Cappello & Anor v Scrivener & Anor

1. [1]

   The first plaintiff, Mr John Cappello, is a licensed real estate agent and property developer based in north western Sydney. He is the sole director and shareholder of the second plaintiff, Shaka Holdings Pty Ltd.

2. [2]

   The first defendant, Mr John Scrivener, is a property developer based in Queensland. He is the sole director and shareholder of the second defendant, Tuscany Corporation Pty Ltd.

3. [3]

   On 20 August 2013 Mr Cappello and Mr Scrivener made an oral agreement to share the profits arising from securing control of and on-selling or developing three 5-acre contiguous parcels of land at Rouse Hill.

4. [4]

   Those parcels of land are depicted in the attached plan (Annexure A (1227665, pdf)) and were then known as:

5. [5]

   Neither Mr Cappello nor Mr Scrivener made a note of their conversation. Neither confirmed to the other their understanding of the agreement by way of letter, email or at all.

6. [6]

   The controversy between Mr Cappello and Mr Scrivener is purely factual. The dispute between the two men is as to whether:

7. [7]

   By 15 November 2013, Tuscany had entered into “Due Diligence Deeds” (in effect, options to purchase) with the owners of the three properties and thereby secured control of the three sites.

8. [8]

   By 14 March 2014, Tuscany in one case, and two companies incorporated by Mr Scrivener for the purpose in the two other cases, had entered into Put and Call Option Deeds with the owners of the three properties. The Put and Call Options entitled the grantee to acquire the properties for a total of $12.65 million.

9. [9]

   Mr Scrivener secured financial assistance from a third party, Oracle Estates Pty Ltd.

10. [10]

    By April 2015 a company jointly owned by Oracle and Tuscany exercised the call options and became the registered proprietor of the three sites upon payment to the vendors of the $12.65 million. At around this time Mr Scrivener had procured a Development Consent for the consolidated sites.

11. [11]

    On about 17 July 2015, the Oracle/Tuscany jointly owned company sold the three sites to a Chinese developer, Tian Tong (Australia) Pty Ltd, for $37 million.

12. [12]

    After payment to Oracle of the amount due pursuant to those arrangements, Tuscany received profits in the order of $9.26 million.

13. [13]

    Mr Cappello claims to be entitled to, in effect, half of that profit.

Decision

1. [14]

   I find that:

2. [15]

   I will now invite submissions as to what, if any, further matters require resolution.

Hearing conducted on Microsoft Teams

1. [16]

   Despite the factual contest about the agreement between Mr Cappello and Mr Scrivener and the concomitant point that credit is a central issue in the case, neither party applied for a “live” hearing nor raised any protest when my Associate informed them that I proposed to conduct the hearing on Microsoft Teams.

2. [17]

   The trial proceeded on Microsoft Teams with only a few technical interruptions. Counsel are to be congratulated on the manner in which they adapted to the “virtual” environment.

3. [18]

   In closing submissions, neither party contended that they had been disadvantaged by the conduct of the case on a virtual platform.

Credit

1. [19]

   The credit of Mr Cappello and Mr Scrivener looms large in these proceedings. Both Mr Pritchard SC, who appeared with Mr Rayment [1] for Mr Cappello, and Mr Studdy SC, who appeared with Mr Chapman [2] for Mr Scrivener, made lengthy and detailed submissions on the subject.

2. [20]

   There is a great deal of evidence as to what transpired between Mr Cappello and Mr Scrivener following their agreement on 20 August 2013, much of which is relevant to the probabilities of the true nature of their agreement, and much of which casts light on the reliability of their recollection.

3. [21]

   Both Mr Pritchard and Mr Studdy referred to the familiar observations of McLelland CJ in Equity in Watson v Foxman [3] :

4. [22]

   I have kept his Honour’s memorable words in mind when considering the evidence in this case, particularly as:

5. [23]

   I see no alternative but to set out, in detail, the evidence of what occurred in relation to the Rouse Hill properties and to deal with the parties’ submissions as to credit as part of that process.

6. [24]

   I will then analyse the evidence that thereby emerges and explain why I have concluded that, more probably than not, Mr Cappello’s recollection of the 20 August 2013 is to be preferred.

Mr Cappello’s steps to secure the site

1. [25]

   Mr Cappello said that in 2011 during the course of working as a real estate agent “in the Hills area” Mrs Bannerman, one of the owners of 104 Rouse Road, contacted him with a view to him acting for her and her husband as a selling agent of that property.

2. [26]

   Mr Cappello said he inspected the property and gave Mrs Bannerman an appraisal figure. Mr Cappello said that Mrs Bannerman did not give him a listing for the property but told him that her neighbour, Mrs Boon at 88 Rouse Road, was thinking of selling that property.

3. [27]

   Mr Cappello said he first dealt with Mrs Boon by September 2012 when he attempted to obtain a listing from her for 88 Rouse Road. Ultimately, Mrs Boon appointed Mrs Sue Lobsey, another real estate agent in the area, as selling agent, as did Mrs Votano in relation to 96 Cudgegong Road. Mrs Lobsey was also in discussions with Mrs Bannerman about being appointed agent for the sale of 104 Rouse Road.

4. [28]

   Mr Cappello said that by late February 2013, he had decided to attempt to “secure” 96 Cudgegong Road from Mrs Votano and 88 Rouse Road from Mrs Boon.

5. [29]

   On 8 March 2013, Mrs Lobsey wrote to Mr Cappello:

6. [30]

   On 19 March 2013 Mr Cappello wrote to Mrs Lobsey asking her to “submit the following offers to your vendors”.

7. [31]

   The offers were:

8. [32]

   At around this time, Mr Cappello contacted Mr Michael Edgerton, who he described as “a business associate and a solicitor” because he thought Mr Edgerton “could assist me in procuring finance to secure the sites of 88 Rouse Road and 96 Cudgegong Road”. Evidently nothing came of that. As I describe below, Mr Edgerton played a later role in relevant events [5] .

9. [33]

   In that context, Mr Cappello said in cross-examination that “at this time, I was the purchaser”, by which he meant that he was considering buying the property himself.

10. [34]

    On 20 March 2013 Mrs Lobsey told Mr Cappello that Mrs Boon “wouldn’t sell under $4.1” in response to which Mr Cappello asked Mrs Lobsey to submit his “final offer” to Mrs Boon of an 18 month option to purchase 88 Rouse Road for $4.15 million.

11. [35]

    On 31 July 2013 Mr Cappello told Mrs Lobsey that he was prepared to pay “1/2% for the extra 6 months” for 88 Rouse Road. Mrs Lobsey told Mr Cappello that Mrs Boon said “she is going to think about it”.

12. [36]

    On 13 August 2013 Mr Cappello wrote to Mrs Lobsey with an offer to purchase, outright, 88 Rouse Road for $4.3 million with a proposed exchange date of 20 December 2013, a 12 month settlement, a due diligence period of 4 months and a due diligence fee of $5,000.

13. [37]

    On 13 August 2013 Mrs Lobsey told Mr Cappello that Mrs Boon “would say yes today if it was a 90 day due diligence and a 10 month settlement” but that she wanted extra time to think about it and would let Mrs Lobsey know the answer on 15 August 2013.

14. [38]

    It appears that Mrs Boon did accept Mr Cappello’s offer. There is no direct evidence of this but, on 16 August 2013, Mrs Lobsey sent an email to Mr Cappello:

15. [39]

    Evidently, the “clients” to whom Mrs Lobsey was referring where Mr Cappello and Mr Scrivener.

16. [40]

    Thus, Mrs Boon met Mrs Lobsey and Mr Scrivener on 20 August 2013 [6] .

17. [41]

    Mr Cappello said that in late July or early August he discussed the Rouse Hill opportunity with Mr Scrivener [7] . It may be that Mr Scrivener’s name had then been mentioned to Mrs Lobsey and Mrs Boon.

18. [42]

    On 17 August 2013 Mrs Lobsey told Mr Cappello that Mrs Votano “will take $4.1” for the sale of 96 Cudgegong Road.

19. [43]

    On the same day, Mrs Lobsey told Mr Cappello she had been named as the selling agent for Mr and Mrs Bannerman’s property at 104 Rouse Road.

20. [44]

    Thus, as Mr Pritchard put in closing submissions:

21. [45]

    Apart from the reference in Mrs Lobsey’s 16 August 2013 email to Mrs Boon meeting the clients on 20 August 2013 there is no suggestion in the correspondence between Mr Cappello and Mrs Lobsey that Mr Scrivener played any role in these negotiations.

22. [46]

    The position of Mr and Mrs Bannerman, however, was not yet clear.

23. [47]

    What then followed was the critical meeting between Mr Cappello and Mr Scrivener on 20 August 2013.

The critical conversation was on 20 August 2013

1. [48]

   Mr Cappello was not clear in his evidence that the meeting did take place on 20 August 2013 and, in cross-examination, said the meeting could have taken place on 18, 19 or 20 August 2013.

2. [49]

   The meeting clearly did not take place on 18 August 2013, a Sunday, as on that date Mr Scrivener was in Brisbane and Mr Cappello sent Mr Scrivener an SMS asking him “What time are you flying down on Tuesday?”

3. [50]

   Further, on Monday 19 August 2013, Mr Cappello sent a message to Mrs Lobsey stating:

4. [51]

   Mr Cappello agreed that it was not accurate for him then to describe Mr Scrivener as his “partner”.

5. [52]

   Mr Cappello was firm in his evidence that he had had some discussion with Mr Scrivener on the telephone prior to this time and that Mr Scrivener had expressed some interest in the Rouse Hill possibility.

6. [53]

   The fact that Mr Scrivener flew down from Queensland on 20 August 2013 is consistent with this, although Mr Scrivener did have other business dealings to attend to in Sydney on that occasion.

7. [54]

   On 19 August 2013 Mr Cappello sent a message to Mrs Lobsey confirming a meeting for 3pm on 20 August 2013 and stating:

8. [55]

   There is no dispute that Mr Scrivener and Mrs Lobsey met Mrs Boon at around 3pm on 20 August 2013 at Mrs Boon’s property at 88 Rouse Road and that, after that meeting, Mr Scrivener and Mrs Lobsey returned to Mr Cappello’s office.

9. [56]

   Mr Cappello did not accompany Mr Scrivener and Mrs Lobsey to the meeting with Mrs Boon because, he said, he thought that the fact that Mrs Boon knew he was a local real estate agent might cause Mrs Boon to wonder whether her agreement with him was the best deal she could get.

10. [57]

    It is clear from these matters that the critical conversation took place on 20 August 2013.

Mr Cappello’s affidavit account of the conversation

1. [58]

   Mr Cappello deposed that in late July or early August 2013 he had this discussion with Mr Scrivener:

2. [59]

   Mr Cappello said that in the 20 August 2013 conversation the following was said:

3. [60]

   Mr Cappello said that “at this point in the discussion we shook hands” and that thereafter the following was said:

Mr Scrivener’s affidavit account of the conversation

1. [61]

   Mr Scrivener deposed that, on 20 August 2013 following a meeting he had with Mrs Boon and Mrs Lobsey at Mrs Boon’s property at 88 Rouse Road, he and Mr Cappello had this conversation:

Generally as to the conversation

1. [62]

   A number of observations can immediately be made about the competing recollections of Mr Cappello and Mr Scrivener of their conversation of 20 August 2013.

