaretail.com.au>Subject: RE: Tan Republic - Concept DesignDate: 9 December 2010 1:17:55 PM AEDTTo: "Aaron Malouf" <aaron.malouf@pacificsquare.com.au>6 Attachments, 34.3KBHI [sic] AaronHope you are having a good day, [sic]I bet you are looking forward to the holidays. The reason for my email is that I am planning on overseas to Dubai to look at opportunities to start up a sub branch thereI was hoping to wrap up Tan Republic before I leave. This would mean I would have to have it to the certifier before the 13th December 2010 In relation to the plumbing this item can be addressed at a later stage as council / certifier would not be concerned on where the core holes need to go.They are mainly interested on complying with the BCA and the DDAIf you could please help out in relation to approval it would be greatly appreciatedKind Regards,Bill IssaManaging DirectorIsabella Retail - Shop Fit Outs & Designa. 2/44 Smithfield Road, Smithfield NSW 2164p. (02) 97572221f. (02) 97571223m. 0413 670 757w. http://www.isabellaretail.com.au/ [Logo 1:] [ISABELLA SHOP FITOUTS & DESIGNBill IssaDirectorIsabella Australasian PTY LTDp (02) [illegible]f (02) [illegible]a 2/44 Smithfield Rd, Smithfield 2164w www.isabellaretail.com.au][Logo 2:][Isabella Design Headquarters"Finalist" in the 2010 Dulux Colour Awards]NOTICE: This e-mail and files attached with it are confidential and are only for the use of the person(s) to whom they are addressed. If you are not the intended recipient(s) and have received this e-mail in error could you kindly notify the sender and delete this e-mail immediately. You may not copy or deliver this message to anyone. Confidentiality and legal privilege are not waived or lost by reason of mistaken delivery. It is the duty of the addressee(s)/recipients to virus scan and otherwise test the information provided before loading it on to any computer system. Isabella Australasian Pty Ltd T/a Isabella Retail Display Solutions does not warrant that this information is virus free." (Exhibit A, tab 11) 48It should be noted that in the "Notice" section, yet another entity "Isabella Australasian Pty Ltd T/a Isabella Retail Display Solutions" has been introduced. However, the importance of this document is not simply the question of whether or not "Isabella Shop Fitouts & Design" and/or Isabella Australasian and/or Bella Retail Design Pty Ltd, or any permutations on these names, was the contracting party. What is important is the information that Mr Issa was giving to Mr Malouf. He told Mr Malouf that he was hoping to "wrap up Tan Republic" before he went overseas to start up a sub-branch. This meant that he had to have the final plans "to the certifier" before 13 December 2010. However, there was no signed contract. Only a quotation had been sent to the plaintiff on 8 December 2010. Mr Issa's email is misleading in this regard. In addition, the reference to the "certifier" was also misleading. There was no certifier. Maggy's evidence was that as she knew little or nothing about shopfitting, she was guided by Mr Issa as to what steps needed to be taken. Nor had any fitout contract been signed. At the time that Mr Issa sent this email, he was taking upon himself the steps he claims the plaintiff or Mr Ishkhanian should have taken prior to fitout work being commenced. That he did so is confirmation that he did in fact make representations set out in paragraph 12(a) above. 49On 13 December 2010, Mr Malouf sent the following email to Ms Tsigounis, Maggy and Mr Issa: "Dear all, The fitout plans been are approved subject to the following conditions: - The projecting external blade sign shown in the perspectives board and elevations is not permitted. - We require the detail of how the alucopanel is to be fixed to the existing highlights - We require detail for the proposed cut back to the ceiling - given that there is already a grid ceiling in place - We require an RCP to show lighting and air conditioning register changes given the enclosed booths Once the attached details are received we will move to issuing a handover notice to enable fitout to commence." (Exhibit A, tab 11) 50On 15 December 2010, the plaintiff obtained an alternative quote for the fitout from Quatram Interiors for $73,854. This quotation was not accepted (Ms Der Bedrossian's affidavit sworn 16 April 2012, tab 4). 51Mr Issa, however, proceeded as if his contract with the plaintiff had been agreed and accepted. On 16 December 2010, Mr Issa sent an email to Mr Malouf, the text of which is as follows: "Hi Aaron Re; Tan Republic In relation to the above, could you please advise on a time frame when you would be expecting the core holes to be completed So I can compile a flow chart for works on the above site" 52Mr Malouf replied on the same day saying: "Bill We will be providing a handover certificate in due course. We want to get the core hols [sic] done before the Christmas break but its becoming a struggle because we require the works to be done while the stores below the tenancy are closed. This will be sorted the next few days." 53A copy of this email was sent to Maggy by Ashley Bushnell, the personal assistant to Mr Issa, with the note: "Please see response from Aaron Below [sic] as requested" 54On 17 December 2010, Mr Malouf sent a further email stating that a subcontractor, Chips, would be completing the core holes and drainage works as these were designated lessor works. According to the email from Mr Malouf on 20 December 2010, Chips would be completing the core holes from 10:00pm on 21 December 2010. It was the following day, 21 December 2010, that Maggy submitted the DA application forms to Randwick Council, which had been in part drafted for her by Mr Issa. The core holes are drilled 55As can be seen from the correspondence above, Mr Issa had plenty of notice that the core holes were to be drilled (T 491). His evidence was as follows: "Q. But you weren't notified that the core holes were going to be carried out that night? A. Correct. Q. All right, but you were notified they were going to be carried out? A. No. I was notified they were being carried out. Q. We'll return to that. A. Yes. Q. But if you wanted to stop the work or provide them with instructions you could have emailed those plans to Centre Management there and then, couldn't you? A. No, I wasn't in my office at the time. Q. Be careful, sir. Think carefully before you give that evidence. You were in your office, Maggy phoned you at your office, didn't she? A. No, she rang my mobile. Q. Nice try, sir, but we'll go back to that, and we're very clear, think carefully about what you just said. You were in your office when she contacted you on your office phone number. Correct? A. No. Q. The party was taking place at your office, wasn't it? A. It was at a club. Q. It was taking place at your office, wasn't it? A. No. Q. Do you want to think about that before you say that? Do you want to carefully consider what you just said? A. No. Q. You're adamant the office party wasn't taking place at your office? A. Yes. Q. You sent an email to Tan detailing where you were and what happened on that day, didn't you? A. Is that a question? Q. Yes. You sent an email to Ms Der Bedrossian indicating where you were on that day, didn't you? A. I can't remember." (T 491-492) 56Mr Issa's evidence was that when Maggy rang, anxiously wanting to know what was happening with the core holes and why they were being drilled, he claims he told her to have the work stopped. This was the subject of cross-examination at T 494: "Q. Well, firstly, this is your email from Isabella Retail Shop Fitout & Design to Maggy Der Bedrossian of 19 January 2011 at 11.51am, and you start off with: "Hi Maggy, in relation to the core holes I received a phone call from you late afternoon on 21 December 2010 whilst having our last day Christmas party in the office." A. Yes, it does say that. Q. You then go on: "You stated to me that you were requested by someone in Centre Management in Pacific Square for you to attend the site and mark out the core holes. During that conversation it was quite clear that you didn't even have a clue what core holes were, nor did you have any idea of how to measure. I then advised you that if I had some sort of notice I was quite happy to send my foreman to your site to mark out the core holes. Unfortunately at this time everybody had several drinks and we were not in a condition to drive, as you can appreciate. I need more than five minutes notice to have people on site at Maroubra when we are based in Smithfield." A. Correct. Q. There's no indication here that you told Maggy, I told you to stop the work. It's not there, is it? A. No. Q. It didn't happen, did it? A. Yes. Q. It's not in any of your affidavits, is it? A. I can't remember. It is there somewhere." 57In addition, as Mr Freeman noted in his cross-examination at T 496, it was never put to Maggy that she was told to have the work stopped. 58What all of these emails and conversations point out is that the only contact point between centre management and the plaintiff, particularly in relation to the drilling of these core holes, was Mr Issa: "Q. But before I do that-- A. Of what? Q. Well before I do that I'm going to suggest to you sir that the only contact point and the only person to instruct Centre Management on core holes was you. What do you say to that? A. Incorrect. Q. And if it wasn't you, certainly there had to be someone authorised and directed by you to instruct Centre Management as to the placement of core holes? A. It was on the plans provided. Q. And that instruction, as you've pointed out many times, could have been provided by provision of plans which were available as and from 16 December 2010, correct? A. Correct. Q. 2012, correct? A. Correct. Q. So all that Centre Management required to enable the plumber to locate and place core holes in the appropriate places and areas were those plans. Correct? A. Correct. Q. And the only entity or person that was engaged and took on the responsibility for writing those plans was you or your business. Correct? A. Correct." (T 496-497) 59This included an email as early as Wednesday 1 December 2010 about the "hydraulics and drainage requirements" (T 498). Mr Issa advised Mr Malouf on 7 December 2010 that no drainage was required for the Tan spray booth and went on to add "if you require any further information please do not hesitate to call me any time" and provided his mobile number (T 499). Summary of evidence of the defendants' dealings with the plaintiff and centre management 60It is helpful to compare the analysis of these events in both parties' submissions. The defendants' case is that the plaintiff's case regarding the core holes is "misconceived". The fitout guidelines are asserted to be the procedure that should have been followed by the plaintiff, and Mr Ishkhanian should have advised the plaintiff to follow this course. The claim that by reason of the many years the shopping centre had been in business that the fitout guidelines were "historic" is disputed. It is further claimed (written submissions, paragraph 72) that the whole issue with the core holes "which happened even on Tan's case before any contract for fitout works had even been entered into" could have been readily resolved by the landlord drilling further (properly) holes prior to the fitout works ever commencing "as was their responsibility in the first place" (pp 10-11). This paragraph highlights two of the main problems in the evidence with which the defendants have failed to come to terms. The first is that the above correspondence makes it overwhelmingly clear that Mr Issa was proceeding as if the contract for fitout works had indeed been entered into, notwithstanding the fact that only a quote had been issued. What is more, as Mr Freeman points out in his submissions, he was taking these steps without prior consultation of the plaintiff. In addition, as Mr Issa himself noted, Maggy did not even know what a core hole was. She was totally dependent upon Mr Issa in this regard. 61The drilling of the core holes in the wrong place was the defining event which caused all of the later problems. At that stage, the fitout contract had not been entered into. This means that questions of liability for breach of contract and negligence needs to be seen in their chronological context. The plaintiff had obtained a design and submitted it, but she had not yet determined who would carry out the fitout works. She had not paid any money for any advice in relation to that fitout. While the task of drilling the core holes was the task of the lessee, and the placement of those core holes was a function of the design, the drilling of those holes was a precursor to the fitout contract, rather than the logical consequence of the design contract. 62In his written submissions, Mr Freeman summarises the concessions made by Mr Issa ("Issa") in cross-examination as to his true role in relation to dealing with centre management ("Malouf") and giving instructions as to the placement of core holes, commencing work without a DA, without a constructions certificate and without appointing a PCA at [49]. These concessions are evidence of the making of the false representations listed in paragraphs 10(a) - (d) of this judgment. 63I shall set out Mr Freeman's helpful list of these concessions, using the same numbered paragraphs, because apart from [49](g) and [49](tt), these issues of fact have not been traversed in the defendants' submissions in reply dated 1 May 2013. (The sole matter raised by Mrs Whitaker in her submissions in reply is that it is not clear what pleading is contradicted in [49](g)). The relevant concessions are: (a) Issa dealt with Malouf to gain consent for approval on plans for the shop fitout (T 452 lines 34 - 36); (b) Issa dealt directly with Malouf with respect to core holes up to 10 January 2011 (T 452 lines 38 - 40); (c) Issa dealt with Malouf with respect to where plumbing and core should be placed up to 10 January 201, with such instructions to be provided by way of drawings to him (T 452 lines 42 - 44); (d) Malouf had asked Issa where to place the core holes, which was done by provision of drawings (T 452 lines 46 - 48); (e) Issa was to make sure he provided drawings which enabled the core holes to be placed correctly (T 452 lines 50 and T 453 lines 1 - 2); (f) Issa initiated wrapping up the approval of the plans prior to 13 December 2010 to suit his own convenience (Tab 11 Exhibit A, T 453 lines 50 and T 454 lines 1 - 9); (g) The PCA was not involved where to place core holes (T 454 lines 19 - 21) (I note this contradicts the pleading that, had the plans been provided to the PCA, core hole problems would have been resolved) (T 454 lines 23 - 25, lines 30 - 34); (h) Construction plans were completed prior to consent to the concept drawings being obtained; (i) Issa personally was sought placement of core holes prior to Christmas (T 457 lines 4 - 6); (j) Issa dealt directly with Malouf as to whether a CDC or DA was required prior to commencing the fitout works (T 458 lines 1 - 18); (k) Maggy was very concerned that the issue of whether a CDC or DA be obtained prior to commencement of any works (T 458 lines 20 - 29); (l) A CC cannot be obtained until after DA is issued by Council (T 458 lines 37 - 44); (m) Issa put pressure on Maggy as from 6 January 2011 to immediately commence works on site and pay a deposit of $21,000: (i) without either concluding negotiations as to the price of the works; (ii) without a concluded signed contract being in place; (iii) without the issue of whether a DA or CDC being resolved; (iv) without a DA; (v) without a CC; and (vi) without the appointment of a PCA (Tab 14 Exhibit A, Tab 17 Exhibit A, T 459 lines 36 - 49, T 460 lines 1 - 45, T 461 lines 41 - 50, T 462 lines 1 - 50, T 463 lines 1 - 50, T 464 lines 1 - 50, T 465 lines 1 - 50, T 466 lines 1 - 15). (n) As at 21 December 2011, the only plans provided by to centre management were the design drawings, not the construction drawings (T 466 lines 34 - 36); (o) Issa took on the role of gaining consent from the centre management and/or the landlord to the shop fitout plans (T 466 lines 38 - 40); (p) Construction plans were be provided immediately upon consent to the concept plans provided (T 466 lines 42 - 44); (q) Issa denied giving centre management the go-ahead with the placement of core on the concept plans (T 467 lines 1 - 2); (r) Issa sent an email to centre management dealing with the plumber, the