2. [63]

   The first is that the agreement was made in a brief, relatively informal conversation.

3. [64]

   The second is that neither Mr Cappello nor Mr Scrivener suggest they had earlier discussed coming to any agreement about the Rouse Hill properties.

4. [65]

   The third is that they agree that they did make a legally binding agreement on 20 August 2013.

5. [66]

   There is no suggestion in the proceedings that consideration did not pass between them, nor that the agreement is imprecise or uncertain. Neither party suggests the agreement is void for uncertainty or otherwise liable to be impugned.

6. [67]

   What is clear from the accounts Mr Cappello and Mr Scrivener give of their conversation is that they agreed:

7. [68]

   On neither Mr Cappello’s nor Mr Scrivener’s account of what was said between them was there any reference to the sharing of losses.

8. [69]

   Mr Cappello’s recollection was that he said:

9. [70]

   Mr Scrivener’s recollection is that Mr Cappello said:

10. [71]

    Mr Cappello gave this evidence in cross-examination:

11. [72]

    However, in re-examination, Mr Cappello gave this evidence:

12. [73]

    My attention was not drawn to anything Mr Scrivener said about this.

13. [74]

    I think the correct conclusion is that neither party addressed, in terms, what would happen if there was a loss but that it was implicit in their agreement that any losses be shared equally.

14. [75]

    I have set out what each of Mr Cappello and Mr Scrivener said about their meeting in their affidavits.

15. [76]

    Understandably, both Mr Pritchard and Mr Studdy devoted a considerable portion of their cross-examination of Mr Scrivener and Mr Cappello respectively to their recollection of the meeting.

16. [77]

    I will deal with Mr Cappello and Mr Scrivener separately.

Mr Cappello’s evidence before me about the conversation

1. [78]

   In closing submissions, Mr Studdy submitted that Mr Cappello’s recollection of the details of the meeting was “woeful” and that the answers that Mr Cappello gave in cross-examination showed that, in truth, he had no recollection of what was said at all.

2. [79]

   Assessment of that submission requires a careful examination of the relevant passages of cross-examination.

3. [80]

   In his affidavit, Mr Cappello expressed uncertainty as to when the critical meeting took place. He said:

4. [81]

   In cross-examination Mr Cappello expressed uncertainty as to when, precisely, the meeting took place.

5. [82]

   This exchange occurred:

6. [83]

   Mr Studdy then took Mr Cappello to his meeting with Mr Scrivener following Mr Scrivener’s and Mrs Lobsey’s meeting with Mrs Boon on the afternoon of 20 August 2013:

7. [84]

   Mr Studdy then put to Mr Cappello statements that Mr Scrivener had deposed were said at the 20 August 2013 meeting. Mr Cappello did not accept that those matters had been discussed.

8. [85]

   This led to this final question and answer:

9. [86]

   I think a fair reading of this evidence is that Mr Cappello was continuing to express uncertainty as to the date on which the critical meeting took place and not as to whether the conversation took place. The critical answers upon which Mr Studdy relied to make the submission that Mr Cappello did not have a recollection of what was said at his meeting with Mr Scrivener were directed to the date of the meeting rather than its content.

10. [87]

    In particular, I read Mr Cappello’s answers, referred to at [83] above that “I don’t recall a meeting” and “I don’t recall a discussion” as being directed to his recollection of a meeting taking place on 20 August 2013; Mr Cappello repeatedly saying he thought the meeting took place on 19 August 2013.

11. [88]

    Similarly, I read Mr Cappello’s answers that “I don’t recall” having a conversation with Mr Scrivener on 20 August 2013 as set out at [85] above as seeking to convey that he did not have a recollection of the conversation being on 20 August, as opposed to on 19 August.

12. [89]

    Mr Studdy did not put to Mr Cappello that the account he gave of the 20 August 2013 conversation in his affidavit was not correct or that he had no present recollection of what was said. Overall, I am not satisfied that Mr Studdy’s cross-examination showed that Mr Cappello had no actual recollection of what was said on 20 August 2013.

13. [90]

    Mr Cappello gave differing, although consistent descriptions of what his agreement with Mr Scrivener was. At first he said it was a “50-50 joint venture partnership” and later a “50-50 partnership” and then, although he was “not sure of the exact words”, it was “clear to the point” that it was “50-50 in relation to any profits and expenses”.

14. [91]

    Mr Cappello was clear (“absolutely not”) that he did not tell Mr Scrivener that he “had buyers” at that stage for the combined site. There is no suggestion that Mr Cappello did have buyers for the combined site at that stage. Nor is there any suggestion in dealings between Mr Cappello and Mr Scrivener in the next few months that Mr Scrivener asserted to Mr Cappello that Mr Cappello had made any such statement. As I describe below, Mr Cappello did pursue negotiations with prospective buyers but that was the following year; 2014.

Mr Scrivener’s evidence before me about the conversation

1. [92]

   On the other hand, there are some difficulties with Mr Scrivener’s account of what happened.

2. [93]

   In his affidavit, he said that the first thing he said to Mr Cappello upon his return from the meeting with Mrs Boon was that the meeting with Mrs Boon went well and:

3. [94]

   Mr Scrivener said that Mr Cappello replied that he was surprised “that you got her to agree to anything” that Mr Scrivener said “you couldn’t have gotten that deal done”.

4. [95]

   But the fact is, as the email correspondence to which I referred shows, Mr Cappello had reached an agreement with Mrs Boon to the effect of that Mr Scrivener says he described to Mr Cappello [10] . In those circumstances I think it unlikely that Mr Cappello reacted as Mr Scrivener asserted to Mr Scrivener’s statement that, in effect, he had reached the same deal with Mrs Boon.

5. [96]

   In cross-examination, Mr Scrivener said that “I discussed trying to move forward to try and amalgamate the three sites” as a “joint endeavour”.

6. [97]

   In cross-examination this exchange occurred:

7. [98]

   The luncheon adjournment then ensued.

8. [99]

   Immediately after the luncheon adjournment, this exchange occurred:

9. [100]

   Shortly after this evidence, Mr Scrivener had said that he had refreshed his recollection of what he said in his affidavit about the agreement “yesterday”.

10. [101]

    What is striking about Mr Scrivener’s answer to the open question put to him (“What agreement do you say you reached with Mr Cappello?”), is Mr Scrivener made no mention of any element of the agreement to the effect of the Sunset Condition.

11. [102]

    Thus the cross-examination continued:

12. [103]

    Mr Scrivener swore the affidavit in which he gives his account of the 20 August 2013 conversation on 5 March 2019; some five and a half years after the conversation.

13. [104]

    I think it likely that the first time Mr Scrivener came to reflect on, and record his recollection of what was said to Mr Cappello on 20 August 2013 was in the course of preparing that affidavit.

14. [105]

    Thus Mr Scrivener gave this evidence in cross-examination:

15. [106]

    Ultimately, Mr Scrivener produced an appointment diary for 20 August 2013 which showed no more than the name “Cappello” in the entry for 2pm.

16. [107]

    As I have said, Mr Cappello also made no note of the meeting at the time although, as I set out below he gave an account of his recollection of the agreement to representatives of Oracle in June 2015. [11]

17. [108]

    Ultimately, my conclusion is that I must be cautious about the recollections of both Mr Cappello and Mr Scrivener as to the detail of what was said on 20 August 2013. What is clear is that they agreed to proceed with a venture involving the securing of the three sites, and their possible on sale or development, and agreed to share expenses and profits of that venture.

18. [109]

    The vital matter that divides them is whether their arrangement was subject to the Sunset Condition.

Post contractual conduct

1. [110]

   Post contractual conduct is admissible to show:

2. [111]

   The conduct of the parties after 20 August 2013, to which I make detailed reference below, makes a number of matters clear concerning the terms agreed on 20 August 2013.

3. [112]

   One is that Mr Cappello and Mr Scrivener agreed that the means by which they would seek to secure the properties was by way of Due Diligence Deed. On Mr Cappello’s account of the conversation, he said he thought he could get “an exclusive 3 months due diligence period” for each of 88 Rouse Road and 96 Cudgegong Road. On Mr Scrivener’s account of the conversation he had actually negotiated a “3 month DD” with Mrs Boon, Mr Cappello had proposed “flicking on” the combined site “before the due diligence period is up” and Mr Scrivener had expressed the Sunset Condition in terms of “the expiry of the DD period”. Those matters, taken with the fact that, very shortly after 20 August 2013, Mr Scrivener caused Tuscany to enter Due Diligence Deeds with Mrs Votano in relation to 96 Cudgegong Road and Mrs Boon in relation to 88 Rouse Road [14] , point to the probability that this was the means discussed on 20 August 2013 to secure the properties.

4. [113]

   Another is that Mr Cappello and Mr Scrivener agreed to use Tuscany as the corporate vehicle for the project. Mr Cappello said that he said “it might be a good idea to leave my name off things at this stage” and that Mr Scrivener suggested using Tuscany “as the company for our partnership”. Mr Scrivener denies these words were said but, almost immediately after 20 August 2013, caused Tuscany to enter the Due Diligence Deeds with Mrs Boon and Mrs Votano.

5. [114]

   Another is that Mr Cappello was to have primary responsibility for finding a buyer for the project. There is, of course, a dispute as to whether, as Mr Scrivener contends, the whole agreement was subject to Mr Cappello doing so “prior to expiry of the DD period”: the Sunset Condition. But, as I describe below [15] it was Mr Cappello, rather than Mr Scrivener who located Sunland Group as a potential purchaser in January 2014 and prepared an Information Memorandum for that purpose. There is no evidence of any other communication between Mr Cappello and Mr Scrivener on this topic between 20 August 2013 and January 2014. I infer from this that, on 20 August 2013, it was either agreed or understood between the two men that Mr Cappello was to endeavour to find a buyer.

6. [115]

   The critical dispute is as to whether the agreement was subject to the Sunset Condition.

7. [116]

   The conduct of the parties after 20 August 2013 persuades me that the agreement was not subject to the Sunset Condition. To understand my reasons for coming to that conclusion, it is necessary to examine, at some length, the course of dealings between Mr Cappello and Mr Scrivener from 20 August 2013.

Events following 20 August 2013

1. [117]

   On 21 August 2013 Mrs Lobsey sent Mr Scrivener’s solicitor, Mr Jim Marsden, Sales Advices for the 88 Rouse Road and 96 Cudgegong Road properties. Those Sales Advice showed sales prices of $4.3 million and $4.15 million respectively, and identified Mrs Boon and Mrs Votano as the respective vendors, and Tuscany as the purchaser.

2. [118]

   On 22 August 2013 Mr Marsden notified Mr Scrivener of his receipt of those sales advices and also sent him copies of the letters that Marsdens had sent to the purchasers’ solicitors confirming the sale agreement.

3. [119]

   Mr Scrivener forwarded that email to Mr Cappello with the note “fyi”.

4. [120]

   This was the first of numerous occasions on which Mr Scrivener forwarded to Mr Cappello email correspondence he had received concerning the transaction.

5. [121]

   Mr Marsden prepared proposed “Due Diligence Deeds” in respect of the two properties.

6. [122]

   On 28 August 2013 Mr Scrivener sent Mr Cappello the proposed Due Diligence Deed for the 88 Rouse Road property with a note:

7. [123]

   Mr Scrivener said he did this simply “out of courtesy”. However, the email appears to me to bespeak Mr Scrivener’s state of mind that he should consult Mr Cappello about the form of the document.

8. [124]

   Mrs Votano executed the Due Diligence Deed concerning 96 Cudgegong Road on 2 September 2013 and Mrs Boon executed the corresponding document in respect of 88 Rouse Road on 6 September 2013.

9. [125]

   Mr Scrivener sent copies of emails he received from Mr Ben Wong, an associate at Marsdens, reporting on these matters to Mr Cappello “fyi”. Mr Cappello replied:

10. [126]

    Each of the 96 Cudgegong Road and 88 Rouse Road Due Diligence Deeds called for non-refundable fee of $5,000. Tuscany paid those fees.

11. [127]

    The 96 Cudgegong Road Due Diligence Deed expired on 16 December 2013 although on 11 December 2013 it was extended to 16 March 2014.

12. [128]

    The 88 Rouse Road Due Diligence Deed had an expiry date of 20 December 2013 which was not extended.

13. [129]

    In relation to each of those properties, Put and Call Option Deeds were ultimately entered into with the jointly owned Oracle/Tuscany Company exercising the call options and becoming registered proprietors.

14. [130]

    A helpful schedule setting up the key dates, that Mr Pritchard handed up during his opening submissions, follows to assist understanding later events. (Annexure B (213519, pdf))

15. [131]

    At this stage Mr and Mrs Bannerman had not yet committed to selling 104 Rouse Road.

16. [132]

    Thus, on 23 September 2013 Mrs Lobsey wrote to Mr Scrivener and Mr Cappello:

17. [133]

    Mr Cappello replied:

18. [134]

    Mr Cappello said that prior to sending this email he had a discussion with Mr Scrivener in which he said:

19. [135]

    Mr Cappello said that Mr Scrivener had responded by saying that he agreed.

20. [136]

    Mr Scrivener did not refer to this conversation in his affidavit and in cross-examination denied the conversation had taken place.

21. [137]

    Thus, he gave this evidence:

22. [138]

    In any event, Mr Scrivener agreed that:

23. [139]

    Mr Scrivener then gave these answers to questions from me and from Mr Pritchard.

24. [140]

    I think it likely, in these circumstances, that the reason there is nothing in Mr Scrivener’s affidavit responding to Mr Cappello’s account of his discussion with Mr Scrivener concerning the Bannermans’ property is that when he came to swear his affidavit, he did not disagree with it.

25. [141]

    I think it likely that the true position is, as Mr Pritchard put to Mr Scrivener, that he and Mr Cappello at this stage were acting together to develop a strategy with the aim of, ultimately, obtaining an option to purchase the Bannermans’ property with a view to consolidating all three sites.

26. [142]

    This shows that at this stage Mr Scrivener and Mr Cappello were working together to promote their joint interest achieving control of the three properties.

27. [143]

    It also suggests an inclination on Mr Scrivener’s part to deny, in cross-examination, matters hitherto undisputed that he saw as being unhelpful to his case.

The meeting at the El Phoenician Restaurant

1. [144]

   In October or November 2013 Mr Cappello and Mr Scrivener had a lunch meeting with their mutual accountant, Mr Aboud, at the El Phoenician restaurant in Parramatta.

2. [145]

   Both Mr Cappello and Mr Aboud gave evidence that Mr Cappello said, in Mr Scrivener’s presence, that he and Mr Scrivener had “formed a joint venture partnership” in respect of the Rouse Hill site.

3. [146]

   Mr Cappello’s account of the conversation was that words were said to the following effect:

4. [147]

   Mr Aboud gave a similar account of the conversation:

5. [148]

   Although in closing submissions, Mr Studdy submitted that I should be “hesitant” to accept Mr Aboud’s evidence, I see no reason to doubt the accuracy of Mr Aboud’s recollection. In any event, his account of what Mr Cappello said in Mr Scrivener’s presence at this meeting was not challenged by Mr Studdy in cross-examination.

6. [149]

   In his affidavit, Mr Scrivener denied Mr Cappello’s account of the conversation. He said:

7. [150]

   But during his cross-examination, Mr Scrivener gave this answer in response to a question from me:

8. [151]

   Thus, although my question was directed to the question of whether, consistently with Mr Cappello’s practice as Mr Scrivener had described it, Mr Cappello called Mr Scrivener his “partner”, Mr Scrivener offered that Mr Cappello “might have said a ‘joint venture’”. This was the very matter that Mr Scrivener had in his affidavit emphatically denied.

9. [152]

   Mr Pritchard took the matter up as follows:

10. [153]

    Mr Scrivener also agreed that Mr Cappello had said he did not want his name on the documentation and that it was possible that Mr Aboud had said that he thought the less people and personalities at the corporate table during negotiations, the better. This passage of the evidence causes me to doubt the reliability of Mr Scrivener’s recollection. It would also suggest to me that Mr Scrivener was in his affidavit prepared to deny matters he knew to be true if those matters were inconsistent with his understanding of the case he should seek to establish.

11. [154]

    This evidence also shows that Mr Scrivener was by this time dealing with Oracle.

The Bannermans agree to enter a Due Diligence Deed

1. [155]

   On 30 October 2013 Mrs Lobsey sent an email to Mr Scrivener:

2. [156]

   Mr Scrivener sent a copy of that email to Mr Cappello “fyi”.

3. [157]

   On 1 November 2013 Mr Scrivener sent an email to Mr Justin Kucic at Oracle stating that “I think we should position ourselves to move on Bannerman”. Mr Scrivener sent a copy of that email to Mr Cappello “fyi”.

4. [158]

   Later on 1 November 2013 Mrs Lobsey sent an email to Mr Scrivener conveying an offer from the Bannermans to enter a three month due diligence/option period on 104 Rouse Road with a purchase price of $4.2 million and a 12 month settlement. Mrs Lobsey said:

5. [159]

   Mr Scrivener sent a copy of that email to Mr Cappello “fyi”.

6. [160]

   There were further email negotiations, all of which Mr Scrivener copied to Mr Cappello, leading to Mr and Mrs Bannerman entering into a Due Diligence Deed with Tuscany on 15 November 2013. That document was in terms to the same effect as the Due Diligence Deeds entered into by Mrs Votano and Mrs Boon in respect of the other two properties. Again, Tuscany paid the $5,000 option fee called for the document.

7. [161]

   The dates corresponding to those set out in a schedule prepared by Mr Pritchard concerning the Bannermans’ property (Annexure C (206088, pdf).

All three sites secured

1. [162]

   Thus, by 15 November 2013, Tuscany had secured control of all three sites. At that stage, the Due Diligence periods expired on 16 December 2013 in the case of 96 Cudgegong Road, [16] 20 December 2013 in the case of 88 Rouse Road, and 13 February 2014 in the case of 104 Rouse Road. [17]

2. [163]

   On 16 November 2013, Mrs Lobsey wrote to Mr Scrivener:

3. [164]

   Mr Scrivener replied “we all make a great team” and forwarded that email chain to Mr Cappello with the note:

4. [165]

   Mr Scrivener’s reference to a “diary note” was an ironic reference to Mr Cappello’s evidently earlier expressed scepticism that the Mr and Mrs Bannerman would agree to sell. Mr Scrivener’s reference to the “fish and chips” being “on the stove” was, I infer, his way of expressing satisfaction with the fact that Tuscany had now secured all three sites.

5. [166]

   As Mr Pritchard pointed out in closing submissions, in this email, the only time frame to which Mr Scrivener referred was “17 months” and he allocated responsibility “to make sure it all happens” to himself.

6. [167]

   Mr Scrivener does not here mention any expectation that Mr Cappello’s involvement process was subject to any step that Mr Cappello needed to take by the Sunset Date.

Mr Scrivener tells Oracle Mr Cappello is “involved in the purchase”

1. [168]

   On 18 November 2013, Mr Scrivener had email communications with Mr Kucic from Oracle concerning commission payable to Mrs Lobsey on the sale of the Bannerman property.

2. [169]

   Mr Kucic asked Mr Scrivener “was there a deal your [sic] cutting on this” to which Mr Scrivener replied:

3. [170]

   Mr Scrivener sent this email exchange to Mr Cappello “fyi”.

4. [171]

   Mr Scrivener’s point was he thought Mr Cappello might otherwise have been able to share the commission on the sale of the Bannermans’ property with Mrs Lobsey but that he could not do so because he was “involved in the purchase”.

5. [172]

   Mr Scrivener gave this evidence in cross-examination:

Mr Scrivener’s negotiations with Oracle

1. [173]

   On 25 November 2013, “Draft 1” of a “Partnering Heads of Agreement” between Mr Scrivener, Tuscany and Oracle had been prepared.

2. [174]

   That document referred to:

3. [175]

   The document also referred to other developments at North Kellyville which are not relevant to this dispute.

4. [176]

   The document provided that Oracle would be responsible to provide “Seed Capital – prior to Land Settlement (stage 1)” and “Project Funding – upon and following Land Settlement (stage 2)”.

5. [177]

   The document defined Stage 1 as being “where the sites are on-sold prior to settlement of the land and no further seed capital or equity is required beyond the $1.5 mil committed by Oracle” and Stage 2 as being “where the Site acquisitions are required to be settled prior to sale or development of the Sites and equity is required beyond the $1.5 mil committed by Oracle”.

6. [178]

   In the events that happened, the Rouse Hill project only reached Stage 1. The draft Heads of Agreement provided that, in that event, profit share between Oracle and Tuscany would be 50:50.

“My joint venture partners”

1. [179]

   On 9 December 2013 Mr Scrivener wrote to Mr Marsden referring to “my joint venture partners”.

2. [180]

   I asked Mr Scrivener whether use of the plural (“joint venture partners”) included Mr Cappello. Mr Scrivener replied “It may well have at that time”. This is further evidence suggesting that, at that stage, Mr Scrivener understood himself to be in a joint venture partnership with Mr Cappello.

The Verve Café Meeting

1. [181]

   Mr Cappello and Mr Scrivener agree that they met at the Verve Café in Cherrybrook. They also agree that, on that occasion, Mr Cappello asked to have their arrangement reduced to writing and that Mr Scrivener reacted angrily. However, Mr Cappello and Mr Scrivener do not agree when that meeting took place and give a different account as to a number of other matters that were said.