drainage and the core holes and telling them to go ahead with the core holes, on the basis that problems could be "resolved later" (T 467 lines 13 - 19); (s) Despite this, Issa later denied he told Malouf to go ahead with the core holes (T 467 lines 37 - 41); (t) Issa admitted he discussed core holes, plumbing and drainage issues with Malouf in December 2010 but denies he told them to go ahead and do it (T 467 lines 43 - 45); (u) That he and his business were asked to, and did, source PCAs for and on behalf of Tan (T 469 lines 31 - 35, 41 - 43); (v) Although told not to proceed by Maggy, Issa proposed to proceed simply on the issuance of a handover notice without any construction certificate, development approval or finalisation of a DA from council, although Maggy had said he would do so at his own risk (T 470 lines 4 - 49, T 471 lines 1 - 48, T 472 lines 1 - 7); (w) Malouf had only wanted one point of contact, and that point of contact throughout December 2010 and January 2011 was Issa (T 472 lines 37 - 39, Tab 19 Exhibit A); (x) The concept plan provided to Malouf indicated where the drainage and cores would go, having regard to what is shown on the plans e.g. toilets/bathrooms (Tab 19 Exhibit A, T 474 lines 20 - 30); (y) Issa was seeking consent and approval of the concept plans to be submitted to council (T 475 lines 1 - 48); (z) Construction plans were to be provided by Issa to Malouf immediately upon approval of concept plans (T 476 lines 40 - 41); (aa) All Malouf really always wanted was the plans to which the fitout was to be built (T 477 lines 19 - 21); (bb) When Issa was told on 21 December 2010 that core holes were to be placed by the plumber of centre management that night, he did not telephone Malouf or anyone at centre management (T 477 lines 37 - 38); (cc) Although Issa said it was not part of his scope of work to tell centre management where to place core holes, he conceded this was done by provision of the plans (T 477 lines 40 - 49); (dd) Issa conceded all that was required was the plans, and that clearly marked on the plans was where the core holes should be placed; as at 21 December 2010 centre management were in possession of the plans, but the only plans, provided by Issa to Aaron Malouf as at 21 December 2010 were the concept plans (T 478 lines 5 - 23); (ee) After denials on oath of having dealt with Aaron Malouf before, Issa then admitted that he had dealt with him on previous fitouts in the same shopping centre where the plaintiff's work was to be done (T 487 lines 20 - 50, T 488 lines 35 - 50); (ff) The construction plans were completed by 16 December 2010, well prior to placing core holes on 21 December 2010 (T 490 lines 5 - 50, T 491 lines 1 - 13); (gg) The design scope of works required Issa "Action paperwork for nominated certifier if applicable, including completion" (T 491 lines 20 - 23, Tab 6 Exhibit A, Tab 5 Exhibit 5); (hh) All Issa had to do to stop the core hole drilling was to telephone centre management and tell them to stop work, which he concedes he did not do (T 493 lines 38 - 40); (ii) Despite Issa asserting in cross-examination that: (i) He received a telephone call in the evening; (ii) He was at the club and not in his office when he received the call; (iii) Work was being carried at the time of the telephone call; and (iv) He had told Maggy to tell centre management to stop the work; this information did not appear in his affidavits, or in his email message to Maggy on 19 January 2010 (T 479 lines 13 - 14, T 480 lines 1 - 6, T 491 line 45, T 492 line 3, T 492 line 15) (jj) He had not told his solicitors to put his alleged request to stop work in his affidavit or pleadings (T 493 lines 19 - 27); (kk) This was despite acknowledging such a conversation to be important (T 494 lines 24 - 25); (ll) No such conversation was put to Maggy in cross-examination(T 494 lines 27 - 33); (mm) The only instructions to be provided and could be provided were by Issa, not Maggy, and the only way to do this was to supply the construction plans, which were prepared and available from 16 December 2010 (T 496 lines 43 - 50, T 497 lines 1 - 18); (nn) Issa or his staff exchanged the following emails with Malouf; (i) Tuesday 23 November 2010 from Bill to Malouf requesting approval and consent to concept drawings/plans (T 497 lines 42 - 43, Tab C1 Exhibit C); (ii) Wednesday 1 December 2010 1.01 pm from Helen Tsigounis to Malouf enclosing concept plans and seeking approval of such plans (T 497 lines 45 - 49, Tab C2 Exhibit C); (iii) Issa received Malouf's reply email of Wednesday 1 December 2010 at 1.53 pm indicating he would get back to Issa by Friday 3 December 2010 and that he specifically needed to spend some time on the hydraulics (drainage) requirements (T 498 lines 1 - 16, Tab C3 Exhibit C); (iv) Issa received Malouf's reply of Monday 6 December 2010 at 2.25 pm indicating he was just waiting for plumbing review and scheduling of works to be confirmed before he can provide approval (T 498 lines 18 - 50, T 499 lines 1 - 7, C4 Exhibit C); (v) Issa received Malouf's Tuesday 7 December 2010 at 4.28 pm email concerning plumbing, inquiring as to whether spray tanning rooms require floor drainage, can drainage be connected to normal sewer lines (C5 Exhibit C); (vi) Issa reply of Tuesday 7 December 2010 regarding drainage issues of Tuesday 7 December 2010 at 4.38.57 pm stating no drainage is required whatsoever for the spray booth as they are self contained units (T 499 lines 1 - 7); (vii) Malouf told Issa he had approved the concept plans, subject to 4 bullet point conditions in his email of 13 December 2010 at 10.07.09 am (T 499 lines 9 - 16); (viii) Helen Tsigounis addressed all 4 bullet point conditions in her email to Malouf on Monday 13 December 2010 10.07 am and on Tuesday 14 December 2010 at 10.58 am, (T 499 lines 29 - 41, C8 and page 2, C9 Exhibit C) with updated plans to follow (C8 Exhibit C); (ix) All plans that were to follow had been completed by 16 December 2010 (T 499 lines 48 - 49); (x) Instructions as to placement of core holes were contained in the construction plans. Only Issa or his staff, not Maggy, could do so (T 500 lines 1 - 38); (xi) Issa's email to Malouf of Thursday 16 December 2010 at 10.28 am seeking a time frame for completion of core holes so he could compile a flow chart. Malouf replied to Issa on Thursday 16 December 2010 at 11.12 am advising a handover certificate would be provided and core holes done before Christmas if possible; (xii) Despite claims the work was being done while Issa spoke to Maggy in the afternoon of 21 December 2010, Issa always knew, and it was the fact, that this work was always to be done when the stores closed and at night (T 501 lines 19 - 24); (xiii) As to bullet points on the email from Malouf to Maggy D7 to EXH C of 20 January 2011 detailing the events leading up to and of the 21 December 2010: (1) On all plumbing and core hole issues in emails, meetings and discussions, Malouf dealt only with Issa (T 505 lines 33 - 40, D7 Exhibit C bullet point 1); (2) As at 21 December 2010, Issa had only given Malouf the concept plans, which could not be relied upon to determine where and how many core holes were to be placed (T 505 lines 42 - 45); (3) The only person to satisfy all lessor/landlord concerns as to how many and where to place the core holes was Issa (T 505 lines 46 - 50); (4) The only person seeking fee proposals from PCAs was Issa, not Maggy (T 507 lines 17 - 37); (5) Malouf dealt with Issa, the designated shopfitter, in the way prescribed in their fitout guidelines; (6) Issa knew that centre management were not using a tenancy co-ordinator on this fitout because of the anticipated simplicity of the tenancy and the unnecessary expense of a Tenancy Co-ordinator in such circumstances; (7) The core holes were placed after the fitout review based on what centre management received by Issa; (8) The plans and the core holes were discussed at length with Issa who indicated with respect to core holes that Issa had internal services to do the job; (9) Malouf determined where to place the core holes based on direct conversations and meetings with Issa; (10) The construction plans were never part of the design package provided by Issa to Malouf; (11) Issa did not reply to Malouf disputing any of the matters raised by him in this email; 64The degree of reliance upon Mr Issa, and the degree to which he was taking steps without consulting her, is best seen from a conversation that Maggy had with Mr Issa on 21 December 2010. Maggy's account of this conversation is set out in paragraph 42 of her affidavit of 10 August 2012: "42. On 21 December 2010 I received a telephone call from a person at centre management requesting that I attend the centre and instruct them on something to do with core holes. I simply did not know what was going on and did not know what a core hole was. I immediately telephoned Bill and we had a conversation part of which was to the following effect: - [Centre Management] said "Can you come on site to show where the core holes are going to be placed tonight after hours" [I] said "Why are you calling me you know that I have a builder who is taking care of all of this and he has been speaking with Aaron." She said "Ok we have tried to get in touch with them but there is no answer. The contractors have been booked and they are doing the job tonight, you will have to come down to show them where to put them." I said "I don't know what a core hole is I will try to get into contact with my builder" I then called Bill and had a conversation to the following effect; I said "they rang me form [sic] the centre an asked me to go down to mark out where the core holes are" He said "why are they calling you and why have they left it so late" I said "I don't know they told me that they couldn't get in touch with you" He said "I've been speaking with Aaron about this, It's [sic] my Christmas party and we are all having drinks, I can't get anyone down there, tell them you can't come down" I said "I don't even know what a core hole is, what should I do?" He said "It is not your responsibility and they should not be calling you, just leave it, there is nothing we can do right now leave it and I will sort it out when I get back" I said "ok so what should I say" He said "let the centre know that your shop fitters have closed for the Christmas break and it is not your responsibility, either way if you go down there you would not know what to do because you do not know what a core hole is" I called the centre back and said "I called my builder and they said that they can't send anyone down. I am not a builder, I am the tenant, I have appointed a shop fitter to do the work, I do not know about any core holes"" 65Mr Issa's version of this conversation is set out below in his email to Maggy (Exhibit C, document D5). His claim that he had been happy to send his foreman out to the site to mark out the core holes is inconsistent with his own emails. His explanation of being at a Christmas party somewhere other than in his office, and not in a fit condition to drive, is unacceptable given his request to centre management for the holes to be drilled as soon as possible because of the other business commitments of the defendants and in particular Mr Issa. 66The circumstances in which the core holes were drilled in the wrong place, by reason principally of Mr Issa's errors in design, are the first of the three main problems. The other two were the proposal for rectification made by Mr Issa to raise the floor, in order to save money from having the core holes redrilled, and the circumstances in which the fitout, when installed, fell so short of the standard required that it was the opinion of the experts it should simply be demolished. However, the catalyst for all these problems was the circumstances in which the core holes were drilled in the wrong place. Once the core holes had been wrongly drilled, the question was how to rectify the situation. The principal problem was that the second defendant continued to give the plaintiff wrong advice about the DA. Council approval problems 67The same pattern of conduct occurred in relation to the question of whether council approval was required (the second representation - see [10](b) above). On 30 December 2010, after having a conversation with Adrian McKeown of Randwick City Council, Maggy received an email requesting some further information: "Margaret,further [sic] to our conversation this morning, please provide the following information to Council:- Applicant to email Council clarifying that the building works are to be covered by a CDC issued by a PCA;- Applicant to provide signage details prior to notification;- Applicant to email Council clarifying that no massage will be provided on the premises; and- Applicant to provide cost estimate summary prior to notificationPlease contact me on 9399 0779 if you have any further queries." (Exhibit A, tab 12) 68On 5 January 2011, an email attaching a Tax Invoice from the second defendant (with an "Isabella Retail - Shop Fit Outs & Design" footer) acknowledged receipt of the $1,350 provided by Maggy and sought the balance due of $1,400. The content of this email was as follows: "From: "Isabella Retail - Shopfitouts and Design" <info@isabellaretail.com.au>Subject: InvoiceDate: 5 January 2011 3:59:42 PM AEDTTo: "maggy der bedrossian" <maggyb@optusnet.com.au>3 Attachments, 442 KBHi MaggyKindly find attached the balance of your accountKind Regards,Bill IssaManaging DirectorIsabella Retail - Shop Fit Outs & Designa. 2/44 Smithfield Road, Smithfield NSW 2164p. (02) 97572221f. (02) 97571223m. 0413 670 757w. http://www.isabellaretail.com.au/ [Logo 1:] [ISABELLA SHOP FITOUTS & DESIGNBill IssaDirectorIsabella Australasian PTY LTDp (02) [illegible]f (02) [illegible]a 2/44 Smithfield Rd, Smithfield 2164w www.isabellaretail.com.au][Logo 2:][Isabella Design Headquarters"Finalist" in the 2010 Dulux Colour Awards]" (Exhibit A, tab 13) 69The attached tax invoice dated 26 November 2010 had a letterhead which belongs to "Isabella Shop Fitouts & Design" and a "How to pay" field at the bottom as follows: "[How to payBY MAILPO Box 36Kemps Creek 2178NSWBY DIRECT DEBIT PAYMENTNAB Business Cheque accountAccount name: Isabella Shop Fitouts & DesignBSB No: 082-366 Account No: 183238678]" (Exhibit A, tab 13) 70Adjacent to this "How to pay" field were the words: "Isabella Australasian Pty Ltd is not responsible for council applications or notifications. It is the responsibility of the tenant.Isabella Australasian Pty Ltd will not be held liable for delays in handover date due to circumstances beyond our control.PAYMENT TERMS: Cash, Bank cheques or business cheque acceptable.Works will commence at the time any cheque has cleared. Shops will be handed over at the time any payment has cleared. Trusting you find our offer acceptable & assuring you of our close co-operation at all times.TERMS: A 60% will be required with your order at the time of approval on offer agreement. A further 37% is required at the time we commence at the job site and the final payment of the remaining 3% is to be paid before site will be handed over. If payment is not made in accordance with THE COMPANY's conditions then THE COMPANY shall without prejudice to any remedy be entitled to charge interest and administration charges of 15% calculated daily. The Customer will also be liable for any legal or other costs incurred by THE COMPANY in attempting to recover the outstanding amounts owed by the Customer.Keys will be available on final settlement. Goods remain in the property of Isabella Australasian Pty Ltd until paid in full. We have allowed for all work to be done during normal working hours (Monday to Friday). If work is required to be done at night or weekend an additional 5% is to be added to the total offer amount.THIS INVOICE IS MADE UNDER THE BUILDING & CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 1999." (Exhibit A, tab 13) 71After receipt of this email attaching a Tax Invoice, Maggy rang the second defendant saying that she was "confused". According to paragraph 35 of her affidavit, the second defendant said: "I am confident in going ahead and building this without the DA; we have done this before and never had any problems... We have done this before and Councils very rarely come out to check. If anything happens, I will take full responsibility." 