2. [182]

   Mr Scrivener said the meeting took place on 11 December 2013. Mr Cappello said it took place on 16 May 2014. Both were adamant that their recollection was correct.

3. [183]

   Mr Scrivener said in his affidavit:

4. [184]

   Consistently with Mr Scrivener’s account, he made an entry in his appointment diary note 11 December 2013 reading “Verve”.

5. [185]

   Further, on 17 December 2013, Mr Cappello sent an email to Mr Aboud, attaching the draft “Partnering Heads of Agreement” between Tuscany and Oracle and stating:

6. [186]

   Mr Cappello gave this account of what happened at the meeting in his affidavit:

7. [187]

   Mr Cappello’s reference to something happening to Mr Scrivener overseas is consistent with the fact that, as at 16 May 2014, Mr Scrivener was about to travel overseas.

8. [188]

   It is also consistent with Mr Cappello’s account that he sent an SMS message to Mr Scrivener on 15 May 2014 in which he said:

9. [189]

   There is also an entry in Mr Scrivener’s appointment diary at 8.00am on 16 May 2014 reading “Cappello”.

10. [190]

    If Mr Scrivener’s recollection is correct, and the meeting took place in December 2013, Mr Cappello’s recollection of there being a reference to Mr Scrivener’s forthcoming overseas trip cannot be right as there is no suggestion that Mr Cappello knew of any such trip in December 2013.

11. [191]

    Conversely, if Mr Cappello’s recollection is accurate, then Mr Scrivener’s recollection of what he said cannot be right. Mr Scrivener’s case is that the “journey” was “over” for Mr Cappello if Mr Cappello could not find a buyer “before the DD period expires”: that is, in the event that happened on 28 February 2014. That period had passed by May 2014.

12. [192]

    I am not able to come to any confident conclusion about when this meeting took place.

13. [193]

    I am inclined to conclude that Mr Scrivener’s recollection on this issue is to be preferred as it is consistent with Mr Cappello’s email, a few days later, complaining to Mr Aboud about a lack of reference to Mr Cappello in the documents.

14. [194]

    However, if, as Mr Scrivener states, he told Mr Cappello on 11 December 2013 that the “journey” was “over” for him if the site was not sold “before the DD period expires” it is strange that Mr Cappello did not mention that in his email to Mr Aboud; and that this vital question was not mentioned in any email correspondence before or after what Mr Scrivener contends to be the critical date: 28 February 2014, the Sunset Date.

Further negotiations with Mrs Boon and government authorities

1. [195]

   During December 2013 Mr Scrivener engaged in negotiations with Mrs Boon leading up to execution of the 20 December 2013 Put and Call option and generally with various regulatory authorities concerning the sites

2. [196]

   Neither counsel took Mr Cappello or Mr Scrivener to the detail of those matters, nor addressed them in terms during final submissions.

3. [197]

   However, on my reading of the email correspondence during this period, it is fair to say that it was Mr Scrivener that took up the running on these matters, albeit keeping Mr Cappello informed by copying him in on emails or sending him emails “fyi”.

Further draft agreement between Tuscany and Oracle

1. [198]

   On 18 December 2013 “Version 3” of a “Partnering Heads of Agreement” between Tuscany and Oracle was created. “Version 2” is not in evidence.

2. [199]

   Like the 25 November 2013 draft Partnering Heads of Agreement “Version 3” referred to “three projects” being the Rouse Hill project and two unrelated projects at Kellyville and proposed a 50:50 profit share if the Rouse Hill property proceeded only to Stage 1.

3. [200]

   However, this document also provided for an “acquisition fee” of 2% in relation to the Rouse Hill Project (and not the other projects) and also provided that:

4. [201]

   When Mr Scrivener received a copy of “Version 3” on 18 December 2013 he forwarded a copy to Mr Cappello “fyi”.

5. [202]

   In relation to this, Mr Scrivener gave this evidence in cross-examination:

6. [203]

   I do not accept that Mr Scrivener forwarded Mr Kucic’s 18 December 2013 email, and the attached copy of Version 3, to Mr Cappello in order that Mr Cappello could provide “secretarial services” of printing for Mr Scrivener a copy of Version 3.

7. [204]

   That response did appear to me, as Mr Pritchard put to Mr Scrivener, to be one that came to Mr Scrivener for the first time when pressed on the subject. There was no dispute that Mr Cappello would share equally in the Acquisition Fee to be paid by Oracle to Tuscany.

The 88 Rouse Road Put and Call Option Deed

1. [205]

   Tuscany’s option to purchase 88 Rouse Road under the 6 September 2013 Due Diligence Deed expired on 20 December 2013.

2. [206]

   On that date, Tuscany entered into a Put and Call Option with Mrs Boon for 88 Rouse Road. The Put and Call Option Deed provided for an option fee of $250,000 and for a purchase price, were either option to be exercised, of $4.3 million.

3. [207]

   Mr Cappello and Tuscany shared equally the payment of the $250,000 option fee. Mr Cappello did not himself have $125,000 to contribute and borrowed this amount from a number of sources.

4. [208]

   There was some delay on Mr Cappello’s part in remitting his share of $125,000 to Mr Marsden’s trust account.

5. [209]

   This led Mr Scrivener to send an email to Mr Marsden on 20 December 2013:

6. [210]

   Mr Scrivener forwarded a copy of this email to Mr Cappello “fyi”.

7. [211]

   He was thus evidently content to let Mr Cappello know that he had described Mr Cappello to Mr Marsden as his joint venture partner, suggesting, strongly in my opinion, that this was in fact Mr Scrivener’s state of mind.

8. [212]

   The 20 December 2013 Put and Call Option Deed was subject to a “Condition Precedent” as follows:

9. [213]

   The effect of this Condition Precedent was that if Tuscany was not, in its absolute discretion, satisfied about the (undefined) “drainage issues” it could rescind the Put and Call Option and be refunded the $250,000 option fee.

10. [214]

    If Tuscany did not so rescind the Put and Call Option Deed by 28 February 2014, Tuscany’s obligations under that document became “unconditional”.

11. [215]

    Thus, 28 February 2014 - the Sunset Date - was, on Mr Scrivener’s account of the 20 August 2013 agreement, the date by which “there will need to be a deal in place”. To adopt the language Mr Scrivener says he used at the Verve Café meeting on 11 December 2013, that was the date by which “this journey” would be “over” for Mr Cappello unless he had by then secured a buyer for the sites.

Events in January 2014

1. [216]

   On 6 January 2014 Mr Scrivener sent Mr Cappello an email stating:

2. [217]

   Mr Scrivener agreed that his reference to “our site” was to the Rouse Hill properties.

3. [218]

   This again points to the conclusion that, at least at this stage, Mr Scrivener saw Mr Cappello as his joint venture partner.

Possible sale to Sunland group - the Information Memorandum

1. [219]

   Mr Cappello was at this stage seeking to negotiate a sale of the property to Sunland Group Ltd.

2. [220]

   My attention was not drawn to evidence showing how Sunland came to be on the scene as a prospective purchaser, although it seems Mr Cappello and Mr Scrivener had had earlier involvement with Sunland in relation to a different project.

3. [221]

   Mr Cappello agreed that during January 2014 Mr Scrivener asked him how he was getting on finding a buyer for the site and that Mr Cappello said that Sunland had expressed an interest in the site and that he was preparing an information memorandum.

4. [222]

   Mr Cappello was seeking to interest Sunland in purchasing the three Rouse Hill sites for $16.5 million.

5. [223]

   To that end, he arranged with a graphic artist to prepare a coloured Information Memorandum entitled “Corner Rouse and Cudgegong Roads, Rouse Hill”.

6. [224]

   On 16 January 2014 Mr Cappello sent Mr Scrivener the “First Draft” of that document. The front cover of the document was headed “Rouse Hill Development Site for Sale” and stated:

7. [225]

   The final page of the document was headed “The Opportunity” and read:

8. [226]

   In the passage I have emphasised, this document stated that Shaka Holdings, the second plaintiff, was Tuscany’s “joint venture partner in the site”.

9. [227]

   Within about 30 minutes Mr Scrivener replied suggesting several changes to the draft but without making any comment on the statement concerning Shaka Holdings being Tuscany’s “joint venture partner”.

10. [228]

    Mr Scrivener concluded:

11. [229]

    The graphic artist prepared a further draft which Mr Cappello sent to Mr Scrivener the following day, 17 January 2014. The second draft incorporated Mr Scrivener’s 16 January 2014 suggestions. It continued to contain the statement that Shaka Holdings was Tuscany’s “joint venture partner”.

12. [230]

    Mr Scrivener replied suggesting some further changes but, again, not making any comment about the “joint venture partner” reference.

13. [231]

    Finally, on 17 January 2014, Mr Scrivener concluded by saying “Great job mate”.

14. [232]

    Although Mr Scrivener in cross-examination spoke somewhat dismissively of the Information Memorandum as a “marketing document”, it clearly stated that Mr Cappello’s company, Shaka Holdings, was Tuscany’s “joint venture partner”. Mr Scrivener’s responses to the Information Memorandum show that he paid it careful attention. He must have seen the reference to Shaka Holdings being Tuscany’s “joint venture partner”. The fact the he made no comment about it in his communications with Mr Cappello about the Information Memorandum suggests to me that he agreed the description was accurate.

“Our vendors”

1. [233]

   On 21 January 2014 Mr Scrivener wrote an email to Mrs Lobsey discussing a number of planning developments which had arisen in relation to the site.

2. [234]

   Mr Scrivener sent a copy of this email to Mr Cappello with the note:

3. [235]

   The fact that Mr Scrivener was referring to “our” vendors is a further suggestion of his understanding of the nature of his relationship with Mr Cappello.

“How it works”

1. [236]

   On 30 January 2014 Mr Marsden sent an internal email to Mr Wong stating:

2. [237]

   The “purchaser” to whom Mr Marsden referred was Sunland, and Mr Marsden continued:

3. [238]

   Mr Marsden then set out details as to how the matter should proceed once Mr Scrivener “has settled on the commercial terms of the deal with his potential purchasers”.

4. [239]

   On 4 February 2014, Mr Scrivener sent a copy of that email to Mr Cappello with a note:

5. [240]

   I read that somewhat cryptic note as Mr Scrivener conveying to Mr Cappello that, if Sunland could be secured as a purchaser for $16.5 million, the manner in which the transaction would proceed was as set out in Mr Marsden’s advice.

6. [241]

   Again, this is consistent with Mr Scrivener regarding Mr Cappello as his joint venture partner and keeping Mr Cappello informed of the advice he was receiving from Mr Marsden about closing a deal with the purchaser that Mr Cappello had introduced.

Events in February 2014

1. [242]

   On 5 February 2014, Mr Scrivener prepared a draft of a letter that he suggested that Mr Cappello send to Mr Soheil Abedian, the chairman of Sunland Group.

2. [243]

   Mr Scrivener said to Mr Cappello:

3. [244]

   Later on 5 February 2014 Mr Cappello sent an email to Mr Abedian in substance in accordance with Mr Scrivener’s draft, and attaching a letter from Marsdens to Tuscany.