72The same pattern of reliance upon Mr Issa by Maggy can be seen here. While Mr Issa denies that this conversation took place in those terms, the similarity between the pattern of conduct Mr Issa showed in relation to dealing with centre management can be seen. 73After this conversation Maggy sent the following email to "Isabella Retail - Shopfitouts and Design <info@isabellaretail.com.au>", which was the email address the second defendant had been using: "From: maggy der bedrossian <maggyb@optusnet.com.au>Subject: Tan Republic fit outDate: 6 January 2011 11:05:21 PM AEDTTo: Isabella Retail - Shopfitouts and Design <info@isabellaretail.com.au>Hi BillThanks for your help today with chasing up with the CDC ect. [sic]If you are confident that we should start building, I'm happy to go ahead. As you can appreciate with all the mixed information I was hesitating.As discussed, the details for the Gyprock, electrician and Alarm/speakers.Joe Gyprock 0404 469 381 (you have this quote)Sam Electrician 0416 229 220Armen Alarm 0403 053 535Kind RegardsMaggy" (Exhibit A, 14) 74On the same day the second defendant rang reminding Maggy that the plaintiff had to pay the remainder of the design fee "because we have completed our job on the design" (paragraph 37 of Ms Der Bedrossian's affidavit). When Maggy went to the shop on 6 January 2011 she told Mr Issa she had come to pay, and he said "you have to pay the boss". Mrs Issa said, when asked how to draw the cheque "write it out to Isabella Design". 75Maggy received a copy of an email sent shortly after this payment by the second defendant, using an "Isabella Retail - Shopfitouts and Design" email footer and "Isabella Shop Fitouts & Design" logo In this email, the second defendant sent Mr Adam DeLooze of City Plan Services "plans for your review" (Exhibit A, tab 15). 76City Plan Services read these plans and sent their fee proposal on "10 January 2010 [sic - should be 2011]" (Exhibit A, tab 16), addressed to "Isabella Retail - Shop Fit Outs & Design" and marked to the attention of "Mr Bill Issa". 77On 10 January 2011, Maggy and her friend, Mr Abraham Ishkhanian, went to a meeting with the second defendant. Mr Ishkhanian is the solicitor for the plaintiff; he advised the plaintiff in relation to entering into the lease, and on 7 December 2010 had provided the plaintiff with a certificate of advice under s 16 Retail Leases Act 1994 (NSW), as well as witnessing her signature. Maggy had spoken to Mr Ishkhanian shortly after Christmas 2010 at a social function about her concern with the shop fitout and how it was going, and following the plaintiff's receipt of information from the Council, Mr Ishkhanian telephoned the plaintiff to discuss the issue. When he attended the meeting on 10 January 2011, he had a conversation with the second defendant in which he was essentially representing the plaintiff. According to paragraph 39 of Ms Der Bedrossian's affidavit, that conversation was as follows: "Abraham said: Bill what do you need from Maggy. I am concerned about her health. These compliance issues are stressing her out and she is becoming depressed because she does not understand completely what is going on.Issa said: Once she signs these forms and makes the first payment I will be handling the whole thing.Abraham said: So Maggy will not have to deal with any Certification or Council related stuff.Issa said: Once she signs this she can go on a holiday and come back to a completed shop. We now have the plans and will handle everything.Abraham said: So once this is signed Maggy does not have to do a thing.Issa said: Yes we will then be appointed and we will have our supervisor handle the lot. We will call her when it is time for handover for completed shop.Abraham said: Good because I am worried about the stress Maggy is going through. You seem to be experienced in this field and I would rather you tackle these issues rather then leave it to her.Issa said: She does not need to stress any more because that's all part of the service we provide." 78Once again, there are references to "I" and "we" without identifying which (or how many) of the corporate entities were carrying out the work. 79On 10 January 2011, City Plans Services sent a proposal for certification services. In his affidavit of 11 July 2012, Mr Issa says that page 9 of the proposal was signed by Maggy in March 2011 and that "I disagree that this page was in that form as at 10 January 2011 as is suggested". 80On 12 January 2011, Mr Issa had two telephone conversations with Mr Malouf. A copy of this email and a copy of the transcript of the conversation is set out behind tab 17 of the Affidavit of Ms Der Bedrossian. Mr Issa agrees (affidavit, 11 July 2012, paragraph 35) that the transcript "accurately reflects the effect of the conversation that I had with Aaron". He identifies the certifier who had "got it wrong" as being City Plan Services. On 12 January 2011, Maggy certified to council that the estimate of the costs of summary for the fitout were $23,000 including GST. 81On 13 January 2011, Maggy met with an employee of Randwick Council named Adrian McKeown and lodged a complete set of plans prepared by an entity described in the defendants' chronology as "Issa/Bella" in November and December 2010. They also lodged a handwritten letter with Randwick Council stating that the construction works would be covered by a DA. 82The second defendant, on 14 January 2011, sent an email, on "Isabella Retail - Shop Fit Outs & Design" email footer and "Isabella Shop Fitout & Design" logo, to Maggy recording his version of the conversation between him and Mr Malouf at Pacific Square: "On or about the 12th January 2011 Aaron rang my office and suggested that the certifier had it wrong and he will ring him directly and discuss the situation. He also advised that to start work immediately as if there were any hold ups in relation to the paperwork it would not hold up the fit out he also informed me that he has been involved in previous fit outs within his centre that only required a simple CDC.At 10:43 am the same day I received a phone message on my desk to call Aaron in which I did at 12:45am of the same day he again advised me that he had no issue with us starting and suggested to start work." (Exhibit A, tab 17) 83In the same email, he said "I need to remind you that we need your deposit today" (Exhibit A, tab 17). He went on to add "As you can appreciate there is a crisis [flooding] in Queensland and if im [sic] not starting your job I will send staff up there". 84On 17 January 2011, Maggy sent the following email to the second defendant (at info@isabellaretail.com.au): "Hi BillAfter meeting with Adrien [sic] from Randwick council, I have been advised not to proceed with the salon fit out until we have DA approval.As discussed Aaron has assured you that we can proceed at this time with out [sic] DA approval, you are my builder therefore I will leave the decision up to you however [sic] if you decide to proceed you will be doing it on your own accord and take full responsibility if there are any orders or fines imposed by council.Please let me know your thoughts on this matter.Kind RegardsMaggy" (Exhibit A, tab 18) 85The scheduled date for the commencement of the lease was 18 January 2011. On 18 January, Maggy attended the shop premises with a plumber to obtain a quotation for the work to be done. The plumber advised her "the core holes are wrong, according to the plans there should be more holes and even the ones that are here do not look as if they are in the correct locations" (paragraph 43 of Ms Der Bedrossian's affidavit). 86On 18 January, Mr Malouf wrote to Maggy saying: "Please find attached the email demonstrating all the [sic] we received from Isabella. As you can see there is no specific plumbing plan, and our plumbers and I made our review based on the floor plan we have received in this email.What I believe should happen now is that you and your plumber should sit down with Isabella and sort through the plumbing requirements. More cores will only be done at your expense, and core holes wont [sic] be possible down the left hand side of the tenancy because of the air conditioning in the ceiling space for the tenancy.As per our conversation, and our fit out guide rules, I really only want one point of contact on this issue, and that should be Bill Issa at Isabella once your internal design issues are resolved." (Exhibit A, tab 19) 87There was a further exchange of emails between Maggy, Mr Malouf and the second defendant. On 19 January 2011, the second defendant sent an email to Maggy as follows: "From: "Isabella Retail - Shopfitouts and Design" <info@isabellaretail.com.au>Date: 19 January 2011 11:51:41 AM AEDTTo: "maggy der bedrossian" <maggyb@optusnet.com.au>Cc: "Helen Tsigounis" <Helen@bellaretail.com.au>Subject: FW: Tan Republic - Concept DesignHi MaggyIn relation to the core holes I received a phone call from you late afternoon on the 21st December 2010 whilst having our last day Christmas party in the office. You stated to me that you were requested by someone in centre management in Pacific Sq for you to attend your site and mark out the core holes. During that conversation it was quite clear that you didn't even have a clue what core holes were nor did you have any idea on how to measure, I then advised you that if I had some sort of notice I was quite happy to send my foreman to your site to mark out the core holes.Unfortunately at this time everybody had several drinks and were in no condition to drive. As you can appreciate I need more than 5 minute notice to have people on site at Maroubra when we are based in SmithfieldPlease also see email below from HelenKind Regards,Bill IssaManaging DirectorIsabella Retail - Shop Fit Outs & Designa. 2/44 Smithfield Road, Smithfield NSW 2164p. (02) 97572221f. (02) 97571223m. 0413 670 757w. http://www.isabellaretail.com.au/" (Exhibit A, tab 20) 88The reference in this email to "email below from Helen" was as follows: "Subject: FW: Tan Republic - Concept DesignImportance: HighBill,Please be advised that the only plans that we have sent to the [sic] Aaron from Pacific Square Centre Management are the CONCEPT design plans which were sent on the 01/12/10 - attachments and string of emails attached to this email. Aaron has also confirmed this in his email, see below. These plans have never been approved by the RDM in terms of the concept design, nor a stamped plan sent to us in order for us to proceed further to produce detail drawings, or has Aaron requested any additional detailed floor plans. We have dealt with many centres in the past and none of which have done core holes based on a concept coloured plan with very little detail and not to mention any dimensions for the set out.I hope this clears up your concerns.Helen TsigounisSenior Interior DesignerBella[Isabella Design Headquarters"Finalist" in the 2010 Dulux Colour Awards]p. 02 9757 2221f. 02 9757 1223e. helen@bellaretail.com.auw. www.bellaretail.com.au" (Exhibit A, tab 22) 89Mr Malouf provided an email on 20 January 2011 saying, in effect, his conversation with Mr Issa was a completely different conversation: "Dear Maggy,Thank you for your email. I have to say that my conversations with Bill Issa are markedly different in content and tone than those indicated in your email below, and I don't propose to enter into any form of slanging match with you.We have been communicating with your designated shopfitter in the way prescribed in our fitout guidelines. To reference some of the points of your email and respond [sic], I make the following comments:- Isabella Retail knew that we would not be using a tenancy co-ordinator on this fitout because of the anticipated simplicity of the tenancy and the unnecessary expense of our Tenancy Coordinator in such circumstances. The core holes were placed after the fitout review based on what we received. They were discussed at length with Bill Issa, who indicated to us that they had internal plumbing services to do the job (this assertion was repeated as late as Tuesday afternoon of this week). We were content with the plumbing and core holes based upon what was discussed between Bill and me.- In respect to December 21, my team asked you to come down to the centre because no-one from Isabella could be contacted regarding the job.- In respect to the DA I am happy to repeat the assertion that many store fitout in this centre only required CC or CDC certificates and not a complete DA from Council. Many Retail and commercial usages are covered under our own DA. Council has known this since the development began. I contend that there is some unique aspect of your DA request that has confounded this process.As I said at the conclusion of our conversation on Tuesday, if I don't receive the hydraulic and plumbing plan, I can't act on it. It forms part of our requested information in the fitout guide. My view is that the documents your plumber had on site here on Tuesday were never part of the Isabella design package. I stand by my comments that you need to sort these issues out internally and come back to me with what you intend to do. Your email today still does not produce that plumbing plan in any way.Making accusing emails is counterproductive to progress. If the fitout design needs adjusting to accommodate new plumbing, then make it known as soon as possible please. Finally you should be aware that we are holding back on presenting our handover notice to you as a favour to you in order to get your internal issues sorted out. Once we provide our handover notice your rent free period for fitout will commence, once that 21 day period expires, rent can be billed. The longer we hold off on handover, the better it is for you presently. Please present any changes to your intended fit out as soon as possible.Kind Regards,Aaron Malouf | Asset Manager |" (Exhibit A, tab 23) 90There were other problems with the fitout work at this time. On 20 January 2011, the second defendant wrote advising that feature wall bricks were unavailable (Exhibit A, tab 24) and the following day he wrote objecting to using the plaintiff's "gyprocker, plumber + electrician" (Exhibit A, tab 25) saying "your project has taken up an unbelievable amount of time and resources" and adding "It's a big ask to ask to [sic] request that Isabella take your contractors under its umbrella" (Exhibit A, tab 24). He further states "You need to remember that I am liable for everybody on that site" (Exhibit A, tab 24). This email, like the other emails during this period of time, is sent with an "Isabella Retail - Shop Fit Outs & Design" email footer and "Isabella Shop Fitout & Design" logo. 91An amended letter of offer was received by the plaintiff on 21 January 2011, and a quotation for the extra core holes to be drilled was received from Mr Malouf on 25 January 2011. 92On 25 January 2011, Mr Malouf emailed Maggy and the entity described in the defendants' chronology as "Isabella" with a quote for $10,317.74 for extra core holes for the revised drainage plan. This quotation is again from Chips Plumbing Pty Ltd. 93On 27 January 2011, a letter sent by Mr Issa, the second defendant, as managing director of "Isabella Retail - Shop Fit Outs & Design" informed Maggy that "we are working on your amended quote and we will have it hopefully to you this afternoon if not tomorrow". This was in response to an enquiry from Mr Malouf as to whether Isabella was still the contracted shopfitter for the site which contains the additional note "once you have sorted things out with Jack, Isabella's supervisor, I can send Aaron my work method statement and insurances so it can formally be nominated as your contractor". This appears to be a notation added by Mr Issa to the enquiry from Mr Malouf, which had been forwarded by Maggy to him. "Jack" was Jack Issa, Mr Issa's brother, who worked in the shop-fitting business at Smithfield with Mr and Mrs Issa. 94On 27 January 2011, Maggy received an email from the second defendant, again with an "Isabella Retail - Shop Fit Outs & Design" email footer and "Isabella Shop Fitout & Design" logo, stating the following: "This is your new offer with GyprockingOnce Aaron gets back to me about the core holes I will try and work out how we can make do with the ones that he has already fittedThis might mean the floor has to be lifted at the back.We have done this on several occasions before and it works well.Obviously there will be a cost for fabricating the frame work and the board but it would be a lot cheaper than the extra core holes" (Exhibit A, tab 30) 95On 1 February 2011, Maggy received a copy of an email addressed to the her brother Steve Der Bedrossian ("Steve") as follows: "From: "Isabella Retail - Shopfitouts and Design" <info@isabellaretail.com.au> Date: 1 February 2011 11:21:39 AM AEDT To: "Steve | Classique" <steve@classiquewatches.com> Cc: "maggy der bedrossian" <maggyb@optusnet.com.au> Subject: Re: Finalize JobHi SteveIn relation to the raised floor the proposal is to raise the floor in the beauty room, bathroom, kitchen and store room All other rooms will be at ground level, the raised room will have a 200mm step up All services will then be run under the proposed raised floor With the majority of the percentage of the floor area being wheel chair compliant we will be compliant Major drawings are not really necessary we are basically doing construction drawings for our trades I will send you a copy when they are completed Hope this information is satisfactory, please advise Kind regards Bill IssaManaging DirectorIsabella Retail - Shop Fit Outs & Designa. 2/44 Smithfield Road, Smithfield NSW 2164p. (02) 97572221f. (02) 97571223m. 0413 670 757w. http://www.isabellaretail.com.au/ [Logo 1:] [ISABELLA SHOP FITOUTS & DESIGNBill IssaDirectorIsabella Australasian PTY LTDp (02) [illegible]f (02) [illegible]a 2/44 Smithfield Rd, Smithfield 2164w www.isabellaretail.com.au][Logo 2:][Isabella Design Headquarters"Finalist" in the 2010 Dulux Colour Awards]" (Exhibit A, tab 33) 96This appears to be in response to the email from Steve of 31 January 2011 saying he wanted to finalise "in the next day or 2 & pay deposit" (Exhibit A, tab 33). Isabella Australasian Pty Ltd goes into liquidation 97A significant day in the corporate life of the respective organisations under the umbrella name of "Isabella" traded was 1 February 2011. It was on this day that the company Isabella Australasian Pty Ltd went into liquidation following a creditor's petition. There was no information at the hearing as to how the placement of this company into liquidation came about. Counsel for the plaintiff was strongly criticised for his wrong assumption that this was a court ordered liquidation. In fact, it was a voluntary liquidation. I consider the defendants' attack on counsel for the plaintiff for making this error to be a matter of little significance in the timeframe of events. Whether Isabella Australasian Pty Ltd was placed into liquidation voluntarily or by court order, Mr and Mrs Issa would both have known for some time that such arrangements were on foot. I agree with Mr Freeman's submissions (3 May 2013, page 3) that whether the liquidator was court-appointed or not makes little or no difference to the facts in issue in these proceedings. 98Isabella Australasian Pty Ltd's annual returns show that it had recorded a profit of $186,659 for the financial year ending 30 June 2009 but then started making losses from 30 June 2010. By that stage, those losses were $4,441 (Exhibit O; T 435). It had continued to make losses from 30 June 2010 to the knowledge of Mr Issa (T 435-436). It was put into liquidation on 1 February 2011. The plaintiff knew nothing of this. 99The liquidator, Mr John Kukulovski wrote to the NAB the following day, 2 February 2011, attaching a copy of his appointment, and saying the following: "It is my understanding that the company may operate banking accounts with your bank. However, to date I have not as yet been provided with any bank account numbers or other details. Please close all accounts operated by the company with the bank and forward to my office a cheque made payable to Isabella Australasian Pty Limited, in liquidation, any credit balance of the accounts after your fees and charges." (Exhibit P) 100At T 437, Mr Issa was asked: "Q. And I'm asking the question of you, as the officer of the company, you did not remit those monies to the liquidator, did you? A. I'm not sure. Q. You actually transferred the monies to the account of Isabella Shop Fitout & Design, did you? A. That could be possible." 101The reference to "the monies" is not just a reference to the plaintiff's money. It is a reference to the whole account. What the second and third defendant did was to change the name of the bank account holder. Who was the account holder? - Mr Issa's evidence about the "mistake" 102It is first necessary to identify the bank accounts held by Isabella Australasian Pty Ltd which went into liquidation on 1 February 2011. Mr Freeman's written submissions (at paragraph 139) stated that Isabella Australasian Pty Ltd had three separate accounts in its own name. In the submissions of 1 May 2013 (paragraph 146), counsel for the defendant states that this is wrong and "there was no evidence that there were three accounts". There was clearly another account for Isabella Australasian Pty Ltd, as the financial statements for the year ending 30 June 2010 referred to there being "cash at bank - NAB" of $66,936 and to there having been another account in 2009 which held $2,831 as at the end of the financial year. The reason for the dispute is the defendants' position that the principal account, account 18-323-8678 was never in the name of Isabella Australasian Pty Ltd and the reason it was put in the name of Isabella Australasian Pty Ltd was because the bank made a "mistake" (T 439). The defendants say this account should have been in the first defendant's name. I shall first set out the relevant details for account 18-323-8678. 103In order to determine if Mr Issa's claim that the bank had made a "mistake" (T 439) with the name of the company, and that the account name should have been changed from Isabella Australasian Pty Ltd to the name of the first defendant, it is necessary to return to the letter sent by Mr Issa on 19 November 2010. This document had stated that "the total amount of design fees less the GST will be credited to your account". 104Mr Issa agreed in cross-examination (T 438) that as at 19 November 2010 he was representing that the contract would be with the company Isabella Australasian Pty Ltd. He was then asked: "Q. And as at 19 November 2010, that company which I have already indicated, Isabella Fitout & Design Pty Limited, Isabella, did not have an operating account with the National Australia Bank, did it? A. I'm not sure." (T 438) 105When shown the company bank account 183238678, he agreed that this account was the account name from 27 October 2010 to 4 February 2011. Account 183238678 106The account 183238678 was opened on 27 October 2010 (Exhibit L). Its first trading activity was almost a month later, on 18 November 2010, when the balance was $6,753.60. On 23 November 2010, it had $10,208.76 in credit and, by the time the plaintiff's first cheque was banked, the account was $92,288.80 in credit, mostly from a deposit of $100,000 on the same day. 107The "amount details" show the name "Isabella Australasian Pty Ltd ATF The Brandon Discretionary Trust Business Cheque Acc". Transfers to this account, and debits from it, all show "Isabella Aust" (see, for example, the entry on 26 November 2010, the day Maggy's cheque for $1,350 was deposited). However, the name on the front of this bank statement is: ""ISABELLA SHOP FITOUTS AND DESIGN PTY LTD" [emphasis added] 108Although this name appears on the front page of the bank statements, this account was opened prior to the incorporation of the first defendant (on 4 November 2010). The explanation of Mr Issa for the account not reflecting the correct company name and providing the name, ACN and ABN of Isabella Australasian Pty Ltd is bank error: "Q. Sorry, just so we're clear, BSB number 082-366, account number 183238678. Do you see that? A. Isn't that the same account? Q. But see what I'm saying here, that's the account of Isabella, correct? A. Yeah, I believe that was a mistake from the bank. Q. Thank you. A. It's the same account. Q. I'm sorry, I return those exhibits, I do apologise. Mr Issa, it's not a mistake of the bank, the only company you were trading in was Australasian, up to the 1 February 2011, that's the case isn't it? A. I'm not sure. " (T 440; see T 447-448) 109Mrs Issa, the sole director of the first defendant, gave similar evidence in her affidavit and in cross-examination: T 422 lines 31-50. The defendants' explanation for the different name is that it is a preference for "form over substance" to complain (submissions, paragraph 15). 110The defendants say that this account was in fact the first defendant's bank account, not the account of Isabella Australasian Pty Ltd, and that opening this account prior to incorporation is not a breach of the ss 3 and 18 Financial Transaction Reports Act 1988 (Cth). The defendants submit that the absence of activity between 4 and 18 November 2010 and the fact that the bank had "all salient details" about the first defendant, including its ACN number of 147193815 and postal address, sufficiently identifies the first defendant as the account holder. 111The question of whether this legislation has been complied with is not relevant to these proceedings. The third defendant set up a company on 4 November 2010 without providing, at least until after Isabella Australasian Pty Ltd's liquidation, particulars of the correct name, ACN and ABN of the first defendant. By itself, this would be a trivial matter. 112However, at the time the second and third defendants were taking these steps, they were entering into an agreement with the plaintiff for design of her shop fitout. The offer contains the names of neither of these companies and I accept the submissions of the plaintiff that at the time Maggy looked on the Internet and first consulted Mr Issa, this company was not trading. The offer refers only to the non-existent company, Bella Retail Design Pty Ltd. Maggy asked who she should make her cheque payable to, and the misspelling of this name on the cheque confirms that she was told this name, rather than shown documents containing a name for her to copy. 113The true nature of the account into which the plaintiff's cheques were all paid can be ascertained by comparing its activities to the account which Isabella Australasian Pty Ltd had been operating since 2007, namely account 833436458 at the same branch, and from comparison between the profit and loss statements for both companies provided by the defendants to the NAB (Exhibit 14). Account 833436458 114This account (Exhibit 14) was held in the name Isabella Australasian Pty Ltd, PO Box 36, Kemps Creek NSW. The account details are "Isabella Australasian Pty Ltd t/as Isabella". 115In November 2010, at the time that the first defendant was being incorporated, and the plaintiff was paying the deposit on the design contract, this company was paying phone bills, wages of $11,944.16 (11 November), electricity, superannuation and council fees (15 November). On 15 November 2010, it made a "holding loan" of $26,621.04 to "Isabella", reducing the balance to zero. A payment on 24 November 2010 from the Boronia Group of $51,007.37 was, after other transactions, transferred to "Isabella" on 29 November 2010 ($51,000), leaving a small balance. On 1 December 2010 $1,000 was transferred to "Isabella" leaving $75.37 credit. Following a debit of $50,924.63 on 4 December, "Isabella Shopfit" returned $51,000 on 6 December. Following a second debit on 6 December 2010 of $12,943.93, this precise sum was transferred by "Isabella" on 7 December. A third payment of $500 was made by Isabella on 9 December to cover a further debit, and a fourth "loan" from Isabella Shopfit of $1,000 was made on 14 December. 116There was no further activity until 11 January 2011, when as a result of further debits, a transfer from "Isabella" for $18,523.32 (the precise amount of this debit) was made on 13 January. A bill from Chubb Fire and Security on 17 January 2011 was similarly paid by a transfer from "Isabella". On 25 January a payment credited to this account for $3,500 was immediately transferred to "Isabella". As at 5 February 2011 this amount had a debit of $11.11 (statement number 84). This debit was paid by "Isabella Shopfit" on 14 February 2011, leaving the balance as zero. 117Although this company purported to be the Trustee of the Brandon Discretionary Trust, on 5 November 2010 the trustee (the third defendant) removed it and appointed Isabella Shop Fitout & Design Pty Ltd (Exhibit 14). There is no information in Exhibit 14 to identify when the trust documents were sent to the bank. 118On 2 February 2011 the liquidator of Isabella Australasian Pty Ltd noting the company was in liquidation, that the NAB "may" hold accounts operated by this company, but that he had "not as yet been provided with any bank account numbers or other details". Attached were the liquidator's appointment documents, which appear to have included the 2010 "interim" report from the company in liquidation, identifying "cash at Bank - NAB" and also "cash at bank" in an unspecified account (I assume this is the third Australasian account referred to in Mr Freeman's submissions). 119The accumulated loss was small - $4,441 while the trading figure for 2009 was a profit of $186,659. Since the financial liabilities included directors' loans of $58,780 and a further $6,038, this was a company which did not appear to be in dire financial straits as at June 2010. 120The first defendant's profit and loss statement for November 2010 to June 2011 showed a total income of $1,007,394.57, direct job costs of $112,374.79 and other expenses which need not be set out here, but which are identical, down to the dollar, for the period July 2010 to June 2011. The only difference is the work in progress figure for the July 2010 to June 2011 Profit and Loss Statement. The expenses (totalling $91,955.45) are all identical. An additional fee for workers compensation explains the small difference between the total employment expenses ($391,642.22 instead of $389,577.80). The additional expenses reduce the operating profit from the November 2010 statement ($45,455.24) to $5,844.79. It is as if Isabella Australasian Pty Ltd, which traded and paid expenses up until mid-November 2010, never existed; the expenses it paid and the income it earned have simply been transferred to the Isabella Australasian Pty Ltd's June 2010 to July 2011. Yet the first defendant was not even incorporated until 4 November 2010. What these bank accounts and profit and loss statements show is that Isabella Australasian Pty Ltd simply ceased to exist and all of its assets and tax deductions were transferred to the first defendant. The companies' names and directors were changed, but everything else remained the same. How the defendants intermingled their business and assets 121Mr Issa was not a director or officer of the company Isabella Shop Fitout & Design Pty Ltd (Exhibit M; T 439). He was nevertheless a signatory to that account, and he agreed that that account had a commencement date of 5 February 2011 (T 439). The following was then put to him: "Q. And if I may just take you through statement 8, page 2 of 2, you see there the balance of the Australasian account is $97,214.49? Can you see that, in credit? 