4. [245]

   Mr Cappello’s email read:

5. [246]

   In circumstances to which my attention was not taken, the sale to Sunland did not proceed.

6. [247]

   Also during February 2014, Mr Wong at Marsdens negotiated an extension of the option period in the 104 Rouse Road Due Diligence Deed to 15 March 2014.

7. [248]

   Mr Scrivener forwarded to Mr Cappello “fyi” correspondence he received from Mr Wong about that matter in response to which Mr Cappello replied:

25 February 2014 conversation

1. [249]

   As I have mentioned, under the 20 December 2013 Put and Call option between Tuscany and Mrs Boon, if Tuscany did not elect to rescind the Put and Call Option by the Sunset Date (which it could on the basis of the “drainage” condition), its obligations under the Put and Call Option would become unconditional. Further, the option fee of $250,000 would then be payable to Mrs Boon.

2. [250]

   Mr Cappello accepted in cross-examination that he understood this and that, were the Put and Call Option to become unconditional, Mrs Boon would have recourse only to Tuscany and not to him for her entitlements under the document.

3. [251]

   In that context, Mr Scrivener deposed that on 25 February 2014 he met with Mr Cappello and that they had this conversation:

4. [252]

   Mr Cappello agreed that he said the words Mr Scrivener attributed to him.

5. [253]

   He also agreed that Mr Scrivener said Tuscany had to go “unconditional” or walk away, that Mrs Boon would not grant any further extension and that Mrs Boon was calling Mr Scrivener and appeared to be nervous.

6. [254]

   However, Mr Cappello denied that Mr Scrivener said anything to the effect that he had “3 days to get a deal done” failing which “that’s it for our deal”.

26 February 2014 conversation

1. [255]

   Mr Scrivener said that on or about 26 February 2014, he had this conversation with Mr Cappello:

2. [256]

   Mr Cappello denied this conversation.

3. [257]

   Mr Scrivener agreed in cross-examination that that it was not correct to say, as his account of this conversation suggests, that the idea of a 2% acquisition fee first arose at around this time. He said:

4. [258]

   It is also revealing that in this account of the conversation Mr Scrivener said that he said to Mr Cappello that “I was on the hook for millions”, rather than “I am on the hook for millions” suggesting that Mr Scrivener was not here giving an account of his actual recollection of the conversation.

Mr Scrivener’s 27 February 2014 email to Mr Aboud

1. [259]

   On 27 February 2014, Mr Scrivener sent Mr Aboud an email in these terms:

2. [260]

   At this stage, Tuscany had only entered into a Put and Call Option Deed in respect of the 88 Rouse Road property. Tuscany had not, at that stage, entered into a Put and Call Option Deed in respect of the 96 Cudgegong Road or 104 Rouse Road properties.

3. [261]

   Evidently, Mr Scrivener had decided that Tuscany would not exercise its right to rescind the 88 Rouse Road Put and Call Option Deed which is why he said to Mr Aboud in the third last line of his email:

4. [262]

   Mr Scrivener expressed anxiety to Mr Aboud, “without having documentation in place” by which he meant finalised “Heads of Agreement with Oracle” but stated that:

5. [263]

   At the time Mr Scrivener sent this email to Mr Aboud, Mr Cappello had not introduced a purchaser for the property. And yet, although Mr Scrivener expressed anxiety about going “unconditional”, and despite what Mr Scrivener claims he said to Mr Cappello two days earlier, there is no reference in the email to the Sunset Condition or the “journey” being “over” for Mr Cappello.

6. [264]

   Mr Scrivener did not send this email to Mr Cappello. He said this was because he had already had the 25 February 2014 discussion to which I have referred.

The Sunset Date – 28 February 2014

1. [265]

   28 February 2014 was the Sunset Date; the date by which, according to Mr Scrivener’s recollection of 20 August 2013 agreement, Mr Cappello was to procure a purchaser for the three Rouse Hill properties.

2. [266]

   On that day, Mr Scrivener wrote to Mrs Lobsey, with a copy to Mr Cappello stating:

3. [267]

   On his account of it, Mr Scrivener knew that by now, there was “no buyer in sight”. [18]

4. [268]

   If Mr Scrivener’s position was that there was “no buyer in sight”, and the deal was “over” for Mr Cappello, it is surprising, if not extraordinary, that Mr Scrivener did not mention that in this email, sent on the Sunset Date itself.

5. [269]

   Rather, as he had done consistently since 20 August 2013, Mr Scrivener kept Mr Cappello informed of the latest position concerning one of the two remaining properties in respect of which no Put and Call Option had been secured.

Events following the Sunset Date

1. [270]

   I turn now to events following the Sunset Date, bearing in mind that Mr Scrivener’s case is that from this point, Mr Cappello’s “journey” was “over”.

2. [271]

   On 7 March 2014 Mr Wong, from Marsdens, sent Mr Scrivener the “Votano execution documents” being the Put and Call Option Deed due for execution on 14 March 2014.

3. [272]

   Mr Scrivener forwarded that email to Mr Cappello. He said the reason he did this was to keep Mr Cappello informed as he was “still an investor in one of the properties” in that he had paid half the option fee in relation to the 88 Rouse Road property.

4. [273]

   Similarly, on 11 March 2014 Mr Scrivener forwarded to Mr Cappello an email that Mr Wong had sent Mr Kucic from Oracle, attaching a copy of the proposed Put and Call Option Deed for 104 Rouse Road and stating:

5. [274]

   Mr Scrivener’s email to Mr Cappello said:

6. [275]

   Mr Scrivener gave this evidence about this communication in response to questions from Mr Pritchard and then from me:

7. [276]

   Mr Scrivener’s reference to 6 August 2014, a date some five months after the email in question, was to the fact that on that date Tuscany and other companies associated with Mr Scrivener, entered into a Development Management Agreement with Oracle. I return to this below at [392].

8. [277]

   I read Mr Scrivener’s response to my question to be that he was saying that his reason for keeping Mr Cappello informed of his progress with the project, as illustrated by his email of 11 March 2014, was that if a deal was eventually done with Oracle, Mr Cappello would be paid half of the acquisition fee to be paid by Oracle and would be repaid the $125,000 he had contributed to the 88 Rouse Road option fee; that is, that Mr Cappello’s ongoing interest in the project was as an investor.

9. [278]

   As I set out below, to Mr Scrivener’s knowledge, Mr Cappello’s ongoing role was more than this.

The events of 14 March 2014

1. [279]

   On 14 March 2014 three important documents were executed.

2. [280]

   First, companies owned and controlled by Mr Scrivener entered into Put and Call Option Deeds in respect of 96 Cudgegong Road and 104 Rouse Road. Those companies were 96 Cudgegong Land Pty Ltd and 104 Rouse Land Pty Ltd.

3. [281]

   Thus, Mr Scrivener, through companies he controlled, now had the right to call for the transfer of all three properties for a total of $12.65 million. Of course, the corollary was that Mr Scrivener’s companies faced the prospect of the owners of the three properties exercising their option to put the properties to Mr Scrivener’s companies for the same figure.

4. [282]

   Also on 14 March 2014, Mr Scrivener’s companies, 96 Cudgegong Land Pty Ltd and 104 Rouse Land Pty Ltd, entered into a Loan Agreement with Oracle pursuant to which Oracle agreed to lend those companies a total of $417,500 being the option fees under the Put and Call Option Deeds in respect of 96 Cudgegong Road and 104 Rouse Road ($207,500 and $210,000 respectively). Mr Scrivener and Tuscany guaranteed the loans.

5. [283]

   The repayment date for those loans was "60 days prior to written notice from the lender”.

6. [284]

   The Loan Agreement also contained the following special condition:

7. [285]

   After those documents were executed, Mr Scrivener sent Mr Cappello an SMS:

8. [286]

   To which Mr Cappello sent the following jocular reply:

9. [287]

   In relation to that SMS, Mr Scrivener gave this evidence:

10. [288]

    And a short time later:

11. [289]

    In my opinion, the proper inference is that Mr Scrivener was, by this SMS, seeking to do more than let Mr Cappello know that he, Mr Scrivener, had managed to secure the site. I conclude that Mr Scrivener’s use of the first person plural, “we”, was intended by Mr Scrivener to convey to a person he still regarded as his joint venture partner that they, as joint venturers, had secured the site.

April 2014

1. [290]

   On 2 April 2014, Mr Graeme Spender, an architect from Davis Sommerville Pty Ltd, sent Mr Scrivener a plan of the combined Rouse Hill site showing “Proposed Medium Density & Small Lot Housing”.

2. [291]

   Mr Scrivener forwarded that document to Mr Cappello on 3 April 2014 with the message:

3. [292]

   The fact that Mr Scrivener wished to discuss Mr Spender’s plan suggests that Mr Scrivener regarded Mr Cappello as more than a “minor” investor.

4. [293]

   Between 3 and 8 April 2014, Mr Scrivener forwarded to Mr Cappello copies of invoices Mr Scrivener had received from Marsdens for legal work done in respect of the Put and Call Options.

5. [294]

   On 12 April 2014 Mr Scrivener sent Mr Cappello aerial images of the site and a covering email:

6. [295]

   Mr Cappello replied:

7. [296]

   On 16 April 2014 Mr Kucic from Oracle wrote to Mr Scrivener stating he had discussed “proposal with the boys last night” and that:

8. [297]

   Mr Kucic was thus anticipating that Oracle’s involvement would progress beyond lending to Mr Scrivener’s companies the amount of the options fees for the 96 Cudgegong Road and 104 Rouse Road sites to, potentially, developing the site.

9. [298]

   Mr Kucic’s reference to Tuscany leaving “in its deposit on 88 Rouse Road” was evidently reference to the $250,000 option fee for 88 Rouse Road that Mr Cappello and Tuscany had jointly paid. Oracle had advanced to Mr Scrivener’s companies the funds needed for the 96 Cudgegong Road and 104 Rouse Road option fees.

10. [299]

    Mr Scrivener forwarded Mr Kucic’s email to Mr Cappello stating:

11. [300]

    Mr Scrivener referred to the proposed Development Management Agreement with Oracle and said that he could “modify” a like agreement that one or other of Mr Scrivener’s companies had with Oracle “to suit”.

12. [301]

    Mr Scrivener was thus letting Mr Cappello know his views about the merits of Oracle’s current proposal suggesting, again in my opinion, that he saw Mr Cappello as being more than a minor investor.

13. [302]

    Similarly, on 23 April 2014 Mr Scrivener gave Mr Cappello a document called “Property Development Feasibility Study” which set out such details as projected income, costs, profit margin and peak debt levels in relation to the proposed development of the Rouse Hill sites. Again, this suggests Mr Scrivener saw Mr Cappello as more than a minor investor.

14. [303]

    There is, however, no dispute that it was Mr Scrivener, and not Mr Cappello who was progressing negotiations with Oracle and that these negotiations, potentially, leading to a result very much more profitable than that contemplated by Mr Scrivener and Mr Cappello in August 2013; securing the three sites and on-selling them for a profit.