97,214.49. A. That's what it says there. Q. Would it be fair to say that that exact amount was transferred to the Isabella account on 5 February 2011? A. Yes. Q. Thank you. A. Is that the same account, sorry? Can I just have a look at that? Q. Sorry, just so we're clear, BSB number 082-366, account number 183238678. Do you see that? A. Isn't that the same account? Q. But see what I'm saying here, that's the account of Isabella, correct? A. Yeah, I believe that was a mistake from the bank. Q. Thank you. A. It's the same account. Q. I'm sorry, I return those exhibits, I do apologise. Mr Issa, it's not a mistake of the bank, the only company you were trading in was Australasian, up to the 1 February 2011, that's the case isn't it? A. I'm not sure. Q. But you understand I've just taken you to a document of 19 November, you were representing that the company that's going to carry out the fitout work was Australasian, correct? A. Sorry? Q. The company that you represented that would be carrying out the fitout work, the fitout contract, was Australasian, correct? A. Yes. Q. And that position did not change up to and including the 1 February 2011, correct? A. I believe so. Q. Just so it's clear, I'm showing you some documents from the liquidators and everything else. You now have confirmation the company was placed into liquidation, that is Australasian was placed in to liquidation on 1 February, you understand that's the date of the appointment of a liquidator. A. I'm not actually certain about the date, but I believe so, somewhere around that time." (T 439-440) 122However, in paragraph 15 of Mr Issa's affidavit, he had stated: "A liquidator was appointed on or about 1 February 2011 for Australasian." (Exhibit 5) 123It is now necessary to return to the representations made to Maggy as at 23 November 2010 to determine whether the entity with which Maggy entered into the fitout contract on 3 November was the same entity with whom she had entered into the design contract in November 2010. Mr Issa agreed: "Q. Can you now open up that affidavit of Maggy Der Bedrossian to tab 7 please? You were as at Tuesday, 23 November 2010 representing yourself as the managing director of Isabella Retail Shop Fitouts & Design, correct? A. Yes. Q. That entity doesn't exist, does it? A. I'm not sure of the date. Q. Incorporation, a business, or whatever you want to describe it as, named Isabella Retail Shop Fitouts & Design doesn't exist, does it? A. I don't think it does. Q. If we now go to tab 8. If I can take you to a document which I take it you prepared this document dated November 24 2010. A. No. Q. You didn't prepare that? A. No. Q. Who did? A. Someone from my office, presumably. Q. Someone in your office prepared that document, is that what you're saying? A. Yes. Q. Just so I understand then, who was authorised in your office to crate letterheads such as that document at tab 8? A. Create the letterhead? Q. Yes. A. Any of the graphic designers. Q. So any of the graphic designers could create a letterhead, "Isabella Shop Fitout & Design", "Isabella Shop Fitouts & Design Pty Limited", with an ACN128689314, ABN46602142945, is that what you're saying? A. They could under instruction. Q. Who would have given instructions to create that letterhead? A. Possibly the office manager. Q. Are you serious, sir? A. Yes. Q. So you're saying that an office manager had the power and authority to create a bogus letterhead? A. Possibly." (T 441-442) 124Mr Freeman sought clarification of the claim of "mistake": "Q. Just so we have a very clear understanding here, in your evidence you said this was a mistake? A. Correct. Q. By you? A. It was a mistake by our office. Q. Well no, you said it was a mistake by you. A. My office is me, isn't it? Q. Okay. No, but I just want to really - this is quite important. Where did the ABN number, 46602142945 come from? A. I believe that it was a typo. Q. How long have you been a director of Australasia? A. A couple of years. Q. You've been the director essentially of that company since its inception, correct? A. Correct. Q. And that's been ten years, isn't it? A. I'm not sure. Q. A bit more than a couple of years, hey? A. It's not that long. Q. But you know your obligations. Do you know if section 153 of the Corporation Act? A. Briefly. Q. Do you know that in all business dealings by way of expressions of descriptions of companies, corporations, associations, but in particular corporations, you must indicate the correct name of the corporation. Do you understand that? A. Yes. Q. You must only include, or first of all, you must include the ABN and ACN number of that company? A. Correct. Q. And you can only include the accurate ABNCAN [sic - should be ACN] number, correct? A. I presume, yes." (T 442-443) 125At T 443, Mr Freeman carefully took Mr Issa through the relevant ACN and ABN numbers: "Q. I'm showing the witness a document behind tab 2 of this affidavit. The ASIC search of Isabella Shop Fitout & Design Pty Limited, it has an ACN number 147193815, did you get that? Yes, right, that's good. You see there the Australian Business Number or ABN for Isabella is 93147193815. Now I'm now showing you the ASIC search of Australasian, the ACN for Australasian is 128689314. The ABN of Australasian is 78128689314. Now just going back to my questions a moment ago. You agree now if we go back to tab 8 that the Isabella, if I can describe it as such, does not have an ACN 128689314, does it? A. The ACN on this invoice is 128689314. Q. And that's the ACN of Australasian, correct? A. Correct. Q. But you agree with me that - just so we have a common understanding, when you go from ACN to an ABN all you do is a number in front, correct? A. I'm not sure. Q. Well have a look at the document you've got in front of you. The ABN, the last nine digits remain the same-- A. It looks like two numbers. Q. Correct? A. I think it's two numbers. Q. There are two numbers added to the front. A. Correct. Q. Thank you. This document behind tab 8 that's the document to be sent to Randwick Council, correct? A. It's - no. Q. Well it's addressed to Randwick Council, is it not? A. Yes. Q. And it's a document to be sent to Randwick Council, correct? A. Sorry? Q. That's a document to be sent to Randwick Council, correct? A. No. Q. Well what is it? A. I gave this document to the client. Q. You gave it to the client? A. Yes. Q. Sorry, we may be at crosspurposes, I do apologise. You gave this document to the client for her to sign and provide to council, correct? A. I gave it to her as a template. Q. All right. So you're the one who gave it to her? A. Correct. Q. And it had all these incorrect ACN and ABN numbers on it? A. Yes. Q. And a misdescription of the company? A. Yes. "(T 443-445) 126It was put to Mr Issa that Bella did not exist. He denied this: "Q. Well Bella doesn't exist, does it? A. Sure. Q. It doesn't exist, does it? A. Bella's for Isabella, obviously. Q. You're saying Bella's short for what? A. Isabella." (T 445) 127Mr Freeman then asked: "Q. Mr Issa, if Bella was the same entity as Isabella on the company documents and business records it'd have the same ACN and ABN number, correct? A. Bella I believe was the trading name, as a design company. HER HONOUR Q. No, but you haven't answered the question. The thing is if it's the same company it would have to have the same ABN and ACN, wouldn't it? A. I presume so, yes. Q. Well that's right, well so how come it doesn't? A. I'm not sure. FREEMAN Q. But just so it's clear, the only company you were trading at that time, we're talking about corporation, was Australasian, correct? A. Correct. Q. And you are the sole director/secretary of that company, correct? A. Correct. Q. You're controlling the financial and business activities of that company, correct? A. Yes." (T 446) 128Mr Issa also agreed, in relation to the design contract that the only entity operating a bank account with the NAB's BSB and account number was Australasian: "Q. As at 19 November 2010 the only entity operating bank account with NAB BSB 082 366 Account 18 323 8678 was Australasian, correct? A. Can you repeat that number please? Q. Have a look at special condition 4, and I'm going to be asking you questions regarding special condition 4. Well terms and condition 4. Well what I'm suggesting to you, well not suggesting, what I'm putting to you the only account being operated by you and your wife through a corporate entity as at 19 November 2010 was the account with Australasian, correct? A. Yes. Q. Isabella Shop Fitouts & Design Pty Ltd as at 19 November did not have a bank account with National Australia Bank with a BSB 082 366 Account 18 323 8678 did it? A. I'm not sure. Q. Sir I've taking you to the actual accounts and shown them to you. Is this a convenient answer you're going to give, you're not sure? A. I'm just not sure. That's the honest answer. Q. But you're the sole director/secretary of Australasian as at 19 November 2010, correct? A. Yes. Q. And you've represented two Tan that it would be contracting with Australasian, correct? A. Yes. Q. So taking that into account, you'd agree that this document is in fact a fabrication by you isn't it? A. Oversight. Q. I'm saying it's a fabrication sir? A. A what? Q. I'm saying to you this document is a fabrication? HER HONOUR: He doesn't - Q. Do you not know what fabrication means? A. We fabricate cabinets. Q. No, you manufacture them, you don't fabricate them? A. Mm-hmm. Q. Now a fabrication is a lie. A. Mm-hmm. Q. Do you understand? A. Yes. ... Q. I'm suggesting to you sir that this document was never attached to any fee proposal or the quote for the design works? A. Is that a question or?" (T 447-449) 129Mr Issa had some difficulty answering this question: "Q. Yes. Very serious. I'm putting it very firmly though. A. this document was emailed. Q. Sorry? A. This document was emailed with the cover. There's a couple more documents that are attached to this. Q. I'm suggesting to you sir this document was not provided to my client at or about 19 November 2010. Do you agree or disagree with that? A. I disagree. Q. But I'm having difficulty with that answer. I'll tell you why. You've got a copy of it there haven't you? A. Yes. Q. Now your talking about special conditions or conditions applying to Isabella, that is Isabella-- A. I can't follow the special conditions. Q. --Shop Fitouts & Design. Do you see that? A. Where does it say special conditions? Q. Well if we could delete the words special conditions from that question. Conditions, terms and conditions-- A. Sure. Q. It has a term and condition which refers to Isabella Shop Fitouts & Design Pty Ltd. Correct? A. Correct. Q. But how could that be when it has clause 21? Read clause 21 to yourself. A. Any images or graphics shown? HER HONOUR Q. Yes, keep going? A. Are proposed only provided by Isabella Australasian Pty Ltd. Is that what you mean? FREEMAN Q. Yes. Now-- A. So, what is your point? Q. --this is a design contract, correct? A. Yes. Q. And you say at that time you concede the only company trading at that time was Australasian, correct? A. Yes. Q. So with that concession in place, how is it that you are able to introduce into this document matters concerning a company which you weren't trading in? A. I'm not sure. Q. I am going to give you one opportunity sir. Would you like to retract your evidence regarding this document? A. No. Q. You want to maintain your evidence that this document was provided to my client on 19 November, on or about 19 November 2010? A. It was emailed. Q. Can you have a look at the top of the document please? A. Sure. Q. And tell me what ACN, ABN number refers to the company Isabella Shop Fitout & Design Pty Ltd? A. that, you want me to read the number? Q. Yes, read the number and then tell me-- A. Yeah, ABN-- Q. --do those numbers apply to-- A. 78 128 689 314. Q. Yes? A. So that's Australasian's ABN. Q. And you've given an ACN number as well? A. The ACN, yeah, 128 689 314. Q. So this document provide an accurate description of the company Australasian, correct? A. Correct. Q. It does not provide any correct description of a company Isabella Shop Fitout & Design Pty Ltd does it? A. No. Q. I am going to suggest to you one last time sir, this document's been fabricated by you to be included in your evidence to create a false bit of evidence for her Honour to make a decision on. That's the case isn't it? A. Disagree." (T 449-451) 130It is necessary to reiterate this material and to note the circumstances in which the plaintiff asserts that the document attached to the November design contract was a later edition in order to ascertain the identity of the company with which Maggy, on behalf of the plaintiff, was dealing when she entered into the contract on 3 February 2011. The contract of 3 February 2011 131It was put to Mr Issa that the first defendant only commenced to trade on 5 February 2011, on the basis that this was the date when the correct name of the bank account was entered. The plaintiff's case is that if the first defendant only commenced to trade on 5 February 2011, it is not open to the defendants to assert the first defendant was the contracting party on not only the design contract, but also the fitout contract, which was entered into on 3 February 2011. 132In particular, the plaintiff relies upon the Terms and Conditions document in Tab 5 of Exhibit 5, which they say is a fabrication created with intent to deceive the court by representing that the first defendant was the contracting party to the design contract when, whether it was trading in February or not, it was clearly not in a position to trade and was not trading, given the entries in the bank accounts. 133The documents signed by the plaintiff's sole director, Maggy, contains the following names for the contracting parties: (a)On the client's page, the name of the company in liquidation, Isabella Australasian Pty Ltd (Exhibit 5, tab 8, p 362); (b)On the offer page, a reference to the wrongly named company "Isabella Shop Fitouts and Design Pty Ltd" with the ACN for the company and the ABN for the Brandon Discretionary Trust; (c)On the quotation page, a reference to this company also appears (Exhibit 5, tab 8, p 328); (d)On the "Electrical" page and all other pages, this party is also named (Exhibit 5, tab 8, p 330-337); and, (e)On the Terms and Conditions page, a combination of the wrongly named (and the plaintiff submits, fictitious) company "Isabella Shop Fitouts and Design Pty Ltd" and Isabella Australasian Pty Ltd (see Clause 36 which refers to Isabella Australasian Pty Ltd). 134Ordinarily, a minor error in the name of a corporation, particularly where the ACN and ABN are correctly given, would be regarded as trivial. In the present case, but for the history of use of other names by the defendants, and in particular the use of a false corporate name in the design offer made to the plaintiff would excite suspicion. This has been compounded by the attempts of the defendants to avoid as much as possible even their omission of which corporation was trading. However, all of the evidence points to the contract having been signed by the plaintiff with the first defendant. In this regard, I note that this was the evidence of Maggy. As her evidence was consistently honest and straightforward, her statement that she believed she was contracting with this company should be given some weight. 135However, the identity of the first defendant was unknown to the plaintiff at the time of the entry into the design contract. Having determined that the identity of the contracting parties for the design contract was Mr Issa and the identity of the first defendant, I now consider summarise those findings and continue to the issue of the negligent work in the fitout. Conclusions: a design contract with Bella Retail Design, and fitout work before the fitout contract was signed 136I accordingly find that in November 2010, the plaintiff executed a document under the letterhead of "Bella" which the above evidence demonstrates was a non-existent corporation in which the second defendant, Mr Issa, had named himself as managing director. Attached to this is a document which the plaintiff submits is of dubious provenance, and should be rejected for the following reasons: (a)The corporation named Isabella Shop Fitouts & Design Pty Limited did not exist with the plural version of "Fitouts and" has thus never existed. In the context of so many other misspellings and similarities in these entities' names, I should view this difference as another "smoke screen" to enable the names of the entities under which the shopfitting business carried out its affairs. (b)If this is a reference to the first defendant this corporation was not, as at 19, 22 or 26 November 2011, the holder of account with NAB 082 366 AC 183238678 as the holder of that account at that time was Isabella Australasian Pty Ltd. (c)This document is described as an invoice, but could not have been attached to the emailed design tender of 19 November 2011 as it represents an invoice for the complete costs for the completion of the design works and not a quote for the design works; (d)The inclusion of the name of Isabella Shop Fitout & Design Pty Ltd (the first defendant) into this document conflicts with the title reference Isabella Australasian Pty Ltd ABN 78 138 689 314 A.C.N. 128 689 314 (which is the only document emanating from the defendants with a proper naming of an existing corporation and with the correct A.C.N. and ABN numbering. (e)The adding of name of Isabella Shop Fitout & Design Pty Ltd to paragraphs 4 and 11 conflicts with paragraph 21, which identify the Company referenced throughout as a reference to Isabella Australasian Pty Ltd and not Isabella. (f)The terms of payment requiring upfront payment of 90% of the total cost of $2,750 conflict with the oral agreement, and actual payment up front, of $1,350 paid on 26 November 2011 as set out in paragraphs 2 and 3 of the Terms and conditions. (g)The document is not incorporated into the offer document and is not signed. 137If I accept that the document at page 93 of Tab 5 to Exhibit 5 did not exist as at November 2010, then it is put I must accept is a recent fabrication, as there is no other explanation for its inconsistencies. It is submitted that it is a fabrication with the intent to deceive the court. If it is to be relied upon to exclude liability, such exclusion could only apply to the company in liquidation, Isabella Australasian Pty Ltd, and not to the first defendant. That is a serious issue in relation to the credit of the second and third defendants. The second defendant was the sole director of Isabella Australasian Pty Ltd and the third defendant was the sole director of Isabella Shop Fitout & Design Pty Ltd (the first defendant). It is submitted that if this document is further proof of collusion between the second and third defendants to enable them to arrange their business affairs to their own benefit, at a time when Isabella Australasian Pty Ltd was insolvent and facing voluntary winding up by its creditors. Does this render the second and third defendants partners, and make one or both of them personally liable? 138What these events establish is that in November 2010, the plaintiff executed a written contract with a non-existent entity, namely Bella Retail Design Pty Ltd, of which Mr Issa could not be the managing director. This means Maggy, on behalf of the plaintiff, was dealing with Mr Issa personally. The consequences of this flow on into the subsequent fitout contract, firstly because the plaintiff was not (apart from the bank account name) told of any other contracting party, and secondly because Mr Issa did not wait for the signed contract of 3 February 2011 to commence the fitout work. His correspondence with the Centre Management, his drafting of council documents and his advice about the core holes had nothing to do with the design contract. This was fitout work. Mr Issa was carrying this out without there being any contract between himself, or any entity under which he was trading and the plaintiff. The plaintiff in fact obtained a quotation from another shopfitter; there was clearly no contractual meeting of the minds until the contract of 5 February 2010 was signed. By that stage, the damage was done; the core holes had been drilled in the wrong place and Mr Issa had put forward the floor raising proposal which caused further difficulties. 139The plaintiff had entered into a design contract with a fictitious company, but in reality with Mr Issa. In breach of the design contract (not the fitout contract) Mr Issa's activities amounted to a breach of that contract firstly because they were negligent and secondly because they were activities the plaintiff never contracted for. 140What, then, was the role of Mrs Issa, the third defendant, in this design contract? The plaintiff submits that the third defendant, the sole director of the first defendant, conducted the financial affairs of the business "in partnership with her husband there being no other corporate entity through which the business and financial affairs of shop fitout design and construction were [sic] then being conducted" (plaintiff's written submissions, paragraph 9). This submission is principally based in part on the claim (which, as I have indicated elsewhere in this judgment, I do not accept) that the slight change in the spelling of the name of the first defendant in many of the defendants' documents means that despite valid ABN and ACN numbers, this company is also fictitious. 141However, the fictitious company under which the design offer was sent has no connection with either the first defendant or the company in liquidation other than the involvement of Mr Issa, the second defendant. The third defendant's role clearly was to conduct the financial affairs of the business. She was not involved in the design or in the making of the representations before or after. 142The use of bogus letterheads incorporating Bella, and responsibilities for the difference in spelling the name of the first defendant, were matters about which both the second and third defendants were cross-examined. Mr Issa agreed he held himself out as the managing director of both. He said that the instructions to create the bogus letterhead would have come "possibly from the office manager": "Q. You didn't prepare that? A. No. Q. Who did? A. Someone from my office, presumably. Q. Someone in your office prepared that document, is that what you're saying? A. Yes. Q. Just so I understand then, who was authorised in your office to crate letterheads such as that document at tab 8? A. Create the letterhead? Q. Yes. A. Any of the graphic designers. Q. So any of the graphic designers could create a letterhead, "Isabella Shop Fitout & Design", "Isabella Shop Fitouts & Design Pty Limited", with an ACN128689314, ABN46602142945, is that what you're saying? A. They could under instruction. Q. Who would have given instructions to create that letterhead? A. Possibly the office manager" (T 442) 143This office manager was not the third defendant; it was a person named Ashleigh Bushnell (T 443). 144This really is the high point of the evidence against the third defendant - the fact that she was the second defendant's wife, the sole director of the first defendant, and managed the company's financial affairs. The evidence of the third defendant made that clear. 145As is set out in more detail below, more would be required in order to find that there was a (presumably secret) partnership between the second and third defendant to conduct their business affairs. The statement of claim simply pleads a partnership. That claim is not, on this evidence, made out. Mere suspicion is insufficient. The fitout contract 146The fitout contract was entered into by the first defendant and by the plaintiff on 3 February 2011 (Exhibit 9). On 4 February 2011 Maggy received a Tenant Handover Notice from Mr Malouf on behalf of Alpine Hotels Pty Ltd and Clycut Pty Ltd. The shop was to be available for fitout work on 7 February 2011, and final tenancy drawings and specifications are noted as having been "authorised" by the lessor. Negligent work in the fitout 147The work the subject of the fitout was the subject of expert evidence by reports and in conclave. Mr Roberts has set out the inadequacies of the design plans, which did not include a drawing of the layout for the drainage points to the new plumbing services, something Mr Roberts noted had been admitted by Mr Issa in his email to Mr Malouf of 9 December 2010 (Exhibit E, paragraph 8.6). Mr Roberts went on to note that the attempted rectification of this problem by raising the floor in rooms where the drainage points were located resulted in non-compliant steps at the door openings. Accordingly, the design offer was simply inadequate. It was a reasonable expectation that Bella Retail Design, or whoever is the alter ego for this non-existent entity, would provide design and architectural drawings meeting the requirements of the Building Code of Australia and relevant Australian Standards that could be approved by Council and any certifying authorities. This "clearly did not occur", said Mr Roberts, at paragraph 8.7 of his report. Following these inadequate plans, a final offer from "Isabella Shop Fitouts & Design" dated 28 January 2011 was provided (Mr Roberts' report, paragraph 10.6). Mr Roberts concludes that there was a lack of due diligence and skill on the part of the project manager or site foreman who oversaw the fitout in that he did not identify the non-compliant and defective work proposed by Mr Issa and there was also a poor standard of work and oversight in relation to the shop fitout of the premises which is set out in detail in Mr Roberts' reports (see also Exhibit D, E, F, G, H, J and the City Plan Services Report, which is Exhibit K). 148A number of matters were admitted by Mr Issa. These have been summarised by counsel for the plaintiff as follows. 149The second defendant ("Issa") made a number of admissions about the negligent work during cross-examination. These were summarised by counsel for the plaintiff in his written submissions, following on from the list of admissions the second defendant made in relation to his dealings with Centre Management and Mr Malouf: (a)He denied telling Maggy's brother that the alternate plan (placing new core holes by raising the floor) had been done many times before but conceded he had told Maggy's brother this, and that it was not the case (T 509-510); (b)Although denying he said that new plans were not required, with only the tradesmen needing new plans, he conceded new plans were necessary, and he had wrongly said to the contrary (T 509 lines 13 - 24, T 510 lines 1 - 8); (c)He conceded the steps he built were not compliant with the BCA (plans show 200mm, but measured step as per Cornerstone report recorded steps of 230 mm to kitchen/store/office, (9.14.1 p18 report 20/04/11), bathroom 240 mm (9.18.1), Beauty room 240 mm (9.25.1)). None of the steps or raised floor areas were compliant with the BCA (T 511 lines 12 - 14); (d)He knew that before commencing and/or completing the works that in order to have Council or any other PCA issue a construction certificate for a fitout on this centre, an alternate fire solution plan/specification had to be provided to the Certifier in order for a construction certificate to issue (T 513 lines 43 - 50); (e)He knew he had not provided to any certifier, an alternate fire solution (T 513 lines 43 - 50, T 514 lines 21 - 24); (f)He knew he could obtain the alternate fire solution from Aaron Malouf (T 514 lines 17 - 19); (g)He was afforded the opportunity for himself and his experts to inspect (before the shopfitting demolition) but chose not to appoint any experts at all to do this (T 520 lines 39 - 47, T 521 lines 1 - 8). The causation argument 150The defendants denied being causally responsible for the loss and say that any loss suffered by the plaintiff was due to the plaintiff not obtaining all requisite approvals and certification from the landlord and Council as they ought to have prior to the works being commenced (outline of issues and outline of contentions, paragraph (g)). Essentially, this is another restatement of the basis upon which a claim is made for proportionate liability. However, analysis of the chronology shows that on 9 December 2010, only two days after Maggy had signed the lease, and in circumstances where she had only made a part payment of the design fee, Mr Issa sent the email to Mr Malouf about plumbing and while Maggy received a copy of this email, and the follow-up email of 16 December 2010, she would not have understood the importance of the "core hols [sic]", nor was she aware that the subcontractor was coming to drill the holes until she received a telephone call from a person at Centre Management on 21 December 2010. Maggy's response, namely that she had "a builder who is taking care of all of this and he has been speaking with Aaron", was correct, as was her statement that "I don't know what a core hole is". 151As I am satisfied that Mr Issa made the representations that he would attend to all necessary approvals, I am satisfied that he was causally directly responsible not only for the negligent design, but also for Maggy's reliance upon him to obtain all the necessary approvals. The third defendant 152I have found that the second defendant entered into a contract with the plaintiff on his own behalf on the basis that the fictitious company, Bella Retail Design, did not exist and the plaintiff was in fact therefore contracting with Mr Issa. I have found that the second defendant made the representations pleaded and that the negligent design work, as well as performance of fitout occurred as a result of his activities. 153As noted above, while Mrs Issa appears to have played a role in the first and second defendants' complex financial set up (in that she is the sole director and secretary of the first defendant), the plaintiff has not discharged its onus of proof in relation to any of the causes of action pleaded against Mrs Issa. 154The plaintiff has not been able to point to any evidence, beyond mere suspicion, as to the role that Mrs Issa, the third defendant, played in any of these transactions, and this includes the fitout contract as well as the design contract. She was not responsible for the negligent design. She did not make any of the representations, although she may have participated in the elaborate corporate structure set up by her husband. However, in relation to causation, as is the case in relation to the first contract, the plaintiff has not been able to discharge the burden of proof that Mrs Issa is in any way responsible. 155Before considering the quantum of the claim, I shall first consider the claim for contributory negligence against the plaintiff and then the claim for proportionate liability in relation to the concurrent wrongdoer defences pleaded in these proceedings. The contributory negligence claim against the plaintiff 156The defendants claim that if the plaintiff is otherwise entitled to relief under s 236 of the ACL, that pursuant to s 137B of the CCA the amount of the loss or damage that the plaintiff may recover should be reduced to the extent to which the court thinks just and equitable, having regard to the plaintiff's share in the responsibility for the loss or damage (paragraphs 40-52 of the Amended Defence filed on 30 January 2013). 157In the alternative, a claim is brought that the plaintiff was contributorily negligent, and there is reliance upon the same particulars as set out in paragraphs 40-54 (see paragraph 55 of the Amended Defence filed on 30 January 2013). 158This portion of the defendants' written submissions consists of largely repetition of the contents of the Amended Defence. For example: (a)Paragraph 247 of the defendants' written submissions repeats paragraph 44 of the Amended Defence; (b)Paragraph 248 of the defendants' written submissions repeats paragraph 45 of the Amended Defence; (c)Paragraph 249 of the defendants' written submissions repeats paragraph 46 of the Amended Defence; (d)Paragraph 250 of the defendants' written submissions repeats paragraph 49 of the Amended Defence; (e)Paragraph 251 of the defendants' written submissions repeats paragraph 51 of the Amended Defence; (f)Paragraph 252 of the defendants' written submissions repeats paragraph 52 of the Amended Defence (although without the particulars); (g)Paragraph 253 of the defendants' written submissions repeats paragraph 53 of the Amended Defence; (h)Paragraph 254 of the defendants' written submissions repeats paragraph 54 of the Amended Defence; and (i)Paragraph 255 of the defendants' written submissions repeats paragraph 55 of the Amended Defence (although without the particulars). 159As is noted below, the defendants' written submissions similarly repeat, often verbatim, the contents of the Amended Defence in relation to the proportionate liability claim under the CCA. By reason of the lack of submissions of the defendants on these issues, I suggested that Mrs Whitaker provide additional submissions, in addition to asking her to look at, and correct, the schedule of companies which is an annexure to this judgment. 160At paragraphs 77 to 94, Mrs Whitaker has provided written submissions in reply, in a rolled-up fashion, concerning the proportionate liability defences and contributory negligence. Essentially what is repeated is the statement that it was the primary responsibility of the plaintiff to obtain the CC and appoint the PCA and otherwise comply with the terms of the EP&A Act and development consent dated 4 February 2011, not the defendants, on the basis that "the first defendant tried to help Tan project manage the process" (paragraph 80). The rest of these submissions deal with the role of the solicitor for the plaintiff, Mr Ishkhanian, on the basis upon which he is asserted to be a concurrent wrongdoer. The concluding remarks to this section relate to reserving a right to be heard in relation to the plaintiff's attacks on the legal representatives of the defendants: "To the extent that attacks are made in Tan's submissions on the legal representatives of the Defendants regarding the Legal Profession Act 2004 NSW the legal representatives reserve the right to be heard on these issues if necessary and to be separately represented if necessary. Any suggestion that there has been any breach is put in issue." (Written submissions, paragraph 94, p 14-15) 161This really gives me no idea as to the basis upon which the defendants assert the plaintiff was contributorily negligent. 