30 April 2014 meeting with Mr Stanley Lei

1. [304]

   On 30 April 2014, Mr Scrivener sent an SMS to Mr Cappello:

2. [305]

   Mr Scrivener sent the text for the purpose of Mr Scrivener and Mr Cappello meeting Mr Steven Chen, a real estate agent then engaged as a consultant with McGrath Estate Agents and his client, Mr Stanley Lei, of Anteus Group. Anteus Group was a Chinese developer company.

3. [306]

   I would infer, from the fact that Mr Scrivener gave Mr Cappello the address and time of the meeting, that Mr Scrivener had arranged the meeting.

4. [307]

   Mr Chen said that another agent in his office requested him to make contact with Mr Scrivener. He said he had never met nor heard of Mr Cappello.

5. [308]

   Mr Cappello did not suggest that he attended the meeting with Mr Lei. Rather, he said this in his second affidavit, in a passage to which objection was not taken:

6. [309]

   Mr Chen said:

7. [310]

   As Mr Pritchard said in final submissions:

8. [311]

   The inference I would draw from this is that Mr Scrivener still regarded Mr Cappello’s involvement in the project as warranting Mr Cappello’s presence at a meeting with a potential purchaser of the site.

9. [312]

   Evidently, nothing came of the meeting with Mr Lei.

6 to 9 May 2014 – final attempt to sell to Sunland

1. [313]

   Between 6 and 9 May 2014 Mr Cappello and Mr Scrivener made a final effort to achieve sale of the Rouse Hill sites to Sunland.

2. [314]

   On 6 May 2014 Mr Ivor Dacic, the State Director of Sunland Group, sent a message that he had received from his solicitor concerning documents the solicitor needed to see in relation to the subject “Rouse Hill purchases”.

3. [315]

   Mr Cappello sent a copy of that email to Mr Scrivener and, a short time later, replied to Mr Dacic saying that Marsdens would respond to Sunland Group’s solicitor’s enquiries the next day.

4. [316]

   On 7 May 2014, Mr Wong from Marsdens wrote to Mr Scrivener asking him to check some figures, including the “balance payable by purchaser on settlement”. Mr Scrivener emailed Mr Wong to say that his figures were correct and forwarded a copy of that email to Mr Cappello. A short time later Mr Cappello confirmed to Mr Scrivener and Mr Wong that Mr Scrivener was correct to confirm Mr Wong’s figures and, finally, Mr Scrivener sent an email to Mr Cappello, copied to Mr Wong, saying that the “figures are right”.

5. [317]

   Later, on 7 May 2014, Mr Wong wrote to Sunland’s solicitor:

6. [318]

   Mr Wong attached to his email the Put and Call Option Deeds in relation to the three Rouse Hill properties. Mr Wong continued:

7. [319]

   Mr Scrivener sent Mr Cappello a copy of Mr Wong’s letter with an email:

8. [320]

   Evidently Mr Scrivener’s reference to the “modified letter” was a reference to Mr Wong’s email to Sunland’s solicitor.

9. [321]

   As to the discussion to which Mr Scrivener referred (“as discussed”) Mr Scrivener’s phone records reveal that he spoke to Mr Cappello twice on 7 May 2014, first for over four minutes and then again for a little over three minutes.

10. [322]

    Later on 7 May 2014, Sunland’s solicitor sent an email to Mr Wong. Mr Dacic forwarded a copy of that email to Mr Cappello and Mr Cappello forwarded that email to Mr Scrivener.

11. [323]

    A short time later, still on 7 May 2014, Mr Wong forwarded the same letter, from Sunland’s solicitor, to Mr Scrivener. In his email, Mr Wong gave advice on the matters raised by Sunland’s solicitor and also noticed that Sunland’s solicitor referred to “further administrative matters to be raised” and about which he suggested to Mr Scrivener that “you may want to get John Cappello to try and find out”. A short time later Mr Scrivener forwarded Mr Wong’s email to Mr Cappello.

12. [324]

    Later on 7 May 2014, by now the early evening, Mr Wong emailed Sunland’s solicitor, copying both Mr Scrivener and Mr Cappello, answering the points that had been raised. Mr Cappello then forwarded the email to Sunland’s solicitor, Mr Dacic, with a copy to Mr Scrivener.

13. [325]

    Still later on the evening of 7 May 2014, Sunland’s solicitor responded to Mr Wong’s email and, a minute later, Mr Dacic forwarded a reply to Mr Cappello which Mr Cappello immediately forwarded to Mr Scrivener.

14. [326]

    Following all of those email exchanges, an hour later in the evening of 7 May 2014, Mr Scrivener and Mr Cappello had the following SMS exchange:

15. [327]

    Here, both Mr Cappello and Mr Scrivener are using the first person plural, “we”, to describe their dealings with Sunland.

16. [328]

    The following day, 8 May 2014, Mr Scrivener sent an email to Mr Wong, a copy of which he forwarded to Mr Cappello, saying:

17. [329]

    Again, Mr Scrivener used the first person, plural.

18. [330]

    Thus, on 9 May 2014, Mr Cappello sent an email to Mr Wong:

19. [331]

    Evidently, that is where the matter rested so far as concerned a possible sale to Sunland. The sale to Sunland did not proceed.

20. [332]

    The degree of involvement of Mr Cappello, well after the Sunset Date, in what appears to be the parties’ last effort to sell the sites to Sunland, is inconsistent with Mr Cappello being, at that stage, a mere investor. It is also inconsistent with, indeed impossible to reconcile with Mr Cappello’s “journey” being “over” by reason of not having introduced a purchaser by the Sunset Date. Mr Cappello’s involvement appears to be that which would ordinarily be expected of a motivated joint venture partner.

The meeting with Mr Edgerton

1. [333]

   In the same email in which Mr Cappello told Mr Wong that the proposed sale to Sunland appeared to be “dead and buried” Mr Cappello told Mr Wong that:

2. [334]

   The “prospective purchaser” was Mr Michael Edgerton, then a non-practising solicitor who invested “in business and real estate opportunities, individually and with others”. [23]

3. [335]

   Mr Edgerton had had earlier dealings with Mr Cappello.

4. [336]

   In his affidavit, Mr Edgerton described those dealings as follows:

5. [337]

   Mr Cappello had also had some communication with Mr Edgerton concerning the Rouse Hill properties early in 2013. [24]

6. [338]

   On 13 May 2014, Mr Cappello sent Mr Edgerton an email in relation to the “Rouse Hill site” which stated:

7. [339]

   It is common ground that Mr Scrivener and Mr Cappello met Mr Edgerton at his home in Drummoyne and that this was the only occasion when Mr Scrivener met Mr Edgerton.

8. [340]

   In his affidavit sworn on 14 December 2017, Mr Edgerton placed the meeting on 24 July 2014. It is common ground that this cannot be correct and that the meeting took place in May 2014.

9. [341]

   Mr Cappello’s email referred to “our meeting Thursday morning”; which would have been 15 May 2014.

10. [342]

    Mr Scrivener’s appointment diary showed a meeting “12.30 Drummoyne Mr Edgerton” on 16 May 2014.

11. [343]

    In his affidavit, Mr Edgerton said that Mr Cappello introduced Mr Scrivener by saying words to the effect:

12. [344]

    Mr Edgerton said he looked at the Put and Call Option Deeds that Mr Cappello had sent and said:

13. [345]

    Mr Edgerton said that in the course of the discussion he asked why Mr Cappello’s name was not “on any of the documents” and that Mr Cappello said in Mr Scrivener’s presence, words to the effect:

14. [346]

    Mr Edgerton said the discussion proceeded for a number of hours and that during that time Mr Cappello said in Mr Scrivener’s presence, words to the effect:

15. [347]

    Mr Edgerton said that, after a number of hours of discussion, he said:

16. [348]

    Mr Edgerton concluded his affidavit by saying that “that offer was not taken up, either at the meeting, or later”.

17. [349]

    During cross-examination of Mr Cappello about this meeting with Mr Edgerton, Mr Studdy suggested that Mr Cappello had not made a note of the meeting. Mr Cappello replied that “I did not but Michael Edgerton did”.

18. [350]

    That caused Mr Cappello’s solicitors to make an enquiry of Mr Edgerton, the result of which was Mr Edgerton produced a 5 page manuscript note that he said he created during his meeting with Mr Scrivener and Mr Cappello.

19. [351]

    That note is dated “15.4.15”. Much time during the hearing was spent debating the significance of that date. It is obviously a mistake as it is clear on the evidence, and common ground, that the meeting took place in May 2014. The original of Mr Edgerton’s diary note is in evidence and the date “15-4-15” does appear to be in a slightly lighter pen than the balance of the note. It may be that Mr Edgerton filled the date in at a different time than when he made his contemporaneous note of the meeting and, evidently, has inadvertently transposed the figures.

20. [352]

    Although Mr Studdy put to Mr Edgerton, and submitted, that Mr Edgerton’s note was of a meeting with Mr Cappello alone in 2015, it is obvious that it was not.

21. [353]

    As Mr Studdy ultimately accepted, there are a number of references in the note which make clear it was created in May 2014. For example, at one point Mr Edgerton recorded:

22. [354]

    Those notes are obviously a reference to what Mr Edgerton was told about the amount advanced by Oracle to Mr Scrivener’s companies pursuant to the 14 March 2014 Loan Agreement and to the attempts made by Mr Scrivener and Mr Cappello earlier that month to interest Sunland in the site.

23. [355]

    There was also a reference to “now doing a deal with Oracle” and to when they needed “to exit Oracle”, each of which references is consistent only with the diary note being made in May 2014.

24. [356]

    The parties devoted a considerable amount of time parsing and analysing Mr Edgerton’s note.

25. [357]

    I do not find it necessary to deal with the detail of those matters.

26. [358]

    The critical aspect of the note is what is obviously Mr Edgerton’s summary of what he was told concerning the events leading to the negotiations with Sunland failing and where the following appears after the words “fell over” (obviously a reference to the unsuccessful discussions with Sunland):

27. [359]

    This note is consistent with what Mr Edgerton said in his affidavit he recalled Mr Cappello saying, as I have set out at [346] above.

28. [360]

    This persuades me that it is probable, as Mr Edgerton (and Mr Cappello) said, that at this meeting Mr Cappello said, in Mr Scrivener’s presence, and without demur from Mr Scrivener, that their arrangement was to share equally in the “profit from the acquisition of the [Rouse Hill] sites”.

29. [361]

    There was no reason for Mr Edgerton to record these matters inaccurately. Mr Edgerton said he had no idea what the arrangements between Mr Cappello and Mr Scrivener were, other than what was discussed at the meeting and that, after the meeting, he had no further discussions with Mr Cappello about the matter.

30. [362]

    I find this impossible to reconcile with Mr Scrivener’s contention that the Sunset Condition was an element of the 20 August 2013 agreement and Mr Scrivener’s concomitant contention that Mr Cappello’s entitlement to share equally in any profit from the venture ceased on the Sunset Date by reason of Mr Cappello not having then secured a purchaser.

31. [363]

    Mr Scrivener’s note does not record Mr Cappello as introducing Mr Scrivener as “my partner” but, in cross-examination, Mr Scrivener agreed that it was possible that Mr Cappello introduced him to Mr Edgerton this way.

32. [364]

    In relation to Mr Edgerton’s affidavit evidence that he had enquired why Mr Cappello’s name was not on any of the documents, Mr Scrivener had said in his affidavit evidence that he could “not recall” whether those words were said. However, in cross-examination, he denied that Mr Edgerton asked this question. He explained the inconsistency between that evidence and what he had said in his affidavit by saying:

33. [365]

    That response suggested to me that Mr Scrivener was endeavouring to deal with the cross-examination by saying whatever he thought might assist his case.

Contribution to costs

1. [366]

   On 26 May 2014 Mr Scrivener sent to Mr Cappello three emails concerning the costs incurred, and to be incurred in relation to the venture.

2. [367]

   First, Mr Scrivener forwarded Mr Cappello a tax invoice from Marsdens dated 31 December 2013 for $2,810.50 and set out in the email what “we” still owe compared to what “I” have already paid.

3. [368]

   The email bespeaks an expectation by Mr Scrivener that Mr Cappello would make a contribution to the amount that “we still owe” as well as to the amount that “I have already paid”.

4. [369]

   It is hard to see why Mr Scrivener would have this expectation if Mr Cappello was, as Mr Scrivener contends, “out of the deal” by this time.

5. [370]

   Second, a minute later, Mr Scrivener sent Mr Cappello an email that Mr Scrivener had received from Mr Wong which attached a schedule of costs incurred to date and an estimate of future costs.

6. [371]

   If Mr Cappello was now no more than a “minor investor” whose only interest in the ongoing venture was a refund of his contribution to the 88 Rouse Road option fee and a share of the proposed Oracle acquisition fee, there would be no point telling Mr Cappello of these matters.

7. [372]

   Third, in the afternoon of 26 May 2014 Mr Scrivener forwarded to Mr Cappello “fyi” an email Mr Scrivener had sent to Mr Aboud concerning “Tuscany invoice” which was an attached draft invoice from Tuscany to Oracle for an acquisition fee of $280,060 and which stated:

8. [373]

   The “balance” figure ($19,071.07) should in fact be $19,701.07, being the difference between the “reimbursement costs” of $31,789.67 and the “less costs paid by JS” of $12,088.60.

9. [374]

   The figure of $9,850.54 adjacent to the words “john C” is half of that (corrected) figure of $19,701.07.

10. [375]

    In this email Mr Scrivener is calculating, for Mr Aboud’s reference, the amount to which Mr Cappello is entitled.

11. [376]

    One element of that amount is $140,030, which was half of the amount proposed to be invoiced by Tuscany to Oracle for the acquisition fee.

12. [377]

    The other “credit” to Mr Cappello is $9,850.54 which, as I have said, is half of the “balance” of $19,701.07 representing the difference between the “reimbursement costs” and the “costs paid by JS”.

13. [378]

    It is thus obvious that the “reimbursement costs” represented costs already paid, jointly, by Mr Scrivener and Mr Cappello leading to the figure of $9,850.54 that Mr Scrivener suggested be added to the amount due to Mr Cappello.

14. [379]

    In cross-examination, Mr Scrivener initially admitted that the figure of $31,789.67 was in relation to expenses already paid. He then sought to retreat from that position and assert that that figure was “the total amount of reimbursement costs that would be applicable by Oracle in relation to the acquisition” and that the $19,701.07 was an amount yet to be paid. But this cannot be right.

15. [380]

    Mr Cappello gave evidence, concerning the payment of expenses, that:

16. [381]

    Mr Scrivener’s email to Mr Cappello of 26 May 2014 appears to be an example of the practice to which Mr Cappello referred. If, as Mr Scrivener contends, Mr Cappello was now “out of the deal” and was only a “minor investor” there is no reason why Mr Scrivener would be communicating with Mr Cappello in this way. These communications suggest that Mr Scrivener understood that his business relationship with Mr Cappello was ongoing and that there needed to be a reconciliation of the manner in which they had shared expenses to date. These exchanges also show that, as both Mr Cappello and Mr Scrivener accept they agreed on 20 August 2013, expenses were to be, and were being, shared equally.

17. [382]

    Mr Scrivener said in his affidavit that about this time he said to Mr Cappello:

18. [383]

    I find this evidence impossible to reconcile with all that had passed between Mr Scrivener and Mr Cappello in the preceding months and in particular with the email exchange to which I have just referred.

June and July 2014

1. [384]

   Mr Scrivener was overseas until early July 2014. In his absence his son, Mr Trent Scrivener, dealt with Mr Cappello.

2. [385]

   On 6 June 2014 Mr Trent Scrivener forwarded to Mr Cappello an email from Mr Wong stating that Mr Wong had:

3. [386]

   On 16 June 2014 Mr Cappello sent an email to Mr Trent Scrivener:

4. [387]

   Mr Trent Scrivener replied:

5. [388]

   On Mr Scrivener’s return in July 2014 he gave Mr Cappello a copy of a plan prepared by Davis Sommerville Pty Ltd of the proposed development of the three sites.

6. [389]

   On the reverse side of that document Mr Scrivener had made handwritten workings of the likely gross realisation of the development on the assumption of 35,550 square metres of development, and assuming realisations of $1,100 per square metre to $1,400 per square metre. Those workings suggested that gross realisations of between $39.14 million and $49.77 million would, on those assumptions, be achieved.

7. [390]

   Mr Scrivener said he gave this document to Mr Cappello only because Mr Cappello had the potential to sell the property as a real estate agent.

8. [391]

   I think a more likely explanation is that, as Mr Pritchard submitted, Mr Scrivener gave Mr Cappello this document to assure him that the venture was likely to be profitable.

The 6 August 2014 Development Management Agreement

1. [392]

   On 6 August 2014 Mr Scrivener’s companies, Tuscany, 96 Cudgegong Land Pty Ltd and 104 Rouse Land Pty Ltd entered a Development Management Agreement with Oracle.

2. [393]

   Another party to that document was 88 Rouse Land Pty Ltd, a company jointly owned by Tuscany and Oracle and, ultimately, the purchaser of the three Rouse Hill sites and vendor of them to Tian Tong.

3. [394]

   The Development Management Agreement defined the “Project” as:

4. [395]

   The Development Management Agreement provided for the division of the Project Proceeds, although this agreement was varied by a one-page “Agreement – Acknowledgement” executed by the parties to the Development Management Agreement on 10 June 2015, to which I will return.

Events thereafter

1. [396]

   On 11 August 2014, Mr Cappello sent an email to Mr Scrivener:

2. [397]

   Mr Scrivener did not suggest that it was inaccurate of Mr Cappello to opine that the “Oracle deal” was great for “us” as opposed to only Mr Scrivener.

3. [398]

   In accordance with the terms of the Development Management Agreement, Oracle paid a 2% acquisition fee to Tuscany in the sum of $280,060.

4. [399]

   On 19 August 2014, Tuscany paid half of that amount, $140,030, at Mr Cappello’s direction. [26]

5. [400]

   On the same day, Mr Scrivener paid $125,000 to Mr Cappello from his own funds representing repayment to Mr Cappello of the $125,000 he had paid on account of the Option Fee under the Put and Call Option Deed with Mrs Boon concerning the 88 Rouse Road property.

6. [401]

   Mr Cappello travelled to Europe on holidays between late August and late September 2014.

7. [402]

   He said that when he returned he spoke to Mr Scrivener who said:

8. [403]

   Mr Scrivener denied having that conversation, although he did not refer to it in his affidavit evidence.

9. [404]

   In November 2014 Mr Scrivener gave Mr Cappello a set of the plans about to be submitted to Blacktown City Council to seek development approval for a proposed subdivision of the Rouse Hill properties.

10. [405]

    On 19 January 2015 Mr Scrivener caused to be sent to Mr Cappello’s employee further architectural drawings relating to the proposed development application.

11. [406]

    Mr Scrivener said that the only reason he was forwarding these documents to Mr Cappello was to prepare for the marketing of the development.

12. [407]

    On 20 January 2015 Mr Scrivener forwarded to Mr Cappello’s office an email he’d received from Mr Wong which said that:

13. [408]

    Mr Scrivener said in cross-examination that the settlement referred to in this email was settlement of the transaction whereby 88 Rouse Land Pty Ltd became the registered proprietor of the three properties as a result of Tuscany, 96 Cudgegong Land Pty Ltd and 104 Rouse Land Pty Ltd having exercised their options under the Put and Call Option Deeds of 20 December 2013 and 14 March 2014 to call for the three Rouse Hill properties.

14. [409]

    In April 2015 Mr Cappello learned from Mr Kucic at Oracle that the Rouse Hill site was to be sold to a Chinese developer.

15. [410]

    Mr Cappello said in one of his affidavits:

16. [411]

    Mr Cappello said that on 11 May 2015 he had this discussion with Mr Scrivener:

17. [412]

    On 11 May 2015 Mr Cappello created what appears to be the only diary note he made about this transaction. The note read:

18. [413]

    Mr Scrivener denied saying anything to this effect to Mr Cappello.

19. [414]

    However, Mr Studdy did not challenge Mr Cappello in relation to his diary entry. I see no reason to doubt the accuracy of the note and conclude that Mr Scrivener did say something to Mr Cappello to the effect that Mr Cappello has recorded.

20. [415]

    There is no suggestion in the evidence that anyone from Oracle said that Oracle would not “honour” its “written agreement”. Indeed, Mr Scrivener agreed that it would not have been true to say that Oracle would not honour its written agreement. That suggests, as Mr Pritchard submitted, that Mr Scrivener was prepared to tell Mr Cappello things that were not true to dissuade him from asserting an interest in the project.

21. [416]

    Mr Cappello said that on 21 May 2015 he received a telephone call from Mr Scrivener which he took on speaker phone in the presence of his brother, Mr William Cappello. Mr Cappello said the conversation was in these terms:

22. [417]

    Mr Scrivener did not refer to this conversation in his affidavit but denied in cross-examination that it took place.

23. [418]

    However, Mr William Cappello has sworn an affidavit in which he said:

24. [419]

    Although in cross-examination Mr Scrivener said that “I totally deny that conversation” Mr Studdy did not cross-examine Mr William Cappello on his affidavit. In those circumstances, I accept that Mr William Cappello’s recollection is accurate. Thus Mr Scrivener’s response to Mr Cappello’s assertion that he was entitled to “half of what Tuscany made” was not to assert, consistently with his account of the 20 August 2013 agreement, that Mr Cappello’s entitlements were subject to him securing a purchaser by 28 February 2014, but, rather to say “You’ve got nothing in writing”.

25. [420]

    Although my attention was not drawn to a document recording this fact, I was informed from the bar table that in May 2015, 88 Rouse Land Pty Ltd obtained approval from Blacktown City Council to develop the consolidated site as a medium density development.