162Rather more helpfully, Mr Freeman in his written submissions (paragraph 50, p 15) summarises the bases upon which it is asserted that the plaintiff is contributorily negligent and/or had sued the wrong parties. Using this as a guide, it would appear that these bases are as follows. (a) Failure to comply with the fitout guide 163The defendants argue the plaintiff received a lessor disclosure statement under the Retail Leases Act at least seven days before entering into the lease (paragraph 42 of the Amended Defence). When she entered into the lease she was therefore on notice of the sections of the fitout guide warning her that it was her responsibility to determine what approvals were required and lodge such applications as were necessary with the Council in relation to a development consent and construction certificate (p 4). 164The first difficulty is that, as the chronology above clearly shows, Mr Issa, the second defendant, was already taking these steps on her behalf. 165The fitout guide was a historical document, not a compliance document. It had been relevant at a time when the shopping centre was first opened. The defendants do not identify by reference to evidence in these proceedings relied upon to establish that certain steps should have been taken and were not taken by reason of failure to comply with the fitout guide, in circumstances where, as the summaries above clearly show, all of those steps were taken by Mr Issa, frequently without any consultation of the plaintiff, and at times to suit his own convenience. 166In addition, as the evidence set out in the summary above clearly shows, if the plaintiff should have had regard to the fitout guide, the reason for this not occurring was by reason of the false representations by Mr Issa that he would handle all of these matters. It would appear that one of the matters relied upon was the failure of the plaintiff to appoint a tenancy coordinator. Mr DeLooze, in addition to pointing out that historical documents such as the fitout guide were irrelevant for the purpose of this kind of construction, also stated that none of the problems could have been cured by appointing a tenancy coordinator, and it is clear from the emails from Mr Malouf that he was prepared to deal with Mr Issa direct without requiring a tenancy coordinator for this comparatively minor work. In addition, any claim that the builder of the shopping centre, who by all accounts had left the site many years prior to 3 February 2011, should be involved in a triparted agreement was not a step recommended by the experts, nor was it ever made clear what difference it would have made to the situation in hand. (b) Failure to obtain proper legal advice 167Although not particularised in the Amended Defence, the frequent references by the defendants to the requirement for the plaintiff to obtain proper legal advice, and to the implications of the certificate provided by Mr Ishkhanian has caused counsel for the plaintiff to provide a brief outline in his written submissions (paragraphs 50-61) identifying a claim of contributory negligence on the basis that the plaintiff should have engaged solicitors to advise on the fitout guidelines and as it did not do so caused its own loss. 168I agree with the submission of counsel for the plaintiff that there was no evidence tendered as to what kind of advice should have been obtained, and it is difficult to determine what more a solicitor could have done, if consulted by the plaintiff, in relation to what steps to take after the core holes had been wrongly drilled. In the evidence, submissions and even a pleading on this issue, it is impossible to deal with any such particular of contributory negligence further. (c) The plaintiff should have appointed a PCA in order to determine whether a DA or a CDC was required 169Both the experts, Mr Shuter and Mr DeLooze, agreed that prior to appointing a PCA the plaintiff had to have a DA approval and an alternate fire solution. As the chronology of events shows, Mr Issa made himself responsible for such documentation. 170Mr Shuter was uncertain on this issue, but Mr DeLooze, who is familiar with the legislation, stated that the CC could not be applied for until after the issue of a DA: "WITNESS DELOOZE: Yeah, I thought that legislation actually changed that it doesn't allow you to accept the PCA role until the DA has been approved." (T 358) 171Both Mr Shuter and Mr DeLooze agreed that a CC would not be issued by Council, in circumstances where there was an alternate fire solution issue to be resolved: "FREEMAN: And this particular council, Mr Shuter, would you agree with this proposition that as a precondition to issuing a construction certificate where an alternate fire solution is an issue, that the council, in particular this council, Randwick Council, required that issue to be resolved before it would issue a construction certificate? WITNESS SHUTER: Yes. FREEMAN: Same question to you, Mr Delooze. WITNESS DELOOZE: Yes, they'd, they'd have to satisfy themselves." (T 359) 172Both Mr Shuter and Mr DeLooze agreed that, as a precondition to the issuance of a CC, the alternate fire solution issue had to be addressed: "FREEMAN: Now with respect to the issue of a construction certificate to private certifiers generally, firstly to you, Mr Shuter, if there was an alternate fire solution issue with respect to the proposed fitout would it be a precondition to the issuance of a construction certificate that that issue be resolved? WITNESS SHUTER: Yes, it's probably worth clarifying that there are base building alternative solutions, so they're alternative solutions that have been written when the original building was built, each time somebody does the fitout, an applicant does a fitout within that existing building, it needs to be ensured that the original recommendations of that alternative solution report aren't breached, and then you can also potentially introduce new issues with your development at hand that need alternative solutions. So there's two different types of alternate solutions, base building and one's caused by the actual development or the fitout. FREEMAN: Mr Delooze? WITNESS DELOOZE: Yeah, I was going to clarify that same, the same issue, but yeah, you need to satisfy that the works proposed are consistent with the existing alternate solutions for the base building before you issue the construction certificate." (T 359) 173In addition, this had to be resolved in order to assess compliance with design prior to work commencing: "FREEMAN: Would it be fair to say that this alternate fire solution issue that would affect the assessment of plans or the works to be carried out to see, to ensure that those works were going to be complaint with the original or the existing alternate fire solution, would that be correct, Mr Shuter? WITNESS SHUTER: It may, it depends on the recommendations that are in that original report, and they, they can vary greatly. FREEMAN: Mr Delooze? WITNESS SHUTER: Yeah. Yeah, it's just basically you have to read the reports and work out if it, if it affects it or not, so again, it depends. FREEMAN: Again, I'm putting this question to both of you, but you, Mr Shuter, first. Had the builder, that is builder 1, in this instance it's Mr Issa or his company, Isabella, or whatever, had carried out the work and all work was compliant to the BCA, and if a building certificate was being sought, it could've been obtained even if a construction certificate wasn't issued? WITNESS SHUTER: In terms of the building code considerations in the building certificate application, yes, but the building certificate application when council assesses it can have, can have considerations that are beyond the building code. FREEMAN: Sorry, can you - if all considerations were compliant-- WITNESS SHUTER: Yep. FREEMAN: A building certificate could have been obtained if the work was carried out (a) compliant to the BCA and any other conditions that of the Land Environment Court Act or any conditions of council and any conditions of the DA. WITNESS SHUTER: To the best of my knowledge, yeah. WITNESS DELOOZE: Yes. " (T 359-360) (d) The plaintiff should not have commenced works without a CC (Defence, paragraphs 45-46) 174The plaintiff applied for a CC on 1 February 2011, two days before the contract was signed, with a work commencement date of 7 February 2011. A CC had been obtained from Randwick Council on 4 February 2011. The difficulty was that Mr Issa had failed to provide to Council the alternate fire solution. Council accordingly declined the appointment as PCA and Mr Issa then sought to appoint City Plan Services and Metropolitan Building Approvals as alternate PCAs on 8 February 2011. 175Mr Issa well knew that the Council had declined the appointment as PCA and went ahead with the work on this basis, in circumstances where this was at his own risk, as he acknowledged in cross-examination. There is no evidence from the experts, Mr Shuter and Mr DeLooze, as to any ramifications flowing from these developments. Had the work been compliant to the BCA and the DA, a final certificate could still have been obtained, according to their evidence. 176Mr Issa had already determined to commence the works without having a DA and without having the alternate fire solution. He elected to continue them without a CC. There was really nothing more that the plaintiff could do. 177Even without a CC of any kind, if the works were properly designed and constructed to the BCA, a certificate could still be issued: "FREEMAN: Okay. With respect to the process of getting to, and there's two processes, in fact there's mostly five, but this confines to two, we're trying to get to a position where a tenant can occupy and commence to trade, now there are fundamentally two ways of getting there, and Mr Shuter, I ask you to accept this, and you can indicate whether you do or don't, that if the builder had carried out the work and his design was compliant and his work was compliant, and he didn't obtain a construction certificate prior to commencing work, it can still get to a building certification certifying the work compliant, even if you didn't get a construction certificate. That's the case, isn't it? WITNESS SHUTER: You're not able to issue retrospective construction certificates as a certifier. FREEMAN: No, not a construction certificate, I said a building certificate. WITNESS DELOOZE A building certificate, that can only be issued by council, not by a private certifier. FREEMAN: Sorry-- WITNESS DELOOZE : But it would be possible once the works are done to have a building certificate issued by a council if it was brought - it was compliant with the building code and whatever other considerations they have. FREEMAN: Thank you. Mr Shuter, the same question to you. WITNESS SHUTER: Yes the same." (T 356-357) Conclusions concerning contributory negligence 178In relation to the claims under the CCA (as set out in paragraphs 40-54 of the Amended Defence) and in relation to the claim for contributory negligence in paragraph 55 of the Defence, I am satisfied that the plaintiff was not contributorily negligent. This brings me to the issue which took up most of the time in these proceedings, namely the concurrent wrongdoer defences. The concurrent wrongdoer defences 179The Amended Defence of 30 January 2013 sets out the following claims: (a)A claim, in the event that the plaintiff is entitled to relief under s 236 of the ACL that pursuant to ss 87CB and 87CD of the Act any such claim should be apportionable claim under the Act in relation to the following four concurrent wrongdoers: (i)Clycut Pty Ltd, the lessor of the premises and registered proprietor of "Pacific Square"; (ii)Alpine Hotels Pty Ltd, the lessor of the premises; (iii)Caverstock Group Pty Ltd, the project manager for the lessor; and, (iv)Mr Ishkhanian and Habourside Legal Services Pty Ltd, the solicitor for the plaintiff with carriage of this matter and his employer. (b)The plaintiff seeks similar relief under s 82 TPA (paragraphs 59 and 60 of the Amended Defence); (c)The defendants seek the same apportionment findings under s 35 of the Civil Liability Act (paragraphs 61-63 of the Amended Defence). 180The failure by the lessor is the subject of submissions by the defendants at paragraphs 272-285 of the written submissions of 8 April 2013. There does not appear to be any separating out of each of the three corporations referred to in paragraphs (a), (b) and (c) in each of the paragraphs of the Amended Defence. 181Essentially the claim is brought on the basis that the lessor made the premises available for fitout purposes and allowed the plaintiff to undertake the fitout works even though: (a)There was no evidence of a constructions certificate or compliance development certificate or of all relevant development consents; (b)There was no evidence that a certifying authority or a principal certifying authority had been appointed; and, (c)The lessor failed to ensure that the tenancy drawings and specifications were authorised by their architects (defendants' written submissions, paragraph 272). 182The relevant provisions of the Amended Defence are set out at paragraphs 64 to 71 the contents of the fitout guide. The Amended Defence then sets out the matters referred to in paragraph 272 of the defendants' written submissions. 183The defendants' written submissions copy the contents of the Amended Defence as follows: (a)Paragraph 273 of the defendants' written submissions repeats paragraph 74 of the Amended Defence; (b)Paragraph 274 of the defendants' written submissions repeats paragraph 75 of the Amended Defence; (c)Paragraph 275 of the defendants' written submissions repeats paragraph 76 of the Amended Defence; (d)Paragraph 276 of the defendants' written submissions repeats paragraph 81 of the Amended Defence; (e)Paragraph 277 of the defendants' written submissions repeats paragraph 82 of the Amended Defence; (f)Paragraph 278 of the defendants' written submissions repeats paragraph 83 of the Amended Defence; (g)Paragraph 279 of the defendants' written submissions repeats paragraph 84 of the Amended Defence; (h)Paragraph 282 of the defendants' written submissions repeats paragraph 86 of the Amended Defence; (i)Paragraph 283 of the defendants' written submissions repeats paragraph 88 of the Amended Defence; (j)Paragraph 284 of the defendants' written submissions repeats paragraph 89 of the Amended Defence (although the heading in the defence "Particulars" had been changed to "and the defendants submit"); and, (k)Paragraph 285 of the defendants' written submissions repeats paragraph 90 of the Amended Defence. 184The defendants provided further written submissions on 1 May 2013. While those submissions answer some of the points taken by Mr Freeman in his written submissions, they do not set out in any clear and comprehensible fashion the basis upon which each of the corporations referred to in paragraphs (a), (b) and (c) of the pleadings is alleged to be a concurrent wrongdoer. 185Legislation such as Part IV of the Civil Liability Act 2002 (NSW) was designed to prevent an injustice whereby a plaintiff who had chosen to sue only one of several wrongdoers, leaving that defendant to pursue other wrongdoers for indemnity or contribution. The principles are helpfully set out by McDougall J in "Proportionate Liability In Construction Litigation" (2006) 22 (6) BCL 394 (http://www.lawlink.nsw.gov.au/lawlink/supreme_court/ll_sc.nsf/vwprint1/sco_mcdougall100706). Leaving aside the difficulties of notification in circumstances where this claim was only formally brought six weeks before the hearing, the issue of the degree to which a plaintiff must shoulder the burden of proving that liability and quantum should be sheeted home to the defendant rather than to the asserted concurrent wrongdoers may depend on whether the concurrent wrongdoer is joined or not. McDougall J in p 399-401 concludes that an obligation is imposed on defendants to identify those whom the defendant believes, on reasonable grounds, may be concurrent wrongdoers, while not imposing an obligation to plead or prove contribution, nevertheless shoulder the onus of proof if they raise a proportionate liability defence in circumstances such as the present (see Ferdinand Nemeth v Prynew Pty Ltd [2005] NSWSC 1296 at [19]). In other words, it is not simply a question of identifying the alleged wrongdoers, but setting out the material facts showing they are the wrongdoers, pleading with the same degree of precision as would be required if the wrongdoer were a party. 