26. [421]

    On 10 June 2015 the parties to the 6 August 2015 Heads of Agreement signed the Agreement – Acknowledgement to which I referred at [395] above which provided, in effect, that the “Project Proceeds” will be divided:

27. [422]

    The following day, 11 June 2015, Mr Cappello visited Oracle’s offices and met with Mr Kucic, and another officer of Oracle, Mr Nic Kennedy.

28. [423]

    Mr Kennedy’s note of that meeting is as follows:

29. [424]

    I see no reason to doubt that Mr Kennedy accurately recorded what Mr Cappello said at this meeting [28] .

30. [425]

    Nor do I see any reason to doubt that Mr Cappello was giving Mr Kucic and Mr Kennedy as accurate an account as he could of his agreement with Mr Scrivener. This account was given less than two years after 20 August 2013. As I have said, Mr Scrivener first turned his mind to recording his recollection of the agreement shortly before he swore his affidavit in these proceedings in March 2019: five years after the agreement was made.

31. [426]

    On about 20 July 2015 88 Rouse Land Pty Ltd sold the three sites to Tian Tong.

32. [427]

    Tuscany received $9,141,937.95 for the venture as follows:

33. [428]

    88 Rouse Land Pty Ltd received $2,276,586.52 on completion. Tuscany was a 50% shareholder in 88 Rouse Land Pty Ltd. My attention was not drawn to evidence showing what benefit Tuscany has received from this payment. On the face of it, it would appear Tuscany would be entitled to half.

34. [429]

    Mr Cappello consulted his current solicitors in relation to this matter on 18 August 2015.

35. [430]

    The following day he wrote to Mrs Lobsey:

36. [431]

    Although Mr Studdy sought to make much of this email, the inference I would draw is no more than that, the day before, Mr Cappello received advice to the effect that it might appear inconsistent with his case were he to retain the $48,000 commission.

Was the agreement subject to the Sunset Condition?

1. [432]

   Mr Studdy submitted that it was inherently improbable that Mr Scrivener would have entered an agreement with Mr Cappello that was not conditional on Mr Cappello finding a buyer for the combined site within a reasonable time.

2. [433]

   Thus, Mr Studdy described the agreement for which Mr Cappello contends as “highly problematic”, a “commercial absurdity only to the advantage of Mr Cappello and to the disadvantage of Mr Scrivener” not “entirely implausible”, and “simply too far-fetched to possibly believe”.

3. [434]

   Mr Studdy submitted that it was “plainly inconceivable” that Mr Scrivener would have entered an unconditional agreement because:

4. [435]

   Mr Studdy submitted that “a consequence of [Mr Cappello’s] failure” to secure a buyer was that Mr Scrivener and Tuscany “were required to go ‘unconditional’ on the project (when that was never the intention) and were required to seek the assistance of Oracle to do so”.

5. [436]

   These submissions do not take account of the fact that, on any view of the matter, it was Mr Cappello who introduced Mr Scrivener to the project and thus made available to Mr Scrivener and Tuscany the opportunity from which they have now profited.

6. [437]

   Nor do they take into account that the undisputed evidence that in December 2013, on Mr Scrivener’s account of it, [29] Mr Cappello asked that the arrangement between them be documented, the result of which would have been that Mr Cappello, or his wife, would have also been “on the hook” financially.

7. [438]

   The submissions also overlook the relatively simple project that was in contemplation as at 20 August 2013. As at that date, the project involved following up on the negotiations Mr Cappello had had with Mrs Boon concerning 88 Rouse Road and with Mrs Votano concerning 96 Cudgegong Road, and endeavouring also to secure the third property from Mr and Mrs Bannerman at 104 Rouse Road.

8. [439]

   The plan was to negotiate options to purchase with the three site owners [30] , with a contemplated option fee of $5,000 for each property and, according to Mr Scrivener’s recollection of what Mr Cappello was proposing, to speedily on-sell the consolidated properties at a profit. [31]

9. [440]

   As things turned out, the project evolved into one far more ambitious than that contemplated on 20 August 2013. Mr Scrivener procured the active and substantial involvement of Oracle. The Put and Call Options were entered, and the vehicle for the Tuscany/Oracle joint venture [32] exercised the call options and acquired the sites. Development Approval was obtained and the combined site sold to Tian Tong to the significant profit of Oracle and Tuscany.

10. [441]

    In the meantime, as Mr Studdy submitted, once Mrs Boon’s Put and Call option became “unconditional” on 28 February 2014, and once Mr Scrivener’s companies entered the Put and Call Options with Mrs Votano and Mr and Mrs Bannerman on 14 March 2014, Mr Scrivener, through his companies, was exposed to the potential liability of being required to purchase the properties for the total price of $12.65 million, as well as to the various obligations arising from the arrangements with Oracle.

11. [442]

    It is also true that, as things turned out, Mr Scrivener ended up putting many more hours work into the venture than did Mr Cappello.

12. [443]

    But I see no basis upon which I could find that these developments were in the contemplation of Mr Cappello and Mr Scrivener when they made their agreement. Neither of them made any such suggestion in their evidence. Accordingly, I do not see how they can be used, retrospectively, to assess the probabilities of what was agreed on 20 August 2013; at a time when a far more modest project was in prospect.

13. [444]

    I also accept that there were some aspects of the 20 August 2013 arrangement that would have made it reasonable for Mr Scrivener to impose a condition of the kind for which he contends.

14. [445]

    For example, Mr Scrivener claims that Mr Cappello said on 20 August 2013 that “I already have buyers for a combined site”. Mr Cappello denied saying that. But there is no evidence that Mr Cappello did have buyers as at 20 August 2013. In those circumstances it may well have been understandable for Mr Scrivener to impose a condition along the lines of the Sunset Condition.

15. [446]

    Similarly, Mr Cappello’s initial insistence “to leave my name off things” [33] meant that only Mr Scrivener’s name was to be “on things” such that only Mr Scrivener would, as things stood on 20 August 2013, be exposed to any liability under the venture. Again, in those circumstances it may well have been understandable for Mr Scrivener to impose a condition along the lines of the Sunset Condition.

16. [447]

    But the question is: did he?

17. [448]

    The following features of Mr Scrivener’s conduct after 20 August 2013 persuades me that, probably, he did not:

18. [449]

    The cumulative effect of these matters leads me to have an actual persuasion of the mind [59] that Mr Scrivener did not, as he claims, refer to the Sunset Condition in the discussion with Mr Cappello on 20 August 2013 and that, accordingly, the Sunset Condition was not a term of the agreement between Mr Cappello and him.

19. [450]

    The evidence that I have set out shows that, consistently between 20 August 2013 and the Sunset Date, Mr Scrivener referred to Mr Cappello as his joint venturer or joint venture partner.

20. [451]

    Further, and critically, after the Sunset Date, and when on Mr Scrivener’s account of it Mr Cappello was no longer his joint venture partner and that the “journey” for Mr Cappello was “over”, [60] Mr Scrivener behaved in a manner that cannot be reconciled with him truly believing that the Sunset Condition was part of their agreement.

21. [452]

    As I have set out, Mr Scrivener was adamant that the Sunset Condition was a part of his agreement with Mr Cappello and gave evidence that he made this clear to Mr Cappello on a number of occasions, including at the Verve Café on 11 December 2013 [61] and again in the conversations on 25 and 26 February 2014. [62]

22. [453]

    Mr Scrivener was either giving evidence he knew to be false or else, perhaps more likely, he has now come to believe that what he said was true because, litigation has intervened and that the processes of Mr Scrivener’s memories have become overlaid, perhaps subconsciously, “by perceptions of self interest as well as conscious consideration of what should have been said or could have been said”. [63]

23. [454]

    However that may be, I have an actual persuasion of mind that Mr Scrivener’s recollection cannot be correct.

24. [455]

    I have made references above to occasions when I was concerned as to the reliability of Mr Scrivener’s evidence and his recollection of events.

25. [456]

    Those matters have informed my conclusion as to the probabilities of what occurred on 20 August 2013.

26. [457]

    Overall, the evidence that I found to be most informative of what was likely to be the true nature of the agreement between Mr Cappello and Mr Scrivener’s own conduct, both by omission and commission.

The result

1. [458]

   In closing written submissions, Mr Studdy said in conclusion:

2. [459]

   There are a number observations to be made about this passage.

3. [460]

   First, Mr Studdy referred to Mr Scrivener having “terminated” the arrangement with Mr Cappello, and of Mr Cappello then being “repaid in excess of the entitlements that the was owed”. My attention was not directed to evidence that Mr Scrivener ever “terminated” the arrangement with Mr Cappello. I infer that the reference to Mr Cappello being paid his ”entitlements” is a reference to the payments made to Mr Cappello on 19 August 2014. [64]

4. [461]

   Second, it is not correct to say that Tuscany approached Oracle “to salvage the project” by reason of a buyer not being located (by the Sunset Date). As I have set out above [65] Mr Scrivener spoke of having approached Oracle as early as October 2013; well before the Sunset Date.

5. [462]

   Third, and most important, Mr Studdy referred to Mr Scrivener imposing “two conditions” to the agreement with Mr Cappello.

6. [463]

   One was of course the Sunset Condition, and I have explained why I do not accept Mr Scrivener’s case about that matter.

7. [464]

   The second condition was, as Mr Studdy had put earlier in the written closing submissions, that Mr Cappello contribute equally to costs and expenses. Mr Cappello did not dispute this. As I have set out above, Mr Cappello accepted, indeed asserted that his arrangement with Mr Scrivener included an agreement that expenses be shared equally. Mr Studdy barely developed a submission that Mr Cappello did not comply with that condition. The email exchange on 26 May 2014 [66] shows that he did.

8. [465]

   As I am persuaded that the first of Mr Scrivener’s asserted conditions was not a part of the 20 August 2013 agreement, and as I find there was no breach by Mr Cappello of the other condition relied on Mr Scrivener, I find that there was a partnership between Mr Cappello and Mr Scrivener of the kind for which Mr Cappello contends.

9. [466]

   In any event, I think Mr Pritchard was correct to submit:

10. [467]

    I propose to make a declaration to the effect of that sought by Mr Cappello, namely, that there was a partnership between themselves and/or their corporate nominees (Tuscany in the case of Mr Scrivener and a company later to be nominated by Mr Cappello) “which acquired the rights to control and sell the three contiguous properties situated at 88 Rouse Road, 104 Rouse Road, and 96 Cudgegong Road, Rouse Hill”.

11. [468]

    In his Summons, Mr Cappello sought an order that an account be taken of the profits made by the defendants from the defendants’ use of the funds received by Tuscany.

12. [469]

    In the alternative, Mr Cappello sought equitable compensation.

13. [470]

    During closing submissions, Mr Pritchard informed me that Mr Cappello elected to receive equitable compensation.

14. [471]

    I will list the matter for directions on a day convenient to counsel and hear submissions as to what, if any, further steps are needed to resolve the dispute between the parties.