186However, mere pleading is not enough. It is also necessary to identify with some precision what the evidence is. 187In relation to the claims against the three corporations, there must be a precise identifying of the facts and matters going to each of the three companies asserted to be concurrent wrongdoers. It is simply not sufficient to identify them in a group as the "lessors". 188In addition, no attempt is made to breakdown the liability of each of these alleged concurrent tortfeasors, as all that is submitted (written submissions, paragraph 305(a)) is that the "landlord" should have 50% of any damages apportioned. Mr Ishkhanian 189The particulars provided to establish Mr Ishkhanian's concurrent wrongdoer role are set out above. Essentially those particulars amount to negligent advice not to obtain the necessary approvals prior to the work commencing, or to obtain and provide advice about the fitout works, draft contract and planning requirements. 190The particulars set out at [91]-[108] of the Amended Defence of 30 January 2013 refer first to Mr Ishkhanian's role to provide advice under s 16 Retail Leases Act and the fact that as a result the Lessor Disclosure Statement and Fitout Guide "comprised part of the file" held by him (paragraph 96). 191The written submissions of the defendants copy the contents of the Amended Defence of 30 January 2013 as follows: (a)Paragraph 286 of the defendants' written submissions repeats paragraph 91 of the Amended Defence; (b)Paragraph 287 of the defendants' written submissions repeats paragraph 92 of the Amended Defence; (c)Paragraph 288 of the defendants' written submissions repeats paragraph 93 of the Amended Defence; (d)Paragraph 289 of the defendants' written submissions repeats paragraph 94 of the Amended Defence; (e)Paragraph 290 of the defendants' written submissions repeats paragraph 95 of the Amended Defence; (f)Paragraph 291 of the defendants' written submissions repeats paragraph 96 of the Amended Defence; (g)Paragraph 292 of the defendants' written submissions repeats paragraph 97 of the Amended Defence; (h)Paragraph 293 of the defendants' written submissions repeats paragraph 98 of the Amended Defence; (i)Paragraph 294 of the defendants' written submissions repeats paragraph 99 of the Amended Defence; (j)Paragraph 295 of the defendants' written submissions repeats paragraph 100 of the Amended Defence; (k)Paragraph 296 of the defendants' written submissions repeats paragraph 101 of the Amended Defence; (l)Paragraph 297 of the defendants' written submissions repeats paragraph 104 of the Amended Defence (the matters in paragraphs 102 and 103 of the Amended Defence and the heading "December 2010" are omitted); (m)Paragraph 298 of the defendants' written submissions contains some changes, but substantially repeats the contents of paragraph 105 of the Amended Defence to take into account the differing evidence as to what was said; and, (n)Paragraph 299 of the defendants' written submissions repeats paragraph 108 of the Amended Defence. 192The only new material provided is a reliance upon Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10 which the written submissions argue "takes a broad approach to the identification of concurrent wrongdoers even where there are arguments around causation or the different nature of the relevant causes of action". It is submitted that the evidence and facts of this case "attract the ratio in this decision in respect of the proportionate liability defences". 193In addition, in the conclusion to these submissions, it is asserted that the negligence of the solicitors should warrant an apportionment of 20%. No explanation is given as to how this figure is reached. 194All that Mr Ishkhanian did was to complete the certificate in relation to the lease on 7 December 2010. By that time Maggy had already made a series of decisions about the shop fitout. While it is not clear from the evidence whether she consulted Mr Ishkhanian before or after the contract of 26 November 2010 was entered into, his role as a solicitor was restricted to the issues relevant to providing a certificate in relation to the lease. The degree to which he was then obliged to advise her needs be seen in this context, and in particular in context of the fact that by the time that he was consulted a second time in January 2011, she had already seen Mr Issa and he had made the representations set out in paragraph 12(a)-(d) above, in relation to each of the representations pleaded by the plaintiff. 195Even if (which I do not accept) Mr Ishkhanian was under an obligation to advise the plaintiff in relation to her obligations as to the fitout and as to obtaining the necessary certificates, he, like the plaintiff, would have been taken in by the misleading and deceptive statements and false representations made by Mr Issa to Maggy that he was attending to these matters. 196Mr Ishkhanian's only other role was, after meeting Maggy socially in late December 2010, to attend the meeting of 10 January 2011. According to Mr Issa, Mr Ishkhanian said so little at this meeting that he mistook Mr Ishkhanian for Maggy's boyfriend. 197The defendants asked me to draw a Jones v Dunkel inference (Jones v Dunkel (1959) 101 CLR 298) from the circumstances in which Mr Ishkhanian was not called to give evidence in relation to his affidavits. 198I decline to draw a Jones v Dunkel inference. Mr Ishkhanian was merely nominated as a wrongdoer, without the appropriate particulars, in the original defence, an improperly drafted pleading in that it failed to set out even the most basic particulars in accordance with the requirement for concurrent wrongdoer. Correspondence from Agostino & Co, the solicitors for the defendants (Exhibit 13), where objection was taken to his filing a Notice of Change of Solicitor, interviewing witnesses and holding a "fluctuating position" (Exhibit 13, tab T) was similarly improper. Mr Ishkhanian stated in his letter in reply of 9 January 2012, in my view correctly, that based on those pleadings, he was neither a witness nor likely to be a witness in these proceedings (Exhibit 13, tab R). The circumstances in which the defendants amended their defence a matter of six weeks before the trial to plead a substantial series of particulars against Mr Ishkhanian for the first time do not reflect credit on the legal representatives of the defendants. 199Counsel for the plaintiff was entitled not to rely upon the affidavit of Mr Ishkhanian or to call him, particularly having regard to the circumstances in which no formal claim identifying particulars of concurrent wrongdoing was made against Mr Ishkhanian until such a short time before the trial, in circumstances where he was the solicitor on the record. 200In addition, Mr Ishkanian's evidence was simply unnecessary. None of the advice given by Mr Ishkhanian was negligent. The defendants rely in their submissions upon Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd, supra, where a law firm was found to have breached its duty by negligently preparing a mortgage which should have contained a covenant to repay a stated amount. Mr Ishkanian did not perform his obligations as the solicitor for the lessee negligently; those duties did not include any of the matters adverted to by the defendants. The principles enunciated by the High Court in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd, supra, do not confer on solicitors the obligation to perform the tasks set out by the defendants in the particulars of negligence. Conclusions concerning concurrent tortfeasors 201I have rejected the defendants' claims in relation to the purported concurrent wrongdoers. 202This brings me to the issue of quantum. Quantum 203None of the works being compliant, the lessor required the shop to be empty before it would issue a construction certificate, to allow the necessary remedial work to commence. Mr David Roberts' report stated that the most cost effective method was to demolish the entire fitout and start again. The rectification claim 204This is a straightforward claim, in that the disbursements were actually incurred in the course of demolishing the shopfitting and building a new shop. 205The defendants' submission (paragraph 164) that Mr Roberts did not consider "all options" is without foundation. Mr Roberts was not challenged by a report in reply, as the defendants concede in paragraph 166 of the submissions. In cross-examination Mr Roberts adhered to this opinion. 206The quantum may therefore be summarised as follows: Rectification work: (a)Final certification by City Plan of the Defendants' work: $2,240; (b)Re-design costs $1,247.00 (c)Second builder's invoiced costs (totalling $44,427) These accounts are: 22 May 2011 --- $12,970.00 29 May 2011 --- $13,375.50 * 5 June 2011 --- $ 5,242.00 13 June 2011--- $ 5,435.00 3 July 2011 --- $7,404.50 * The bill for 29 May 2011, originally for $14,346.20, was found during the hearing to have been wrongly added up: see the plaintiff's submissions at paragraph 437. There was no cross-examination of the builder during these proceedings. The only issue taken with the builder's bills by the defendants was the wrongly added up bill (written submissions, paragraph 167). (d)Painter's invoice 21 June 2011 $2,950.00 (e)The Factory outlet 4 and 6 May 2011 $1,231.19 (f)Bunnings 3 June and 2 July 2011 $295.58 (g)Electrical work 2 July 2011 $3,904.60 (h)Plumber $4,400.00 (i)Osmans 10 June 2011 $392.10 (j)Light repairs 21 June 2011 $60.00 (k)Tile delivery 23 May 2011 $90.00 (l)New core holes $2,240.00 Total: $63,477.47 [plus GST] Consequential Loss Claim 207The claim is computed by the plaintiff as follows. 208As the lease signed on 7 December 2010 had a rent-free period of 3 months from the commencement date of 28 January, this rent-free period was adjusted. The commencement date was deferred to 21 days after the provision of the handover notice on 4 February 2011 with a rent-free period to commence on 28 February and expire on 28 May 2011 (Exhibit B, Tab 1). 209The handover notice was issued on 4 February 2011. Works were to be completed within 21 days of commencement on 7 February 2011 (i.e. 28 February 2011). 210The builder did not provide a handover to the plaintiff of the certified completed works until 4 July 2011. 211The plaintiff could not trade until 4 July 2011. The total extended period to bring the works to final completion was 4 months and 6 days. The plaintiff has rounded this sum down from $2,538 inclusive of GST to $2,500 for loss of opportunity to utilise the rent free period (from 28 February) as follows: (a)4 months at $2,500.00 = $10,000 (b)6 days at $82.19 per day = $493.15 212This makes a total of $10,493.15 where the plaintiff lost the rent-free period and had to pay rent from 28 May 2011 until the certificate was provided on 4 July 2011. 213The defendants, in their written submissions dated 8 April 2013, have raised a series of technical arguments in relation to the claim for rental, namely: (a)The lease in its entirety was not tendered (paragraph 202); (b)The commencement date was not initialled in the lease (paragraph 203); (c)Rent receipts were not tendered (paragraph 204); (d)Evidence of the plaintiff's obligation to pay rent was "sparse" (paragraph 205); (e)There was no evidence of how Ms Der Bedrossian derived the starting date of 12 March 2011 (paragraph 206); (f)The claim was for the loss of benefit of a rent-free period, but not expressed to be such in the statement of claim, which meant that the claim was not permissible (paragraphs 207-208); (g)The plaintiff was not entitled to a rent-free period because it had not complied with the fitout guide (paragraph 209); (h)The plaintiff's evidence "appeared" to be that no rent was payable for July, August or September and there was no documentary evidence to support this (paragraph 210-212). 214The terms of the lease signed by the plaintiff are as set out above. The plaintiff was liable to pay rent, and did pay rent, as is evidenced by the bank statements of the plaintiff tendered in these proceedings. All of the dates set out in the consequential loss claim as pleaded above were set out without challenge in the evidence of Ms Der Bedrossian and in the documents attached to her affidavit. 215I propose to allow this claim. Section 18 consumer law claim 216The plaintiff seeks the refund of monies paid into the bank account currently maintained by the first defendant. Those monies were paid as a result of the misrepresentations made by the second defendant. Section 18 permits the recovery of all remedial costs, including consequential loss causally linked to the misleading and deceptive conduct of the second defendant. 217These sums are: (a)26 November 2010 --- $1,350; (b)10 January 2011 --- $1,400; (c)1 February 2011 --- $21,000; (d)22 February 2011 --- $6,000; (e)24 February 2011 --- $10,000 Total --- $39,750 218Additional causally linked loss and damage, including the loss of rent claim and the remedial design and building costs exceeding the amount paid to the first defendant is summarised by the plaintiff as being $77,734 less $39,750, resulting in a total of $37,984. 219Accordingly, the total claimed under the consumer law claim is $39,750 plus GST, and $37,984 plus GST, equals $77,734 plus GST. 220I was not addressed as to whether or not to include GST in this sum. If I did, the total sum claimed for consumer law damages would be $85,507.40. 221The liability for the first defendant for these expenses arises from the circumstances in which it was responsible for the remedial costs, including consequential loss, arising from the misleading and deceptive statements made independently, as well as on its behalf, by Mr Issa. Summary of the plaintiff's claim 222The sums are as follows: (1)Actual fitout replacements (as summarised in the plaintiff's written submissions at paragraphs 105-201): $63,477.47 plus GST (i.e. $69,825.22); (2)Consequential loss claim: $10,493.15; (3)Consumer law claim: $77,734 plus GST (i.e. $85,507.40). 223Given the very limited submissions made on these issues by the defendants, and the difficulties caused by the fact that submissions were made only in writing on quantum (due to the manner of presentation of the defendants' claims), I have made an order for judgment in favour of the plaintiff, but given the parties liberty to bring in Short Minutes of Order reflecting the total sum payable, as well as the plaintiff's mathematically agreed claim for interest. This will also enable the parties to consider the position about GST and to make any application under the slip rule in the event of error in computing the quantum of damages. Costs 224I have granted liberty to apply in relation to the costs generally, and I have made no order as to the costs of any party, as I apprehend there will be an application by the plaintiff for a Bullock and/or Sanderson order in relation to the costs of the third defendant: Bullock v London General Omnibus Company [1907] 1 KB 264; Sanderson v Blyth Theatre Co [1903] 2 KB 533. 225In addition, in relation to any costs order sought by or against Mrs Issa, it may be appropriate for the solicitors for the defendants to consider whether she should be separately represented in relation to costs issues. 226It is appropriate to note that this may be a case where r 42.1 Uniform Civil Procedure Rules 2004 (NSW) (costs follow the event) may not apply to the defendants, given the conduct of case by the defendants' solicitors, such as the late amendment to bringing concurrent tortfeasor claims against Mr Ishkhanian and companies associated with the shopping centre at which the plaintiff had entered into the lease. I express no view on this issue beyond noting these provisions. Orders (1)Judgment for the plaintiff against the first and second defendants. (2)Judgment for the third defendant against the plaintiff. (3)Parties to bring in Short Minutes of Order reflecting the calculation of damages and the agreed sums for GST and interest. (4)Liberty to apply in relation to costs. (5)Exhibits retained for 28 days. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 July 2014